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Future policy benefits and related reinsurance recoverable | 12 Months Ended
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Dec. 31, 2025
Insurance [Abstract] |
Future policy benefits and related reinsurance recoverable | Note 14. Future policy benefits and related reinsurance recoverable Future policy benefits comprise substantially all obligations to insureds in the Company’s insurance operations. A summary of future policy benefits and reinsurance recoverable are presented below.
As of |  | December 31, 2025 |  | December 31, 2024
Reinsurance recoverable |  |  |  |
Long term care reinsurance |  | $ | 452,254 |  |  | $ | 445,847 |
Other |  | 4,466 |  |  | 4,378 |
Modco investments Vista¹ |  | (183,802) |  |  | (190,771) |
Total reinsurance recoverable |  | $ | 272,918 |  |  | $ | 259,454 |
Future policy benefits |  |  |  |
Long term care insurance |  | $ | 777,412 |  |  | $ | 765,155 |
Other |  | 4,469 |  |  | 4,378 |
Total future policy benefits |  | $ | 781,881 |  |  | $ | 769,533 |
Funds held under reinsurance contracts |  |  |  |
Funds held arrangement Front Street Re¹ |  | $ | 237,143 |  |  | $ | 239,918 |
_______________ (1)The Company has a coinsurance or Modco with funds withheld arrangement with its two reinsurers. The Modco agreement with Vista Re dictates that the assets held as collateral are held with the legal right of offset to the related insurance contract liabilities. Therefore, the collateral held for this agreement is netted against the reserves under this contract. The agreement with Front Street Re does not have the legal right of offset therefore the reserves are not presented net of the collateral held, instead they are in the line item “Funds held under reinsurance contracts” in the Consolidated Statements of Financial Position. The following tables summarize balances of and changes in future policy benefits reserves:
|  | Years Ended December 31,
Long-term care |  | 2025 |  | 2024
Present value of expected net premiums |  |  |  |
Balance, beginning of year |  | $ | 306,206 |  |  | $ | 363,367 |
Beginning balance at locked-in discount rate |  | $ | 343,705 |  |  | $ | 405,083 |
Change in effect in cashflow assumptions |  | — |  |  | (7,514) |
Effect of actual variances from expected experience |  | (9,308) |  |  | (12,435) |
Adjusted balance |  | 334,397 |  |  | 385,134 |
Interest accrual |  | 7,051 |  |  | 6,611 |
Net premiums collected |  | (43,739) |  |  | (48,040) |
Effect of foreign currency |  | — |  |  | — |
Ending balance at locked-in discount rate |  | 297,709 |  |  | 343,705 |
Effect of changes in discount rate assumptions |  | (24,314) |  |  | (37,499) |
Balance, end of year |  | $ | 273,395 |  |  | $ | 306,206 |
Present value of Expected Future Policy Benefits |  |  |  |
Balance, beginning of year |  | $ | 1,071,361 |  |  | $ | 1,170,790 |
Beginning balance at locked-in discount rate |  | 1,306,356 |  |  | 1,388,196 |
Change in effect in cashflow assumptions |  | 2,632 |  |  | 1,102 |
Effect of actual variances from expected experience |  | 9,860 |  |  | 1,399 |
Adjusted balance |  | 1,318,848 |  |  | 1,390,697 |
Interest accrual |  | 28,190 |  |  | 23,700 |
Benefit payments |  | (107,763) |  |  | (108,041) |
Ending balance at locked-in discount rate |  | $ | 1,239,275 |  |  | $ | 1,306,356 |
Effect of changes in discount rate assumptions |  | (188,468) |  |  | (234,995) |
Balance, end of year |  | $ | 1,050,807 |  |  | $ | 1,071,361 |
Net future policy benefit reserves ¹ |  | $ | 777,412 |  |  | $ | 765,155 |
Less: Reinsurance recoverables, net of allowance for credit losses ² |  | (452,254) |  |  | (445,847) |
Net future policy benefit reserves, after reinsurance recoverables |  | $ | 325,158 |  |  | $ | 319,308 |
_______________ (1)Net future policy benefit reserves excludes $4.5 million and $4.4 million as of December 31, 2025 and December 31, 2024, respectively, of Medico assumed reserves which are 100% ceded. (2)Reinsurance recoverables, net of allowance for credit losses excludes $4.5 million and $4.4 million of reinsurance recoverable as of December 31, 2025 and December 31, 2024, respectively. During 2025, the underlying cash flow assumptions were reviewed with respect to incurred claims anti-selection. The resulting assumption updates resulted in a $2.6 million increase in the liability for future policy benefits, mainly as a result of unfavorable claim anti-selection experience related to rate increase. The effect of actual variances from expected experience observed a $19.1 million increase in the liability for future policy benefits, mainly driven by the lower than expected future premium receipts and higher claims. During 2024, the underlying cash flow assumptions were reviewed with respect to mortality, lapse, morbidity incidence and morbidity termination. The resulting assumption updates resulted in an $8.6 million increase in the liability for future policy benefits, mainly as a result of unfavorable mortality experience. The effect of actual variances from expected experience observed a $13.8 million increase in the liability for future policy benefits, mainly due to lower than expected future premium receipts and higher claims. The following tables provides the amount of undiscounted and discounted expected future gross premiums and expected future benefits and expenses for the LTC line of business:
Years Ended December 31, |  | 2025 |  | 2024
Long-term care |  | Undiscounted |  | Discounted¹ |  | Undiscounted |  | Discounted¹
Expected future gross premiums |  | $ | 361,287 |  |  | $ | 273,395 |  |  | $ | 414,531 |  |  | $ | 306,206 |
Benefit payments |  | $ | 1,746,839 |  |  | $ | 1,050,807 |  |  | $ | 1,840,853 |  |  | $ | 1,071,361 |
_______________ (1)Discount was determined using the current discount rate as of December 31, 2025 and December 31, 2024. The following table provides the weighted-average durations of and weighted-average interest rates for the liability for future policy benefits:
|  | Year Ended December 31,
Long-term care |  | 2025 |  | 2024
Weighted-average duration of liability (years) at current rate |  | 10.10 |  | 10.27
Weighted-average duration of liability (years) at original rate |  | 11.93 |  | 12.44
Weighted-average interest rate at current rate |  | 5.04 | % |  | 5.26 | %
Weighted-average interest rate at original rate |  | 3.13 | % |  | 3.05 | %
Note 15. Interest sensitive contract liabilities The following table shows the outstanding Interest sensitive contract liabilities which represents the policyholder balances for MYGA product line:
|  | Years Ended December 31,
|  | 2025 |  | 2024
Balance, beginning of year |  | $ | 334,876 |  |  | $ | 256,569 |
Deposits |  | 42,996 |  |  | 72,818 |
Product charges |  | (1,877) |  |  | (266) |
Surrenders and withdrawals |  | (19,499) |  |  | (2,982) |
Benefit payments |  | (8,590) |  |  | (6,235) |
Interest credited |  | 16,075 |  |  | 14,972 |
Balance at December 31, |  | $ | 363,981 |  |  | $ | 334,876 |
Weighted-average annual crediting rate |  | 5.00% |  | 5.00%
At period end: |  |  |  |
Cash surrender value |  | $ | 337,682 |  |  | $ | 303,035 |
Net amount at risk: |  |  |  |
In the event of death ¹ |  | $ | 363,981 |  |  | $ | 334,876 |
_______________ (1)For benefits that are payable in the event of death, the net amount at risk is generally defined as the current death benefit in excess of the current account balances at the Consolidated Statements of Financial Position date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the Consolidated Statements of Financial Position date. MYGA policyholder account balances totaled $364.0 million and $334.9 million, as of December 31, 2025, and 2024, respectively. Changes in policyholder account balances are primarily attributed to deposits associated with new MYGA policies assumed of $43.0 million and $72.8 million and interest credited of $16.1 million and $15.0 million for the year ended December 31, 2025 and December 31, 2024, respectively. These increases were partially offset by surrenders, withdrawals, benefits and product charges of $30.0 million and $9.5 million for the year ended December 31, 2025 and December 31, 2024, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 2% and 7% at both December 31, 2025 and December 31, 2024.

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- Definition The entire disclosure for long duration contracts. This may include the information pertinent to an understanding of the types of traditional and nontraditional insurance and investment contracts sold and serviced, including the nature and amount of estimated guaranteed obligations pertaining to such contracts and the assumptions underlying such estimated amounts, hedging strategies, and sales inducements offered. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/944/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 40 -Name Accounting Standards Codification -Section 65 -Paragraph 2 -Subparagraph (u) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480016/944-40-65-2 + Details
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