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Revenue from Contracts with Customers
 6 Months Ended
Jun. 30, 2022
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;

 

•

Commissions and fees earned from the distribution of Medicare-related insurance products on behalf of health insurance carriers, including tail revenue adjustments;

 

•

Marketing development revenues earned for selling Medicare-related insurance products on behalf of health insurance carriers, which is recorded in Other, net revenue;

 

•

Fees associated with mortgage distribution and the distribution of other third-party financial products; and

 

•

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 2021 Annual Report.


 

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

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

2022

 

 

2021

 

 

 

(In thousands)

 

Term Life Insurance segment revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Other, net

 

$

12,374

 

 

$

12,313

 

$

24,550

 

 

$

24,125

 

    Total segment revenues from contracts with customers

 

 

12,374

 

 

 

12,313

 

 

24,550

 

 

 

24,125

 

  Revenues from sources other than contracts with customers

 

 

398,333

 

 

 

371,223

 

 

804,586

 

 

 

741,440

 

      Total Term Life Insurance segment revenues

 

$

410,707

 

 

$

383,536

 

$

829,136

 

 

$

765,565

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment and Savings Products segment revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commissions and fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Sales-based revenues

 

$

88,701

 

 

$

104,716

 

$

191,942

 

 

$

202,828

 

    Asset-based revenues

 

 

93,419

 

 

 

92,288

 

 

190,773

 

 

 

177,901

 

    Account-based revenues

 

 

22,592

 

 

 

21,848

 

 

44,134

 

 

 

42,968

 

  Other, net

 

 

3,022

 

 

 

2,958

 

 

6,166

 

 

 

5,907

 

      Total segment revenues from contracts with customers

 

 

207,734

 

 

 

221,810

 

 

433,015

 

 

 

429,604

 

  Revenues from sources other than contracts

    with customers (segregated funds)

 

 

14,682

 

 

 

16,202

 

 

30,440

 

 

 

31,830

 

        Total Investment and Savings Products segment revenues

 

$

222,416

 

 

$

238,012

 

$

463,455

 

 

$

461,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior Health segment revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commissions and fees

 

$

9,343

 

 

N/A

 

$

10,621

 

 

N/A

 

  Other, net

 

 

2,471

 

 

N/A

 

 

7,024

 

 

N/A

 

      Total Senior Health segment revenues

 

$

11,814

 

 

N/A

 

$

17,645

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Distributed Products segment revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Commissions and fees

 

$

11,951

 

 

$

15,634

 

$

24,579

 

 

$

29,206

 

  Other, net

 

 

889

 

 

 

1,042

 

 

2,005

 

 

 

1,875

 

    Total segment revenues from contracts with customers

 

 

12,840

 

 

 

16,676

 

 

26,584

 

 

 

31,081

 

  Revenues from sources other than contracts with customers

 

 

10,905

 

 

 

16,462

 

 

23,089

 

 

 

34,319

 

      Total Corporate and Other Distributed Products segment revenues

 

$

23,745

 

 

$

33,138

 

$

49,673

 

 

$

65,400

 

 

Renewal Commissions Receivable. For revenue associated with ongoing renewal commissions in the Senior Health and Corporate and Other Distributed Products segments, we record a renewal commission receivable asset for the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to the satisfaction of the performance obligation, less amounts that are constrained in the accompanying unaudited condensed consolidated balance sheets. From time to time, new facts or circumstances that were not available at the time of the initial estimate may indicate that the expected renewal commissions are higher or lower than our renewal commissions receivable. In those situations, the expected renewal commissions receivable will be written down or up to its revised expected value by adjustments to revenue, which we refer to as tail revenue adjustments. During the three and six months ended June 30, 2022, we recognized a tail revenue adjustment to reduce the balance of the renewal commissions receivable in the Senior Health business as retention for policies scheduled to renew during the period was lower than expectations.

Activity in the Renewal commissions receivable account was as follows:

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

2022

 

 

2021

 

 

 

(In thousands)

 

Senior Health segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

153,783

 

 

N/A

 

$

172,308

 

 

N/A

 

Measurement period adjustment (1)

 

 

(11,863

)

 

N/A

 

 

(11,863

)

 

N/A

 

Commissions revenue

 

 

9,563

 

 

N/A

 

 

22,412

 

 

N/A

 

Less: collections

 

 

(11,910

)

 

N/A

 

 

(24,224

)

 

N/A

 

Tail revenue adjustments from change in estimate

 

 

(5,361

)

 

N/A

 

 

(24,421

)

 

N/A

 

Balance, at the end of period

 

$

134,212

 

 

N/A

 

$

134,212

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other Distributed Products segments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

59,392

 

 

$

55,704

 

$

59,443

 

 

$

54,845

 

Commissions revenue

 

 

6,283

 

 

 

6,898

 

 

11,926

 

 

 

13,159

 

Less: collections

 

 

(6,226

)

 

 

(5,919

)

 

(11,920

)

 

 

(11,321

)

Balance, at the end of period

 

$

59,449

 

 

$

56,683

 

$

59,449

 

 

$

56,683

 

(1)   The measurement period adjustment was recorded during the three and six months ended June 30, 2022 in order to finalize the purchase price allocation for the acquisition of e-TeleQuote. Refer to Note 14 (Acquisition) for further details.

 

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.