Deferred Policy Acquisition Costs and Cost of Insurance Acquired

9 Months Ended

Sep. 30, 2023

Deferred Policy Acquisition Costs and Cost of Insurance Acquired

DEFERRED POLICY ACQUISITION COSTS AND COST OF INSURANCE ACQUIRED

DAC

The following tables roll forward the DAC asset for the nine months ended September 30, 2023 and 2022 by reporting cohort. Our reporting cohorts are Permanent, which summarizes insurance policies with premiums payable over the lifetime of the policy, and Permanent Limited Pay, which summarizes insurance policies with

premiums payable for a limited time after which the policy is fully paid up. Both reporting cohorts include whole life and endowment policies.


	Nine Months Ended September 30, 2023
(In thousands)	Permanent		Permanent Limited Pay	Other Business	Total
Life Insurance:
Balance, beginning of year	$	100,926	11,542	1,016	113,484
Capitalizations	11,220		2,385	353	13,958
Amortization expense	(8,859)		(586)	(197)	(9,642)

Balance, end of period	103,287		13,341	1,172	117,800

Home Service Insurance:
Balance, beginning of year	38,793		9,729	921	49,443
Capitalizations	5,026		865	185	6,076
Amortization expense	(1,542)		(295)	(65)	(1,902)

Balance, end of period	42,277		10,299	1,041	53,617

Consolidated:
Balance, beginning of year	139,719		21,271	1,937	162,927
Capitalizations	16,246		3,250	538	20,034
Amortization expense	(10,401)		(881)	(262)	(11,544)

Balance, end of period	$	145,564	23,640	2,213	171,417


	Nine Months Ended September 30, 2022
(In thousands)	Permanent		Permanent Limited Pay	Other Business	Total
Life Insurance:
Balance, beginning of year	$	97,675	9,001	1,026	107,702
Capitalizations	10,043		2,121	41	12,205
Amortization expense	(8,462)		(476)	(113)	(9,051)

Balance, end of period	99,256		10,646	954	110,856

Home Service Insurance:
Balance, beginning of year	35,137		8,723	856	44,716
Capitalizations	4,049		1,064	19	5,132
Amortization expense	(1,361)		(271)	32	(1,600)

Balance, end of period	37,825		9,516	907	48,248

Consolidated:
Balance, beginning of year	132,812		17,724	1,882	152,418
Capitalizations	14,092		3,185	60	17,337
Amortization expense	(9,823)		(747)	(81)	(10,651)

Balance, end of period	$	137,081	20,162	1,861	159,104

DAC capitalization increased for the nine months ended September 30, 2023, compared to the same prior year period mainly from increased commissions from higher first year sales across our business segments.

COIA

The following tables provide rollforwards of the COIA balances for the nine months ended September 30, 2023 and 2022 by reporting cohort. Our reporting cohorts are Permanent, which summarizes insurance policies with premiums payable over the lifetime of the policy, and Permanent Limited Pay, which summarizes insurance policies with premiums payable for a limited time after which the policy is fully paid up. Both reporting cohorts include whole life and endowment policies.


	Nine Months Ended September 30, 2023
(In thousands)	Permanent		Permanent Limited Pay	Other Business	Total
Life Insurance:
Balance, beginning of year	$	267	750	444	1,461
Amortization expense	(14)		(43)	(29)	(86)

Balance, end of period	253		707	415	1,375

Home Service Insurance:
Balance, beginning of year	7,583		176	1,427	9,186
Amortization expense	(293)		(6)	(80)	(379)

Balance, end of period	7,290		170	1,347	8,807

Consolidated:
Balance, beginning of year	7,850		926	1,871	10,647
Amortization expense	(307)		(49)	(109)	(465)

Balance, end of period	$	7,543	877	1,762	10,182


	Nine Months Ended September 30, 2022
(In thousands)	Permanent		Permanent Limited Pay	Other Business	Total
Life Insurance:
Balance, beginning of year	$	287	812	485	1,584
Amortization expense	(15)		(47)	(32)	(94)

Balance, end of period	272		765	453	1,490

Home Service Insurance:
Balance, beginning of year	7,989		184	1,511	9,684
Amortization expense	(306)		(6)	(40)	(352)

Balance, end of period	7,683		178	1,471	9,332

Consolidated:
Balance, beginning of year	8,276		996	1,996	11,268
Amortization expense	(321)		(53)	(72)	(446)

Balance, end of period	$	7,955	943	1,924	10,822