2024 N-VPFS WSLAC

FINANCIAL STATEMENTS

Western-Southern Life Assurance Company

Separate Account 1

Year Ended December 31, 2023

With Report of Independent Registered Public

Accounting Firm

Western-Southern Life Assurance Company

Separate Account 1

Financial Statements

Year Ended December 31, 2023


Contents

Report of Independent Registered Public Accounting Firm			1

Financial Statements

Statements of Assets and Liabilities as of December 31, 2023			3
Statements of Operations for the Year ended December 31, 2023			4
Statements of Changes in Net Assets for the Year ended December 31, 2023			5
Statements of Changes in Net Assets for the Year ended December 31, 2022			6
Notes to Financial Statements			7

Report of Independent Registered Public Accounting Firm

The Board of Directors of Western-Southern Life Assurance Company and

The Contract Owners of Western-Southern Life Assurance Company Separate Account 1

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of each of the subaccounts listed in Appendix A that comprise Western-Southern Life Assurance Company Separate Account 1 (the Separate Account), as of December 31, 2023, the related statements of operations and the statements of changes in net assets for each of the periods indicated in Appendix A, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each subaccount as of December 31, 2023, the results of its operations and changes in its net assets for each of the periods indicated in Appendix A, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Separate Account’s management. Our responsibility is to express an opinion on each of the subaccounts’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Separate Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023, by correspondence with the fund companies or their transfer agents, as applicable. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Separate Account’s auditor since 1999.

Cincinnati, Ohio

April 17, 2024

Appendix A

Subaccounts comprising Western-Southern Life Assurance Company Separate Account 1


Subaccounts	Statement of operations	Statements of changes in net assets
The Alger Portfolios Non-Affiliated: Alger Large Cap Growth Fund Alger Small Cap Growth Fund DWS Investments VIT Fund Non-Affiliated Class A: DWS Equity 500 Index VIP Fund Invesco Variable Insurance Funds Non-Affiliated: Invesco V.I. American Franchise Fund Invesco V.I. Government Securities Fund Massachusetts Financial Service Variable Insurance Trust Non-Affiliated Initial Class: MFS Growth Fund MFS Investors Trust Fund Pimco Variable Insurance Trust Non-Affiliated: PIMCO VIT Long-Term U.S. Government Portfolio Putnam Variable Trust Non-Affiliated Class 1A: Putnam VT Government Money Market Fund Non-Affiliated Class 1B: Putnam VT International Equity Fund Touchstone Variable Series Trust Affiliated Service Class: Touchstone VST Balanced Fund Touchstone VST Bond Fund Touchstone VST Common Stock Fund	For the year ended December 31, 2023	For each of the two years in the period ended December 31, 2023

Western-Southern Life Assurance Company Separate Account 1

Statement of Assets and Liabilities

December 31, 2023


Subaccount		Investments at fair value		Receivable from (payable to) the general account		Net Assets		Unit Value Range (Lowest to Highest)					Units Outstanding
Affiliated:
	Touchstone VST Balanced Fund	$	1,283,072	$	—	$	1,283,072	$	10.36	to	$	10.58	123,174
	Touchstone VST Bond Fund	1,623,437		—		1,623,437		9.41		to	9.74		170,865
	Touchstone VST Common Stock Fund	9,363,796		1		9,363,797		16.58		to	17.15		559,226
Non-Affiliated:
	Alger Large Cap Growth Fund	845,679		(7)		845,672		32.01		to	38.44		25,012
	Alger Small Cap Growth Fund	396,215		3		396,218		27.35		to	32.85		13,754
	Invesco V.I. American Franchise Fund	606,280		(4)		606,276		34.52		to	37.67		17,152
	Invesco V.I. Government Securities Fund	50,976		(1)		50,975		14.59		to	17.52		3,326
	PIMCO VIT Long-Term U.S. Government Portfolio	412,916		9		412,925		23.28		to	27.96		16,685
Non-Affiliated Initial Class:
	MFS Growth Fund	798,147		2		798,149		45.35		to	54.47		16,693
	MFS Investors Trust Fund	443,344		(1)		443,343		33.11		to	39.76		12,757
Non-Affiliated Class 1A:
	Putnam VT Government Money Market Fund	213,564		—		213,564		9.64		to	10.29		21,770
Non-Affiliated Class 1B:
	Putnam VT International Equity Fund	1,031,384		(6)		1,031,378		24.57		to	28.66		39,952
Non-Affiliated Class A:
	DWS Equity 500 Index VIP Fund	350,070		2		350,072		34.48		to	41.11		9,591

	See accompanying notes



(a) New Underlying Fund. See Note 1.						3

Western-Southern Life Assurance Company Separate Account 1

Statement of Operations

Year Ended December 31, 2023


		Investment Income		Expenses				Realized and unrealized gain (loss) on investments
Subaccount		Reinvested dividends		Mortality and expense risk, and administrative charge		Net investment income (loss)		Realized gain (loss) on sale of investments		Realized gain distributions		Change in unrealized appreciation (depreciation) during the period		Net unrealized and realized gain (loss) on investments		Net increase (decrease) in net assets resulting from operations
Affiliated:
	Touchstone VST Balanced Fund	$	15,944	$	17,377	$	(1,433)	$	(61,378)	$	—	$	261,565	$	200,187	$	198,754
	Touchstone VST Bond Fund	78,796		21,721		57,075		(19,439)		—		29,182		9,743		66,818
	Touchstone VST Common Stock Fund	55,499		119,699		(64,200)		199,606		570,782		1,249,746		2,020,134		1,955,934
Non-Affiliated:
	Alger Large Cap Growth Fund	—		10,671		(10,671)		2,166		—		225,618		227,784		217,113
	Alger Small Cap Growth Fund	—		4,980		(4,980)		(13,384)		—		70,681		57,297		52,317
	Invesco V.I. American Franchise Fund	—		7,621		(7,621)		5,914		12,340		174,746		193,000		185,379
	Invesco V.I. Government Securities Fund	1,024		649		375		(99)		—		1,317		1,218		1,593
	PIMCO VIT Long-Term U.S. Government Portfolio	9,288		5,085		4,203		(6,633)		—		12,941		6,308		10,511
Non-Affiliated Initial Class:
	MFS Growth Fund	—		10,222		(10,222)		64,416		58,874		109,658		232,948		222,726
	MFS Investors Trust Fund	3,077		5,765		(2,688)		14,411		23,684		32,564		70,659		67,971
Non-Affiliated Class 1A:
	Putnam VT Government Money Market Fund	10,474		3,112		7,362		—		—		1		1		7,363
Non-Affiliated Class 1B:
	Putnam VT International Equity Fund	360		13,194		(12,834)		34,775		—		135,501		170,276		157,442
Non-Affiliated Class A:
	DWS Equity 500 Index VIP Fund	4,379		4,198		181		3,815		16,528		49,260		69,603		69,784




	See accompanying notes



(a) New Underlying Fund. See Note 1.						4

Western-Southern Life Assurance Company Separate Account 1

Statements of Changes in Net Assets

Year Ended December 31, 2023


		Increase (decrease) in net assets from operations								Increase (decrease) in net assets from contract related transactions																Unit Transactions
Subaccount		Net investment income (loss)		Net realized gain (loss)		Change in net unrealized appreciation (depreciation) during the period		Net increase (decrease) in net assets resulting from operations		Contributions from contract holders		Contract terminations and benefits		Net transfers among investment options		Contract Maintenance Charges		Net increase (decrease) in net assets from contract related transactions		Net increase (decrease) in net assets		Net Assets, beginning of period		Net Assets, end of period		Units purchased	Units redeemed	Increase (decrease) in units
Affiliated:
	Touchstone VST Balanced Fund	$	(1,433)	$	(61,378)	$	261,565	$	198,754	$	8,694	$	(156,123)	$	2,495	$	(750)	$	(145,684)	$	53,070	$	1,230,002	$	1,283,072	1,417	(16,366)	(14,949)
	Touchstone VST Bond Fund	57,075		(19,439)		29,182		66,818		26,580		(145,086)		56,628		(973)		(62,851)		3,967		1,619,470		1,623,437		8,306	(15,202)	(6,896)
	Touchstone VST Common Stock Fund	(64,200)		770,388		1,249,746		1,955,934		53,076		(832,840)		(15,428)		(4,820)		(800,012)		1,155,922		8,207,875		9,363,797		2,740	(54,666)	(51,926)
Non-Affiliated:
	Alger Large Cap Growth Fund	(10,671)		2,166		225,618		217,113		4,863		(125,477)		21,496		(492)		(99,610)		117,503		728,169		845,672		422	(3,619)	(3,197)
	Alger Small Cap Growth Fund	(4,980)		(13,384)		70,681		52,317		2,220		(53,258)		38,395		(200)		(12,843)		39,474		356,744		396,218		783	(1,267)	(484)
	Invesco V.I. American Franchise Fund	(7,621)		18,254		174,746		185,379		6,153		(88,291)		6,657		(331)		(75,812)		109,567		496,709		606,276		404	(2,792)	(2,388)
	Invesco V.I. Government Securities Fund	375		(99)		1,317		1,593		1,157		(268)		2,433		(25)		3,297		4,890		46,085		50,975		244	(22)	222
	PIMCO VIT Long-Term U.S. Government Portfolio	4,203		(6,633)		12,941		10,511		5,434		(7,945)		29,932		(241)		27,180		37,691		375,234		412,925		1,455	(338)	1,117
Non-Affiliated Initial Class:
	MFS Growth Fund	(10,222)		123,290		109,658		222,726		1,957		(148,547)		26,843		(420)		(120,167)		102,559		695,590		798,149		65	(2,887)	(2,822)
	MFS Investors Trust Fund	(2,688)		38,095		32,564		67,971		3,311		(46,379)		(672)		(303)		(44,043)		23,928		419,415		443,343		181	(1,589)	(1,408)
Non-Affiliated Class 1A:
	Putnam VT Government Money Market Fund	7,362		—		1		7,363		4,055		(39,419)		580		(194)		(34,978)		(27,615)		241,179		213,564		634	(4,260)	(3,626)
Non-Affiliated Class 1B:
	Putnam VT International Equity Fund	(12,834)		34,775		135,501		157,442		13,285		(98,154)		(14,094)		(610)		(99,573)		57,869		973,509		1,031,378		999	(5,190)	(4,191)
Non-Affiliated Class A:
	DWS Equity 500 Index VIP Fund	181		20,343		49,260		69,784		397		(9,120)		(5,198)		(212)		(14,133)		55,651		294,421		350,072		43	(484)	(441)






	See accompanying notes


(a) New Underlying Fund. See Note 1.						5

Western-Southern Life Assurance Company Separate Account 1

Statements of Changes in Net Assets

Year Ended December 31, 2022


	Increase (decrease) in net assets from operations				Increase (decrease) in net assets from contract related transactions								Unit Transactions
Subaccount	Net investment income (loss)	Net realized gain (loss)	Change in net unrealized appreciation (depreciation) during the period	Net increase (decrease) in net assets resulting from operations	Contributions from contract holders	Contract terminations and benefits	Net transfers among investment options	Contract Maintenance Charges	Net increase (decrease) in net assets from contract related transactions	Net increase (decrease) in net assets	Net Assets, beginning of period	Net Assets, end of period	Units purchased	Units redeemed	Increase (decrease) in units
Affiliated:
Touchstone VST Balanced Fund	$(11,833)	$297,264	$(548,366)	$(262,935)	$10,698	$(81,180)	$(14,067)	$(856)	$(85,405)	$(348,340)	$1,578,342	$1,230,002	2,996	(11,834)	(8,838)
Touchstone VST Bond Fund	7,483	2,991	(311,451)	(300,977)	28,675	(101,663)	(59,513)	(1,090)	(133,591)	(434,568)	2,054,038	1,619,470	6,942	(20,719)	(13,777)
Touchstone VST Common Stock Fund	(99,300)	1,369,237	(3,231,589)	(1,961,652)	58,149	(354,491)	(125,700)	(5,115)	(427,157)	(2,388,809)	10,596,684	8,207,875	10,715	(39,655)	(28,940)
Non-Affiliated:
Alger Large Cap Growth Fund	(12,230)	36,753	(518,317)	(493,794)	8,127	(61,234)	22,464	(570)	(31,213)	(525,007)	1,253,176	728,169	2,383	(3,609)	(1,226)
Alger Small Cap Growth Fund	(5,701)	62,063	(279,812)	(223,450)	5,544	(15,949)	36,760	(231)	26,124	(197,326)	554,070	356,744	1,668	(963)	705
Invesco V.I. American Franchise Fund	(8,107)	185,196	(424,124)	(247,035)	6,627	(52,227)	7,402	(353)	(38,551)	(285,586)	782,295	496,709	968	(2,339)	(1,371)
Invesco V.I. Government Securities Fund	309	(346)	(6,088)	(6,125)	1,152	(2,122)	(1,907)	(27)	(2,904)	(9,029)	55,114	46,085	174	(355)	(181)
PIMCO VIT Long-Term U.S. Government Portfolio	3,265	(6,123)	(162,769)	(165,627)	4,860	(9,923)	(49,048)	(276)	(54,387)	(220,014)	595,248	375,234	668	(2,448)	(1,780)
Non-Affiliated Initial Class:
MFS Growth Fund	(11,008)	150,378	(493,474)	(354,104)	2,215	(89,950)	6,232	(441)	(81,944)	(436,048)	1,131,638	695,590	381	(2,301)	(1,920)
MFS Investors Trust Fund	(3,486)	90,879	(194,615)	(107,222)	3,497	(74,359)	(21,423)	(340)	(92,625)	(199,847)	619,262	419,415	181	(3,253)	(3,072)
Non-Affiliated Class 1A:
Putnam VT Government Money Market Fund	(285)	—	—	(285)	3,979	(18,211)	(9,320)	(226)	(23,778)	(24,063)	265,242	241,179	872	(3,388)	(2,516)
Non-Affiliated Class 1B:
Putnam VT International Equity Fund	2,546	135,438	(334,355)	(196,371)	17,006	(63,560)	(8,575)	(638)	(55,767)	(252,138)	1,225,647	973,509	2,201	(4,799)	(2,598)
Non-Affiliated Class A:
DWS Equity 500 Index VIP Fund	(100)	23,986	(92,729)	(68,843)	2,992	(30,110)	36,007	(217)	8,672	(60,171)	354,592	294,421	1,349	(1,046)	303






See accompanying notes


(a) New Underlying Fund. See Note 1.						6

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements

December 31, 2023

1. Organization and Nature of Operations

Western-Southern Life Assurance Company Separate Account 1 (the “Separate Account”) is a unit investment trust registered under the Investment Company Act of 1940 (the “1940 Act”), established by the Western-Southern Life Assurance Company (the “Company”), a life insurance company, that is a wholly-owned subsidiary of The Western and Southern Life Insurance Company. The Separate Account is a funding vehicle for individual variable annuity contracts, and commenced operations on February 23, 1995.

The contract holder’s account value in a subaccount will vary depending on the performance of the corresponding investment portfolio (“Underlying Fund”). The Separate Account currently has 13 subaccounts available. The investment objective of each subaccount is to invest in the corresponding Underlying Fund. Refer to each Underlying Fund’s prospectus for a description of investment objectives.

Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company’s other assets and liabilities. The portion of the Separate Account’s assets applicable to contract holders’ accounts is not chargeable with liabilities arising out of any other business the Company may conduct.

Each subaccount invests all its investible assets in shares of the Underlying Funds listed below:


The Alger Portfolios						Pimco Variable Insurance Trust
Non-Affiliated:						Non-Affiliated:
Alger Large Cap Growth Fund						PIMCO VIT Long-Term U.S. Government Portfolio
Alger Small Cap Growth Fund

DWS Investments VIT Fund						Putnam Variable Trust
Non-Affiliated Class A:						Non-Affiliated Class 1A:
DWS Equity 500 Index VIP Fund						Putnam VT Government Money Market Fund
						Non-Affiliated Class 1B:
						Putnam VT International Equity Fund
Invesco Variable Insurance Funds
Non-Affiliated:						Touchstone Variable Series Trust
Invesco V.I. American Franchise Fund						Affiliated Service Class:
Invesco V.I. Government Securities Fund						Touchstone VST Balanced Fund
						Touchstone VST Bond Fund
Massachusetts Financial Service Variable Insurance Trust						Touchstone VST Common Stock Fund
Non-Affiliated Initial Class:
MFS Growth Fund
MFS Investors Trust Fund

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

2. Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”).

Investments

Investments in shares of the Underlying Funds are valued at fair value as determined by the closing net asset value per share on December 31, 2023. The difference between cost and fair value is reflected as unrealized appreciation or depreciation of investments. Share transactions are recorded on the trade date. Realized gains and losses on sales of Underlying Funds’ shares are determined based on the identified cost basis.

Capital gain distributions are included in the realized gain distributions line on the Statements of Operations. Dividends are included in the reinvested dividends line on the Statements of Operations. Dividends and capital gain distributions are recorded on the ex-dividend date. Dividends and capital gain distributions from the Underlying Funds’ are reinvested in the respective Underlying Funds and are reflected in the unit values of the subaccounts.

A contract owner may also allocate funds to the Fixed Account, which is part of the general account of the Company. Upon annuitization, the contract assets are transferred to the general account of the Company. Accordingly, contract reserves are recorded by the Company.

The Separate Account’s investments are held at fair value. Fair value is the price that the Separate Account would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is established using a three-level hierarchy based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assessment regarding the assumptions market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The Separate Account’s investments are assigned a level based upon the observability of the inputs that are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

•Level 1 - inputs to the valuation methodology are quoted prices in active markets.

•Level 2 - inputs to the valuation methodology are observable, directly or indirectly.

•Level 3 - inputs to the valuation methodology are unobservable and reflect assumptions on the part of the reporting entity.

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

2. Significant Accounting Policies (continued)

The Separate Account’s investments are valued as Level 1. There were no transfers between levels 1, 2, and 3 during the year. The Separate Account’s policy is to recognize the transfers in and transfers out of levels at the beginning of the annual reporting period.

Unit Value

Unit values for the subaccounts are computed at the end of each business day. The unit value is equal to the unit value for the preceding business day multiplied by a net investment factor. This net investment factor is determined based on the net asset value of the Underlying Fund, reinvested dividends and capital gains, and the daily asset charge for the mortality and expense risk and administrative charges, as applicable.

Taxes

Operations of the Separate Account are included in the income tax return of the Company, which is taxed as a life insurance company under the Internal Revenue Code (“IRC”). The Separate Account is not taxed as a regulated investment company under Subchapter M of the IRC. Under the provisions of the policies, the Company has the right to charge the Separate Account for federal income tax attributable to the Separate Account. No charge is currently being made against the Separate account for such tax since, under current tax law, the Company pays no tax on investment income and capital gains reflected in variable annuity policy reserves. However, the Company retains the right to charge for any federal income tax incurred, which is attributable to the Separate Account if the law is changed. Charges for state and local taxes, if any, attributable to the Separate Account may also be made.

Use of Estimates

The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Subsequent Events

Management has evaluated subsequent events though the issuance of these financial statements and

determined that no additional disclosures are required.

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

3. Purchases and Sales of Investments

The aggregate cost of Underlying Fund shares purchased and proceeds from Underlying Fund shares sold during the period ended December 31, 2023 and the cost of shares held at December 31, 2023, for each subaccount were as follows:


	Subaccount	Purchases		Sales		Cost

Touchstone Variable Series Trust
	Touchstone VST Balanced Fund	$	29,411	$	(176,528)	$	1,482,716
	Touchstone VST Bond Fund	155,434		(161,211)		1,858,147
	Touchstone VST Common Stock Fund	667,703		(961,136)		7,795,045
The Alger Portfolios
	Alger Large Cap Growth Fund	12,100		(122,379)		927,441
	Alger Small Cap Growth Fund	21,181		(39,005)		555,840
Invesco Variable Insurance Funds
	Invesco V.I. American Franchise Fund	23,850		(94,943)		606,518
	Invesco V.I. Government Securities Fund	4,653		(980)		56,881
Pimco Variable Insurance Trust
	PIMCO VIT Long-Term U.S. Government Portfolio	44,606		(13,223)		603,117
Massachusetts Financial Service Variable Insurance Trust
	MFS Growth Fund	61,529		(133,045)		701,823
	MFS Investors Trust Fund	32,455		(55,500)		373,897
Putnam Variable Trust - Class IA
	Putnam VT Government Money Market Fund	16,579		(44,193)		213,563
Putnam Variable Trust - Class IB
	Putnam VT International Equity Fund	24,852		(137,258)		912,181
DWS Investments VIT Funds
	DWS Equity 500 Index VIP Fund	22,303		(19,725)		276,295


						10

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

4. Expenses and Related Party Transactions

The charges listed below are the annual rates deducted as a daily charge, thus affecting the unit values to compensate the Company for administrative expenses and for the assumption of mortality and expense risks.

•Touchstone Gold Variable Annuity - 1.35%

•Touchstone Advisor Variable Annuity - 0.80%

•Touchstone Select Variable Annuity

◦1.35% for the Standard Death Benefit

◦1.45% for the Annual Step Up Death Benefit

◦1.55% for the 6% Accumulating Death Benefit

The Company also deducts an annual contract maintenance charge from the contract value on each contract anniversary and upon any full surrender as indicated below. The annual fee is taken from the contract’s account value by redeeming units.

•Touchstone Gold Variable Annuity - $35 for the first ten contract years and the lesser of (a) $35 and (b) 0.17% of the contract value after the tenth contract anniversary.

•Touchstone Advisor - $35

•Touchstone Select Variable Annuity - $40 for the first ten contract years and the lesser of (a) $40 or (b) 0.14% of the contract value after the tenth Contract Anniversary. If the contract value is less than $50,000, the charge is waived.

Since no deduction for a sales charge is made from the payments received from contract owners, a surrender charge is imposed by the Company on certain surrenders and partial withdrawals to cover expenses relating to promotion, sale and distribution of the contracts. The surrender charge is assessed on each redemption, except for certain amounts excluded from charges under the contract, by redeeming units. For the Touchstone Gold Variable Annuity, this charge ranges from 7% to 0% depending on the number of years since the payment was received. For the Touchstone Select Variable Annuity, this charge ranges from 8% to 0%, depending on the number of years since the payment was received. Touchstone Advisor has no surrender charge.

Touchstone Advisors Inc., which is affiliated with the Company, advises each of the Touchstone Variable Series Trust offered through the Company’s variable products.

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

5. Financial Highlights

A summary of net assets, unit values and units outstanding for variable annuity contracts, investment income and expense ratios, excluding expenses of the underlying funds and total returns are presented for each period ended December 31. The ranges of lowest to highest unit values and total return are based on the product groupings that represent lowest and highest expense ratio amounts. The first unit value presented in the range of each subaccount within the table corresponds to the highest expense ratio for each subaccount presented within the table. The first total return presented in the range of each subaccount within the table corresponds to the highest expense ratio for each subaccount presented within the table. Therefore, some individual contract ratios are not within the ranges presented.

** Investment income ratio amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the Underlying Fund net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense risk and administrative charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the Underlying Fund in which the subaccounts invest. Therefore, the Investment Income Ratio is greatly affected by the amount of subaccount assets that are present on specific dividend record dates.

*** Expense ratio amounts represent the annualized contract expenses of the Separate Account, consisting primarily of mortality and expense risk and administrative charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded.

**** Total return amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, which includes expenses assessed through the reduction of unit values. The ratio does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period.

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

5. Financial Highlights (continued)


For Year Ended 2023
Subaccount	Units (000s)	Unit Value Range			Net Assets (000s)		Investment Income Ratio (**)	Expense Ratio (***)	Total Return (****)
Affiliated:
Touchstone VST Balanced Fund	123	$10.36	to	$10.58	$	1,283	1.25%	0.80% to 1.55%	16.80	%	to	17.69%
Touchstone VST Bond Fund	171	9.41	to	9.74	1,623		4.89%	0.80% to 1.55%	4.09	%	to	4.96%
Touchstone VST Common Stock Fund	559	16.58	to	17.15	9,364		0.62%	0.80% to 1.55%	24.38	%	to	25.37%
Non-Affiliated:
Alger Large Cap Growth Fund	25	32.01	to	38.44	846		—%	0.80% to 1.55%	30.60	%	to	31.60%
Alger Small Cap Growth Fund	14	27.35	to	32.85	396		—%	0.80% to 1.55%	14.68	%	to	15.55%
Invesco V.I. American Franchise Fund	17	34.52	to	37.67	606		—%	0.80% to 1.55%	38.75	%	to	39.83%
Invesco V.I. Government Securities Fund	3	14.59	to	17.52	51		2.13%	0.80% to 1.55%	3.04	%	to	3.79%
PIMCO VIT Long-Term U.S. Government Portfolio	17	23.28	to	27.96	413		2.38%	0.80% to 1.55%	2.37	%	to	3.14%
Non-Affiliated Initial Class:
MFS Growth Fund	17	45.35	to	54.47	798		—%	0.80% to 1.55%	33.78	%	to	34.79%
MFS Investors Trust Fund	13	33.11	to	39.76	443		0.72%	0.80% to 1.55%	17.16	%	to	18.02%
Non-Affiliated Class 1A:
Putnam VT Government Money Market Fund	22	9.64	to	10.29	214		4.58%	0.80% to 1.55%	3.10	%	to	3.83%
Non-Affiliated Class 1B:
Putnam VT International Equity Fund	40	24.57	to	28.66	1,031		0.04%	0.80% to 1.55%	16.67	%	to	17.56%
Non-Affiliated Class A:
DWS Equity 500 Index VIP Fund	10	34.48	to	41.11	350		1.36%	0.80% to 1.55%	24.07	%	to	24.99%



						13

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

5. Financial Highlights (continued)


For Year Ended 2022
Subaccount	Units (000s)	Unit Value Range			Net Assets (000s)		Investment Income Ratio (**)	Expense Ratio (***)	Total Return (****)
Affiliated:
Touchstone VST Balanced Fund	138	$8.87	to	$8.99	$	1,230	0.47%	0.80% to 1.55%	(17.26)	%	to	(16.60)%
Touchstone VST Bond Fund	178	9.04	to	9.28	1,619		1.78%	0.80% to 1.55%	(15.28)	%	to	(14.63)%
Touchstone VST Common Stock Fund	611	13.33	to	13.68	8,208		0.23%	0.80% to 1.55%	(19.06)	%	to	(18.47)%
Non-Affiliated:
Alger Large Cap Growth Fund	28	24.51	to	29.21	728		—%	0.80% to 1.55%	(39.59)	%	to	(39.15)%
Alger Small Cap Growth Fund	14	23.85	to	28.43	357		—%	0.80% to 1.55%	(38.96)	%	to	(38.50)%
Invesco V.I. American Franchise Fund	20	24.88	to	26.94	497		—%	0.80% to 1.55%	(32.19)	%	to	(31.68)%
Invesco V.I. Government Securities Fund	3	14.16	to	16.88	46		1.99%	0.80% to 1.55%	(11.72)	%	to	(11.02)%
PIMCO VIT Long-Term U.S. Government Portfolio	16	22.74	to	27.11	375		2.03%	0.80% to 1.55%	(29.99)	%	to	(29.44)%
Non-Affiliated Initial Class:
MFS Growth Fund	20	33.90	to	40.41	696		—%	0.80% to 1.55%	(32.70)	%	to	(32.19)%
MFS Investors Trust Fund	14	28.26	to	33.69	419		0.67%	0.80% to 1.55%	(17.78)	%	to	(17.14)%
Non-Affiliated Class 1A:
Putnam VT Government Money Market Fund	25	9.35	to	9.91	241		1.25%	0.80% to 1.55%	(0.32)	%	to	0.51%
Non-Affiliated Class 1B:
Putnam VT International Equity Fund	44	21.06	to	24.38	974		1.57%	0.80% to 1.55%	(16.10)	%	to	(15.46)%
Non-Affiliated Class A:
DWS Equity 500 Index VIP Fund	10	27.79	to	32.89	294		1.28%	0.80% to 1.55%	(19.61)	%	to	(18.99)%



						14

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

5. Financial Highlights (continued)


For Year Ended 2021
Subaccount	Units (000s)	Unit Value Range			Net Assets (000s)		Investment Income Ratio (**)	Expense Ratio (***)	Total Return (****)
Affiliated:
Touchstone VST Balanced Fund (April 17, 2021)	147	$10.72	to	$10.78	$	1,578	0.31%	0.80% to 1.55%	7.20	%	to	7.80%
Touchstone VST Bond Fund	192	10.67	to	10.87	2,054		2.37%	0.80% to 1.55%	(2.82)	%	to	(2.07)%
Touchstone VST Common Stock Fund	640	16.47	to	16.78	10,597		0.39%	0.80% to 1.55%	25.63	%	to	26.55%
Non-Affiliated:
Alger Large Cap Growth Fund	29	40.57	to	48.00	1,253		—%	0.80% to 1.55%	10.09	%	to	10.96%
Alger Small Cap Growth Fund	14	39.07	to	46.23	554		—%	0.80% to 1.55%	(7.53)	%	to	(6.81)%
Invesco V.I. American Franchise Fund	21	36.69	to	39.43	782		—%	0.80% to 1.55%	10.21	%	to	11.04%
Invesco V.I. Government Securities Fund	3	16.04	to	18.97	55		2.03%	0.80% to 1.55%	(3.78)	%	to	(3.07)%
PIMCO VIT Long-Term U.S. Government Portfolio	17	32.48	to	38.42	595		1.57%	0.80% to 1.55%	(6.26)	%	to	(5.56)%
Non-Affiliated Initial Class:
MFS Growth Fund	21	50.37	to	59.59	1,132		—%	0.80% to 1.55%	21.61	%	to	22.54%
MFS Investors Trust Fund	17	34.37	to	40.66	619		0.58%	0.80% to 1.55%	24.85	%	to	25.80%
Non-Affiliated Class 1A:
Putnam VT Government Money Market Fund	28	9.38	to	9.86	265		0.01%	0.80% to 1.55%	(1.57)	%	to	(0.80)%
Non-Affiliated Class 1B:
Putnam VT International Equity Fund	47	25.10	to	28.84	1,226		1.22%	0.80% to 1.55%	7.13	%	to	7.97%
Non-Affiliated Class A:
DWS Equity 500 Index VIP Fund	10	34.57	to	40.60	355		1.39%	0.80% to 1.55%	26.40	%	to	27.35%



						15

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

5. Financial Highlights (continued)


For Year Ended 2020
Subaccount	Units (000s)	Unit Value Range				Net Assets (000s)		Investment Income Ratio (**)	Expense Ratio (***)	Total Return (****)
Affiliated:
Touchstone VST Bond Fund	185	$	10.98	to	$11.10	$	2,041	1.70%	0.80% to 1.55%	7.96	%	to	8.72%
Touchstone VST Common Stock Fund	740	13.11		to	13.26	9,729		0.61%	0.80% to 1.55%	21.61	%	to	22.55%
Non-Affiliated:
Alger Large Cap Growth Fund	34	36.85		to	43.26	1,296		0.18%	0.80% to 1.55%	64.44	%	to	65.68%
Alger Small Cap Growth Fund	14	42.25		to	49.61	636		1.05%	0.80% to 1.55%	64.59	%	to	65.81%
Invesco V.I. American Franchise Fund	24	33.29		to	35.51	817		0.07%	0.80% to 1.55%	40.17	%	to	41.19%
Invesco V.I. Government Securities Fund	5	16.67		to	19.57	88		2.43%	0.80% to 1.55%	4.65	%	to	5.44%
PIMCO VIT Long-Term U.S. Government Portfolio	17	34.65		to	40.68	636		1.69%	0.80% to 1.55%	15.58	%	to	16.46%
Non-Affiliated Initial Class:
MFS Growth Fund	25	41.42		to	48.63	1,090		—%	0.80% to 1.55%	29.84	%	to	30.83%
MFS Investors Trust Fund	22	27.53		to	32.32	632		0.64%	0.80% to 1.55%	12.09	%	to	12.93%
Non-Affiliated Class 1A:
Putnam VT Government Money Market Fund	37	9.53		to	9.94	359		0.25%	0.80% to 1.55%	(1.24)	%	to	(0.60)%
Non-Affiliated Class 1B:
Putnam VT International Equity Fund	55	23.43		to	26.71	1,344		1.61%	0.80% to 1.55%	10.36	%	to	11.20%
Non-Affiliated Class A:
DWS Equity 500 Index VIP Fund	12	27.35		to	31.88	357		1.66%	0.80% to 1.55%	16.28	%	to	17.16%



						16

Western-Southern Life Assurance Company Separate Account 1

Notes to Financial Statements (continued)

5. Financial Highlights (continued)


For Year Ended 2019
Subaccount	Units (000s)	Unit Value Range				Net Assets (000s)		Investment Income Ratio (**)	Expense Ratio (***)	Total Return (****)
Affiliated:
Touchstone VST Bond Fund (July 12, 2019)	199	$	10.17	to	$10.21	$	2,029	1.26%	0.80% to 1.55%	1.70	%	to	2.10%
Touchstone VST Common Stock Fund (July 12, 2019)	819	10.78		to	10.82	8,841		0.55%	0.80% to 1.55%	7.80	%	to	8.20%
Non-Affiliated:
Alger Large Cap Growth Fund	38	22.41		to	26.11	882		—%	0.80% to 1.55%	25.48	%	to	26.44%
Alger Small Cap Growth Fund	16	25.67		to	29.92	437		—%	0.80% to 1.55%	27.33	%	to	28.30%
Invesco V.I. American Franchise Fund	26	23.75		to	25.15	626		—%	0.80% to 1.55%	34.64	%	to	35.65%
Invesco V.I. Government Securities Fund	5	15.93		to	18.56	85		2.13%	0.80% to 1.55%	4.46	%	to	5.22%
PIMCO VIT Long-Term U.S. Government Portfolio	18	29.98		to	34.93	575		2.08%	0.80% to 1.55%	11.62	%	to	12.42%
Non-Affiliated Initial Class:
MFS Growth Fund	26	31.90		to	37.17	859		—%	0.80% to 1.55%	36.03	%	to	37.06%
MFS Investors Trust Fund	22	24.56		to	28.62	572		0.68%	0.80% to 1.55%	29.60	%	to	30.57%
Non-Affiliated Class 1A:
Putnam VT Government Money Market Fund	40	9.65		to	10.00	393		1.82%	0.80% to 1.55%	0.21	%	to	1.01%
Non-Affiliated Class 1B:
Putnam VT International Equity Fund	55	21.23		to	24.02	1,209		1.41%	0.80% to 1.55%	23.29	%	to	24.13%
Non-Affiliated Class A:
DWS Equity 500 Index VIP Fund	13	23.52		to	27.21	314		2.03%	0.80% to 1.55%	29.16	%	to	30.13%



						17

STATUTORY-BASIS FINANCIAL STATEMENTS

Western-Southern Life Assurance Company

Years Ended December 31, 2023, 2022 and 2021

With Report of Independent Auditors

Western-Southern Life Assurance Company

Statutory-Basis Financial Statements

Years Ended December 31, 2023, 2022 and 2021

Contents


Report of Independent Auditors			1

Financial Statements

Balance Sheets (Statutory-Basis)			4
Statements of Operations (Statutory-Basis)			5
Statements of Changes in Capital and Surplus (Statutory-Basis)			6
Statements of Cash Flow (Statutory-Basis)			7
Notes to Financial Statements (Statutory-Basis)			8

Report of Independent Auditors

The Board of Directors

Western-Southern Life Assurance Company

Opinion

We have audited the statutory-basis financial statements of Western-Southern Life Assurance Company (the Company), which comprise the balance sheets as of December 31, 2023 and 2022, and the related statements of operations, changes in capital and surplus and cash flows for each of the three years ended December 31, 2023, and the related notes to the financial statements (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for the three years ended December 31, 2023, on the basis of accounting described in Note 1.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles section of our report, the financial statements do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company at December 31, 2023 and 2022, or the results of its operations or its cash flows for the three years ended December 31, 2023.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 to the financial statements, the Company prepared these financial statements using accounting practices prescribed or permitted by the Ohio Department of Insurance, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between these statutory accounting practices described

in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material and pervasive.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Ohio Department of Insurance. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young LLP

April 17, 2024

Western-Southern Life Assurance Company

Balance Sheets (Statutory-Basis)


	December 31
	2023		2022
Admitted assets	(In Thousands)
Cash and invested assets:
Debt securities	$	21,303,198	$	17,777,133
Preferred and common stocks	1,214,175		938,594
Investment in common stock of subsidiaries	2,832		2,809
Mortgage loans	4,839,834		3,760,559
Policy loans	22,438		23,350
Cash, cash equivalents and short-term investments	345,191		523,330
Receivable for securities	13,487		7,093
Derivatives	5,029		794
Receivable for collateral on derivatives	1,774		—
Securities lending reinvested collateral assets	63,603		45,424
Other invested assets	535,699		463,657
Total cash and invested assets	28,347,260		23,542,743

Investment income due and accrued	200,052		153,885
Premiums deferred and uncollected	19,143		19,085

Net deferred income tax asset	265,225		199,420

Other admitted assets	39,277		19,065
Separate account assets	2,067,455		1,429,234
Total admitted assets	$	30,938,412	$	25,363,432

Liabilities and capital and surplus
Liabilities:
Policy and contract liabilities:
Life and annuity reserves	$	23,579,949	$	19,394,847
Liability for deposit-type contracts	2,092,584		1,807,934
Policy and contract claims	18,122		20,615
Premiums received in advance	185		137
Total policy and contract liabilities	25,690,840		21,223,533

General expense due and accrued	11,392		237
Current federal income taxes payable to parent	38,198		4,560
Transfer to (from) separate accounts due and accrued, net	9,417		(8,522)
Asset valuation reserve	506,502		367,953
Interest maintenance reserve	—		308
Other liabilities	128,054		95,618


Derivatives	3,834		834
Payable for securities lending	542,557		472,454
Separate account liabilities	2,067,455		1,429,234
Total liabilities	28,998,249		23,586,209

Capital and surplus:
Common stock, $1 par value, authorized 10,000 shares, issued and outstanding 2,500 shares	2,500		2,500
Paid-in surplus	1,672,408		1,397,408
Accumulated surplus	265,255		377,315
Total capital and surplus	1,940,163		1,777,223
Total liabilities and capital and surplus	$	30,938,412	$	25,363,432

See accompanying notes.

Western-Southern Life Assurance Company

Statements of Operations (Statutory-Basis)


	Year Ended December 31
	2023		2022		2021
	(In Thousands)
Premiums and other revenues:
Premiums and annuity considerations	$	7,007,773	$	6,660,230	$	2,988,200
Net investment income	1,245,747		856,014		670,539
Considerations for supplementary contracts with life contingencies	196		600		851
Amortization of the interest maintenance reserve	(6,567)		(753)		984
Fees from management of separate accounts	855		879		971
Other revenues	1,993		1,355		1,766
Total premiums and other revenues	8,249,997		7,518,325		3,663,311

Benefits paid or provided:
Death benefits	124,138		133,355		152,078
Annuity benefits	589,551		488,520		451,745
Disability and accident and health benefits	1,669		1,814		1,966
Surrender benefits	2,276,960		1,222,883		743,147
Payments on supplementary contracts with life contingencies	2,798		2,788		2,926
Other benefits	2,504		2,402		2,115
Increase (decrease) in policy reserves and other policyholders’ funds	4,268,509		4,679,285		1,667,560
Total benefits paid or provided	7,266,129		6,531,047		3,021,537

Insurance expenses and other deductions:
Commissions	152,990		143,851		69,269

General expenses	157,285		124,604		117,226
Net transfers to (from) separate accounts	570,570		721,683		295,924
Other deductions	31,645		13,980		5,589
Total insurance expenses and other deductions	912,490		1,004,118		488,008

Gain (loss) from operations before federal income tax expense and net realized capital gains (losses)	71,378		(16,840)		153,766
Federal income tax expense (benefit), excluding tax on capital gains	112,756		65,520		42,131
Gain (loss) from operations before net realized capital gains (losses)	(41,378)		(82,360)		111,635
Net realized capital gains (losses) (excluding gains (losses) transferred to IMR and capital gains tax)	(21,227)		(2,189)		6,786
Net income (loss)	$	(62,605)	$	(84,549)	$	118,421

See accompanying notes.

Western-Southern Life Assurance Company

Statements of Changes in Capital and Surplus (Statutory-Basis)


	Common Stock		Paid-In Surplus		Accumulated Surplus		Total Capital and Surplus
	(In Thousands)

Balance, January 1, 2021	$	2,500	$	827,408	$	366,893	$	1,196,801
Net income (loss)	—		—		118,421		118,421
Change in net deferred income tax	—		—		30,146		30,146
Net change in unrealized gains (losses) on investments (net of deferred tax expense (benefit) of $19,201)	—		—		106,696		106,696
Net change in nonadmitted assets and related items	—		—		(72,985)		(72,985)
Change in asset valuation reserve	—		—		(88,176)		(88,176)
Change in valuation basis	—		—		(566)		(566)

Change in surplus in separate accounts	—		—		(1,041)		(1,041)
Capital contribution	—		250,000		—		250,000

Balance, December 31, 2021	2,500		1,077,408		459,388		1,539,296
Net income (loss)	—		—		(84,549)		(84,549)
Change in net deferred income tax	—		—		88,826		88,826
Net change in unrealized gains (losses) on investments (net of deferred tax expense (benefit) of ($18,180))	—		—		(68,473)		(68,473)
Net change in nonadmitted assets and related items	—		—		(11,700)		(11,700)
Change in asset valuation reserve	—		—		(5,239)		(5,239)


Change in surplus in separate accounts	—		—		(938)		(938)
Capital contribution	—		320,000		—		320,000

Balance, December 31, 2022	2,500		1,397,408		377,315		1,777,223
Net income (loss)	—		—		(62,605)		(62,605)
Change in net deferred income tax	—		—		112,298		112,298
Net change in unrealized gains (losses) on investments (net of deferred tax expense (benefit) of $38,090)	—		—		128,280		128,280
Net change in nonadmitted assets and related items	—		—		(197)		(197)
Change in asset valuation reserve	—		—		(138,549)		(138,549)
Change in valuation basis	—		—		(1,287)		(1,287)


Capital contribution	—		275,000		—		275,000
Dividends to stockholder	—		—		(150,000)		(150,000)
Balance, December 31, 2023	$	2,500	$	1,672,408	$	265,255	$	1,940,163

See accompanying notes.

Western-Southern Life Assurance Company

Statements of Cash Flow (Statutory-Basis)


	Year Ended December 31
	2023		2022		2021
	(In Thousands)
Operating activities
Premiums collected net of reinsurance	$	7,009,480	$	6,666,375	$	2,990,060
Net investment income received	1,201,965		845,843		686,190
Benefits paid	(3,087,132)		(1,902,612)		(1,367,531)
Net transfers from (to) separate accounts	(552,630)		(720,340)		(299,688)
Commissions and expense paid	(329,485)		(279,084)		(190,331)
Federal income taxes recovered (paid)	(75,085)		(75,994)		(61,237)
Other, net	975		4,512		2,474
Net cash from (for) operations	4,168,088		4,538,700		1,759,937

Investing activities
Proceeds from investments sold, matured or repaid:
Debt securities	2,647,335		3,190,392		2,857,435
Preferred and common stocks	77,692		129,449		124,357
Mortgage loans	250,298		339,535		84,482

Other invested assets	20,217		17,368		53,872
Net gains (losses) on cash, cash equivalents and short-term investments	1,088		5		(25)
Miscellaneous proceeds	4,151		802		57,250
Net proceeds from investments sold, matured or repaid	3,000,781		3,677,551		3,177,371

Cost of investments acquired:
Debt securities	(6,248,001)		(6,984,854)		(3,990,181)
Preferred and common stocks	(149,574)		(177,238)		(268,344)
Mortgage loans	(1,330,215)		(1,316,726)		(903,416)

Other invested assets	(63,588)		(55,902)		(78,842)
Miscellaneous applications	(21,730)		(26,125)		(30,664)
Total cost of investments acquired	(7,813,108)		(8,560,845)		(5,271,447)

Net change in policy and other loans	912		1,576		2,289
Net cash from (for) investments	(4,811,415)		(4,881,718)		(2,091,787)

Financing and miscellaneous activities
Capital and paid in surplus, less treasury stock	225,000		320,000		250,000
Net deposits on deposit-type contract funds and other insurance liabilities	284,650		42,853		187,066
Dividends paid to stockholder	(150,000)		—		—
Other cash provided (applied)	105,538		177,195		(54,930)
Net cash from (for) financing and miscellaneous sources	465,188		540,048		382,136

Net change in cash, cash equivalents and short-term investments	(178,139)		197,030		50,286
Cash, cash equivalents and short-term investments:
Beginning of year	523,330		326,300		276,014
End of year	$	345,191	$	523,330	$	326,300

Cash flow information for noncash transactions:
Capital contribution received from The Western and Southern Life Insurance Company in the form of common stock	$	50,000	$	—	$	—

See accompanying notes.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

1. Nature of Operations and Significant Accounting Policies

Western-Southern Life Assurance Company (the Company), a stock life insurance company, is a wholly-owned subsidiary of The Western and Southern Life Insurance Company (Western and Southern), a stock life insurance company. The Company is domiciled in Ohio.

The Company offers individual annuities and interest-sensitive life insurance products through Western and Southern agents and various financial institutions. The Company is licensed in 49 states and the District of Columbia. For the year ended December 31, 2023, approximately 40.6% of the gross premiums and annuity considerations for the Company were derived from California, Florida, Massachusetts, Ohio, and Texas.

State regulatory authorities have powers relating to granting and revoking licenses to transact business, the licensing of agents, the regulation of premium rates and trade practices, the form and content of insurance policies, the content of advertising material, financial statements and the nature of permitted practices.

Use of Estimates

The preparation of statutory-basis financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Basis of Presentation

The accompanying financial statements of the Company have been prepared in conformity with accounting practices prescribed or permitted by the Ohio Department of Insurance (the Department). The National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual (NAIC SAP or SSAP) has been adopted as a component of prescribed or permitted practices by the State of Ohio. These practices differ in some respects from U.S. generally accepted accounting principles (GAAP). The more significant differences follow.

Investments

Investments in debt securities and mandatory redeemable preferred stocks are reported at amortized cost or fair value based on the NAIC’s rating; for GAAP, such fixed maturity investments are designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments are reported at amortized cost, and the remaining fixed maturity investments are reported at fair value with unrealized holding gains and losses reported in the statement of operations for those designated as trading and as a separate component of other comprehensive income (loss) for those designated as available-for-sale.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

All single-class and multiclass mortgage-backed/asset-backed securities (e.g., CMOs) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using the retrospective method. The prospective method is used to determine amortized cost for securities that experience a decline that is deemed to be other-than-temporary. Securities that are in an unrealized loss position which the Company intends to sell, or does not have the intent and ability to hold until recovery, are written down to fair value as a realized loss. Securities that are in an unrealized loss position which the Company has the intent and ability to hold until recovery are written down to the extent the present value of expected future cash flows using the security’s effective yield is lower than the amortized cost. For GAAP purposes, all securities, purchased or retained, that represent beneficial interests in securitized assets (e.g., CMO, CBO, CDO, CLO, MBS and ABS securities), other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If it is determined that a decline in fair value is other-than-temporary, the cost basis of the security is written down to the extent the present value of expected future cash flows using the security’s effective yield is lower than the amortized cost. If high credit quality securities are adjusted, the retrospective method is used.

The Company monitors other investments to determine if there has been an other-than-temporary decline in fair value. Factors that management considers for each identified security include the following:

•The extent the fair value has been below the book/adjusted carrying value;

•The reasons for the decline in value;

•Specific credit issues related to the issuer and current economic conditions, including the current and future impact of any specific events;

•For structured investments (e.g., residential mortgage-backed securities, commercial mortgage-backed securities, asset-backed securities and other structured investments), factors such as overall deal structure and the Company’s position within the structure, quality of underlying collateral, delinquencies and defaults, loss severities, recoveries, prepayments and cumulative loss projections are considered;

•For all equity securities and other debt securities with credit-related declines in fair value, the Company’s intent and ability to hold the security long enough for it to recover its value to book/adjusted carrying value; and

•For all other debt securities with interest-related declines in fair value, the Company’s intent to sell the security before recovery of its book/adjusted carrying value.

If the decline is judged to be other-than-temporary, an impairment charge to fair value is recorded as a net realized capital loss in the period the determination is made. Under GAAP, if the decline is judged to be other-than-temporary because the Company has the intent to sell the debt security or is more likely than not to be required to sell the debt security before its anticipated recovery, an impairment charge to fair value is recorded as a net realized capital loss. If the decline is judged to be other-than-temporary because the Company does not expect to recover the entire amortized cost basis of the security due to expected credit losses, an impairment charge is recorded to net realized capital loss as the difference between amortized cost and the net present value of expected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.

Investments in real estate are reported net of required obligations rather than on a gross basis as for GAAP.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally debt securities and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity based on groupings of individual security sold in five-year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statements of operations on a pretax basis in the period that the assets giving rise to the gains or losses are sold.

The asset valuation reserve (AVR) provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in capital and surplus. AVR is not recognized for GAAP.

Subsidiaries

The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP.

Policy Acquisition Costs

The costs of acquiring and renewing business are expensed when incurred. Under GAAP, policy acquisition costs, related to traditional life insurance and certain long-duration accident and health insurance policies sold, to the extent recoverable from future policy revenues, would be deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves; for universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investments, mortality, and expense margins.

Nonadmitted Assets

Certain assets designated as “nonadmitted” (principally investments in unaudited subsidiaries and controlled and affiliated entities), and other assets not specifically identified as admitted assets within the NAIC’s Accounting Practices and Procedures Manual, are excluded from the accompanying balance sheets and are charged directly to accumulated surplus. Under GAAP, such assets are included in the balance sheets.

Premiums and Benefits

Revenues for universal life and annuity policies with mortality or morbidity risk, except for guaranteed interest and group annuity contracts, consist of the entire premium received, and benefits incurred represent the total of death benefits paid and the change in policy reserves. Premiums received for annuity policies without mortality or morbidity risk and for guaranteed interest and group annuity contracts are recorded using deposit accounting, and credited directly to an appropriate policy reserve account, without recognizing premium income. Under GAAP, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent the excess of benefits paid over the policy

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

account value and interest credited to the account values.

Benefit Reserves

Certain policy reserves are calculated using statutorily prescribed interest and mortality assumptions rather than on estimated expected experience or actual account balances as would be required under GAAP.

Reinsurance

A liability for reinsurance balances is required to be provided for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to those amounts are credited or charged directly to capital and surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.

Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP. Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with policy acquisition costs as required under GAAP.

Statutory accounting contains specific criteria related to risk transfer that must be met in order to qualify for reinsurance accounting. Under GAAP, the risk transfer criteria is less specific and focuses on whether or not the agreement exposes the company to the reasonable possibility of incurring a significant loss from the assumed insurance risk. Consequently, certain reinsurance contracts may qualify for reinsurance accounting for statutory purposes while not qualifying under GAAP. To the extent an agreement does not qualify for reinsurance accounting, deposit accounting is used.

Deferred Income Taxes

Deferred tax assets are recorded for the amount of gross deferred tax assets expected to be realized in future years, and a valuation allowance is established for deferred tax assets not meeting a more-likely-than-not realization threshold. Deferred tax assets are limited to 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse during a time frame corresponding with Internal Revenue Service (IRS) tax loss carryback provisions, not to exceed three years, including amounts established in accordance with the provision of SSAP No. 5R, plus 2) for entities that meet the required realization threshold in SSAP No. 101, the lesser of the remaining gross deferred tax assets expected to be realized within three years of the balance sheet date or 15% of capital and surplus excluding any net deferred tax assets, electronic data processing equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities. The remaining deferred tax assets are nonadmitted. Under GAAP, a deferred tax asset is recorded for the amount of gross deferred tax assets expected to be realized in all future years, and a valuation allowance is established for deferred tax assets not meeting a more-likely-than-not realization threshold.

Policyholder Dividends

Policyholder dividends are recognized when declared rather than over the term of the related policies.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Statements of Cash Flow

Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less. Under GAAP, the corresponding captions of cash and cash equivalents include cash balances and investments with initial maturities of three months or less.

Other significant statutory accounting practices follow.

Restricted Assets

The Company has assets pledged as collateral, or otherwise not exclusively under control of the Company, totaling $4,587.1 million and $3,084.8 million as of December 31, 2023 and 2022, respectively. These assets are primarily collateral pledged to the Federal Home Loan Bank (FHLB), collateral held in relation to the Company's securities lending program, and FHLB stock. These restricted assets are discussed in more detail in their relevant sections.

Investments

Debt securities, common stocks, preferred stocks, and short-term investments are stated at values prescribed by the NAIC, as follows:

Debt securities not backed by other loans are principally stated at amortized cost using the interest method.

Single-class and multiclass mortgage-backed/asset-backed securities are valued at amortized cost using the interest method including anticipated prepayments. Prepayment assumptions are obtained from Bloomberg and broker-dealer prepayment models or derived from empirical data and are based on the current interest rate and economic environment. The retrospective adjustment method is used to value all such securities except securities that are deemed to be other-than-temporarily impaired and securities that are principal-only or interest-only, which are valued using the prospective method.

Unaffiliated common stocks, other than FHLB stock, are unrestricted and reported at fair value utilizing publicly quoted prices from third-party pricing services and the related unrealized capital gains and losses are reported in capital and surplus along with any adjustment for federal income taxes. FHLB stock is carried at cost and is restricted. At December 31, 2023 and 2022, the Company owned $94.7 million and $92.9 million, of FHLB stock, respectively. The FHLB stock is held in conjunction with the issuance of deposit contracts to the FHLB. See Note 9 for further description.

Redeemable preferred stocks that have characteristics of debt securities and are rated as medium quality or better are reported or amortized cost. All other redeemable preferred stocks are reported at the lower of amortized cost or fair value. Perpetual preferred stocks are valued at fair value, not exceeding any currently effective call price, utilizing publicly quoted prices from third-party pricing services and the related unrealized capital gains and losses are reported in capital and surplus along with any adjustment for federal income taxes.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Short-term investments include investments with remaining maturities of one year or less at the date of acquisition and are principally stated at amortized cost, which approximates fair value.

Cash equivalents are short-term highly liquid investments with original maturities of three months or less and are principally stated at amortized cost, which approximates fair value.

The Company’s noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries’ equity is included in capital and surplus.

Joint ventures, partnerships, and limited liability companies are carried at the Company’s interest in the underlying audited GAAP equity of the investee. Undistributed earnings allocated to the Company are reported in the change in net unrealized capital gains or losses. Distributions from earnings of the investees are reported as net investment income when received. Because of the indirect nature of these investments, there is an inherent reduction in transparency and liquidity and increased complexity in valuing the underlying investments. As a result, these investments are actively managed by the Company’s management via detailed evaluation of the investment performance relative to risk.

Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines foreclosure is probable, the impairment is other than temporary; the mortgage loan is written down to realized value and a realized loss is recognized.

Policy loans are reported at unpaid principal balances.

Real estate held for the production of income is reported at depreciated cost net of related obligations. Real estate that the Company has the intent to sell is reported at the lower of depreciated cost or fair value, net of related obligations. Depreciation is computed by the straight-line method over the estimated useful life of the properties.

Property acquired in the satisfaction of debt is recorded at the lower of cost less accumulated depreciation or fair market value.

Debt securities and other loan interest are credited to income as it accrues. Dividends are recorded as income on ex-dividend dates. To the extent income is uncertain, due and accrued income is excluded and treated as nonadmitted through surplus.

Realized capital gains and losses are determined using the specific identification method.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Premiums

Life and accident and health premiums are recognized as revenue when due. Premiums for annuity policies with mortality and morbidity risk, except for guaranteed interest and group annuity contracts, are also recognized as revenue when due. Premiums received for annuity policies without mortality or morbidity risk and for guaranteed interest and group annuity contracts are recorded using deposit accounting.

Policy Reserves

Life and annuity reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed policy cash values or the amounts required by the Department. The Company waives deduction of deferred fractional premiums on the death of life and annuity policy insureds and does return any premium beyond the date of death. Surrender values on policies do not exceed the corresponding benefit reserves. Policies issued subject to multiple table substandard extra premiums are valued on the standard reserve basis, which recognizes the nonlevel incidence of the excess mortality costs. Additional reserves are established when the results of cash flow testing under various interest rate scenarios indicate the need for such reserves, or the net premiums exceed the gross premiums on any insurance in-force.

For policies issued in 2020 or after, life insurance reserves are developed using principle-based policyholder and asset assumptions with margins and floored at formulaic reserves based upon published tables using statutorily specified interest rates and valuation methods.

Formulaic policy reserves for life insurance and supplemental benefits are computed on the Commissioner’s Reserve Valuation Method. The following mortality tables and interest rates are used:


	Percentage of Reserves
	2023		2022
Life Insurance:
1958 Commissioners Standard Ordinary (CSO), 2-1/2% - 4-1/2%	0.9	%	1.2	%
1980 CSO, 4% - 6%	1.2		1.5
2001 CSO, 3-1/2% - 4-1/2%	4.3		5.0
2017 CSO, 3-1/2%	2.2		2.4
Other	0.1		—
Annuities:
Various, 2-1/4% - 8-1/4%	91.1		89.7
Supplemental benefits:
Various, 2-1/2% - 6%	0.2		0.2
	100.0	%	100.0	%

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The mean reserve method is used to adjust the calculated terminal reserve to the appropriate reserve at December 31. Mean reserves are determined by computing the regular mean reserve for the plan at the rated age and holding, in addition, one-half of the extra premium charge for the year. Policies issued after July 1 for substandard lives, are charged an extra premium plus the regular premium for the true age. Mean reserves are based on appropriate multiples of standard rates of mortality. An asset is recorded for deferred premiums net of loading to adjust the reserve for modal premium payments.

For substandard table ratings, mean reserves are based on 125% to 500% of standard mortality rates. For flat extra ratings, mean reserves are based on the standard or substandard mortality rates increased by 1 to 25 deaths per thousand.

As of December 31, 2023 and 2022, reserves of $7.3 million and $6.8 million respectively, were recorded on in-force amounts of $630.3 million and $645.8 million respectively, for which gross premiums are less than the net premiums according to the standard of valuation required by the Department.

Tabular interest, tabular less actual reserves released, and tabular cost have been determined by formula. Tabular interest on funds not involving life contingencies is calculated as one-hundredth of the product of such valuation rate of interest times the mean of the amount of funds subject to such valuation rate of interest held at the beginning and end of the year of valuation.

The Company's variable annuities are reserved under VM-21. Policies reserved under VM-21 are based on principle-based policyholder and asset assumptions with margins and floored at cash values.

Contracts issued that do not incorporate mortality or morbidity risk, such as guaranteed interest contracts, are accounted for as deposit-type contracts. Amounts received as payments and amounts withdrawn on deposit-type contracts are recorded directly to the liability for deposit-type contracts.

The establishment of appropriate reserves is an inherently uncertain process, and there can be no assurance that the ultimate liability will not exceed the Company’s policy reserves and have an adverse effect on the Company’s results of operations and financial condition. Due to the inherent uncertainty of estimating reserves, it has been necessary, and may over time continue to be necessary, to revise estimated future liabilities as reflected in the Company’s policy reserves.

Policy and Contract Claims

Policy and contract claims in process of settlement represent the estimated ultimate net cost of all reported and unreported claims incurred through December 31, 2023 and 2022. The reserves for unpaid claims are estimated using individual case-basis valuations and statistical analysis. These estimates are subject to the effects of trends in claim severity and frequency. Although considerable variability is inherent in such estimates, management believes that the reserves for claims are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known; such adjustments are included in current operations.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Reinsurance

Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

Securities Lending

At December 31, 2023, the Company had loaned various debt securities, preferred stocks and common stocks as part of a securities lending program administered by Deutsche Bank, of which the fair value was $527.6 million. At December 31, 2022, the Company had loaned various debt securities, preferred stocks and common stocks as part of a securities lending program administered by Deutsche Bank, of which the fair value was $460.1 million. The Company maintains effective control over all loaned securities and, therefore, continues to report such securities as invested assets in the balance sheets.

The Company requires at the initial transaction that the fair value of the cash collateral received must be equal to 102% of the fair value of the loaned securities. The Company monitors the ratio of the fair value of the collateral to loaned securities to ensure it does not fall below 100%. If the fair value of the collateral falls below 100% of the fair value of the securities loaned, the Company nonadmits that portion of the loaned security. At December 31, 2023 and 2022, the Company did not nonadmit any portion of the loaned securities.

The Company reports all collateral on the balance sheet with an offsetting liability recognized for the obligation to return the collateral. Collateral for the securities lending program is either managed by an affiliated agent of the Company or is managed by Deutsche Bank, an unaffiliated agent. Collateral managed by an affiliated agent, which approximated $475.0 million and $424.2 million at December 31, 2023 and 2022, respectively, is invested primarily in investment-grade debt securities and cash equivalents and is included in the applicable amount on the balance sheets because the funds are available for the general use of the Company. At December 31, 2023 and 2022, collateral managed by an unaffiliated agent, which approximated $63.6 million and $45.4 million, respectively, was invested in cash equivalents and was included in securities lending reinvested collateral assets on the balance sheet.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The aggregate collateral broken out by maturity date is as follows at December 31, 2023:


	Amortized Cost		Fair Value
	(In Thousands)

Open	$	—	$	—
30 days or less	277,288		277,284
31 to 60 days	22,997		22,997
61 to 90 days	6,175		6,174
91 to 120 days	2,658		2,661
121 to 180 days	13,035		13,052
181 to 365 days	16,090		16,077
1 to 2 years	58,667		58,740
2 to 3 years	—		—
Greater than 3 years	141,628		141,628
Total collateral	$	538,538	$	538,613

At December 31, 2023, all of the collateral held for the securities lending program was invested in tradable securities that could be sold and used to pay for the $542.6 million in collateral calls that could come due under a worst-case scenario where all collateral was called simultaneously.

The Company does not accept collateral that is not permitted by contract or custom to sell or repledge. The Company does not have any securities lending transactions that extend beyond one year from the reporting date.

Separate Accounts

Separate account assets and liabilities reported in the accompanying balance sheets represent funds that are separately administered, principally for group variable universal life, nonguaranteed variable annuity contracts, and guaranteed market value adjustment annuity contracts. Assets held in the separate account supporting variable annuities and group variable universal life are carried at fair value. Assets held in the separate account supporting market value adjusted annuities are carried at the general account basis. These separate account assets are considered legally insulated from the general account. Surrender charges collectible by the general account in the event of annuity contract surrenders are reported as a negative liability rather than an asset. Policy-related activity involving cash flow, such as premiums and benefits, are reported in the accompanying statements of operations in separate line items combined with related general account amounts. Investment income and interest credited on deposits held in guaranteed separate accounts are included in the accompanying statements of operations as a net amount included in net transfers to (from) separate accounts. The Company receives administrative fees for managing the nonguaranteed separate accounts and other fees for assuming mortality and certain expense risks.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Federal Income Taxes

Western and Southern files a consolidated income tax return with its eligible subsidiaries and affiliates, including the Company. The provision for federal income taxes is allocated to the Company using a separate return method based upon a written tax-sharing agreement. The benefits from losses of subsidiaries and affiliates, which are utilized in the consolidated return, will be retained by the subsidiaries and affiliates under the tax-sharing agreement. Western and Southern pays all federal income taxes due for all members of the consolidated group. The Company will then charge or reimburse, as the case may be, the members of the group an amount consistent with the method described in the tax-sharing agreement.

The Company includes interest and penalties in the federal income tax line on the statements of operations.

Accounting Changes

In 2023, the Statutory Accounting Principles Working Group issued INT 23-01 Net Negative (Disallowed) Interest Maintenance Reserve that allows for admission of IMR in a net asset position, which was previously non-admitted, if certain criteria are met. The amount allowed to be admitted is limited to 10% of an entity's adjusted capital and surplus. Having adopted this interpretation, the Company has admitted $17.3 million of general account IMR assets.

The Company had no significant accounting changes in 2022 or 2021.

Subsequent Events

The Company recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the balance sheet date. For nonrecognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Company is required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. Management has evaluated subsequent events through the issuance of these financial statements on April 17, 2024.

Note 4 describes an event that occurred subsequent to the December 31, 2023, financial statement date; the Company paid an ordinary dividend to Western and Southern.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

2. Investments

The book/adjusted carrying value and fair value of the Company’s investments in debt securities are summarized as follows:


	Book/ Adjusted Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2023:
U.S. Treasury securities and obligations of U.S. government corporation and agencies	$	109,862	$	580	$	(523)	$	109,919
Debt securities issued by states of the U.S. and political subdivisions of the states	83,560		1,872		(3,792)		81,640
Non-U.S. government securities	143,576		240		(21,962)		121,854
Corporate securities	10,016,585		151,456		(467,517)		9,700,524
Commercial mortgage-backed securities	2,961,077		9,439		(219,824)		2,750,692
Residential mortgage-backed securities	2,326,223		20,150		(143,693)		2,202,680
Asset-backed securities	5,662,315		16,699		(196,220)		5,482,794
Total	$	21,303,198	$	200,436	$	(1,053,531)	$	20,450,103


	Book/ Adjusted Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2022:
U.S. Treasury securities and obligations of U.S. government corporation and agencies	$	98,675	$	—	$	(2,320)	$	96,355
Debt securities issued by states of the U.S. and political subdivisions of the states	49,867		175		(4,827)		45,215
Non-U.S. government securities	170,772		1,171		(27,577)		144,366
Corporate securities	8,763,028		33,110		(760,308)		8,035,830
Commercial mortgage-backed securities	3,015,111		1,845		(221,906)		2,795,050
Residential mortgage-backed securities	1,664,885		11,612		(174,804)		1,501,693
Asset-backed securities	4,014,795		2,297		(327,821)		3,689,271
Total	$	17,777,133	$	50,210	$	(1,519,563)	$	16,307,780

At December 31, 2023 and 2022, the Company held unrated or below-investment-grade corporate debt securities with a book/adjusted carrying value of $2,145.5 million and $2,112.3 million, respectively, and an aggregate fair value of $2,046.2 million and $1,898.7 million, respectively. As of December 31, 2023

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

and 2022, such holdings amounted to 10.1% and 11.9%, respectively, of the Company’s investments in debt securities and 6.9% and 8.3%, respectively, of the Company’s total admitted assets. The Company performs periodic evaluations of the relative credit standing of the issuers of these debt securities. The Company considers these evaluations in its overall investment strategy.

Unrealized gains and losses on investments in unaffiliated common stocks, and common stocks of subsidiaries are reported directly in capital and surplus and do not affect net income. The unrealized gains and unrealized losses on, and the cost and fair value of those investments and preferred stocks are as follows:


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2023:
Preferred stocks	$	32,724	$	75	$	(606)	$	32,193

Common stocks, unaffiliated	$	710,297	$	390,305	$	(7,154)	$	1,093,448
Common stocks, mutual funds	87,884		650		—		88,534
Common stocks, subsidiaries	15,602		—		(12,770)		2,832
	$	813,783	$	390,955	$	(19,924)	$	1,184,814

At December 31, 2022:
Preferred stocks	$	33,899	$	—	$	(7,677)	$	26,222

Common stocks, unaffiliated	$	614,910	$	258,824	$	(21,276)	$	852,458
Common stocks, mutual funds	70,090		—		(10,176)		59,914
Common stocks, subsidiaries	13,202		—		(10,393)		2,809
	$	698,202	$	258,824	$	(41,845)	$	915,181

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The following table shows unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.


	Unrealized Losses Less Than 12 Months				Unrealized Losses Greater Than or Equal to 12 Months
	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2023:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	(386)	$	19,168	$	(137)	$	2,437
Debt securities issued by states of the U.S. and political subdivisions of the states	—		—		(3,792)		32,418
Non-U.S. government securities	(180)		19,676		(21,782)		97,160
Corporate securities	(14,762)		366,692		(452,755)		5,211,188
Commercial mortgage-backed securities(1)	(7,236)		257,418		(212,588)		2,126,547
Residential mortgage-backed securities(1)	(1,679)		170,418		(142,014)		1,321,474
Asset-backed securities(1)	(3,465)		571,932		(192,755)		3,301,809
Total	$	(27,708)	$	1,405,304	$	(1,025,823)	$	12,093,033

Preferred stocks	$	(606)	$	27,881	$	—	$	—
Common stocks, unaffiliated	$	(7,154)	$	150,877	$	—	$	—

(1) Amounts relate to securities subject to SSAP 43R.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	Unrealized Losses Less Than 12 Months				Unrealized Losses Greater Than or Equal to 12 Months
	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2022:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	(1,446)	$	19,082	$	(874)	$	7,610
Debt securities issued by states of the U.S. and political subdivisions of the states	(4,827)		36,698		—		—
Non-U.S. government securities	(11,129)		67,068		(16,448)		43,960
Corporate securities	(620,124)		6,157,732		(140,184)		600,927
Commercial mortgage-backed securities(1)	(139,321)		1,975,520		(82,585)		741,842
Residential mortgage-backed securities(1)	(118,209)		1,116,668		(56,595)		285,964
Asset-backed securities(1)	(257,868)		2,858,951		(69,953)		692,190
Total	$	(1,152,924)	$	12,231,719	$	(366,639)	$	2,372,493

Preferred stocks	$	(7,677)	$	26,221	$	—	$	—
Common stocks, unaffiliated	$	(21,276)	$	112,681	$	—	$	—
Common stocks, mutual funds	(10,176)		59,914		—		—
Total	$	(31,452)	$	172,595	$	—	$	—

(1) Amounts relate to securities subject to SSAP 43R.

Investments that are impaired at December 31, 2023 and 2022, for which other-than-temporary impairments have not been recognized, consist mainly of corporate debt securities, asset-backed securities, and residential mortgage-backed securities. The aggregated unrealized loss is approximately 7.2% and 9.5% of the carrying value of securities considered temporarily impaired at December 31, 2023 and 2022, respectively. At December 31, 2023, there were a total of 1,968 securities held that are considered temporarily impaired, 1,676 of which have been impaired for 12 months or longer. At December 31, 2022, there were a total of 2,408 securities held that are considered temporarily impaired, 370 of which have been impaired for 12 months or longer. The Company recorded other-than-temporary impairments on securities of $25.3 million, $13.0 million, and $6.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The following is a list of each loan-backed security held at December 31, 2023, with a recognized other-than-temporary impairment (OTTI) for the year ended December 31, 2023, where the present value of future cash flows expected to be collected was less than the amortized cost basis of the securities.



CUSIP	Book/Adj Carrying Value Amortized Cost Before Current Period OTTI		Present Value of Future Cash Flows		Recognized Other-Than- Temporary Impairment		Amortized Cost After Other-Than-Temporary Impairment		Fair Value		Date of Other-Than-Temporary Impairment
(In Thousands)
For the year ended, December 31, 2023:

12667G-7H-0	$	859	$	853	$	6	$	853	$	834	6/30/2023
12667G-BD-4	1,487		1,213		274		1,213		1,213		6/30/2023
52520Q-AG-9	1,646		1,564		82		1,564		1,490		6/30/2023
760985-7P-0	208		199		9		199		178		6/30/2023
74957E-AM-9	247		240		7		240		240		9/30/2023
76111X-ZU-0	14		14		0		14		14		9/30/2023
05951F-AG-9	993		844		149		844		844		12/31/2023
251513-AQ-0	9		7		2		7		7		12/31/2023











Total	XXX		XXX		$	529	XXX		XXX		XXX

The Company had no OTTI on loan-backed and structured securities for the year ended December 31, 2023, due to the intent to sell the security or the inability or lack of intent to retain the investment in the security for a period of time sufficient to recover the amortized cost basis.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

A summary of the cost or amortized cost and fair value of the Company’s debt securities at December 31, 2023, by contractual maturity, is as follows:


	Book/Adjusted Carrying Value		Fair Value
	(In Thousands)
Years to maturity:
One or less	$	365,341	$	362,576
After one through five	3,267,355		3,217,613
After five through ten	3,823,331		3,681,363
After ten	2,897,556		2,752,385
Mortgage-backed securities	10,949,615		10,436,166
Total	$	21,303,198	$	20,450,103

The expected maturities may differ from contractual maturities in the foregoing table because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties and because asset-backed and mortgage-backed securities (including floating-rate securities) provide for periodic payments throughout their lives.

Proceeds from sales of investments in debt securities during 2023, 2022, and 2021 were $1,220.8 million, $1,271.3 million, and $626.6 million; gross gains of $7.8 million, $3.9 million, and $12.0 million and gross losses of $35.7 million, $28.6 million, and $1.5 million were realized on these sales, respectively.

Proceeds from sales of investments in equity securities during 2023, 2022, and 2021 were $56.2 million, $114.7 million, and $120.0 million; gross gains of $10.7 million, $23.1 million, and $27.9 million and gross losses of $1.9 million, $4.6 million, and $2.9 million were realized on these sales, respectively.

Realized capital gains (losses) are reported net of federal income taxes and amounts transferred to the IMR as follows for the years ended December 31:


	2023		2022		2021
	(In Thousands)

Realized capital gains (losses)	$	(49,431)	$	(17,252)	$	31,406
Less amount transferred to (from) IMR (net of related taxes (benefits) of $(6,418) in 2023, $(4,640) in 2022, and $2,908 in 2021)	(24,142)		(17,456)		10,938
Less federal income tax expense (benefit) of realized capital gains(losses)	(4,062)		2,393		13,682
Net realized capital gains (losses)	$	(21,227)	$	(2,189)	$	6,786

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Net investment income was generated from the following for the years ended December 31:


	2023		2022		2021
	(In Thousands)

Debt securities	$	975,296	$	653,795	$	505,030
Equity securities	57,216		48,629		34,844
Mortgage loans	189,856		140,529		85,636

Policy loans	1,683		1,758		1,931
Cash, cash equivalents and short-term investments	14,070		5,065		1,162
Derivative instruments	(308)		—		—
Other invested assets	23,107		17,313		50,788
Other	3,373		3,327		1,695
Gross investment income	1,264,293		870,416		681,086
Investment expenses	18,546		14,402		10,547
Net investment income	$	1,245,747	$	856,014	$	670,539

The Company’s investments in mortgage loans principally involve commercial real estate. At December 31, 2023, 49.7% of such mortgages, or $2,343.8 million, involved properties located in Florida, Tennessee, Ohio, and Texas. Such investments consist of primarily first-mortgage liens on completed income-producing properties. The aggregate mortgage outstanding to any one borrower does not exceed $132.1 million. During 2023, the respective minimum and maximum lending rates for mortgage loans issued were 5.89% and 10.36%. At the issuance of a loan, the percentage of any one loan to value of security, exclusive of insured, guaranteed or purchase money mortgage did not exceed 80.0%. During 2023, the Company did not reduce interest rates on any outstanding mortgages.

The Company utilizes loan-to-value and debt-service coverage ratios as credit quality indicators for its commercial mortgage loans. The Company updates and analyzes these indicators at least annually. 92.1% of the Company’s mortgage loans were less than 75% loan-to-value and the total portfolio’s debt-service coverage ratio was 1.69 at December 31, 2023, based on the most recent data available.

3. Fair Values of Financial Instruments

Included in various investment-related line items in the financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value such as when impaired or, for certain bonds and preferred stocks, when carried at the lower of cost or market.

The Company uses fair value measurements to record the fair value of certain assets and liabilities and to estimate the fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, particularly policyholder liabilities other than investment-type contracts, are excluded from this fair value discussion.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

liabilities carried at fair value have been classified, for disclosure purposes, based on the following hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels. The Company’s policy is to recognize transfers in and transfers out of levels at the beginning of the quarterly reporting period.

•Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include exchange-traded equity securities and mutual funds, including those which are part of the Company’s separate account assets.

•Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s Level 2 assets and liabilities primarily include investment grade municipal, corporate bonds, and surplus notes within the Company's separate account, preferred stock, stock warrants, interest rate swaps, to be announced (TBA) forward contracts, industrial and miscellaneous bonds, foreign government bonds, bank loans, and initially rated NAIC 6 commercial and residential mortgage-backed securities. The fair values of these instruments are determined through the use of third-party pricing services or models utilizing market observable inputs.

•Level 3 - Significant unobservable inputs for the asset or liability. The Company's Level 3 assets primarily include fixed income residual tranches, which is priced utilizing client statements.

Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, including discount rates, estimates of timing, amount of expected future cash flows and the credit standing of the issuer. Such estimates do not consider the tax impact of the realization of unrealized gains or losses.

For Level 3 investments, the fair value estimates cannot be substantiated by comparison to independent markets. In addition, the disclosed fair value may not be realized in the immediate settlement of the financial instrument.

As described below, certain fair values are determined through the use of third-party pricing services. Management does not adjust prices received from third parties; however, the Company does analyze the third-party pricing services’ valuation methodologies and related inputs and performs additional evaluation to determine the appropriate level within the fair value hierarchy. The Company performs annual due diligence of third-party pricing services, which includes assessing the vendor’s valuation qualifications, control environment, analysis of asset class-specific valuation methodologies and understanding of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. Care should be exercised in deriving conclusions about the Company’s business, its value or financial position based on the fair value information of financial instruments presented below. The following discussion describes the valuation methodologies utilized by the Company for assets and liabilities measured or disclosed at fair value.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Debt and Equity Securities

The fair values of debt securities and asset/mortgage-backed securities have been determined through the use of third-party pricing services utilizing market observable inputs. Private placement securities trading in less liquid or illiquid markets with limited or no pricing information are valued using either broker quotes or by discounting the expected cash flows using current market-consistent rates applicable to the yield, credit quality and maturity of each security.

The fair values of actively traded equity securities and exchange traded funds (including exchange traded funds with debt like characteristics) have been determined utilizing publicly quoted prices obtained from third-party pricing services. The fair values of certain equity securities for which no publicly quoted prices are available have been determined through the use of third-party pricing services utilizing market observable inputs. Actively traded mutual funds are valued using the net asset values of the funds. The fair value of preferred stock included in Level 3 has been determined by either broker quotes or by discounting the expected cash flows using current market-consistent rates applicable to the yield.

Mortgage Loans

The fair values for mortgage loans, consisting principally of commercial real estate loans, are estimated using discounted cash flow analyses, using interest rates currently being offered for similar loans collateralized by properties with similar investment risk. The fair values for mortgage loans in default are established at the lower of the fair value of the underlying collateral less costs to sell or the carrying amount of the loan.

Derivative Instruments

The fair values of free-standing derivative instruments, primarily interest rate swaps, TBA forward contracts, and stock warrants, are determined through the use of third-party pricing services or models utilizing market observable inputs.

Cash Collateral Receivable

The receivable represents the obligation to return cash collateral the Company has posted relating to derivative instruments. The fair value is based upon the stated amount.

Cash, Cash Equivalents and Short-Term Investments

The fair values of cash, cash equivalents and short-term investments are based on quoted market prices or stated amounts.

Securities Lending Reinvested Collateral Assets

The fair values of securities lending reinvested collateral assets are determined through the use of third-party sources utilizing publicly quoted prices.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Other Invested Assets

Other invested assets primarily include surplus debentures and fixed income residual tranches for which fair values have been determined through the use of third-party pricing services utilizing market observable inputs.

Assets Held in Separate Accounts

Assets held in separate accounts include debt securities, surplus notes, and mutual funds. The fair values of these assets have been determined using the same methodologies as similar assets held in the general account.

Life and Annuity Reserves for Investment-Type Contracts and Deposit Fund Liabilities

The fair value of liabilities for investment-type contracts is based on the present value of estimated liability cash flows, which are discounted using rates that incorporate risk-free rates and margins for the Company’s own credit spread and the riskiness of cash flows. Key assumptions to the cash flow model include the timing of policyholder withdrawals and the level of interest credited to contract balances. Fair values for insurance reserves are not required to be disclosed. However, the estimated fair values of all insurance reserves and investment contracts are taken into consideration in the Company’s overall management of interest rate risk.

Cash Collateral Payable

The payable represents the obligation to return cash collateral the Company has received relating to derivative instruments. The fair value is based upon the stated amount.

Securities Lending Liability

The liability represents the Company’s obligation to return collateral related to securities lending transactions. The liability is short-term in nature and therefore, the fair value of the obligation approximates the carrying amount.

Separate Account Liabilities

Certain separate account liabilities are classified as investment contracts and are carried at an amount equal to the related separate account assets. Carrying value is a reasonable estimate of the fair value as it represents the exit value as evidenced by withdrawal transactions between contract holders and the Company.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Assets and liabilities measured at fair value on a recurring basis are outlined below:


	Assets/(Liabilities) Measured at Fair Value		Fair Value Hierarchy Level
			Level 1		Level 2		Level 3
	(In Thousands)
At December 31, 2023
Assets:
Bonds, industrial and misc.	$	1,793	$	—	$	1,793	$	—

Bonds, bank loans	244		—		244		—
Commercial mortgage-backed securities	7,876		—		7,876		—
Residential mortgage-backed securities	591		—		591		—
Bonds, exchange traded funds	7,113		7,113		—		—
Common stocks, unaffiliated	998,724		998,382		—		342
Common stocks, mutual funds	88,534		88,534		—		—
Preferred stock	32,193		—		32,193		—
Other invested assets, fixed income residual tranche	9,467		—		—		9,467
Derivative assets	5,029		—		5,029		—
Separate account assets*	68,019		19,056		48,963		—
Total assets	$	1,219,583	$	1,113,085	$	96,689	$	9,809

Liabilities:
Derivative liabilities	$	(3,834)	$	—	$	(3,834)	$	—

* Separate account assets measured at fair value in this table do not include assets backing market value adjusted annuities, which are held at amortized cost, with the exception of securities rated NAIC 6 where the security’s fair value is below amortized cost.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	Assets/(Liabilities) Measured at Fair Value		Fair Value Hierarchy Level
			Level 1		Level 2		Level 3
	(In Thousands)
At December 31, 2022
Assets:
Bonds, industrial and misc.	$	112	$	—	$	112	$	—
Bonds, foreign government	155		—		155		—
Residential mortgage-backed securities	454		—		454		—
Bonds, exchange traded funds	6,722		6,722		—		—
Common stocks, unaffiliated	759,509		759,509		—		—
Common stocks, mutual funds	59,914		59,914		—		—
Preferred stock	26,222		—		26,222		—
Derivative assets	794		—		794		—
Separate account assets*	64,724		17,122		47,602		—
Total assets	$	918,606	$	843,267	$	75,339	$	—

Liabilities:
Derivative liabilities	$	(834)	$	—	$	(834)	$	—

The Company did not have any significant assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2023 and 2022.

The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2023, is as follows:


	Beginning Asset/(Liability) as of January 1, 2023		Total Realized/Unrealized Gains (Losses) Included in:				Purchases, Sales, Issuances and Settlements		Transfers Into Level 3*		Transfers Out of Level 3		Ending Asset/(Liability) as of December 31, 2023
			Net Income		Surplus
	(In Thousands)
Assets:
Common stocks, unaffiliated	$	—	$	—	$	—	$	342	$	—	$	—	$	342
Other invested assets, fixed income residual tranche	—		—		(198)		—		9,665		—		9,467
Total assets	$	—	$	—	$	(198)	$	342	$	9,665	$	—	$	9,809

* Transfers into Level 3 are due to changes resulting from the application of the lower of amortized cost or fair value rules.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The gross purchases, issuances, sales and settlements included in the reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2023, is as follows:


	Purchases		Issuances		Sales		Settlements		Net Purchases, Issuances, Sales and Settlements
	(In Thousands)
Assets:
Common stocks, unaffiliated	$	342	$	—	$	—	$	—	$	342
Other invested assets, fixed income residual tranche	—		—		—		—		—
Total assets	$	342	$	—	$	—	$	—	$	342

The carrying amounts and fair values of the Company’s significant financial instruments follow:


	December 31, 2023
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(In Thousands)
Assets:
Bonds	$	21,303,198	$	20,450,103	$	56,080	$	19,437,356	$	956,667
Common stock:
Unaffiliated**	1,093,448		1,093,448		1,093,106		—		342
Mutual funds	88,534		88,534		88,534		—		—
Preferred stock	32,193		32,193		—		32,193		—
Mortgage loans	4,839,834		4,677,737		—		—		4,677,737
Cash, cash equivalents and short-term investments	345,191		345,211		345,211		—		—
Other invested assets:
Surplus notes	46,735		46,837		—		46,837		—
Fixed income residual tranche	24,175		24,175		—		—		24,175
Securities lending reinvested collateral assets	63,603		63,603		63,603		—		—
Derivative assets	5,029		5,029		—		5,029		—
Cash collateral receivable	1,774		1,774		—		1,774		—
Separate account assets	2,067,455		2,018,572		64,457		1,916,672		37,443

Liabilities:
Life and annuity reserves for investment-type contracts and deposit fund liabilities	$	(17,482,315)	$	(16,913,352)	$	—	$	—	$	(16,913,352)
Derivative liabilities	(3,834)		(3,834)		—		(3,834)		—
Cash collateral payable	(2,660)		(2,660)		—		(2,660)		—
Securities lending liability	(542,557)		(542,557)		—		(542,557)		—
Separate account liabilities*	(2,008,453)		(1,938,936)		—		—		(1,938,936)

* Variable annuity contracts are considered insurance contracts and therefore, are not included in separate account liabilities for purposes of this disclosure.

** Includes FHLB common stock, which is held at cost.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	December 31, 2022
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(In Thousands)
Assets:
Bonds	$	17,777,133	$	16,307,780	$	33,414	$	15,749,601	$	524,765
Common stock:
Unaffiliated**	852,458		852,458		852,458		—		—
Mutual funds	59,914		59,914		59,914		—		—
Preferred stock	26,222		26,222		—		26,222		—
Mortgage loans	3,760,559		3,511,563		—		—		3,511,563
Cash, cash equivalents and short-term investments	523,330		523,507		523,507		—		—
Other invested assets:
Surplus notes	46,835		45,291		—		45,291		—
Fixed income residual tranche	9,665		10,689		—		—		10,689
Securities lending reinvested collateral assets	45,424		45,424		45,424		—		—
Derivative assets	794		794		—		794		—
Separate account assets	1,429,234		1,331,610		31,191		1,277,647		22,772

Liabilities:
Life and annuity reserves for investment-type contracts and deposit fund liabilities	$	(14,376,678)	$	(13,922,842)	$	—	$	—	$	(13,922,842)
Derivative liabilities	(834)		(834)		—		(834)		—
Cash collateral payable	(51)		(51)		—		(51)		—
Securities lending liability	(472,454)		(472,454)		—		(472,454)		—
Separate account liabilities*	(1,355,654)		(1,317,136)		—		—		(1,317,136)

* Variable annuity contracts are considered insurance contracts and therefore, are not included in separate account liabilities for purposes of this disclosure.

** Includes FHLB common stock, which is held at cost.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

4. Related-Party Transactions

The Company received payments of principal and interest under mortgage financing arrangements in the amount of $14.7 million, $9.9 million, and $32.1 million in 2023, 2022 and 2021, respectively, on behalf of certain partnerships in which Western and Southern has an equity interest. The principal balance of the mortgage financing arrangements was $127.5 million and $132.1 million at December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, the Company had $88.5 million and $59.9 million, respectively, invested in the Touchstone Funds, which are exchange traded and mutual funds administered by Touchstone Advisors, Inc., an indirect subsidiary of the company.

At December 31, 2023 and 2022, the Company had $219.0 million and $192.6 million, respectively, invested in various private debt funds managed by Fort Washington Investment Advisors, Inc., an indirect subsidiary of Western and Southern.

In March 2024, the Company paid a $155.0 million ordinary dividend to Western and Southern, which was referenced in Note 1, Subsequent Events. The dividend was in the form of cash.

In December 2023, the Company received a $275.0 million capital contribution from Western and Southern. The contribution was in the form of $225.0 million and $50.0 million in cash and equity securities, respectively.

In August 2023, the Company entered into a Pension Risk Transfer agreement with Western and Southern to transfer risk and administration costs associated with Western and Southern's pension benefit obligation in the amount of $54.6 million.

In March 2023, the Company paid a $150.0 million ordinary dividend to Western and Southern. The dividend was in the form of cash.

In December 2022, the Company received a capital contribution of $320.0 million from Western and Southern. The contribution was in the form of cash.

In December 2021, the Company received a capital contribution of $250.0 million from Western and Southern. The contribution was in the form of cash.

The Company had $3.9 million and $0.0 million receivable from parent, subsidiaries and affiliates as of December 31, 2023 and 2022, respectively. The Company had $33.9 million and $18.0 million payable to parent, subsidiaries and affiliates as of December 31, 2023 and 2022, respectively. The terms of the settlement generally require that these amounts be settled in cash within 30 days.

Western and Southern guarantees the payment of the Company’s policyholder obligations. In the unlikely event the guarantee would be triggered, Western and Southern may be permitted to take control of the Company’s assets to recover all or a portion of the amounts paid under the guarantee.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

5. Reinsurance

Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The ceded reinsurance agreements provide the Company with increased capacity to write larger risks and maintain its exposure to loss within its capital resources.

The effects of reinsurance on premiums, annuity considerations and deposit-type funds are as follows for the years ended December 31:


	2023		2022		2021
	(In Thousands)

Direct premiums	$	7,041,103	$	6,690,247	$	3,012,666
Assumed premiums:
Affiliates	—		—		—
Nonaffiliates	—		—		—
Ceded premiums:
Affiliates	—		—		—
Nonaffiliates	(33,330)		(30,017)		(24,466)
Net premiums	$	7,007,773	$	6,660,230	$	2,988,200

The Company’s ceded reinsurance arrangements impacted certain other items in the accompanying financial statements by the following amounts as of and for the years ended December 31:


	2023		2022		2021
	(In Thousands)
Policy and contract claims:
Affiliates	$	—	$	—	$	—
Nonaffiliates	32,096		30,444		21,540
Policy and contract liabilities:
Affiliates	—		—		—
Nonaffiliates	28,244		28,101		28,970
Amounts recoverable on reinsurance contracts:
Affiliates	—		—		—
Nonaffiliates	3,618		6,388		2,328

In 2023, 2022 and 2021, the Company did not commute any ceded reinsurance.

At December 31, 2023, the Company has no significant reserves ceded to unauthorized reinsurers. Amounts payable or recoverable for reinsurance on policy and contract liabilities are not subject to periodic or maximum limits.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Neither the Company nor any of its related parties, control directly or indirectly, any reinsurers with whom the Company conducts business. No policies issued by the Company have been reinsured with a foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. At December 31, 2023, there are no reinsurance agreements in effect such that the amount of losses paid or accrued exceed the total direct premium collected. The Company remains obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

The Company has certain reinsurance agreements in effect under which the reinsurer may unilaterally cancel the agreement under certain conditions. In addition, these reinsurance agreements reinsure contracts that had existing reserves as of the effective date of the agreements. There are no reinsurance credits associated with these agreements, and there would be no reduction in surplus if these reinsurance agreements were cancelled.

There would be no reduction in surplus at December 31, 2023, if all reinsurance agreements were cancelled.

6. Federal Income Taxes

The Company is included in the consolidated federal income tax return of Western and Southern. The Company had a receivable (payable) from (to) Western and Southern in the amount of $(38.2) million and $(4.6) million as of December 31, 2023 and 2022, respectively. The tax years 2014 through 2022 remain subject to examination by major tax jurisdictions.

The amount of federal income taxes incurred that will be available for recoupment at December 31, 2023, in the event of future net losses is $0.0 million, $0.0 million, and $15.6 million from 2023, 2022 and 2021, respectively.

The components of net deferred tax asset (liability) at December 31 are as follows:


		12/31/2023
		(In Thousands)
		(1)		(2)		(3)
						(Col 1+2)
		Ordinary		Capital		Total

(a)	Gross deferred tax assets	$	368,357	$	21,562	$	389,919
(b)	Statutory valuation allowance adjustments	—		—		—
(c)	Adjusted gross deferred tax assets (a – b)	368,357		21,562		389,919
(d)	Deferred tax assets nonadmitted	12,002		—		12,002
(e)	Subtotal net admitted deferred tax assets (c – d)	356,355		21,562		377,917
(f)	Deferred tax liabilities	34,505		78,187		112,692
(g)	Net admitted deferred tax asset/(net deferred tax liability) (e – f)	$	321,850	$	(56,625)	$	265,225

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


		12/31/2022
		(In Thousands)
		(4)		(5)		(6)
						(Col 4+5)
		Ordinary		Capital		Total

(a)	Gross deferred tax assets	$	255,626	$	21,695	$	277,321
(b)	Statutory valuation allowance adjustments	—		—		—
(c)	Adjusted gross deferred tax assets (a – b)	255,626		21,695		277,321
(d)	Deferred tax assets nonadmitted	3,570		—		3,570
(e)	Subtotal net admitted deferred tax assets (c – d)	252,056		21,695		273,751
(f)	Deferred tax liabilities	21,991		52,340		74,331
(g)	Net admitted deferred tax asset/(net deferred tax liability) (e – f)	$	230,065	$	(30,645)	$	199,420


		Change
		(In Thousands)
		(7)		(8)		(9)
						7+8
		Ordinary		Capital		Total












(a)	Gross deferred tax assets	$	112,731	$	(133)	$	112,598
(b)	Statutory valuation allowance adjustments	—		—		—
(c)	Adjusted gross deferred tax assets (a – b)	112,731		(133)		112,598
(d)	Deferred tax assets nonadmitted	8,432		—		8,432
(e)	Subtotal net admitted deferred tax assets (c – d)	104,299		(133)		104,166
(f)	Deferred tax liabilities	12,514		25,847		38,361
(g)	Net admitted deferred tax asset/(net deferred tax liability) (e – f)	$	91,785	$	(25,980)	$	65,805


		12/31/2023
		(In Thousands)
		(7)		(8)		(9)
						(Col 1+2)
Admission Calculation Components SSAP No. 101		Ordinary		Capital		Total

(a)	Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	10,043	$	10,043
(b)	Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (the lesser of (b)1 and (b)2 below)	243,663		11,519		255,182
	1. Adjusted gross deferred tax assets expected to be realized following the balance sheet date	243,663		11,519		255,182
	2. Adjusted gross deferred tax assets allowed per limitation threshold.	XXX		XXX		255,214
(c)	Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities	112,692		—		112,692
(d)	Deferred tax assets admitted as the result of application of SSAP No. 101 Total ((a) + (b) + (c))	$	356,355	$	21,562	$	377,917

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


		12/31/2022
		(In Thousands)
		(4)		(5)		(6)
						(Col 4+5)
Admission Calculation Components SSAP No. 101		Ordinary		Capital		Total

(a)	Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	16,258	$	16,258
(b)	Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (the lesser of (b)1 and (b)2 below)	177,726		5,437		183,163
	1. Adjusted gross deferred tax assets expected to be realized following the balance sheet date	177,726		5,437		183,163
	2. Adjusted gross deferred tax assets allowed per limitation threshold	XXX		XXX		251,452
(c)	Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities	74,330		—		74,330
(d)	Deferred tax assets admitted as the result of application of SSAP No. 101 Total ((a) + (b) + (c))	$	252,056	$	21,695	$	273,751


		Change
		(In Thousands)
		(7)		(8)		(9)
						(Col 7+8)
Admission Calculation Components SSAP No. 101		Ordinary		Capital		Total














(a)	Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	(6,215)	$	(6,215)
(b)	Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (the lesser of (b)1 and (b)2 below)	65,938		6,082		72,020
	1. Adjusted gross deferred tax assets expected to be realized following the balance sheet date	65,938		6,082		72,020
	2. Adjusted gross deferred tax assets allowed per limitation threshold.	XXX		XXX		3,762
(c)	Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities	38,361		—		38,361
(d)	Deferred tax assets admitted as the result of application of SSAP No. 101 Total ((a) + (b) + (c))	$	104,299	$	(133)	$	104,166


		2023	2022

(a)	Ratio percentage used to determine recovery period and threshold limitation amount	588%	581%

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


		12/31/2023
		(1)	(2)
Impact of tax planning strategies		Ordinary	Capital
		(In Thousands)
(a)	Adjusted gross DTAs amount	$368,357	$21,562
(b)	Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	22.25%	5.53%
(c)	Net admitted adjusted gross DTAs amount	$356,355	$21,562
(d)	Percentage of net admitted adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	22.96%	5.71%


		12/31/2022
		(3)	(4)
Impact of tax planning strategies		Ordinary	Capital
		(In Thousands)
(a)	Adjusted gross DTAs amount	$255,626	$21,695
(b)	Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	26.23%	7.82%
(c)	Net admitted adjusted gross DTAs amount	$252,056	$21,695
(d)	Percentage of net admitted adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	26.58%	7.92%


		Change
		(5)	(6)
Impact of tax planning strategies		Ordinary	Capital
		(In Thousands)












(a)	Adjusted gross DTAs amount	$112,731	$(133)
(b)	Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	(3.98)%	(2.29)%
(c)	Net admitted adjusted gross DTAs amount	$104,299	$(133)
(d)	Percentage of net admitted adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	(3.62)%	(2.21)%

The Company's tax planning strategies include the use of reinsurance.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Current income taxes incurred consist of the following major components:


			12/31/2023		12/31/2022		12/31/2021
			(In Thousands)
(1)	Current income tax
	(a)	Federal	$	112,725	$	65,520	$	42,103
	(b)	Foreign	31		—		28
	(c)	Subtotal	112,756		65,520		42,131
	(d)	Federal income tax on net capital gains	(4,062)		2,393		13,682
	(e)	Utilization of capital loss carryforwards	—		—		—
	(f)	Other	—		—		—
	(g)	Federal and foreign income taxes incurred	$	108,694	$	67,913	$	55,813

			(1)		(2)		(3)
							(Col 1-2)
(2)	Deferred tax assets:		12/31/2023		12/31/2022		Change
	(a)	Ordinary	(In Thousands)
		(1) Discounting of unpaid losses	$	—	$	—	$	—
		(2) Unearned premium revenue	—		—		—
		(3) Policyholder reserves	317,488		214,202		103,286
		(4) Investments	4,304		831		3,473
		(5) Deferred acquisition costs	44,516		39,182		5,334
		(6) Policyholder dividends accrual	—		—		—
		(7) Fixed assets	—		—		—
		(8) Compensation and benefits accrual	—		—		—
		(9) Pension accrual	—		—		—
		(10) Receivables - nonadmitted	1,043		1,060		(17)
		(11) Net operating loss carryforward	—		—		—
		(12) Tax credit carryforward	—		—		—
		(13) Other	1,006		351		655
		(99) Subtotal	368,357		255,626		112,731
	(b)	Statutory valuation allowance adjustment	—		—		—
	(c)	Nonadmitted	12,002		3,570		8,432
	(d)	Admitted ordinary deferred tax assets (2a99 - 2b - 2c)	356,355		252,056		104,299
	(e)	Capital					—
		(1) Investments	21,562		21,695		(133)
		(2) Net capital loss carryforward	—		—		—
		(3) Real estate	—		—		—
		(4) Other	—		—		—
		(99) Subtotal	21,562		21,695		(133)
	(f)	Statutory valuation allowance adjustment	—		—		—
	(g)	Nonadmitted	—		—		—
	(h)	Admitted capital deferred tax assets (2e99- 2f - 2g)	21,562		21,695		(133)
	(i)	Admitted deferred tax assets (2d + 2h)	$	377,917	$	273,751	$	104,166

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


			(1)		(2)		(3)
							(Col 1-2)
			12/31/2023		12/31/2022		Change
(3)	Deferred tax liabilities:		(In Thousands)
	(a)	Ordinary
		(1) Investments	$	25,975	$	10,958	$	15,017
		(2) Fixed assets	—		—		—
		(3) Deferred and uncollected premium	4,098		4,050		48
		(4) Policyholder reserves	4,198		6,953		(2,755)
		(5) Other	234		30		204
		(99) Subtotal	34,505		21,991		12,514
	(b)	Capital
		(1) Investments	78,187		52,340		25,847
		(2) Real estate	—		—		—
		(3) Other	—		—		—
		(99) Subtotal	78,187		52,340		25,847
	(c)	Deferred tax liabilities (3a99 + 3b99)	$	112,692	$	74,331	$	38,361

(4)	Net deferred tax assets/liabilities (2i - 3c)		$	265,225	$	199,420	$	65,805

Among the more significant book-to-tax adjustments were the following:


	12/31/2023		Effective Tax Rate		12/31/2022		Effective Tax Rate		12/31/2021		Effective Tax Rate
	(In Thousands)				(In Thousands)				(In Thousands)

Provision computed at statutory rate	$	9,679	21.00	%	$	(7,159)	21.00	%	$	38,886	21.00	%
Dividend received deduction	(1,609)		(3.49)		(6,054)		17.76		(4,431)		(2.39)
Tax credits	(1,684)		(3.65)		(2,314)		6.79		(1,296)		(0.70)
Other invested assets and nonadmitted change	(6,199)		(13.45)		(5,824)		17.07		(6,851)		(3.70)

Other	(3,791)		(8.23)		438		(1.28)		(641)		(0.35)



Total statutory income taxes	$	(3,604)	(7.82)	%	$	(20,913)	61.34	%	$	25,667	13.86	%

Federal and foreign taxes incurred	$	108,694	235.83	%	$	67,913	(199.21)	%	$	55,813	30.14	%
Change in net deferred income taxes	(112,298)		(243.65)		(88,826)		260.55		(30,146)		(16.28)
Total statutory income taxes	$	(3,604)	(7.82)	%	$	(20,913)	61.34	%	$	25,667	13.86	%

At December 31, 2023, the Company had $0.0 million of net operating loss carryforwards, net capital loss carryforwards and tax credit carry forwards; the company had $0.0 million of deferred tax liabilities that are not recognized.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The Inflation Reduction Act (the “IRA”) was enacted on August 16, 2022, and included a provision for a new Corporate Alternative Minimum Tax (CAMT), effective in 2023, that is based on the adjusted financial statement income set forth on the applicable financial statement of an “applicable corporation.” The controlled group of corporations of which the reporting entity is a member has determined that it is not an “applicable corporation” for purposes of CAMT during the reporting period, and is not liable for the CAMT.

7. Capital and Surplus

The Company is required by statutory regulations to meet minimum risk-based capital standards. Risk-based capital is a method of measuring the minimum amount of capital appropriate for an insurance company to support its overall business operations in consideration of its size and risk profile. At December 31, 2023 and 2022, the Company exceeded the minimum risk-based capital.

Ohio insurance law limits the amount of dividends that can be paid to a parent in a holding company structure without prior approval of the regulators to the greater of 10% of statutory surplus or statutory net income as of the preceding December 31 less any dividends paid in the preceding 12 months, but only to the extent of earned surplus as of the preceding December 31. Based on these limitations, the Company is able to pay dividends of up to $194.0 million by the end of 2024 without seeking prior regulatory approval based on capital and surplus of $1,940.2 million at December 31, 2023.

8. Commitments and Contingencies

The Company is named as a defendant in various legal actions arising principally from claims made under insurance policies and contracts. The Company believes the resolution of these actions will not have a material effect on the Company’s financial position or results of operations.

At December 31, 2023, the Company does not have any material lease agreements as a lessee for office space or equipment.

At December 31, 2023, the Company has future commitments to provide additional capital contributions of $235.3 million to investments in joint ventures, limited partnerships and limited liability companies. Additionally, the Company has commitments to fund $724.9 million of commercial mortgage loans and $193.0 million of debt capital.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

9. Life and Annuity Reserves and Deposit-Type Contract Liabilities

At December 31, 2023, the Company’s general and separate account annuity reserves and deposit-type contract liabilities that are subject to discretionary withdrawal (with adjustment), subject to discretionary withdrawal (without adjustment), and not subject to discretionary withdrawal provisions are summarized as follows:


Individual Annuities	General Account		Separate Account With Guarantees		Separate Account Non-guaranteed		Total		Percent
	(In Thousands)
Subject to discretionary withdrawal:
With market value adjustment	$	12,010,443	$	2,008,453	$	—	$	14,018,896	64.7	%
At book value less current surrender charge of 5% or more	30,993		—		—		30,993		0.1
At fair value	—		—		17,357		17,357		0.1
Total with adjustment or at fair value	12,041,436		2,008,453		17,357		14,067,246		64.9
Subject to discretionary withdrawal at book value without adjustment (minimal or no charge or adjustment)	3,346,573		—		—		3,346,573		15.5
Not subject to discretionary withdrawal	4,240,780		—		—		4,240,780		19.6
Total individual annuity reserves (before reinsurance)	19,628,789		2,008,453		17,357		21,654,599		100.0	%
Reinsurance ceded	—		—		—		—
Net individual annuity reserves	$	19,628,789	$	2,008,453	$	17,357	$	21,654,599
Amount subject to greater than a 5% surrender charge that will be subject to minimal or no surrender charge after the statement date	$	30,993	$	—	$	—	$	30,993

Group Annuities	General Account		Separate Account With Guarantees		Separate Account Non-guaranteed		Total		Percent
	(In Thousands)






Not subject to discretionary withdrawal	$	1,914,413	$	—	$	—	$	1,914,413	100.0	%
Total group annuity reserves (before reinsurance)	1,914,413		—		—		1,914,413		100.0	%
Reinsurance ceded	—		—		—		—
Net group annuity reserves	$	1,914,413	$	—	$	—	$	1,914,413

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


Deposit-type contracts (no life contingencies)	General Account		Separate Account With Guarantees		Separate Account Non-guaranteed		Total		Percent
	(In Thousands)





Subject to discretionary withdrawal at book value without adjustment (minimal or no charge or adjustment)	$	15	$	—	$	—	$	15	—	%
Not subject to discretionary withdrawal	2,092,570		—		—		2,092,570		100.0
Total deposit-type contract liability (before reinsurance)	2,092,585		—		—		2,092,585		100.0	%
Reinsurance ceded	—		—		—		—
Total deposit-type contract liability	$	2,092,585	$	—	$	—	$	2,092,585

Interest rate changes may have temporary effects on the sale and profitability of annuity products offered by the Company. Although the rates offered by the Company are adjustable in the long-term, in the short-term they may be subject to contractual and competitive restrictions, which may prevent timely adjustment. The Company’s management constantly monitors interest rates with respect to a spectrum of product durations and sells annuities that permit flexible responses to interest rate changes as part of the Company’s management of interest spreads. However, adverse changes in investment yields on invested assets will affect the earnings on those products with a guaranteed return.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

At December 31, 2023, the Company's general and separate account life insurance account values, cash value, and reserves for policies subject to discretionary withdrawal, not subject to discretionary withdrawal, or with no cash value are summarized as follows:


	General Account						Separate Account - Nonguaranteed
	Account Value		Cash Value		Reserve		Account Value		Cash Value		Reserve
	(In Thousands)
Subject to discretionary withdrawal, surrender values, or policy loans:
Term policies with cash value	$	—	$	—	$	—	$	—	$	—	$	—
Universal life	407,807		413,530		423,463		—		—		—
Universal life with secondary guarantees	770,766		814,189		1,377,060		—		—		—
Indexed universal life	—		—		—		—		—		—
Indexed universal life with secondary guarantees	—		—		—		—		—		—
Indexed life	—		—		—		—		—		—
Other permanent cash value life insurance	—		4,753		4,972		—		—		—
Variable life	—		—		—		—		—		—
Variable universal life	—		—		—		51,063		51,063		51,063
Miscellaneous reserves	—		—		—		—		—		—

Not subject to discretionary withdrawal or no cash values:
Term policies without cash value	XXX		XXX		240,469		XXX		XXX		—
Accidental death benefits	XXX		XXX		289		XXX		XXX		—
Disability - active lives	XXX		XXX		2,027		XXX		XXX		—
Disability - disabled lives	XXX		XXX		11,812		XXX		XXX		—
Miscellaneous reserves	XXX		XXX		—		XXX		XXX		—
Total life reserves (before reinsurance)	1,178,573		1,232,472		2,060,092		51,063		51,063		51,063
Reinsurance ceded	—		—		23,344		—		—		—
Net life reserves	$	1,178,573	$	1,232,472	$	2,036,748	$	51,063	$	51,063	$	51,063

Federal Home Loan Bank

The Company is a member of the FHLB of Cincinnati. Through its membership, the Company has conducted business activity (borrowings) with the FHLB. It is part of the Company’s strategy to utilize these funds to increase profitability. The Company has determined the actual/estimated maximum borrowing capacity as $4.18 billion. The Company calculated this amount after a review of its pledgeable assets (both pledged and unpledged) and after applying the respective FHLB borrowing haircuts.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

FHLB Capital Stock – General Account:


	December 31
	2023		2022
	(In Thousands)
Membership stock - Class A (not eligible for redemption)	$	20,000	$	15,630
Membership stock - Class B	—		—
Activity stock	74,137		66,205
Excess stock	587		11,114
Aggregate total	$	94,724	$	92,949
Actual or estimated borrowing capacity as determined by the insurer	$	4,180,000	$	2,350,000

Collateral Pledged to FHLB – General Account:


	2023							2022
	Fair Value		Carrying Value		Aggregate Total Borrowing		Borrowed at Time of Maximum Collateral	Fair Value		Carrying Value		Aggregate Total Borrowing		Borrowed at Time of Maximum Collateral
	(In Thousands)
Total as of reporting date	$	3,761,455	$	3,949,497	$	1,654,932	XXX	$	2,339,900	$	2,519,348	$	1,479,736	XXX
Maximum during reporting period	3,739,243		4,074,642		XXX		1,613,290	2,567,555		2,630,446		XXX		1,551,352

Borrowing from FHLB - General Account:


	2023						2022
	At Reporting Date		Reserves Established at Reporting Date		Maximum Amount During Period		At Reporting Date		Reserves Established at Reporting Date
	(In Thousands)
Funding agreements	$	1,654,932	$	1,659,966	$	1,592,691	$	1,479,736	$	1,478,780
Debt	—		XXX		$	65,000	—		XXX
Aggregate total	$	1,654,932	$	1,659,966	$	1,657,691	$	1,479,736	$	1,478,780

The Company does not have any prepayment obligations under these FHLB borrowing arrangements.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

10. Separate Accounts

The Company’s guaranteed separate account consists of non-indexed, guaranteed rate options that include market value adjustments. The guaranteed rate options were sold in a fixed annuity product. These options carry a minimum interest guarantee based on the guarantee period selected by the policyholder. The fixed annuity product provides a death benefit equal to the account value.

The Company’s nonguaranteed separate accounts consist of subaccounts available through variable annuities and group variable universal life insurance. The net investment experience of each subaccount is credited directly to the policyholder and can be positive or negative. Variable annuities include guaranteed minimum death benefits that vary by product and include optional death benefits available on some products. The death benefits include the following: account value, return of premium paid, a death benefit that accumulates at a specified interest rate, a death benefit that is adjusted septennially to the current account value, and a death benefit that is adjusted annually to the current account value. The death benefit under the group variable universal life insurance policies may vary with the investment performance of the underlying investments in the separate accounts.

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Information regarding the separate accounts of the Company as of and for the year ended December 31, 2023, is as follows:


	Separate Accounts With Guarantees
	Nonindexed Guaranteed Less Than/ Equal to 4%		Nonindexed Guaranteed More Than 4%		Nonguaranteed Separate Accounts		Total
	(In Thousands)

Premiums, considerations or deposits	$	708,764	$	95,618	$	131	$	804,513

Reserves for separate accounts with assets at:
Fair value	$	—	$	—	$	68,419	$	68,419
Amortized cost	1,829,176		179,277		—		2,008,453
Total reserves	$	1,829,176	$	179,277	$	68,419	$	2,076,872

Reserves for separate accounts by withdrawal characteristics:
Subject to discretionary withdrawal:
With fair value adjustment	$	1,829,176	$	179,277	$	—	$	2,008,453
At book value without fair value adjustment and with current surrender charge of 5% or more	—		—		—		—
At fair value	—		—		68,419		68,419
At book value without fair value adjustment and with current surrender charge of less than 5%	—		—		—		—
Subtotal	1,829,176		179,277		68,419		2,076,872
Not subject to discretionary withdrawal	—		—		—		—
Total separate accounts reserves	$	1,829,176	$	179,277	$	68,419	$	2,076,872

Western-Southern Life Assurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

A reconciliation of the amounts transferred to and from the separate accounts for the year ended December 31, 2023, is presented below:


	2023
	(In Thousands)
Transfers as reported in the Summary of Operations of the Separate Accounts Statement:
Transfers to separate accounts	$	804,513
Transfers from separate accounts	233,951
Net transfers to (from) separate accounts	570,562

Reconciling adjustments:
Policy deductions and other expenses	(151)
Change in surplus in separate accounts	—
Other account adjustments	159
Transfers as reported in the Summary of Operations of the Company	$	570,570

11. Premium and Annuity Considerations Deferred and Uncollected

Deferred and uncollected life insurance premiums and annuity considerations at December 31, 2023, were as follows:


	Gross		Net of Loading
	(In Thousands)

Ordinary new business	$	1,510	$	18
Ordinary renewal	13,406		19,125
Total	$	14,916	$	19,143

STATUTORY-BASIS FINANCIAL STATEMENTS

The Western and Southern Life Insurance Company

Years Ended December 31, 2023, 2022 and 2021

With Report of Independent Auditors

The Western and Southern Life Insurance Company

Statutory-Basis Financial Statements

Years Ended December 31, 2023, 2022 and 2021

Contents


Report of Independent Auditors			1

Financial Statements

Balance Sheets (Statutory-Basis)			4
Statements of Operations (Statutory-Basis)			5
Statements of Changes in Capital and Surplus (Statutory-Basis)			6
Statements of Cash Flow (Statutory-Basis)			7
Notes to Financial Statements (Statutory-Basis)			8

Report of Independent Auditors

The Board of Directors

The Western and Southern Life Insurance Company

Opinion

We have audited the statutory-basis financial statements of The Western and Southern Life Insurance Company (the Company), which comprise the balance sheets as of December 31, 2023 and 2022, and the related statements of operations, changes in capital and surplus and cash flows for each of the three years ended December 31, 2023, and the related notes to the financial statements (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

Adverse Opinion on U.S. Generally Accepted Accounting Principles

Basis for Opinion

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material and pervasive.

Responsibilities of Management for the Financial Statements

Auditor’s Responsibilities for the Audit of the Financial Statements

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

/s/ Ernst & Young LLP

April 17, 2024

The Western and Southern Life Insurance Company

Balance Sheets (Statutory-Basis)


	December 31
	2023		2022
Admitted assets	(In Thousands)
Cash and invested assets:
Debt securities	$	2,844,267	$	2,769,710
Preferred and common stocks	635,714		902,050
Investments in common stocks of subsidiaries	4,798,724		4,592,609
Mortgage loans	54,659		55,841
Policy loans	142,732		142,493
Real estate:
Properties held for the production of income	817		833
Properties occupied by the Company	24,182		24,705
Cash, cash equivalents and short-term investments	153,730		22,479
Receivable for securities	2,114		3,296
Derivatives	—		196

Securities lending reinvested collateral assets	30,767		17,779
Other invested assets	2,438,680		2,471,001
Total cash and invested assets	11,126,386		11,002,992

Investment income due and accrued	37,542		38,913
Premiums deferred and uncollected	46,707		47,582
Current federal income taxes recoverable	102,121		36,220

Receivables from parent, subsidiaries and affiliates	64,239		50,439
Other admitted assets	12,657		15,104
Separate account assets	1,137,428		1,131,631
Total admitted assets	$	12,527,080	$	12,322,881

Liabilities and capital and surplus
Liabilities:
Policy and contract liabilities:
Life and annuity reserves	$	2,831,496	$	2,795,292
Accident and health reserves	144,794		143,743
Liability for deposit-type contracts	174,161		183,197
Policy and contract claims	49,917		53,974
Dividends payable to policyholders	31,187		33,995
Premiums received in advance	2,754		2,953
Total policy and contract liabilities	3,234,309		3,213,154

General expense due and accrued	51,754		44,050

Net deferred income tax liability	7,984		10,799
Transfer to (from) separate accounts due and accrued, net	(22)		(9)
Asset valuation reserve	327,391		370,006
Interest maintenance reserve	49,848		57,350
Other liabilities	515,377		419,442

Liability for postretirement benefits other than pensions	93,081		94,468

Payable for securities lending	76,738		80,925
Separate account liabilities	1,137,428		1,131,631
Total liabilities	5,493,888		5,421,816

Capital and surplus:
Common stock, $1 par value, authorized 2,500 shares, issued and outstanding 2,500 shares	2,500		2,500
Surplus Notes	995,644		995,499
Paid-in surplus	757,103		607,103
Accumulated surplus	5,277,945		5,295,963
Total capital and surplus	7,033,192		6,901,065
Total liabilities and capital and surplus	$	12,527,080	$	12,322,881

See accompanying notes.

The Western and Southern Life Insurance Company

Statements of Operations (Statutory-Basis)


	Year Ended December 31
	2023		2022		2021
	(In Thousands)
Premiums and other revenues:
Premiums and annuity considerations	$	212,486	$	214,967	$	220,346
Net investment income	590,763		481,052		542,715
Considerations for supplementary contracts with life contingencies	—		31		8
Amortization of the interest maintenance reserve	6,812		6,802		6,688
Commissions and expenses on reinsurance ceded	1,075		1,061		1,055

Other revenues	336		209		339
Total premiums and other revenues	811,472		704,122		771,151

Benefits paid or provided:
Death benefits	129,169		143,821		153,175
Annuity benefits	117,163		52,603		51,804
Disability and accident and health benefits	11,899		10,903		17,541
Surrender benefits	46,428		40,283		41,512
Payments on supplementary contracts with life contingencies	202		237		276
Other benefits	3,489		2,537		6,246
Increase in policy reserves and other policyholders’ funds	42,911		(91,642)		33,034
Total benefits paid or provided	351,261		158,742		303,588

Insurance expenses and other deductions:
Commissions	16,784		14,795		13,563

General expenses	158,625		146,735		197,470
Net transfers to (from) separate account	(117,344)		(52,808)		(51,774)
Reserve adjustments on reinsurance assumed	(74)		48		—

Other deductions	42,720		(52,197)		60,850
Total insurance expenses and other deductions	100,711		56,573		220,109

Gain (loss) from operations before dividends to policyholders, federal income tax expense, and net realized capital gains (losses)	359,500		488,807		247,454

Dividends to policyholders	41,140		47,950		43,535
Gain (loss) from operations before federal income tax expense and net realized capital gains (losses)	318,360		440,857		203,919
Federal income tax expense (benefit), excluding tax on capital gains	(47,089)		34,062		30,313
Gain (loss) from operations before net realized capital gains (losses)	365,449		406,795		173,606
Net realized capital gains (losses) (excluding gains (losses) transferred to IMR and capital gains tax)	(16,061)		(3,985)		(74,945)
Net income (loss)	$	349,388	$	402,810	$	98,661

See accompanying notes.

The Western and Southern Life Insurance Company

Statements of Changes in Capital and Surplus (Statutory-Basis)


	Common Stock		Surplus Notes and Paid-In Surplus		Accumulated Surplus		Total Capital and Surplus
	(In Thousands)

Balance, January 1, 2021	$	2,500	$	914,707	$	4,740,533	$	5,657,740
Net income (loss)	—		—		98,661		98,661
Change in net deferred income tax	—		—		30,231		30,231
Net change in unrealized gains (losses) on investments (net of deferred tax expense (benefit) of $111,301)	—		—		625,648		625,648
Change in net unrealized foreign exchange capital gain (loss)	—		—		(2,287)		(2,287)

Change in surplus notes	—		497,750		—		497,750
Net change in nonadmitted assets and related items	—		—		67,456		67,456
Change in asset valuation reserve	—		—		(258,434)		(258,434)

Dividends to stockholder	—		—		(50,000)		(50,000)
Change in unrecognized post retirement benefit obligation	—		—		89,365		89,365



Balance, December 31, 2021	2,500		1,412,457		5,341,173		6,756,130
Net income (loss)	—		—		402,810		402,810
Change in net deferred income tax	—		—		(44,085)		(44,085)
Net change in unrealized gains (losses) on investments (net of deferred tax expense (benefit) of ($53,721))	—		—		(569,358)		(569,358)
Change in net unrealized foreign exchange capital gain (loss)	—		—		208		208

Change in surplus notes	—		145		—		145
Net change in nonadmitted assets and related items	—		—		(89,828)		(89,828)
Change in asset valuation reserve	—		—		133,839		133,839


Change in unrecognized post retirement benefit obligation	—		—		121,204		121,204

Capital contribution	—		190,000		—		190,000

Balance, December 31, 2022	2,500		1,602,602		5,295,963		6,901,065
Net income (loss)	—		—		349,388		349,388
Change in net deferred income tax	—		—		(11,576)		(11,576)
Net change in unrealized gains (losses) on investments (net of deferred tax expense (benefit) of ($21,887))	—		—		(162,717)		(162,717)
Change in net unrealized foreign exchange capital gain (loss)	—		—		913		913

Change in surplus notes	—		145		—		145
Net change in nonadmitted assets and related items	—		—		(19,841)		(19,841)
Change in asset valuation reserve	—		—		42,615		42,615

Dividends to stockholder	—		—		(245,000)		(245,000)
Change in unrecognized post retirement benefit obligation	—		—		28,200		28,200

Capital contribution	—		150,000		—		150,000

Balance, December 31, 2023	$	2,500	$	1,752,747	$	5,277,945	$	7,033,192

See accompanying notes.

The Western and Southern Life Insurance Company

Statements of Cash Flow (Statutory-Basis)


	Year Ended December 31
	2023		2022		2021
	(In Thousands)
Operating activities
Premiums collected net of reinsurance	$	213,828	$	216,066	$	221,565
Net investment income received	488,006		361,478		453,781
Benefits paid	(317,916)		(258,418)		(275,261)
Net transfers from (to) separate accounts	117,331		52,812		51,778
Commissions and expense paid	(169,178)		(218,473)		(158,324)
Dividends paid to policyholders	(43,947)		(46,770)		(47,553)
Federal income taxes recovered (paid)	(18,157)		(75,259)		2,619
Other, net	1,409		1,269		1,394
Net cash from (for) operations	271,376		32,705		249,999

Investing activities
Proceeds from investments sold, matured or repaid:
Debt securities	179,708		561,910		236,424
Preferred and common stocks	325,142		396,955		315,580
Mortgage loans	1,182		1,107		970
Real estate	—		—		771
Other invested assets	392,898		291,307		528,139
Net gains (losses) on cash, cash equivalents and short-term investments	(34)		(18)		(30)
Miscellaneous proceeds	2,004		19,350		44,383
Net proceeds from investments sold, matured or repaid	900,900		1,270,611		1,126,237

Cost of investments acquired:
Debt securities	(124,749)		(462,989)		(347,164)
Preferred and common stocks	(379,334)		(816,114)		(807,957)

Real estate	(2,456)		(5,348)		(4,228)
Other invested assets	(439,178)		(563,986)		(533,987)
Miscellaneous applications	(12,988)		(830)		(6,291)
Total cost of investments acquired	(958,705)		(1,849,267)		(1,699,627)

Net change in policy and other loans	(239)		2,815		7,002
Net cash from (for) investments	(58,044)		(575,841)		(566,388)

Financing activities
Surplus notes, capital notes	145		—		497,635
Capital and paid in surplus, less treasury stock	150,000		190,000		—
Borrowed funds	60,666		48,967		—
Net deposits on deposit-type contract funds and other insurance liabilities	(9,036)		(6,171)		(8,197)
Dividends paid to stockholder	(245,000)		—		(50,000)
Other cash provided (applied)	(38,856)		(25,207)		(91,150)
Net cash from (for) financing and miscellaneous sources	(82,081)		207,589		348,288

Net change in cash, cash equivalents and short-term investments	131,251		(335,547)		31,899
Cash, cash equivalents and short-term investments:
Beginning of year	22,479		358,026		326,127
End of year	$	153,730	$	22,479	$	358,026

Cash flow information for noncash transactions:
Dividend from Integrity Life Insurance Company in the form of common stock	$	50,000	$	—	$	—
Capital contribution to Western-Southern Life Assurance Company in the form of common stock	$	(50,000)	$	—	$	—

See accompanying notes.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

1. Nature of Operations and Significant Accounting Policies

The Western and Southern Life Insurance Company (the Company) is a stock life insurance company that offers primarily individual traditional and whole life insurance policies. The Company is licensed in 46 states and the District of Columbia. For the year ended December 31, 2023, approximately 68.8% of the gross premiums and annuity considerations for the Company were derived from California, Illinois, Indiana, North Carolina, Ohio, and Pennsylvania. The Company is domiciled in Ohio. The Company is an indirect, wholly-owned subsidiary of Western & Southern Mutual Holding Company (Mutual Holding), a mutual holding company formed pursuant to the insurance regulations of the State of Ohio. Ohio law requires Mutual Holding to hold at least a majority voting interest in the Company. Currently, Mutual Holding indirectly holds 100% of the voting interest through Western & Southern Financial Group, Inc. (WSFG), its wholly-owned subsidiary. The Company wholly owns the following insurance entities: Western-Southern Life Assurance Company (WSLAC), Columbus Life Insurance Company (Columbus Life), Integrity Life Insurance Company (Integrity) and Gerber Life Insurance Company (Gerber Life). Integrity Life Insurance Company wholly owns National Integrity Life Insurance Company (National).

Included within the financial statements, the Company has established and operates a closed block for the benefit of holders of most participating individual ordinary and weekly industrial life insurance policies issued on or before the formation of Mutual Holding in 2000 (the Closed Block). Assets have been allocated to the Closed Block in an amount that is expected to produce cash flows which, together with anticipated revenue from the policies included in the Closed Block, are reasonably expected to be sufficient to support the Closed Block policies, the continuation of policyholder dividends, in aggregate, in accordance with the 2000 dividend scale if the experience underlying such scale continues, and for appropriate adjustments in the dividend scale if the experience changes. Invested assets allocated to the Closed Block consist primarily of high-quality debt securities, mortgage loans, policy loans, short-term investments, other invested assets, and securities lending reinvested collateral. Invested assets of $1,801.4 million and $1,828.7 million were allocated to the Closed Block as of December 31, 2023 and 2022, respectively. The assets allocated to the Closed Block inure solely for the benefit of the Closed Block policyholders and will not revert to the benefit of the Company. The purpose of the Closed Block is to protect the policy dividend expectations of these policies after the formation of Mutual Holding. The Closed Block will continue in effect until the last policy in the Closed Block is no longer in force.

Use of Estimates

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Basis of Presentation

Investments

•The extent the fair value has been below the book/adjusted carrying value;

•The reasons for the decline in value;

•Specific credit issues related to the issuer and current economic conditions, including the current and future impact of any specific events;

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

•For all other debt securities with interest-related declines in fair value, the Company’s intent to sell the security before recovery of its book/adjusted carrying value.

Investments in real estate are reported net of required obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses include rent for the Company’s occupancy of those properties.

Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally debt securities and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity based on groupings of individual security sold in five-year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statement of operations on a pretax basis in the period that the assets giving rise to the gains or losses are sold.

Subsidiaries

The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Policy Acquisition Costs

Nonadmitted Assets

Certain assets designated as “nonadmitted” (principally investments in unaudited subsidiaries and controlled and affiliated entities, the pension asset, and a trademark license agreement), and other assets not specifically identified as admitted assets within the NAIC’s Accounting Practices and Procedures Manual, are excluded from the accompanying balance sheets and are charged directly to accumulated surplus. Under GAAP, such assets are included in the balance sheets.

Premiums and Benefits

Benefit Reserves

Reinsurance

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Employee Benefits

For purposes of calculating the Company’s pension and postretirement benefit obligations, vested participants, non-vested participants and current retirees are included in the valuation. The prepaid pension asset resulting from the excess of the fair value of plan assets over the benefit obligation, which is nonadmitted under statutory accounting rules, is included in other comprehensive income under GAAP.

Deferred Income Taxes

Deferred tax assets are recorded for the amount of gross deferred tax assets expected to be realized in future years, and a valuation allowance is established for deferred tax assets not meeting a more-likely-than-not realization threshold. Deferred tax assets are limited to 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse during a time frame corresponding with Internal Revenue Service (IRS) tax loss carryback provisions, not to exceed three years, including amounts established in accordance with the provision of SSAP No. 5R, plus 2) for entities who meet the required realization threshold in SSAP No. 101, the lesser of the remaining gross deferred tax assets expected to be realized within three years of the balance sheet date or 15% of capital and surplus excluding any net deferred tax assets, electronic data processing equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities. The remaining deferred tax assets are nonadmitted. Under GAAP, a deferred tax asset is recorded for the amount of gross deferred tax assets expected to be realized in all future years, and a valuation allowance is established for deferred tax assets not meeting a more-likely-than-not realization threshold.

Policyholder Dividends

Policyholder dividends are recognized when declared rather than over the term of the related policies.

Surplus Notes

Surplus Notes are classified as a component of equity rather than as long-term debt.

Statements of Cash Flow

Other significant statutory accounting practices follow.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Restricted Assets

The Company has assets pledged as collateral, or otherwise not exclusively under control of the Company, totaling $106.2 million and $147.4 million as of December 31, 2023 and 2022, respectively. These assets are primarily collateral held in relation to the Company's securities lending program. These restricted assets are discussed in more detail in their relevant section.

Investments

Debt securities, common stocks, preferred stocks, and short-term investments are stated at values prescribed by the NAIC, as follows:

Debt securities not backed by other loans are principally stated at amortized cost using the interest method.

Unaffiliated common stocks are reported at fair value utilizing publicly quoted prices from third-party pricing services and the related unrealized capital gains and losses are reported in capital and surplus along with any adjustment for federal income taxes.

There are no restrictions on unaffiliated common or preferred stocks.

Short-term investments include investments with remaining maturities of one year or less at the date of acquisition and are principally stated at amortized cost, which approximates fair value.

Cash equivalents are short-term highly liquid investments with original maturities of three months or less and are principally stated at amortized cost, which approximates fair value.

The Company’s insurance subsidiaries are reported at their underlying audited statutory equity. The Company’s noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries’ equity is included in capital and surplus.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Policy loans are reported at unpaid principal balances.

Real estate occupied by the Company and real estate held for the production of income are reported at depreciated cost net of related obligations. Real estate that the Company has the intent to sell is reported at the lower of depreciated cost or fair value, net of related obligations. Depreciation is computed by the straight-line method over the estimated useful life of the properties.

Property acquired in the satisfaction of debt is recorded at the lower of cost less accumulated depreciation or fair market value.

The Company utilizes customized call and put options to hedge market volatility related to the S&P 500 index . At the beginning of these contracts, a premium is either paid or received for transferring the related risk. The options are not designated as a hedge for accounting purposes and are carried at fair value on the balance sheet with changes in fair value recorded in surplus. The related gains and losses from terminations or expirations are recorded in realized capital gains and losses.

Realized capital gains and losses are determined using the specific identification method.

Premiums

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Policy Reserves

Life, annuity and accident and health disability benefit reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed policy cash values or the amounts required by the Department. The Company waives deduction of deferred fractional premiums on the death of life and annuity policy insureds and does return any premium beyond the date of death. Surrender values on policies do not exceed the corresponding benefit reserves. Policies issued subject to multiple table substandard extra premiums are valued on the standard reserve basis which recognizes the nonlevel incidence of the excess mortality costs. Additional reserves are established when the results of cash flow testing under various interest rate scenarios indicate the need for such reserves, or the net premiums exceed the gross premiums on any insurance in-force.

Formulaic policy reserves for life insurance and supplemental benefits are computed on the Commissioner’s Reserve Valuation Method. The following mortality tables and interest rates are used:


	Percentage of Reserves
	2023		2022
Life insurance:
1941 Commissioners Standard Ordinary, 2-1/4% - 3-1/2%	5.7	%	6.1	%
1941 Standard Industrial, 2-1/2% - 3-1/2%	8.6		8.8
1958 Commissioners Standard Ordinary, 2-1/2% - 6%	15.4		16.3
1980 Commissioners Standard Ordinary, 4% - 6%	40.6		39.8
2001 Commissioners Standard Ordinary, 3-1/2% - 4-1/2%	26.8		23.7
2017 Commissioners Standard Ordinary, 3-1/2%	1.1		—
Other, 2-1/2% - 6%	0.9		4.3
	99.1		99.0
Other benefits (including annuities):
Various, 2-1/2% - 8-1/4%	0.9		1.0
	100.0	%	100.0	%

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

As of December 31, 2023 and 2022, reserves of $13.2 million and $13.7 million, respectively, were recorded on in-force amounts of $774.5 million and $803.7 million, respectively, for which gross premiums are less than the net premiums according to the standard of valuation required by the Department. The Company anticipates investment income as a factor in the premium deficiency calculation for all accident and health contracts.

Policyholders’ Dividends

The amount of policyholders’ dividends to be paid (including those on policies included in the Closed Block) is determined annually by the Company’s Board of Directors. The aggregate amount of policyholders’ dividends is related to actual interest, mortality, morbidity and expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by the Company.

Policy and Contract Claims

Reinsurance

Reinsurance premiums and benefits paid or provided are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

Securities Lending

At December 31, 2023, the Company had loaned various debt securities, preferred stocks and common stocks as part of a securities lending program administered by Deutsche Bank, of which the fair value was $74.5 million and $23.4 million in the general and separate account, respectively. At December 31, 2022, the Company had loaned various debt securities, preferred stocks and common stocks as part of a securities lending program administered by Deutsche Bank, of which the fair value was $78.7 million and

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

$59.7 million in the general and separate account, respectively. The Company maintains effective control over all loaned securities and, therefore, continues to report such securities as invested assets in the balance sheets. The general account collateral is managed by both an affiliated and unaffiliated agent. The separate account is managed by an unaffiliated agent.

The Company reports all collateral on the balance sheet with an offsetting liability recognized for the obligation to return the collateral. Collateral for the securities lending program is either managed by an affiliated agent of the Company or is managed by Deutsche Bank, an unaffiliated agent. Collateral managed by an affiliated agent, which approximated $45.5 million and $62.6 million at December 31, 2023 and 2022, respectively, is invested primarily in investment-grade debt securities and cash equivalents and is included in the applicable amount on the balance sheets because the funds are available for the general use of the Company. At December 31, 2023 and 2022, collateral managed by an unaffiliated agent, which approximated $30.8 million and $17.8 million respectively, was invested in cash equivalents and was included in securities lending reinvested collateral assets on the balance sheet.

At December 31, 2023, the collateral for all securities on loan could be requested to be returned on demand by the borrower. At December 31, 2023 and 2022, the fair value of the total collateral in the general account was $76.3 million and $80.4 million, respectively. The fair value of the total collateral in the separate account was $24.1 million and $61.1 million at December 31, 2023 and 2022, respectively, which was all managed by an unaffiliated agent.

The aggregate collateral broken out by maturity date is as follows at December 31, 2023:


	Amortized Cost		Fair Value
	(In Thousands)
Open	$	—	$	—
30 days or less	45,348		45,348
31 to 60 days	1,469		1,469
61 to 90 days	747		747
91 to 120 days	266		266
121 to 180 days	—		—
181 to 365 days	1,999		1,997
1 to 2 years	5,600		5,607
2 to 3 years	—		—
Greater than 3 years	20,826		20,826
Total collateral	$	76,255	$	76,260

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

At December 31, 2023, all of the collateral held for the securities lending program was invested in tradable securities that could be sold and used to pay for the $76.7 million and $24.1 million in the general and separate accounts, respectively, in collateral calls that could come due under a worst-case scenario where all collateral was called simultaneously.

Separate Account

The Company maintains a separate account, which holds all of the Company’s pension plan assets. The assets of the separate account consist primarily of marketable securities, which are recorded at fair value. These assets are considered legally insulated from the general accounts.

There are no separate account liabilities that are guaranteed by the general account. (See Note 10 for further discussion on the general account’s responsibility as it relates to the obligations of the Company’s pension plan).

The activity within the separate account, including realized and unrealized gains or losses on its investments, has no effect on net income or capital and surplus of the Company. The Company’s statements of operations reflect annuity payments to pension plan participants and other expenses of the separate account, as well as the reimbursement of such expenses from the separate account.

Federal Income Taxes

The Company files a consolidated income tax return with its eligible subsidiaries and affiliates. The provision for federal income taxes is allocated to the individual companies using a separate return method based upon a written tax-sharing agreement. Under the agreement, the benefits from losses of subsidiaries and affiliates are retained by the subsidiary and affiliated companies. The Company pays all federal income taxes due for all members of the group. The Company then immediately charges or reimburses, as the case may be, the members of the group an amount consistent with the method described in the tax-sharing agreement.

The Company includes interest and penalties in the federal income tax line on the statements of operations.

Postretirement Benefits Other Than Pensions

The Company accounts for its postretirement benefits other than pensions on an accrual basis. The postretirement benefit obligation for current retirees and fully eligible employees is measured by estimating the actuarial present value of benefits expected to be received at retirement using explicit assumptions.

Actuarial and investment gains and losses arising from differences between assumptions and actual experience upon subsequent remeasurement of the obligation may be recognized as a component of the

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

net periodic benefit cost in the current period or amortized. The net gain or loss will be included as a component of net postretirement benefit cost for a year if, as of the beginning of the year, the unrecognized net gain or loss exceeds 10% of the postretirement benefit obligation. That gain or loss, if not recognized immediately, will be amortized over the average life expectancy of the employer’s fully vested and retiree group.

Accounting Changes

There were no material accounting changes in 2023, 2022, or 2021.

Business Combinations

On December 31, 2018, the Company purchased 100% of the common stock of Gerber Life from Nestlé S.A. ("Nestlé"). Gerber Life is an insurer that operates primarily in the juvenile life insurance and medical stop-loss insurance markets. Gerber Life is New York-domiciled and is licensed in 50 states, the District of Columbia, Puerto Rico and certain Canadian provinces. The cost of the acquired entity was $1,257.3 million. The original goodwill balance was $945.5 million, of which $528.1 million was admitted, based on an admission limit of 10% of adjusted company surplus as of the last reported period..

The transaction was accounted for as a statutory purchase and reflects the following:


Year	Admitted Goodwill at Reporting Date		Goodwill Amortized in Period		Book Value of Acquisition		Admitted Goodwill as a % of Admitted Acquisition
	(In Thousands)
2023	$	472,774	$	94,555	$	1,121,475	42.2	%
2022	567,328		94,555		1,149,908		49.3


	2023			2022
	(In Thousands)

Company Surplus as of September 30	$	6,672,215		$	6,532,219
Less September 30 electronic data processing	10,441			10,318
Less September 30 net deferred tax assets	38,823			51,157
Less September 30 net positive goodwill	496,412			590,967
Adjusted Company surplus as of September 30	$	6,126,539		$	5,879,777
Admitted goodwill as a percentage of adjusted surplus	7.7		%	9.6		%

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Subsequent Events

Note 4 describes events that occurred subsequent to the December 31, 2023, financial statement date; the Company sold equity and fixed income securities to two subsidiaries, received an ordinary dividend from a subsidiary, and paid an ordinary dividend to its parent.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

2. Investments

The book/adjusted carrying value and fair value of the Company’s investments in debt securities are summarized as follows:


	Book/ Adjusted Carrying Value		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2023:
U.S. Treasury securities and obligations of U.S. government corporation and agencies	$	18,882	$	—	$	(287)	$	18,595
Debt securities issued by states of the U.S. and political subdivisions of the states	9,810		401		—		10,211
Non-U.S. government securities	61,405		1,069		(12,055)		50,419
Corporate securities	2,516,971		94,263		(172,694)		2,438,540
Commercial mortgage-backed securities	22,356		42		(4,483)		17,915
Residential mortgage-backed securities	109,326		2,867		(10,142)		102,051
Asset-backed securities	105,517		2,356		(4,585)		103,288
Total	$	2,844,267	$	100,998	$	(204,246)	$	2,741,019

At December 31, 2022:
U.S. Treasury securities and obligations of U.S. government corporation and agencies	$	23,341	$	314	$	(394)	$	23,261
Debt securities issued by states of the U.S. and political subdivisions of the states	9,805		341		—		10,146
Non-U.S. government securities	77,002		23		(12,656)		64,369
Corporate securities	2,385,532		62,279		(235,690)		2,212,121
Commercial mortgage-backed securities	22,852		32		(4,447)		18,437
Residential mortgage-backed securities	120,923		3,874		(11,603)		113,194
Asset-backed securities	130,255		1,844		(8,123)		123,976
Total	$	2,769,710	$	68,707	$	(272,913)	$	2,565,504

At December 31, 2023 and 2022, the Company held unrated or below-investment-grade corporate debt securities with a book/adjusted carrying value of $185.7 million and $90.7 million, respectively, and an aggregate fair value of $177.2 million and $78.3 million, respectively. As of December 31, 2023 and 2022, such holdings amounted to 6.5% and 3.3%, respectively, of the Company’s investments in debt securities and 1.5% and 0.7%, respectively, of the Company’s total admitted assets. The Company performs periodic evaluations of the relative credit standing of the issuers of these debt securities. The Company considers these evaluations in its overall investment strategy.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Unrealized gains and losses on investments in unaffiliated common stocks, mutual funds and common stocks of subsidiaries are reported directly in capital and surplus and do not affect net income. The unrealized gains and unrealized losses on, and the cost and fair value of those investments and preferred stocks are as follows:


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2023:
Preferred stocks	$	53,381	$	1,804	$	(406)	$	54,779

Common stocks, unaffiliated	$	206,721	$	163,213	$	(1,346)	$	368,588
Common stocks, mutual funds	190,611		21,865		(129)		212,347
Common stocks, subsidiaries	4,024,050		942,652		(167,978)		4,798,724
	$	4,421,382	$	1,127,730	$	(169,453)	$	5,379,659


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2022:
Preferred stocks	$	44,868	$	2,453	$	(4,807)	$	42,514

Common stocks, unaffiliated	$	290,425	$	212,017	$	(8,987)	$	493,455
Common stocks, mutual funds	390,433		1,629		(25,981)		366,081
Common stocks, subsidiaries	3,843,604		956,870		(207,865)		4,592,609
	$	4,524,462	$	1,170,516	$	(242,833)	$	5,452,145

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The following table shows unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.


	Unrealized Losses Less Than 12 Months				Unrealized Losses Greater Than or Equal to 12 Months
	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2023:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	—	$	—	$	(287)	$	5,574
Debt securities issued by states of the U.S. and political subdivisions of the states	—		—		—		—
Non-U.S. government securities	—		—		(12,055)		39,135
Corporate securities	(1,056)		70,371		(171,638)		1,143,248
Commercial mortgage-backed securities(1)	—		—		(4,483)		16,622
Residential mortgage-backed securities(1)	(118)		5,364		(10,024)		76,108
Asset-backed securities(1)	(105)		4,776		(4,480)		66,938
Total	$	(1,279)	$	80,511	$	(202,967)	$	1,347,625

Preferred stocks	$	(406)	$	11,144	$	—	$	—

Common stocks, unaffiliated	$	(1,346)	$	22,807	$	—	$	—
Common stocks, mutual funds	(129)		5,865		—
Total	$	(1,475)	$	28,672	$	—	$	—

(1) Amounts relate to securities subject to SSAP 43R.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	Unrealized Losses Less Than 12 Months				Unrealized Losses Greater Than or Equal to 12 Months
	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
	(In Thousands)
At December 31, 2022:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	(316)	$	4,746	$	(78)	$	722
Debt securities issued by states of the U.S. and political subdivisions of the states	—		—		—		—
Non-U.S. government securities	(8,514)		49,059		(4,142)		14,328
Corporate securities	(205,116)		1,258,582		(30,574)		83,859
Commercial mortgage-backed securities(1)	(2,573)		9,681		(1,874)		7,117
Residential mortgage-backed securities(1)	(11,331)		89,104		(272)		2,028
Asset-backed securities(1)	(6,719)		70,775		(1,404)		16,583
Total	$	(234,569)	$	1,481,947	$	(38,344)	$	124,637

Preferred stocks	$	(4,807)	$	26,923	$	—	$	—

Common stocks, unaffiliated	$	(8,987)	$	42,253	$	—	$	—
Common stocks, mutual funds	(25,981)		327,028		—		—
Total	$	(34,968)	$	369,281	$	—	$	—

(1) Amounts relate to securities subject to SSAP 43R.

The aggregated unrealized loss is approximately 12.3% and 13.5% of the carrying value of securities considered temporarily impaired at December 31, 2023 and 2022, respectively. At December 31, 2023, there were a total of 424 securities held that are considered temporarily impaired, 346 of which have been impaired for 12 months or longer. At December 31, 2022, there were a total of 570 securities held that were considered temporarily impaired, 29 of which had been impaired for 12 months or longer. The Company recorded other-than-temporary impairments on securities of $20.1 million, $12.4 million and $3.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


CUSIP	Book/Adj Carrying Value Amortized Cost Before Current Period OTTI		Present Value of Future Cash Flows		Recognized Other- Than- Temporary Impairment		Amortized Cost After Other-Than-Temporary Impairment		Fair Value		Date of Other-Than-Temporary Impairment



(In Thousands)
For the year ended, December 31, 2023:
52521H-AJ-2	$	423	$	422	$	1	$	422	$	391	06/30/2023







Total	XXX		XXX		$	1	XXX		XXX		XXX

The Company had no OTTI on loan-backed securities for the year ended December 31, 2023, due to the intent to sell the security or the inability or lack of intent to retain the investment in the security for a period of time sufficient to recover the amortized cost basis of the security.

A summary of the cost or amortized cost and fair value of the Company’s debt securities at December 31, 2023, by contractual maturity, is as follows:


	Book/Adjusted Carrying Value		Fair Value
	(In Thousands)
Years to maturity:
One or less	$	22,031	$	21,943
After one through five	315,795		320,525
After five through ten	436,766		449,543
After ten	1,832,476		1,725,754
Mortgage-backed securities/asset-backed securities	237,199		223,254
Total	$	2,844,267	$	2,741,019

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Proceeds from sales of investments in debt securities during 2023, 2022 and 2021 were $60.6 million, $248.3 million, and $33.6 million; gross gains of $0.6 million, $5.1 million, and $1.0 million and gross losses of $1.5 million, $1.0 million, and $0.0 million were realized on these sales in 2023, 2022 and 2021, respectively.

Proceeds from the sales of investments in equity securities during 2023, 2022 and 2021 were $357.2 million, $372.1 million, and $284.5 million; gross gains of $80.7 million, $67.6 million, and $45.3 million and gross losses of $12.4 million, $22.3 million, and $4.1 million were realized on these sales in 2023, 2022 and 2021, respectively.

Realized capital gains (losses) are reported net of federal income taxes and amounts transferred to the IMR as follows for the years ended December 31:


	2023		2022		2021
	(In Thousands)
Realized capital gains (losses)	$	(17,404)	$	10,230	$	(78,811)
Less amount transferred to IMR (net of related taxes (benefits) of $(183) in 2023, $1,327 in 2022, and $248 in 2021)	(689)		4,993		932
Less federal income tax expense (benefit) of realized capital gains (losses)	(654)		9,222		(4,798)
Net realized capital gains (losses)	$	(16,061)	$	(3,985)	$	(74,945)

Net investment income was generated from the following for the years ended December 31:


	2023		2022		2021
	(In Thousands)
Debt securities	$	145,319	$	141,466	$	158,760
Equity securities	294,929		107,536		32,007
Mortgage loans	2,273		2,318		2,363
Real estate	10,536		9,982		12,377
Policy loans	10,582		10,704		11,067
Cash, cash equivalents and short-term investments	2,588		1,567		688
Other invested assets	195,684		274,692		390,541
Other	621		252		(785)
Gross investment income	662,532		548,517		607,018
Investment expenses	71,769		67,465		64,303
Net investment income	$	590,763	$	481,052	$	542,715

The Company’s investments in mortgage loans principally involve commercial real estate. At December 31, 2023, 79.7% of such mortgages, or $43.6 million, involved properties located in Ohio, Washington, and South Carolina. Such investments consist of primarily first-mortgage liens on completed income-producing properties. The aggregate mortgage outstanding to any one borrower does not exceed $21.2 million. During 2023, there were no loans issued. At the issuance of a loan, the percentage of any one loan to value of security, exclusive of insured, guaranteed or purchase money mortgage did not exceed 80.0%. During 2023, the Company did not reduce interest rates on any outstanding mortgages.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Derivative Instruments

The Company entered into an equity hedge program designed to hedge the market value risks associated with the broad equity market. Hedging this risk reduces the economic sensitivity to price declines. At the beginning of these contracts, a premium is either paid or received for transferring the related risk. The options are not designated as a hedge for accounting purposes and are carried at fair value on the balance sheet with changes in fair value recorded in surplus. The related gains and losses from terminations or expirations are recorded in realized capital gains and losses. The change in fair value was $0.0 million, $0.0 million, and $50.6 million for the years ended December 31, 2023, 2022, and 2021, respectively. The net gain/(loss) recognized through net income within realized gains and losses was $0.0 million, $0.0 million, and $(97.2) million for the years ended December 31, 2023, 2022, and 2021, respectively. The Company closed the hedge in the first quarter of 2021.

Information related to the Company’s derivative instruments as described above and the effects of offsetting on the balance sheet consisted of the following for the years ended December 31:


	2023		2022
	(In Thousands)
Derivative assets:
Gross amount of recognized assets	$	—	$	196
Gross amounts offset	—		—
Net amount of assets	$	—	$	196

Derivative liabilities:
Gross amount of recognized liabilities	$	—	$	—
Gross amounts offset	—		—
Net amount of liabilities	$	—	$	—

3. Fair Values of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company’s financial assets and liabilities carried at fair value have been classified, for disclosure purposes, based on the following hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels. The

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Company’s policy is to recognize transfers in and transfers out of levels at the beginning of the quarterly reporting period.

•Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s Level 2 assets and liabilities primarily include debt securities within the Company’s separate account for which public quotations are not available, but that are priced by third-party pricing services or internal models using observable inputs. Also included in Level 2 assets and liabilities are preferred stock, fixed income residual tranches, and stock warrants. The fair value of these instruments is determined through the use of third-party pricing services or models utilizing market observable inputs.

•Level 3 - Significant unobservable inputs for the asset or liability. The Company’s Level 3 assets and liabilities primarily include private real estate funds within the Company’s separate account that are priced utilizing significant unobservable inputs. Also included in Level 3 assets and liabilities are common and preferred stocks being priced by broker quotes or utilizing recent financing for similar securities.

Certain investments utilize net asset value (NAV) as a practical expedient for fair value. These investments are reported separately from the hierarchy. Investments utilizing NAV consist mainly of equity interest in limited partnerships and limited liabilities in the separate account. These investments contain fixed income, common stock, and real estate characteristics. The interests in these partnerships can be sold or transferred with prior consent from the general partner. The average remaining life of the investments is 16.7 years. The Company's unfunded commitment for these investments is $74.5 million. In addition, a collective trust in the separate account utilizing NAV is primarily investing in domestic fixed income securities. Shares in the trust can be redeemed at their net asset value. The NAV for this investment is $10.91. The Company does not intend to sell any investments utilizing NAV.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

understanding of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. Care should be exercised in deriving conclusions about the Company’s business, its value or financial position based on the fair value information of financial instruments presented below. The following discussion describes the valuation methodologies utilized by the Company for assets and liabilities measured or disclosed at fair value.

Debt and Equity Securities

The fair values of actively traded equity securities and exchange traded funds (including exchange traded funds with debt like characteristics) have been determined utilizing publicly quoted prices obtained from third-party pricing services. The fair values of certain equity securities for which no publicly quoted prices are available have been determined through the use of third-party pricing services utilizing market observable inputs. Actively traded mutual funds are valued using the net asset values of the funds. The fair value of equity securities included in Level 3 has been determined by utilizing broker quotes or recent financing for similar securities.

Mortgage Loans

Cash, Cash Equivalents and Short-Term Investments

The fair values of cash, cash equivalents and short-term investments are based on quoted market prices or stated amounts.

Securities Lending Reinvested Collateral Assets

The fair values of securities lending reinvested collateral assets are determined through the use of third-party sources utilizing publicly quoted prices.

Other Invested Assets

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Derivative Instruments

The fair values of free-standing derivative instruments, primarily stock warrants, are determined through the use of third-party pricing services or models utilizing market observable inputs.

Assets Held in Separate Accounts

Assets held in separate accounts include debt securities, equity securities, mutual funds, surplus notes, private equity, and private debt fund investments. The fair values of debt securities, equity securities and mutual funds have been determined using the same methodologies as similar assets held in the general account. The fair values of private equity and private debt fund investments have been determined utilizing the net asset values of the funds. The fair values of the private real estate funds have been determined by significant unobservable inputs.

Life and Annuity Reserves for Investment-Type Contracts and Deposit Fund Liabilities

Securities Lending Liability

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Assets and liabilities measured at fair value on a recurring basis are outlined below:


	Assets/(Liabilities) Measured at Fair Value		Fair Value Hierarchy Level
			Level 1		Level 2		Level 3		NAV
	(In Thousands)
At December 31, 2023
Assets:

Bonds, exchange traded funds	$	151,108	$	151,108	$	—	$	—	$	—
Common stocks, unaffiliated	368,588		348,596		—		17,110		2,882
Common stocks, mutual funds	212,347		212,347		—		—		—
Preferred stocks	54,779		—		40,161		14,618		—
Other invested assets, fixed income residual tranche	28,626		—		28,626		—		—

Separate account assets	1,137,428		731,114		125,126		23,734		257,454
Total assets	$	1,952,876	$	1,443,165	$	193,913	$	55,462	$	260,336


	Assets/(Liabilities) Measured at Fair Value		Fair Value Hierarchy Level
			Level 1		Level 2		Level 3		NAV
	(In Thousands)
At December 31, 2022
Assets:


Common stocks, unaffiliated	$	493,455	$	467,200	$	—	$	23,394	$	2,861
Common stocks, mutual funds	366,081		366,081		—		—		—
Preferred stocks	42,514		—		26,917		15,597		—
Other invested assets, fixed income residual tranche	28,701		—		28,701		—
Derivative assets	196		—		196		—		—
Separate account assets	1,131,631		709,833		134,147		—		287,651
Total assets	$	2,062,578	$	1,543,114	$	189,961	$	38,991	$	290,512

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2023 are as follows:


	Beginning Asset/(Liability) as of January 1, 2023		Total Realized/Unrealized Gains (Losses) Included in:						Purchases, Sales, Issuances and Settlements		Transfers Into Level 3**		Transfers Out of Level 3		Ending Asset/ (Liability) as of December 31, 2023
			Net Income		Surplus		Other*
	(In Thousands)
Assets:
Common stocks, unaffiliated	$	23,394	$	—	$	(6,284)	$	—	$	—	$	—	$	—	$	17,110
Preferred stocks	15,597		—		(1,979)		—		1,000		—		—		14,618
Separate account assets	—		—		—		—		—		23,734		—		23,734
Total assets	$	38,991	$	—	$	(8,263)	$	—	$	1,000	$	23,734	$	—	$	55,462

* Gains and losses for assets held in separate accounts do not impact net income or surplus as the change in value of assets held in separate accounts is offset by a change in value of liabilities related to separate accounts.

** Transfers into Level 3 are due to using a pricing source with unobservable inputs.


	Purchases		Issuances		Sales		Settlements		Net Purchases, Issuances, Sales and Settlements
	(In Thousands)
Assets:
Common stocks, unaffiliated	$	—	$	—	$	—	$	—	$	—
Preferred stocks	1,000		—		—		—		1,000
Separate account assets	—		—		—		—		—
Total assets	$	1,000	$	—	$	—	$	—	$	1,000

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2022, is as follows:


	Beginning Asset/(Liability )as of January 1, 2022		Total Realized/Unrealized Gains (Losses) Included in:						Purchases, Sales, Issuances and Settlements		Transfers Into Level 3*		Transfers Out of Level 3		Ending Asset/ (Liability) as of December 31, 2022
			Net Income		Surplus		Other
	(In Thousands)
Assets:
Common stocks, unaffiliated	$	21,416	$	—	$	848	$	—	$	—	$	1,130	$	—	$	23,394
Preferred stocks	4,227		—		2,370		—		9,000		—		—		15,597

Total assets	$	25,643	$	—	$	3,218	$	—	$	9,000	$	1,130	$	—	$	38,991

* Transfers into Level 3 are due to changes in the price source.


	Purchases		Issuances		Sales		Settlements		Net Purchases, Issuances, Sales and Settlements
	(In Thousands)
Assets:
Common stocks, unaffiliated	$	—	$	—	$	—	$	—	$	—
Preferred stocks	9,000		—		—		—		9,000

Total Assets	$	9,000	$	—	$	—	$	—	$	9,000

The Company did not have any significant assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2023 and 2022.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The carrying amounts and fair values of the Company’s significant financial instruments follow:


	December 31, 2023
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3		NAV
	(In Thousands)
Assets:
Bonds	$	2,844,267	$	2,741,019	$	156,682	$	2,577,577	$	6,760	$	—
Common stock:
Unaffiliated	368,588		368,588		348,596		—		17,110		2,882
Mutual funds	212,347		212,347		212,347		—		—		—
Preferred stock	54,779		54,779		—		40,161		14,618		—
Mortgage loans	54,659		49,978		—		—		49,978		—
Cash, cash equivalents and short-term investments	153,730		153,733		153,733		—		—		—
Other invested assets:
Surplus notes	38,977		37,495		—		37,495		—		—
Fixed income residual tranche	28,626		28,626		—		28,626		—		—
Securities lending reinvested collateral assets	30,767		30,767		30,767		—		—		—


Separate account assets	1,137,428		1,137,428		731,114		125,126		23,734		257,454

Liabilities:
Life and annuity reserves for investment-type contracts and deposit fund liabilities	$	(2,476)	$	(2,417)	$	—	$	—	$	(2,417)	$	—


Securities lending liability	(76,738)		(76,738)		—		(76,738)		—		—

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	December 31, 2022
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3		NAV
	(In Thousands)
Assets:
Bonds	$	2,769,710	$	2,565,504	$	8,887	$	2,553,262	$	3,355	$	—
Common stock:
Unaffiliated	493,455		493,455		467,200		—		23,394		2,861
Mutual funds	366,081		366,081		366,081		—		—		—
Preferred stock	42,514		42,514		—		26,917		15,597		—
Mortgage loans	55,841		50,158		—		—		50,158		—
Cash, cash equivalents and short-term investments	22,479		22,479		22,479		—		—		—
Other invested assets:
Surplus notes	39,025		35,761		—		35,761		—		—
Fixed income residual tranche	28,701		28,701		—		28,701		—		—
Securities lending reinvested collateral assets	17,779		17,779		17,779		—		—		—
Derivative assets	196		196		—		196		—

Separate account assets	1,131,631		1,131,631		709,833		134,147		—		287,651

Liabilities:
Life and annuity reserves for investment-type contracts and deposit fund liabilities	$	(2,823)	$	(2,733)	$	—	$	—	$	(2,733)	$	—

Securities lending liability	(80,925)		(80,925)		—		(80,925)		—		—

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

4. Related-Party Transactions

The Company owns a 100% interest in Integrity and WSLAC, whose carrying values based on underlying statutory surplus at December 31, 2023, are $1.3 billion and $1.9 billion, respectively. The accounting policies of Integrity and WSLAC are the same as those of the Company described in Note 1. The summary financial data for Integrity and WSLAC follows:


	2023		2022
	(In Thousands)
Integrity:
Admitted Assets	$	9,057,180	$	9,377,215
Liabilities	7,729,686		8,081,440
Statutory Surplus	$	1,327,494	$	1,295,775
Net Income	$	28,010	$	5,477


WSLAC:
Admitted Assets	$	30,938,412	$	25,363,432
Liabilities	28,998,249		23,586,209
Statutory Surplus	$	1,940,163	$	1,777,223
Net Income	$	(62,605)	$	(84,549)

The Company has an equity interest in certain partnerships that made payments of principal and interest under mortgage financing arrangements to subsidiaries in the amount of $26.0 million, $18.1 million, and $39.0 million in 2023, 2022 and 2021, respectively. The principal balance of the mortgage financing arrangements with subsidiaries was $259.9 million and $267.3 million at December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, the Company had $294.7 million and $275.7 million, respectively, invested in the Touchstone Funds, which are exchange traded and mutual funds administered by Touchstone Advisors, Inc., an indirect subsidiary of the company.

At December 31, 2023 and 2022, the Company had $630.6 million and $709.4 million, respectively, invested in fixed income residual tranches and various private equity and private debt funds managed by Fort Washington Investment Advisors, Inc., an indirect subsidiary of the Company.

At December 31, 2023 and 2022, the Company had $1,255.8 million and $1,214.0 million, respectively, invested in WS Real Estate Holdings, LLC, which is a holding company managed by Eagle Realty Group, LLC, an indirect subsidiary of the Company.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

In April 2024, the Company sold $62.9 million of equity securities in exchange for cash to National, which was referenced in Note 1, Subsequent Events.

In March 2024, the Company paid a $155.0 million ordinary dividend to WSFG, which was referenced in Note 1, Subsequent Events. The dividend was in the form of cash.

In March 2024, the Company received a $155.0 million ordinary dividend from WSLAC, which was referenced in Note 1, Subsequent Events. The dividend was in the form of cash.

In March 2024, the Company sold $50.0 million of fixed income securities in exchange for cash to Gerber Life, which was referenced in Note 1, Subsequent Events.

In December 2023, the Company received a $150.0 million capital contribution from WSFG. The contribution was in the form of cash.

In December 2023, the Company paid a $275.0 million capital contribution to WSLAC. The contribution was in the form of $225.0 million and $50.0 million in cash and equity securities, respectively.

In December 2023, the Company received a $125.0 million ordinary dividend from Integrity. The dividend was in the form of $75.0 million and $50.0 million in cash and equity securities, respectively.

In August 2023, the Company entered into a Pension Risk Transfer agreement with WSLAC. Refer to Note 10 for more detail.

In June and July 2023, the Company sold $25.0 million and $24.0 million of equity securities, respectively, in exchange for cash to Gerber Life.

In March 2023, the Company paid a $245.0 million ordinary dividend to WSFG. The dividend was in the form of cash.

In March 2023, the Company received a $150.0 million ordinary dividend from WSLAC. The dividend was in the form of cash.

In the the first quarter of 2023, the Company sold $80.0 million of equity securities in exchange for cash to National.

The Company has an outstanding loan issued January 6, 2023, in the amount of $72.2 million due to WSLAC. Any outstanding principal is due January 6, 2033.

In December 2022, the Company received a $190.0 million capital contribution from WSFG. The contribution was in the form of cash.

In December 2022, the company paid a $320.0 million capital contribution to WSLAC. The contribution was in the form of cash.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

In December 2022, the Company paid a $50.0 million capital contribution to Columbus Life. The contribution was in the form of cash.

In December 2022, the Company received an $80.0 million ordinary dividend from Integrity. The dividend was in the form of cash.

In December 2021, the company paid a $250.0 million capital contribution to WSLAC. The contribution was in the form of cash.

In November 2021, the Company paid a $50.0 million ordinary dividend to WSFG. The dividend was in the form of cash.

In March 2021, the Company paid a $100.0 million capital contribution to Columbus Life. The contribution was in the form of cash.

The Company had $64.2 million and $50.4 million receivable from parent, subsidiaries and affiliates as of December 31, 2023 and 2022, respectively. The Company had $0.3 million and $0.5 million payable to parent, subsidiaries and affiliates as of December 31, 2023 and 2022, respectively. The terms of the settlement generally require that these amounts be settled in cash within 30 days.

The Company has entered into multiple reinsurance agreements with affiliated entities. See Note 5 for further description.

5. Reinsurance

The Company has a ceded reinsurance agreement with Columbus Life. Under the reinsurance agreement, Columbus Life reinsures the former liabilities of Columbus Mutual, a former affiliate, which was merged into the Company. Life and accident and health reserves ceded from the Company to Columbus Life totaled $421.5 million and $443.8 million at December 31, 2023 and 2022, respectively.

In 2006, the Company entered into a yearly renewable term reinsurance agreement with Lafayette Life, an affiliated entity, whereby the Company provides reinsurance coverage on certain life products and associated riders as this coverage is recaptured by Lafayette Life from unaffiliated reinsurers. Life reserves ceded from Lafayette Life to the Company under this agreement totaled $0.8 million and $0.9 million at December 31, 2023 and 2022, respectively.

Certain premiums and benefits are ceded to other unaffiliated insurance companies under various reinsurance agreements. The majority of the ceded business is due to ceding substandard business to reinsurers (facultative basis).

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The effects of reinsurance on premiums, annuity considerations and deposit-type funds are as follows for the years ended December 31:


	2023		2022		2021
	(In Thousands)

Direct premiums	$	218,455	$	220,548	$	225,660
Assumed premiums:
Affiliates	1,074		1,185		1,203
Nonaffiliates	—		—		—
Ceded premiums:
Affiliates	—		—		—
Nonaffiliates	(7,043)		(6,766)		(6,517)
Net premiums	$	212,486	$	214,967	$	220,346

The Company’s ceded reinsurance arrangements impacted certain other items in the accompanying financial statements by the following amounts as of and for the years ended December 31:


	2023		2022		2021
	(In Thousands)
Policy and contract claims:
Affiliates	$	—	$	—	$	—
Nonaffiliates	3,846		2,401		4,696
Policy and contract liabilities:
Affiliates	421,470		443,797		460,048
Nonaffiliates	33,465		30,758		28,786
Amounts recoverable on reinsurance contracts:
Affiliates	—		—		—
Nonaffiliates	118		221		303

In 2023, 2022 and 2021, the Company did not commute any ceded reinsurance nor did it enter into or engage in any agreement that reinsures policies or contracts that were in-force or had existing reserves as of the effective date of such agreements.

Neither the Company nor any of its related parties, control directly or indirectly, any reinsurers with whom the Company conducts business. No policies issued by the Company have been reinsured with a foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. The Company does not have any reinsurance agreements in effect under which the reinsurer may unilaterally cancel the agreement. At December 31, 2023, there are no reinsurance

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

agreements in effect such that the amount of losses paid or accrued exceed the total direct premium collected. The Company remains obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

There would be no reduction in surplus at December 31, 2023, if all reinsurance agreements were cancelled.

6. Federal Income Taxes

The Company and its eligible subsidiaries and affiliates file a consolidated federal income tax return. Amounts due (to)/from the Internal Revenue Service for federal income taxes, net of the amounts due (to)/from subsidiaries and affiliates, were $102.1 million and $36.2 million at December 31, 2023 and 2022, respectively. The tax years 2014 through 2022 remain subject to examination by major tax jurisdictions.

The amount of federal income taxes incurred that will be available for recoupment at December 31, 2023, in the event of future capital losses is $0.0 million, $27.6 million, and $61.2 million from 2023, 2022 and 2021, respectively.

The components of the net deferred tax asset (liability) at December 31 are as follows:


		12/31/2023
		(In Thousands)
		(1)		(2)		(3)
						(Col 1+2)
		Ordinary		Capital		Total

(a)	Gross deferred tax assets	$	203,714	$	8,217	$	211,931
(b)	Statutory valuation allowance adjustments	—		—		—
(c)	Adjusted gross deferred tax assets (a - b)	203,714		8,217		211,931
(d)	Deferred tax assets nonadmitted	—		—		—
(e)	Subtotal net admitted deferred tax assets (c - d)	203,714		8,217		211,931
(f)	Deferred tax liabilities	168,514		51,401		219,915
(g)	Net admitted deferred tax asset/(net deferred tax liability) (e - f)	$	35,200	$	(43,184)	$	(7,984)

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


		12/31/2022
		(In Thousands)
		(4)		(5)		(6)
						(Col 4+5)
		Ordinary		Capital		Total

(a)	Gross deferred tax assets	$	180,314	$	13,498	$	193,812
(b)	Statutory valuation allowance adjustments	—		—		—
(c)	Adjusted gross deferred tax assets (a - b)	180,314		13,498		193,812
(d)	Deferred tax assets nonadmitted	—		—		—
(e)	Subtotal net admitted deferred tax assets (c - d)	180,314		13,498		193,812
(f)	Deferred tax liabilities	167,632		36,979		204,611
(g)	Net admitted deferred tax asset/(net deferred tax liability) (e - f)	$	12,682	$	(23,481)	$	(10,799)


		Change
		(In Thousands)
		(7)		(8)		(9)
						(Col 7+8)
		Ordinary		Capital		Total

















(a)	Gross deferred tax assets	$	23,400	$	(5,281)	$	18,119
(b)	Statutory valuation allowance adjustments	—		—		—
(c)	Adjusted gross deferred tax assets (a - b)	23,400		(5,281)		18,119
(d)	Deferred tax assets nonadmitted	—		—		—
(e)	Subtotal net admitted deferred tax assets (c - d)	23,400		(5,281)		18,119
(f)	Deferred tax liabilities	882		14,422		15,304
(g)	Net admitted deferred tax asset/(net deferred tax liability) (e - f)	$	22,518	$	(19,703)	$	2,815


		12/31/2023
		(In Thousands)
		(1)		(2)		(3)
						(Col 1+2)
Admission Calculation Components SSAP No. 101		Ordinary		Capital		Total

(a)	Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	8,217	$	8,217
(b)	Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (the lesser of (b)1 and (b)2 below)	20,977		—		20,977
	1. Adjusted gross deferred tax assets expected to be realized following the balance sheet date	20,977		—		20,977
	2. Adjusted gross deferred tax assets allowed per limitation threshold.	XXX		XXX		934,023
(c)	Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities	182,737		—		182,737
(d)	Deferred tax assets admitted as the result of application of SSAP No. 101 Total ((a) + (b) + (c))	$	203,714	$	8,217	$	211,931

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


		12/31/2022
		(In Thousands)
		(4)		(5)		(6)
						(Col 4+5)
Admission Calculation Components SSAP No. 101		Ordinary		Capital		Total

(a)	Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	13,498	$	13,498
(b)	Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (the lesser of (b)1 and (b)2 below)	39,349		—		39,349
	1. Adjusted gross deferred tax assets expected to be realized following the balance sheet date	39,349		—		39,349
	2. Adjusted gross deferred tax assets allowed per limitation threshold.	XXX		XXX		982,746
(c)	Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities	140,965		—		140,965
(d)	Deferred tax assets admitted as the result of application of SSAP No. 101 Total ((a) + (b) + (c))	$	180,314	$	13,498	$	193,812


		Change
		(In Thousands)
		(7)		(8)		(9)
						(Col 7+8)
Admission Calculation Components SSAP No. 101		Ordinary		Capital		Total
















(a)	Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	(5,281)	$	(5,281)
(b)	Adjusted gross deferred tax assets expected to be realized (excluding the amount of deferred tax assets from (a) above) after application of the threshold limitation (the lesser of (b)1 and (b)2 below)	(18,372)		—		(18,372)
	1. Adjusted gross deferred tax assets expected to be realized following the balance sheet date	(18,372)		—		(18,372)
	2. Adjusted gross deferred tax assets allowed per limitation threshold.	XXX		XXX		(48,723)
(c)	Adjusted gross deferred tax assets (excluding the amount of deferred tax assets from (a) and (b) above) offset by gross deferred tax liabilities	41,772		—		41,772
(d)	Deferred tax assets admitted as the result of application of SSAP No. 101 Total ((a) + (b) + (c))	$	23,400	$	(5,281)	$	18,119


	2023	2022

Ratio percentage used to determine recovery period and threshold limitation amount	879%	848%


		12/31/2023
		(1)	(2)
Impact of tax planning strategies		Ordinary	Capital
		(In Thousands)
(a)	Adjusted gross DTAs amount	$203,714	$8,217
(b)	Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	11.28%	3.88%
(c)	Net admitted adjusted gross DTAs amount	$203,714	$8,217
(d)	Percentage of net admitted adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	11.28%	3.88%

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


		12/31/2022
		(3)	(4)
Impact of tax planning strategies		Ordinary	Capital
		(In Thousands)
(a)	Adjusted gross DTAs amount	$180,314	$13,498
(b)	Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	11.99%	6.96%
(c)	Net admitted adjusted gross DTAs amount	$180,314	$13,498
(d)	Percentage of net admitted adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	11.99%	6.96%


		Change
		(5)	(6)
Impact of tax planning strategies		Ordinary	Capital
		(In Thousands)










(a)	Adjusted gross DTAs amount	$23,400	$(5,281)
(b)	Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	(0.71)%	(3.08)%
(c)	Net admitted adjusted gross DTAs amount	$23,400	$(5,281)
(d)	Percentage of net admitted adjusted gross DTAs by tax character attributable to the impact of tax planning strategies	(0.71)%	(3.08)%

The Company's tax planning strategies include the use of reinsurance.

Current income taxes incurred consist of the following major components:


			12/31/2023		12/31/2022		12/31/2021
			(In Thousands)
(1)	Current income tax
	(a)	Federal	$	(47,285)	$	33,781	$	30,114
	(b)	Foreign	196		281		199
	(c)	Subtotal	(47,089)		34,062		30,313
	(d)	Federal income tax on net capital gains	(654)		9,222		(4,798)
	(e)	Utilization of capital loss carryforwards	—		—		—
	(f)	Other	—		—		—
	(g)	Federal and foreign income taxes incurred	$	(47,743)	$	43,284	$	25,515

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


			(1)		(2)		(3)
							(Col 1-2)
(2)	Deferred tax assets:		12/31/2023		12/31/2022		Change
	(a)	Ordinary	(In Thousands)
		(1) Discounting of unpaid losses	$	—	$	—	$	—
		(2) Unearned premium revenue	—		—		—
		(3) Policyholder reserves	31,053		30,684		369
		(4) Investments	26,058		28,658		(2,600)
		(5) Deferred acquisition costs	19,527		18,992		535
		(6) Policyholder dividends accrual	3,133		3,596		(463)
		(7) Fixed assets	—		—		—
		(8) Compensation and benefits accrual	45,514		50,512		(4,998)
		(9) Pension accrual	—		—		—
		(10) Receivables - nonadmitted	74,438		43,517		30,921
		(11) Net operating loss carryforward	—		—		—
		(12) Tax credit carryforward	—		—		—
		(13) Other	3,991		4,355		(364)
		(99) Subtotal	203,714		180,314		23,400
	(b)	Statutory valuation allowance adjustment	—		—		—
	(c)	Nonadmitted	—		—		—
	(d)	Admitted ordinary deferred tax assets (2a99 - 2b - 2c)	203,714		180,314		23,400
	(e)	Capital
		(1) Investments	8,217		13,498		(5,281)
		(2) Net capital loss carryforward	—		—		—
		(3) Real estate	—		—		—
		(4) Other	—		—		—
		(99) Subtotal	8,217		13,498		(5,281)
	(f)	Statutory valuation allowance adjustment	—		—		—
	(g)	Nonadmitted	—		—		—
	(h)	Admitted capital deferred tax assets (2e99- 2f - 2g)	8,217		13,498		(5,281)
	(i)	Admitted deferred tax assets (2d + 2h)	$	211,931	$	193,812	$	18,119

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


			(1)		(2)		(3)
							(Col 1-2)
			12/31/2023		12/31/2022		Change
(3)	Deferred tax liabilities:		(In Thousands)
	(a)	Ordinary
		(1) Investments	$	153,049	$	153,707	$	(658)
		(2) Fixed assets	6,054		4,578		1,476
		(3) Deferred and uncollected premium	7,264		7,585		(321)
		(4) Policyholder reserves	1,095		1,762		(667)
		(5) Other	1,052		—		1,052
		(99) Subtotal	168,514		167,632		882
	(b)	Capital
		(1) Investments	51,401		36,979		14,422
		(2) Real estate	—		—		—
		(3) Other	—		—		—
		(99) Subtotal	51,401		36,979		14,422
	(c)	Deferred tax liabilities (3a99 + 3b99)	219,915		204,611		15,304

(4)	Net deferred tax assets/liabilities (2i - 3c)		$	(7,984)	$	(10,799)	$	2,815

Among the more significant book-to-tax adjustments were the following:


	12/31/2023		Effective Tax Rate		12/31/2022		Effective Tax Rate		12/31/2021		Effective Tax Rate
	(In Thousands)				(In Thousands)				(In Thousands)

Provision computed at statutory rate	$	63,345	21.00	%	$	94,728	21.00	%	$	26,273	21.00	%
Dividends received deduction	(2,781)		(0.93)		(3,577)		(0.79)		(2,613)		(2.09)
Tax credits	(195)		(0.06)		652		0.14		(1,227)		(0.98)
Other invested assets and nonadmitted change	39,127		12.97		2,072		0.46		(19,292)		(15.42)



Affiliated income	(57,750)		(19.15)		—		—		—		—
Nonadmitted pension asset	(34,098)		(11.30)		—		—		—		—
Other	(43,815)		(14.52)		(6,506)		(1.44)		(7,857)		(6.28)

Total statutory income taxes	$	(36,167)	(11.99)	%	$	87,369	19.37	%	$	(4,716)	(3.77)	%

Federal and foreign taxes incurred	$	(47,743)	(15.83)	%	$	43,284	9.60	%	$	25,515	20.39	%
Change in net deferred income taxes	11,576		3.84		44,085		9.77		(30,231)		(24.16)
Total statutory income taxes	$	(36,167)	(11.99)	%	$	87,369	19.37	%	$	(4,716)	(3.77)	%

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The controlled group of corporations of which the reporting entity is a member has determined that it is not an “applicable corporation” for purposes of CAMT during the reporting period, and is not liable for the CAMT.

7. Capital and Surplus

Ohio insurance law limits the amount of dividends that can be paid to a parent in a holding company structure without prior approval of the regulators to the greater of 10% of statutory surplus or statutory net income as of the preceding December 31 less any dividends paid in the preceding 12 months, but only to the extent of earned surplus as of the preceding December 31. Based on these limitations, the Company is able to pay dividends of up to $703.3 million by the end of 2024 without seeking prior regulatory approval based on capital and surplus of $7,033.2 million at December 31, 2023.

The Company currently has the following outstanding surplus notes:


	2023		2022
	(In Thousands)
2019 Notes, 5.15% interest rate, due 2049	$	497,861	$	497,775
2021 Notes, 3.75% interest rate, due 2061	497,783		497,724
Total carrying value of surplus notes	$	995,644	$	995,499

On January 23, 2019, the Company issued $500.0 million in surplus notes (the “2019 Notes”) due January 15, 2049, at a discount of $2.6 million. The entire balance was received in cash, none of which came from related parties. Interest on the 2019 Notes is fixed at 5.15% and payable semiannually on January 15 and July 15 of each year. The 2019 Notes and are administered by The Bank of New York Mellon. Subject to the approval of the Ohio Director of Insurance (the “Director”), the Company has the option to redeem the 2019 Notes (i) in whole within 90 days after the occurrence of a “Tax Event” where the Company receives an opinion of tax counsel that there is a more than insubstantial risk that interest payable on the 2019 Notes is not deductible by the Company, at a redemption price equal to the principal amount of the 2019 Notes to be redeemed (the ‘‘Par Value Redemption Price’’), (ii) in whole or in part, on or after January 23, 2024 but prior to July 15, 2048, at a redemption price equal to the greater of (a) the Par Value Redemption Price or (b) the sum of the present value of the remaining scheduled principal and interest payments on the 2019 Notes from the redemption date to July 15, 2048, discounted to the redemption date on a semi-annual basis at an adjusted treasury rate plus 35 basis points or (iii) in whole or in part, on or after July 15, 2048, at the Par Value Redemption Price, plus, in each case of (i), (ii) and (iii), accrued and unpaid interest payments on the 2019 Notes to be redeemed to the redemption date.

On April 28, 2021, the Company issued $500.0 million in surplus notes (the “2021 Notes”) due April 28, 2061 at a discount of $2.4 million. The entire balance was received in cash, none of which came from related parties. Interest on the 2021 Notes is fixed at 3.75% and payable semiannually on April 28 and

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

October 28 of each year. The 2021 Notes are administered by The Bank of New York Mellon. Subject to the approval of the Director, the Company has the option to redeem the 2021 Notes (i) in whole within 90 days after the occurrence of a “Tax Event” where the Company receives an opinion of tax counsel that there is a more than insubstantial risk that interest payable on the 2021 Notes is not deductible by the Company, at a redemption price equal to the principal amount of the 2021 Notes to be redeemed (the ‘‘Par Value Redemption Price’’), (ii) in whole or in part, prior to October 28, 2060, at a redemption price equal to the greater of (a) the Par Value Redemption Price or (b) the sum of the present value of the remaining scheduled principal and interest payments on the 2021 Notes from the redemption date to October 28, 2060, discounted to the redemption date on a semi-annual basis at an adjusted treasury rate plus 25 basis points or (iii) in whole or in part, on or after October 28, 2060, at the Par Value Redemption Price, plus, in each case of (i), (ii) and (iii), accrued and unpaid interest payments on the 2021 Notes to be redeemed to the redemption date.

The 2019 Notes and 2021 Notes (collectively the “Notes”) do not have payments that are contractually linked nor are any of the payments subject to administrative offsetting provisions. Additionally, proceeds from the Notes were not used to purchase an asset directly from the holders. The Notes were issued pursuant to Rule 144A as defined by the Securities Act of 1933. The Notes are unsecured and subordinated to all present and future indebtedness, policy claims and “prior claims” (those claims referred to in classes 1 through 7 of Section 3903.42 of the Ohio Revised Code) against the Company. Under Ohio insurance laws, the Notes are not part of the legal liabilities of the Company. Each payment of principal of, interest on or redemption price with respect to the Notes, may be made only with the prior approval of the Director, and only out of surplus earnings.

Interest expense of $44.5 million and $44.5 million was recognized from the Notes in 2023 and 2022, respectively. Life-to-date interest expense recognized December 31, 2023, was $175.1 million. There has been no principal paid as of December 31, 2023. As of December 31, 2023, there was unapproved interest of $3.2 million related to 2023 that will come due in 2024. In the event the Company was subject to a liquidation event, the Notes would have preference over the common shareholders. No affiliates of the Company hold any of the Notes. As of the closing, Guggenheim Partners was the only holder of more than 10% of the outstanding Notes on record at the Depository Trust Company.

8. Commitments and Contingencies

At December 31, 2023, the Company does not have any material lease agreements as a lessee for office space or equipment.

At December 31, 2023, the Company has future commitments to provide additional capital contributions of $723.6 million to investments in joint ventures, limited partnerships and limited liability companies.

The Company guarantees the payment of all policyholder obligations of each of the following wholly-owned subsidiaries: WSLAC, Columbus Life and Integrity. In addition, the Company guarantees all

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

policyholder obligations of National and The Lafayette Life Insurance Company (Lafayette Life), an affiliated entity which is wholly-owned by WSFG. Guarantees on behalf of wholly-owned subsidiaries or on behalf of related parties that are considered to be unlimited (as in the case of the guarantee on behalf of Lafayette Life) are exempt from the initial liability recognition criteria and therefore no liability has been recognized in the financial statements. Due to the unlimited nature of the guarantees, the Company is unable to estimate the maximum potential amount of future payments under the guarantees. In the unlikely event the guarantees would be triggered, the Company may be permitted to take control of the underlying assets to recover all or a portion of the amounts paid under the guarantees.

The Company has guaranteed one mortgage loan in which the borrower is an affiliated limited liability company involved in development of real estate. This guarantee has a maximum exposure to the Company of $12.8 million for 506 Phelps Holdings, LLC, in the event the real estate collateral of the affiliated limited liability company is not sufficient to cover the payment of the loan. The fair value of the real estate collateral at December 31, 2023, was approximately $33.1 million. This loan matured in February 2024.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

9. Life and Annuity Reserves and Deposit-Type Contract Liabilities


Individual Annuities	General Account		Separate Account With Guarantees		Separate Account Non-guaranteed		Total		Percent
	(In Thousands)





Subject to discretionary withdrawal at book value without adjustment (minimal or no charge or adjustment)	$	60,064	$	—	$	—	$	60,064	95.9	%
Not subject to discretionary withdrawal	2,541		—		—		2,541		4.1
Total individual annuity reserves (before reinsurance)	62,605		—		—		62,605		100.0	%
Reinsurance ceded	58,796		—		—		58,796
Net individual annuity reserves	$	3,809	$	—	$	—	$	3,809


Group Annuities	General Account		Separate Account With Guarantees		Separate Account Non-guaranteed		Total		Percent
	(In Thousands)






Not subject to discretionary withdrawal	$	2,388	$	—	$	1,113,295	$	1,115,683	100.0	%
Total group annuity reserves (before reinsurance)	2,388		—		1,113,295		1,115,683		100.0	%
Reinsurance ceded	2,388		—		—		2,388
Net group annuity reserves	$	—	$	—	$	1,113,295	$	1,113,295


Deposit-type contracts (no life contingencies)	General Account		Separate Account With Guarantees		Separate Account Non-guaranteed		Total		Percent
	(In Thousands)





Subject to discretionary withdrawal at book value without adjustment (minimal or no charge or adjustment)	$	191,472	$	—	$	—	$	191,472	98.6	%
Not subject to discretionary withdrawal	2,812		—		—		2,812		1.4
Total deposit-type contract liability (before reinsurance)	194,284		—		—		194,284		100.0	%
Reinsurance ceded	20,123		—		—		20,123
Total deposit-type contract liability	$	174,161	$	—	$	—	$	174,161

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

adjustment. The Company’s management constantly monitors interest rates with respect to a spectrum of product durations and sells annuities that permit flexible responses to interest rate changes as part of the Company’s management of interest spreads. However, adverse changes in investment yields on invested assets will affect the earnings on those products with a guaranteed return.


	General Account						Separate Account - Guaranteed and Nonguaranteed
	Account Value		Cash Value		Reserve		Account Value		Cash Value		Reserve
	(In Thousands)
Subject to discretionary withdrawal, surrender values, or policy loans:
Term policies with cash value	$	—	$	—	$	—	$	—	$	—	$	—
Universal life	—		—		—		—		—		—
Universal life with secondary guarantees	—		—		—		—		—		—
Indexed universal life	—		—		—		—		—		—
Indexed universal life with secondary guarantees	—		—		—		—		—		—
Indexed life	—		—		—		—		—		—
Other permanent cash value life insurance	—		2,804,330		3,142,811		—		—		—
Variable life	—		—		—		—		—		—
Variable universal life	—		—		—		—		—		—
Miscellaneous reserves	—		—		—		—		—		—

Not subject to discretionary withdrawal or no cash values:
Term policies without cash value	XXX		XXX		—		XXX		XXX		—
Accidental death benefits	XXX		XXX		3,538		XXX		XXX		—
Disability - active lives	XXX		XXX		4,021		XXX		XXX		—
Disability - disabled lives	XXX		XXX		18,536		XXX		XXX		—
Miscellaneous reserves	XXX		XXX		—		XXX		XXX		—
Total life reserves (before reinsurance)	—		2,804,330		3,168,906		—		—		—
Reinsurance Ceded	—		—		341,220		—		—		—
Net life reserves	$	—	$	2,804,330	$	2,827,686	$	—	$	—	$	—

10. Employee Retirement Benefits

The Company has a noncontributory pension plan under a deposit administration group annuity contract covering substantially all employees and field representatives that meet eligibility requirements while working for the Company and attaining normal retirement age. In addition, the Company provides certain health care and life insurance benefits for certain retired employees or their beneficiaries. Substantially all of the Company’s employees and field representatives may become eligible for those benefits when they reach normal retirement age while working for the Company.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The Company uses a December 31 measurement date for all plans.

A summary of assets, obligations and assumptions of the pension and other postretirement benefit plans at December 31, are as follows:


	Pension Benefits				Postretirement Medical
	2023		2022		2023		2022
	(In Thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	883,366	$	1,208,163	$	94,468	$	154,087
Service cost	20,373		33,641		79		163
Interest cost	45,899		29,615		4,719		2,921
Contribution by plan participants	—		—		4,457		4,626
Actuarial (gain) loss	42,624		(334,481)		1,648		(55,388)
Benefits paid	(54,372)		(53,572)		(12,312)		(11,941)
Plan amendments	—		—		—		—
Settlements	(63,026)		—		—		—
Benefit obligation at end of year	$	874,864	$	883,366	$	93,059	$	94,468

Change in plan assets:
Fair value of plan assets at beginning of year	$	1,070,044	$	1,284,221	$	—	$	—
Actual return on plan assets	160,648		(160,605)		—		—
Employer contribution	—		—		7,854		7,315
Plan participants’ contributions	—		—		4,457		4,626
Benefits paid	(54,371)		(53,572)		(12,311)		(11,941)
Settlements	(63,026)		—		—		—
Fair value of plan assets at end of year	$	1,113,295	$	1,070,044	$	—	$	—


	Pension Benefits				Postretirement Medical
	2023		2022		2023		2022
	(In Thousands)


Funded status:
Overfunded (underfunded) obligation	$	238,431	$	186,678	$	(93,059)	$	(94,468)
Unrecognized net (gain) or loss	—		—		—		—
Unrecognized prior service cost	—		—		—		—
Net amount recognized*	$	238,431	$	186,678	$	(93,059)	$	(94,468)

Accumulated benefit obligation for vested employees and partially vested employees to the extent vested	$	796,625	$	817,582	$	93,059	$	94,468

*Nonadmitted if overfunded

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	Pension Benefits
	2023		2022		2021
	(In Thousands)
Components of net periodic benefit cost:
Service cost	$	20,373	$	33,641	$	35,815
Interest cost	45,899		29,615		25,031
Expected return on plan assets	(75,560)		(91,126)		(83,066)
Amount of recognized gains and losses	4,173		9,867		22,281
Amount of prior service cost recognized	531		476		(579)
Total net periodic benefit cost (benefit)	$	(4,584)	$	(17,527)	$	(518)


	Postretirement Medical
	2023		2022		2021
	(In Thousands)
Components of net periodic benefit cost:
Service cost	$	79	$	163	$	248
Interest cost	4,719		2,921		2,927
Amount of recognized gains and losses	(11,306)		(6,777)		(1,838)
Amount of prior service cost recognized	—		(1,392)		(1,392)
Total net periodic benefit cost (benefit)	$	(6,508)	$	(5,085)	$	(55)


	Pension Benefits				Postretirement Medical
	2023		2022		2023		2022
	(In Thousands)
Amounts in unassigned funds (surplus) recognized as components of net periodic benefit cost:
Items not yet recognized as a component of net periodic cost - prior year	$	149,145	$	242,238	$	(75,546)	$	(28,326)
Net transition asset or obligation recognized	—		—		—		—
Net prior service cost or credit arising during the period	—		—		—		—
Net prior service cost or credit recognized	(531)		(476)		—		1,392
Net gain and loss arising during the period	(42,464)		(82,750)		1,647		(55,388)
Net gain and loss recognized	(4,173)		(9,867)		11,306		6,777
Items not yet recognized as a component of net periodic cost - current year	$	101,977	$	149,145	$	(62,593)	$	(75,545)

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Assumptions used to determine net periodic benefit cost for the year ended December 31:


	Pension Benefits		Postretirement Medical
	2023	2022	2023	2022

Discount rate	5.46%	3.00%	5.43%	2.88%
Rate of compensation increase	4.60%	4.60%	N/A	N/A
Expected long-term rate of return on plan assets	7.25%	7.25%	N/A	N/A

Assumptions used to determine the benefit obligation at December 31:


	Pension Benefits		Postretirement Medical
	2023	2022	2023	2022

Discount rate	5.13%	5.46%	5.07%	5.43%
Rate of compensation increase	4.60%	4.60%	N/A	N/A

The Company's non-admitted pension asset was $238.4 million and $186.7 million at December 31, 2023 and 2022, respectively.

The Company utilizes a full yield curve approach in the estimation of liabilities, service cost, and interest cost for pension and postretirement benefits by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The yield curve utilized in the cash flow analysis is comprised of highly rated (Aaa or Aa) corporate bonds. The discount rate was decreased from 5.46% at December 31, 2022, to 5.13% at December 31, 2023. This resulted in a $34.2 million increase in the pension benefit obligation in 2023. The discount rate was increased from 3.00% at December 31, 2021, to 5.46% at December 31, 2022. This resulted in a $327.6 million decrease in the pension benefit obligation in 2022.

The Company employs a prospective building block approach in determining the long-term expected rate of return for plan assets. Historical returns are determined by asset class. The historical relationships between equities, fixed income securities, and other assets are reviewed. The Company applies long-term asset return estimates to the plan’s target asset allocation to determine the weighted-average long-term return. The Company’s long-term asset allocation was determined through modeling long-term returns and asset return volatilities and is guided by an investment policy statement created for the plan.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The asset allocation for the defined benefit pension plan at the end of 2023 and 2022, and the target allocation for 2023 by asset category, are as follows:


	Target Allocation Percentage		Percentage of Plan Assets
	2023		2023		2022
Asset category:
Equity securities	60	%	65	%	64	%
Fixed income securities	13		11		12
Short-term investments	2		—		—
Other	25		24		24
Total	100	%	100	%	100	%

The plan employs a total return investment approach whereby a mix of fixed income and equity investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The total portfolio is structured with multiple sub-portfolios, each with a specific fixed income or equity asset management discipline. Each sub-portfolio is subject to individual limitations and performance benchmarks as well as limitations at the consolidated portfolio level. Quarterly asset allocation meetings are held to evaluate portfolio asset allocations and to establish the optimal mix of assets given current market conditions and risk tolerance. Investment mix is measured and monitored on an ongoing basis through regular investment reviews, annual liability measurements, and periodic asset/liability studies.

The Company’s pension plan assets consist primarily of debt and equity securities, mutual funds and private equity funds, all of which are carried at fair value.

Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date (an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels.

•Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company’s Level 1 assets primarily include exchange-traded equity securities and mutual funds.

•Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s Level 2 assets include certain debt securities for which public price quotations are not available, but that use other market observable inputs from third-party pricing service quotes or internal valuation models using observable inputs. Level 2 assets also include private funds that invest primarily in domestic debt securities where the Company has the right to redeem its interest at net asset values. The underlying debt securities within these funds employ similar valuation methodologies as the Company’s other investments in debt securities.

•Level 3 - Significant unobservable inputs for the asset or liability. The Company's Level 3 assets primarily include private real estate funds.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

Debt Securities

The fair values of actively traded debt securities have been determined through the use of third-party pricing services utilizing market observable inputs.

Equity Securities

The fair values of actively traded equity securities have been determined utilizing publicly quoted prices from third-party pricing services.

Mutual Funds

The fair values of mutual funds have been determined utilizing the net asset values of the funds.

Private Equity and Fixed Income Funds

The fair values of private equity and fixed income funds have been determined utilizing the net asset values of the funds. The fair values of the private real estate funds have been determined by utilizing significant unobservable inputs.

Other Assets

Other assets primarily include securities lending reinvested collateral and cash equivalents. The fair value of securities lending reinvested collateral assets are from third-party sources utilizing publicly quoted prices. The fair value of the cash equivalents are based on quoted market prices.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

The fair value of the pension plan’s assets by asset category is as follows:


	Assets Measured at Fair Value		Fair Value Hierarchy Level
			Level 1		Level 2*		Level 3
	(In Thousands)
At December 31, 2023:
Debt securities:

Debt securities issued by states of the U.S. and political subdivisions of the states	$	2,209	$	—	$	2,209	$	—
Corporate securities	103,856		—		103,856		—
Residential mortgage-backed securities	701		—		701		—

Asset-backed securities	10,936		—		10,936		—
Equity securities:
Common equity	604,439		560,335		44,104		—
Mutual funds	116,393		116,393		—		—
Preferred stock	2,765		—		2,765		—
Other invested assets:
Private equity and fixed income funds	213,350		—		213,350		—
Surplus notes	2,711		—		2,711		—
Real estate	23,734		—		—		23,734
Other assets	56,334		54,386		1,948		—
Total plan assets	$	1,137,428	$	731,114	$	382,580	$	23,734

* Includes investments using net asset value (NAV) as a practical expedient.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021


	Assets Measured at Fair Value		Fair Value Hierarchy Level
			Level 1			Level 2*		Level 3
	(In Thousands)
At December 31, 2022:
Debt securities:

Debt securities issued by states of the U.S. and political subdivisions of the states	$	2,040	$	—		$	2,040	$	—
Corporate securities	112,201		—			112,201		—
Residential mortgage-backed securities	777		—			777		—

Asset-backed securities	11,843		—			11,843		—
Equity securities:
Common equity	555,090		513,330			41,760		—
Mutual funds	123,560		123,560			—		—
Preferred stock	2,597		—			2,597		—
Other invested assets:
Private equity and fixed income funds	225,570		—			225,570		—
Surplus notes	2,542		—			2,542		—
Real estate	20,321		—			20,321		—
Other assets	75,090		72,943		`	2,147		—
Total plan assets	$	1,131,631	$	709,833		$	421,798	$	—

* Includes investments using net asset value (NAV) as a practical expedient.

For measurement purposes of the postretirement benefit obligation at December 31, 2023, a 5.275 percent annual rate of increase in the per capita cost of covered health care benefits is assumed for 2024. The rate was assumed to decrease gradually to 4.75 percent for 2031 and remain at that level thereafter.

At December 31, 2023, the assets of the Company’s pension include approximately $52.7 million invested in the Touchstone Family of Funds, which are administered by the Company, and $240.7 million invested in private equity and fixed income funds managed by Fort Washington Investment Advisors, Inc. At December 31, 2022, the assets of the Company’s pension include approximately $67.0 million invested in the Touchstone Family of Funds, which are administered by the Company, $251.4 million invested in private equity and fixed income funds managed by Fort Washington Investment Advisors, Inc.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

As of December 31, 2023, future benefit payments for the pension plan are expected as follows (in millions):


2024	$	53.4
2025	54.1
2026	54.6
2027	55.4
2028	56.3
Five years thereafter	295.2

Future benefit payments for the postretirement medical plan, net of amounts contributed by plan participants, are expected as follows (in millions):


2024	$	7.7
2025	7.6
2026	7.3
2027	7.1
2028	6.9
Five years thereafter	32.6

The Company did not make any contributions to the pension plan in 2023 and 2022. The Company does not expect to make contributions to the pension plan during 2024.

In 2023, the Company entered into a group annuity contract with WSLAC to transfer risk and administration costs associated with its pension benefit obligations in the amount of $54.6 million, which is included in the Settlements line in the change in projected benefits obligation table.

The Company made contributions to the postretirement medical plan of $7.9 million in 2023 and expects to contribute $69.1 million between 2024 and 2033, inclusive. The Company received no subsidies in 2023. The Company’s postretirement medical plan did not collect the Medicare Part D Subsidy for claims activity occurring after January 1, 2013.

The Company sponsors a contributory employee retirement savings plan covering substantially all eligible, full-time employees. This plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Company’s contributions to the plan are based on a combination of the employee’s contributions to the plan and a percentage of the employee’s earnings for the year. The total of the Company’s contributions to the defined contribution plan were $5.7 million, $5.0 million, and $4.8 million for 2023, 2022 and 2021, respectively.

The Western and Southern Life Insurance Company

Notes to Financial Statements (Statutory-Basis)

December 31, 2023, 2022 and 2021

11. Premium and Annuity Considerations Deferred and Uncollected

Deferred and uncollected life insurance premiums and annuity considerations at December 31, 2023, were as follows:


	Gross		Net of Loading
	(In Thousands)
Ordinary new business	$	3,585	$	270
Ordinary renewal	63,673		45,719
Accident and health renewal	389		324
Assumed investment type-contracts	394		394
Total	$	68,041	$	46,707