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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Liability for Future Policy Benefit, Activity


	Liability for Future Policy Benefits for Payout Annuity With Life Contingency
	(Dollars in thousands)
Pre-adoption 12/31/2020 balance	$	337,467
Adjustment to opening retained earnings for expected future policy benefits	2,566
Adjustment for the effect of remeasurement of liability at current single A rate	68,717
Post adoption 1/1/2021 balance	$	408,750

The balances of and changes in the liability for future policy benefits for the three months ended March 31, 2023 and year ended December 31, 2022 is as follows:


	Present Value of Expected Future Policy Benefits
	Three Months Ended March 31, 2023		Year Ended December 31, 2022
	(Dollars in thousands)
Balance, beginning of year	$	317,418	$	401,022
Beginning balance at original discount rate	341,071		351,575
Effect of changes in cash flow assumptions	—		1,280
Effect of actual variances from expected experience	(354)		(1,958)
Adjusted beginning of year balance	340,717		350,897

Issuances	2,874		15,766
Interest accrual	3,548		14,613
Benefit payments	—		—

Derecognition (lapses)	(9,818)		(40,205)
Ending balance at original discount rate	337,321		341,071
Effect of changes in discount rate assumptions	(18,859)		(23,653)
Balance, end of period	$	318,462	$	317,418

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, 2023		December 31, 2022
	(Dollars in thousands)
Liability for future policy benefits	$	319,895	$	318,677
Deferred profit liability	19,341		19,084
	339,236		337,761
Less: Reinsurance recoverable	(1,433)		(1,259)
Net liability for future policy benefits, after reinsurance recoverable	$	337,803	$	336,502

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


	March 31, 2023	December 31, 2022
SPIA With Life Contingency:
Weighted-average liability duration of the liability for future policy benefits (years)	7.58	6.78

The amount of revenue and interest recognized in the statement of operations for the three months ended March 31, 2023 and year ended December 31, 2022 is as follows:


	Three Months Ended March 31, 2023				Year Ended December 31, 2022
	Gross Premiums or Assessments		Interest Expense		Gross Premiums or Assessments		Interest Expense
	(Dollars in thousands)
Liability for future policy benefits	$	3,391	$	3,548	$	16,994	$	14,613

Total	$	3,391	$	3,548	$	16,994	$	14,613

The weighted-average interest rate is as follows:


	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Interest accretion rate	4.26	%	4.25	%
Current discount rate	4.95	%	5.37	%

Market Risk Benefit, Activity


	Market Risk Benefit Liability
	(Dollars in thousands)
Pre-adoption 12/31/2020 carrying amount for features now classified as MRBs	$	2,547,231
Adjustment for the removal of shadow adjustments	(584,636)
Adjustment for the cumulative effect of the changes in the instrument-specific credit risk between the original contract issuance date and the transition date	229,108
Adjustment for the remaining difference between previous carrying amount and fair value measurement for the MRB, exclusive of the instrument specific credit risk	33,781
Post adoption 1/1/2021 MRB balance	$	2,225,484


	Ceded Market Risk Benefit (a)
	(Dollars in thousands)
Pre-adoption 12/31/2020 carrying amount for features now classified as MRBs	$	62,108
Adjustment for the difference between previous carrying amount and fair value measurement for the MRB, exclusive of the instrument specific credit risk	27,230
Post adoption 1/1/2021 ceded MRB balance	$	89,338

(a)The ceded market risk benefit is recognized in coinsurance deposits on the Consolidated Balance Sheets.

The balances of and changes in the liability for market risk benefits (MRB) for the three months ended March 31, 2023 and year ended December 31, 2022 is as follows:


	Three Months Ended March 31, 2023				Year Ended December 31, 2022
	Fixed Rate Annuities		Fixed Index Annuities		Fixed Rate Annuities		Fixed Index Annuities
	(Dollars in thousands)
MRB Liability
Balance, beginning of year	$	37,863	$	2,187,758	$	78,411	$	2,557,379
Balance, beginning of year, before effect of changes in the instrument-specific credit risk	44,355		2,453,169		77,732		2,310,436
Issuances	—		44,841		376		59,452
Interest accrual	607		36,217		1,349		72,551
Attributed fees collected	302		30,041		1,270		125,168
Benefits payments	—		—		—		—
Effect of changes in interest rates	2,973		172,165		(19,421)		(952,265)
Effect of changes in equity markets	—		(16,573)		—		186,618
Effect of changes in equity index volatility	—		(7,760)		—		241,563
Actual policyholder behavior different from expected behavior	—		—		—		—
Effect of changes in future expected policyholder behavior	714		3,738		602		46,567
Effect of changes in other future expected assumptions	—		—		(17,553)		363,079
Balance, end of year, before effect of changes in the instrument-specific credit	48,951		2,715,838		44,355		2,453,169
Effect of changes in the instrument-specific credit risk	(7,795)		(334,113)		(6,492)		(265,411)
Balance, end of year	41,156		2,381,725		37,863		2,187,758
Reinsured MRB, end of period	11,463		674,239		10,656		593,959
Balance, end of period, net of reinsurance	$	29,693	$	1,707,486	$	27,207	$	1,593,799

Net amount at risk (a)	$	262,643	$	11,120,564	$	258,826	$	10,987,198
Weighted average attained age of contract holders (years)	69		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 other assets and market risk benefit reserves, respectively, in the Consolidated Balance Sheets:


	March 31, 2023
	Asset		Liability		Net Liability
	(Dollars in thousands)
Fixed Index Annuities	$	226,747	$	2,608,472	$	2,381,725
Fixed Rate Annuities	3,557		44,713		41,156

Total	$	230,304	$	2,653,185	$	2,422,881


	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

The following table presents the balances and changes in reinsured market risk benefits associated with fixed index annuities for the three months ended March 31, 2023 and year ended December 31, 2022:


	Three Months Ended March 31, 2023				Year Ended December 31, 2022
	Fixed Rate Annuities		Fixed Index Annuities		Fixed Rate Annuities		Fixed Index Annuities
Ceded MRB	(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	—		32,744		—		36,036
Interest accrual	128		7,136		104		7,598
Attributed fees collected	7		6,106		28		23,745
Benefits payments	—		—		—		—
Effect of changes in interest rates	603		40,846		135		(171,948)
Effect of changes in equity markets	—		(7,043)		118		43,799
Effect of changes in equity index volatility	—		(2,021)		—		34,278
Actual policyholder behavior different from expected behavior	—		—		—		—
Effect of changes in future expected policyholder behavior	69		2,512		180		12,598
Effect of changes in other future expected assumptions	—		—		—		116,087
Balance, end of year	$	11,463	$	674,239	$	10,656	$	593,959

Net amount at risk (a)	$	73,259	$	2,419,275	$	72,350	$	2,402,964
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 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, 2023
	Asset		Liability		Net Asset
	(Dollars in thousands)
Fixed Index Annuities	$	712,734	$	38,495	$	674,239
Fixed Rate Annuities	11,884		421		11,463

Total	$	724,618	$	38,916	$	685,702


	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

Deferred Policy Acquisition Costs


	Deferred Policy Acquisition Costs
	Fixed Index Annuities and Fixed Rate Annuities
	(Dollars in thousands)
Pre-adoption 12/31/2020 balance	$	2,225,199
Adjustments for the removal of shadow adjustments	1,183,306
Post adoption 1/1/2021 balance	$	3,408,505

The following tables present the balances and changes in deferred policy acquisition costs:


	Three Months Ended March 31, 2023
	Fixed Index Annuities		Fixed Rate Annuities		Single Premium Immediate Annuities
	(Dollars in thousands)
Balance, beginning of year	$	2,649,322	$	120,105	$	4,216

Capitalizations	54,803		11,949		16
Amortization expense	(60,801)		(7,247)		(188)
Balance, end of period	$	2,643,324	$	124,807	$	4,044


	Year Ended December 31, 2022
	Fixed Index Annuities		Fixed Rate Annuities		Single Premium Immediate Annuities
	(Dollars in thousands)
Balance, beginning of year	$	2,906,684	$	151,322	$	4,198
Write-off related to in-force ceded reinsurance	(196,417)		(7,209)		—
Capitalizations	193,988		4,424		663
Amortization expense	(254,933)		(28,432)		(645)
Balance, end of period	$	2,649,322	$	120,105	$	4,216

The reconciliation of the deferred policy acquisition costs to the deferred policy acquisition costs in the consolidated balance sheets is as follows:


	Deferred Policy Acquisitions Costs
	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Fixed Index Annuities	$	2,643,324	$	2,649,322
Fixed Rate Annuities	124,807		120,105
Single Premium Immediate Annuities	4,044		4,216
Total	$	2,772,175	$	2,773,643

Deferred Sale Inducement Cost


	Deferred Sales Inducements
	Fixed Index Annuities and Fixed Rate Annuities
	(Dollars in thousands)
Pre-adoption 12/31/2020 balance	$	1,448,375
Adjustments for the removal of shadow adjustments	768,310
Post adoption 1/1/2021 balance	$	2,216,685

The following tables present the balances and changes in deferred sales inducements:


	Three Months Ended March 31, 2023
	Fixed Index Annuities		Fixed Rate Annuities
	(Dollars in thousands)
Balance, beginning of year	$	2,017,960	$	27,723
Capitalizations	45,266		—
Amortization expense	(45,786)		(814)
Balance, end of period	$	2,017,440	$	26,909


	Year Ended December 31, 2022
	Fixed Index Annuities		Fixed Rate Annuities
	(Dollars in thousands)
Balance, beginning of year	$	2,088,591	$	31,370
Capitalizations	107,683		8
Amortization expense	(178,314)		(3,655)
Balance, end of period	$	2,017,960	$	27,723

The reconciliation of the deferred sales inducements to the deferred sales inducements in the consolidated balance sheets is as follows:


	Deferred Sales Inducements
	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Fixed Index Annuities	$	2,017,440	$	2,017,960
Fixed Rate Annuities	26,909		27,723
Total	$	2,044,349	$	2,045,683