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INCOME TAXES
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company's interim tax expense is based upon the estimated annual effective tax rate for the respective period. Under authoritative guidance, certain items are required to be excluded from the estimated annual effective tax rate calculation. Such items include changes in judgment about the realizability of deferred tax assets resulting from changes in projections of income expected to be available in future years, and items deemed to be unusual, infrequent, or that cannot be reliably estimated. In these cases, the actual tax expense or benefit applicable to that item is treated discretely and is reported in the same period as the related item.
The components of income tax expense are as follows (dollars in millions):

Three months endedNine months ended
September 30,September 30,
 2025202420252024
Current tax expense$16.0 $11.6 $19.5 $38.2 
Deferred tax expense
12.2 (9.9)41.2 31.7 
Total income tax expense calculated based on estimated annual effective tax rate
28.2 1.7 60.7 69.9 
Income tax benefit on discrete item:
Goodwill and other asset impairment
(15.1)— (15.1)— 
Total income tax expense
$13.1 $1.7 $45.6 $69.9 

A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective tax rate, reflected in the consolidated statement of operations is as follows: 
Nine months ended
September 30,
 20252024
U.S. statutory corporate rate21.0 %21.0 %
Non-taxable income and nondeductible benefits, net(1.0)(0.5)
State taxes2.1 2.2 
Estimated annual effective tax rate calculated before discrete items22.1 22.7 
Impact on effective tax rate from discrete items:
Goodwill and other asset impairment
2.9 — 
Effective tax rate
25.0 %22.7 %
The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):
September 30,
2025		December 31,
2024
Deferred tax assets:  
Net federal operating loss carryforwards$205.2 $72.2 
Net state operating loss carryforwards41.1 4.4 
Insurance liabilities340.4 325.5 
Indirect costs allocable to self-constructed real estate assets1.5 205.1 
Accumulated other comprehensive income (loss)
314.9 385.1 
Other41.9 19.4 
Gross deferred tax assets945.0 1,011.7 
Deferred tax liabilities:  
Investments(48.6)(40.8)
Present value of future profits and deferred acquisition costs(205.8)(184.3)
Gross deferred tax liabilities(254.4)(225.1)
Net deferred tax assets690.6 786.6 
Current income taxes prepaid (accrued)17.5 27.5 
Income tax assets, net$708.1 $814.1 

Effective January 1, 2024, the Company elected to change its tax method of accounting for indirect costs allocable to self-constructed real estate assets. The change in accounting method results in a tax deduction of certain indirect costs previously capitalized under the Company's prior method of accounting. In the second quarter of 2024, the Internal Revenue Service (the "IRS") revised the list of tax method accounting changes that require approval from the IRS to include tax method accounting changes related to indirect costs allocable to self-constructed real estate assets. Previously, only a taxpayer-initiated election was necessary and formal IRS approval was not required. The Company requested approval for its tax method change in June 2024. At December 31, 2024, the Company had not yet received approval from the IRS and was therefore required to account for the existing tax assets under the prior tax method of accounting. In March 2025, the Company executed a consent agreement with the IRS that provides formal approval for the tax method change. As a result, the Company recharacterized the remaining $797.6 million of capitalized indirect costs under the prior accounting method to a net operating loss carryforward ("NOL") with no expiration date.

Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities and NOLs. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or paid.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in earnings in the period when the changes are enacted.

A reduction of the net carrying amount of deferred tax assets by establishing a valuation allowance is required if, based on the available evidence, it is more likely than not that such assets will not be realized. In assessing the need for a valuation allowance, all available evidence, both positive and negative, are considered to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets is needed. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, our experience with operating loss and tax credit carryforwards expiring unused, and tax planning strategies.

We evaluate the need to establish a valuation allowance for our deferred income tax assets on an ongoing basis using a deferred tax valuation model. Our model is adjusted to reflect changes in our projections of future taxable income. Our estimates of future taxable income are based on evidence we consider to be objectively verifiable. Such estimates are subject to numerous risks and uncertainties and the extent to which actual impacts differ from the assumptions used in our deferred tax valuation model. Based on our assessment, we have concluded that it is more likely than not that all our net deferred tax assets of $690.6 million will be realized through future taxable earnings.
Recovery of our deferred tax asset is dependent on achieving the level of future taxable income projected in our deferred tax valuation model and failure to do so could result in the recognition of a valuation allowance in a future period.  The recognition of a valuation allowance would increase income tax expense and reduce shareholders' equity.

Section 382 of the Internal Revenue Code (the "Code") imposes limitations on a corporation's ability to use its NOLs when the company undergoes a 50 percent ownership change over a three-year period.  Future transactions and the timing of such transactions could cause an ownership change for Section 382 income tax purposes.  Such transactions may include, but are not limited to, additional repurchases under our securities repurchase program, issuances of common stock and acquisitions or sales of shares of CNO stock by certain holders of our shares, including persons who have held, currently hold or may accumulate in the future five percent or more of our outstanding common stock for their own account.  Many of these transactions are beyond our control.  If an ownership change were to occur for purposes of Section 382, we would be required to calculate an annual restriction on the use of our NOLs to offset future taxable income.  The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (3.71 percent at September 30, 2025), and the annual restriction could limit our ability to use a substantial portion of our NOLs to offset future taxable income or may defer the utilization of such NOLs.  We regularly monitor ownership change (as calculated for purposes of Section 382) and, as of September 30, 2025, we were below the 50 percent ownership change level that could limit our ability to utilize our NOLs.

We have $977.3 million of federal non-life NOLs as of September 30, 2025, as summarized below (dollars in millions):
Year of expirationTotal
NOLs expiring in 2029 through 2035$150.4 
NOLs with no expiration date826.9 
Total$977.3 

Our non-life NOLs with expiration dates can be used to offset 35 percent of life insurance company taxable income and 100 percent of non-life company taxable income until all non-life NOLs are utilized or expire. Our non-life NOLs with no expiration date can be used to offset 35 percent of life insurance company taxable income and 80 percent of non-life company taxable income.
We also had deferred tax assets related to NOLs for state income taxes of $41.1 million and $4.4 million at September 30, 2025 and December 31, 2024, respectively, primarily resulting from the tax method change discussed previously.  The related state NOLs are available to offset future state taxable income in certain states and are expected to be fully utilized prior to expiration.

The Company had a capital loss carryforward of $30.9 million and $5.6 million at September 30, 2025 and December 31, 2024, respectively. Capital loss carryforwards can be carried forward for up to five years to offset future capital gains. We expect this carryforward to be fully utilized prior to the expiration date in 2030.

The IRS is conducting an examination of our 2016 through 2018 tax returns. The federal statute of limitations remains open with respect to tax years 2016 through 2024. The Company's various state income tax returns are generally open for tax years based on individual state statutes of limitation. Generally, for tax years which generate NOLs, capital losses or tax credit carryforwards, the statute remains open until the expiration of the statute of limitations for the tax year in which such carryforwards are utilized. The outcome of tax audits cannot be predicted with certainty. If the Company's tax audits are not resolved in a manner consistent with management’s expectations, the Company may be required to adjust its provision for income taxes.

On July 4, 2025, the One Big Beautiful Bill Act of 2025 was enacted in the United States, which among other things, provides permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. These changes will primarily impact the timing of our tax deductions; however, we do not expect these provisions to have a material impact on our financial position or results of operations.