| Deferred Policy and Pre-need Contract Acquisition Costs, Value of Business Acquired, and Unearned Premium Reserve |
(8)
Deferred Policy and Pre-need Contract Acquisition Costs, Value of Business Acquired, and Unearned Premium Reserve
Refer
to Note 1 regarding the adoption of ASU 2018-12.
Deferred
Policy and Pre-need Contract Acquisition Costs (“DAC”)
The
following tables show a roll forward for the lines of business that contain DAC balances, along with a reconciliation to the Company’s
total DAC balance:
Schedule
of Roll Forward for the Lines of Business that Contain DAC Balances
| | |
Traditional Life | | |
Fixed Annuities | | |
Universal Life | | |
Accident and Health | | |
Pre-need Contracts | | |
Total | |
| Balance at December 31, 2025 | |
$ | 127,639,286 | | |
$ | 571,370 | | |
$ | 3,430,518 | | |
$ | - | | |
$ | 4,337,629 | | |
$ | 135,978,803 | |
| Deferrals | |
| 9,001,384 | | |
| 62,910 | | |
| - | | |
| - | | |
| 607,942 | | |
| 9,672,236 | |
| Amortization | |
| (4,963,505 | ) | |
| (59,996 | ) | |
| (148,274 | ) | |
| - | | |
| (511,777 | ) | |
| (5,683,552 | ) |
| Balance at June 30, 2026 | |
$ | 131,677,165 | | |
$ | 574,284 | | |
$ | 3,282,244 | | |
$ | - | | |
$ | 4,433,794 | | |
$ | 139,967,487 | |
| | |
Traditional Life | | |
Fixed Annuities | | |
Universal Life | | |
Accident and Health | | |
Pre-need Contracts | | |
Total | |
| Balance at December 31, 2024 | |
$ | 118,803,677 | | |
$ | 535,836 | | |
$ | 3,754,867 | | |
$ | 466 | | |
$ | 4,125,061 | | |
$ | 127,219,907 | |
| Balance, beginning of period | |
$ | 118,803,677 | | |
$ | 535,836 | | |
$ | 3,754,867 | | |
$ | 466 | | |
$ | 4,125,061 | | |
$ | 127,219,907 | |
| Deferrals | |
| 10,207,141 | | |
| 91,482 | | |
| - | | |
| - | | |
| 254,754 | | |
| 10,553,377 | |
| Amortization | |
| (4,855,911 | ) | |
| (66,913 | ) | |
| (167,561 | ) | |
| (466 | ) | |
| (327,377 | ) | |
| (5,418,228 | ) |
| Balance at June 30, 2025 | |
$ | 124,154,907 | | |
$ | 560,405 | | |
$ | 3,587,306 | | |
$ | - | | |
$ | 4,052,438 | | |
$ | 132,355,056 | |
| Balance, end of period | |
$ | 124,154,907 | | |
$ | 560,405 | | |
$ | 3,587,306 | | |
$ | - | | |
$ | 4,052,438 | | |
$ | 132,355,056 | |
Value
of Business Acquired (“VOBA”)
The
following tables show a roll forward for the lines of business that contain VOBA balances, along with a reconciliation to the Company’s
total VOBA balance:
Schedule
of Roll Forward for the Lines of Business That Contain VOBA Balances
| | |
Traditional Life | | |
Fixed Annuities | | |
Universal Life | | |
Accident
and Health | | |
Total | |
| Balance at December 31, 2025 | |
$ | 6,968,331 | | |
$ | - | | |
$ | 124,932 | | |
$ | 15,923 | | |
$ | 7,109,186 | |
| Deferrals | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Amortization | |
| (203,735 | ) | |
| - | | |
| (28,884 | ) | |
| (1,043 | ) | |
| (233,662 | ) |
| Balance at June 30, 2026 | |
$ | 6,764,596 | | |
$ | - | | |
$ | 96,048 | | |
$ | 14,880 | | |
$ | 6,875,524 | |
| | |
Traditional Life | | |
Fixed Annuities | | |
Universal Life | | |
Accident
and Health | | |
Total | |
| Balance at December 31, 2024 | |
$ | 7,397,519 | | |
$ | - | | |
$ | 186,632 | | |
$ | 18,370 | | |
$ | 7,602,521 | |
| Balance, beginning of period | |
$ | 7,397,519 | | |
$ | - | | |
$ | 186,632 | | |
$ | 18,370 | | |
$ | 7,602,521 | |
| Deferrals | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Amortization | |
| (219,165 | ) | |
| - | | |
| (31,862 | ) | |
| (1,251 | ) | |
| (252,278 | ) |
| Balance at June 30, 2025 | |
$ | 7,178,354 | | |
$ | - | | |
$ | 154,770 | | |
$ | 17,119 | | |
$ | 7,350,243 | |
| Balance, end of period | |
$ | 7,178,354 | | |
$ | - | | |
$ | 154,770 | | |
$ | 17,119 | | |
$ | 7,350,243 | |
Unearned
Premium Reserve
The
balance and the changes in Unearned Premium Reserve are as follows:
Schedule
of Balance and the Changes in Unearned Premium Reserve
| | |
2026 | | |
2025 | |
| | |
Six Months Ended June 30, | |
| | |
2026 | | |
2025 | |
| | |
| Universal Life | | |
| Universal Life | |
| Balance, beginning of period | |
$ | 1,824,796 | | |
$ | 2,013,245 | |
| Deferrals | |
| - | | |
| - | |
| Amortization (1) | |
| (86,389 | ) | |
| (97,037 | ) |
| Unearned premium reserve, end of period | |
$ | 1,738,407 | | |
$ | 1,916,208 | |
| (1) |
Included in premiums and other considerations on the condensed consolidated statements of earnings. |
SECURITY
NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES
Notes
to Condensed Consolidated Financial Statements
June
30, 2026 (Unaudited)
|