Intangibles, Value of Business Acquired, and Goodwill

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLES, VALUE OF BUSINESS ACQUIRED, AND GOODWILL

INTANGIBLES, VALUE OF BUSINESS ACQUIRED, AND GOODWILL

Identifiable Intangible Assets

The gross carrying amounts and accumulated amortization for intangible assets are as follows for the dates shown.

		September 30, 2021			December 31, 2020
	Weighted-Average Amortization Period	Gross Carrying Amount		Accumulated Amortization	Gross Carrying Amount	Accumulated Amortization
		(In thousands)
Trademarks/trade names	15	$	2,800	(497)	2,800	(358)
Internally developed software	7	3,800		(1,448)	3,800	(1,040)
Insurance licenses	N/A	3,000		—	3,000	—
		$	9,600	(1,945)	9,600	(1,398)

The value of trademarks was estimated using the relief from royalty method, based on the assumption that in lieu of ownership, an organization would be willing to pay a royalty in order to receive the related benefits of using the brand. The value of insurance licenses was estimated using the market approach to value, based on values paid for licenses in recent shell company transactions. The value of internally developed software was estimated using the replacement cost method. Trademarks, trade names and internally developed software are amortized using a straight-line method over the estimated useful lives. These intangible assets will be evaluated for impairment if indicators of impairment arise. Insurance licenses were determined to have an indefinite useful life. The Company evaluates the useful life of insurance licenses at each reporting period to determine whether the useful life remains indefinite.

As of September 30, 2021, expected amortization expense relating to purchased intangible assets for each of the next 5 years and thereafter is as follows:

	Expected Amortization
	(In thousands)
Remainder of 2021	$	182
2022	730
2023	730
2024	730
2025	730
Thereafter	1,553

Value of Business Acquired ("VOBA")

VOBA is a purchase accounting convention for life insurance companies in business combinations based upon an actuarial determination of the difference between the fair value of policyholder liabilities acquired and the same policyholder liabilities measured in accordance with the acquiring company's accounting policies. The difference, referred to as VOBA, is an intangible asset subject to periodic amortization. Changes in VOBA were as follows for the periods shown:

	September 30,		December 31,
	2021		2020
	(In thousands)
Balance, beginning of year	$	162,968	138,071
Other increase	—		35,125
Amortization:
Amortization, excluding unlocking	(6,709)		(10,228)
Balance as of end of period	$	156,259	162,968

Estimated future amortization of VOBA, net of interest (in thousands), as of September 30, 2021, is as follows:

	Expected Amortization
	(In thousands)
Remainder of 2021	$	2,557
2022	9,753
2023	9,368
2024	9,015
2025	8,804

Goodwill

The changes in the carrying amount of goodwill (in thousands) were as follows:

	September 30,		December 31,
	2021		2020
	(In thousands)
Gross goodwill as of beginning of year	$	13,864	13,864
Goodwill resulting from business acquisition	—		—
Gross goodwill, before impairments	13,864		13,864
Accumulated impairment as of beginning of year	—		—
Current year impairments	—		—
Net goodwill as of end of period	$	13,864	13,864

Goodwill is evaluated for impairment annually, or more frequently if indicators of impairment arise.