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Contingencies and Commitments
6 Months Ended
Jun. 30, 2025
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Commitments Contingencies and Commitments
Lawsuits and Legal Proceedings
Companies in the insurance industry have been subject to substantial litigation resulting from claims, disputes and other matters. For instance, they have faced expensive claims, including class action lawsuits, alleging, among other things, improper sales practices and improper claims settlement procedures. Negotiated settlements of certain such actions have had a material adverse effect on many insurance companies. At the time of issuance of this Interim Report on Form 10-Q, except as noted below, the Company does not have pending litigation from which there is a reasonable possibility of material loss.
In 2023, the Horace Mann Insurance Company (HMIC) was named as a defendant in one lawsuit and received various demands for reimbursement and notices of claims related to legacy, long-tail commercial lines claims, including asbestos, environmental, and sexual molestation claims. It is alleged that HMIC reinsured certain commercial lines policies as a member of various insurance pooling arrangements in the late 1960s and early 1970s. The related policies were written prior to the 1975 acquisition of Horace Mann by INA discussed in Part I - Item 1 of the Annual Report on Form 10-K. HMEC’s available records indicate that on January 1, 1975, HMIC entered a quota share retrocession treaty with INA. It is the Company’s understanding that claims arising under these legacy policies were handled by various third parties pursuant to the terms of that treaty and its subsequent amendments entered into on behalf of HMIC. Ultimately, after amendments to the treaty and various corporate transactions involving the reinsurer, these obligations were assumed by companies that were affiliated with R&Q Reinsurance Company (R&Q).
The matters noted above arose following the March 23, 2023, Order of Liquidation in Pennsylvania of R&Q. HMIC is defending itself against the pending litigation and is in the process of investigating and evaluating the other demands and claims notices under a complete reservation of rights. In addition, in order to preserve its rights, HMIC submitted a proof of claim in the pending R&Q liquidation proceeding.
In the fourth quarter of 2024, the Company recorded $15.7 million, after-tax of costs related to these non-core legacy commercial liability policies in the Corporate & Other Segment. As noted above, these policies were issued as early as the 1960s and prior to the current ownership structure of the Company.
Investment Commitments
The Company has outstanding commitments to fund investments primarily in limited partnership interests. Such unfunded commitments were $423.0 million and $449.9 million as of June 30, 2025 and December 31, 2024, respectively.