Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2026

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows:


	June 30, 2026
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	8,828	$	-	$	8,828
Foreign government		-		159,724		-		159,724
States and political subdivisions		-		125,196		-		125,196
Corporates		2,665		2,197,986		-		2,200,651
Mortgage- and asset-backed securities:
Residential mortgage-backed securities		-		645,615		-		645,615
Commercial mortgage-backed securities		-		78,424		-		78,424
Other asset-backed securities		-		253,244		-		253,244
Total available-for-sale fixed-maturity securities		2,665		3,469,017		-		3,471,682
Short-term investments		-		4,950		-		4,950
Total available-for-sale securities		2,665		3,473,967		-		3,476,632
Equity securities		29,265		-		-		29,265
Trading securities		-		32,376		-		32,376
Cash and cash equivalents		540,540		59,643		-		600,183
Separate accounts		-		2,156,498		-		2,156,498
Total fair value assets	$	572,470	$	5,722,484	$	-	$	6,294,954
Fair value liabilities:
Separate accounts	$	-	$	2,156,498	$	-	$	2,156,498
Total fair value liabilities	$	-	$	2,156,498	$	-	$	2,156,498


	December 31, 2025
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	9,742	$	-	$	9,742
Foreign government		-		169,033		-		169,033
States and political subdivisions		-		126,932		-		126,932
Corporates		3,748		1,992,125		-		1,995,873
Mortgage-and asset-backed securities:
Residential mortgage-backed securities		-		645,865		-		645,865
Commercial mortgage-backed securities		-		83,456		1,576		85,032
Other asset-backed securities		-		232,769		-		232,769
Total available-for-sale fixed-maturity securities		3,748		3,259,922		1,576		3,265,246
Equity securities		26,433		-		-		26,433
Trading securities		-		12,801		-		12,801
Cash and cash equivalents		756,227		-		-		756,227
Separate accounts		-		2,281,520		-		2,281,520
Total fair value assets	$	786,408	$	5,554,243	$	1,576	$	6,342,227
Fair value liabilities:
Separate accounts	$	-	$	2,281,520	$	-	$	2,281,520
Total fair value liabilities	$	-	$	2,281,520	$	-	$	2,281,520

Roll forward of Level 3 Assets Measured on Recurring Basis

The rollforward of the Level 3 assets measured at fair value on a recurring basis was as follows:


	Three months ended June 30,						Six months ended June 30, (1)
	2026			2025			2026			2025
	(In thousands)
Level 3 assets, beginning of period	$	12,500		$	1,601		$	1,576		$	1,543
Net unrealized gains (losses) included in other comprehensive income (loss)		(55	)		-			(55	)		-
Investment gains (losses) and accretion (amortization) recognized in earnings		-			(772	)		(885	)		(714	)
Purchases		-			-			12,500			-
Sales		-			-			(691	)		-
Settlements		-			(829	)		-			(829	)
Transfers out of Level 3		(12,445	)		-			(12,445	)		-
Level 3 assets, end of period	$	-		$	-		$	-		$	-

(1)

Transfers of investments that enter and exit Level 3 in different quarters within the same fiscal year are not eliminated until the full year amounts are presented.

Carrying Values and Estimated Fair Values of Financial Instruments

The carrying values and estimated fair values of our financial instruments were as follows:


	June 30, 2026				December 31, 2025
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)	$	3,471,682	$	3,471,682	$	3,265,246	$	3,265,246
Fixed-maturity security (held-to-maturity) (1)		1,073,520		1,036,619		1,175,380		1,153,047
Short-term investments (available-for-sale)		4,950		4,950		-		-
Equity securities		29,265		29,265		26,433		26,433
Trading securities		32,376		32,376		12,801		12,801
Policy loans (1)		48,396		48,396		47,583		47,583
Deposit asset underlying 10% coinsurance agreement (1)(2)		-		-		131,418		131,418
Separate accounts		2,156,498		2,156,498		2,281,520		2,281,520
Liabilities:
Note payable (3)(4)	$	595,716	$	539,627	$	595,315	$	543,461
Surplus note (1)(3)		1,073,291		1,035,912		1,175,119		1,150,995
Separate accounts		2,156,498		2,156,498		2,281,520		2,281,520

(1)

Classified as a Level 3 fair value measurement.

(2)

On January 1, 2026, we terminated a coinsurance agreement (the “10% Coinsurance Agreement”) (that was entered into in connection with our 2010 initial public offering) with Prime Reinsurance Company (“Prime Re”), an affiliate of Citigroup, Inc. The 10% Coinsurance Agreement ceded 10% of our U.S. (except New York) term life insurance business in force at year-end 2009 subject to an experience refund provision. As the 10% Coinsurance Agreement included an experience refund provision, it did not satisfy U.S. GAAP risk transfer rules. As a result, we accounted for this contract using deposit method accounting and recognized a deposit asset in other assets on our consolidated balance sheets for assets backing the reserves of the policies subject to the agreement. The deposit asset held in support of this agreement was $131.4 million at December 31, 2025. We made contributions to the deposit asset during the life of the agreement to fulfill our responsibility of funding the reserves. During 2025, the cumulative experience refund provision was settled by reductions in the deposit asset over the normal course of the 10% Coinsurance Agreement. Upon termination of the 10% Coinsurance Agreement, the Company received cash equal to the carrying value of the deposit asset and thus did not recognize any gain or loss. Prior to the termination of the 10% Coinsurance Agreement, the market return on the deposit asset was reflected in net investment income as disclosed in Note 4 (Investments).

(3)

Carrying value amounts shown are net of unamortized issuance costs.

(4)

Classified as a Level 2 fair value measurement.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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