Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Primerica, Inc. | |
Entity Central Index Key | 0001475922 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PRI | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 40,127,473 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-34680 | |
Entity Tax Identification Number | 27-1204330 | |
Entity Current Reporting Status | Yes | |
Entity Address, Address Line One | 1 Primerica Parkway | |
Entity Address, City or Town | Duluth | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30099 | |
City Area Code | 770 | |
Local Phone Number | 381-1000 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments: | ||
Fixed-maturity securities and Short-term investments available-for-sale, at fair value | $ 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 | 31,799 | 32,927 |
Total investments | 3,590,228 | 3,658,210 |
Cash and cash equivalents | 273,085 | 256,876 |
Accrued investment income | 18,582 | 17,361 |
Reinsurance recoverables | 4,132,897 | 4,169,823 |
Deferred policy acquisition costs, net | 2,346,656 | 2,325,750 |
Agent balances, due premiums and other receivables | 226,830 | 227,100 |
Intangible assets | 45,275 | 45,275 |
Income taxes | 66,744 | 70,492 |
Operating lease right-of-use assets | 49,192 | 47,265 |
Other assets | 392,498 | 384,634 |
Separate account assets | 2,128,924 | 2,485,745 |
Total assets | 13,270,911 | 13,688,531 |
Liabilities: | ||
Future policy benefits | 6,472,397 | 6,446,569 |
Unearned and advance premiums | 16,905 | 15,470 |
Policy claims and other benefits payable | 330,489 | 339,954 |
Other policyholders’ funds | 390,040 | 388,663 |
Notes payable | 374,131 | 374,037 |
Surplus note | 1,236,644 | 1,183,728 |
Income taxes | 208,357 | 209,221 |
Operating lease liabilities | 55,315 | 53,487 |
Other liabilities | 498,699 | 510,443 |
Payable under securities lending | 28,896 | 28,723 |
Separate account liabilities | 2,128,924 | 2,485,745 |
Commitments and contingent liabilities (see Commitments and Contingent Liabilities note) | ||
Total liabilities | 11,740,797 | 12,036,040 |
Stockholders’ equity: | ||
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 |
Retained earnings | 1,565,803 | 1,593,281 |
Accumulated other comprehensive income (loss), net of income tax: | ||
Unrealized foreign currency translation gains (losses) | (34,776) | (5,765) |
Net unrealized investment gains (losses) on available-for-sale securities: | ||
Total stockholders’ equity | 1,530,114 | 1,652,491 |
Total liabilities and stockholders’ equity | $ 13,270,911 | $ 13,688,531 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets Parenthetical - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments: | ||
Fixed-maturity securities and Short-term investments available-for-sale, amortized cost | $ 2,243,288 | $ 2,274,770 |
Fixed-maturity securities held to maturity, fair value | 1,310,909 | 1,299,102 |
Equity securities, at fair value, cost | 32,732 | 32,671 |
Trading securities, amortized cost | $ 45,279 | $ 43,257 |
Stockholders’ equity: | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 40,460,000 | 41,207,000 |
Common stock, shares outstanding | 40,460,000 | 41,207,000 |
Fixed Maturities | ||
Investments: | ||
Fixed-maturity securities and Short-term investments available-for-sale, amortized cost | $ 2,243,288 | $ 2,274,770 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - Unaudited - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Direct premiums | $ 702,637 | $ 677,286 |
Ceded premiums | (386,825) | (389,795) |
Net premiums | 315,812 | 287,491 |
Commissions and fees | 190,069 | 167,315 |
Investment income net of investment expenses | 28,892 | 34,785 |
Interest expense on surplus note | (13,472) | (10,674) |
Net investment income | 15,420 | 24,111 |
Realized investment gains (losses) | (10,030) | 2,847 |
Other, net | 13,665 | 13,223 |
Revenues | 524,936 | 494,987 |
Benefits and expenses: | ||
Benefits and claims | 134,813 | 122,284 |
Amortization of deferred policy acquisition costs | 70,311 | 64,628 |
Sales commissions | 96,607 | 83,799 |
Insurance expenses | 48,709 | 43,402 |
Insurance commissions | 6,844 | 5,619 |
Interest expense | 7,192 | 7,180 |
Other operating expenses | 65,914 | 65,707 |
Total benefits and expenses | 430,390 | 392,619 |
Income before income taxes | 94,546 | 102,368 |
Income taxes | 22,077 | 23,203 |
Net income | $ 72,469 | $ 79,165 |
Earnings per share: | ||
Basic earnings per share | $ 1.75 | $ 1.84 |
Diluted earnings per share | $ 1.75 | $ 1.83 |
Weighted-average shares used in computing earnings per share: | ||
Basic | 41,131 | 42,824 |
Diluted | 41,239 | 42,942 |
Supplemental disclosures: | ||
Total impairment losses | $ (3,701) | |
Net impairment losses recognized in earnings | (3,701) | |
Other net realized investment gains (losses) | 343 | $ (54) |
Net gains (losses) recognized on equity securities | (6,672) | 2,901 |
Net realized investment gains (losses) | $ (10,030) | $ 2,847 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - Unaudited - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income | $ 72,469 | $ 79,165 |
Unrealized investment gains (losses) on available-for-sale securities: | ||
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) | (29,011) | 6,167 |
Total other comprehensive income (loss) before income taxes | (112,488) | 52,432 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | (17,596) | 9,979 |
Other comprehensive income (loss), net of income taxes | (94,892) | 42,453 |
Total comprehensive income (loss) | $ (22,423) | $ 121,618 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balance, beginning of period at Dec. 31, 2018 | $ 427 | $ 1,489,520 | $ (28,434) | ||
Repurchases of common stock | (5) | $ (13,169) | (47,114) | ||
Share-based compensation | 13,171 | ||||
Net issuance of common stock | 2 | (2) | |||
Net income | $ 79,165 | 79,165 | |||
Dividends | (14,628) | ||||
Change in foreign currency translation adjustment,net of income taxes | 6,167 | ||||
Change in net unrealized investment gains (losses) during the period, net of income taxes | 36,286 | ||||
Balance, end of period at Mar. 31, 2019 | $ 1,521,386 | 424 | 1,506,943 | 14,019 | |
Dividends declared per share | $ 0.34 | ||||
Balance, beginning of period at Dec. 31, 2019 | $ 1,652,491 | 412 | 1,593,281 | 58,798 | |
Cumulative effect from the adoption of new accounting standards, net | (1,240) | ||||
Repurchases of common stock | (90,100) | (9) | (13,490) | (82,177) | |
Share-based compensation | 13,492 | ||||
Net issuance of common stock | 2 | $ (2) | |||
Net income | 72,469 | 72,469 | |||
Dividends | (16,530) | ||||
Change in foreign currency translation adjustment,net of income taxes | (29,011) | ||||
Change in net unrealized investment gains (losses) during the period, net of income taxes | (65,881) | ||||
Balance, end of period at Mar. 31, 2020 | $ 1,530,114 | $ 405 | $ 1,565,803 | $ (36,094) | |
Dividends declared per share | $ 0.40 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 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 | 63,975 | 65,733 |
Deferral of policy acquisition costs | (112,160) | (105,080) |
Amortization of deferred policy acquisition costs | 70,311 | 64,628 |
Change in income taxes | 15,481 | 6,180 |
Realized investment (gains) losses | 10,030 | (2,847) |
Accretion and amortization of investments | 489 | (120) |
Depreciation and amortization | 3,940 | 4,156 |
Change in reinsurance recoverables | 8,306 | (54,860) |
Change in agent balances, due premiums and other receivables | 274 | (7,910) |
Trading securities sold, matured, or called (acquired), net | (2,024) | (12,918) |
Share-based compensation | 11,161 | 10,896 |
Change in other operating assets and liabilities, net | (10,730) | 19,398 |
Net cash provided by (used in) operating activities | 131,522 | 66,421 |
Available-for-sale investments sold, matured or called: | ||
Fixed-maturity securities — sold | 25,392 | 6,467 |
Fixed-maturity securities — matured or called | 116,525 | 108,972 |
Equity securities — sold | 3,109 | |
Available-for-sale investments acquired: | ||
Fixed-maturity securities | (132,681) | (86,301) |
Equity securities — acquired | (59) | (375) |
Purchases of property and equipment and other investing activities, net | (9,921) | (6,594) |
Cash collateral received (returned) on loaned securities, net | 173 | 12,352 |
Sales (purchases) of short-term investments using securities lending collateral, net | (173) | (12,352) |
Net cash provided by (used in) investing activities | (744) | 25,278 |
Cash flows from financing activities: | ||
Dividends paid | (16,530) | (14,628) |
Common stock repurchased | (90,063) | (53,625) |
Tax withholdings on share-based compensation | (5,614) | (6,664) |
Finance leases | (67) | (70) |
Net cash provided by (used in) financing activities | (112,274) | (74,987) |
Effect of foreign exchange rate changes on cash | (2,295) | 776 |
Change in cash and cash equivalents | 16,209 | 17,488 |
Cash and cash equivalents, beginning of period | 256,876 | 262,138 |
Cash and cash equivalents, end of period | $ 273,085 | $ 279,626 |
Description of Business, Basis
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies | (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; 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 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 March 31, 2020 and December 31, 2019, the statements of income, comprehensive income, stockholders’ equity, and cash flows for the three months ended March 31, 2020 and 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, 2019 (“2019 Annual Report”). Use of Estimates. The preparation of financial statements in 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 2019 Annual Report unless otherwise described. New Accounting Principles. 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 (“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 losses on 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 AFS securities 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 AFS security has been in an unrealized loss position to avoid recording a credit loss and remove the requirement to consider recoveries or declines in fair value after the balance sheet date. 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 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. |
Segment and Geographical Inform
Segment and Geographical Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | (2) Segment and Geographical Information Segments. We have two primary operating segments — Term Life Insurance and Investment and Savings Products. We also have a Corporate and Other Distributed Products segment. Notable information included in profit or loss by segment was as follows: Three months ended March 31, 2020 2019 (In thousands) Revenues: Term life insurance segment $ 327,746 $ 296,843 Investment and savings products segment 185,032 162,672 Corporate and other distributed products segment 12,158 35,472 Total revenues $ 524,936 $ 494,987 Net investment income: Term life insurance segment $ 6,246 $ 4,444 Investment and savings products segment - - Corporate and other distributed products segment 9,174 19,667 Total net investment income $ 15,420 $ 24,111 Amortization of DAC: Term life insurance segment $ 65,840 $ 64,066 Investment and savings products segment 4,305 477 Corporate and other distributed products segment 166 85 Total amortization of DAC $ 70,311 $ 64,628 Non-cash share-based compensation expense: Term life insurance segment $ 1,786 $ 1,872 Investment and savings products segment 1,105 1,454 Corporate and other distributed products segment 8,270 7,557 Total non-cash share-based compensation expense $ 11,161 $ 10,883 Income (loss) before income taxes: Term life insurance segment $ 82,892 $ 70,339 Investment and savings products segment 47,700 42,684 Corporate and other distributed products segment (36,046 ) (10,655 ) Total income before income taxes $ 94,546 $ 102,368 Total assets by segment were as follows: March 31, 2020 December 31, 2019 (In thousands) Assets: Term life insurance segment $ 6,535,597 $ 6,546,129 Investment and savings products segment (1) 2,233,435 2,598,493 Corporate and other distributed products segment 4,501,879 4,543,909 Total assets $ 13,270,911 $ 13,688,531 _______________ (1) 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 March 31, 2020 2019 (In thousands) Revenues by country: United States $ 443,135 $ 419,992 Canada 81,801 74,995 Total revenues $ 524,936 $ 494,987 Income before income taxes by country: United States $ 72,947 $ 80,735 Canada 21,599 21,633 Total income before income taxes $ 94,546 $ 102,368 March 31, 2020 December 31, 2019 (In thousands) Long-lived assets by country: United States $ 42,829 $ 41,200 Canada 4,611 4,916 Total long-lived assets $ 47,440 $ 46,116 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | (3) Investments 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: March 31, 2020 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Securities available-for-sale, carried at fair value: Fixed-maturity securities: U.S. government and agencies $ 10,040 $ 548 $ - $ 10,588 Foreign government 145,858 7,225 (297 ) 152,786 States and political subdivisions 122,242 3,779 (702 ) 125,319 Corporates 1,416,090 32,614 (45,737 ) 1,402,967 Residential mortgage-backed securities 314,157 12,058 (5,531 ) 320,684 Commercial mortgage-backed securities 121,365 2,599 (3,017 ) 120,947 Other asset-backed securities 113,536 440 (5,230 ) 108,746 Total fixed-maturity securities 2,243,288 59,263 (60,514 ) 2,242,037 December 31, 2019 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Securities available-for-sale, carried at fair value: Fixed-maturity securities: U.S. government and agencies $ 10,197 $ 287 $ - $ 10,484 Foreign government 154,945 6,362 (235 ) 161,072 States and political subdivisions 120,000 3,288 (695 ) 122,593 Corporates 1,436,877 63,892 (1,118 ) 1,499,651 Residential mortgage-backed securities 305,897 6,848 (222 ) 312,523 Commercial mortgage-backed securities 128,913 3,191 (99 ) 132,005 Other asset-backed securities 117,941 970 (243 ) 118,668 Total fixed-maturity securities 2,274,770 84,838 (2,612 ) 2,356,996 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 March 31, 2020 was as follows: Amortized cost Fair value (In thousands) Due in one year or less $ 186,625 $ 185,059 Due after one year through five years 875,325 874,333 Due after five years through 10 years 489,101 485,780 Due after 10 years 143,179 146,488 1,694,230 1,691,660 Mortgage- and asset-backed securities 549,058 550,377 Total AFS fixed-maturity securities $ 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. Trading Securities. The cost and fair value of the securities classified as trading securities were as follows: March 31, 2020 December 31, 2019 Cost Fair value Cost Fair value (In thousands) Fixed-maturity securities $ 45,279 $ 44,997 $ 43,257 $ 43,233 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 March 31, 2020, the LLC Note, which was rated A+ by Fitch Ratings, had an estimated unrealized holding gain of $73.6 million As of March 31, 2020, no 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 $7.7 million and $7.5 million as of March 31, 2020 and December 31, 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 $28.9 million and $28.7 million as of March 31, 2020 and December 31, 2019, respectively. Investment Income. The components of net investment income were as follows: Three months ended March 31, 2020 2019 (In thousands) Fixed-maturity securities (available-for-sale) $ 20,784 $ 20,333 Fixed-maturity security (held-to-maturity) 13,472 10,674 Equity securities 451 487 Policy loans and other invested assets 189 320 Cash and cash equivalents 843 1,203 Total return on deposit asset underlying 10% coinsurance agreement (1) (4,549 ) 3,902 Gross investment income 31,190 36,919 Investment expenses (2,298 ) (2,134 ) Investment income net of investment expenses 28,892 34,785 Interest expense on surplus note (13,472 ) (10,674 ) Net investment income $ 15,420 $ 24,111 (1) 10% 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 March 31, 2020 2019 (In thousands) Net realized investment gains (losses): Gross gains from sales of available-for-sale securities $ 357 $ 178 Gross losses from sales of available-for-sale securities (66 ) (243 ) Credit losses on available-for-sale securities (3,701 ) - Net gains (losses) recognized in net income during the period on equity securities (6,672 ) 2,901 Gains (losses) from bifurcated options 52 - Gains (losses) on trading securities - 11 Net realized investment gains (losses) $ (10,030 ) $ 2,847 The proceeds from sales or other redemptions of available-for-sale securities were as follows: Three months ended March 31, 2020 2019 (In thousands) Proceeds from sales or other redemptions $ 141,917 $ 115,439 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 March 31, 2020 2019 (In thousands) 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 - (254 ) Net gains (losses) recognized in net income on equity securities still held as of period-end $ (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: March 31, 2020 Less than 12 months 12 months or longer Fair value Unrealized losses Fair value Unrealized losses (Dollars in thousands) Fixed-maturity securities: U.S. government and agencies $ - $ - $ - $ - Foreign government 6,021 (297 ) - - States and political subdivisions 28,549 (702 ) - - Corporates 570,920 (42,960 ) 9,736 (2,777 ) Residential mortgage-backed securities 77,740 (5,508 ) 857 (23 ) Commercial mortgage-backed securities 43,906 (2,906 ) 2,557 (111 ) Other asset-backed securities 76,812 (4,807 ) 3,183 (423 ) Total fixed-maturity securities $ 803,948 $ (57,180 ) $ 16,333 $ (3,334 ) 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 income 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 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: 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 O ther-than-temporary I mpairments (“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 recognized OTTI in the condensed consolidated statement of income for the impairment on available-for-sale securities that we intended to 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 believed that it was not more-likely-than-not we would be required to sell prior to recovery, only the credit loss component of OTTI was recognized in 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 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 was temporary include : the length of time and extent to which fair value had been below cost ; the financial condition and near-term prospects for the issuer ; the payment structure of the security, and our ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery of its amortized cost. We also considered our anticipated sources of cash to fund operating activities and share repurchases when assessing our ability and intent to hold a security assets to allow for the recovery of amortized cost basis in determining whether to recognize OTTI. The following 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: December 31, 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 $ - $ - - $ - $ - - Foreign government 11,824 (144 ) 14 8,578 (91 ) 7 States and political subdivisions 39,379 (690 ) 21 4,000 (5 ) 4 Corporates 52,474 (453 ) 40 21,739 (665 ) 19 Residential mortgage-backed securities 40,690 (207 ) 20 2,071 (15 ) 3 Commercial mortgage-backed securities 11,526 (28 ) 13 12,835 (71 ) 16 Other asset-backed securities 22,501 (190 ) 17 4,613 (53 ) 20 Total fixed-maturity securities $ 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 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. OTTI recognized in earnings for available-for-sale securities for the three months ended March 31, 2019 were as follows: 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 $ - OTTI recognized in earnings for available-for-sale securities for the three months ended March 31, 2019 were as follows: 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 $ - 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: 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 As of December 31, 2019, no 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 March 31, 2020 and December 31, 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 of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | (4) Fair Value of Financial Instruments 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: • Level 1. Quoted prices for identical instruments in active markets. Level 1 consists of financial instruments whose value is based on quoted market prices in active markets, such as exchange-traded common stocks and actively traded mutual fund investments; • Level 2. Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 2 includes those financial instruments that are valued using industry-standard pricing methodologies, models or other valuation methodologies. Various inputs are considered in deriving the fair value of the underlying financial instrument, including interest rate and yield curves, credit spread, and foreign exchange rates. All significant inputs are observable, or derived from observable information in the marketplace or are supported by observable levels at which transactions are executed in the marketplace. Financial instruments in this category primarily include: certain public and private corporate fixed-maturity and equity securities; government or agency securities; and certain mortgage- and asset-backed securities; and • Level 3. Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Level 3 consists of financial instruments whose fair value is estimated based on industry-standard pricing methodologies and models using significant inputs not based on, nor corroborated by, readily available market information. Valuations for this category primarily consist of non-binding broker quotes. Financial instruments in this category primarily include less liquid mortgage- and asset-backed securities and equity securities. 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: March 31, 2020 Level 1 Level 2 Level 3 Total (In thousands) Fair value assets: Available-for-sale fixed-maturity securities: U.S. government and agencies $ - $ 10,588 $ - $ 10,588 Foreign government - 152,786 - 152,786 States and political subdivisions - 125,319 - 125,319 Corporates 4,877 1,398,090 - 1,402,967 Residential mortgage-backed securities - 320,658 26 320,684 Commercial mortgage-backed securities - 120,947 - 120,947 Other asset-backed securities - 108,496 250 108,746 Total available-for-sale securities 4,877 2,236,884 276 2,242,037 Equity securities 33,015 1,000 110 34,125 Trading securities - 44,997 - 44,997 Separate accounts - 2,128,924 - 2,128,924 Total fair value assets $ 37,892 $ 4,411,805 $ 386 $ 4,450,083 Fair value liabilities: Separate accounts $ - $ 2,128,924 $ - $ 2,128,924 Total fair value liabilities $ - $ 2,128,924 $ - $ 2,128,924 December 31, 2019 Level 1 Level 2 Level 3 Total (In thousands) Fair value assets: Available-for-sale fixed-maturity securities: U.S. government and agencies $ - $ 10,484 $ - $ 10,484 Foreign government - 161,072 - 161,072 States and political subdivisions - 122,593 - 122,593 Corporates 5,865 1,493,786 - 1,499,651 Residential mortgage-backed securities - 312,497 26 312,523 Commercial mortgage-backed securities - 132,005 - 132,005 Other asset-backed securities - 118,244 424 118,668 Total available-for-sale securities 5,865 2,350,681 450 2,356,996 Equity securities 39,499 1,050 135 40,684 Trading securities - 43,233 - 43,233 Separate accounts - 2,485,745 - 2,485,745 Total fair value assets $ 45,364 $ 4,880,709 $ 585 $ 4,926,658 Fair value liabilities: Separate accounts $ - $ 2,485,745 $ - $ 2,485,745 Total fair value liabilities $ - $ 2,485,745 $ - $ 2,485,745 In estimating fair value of our investments, we use third-party pricing services for 95% Furthermore, we perform internal reasonableness assessments on fair value determinations within our portfolio throughout the year and as of 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 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 March 31, (1) 2020 2019 (In thousands) Level 3 assets, beginning of period $ 585 $ 921 Net unrealized gains (losses) included in other comprehensive income 1 (6 ) Realized gains (losses) and accretion (amortization) recognized in earnings (25 ) 8 Settlements (175 ) (44 ) Transfers into Level 3 - - Transfers out of Level 3 (2) - (498 ) Level 3 assets, end of period $ 386 $ 381 (1) Activities for investments that enter Level 3 in one quarter and exit Level 3 in another quarter within the same fiscal year are not eliminated until year-end when only the full year amounts are presented. (2) Transfers out of Level 3 assets primarily consisted of newly issued fixed-maturity securities in the previous period for which observable inputs, most notably quoted prices, used to derive valuations became readily available. 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 no material transfers between Level 1 and Level 3 during the three months ended March 31, 2020 and March 31, 2019. The carrying values and estimated fair values of our financial instruments were as follows: March 31, 2020 December 31, 2019 Carrying value Estimated fair value Carrying value Estimated fair value (In thousands) Assets: Fixed-maturity securities (available-for-sale) $ 2,242,037 $ 2,242,037 $ 2,356,996 $ 2,356,996 Fixed-maturity security (held-to-maturity) (3) 1,237,270 1,310,909 1,184,370 1,299,102 Equity securities 34,125 34,125 40,684 40,684 Trading securities 44,997 44,997 43,233 43,233 Policy loans (3) 31,799 31,799 32,927 32,927 Deposit asset underlying 10% coinsurance agreement (3) 234,833 234,833 233,499 233,499 Separate accounts 2,128,924 2,128,924 2,485,745 2,485,745 Liabilities: Notes payable (1) (2) $ 374,131 $ 386,156 $ 374,037 $ 395,522 Surplus note (1) (3) 1,236,644 1,310,909 1,183,728 1,296,972 Separate accounts 2,128,924 2,128,924 2,485,745 2,485,745 (1) Carrying value amounts shown are net of issuance costs (2) Classified as a Level 2 fair value measurement. (3) Classified as a Level 3 fair value measurement. 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 AFS securities 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. |
Reinsurance
Reinsurance | 3 Months Ended |
Mar. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | (5) Reinsurance 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. Details on in force life insurance were as follows: March 31, 2020 December 31, 2019 (Dollars in thousands) Direct life insurance in force $ 807,245,574 $ 810,995,295 Amounts ceded to other companies (700,084,862 ) (702,727,956 ) Net life insurance in force $ 107,160,712 $ 108,267,339 Percentage of reinsured life insurance in force 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 claims paid. Reinsurance recoverables and financial strength ratings by reinsurer were as follows: March 31, 2020 December 31, 2019 Reinsurance recoverables A.M. Best rating Reinsurance recoverables A.M. Best rating (In thousands) Pecan Re Inc. (1) (2) $ 2,699,114 N/R $ 2,696,924 NR SCOR Global Life Reinsurance Companies (3) 345,784 A+ 352,049 A+ Munich Re of Malta (2) (5) 257,535 N/R 286,433 NR Swiss Re Life & Health America Inc. (4) 222,245 A+ 233,572 A+ American Health and Life Insurance Company (2) 165,953 B++ 167,471 B++ Munich American Reassurance Company 118,135 A+ 118,372 A+ Korean Reinsurance Company 107,874 A 108,410 A RGA Reinsurance Company 103,502 A+ 100,328 A+ Hannover Life Reassurance Company 32,992 A+ 33,772 A+ TOA Reinsurance Company 29,355 A 26,160 A All other reinsurers 55,950 - 48,679 - Allowance for credit losses (5,542 ) (2,347 ) Reinsurance recoverables $ 4,132,897 $ 4,169,823 NR – not rated (1) (2) Reinsurance recoverables includes balances ceded under coinsurance transactions of term life insurance policies that were in force as of December 31, 2009. Amounts shown are net of their share of the reinsurance recoverables from other reinsurers. (3) Includes amounts ceded to Transamerica Reinsurance Companies and fully retroceded to SCOR Global Life Reinsurance Companies. (4) Includes amounts ceded to Lincoln National Life Insurance and fully (5) Upon the adoption of ASC 326, we estimate and 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: 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 (1) We recorded a current period provision for expected credit losses of approximately $1.6 million during the three months ended 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 recognized based on an incurred loss model that recognized credit losses if probable and reasonably estimable. No credit losses were recognized under the incurred loss model during the three months ended March 31, 2019. |
Policy Claims and Other Benefit
Policy Claims and Other Benefits Payable | 3 Months Ended |
Mar. 31, 2020 | |
Liability For Future Policy Benefits And Unpaid Claims And Claims Adjustment Expense [Abstract] | |
Policy Claims and Other Benefits Payable | (6) Policy Claims and Other Benefits Payable Changes in policy claims incurred and other benefits payable were as follows: Three months ended March 31, 2020 2019 (In thousands) Policy claims and other benefits payable, beginning of period $ 339,954 $ 313,862 Less reinsured policy claims and other benefits payable 388,797 318,653 Net balance, beginning of period (48,843 ) (4,791 ) Incurred related to current year 53,828 47,973 Incurred related to prior years (1) (5,045 ) (2,095 ) Total incurred 48,783 45,878 Claims paid related to current year, net of reinsured policy claims received (123,305 ) (135,225 ) Reinsured policy claims received related to prior years, net of claims paid 59,269 13,795 Total paid (64,036 ) (121,430 ) Foreign currency translation (518 ) 160 Net balance, end of period (64,614 ) (80,183 ) Add reinsured policy claims and other benefits payable 395,103 388,605 Balance, end of period $ 330,489 $ 308,422 (1) des the difference between our estimate of claims incurred but not yet reported as of period-end and the actual incurred claims reported after period-end. 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. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | (7) Stockholders’ Equity A reconciliation of the number of shares of our common stock follows: Three months ended March 31, 2020 2019 (In thousands) Common stock, beginning of period $ 41,207 $ 42,694 Shares issued for stock options exercised - - Shares of common stock issued upon lapse of restricted stock units (“RSUs”) 183 231 Common stock retired (930 ) (526 ) Common stock, end of period $ 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 March 31, 2020, we had a total of 340,527 RSUs and 81,796 PSUs outstanding. The PSU outstanding balance is based on the number of PSUs granted pursuant to the award 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 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, 2021. Under these share repurchase programs, we repurchased 880,222 shares of our common stock in the open market for an aggregate purchase price of $90.1 million through March 31, 2020. Approximately $209.9 million remains available for repurchases of our outstanding common stock under the share repurchase program as of March 31, 2020. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (8) Earnings Per Share 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. The calculation of basic and diluted EPS was as follows: Three months ended March 31, 2020 2019 (In thousands, except per-share amounts) Basic EPS: Numerator: Net income $ 72,469 $ 79,165 Income attributable to unvested participating securities (310 ) (401 ) Net income used in calculating basic EPS $ 72,159 $ 78,764 Denominator: Weighted-average vested shares 41,131 42,824 Basic EPS $ 1.75 $ 1.84 Diluted EPS: Numerator: Net income $ 72,469 $ 79,165 Income attributable to unvested participating securities (310 ) (400 ) Net income used in calculating diluted EPS $ 72,159 $ 78,765 Denominator: Weighted-average vested shares 41,131 42,824 Dilutive effect of incremental shares to be issued for contingently-issuable shares 108 118 Weighted-average shares used in calculating diluted EPS 41,239 42,942 Diluted EPS $ 1.75 $ 1.83 |
Share-Based Transactions
Share-Based Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Transactions | (9) Share-Based Transactions 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 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. The impacts of equity awards granted are as follows: Three months ended March 31, 2020 2019 (In thousands) Equity awards expense recognized $ 11,161 $ 10,883 Equity awards expense deferred 2,359 2,279 On February 26, 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: • 81,848 • 25,734 three-year All awards granted to employees on February 26, 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, 20 22 , even if that employee retires prior to the completion of the three-year performance period. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | (10) Commitments and Contingent Liabilities 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 March 31, 2020, the amount of the LOC outstanding was $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 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 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. |
Other Comprehensive Income
Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Other Comprehensive Income | (11) Other Comprehensive Income The components of other comprehensive income (loss) ( “ ” 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 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | (12) Debt Notes Payable. As of 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 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 months ended March 31, 2020. Further discussion on the Company’s Senior Notes is included in Note 10 (Debt) to our consolidated financial statements within our 2019 Annual Report. Surplus Note. As of March 31, 2020, the principal amount outstanding on the Surplus Note issued by Vidalia Re was $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 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 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 occurred under the Revolving Credit Facility during the three months ended March 31, 2020. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contract with Customers | (13) Revenue from Contracts with Customers Our revenues from contracts with customers primarily include: • Commissions and fees earned for the marketing and distribution of investment and savings products underwritten by mutual fund companies and annuity providers. For purposes of revenue recognition, mutual fund companies and annuity providers are considered the customers in marketing and distribution arrangements. • Fees earned for investment advisory and administrative services within our managed investments program. • Account-based fees for transfer agent recordkeeping functions and non-bank custodial services. • Fees associated with the distribution of other third-party financial products. • Other revenue from the sale of miscellaneous products and services including monthly subscription fees from the sales representatives for access to Primerica Online ( “ POL ” ), our primary sales force support tool. 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 2019 Annual Report. The disaggregation of our revenues from contracts with customers were as follows: Three months ended March 31, 2020 2019 (In thousands) Term Life Insurance segment revenues: Other, net $ 10,168 $ 9,744 Total segment revenues from contracts with customers 10,168 9,744 Revenues from sources other than contracts with customers 317,578 287,099 Total Term Life Insurance segment revenues $ 327,746 $ 296,843 Investment and Savings Products segment revenues: Commissions and fees Sales-based revenues $ 80,891 $ 66,997 Asset-based revenues 66,994 59,754 Account-based revenues 20,204 19,613 Other, net 2,542 2,423 Total segment revenues from contracts with customers 170,631 148,787 Revenues from sources other than contracts with customers (segregated funds) 14,401 13,885 Total Investment and Savings Products segment revenues $ 185,032 $ 162,672 Corporate and Other Distributed Products segment revenues: Commissions and fees (1) $ 7,579 $ 7,066 Other, net 955 1,056 Total segment revenues from contracts with customers 8,534 8,122 Revenues from sources other than contracts with customers 3,624 27,350 Total Corporate and Other Distributed Products segment revenues $ 12,158 $ 35,472 (1) Commissions and fees include million for the three months ended March 31, 2020 and March 31, 2019 to performance obligations satisfied in a previous reporting period and represent the collection of variable consideration in the transaction price that had been previously constrained. 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. Activity in the contract asset account was as follows: Three months ended March 31, 2020 2019 (In thousands) Balance, beginning of period $ 51,701 $ 50,119 Current period sales, net of collection of renewal commissions (202 ) (28 ) Balance, at the end of period $ 51,499 $ 50,091 No significant estimate adjustments were made to the contract asset and no impairment losses were recognized on the contract asset during the three months ended 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 no assets recognized for incremental costs to obtain or fulfill contracts. |
Description of Business, Basi_2
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | 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 March 31, 2020 and December 31, 2019, the statements of income, comprehensive income, stockholders’ equity, and cash flows for the three months ended March 31, 2020 and 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, 2019 (“2019 Annual Report”). |
Use of Estimates | Use of Estimates. The preparation of financial statements in 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 | 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 | 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 | Significant Accounting Policies . All significant accounting policies remain unchanged from the 2019 Annual Report unless otherwise described. |
New Accounting Principles | New Accounting Principles. 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 (“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 losses on 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 AFS securities 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 AFS security has been in an unrealized loss position to avoid recording a credit loss and remove the requirement to consider recoveries or declines in fair value after the balance sheet date. 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 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. |
Investments (Policies)
Investments (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Credit Losses for Available-for-sale Fixed-maturity Securities | 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. |
Segment and Geographical Info_2
Segment and Geographical Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Assets and Profit or Loss by Segment | Notable information included in profit or loss by segment was as follows: Three months ended March 31, 2020 2019 (In thousands) Revenues: Term life insurance segment $ 327,746 $ 296,843 Investment and savings products segment 185,032 162,672 Corporate and other distributed products segment 12,158 35,472 Total revenues $ 524,936 $ 494,987 Net investment income: Term life insurance segment $ 6,246 $ 4,444 Investment and savings products segment - - Corporate and other distributed products segment 9,174 19,667 Total net investment income $ 15,420 $ 24,111 Amortization of DAC: Term life insurance segment $ 65,840 $ 64,066 Investment and savings products segment 4,305 477 Corporate and other distributed products segment 166 85 Total amortization of DAC $ 70,311 $ 64,628 Non-cash share-based compensation expense: Term life insurance segment $ 1,786 $ 1,872 Investment and savings products segment 1,105 1,454 Corporate and other distributed products segment 8,270 7,557 Total non-cash share-based compensation expense $ 11,161 $ 10,883 Income (loss) before income taxes: Term life insurance segment $ 82,892 $ 70,339 Investment and savings products segment 47,700 42,684 Corporate and other distributed products segment (36,046 ) (10,655 ) Total income before income taxes $ 94,546 $ 102,368 |
Total Assets by Segment | Total assets by segment were as follows: March 31, 2020 December 31, 2019 (In thousands) Assets: Term life insurance segment $ 6,535,597 $ 6,546,129 Investment and savings products segment (1) 2,233,435 2,598,493 Corporate and other distributed products segment 4,501,879 4,543,909 Total assets $ 13,270,911 $ 13,688,531 _______________ (1) |
Long Lived Assets and Continuing Operations by Country | 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 March 31, 2020 2019 (In thousands) Revenues by country: United States $ 443,135 $ 419,992 Canada 81,801 74,995 Total revenues $ 524,936 $ 494,987 Income before income taxes by country: United States $ 72,947 $ 80,735 Canada 21,599 21,633 Total income before income taxes $ 94,546 $ 102,368 March 31, 2020 December 31, 2019 (In thousands) Long-lived assets by country: United States $ 42,829 $ 41,200 Canada 4,611 4,916 Total long-lived assets $ 47,440 $ 46,116 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of Investments Debt and Equity Securities [Line Items] | |
Schedule of 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: March 31, 2020 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Securities available-for-sale, carried at fair value: Fixed-maturity securities: U.S. government and agencies $ 10,040 $ 548 $ - $ 10,588 Foreign government 145,858 7,225 (297 ) 152,786 States and political subdivisions 122,242 3,779 (702 ) 125,319 Corporates 1,416,090 32,614 (45,737 ) 1,402,967 Residential mortgage-backed securities 314,157 12,058 (5,531 ) 320,684 Commercial mortgage-backed securities 121,365 2,599 (3,017 ) 120,947 Other asset-backed securities 113,536 440 (5,230 ) 108,746 Total fixed-maturity securities 2,243,288 59,263 (60,514 ) 2,242,037 December 31, 2019 Amortized cost Gross unrealized gains Gross unrealized losses Fair value (In thousands) Securities available-for-sale, carried at fair value: Fixed-maturity securities: U.S. government and agencies $ 10,197 $ 287 $ - $ 10,484 Foreign government 154,945 6,362 (235 ) 161,072 States and political subdivisions 120,000 3,288 (695 ) 122,593 Corporates 1,436,877 63,892 (1,118 ) 1,499,651 Residential mortgage-backed securities 305,897 6,848 (222 ) 312,523 Commercial mortgage-backed securities 128,913 3,191 (99 ) 132,005 Other asset-backed securities 117,941 970 (243 ) 118,668 Total fixed-maturity securities 2,274,770 84,838 (2,612 ) 2,356,996 |
Fixed-maturity Securities Classified by Contractual Maturity Date | The scheduled maturity distribution of the available-for-sale fixed-maturity portfolio as of March 31, 2020 was as follows: Amortized cost Fair value (In thousands) Due in one year or less $ 186,625 $ 185,059 Due after one year through five years 875,325 874,333 Due after five years through 10 years 489,101 485,780 Due after 10 years 143,179 146,488 1,694,230 1,691,660 Mortgage- and asset-backed securities 549,058 550,377 Total AFS fixed-maturity securities $ 2,243,288 $ 2,242,037 |
Costs and Fair Value of Securities Classified as Trading Securities | The cost and fair value of the securities classified as trading securities were as follows: March 31, 2020 December 31, 2019 Cost Fair value Cost Fair value (In thousands) Fixed-maturity securities $ 45,279 $ 44,997 $ 43,257 $ 43,233 |
Net Investment Income | Investment Income. The components of net investment income were as follows: Three months ended March 31, 2020 2019 (In thousands) Fixed-maturity securities (available-for-sale) $ 20,784 $ 20,333 Fixed-maturity security (held-to-maturity) 13,472 10,674 Equity securities 451 487 Policy loans and other invested assets 189 320 Cash and cash equivalents 843 1,203 Total return on deposit asset underlying 10% coinsurance agreement (1) (4,549 ) 3,902 Gross investment income 31,190 36,919 Investment expenses (2,298 ) (2,134 ) Investment income net of investment expenses 28,892 34,785 Interest expense on surplus note (13,472 ) (10,674 ) Net investment income $ 15,420 $ 24,111 (1) 10% |
Schedule of Net Realized Investment Gains and Losses Recognized in Net Income | 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 March 31, 2020 2019 (In thousands) Net realized investment gains (losses): Gross gains from sales of available-for-sale securities $ 357 $ 178 Gross losses from sales of available-for-sale securities (66 ) (243 ) Credit losses on available-for-sale securities (3,701 ) - Net gains (losses) recognized in net income during the period on equity securities (6,672 ) 2,901 Gains (losses) from bifurcated options 52 - Gains (losses) on trading securities - 11 Net realized investment gains (losses) $ (10,030 ) $ 2,847 |
Schedule of Proceeds from Sales or Other Redemptions of Available-for-Sale Securities | The proceeds from sales or other redemptions of available-for-sale securities were as follows: Three months ended March 31, 2020 2019 (In thousands) Proceeds from sales or other redemptions $ 141,917 $ 115,439 |
Schedule of Unrealized Net Gains (Losses) Recognized in NI on Equity Securities Still Held at Period-End | 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 March 31, 2020 2019 (In thousands) 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 - (254 ) Net gains (losses) recognized in net income on equity securities still held as of period-end $ (6,672 ) $ 3,155 |
Schedule of Securities in Unrealized Loss Position | 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: March 31, 2020 Less than 12 months 12 months or longer Fair value Unrealized losses Fair value Unrealized losses (Dollars in thousands) Fixed-maturity securities: U.S. government and agencies $ - $ - $ - $ - Foreign government 6,021 (297 ) - - States and political subdivisions 28,549 (702 ) - - Corporates 570,920 (42,960 ) 9,736 (2,777 ) Residential mortgage-backed securities 77,740 (5,508 ) 857 (23 ) Commercial mortgage-backed securities 43,906 (2,906 ) 2,557 (111 ) Other asset-backed securities 76,812 (4,807 ) 3,183 (423 ) Total fixed-maturity securities $ 803,948 $ (57,180 ) $ 16,333 $ (3,334 ) The following 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: December 31, 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 $ - $ - - $ - $ - - Foreign government 11,824 (144 ) 14 8,578 (91 ) 7 States and political subdivisions 39,379 (690 ) 21 4,000 (5 ) 4 Corporates 52,474 (453 ) 40 21,739 (665 ) 19 Residential mortgage-backed securities 40,690 (207 ) 20 2,071 (15 ) 3 Commercial mortgage-backed securities 11,526 (28 ) 13 12,835 (71 ) 16 Other asset-backed securities 22,501 (190 ) 17 4,613 (53 ) 20 Total fixed-maturity securities $ 178,394 $ (1,712 ) $ 53,836 $ (900 ) |
Schedule of Securities in 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: 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 |
OTTI in Earnings on Available-for-sale Securities | OTTI recognized in earnings for available-for-sale securities for the three months ended March 31, 2019 were as follows: 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 $ - |
Schedule of OTTI Recognized in Earnings for Available-for-sale Securities | 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: 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 |
Available-for-Sale [Member] | |
Schedule of Investments Debt and Equity Securities [Line Items] | |
Schedule of OTTI Recognized in Earnings for Available-for-sale Securities | OTTI recognized in earnings for available-for-sale securities for the three months ended March 31, 2019 were as follows: 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 $ - |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis | The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows: March 31, 2020 Level 1 Level 2 Level 3 Total (In thousands) Fair value assets: Available-for-sale fixed-maturity securities: U.S. government and agencies $ - $ 10,588 $ - $ 10,588 Foreign government - 152,786 - 152,786 States and political subdivisions - 125,319 - 125,319 Corporates 4,877 1,398,090 - 1,402,967 Residential mortgage-backed securities - 320,658 26 320,684 Commercial mortgage-backed securities - 120,947 - 120,947 Other asset-backed securities - 108,496 250 108,746 Total available-for-sale securities 4,877 2,236,884 276 2,242,037 Equity securities 33,015 1,000 110 34,125 Trading securities - 44,997 - 44,997 Separate accounts - 2,128,924 - 2,128,924 Total fair value assets $ 37,892 $ 4,411,805 $ 386 $ 4,450,083 Fair value liabilities: Separate accounts $ - $ 2,128,924 $ - $ 2,128,924 Total fair value liabilities $ - $ 2,128,924 $ - $ 2,128,924 December 31, 2019 Level 1 Level 2 Level 3 Total (In thousands) Fair value assets: Available-for-sale fixed-maturity securities: U.S. government and agencies $ - $ 10,484 $ - $ 10,484 Foreign government - 161,072 - 161,072 States and political subdivisions - 122,593 - 122,593 Corporates 5,865 1,493,786 - 1,499,651 Residential mortgage-backed securities - 312,497 26 312,523 Commercial mortgage-backed securities - 132,005 - 132,005 Other asset-backed securities - 118,244 424 118,668 Total available-for-sale securities 5,865 2,350,681 450 2,356,996 Equity securities 39,499 1,050 135 40,684 Trading securities - 43,233 - 43,233 Separate accounts - 2,485,745 - 2,485,745 Total fair value assets $ 45,364 $ 4,880,709 $ 585 $ 4,926,658 Fair value liabilities: Separate accounts $ - $ 2,485,745 $ - $ 2,485,745 Total fair value liabilities $ - $ 2,485,745 $ - $ 2,485,745 |
Roll forward of Level 3 Assets Measured on Recurring Basis | The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows: Three months ended March 31, (1) 2020 2019 (In thousands) Level 3 assets, beginning of period $ 585 $ 921 Net unrealized gains (losses) included in other comprehensive income 1 (6 ) Realized gains (losses) and accretion (amortization) recognized in earnings (25 ) 8 Settlements (175 ) (44 ) Transfers into Level 3 - - Transfers out of Level 3 (2) - (498 ) Level 3 assets, end of period $ 386 $ 381 (1) Activities for investments that enter Level 3 in one quarter and exit Level 3 in another quarter within the same fiscal year are not eliminated until year-end when only the full year amounts are presented. (2) Transfers out of Level 3 assets primarily consisted of newly issued fixed-maturity securities in the previous period for which observable inputs, most notably quoted prices, used to derive valuations became readily available. |
Carrying Values and Estimated Fair Values of Financial Instruments | The carrying values and estimated fair values of our financial instruments were as follows: March 31, 2020 December 31, 2019 Carrying value Estimated fair value Carrying value Estimated fair value (In thousands) Assets: Fixed-maturity securities (available-for-sale) $ 2,242,037 $ 2,242,037 $ 2,356,996 $ 2,356,996 Fixed-maturity security (held-to-maturity) (3) 1,237,270 1,310,909 1,184,370 1,299,102 Equity securities 34,125 34,125 40,684 40,684 Trading securities 44,997 44,997 43,233 43,233 Policy loans (3) 31,799 31,799 32,927 32,927 Deposit asset underlying 10% coinsurance agreement (3) 234,833 234,833 233,499 233,499 Separate accounts 2,128,924 2,128,924 2,485,745 2,485,745 Liabilities: Notes payable (1) (2) $ 374,131 $ 386,156 $ 374,037 $ 395,522 Surplus note (1) (3) 1,236,644 1,310,909 1,183,728 1,296,972 Separate accounts 2,128,924 2,128,924 2,485,745 2,485,745 (1) Carrying value amounts shown are net of issuance costs (2) Classified as a Level 2 fair value measurement. (3) Classified as a Level 3 fair value measurement. |
Reinsurance (Tables)
Reinsurance (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Reinsurance Disclosures [Abstract] | |
In-force Life Insurance | Details on in force life insurance were as follows: March 31, 2020 December 31, 2019 (Dollars in thousands) Direct life insurance in force $ 807,245,574 $ 810,995,295 Amounts ceded to other companies (700,084,862 ) (702,727,956 ) Net life insurance in force $ 107,160,712 $ 108,267,339 Percentage of reinsured life insurance in force 87 % 87 % |
Reinsurance Recoverables and Financial Strength Ratings by Reinsurer | Reinsurance recoverables includes ceded reserve balances, ceded claim liabilities, and ceded claims paid. Reinsurance recoverables and financial strength ratings by reinsurer were as follows: March 31, 2020 December 31, 2019 Reinsurance recoverables A.M. Best rating Reinsurance recoverables A.M. Best rating (In thousands) Pecan Re Inc. (1) (2) $ 2,699,114 N/R $ 2,696,924 NR SCOR Global Life Reinsurance Companies (3) 345,784 A+ 352,049 A+ Munich Re of Malta (2) (5) 257,535 N/R 286,433 NR Swiss Re Life & Health America Inc. (4) 222,245 A+ 233,572 A+ American Health and Life Insurance Company (2) 165,953 B++ 167,471 B++ Munich American Reassurance Company 118,135 A+ 118,372 A+ Korean Reinsurance Company 107,874 A 108,410 A RGA Reinsurance Company 103,502 A+ 100,328 A+ Hannover Life Reassurance Company 32,992 A+ 33,772 A+ TOA Reinsurance Company 29,355 A 26,160 A All other reinsurers 55,950 - 48,679 - Allowance for credit losses (5,542 ) (2,347 ) Reinsurance recoverables $ 4,132,897 $ 4,169,823 NR – not rated (1) (2) Reinsurance recoverables includes balances ceded under coinsurance transactions of term life insurance policies that were in force as of December 31, 2009. Amounts shown are net of their share of the reinsurance recoverables from other reinsurers. (3) Includes amounts ceded to Transamerica Reinsurance Companies and fully retroceded to SCOR Global Life Reinsurance Companies. (4) Includes amounts ceded to Lincoln National Life Insurance and fully (5) |
Allowance for Credit Loss on Reinsurance Recoverable | The rollforward of the allowance for credit losses on reinsurance recoverables for the three months ended March 31, 2020 was as follows: 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 (1) |
Policy Claims and Other Benef_2
Policy Claims and Other Benefits Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Liability For Future Policy Benefits And Unpaid Claims And Claims Adjustment Expense [Abstract] | |
Schedule of Liability For Future Policy Benefits and Unpaid Claims | Changes in policy claims incurred and other benefits payable were as follows: Three months ended March 31, 2020 2019 (In thousands) Policy claims and other benefits payable, beginning of period $ 339,954 $ 313,862 Less reinsured policy claims and other benefits payable 388,797 318,653 Net balance, beginning of period (48,843 ) (4,791 ) Incurred related to current year 53,828 47,973 Incurred related to prior years (1) (5,045 ) (2,095 ) Total incurred 48,783 45,878 Claims paid related to current year, net of reinsured policy claims received (123,305 ) (135,225 ) Reinsured policy claims received related to prior years, net of claims paid 59,269 13,795 Total paid (64,036 ) (121,430 ) Foreign currency translation (518 ) 160 Net balance, end of period (64,614 ) (80,183 ) Add reinsured policy claims and other benefits payable 395,103 388,605 Balance, end of period $ 330,489 $ 308,422 (1) des the difference between our estimate of claims incurred but not yet reported as of period-end and the actual incurred claims reported after period-end. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stockholders Equity Note [Abstract] | |
Reconciliation of Number of Shares of Common Stock | A reconciliation of the number of shares of our common stock follows: Three months ended March 31, 2020 2019 (In thousands) Common stock, beginning of period $ 41,207 $ 42,694 Shares issued for stock options exercised - - Shares of common stock issued upon lapse of restricted stock units (“RSUs”) 183 231 Common stock retired (930 ) (526 ) Common stock, end of period $ 40,460 $ 42,399 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | The calculation of basic and diluted EPS was as follows: Three months ended March 31, 2020 2019 (In thousands, except per-share amounts) Basic EPS: Numerator: Net income $ 72,469 $ 79,165 Income attributable to unvested participating securities (310 ) (401 ) Net income used in calculating basic EPS $ 72,159 $ 78,764 Denominator: Weighted-average vested shares 41,131 42,824 Basic EPS $ 1.75 $ 1.84 Diluted EPS: Numerator: Net income $ 72,469 $ 79,165 Income attributable to unvested participating securities (310 ) (400 ) Net income used in calculating diluted EPS $ 72,159 $ 78,765 Denominator: Weighted-average vested shares 41,131 42,824 Dilutive effect of incremental shares to be issued for contingently-issuable shares 108 118 Weighted-average shares used in calculating diluted EPS 41,239 42,942 Diluted EPS $ 1.75 $ 1.83 |
Share-Based Transactions (Table
Share-Based Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Impacts of Equity Awards Granted | The impacts of equity awards granted are as follows: Three months ended March 31, 2020 2019 (In thousands) Equity awards expense recognized $ 11,161 $ 10,883 Equity awards expense deferred 2,359 2,279 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of other comprehensive income (loss) ( “ ” 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 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregation of Revenues from Contracts | The disaggregation of our revenues from contracts with customers were as follows: Three months ended March 31, 2020 2019 (In thousands) Term Life Insurance segment revenues: Other, net $ 10,168 $ 9,744 Total segment revenues from contracts with customers 10,168 9,744 Revenues from sources other than contracts with customers 317,578 287,099 Total Term Life Insurance segment revenues $ 327,746 $ 296,843 Investment and Savings Products segment revenues: Commissions and fees Sales-based revenues $ 80,891 $ 66,997 Asset-based revenues 66,994 59,754 Account-based revenues 20,204 19,613 Other, net 2,542 2,423 Total segment revenues from contracts with customers 170,631 148,787 Revenues from sources other than contracts with customers (segregated funds) 14,401 13,885 Total Investment and Savings Products segment revenues $ 185,032 $ 162,672 Corporate and Other Distributed Products segment revenues: Commissions and fees (1) $ 7,579 $ 7,066 Other, net 955 1,056 Total segment revenues from contracts with customers 8,534 8,122 Revenues from sources other than contracts with customers 3,624 27,350 Total Corporate and Other Distributed Products segment revenues $ 12,158 $ 35,472 (1) Commissions and fees include million for the three months ended March 31, 2020 and March 31, 2019 to performance obligations satisfied in a previous reporting period and represent the collection of variable consideration in the transaction price that had been previously constrained. |
Summary of Contract Asset Account | Activity in the contract asset account was as follows: Three months ended March 31, 2020 2019 (In thousands) Balance, beginning of period $ 51,701 $ 50,119 Current period sales, net of collection of renewal commissions (202 ) (28 ) Balance, at the end of period $ 51,499 $ 50,091 |
Description of Business, Basi_3
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies - Narrative (Details) $ in Millions | Jan. 01, 2020USD ($) |
Accounting Standards Update 2016-13 [Member] | |
Organization Consolidation Basis Of Presentation Business Description And Accounting Policies [Line Items] | |
Cumulative effect from the adoption of new accounting standards, net | $ 1.2 |
Segment and Geographical Info_3
Segment and Geographical Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment and Geographical Info_4
Segment and Geographical Information - Summary of Assets and Profit or Loss by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | ||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 524,936 | $ 494,987 | ||
Net investment income | 15,420 | 24,111 | ||
Amortization of deferred policy acquisition costs | 70,311 | 64,628 | ||
Non-cash share-based compensation expense | 11,161 | 10,883 | ||
Income (loss) before income taxes | 94,546 | 102,368 | ||
Assets | 13,270,911 | $ 13,688,531 | ||
Term Life Insurance Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 327,746 | 296,843 | ||
Net investment income | 6,246 | 4,444 | ||
Amortization of deferred policy acquisition costs | 65,840 | 64,066 | ||
Non-cash share-based compensation expense | 1,786 | 1,872 | ||
Income (loss) before income taxes | 82,892 | 70,339 | ||
Assets | 6,535,597 | 6,546,129 | ||
Investment and Savings Products Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 185,032 | 162,672 | ||
Amortization of deferred policy acquisition costs | 4,305 | 477 | ||
Non-cash share-based compensation expense | 1,105 | 1,454 | ||
Income (loss) before income taxes | 47,700 | 42,684 | ||
Assets | [1] | 2,233,435 | 2,598,493 | |
Corporate and Other Distributed Products Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 12,158 | 35,472 | ||
Net investment income | 9,174 | 19,667 | ||
Amortization of deferred policy acquisition costs | 166 | 85 | ||
Non-cash share-based compensation expense | 8,270 | 7,557 | ||
Income (loss) before income taxes | (36,046) | $ (10,655) | ||
Assets | $ 4,501,879 | $ 4,543,909 | ||
[1] | The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, the Investment and Savings Products segment assets were $104.6 million and $112.8 million as of March 31, 2020 and December 31, 2019, respectively. |
Segment and Geographical Info_5
Segment and Geographical Information - Summary of Assets and Profit or Loss by Segment (Parenthetical) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Investment and Savings Products Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Assets, excluding separate account assets | $ 104.6 | $ 112.8 |
Segment and Geographical Info_6
Segment and Geographical Information - Long Lived Assets and Continuing Operations by Country (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | $ 524,936 | $ 494,987 | |
Income (loss) before income taxes | 94,546 | 102,368 | |
Long-lived assets | 47,440 | $ 46,116 | |
United States [Member] | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | 443,135 | 419,992 | |
Income (loss) before income taxes | 72,947 | 80,735 | |
Long-lived assets | 42,829 | 41,200 | |
Canada [Member] | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Revenues | 81,801 | 74,995 | |
Income (loss) before income taxes | 21,599 | $ 21,633 | |
Long-lived assets | $ 4,611 | $ 4,916 |
Investments - Schedule of Avail
Investments - Schedule of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | $ 2,243,288 | $ 2,274,770 |
Available-for-sale debt securities gross unrealized gain | 59,263 | 84,838 |
Available-for-sale debt securities, gross unrealized loss | (60,514) | (2,612) |
Available-for-sale debt securities, at fair value | 2,242,037 | 2,356,996 |
U.S. Government and Agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 10,040 | 10,197 |
Available-for-sale debt securities gross unrealized gain | 548 | 287 |
Available-for-sale debt securities, at fair value | 10,588 | 10,484 |
Foreign Government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 145,858 | 154,945 |
Available-for-sale debt securities gross unrealized gain | 7,225 | 6,362 |
Available-for-sale debt securities, gross unrealized loss | (297) | (235) |
Available-for-sale debt securities, at fair value | 152,786 | 161,072 |
States and Political Subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 122,242 | 120,000 |
Available-for-sale debt securities gross unrealized gain | 3,779 | 3,288 |
Available-for-sale debt securities, gross unrealized loss | (702) | (695) |
Available-for-sale debt securities, at fair value | 125,319 | 122,593 |
Corporates [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 1,416,090 | 1,436,877 |
Available-for-sale debt securities gross unrealized gain | 32,614 | 63,892 |
Available-for-sale debt securities, gross unrealized loss | (45,737) | (1,118) |
Available-for-sale debt securities, at fair value | 1,402,967 | 1,499,651 |
Residential Mortgage-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 314,157 | 305,897 |
Available-for-sale debt securities gross unrealized gain | 12,058 | 6,848 |
Available-for-sale debt securities, gross unrealized loss | (5,531) | (222) |
Available-for-sale debt securities, at fair value | 320,684 | 312,523 |
Commercial Mortgage-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 121,365 | 128,913 |
Available-for-sale debt securities gross unrealized gain | 2,599 | 3,191 |
Available-for-sale debt securities, gross unrealized loss | (3,017) | (99) |
Available-for-sale debt securities, at fair value | 120,947 | 132,005 |
Other Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale debt securities, amortized cost basis | 113,536 | 117,941 |
Available-for-sale debt securities gross unrealized gain | 440 | 970 |
Available-for-sale debt securities, gross unrealized loss | (5,230) | (243) |
Available-for-sale debt securities, at fair value | $ 108,746 | $ 118,668 |
Investments - Fixed-maturity Se
Investments - Fixed-maturity Securities Classified by Contractual Maturity Date (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available-for-sale Securities, Debt Maturities [Abstract] | ||
Due in one year or less, amortized cost | $ 186,625 | |
Due after one year through five years, amortized cost | 875,325 | |
Due after five years through 10 years, amortized cost | 489,101 | |
Due after 10 years, amortized cost | 143,179 | |
Total fixed-maturity securities with single maturity dates, amortized cost | 1,694,230 | |
Mortgage and asset-backed securities, amortized cost | 549,058 | |
Available-for-sale debt securities, amortized cost basis | 2,243,288 | $ 2,274,770 |
Available-for-sale debt securities, at fair value | 2,242,037 | 2,356,996 |
Fixed Maturities | ||
Available-for-sale Securities, Debt Maturities [Abstract] | ||
Available-for-sale debt securities, amortized cost basis | 2,243,288 | $ 2,274,770 |
Due in one year or less, fair value | 185,059 | |
Due after one year through five years, fair value | 874,333 | |
Due after five years through 10 years, fair value | 485,780 | |
Due after 10 years, fair value | 146,488 | |
Total fixed-maturity securities with single maturity dates, fair value | 1,691,660 | |
Mortgage and asset-backed securities, fair value | 550,377 | |
Available-for-sale debt securities, at fair value | $ 2,242,037 |
Investments - Costs and Fair Va
Investments - Costs and Fair Value of Securities Classified as Trading Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Total trading securities, Fair value | $ 44,997 | $ 43,233 |
Fixed Maturities | ||
Schedule Of Trading Securities And Other Trading Assets [Line Items] | ||
Total trading securities, cost | 45,279 | 43,257 |
Total trading securities, Fair value | $ 44,997 | $ 43,233 |
Investments - Held-to-maturity
Investments - Held-to-maturity Security - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Schedule Of Held To Maturity Securities [Line Items] | |
Held-to-maturity debt security estimated unrealized holding gain | $ 73,600,000 |
Held-to-maturity debt security Credit losses | $ 0 |
LLC Note [Member] | |
Schedule Of Held To Maturity Securities [Line Items] | |
Debt instrument, maturity date | Dec. 31, 2030 |
Debt instrument, interest rate, stated percentage | 4.50% |
Surplus Note [Member] | |
Schedule Of Held To Maturity Securities [Line Items] | |
Debt instrument, maturity date | Dec. 31, 2030 |
Debt instrument, interest rate, stated percentage | 4.50% |
Investments - Fair Value of Inv
Investments - Fair Value of Investments on Deposit with Governmental Authorities - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Investments Debt And Equity Securities [Abstract] | ||
Fair values of investments on deposit | $ 7.7 | $ 7.5 |
Investments - Securities Lendin
Investments - Securities Lending Collateral - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Securities Received as Collateral [Abstract] | ||
Securities loaned, minimum collateral to loan ratio | 102.00% | |
Securities loaned, additional collateral requirement, decline in collateral value threshold percentage | 100.00% | |
Cash collateral received and reinvested | $ 28.9 | $ 28.7 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | $ 31,190 | $ 36,919 | |
Investment expenses | (2,298) | (2,134) | |
Investment income net of investment expenses | 28,892 | 34,785 | |
Interest expense on surplus note | (13,472) | (10,674) | |
Net investment income | 15,420 | 24,111 | |
Equity Securities [Member] | |||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | 451 | 487 | |
Policy Loans and Other Invested Assets [Member] | |||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | 189 | 320 | |
Cash and Cash Equivalents [Member] | |||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | 843 | 1,203 | |
Total return on deposit asset underlying 10% insurance agreement [Member] | |||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | [1] | (4,549) | 3,902 |
Available-for-Sale [Member] | Fixed Maturities | |||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | 20,784 | 20,333 | |
Held-to-Maturity [Member] | Fixed Maturities | |||
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gross investment income, operating | $ 13,472 | $ 10,674 | |
[1] | 10% |
Investments - Net Investment _2
Investments - Net Investment Income (Parenthetical) (Details) - Deposit asset underlying 10% coinsurance agreement [Member] - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Schedule of Net Investment Income, Reported Amounts, by Category [Line Items] | |||
Gains (Losses) recognized for change in fair value of deposit asset underlying the 10% coinsurance agreement | $ (6.4) | $ 2.1 | |
Percentage of coinsurance costs | 10.00% | 10.00% |
Investments - Schedule of Net R
Investments - Schedule of Net Realized Investment Gains and Losses Recognized in Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Realized Investment Gains Losses [Abstract] | ||
Gross gains from sales of available-for-sale securities | $ 357 | $ 178 |
Gross losses from sales of available-for-sale securities | (66) | (243) |
Credit losses on available-for-sale securities | (3,701) | |
Net gains (losses) recognized in net income during the period on equity securities | (6,672) | 2,901 |
Gains (losses) from bifurcated options | 52 | |
Gains (losses) on trading securities | 11 | |
Net realized investment gains (losses) | $ (10,030) | $ 2,847 |
Investments - Schedule of Proce
Investments - Schedule of Proceeds from Sales or Other Redemptions of Available-For-Sale Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Proceeds From Sale And Maturity Of Available For Sale Securities [Abstract] | ||
Proceeds from sales or other redemptions | $ 141,917 | $ 115,439 |
Investments - Schedule of Unrea
Investments - Schedule of Unrealized Net Gains (Losses) Recognized in NI on Equity Securities Still Held at Period-End (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Realized Investment Gains Losses [Abstract] | ||
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 | (254) | |
Net gains (losses) recognized in net income on equity securities still held as of period-end | $ (6,672) | $ 3,155 |
Investments - Accrued Interest
Investments - Accrued Interest - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Securities, description on 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. |
Investments - Schedule of Secur
Investments - Schedule of Securities in Unrealized Loss Position (Details) - Fixed Maturities $ in Thousands | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)Securities |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | $ 803,948 | $ 178,394 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (57,180) | (1,712) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 16,333 | 53,836 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | (3,334) | (900) |
Foreign Government [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 6,021 | 11,824 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (297) | (144) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 8,578 | |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | $ (91) | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, less than one year | Securities | 14 | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, greater than or equal to one year | Securities | 7 | |
States and Political Subdivisions [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 28,549 | $ 39,379 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (702) | (690) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 4,000 | |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | $ (5) | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, less than one year | Securities | 21 | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, greater than or equal to one year | Securities | 4 | |
Corporates [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 570,920 | $ 52,474 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (42,960) | (453) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 9,736 | 21,739 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | (2,777) | $ (665) |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, less than one year | Securities | 40 | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, greater than or equal to one year | Securities | 19 | |
Residential Mortgage-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 77,740 | $ 40,690 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (5,508) | (207) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 857 | 2,071 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | (23) | $ (15) |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, less than one year | Securities | 20 | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, greater than or equal to one year | Securities | 3 | |
Commercial Mortgage-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 43,906 | $ 11,526 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (2,906) | (28) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 2,557 | 12,835 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | (111) | $ (71) |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, less than one year | Securities | 13 | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, greater than or equal to one year | Securities | 16 | |
Other Asset-backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, continuous unrealized loss position, less than 12 months, fair value | 76,812 | $ 22,501 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, aggregate losses | (4,807) | (190) |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, fair value | 3,183 | 4,613 |
Available-for-sale securities, continuous unrealized loss position, 12 months or longer, aggregate losses | $ (423) | $ (53) |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, less than one year | Securities | 17 | |
Available-for-sale, securities in unrealized loss positions, qualitative disclosure, number of positions, greater than or equal to one year | Securities | 20 |
Investments - Available-for-sal
Investments - Available-for-sale Securities with Cost Basis in Excess of Fair Value - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale fixed-maturities with cost basis in excess of fair values, cost basis | $ 880.8 | $ 234.8 |
Available-for-sale credit losses | 3.7 | |
COVID-19 [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Credit losses adjustment to amortized cost | $ 3.7 |
Investments - Schedule of Sec_2
Investments - Schedule of Securities in Allowance for Credit Losses (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Investments Debt And Equity Securities [Abstract] | |
Additions to the allowance for credit losses on securities | $ 37 |
Allowance for credit losses, end of period | $ 37 |
Investments - OTTI in Earnings
Investments - OTTI in Earnings on Available-for-sale Securities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |
OTTI recognized in earnings | $ 3,701 |
Investments - Schedule of OTTI
Investments - Schedule of OTTI Recognized in Earnings for Available-for-sale Securities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | |
Total OTTI losses recognized | $ 3,701 |
OTTI recognized in earnings | $ 3,701 |
Investments - Rollforward of OT
Investments - Rollforward of OTTI Recognized in Net Income, Fixed-maturity Securities Still Held (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Other than Temporary Impairment, OTTI Recognized in Earnings [Roll Forward] | |
Cumulative OTTI recognized in net income for securities still held, beginning of period | $ 2,511 |
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) |
Cumulative OTTI recognized in net income for securities still held, end of period | $ 2,467 |
Investments - Impairment Losses
Investments - Impairment Losses on Held-to-maturity Security - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Investments Debt And Equity Securities [Abstract] | |
Cumulative impairment loss held-to-maturity security | $ 0 |
Investments - Loss from Closed
Investments - Loss from Closed Currency Forward Contracts Recorded in Accumulated Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract] | ||
Deferred loss related to closed forward contracts | $ (26.4) | $ (26.4) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | $ 2,242,037 | $ 2,356,996 |
Equity securities | 34,125 | 40,684 |
Separate accounts assets | 2,128,924 | 2,485,745 |
Separate accounts liabilities | $ 2,128,924 | 2,485,745 |
Fair value assumptions, percentage of securities assessed by third-party pricing service | 95.00% | |
Fair Value, Recurring Measurements [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale securities | $ 2,242,037 | 2,356,996 |
Equity securities | 34,125 | 40,684 |
Trading securities | 44,997 | 43,233 |
Separate accounts assets | 2,128,924 | 2,485,745 |
Assets, fair value disclosure | 4,450,083 | 4,926,658 |
Separate accounts liabilities | 2,128,924 | 2,485,745 |
Liabilities, fair value disclosure | 2,128,924 | 2,485,745 |
Fair Value, Recurring Measurements [Member] | Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale securities | 4,877 | 5,865 |
Equity securities | 33,015 | 39,499 |
Assets, fair value disclosure | 37,892 | 45,364 |
Fair Value, Recurring Measurements [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale securities | 2,236,884 | 2,350,681 |
Equity securities | 1,000 | 1,050 |
Trading securities | 44,997 | 43,233 |
Separate accounts assets | 2,128,924 | 2,485,745 |
Assets, fair value disclosure | 4,411,805 | 4,880,709 |
Separate accounts liabilities | 2,128,924 | 2,485,745 |
Liabilities, fair value disclosure | 2,128,924 | 2,485,745 |
Fair Value, Recurring Measurements [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale securities | 276 | 450 |
Equity securities | 110 | 135 |
Assets, fair value disclosure | 386 | 585 |
Fair Value, Recurring Measurements [Member] | U.S. Government and Agencies [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 10,588 | 10,484 |
Fair Value, Recurring Measurements [Member] | U.S. Government and Agencies [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 10,588 | 10,484 |
Fair Value, Recurring Measurements [Member] | Foreign Government [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 152,786 | 161,072 |
Fair Value, Recurring Measurements [Member] | Foreign Government [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 152,786 | 161,072 |
Fair Value, Recurring Measurements [Member] | States and Political Subdivisions [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 125,319 | 122,593 |
Fair Value, Recurring Measurements [Member] | States and Political Subdivisions [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 125,319 | 122,593 |
Fair Value, Recurring Measurements [Member] | Corporates [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 1,402,967 | 1,499,651 |
Fair Value, Recurring Measurements [Member] | Corporates [Member] | Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 4,877 | 5,865 |
Fair Value, Recurring Measurements [Member] | Corporates [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 1,398,090 | 1,493,786 |
Fair Value, Recurring Measurements [Member] | Residential Mortgage-backed Securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 320,684 | 312,523 |
Fair Value, Recurring Measurements [Member] | Residential Mortgage-backed Securities [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 320,658 | 312,497 |
Fair Value, Recurring Measurements [Member] | Residential Mortgage-backed Securities [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 26 | 26 |
Fair Value, Recurring Measurements [Member] | Commercial Mortgage-backed Securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 120,947 | 132,005 |
Fair Value, Recurring Measurements [Member] | Commercial Mortgage-backed Securities [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 120,947 | 132,005 |
Fair Value, Recurring Measurements [Member] | Other Asset-backed Securities [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 108,746 | 118,668 |
Fair Value, Recurring Measurements [Member] | Other Asset-backed Securities [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | 108,496 | 118,244 |
Fair Value, Recurring Measurements [Member] | Other Asset-backed Securities [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total available-for-sale fixed-maturity securities | $ 250 | $ 424 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Rollforward of Level 3 Assets Measured on Recurring Basis (Details) - Fair Value, Recurring Measurements [Member] - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Level 3 assets, beginning of period | [1] | $ 585 | $ 921 |
Net unrealized gains (losses) included in other comprehensive income | [1] | 1 | (6) |
Realized gains (losses) and accretion (amortization) recognized in earnings | [1] | (25) | 8 |
Settlements | [1] | (175) | (44) |
Transfers out of Level 3 | [1],[2] | (498) | |
Level 3 assets, end of period | [1] | $ 386 | $ 381 |
[1] | Activities for investments that enter Level 3 in one quarter and exit Level 3 in another quarter within the same fiscal year are not eliminated until year-end when only the full year amounts are presented. | ||
[2] | Transfers out of Level 3 assets primarily consisted of newly issued fixed-maturity securities in the previous period for which observable inputs, most notably quoted prices, used to derive valuations became readily available. |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Fair value security, level 1 to level 2 transfers, amount | $ 0 | $ 0 |
Fair Value security, level 1 to level 3 transfers, amount | $ 0 | $ 0 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Carrying Values and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, at fair value | $ 2,242,037 | $ 2,356,996 | |
Fixed-maturity security held to maturity, fair value | 1,310,909 | 1,299,102 | |
Equity securities | 34,125 | 40,684 | |
Separate accounts assets | 2,128,924 | 2,485,745 | |
Surplus note | 1,236,644 | 1,183,728 | |
Separate accounts liabilities | 2,128,924 | 2,485,745 | |
Fixed-maturity security (held-to-maturity) | 1,237,270 | 1,184,370 | |
Reported Value Measurement [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, at fair value | 2,242,037 | 2,356,996 | |
Equity securities | 34,125 | 40,684 | |
Trading securities | 44,997 | 43,233 | |
Separate accounts assets | 2,128,924 | 2,485,745 | |
Separate accounts liabilities | 2,128,924 | 2,485,745 | |
Reported Value Measurement [Member] | Level 3 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Policy loans | [1] | 31,799 | 32,927 |
Surplus note | [1],[2] | 1,236,644 | 1,183,728 |
Fixed-maturity security (held-to-maturity) | [1] | 1,237,270 | 1,184,370 |
Reported Value Measurement [Member] | Level 3 [Member] | Deposits [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Deposit asset underlying 10% coinsurance agreement | [1] | 234,833 | 233,499 |
Reported Value Measurement [Member] | Senior Notes [Member] | Level 2 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notes payable | [2],[3] | 374,131 | 374,037 |
Estimate of Fair Value Measurement [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, at fair value | 2,242,037 | 2,356,996 | |
Equity securities | 34,125 | 40,684 | |
Trading securities | 44,997 | 43,233 | |
Separate accounts assets | 2,128,924 | 2,485,745 | |
Separate accounts liabilities | 2,128,924 | 2,485,745 | |
Estimate of Fair Value Measurement [Member] | Level 3 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fixed-maturity security held to maturity, fair value | [1] | 1,310,909 | 1,299,102 |
Policy loans | [1] | 31,799 | 32,927 |
Surplus note | [1],[2] | 1,310,909 | 1,296,972 |
Estimate of Fair Value Measurement [Member] | Level 3 [Member] | Deposits [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Deposit asset underlying 10% coinsurance agreement | [1] | 234,833 | 233,499 |
Estimate of Fair Value Measurement [Member] | Senior Notes [Member] | Level 2 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Notes payable | [2],[3] | $ 386,156 | $ 395,522 |
[1] | Classified as a Level 3 fair value measurement. | ||
[2] | Carrying value amounts shown are net of issuance costs | ||
[3] | Classified as a Level 2 fair value measurement. |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Carrying Values and Estimated Fair Values of Financial Instruments (Parenthetical) (Details) | Mar. 31, 2020 | Dec. 31, 2019 |
Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Percentage of coinsurance costs | 10.00% | 10.00% |
Reinsurance - In-force Life Ins
Reinsurance - In-force Life Insurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | ||
Direct life insurance in force | $ 807,245,574 | $ 810,995,295 |
Amounts ceded to other companies | (700,084,862) | (702,727,956) |
Net life insurance in force | $ 107,160,712 | $ 108,267,339 |
Percentage of reinsured life insurance in force | 87.00% | 87.00% |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reinsurance Disclosures [Abstract] | ||
Benefits and claims ceded to reinsurers | $ 349,100 | $ 332,600 |
Current period provision for expected credit losses | 1,625 | |
Reinsurance, loss on uncollectible accounts in period, amount | $ 0 |
Reinsurance - Reinsurance Recov
Reinsurance - Reinsurance Recoverables and Financial Strength Ratings by Reinsurer (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | $ 4,132,897 | $ 4,169,823 | |
Pecan Re Inc [Member] | External credit rating, not rated [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | [1],[2] | 2,699,114 | 2,696,924 |
SCOR Global Life Reinsurance Companies [Member] | AM Best, A+ Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | [3] | 345,784 | 352,049 |
Munich Re of Malta [Member] | External credit rating, not rated [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | [2] | 257,535 | 286,433 |
Swiss Re Life & Health America Inc. [Member] | AM Best, A+ Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | [4] | 222,245 | 233,572 |
American Health and Life Insurance Company [Member] | AM Best, B++ Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | [2] | 165,953 | 167,471 |
Munich American Reassurance Company [Member] | AM Best, A+ Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | 118,135 | 118,372 | |
Korean Reinsurance Company [Member] | AM Best, A Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | 107,874 | 108,410 | |
RGA Reinsurance Company [Member] | AM Best, A+ Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | 103,502 | 100,328 | |
Hannover Life Reassurance Company [Member] | AM Best, A+ Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | 32,992 | 33,772 | |
TOA Reinsurance Company [Member] | AM Best, A Rating [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | 29,355 | 26,160 | |
All Other Reinsurers [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | 55,950 | 48,679 | |
Allowance for Credit Losses [Member] | |||
Ceded Credit Risk [Line Items] | |||
Reinsurance recoverables | $ (5,542) | $ (2,347) | |
[1] | Pecan Re Inc. is a wholly owned subsidiary of Swiss Re Life & Health America Inc. | ||
[2] | Reinsurance recoverables includes balances ceded under coinsurance transactions of term life insurance policies that were in force as of December 31, 2009. Amounts shown are net of their share of the reinsurance recoverables from other reinsurers. | ||
[3] | Includes amounts ceded to Transamerica Reinsurance Companies and fully retroceded to SCOR Global Life Reinsurance Companies. | ||
[4] | Includes amounts ceded to Lincoln National Life Insurance and fully |
Reinsurance - Allowance for Cre
Reinsurance - Allowance for Credit Loss on Reinsurance Recoverable (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($) | ||
Reinsurance Disclosures [Abstract] | ||
Balance, beginning of period | $ 3,917 | [1] |
Current period provision for expected credit losses | 1,625 | |
Balance, at the end of period | $ 5,542 | |
[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 |
Policy Claims and Other Benef_3
Policy Claims and Other Benefits Payable - Schedule of Liability For Policy Claims and Other Benefits Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Roll Forward In Liability For Unpaid Claims And Claims Adjustment Expense [Abstract] | |||
Policy claims and other benefits payable, beginning of period | $ 339,954 | $ 313,862 | |
Reinsured policy claims and other benefits payable, beginning of period | 388,797 | 318,653 | |
Net balance, beginning of period | (48,843) | (4,791) | |
Incurred related to current year | 53,828 | 47,973 | |
Incurred related to prior years | [1] | (5,045) | (2,095) |
Total incurred | 48,783 | 45,878 | |
Claims paid related to current year, net of reinsured policy claims received | (123,305) | (135,225) | |
Reinsured policy claims received related to prior years, net of claims paid | 59,269 | 13,795 | |
Total paid | (64,036) | (121,430) | |
Foreign currency translation | (518) | 160 | |
Net balance, end of period | (64,614) | (80,183) | |
Reinsured policy claims and other benefits payable, end of period | 395,103 | 388,605 | |
Policy claims and other benefits payable, end of period | $ 330,489 | $ 308,422 | |
[1] | Inclu des the difference between our estimate of claims incurred but not yet reported as of period-end and the actual incurred claims reported after period-end. |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Number of Shares of Common Stock (Details) - shares | 3 Months Ended | 14 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | |
Stockholders Equity Note [Abstract] | |||
Common stock, beginning of period | 41,207,000 | 42,694,000 | |
Shares of common stock issued upon lapse of restricted stock units (“RSUs”) | 183,000 | 231,000 | |
Common stock retired | (930,000) | (526,000) | (880,222) |
Common stock, end of period | 40,460,000 | 42,399,000 | 40,460,000 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | 3 Months Ended | 14 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Feb. 10, 2020 | Feb. 07, 2019 | |
Class Of Stock [Line Items] | |||||
Stock repurchased program, authorized amount | $ 300,000,000 | $ 275,000,000 | |||
Stock repurchased and retired during period, shares | 930,000 | 526,000 | 880,222 | ||
Stock repurchased and retired during period, value | $ 90,100,000 | ||||
Stock repurchase program, remaining authorized repurchase amount | $ 209,900,000 | $ 209,900,000 | $ 50,000,000 | ||
Restricted stock units (RSUs) [Member] | |||||
Class Of Stock [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number | 340,527 | 340,527 | |||
Performance share units (PSUs) [Member] | |||||
Class Of Stock [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number | 81,796 | 81,796 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income | $ 72,469 | $ 79,165 |
Income attributable to unvested participating securities, basic EPS | (310) | (401) |
Net income used in calculating basic EPS | $ 72,159 | $ 78,764 |
Weighted-average vested shares | 41,131 | 42,824 |
Basic EPS | $ 1.75 | $ 1.84 |
Income attributable to unvested participating securities, diluted EPS | $ (310) | $ (400) |
Net income used in calculating diluted EPS | $ 72,159 | $ 78,765 |
Dilutive effect of incremental shares to be issued for contingently-issuable shares | 108 | 118 |
Weighted-average shares used in calculating diluted EPS | 41,239 | 42,942 |
Diluted EPS | $ 1.75 | $ 1.83 |
Share-Based Transactions - Impa
Share-Based Transactions - Impact of Equity Awards Granted (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Equity awards expense recognized | $ 11,161 | $ 10,883 |
Expense Deferred [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Equity awards expense deferred | $ 2,359 | $ 2,279 |
Share-Based Transactions - Narr
Share-Based Transactions - Narrative (Details) | Feb. 26, 2020$ / sharesshares |
Restricted stock units (RSUs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of shares awarded | 81,848 |
Measurement date fair value | $ / shares | $ 121.42 |
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years |
Performance share units (PSUs) [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of shares awarded | 25,734 |
Measurement date fair value | $ / shares | $ 121.42 |
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years |
Performance share units (PSUs) [Member] | Maximum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of PSUs vested during the period | 38,601 |
Performance share units (PSUs) [Member] | Minimum [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of PSUs vested during the period | 0 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($)Jurisdiction | |
Commitments And Contingent Liabilities [Line Items] | |
Number of jurisdiction | Jurisdiction | 30 |
Letter of Credit [Member] | |
Commitments And Contingent Liabilities [Line Items] | |
Letter of credit, outstanding | $ | $ 241.3 |
Other Comprehensive Income (Det
Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Foreign currency translation adjustments: | ||
Change in unrealized foreign currency translation gains (losses) | $ (29,011) | $ 6,167 |
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 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 200,000,000 |
Debt instrument maturity date | Dec. 19, 2022 |
Debt instrument, frequency of commitment fee payable | quarterly |
Debt instrument, current borrowing capacity | $ 0 |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 1,500,000,000 |
Maximum [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, commitment fee percentage | 0.225% |
Maximum [Member] | LIBOR Rate [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate margin | 1.625% |
Maximum [Member] | Base Rate [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate margin | 0.625% |
Minimum [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, commitment fee percentage | 0.125% |
Minimum [Member] | LIBOR Rate [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate margin | 1.125% |
Minimum [Member] | Base Rate [Member] | Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate margin | 0.125% |
Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 375,000,000 |
Debt instrument, interest rate, stated percentage | 4.75% |
Debt instrument maturity date | Jul. 15, 2022 |
Surplus Note [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, face amount | $ 1,200,000,000 |
Debt instrument, interest rate, stated percentage | 4.50% |
Debt instrument maturity date | Dec. 31, 2030 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Summary of Disaggregation of Revenues from Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | $ 524,936 | $ 494,987 | |
Term Life Insurance Segment Revenues [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 327,746 | 296,843 | |
Term Life Insurance Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 10,168 | 9,744 | |
Term Life Insurance Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Other, Net [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 10,168 | 9,744 | |
Term Life Insurance Segment Revenues [Member] | Revenues from Sources Other Than Contracts with Customers (Segregated Funds) [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 317,578 | 287,099 | |
Investment and Savings Products Segment Revenues [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 185,032 | 162,672 | |
Investment and Savings Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 170,631 | 148,787 | |
Investment and Savings Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Other, Net [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 2,542 | 2,423 | |
Investment and Savings Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Commissions and Fees [Member] | Sales-based Revenues [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 80,891 | 66,997 | |
Investment and Savings Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Commissions and Fees [Member] | Asset-based Revenues [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 66,994 | 59,754 | |
Investment and Savings Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Commissions and Fees [Member] | Account-based Revenues [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 20,204 | 19,613 | |
Investment and Savings Products Segment Revenues [Member] | Revenues from Sources Other Than Contracts with Customers (Segregated Funds) [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 14,401 | 13,885 | |
Corporate and Other Distributed Products Segment Revenues [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 12,158 | 35,472 | |
Corporate and Other Distributed Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 8,534 | 8,122 | |
Corporate and Other Distributed Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Other, Net [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | 955 | 1,056 | |
Corporate and Other Distributed Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Commissions and Fees [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | [1] | 7,579 | 7,066 |
Corporate and Other Distributed Products Segment Revenues [Member] | Revenues from Sources Other Than Contracts with Customers (Segregated Funds) [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Disaggregation of revenues from contracts with customers | $ 3,624 | $ 27,350 | |
[1] | Commissions and fees include million for the three months ended March 31, 2020 and March 31, 2019 to performance obligations satisfied in a previous reporting period and represent the collection of variable consideration in the transaction price that had been previously constrained. |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Disaggregation of Revenues from Contracts (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Corporate and Other Distributed Products Segment Revenues [Member] | Total Segment Revenues from Contracts with Customers [Member] | Commissions and Fees [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Performance obligation satisfied and collection of variable consideration in transaction price | $ 1.1 | $ 1.1 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Summary of Contract Asset Account (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Contract With Customer Asset And Liability [Abstract] | ||
Balance, beginning of period | $ 51,701 | $ 50,119 |
Current period sales, net of collection of renewal commissions | (202) | (28) |
Balance, at the end of period | $ 51,499 | $ 50,091 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue From Contract With Customer [Abstract] | ||
Estimate adjustments to contract asset | $ 0 | $ 0 |
Impairment losses recognized on contract asset | 0 | $ 0 |
Assets recognized for incremental costs | $ 0 |