Accounting Pronouncements (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Update and Change in Accounting Principle


(In thousands)	Life Insurance Segment		Home Service Insurance Segment	Consolidated
Liability for Future Policy Benefits
Pre-adoption liability as of 12/31/2020	$	987,373	255,513	1,242,886

Change in discount rate assumptions	261,823		108,468	370,291
Effect of reserve changes	6		96	102
Post-adoption liability as of 1/1/2021	$	1,249,202	364,077	1,613,279

Fixed Annuity Liability
Pre-adoption liability as of 12/31/2020	$	60,027	18,277	78,304
Adjustments for the removal of shadow adjustments	—		3,426	3,426
Post-adoption liability as of 1/1/2021	$	60,027	21,703	81,730

Deferred Acquisition Costs
Pre-adoption balance as of 12/31/2020	$	94,771	10,142	104,913
Adjustments for the removal of shadow adjustments	8,270		29,905	38,175
Impact of flooring cohorts at zero	23		12	35
Post adoption balance as of 1/1/2021	$	103,064	40,059	143,123

Cost of Insurance Acquired
Pre-adoption balance as of 12/31/2020	$	1,734	9,807	11,541
Adjustments for the removal of shadow adjustments	—		484	484
Post adoption balance as of 1/1/2021	$	1,734	10,291	12,025

At transition, the Company recorded a charge of $0.1 million to retained earnings, net of tax, primarily from capping net premium ratios for certain policyholder benefit cohorts at 100%, increasing reserves for certain non-premium paying cohorts and flooring certain DAC cohorts at zero. Other comprehensive income ("OCI") was reduced by $316.8 million primarily due to the difference in the discount rate used prior to transition and the discount rate at January 1, 2021. The Company also removed shadow adjustments previously recorded in OCI for the impact of unrealized gains and losses on annuity products that previously amortized unearned revenue, DAC and COIA over expected future gross profits.

Impacts to Previously Reported Results

Adoption of the standard impacted our previously reported consolidated financial results as follows:


(In thousands)	As Previously Reported		Adoption of New Standard	Post Adoption
As of December 31, 2022
Consolidated Balance Sheet
Deferred policy acquisition costs	$	140,167	22,760	162,927
Cost of insurance acquired	10,260		387	10,647
Deferred tax asset, net	2,414		(2,414)	—
Total assets	1,569,970		20,733	1,590,703

Future policy benefit reserves:
Life insurance	1,305,506		(106,859)	1,198,647
Annuities	91,234		(91,234)	—
Policyholders' funds:
Annuities	—		121,422	121,422
Other policyholders' funds	40,497		(32,996)	7,501
Deferred federal income tax liability	—		3,653	3,653
Total liabilities	1,568,927		(106,014)	1,462,913

Retained earnings (accumulated deficit)	(52,203)		68,512	16,309
Accumulated other comprehensive income (loss)	(195,279)		58,235	(137,044)
Total stockholders' equity	1,043		126,747	127,790


(In thousands, except per share amounts)	As Previously Reported		Adoption of New Standard	Post Adoption
















For the Three Months Ended June 30, 2022
Consolidated Statement of Operations
Increase (decrease) in future policy benefit reserves	$	9,378	(5,648)	3,730
Policyholder liability remeasurement (gain) loss	—		667	667
Amortization of deferred policy acquisition costs	5,970		(2,502)	3,468
Amortization of cost of insurance acquired	263		(112)	151
Federal income tax expense (benefit)	(81)		1,555	1,474
Net income (loss)	(3,548)		6,040	2,492
Basic and diluted earnings (losses) per share of Class A common stock	(0.07)		0.12	0.05

Consolidated Statement of Comprehensive Income (Loss)
Unrealized holding gains (losses) arising during period	$	(120,934)	1,403	(119,531)
Change in current discount rate for liability for future policy benefits	—		120,437	120,437
Income tax expense (benefit) on other comprehensive income items	(4,735)		9,369	4,634
Other comprehensive income (loss)	(116,223)		112,471	(3,752)
Total comprehensive income (loss)	(119,771)		118,511	(1,260)

For the Six Months Ended June 30, 2022
Consolidated Statement of Operations
Increase (decrease) in future policy benefit reserves	$	15,947	(12,103)	3,844
Policyholder liability remeasurement (gain) loss	—		1,335	1,335
Amortization of deferred policy acquisition costs	11,787		(4,760)	7,027
Amortization of cost of insurance acquired	499		219	280
Federal income tax expense (benefit)	278		1,925	2,203
Net income (loss)	(4,881)		13,822	8,941
Basic and diluted earnings (losses) per share of Class A common stock	(0.10)		0.28	0.18

Consolidated Statement of Comprehensive Income (Loss)
Unrealized holding gains (losses) arising during period	$	(254,276)	1,980	(252,296)
Change in current discount rate for liability for future policy benefits	—		272,044	272,044
Income tax expense (benefit) on other comprehensive income items	(13,801)		20,147	6,346
Other comprehensive income (loss)	(240,440)		253,877	13,437
Total comprehensive income (loss)	(245,321)		267,699	22,378