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Policyholder Liabilities

12 Months Ended

Dec. 31, 2023

Insurance [Abstract]

Policyholder Liabilities

Policyholder Liabilities

Liability for Future Policy Benefits

The liability for future policy benefits consists only of the liability associated with single premium immediate annuities (SPIA) with life contingencies. As this business has no future expected premiums, the rollforward presented below is the present value of expected future benefits. The balances of and changes in the liability for future policy benefits for the years ended December 31, 2023 and 2022 is as follows:

			Present Value of Expected Future Policy Benefits
			December 31,
			2023						2022
			(Dollars in thousands)
Balance, beginning of year			$	318,677					$	402,305
Beginning balance at original discount rate			342,453						352,708
Effect of changes in cash flow assumptions			(4,607)						1,277
Effect of actual variances from expected experience			(1,887)						(1,941)
Adjusted beginning of year balance			335,959						352,044
Issuances			6,945						16,072
Interest accrual			13,710						14,664
Derecognition (lapses and benefit payments)			(38,980)						(40,327)
Ending balance at original discount rate			317,634						342,453
Effect of changes in discount rate assumptions			(14,434)						(23,776)
Balance, end of year			$	303,200					$	318,677

The reconciliation of the net liability for future policy benefits to the liability for future policy benefits included in policy benefit reserves in the Consolidated Balance Sheets is as follows:

			December 31,
			2023						2022
			(Dollars in thousands)
Liability for future policy benefits			$	303,200					$	318,677
Deferred profit liability			22,455						19,223
Liability for future policy benefits included in policy benefit reserves			325,655						337,900
Less: Reinsurance recoverable			(2,496)						(1,259)
Net liability for future policy benefits, after reinsurance recoverable			$	323,159					$	336,641

The weighted-average liability duration of the liability for future policy benefits is as follows:

			December 31,
			2023						2022
SPIA With Life Contingency:
Weighted-average liability duration of the liability for future policy benefits (years)			6.56						6.78

The following table presents the amount of undiscounted expected future benefit payments and expected gross premiums:

			December 31,
			2023						2022
			(Dollars in thousands)
SPIA With Life Contingency:
Expected future benefit payments			$	447,669					$	467,627
Expected future gross premiums			—						—

The amount of revenue and interest associated with the liability for future policy benefits recognized in the Consolidated Statement of Operations for the years ended December 31, 2023 and 2022 is as follows:

			December 31, 2023												December 31, 2022
			Gross Premiums or Assessments						Interest Expense						Gross Premiums or Assessments						Interest Expense
			(Dollars in thousands)
SPIA With Life Contingency			$	7,608					$	13,626					$	16,994					$	14,613
Total			$	7,608					$	13,626					$	16,994					$	14,613

The weighted-average interest rate is as follows:

			December 31,
			2023						2022
Interest accretion rate			4.26		%				4.25		%
Current discount rate			5.00		%				5.37		%

Market Risk Benefits

The balances of and changes in the net market risk benefit (MRB) assets and liabilities for the years ended December 31, 2023 and 2022 is as follows:

			December 31, 2023												December 31, 2022
			Fixed Rate Annuities						Fixed Index Annuities						Fixed Rate Annuities						Fixed Index Annuities
			(Dollars in thousands)
Balance, beginning of year			$	37,863					$	2,187,758					$	78,411					$	2,557,378
Balance, beginning of year, before effect of changes in the instrument-specific credit risk			44,355						2,453,169						77,731						2,310,437
Issuances			32						289,939						376						59,452
Interest accrual			3,139						155,512						1,349						72,551
Attributed fees collected			1,216						128,437						1,270						125,168
Benefits payments			—						—						—						—
Effect of changes in interest rates			(380)						(126,255)						(19,421)						(952,265)
Effect of changes in equity markets			—						(48,164)						—						186,618
Effect of changes in equity index volatility			—						(77,023)						—						241,563
Effect of changes in future expected policyholder behavior			(1,509)						(11,582)						602						46,567
Effect of changes in other future expected assumptions			16,720						(219,094)						(17,552)						363,078
Balance, end of year, before effect of changes in the instrument-specific credit			63,573						2,544,939						44,355						2,453,169
Effect of changes in the instrument-specific credit risk			(3,386)						61,734						(6,492)						(265,411)
Balance, end of year			60,187						2,606,673						37,863						2,187,758
Reinsured MRB, end of period			18,391						640,826						10,656						593,959
Balance, end of period, net of reinsurance			$	41,796					$	1,965,847					$	27,207					$	1,593,799
Net amount at risk (a)			$	266,438					$	11,721,734					$	258,826					$	10,987,198
Weighted average attained age of contract holders (years)			70						71						69						71

(a)Net amount at risk is defined as the current guarantee amount in excess of the current account balance.

The following is a reconciliation of market risk benefits by amounts in an asset position and in a liability position to market risk benefit amounts included in Market risk benefit asset and Market risk benefit reserves, respectively, in the Consolidated Balance Sheets:

			December 31, 2023
			Asset						Liability						Net Liability
			(Dollars in thousands)
Fixed Index Annuities			$	477,306					$	3,083,979					$	2,606,673
Fixed Rate Annuities			2,388						62,575						60,187
Total			$	479,694					$	3,146,554					$	2,666,860
			December 31, 2022
			Asset						Liability						Net Liability
			(Dollars in thousands)
Fixed Index Annuities			$	226,294					$	2,414,052					$	2,187,758
Fixed Rate Annuities			3,577						41,440						37,863
Total			$	229,871					$	2,455,492					$	2,225,621

Reinsured Market Risk Benefits

The following table presents the balances and changes in reinsured market risk benefit assets and liabilities associated with fixed index annuities for the years ended December 31, 2023 and 2022:

			December 31, 2023												December 31, 2022
			Fixed Rate Annuities						Fixed Index Annuities						Fixed Rate Annuities						Fixed Index Annuities
			(Dollars in thousands)
Balance, beginning of year			$	10,656					$	593,959					$	—					$	156,931
Write-off related to in-force ceded reinsurance			—						—						10,091						334,835
Issuances			—						146,898						—						36,036
Interest accrual			775						33,503						104						7,598
Attributed fees collected			67						32,036						28						23,745
Benefits payments			—						—						—						—
Effect of changes in interest rates			1,407						14,700						135						(171,948)
Effect of changes in equity markets			—						(22,775)						118						43,799
Effect of changes in equity index volatility			—						(18,656)						—						34,278
Effect of changes in future expected policyholder behavior			(128)						5,855						180						12,598
Effect of changes in other future expected assumptions			5,614						(144,694)						—						116,087
Balance, end of year			$	18,391					$	640,826					$	10,656					$	593,959
Net amount at risk (a)			$	75,281					$	2,853,318					$	72,350					$	2,402,964
Weighted average attained age of contract holders (years)			70						70						70						71

(a)Net amount at risk is defined as the current guarantee amount in excess of the current account balance.

The following is a reconciliation of reinsurance market risk benefits by amounts in an asset position and in liability position to market risk benefit amounts included in Coinsurance deposits and Other liabilities, respectively, in the Consolidated Balance Sheets:

			December 31, 2023
			Asset						Liability						Net Asset
			(Dollars in thousands)
Fixed Index Annuities			$	820,006					$	179,180					$	640,826
Fixed Rate Annuities			18,628						237						18,391
Total			$	838,634					$	179,417					$	659,217
			December 31, 2022
			Asset						Liability						Net Asset
			(Dollars in thousands)
Fixed Index Annuities			$	629,611					$	35,652					$	593,959
Fixed Rate Annuities			11,070						414						10,656
Total			$	640,681					$	36,066					$	604,615

Significant Inputs for Fair Value Measurement - Market Risk Benefits

The following tables provides a summary of the significant inputs and assumptions used in the fair value measurements of market risk benefits:

			December 31, 2023
			Fair Value						Valuation Technique						Significant Inputs and Assumptions						Range						Weighted Average
			(in thousands)
Market risk benefits			$	2,666,860					Discounted cash flow						Utilization (a)						0.04% - 47.37%						6.55%
Ceded market risk benefits			659,217												Option budget (b)						1.85% - 2.75%						2.29%
															Risk-free interest rate (c)						2.98% - 4.76%						3.35%
															Nonperformance risk (d)						0.53% - 2.66%						1.98%
															Mortality (e)						0.01% - 46.00%						3.97%
															Lapse (f)						0.25% - 40.00%						3.70%
			December 31, 2022
			Fair Value						Valuation Technique						Significant Inputs and Assumptions						Range						Weighted Average
			(in thousands)
Market risk benefits			$	2,225,621					Discounted cash flow						Utilization (a)						0.04% - 78.75%						4.24%
Ceded market risk benefits			604,615												Option budget (b)						1.65% - 2.50%						2.31%
															Risk-free interest rate (c)						2.51% - 4.90%						3.31%
															Nonperformance risk (d)						0.06% - 3.27%						2.59%
															Mortality (e)						0.01% - 44.00%						3.44%
															Lapse (f)						0.25% - 40.00%						3.65%

(a)The utilization assumption represents the percentage of policyholders who will elect to receive lifetime income benefit payments in a given year. The range and weighted average of this assumption can vary from year to year depending on the characteristics of policies in a given cohort within the range. A decrease (increase) in the utilization assumption used in the fair value of market risk benefits could lead to favorable (unfavorable) changes in the market risk benefits.

(b)The option budget assumption represents the expected cost of annual call options we will purchases in the future. An increase (decrease) in the option budget assumption used in the fair value of market risk benefits could lead to favorable (unfavorable) changes in the market risk benefits.

(c)The risk-free interest rate assumption impacts the discount rate used in the discounted future cash flow valuation. An increase (decrease) in the risk-free interest rate assumption used in the fair value of market risk benefits could lead to favorable (unfavorable) changes in the market risk benefits.

(d)The nonperformance risk assumption impacts the discount rate used in the discounted future cash flow valuation and includes our own credit risk based on the current market credit spreads for debt-like instruments we have issued and are available in the market. Additionally, the nonperformance risk assumption includes the counterparty credit risk used in the fair value measurement of ceded market risk benefits which is determined using the current market credit spreads based on the counterparty credit rating. An increase (decrease) in the nonperformance risk assumption for own credit risk used in the fair value of market risk benefits could lead to favorable (unfavorable) changes in the market risk benefits. An decrease (increase) in the nonperformance risk assumption for counterparty credit risk used in the fair value of ceded market risk benefits could lead to favorable (unfavorable) changes in the ceded market risk benefits.

(e)The mortality rate assumptions are set based on a combination of company and industry experience, adjusted for improvement factors. Mortality rates vary by age and by demographic characteristics such as gender. An increase (decrease) in the mortality rate assumptions used in the fair value of market risk benefits could lead to favorable (unfavorable) changes in the market risk benefits.

(f)The lapse rate assumptions represent the expected rate of full surrenders which are set based on product type or feature and whether a policy is subject to surrender charges. An increase (decrease) in lapse rate assumptions used in the fair value of market risk benefits could lead to favorable (unfavorable) changes in the market risk benefits.

During the year ended December 31, 2023, the Company made the following notable changes to significant inputs and assumptions resulting in changes in the fair value measurement of market risk benefits:

•Utilization assumptions were increased resulting in an increase to the market risk benefits liability and a decrease to net income.

•Option budget assumptions were changed to increase the near term assumption and decrease the long-term assumption. There was no change to the grading of these assumptions. The net impact of these changes resulted in an increase in the market risk benefits and a decrease to net income.

•Mortality assumptions were increased resulting in a decrease to the market risk benefits liability and an increase to net income.

•Lapse assumptions were increased resulting in a decrease to the market risk benefits liability and an increase to net income.

During the year ended December 31, 2022, the Company made the following notable changes to significant inputs and assumptions resulting in changes in the fair value measurement and market risk benefits:

•Utilization assumptions were increased resulting in an increase to the market risk benefits liability and a decrease to net income.

•Option budget assumptions were increased resulting in a decrease to the market risk benefits liability and an increase to net income.

•Mortality assumptions were decreased resulting in an increase to the market risk benefits liability and a decrease to net income.

•Lapse assumptions were increased resulting in a decrease to the market risk benefits liability and an increase to net income.

Policyholder Account Balances

The following table presents the balances and changes in policyholders’ account balances:

			December 31, 2023												December 31, 2022
			Fixed Rate Annuities						Fixed Index Annuities						Fixed Rate Annuities						Fixed Index Annuities
			(Dollars in thousands)
Balance, beginning of year			$	6,589,577					$	53,826,234					$	6,860,060					$	55,003,305
Issuances			840,022						7,555,709						159,570						3,001,738
Premiums received			12,472						152,532						4,811						170,493
Policy charges			(3,428)						(217,523)						(6,587)						(272,604)
Surrenders and withdrawals			(1,668,966)						(6,122,084)						(574,590)						(3,945,504)
Benefit payments			(13,085)						(836,507)						(11,328)						(727,847)
Interest credited			163,918						1,096,493						151,762						599,259
Other			(6,545)						(882)						5,879						(2,606)
Balance, end of year			$	5,913,965					$	55,453,972					$	6,589,577					$	53,826,234
Weighted-average crediting rate			2.66		%				2.03		%				2.28		%				1.11		%
Net amount at risk (a)			$	266,438					$	11,721,734					$	258,826					$	10,987,198
Cash surrender value			5,571,171						50,983,033						6,208,597						49,551,657

(a)Net amount at risk is defined as the current guarantee amount in excess of the current account balance.

The following table presents the reconciliation of policyholders’ account balances to policy benefit reserves in the Consolidated Balance Sheets:

			December 31, 2023						December 31, 2022
			(Dollars in thousands)
Fixed index annuities policyholder account balances			$	55,453,972					$	53,826,234
Fixed rate annuities policyholder account balances			5,913,965						6,589,577
Embedded derivative adjustment (b)			(818,754)						(1,996,640)
Liability for future policy benefits			303,200						318,677
Deferred profit liability			22,455						19,223
Other			26,803						24,765
Total			$	60,901,641					$	58,781,836

(b)The embedded derivative adjustment reconciles the account balance to the gross GAAP liability and represents the combination of the host contract and the fair value of the embedded derivatives.

The following table presents the balance of account values by range of guaranteed minimum crediting rates and the related range of the difference, in basis points, between rates being credited to policyholders and the respective guaranteed minimums:

			December 31, 2023
			Range of guaranteed minimum crediting rate						At guaranteed minimum						1 to 50						51 to 150						Greater than 150 basis points above						Total
									(Dollars in thousands)
Fixed Index Annuities			0.00% - 0.50%						$	—					$	1,032,438					$	466,789					$	1,012,155					$	2,511,382
			0.50% - 1.00%						2,276,625						1,008,139						1,995,206						131,412						5,411,382
			1.00% - 1.50%						43,029						8,190						—						—						51,219
			1.50% - 2.00%						50						—						—						—						50
			2.00% - 2.50%						121,921						68,698						8						—						190,627
			2.50% - 3.00%						759,353						—						—						—						759,353
			Greater than 3.00%						—						—						—						—						—
			Allocated to index strategies																														46,529,959
Total									$	3,200,978					$	2,117,465					$	2,462,003					$	1,143,567					$	55,453,972
Fixed Rate Annuities			0.00% - 0.50%						$	53					$	—					$	—					$	—					$	53
			0.50% - 1.00%						51,581						172,470						2,813,380						1,417,915						4,455,346
			1.00% - 1.50%						430,052						237						—						—						430,289
			1.50% - 2.00%						352,184						29,378						224,846						217						606,625
			2.00% - 2.50%						18,714						23						—						—						18,737
			2.50% - 3.00%						349,890						6,783						—						—						356,673
			Greater than 3.00%						46,242						—						—						—						46,242
Total									$	1,248,716					$	208,891					$	3,038,226					$	1,418,132					$	5,913,965

			December 31, 2022
			Range of guaranteed minimum crediting rate						At guaranteed minimum						1 to 50						51 to 150						Greater than 150 basis points above						Total
									(Dollars in thousands)
Fixed Index Annuities			0.00% - 0.50%						$	—					$	462,356					$	407,426					$	314,929					$	1,184,711
			0.50% - 1.00%						2,421,795						1,098,332						2,258,992						77,901						5,857,020
			1.00% - 1.50%						51,586						9,391						—						—						60,977
			1.50% - 2.00%						57						—						—						—						57
			2.00% - 2.50%						133,059						100,205						8						—						233,272
			2.50% - 3.00%						939,684						—						—						—						939,684
			Greater than 3.00%						—						—						—						—						—
			Allocated to index strategies																														45,550,513
Total									$	3,546,181					$	1,670,284					$	2,666,426					$	392,830					$	53,826,234
Fixed Rate Annuities			0.00% - 0.50%						$	61					$	—					$	—					$	—					$	61
			0.50% - 1.00%						55,458						203,523						4,000,203						701,836						4,961,020
			1.00% - 1.50%						454,728						231						—						—						454,959
			1.50% - 2.00%						281,694						96,767						277,053						189						655,703
			2.00% - 2.50%						21,887						22						—						—						21,909
			2.50% - 3.00%						434,042						7,417						—						—						441,459
			Greater than 3.00%						54,466						—						—						—						54,466
Total									$	1,302,336					$	307,960					$	4,277,256					$	702,025					$	6,589,577

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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
-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

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//944/tableOfContent

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