Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue from Contract with Customers

(13) Revenue from Contracts with Customers

Our revenues from contracts with customers primarily include:

• Commissions and fees earned for the marketing and distribution of investment and savings products underwritten by mutual fund companies and annuity providers. For purposes of revenue recognition, mutual fund companies and annuity providers are considered the customers in marketing and distribution arrangements.

• Fees earned for investment advisory and administrative services within our managed investments program.

• Account-based fees for transfer agent recordkeeping functions and non-bank custodial services.

• Fees associated with the distribution of other third-party financial products.  

• Other revenue from the sale of miscellaneous products and services including monthly subscription fees from the sales representatives for access to Primerica Online (“POL”), our primary sales force support tool.

Premiums from insurance contracts we underwrite, fees received from segregated funds insurance contracts, and income earned on our invested assets are excluded from the definition of revenues from contracts with customers in accordance with U.S. GAAP.

Further discussion on the Company’s revenues from contracts with customers and revenue recognition policies are included in Note 18 (Revenue from Contracts with Customers) to our consolidated financial statements within our 2019 Annual Report.

The disaggregation of our revenues from contracts with customers were as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(In thousands)
Term Life Insurance segment revenues:
Other, net	$	11,426	$	10,055	$	21,594	$	19,800
Total segment revenues from contracts with customers		11,426		10,055		21,594		19,800
Revenues from sources other than contracts with customers		316,807		286,813		634,385		573,912
Total Term Life Insurance segment revenues	$	328,233	$	296,868	$	655,979	$	593,712
Investment and Savings Products segment revenues:
Commissions and fees
Sales-based revenues	$	62,812	$	71,438	$	143,704	$	138,435
Asset-based revenues		64,666		64,953		131,659		124,707
Account-based revenues		20,478		19,897		40,682		39,509
Other, net		2,745		2,434		5,287		4,856
Total segment revenues from contracts with customers		150,701		158,722		321,332		307,507
Revenues from sources other than contracts     with customers (segregated funds)		13,480		14,364		27,881		28,249
Total Investment and Savings Products segment revenues	$	164,181	$	173,086	$	349,213	$	335,756
Corporate and Other Distributed Products segment revenues:
Commissions and fees (1)	$	10,352	$	7,817	$	17,931	$	14,883
Other, net		865		1,335		1,820		2,392
Total segment revenues from contracts with customers		11,217		9,152		19,751		17,275
Revenues from sources other than contracts with customers		22,184		25,796		25,808		53,147
Total Corporate and Other Distributed Products segment revenues	$	33,401	$	34,948	$	45,559	$	70,422

^{(1) Commissions and fees for the three and six months ended June 30, 2020 included $1.5 million and $2.6 million, respectively, and for the three and six months ended June 30, 2019 included $1.4 million and $2.5 million, respectively, attributable to performance obligations satisfied in a previous reporting period and represent the collection of variable consideration in the transaction price that had been previously constrained.}

We recognize revenue upon the satisfaction of the related performance obligation, unless the transaction price includes variable consideration that is constrained; in such case, we recognize revenue when the uncertainty associated with the constrained amount is subsequently resolved. Variable consideration is not treated as constrained to the extent it is probable that no significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is resolved. We have no material obligations for refunds of commission and fees on contracts with customers subsequent to completion of our performance obligation.

Contract Balances. For revenue associated with ongoing renewal commissions we receive subsequent to the satisfaction of our performance obligation, we record a contract asset for the amount of ongoing renewal commissions we anticipate collecting in reporting periods subsequent to the sale or referral, less amounts that are constrained in other assets. The contract asset is reduced for commissions that are billed and become due receivables from product providers during the reporting period.

Activity in the contract asset account was as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(In thousands)				(In thousands)
Balance, beginning of period	$	51,499	$	50,091	$	51,701	$	50,119
Current period sales, net of collection of renewal commissions		1,024		376		822		348
Balance, at the end of period	$	52,523	$	50,467	$	52,523	$	50,467

No significant estimate adjustments were made to the contract asset and no impairment losses were recognized on the contract asset during the three and six months ended June 30, 2020 and June 30, 2019.

Incremental costs to obtain or fulfill contracts, most notably sales commissions to the sales representatives, are not incurred prior to the recognition of the related revenue. Therefore, we have no assets recognized for incremental costs to obtain or fulfill contracts.