XML 36 R25.htm IDEA: XBRL DOCUMENT
v3.23.3

Accounting Pronouncements | 3 Months Ended
--- | ---
Sep. 30, 2023
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] |
New Accounting Pronouncements And Changes In Accounting Principles [Text Block] | Adoption of new Accounting Pronouncements On April 1, 2023, the Company adopted ASU 2018-12 which is applicable to Oxford. The Company adopted ASU 2018-12 effective April 1, 2023 and used the modified retrospective method with a transition date of April 1, 2021. The updated accounting guidance required changes to the measurement and disclosure of long-duration contracts. For the Company, this includes all life insurance products, annuities, Medicare supplement products and our long-term care business. Entities will be required to review, and update if there is a change to cash flow assumptions (including morbidity and persistency) at least annually, and to update discount rate assumptions quarterly using an upper-medium grade fixed-income instrument yield. The effect of changes in cash flow assumptions will be recorded in the Company's results of operations and the effect of changes in discount rate assumptions will be recorded in other comprehensive income. The most significant impact will be the effect of updating the discount rate assumption quarterly to reflect an upper-medium grade fixed-income instrument yield, rather than Oxford Life’s expected investment portfolio yield. This will be partially offset by the de-recognition of cumulative adjustments to DAC associated with unrealized gains and losses associated with long-duration contracts. The Company uses a published spot rate curve constructed from “A”-rated U.S. dollar denominated corporate bonds matched to the duration of the corresponding insurance liabilities, to calculate discount rates. The Company groups its long-duration contracts into calendar year cohorts based on the contract issue date. DAC and other capitalized costs such as unearned revenue are amortized on a constant level or straight-line basis over the expected term of the contracts. Under ASU 2018-12, the annual amortization of DAC in our Consolidated Statements of Operations will differ from previous trends due to: (1) the requirement to no longer defer renewal commissions until such year as the commissions are actually incurred, (2) the requirement to no longer accrue and amortize interest on our DAC balances, and (3) the modification of the method for amortizing DAC including the updating of assumptions. For business with deferrals of renewal commissions, as is the case with our final expense life insurance policies, the expected amortization rate, as a percentage of premium, for certain blocks of business will no longer be level but will increase over the period of time during which commissions are deferred. The decrease in amortization in the near term will primarily impact our life insurance line of business. Upon adoption, the Company made adjustments to AOCI for the removal of cumulative adjustments to DAC associated with unrealized gains and losses previously recorded in AOCI. In total, we expect the impact on net earnings, largely from the decrease in amortization, to be immaterial during fiscal 2024, but could become material with a large increase in sales. Market risk benefits, which are contracts or contract features that provide protection to the policyholder from capital market risk and expose the Company to other-than-nominal capital market risk, are measured at fair value. Market risk benefits are contracts or contract features that guarantee benefits, such as guaranteed life withdrawal benefits, in addition to an account balance which expose insurance companies to other than nominal capital market risk and protect the contract holder from the same risk. Certain contracts or contract features to be identified as market risk benefits were accounted for as embedded derivatives and measured at fair value, while others transitioned to fair value measurement upon the adoption of ASU 2018-12. Also in consideration of market risk benefits, upon adoption, there were impacts to (1) AOCI for the cumulative effect of changes in the instrument-specific credit risk between contract issue date and transition date and (2) retained earnings for the difference between fair value and carrying value at the transition date, excluding the changes in the instrument-specific credit risk. The requirement to review, and update if there is a change, cash flow assumptions at least annually is expected to change the pattern of earnings being recognized. Adoption significantly expanded the Company’s disclosures, and will impact systems, processes, and controls. While the requirements of the new guidance represent a material change from existing GAAP, the accounting adoption had no economic impact on the cash flows of our business nor influence on our business model of providing basic mortality and longevity protection-oriented products to the underserved senior market. In addition, it did not impact our statutory earnings, statutory capital, or capital management philosophies. The following tables present the effect of the adoption of ASU 2018-12 on selected consolidated balance sheet data for the fiscal years ended March 31, 2023 and 2022.
|  | Year Ended March 31,
|  | 2023 |  | 2022
|  | (Unaudited)
|  | (In thousands)
Total Assets |  |  |  |
Prior to adoption | $ | 18,124,648 | $ | 17,299,581
Effect of adoption: |  |  |  |
Derecognition of shadow DAC |  | (25,141) |  | 26,131
Re-measurement due to discount rate |  | – |  | –
Other adjustments |  | 1,227 |  | 1,471
Subtotal | $ | (23,914) | $ | 27,602
After adoption | $ | 18,100,734 | $ | 17,327,183
|  | Year Ended March 31,
|  | 2023 |  | 2022
|  | (Unaudited)
|  | (In thousands)
Total Liabilities |  |  |  |
Prior to adoption | $ | 11,596,313 | $ | 11,347,089
Effect of adoption: |  |  |  |
Deferred income tax adjustment on Shadow removal |  | (5,280) |  | 5,488
Re-measurement due to discount rate |  | (1,626) |  | 87,258
Deferred income tax adjustment on discount rate |  | 342 |  | (18,324)
Other adjustments |  | 6,794 |  | 8,511
Subtotal | $ | 230 | $ | 82,933
After adoption | $ | 11,596,543 | $ | 11,430,022
|  | Year Ended March 31,
|  | 2023 |  | 2022
|  | (Unaudited)
|  | (In thousands)
Accumulated other comprehensive income (loss) |  |  |  |
Prior to adoption | $ | (267,046) | $ | 46,384
Effect of adoption: |  |  |  |
Derecognition on shadow DAC (tax effect) |  | (19,861) |  | 20,644
Re-measurement due to discount rate |  | 1,626 |  | (87,258)
Re-measurement due to discount rate (tax effect) |  | (342) |  | 18,324
Other adjustments |  | – |  | –
Subtotal | $ | (18,577) | $ | (48,290)
After adoption | $ | (285,623) | $ | (1,906)
|  | Year Ended March 31,
|  | 2023 |  | 2022
|  | (Unaudited)
|  | (In thousands)
Total Stockholders' equity |  |  |  |
Prior to adoption | $ | 6,528,335 | $ | 5,952,492
Effect of adoption: |  |  |  |
Derecognition on shadow DAC (tax effect) |  | (19,861) |  | 20,644
Re-measurement due to discount rate (tax effect) |  | 1,284 |  | (68,934)
Other adjustments |  | (5,567) |  | (7,042)
Subtotal | $ | (24,144) | $ | (55,332)
After adoption | $ | 6,504,191 | $ | 5,897,160
|  | Year Ended March 31, 2023
|  | As previously reported |  | Adoption impact |  | As adjusted
|  | (Unaudited)
|  | (In thousands)
Deferred policy acquisition costs, net | $ | 152,377 |  | (23,914) | $ | 128,463
Total assets |  | 18,124,648 |  | (23,914) |  | 18,100,734
Policy benefits and losses, claims and loss expenses payable |  | 875,034 |  | 5,168 |  | 880,202
Deferred income taxes, net |  | 1,334,427 |  | (4,938) |  | 1,329,489
Total liabilities |  | 11,596,313 |  | 230 |  | 11,596,543
Accumulated other comprehensive loss |  | (267,046) |  | (18,577) |  | (285,623)
Retained earnings |  | 7,008,715 |  | (5,567) |  | 7,003,148
Total stockholders' equity |  | 6,528,335 |  | (24,144) |  | 6,504,191
Total liabilities and stockholders' equity |  | 18,124,648 |  | (23,914) |  | 18,100,734
|  | April 1, 2021 |  | March 31, 2021
|  | (Unaudited)
|  | (In thousands)
Deferred policy acquisition costs, net | $ | 131,187 | $ | 89,749
Total assets |  | 14,693,044 |  | 14,651,606
Policy benefits and losses, claims and loss expenses payable |  | 1,040,951 |  | 909,701
Deferred income taxes, net |  | 1,182,123 |  | 1,199,280
Total liabilities |  | 9,846,608 |  | 9,732,515
Accumulated other comprehensive income |  | 42,319 |  | 106,857
Retained earnings |  | 5,017,451 |  | 5,025,568
Total stockholders' equity |  | 4,846,436 |  | 4,919,091
Total liabilities and stockholders' equity |  | 14,693,044 |  | 14,651,606
The following tables present the balances of and changes in deferred acquisition costs, future policy benefits and market risk benefits and balances amortized on a basis consistent with DAC on April 1, 2021 due to the adoption of ASU 2018-12 by Oxford.
Deferred Policy Acquisition Costs |  | Payout Annuities |  | Life Insurance |  | Health Insurance |  | Total
|  | (Unaudited)
|  | (In thousands)
Balance, end of year March 31, 2021 | $ | 15,654 | $ | 64,552 | $ | 9,543 | $ | 89,749
Adjustments for removal of related balances in accumulated other comprehensive income |  | 41,438 |  | – |  | – |  | 41,438
Adjusted balance, beginning of year April 1, 2021 | $ | 57,092 | $ | 64,552 | $ | 9,543 | $ | 131,187
Future Policy Benefit |  | Payout Annuities |  | Life Insurance |  | Health Insurance |  | Total
|  | (Unaudited)
|  | (In thousands)
Balance, end of year March 31, 2021 | $ | 8,370 | $ | 310,311 | $ | 18,341 | $ | 337,022
Change in discount rate assumptions |  | 2,307 |  | 115,978 |  | 4,847 |  | 123,132
Change in cash flow assumptions, effect of net premiums exceeding gross premiums |  | – |  | 1,747 |  | – |  | 1,747
Change in cash flow assumptions, effect of decrease of the deferred profit liability |  | – |  | 2,580 |  | – |  | 2,580
Adjusted balance, beginning of year April 1, 2021 | $ | 10,677 | $ | 430,616 | $ | 23,188 | $ | 464,481
Market Risk Benefits |  |  |  |  |  |  |  | Deferred Annuities
|  |  |  |  |  |  |  | (Unaudited)
|  |  |  |  |  |  |  | (In thousands)
Balance, end of year March 31, 2021 |  |  |  |  |  |  | $ | 7,339
Adjustment for the difference between carrying amount and fair value, except for the difference due to instrument-specific credit risk |  |  |  |  |  |  |  | 3,791
Adjusted balance, beginning of year April 1, 2021 |  |  |  |  |  |  | $ | 11,130
|  |  |  |  |  | Retained Earnings |  | Accumulated Other Comprehensive Loss
|  |  |  |  |  | (Unaudited)
|  |  |  |  |  | (In thousands)
Liability for future policy benefits |  |  |  |  | $ | (4,327) | $ | (123,132)
Market risk benefits |  |  |  |  |  | (3,791) |  | –
Deferred acquisition costs and related asset balances |  |  |  |  |  | – |  | 41,438
Tax effect |  |  |  |  |  | – |  | 17,156
Total |  |  |  |  | $ | (8,118) | $ | (64,538)
Recent Accounting Pronouncements In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842 – Common Control Arrangements (“ASU 2023-01”). ASU 2023-01, accounting for leasehold improvements, requires a lessee in a common-control lease arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. The amendment is effective for fiscal years beginning after December 15, 2023. We are currently in the process of evaluating the impact if any of the adoption of ASU 2023-01 on our financial statements.

X
- References No definition available. + Details
Name: | us-gaap_NewAccountingPronouncementsAndChangesInAccountingPrinciplesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (g)(2)(i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480016/944-40-65-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (g)(2)(ii) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480016/944-40-65-2 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (g)(2)(iii) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480016/944-40-65-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (g)(2)(iv) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480016/944-40-65-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (h)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480016/944-40-65-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 5 -Subparagraph (SAB Topic 11.M.Q2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480530/250-10-S99-5 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(4) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483443/250-10-50-1 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 20 -Name Accounting Standards Codification -Section 65 -Paragraph 6 -Subparagraph (i)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480528/815-20-65-6 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 5 -Subparagraph (f)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479832/842-10-65-5 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 5 -Subparagraph (f)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479832/842-10-65-5 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (c)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480175/815-40-65-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (c)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480175/815-40-65-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480175/815-40-65-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 848 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483550/848-10-65-2 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 105 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 6 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479343/105-10-65-6 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483443/250-10-50-1 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 8 -Subparagraph (e)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482615/740-10-65-8 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 8 -Subparagraph (e)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482615/740-10-65-8 Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 8 -Subparagraph (e)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482615/740-10-65-8 Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 825 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 6 -Subparagraph (e)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482833/825-10-65-6 Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 825 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 6 -Subparagraph (e)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482833/825-10-65-6 Reference 22: http://www.xbrl.org/2003/role/disclosureRef -Topic 825 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 6 -Subparagraph (e)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482833/825-10-65-6 Reference 23: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 4 -Subparagraph (e)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479654/326-10-65-4 Reference 24: http://www.xbrl.org/2003/role/disclosureRef -Topic 326 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 4 -Subparagraph (e)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479654/326-10-65-4 Reference 25: http://www.xbrl.org/2003/role/disclosureRef -Topic 926 -SubTopic 20 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (f)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483194/926-20-65-2 Reference 26: http://www.xbrl.org/2003/role/disclosureRef -Topic 926 -SubTopic 20 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (f)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483194/926-20-65-2 Reference 27: http://www.xbrl.org/2003/role/disclosureRef -Topic 926 -SubTopic 20 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (f)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483194/926-20-65-2 Reference 28: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480530/250-10-S99-6 Reference 29: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (c)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483443/250-10-50-1 Reference 30: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147483443/250-10-50-1 Reference 31: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 250 -Publisher FASB -URI https://asc.fasb.org//250/tableOfContent Reference 32: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 1 -Subparagraph (e)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480175/815-40-65-1 Reference 33: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (d)(1) -SubTopic 20 -Topic 310 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481925/310-20-65-2 Reference 34: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (d)(2) -SubTopic 20 -Topic 310 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481925/310-20-65-2 + Details
Name: | us-gaap_NewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration