Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customers

(16) Revenue from Contracts with Customers

Our revenues from contracts with customers primarily include:

•Commissions and fees earned for the marketing and distribution of investment and savings products underwritten by mutual fund companies and annuity providers. For purposes of revenue recognition, mutual fund companies and annuity providers are considered the customers in marketing and distribution arrangements;

•Fees earned for investment advisory and administrative services within our managed investments program and shareholder services fees earned in Canada for mutual funds for which we serve as principal distributor;

•Account-based fees for transfer agent recordkeeping functions and non-bank custodial services;

•Commissions and fees earned from the distribution of Medicare-related insurance products on behalf of health insurance carriers, including tail revenue adjustments;

•Marketing development revenues earned for selling Medicare-related insurance products on behalf of health insurance carriers, which is recorded in Other, net revenue;

•Fees associated with mortgage distribution and the distribution of other third-party financial products; and

•Other revenue from the sale of miscellaneous products and services including monthly subscription fees from the sales representatives for access to Primerica Online, our primary sales force support tool.

Premiums from insurance contracts we underwrite, fees received from segregated funds insurance contracts, and income earned on our invested assets are excluded from the definition of revenues from contracts with customers in accordance with U.S. GAAP.

Further discussion on the Company’s revenues from contracts with customers and revenue recognition policies are included in Note 18 (Revenue from Contracts with Customers) to our consolidated financial statements within our 2022 Annual Report.

The disaggregation of our revenues from contracts with customers were as follows:

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(In thousands)
Term Life Insurance segment revenues:
Other, net	$	12,280	$	12,374	$	24,513	$	24,550
Total segment revenues from contracts with customers		12,280		12,374		24,513		24,550
Revenues from sources other than contracts with customers		399,593		386,047		808,430		780,855
Total Term Life Insurance segment revenues	$	411,873	$	398,421	$	832,943	$	805,405
Investment and Savings Products segment revenues:
Commissions and fees
Sales-based revenues	$	74,958	$	88,701	$	147,346	$	191,942
Asset-based revenues		99,521		93,419		197,625		190,773
Account-based revenues		23,095		22,592		45,886		44,134
Other, net		3,121		3,022		6,240		6,166
Total segment revenues from contracts with customers		200,695		207,734		397,097		433,015
Revenues from sources other than contracts     with customers (segregated funds)		13,814		14,682		27,614		30,440
Total Investment and Savings Products segment revenues	$	214,509	$	222,416	$	424,711	$	463,455
Senior Health segment revenues:
Commissions and fees	$	11,371	$	9,343	$	27,125	$	10,621
Other, net		3,519		2,471		6,474		7,024
Total Senior Health segment revenues	$	14,890	$	11,814	$	33,599	$	17,645
Corporate and Other Distributed Products segment revenues:
Commissions and fees	$	10,371	$	11,951	$	19,081	$	24,579
Other, net		1,235		889		2,436		2,005
Total segment revenues from contracts with customers		11,606		12,840		21,517		26,584
Revenues from sources other than contracts with customers		35,507		23,191		65,652		46,820
Total Corporate and Other Distributed Products segment revenues	$	47,113	$	36,031	$	87,169	$	73,404

Renewal Commissions Receivable. For revenue associated with ongoing renewal commissions in the Senior Health and Corporate and Other Distributed Products segments, we record a renewal commission receivable asset for the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to the satisfaction of the performance obligation, less amounts that are constrained in the accompanying unaudited condensed consolidated balance sheets. We update our estimate of variable consideration each period as new facts or circumstances that were not available at the time of the initial estimate will indicate that the expected renewal commissions are higher or lower than our renewal commissions receivable. As such, the expected renewal commissions receivable will be written down or up to its revised expected value by adjustments to revenue, which we refer to as tail revenue adjustments. During the three and six months ended June 30, 2023, no tail revenue adjustments were recognized based on our current estimates.

Activity in the Renewal commissions receivable account was as follows:

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
	(In thousands)
Senior Health segment:
Balance, beginning of period	$	134,199		$	153,783		$	139,399		$	172,308
Measurement period adjustment (1)		-			(11,863	)		-			(11,863	)
Commissions revenue		6,923			9,563			15,985			22,412
Less: collections		(10,304	)		(11,910	)		(24,566	)		(24,224	)
Tail revenue adjustments from change in estimate		-			(5,361	)		-			(24,421	)
Balance, at the end of period	$	130,818		$	134,212		$	130,818		$	134,212
Corporate and Other Distributed Products segments:
Balance, beginning of period	$	60,210		$	59,392		$	60,644		$	59,443
Commissions revenue		6,405			6,283			11,775			11,926
Less: collections		(6,209	)		(6,226	)		(12,013	)		(11,920	)
Balance, at the end of period	$	60,406		$	59,449		$	60,406		$	59,449

(1)The measurement period adjustment was recorded during the three and six months ended June 30, 2022 in order to finalize the purchase price allocation for the acquisition of e-TeleQuote.

Incremental costs to obtain or fulfill contracts, most notably sales commissions to the sales representatives, are not incurred prior to the recognition of the related revenue. Therefore, we have no assets recognized for incremental costs to obtain or fulfill contracts.