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Policyholder Liabilities

3 Months Ended

Mar. 31, 2024

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 three months ended March 31, 2024 and year ended December 31, 2023 is as follows:

									Present Value of Expected Future Policy Benefits
									Three Months Ended   March 31, 2024						Year Ended December 31, 2023
									(Dollars in thousands)
Balance, beginning of period									$	303,200					$	318,677
Beginning balance at original discount rate									317,634						342,453
Effect of changes in cash flow assumptions									—						(4,607)
Effect of actual variances from expected experience									(102)						(1,887)
Adjusted beginning of year balance									317,532						335,959
Issuances									796						6,945
Interest accrual									3,295						13,710
Derecognition (lapses and benefit payments)									(9,493)						(38,980)
Ending balance at original discount rate									312,130						317,634
Effect of changes in discount rate assumptions									(18,187)						(14,434)
Balance, end of period									$	293,943					$	303,200

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:

			March 31, 2024						December 31, 2023
			(Dollars in thousands)
Liability for future policy benefits			$	293,943					$	303,200
Deferred profit liability			22,281						22,455
Liability for future policy benefits included in policy benefit reserves			316,224						325,655
Less: Reinsurance recoverable			(2,615)						(2,496)
Net liability for future policy benefits, after reinsurance recoverable			$	313,609					$	323,159

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

			March 31, 2024						December 31, 2023
SPIA With Life Contingency:
Weighted-average liability duration of the liability for future policy benefits (years)			7.15						6.56

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

			March 31, 2024						December 31, 2023
			(Dollars in thousands)
SPIA With Life Contingency:
Expected future benefit payments			$	410,285					$	447,669
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 three months ended March 31, 2024 and year ended December 31, 2023 is as follows:

									Three Months Ended   March 31, 2024												Year Ended December 31, 2023
															Gross Premiums or Assessments						Interest Expense						Gross Premiums or Assessments						Interest Expense
															(Dollars in thousands)
SPIA With Life Contingency															$	764					$	3,271					$	7,608					$	13,626
Total															$	764					$	3,271					$	7,608					$	13,626

The weighted-average interest rate is as follows:

			March 31, 2024						December 31, 2023
Interest accretion rate			4.26		%				4.26		%
Current discount rate			5.23		%				5.00		%

Market Risk Benefits

The balances of and changes in the net market risk benefit (MRB) assets and liabilities for the three months ended March 31, 2024 and year ended December 31, 2023 is as follows:

									Three Months Ended   March 31, 2024												Year Ended December 31, 2023
															Fixed Rate Annuities						Fixed Index Annuities						Fixed Rate Annuities						Fixed Index Annuities
															(Dollars in thousands)
Balance, beginning of period															$	60,187					$	2,606,673					$	37,863					$	2,187,758
Balance, beginning of period, before effect of changes in the instrument-specific credit risk															63,573						2,544,939						44,355						2,453,169
Issuances															7						41,126						32						289,939
Interest accrual															973						42,184						3,139						155,512
Attributed fees collected															284						33,800						1,216						128,437
Benefits payments															—						—						—						—
Effect of changes in interest rates															(3,912)						(208,365)						(380)						(126,255)
Effect of changes in equity markets															—						(64,867)						—						(48,164)
Effect of changes in equity index volatility															—						28,599						—						(77,023)
Effect of changes in future expected policyholder behavior															73						297						(1,509)						(11,582)
Effect of changes in other future expected assumptions															—						—						16,720						(219,094)
Balance, end of period, before effect of changes in the instrument-specific credit															60,998						2,417,713						63,573						2,544,939
Effect of changes in the instrument-specific credit risk															(1,899)						121,508						(3,386)						61,734
Balance, end of period															59,099						2,539,221						60,187						2,606,673
Reinsured MRB, end of period															18,256						609,566						18,391						640,826
Balance, end of period, net of reinsurance															$	40,843					$	1,929,655					$	41,796					$	1,965,847
Net amount at risk (a)															$	268,085					$	11,725,220					$	266,438					$	11,721,734
Weighted average attained age of contract holders (years)															70						71						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 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:

			March 31, 2024
			Asset						Liability						Net Liability
			(Dollars in thousands)
Fixed Index Annuities			$	522,323					$	3,061,544					$	2,539,221
Fixed Rate Annuities			2,275						61,374						59,099
Total			$	524,598					$	3,122,918					$	2,598,320

			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

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 three months ended March 31, 2024 and year ended December 31, 2023:

									Three Months Ended   March 31, 2024												Year Ended December 31, 2023
															Fixed Rate Annuities						Fixed Index Annuities						Fixed Rate Annuities						Fixed Index Annuities
															(Dollars in thousands)
Balance, beginning of period															$	18,391					$	640,826					$	10,656					$	593,959
Issuances															—						57						—						146,898
Interest accrual															274						9,527						775						33,503
Attributed fees collected															7						10,276						67						32,036
Benefits payments															—						—						—						—
Effect of changes in interest rates															(634)						(42,876)						1,407						14,700
Effect of changes in equity markets															—						(21,174)						—						(22,775)
Effect of changes in equity index volatility															—						6,817						—						(18,656)
Effect of changes in future expected policyholder behavior															218						6,113						(128)						5,855
Effect of changes in other future expected assumptions															—						—						5,614						(144,694)
Balance, end of period															$	18,256					$	609,566					$	18,391					$	640,826
Net amount at risk (a)															$	75,941					$	2,877,855					$	75,281					$	2,853,318
Weighted average attained age of contract holders (years)															70						70						70						70

(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:

			March 31, 2024
			Asset						Liability						Net Asset
			(Dollars in thousands)
Fixed Index Annuities			$	785,410					$	175,844					$	609,566
Fixed Rate Annuities			18,488						232						18,256
Total			$	803,898					$	176,076					$	627,822

			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

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:

			March 31, 2024
			Fair Value						Valuation Technique						Significant Inputs and Assumptions						Range						Weighted Average
			(in thousands)
Market risk benefits			$	2,598,320					Discounted cash flow						Utilization (a)						0.04% - 47.37%						6.54%
Ceded market risk benefits			627,822												Option budget (b)						1.85% - 2.75%						2.30%
															Risk-free interest rate (c)						3.31% - 5.04%						3.65%
															Nonperformance risk (d)						0.39% - 2.59%						1.91%
															Mortality (e)						0.01% - 46.00%						3.99%
															Lapse (f)						0.25% - 40.00%						3.64%

			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%

(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 purchase 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 three months ended March 31, 2024, the Company did not make any changes to the significant inputs and assumptions used in the fair value measurements of 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.

Policyholder Account Balances

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

									Three Months Ended   March 31, 2024												Year Ended December 31, 2023
															Fixed Rate Annuities						Fixed Index Annuities						Fixed Rate Annuities						Fixed Index Annuities
															(Dollars in thousands)
Balance, beginning of period															$	5,913,965					$	55,453,972					$	6,589,577					$	53,826,234
Issuances															1,232,426						1,866,523						840,022						7,555,709
Premiums received															566						17,116						12,472						152,532
Policy charges															(2,256)						(123,631)						(3,428)						(217,523)
Surrenders and withdrawals															(1,464,230)						(1,965,003)						(1,668,966)						(6,122,084)
Benefit payments															(3,715)						(232,754)						(13,085)						(836,507)
Interest credited															43,851						444,399						163,918						1,096,493
Other															5,426						1,099						(6,545)						(882)
Balance, end of period															$	5,726,033					$	55,461,721					$	5,913,965					$	55,453,972
Weighted-average crediting rate															3.03		%				3.22		%				2.66		%				2.03		%
Net amount at risk (a)															$	268,085					$	11,725,220					$	266,438					$	11,721,734
Cash surrender value															$	5,385,577					$	50,946,469					$	5,571,171					$	50,983,033

(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:

			March 31, 2024						December 31, 2023
			(Dollars in thousands)
Fixed index annuities policyholder account balances			$	55,461,721					$	55,453,972
Fixed rate annuities policyholder account balances			5,726,033						5,913,965
Embedded derivative adjustment (b)			(548,478)						(818,754)
Liability for future policy benefits			293,943						303,200
Deferred profit liability			22,281						22,455
Other			24,742						26,803
Total			$	60,980,242					$	60,901,641

(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:

			March 31, 2024
			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%						$	—					$	1,265,350					$	452,749					$	1,127,714					$	2,845,813
			0.50% - 1.00%						2,161,233						962,799						1,870,378						131,984						5,126,394
			1.00% - 1.50%						39,737						7,902						—						—						47,639
			1.50% - 2.00%						50						—						—						—						50
			2.00% - 2.50%						118,170						63,016						8						—						181,194
			2.50% - 3.00%						699,138						—						—						—						699,138
			Greater than 3.00%						—						—						—						—						—
			Allocated to index strategies																														46,561,493
Total									$	3,018,328					$	2,299,067					$	2,323,135					$	1,259,698					$	55,461,721
Fixed Rate Annuities			0.00% - 0.50%						$	358					$	—					$	—					$	—					$	358
			0.50% - 1.00%						50,765						167,501						1,479,169						2,586,341						4,283,776
			1.00% - 1.50%						463,258						238						—						—						463,496
			1.50% - 2.00%						352,534						27,694						198,956						218						579,402
			2.00% - 2.50%						17,408						23						—						—						17,431
			2.50% - 3.00%						329,920						6,686						—						—						336,606
			Greater than 3.00%						44,964						—						—						—						44,964
Total									$	1,259,207					$	202,142					$	1,678,125					$	2,586,559					$	5,726,033

			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

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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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