v3.26.1
Future policy benefits and related reinsurance recoverable
 12 Months Ended
Dec. 31, 2025
Insurance [Abstract]  
Future policy benefits and related reinsurance recoverable
Note 14. Future policy benefits and related reinsurance recoverable
Future policy benefits comprise substantially all obligations to insureds in the Company’s insurance operations. A summary of future policy benefits and reinsurance recoverable are presented below.
As ofDecember 31, 2025 December 31, 2024
Reinsurance recoverable
  Long term care reinsurance$452,254 $445,847 
  Other4,466 4,378 
  Modco investments Vista¹
(183,802)(190,771)
Total reinsurance recoverable$272,918 $259,454 
Future policy benefits
  Long term care insurance$777,412 $765,155 
  Other4,469 4,378 
Total future policy benefits$781,881 $769,533 
Funds held under reinsurance contracts
Funds held arrangement Front Street Re¹
$237,143 $239,918 
_______________
(1)The Company has a coinsurance or Modco with funds withheld arrangement with its two reinsurers. The Modco agreement with Vista Re dictates that the assets held as collateral are held with the legal right of offset to the related insurance contract liabilities. Therefore, the collateral held for this agreement is netted against the reserves under this contract. The agreement with Front Street Re does not have the legal right of offset therefore the reserves are not presented net of the collateral held, instead they are in the line item “Funds held under reinsurance contracts” in the Consolidated Statements of Financial Position.
The following tables summarize balances of and changes in future policy benefits reserves:
Years Ended December 31,
Long-term care20252024
Present value of expected net premiums
Balance, beginning of year$306,206 $363,367 
Beginning balance at locked-in discount rate$343,705 $405,083 
Change in effect in cashflow assumptions— (7,514)
Effect of actual variances from expected experience(9,308)(12,435)
Adjusted balance334,397 385,134 
Interest accrual7,051 6,611 
Net premiums collected(43,739)(48,040)
Effect of foreign currency— — 
Ending balance at locked-in discount rate297,709 343,705 
Effect of changes in discount rate assumptions(24,314)(37,499)
Balance, end of year$273,395 $306,206 
Present value of Expected Future Policy Benefits
Balance, beginning of year$1,071,361 $1,170,790 
Beginning balance at locked-in discount rate1,306,356 1,388,196 
Change in effect in cashflow assumptions2,632 1,102 
Effect of actual variances from expected experience9,860 1,399 
Adjusted balance1,318,848 1,390,697 
Interest accrual28,190 23,700 
Benefit payments(107,763)(108,041)
Ending balance at locked-in discount rate$1,239,275 $1,306,356 
Effect of changes in discount rate assumptions(188,468)(234,995)
Balance, end of year$1,050,807 $1,071,361 
Net future policy benefit reserves ¹
$777,412 $765,155 
Less: Reinsurance recoverables, net of allowance for credit losses ²
(452,254)(445,847)
Net future policy benefit reserves, after reinsurance recoverables$325,158  $319,308 
_______________
(1)Net future policy benefit reserves excludes $4.5 million and $4.4 million as of December 31, 2025 and December 31, 2024, respectively, of Medico assumed reserves which are 100% ceded.
(2)Reinsurance recoverables, net of allowance for credit losses excludes $4.5 million and $4.4 million of reinsurance recoverable as of December 31, 2025 and December 31, 2024, respectively.
During 2025, the underlying cash flow assumptions were reviewed with respect to incurred claims anti-selection. The resulting assumption updates resulted in a $2.6 million increase in the liability for future policy benefits, mainly as a result of unfavorable claim anti-selection experience related to rate increase. The effect of actual variances from expected experience observed a $19.1 million increase in the liability for future policy benefits, mainly driven by the lower than expected future premium receipts and higher claims.

During 2024, the underlying cash flow assumptions were reviewed with respect to mortality, lapse, morbidity incidence and morbidity termination. The resulting assumption updates resulted in an $8.6 million increase in the liability for future policy benefits, mainly as a result of unfavorable mortality experience. The effect of actual variances from expected experience observed a $13.8 million increase in the liability for future policy benefits, mainly due to lower than expected future premium receipts and higher claims.
The following tables provides the amount of undiscounted and discounted expected future gross premiums and expected future benefits and expenses for the LTC line of business:
Years Ended December 31,20252024
Long-term careUndiscounted
Discounted¹
UndiscountedDiscounted¹
  Expected future gross premiums$361,287 $273,395 $414,531 $306,206 
  Benefit payments$1,746,839 $1,050,807 $1,840,853 $1,071,361 
_______________
(1)Discount was determined using the current discount rate as of December 31, 2025 and December 31, 2024.
The following table provides the weighted-average durations of and weighted-average interest rates for the liability for future policy benefits:
Year Ended December 31,
Long-term care 20252024
Weighted-average duration of liability (years) at current rate10.1010.27
Weighted-average duration of liability (years) at original rate11.9312.44
Weighted-average interest rate at current rate5.04 %5.26 %
Weighted-average interest rate at original rate3.13 %3.05 %
Note 15. Interest sensitive contract liabilities
The following table shows the outstanding Interest sensitive contract liabilities which represents the policyholder balances for MYGA product line:
Years Ended December 31,
  20252024
Balance, beginning of year$334,876 $256,569 
Deposits42,996 72,818 
Product charges(1,877)(266)
Surrenders and withdrawals(19,499)(2,982)
Benefit payments(8,590)(6,235)
Interest credited16,075 14,972 
Balance at December 31,$363,981 $334,876 
Weighted-average annual crediting rate5.00%5.00%
At period end:
Cash surrender value$337,682 $303,035 
Net amount at risk:
In the event of death ¹
$363,981 $334,876 
_______________
(1)For benefits that are payable in the event of death, the net amount at risk is generally defined as the current death benefit in excess of the current account balances at the Consolidated Statements of Financial Position date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the Consolidated Statements of Financial Position date.
MYGA policyholder account balances totaled $364.0 million and $334.9 million, as of December 31, 2025, and 2024, respectively. Changes in policyholder account balances are primarily attributed to deposits associated with new MYGA policies assumed of $43.0 million and $72.8 million and interest credited of $16.1 million and $15.0 million for the year ended December 31, 2025 and December 31, 2024, respectively. These increases were partially offset by surrenders, withdrawals, benefits and product charges of $30.0 million and $9.5 million for the year ended December 31, 2025 and December 31, 2024, respectively. Interest on policyholder account balances is generally credited at minimum guaranteed rates, primarily between 2% and 7% at both December 31, 2025 and December 31, 2024.