| Schedule Of Future Policy Benefits And 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 of | | December 31, 2025 | | December 31, 2024 | | Reinsurance recoverable | | | | | | Long term care reinsurance | | $ | 452,254 | | | $ | 445,847 | | | Other | | 4,466 | | | 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 | | | Other | | 4,469 | | | 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.
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| Liability for Future Policy Benefit, Activity |
The following tables summarize balances of and changes in future policy benefits reserves: | | | | | | | | | | | | | | | | | Years Ended December 31, | | Long-term care | | 2025 | | 2024 | | 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 balance | | 334,397 | | | 385,134 | | | Interest accrual | | 7,051 | | | 6,611 | | | Net premiums collected | | (43,739) | | | (48,040) | | | Effect of foreign currency | | — | | | — | | | Ending balance at locked-in discount rate | | 297,709 | | | 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 rate | | 1,306,356 | | | 1,388,196 | | | Change in effect in cashflow assumptions | | 2,632 | | | 1,102 | | | Effect of actual variances from expected experience | | 9,860 | | | 1,399 | | | Adjusted balance | | 1,318,848 | | | 1,390,697 | | | Interest accrual | | 28,190 | | | 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.
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| Additional Liability, Long-Duration Insurance |
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, | | 2025 | | 2024 | | Long-term care | | Undiscounted | | Discounted¹ | | Undiscounted | | Discounted¹ | | | | | | | | | | | 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 | | 2025 | | 2024 | | Weighted-average duration of liability (years) at current rate | | 10.10 | | 10.27 | | Weighted-average duration of liability (years) at original rate | | 11.93 | | 12.44 | | Weighted-average interest rate at current rate | | 5.04 | % | | 5.26 | % | | Weighted-average interest rate at original rate | | 3.13 | % | | 3.05 | % |
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