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Deferred Transaction Costs
 6 Months Ended
Jun. 30, 2023
Deferred Charges, Insurers [Abstract]  
DEFERRED TRANSACTION COSTS DEFERRED TRANSACTION COSTS
Deferred transaction costs include deferred policy acquisition costs (DPAC), deferred sales inducements (DSI), value of business acquired (VOBA), and cost of reinsurance (COR).

Deferred policy acquisition costs ("DPAC") include certain costs of successfully acquiring new insurance business, including commissions and other expenses related directly to the production of new business (indirect or unsuccessful acquisition costs, maintenance, product development and overhead expenses are charged to expenses as incurred). Also included are premium bonuses and bonus interest credited to contracts during the first contract year only which are recorded as deferred sales inducements ("DSI").

Prior to the adoption of LDTI, DPAC and DSI balances were amortized in relation to the present value of expected gross profits for interest sensitive universal life and annuity products, and over the premium paying period for nonparticipating traditional life products proportional to the ratio of annual premium revenues to total anticipated premium revenues. Under LDTI guidance, deferred policy acquisition costs and deferred sales inducements are amortized on a constant level cohort basis over the expected term of the contracts approximating a straight-line amortization on an individual contract basis. Contracts are grouped consistent with the groupings used to estimate the liability for future policy benefits. The constant-level basis for amortizing DAC is generally in proportion to the initial face amount of life insurance in force for life insurance policies, in proportion to deposits for deferred annuity contracts, and in proportion to annual benefit payments for annuity contracts in payout mode.

The Company is required to write off deferred policy acquisition costs and unearned revenue liabilities upon internal replacement of certain contracts as well as annuitizations of deferred annuities. All insurance and investment contract modifications and replacements are reviewed to determine if the internal replacement results in a substantially changed contract. If so, the acquisition costs, sales inducements and unearned revenue associated with the new contract are deferred and amortized over the lifetime of the new contract. In addition, the existing deferred policy acquisition costs, sales inducement costs and unearned revenue balances associated with the replaced contract are written off. If an internal replacement results in a substantially unchanged contract, the acquisition costs, sales inducements and unearned revenue associated with the new contract are immediately recognized in the period incurred. In addition, the existing deferred policy acquisition costs, sales inducement costs or unearned revenue balance associated with the replaced contract are not written off, but instead are carried over to the new contract.

Current period amortization of DPAC and DSI is impacted by changes in actual insurance in force during the period as well as changes in future assumptions as of the end of each reporting period, where applicable. Assumptions used for DPAC are consistent with those used in estimating the liability for future policy benefits (or any other related balance) for the corresponding contracts. Determining the level of aggregation and actuarial assumptions used in projecting in force terminations requires judgment.

The value of insurance in force business acquired ("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 policy 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. It represents the portion of the purchase price allocated to the value of the rights to receive future cash flows from the business in force at the acquisition date. The Company performs recoverability testing of VOBA consistent with the recoverability analysis performed for DPAC and DSI balances. Under LDTI guidance, VOBA is amortized on the same basis used for DPAC and DSI balances.

The Cost of Reinsurance ("COR") asset represents the amount of assets transferred at the closing date of a funds withheld agreement (debt securities, policy loans, and cash) in excess of the GAAP liability ceded plus a $48.0 million ceding commission paid to the reinsurer. The original COR balance of $102.8 million is amortized commensurate with the runoff of the ceded block of funds withheld business and the amortization expense is reported in the Condensed Consolidated Statements of Earnings.
Deferred Policy Acquisition Costs - A summary of information related to DPAC is provided in the following table.

 Six Months Ended June 30, 2023
 Domestic Traditional LifeDomestic Universal LifeInternational Traditional LifeInternational Universal LifeAnnuities excl. SPIAs WLCONL & Affiliates
 (In thousands)
Balance, beginning of period$3,159 176,034 11,151 152,287 306,489 14,762 
Capitalization additions7 7,224 — 305 4,186 2,153 
Amortization(143)(6,232)(558)(7,519)(17,954)(418)
Experience adjustment— — — — — — 
Balance, end of period$3,023 177,026 10,593 145,073 292,721 16,497 

 Six Months Ended June 30, 2022
 Domestic Traditional LifeDomestic Universal LifeInternational Traditional LifeInternational Universal LifeAnnuities excl. SPIAs WLCONL & Affiliates
 (In thousands)
Balance, beginning of period$3,448 167,748 12,415 167,556 341,897 11,289 
Capitalization additions9 12,684 — 427 13,762 2,214 
Amortization(157)(6,384)(666)(8,173)(18,208)(429)
Experience adjustment— — — — — — 
Balance, end of period$3,300 174,048 11,749 159,810 337,451 13,074 

The following table summarizes DPAC balances by product line as of the end of the following periods.

June 30,
20232022
(In thousands)
Domestic traditional life$3,023 3,300 
Domestic universal life177,026 174,048 
International traditional life10,593 11,749 
International universal life145,073 159,810 
SPIAs with life contingencies— — 
Annuities, excl. SPIAs with life contingencies292,721 337,451 
ONL & Affiliates16,497 13,074 
Total$644,933 699,432 
Deferred Sales Inducements - A summary of information related to DSI is provided in the following tables.

Six Months Ended June 30, 2023
Domestic Traditional LifeDomestic Universal LifeInternational Traditional LifeInternational Universal LifeAnnuities excl. SPIAs WLCONL & Affiliates
(In thousands)
Balance, beginning of period$— — — — 85,303 — 
Capitalization additions— — — — (2,829)— 
Amortization— — — — (4,265)— 
Experience adjustment— — — — — — 
Balance, end of period$— — — — 78,209 — 

Six Months Ended June 30, 2022
Domestic Traditional LifeDomestic Universal LifeInternational Traditional LifeInternational Universal LifeAnnuities excl. SPIAs WLCONL & Affiliates
(In thousands)
Balance, beginning of period$— — — — 102,976 — 
Capitalization additions— — — — 5,040 — 
Amortization— — — — (5,563)— 
Experience adjustment— — — — — — 
Balance, end of period$— — — — 102,453 — 
The following table summarizes DSI balances by product line as of the end of the following periods.

June 30,
20232022
(In thousands)
Domestic traditional life$— — 
Domestic universal life— — 
International traditional life— — 
International universal life— — 
SPIAs with life contingencies— — 
Annuities, excluding SPIAs with life contingencies78,209 102,453 
ONL & Affiliates— — 
Total$78,209 102,453 

Value of Business Acquired - A summary of information related to VOBA is provided in the following table.

 Six Months Ended June 30,
 20232022
(In thousands)
Balance, beginning of period$138,495 149,408 
Amortization(4,398)(6,408)
Experience adjustment— — 
Balance as of end of period$134,097 143,000 

Estimated future amortization of VOBA, net of interest, is as follows as of June 30, 2023:

(In thousands)
Remainder of 2023$4,284 
20248,230 
20257,792 
20267,352 
20276,937 
Cost of Reinsurance - A summary of information related to COR is provided in the following table.

 Six Months Ended June 30,
 20232022
SPIAs WLCAnnuities excl. SPIAs WLCSPIAs WLCAnnuities excl. SPIAs WLC
(In thousands)
Balance, beginning of period$11,897 66,431 12,591 77,095 
Additions— — — — 
Amortization(522)(5,530)(284)(5,227)
Experience Adjustment— — — — 
Balance as of end of period$11,375 60,901 12,307 71,868 

The following table summarizes the COR balance by product line as of the end of the following periods.

June 30,
20232022
(In thousands)
SPIAs with life contingencies$11,375 12,307 
Annuities, excl. SPIAs with life contingencies60,901 71,868 
Total$72,276 84,175