(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~July 31, 2019,~~April 30, 2020, the registrant had ~~41,880,767~~40,127,473 shares of common stock, $0.01 par value per share, outstanding.

	(Unaudited)						(Unaudited)
	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(In thousands)						(In thousands)
Assets:
Investments:
Fixed-maturity securities available-for-sale, at fair value (amortized cost: $2,144,445 in 2019 and $2,078,822 in 2018)	$	2,216,260		$	2,069,635
Fixed-maturity security held-to-maturity, at amortized cost (fair value: $1,157,585 in 2019 and $945,331 in 2018)		1,087,790			970,390
Short-term investments available-for-sale, at fair value (amortized cost: $0 in 2019 and $8,171 in 2018)		-			8,171
Equity securities, at fair value (historical cost: $32,212 in 2019 and $34,997 in 2018)		38,897			37,679
Trading securities, at fair value (cost: $23,295 in 2019 and $13,597 in 2018)		23,375			13,610
Fixed-maturity securities available-for-sale, at fair value (amortized cost: $2,243,288 in 2020 and $2,274,770 in 2019)							$	2,242,037		$	2,356,996
Fixed-maturity security held-to-maturity, at amortized cost (fair value: $1,310,909 in 2020 and $1,299,102 in 2019)								1,237,270			1,184,370
Equity securities, at fair value (historical cost: $32,732 in 2020 and $32,671 in 2019)								34,125			40,684
Trading securities, at fair value (cost: $45,279 in 2020 and $43,257 in 2019)								44,997			43,233
Policy loans		33,527			31,501			31,799			32,927
Total investments		3,399,849			3,130,986			3,590,228			3,658,210
Cash and cash equivalents		244,975			262,138			273,085			256,876
Accrued investment income		17,434			17,057			18,582			17,361
Reinsurance recoverables		4,185,850			4,141,569			4,132,897			4,169,823
Deferred policy acquisition costs, net		2,238,315			2,133,920			2,346,656			2,325,750
Agent balances, due premiums and other receivables		238,367			215,139			226,830			227,100
Intangible assets, net (accumulated amortization: $83,737 in 2019 and $82,035 in 2018)		46,409			48,111
Intangible assets								45,275			45,275
Income taxes		65,777			59,336			66,744			70,492
Operating lease right-of-use assets		49,381			-			49,192			47,265
Other assets		394,058			391,291			392,498			384,634
Separate account assets		2,437,291			2,195,501			2,128,924			2,485,745
Total assets	$	13,317,706		$	12,595,048		$	13,270,911		$	13,688,531

Liabilities and Stockholders’ Equity:
Liabilities:
Future policy benefits	$	6,314,403		$	6,168,157		$	6,472,397		$	6,446,569
Unearned and advance premiums		17,111			15,587			16,905			15,470
Policy claims and other benefits payable		322,417			313,862			330,489			339,954
Other policyholders’ funds		377,737			370,644			390,040			388,663
Notes payable		373,848			373,661			374,131			374,037
Surplus note		1,087,117			969,685			1,236,644			1,183,728
Income taxes		206,301			187,104			208,357			209,221
Operating lease liabilities		55,662			-			55,315			53,487
Other liabilities		496,027			486,772			498,699			510,443
Payable under securities lending		43,867			52,562			28,896			28,723
Separate account liabilities		2,437,291			2,195,501			2,128,924			2,485,745
Commitments and contingent liabilities (see Commitments and Contingent Liabilities note)
Total liabilities		11,731,781			11,133,535			11,740,797			12,036,040

Stockholders’ equity:
Common stock ($0.01 par value; authorized 500,000 shares in 2019 and 2018; issued and outstanding 42,008 shares in 2019 and 42,694 shares in 2018)		420			427
Common stock ($0.01 par value; authorized 500,000 shares in 2020 and 2019; issued and outstanding 40,460 shares in 2020 and 41,207 shares in 2019)								405			412
Paid-in capital		-			-			-			-
Retained earnings		1,537,535			1,489,520			1,565,803			1,593,281
Accumulated other comprehensive income (loss), net of income tax:
Unrealized foreign currency translation gains (losses)		(8,258	)		(21,064	)		(34,776	)		(5,765	)
Net unrealized investment gains (losses) on available-for-sale securities:								(1,318	)		64,563
Net unrealized investment gains (losses) not other-than-temporarily impaired		56,288			(7,253	)
Net unrealized investment losses other-than-temporarily impaired		(60	)		(117	)
Total stockholders’ equity		1,585,925			1,461,513			1,530,114			1,652,491
Total liabilities and stockholders’ equity	$	13,317,706		$	12,595,048		$	13,270,911		$	13,688,531

	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
	(In thousands, except per-share amounts)												(In thousands, except per-share amounts)
Revenues:
Direct premiums	$	687,262		$	667,191		$	1,364,548		$	1,323,278		$	702,637		$	677,286
Ceded premiums		(400,588	)		(403,449	)		(790,383	)		(797,698	)		(386,825	)		(389,795	)
Net premiums		286,674			263,742			574,165			525,580			315,812			287,491
Commissions and fees		178,468			167,940			345,783			334,767			190,069			167,315
Investment income net of investment expenses		36,637			29,082			71,424			56,472			28,892			34,785
Interest expense on surplus note		(11,769	)		(9,052	)		(22,444	)		(17,425	)		(13,472	)		(10,674	)
Net investment income		24,868			20,030			48,980			39,047			15,420			24,111
Realized investment gains (losses), including other-than- temporary impairment losses		1,067			1,313			3,914			(344	)
Realized investment gains (losses)														(10,030	)		2,847
Other, net		13,825			14,790			27,048			28,687			13,665			13,223
Total revenues		504,902			467,815			999,890			927,737			524,936			494,987

Benefits and expenses:
Benefits and claims		115,068			105,069			237,352			221,960			134,813			122,284
Amortization of deferred policy acquisition costs		58,762			53,847			123,390			114,011			70,311			64,628
Sales commissions		90,099			82,954			173,898			165,473			96,607			83,799
Insurance expenses		44,570			43,451			87,972			84,560			48,709			43,402
Insurance commissions		5,829			6,417			11,447			12,294			6,844			5,619
Interest expense		7,201			7,229			14,381			14,401			7,192			7,180
Other operating expenses		55,913			55,083			121,622			118,311			65,914			65,707
Total benefits and expenses		377,442			354,050			770,062			731,010			430,390			392,619
Income before income taxes		127,460			113,765			229,828			196,727			94,546			102,368
Income taxes		30,014			27,065			53,217			44,313			22,077			23,203
Net income		97,446			86,700			176,611			152,414			72,469			79,165

Earnings per share:
Basic earnings per share	$	2.28		$	1.96		$	4.12		$	3.41		$	1.75		$	1.84
Diluted earnings per share	$	2.28		$	1.95		$	4.11		$	3.40		$	1.75		$	1.83

Weighted-average shares used in computing earnings per share:
Basic		42,483			44,066			42,653			44,401			41,131			42,824
Diluted		42,619			44,207			42,780			44,529			41,239			42,942

Supplemental disclosures:
Total impairment losses	$	(161	)	$	(54	)	$	(161	)	$	(103	)	$	(3,701	)	$	-
Impairment losses recognized in other comprehensive income before income taxes		-			-			-			-			-			-
Net impairment losses recognized in earnings		(161	)		(54	)		(161	)		(103	)		(3,701	)		-
Other net realized investment gains (losses)		251			828			197			1,165			343			(54	)
Net gains (losses) recognized on equity securities		977			539			3,878			(1,406	)		(6,672	)		2,901
Net realized investment gains (losses), including other-than- temporary impairment losses	$	1,067		$	1,313		$	3,914		$	(344	)
Net realized investment gains (losses)													$	(10,030	)	$	2,847

	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
	(In thousands)												(In thousands)
Net income	$	97,446		$	86,700		$	176,611		$	152,414		$	72,469		$	79,165
Other comprehensive income (loss) before income taxes:
Unrealized investment gains (losses) on available-for-sale securities:
Change in unrealized holding gains (losses) on investment securities		34,826			(15,578	)		81,027			(47,920	)
Reclassification adjustment for realized investment (gains) losses included in net income		(90	)		(347	)		(25	)		(662	)
Change in unrealized holding gains (losses) on available-for-sale securities														(86,887	)		46,200
Reclassification adjustment for realized investment losses included in net income														3,410			65
Foreign currency translation adjustments:
Change in unrealized foreign currency translation gains (losses)		6,639			(5,902	)		12,806			(14,304	)		(29,011	)		6,167
Total other comprehensive income (loss) before income taxes		41,375			(21,827	)		93,808			(62,886	)		(112,488	)		52,432
Income tax expense (benefit) related to items of other comprehensive income (loss)		7,425			(3,379	)		17,404			(10,293	)		(17,596	)		9,979
Other comprehensive income (loss), net of income taxes		33,950			(18,448	)		76,404			(52,593	)		(94,892	)		42,453
Total comprehensive income	$	131,396		$	68,252		$	253,015		$	99,821
Total comprehensive income (loss)													$	(22,423	)	$	121,618

	Three months ended June 30,						Six months ended June 30,							Three months ended March 31,
	2019			2018			2019			2018				2020			2019
	(In thousands)												(In thousands)
Common stock:
Balance, beginning of period	$	424		$	440		$	427		$	443			$	412		$	427
Repurchases of common stock		(5	)		(9	)		(10	)		(14	)			(9	)		(5	)
Net issuance of common stock		1			1			3			3				2			2
Balance, end of period		420			432			420			432				405			424

Paid-in capital:
Balance, beginning of period		-			-			-			-				-			-
Share-based compensation		4,778			4,368			17,950			18,356				13,492			13,171
Net issuance of common stock		(1	)		(1	)		(3	)		(3	)			(2	)		(2	)
Repurchases of common stock		(4,777	)		(4,367	)		(17,947	)		(18,353	)			(13,490	)		(13,169	)
Balance, end of period		-			-			-			-				-			-

Retained earnings:
Balance, beginning of period		1,506,943			1,416,564			1,489,520			1,375,090				1,593,281			1,489,520
Cumulative effect from the adoption of new accounting standards, net		-			-			-			24,610				(1,240	)		-
Net income		97,446			86,700			176,611			152,414				72,469			79,165
Dividends		(14,517	)		(11,087	)		(29,145	)		(22,364	)			(16,530	)		(14,628	)
Repurchases of common stock		(52,337	)		(83,073	)		(99,451	)		(120,646	)			(82,177	)		(47,114	)
Balance, end of period		1,537,535			1,409,104			1,537,535			1,409,104				1,565,803			1,506,943

Accumulated other comprehensive income (loss):
Balance, beginning of period		14,020			9,496			(28,434	)		43,568				58,798			(28,434	)
Cumulative effect from the adoption of new accounting standards, net		-			-			-			73
Change in foreign currency translation adjustment, net of income taxes		6,639			(5,902	)		12,806			(14,304	)			(29,011	)		6,167
Change in net unrealized investment gains (losses) during the period, net of income taxes:
Change in net unrealized investment gains (losses) not-other- than temporarily impaired		27,265			(12,547	)		63,541			(38,266	)
Change in net unrealized investment gains (losses) other-than-temporarily impaired		46			1			57			(23	)
Change in net unrealized investment gains (losses) during the period, net of income taxes															(65,881	)		36,286
Balance, end of period		47,970			(8,952	)		47,970			(8,952	)			(36,094	)		14,019
Total stockholders’ equity	$	1,585,925		$	1,400,584		$	1,585,925		$	1,400,584			$	1,530,114		$	1,521,386

Dividends declared per share	$	0.34		$	0.25		$	0.68		$	0.50			$	0.40		$	0.34

	Six months ended June 30,						Three months ended March 31,
	2019			2018			2020			2019
	(In thousands)						(In thousands)
Cash flows from operating activities:
Net income	$	176,611		$	152,414		$	72,469		$	79,165
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Change in future policy benefits and other policy liabilities		142,843			111,917			63,975			65,733
Deferral of policy acquisition costs		(212,300	)		(221,934	)		(112,160	)		(105,080	)
Amortization of deferred policy acquisition costs		123,390			114,011			70,311			64,628
Change in income taxes		(4,649	)		6,023			15,481			6,180
Realized investment (gains) losses, including other-than-temporary impairments		(3,914	)		344
Realized investment (gains) losses								10,030			(2,847	)
Accretion and amortization of investments		(416	)		(675	)		489			(120	)
Depreciation and amortization		8,490			5,994			3,940			4,156
Change in reinsurance recoverables		(31,208	)		(9,280	)		8,306			(54,860	)
Change in agent balances, due premiums and other receivables		(23,151	)		(15,792	)		274			(7,910	)
Trading securities sold, matured, or called (acquired), net		(9,700	)		(18,309	)		(2,024	)		(12,918	)
Share-based compensation		13,000			13,392			11,161			10,896
Change in other operating assets and liabilities, net		6,089			22,144			(10,730	)		19,398
Net cash provided by (used in) operating activities		185,085			160,249			131,522			66,421

Cash flows from investing activities:
Available-for-sale investments sold, matured or called:
Fixed-maturity securities — sold		22,137			30,825			25,392			6,467
Fixed-maturity securities — matured or called		210,507			209,438			116,525			108,972
Short-term investments - matured or called		8,250			-
Equity securities — sold		3,136			1,819			-			3,109
Available-for-sale investments acquired:
Fixed-maturity securities		(284,423	)		(354,075	)		(132,681	)		(86,301	)
Equity securities — acquired		(466	)		(130	)		(59	)		(375	)
Purchases of property and equipment and other investing activities, net		(15,903	)		(6,154	)		(9,921	)		(6,594	)
Cash collateral received (returned) on loaned securities, net		(8,695	)		(7,690	)		173			12,352
Sales (purchases) of short-term investments using securities lending collateral, net		8,695			7,690			(173	)		(12,352	)
Net cash provided by (used in) investing activities		(56,762	)		(118,277	)		(744	)		25,278

Cash flows from financing activities:
Dividends paid		(29,145	)		(22,364	)		(16,530	)		(14,628	)
Common stock repurchased		(110,731	)		(133,776	)		(90,063	)		(53,625	)
Tax withholdings on share-based compensation		(6,677	)		(5,237	)		(5,614	)		(6,664	)
Finance leases		(140	)		-			(67	)		(70	)
Net cash provided by (used in) financing activities		(146,693	)		(161,377	)		(112,274	)		(74,987	)
Effect of foreign exchange rate changes on cash		1,207			(1,277	)		(2,295	)		776
Change in cash and cash equivalents		(17,163	)		(120,682	)		16,209			17,488
Cash and cash equivalents, beginning of period		262,138			279,962			256,876			262,138
Cash and cash equivalents, end of period		244,975			159,280			273,085			279,626

(1) Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies

Description of Business. Primerica, Inc. (the “Parent Company”), together with its subsidiaries (collectively, “we”, “us” or the “Company”), is a leading provider of financial products to middle-income households in the United States and Canada through a network of independent contractor sales representatives (“sales representatives” or “sales force”). We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities, managed investments and other financial products, which we distribute primarily on behalf of third parties. Our primary subsidiaries include the following entities: Primerica Financial Services, LLC (“PFS”), a general agency and marketing company; Primerica Life Insurance Company (“Primerica Life”), our principal life insurance company; ~~PFS Investments Inc. (“PFS Investments”), an investment products company and broker-dealer,~~ Primerica Financial Services (Canada) Ltd., a holding company for our Canadian operations, which includes Primerica Life Insurance Company of Canada (“Primerica Life Canada”) and PFSL Investments Canada Ltd. (“PFSL Investments Canada”).; and PFS Investments Inc. (“PFS Investments”), an investment products company and broker-dealer. Primerica Life, domiciled in Tennessee, owns National Benefit Life Insurance Company (“NBLIC”), a New York ~~life~~ insurance company. Peach Re, Inc. (“Peach Re”) and Vidalia Re, Inc. (“Vidalia Re”) are special purpose financial captive insurance companies and wholly owned subsidiaries of Primerica Life. Peach Re and Vidalia Re have each entered into separate coinsurance agreements with Primerica Life whereby Primerica Life has ceded certain level-premium term life insurance policies to Peach Re and Vidalia Re (respectively, the “Peach Re Coinsurance Agreement” and the “Vidalia Re Coinsurance Agreement”).

Basis of Presentation. We prepare our financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). These principles are established primarily by the Financial Accounting Standards Board (“FASB”).

The accompanying unaudited condensed consolidated financial statements contain all adjustments, generally consisting of normal recurring accruals, which are necessary to fairly present the balance sheets as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the statements of income, comprehensive income, ~~and stockholders'~~stockholders’ equity, ~~for the three~~ and ~~six months ended June 30, 2019 and 2018, and statement of~~ cash flows for the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 and ~~2018.~~2019. Results of operations for interim periods are not necessarily indicative of results for the entire year or of the results to be expected in future periods.

These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are sufficient to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (“~~2018~~2019 Annual Report”).

Use of Estimates. The preparation of financial statements in ~~accordance~~conformity with U.S. GAAP requires us to make estimates and assumptions that affect financial statement balances, revenues and expenses and cash flows, as well as the disclosure of contingent assets and liabilities. Management considers available facts and knowledge of existing circumstances when establishing the estimates included in our financial statements. The most significant items that involve a greater degree of accounting estimates and actuarial determinations subject to change in the future are the valuation of investments, deferred policy acquisition costs (“DAC”), future policy benefit reserves and corresponding amounts recoverable from reinsurers, and income taxes. Estimates for these and other items are subject to change and are reassessed by management in accordance with U.S. GAAP. Actual results could differ from those estimates.

Consolidation. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and those entities required to be consolidated under U.S. GAAP. All material intercompany profits, transactions, and balances among the consolidated entities have been eliminated.

Reclassifications. Certain reclassifications have been made to prior-period amounts to conform to current-period reporting classifications. These reclassifications had no impact on net income or total stockholders’ equity.

Significant Accounting Policies. All significant accounting policies remain unchanged from the ~~2018~~2019 Annual Report unless otherwise described.

New Accounting Principles. In ~~February 2016, the FASB issued Accounting Standards Update No. 2016-02,~~ ~~Leases (ASC 842)~~ (“ASC 842”), which requires lessees to recognize right-of-use operating lease assets and operating lease liabilities on the balance sheet. The Company adopted the amendments in ASC 842 on January 1, 2019 using the modified retrospective approach through a cumulative-effect adjustment to beginning retained earnings. The cumulative-effect adjustment to beginning retained earnings was zero. In addition, we elected the package of practical expedients permitted under ASC 842, which included not reassessing whether existing contracts contained leases and not reassessing the lease classification for existing leases. The effect of adopting ASC 842 resulted in an increase to both total assets and total liabilities of $52.7 million on January 1, 2019. The increase to both assets and liabilities is less than 1% of our total assets and total liabilities. The adjustment recognized upon the adoption of ASC 842 included the recognition of our operating lease obligations and corresponding right-of-use assets on our condensed consolidated balance sheet,

~~which mainly consist of our executive office operations and other real estate leases of office space.~~ The adoption of ASC 842 did not affect the Company’s results of operations or liquidity. The Company’s reporting for the comparative periods prior to adoption continues to be presented in the condensed consolidated financial statements in accordance with previous lease accounting guidance, Accounting Standards Codification Topic 840 – ~~Leases~~ ~~(“ASC 840”).~~ ~~Refer to Note 14 (Leases) for more information on leases.~~

~~Future Application of Accounting Standards.~~ ~~In August 2018, the FASB issued Accounting Standards Update No. 2018-12,~~ ~~Financial Services—Insurance (Topic 944) — Targeted Improvements to the Accounting for Long-Duration Contracts~~ (“ASU 2018-12”). The amendments in this update change accounting guidance for insurance companies that issue long-duration contracts, including term life insurance. ASU 2018-12 requires companies that issue long-duration insurance contracts to update assumptions used in measuring future policy benefits, including mortality, persistency, and disability rates, at least annually instead of locking those assumptions at contract inception and reflecting differences in assumptions and actual performance as the experience occurs. ASU 2018-12 also includes changes to how insurance companies that issue long-duration contracts amortize DAC and determine and update the discount rate assumptions used in measuring future policy benefits reserves while increasing the level of financial statement disclosures required. The guidance in ASU 2018-12 will be applied to the earliest period presented in the condensed consolidated financial statements beginning on the effective date. On July 17, 2019, the FASB tentatively decided to defer the effective date of ASU 2018-12 by one year, which would push the effective date from January 1, 2021 to January 1, 2022. We anticipate that the adoption of ASU 2018-12 will have a pervasive impact on our consolidated financial statements and related disclosures and will require changes to certain of our processes, systems and controls. We are unable to determine the magnitude of its impact at this time as we are still evaluating and implementing this standard.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (“ASU 2016-13”), Financial Instruments—Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASC 326”). ASC 326 introduces new guidance for accounting for credit losses on financial instruments within its scope, including reinsurance recoverables, by replacing the current approach that delays recognition until it is probable a loss has been incurred with a new approach that estimates an allowance for anticipated credit losses on the basis of an entity’s own expectations. The objective of the new approach for estimating credit losses is to require consideration of a broader range of forward-looking information, which is expected to result in earlier recognition of credit losses on financial instruments. Available-for-sale ~~debt~~(“AFS”) securities are excluded from the scope of financial instruments that require measurement of credit losses on the basis of a forward-looking expected loss estimate under ASC 326. The incurred probable loss approach for measuring ~~credit~~ losses on ~~available-for-sale debt~~AFS securities in the condensed consolidated statement of income

will remain under ASC 326, however, an entity will be allowed to reverse credit losses previously recognized in an allowance for ~~available-for-sale debt~~AFS securities ~~(other than credit losses for securities an entity intends to sell or will more-likely-than-not be required to sell before recovery of amortized cost)~~ in situations where the estimate of credit losses on those securities has declined. The amendments in ASC 326 also preclude an entity from considering the length of time an ~~available-for-sale debt~~AFS security has been in an unrealized loss position to avoid recording a credit loss and ~~removes~~remove the requirement to consider recoveries or declines in fair value after the balance sheet date. ~~The~~We adopted the amendments in ASC 326 as of the January 1, 2020 application date through a cumulative-effect adjustment to beginning retained earnings of $1.2 million, net of taxes. Furthermore, the adoption of ASC 326 did not result in any material changes to impairment losses recognized in our condensed consolidated statement of income for AFS securities. Refer to Note 3 (Investments) and Note 5 (Reinsurance) for more information on credit losses.

Future Application of Accounting Standards. In August 2018, the FASB issued Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944) — Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”). The amendments in this update change accounting guidance for insurance companies that issue long-duration contracts, including term life insurance. ASU 2018-12 requires companies that issue long-duration insurance contracts to update assumptions used in measuring future policy benefits, including mortality, disability, and persistency, at least annually instead of locking those assumptions at contract inception and reflecting differences in assumptions and actual performance as the experience occurs. ASU 2018-12 also includes changes to how insurance companies that issue long-duration contracts amortize DAC and determine and update the discount rate assumptions used in measuring future policy benefits reserves while increasing the level of financial statement disclosures required. The guidance in ASU 2018-12 will be applied to the earliest period presented in the condensed consolidated financial statements beginning on the effective date. In November 2019, the FASB issued Accounting Standards Update No. 2019-09, Financial Services-Insurance (Topic 944) – Effective Date, which defers the effective date of ASU 2018-12 for the Company by one year, from January 1, 2021 to January 1, 2022. The adoption of ASU 2018-12 will have an impact on our consolidated financial statements and related disclosures and will require changes to certain of our processes, systems, and controls. We are currently working on processes that will allow us to obtain the requisite data, modify our valuation system, and develop key assumptions that will be necessary to evaluate and implement this standard. As such, we are unable to determine the magnitude of the impact ASU 2018-12 will have on our condensed consolidated financial statements at this time.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The guidance in ASU 2019-12 is effective for the Company beginning January 1, ~~2020. The Company is currently in the process of evaluating how~~2021. We do not expect the implementation of ~~this standard will affect the valuation of its assets measured at amortized cost, most notably reinsurance recoverables, and has not yet determined the impact that the adoption of ASC 326 will~~ASU 2019-12 to have a material effect on ~~the Company’s~~our condensed consolidated financial statements.

Recently-issued accounting guidance not discussed above is not applicable, is immaterial to our condensed consolidated financial statements, or did not or is not expected to have a material impact on our business.

Segments. We have ~~two~~2 primary operating segments — Term Life Insurance and Investment and Savings Products. We also have a Corporate and Other Distributed Products segment.

	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
	(In thousands)												(In thousands)
Revenues:
Term life insurance segment	$	296,868		$	272,978		$	593,712		$	543,286		$	327,746		$	296,843
Investment and savings products segment		173,086			162,841			335,756			324,883			185,032			162,672
Corporate and other distributed products segment		34,948			31,996			70,422			59,568			12,158			35,472
Total revenues	$	504,902		$	467,815		$	999,890		$	927,737		$	524,936		$	494,987

Net investment income:
Term life insurance segment	$	4,736		$	3,246		$	9,180		$	6,334		$	6,246		$	4,444
Investment and savings products segment		-			-			-			-			-			-
Corporate and other distributed products segment		20,132			16,784			39,800			32,713			9,174			19,667
Total net investment income	$	24,868		$	20,030		$	48,980		$	39,047		$	15,420		$	24,111

Amortization of DAC:
Term life insurance segment	$	56,179		$	51,257		$	120,245		$	107,930		$	65,840		$	64,066
Investment and savings products segment		2,101			2,080			2,578			5,521			4,305			477
Corporate and other distributed products segment		482			510			567			560			166			85
Total amortization of DAC	$	58,762		$	53,847		$	123,390		$	114,011		$	70,311		$	64,628

Non-cash share-based compensation expense:
Term life insurance segment	$	617		$	793		$	2,489		$	2,966		$	1,786		$	1,872
Investment and savings products segment		666			325			2,121			1,518			1,105			1,454
Corporate and other distributed products segment		820			773			8,377			8,908			8,270			7,557
Total non-cash share-based compensation expense	$	2,103		$	1,891		$	12,986		$	13,392		$	11,161		$	10,883

Income (loss) before income taxes:
Term life insurance segment	$	83,997		$	75,828		$	154,337		$	135,448		$	82,892		$	70,339
Investment and savings products segment		47,343			43,227			90,026			83,214			47,700			42,684
Corporate and other distributed products segment		(3,880	)		(5,290	)		(14,535	)		(21,935	)		(36,046	)		(10,655	)
Total income before income taxes	$	127,460		$	113,765		$	229,828		$	196,727		$	94,546		$	102,368

	June 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
	(In thousands)				(In thousands)
Assets:
Term life insurance segment	$	6,478,885	$	6,322,555	$	6,535,597	$	6,546,129
Investment and savings products segment ⁽¹⁾		2,560,420		2,298,238		2,233,435		2,598,493
Corporate and other distributed products segment		4,278,401		3,974,255		4,501,879		4,543,909
Total assets	$	13,317,706	$	12,595,048	$	13,270,911	$	13,688,531

⁽¹⁾ The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, the Investment and Savings Products segment assets were ~~$123.2~~$104.6 million and ~~$102.8~~$112.8 million as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively.

Geographical Information. Results of operations by country and long-lived assets, primarily tangible assets reported in other assets in our unaudited condensed consolidated balance sheets and condensed consolidated statements of income, were as follows:

	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
	2019		2018		2019		2018		2020		2019
	(In thousands)								(In thousands)
Revenues by country:
United States	$	430,093	$	395,710	$	850,086	$	779,504	$	443,135	$	419,992
Canada		74,809		72,105		149,804		148,233		81,801		74,995
Total revenues	$	504,902	$	467,815	$	999,890	$	927,737	$	524,936	$	494,987
Income before income taxes by country:
United States	$	106,723	$	94,100	$	187,457	$	157,314	$	72,947	$	80,735
Canada		20,737		19,665		42,371		39,413		21,599		21,633
Total income before income taxes	$	127,460	$	113,765	$	229,828	$	196,727	$	94,546	$	102,368

	June 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
	(In thousands)				(In thousands)
Long-lived assets by country:
United States	$	30,715	$	30,999	$	42,829	$	41,200
Canada		5,218		4,997		4,611		4,916
Total long-lived assets	$	35,933	$	35,996	$	47,440	$	46,116

Available-for-sale Securities. The period-end amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities were as follows:

	June 30, 2019									March 31, 2020
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)									(In thousands)
Securities available-for-sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	11,377	$	307	$	(6	)	$	11,678	$	10,040	$	548	$	-		$	10,588
Foreign government		158,160		7,799		(76	)		165,883		145,858		7,225		(297	)		152,786
States and political subdivisions		83,534		3,159		(28	)		86,665		122,242		3,779		(702	)		125,319
Corporates		1,465,008		52,947		(2,140	)		1,515,815		1,416,090		32,614		(45,737	)		1,402,967
Residential mortgage-backed securities		197,137		5,416		(53	)		202,500		314,157		12,058		(5,531	)		320,684
Commercial mortgage-backed securities		138,143		3,712		(198	)		141,657		121,365		2,599		(3,017	)		120,947
Other asset-backed securities		91,086		1,037		(61	)		92,062		113,536		440		(5,230	)		108,746
Total fixed-maturity securities⁽¹⁾		2,144,445		74,377		(2,562	)		2,216,260		2,243,288		59,263		(60,514	)		2,242,037
Short-term investments		-		-		-			-
Total fixed-maturity and short-term investments	$	2,144,445	$	74,377	$	(2,562	)	$	2,216,260

	December 31, 2018									December 31, 2019
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)									(In thousands)
Securities available-for-sale, carried at fair value:
Fixed-maturity securities:
U.S. government and agencies	$	12,115	$	176	$	(58	)	$	12,233	$	10,197	$	287	$	-		$	10,484
Foreign government		155,723		3,347		(958	)		158,112		154,945		6,362		(235	)		161,072
States and political subdivisions		59,075		1,202		(271	)		60,006		120,000		3,288		(695	)		122,593
Corporates		1,447,075		11,916		(24,773	)		1,434,218		1,436,877		63,892		(1,118	)		1,499,651
Residential mortgage-backed securities		191,245		2,439		(1,733	)		191,951		305,897		6,848		(222	)		312,523
Commercial mortgage-backed securities		131,279		1,712		(1,636	)		131,355		128,913		3,191		(99	)		132,005
Other asset-backed securities		82,310		205		(755	)		81,760		117,941		970		(243	)		118,668
Total fixed-maturity securities⁽¹⁾		2,078,822		20,997		(30,184	)		2,069,635		2,274,770		84,838		(2,612	)		2,356,996
Short-term investments		8,171		-		-			8,171
Total fixed-maturity and short-term investments	$	2,086,993	$	20,997	$	(30,184	)	$	2,077,806

All of our available-for-sale mortgage- and asset-backed securities represent variable interests in variable interest entities (“VIEs”). We are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the entities’ economic performance. The maximum exposure to loss as a result of our involvement in these VIEs equals the carrying value of the securities.

The scheduled maturity distribution of the available-for-sale fixed-maturity portfolio as of ~~June 30, 2019~~March 31, 2020 was as follows:

	Amortized cost		Fair value		Amortized cost		Fair value
	(In thousands)				(In thousands)
Due in one year or less	$	252,453	$	253,665	$	186,625	$	185,059
Due after one year through five years		892,504		920,492		875,325		874,333
Due after five years through 10 years		491,769		516,329		489,101		485,780
Due after 10 years		81,353		89,555		143,179		146,488
		1,718,079		1,780,041		1,694,230		1,691,660
Mortgage- and asset-backed securities		426,366		436,219		549,058		550,377
Total AFS fixed-maturity securities	$	2,144,445	$	2,216,260	$	2,243,288	$	2,242,037

Expected maturities may differ from scheduled contractual maturities because issuers of securities may have the right to call or prepay obligations with or without call or prepayment penalties.

~~Unrealized Gains and Losses on Investments.~~ ~~The net effect on stockholders’ equity of unrealized gains and losses on available-for-sale investments was as follows:~~

Trading Securities. The cost and fair value of the securities classified as trading securities were as follows:

Held-to-maturity Security. Concurrent with the execution of the Vidalia Re Coinsurance Agreement, Vidalia Re entered into a Surplus Note Purchase Agreement (the “Surplus Note Purchase Agreement”) with Hannover Life Reassurance Company of America and certain of its affiliates (collectively, “Hannover Re”) and a newly formed limited liability company (the “LLC”) owned by a third- party service provider. Under the Surplus Note Purchase Agreement, Vidalia Re issued a surplus note (the “Surplus Note”) to the LLC in exchange for a credit enhanced note from the LLC with an equal principal amount (the “LLC Note”). The principal amount of both the LLC Note and the Surplus Note will fluctuate over time to coincide with the amount of reserves contractually supported under the Vidalia Re Coinsurance Agreement. Both the LLC Note and the Surplus Note mature on December 31, 2030 and bear interest at an annual interest rate of 4.50%. The LLC Note is guaranteed by Hannover Re through a credit enhancement feature in exchange for a fee, which is reflected in interest expense on our unaudited condensed consolidated statements of income.

The LLC is a VIE as its owner does not have an equity investment at risk that is sufficient to permit the LLC to finance its activities without Vidalia Re or Hannover Re. The Parent Company, Primerica Life, and Vidalia Re share the power to direct the activities of the LLC with Hannover Re, but do not have the obligation to absorb losses or the right to receive any residual returns related to the LLC’s primary risks or sources of variability. Through the credit enhancement feature, Hannover Re is the ultimate risk taker in this transaction and bears the obligation to absorb the LLC’s losses in the event of a Surplus Note default in exchange for the fee. Accordingly, the Company is not the primary beneficiary of the LLC and does not consolidate the LLC within its condensed consolidated financial statements.

The LLC Note is classified as a fixed-maturity held-to-maturity security in the Company’s invested asset portfolio as we have the positive intent and ability to hold the security until maturity. As of ~~June 30, 2019,~~March 31, 2020, the LLC Note, which was rated A+ by Fitch Ratings, had an estimated unrealized holding gain of ~~$69.8~~$73.6 million based on its amortized cost and estimated fair value. The estimated fair value of the LLC Note is expected to be at least equal to the estimated fair value of the offsetting Surplus Note. See Note 4 (Fair Value of Financial Instruments) for information on the fair value of our financial instruments and see Note 12 (Debt) for more information on the Surplus Note.

As of March 31, 2020, 0 credit losses have been recognized on the LLC Note held-to-maturity security.

Investments on Deposit with Governmental Authorities. As required by law, we have investments on deposit with governmental authorities and banks for the protection of policyholders. The fair values of investments on deposit were ~~$7.5~~$7.7 million and ~~$10.1~~$7.5 million as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively.

Securities Lending Transactions. We participate in securities lending transactions with broker-dealers and other financial institutions to increase investment income with minimal risk. We require minimum collateral on securities loaned equal to 102% of the fair value of the loaned securities. We accept collateral in the form of securities, which we are not able to sell or encumber, and to the extent the collateral declines in value below 100%, we require additional collateral from the borrower. Any securities collateral received is not reflected on our unaudited condensed consolidated balance sheets. We also accept collateral in the form of cash, all of which we reinvest. For loans involving unrestricted cash collateral, the collateral is reported as an asset with a corresponding liability representing our obligation to return the collateral. We continue to carry the loaned securities as invested assets on our unaudited condensed consolidated balance sheets during the terms of the loans, and we do not report them as sales. Cash collateral received and reinvested was ~~$43.9~~$28.9 million and ~~$52.6~~$28.7 million as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively.

	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
	(In thousands)												(In thousands)
Fixed-maturity securities (available-for-sale)	$	20,345		$	19,743		$	40,679		$	39,031		$	20,784		$	20,333
Fixed-maturity security (held-to-maturity)		11,769			9,052			22,444			17,425			13,472			10,674
Equity securities		446			466			933			979			451			487
Policy loans and other invested assets		300			284			618			563			189			320
Cash and cash equivalents		1,414			747			2,617			1,465			843			1,203
Total return on deposit asset underlying 10% coinsurance agreement⁽¹⁾		4,588			895			8,491			788			(4,549	)		3,902
Gross investment income		38,862			31,187			75,782			60,251			31,190			36,919
Investment expenses		(2,225	)		(2,105	)		(4,358	)		(3,779	)		(2,298	)		(2,134	)
Investment income net of investment expenses		36,637			29,082			71,424			56,472			28,892			34,785
Interest expense on surplus note		(11,769	)		(9,052	)		(22,444	)		(17,425	)		(13,472	)		(10,674	)
Net investment income	$	24,868		$	20,030		$	48,980		$	39,047		$	15,420		$	24,111

The components of net realized investment gains (losses) recognized in net income as well as details on gross realized investment gains and losses were as follows:

	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
	(In thousands)												(In thousands)
Net realized investment gains (losses):
Gross gains from sales of available-for-sale securities	$	293		$	404		$	471		$	786		$	357		$	178
Gross losses from sales of available-for-sale securities		(42	)		(3	)		(285	)		(21	)		(66	)		(243	)
OTTI losses of available-for-sale securities		(161	)		(54	)		(161	)		(103	)
Credit losses on available-for-sale securities														(3,701	)		-
Net gains (losses) recognized in net income during the period on equity securities		977			539			3,878			(1,406	)		(6,672	)		2,901
Gains (losses) from bifurcated options		-			427			-			400			52			-
Gains (losses) on trading securities		-			-			11			-			-			11
Net realized investment gains (losses)	$	1,067		$	1,313		$	3,914		$	(344	)	$	(10,030	)	$	2,847

The proceeds from sales or other redemptions of available-for-sale securities were as follows:

The components of net gains (losses) recognized in net income on equity securities still held as of period-end were as follows:

	Three months ended June 30,					Six months ended June 30,						Three months ended March 31,
	2019		2018			2019			2018			2020			2019
	(In thousands)											(In thousands)
Net gains (losses) recognized on equity securities	$	977	$	539		$	3,878		$	(1,406	)
Net gains (losses) recognized in net income during the period on equity securities												$	(6,672	)	$	2,901
Less: Net gains (losses) recognized on equity securities sold		-		(49	)		(254	)		(49	)		-			(254	)
Net gains (losses) recognized in net income on equity securities still held as of period-end	$	977	$	588		$	4,132		$	(1,357	)	$	(6,672	)	$	3,155

Accrued Interest. Accrued interest is recorded in accordance with the original interest schedule of the underlying security. In the event of default, the Company’s policy is to no longer accrue interest on these securities and any remaining accrued interest will be written off. As a result, the Company has made the policy election to not record an allowance for credit losses on accrued interest.

Credit Losses for Available-for-sale Fixed-maturity Securities. The Company adopted ASC 326 as of January 1, 2020, which maintains the fundamental incurred probable loss approach for measuring losses in the condensed consolidated statement of income. For an available-for-sale security with an amortized cost that exceeds its fair value, we first determine if we intend to sell or will more-likely-than-not be required to sell the security before the expected recovery of its amortized cost. If we intend to sell or will more-likely-than-not be required to sell the security, then we recognize the impairment as a credit loss in our condensed consolidated statements of income by writing down the security’s amortized cost to its fair value. If we do not intend to sell or it is not more-likely-than-not that we will be required to sell the security before the expected recovery of its amortized cost, we recognize the portion of the impairment that is due to a credit loss, if any, in our condensed consolidated statement of income through an allowance. The portion of the impairment that is due to factors other than a credit loss is recognized in other comprehensive income (loss) in the condensed consolidated statement of comprehensive income (loss) as an unrealized loss. Credit losses recognized in the allowance for credit losses are reversed in situations where the estimate of credit losses on those securities has declined. When determining whether an impairment is due to a credit loss or other factors, we determine the extent to which we do not expect to recover the security’s amortized cost and record such amount, if any, as a credit loss. Factors we consider in determining whether the security’s decline in fair value is below amortized cost due to a credit loss include the magnitude of the security’s decline in fair value below its amortized cost, the financial condition, long and near-term prospects for the issuer, industry conditions and trends, rating agency actions, the payment structure of the security, likelihood of the recoverability of principal and interest, and our ability and intent to hold the security for a period of time sufficient to allow for the anticipated recovery of its amortized cost. In assessing our ability and intent to hold the security for a period of time to allow for the anticipated recovery of its amortized cost, we also consider our anticipated sources of cash to fund operating activities and share repurchases. If we do not anticipate recovering a security’s amortized cost basis, we estimate the present value of the security’s expected cash flows and recognize the difference from amortized cost (using fair value as a floor) as a credit loss.

The following table summarize all AFS securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of March 31, 2020, aggregated by major security type and length of time such securities have continuously been in an unrealized loss position:

The amortized cost of available-for-sale fixed-maturity securities with a cost basis in excess of their fair values were $880.8 million as of March 31, 2020.

As of March 31, 2020, we did not recognize credit losses in the condensed consolidated statement of incomeon available-for-sale securities with unrealized losses that were due to interest rate sensitivity and changes in credit spreads. We believe that fluctuations caused by movement in interest rates and credit spreads have little bearing on the recoverability of our investments. In addition, we believe that unrealized losses as of March 31, 2020 were largely driven by volatility and illiquidity experienced in bond markets as a result of the COVID-19 pandemic during the three months ended March 31, 2020 and were not due to significant deteriorations in the underlying credit fundamentals of the issuers. We also have the ability to hold these investments until maturity or a market price recovery, and we have no present intention to dispose them.

For the three months ended March 31, 2020, we recorded a total of $3.7 million for credit losses in the condensed consolidated statement of income on available-for-sale securities. Approximately $3.7 million of credit losses were recorded as an adjustment to amortized cost due to our intent to sell securities of specific issuers that operate in distressed industry sectors that were particularly affected by deteriorating credit conditions in the oil markets and as a result of the COVID-19 pandemic. We recognize credit losses on securities due to: our intent to sell them; adverse credit events, such as news of an impending filing for bankruptcy; analyses of the issuer’s most recent financial statements or other information in which liquidity deficiencies, significant losses and large declines in capitalization were evident; and analyses of rating agency information for issuances with severe ratings downgrades that indicated a significant increase in the possibility of default. The remaining portion of credit losses was recognized in the allowance for credit losses.

The rollforward of the allowance for credit losses on available-for-sale securities for the three months ended March 31, 2020 was as follows:

~~Other-Than-Temporary Impairment.~~ Other-than-temporary Impairments (“OTTI”). For the three months ended March 31, 2019, which preceded the adoption of ASC 326, we reviewed available-for-sale securities in an unrealized loss position for OTTI. Credit risk, interest rate risk, the amount of time the security has been in an unrealized loss position, actions taken by ratings agencies, and other factors were considered in determining whether an unrealized loss is other-than-temporary. We ~~conduct a review each quarter~~recognized OTTI in the condensed consolidated statement of income for the impairment on available-for-sale securities that we intended to ~~identify~~sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale securities that we had no intent to sell and ~~evaluate impaired investments~~believed that ~~have indications~~it was not more-likely-than-not we would be required to sell prior to recovery, only the credit loss component of ~~possible OTTI. An investment~~OTTI was recognized in ~~a debt security is impaired if its~~our condensed consolidated statement of income, while the remainder was recognized in other comprehensive income (loss) in the condensed consolidated statement of comprehensive income (loss) as an unrealized loss. The credit loss component of OTTI recognized in net income was identified as the amount of principal cash flows not expected to be received over the remaining term of the security. Any subsequent changes (if not an other-than-temporary impairment) in the fair value ~~falls below its cost.~~ of available-for-sale securities were recognized in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income. Factors considered in determining whether an impairment iswas temporary ~~include~~include: the length of time and extent to which fair value ~~has~~had been below ~~cost,~~cost; the financial condition and near-term prospects for the ~~issuer,~~issuer; the payment structure of the security, and our ability and intent to hold the ~~investment~~security for a period of time sufficient to allow for any anticipated recovery ~~which may be maturity for fixed-maturity securities.~~of its amortized cost. We also ~~consider~~considered our anticipated sources of cash to fund operating activities and share repurchases when assessing our ability and intent to hold ~~invested~~a security assets to allow for the recovery of amortized cost basis in determining whether to recognize ~~OTTI related to such invested assets.~~OTTI.

The amortized cost of available-for-sale fixed-maturity securities with a cost basis in excess of their fair values were $212.0 million and $1,239.6 million as of June 30, 2019 and December 31, 2018, respectively.

The following ~~tables summarize, for~~table summarizes all available-for-sale securities as of December 31, 2019 (prior to adoption of ASC 326), in an unrealized loss position, the aggregate fair value and the gross unrealized loss by length of time such securities have continuously been in an unrealized loss position:

June 30, 2019

Less than 12 months

12 months or longer

Fair value

Unrealized losses

Number of securities

Fair value

Unrealized losses

Number of securities

(Dollars in thousands)

Fixed-maturity securities:

U.S. government and agencies

$
1,247

$
(3
)

3

$
3,201

$
(3
)

3

Foreign government

2,091

(3
)

1

11,180

(73
)

13

States and political subdivisions

2,262

(3
)

2

6,516

(25
)

7

Corporates

24,439

(171
)

23

79,667

(1,969
)

80

Residential mortgage-backed securities

1,304

(15
)

3

16,970

(38
)

8

Commercial mortgage-backed securities

4,805

(7
)

4

30,012

(191
)

40

Other asset-backed securities

12,765

(34
)

23

12,933

(27
)

23

Total fixed-maturity securities

$
48,913

$
(236
)

$
160,479

$
(2,326
)

	December 31, 2018														December 31, 2019
	Less than 12 months							12 months or longer							Less than 12 months							12 months or longer
	Fair value		Unrealized losses			Number of securities		Fair value		Unrealized losses			Number of securities		Fair value		Unrealized losses			Number of securities		Fair value		Unrealized losses			Number of securities
	(Dollars in thousands)														(Dollars in thousands)
Fixed-maturity securities:
U.S. government and agencies	$	1,668	$	(10	)		1	$	4,541	$	(48	)		6	$	-	$	-			-	$	-	$	-			-
Foreign government		7,326		(170	)		7		52,086		(788	)		54		11,824		(144	)		14		8,578		(91	)		7
States and political subdivisions		2,644		(9	)		3		23,324		(262	)		20		39,379		(690	)		21		4,000		(5	)		4
Corporates		489,880		(10,649	)		396		360,516		(14,124	)		321		52,474		(453	)		40		21,739		(665	)		19
Residential mortgage-backed securities		32,725		(86	)		14		71,308		(1,647	)		41		40,690		(207	)		20		2,071		(15	)		3
Commercial mortgage-backed securities		31,129		(173	)		20		78,911		(1,463	)		77		11,526		(28	)		13		12,835		(71	)		16
Other asset-backed securities		19,363		(184	)		35		33,989		(571	)		41		22,501		(190	)		17		4,613		(53	)		20
Total fixed-maturity securities		584,735		(11,281	)				624,675		(18,903	)			$	178,394	$	(1,712	)			$	53,836	$	(900	)

The amortized cost of available-for-sale fixed-maturity securities with a cost basis in excess of their fair values was $234.8 million as of December 31, 2019.

As of ~~June 30,~~December 31, 2019, the unrealized losses on our available-for-sale security portfolio were largely caused by interest rate sensitivity and, to a lesser extent, changes in credit spreads. We believe that fluctuations caused by movement in interest rates and credit spreads have little bearing on the recoverability of our investments. We do not consider these investments to be other-than-temporarily impaired because we have the ability to hold these investments until maturity or a market price recovery, and we have no present intention to dispose of them.

~~The amortized cost and fair value of~~OTTI recognized in earnings for available-for-sale ~~fixed-maturity~~ securities ~~in default~~for the three months ended March 31, 2019 were as follows:

~~OTTI recognized in earnings on available-for-sale securities were as follows:~~

The securities noted above were considered to be other-than-temporarily impaired due to: our intent to sell them; adverse credit events, such as news of an impending filing for bankruptcy; analyses of the issuer’s most recent financial statements or other information in which liquidity deficiencies, significant losses and large declines in capitalization were evident; and analyses of rating agency information for issuances with severe ratings downgrades that indicated a significant increase in the possibility of default.

OTTI recognized in earnings for available-for-sale securities for the three months ended March 31, 2019 were as follows:

The rollforward of the OTTI recognized in net income for all fixed-maturity securities still held for the three months ended March 31, 2019 was as follows:

As of ~~June 30,~~December 31, 2019, no0 cumulative impairment losses have been recognized on the LLC Note held-to-maturity security.

Derivatives. We have a deferred loss related to closed forward contracts, which were settled several years ago, that were used to mitigate our exposure to foreign currency exchange rates that resulted from the net investment in our Canadian operations. The amount of deferred loss included in accumulated other comprehensive income (loss) was $26.4 million as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019. These deferred losses will not be recognized until such time as we sell or substantially liquidate our Canadian operations; although we have no such intention.

Fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Invested assets recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information. We classify and disclose all invested assets carried at fair value in one of the following three levels:

As of each reporting period, all assets and liabilities recorded at fair value are classified in their entirety based on the lowest level of input (Level 3 being the lowest in the hierarchy) that is significant to the fair value measurement. Significant levels of estimation and

judgment are required to determine the fair value of certain of our investments. The factors influencing these estimations and judgments are subject to change in subsequent reporting periods.

The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows:

	June 30, 2019								March 31, 2020
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(In thousands)								(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	11,678	$	-	$	11,678	$	-	$	10,588	$	-	$	10,588
Foreign government		-		165,883		-		165,883		-		152,786		-		152,786
States and political subdivisions		-		86,665		-		86,665		-		125,319		-		125,319
Corporates		3,148		1,512,667		-		1,515,815		4,877		1,398,090		-		1,402,967
Residential mortgage-backed securities		-		202,473		27		202,500		-		320,658		26		320,684
Commercial mortgage-backed securities		-		141,657		-		141,657		-		120,947		-		120,947
Other asset-backed securities		-		91,226		836		92,062		-		108,496		250		108,746
Short-term investments		-		-		-		-
Total available-for-sale securities		3,148		2,212,249		863		2,216,260		4,877		2,236,884		276		2,242,037
Equity securities		37,704		1,030		163		38,897		33,015		1,000		110		34,125
Trading securities		-		23,375		-		23,375		-		44,997		-		44,997
Separate accounts		-		2,437,291		-		2,437,291		-		2,128,924		-		2,128,924
Total fair value assets	$	40,852	$	4,673,945	$	1,026	$	4,715,823	$	37,892	$	4,411,805	$	386	$	4,450,083
Fair value liabilities:
Separate accounts	$	-	$	2,437,291	$	-	$	2,437,291	$	-	$	2,128,924	$	-	$	2,128,924
Total fair value liabilities	$	-	$	2,437,291	$	-	$	2,437,291	$	-	$	2,128,924	$	-	$	2,128,924

	December 31, 2018								December 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(In thousands)								(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	12,233	$	-	$	12,233	$	-	$	10,484	$	-	$	10,484
Foreign government		-		158,112		-		158,112		-		161,072		-		161,072
States and political subdivisions		-		60,006		-		60,006		-		122,593		-		122,593
Corporates		2,869		1,431,346		3		1,434,218		5,865		1,493,786		-		1,499,651
Residential mortgage-backed securities		-		191,720		231		191,951		-		312,497		26		312,523
Commercial mortgage-backed securities		-		131,355		-		131,355		-		132,005		-		132,005
Other asset-backed securities		-		81,259		501		81,760		-		118,244		424		118,668
Short-term investments		-		8,171		-		8,171
Total available-for-sale securities		2,869		2,074,202		735		2,077,806		5,865		2,350,681		450		2,356,996
Equity securities		36,473		1,020		186		37,679		39,499		1,050		135		40,684
Trading securities		-		13,610		-		13,610		-		43,233		-		43,233
Separate accounts		-		2,195,501		-		2,195,501		-		2,485,745		-		2,485,745
Total fair value assets	$	39,342	$	4,284,333	$	921	$	4,324,596	$	45,364	$	4,880,709	$	585	$	4,926,658
Fair value liabilities:
Separate accounts	$	-	$	2,195,501	$	-	$	2,195,501	$	-	$	2,485,745	$	-	$	2,485,745
Total fair value liabilities	$	-	$	2,195,501	$	-	$	2,195,501	$	-	$	2,485,745	$	-	$	2,485,745

In estimating fair value of our investments, we use a third-party pricing ~~service~~services for 95% of our securities that are measured at fair value on a recurring basis. The remaining securities are primarily thinly-traded securities, such as private placements, and are valued using models based on observable inputs on public corporate spreads having similar characteristics (e.g., sector, average life and quality rating), liquidity and yield based on quality rating, average life and U.S. Treasury yields. All observable data inputs are corroborated by independent third-party data. We also corroborate pricing information provided by our third-party pricing service by performing a review of selected securities. Our review activities include obtaining detailed information about the assumptions, inputs and methodologies used in pricing the security; documenting this information; and corroborating it by comparison to independently obtained prices and/or independently developed pricing methodologies.

Furthermore, we perform internal reasonableness assessments on fair value determinations within our portfolio throughout the ~~quarter~~year and as of ~~quarter-end,~~year-end, including pricing variance analyses and comparisons to alternative pricing sources and benchmark returns. If a fair value appears unusual relative to these assessments, we will re-examine the inputs and may challenge a fair value assessment made by the pricing service. If there is a known pricing error, we will request a reassessment by the pricing service. If the pricing service is unable to perform the reassessment on a timely basis, we will determine the appropriate price by requesting a reassessment from an alternative pricing service or other qualified source as necessary. We do not adjust quotes or prices except in a rare circumstance to resolve a known error.

Because many fixed-maturity securities do not trade on a daily basis, third-party pricing services generally determine fair value using industry-standard methodologies, which vary by asset class. For corporates, governments, and agency securities, these methodologies include developing prices by incorporating available market information such as U.S. Treasury curves, benchmarking of similar securities including new issues, sector groupings, quotes from market participants and matrix pricing. Observable information is compiled and integrates relevant credit information, perceived market movements and sector news. Additionally, security prices are periodically back-tested to validate and/or refine models as conditions warrant. Market indicators and industry and economic events are also monitored as triggers to obtain additional data. For certain structured securities (such as ~~mortgage-and~~mortgage- and asset-backed securities) with limited trading activity, third-party pricing services generally use industry-standard pricing methodologies that incorporate market information, such as index prices or discounting expected future cash flows based on underlying collateral, and quotes from market participants, to estimate fair value. If one or more of these input measures are not deemed observable for a particular security, the security will be classified as Level 3 in the fair value hierarchy.

Where specific market information is unavailable for certain securities, pricing models produce estimates of fair value primarily using Level 2 inputs along with certain Level 3 inputs. These models include matrix pricing. The pricing matrix uses current U.S. Treasury rates and credit spreads received from third-party sources to estimate fair value. The credit spreads incorporate the issuer’s industry- or issuer-specific credit characteristics and the security’s time to maturity, if warranted. Remaining unpriced securities are valued using an estimate of fair value based on indicative market prices that include significant unobservable inputs not based on, nor corroborated by, market information, including the utilization of non-binding broker quotes.

The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows:

	Three months ended June 30,						Six months ended June 30, ⁽¹⁾						Three months ended March 31,⁽¹⁾
	2019			2018			2019			2018			2020			2019
	(In thousands)												(In thousands)
Level 3 assets, beginning of period	$	381		$	535		$	921		$	567		$	585		$	921
Net unrealized gains (losses) included in other comprehensive income		(7	)		(4	)		(13	)		(13	)		1			(6	)
Realized gains (losses) and accretion (amortization) recognized in earnings, including OTTI		(32	)		27			(24	)		45
Realized gains (losses) and accretion (amortization) recognized in earnings														(25	)		8
Settlements		(152	)		(42	)		(196	)		(83	)		(175	)		(44	)
Transfers into Level 3		836			-			836			-			-			-
Transfers out of Level 3 ⁽²⁾		-			-			(498	)		-			-			(498	)
Level 3 assets, end of period	$	1,026		$	516		$	1,026		$	516		$	386		$	381

We obtain independent pricing quotes based on observable inputs as of the end of the reporting period for all securities in Level 2. Those inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, market bids/offers, quoted prices for similar instruments in markets that are not active, and other relevant data. We monitor these inputs for market indicators, industry and economic events. There were no0 material transfers between Level 1 and Level 3 during the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 and ~~2018.~~March 31, 2019.

The carrying values and estimated fair values of our financial instruments were as follows:

	June 30, 2019				December 31, 2018				March 31, 2020				December 31, 2019
	Carrying value		Estimated fair value		Carrying value		Estimated fair value		Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)								(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)	$	2,216,260	$	2,216,260	$	2,069,635	$	2,069,635	$	2,242,037	$	2,242,037	$	2,356,996	$	2,356,996
Fixed-maturity security (held-to-maturity) ⁽³⁾		1,087,790		1,157,585		970,390		945,331		1,237,270		1,310,909		1,184,370		1,299,102
Short-term investments (available-for-sale)		-		-		8,171		8,171
Equity securities		38,897		38,897		37,679		37,679		34,125		34,125		40,684		40,684
Trading securities		23,375		23,375		13,610		13,610		44,997		44,997		43,233		43,233
Policy loans ⁽³⁾		33,527		33,527		31,501		31,501		31,799		31,799		32,927		32,927
Deposit asset underlying 10% coinsurance agreement ⁽³⁾		232,204		232,204		228,974		228,974		234,833		234,833		233,499		233,499
Separate accounts		2,437,291		2,437,291		2,195,501		2,195,501		2,128,924		2,128,924		2,485,745		2,485,745
Liabilities:
Notes payable ^{(1) (2)}	$	373,848	$	396,129	$	373,661	$	384,909	$	374,131	$	386,156	$	374,037	$	395,522
Surplus note ^{(1) (3)}		1,087,117		1,157,282		969,685		945,331		1,236,644		1,310,909		1,183,728		1,296,972
Separate accounts		2,437,291		2,437,291		2,195,501		2,195,501		2,128,924		2,128,924		2,485,745		2,485,745

The fair values of financial instruments presented above are estimates of the fair values at a specific point in time using various sources and methods, including market quotations and a complex matrix system that takes into account issuer sector, quality, and spreads in the current marketplace.

Financial Instruments Recognized at Fair Value in the Balance Sheet. Estimated fair values of investments in ~~available-for-sale fixed-maturity~~AFS securities ~~and short-term investments~~ are principally a function of current spreads and interest rates that are corroborated by independent third-party data. Therefore, the fair values presented are indicative of amounts we could realize or settle at the respective balance sheet date. We do not necessarily intend to dispose of or liquidate such instruments prior to maturity. Trading securities and equity securities, including common and nonredeemable preferred stocks, are carried at fair value. Segregated funds in separate accounts are carried at the underlying value of the variable insurance contracts, which is fair value.

The carrying amounts for cash and cash equivalents, trade receivables, accrued investment income, accounts payable, cash collateral and payables for security transactions approximate their fair values due to the short-term nature of these instruments. Consequently, such financial instruments are not included in the above table.

We use reinsurance extensively, which has a significant effect on our results of operations. Reinsurance arrangements do not relieve us of our primary obligation to the policyholder. ~~We monitor the concentration of credit risk we have with any reinsurer, as well as the financial condition of the reinsurers.~~

	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(Dollars in thousands)						(Dollars in thousands)
Direct life insurance in force	$	799,212,496		$	783,979,673		$	807,245,574		$	810,995,295
Amounts ceded to other companies		(694,112,839	)		(682,708,797	)		(700,084,862	)		(702,727,956	)
Net life insurance in force	$	105,099,657		$	101,270,876		$	107,160,712		$	108,267,339
Percentage of reinsured life insurance in force		87	%		87	%		87	%		87	%

Benefits and claims ceded to reinsurers during the three months ended March 31, 2020 and March 31, 2019 were $349.1 million and $332.6 million, respectively.

Reinsurance recoverables includes ceded reserve balances, ceded claim liabilities, and ceded ~~claim liabilities.~~claims paid. Reinsurance recoverables and financial strength ratings by reinsurer were as follows:

	June 30, 2019			December 31, 2018			March 31, 2020				December 31, 2019
	Reinsurance recoverables		A.M. Best rating	Reinsurance recoverables		A.M. Best rating	Reinsurance recoverables			A.M. Best rating	Reinsurance recoverables			A.M. Best rating
	(In thousands)						(In thousands)
Pecan Re Inc. ^{(1) (2)}	$	2,727,285	NR	$	2,701,326	NR	$	2,699,114		N/R	$	2,696,924		NR
SCOR Global Life Reinsurance Companies ⁽³⁾		346,173	A+		348,109	A+		345,784		A+		352,049		A+
Munich Re of Malta ^{(2) (5)}		286,536	NR		276,154	NR		257,535		N/R		286,433		NR
Swiss Re Life & Health America Inc. ⁽⁴⁾		228,698	A+		234,643	A+		222,245		A+		233,572		A+
American Health and Life Insurance Company ⁽²⁾		169,742	B+		170,628	B+		165,953		B++		167,471		B++
Munich American Reassurance Company		119,063	A+		114,604	A+		118,135		A+		118,372		A+
Korean Reinsurance Company		105,574	A		104,101	A		107,874		A		108,410		A
RGA Reinsurance Company		95,525	A+		90,989	A+		103,502		A+		100,328		A+
Hannover Life Reassurance Company		33,560	A+		31,729	A+		32,992		A+		33,772		A+
TOA Reinsurance Company		27,558	A		25,434	A		29,355		A		26,160		A
All other reinsurers		46,136	-		43,852	-		55,950		-		48,679		-
Allowance for credit losses								(5,542	)			(2,347	)
Reinsurance recoverables	$	4,185,850		$	4,141,569		$	4,132,897			$	4,169,823

~~Benefits~~Upon the adoption of ASC 326, we estimate and ~~claims ceded~~recognize lifetime expected credit losses for reinsurance recoverables. In estimating the allowance for expected credit losses for reinsurance recoverables, we factor in the underlying collateral for reinsurance agreements where available. Specifically, for reinsurers with underlying trust assets, we compare the reinsurance recoverables balance to the underlying trust assets that mitigate the potential exposure to credit losses. We also analyze the financial condition of the reinsurers, as determined by third-party rating agencies, to determine the probability of default for the reinsurers. We then utilize a third-party credit default study to calculate an expected credit loss given default rate or recovery rate. The probability of default and loss given default

rates are then applied to the reinsurers’ recoverable balance, while also factoring in any third-party letters of credit that support the reinsurance agreement, in order to calculate our current expected credit loss allowance.

The rollforward of the allowance for credit losses on reinsurance recoverables for the three months ended March 31, 2020 was as follows:

⁽¹⁾ The beginning balance reflects the adjustment made to the allowance for credit losses balance for the adoption of ASC 326 on January 1, 2020.

We recorded a current period provision for expected credit losses of approximately $1.6 million during the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 related to ceded claims on a closed block of business that may not be collected from a reinsurer that was ordered into receivership.

Prior to the adoption of ASC 326, credit losses on reinsurance recoverables were ~~$327.4 million~~recognized based on an incurred loss model that recognized credit losses if probable and ~~$660.0 million, respectively, compared to $312.9 million and $653.2 million for~~reasonably estimable. NaN credit losses were recognized under the incurred loss model during the three ~~and six~~ months ended ~~June 30, 2018, respectively.~~March 31, 2019.

	Six months ended June 30,						Three months ended March 31,
	2019			2018			2020			2019
	(In thousands)						(In thousands)
Policy claims and other benefits payable, beginning of period	$	313,862		$	307,401		$	339,954		$	313,862
Less reinsured policy claims and other benefits payable		318,653			322,137			388,797			318,653
Net balance, beginning of period		(4,791	)		(14,736	)		(48,843	)		(4,791	)
Incurred related to current year		92,355			90,659			53,828			47,973
Incurred related to prior years ⁽¹⁾		(1,456	)		(2,233	)		(5,045	)		(2,095	)
Total incurred		90,899			88,426			48,783			45,878
Claims paid related to current year, net of reinsured policy claims received		(150,765	)		(152,561	)		(123,305	)		(135,225	)
Reinsured policy claims received related to prior years, net of claims paid		16,105			24,575			59,269			13,795
Total paid		(134,660	)		(127,986	)		(64,036	)		(121,430	)
Foreign currency translation		323			(267	)		(518	)		160
Net balance, end of period		(48,229	)		(54,563	)		(64,614	)		(80,183	)
Add reinsured policy claims and other benefits payable		370,646			341,453			395,103			388,605
Balance, end of period	$	322,417		$	286,890		$	330,489		$	308,422

The liability for policy claims and other benefits payable on traditional life insurance products includes estimated unpaid claims that have been reported to us and claims incurred but not yet reported. We estimate claims incurred but not yet reported based on our historical claims activity and reported lag time experience.

	Six months ended June 30,						Three months ended March 31,
	2019			2018			2020			2019
	(In thousands)						(In thousands)
Common stock, beginning of period		42,694			44,251		$	41,207		$	42,694
Shares issued for stock options exercised		-			-			-			-
Shares of common stock issued upon lapse of restricted stock units ("RSUs")		304			329
Shares of common stock issued upon lapse of restricted stock units (“RSUs”)								183			231
Common stock retired		(990	)		(1,412	)		(930	)		(526	)
Common stock, end of period		42,008			43,168		$	40,460		$	42,399

The above reconciliation excludes RSUs and performance-based stock units (“PSUs”), which do not have voting rights. As sales restrictions on RSUs lapse and PSUs are earned, we issue common shares with voting rights. As of ~~June 30, 2019,~~March 31, 2020, we had a total of ~~438,344~~340,527 RSUs and ~~92,108~~81,796 PSUs outstanding. The PSU outstanding balance is based on the number of PSUs granted pursuant to the award ~~agreement;~~agreements; however, the actual number of common shares issued could be higher or lower based on actual versus targeted performance. See Note 9 (Share-Based Transactions) for discussion of the PSU award structure.

On February 7, 2019, our Board of Directors authorized a share repurchase program for up to ~~$275.0~~$275 million of our outstanding common stock through June 30, 2020. On February 10, 2020, our Board of Directors authorized a new share repurchase program for up to $300.0 million of our outstanding common stock (including $50.0 million that remained from the prior repurchase program) for purchases through June 30, ~~2020 (the “share repurchase program”).~~2021. Under ~~the~~these share repurchase ~~program,~~programs, we repurchased ~~937,054~~880,222 shares of our common stock in the open market for an aggregate purchase price of ~~$110.7~~$90.1 million through ~~June 30, 2019.~~March 31, 2020. Approximately ~~$164.3~~$209.9 million remains available for repurchases of our outstanding common stock under the share repurchase program as of ~~June 30, 2019.~~March 31, 2020.

The Company has outstanding common stock and equity awards that consist of RSUs, PSUs and stock options. The RSUs maintain non-forfeitable dividend rights that result in dividend payment obligations on a one-to-one ratio with common shares for any future dividend declarations.

Unvested RSUs are deemed participating securities for purposes of calculating earnings per share (“EPS”) as they maintain dividend rights. We calculate EPS using the two-class method. Under the two-class method, we allocate earnings to common shares and vested RSUs outstanding for the period. Earnings attributable to unvested participating securities, along with the corresponding share counts, are excluded from EPS as reflected in our unaudited condensed consolidated statements of income.

In calculating basic EPS, we deduct from net income any dividends and undistributed earnings allocated to unvested RSUs and then divide the result by the weighted-average number of common shares and vested RSUs outstanding for the period.

We determine the potential dilutive effect of PSUs and stock options outstanding (“contingently-issuable shares”) on EPS using the treasury-stock method. Under this method, we determine the proceeds that would be received from the issuance of the contingently-issuable shares if the end of the reporting period were the end of the contingency period. The proceeds from the contingently-issuable shares include the remaining unrecognized compensation expense of the awards and the cash received for the exercise price on stock options. We then use the average market price of our common shares during the period the contingently-issuable shares were outstanding to determine how many shares we could repurchase with the proceeds raised from the issuance of the contingently-issuable shares. The net incremental share count issued represents the potential dilutive securities. We then reallocate earnings to common shares and vested RSUs by incorporating the increased fully-diluted share count to determine diluted EPS.

	Three months ended June 30,						Six months ended June 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
	(In thousands, except per-share amounts)												(In thousands, except per-share amounts)
Basic EPS:
Numerator:
Net income	$	97,446		$	86,700		$	176,611		$	152,414		$	72,469		$	79,165
Income attributable to unvested participating securities		(428	)		(483	)		(835	)		(917	)		(310	)		(401	)
Net income used in calculating basic EPS	$	97,018		$	86,217		$	175,776		$	151,497		$	72,159		$	78,764
Denominator:
Weighted-average vested shares		42,483			44,066			42,653			44,401			41,131			42,824
Basic EPS	$	2.28		$	1.96		$	4.12		$	3.41		$	1.75		$	1.84

Diluted EPS:
Numerator:
Net income	$	97,446		$	86,700		$	176,611		$	152,414		$	72,469		$	79,165
Income attributable to unvested participating securities		(427	)		(482	)		(833	)		(915	)		(310	)		(400	)
Net income used in calculating diluted EPS	$	97,019		$	86,218		$	175,778		$	151,499		$	72,159		$	78,765
Denominator:
Weighted-average vested shares		42,483			44,066			42,653			44,401			41,131			42,824
Dilutive effect of incremental shares to be issued for contingently-issuable shares		136			141			127			128			108			118
Weighted-average shares used in calculating diluted EPS		42,619			44,207			42,780			44,529			41,239			42,942
Diluted EPS	$	2.28		$	1.95		$	4.11		$	3.40		$	1.75		$	1.83

The Company has outstanding equity awards under the Primerica, Inc. Second Amended and Restated 2010 Omnibus Incentive Plan (“OIP”). The OIP provides for the issuance of equity awards, including stock options, stock appreciation rights, restricted stock, deferred stock, RSUs, PSUs, and stock payment awards, as well as cash-based awards. In addition to time-based vesting requirements, awards granted under the OIP may also be subject to specified performance criteria. Since 2010, the Company has issued equity awards under the OIP to our management (officers and other key employees), non-employees who serve on our Board of Directors, and sales force leaders. For more information on equity awards granted under the OIP, see Note 14 (Share-Based Transactions) to our consolidated financial statements within our ~~2018~~2019 Annual Report.

In connection with our granting of equity awards to management and members of the Board of Directors, we recognize expense over the requisite service period of the equity award. We defer and amortize the fair value of equity awards granted to the sales force in the same manner as other deferred policy acquisition costs for those awards that are an incremental direct cost of successful acquisitions of life insurance policies that result directly from and are essential to the policy acquisition(s) and would not have been incurred had the policy acquisition(s) not occurred. All equity awards granted to the sales force that are not directly related to the successful acquisition of life insurance policies are recognized as expense as incurred, which is in the quarter granted and earned.

On February 26, ~~2019,~~2020, the Compensation Committee of our Board of Directors granted the following equity awards to employees as part of the annual approval of management incentive compensation:

All awards granted to employees on February 26, ~~2019~~2020 vest upon voluntary termination of employment by any employee who is “retirement eligible” as of his or her termination date. In order to be retirement eligible, an employee must be at least 55 years old and

his or her age plus years of service with the Company must equal at least 75. The number of PSUs that will ultimately be issued for a retirement eligible employee is equal to the amount calculated using the Company’s actual cumulative three-year ROAE and average EPS growth, if applicable, for the relevant performance period ending on December 31, ~~2021,~~2022, even if that employee retires prior to the completion of the three-year performance period.

Letter of Credit (“LOC”). Peach Re maintains a credit facility agreement with Deutsche Bank (the “Credit Facility Agreement”) to support certain obligations for a portion of the Regulation XXX reserves related to the Peach Re Coinsurance Agreement. Under the Credit Facility Agreement, Deutsche Bank issued a letter of credit for the benefit of Primerica Life with a term expiring on December 31, 2025. As of ~~June 30, 2019,~~March 31, 2020, the amount of the LOC outstanding was ~~$274.2~~$241.3 million. This amount will decline over the remaining term of the LOC to correspond with declines in the Regulation XXX reserves. As of ~~June 30, 2019,~~March 31, 2020, the Company was in compliance with all financial covenants under the Credit Facility Agreement.

Further discussion on the Company’s letter of credit is included in Note 16 (Commitments and Contingent Liabilities) to our consolidated financial statements within our ~~2018~~2019 Annual Report.

Contingent Liabilities. The Company is involved from time to time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. These disputes are subject to uncertainties, including the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation. As such, the Company is unable to estimate the possible loss or range of loss that may result from these matters unless otherwise indicated.

The Company is currently undergoing multi-state unclaimed property audits by 30 jurisdictions, currently focusing on the life insurance claims paying practices of its subsidiaries, Primerica Life and NBLIC. Other jurisdictions may pursue similar audits. The potential outcome of such audits is difficult to predict but could subject the Company to adverse consequences, including, but not limited to, settlement payments, additional payments to beneficiaries and additional escheatment of funds deemed abandoned under state laws. At this time, the Company cannot reasonably estimate the likelihood or the impact of additional costs or liabilities that could result from the resolution of these matters.

The components of other comprehensive income (loss) (“OCI”), including the income tax expense or benefit allocated to each component, were as follows:

Three months ended June 30,

Six months ended June 30,

2019

2018

2019

2018

(In thousands)

Foreign currency translation adjustments:

Change in unrealized foreign currency translation gains (losses)
   before income taxes

$
6,639

$
(5,902
)

$
12,806

$
(14,304
)
Income tax expense (benefit) on unrealized foreign currency
  translation gains (losses)

-

-

-

-

Change in unrealized foreign currency translation gains
  (losses), net of income taxes

$
6,639

$
(5,902
)

$
12,806

$
(14,304
)
Unrealized gain (losses) on available-for-sale securities:

Change in unrealized holding gains (losses) arising during
   period before income taxes

$
34,826

$
(15,578
)

$
81,027

$
(47,920
)
Income tax expense (benefit) on unrealized holding gains
  (losses) arising during period

7,444

(3,306
)

17,409

(10,154
)
Change in unrealized holding gains (losses) on available-for-sale
  securities arising during period, net of income taxes

27,382

(12,272
)

63,618

(37,766
)

Reclassification from accumulated OCI to net income for (gains)
  losses realized on available-for-sale securities

(90
)

(347
)

(25
)

(662
)
Income tax (expense) benefit on (gains) losses reclassified from
  accumulated OCI to net income

(19
)

(73
)

(5
)

(139
)
Reclassification from accumulated OCI to net income for (gains)
  losses realized on available-for-sale securities, net of income
  taxes

(71
)

(274
)

(20
)

(523
)
Change in unrealized gains (losses) on available-for-sale
  securities, net of income taxes and reclassification adjustment

$
27,311

$
(12,546
)

$
63,598

$
(38,289
)

	Three months ended March 31,
	2020			2019
	(In thousands)
Foreign currency translation adjustments:
Change in unrealized foreign currency translation gains (losses) before income taxes	$	(29,011	)	$	6,167
Income tax expense (benefit) on unrealized foreign currency translation gains (losses)		-			-
Change in unrealized foreign currency translation gains (losses), net of income taxes	$	(29,011	)	$	6,167
Unrealized gain (losses) on available-for-sale securities:
Change in unrealized holding gains (losses) arising during period before income taxes	$	(86,887	)	$	46,200
Income tax expense (benefit) on unrealized holding gains (losses) arising during period		(18,312	)		9,965
Change in unrealized holding gains (losses) on available-for-sale securities arising during period, net of income taxes		(68,575	)		36,235

Reclassification from accumulated OCI to net income for (gains)losses realized on available-for-sale securities		3,410			65
Income tax (expense) benefit on (gains) losses reclassified from accumulated OCI to net income		716			14
Reclassification from accumulated OCI to net income for (gains) losses realized on available-for-sale securities, net of income taxes		2,694			51
Change in unrealized gains (losses) on available-for-sale securities, net of income taxes and reclassification adjustment	$	(65,881	)	$	36,286

Notes Payable. As of ~~June 30, 2019,~~March 31, 2020, the Company had $375.0 million of publicly-traded, senior unsecured notes (the “Senior Notes”), with an annual interest rate of 4.75% that are scheduled to mature on July 15, 2022. As of ~~June 30, 2019,~~March 31, 2020, we were in compliance with the covenants of the Senior Notes. No events of default occurred on the Senior Notes during the three ~~or six~~ months ended ~~June 30, 2019.~~March 31, 2020.

Further discussion on the Company’s Senior Notes is included in Note 10 (Debt) to our consolidated financial statements within our ~~2018~~2019 Annual Report.

Surplus Note. As of ~~June 30, 2019,~~March 31, 2020, the principal amount outstanding on the Surplus Note issued by Vidalia Re was ~~$1.1~~$1.2 billion, which is equal to the principal amount of the LLC Note. The principal amount of both the Surplus Note and the LLC Note will fluctuate over time to coincide with the amount of policy reserves being contractually supported under the Vidalia Re Coinsurance Agreement. Both the LLC Note and the Surplus Note mature on December 31, 2030 and bear interest at an annual interest rate of 4.50%. Based on the estimated reserves for policies issued in 2011 through 2017 that have been ceded under the Vidalia Re Coinsurance Agreement, the principal amounts of the Surplus Note and the LLC Note are expected to reach $1.5 billion each. This financing arrangement is non-recourse to the Parent Company and Primerica Life, meaning that neither of these companies has guaranteed the Surplus Note or is otherwise liable for reimbursement for any payments triggered by the LLC Note’s credit enhancement feature. The Parent Company has agreed to support Vidalia Re’s obligation to pay the credit enhancement fee incurred on the LLC Note.

Further discussion on the Company’s Surplus Note and LLC Note are included in Note 10 (Debt) and Note 4 (Investments) to our consolidated financial statements within our ~~2018~~2019 Annual Report.

Revolving Credit Facility. We maintain an unsecured $200.0 million revolving credit facility (“Revolving Credit Facility”) with a syndicate of commercial banks that has a scheduled termination date of December 19, 2022. Amounts outstanding under the Revolving Credit Facility bear interest at a periodic rate equal to LIBOR or the base rate, plus in either case an applicable margin. The Revolving Credit Facility contains language that allows for the Company and the lenders to agree on a comparable or successor reference rate in the event LIBOR is no longer available, as is expected to happen in 2022. The Revolving Credit Facility also permits the issuance of letters of credit. The applicable margins are based on our debt rating with such margins for LIBOR rate loans and letters of credit ranging from 1.125% to 1.625% per annum and for base rate loans ranging from 0.125% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges from 0.125% to 0.225% per annum of the aggregate $200.0 million commitment of the lenders under the Revolving Credit Facility. As of ~~June 30, 2019, no~~March 31, 2020, 0 amounts have been drawn under the Revolving Credit Facility and we were in compliance with its covenants. Furthermore, no events of default occurred under the Revolving Credit Facility during the three ~~or six~~ months ended ~~June 30, 2019.~~March 31, 2020.

Premiums from insurance contracts we underwrite, fees received from segregated funds insurance contracts, and income earned on our invested assets are excluded from the definition of revenues from contracts with customers in accordance with U.S. GAAP.

Further discussion on the Company’s revenues from contracts with customers and revenue recognition policies are included in Note 18 (Revenue from Contracts with Customers) to our consolidated financial statements within our ~~2018~~2019 Annual Report.

The disaggregation of our revenues from contracts with customers were as follows:

	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
	2019		2018		2019		2018		2020		2019
	(In thousands)								(In thousands)
Term Life Insurance segment revenues:
Other, net	$	10,055	$	10,913	$	19,800	$	21,328	$	10,168	$	9,744
Total segment revenues from contracts with customers		10,055		10,913		19,800		21,328		10,168		9,744
Revenues from sources other than contracts with customers		286,813		262,065		573,912		521,958		317,578		287,099
Total Term Life Insurance segment revenues	$	296,868	$	272,978	$	593,712	$	543,286	$	327,746	$	296,843

Investment and Savings Products segment revenues:
Commissions and fees
Sales-based revenues	$	71,438	$	64,307	$	138,435	$	128,768	$	80,891	$	66,997
Asset-based revenues		64,953		61,152		124,707		120,693		66,994		59,754
Account-based revenues		19,897		20,438		39,509		41,033		20,204		19,613
Other, net		2,434		2,424		4,856		4,760		2,542		2,423
Total segment revenues from contracts with customers		158,722		148,321		307,507		295,254		170,631		148,787
Revenues from sources other than contracts with customers (segregated funds)		14,364		14,520		28,249		29,629		14,401		13,885
Total Investment and Savings Products segment revenues	$	173,086	$	162,841	$	335,756	$	324,883	$	185,032	$	162,672

Corporate and Other Distributed Products segment revenues:
Commissions and fees ⁽¹⁾	$	7,817	$	7,523	$	14,883	$	14,644	$	7,579	$	7,066
Other, net		1,335		1,453		2,392		2,599		955		1,056
Total segment revenues from contracts with customers		9,152		8,976		17,275		17,243		8,534		8,122
Revenues from sources other than contracts with customers		25,796		23,020		53,147		42,325		3,624		27,350
Total Corporate and Other Distributed Products segment revenues	$	34,948	$	31,996	$	70,422	$	59,568	$	12,158	$	35,472

We recognize revenue upon the satisfaction of the related performance obligation, unless the transaction price includes variable consideration that is constrained; in such case, we recognize revenue when the uncertainty associated with the constrained amount is subsequently resolved. Variable consideration is not treated as constrained to the extent it is probable that no significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is resolved. We have no material obligations for refunds of commission and fees on contracts with customers subsequent to completion of our performance obligation.

Contract Balances. For revenue associated with ongoing renewal commissions we receive subsequent to the satisfaction of our performance obligation, we record a contract asset for the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to the sale or referral, less amounts that are constrained in other assets. The contract asset is reduced for commissions that are billed and become due receivables from product providers during the reporting period.

	Three months ended June 30,					Six months ended June 30,						Three months ended March 31,
	2019		2018			2019			2018			2020			2019
	(In thousands)					(In thousands)						(In thousands)
Balance, beginning of period	$	50,091	$	48,413		$	50,119	⁽¹⁾	$	48,533		$	51,701		$	50,119
Current period sales, net of collection of renewal commissions		376		(245	)		348			(365	)		(202	)		(28	)
Balance, at the end of period	$	50,467	$	48,168		$	50,467		$	48,168		$	51,499		$	50,091

NoNaN significant estimate adjustments were made to the contract asset and no0 impairment losses were recognized on the contract asset during the three ~~or six~~ months ended ~~June 30,~~March 31, 2020 and March 31, 2019.

Incremental costs to obtain or fulfill contracts, most notably sales commissions to the sales representatives, are not incurred prior to the recognition of the related revenue. Therefore, we have no0 assets recognized for incremental costs to obtain or fulfill contracts.

We have operating leases for our executive office operations and other real estate leases of office space and finance leases for certain office equipment. Our leases have remaining lease terms of 1 year to 11 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 4 years, exercisable at the Company’s discretion. Operating lease right-of-use assets and operating lease liabilities are presented separately in our condensed consolidated balance sheets. As of June 30, 2019, finance right-of-use assets of $0.8 million and finance lease liabilities of $0.8 million were recorded within Other assets and Other liabilities, respectively, within our condensed consolidated balance sheets. The Company determines its lease liabilities, which are measured at the present value of future lease payments, using the Company’s incremental secured borrowing rate that is commensurate with the term of the underlying lease or the rate implicit in the lease if readily determinable.

⁽¹⁾~~Included in change in other operating assets and liabilities, net in the accompanying condensed consolidated statements of cash flows.~~

~~The following disclosures for the comparative periods presented in accordance with ASC 840 have been carried forward.~~

~~Total minimum rent expense for operating leases for the three and six months ended June 30, 2018 were $2.0million and $3.8million, respectively. We had no contingent rent expense during the three and six months ended June 30, 2018.~~

~~As of December 31, 2018, the minimum aggregate rental commitments for operating leases were as follows:~~

~~As of December 31, 2018, the aggregate balance of our capital lease liabilities was not material.~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to inform the reader about matters affecting the financial condition and results of operations of Primerica, Inc. (the “Parent Company”) and its subsidiaries (collectively, “we”, “us” or the “Company”) for the period from December 31, ~~2018~~2019 to ~~June 30, 2019.~~March 31, 2020. As a result, the following discussion should be read in conjunction with MD&A and the consolidated financial statements and notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (“~~2018~~2019 Annual Report”). This discussion contains forward-looking statements that constitute our plans, estimates and beliefs. These forward-looking statements involve numerous risks and uncertainties, including, but not limited to, those discussed under the heading “Risk Factors” in the ~~2018~~2019 Annual Report and in Item 1A of this Report. Actual results may differ materially from those contained in any forward-looking statements.

We are a leading provider of financial products to middle-income households in the United States and Canada through a network of independent contractor sales representatives (“sales representatives” or “sales force”). We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, annuities, managed investments and other financial products, which we distribute primarily on behalf of third parties. We have two primary operating segments, Term Life Insurance and Investment and Savings Products; and a third segment, Corporate and Other Distributed Products.

Term Life Insurance. We distribute the term life insurance products that we underwrite through our three issuing life insurance company subsidiaries: Primerica Life Insurance Company (“Primerica Life”), National Benefit Life Insurance Company (“NBLIC”), and Primerica Life Insurance Company of Canada (“Primerica Life Canada”). Policies remain in force until the expiration of the coverage period or until the policyholder ceases to make premium payments. Our in-force term life insurance policies have level premiums for the stated term period. As such, the policyholder pays the same amount each year. Initial policy term periods are between 10 and 35 years. While premiums typically remain level during the initial term period, our claim obligations generally increase as our policyholders age. In addition, we incur significant upfront costs in acquiring new insurance business. Our deferral and amortization of policy acquisition costs and reserving methodology are designed to match the recognition of premium revenues with the timing of policy lapses and the payment of expected claims obligations.

Investment and Savings Products. In the United States, we distribute mutual funds, managed investments, variable annuity, and fixed annuity products of several third-party companies. We provide investment advisory and administrative services for client assets invested in our managed investments program. We also perform distinct transfer agent recordkeeping services and non-bank custodial services for investors purchasing certain mutual funds we distribute. In Canada, we offer our own Primerica-branded mutual funds, as well as mutual funds of other companies, and segregated funds, which are underwritten by Primerica Life Canada.

Corporate and Other Distributed Products. Our Corporate and Other Distributed Products segment consists primarily of revenues and expenses related to other distributed products, including closed blocks of various insurance products underwritten by NBLIC, prepaid legal services, and other financial products. These products, except for closed blocks of various insurance products underwritten by NBLIC, are distributed pursuant to distribution arrangements with third-party companies through the independent sales force. Net investment income earned on our invested asset portfolio is recorded in our Corporate and Other Distributed Products segment, with the exception of the assumed net interest accreted to our Term Life Insurance segment’s future policy benefit reserve liability less deferred acquisition costs. Interest expense incurred by the Company is attributed solely to the Corporate and Other Distributed Products segment.

The relative strength and stability of financial markets and economies in the United States and Canada affect our growth and profitability. Our business is, and we expect will continue to be, influenced by a number of industry-wide and product-specific trends and conditions. Economic conditions, including unemployment levels and consumer confidence, influence investment and spending decisions by middle-income consumers, who are generally our primary clients. These conditions and factors also impact prospective recruits’ perceptions of the business opportunity that becoming a sales representative offers, which can drive or dampen recruiting. Consumer spending and borrowing levels affect how consumers evaluate their savings and debt management plans. In addition, interest rates and equity market returns impact consumer demand for the savings and investment products we distribute. Our

customers’ perception of the strength of the capital markets may influence their decisions to invest in the investment and savings products we distribute.

The financial and distribution results of our operations in Canada, as reported in U.S. dollars, are affected by changes in the currency exchange rate. As a result, changes in the Canadian dollar exchange rate may significantly affect the result of our business for all amounts translated and reported in U.S. dollars.

During the first quarter of 2020, market conditions have changed rapidly due to the impact of the novel Coronavirus (“COVID-19”) pandemic. Measures taken to combat the spread of COVID-19 have led to an economic downturn in the United States and Canada that is likely to continue for the foreseeable future and will have repercussions on our business. To date this economic downturn has resulted in extraordinary unemployment rates, lower household income, and lower consumer spending. The resulting significant decline in North American equity markets during the first quarter has decreased the value of clients’ investment accounts and will likely cause asset-based revenues in our investment and savings products to decrease. In addition, major declines in bond prices have adversely affected the fair value of our invested asset portfolio and resulted in an increase in unrealized losses as of March 31, 2020. Such unrealized losses could lead to further recognition of credit losses in subsequent periods if credit conditions of the underlying security issuers worsen. The impact of economic conditions caused by the spread of COVID-19 on our operating results in the first quarter of 2020 is discussed in more detail later in this section, the Results of Operations section, and the Financial Condition section.

Due to the evolving and highly uncertain nature of this event, it currently is not possible to estimate the impact the COVID-19 pandemic will have on our business in future periods. However, we believe the effect of COVID-19 could create uncertainty in the following business trends and conditions:

The effects of ~~these~~business trends and conditions on our quarterly results are discussed below, ~~and~~ in the Results of Operations section, and in the Financial Condition section.

Our ability to increase the size of the independent sales force ~~(“sales representatives” or “sales force”)~~ is largely based on the success of the sales force’s recruiting efforts as well as training and motivating recruits to get licensed to sell life insurance. We believe that recruitment and licensing levels are important to sales force trends, and growth in recruiting and licensing is usually indicative of future growth in the overall size of the sales force. Changes in the number of new recruits do not always result in commensurate changes in the size of the licensed sales force because new recruits may obtain the requisite licenses at rates above or below historical levels.

Details on new recruits and life-licensed sales representative activity were as follows:

	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
	2019		2018		2019		2018		2020		2019
New recruits		86,173		76,520		149,396		152,750		84,762		63,223
New life-licensed sales representatives		10,919		13,544		20,984		25,274		10,599		10,065

New recruits increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the same period in ~~2018 primarily~~2019 due to ~~excitement~~positive recruiting momentum generated in recent periods combined with the effect of offering discounted business application fees in early January and again at the ~~biennial convention in June 2019 and incentives announced~~end of March to ~~drive~~sustain our recruiting ~~and productivity.~~momentum as COVID-19 concerns began to emerge. New ~~recruits decreased~~life-licensed representatives increased during the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 compared to the same period in ~~2018 as we experienced slower momentum~~2019 due to strength in recruiting ~~earlier in 2019 after a sustained period of growth prior to 2019.~~

~~New life-licensed sales representatives decreased during the three and six months ended June 30, 2019 compared~~despite licensing headwinds related to the ~~same periods~~COVID-19 pandemic that included the suspension of live licensing preparation classes and the closing of licensing exam centers. In order to address challenges in ~~2018 as~~life licensing presented by the COVID-19 pandemic, we ~~experienced slower momentum in recruiting after a sustained period~~have enhanced current incentive programs that encourage recruits to get through the licensing process, expanded the reach of ~~growth prior~~online offerings for licensing exam preparation, and worked with states to ~~2019.~~

~~The size~~offer alternatives to the traditional licensing process including remote testing and the issuance of temporary licenses until the ~~life-licensed independent sales force was as follows:~~

The number of the life-licensed sales representatives remained stable as of June 30, 2019 compared to March 31, 2019 as the number of new life-licensed representatives were offset by non-renewals during the second quarter of 2019.full licensing process can be completed.

The average number of life-licensed sales representatives and the number of term life insurance policies issued, as well as the average monthly rate of new policies issued per life-licensed sales representative (historically between 0.18 and 0.22), were as follows:

	Three months ended June 30,				Six months ended June 30,				Three months ended March 31,
	2019		2018		2019		2018		2020		2019
Average number of life-licensed sales representatives		130,040		128,714		130,115		127,588		130,106		130,117
Number of new policies issued		78,664		83,754		142,906		154,575		71,318		64,242
Average monthly rate of new policies issued per life-licensed sales representative		0.20		0.22		0.18		0.20		0.18		0.16

~~The slowdown in momentum also contributed to the decline in productivity and new life insurance~~New policies issued during the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 increased compared to the same period in 2019 ~~versus the comparable periods in 2018. Productivity,~~as a result of a stronger productivity, which is measured by the average monthly rate of new policies issued per life-licensed sales ~~representative, during~~representative. Productivity increased in the ~~three~~current period as a result of positive distribution momentum. We utilized existing tools to minimize the adverse impact that COVID-19-related conditions could have on new policy sales such as mobile and ~~six months ended June 30, 2019 was lower than~~web-based applications that allow life-licensed sales representatives to communicate with clients remotely and submit applications electronically. Furthermore, we have leveraged the ~~comparable periods~~use of TermNow, our rapidly underwritten term life product that uses database underwriting instead of traditional medical exam information for policies with face amounts of $300,000 or less. For new policies sales exceeding these limits, we have identified alternative solutions to traditional methods of collecting medical exam information such as the use of available clinical testing instead of in-home testing. Given the time it takes to issue a policy underwritten with medical exam information, policies issued in ~~2018, but remained within our typical experience range.~~the first quarter of 2020 generally are attributable to applications submitted prior to the onset of COVID-19 stay-at-home orders.

The changes in the face amount of our in-force book of term life insurance policies were as follows:

	Three months ended June 30,												Six months ended June 30,												Three months ended March 31,
	2019			% of beginning balance			2018			% of beginning balance			2019			% of beginning balance			2018			% of beginning balance			2020			% of beginning balance			2019			% of beginning balance
	(Dollars in millions)																								(Dollars in millions)
Face amount in force, beginning of period	$	785,552					$	765,732					$	781,041					$	763,831					$	808,262					$	781,041
Net change in face amount:
Issued face amount		25,300			3	%		26,001			3	%		46,225			6	%		48,259			6	%		23,221			3	%		20,925			3	%
Terminations		(16,512	)		(2	)%		(16,341	)		(2	)%		(34,895	)		(4	)%		(34,128	)		(4	)%		(18,294	)		(2	)%		(18,383	)		(2	)%
Foreign currency		2,036		*				(1,788	)	*				4,005			1	%		(4,358	)		(1	)%		(8,676	)		(1	)%		1,969		*
Net change in face amount		10,824			1	%		7,872			1	%		15,335			2	%		9,773			1	%		(3,749	)	*				4,511			1	%
Face amount in force, end of period	$	796,376					$	773,604					$	796,376					$	773,604					$	804,513					$	785,552

The face amount of term life policies in force increased 3% as of ~~June 30, 2019~~March 31, 2020 compared to ~~the same period in 2018~~March 31, 2019 as the level of face amount issued continued to exceed the face amount ~~of terminations.~~terminated. As a percentage of the beginning face amount in force, issued face amount as well as terminated face amount during the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 remained consistent with the comparable ~~2018 periods. The~~2019 period.During the three months ended March 31, 2020, the effect of a stronger U.S. dollar in relation to the Canadian dollar reduced the translated face amount of existing policies in force and reduced the overall issued face amount. Conversely, during the three months ended March 31, 2019, the strengthening of the Canadian dollar ~~spot rate relative~~in relation to the U.S. dollar ~~during the three and six months ended June 30, 2019 also contributed~~added to the increase in face amount.

Investment and savings products sales and average client asset values were as follows:

	Three months ended June 30,				Change						Six months ended June 30,				Change						Three months ended March 31,				Change
	2019		2018		$			%			2019		2018		$			%			2020		2019		$		%
	(Dollars in millions)																				(Dollars in millions)
Product sales:
Retail mutual funds	$	1,056	$	1,000	$	56			6	%	$	2,010	$	2,068	$	(59	)		(3	)%	$	1,202	$	954	$	248		26	%
Annuities and other		602		504		98			19	%		1,149		948		201			21	%		673		547		126		23	%
Total sales-based revenue generating product sales		1,658		1,504		154			10	%		3,159		3,016		143			5	%		1,875		1,501		374		25	%
Managed investments		203		204		(1	)	*				365		393		(28	)		(7	)%		246		162		85		52	%
Segregated funds and other		76		51		25			50	%		170		133		38			28	%		125		94		30		32	%
Total product sales	$	1,937	$	1,759	$	179			10	%	$	3,694	$	3,542	$	153			4	%	$	2,246	$	1,757	$	490		28	%
Average client asset values:
Retail mutual funds	$	39,539	$	37,792	$	1,747			5	%	$	38,598	$	37,987	$	611			2	%	$	40,643	$	37,657	$	2,986		8	%
Annuities and other		19,054		18,173		881			5	%		18,647		18,222		424			2	%		19,681		18,240		1,442		8	%
Managed investments		3,455		2,930		525			18	%		3,348		2,834		514			18	%		3,905		3,241		664		20	%
Segregated funds		2,378		2,402		(25	)		(1	)%		2,346		2,456		(111	)		(4	)%		2,366		2,314		52		2	%
Total average client asset values	$	64,427	$	61,297	$	3,129			5	%	$	62,938	$	61,499	$	1,439			2	%	$	66,595	$	61,452	$	5,143		8	%

	Three months ended June 30,												Six months ended June 30,												Three months ended March 31,
	2019			% of beginning balance			2018			% of beginning balance			2019			% of beginning balance			2018			% of beginning balance			2020			% of beginning balance			2019			% of beginning balance
	(Dollars in millions)																								(Dollars in millions)
Asset values, beginning of period	$	63,602					$	60,821					$	57,704					$	61,167					$	70,537					$	57,704
Net change in asset values:
Inflows		1,937			3	%		1,759			3	%		3,694			6	%		3,542			6	%		2,246			3	%		1,757			3	%
Redemptions		(1,633	)		(3	)%		(1,498	)		(2	)%		(3,163	)		(5	)%		(3,069	)		(5	)%		(1,704	)		(2	)%		(1,530	)		(3	)%
Net flows		304		*				261		*				531			1	%		473			1	%		542		*				227		*
Change in fair value, net		1,746			3	%		891			1	%		7,216			13	%		615			1	%		(11,065	)		(19	)%		5,470			9	%
Foreign currency, net		225		*				(195	)	*				426			1	%		(477	)		(1	)%		(978	)	*				201		*
Net change in asset values		2,275			4	%		957			2	%		8,174			14	%		611			1	%		(11,501	)		(20	)%		5,898			10	%
Asset values, end of period	$	65,878					$	61,778					$	65,878					$	61,778					$	59,036					$	63,602

	Three months ended June 30,				Change						Six months ended June 30,				Change						Three months ended March 31,				Change
	2019		2018		Positions			%			2019		2018		Positions			%			2020		2019		Positions		%
	(Positions in thousands)																				(Positions in thousands)
Average number of fee-generating positions ⁽¹⁾:
Recordkeeping and custodial		1,996		2,086		(90	)		(4	)%		1,997		2,108		(111	)		(5	)%		2,031		1,998		33		2	%
Recordkeeping only		641		660		(19	)		(3	)%		641		662		(22	)		(3	)%		658		641		18		3	%
Total average number of fee- generating positions		2,637		2,746		(109	)		(4	)%		2,638		2,770		(133	)		(5	)%		2,689		2,639		50		2	%

Changes in Investment and Savings Products Sales, Asset Values and Accounts/Positions during the Three Months Ended ~~June 30, 2019~~March 31, 2020

Product sales. Investment and savings products sales increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018 primarily~~March 31, 2019 due to a combination of strong demand for variable annuity products and mutual funds and, to a lesser degree, higher sales of managed accounts, that followed a prolonged period of strong equity market performance leading into early 2020. In contrast, the period ended March 31, 2019 was preceded by a market correction in December 2018 that weakened demand for investment and saving products. We did not experience an ~~increase in annuity sales~~adverse impact to demand for the investments and savings products we distribute as a result of ~~continued demand within~~ the ~~industry for products~~economic downturn associated with ~~guarantees and positive movements~~the COVID-19 pandemic as these events occurred late in ~~equity markets during 2019 that led to increased demand for retail mutual funds.~~the quarter.

Average client asset values. Average client asset values increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 primarily due to market appreciation between the periods and continued positive net ~~flows.~~ flows, partially offset by poor market performance at the end of the quarter as a result of the market reaction and economic uncertainty associated with the COVID-19 pandemic.

Rollforward of client asset values. The ~~increase~~decrease in client asset values ~~during~~for the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 was primarily due to the significant decline in the value of client assets stemming from

market reaction and economic uncertainty associated with the COVID-19 pandemic. Partially offsetting the decline in client asset values was positive ~~market performance and continued inflows from~~net flows driven by strong product sales ~~which outpaced redemptions.~~during the quarter. Redemptions for the quarter grew in-line with client asset values.

Average number of fee-generating ~~positions.~~positions. The average number of fee-generating positions ~~decreased~~increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 primarily due to the ~~completed transition~~cumulative effect of ~~our clients’ managed investments from Freedom Portfolios, for which we earned transfer agent recordkeeping fees and custodial fees,~~retail mutual fund sales in recent periods that led to ~~the Lifetime Investments Platform, for which we do not earn transfer agent recordkeeping fees or custodial fees. Partially offsetting the impact from the managed account transition was~~ an increase in the number of retail mutual fund positions for which we earn these fees. With the transition of Freedom Portfolios to the Lifetime Investment Platform now complete, we will only earn transfer agent recordkeeping fees and custodial fees on retail mutual fund positionsserviced on our transfer agent ~~recordkeeping~~record keeping platform.

~~Changes in Investment and Savings Products Sales, Asset Values and Accounts/Positions during the Six Months Ended June 30, 2019~~

~~Product sales.~~ Investment and savings products sales increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to an increase in annuity sales as a result of continued demand within the industry for products with guarantees. This was partially offset by the year over year decrease in mutual fund sales due to lower demand for retail mutual fund products as a result of market volatility, in particular a period of lower equity prices at the beginning of 2019.

~~Average client asset values.~~ Average client asset values increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to the same factors impacting average client asset values as described above in the three-month comparison.

~~Rollforward of client asset values.~~ The increase in client asset values during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 was primarily due to the same factors impacting client asset values as discussed above in the three-month comparison.

~~Average number of fee-generating positions.~~ The average number of fee-generating positions decreased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to the same factors impacting average number of fee-generating positions as discussed above in the three-month comparison.

~~Regulatory changes can also impact our product sales.~~Standards of care. On June 5, 2019, the ~~Securities and Exchange Commission (“SEC”)~~SEC adopted rules and interpretations addressing the standards of conduct applicable to broker-dealers and investment advisers and their associated persons (collectively, the “SEC Rulemaking”). Specifically, the SEC Rulemaking ~~includes Regulation Best Interest (“Reg BI”), which~~(i) creates a new “best interest” standard of conduct for ~~broker-dealers. The SEC Rulemaking also includes (i)~~broker-dealers (“Reg BI”), (ii) imposes new disclosure requirements through summary forms intended to clarify relationships among brokers, advisers, and their retail customers (“Form CRS”), ~~(ii)~~(iii) provides interpretative guidance regarding the standard of conduct that applies to investment advisers under the Investment Advisers Act of 1940 (“Advisers Act’), and ~~(iii)~~(iv) provides interpretative guidance on the scope of the broker-dealer “solely incidental” exclusion from the definition of “investment adviser” in the Advisers ~~Act~~.Act. The SEC Rulemaking became effective on July 12, 2019, with a compliance date of June 30, 2020 for Reg BI and Form ~~CRS. While we~~CRS. We anticipate making certain changes to our sales processes,

policies, and procedures in order to comply with the SEC ~~Rulemaking and~~Rulemaking. While we acknowledge that its higher standards of care and enhanced obligations increase regulatory and litigation risk, we do not anticipate that the SEC Rulemaking will cause significant disruption to our business.

~~In addition to federal regulators, certain~~Certain states have proposed or passed laws or proposed or issued regulations requiring investment advisers, broker-dealers, and/or insurance agents to meet fiduciary standards or standards of care that their advice be in the customer’s best interest, and to mitigate and disclose conflicts of interest to consumers of investment and insurance products. The severity of the impact that such state laws or regulations could have on our business vary from state to state depending on the content of the legislation or regulation and how it iswould be applied by state regulators and interpreted by the ~~courts. Because there is significant uncertainty concerning what, if~~courts, but any ~~final rule will take effect, we~~such laws or regulations could disrupt our brokerage business in the relevant state. We cannot quantify the financial impact, if any, of any changes to our business that may be necessary in order to comply with such laws or regulations at this time.

~~In Canada, the~~Restriction on compensation models in Canada. The organization of provincial and territorial securities regulators ~~(“Canadian~~(collectively referred to as the “Canadian Securities Administrators” or “CSA”) published ~~a notice on June 21, 2018 requesting public comment on reforms~~final rule amendments, applicable in all provinces except Ontario, to obligations of registered firms and individuals to enhance conflict of interest mitigation rules (“Client Focused Reforms”). Among other items in the rule, all embedded commissions would be considered conflicts that must be addressed in the best interests of clients or avoided. On September 13, 2018, the CSA published for comment proposed amendments that would prohibit upfront sales commissions by fund companies for the sale of mutual funds offered under a prospectus in ~~Canada.~~Canada effective June 1, 2022 (“DSC Ban”). The CSA ~~has~~ indicated that the participating provinces’ prohibition of upfront sales commissions by fund companies will ~~eliminate~~require firms to discontinue the use of the mutual fund deferred sales charge compensation model, which is the primary model for the mutual funds we distribute in Canada. ~~If these~~These rules ~~are adopted as proposed,~~will result in changes in compensation arrangements with both the fund companies that offer the mutual fund products we distribute and sales representatives in ~~Canada will~~the participating provinces. The deferred sales charge compensation model is permitted to be ~~necessary. Because~~used until the effective date. While Ontario has disagreed with the prohibition of upfront sales commissions by fund companies and is not at this time participating in adoption of the ~~uncertain status~~DSC Ban, the Ontario Securities Commission has proposed several restrictions effective June 1, 2022 on the use of the ~~rules, we~~deferred compensation model, including a $50,000 maximum account size and a limitation on the maximum term of the deferred sales charge schedule to three years compared to current industry practice where the maximum term can be up to seven years. We have not ~~determined~~finished the ~~extent~~process of determining the types of changes we will make in response to ~~which changes to our business would be necessary~~the DSC Ban and the restrictions in Ontario, therefore, we are ~~therefore,~~ unable to quantify the potential impact ~~if any,~~ on our ~~business, nor are we able to project the timing~~financial condition or results of ~~the adoption of any such reforms or transition timeline.~~ operations.

Refer to the Business Trends and Conditions section for discussion of the potential impact on our business from the COVID-19 pandemic.

Term Life Insurance Segment. Our Term Life Insurance segment results are primarily driven by sales volumes, how closely actual experience matches our pricing assumptions, terms and use of reinsurance, and expenses.

Sales and policies in force. Sales of term policies and the size and characteristics of our in-force book of policies are vital to our results over the long term. Premium revenue is recognized as it is earned over the term of the policy, and eligible acquisition expenses are deferred and amortized ratably with the level premiums of the underlying policies. However, because we incur significant cash outflows at or about the time policies are issued, including the payment of sales commissions and underwriting costs, changes in life insurance sales volume in a period will have a more immediate impact on our cash flows than on revenue and expense recognition in that period.

Historically, we have found that while sales volume of term life insurance products between fiscal periods may vary based on a variety of factors, the productivity of sales representatives generally remains within a range (i.e., an average monthly rate of new policies issued per life-licensed sales representative between 0.18 and 0.22). The volume of our term life insurance products sales will fluctuate in the short-term, but over the longer term, our sales volume ~~will~~ generally ~~correlate~~correlates to the size of the independent sales force.

Pricing assumptions. Our pricing methodology is intended to provide us with appropriate profit margins for the risks we assume. We determine pricing classifications based on the coverage sought, such as the size and term of the policy, and certain policyholder attributes, such as age and health. In addition, we generally utilize unisex rates for our term life insurance policies. The pricing assumptions that underlie our rates are based upon our best estimates of mortality, persistency, disability, ~~rates,~~and interest rates at the time of issuance, sales force commission rates, issue and underwriting expenses, operating expenses and the characteristics of the insureds, including the distribution of sex, age, underwriting class, product and amount of coverage. Our results will be affected to the extent there is a variance between our pricing assumptions and actual experience.

Reinsurance. We use reinsurance extensively, which has a significant effect on our results of operations. We have generally reinsured between 80% and 90% of the mortality risk on our term life insurance (excluding coverage under certain riders) on a quota share yearly renewable term (“YRT”) basis. To the extent actual mortality experience is more or less favorable than the contractual rate, the reinsurer will earn incremental profits or bear the incremental cost, as applicable. In contrast to coinsurance, which is intended to eliminate all risks (other than counterparty risk of the reinsurer) and rewards associated with a specified percentage of the block of policies subject to the reinsurance arrangement, the YRT reinsurance arrangements we enter into are intended only to reduce volatility associated with variances between estimated and actual mortality rates.

In 2010, as part of our corporate reorganization and the initial public offering of our common stock, we entered into significant coinsurance transactions (the “IPO coinsurance transactions”) with entities then affiliated with Citigroup, Inc. (collectively, the “IPO coinsurers”) and ceded between 80% and 90% of the risks and rewards of our term life insurance policies that were in force at year-end 2009. We administer all such policies subject to these coinsurance agreements. ~~Beginning in 2017, policies~~Policies reaching the end of their initial level term period are no longer ceded under the IPO coinsurance transactions.

The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our statement of income follows:

We may alter our reinsurance practices at any time due to the unavailability of YRT reinsurance at attractive rates or the availability of alternatives to reduce our risk exposure. We presently intend to continue ceding approximately 90% of our U.S. and Canadian mortality risk on new business.

Expenses. Results are also affected by variances in client acquisition, maintenance and administration expense levels.

Investment and Savings Products Segment. Our Investment and Savings Products segment results are primarily driven by sales, the value of assets in client accounts for which we earn ongoing management, marketing and support, and distribution fees, and the number of transfer agent recordkeeping positions and non-bank custodial fee-generating accounts we administer.

Sales. We earn commissions and fees, such as dealer re-allowances and marketing and distribution fees, based on sales of mutual fund products and annuities. Sales of investment and savings products are influenced by the overall demand for investment products in the United States and Canada, as well as by the size and productivity of the independent sales force. We generally experience seasonality in our Investment and Savings Products segment results due to our high concentration of sales of retirement account products. These accounts are typically funded in February through April, coincident with our ~~clients'~~clients’ tax return preparation season. While we believe the size of the independent sales force is a factor in driving sales volume in this segment, there are a number of other variables, such as economic and market conditions, which may have a significantly greater effect on sales volume in any given fiscal period.

Asset values in client accounts. We earn marketing and distribution fees (trail commissions or, with respect to U.S. mutual funds, 12b-1 fees) on mutual fund and annuity assets in the United States and Canada. In the United States, we also earn investment advisory and administrative fees on assets in managed investments. In Canada, we earn management fees on certain mutual fund assets and on the segregated funds for which we serve as investment manager. Asset values are influenced by new product sales, ongoing contributions to existing accounts, redemptions and the change in market values in existing accounts. While we offer a wide variety of asset classes and investment styles, our ~~clients'~~clients’ accounts are primarily invested in equity funds.

Positions. We earn transfer agent recordkeeping fees for administrative functions we perform on behalf of several of our mutual fund providers. An individual client account may include multiple fund positions for which we earn transfer agent recordkeeping fees. We may also receive fees earned for non-bank custodial services that we provide to clients with retirement plan accounts.

Sales mix. While our investment and savings products all provide similar long-term economic returns to the Company, our results in a given fiscal period will be affected by changes in the overall mix of products within these categories. Examples of changes in the sales mix that influence our results include the following:

Corporate and Other Distributed Products Segment. We earn revenues and pay commissions and referral fees within our Corporate and Other Distributed Products segment for various other insurance products, prepaid legal services and other financial products, all of which are originated by third parties. Our Corporate and Other Distributed Products segment also includes in-force policies from several discontinued lines of insurance underwritten by NBLIC.

Corporate and Other Distributed Products segment net investment income reflects actual net investment income recognized by the Company less the amount allocated to our Term Life Insurance segment based on the assumed net interest accreted to the segment’s U.S. GAAP-measured future policy benefit reserve liability less DAC. Actual net investment income reflected in the Corporate and Other Distributed Products segment is impacted by the size and performance of our invested asset portfolio, which can be influenced by interest rates, credit spreads, and the mix of invested assets.

The Corporate and Other Distributed Products segment also includes corporate income and expenses not allocated to our other segments, general and administrative expenses (other than expenses that are allocated to our Term Life Insurance or Investment and Savings Products segments), interest expense on notes payable, redundant reserve financing transactions and our revolving credit facility, as well as realized gains and losses on our invested asset portfolio.

Capital Structure. Our financial results are affected by our capital structure, which includes our senior unsecured notes (the “Senior Notes”), redundant reserve financing transactions, our revolving credit facility, and our common stock. See Note ~~12 (Debt)~~7 (Stockholders’ Equity), Note 10 (Commitments and Contingent Liabilities), and Note ~~7 (Stockholders’ Equity)~~12 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report for more information on changes in our capital structure.

Foreign Currency. The Canadian dollar is the functional currency for our Canadian subsidiaries and our consolidated financial results, reported in U.S. dollars, are affected by changes in the currency exchange rate. As such, the translated amount of revenues, expenses, assets and liabilities attributable to our Canadian subsidiaries will be higher or lower in periods where the Canadian dollar appreciates or weakens relative to the U.S. dollar, respectively. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Canadian Currency Risk included in our ~~2018~~2019 Annual Report and Note 2 (Segment and Geographical Information) to our unaudited condensed consolidated financial statements included elsewhere in this report for more information on our Canadian subsidiaries and the impact of foreign currency on our financial results.

We prepare our financial statements in accordance with U.S. GAAP. These principles are established primarily by the Financial Accounting Standards Board. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions based on currently available information when recording transactions resulting from business operations. Our significant accounting policies are described in Note 1 (Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies) to our consolidated financial statements included in our ~~2018~~2019 Annual Report. The most significant items on our condensed consolidated balance sheets are based on fair value determinations, accounting estimates and actuarial determinations, which are susceptible to changes in future periods and could affect our results of operations and financial position.

The estimates that we deem to be most critical to an understanding of our results of operations and financial position are those related to DAC, future policy benefit reserves and corresponding amounts recoverable from reinsurers, income taxes, and the valuation of investments. The preparation and evaluation of these critical accounting estimates involve the use of various assumptions developed from management’s analyses and judgments. Subsequent experience or use of other assumptions could produce significantly different results.

Accounting Policy Changes. On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASC 326”). ASC 326 maintains the fundamental incurred probable loss approach for measuring losses in the condensed consolidated statement of income and replaces the other-than-temporary impairment model with a subtly different credit loss model. For available-for-sale securities in an unrealized loss position that we intend to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis, we still recognize the impairment in our condensed consolidated statements of income by writing down the amortized cost basis to the fair value under ASC 326. For available-for-sale securities in an unrealized loss position that we do not intend to sell or it is not more-likely-than-not that we will be required to sell before the expected recovery of the amortized cost basis, ASC 326 requires that we recognize the portion of the impairment that is due to a credit loss in our condensed consolidated statements of income through an allowance. We are allowed to reverse credit losses previously recognized in the allowance in situations where the estimate of credit losses on those securities has declined. The amendments in ASC 326 also preclude us from considering the length of time an available-for-sale security has been in an unrealized loss position and removes the requirement to consider recoveries or declines in fair value after the balance sheet date when determining whether an impairment on a security is due to a credit loss. The adoption of ASC 326 has not resulted in any material changes to impairment losses recognized in our condensed consolidated statements of income for available-for-sale securities.

During the three months ended ~~June 30, 2019,~~March 31, 2020, there have been no changes in the accounting methodology for items that we have identified as critical accounting estimates. For additional information regarding our critical accounting estimates, see the Critical Accounting Estimates section of MD&A included in our ~~2018~~2019 Annual Report.

Primerica, Inc. and Subsidiaries Results. Our results of operations were as follows:

	Three months ended June 30,						Change						Six months ended June 30,						Change						Three months ended March 31,						Change
	2019			2018			$			%			2019			2018			$			%			2020			2019			$			%
	(Dollars in thousands)																								(Dollars in thousands)
Revenues:
Direct premiums	$	687,262		$	667,191		$	20,071			3	%	$	1,364,548		$	1,323,278		$	41,270			3	%	$	702,637		$	677,286		$	25,351			4	%
Ceded premiums		(400,588	)		(403,449	)		(2,861	)		(1	)%		(790,383	)		(797,698	)		(7,315	)		(1	)%		(386,825	)		(389,795	)		(2,970	)		(1	)%
Net premiums		286,674			263,742			22,932			9	%		574,165			525,580			48,585			9	%		315,812			287,491			28,321			10	%
Commissions and fees		178,468			167,940			10,528			6	%		345,783			334,767			11,016			3	%		190,069			167,315			22,754			14	%
Investment income net of investment expenses		36,637			29,082			7,555			26	%		71,424			56,472			14,952			26	%		28,892			34,785			(5,893	)		(17	)%
Interest expense on surplus note		(11,769	)		(9,052	)		2,717			30	%		(22,444	)		(17,425	)		5,019			29	%		(13,472	)		(10,674	)		2,798			26	%
Net investment income		24,868			20,030			4,838			24	%		48,980			39,047			9,933			25	%		15,420			24,111			(8,691	)		(36	)%
Realized investment gains (losses), including other-than-temporary impairment losses		1,067			1,313			(246	)	*				3,914			(344	)		4,258		*
Realized investment gains (losses)																										(10,030	)		2,847			(12,877	)	*
Other, net		13,825			14,790			(965	)		(7	)%		27,048			28,687			(1,639	)		(6	)%		13,665			13,223			442			3	%
Total revenues		504,902			467,815			37,087			8	%		999,890			927,737			72,153			8	%		524,936			494,987			29,949			6	%

Benefits and expenses:
Benefits and claims		115,068			105,069			9,999			10	%		237,352			221,960			15,392			7	%		134,813			122,284			12,529			10	%
Amortization of DAC		58,762			53,847			4,915			9	%		123,390			114,011			9,379			8	%		70,311			64,628			5,683			9	%
Sales commissions		90,099			82,954			7,145			9	%		173,898			165,473			8,425			5	%		96,607			83,799			12,808			15	%
Insurance expenses		44,570			43,451			1,119			3	%		87,972			84,560			3,412			4	%		48,709			43,402			5,307			12	%
Insurance commissions		5,829			6,417			(588	)		(9	)%		11,447			12,294			(847	)		(7	)%		6,844			5,619			1,225			22	%
Interest expense		7,201			7,229			(28	)	*				14,381			14,401			(20	)	*				7,192			7,180			12		*
Other operating expenses		55,913			55,083			830			2	%		121,622			118,311			3,311			3	%		65,914			65,707			207		*
Total benefits and expenses		377,442			354,050			23,392			7	%		770,062			731,010			39,052			5	%		430,390			392,619			37,771			10	%
Income before income taxes		127,460			113,765			13,695			12	%		229,828			196,727			33,101			17	%		94,546			102,368			(7,822	)		(8	)%
Income taxes		30,014			27,065			2,949			11	%		53,217			44,313			8,904			20	%		22,077			23,203			(1,126	)		(5	)%
Net income	$	97,446		$	86,700		$	10,746			12	%	$	176,611		$	152,414		$	24,197			16	%	$	72,469		$	79,165		$	(6,696	)		(8	)%

Total revenues. Total revenues increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the same period in ~~2018~~2019 driven by incremental premiums on term life insurance policies that are not subject to the IPO coinsurance transactions. The run-off of business subject to these same transactions is reflected in the decline in ceded premiums. Commissions and fees from our Investment and Savings Products segment increased largely due to growth in product sales and higher average client asset values in 2020 as compared to 2019.

Net investment income ~~increased~~decreased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the same period in ~~2018~~2019 largely due to the ~~positive~~negative impact from a ~~higher~~lower total return on the deposit asset backing the 10% coinsurance agreement that is subject to deposit method accounting. The ~~$3.7 million higher~~lower total return of $8.5 million on this deposit asset was primarily due to a ~~favorable~~negative mark-to-market adjustment as fixed income security prices ~~rose~~fell during the current year period ~~and fell during~~as a result of economic uncertainty associated with the ~~prior year period, as well as higher book earnings~~COVID-19 pandemic. Also contributing to a decrease in net investment income was lower yield on ~~the deposit asset as the duration and book yield~~our invested portfolio of ~~the investments comprising the deposit asset have both increased in 2019.~~Aapproximately $2.1 million, partially offset by larger invested asset portfolio ~~also contributed approximately $2 million to the higher~~which resulted in an increase in net investment income ~~when~~of approximately $1.8 million compared to the prior ~~period, partially offset by $0.9 million of lower net investment income due to lower total portfolio yields.~~period. Investment income net of investment expenses includes interest earned on our held-to-maturity invested asset, which is completely offset by interest expense on surplus note, thereby eliminating any impact on net investment income. Amounts recognized for each line item will remain offsetting and will fluctuate from period to period along with the principal amounts of the held-to-maturity asset and the surplus note based on the balance of reserves being contractually supported under a redundant reserve financing transaction used by Vidalia Re, Inc. (“Vidalia Re Financing Transaction”). For more information on the Vidalia Re Financing Transaction, see Note 3 (Investments) and Note 12 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Realized investment gains (losses) during the three months ended March 31, 2020 was a loss compared to a gain in the same period in 2019 primarily due to $6.7 million negative mark-to-market adjustment on equity securities held within our investment portfolio as a result of market reaction to the economic disruption caused by the COVID-19 pandemic. Also contributing to the realized investment loss in the current period is the recognition of $3.7 million of credit losses for specific issuers that operate in distressed industry sectors that were particularly affected by deteriorating credit conditions during the three months ended March 31, 2020.

Total benefits and expenses. Total benefits and expenses increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 led by growth in premium-related costs, which include benefits and claims and amortization of DAC. Sales commissions expense also increased in the three months ended March 31, 2020 versus the three months ended March 31,

2019 due to increased commissions and fees revenue. Insurance expenses were higher due to increases in expenses to support growth in the business and to enhance technology-related capabilities.

Income taxes. Our effective income tax rate for the three months ended ~~June 30, 2019~~March 31, 2020 was ~~23.5%~~23.4%, ~~consistent with 23.8%~~compared to 22.7% for the three months ended ~~June 30, 2018.~~

~~Results for~~March 31, 2019 due to lower tax benefits recognized in the ~~Six Months Ended June 30, 2019~~

~~Total revenues.~~ ~~Total revenues increased during the six months ended June 30, 2019~~current period on equity award vesting compared to the same period in ~~2018 driven by incremental premiums~~2019. Tax benefits recognized on ~~term life insurance policies that are not subject~~equity awards include increases in the share price of equity awards from the grant date to the ~~IPO coinsurance transactions. The run-off of business subject to these same transactions is reflected~~vest date and such increases were lower in ~~the decline in ceded premiums.~~

~~Net investment income increased during the six months ended June 30, 2019~~2020 as compared to the same period in 2018 largely due to the positive impact from a higher total return on the deposit asset backing the 10% coinsurance agreement that is subject to deposit method accounting. The $7.7 million higher total return on this deposit asset was due to a favorable mark-to-market adjustment as fixed income prices rose during the current year period and fell during the prior year period, as well as higher book earnings on the deposit asset as the duration and book yield of the investments comprising the deposit asset have both increased inwith 2019. A larger invested asset portfolio also contributed approximately $3.6 million to the higher net investment income when compared to the prior period, partially offset by $1.4 million of lower net investment income due to lower portfolio yields.

Realized investment gains (losses), including other-than-temporary impairment (“OTTI”) losses increased to a gain during the six months ended June 30, 2019 compared to a loss for the same period in 2018 as a result of changes in the value of equity securities held within our investment portfolio which are marked to market through the income statement.

~~Total benefits and expenses.~~ Total benefits and expenses increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 led by growth in premium-related costs, which include benefits and claims and amortization of DAC. Insurance expenses and other operating expenses were higher primarily due to an increase of approximately $4.5 million in technology-related expenses as well as $2.3 million of increased expenses for annual employee merit increases and other expenses to support the growth of the business.

~~Income taxes.~~ Our effective income tax rate for the six months ended June 30, 2019 was 23.2% compared to 22.5% for the six months ended June 30, 2018. The lower rate in the prior year period was driven by an adjustment made to the transition impact of the Tax Cuts and Jobs Act of 2017, which resulted in a $1.8 million benefit recorded in the first quarter of 2018.

Term Life Insurance Segment Results. Our results for the Term Life Insurance segment were as follows:

	Three months ended June 30,						Change						Six months ended June 30,						Change						Three months ended March 31,						Change
	2019			2018			$			%			2019			2018			$			%			2020			2019			$			%
	(Dollars in thousands)																								(Dollars in thousands)
Revenues:
Direct premiums	$	681,004		$	660,505		$	20,499			3	%	$	1,351,759		$	1,309,871		$	41,888			3	%	$	696,564		$	670,755		$	25,809			4	%
Ceded premiums		(398,927	)		(401,686	)		(2,759	)		(1	)%		(787,027	)		(794,247	)		(7,220	)		(1	)%		(385,232	)		(388,100	)		(2,868	)		(1	)%
Net premiums		282,077			258,819			23,258			9	%		564,732			515,624			49,108			10	%		311,332			282,655			28,677			10	%
Allocated investment income		4,736			3,246			1,490			46	%		9,180			6,334			2,846			45	%		6,246			4,444			1,802			41	%
Other, net		10,055			10,913			(858	)		(8	)%		19,800			21,328			(1,528	)		(7	)%		10,168			9,744			424			4	%
Total revenues		296,868			272,978			23,890			9	%		593,712			543,286			50,426			9	%		327,746			296,843			30,903			10	%
Benefits and expenses:
Benefits and claims		111,480			101,755			9,725			10	%		229,923			214,586			15,337			7	%		128,563			118,443			10,120			9	%
Amortization of DAC		56,179			51,257			4,922			10	%		120,245			107,930			12,315			11	%		65,840			64,066			1,774			3	%
Insurance expenses		42,914			41,282			1,632			4	%		84,746			80,238			4,508			6	%		47,165			41,832			5,333			13	%
Insurance commissions		2,298			2,856			(558	)		(20	)%		4,461			5,084			(623	)		(12	)%		3,286			2,163			1,123			52	%
Total benefits and expenses		212,871			197,150			15,721			8	%		439,375			407,838			31,537			8	%		244,854			226,504			18,350			8	%
Income before income taxes	$	83,997		$	75,828		$	8,169			11	%	$	154,337		$	135,448		$	18,889			14	%	$	82,892		$	70,339		$	12,553			18	%

Net premiums. Direct premiums increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 largely due to sales of new policies in recent periods that have contributed to growth in the in-force book of business. The decline in ceded premiums includes ~~$14.9~~$13.3 million in lower coinsurance ceded premiums due to the run-off of business subject to the IPO coinsurance transactions, partially offset by ~~$12.1~~$10.4 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages. The continued impact from the increase inof direct premiums combined with the reduction in ceded premiums caused net premiums to grow at a higher rate than direct premiums.

Allocated investment income. Allocated investment income increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 due to an increase in the assumed net interest accreted to our Term Life Insurance segment’s future policy benefit reserve liability less deferred acquisition costs as our Term Life Insurance segment’s in-force business continues to grow.

Benefits and claims. Benefits and claims increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the same period in ~~2018~~2019 primarily due to the growth in net premiums. Claims experience was ~~in-line~~in line with historical ~~trends and was $2 million higher when compared to favorable experience during the same period of 2018.~~trends.

Amortization of DAC. The amortization of DAC increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 largely due to growth in net ~~premiums. Persistency~~premiums during the ~~second~~first quarter of ~~2019 was generally in line with~~2020 compared to the ~~comparable~~same period in ~~2018.~~2019. The rate of growth in DAC is lower than the premium growth due to the impact of favorable trends in persistency in recent periods.

Insurance expenses. Insurance expenses increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 primarily due to increases in expenses to support ~~the~~ growth ofin the business and to enhance technology-related ~~expenses.~~capabilities.

~~Net premiums.~~ ~~Direct premiums~~Insurance commissions increased during the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 compared to the ~~six~~three months ended ~~June 30, 2018 largely due to~~March 31, 2019 as a result of higher non-deferrable sales of new policies in recent periods that have contributed to growth in the in-force book of business. The decline in ceded premiums includes $30.6 million in lower coinsurance ceded premiums due to the run-off of business subject to the IPO coinsurance transactions, partially offset by $23.3 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages. The continued impact from the increase in direct premiums combined with the reduction in ceded premiums caused net premiums to grow at a higher rate than direct premiums.

~~Allocated investment income.~~ ~~Allocated investment income increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 due the same factor discussed above in the three-month comparison.~~

~~Benefits and claims.~~ Benefits and claims increased during the six months ended June 30, 2019 compared to the same period in 2018 primarily due to the growth in net premiums. Claims experience was in-line with historical trends.

~~Amortization of DAC.~~ The amortization of DAC increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 largely due to growth in net premiums. Persistency was generally in line with the comparable period in 2018.

~~Insurance expenses.~~ Insurance expenses increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to $4.5 million in increased expenses to support the growth of the business and technology-related expenses. force promotional activities.

Investment and Savings Products Segment Results. Investment and Savings Products segment results were as follows:

Three months ended June 30,

Change

Six months ended June 30,

Change

2019

2018

$

%

2019

2018

$

%

(Dollars in thousands)

Revenues:

Commissions and fees:

Sales-based revenues

$
71,438

$
64,307

$
7,131

11
%

$
138,435

$
128,768

$
9,667

8
%
Asset-based revenues

79,317

75,672

3,645

5
%

152,956

150,322

2,634

2
%
Account-based revenues

19,897

20,438

(541
)

(3
)%

39,509

41,033

(1,524
)

(4
)%
Other, net

2,434

2,424

10

*

4,856

4,760

96

2
%
Total revenues

173,086

162,841

10,245

6
%

335,756

324,883

10,873

3
%
Expenses:

Amortization of DAC

2,101

2,080

21

1
%

2,578

5,521

(2,943
)

(53
)%
Insurance commissions

3,155

3,132

23

1
%

6,180

6,332

(152
)

(2
)%
Sales commissions:

Sales-based

50,679

45,905

4,774

10
%

98,509

92,163

6,346

7
%
Asset-based

35,665

33,350

2,315

7
%

68,008

65,833

2,175

3
%
Other operating expenses

34,143

35,147

(1,004
)

(3
)%

70,455

71,820

(1,365
)

(2
)%
Total expenses

125,743

119,614

6,129

5
%

245,730

241,669

4,061

2
%
Income before income taxes

$
47,343

$
43,227

$
4,116

10
%

$
90,026

$
83,214

$
6,812

8
%

*

Three months ended March 31,

Change

2020

2019

$

%

(Dollars in thousands)
Revenues:

Commissions and fees:

Sales-based revenues

$
80,891

$
66,997

$
13,894

21
%

Asset-based revenues

81,395

73,639

7,756

11
%

Account-based revenues

20,204

19,613

591

3
%

Other, net

2,542

2,423

119

5
%

Total revenues

185,032

162,672

22,360

14
%

Expenses:

Amortization of DAC

4,305

477

3,828

803
%

Insurance commissions

3,201

3,025

176

6
%

Sales commissions:

Sales-based

56,561

47,831

8,730

18
%

Asset-based

36,323

32,343

3,980

12
%

Other operating expenses

36,942

36,312

630

2
%

Total expenses

137,332

119,988

17,344

14
%

Income before income taxes

$
47,700

$
42,684

$
5,016

12
%

~~Less than 1%.~~

Commissions and fees. Commissions and fees increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~ March 31, 2019driven by ~~growth in~~higher demand for mutual fund products and variable annuity ~~product sales, which have higher upfront commissions than other~~ products. Also contributing to the increase in commissions and fees was growth in asset-based revenues ~~largely reflecting higher~~as average client asset

values ~~driven by favorable~~increased in 2020 versus 2019 due to market performance and continued positive net ~~flows.~~ ~~Account-based revenues decreased compared to~~flows between the ~~prior year period due to~~two periods. The impact of the ~~completed transition~~significant decline in investment markets during the first quarter of ~~clients’ managed Freedom Portfolio accounts, for which we earned transfer agent recordkeeping fees and custodial fees, to~~2020 on average client asset values was limited as the ~~Lifetime Investments Platform, for which we do not earn transfer agent recordkeeping fees or custodial fees.~~decline occurred during the final month of the three months ended March 31, 2020.

Amortization of DAC. Amortization of DAC ~~remained consistent~~increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018.~~March 31, 2019 largely due to a negative market performance of the funds underlying our Canadian segregated funds product caused by market conditions and economic uncertainty associated with the COVID-19 pandemic in 2020 compared with positive market performance in 2019.

Sales commissions. The increase in sales-based and asset-based commissions for the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 were generally consistent with the increase in sales-based revenue and asset-based revenue, respectively.

Other operating expenses. Other operating expenses ~~decreased~~increased during the three months ended ~~June 30, 2019~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 due to increased spending on technology-related expenses, partially offset by the phase-in of reduced fees paid to a service provider for the Company’s transfer agent ~~record keeping platform, negotiated fee reductions with a managed account service provider, and operational efficiencies realized within the business.~~

~~Commissions and fees.~~ ~~Commissions and fees increased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018~~ driven by growth in annuity product sales, which have higher upfront commissions than other products. This was partially offset by a decrease in mutual fund sales due to lower demand for retail mutual fund products as a result of market volatility, in particular, lower equity prices at the beginning of 2019. Also contributing to the increase in commissions and fees was growth in asset-based revenues largely reflecting higher ~~average client asset values~~ driven by favorable market performance and continued positive net flows. Account-based revenues decreased compared to the prior year period due to the completed transition of clients’ managed Freedom Portfolio accounts, for which we earned transfer agent recordkeeping ~~fees and custodial fees, to the Lifetime Investments Platform, for which we do not earn transfer agent recordkeeping fees or custodial fees.~~

~~Amortization of DAC.~~ Amortization of DAC decreased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 largely due to favorable market performance of the funds underlying our Canadian segregated funds product in the first quarter of 2019 compared with unfavorable market performance in the first quarter of 2018.

~~Sales commissions.~~ The increase in sales-based and asset-based commissions for the six months ended June 30, 2019 compared to the six months ended June 30, 2018 were generally consistent with the increase in sales-based revenue and asset-based revenue, respectively.

~~Other operating expenses.~~ ~~Other operating expenses decreased during the six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to the factors discussed above in the three-month comparison.~~ platform.

Corporate and Other Distributed Products Segment Results. Corporate and Other Distributed Products segment results were as follows:

	Three months ended June 30,						Change						Six months ended June 30,						Change						Three months ended March 31,						Change
	2019			2018			$			%			2019			2018			$			%			2020			2019			$			%
	(Dollars in thousands)																								(Dollars in thousands)
Revenues:
Direct premiums	$	6,258		$	6,686		$	(428	)		(6	)%	$	12,789		$	13,407		$	(618	)		(5	)%	$	6,073		$	6,531		$	(458	)		(7	)%
Ceded premiums		(1,661	)		(1,763	)		(102	)		(6	)%		(3,356	)		(3,451	)		(95	)		(3	)%		(1,593	)		(1,695	)		(102	)		(6	)%
Net premiums		4,597			4,923			(326	)		(7	)%		9,433			9,956			(523	)		(5	)%		4,480			4,836			(356	)		(7	)%
Commissions and fees		7,817			7,523			294			4	%		14,883			14,644			239			2	%		7,579			7,066			513			7	%
Investment income net of investment expenses		31,901			25,836			6,065			23	%		62,244			50,138			12,106			24	%		22,646			30,341			(7,695	)		(25	)%
Interest expense on surplus note		(11,769	)		(9,052	)		2,717			30	%		(22,444	)		(17,425	)		5,019			29	%		(13,472	)		(10,674	)		2,798			26	%
Net investment income		20,132			16,784			3,348			20	%		39,800			32,713			7,087			22	%		9,174			19,667			(10,493	)		(53	)%
Realized investment gains (losses), including other-than- temporary impairment losses		1,067			1,313			(246	)	*				3,914			(344	)		4,258		*
Realized investment gains (losses)																										(10,030	)		2,847			(12,877	)	*
Other, net		1,335			1,453			(118	)		(8	)%		2,392			2,599			(207	)		(8	)%		955			1,056			(101	)		(10	)%
Total revenues		34,948			31,996			2,952			9	%		70,422			59,568			10,854			18	%		12,158			35,472			(23,314	)		(66	)%
Benefits and expenses:
Benefits and claims		3,588			3,314			274			8	%		7,430			7,373			57			1	%		6,250			3,841			2,409			63	%
Amortization of DAC		482			510			(28	)		(5	)%		567			560			7			1	%		166			85			81			95	%
Insurance expenses		1,657			2,169			(512	)		(24	)%		3,226			4,322			(1,096	)		(25	)%		1,544			1,570			(26	)		(2	)%
Insurance commissions		376			429			(53	)		(12	)%		806			879			(73	)		(8	)%		357			431			(74	)		(17	)%
Sales commissions		3,755			3,699			56			2	%		7,381			7,477			(96	)		(1	)%		3,723			3,625			98			3	%
Interest expense		7,201			7,229			(28	)	*				14,381			14,401			(20	)	*				7,192			7,180			12		*
Other operating expenses		21,769			19,936			1,833			9	%		51,166			46,491			4,675			10	%		28,972			29,395			(423	)		(1	)%
Total benefits and expenses		38,828			37,286			1,542			4	%		84,957			81,503			3,454			4	%		48,204			46,127			2,077			5	%
Loss before income taxes	$	(3,880	)	$	(5,290	)	$	(1,410	)		27	%	$	(14,535	)	$	(21,935	)	$	(7,400	)		(34	)%	$	(36,046	)	$	(10,655	)	$	25,391			238	%

Total revenues. Total revenues decreased during the three months ended ~~June 30, 2019 increased as~~March 31, 2020 compared to the three months ended ~~June 30, 2018~~March 31, 2019 largely due to the ~~increase~~decrease in net investment income and realized investment gains (losses) as discussed in the Primerica, Inc. and Subsidiaries Results of Operations section above.

~~Total revenues.~~ Total revenues during the six months ended June 30, 2019 increased as compared to the six months ended June 30, 2018 largely due to the increase in net investment income and realized investment gains as discussed in the Primerica, Inc. and Subsidiaries Results of Operation section above.

~~Total~~higher benefits and ~~expenses.~~ ~~Total benefits~~claims experienced on non-term life insurance business underwritten by NBLIC and ~~expenses increased during~~ the ~~six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to increased technology, other~~recognition of a $1.6 million allowance for ceded claims on a closed block of business ~~development, and employee-related costs.~~ that may not be collected from a reinsurer that was ordered into receivership.

Investments. Our insurance business is primarily focused on selling term life insurance, which does not include an investment component for the policyholder. The invested asset portfolio funded by premiums from our term life insurance business does not involve the substantial asset accumulations and spread requirements that exist with other non-term life insurance products. As a result, the profitability of our term life insurance business is not as sensitive to the impact that interest rates have on our invested asset portfolio and investment income as the profitability of other companies that distribute non-term life insurance products.

We follow a conservative investment strategy designed to emphasize the preservation of our invested assets and provide adequate liquidity for the prompt payment of claims. To meet business needs and mitigate risks, our investment guidelines provide restrictions on our portfolio’s composition, including limits on asset type, per issuer limits, credit quality limits, portfolio duration, limits on the amount of investments in approved countries and permissible security types. We also manage and monitor our allocation of investments to limit the accumulation of any disproportionate concentrations of risk among industry sectors or issuer countries outside of the U.S. and Canada. In addition, as of ~~June 30, 2019,~~March 31, 2020, we did not hold any country of issuer concentrations outside of the U.S. or Canada that represented more than 5% of the fair value of our available-for-sale invested asset portfolio or any industry concentrations of corporate bonds that represented more than 10% of the fair value of our available-for-sale invested asset portfolio.

We invest a portion of our portfolio in assets denominated in Canadian dollars to support our Canadian operations. Additionally, to ensure adequate liquidity for payment of claims, we take into account the maturity and duration of our invested asset portfolio and our general liability profile.

We also hold within our invested asset portfolio a credit enhanced note (“LLC Note”) issued by a limited liability company owned by a third-party service provider which is classified as a held-to-maturity security. The LLC Note, which is scheduled to mature on December 31, 2030, was obtained in exchange for the Surplus Note of equal principal amount issued by Vidalia Re. For more information on the LLC Note, see Note 3 (Investments) to our unaudited condensed consolidated financial statements included elsewhere in this report.

We have an investment committee composed of members of our senior management team that is responsible for establishing and maintaining our investment guidelines and supervising our investment activity. Our investment committee regularly monitors our overall investment results and our compliance with our investment objectives and guidelines. We use a third-party investment advisor to assist us in the management of our investing activities. Our investment advisor reports to our investment committee.

Our invested asset portfolio is subject to a variety of risks, including risks related to general economic conditions, market volatility, interest rate fluctuations, liquidity risk and credit and default risk. Investment guideline restrictions have been established to minimize the effect of these risks but may not always be effective due to factors beyond our control. Interest rates and credit spreads are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. A significant increase in interest rates or credit spreads could result in significant losses, realized or unrealized, in the value of our invested asset portfolio. For example, from December 31, 2019 to March 31, 2020 market volatility and economic uncertainty associated with the COVID-19 pandemic caused a sharp increase in credit spreads, which translated to a reduction in the net unrealized gain on available-for-sale securities portfolio from $82.2 million to a net unrealized loss of $1.3 million. Additionally, with respect to some of our investments, we are subject to prepayment and, therefore, reinvestment risk.

June 30, 2019

December 31, 2018

March 31, 2020

December 31, 2019

Average rating of our fixed-maturity portfolio

Average duration of our fixed-maturity portfolio

3.6 years

3.5 years

3.6 years

Average book yield of our fixed-maturity portfolio

3.74%

3.89%

3.55%

3.54%

The distribution of our investments in fixed-maturity securities (excluding our held-to-maturity security) by rating, including those classified as trading securities, were as follows:

	June 30, 2019					December 31, 2018					March 31, 2020					December 31, 2019
	Amortized cost ⁽¹⁾		%			Amortized cost ⁽¹⁾		%			Amortized cost ⁽¹⁾		%			Amortized cost ⁽¹⁾		%
	(Dollars in thousands)										(Dollars in thousands)
AAA	$	452,171		21	%	$	444,466		21	%	$	524,942		23	%	$	555,640		24	%
AA		245,042		11	%		217,541		10	%		277,247		12	%		271,936		12	%
A		496,936		23	%		469,044		22	%		523,598		23	%		543,351		23	%
BBB		905,443		42	%		898,694		43	%		889,352		39	%		885,497		38	%
Below investment grade		65,258		3	%		59,368		4	%		70,045		3	%		59,190		3	%
Not rated		2,970	*				3,319	*				3,101	*				2,389	*
Total	$	2,167,820		100	%	$	2,092,432		100	%	$	2,288,285		100	%	$	2,318,003		100	%

The ten largest holdings within our fixed-maturity invested asset portfolio (excluding our held-to-maturity security) were as follows:

	June 30, 2019									March 31, 2020
Issuer	Fair value			Amortized cost ⁽¹⁾			Unrealized gain (loss)		Credit rating	Fair value			Amortized cost ⁽¹⁾			Unrealized gain (loss)			Credit rating
	(Dollars in thousands)									(Dollars in thousands)
Government of Canada	$	24,516		$	24,070		$	446	AAA	$	19,286		$	18,625		$	661		AAA
Province of Ontario Canada											13,191			12,552			639		A+
Province of Quebec Canada		13,882			12,725			1,157	AA-		12,913			11,787			1,126		AA-
Wells Fargo & Co											11,376			11,702			(326	)	A-
Enbridge Inc											10,681			10,876			(195	)	A+
Cigna Corp											10,414			10,192			222		A-
Bank of America Corp		12,109			11,880			229	A-		10,095			9,822			273		A-
Honda Motor Co Ltd		11,844			11,587			257	A
Office Properties Income Trust		11,554			11,470			84	BBB-
Province of British Columbia Canada											10,093			9,729			364		AAA
Province of Alberta Canada		11,528			11,057			471	A+		9,984			9,538			446		A+
Cigna Corp		11,201			10,849			352	A-
Province of Ontario Canada		10,904			10,419			485	A+
Province of British Columbia Canada		10,727			10,450			277	AAA
Siemens AG		9,990			9,975			15	A+
Province of New Brunswick Canada											9,180			8,790			390		A+
Total – ten largest holdings	$	128,255		$	124,482		$	3,773		$	117,213		$	113,613		$	3,600
Total – fixed-maturity securities	$	2,239,635		$	2,167,820					$	2,287,034		$	2,288,285
Percent of total fixed-maturity securities		6	%		6	%					5	%		5	%

For additional information on our invested asset portfolio, see Note 3 (Investments) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Dividends and other payments to the Parent Company from its subsidiaries are our principal sources of cash. The amount of dividends paid by the subsidiaries is dependent on their capital needs to fund future growth and applicable regulatory restrictions. The primary uses of funds by the Parent Company include the payments of stockholder dividends, interest on notes payable, general operating expenses, and income taxes, as well as repurchases of common shares outstanding. As of ~~June 30, 2019,~~March 31, 2020, the Parent Company had cash and invested assets of ~~$229.7~~$271.8 million.

The Parent Company’s subsidiaries generate operating cash flows primarily from term life insurance premiums (net of premiums ceded to reinsurers), income from invested assets, commissions and fees collected from the distribution of investment and savings products as well as other financial products. The ~~subsidiaries'~~subsidiaries’ principal operating cash outflows include the payment of insurance claims and benefits (net of ceded claims recovered from reinsurers), commissions to the sales force, insurance and other operating expenses, interest expense for future policy benefit reserves financing transactions, and income taxes.

The distribution and underwriting of term life insurance requires upfront cash outlays at the time the policy is issued as we pay a substantial majority of the sales commission during the first year following the sale of a policy and incur costs for underwriting activities at the inception of a policy’s term. During the early years of a ~~policy's~~policy’s term, we generally receive level term premiums in excess of claims paid. We invest the excess cash generated during earlier policy years in fixed-maturity and equity securities held in support of future policy benefit reserves. In later policy years, cash received from the maturity or sale of invested assets is used to pay claims in excess of level term premiums received.

Historically, cash flows generated by our businesses, primarily from our existing block of term life policies and our investment and savings products, have provided us with sufficient liquidity to meet our operating requirements. WeAlthough our cash flow could be adversely affected by the deteriorating economic conditions caused by the COVID-19 pandemic, we anticipate that cash flows from our businesses will continue to provide sufficient operating liquidity over the next 12 months.

~~We may~~If necessary, we could seek to enhance our liquidity position or capital structure through ~~borrowings from third-party sources,~~ sales of ~~debt~~our available-for-sale investment portfolio, changes in the timing or ~~equity securities, reserve financings~~amount of share repurchases, borrowings against our revolving credit facility, or some combination of these sources. Additionally, we believe that cash flows from our businesses and potential sources of funding will sufficiently support our long-term liquidity needs.

Cash Flows. The components of the ~~change~~changes in cash and cash equivalents were as follows:

	Six months ended June 30,						Change			Three months ended March 31,						Change
	2019			2018			$			2020			2019			$
	(In thousands)									(In thousands)
Net cash provided by (used in) operating activities	$	185,085		$	160,249		$	24,836		$	131,522		$	66,421		$	65,101
Net cash provided by (used in) investing activities		(56,762	)		(118,277	)		(61,515	)		(744	)		25,278			(26,022	)
Net cash provided by (used in) financing activities		(146,693	)		(161,377	)		(14,684	)		(112,274	)		(74,987	)		(37,287	)
Effect of foreign exchange rate changes on cash		1,207			(1,277	)		2,484			(2,295	)		776			(3,071	)
Change in cash and cash equivalents	$	(17,163	)	$	(120,682	)	$	(48,879	)	$	16,209		$	17,488		$	(1,279	)

Operating Activities. Cash provided by operating activities increased during the ~~six~~three months ended ~~June 30, 2019 versus~~March 31, 2020 compared to the ~~six~~three months ended ~~June 30, 2018 driven~~March 31, 2019in large part due to the impact in the prior year of reduced cash flows caused by ~~growth~~the timing of when cash payments to or from reinsurers were due for ceded premiums and ceded claims. In addition, cash flows from operations increased in 2020 due to higher cash receipts from the collection of premium revenues in excess of benefits and claims paid in our Term Life Insurance segment. The impact of direct premium growth and the additional layering of net premiums from term life insurance policies not subject to the IPO coinsurance transactions has continued to ~~generate~~drive positive incremental ~~cash. The year-over-year increase in~~ cash ~~provided by~~flows from operating ~~activities was partially offset by the timing effect of when cash payments to/from reinsurers were due for ceded premiums and ceded claims.~~activities.

Investing Activities. Cash ~~used in investing activities decreased duringthe six months ended June 30, 2019 versus the six months ended June 30, 2018 driven by a reduction in the acquisition of fixed-maturity securities largely due~~flows related to timing influenced by when our subsidiaries paid dividends to the Parent Company and when cash was able to be deployed to acquire fixed-maturity securities. Also contributing to the net decrease in cash used in investing activities was a slight use of cash ~~received from maturing short-term investments. Partially offsetting this decrease~~during the three months ended March 31, 2020 compared to a source of cash in ~~cash used in investing was~~2019 as a result of higher purchases of fixed ~~assets~~maturity securities as our invested asset portfolio has increased with the continued growth of our term life business in force. This was partially offset due to ~~support technology-related initiatives.~~cash receipts from the sale and maturity of fixed-maturity securities.

Financing Activities. Cash used in financing activities ~~decreased~~increased during the ~~six~~three months ended ~~June 30, 2019~~March 31, 2020 compared to the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 mainly due to the accelerated timing of share repurchases made in 2020 in response to market conditions that provided an opportunity to repurchase shares at attractive prices. In addition, the level of ~~common stock which was influenced by the market price. The decrease was partially offset by higher dividends paid to shareholders~~share repurchase activity increased as the ~~Company~~size of the share repurchase program in 2020 increased ~~its per share dividend.~~over 2019.

Risk-Based Capital (“RBC”). The National Association of Insurance Commissioners (“NAIC”) has established RBC standards for U.S. life insurers, as well as a risk-based capital model act (the “RBC Model Act”) that has been adopted by the insurance regulatory authorities. The RBC Model Act requires that life insurers annually submit a report to state regulators regarding their RBC based upon four categories of risk: asset risk; insurance risk; interest rate risk and business risk. The capital requirement for each is determined by

applying factors that vary based upon the degree of risk to various asset, premiums and policy benefit reserve items. The formula is an early warning tool to identify possible weakly capitalized companies for purposes of initiating further regulatory action.

As of ~~June 30, 2019,~~March 31, 2020, our U.S. life insurance subsidiaries maintained statutory capital and surplus substantially in excess of the applicable regulatory requirements and remain well positioned to support existing operations and fund future growth.

In Canada, an insurer’s minimum capital requirement is overseen by the Office of the Superintendent of Financial Institutions (“OSFI”) and determined as the sum of the capital requirements for five categories of risk: asset default risk; mortality/morbidity/lapse risks; changes in interest rate environment risk; segregated funds risk; and foreign exchange risk. As of ~~June 30, 2019,~~March 31, 2020, Primerica Life Insurance Company of Canada was in compliance with Canada’s minimum capital requirements as determined by OSFI.

Redundant Reserve Financings. The Model Regulation entitled Valuation of Life Insurance Policies, commonly known as Regulation XXX, requires insurers to carry statutory policy benefit reserves for term life insurance policies with long-term premium guarantees which are often significantly in excess of the future policy benefit reserves that insurers deem necessary to satisfy claim obligations (“redundant policy benefit reserves”). Accordingly, many insurance companies have sought ways to reduce their capital needs by financing redundant policy benefit reserves through bank financing, reinsurance arrangements and other financing transactions.

We have established Peach Re, Inc. (“Peach Re”) and Vidalia Re as special purpose financial captive insurance companies and wholly owned subsidiaries of Primerica Life. Primerica Life has ceded certain term life policies issued prior to 2011 to Peach Re as part of a Regulation XXX redundant reserve financing transaction (the “Peach Re Redundant Reserve Financing Transaction”) and has ceded certain term life policies issued in 2011 through 2017 to Vidalia Re as part of a Regulation XXX redundant reserve financing transaction (the “Vidalia Re Redundant Reserve Financing Transaction”). These redundant reserve financing transactions allow us to more efficiently manage and deploy our capital.

The NAIC has adopted a model regulation for determining reserves using a principle-based approach (“principle-based reserves” or “PBR”), which is designed to reflect each insurer’s own experience in calculating reserves and move away from a standardized reserving formula. Primerica Life adopted PBR ~~during the first quarter~~as of January 1, 2018. The adoption of PBR facilitated extending the premium guarantees for Primerica Life for the entire initial term period for new sales. The PBR regulation will significantly ~~reduces~~reduce the statutory policy benefit reserve requirements, but ~~only applies to~~will apply for business issued after the effective date. As a result, we expect that the adoption of PBR will significantly reduce the need to engage in future redundant reserve financing transactions for business issued after the effective date. See Note 4 (Investments), Note 10 (Debt) and Note 16 (Commitments and Contingent Liabilities) to our consolidated financial statements within our ~~2018~~2019 Annual Report for more information on these redundant reserve financing transactions.

Notes Payable. The Company has $375.0 million of publicly-traded, Senior Notes outstanding issued at a price of 99.843% with an annual interest rate of 4.75%, payable semi-annually in arrears on January 15 and July 15. The Senior Notes mature July 15, 2022. We were in compliance with the covenants of the Senior Notes as of ~~June 30, 2019.~~March 31, 2020. No events of default occurred during the three ~~or six~~ months ended ~~June 30, 2019.~~March 31, 2020.

Rating Agencies. There have been no changes to Primerica, Inc.'s Senior Notes ratings or Primerica Life's financial strength ratings since December 31, ~~2018.~~2019.

Short-Term Borrowings. We had no short-term borrowings as of or during the three months ended ~~June 30, 2019.~~March 31, 2020.

Surplus Note. Vidalia Re issued the Surplus Note in exchange for the LLC Note as a part of the Vidalia Re Redundant Reserve Financing Transaction. The Surplus Note has a principal amount equal to the LLC Note and is scheduled to mature on December 31, 2030. For more information on the Surplus Note, see Note 12 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Off-Balance Sheet Arrangements. We have no transactions, agreements or other contractual arrangements to which an entity unconsolidated with the Company is a party, under which the Company maintains any off-balance sheet obligations or guarantees as of ~~June 30, 2019.~~March 31, 2020.

Credit Facility Agreement. We maintain an unsecured $200.0 million revolving credit facility (“Revolving Credit Facility”) with a syndicate of commercial banks that has a scheduled termination date of December 19, 2022. Amounts outstanding under the Revolving Credit Facility bear interest at a periodic rate equal to LIBOR or the base rate, plus in either case an applicable margin. The Revolving Credit Facility contains language that allows for the Company and the lenders to agree on a comparable or successor reference rate in the event LIBOR is no longer available, as is expected to happen in 2022. The Revolving Credit Facility also permits the issuance of letters of credit. The applicable margins are based on our debt rating with such margins for LIBOR rate loans and letters of credit ranging from 1.125% to 1.625% per annum and for base rate loans ranging from 0.125% to 0.625% per annum. Under the Revolving Credit Facility, we incur a commitment fee that is payable quarterly in arrears and is determined by our debt rating. This commitment fee ranges from 0.125% to 0.225% per annum of the aggregate $200.0 million commitment of the lenders under the R~~evolving~~Revolving Credit Facility. As of ~~June 30, 2019,~~March 31, 2020, no amounts have been drawn under the Revolving Credit Facility and we were in compliance with its covenants. Furthermore, no events of default have occurred under the Revolving Credit Facility in the ~~six~~three months ended ~~June 30, 2019.~~March 31, 2020.

Contractual Obligations Update. There have been no material changes in contractual obligations from those disclosed in the ~~2018~~2019 Annual Report.

Investors are cautioned that certain statements contained in this report as well as some statements in periodic press releases and some oral statements made by our officials during our presentations are “forward-looking” statements. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words “expect”, “intend”, “plan”, “anticipate”, “estimate”, “believe”, “will be”, “will continue”, “will likely result”, and similar expressions, or future conditional verbs such as “may”, “will”, “should”, “would”, and “could”. In addition, any statement concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible actions taken by us or our subsidiaries are also forward-looking statements. These forward-looking statements involve external risks and uncertainties, including, but not limited to, those described under the section entitled “Risk Factors” included herein.

Forward-looking statements are based on current expectations and projections about future events and are inherently subject to a variety of risks and uncertainties, many of which are beyond the control of our management team. All forward-looking statements in this report and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by these risks and uncertainties. These risks and uncertainties include, among others:

the Company’s or the independent sales representatives' violation of, or non-compliance with, laws and regulations and related claims and proceedings could expose us to material liabilities;

valuation of our investments and the determination of when the fair value of our available-for-sale invested assets is below amortized costs are both based on estimates that may prove to be incorrect;

Developments in any of these areas could cause actual results to differ materially from those anticipated or projected or cause a significant reduction in the market price of our common stock.

The foregoing list of risks and uncertainties may not contain all of the risks and uncertainties that could affect us. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. Accordingly, undue reliance should not be placed on these statements. We undertake no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law.

There have been no material changes in our exposures to market risk since December 31, ~~2018.~~2019. For details on the Company's interest rate, foreign currency exchange, and credit risks, see “Item 7A. Quantitative and Qualitative Information About Market Risks” in our ~~2018~~2019 Annual Report.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report (the “Evaluation Date”). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~June 30, 2019~~March 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

We are involved from time to time in legal disputes, regulatory inquiries and arbitration proceedings in the normal course of business. Additional information regarding certain legal proceedings to which we are a party is described under “Contingent Liabilities” in Note 10 (Commitments and Contingent Liabilities) to our unaudited condensed consolidated financial statements included elsewhere in this report, and such information is incorporated herein by reference. As of the date of this report, we do not believe any pending legal proceeding to which Primerica or any of its subsidiaries is a party is required to be disclosed pursuant to this item.

The following supplements and amends the Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 are incorporated herein by reference.

~~Our insurance business is highly regulated, and statutory and regulatory changes may~~

Major public health pandemics, epidemics or outbreaks, specifically the novel coronavirus COVID-19 (“COVID-19”) pandemic, could materially adversely ~~affect~~impact our business, financial condition and results of operations.

Our operations are ~~generally designed~~exposed to ~~protect~~ the ~~interests~~risk of major public health pandemics, epidemics or outbreaks (a “major public health crisis”), such as the public and policyholders. Those interests may conflict with the interests of our stockholders. Currently, in the United States, the power to regulate insurance resides almost exclusively with the states. The laws of the various U.S. jurisdictions grant state insurance regulators broad powers to regulate almost all aspects of our insurance business. Much of this state regulation follows model statutes or regulations developed or amended by the NAIC,COVID-19 pandemic, which, is composed of the insurance commissioners of each U.S. jurisdiction. The NAIC re-examines and amends existing model laws and regulations (including holding company regulations) in addition to determining whether new ones are needed.

~~The Dodd-Frank Act created the Federal Insurance Office and authorized it to,~~ among other things, ~~study methods~~could cause a large number of premature deaths of our insureds. Although we have ceded a significant majority of our mortality risk to ~~modernize~~reinsurers, a major public health crisis could cause substantial volatility in our financial results for a period of time and ~~improve insurance regulation. We cannot predict with certainty whether,~~could also materially harm the financial condition of our reinsurers or decrease the availability of reinsurance on new business. A major public health crisis could negatively impact our ability to attract new recruits, train and license our sales force, and incentivize our sales force to sell our products. If a significant number of sales representatives were to become ill, it could have a material adverse effect on recruiting, licensing, and our ability to write new business. A major public health crisis could also cause significant volatility in ~~what form, reforms will be enacted~~global financial markets and ~~if so, whether~~disrupt the ~~enacted reforms will materially affect our business. Changes in federal statutes, including the Gramm-Leach-Bliley Act~~economy and the McCarran-Ferguson Act, financial services regulation and federal taxation, in addition to changes to state statutes and regulations, may be more restrictive than current requirements or may result in higher costs, and could materially adversely affect our business, financial condition and results of operations.

~~On July 18, 2018,~~demand for the NYDFS issued final amendments to its suitability regulation for annuities (the “Amended Suitability Rule”), which imposes certain duties and obligations on insurers and insurance producers in the sale of life insurance, including term life insurance, investment and ~~annuities. Under~~savings and other financial products that we sell. Our investment portfolio and the ~~Amended Suitability Rule,~~valuations of invested assets we hold could also be materially adversely affected.

Specifically with respect to the ~~NYDFS requires firms~~COVID-19 pandemic, government-mandated stay-at-home orders and similar social distancing measures (collectively, “prevention measures”) have inhibited the face-to-face setting sales representatives primarily use to meet the needs of clients, attract new recruits, and retain and motivate sales representatives and such interactions may not be adequately replaced by technological solutions. Prevention measures have hindered the completion of paramedical tests necessary to underwrite some of our life insurance applications and have resulted in the temporary closing of licensing test centers, which negatively impacts the ability of sales representatives to ~~ensure~~obtain the licenses necessary to sell certain of our products, including life insurance, securities and mortgages. Prevention measures, if extended, will likely cause the cancellation of large meetings that ~~transactions are suitable~~we use to motivate the sales force to sell our products.

The COVID-19 pandemic has led to an economic downturn that is likely to continue for the foreseeable future. This economic downturn has resulted in extraordinary unemployment rates, lower household income, lower valuation of retirement savings accounts and ~~consistent with~~lower consumer spending, all of which may adversely affect the ~~customer’s “best interest”. Because~~persistency of in force business, the Amended Suitability Rule imposes a higher standard of care and enhanced disclosure and other obligations on life and annuities transactions, it may increase our regulatory or litigation risk. The Amended Suitability Rule does not necessitate significant changes to ourdemand for the term life insurance, ~~or annuities~~investment and savings and other financial products that we sell and our ability to attract new recruits. It could also negatively impact product providers and business ~~in New York. The Amended Suitability Rule became effective for annuity products on August 1, 2019 and will become effective for life insurance products on February 1, 2020.~~

Federal and provincial insurance laws regulate all aspects of our Canadian insurance business. Changes to federal or provincial statutes and regulations may be more restrictive than current requirements or may result in higher costs,partners with whom we have long-standing business relationships, which could materially adversely affect our ~~business,~~business. Many state governments have required that insurance companies extend grace periods and adopt other measures intended to enable customers to maintain life insurance policies when facing financial ~~condition and results of operations. If OSFI determines that our corporate actions~~hardships due to the COVID-19 pandemic. We do not comply with applicable Canadian law, Primerica Life Canada could face sanctions or fines, and Primerica Life Canada could be subject to increased capital requirements or other requirements deemed appropriate by OSFI.

~~We received approval from~~yet know the Minister of Finance (Canada) under the Insurance Companies Act (Canada) in connection with our indirect acquisition of Primerica Life Canada. The Minister expects that a person controlling a federal insurance companyimpact this will provide ongoing financial, managerial or operational support to its subsidiary should such support prove necessary. This ongoing support may take the form of additional capital, the provision of managerial expertise or the provision of support in such areas as risk management, internal control systems and training. In the event that OSFI determines Primerica Life Canada is not receiving adequate support from the Parent Company under applicable Canadian law, Primerica Life Canada may be subject to increased capital requirements or other requirements deemed appropriate by OSFI.

If there were to be extraordinary changes to statutory or regulatory requirements in the United States or Canada, we may be unable to fully comply with or maintain all required insurance licenses and approvals. Regulatory authorities have relatively broad discretion to grant, renew and revoke licenses and approvals. If we do not have all requisite licenses and approvals, or do not comply with applicable statutory and regulatory requirements, the regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our insurance activities or impose fines or penalties on us, which could materially adversely affect our business, financial condition and results of operations. We cannot predict with certainty the effect any proposed or future legislation or regulatory initiatives may have on the ~~conduct~~persistency of our ~~business.~~

~~If heightened standards~~life insurance policies. Further, the recent significant decline in the North American equity markets has decreased the value of ~~conduct or more stringent licensing requirements, such as those adopted by~~clients’ investment accounts and may have a negative effect on the ~~SEC~~Company’s sales of investment and ~~those proposed or adopted by state legislatures or regulators or Canadian securities regulators, are imposed on us or the sales representatives, or selling compensation is reduced as a result~~savings products, both of ~~new legislation or regulations, it~~which could have ~~a material~~an adverse effect on our business, financial condition and results of operations.

~~The U.S.~~While governmental and non-governmental organizations are engaging in efforts to combat the spread and severity of COVID-19, these measures may not be effective. We also cannot predict accurately how legal and regulatory responses to concerns about the COVID-19 pandemic will impact our business. For example, liability could result if persons are infected with COVID-19 at one of our offices or by one of our sales representatives ~~are subject to federal~~ and state regulation as well as state licensing requirements. PFS Investments, Inc., which is regulated as a broker-dealer, and U.S. sales representatives are currently subject to general anti-fraud limitations under the Exchange Act and SEC rules and regulations, as well as other conduct standards prescribed by the FINRA. These standards generally require that broker-dealers and their sales representatives disclose conflicts of interest that might affect the advice or recommendations they provide and require them to make suitable investment recommendations to their customers. ~~On June 5, 2019, the SEC adopted rules and interpretations addressing the standards of conduct applicable to broker-dealers and investment advisers and their associated~~

persons (collectively, the “SEC Rulemaking”). Specifically, the SEC Rulemaking (i) creates a new “best interest” standard of conduct for broker-dealers (“Reg BI”), (ii) imposes new disclosure requirements through summary forms intended to clarify relationships among brokers, advisers, and their retail customers (“Form CRS”), (iii) provides interpretative guidance regarding the standard of conduct that applies to investment advisers under the Investment Advisers Act of 1940 (“Advisers Act’), and (iv) provides interpretative guidance on the scope of the broker-dealer “solely incidental” exclusion from the definition of “investment adviser” in the Advisers Act. ~~The SEC Rulemaking became effective on July 12, 2019, with a compliance date of June 30, 2020 for Reg BI and Form CRS~~. While we anticipate making certain changes to our sales processes, policies, and procedures in order to comply with the SEC Rulemaking and acknowledge that its higher standards of care and enhanced obligations increase regulatory and litigation risk, we do not anticipate that the SEC Rulemaking will cause significant disruption to our business.

In addition to federal regulators, certain states have proposed or passed laws or proposed or issued regulations requiring investment advisers, broker-dealers, and/or insurance agents to meet fiduciary standards or standards of care that their advice be in the customer’s best interest, and to disclose conflicts of interest to consumers of investment and insurance products. The severity of the impact that such state laws or regulations could have on our business vary from state to state depending on the content of the legislation or regulation and how it is ~~applied by state regulators and interpreted by the courts. We cannot quantify the financial impact, if any, of any changes to~~determined that we did not exercise reasonable precautions in how we protect our ~~business that may be necessary in order to comply with such laws or regulations at this time.~~

In Canada, the organization of provincial and territorial securities regulators (“Canadian Securities Administrators” or “CSA”) published a notice on June 21, 2018 requesting public comment on reforms to obligations of registered firms and individuals to enhance conflict of interest mitigation rules (“Client Focused Reforms”). Among other items in the rule, all embedded commissions would be considered conflicts that must be addressed in the best interests of clients or avoided. On September 13, 2018, the CSA published for comment proposed amendments that would prohibit upfront sales commissions by fund companies for the sale of mutual funds offered under a prospectus in Canada.workplaces. The CSA has indicated that the prohibition of upfront sales commissions by fund companies will eliminate the use of the mutual fund deferred sales charge compensation model, which is the primary model for the mutual funds we distribute in Canada. If these rules are adopted as proposed, changes in compensation arrangements with the fund companies that offer the mutual fund products we distribute in Canada will be necessary. Because of the uncertain status of the rules, we have not determined the extent to which ~~changes to our business would be necessary and are, therefore, unable to quantify~~ the COVID-19 pandemic may impact ~~if any, on our business, nor are we able to project the timing of the adoption of any such reforms or transition timeline.~~

Heightened standards of conduct or restrictions on compensation as a result of any of the above items or other similar proposed rules or regulations could also increase the compliance and regulatory burdens on the sales representatives and could lead to increased litigation and regulatory risks, changes to our business model, a decrease in the number of licensed representatives and a reduction in the products we offer to our clients, any of which could have a material adverse effect on our business, financial condition and results of ~~operations.~~operations will depend on future developments which are highly uncertain and cannot be predicted accurately, including new information that may emerge concerning the severity of the COVID-19 pandemic, the duration of the pandemic and actions taken to contain or mitigate its impact.

During the quarter ended ~~June 30, 2019,~~March 31, 2020, we repurchased shares of our common stock as follows:

For information regarding year-to-date share repurchases, refer to Note 7 (Stockholders' Equity) to our unaudited condensed consolidated financial statements included elsewhere in this report.

The agreements included as exhibits to this report are included to provide you with information regarding the terms of these agreements and are not intended to provide any other factual or disclosure information about the Company or its subsidiaries, our business or the other parties to these agreements. These agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time, and should not be relied upon by investors.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		27-1204330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1 Primerica Parkway Duluth, Georgia		30099
(Address of principal executive offices)		(ZIP Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		PRI		New York Stock Exchange

		Page
PART I – FINANCIAL INFORMATION		2
Item 1. Financial Statements (unaudited).		2
Condensed Consolidated Balance Sheets as of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019		2
Condensed Consolidated Statements of Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		3
Condensed Consolidated Statements of Comprehensive Income for the three ~~and six~~ months ended ~~June 30, 2019~~March 31, 2020 and 20189		4
Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		5
Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		2625
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		4241
Item 4. Controls and Procedures.		4241
PART II – OTHER INFORMATION		4241
Item 1. Legal Proceedings.		4241
Item 1A. Risk Factors.		4342
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		4442
Item 6. Exhibits.		4443
Signatures		4644

	June 30, 2019			December 31, 2018
	(In thousands)
Net unrealized investment gains (losses) on available-for-sale securities including OTTI:
Available-for-sale securities	$	71,815		$	(9,187	)
OTTI		76			147
Net unrealized investment gains (losses) on available-for-sale securities excluding OTTI		71,891			(9,040	)
Deferred income taxes		(15,603	)		1,787
Net unrealized investment gains (losses) on available-for-sale securities excluding OTTI, net of tax	$	56,288		$	(7,253	)

		Three months ended March 31, 2019
	(In thousands)
OTTI on fixed-maturity securities not in default		$	-
OTTI on fixed-maturity securities in default			-
Total OTTI recognized in earnings		$	-


☒☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

	June 30, 2019				December 31, 2018
	Cost		Fair value		Cost		Fair value
	(In thousands)
Fixed-maturity securities	$	23,295	$	23,375	$	13,597	$	13,610

	Three months ended March 31, 2020
	(In thousands)
Allowance for credit losses, beginning of period	$	-
Additions to the allowance for credit losses on securities		37
Allowance for credit losses, end of period	$	37

		Three months ended March 31, 2019
	(In thousands)
Total OTTI related to securities which the Company does not intend to sell or more-likely-than-not will not be required to sell:
Total OTTI losses recognized		$	-
Less portion of OTTI recognized in accumulated other comprehensive income (loss)			-
OTTI recognized in earnings for securities which the Company does not intend to sell or more-likely than-not will not be required to sell before recovery			-
OTTI recognized in earnings for securities which the Company intends to sell or more-likely-than-not will be required to sell before recovery			-
OTTI recognized in earnings		$	-

		Three months ended March 31, 2019
	(In thousands)
Cumulative OTTI recognized in net income for securities still held, beginning of period		$	2,511
Additions for securities where no OTTI were recognized prior to the beginning of the period			-
Additions for securities where OTTI have been recognized prior to the beginning of the period			-
Reductions due to sales, maturities, calls, amortization or increases in cash flows expected to be collected over the remaining life of credit-impaired securities			(44	)
Reductions for exchanges of securities previously impaired			-
Cumulative OTTI recognized in net income for securities still held, end of period		$	2,467

	March 31, 2020
	(In thousands)
Balance, beginning of period ⁽¹⁾	$	3,917
Current period provision for expected credit losses		1,625
Balance, at the end of period	$	5,542

	Six months ended June 30,
	2019

Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases ⁽¹⁾	$	3,770
Operating cash flows used in finance leases ⁽¹⁾		25
Financing cash flows used in finance leases		140


	June 30, 2019
Weighted Average Remaining Lease Term
Operating leases	9 years
Finance leases	3 years

Weighted Average Discount Rate
Operating leases		4.6	%
Finance leases		6.2	%

		Operating Leases		Finance Leases
Year Ended December 31,		(In thousands)
2019 (excluding the six months ended June 30, 2019)		$	3,834	$	165
	2020		7,271		313
	2021		7,125		260
	2022		7,191		92
	2023		7,197		32
Thereafter			35,662		9
Total minimum rental commitments for operating leases			68,280		871
Less imputed interest			12,618		74
Total lease liabilities		$	55,662	$	797

		March 31, 2020				December 31, 2019
Life-licensed sales representatives			130,095				130,522

		June 30, 2019				March 31, 2019
Life-licensed sales representatives			129,550				129,821

Period	Total number of shares purchased ⁽¹⁾		Average price paid per share ⁽¹⁾		Total number of shares purchased as part of publicly announced plans or programs ⁽²⁾		Approximate dollar value of shares that may yet be purchased under the plans or programs ⁽²⁾
April 1 - 30, 2019		121,171	$	126.25		121,171	$	206,085,183
May 1 - 31, 2019		157,275		123.98		157,275		186,586,824
June 1 - 30, 2019		185,470		120.23		185,470		164,288,268
Total		463,916		123.07		463,916		164,288,268

Exhibit Number	Description	Reference
31.1	Rule 13a-14(a)/15d-14(a) Certification, executed by Glenn J. Williams, Chief Executive Officer.	Filed with the Securities and Exchange Commission as part of this Quarterly Report.
31.2	Rule 13a-14(a)/15d-14(a) Certification, executed by Alison S. Rand, Executive Vice President and Chief Financial Officer.	Filed with the Securities and Exchange Commission as part of this Quarterly Report.
32.1	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350), executed by Glenn J. Williams, Chief Executive Officer, and Alison S. Rand, Executive Vice President and Chief Financial Officer.	Filed with the Securities and Exchange Commission as part of this Quarterly Report.
101.INS	Inline XBRL Instance Document.	The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase.
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101).

	Primerica, Inc.

~~August 8, 2019~~May 1, 2020	/s/ Alison S. Rand
	Alison S. Rand
	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)