10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-38945

VERICITY, INC.

(Exact name of Registrant as specified in its Charter)

Delaware	46-2348863
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1350 E Touhy Avenue, Suite 205W, Des Plaines, Illinois	60018
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (312) 288-0073

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name on each exchange on which registered
Common Stock, Par Value $0.001 per share	VERY	NASDAQ Capital Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

The number of shares of Registrant’s Common Stock outstanding as of November 10, 2023 was 14,875,000.

Table of Contents

			Page
PART I –	Financial Information		1
Item 1.	Financial Statements (Unaudited) (at September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022		1
	Interim Condensed Consolidated Balance Sheets		1
	Interim Condensed Consolidated Statements of Operations		2
	Interim Condensed Consolidated Statements of Comprehensive (Loss) Income		3
	Interim Condensed Consolidated Statements of Changes in Shareholders' Equity		4
	Interim Condensed Consolidated Statements of Cash Flows		5
	Notes to the Interim Condensed Consolidated Financial Statements		6
		Note 1 – Summary of Significant Accounting Policies	6
		Note 2 – Investments	7
		Note 3 – Policy Liabilities	13
		Note 4 – Reinsurance	14
		Note 5 – Closed Block	14
		Note 6 – Commitments and Contingencies	16
		Note 7 – Assets and Liabilities Measured at Fair Value	17
		Note 8 – Long and Short-term Debt	20
		Note 9– Accumulated Other Comprehensive (Loss) Income	22
		Note 10 – Business Segments	22
		Note 11 – Subsequent Events	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 4.	Controls and Procedures		38
PART II –	Other Information		38
Item 1.	Legal Proceedings		38
Item 1A.	Risk Factors		39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 3.	Default upon Senior Securities		39
Item 4.	Mine Safety Disclosures		39
Item 5.	Other Information		39
Item 6.	Exhibits		40
Signature			41

Part 1. Financial Information

Item I. Financial Statements

Vericity, Inc.

Interim Condensed Consolidated Balance Sheets

(dollars in thousands)

	September 30,			December 31,
	2023			2022
	(Unaudited)			(Audited)
Assets
Investments:
Fixed maturities – available-for-sale – at fair value (amortized cost; $334,600    and $331,946, net of allowances for credit losses of $21 and $0)	$	295,524		$	298,138
Mortgage loans (net of allowances for credit losses of $571 and $83)		42,005			45,270
Policyholder loans		7,062			6,699
Other invested assets		2,803			3,693
Total investments		347,394			353,800
Cash, cash equivalents and restricted cash		7,625			9,776
Accrued investment income		4,064			3,006
Reinsurance recoverables (net of allowances for credit losses of $126 and $126)		230,585			214,862
Deferred policy acquisition costs		88,171			90,189
Commissions and agent balances (net of allowances for credit losses of $337 and $338)		50,415			34,766
Intangible assets		1,635			1,635
Deferred income tax assets, net		32,003			28,437
Other assets		34,293			33,607
Total assets		796,185			770,078
Liabilities and Shareholders' Equity
Liabilities
Future policy benefits and claims		490,506			453,763
Policyholder account balances		72,245			77,443
Other policyholder liabilities		41,012			47,486
Policy dividend obligations		9,544			9,515
Reinsurance liabilities and payables		6,959			6,246
Long-term debt		37,311			30,213
Short-term debt		9,172			6,976
Other liabilities		30,113			27,093
Total liabilities		696,862			658,735
Commitments and Contingencies (Note 6)
Shareholders' Equity
Common stock, $.001 par value, 30,000,000 shares authorized, 14,875,000 shares, issued and outstanding		15			15
Additional paid-in capital		39,840			39,840
Retained earnings		93,596			101,660
Accumulated other comprehensive (loss) income		(34,128	)		(30,172	)
Total shareholders' equity		99,323			111,343
Total liabilities and shareholders' equity	$	796,185		$	770,078

See notes to interim condensed consolidated financial statements

1

Vericity, Inc.

Interim Condensed Consolidated Statements of Operations

(dollars in thousands, except earnings per share)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues
Net insurance premiums	$	23,434		$	24,468		$	71,515		$	73,474
Net investment income		4,010			4,126			12,846			11,390
Net (losses) gains on investments		(883	)		(1,570	)		(1,759	)		89
Earned commissions		15,354			11,267			45,535			32,792
Insurance lead sales		1,026			1,259			3,052			3,773
Other income		720			144			1,831			419
Total revenues		43,661			39,694			133,020			121,937
Benefits and expenses
Life, annuity, and health claim benefits		22,583			17,505			51,567			47,622
Interest credited to policyholder account balances		627			646			2,000			2,100
Operating costs and expenses		26,755			23,133			78,239			72,859
Amortization of deferred policy acquisition costs		3,283			4,086			9,913			13,237
Total benefits and expenses		53,248			45,370			141,719			135,818
Income (loss) before income tax		(9,587	)		(5,676	)		(8,699	)		(13,881	)
Income tax expense (benefit)		(1,612	)		(591	)		(822	)		(785	)
Net income (loss)	$	(7,975	)	$	(5,085	)	$	(7,877	)	$	(13,096	)
Earnings per share for the periods
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Weighted average shares outstanding, basic and diluted		14,875,000			14,875,000			14,875,000			14,875,000
Basic earnings per share	$	(0.54	)	$	(0.34	)	$	(0.53	)	$	(0.88	)
Diluted earnings per share	$	(0.54	)	$	(0.34	)	$	(0.53	)	$	(0.88	)

See notes to interim condensed consolidated financial statements

2

Vericity, Inc.

Interim Condensed Consolidated Statements of Comprehensive (Loss) Income

(dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(Unaudited)						(Unaudited)
Net income (loss)	$	(7,975	)	$	(5,085	)	$	(7,877	)	$	(13,096	)
Other comprehensive (loss) income, net of tax:
Change in net unrealized (losses) gains		(8,082	)		(10,964	)		(3,956	)		(40,993	)
Total other comprehensive (loss) income		(8,082	)		(10,964	)		(3,956	)		(40,993	)
Total comprehensive (loss) income	$	(16,057	)	$	(16,049	)	$	(11,833	)	$	(54,089	)

See notes to interim condensed consolidated financial statements

3

Vericity, Inc.

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

(dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(Unaudited)						(Unaudited)
Common stock
Balance – beginning of period	$	15		$	15		$	15		$	15
Balance – end of period	$	15		$	15		$	15		$	15
Additional paid-in capital
Balance – beginning of period	$	39,840		$	39,840		$	39,840		$	39,840
Balance – end of period	$	39,840		$	39,840		$	39,840		$	39,840
Retained earnings
Balance – beginning of period	$	101,571		$	114,109		$	101,660		$	122,120
Cumulative effect adjustment from changes in accounting guidance, net of tax		—			—			(187	)		—
Balance after adjustments - beginning of period	$	101,571		$	114,109		$	101,473		$	122,120
Net income (loss)		(7,975	)		(5,085	)		(7,877	)		(13,096	)
Balance – end of period	$	93,596		$	109,024		$	93,596		$	109,024
Accumulated other comprehensive income (loss)
Balance – beginning of period	$	(26,046	)	$	(19,100	)	$	(30,172	)	$	10,929
Other comprehensive income (loss)		(8,082	)		(10,964	)		(3,956	)		(40,993	)
Balance – end of period	$	(34,128	)	$	(30,064	)	$	(34,128	)	$	(30,064	)
Total shareholders' equity	$	99,323		$	118,815		$	99,323		$	118,815

See notes to interim condensed consolidated financial statements

4

Vericity, Inc.

Interim Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

	Nine Months Ended September 30,
	2023			2022
	(Unaudited)
Cash flows from operating activities
Net income (loss)	$	(7,877	)	$	(13,096	)
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities:
Depreciation and amortization and other non-cash items		3,899			3,187
Interest credited to policyholder account balances		2,000			2,100
Deferred income tax		(2,673	)		(3,908	)
Net investment losses (gains)		1,759			(89	)
Interest expense		1,775			931
Change in:
Accrued investment income		(1,058	)		(957	)
Reinsurance recoverables, net		(15,723	)		(27,932	)
Deferred policy acquisition costs		2,018			3,529
Commissions and agent balances		(15,649	)		(4,719	)
Other assets		1,638			(2,407	)
Insurance liabilities		30,766			30,687
Other liabilities		1,002			5,580
Net cash (used) provided by operating activities		1,877			(7,094	)
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturities		39,190			33,176
Mortgage loans		3,796			4,515
Purchases of:
Fixed maturities		(42,018	)		(34,685	)
Mortgage loans		(964	)		(3,965	)
Other invested assets		(190	)		(724	)
Change in policyholder loans, net		(363	)		(289	)
Other, net		(3,934	)		(4,156	)
Net cash (used) provided by investing activities		(4,483	)		(6,128	)
Cash flows from financing activities
Debt issued		35,321			13,600
Debt repaid		(27,803	)		(6,127	)
Deposits to policyholder account balances		387			294
Withdrawals from policyholder account balances		(7,450	)		(4,241	)
Net cash (used) provided by financing activities		455			3,526
Net (decrease) in cash, cash equivalents and restricted cash		(2,151	)		(9,696	)
Cash, cash equivalents and restricted cash – beginning of period		9,776			22,399
Cash, cash equivalents and restricted cash – end of period	$	7,625		$	12,703
Supplemental cash flow information
Non-cash transactions:	$	—		$	—

See notes to interim condensed consolidated financial statements

5

Vericity, Inc.

Notes to Interim Condensed Consolidated Financial Statements

(dollars in thousands)

Note 1 – Summary of Significant Accounting Policies

Description of Business

Vericity, Inc. (the Company) is a Delaware corporation organized to be the stock holding company for Members Holding Company (Members) and its subsidiaries. On August 7, 2019, the Company completed the initial public offering of 14,875,000 shares of its common stock at a price of $10.00 per share (the IPO). The IPO was conducted in connection with the conversion of Members Mutual Holding Company from mutual to stock form and the acquisition by the Company of all of the capital stock of Members following its conversion to stock form after its plan of conversion and amended and restated articles of incorporation were approved at a special meeting of eligible members on August 6, 2019 (the Conversion). As a result of the Conversion, the Company became the holding company for converted Members Mutual Holding Company and its indirect subsidiaries, including Fidelity Life Association (Fidelity Life) and Efinancial, LLC (Efinancial).

On October 3, 2023, the Company, announced that it entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, iA American Holdings Inc. (“iA” or “Parent”), Long Grove Acquisition Corp., a wholly owned subsidiary of Parent (“Merger Sub”), and, solely for purposes of Section 6.03 and Article IX thereof, iA Financial Corporation, Inc. (“Guarantor”).

On the terms and subject to the conditions of the Merger Agreement, at the closing, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving entity, which will become a wholly-owned subsidiary of Parent. The time that the Merger becomes effective is referred to as the “Effective Time.” The Merger was unanimously approved by the Company’s board of directors.

Following execution of the Merger Agreement, Apex Holdco L.P. (the “Consenting Stockholder” or “Apex”) executed and delivered to the Company a written consent (the “Stockholder Written Consent”), adopting the Merger Agreement and the transactions contemplated thereby, including the Merger.

As a result of the execution and delivery of the Stockholder Written Consent, the holders of at least a majority of the outstanding shares of Common Stock have adopted the Merger Agreement. No further approval of the stockholders of the Company is required to adopt the Merger Agreement.

As a result of the Merger, each share of Common Stock outstanding immediately prior to the Effective Time (subject to certain exceptions, including shares of Common Stock owned by stockholders of the Company who have not voted in favor of the adoption of the Merger Agreement and have properly exercised appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) will, at the Effective Time, automatically be converted into the right to receive $11.43 in cash, without interest and subject to applicable withholding taxes (the “Merger Consideration”). The aggregate equity value of the Common Stock acquired by Parent will be approximately $170 million.

If the Merger is consummated, the Company’s Common Stock will be delisted from The Nasdaq Capital Market and deregistered under the Securities Exchange Act of 1934, as amended. The completion of the Merger is subject to satisfaction or waiver of certain closing conditions, including: (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), and receipt of certain regulatory approvals; (ii) there being no law or injunction prohibiting consummation of the Merger; (iii) subject to specified materiality standards, the accuracy of the representations and warranties of the other party; and (iv) compliance by the other party in all material respects with its covenants. Parent’s and Merger Sub’s obligations are also conditioned upon the absence of a material adverse effect on the Company and the absence of any burdensome condition (as defined in the Merger Agreement) imposed by any regulators as part of the regulatory approval process.

On October 3, 2023, the Company issued a Form 8-K and press release announcing the execution of the Merger Agreement and the Form 8-K is incorporated into this filing by reference. The Merger is expected to close in the first half of 2024.

The Company operates as a holding company and currently has no other business operations. Fidelity Life is an Illinois‑domiciled life insurance company that was founded in 1896. Fidelity Life markets life insurance products through independent and affiliated distributors and is licensed in the District of Columbia and all states, except New York and Wyoming. Efinancial markets life and other products for non‑affiliated insurance companies and sells life products for Fidelity Life.

The accompanying interim condensed consolidated financial statements present the accounts of the Company and subsidiaries for the three and nine months ended September 30, 2023 and at September 30, 2022 and December 31, 2022. These interim condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report in the Form 10-K for the year ended December 31, 2022. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

6

Basis of Presentation

These interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The unaudited interim condensed consolidated financial information furnished herein reflects all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. All such adjustments are of a normal recurring nature. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this report, as is permitted by such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2022, and notes thereto, included in the Form 10-K.

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more significant estimates employed in the preparation of the interim condensed consolidated financial statements include the determination of the valuation of investments in fixed maturity, investment impairments, the valuation of deferred tax assets, future policy benefits and other policyholder liabilities.

Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance requires that Other-Than-Temporary Impairment (OTTI) on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through net gains (losses) on investments. The guidance also requires enhanced disclosures. In March 2022, the FASB issued ASU 2022-02 – Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosure. This ASU was issued to eliminate the troubled debt restructuring recognition and measurement guidance for creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. The Company has assessed the impact of ASU 2016-13 and has established an additional for credit losses on our mortgage portfolio of $237. The tax effected amount of $187 is reflected as a beginning of year equity as a Cumulative effect adjustment from changes in accounting guidance, net of tax. The Company has also assessed fixed maturities - available-for-sale, reinsurance recoverables and commissions and agent balances and determined no additional allowance for credit losses is needed. We also adopted the required disclosures within Note 2 Investments, Note 4 Reinsurance, Note 9 Accumulated Other Comprehensive Income and Note 10 Business Segments. Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

Note 2 – Investments

The Company continuously monitors its investment strategies and individual holdings with consideration of current and projected market conditions, the composition of the Company’s liabilities, projected liquidity and capital investment needs, and compliance with investment policies and state regulatory guidelines.

7

Fixed Maturities

The amortized cost, gross unrealized gains, gross unrealized losses, fair value, and net of allowances for credit losses are included in accumulated other comprehensive income (AOCI) of fixed maturities available-for-sale are as follows:

	September 30, 2023
Fixed maturities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government and agencies	$	10,206	$	108	$	(715	)	$	9,599
U.S. agency mortgage-backed		7,353		15		(835	)		6,533
State and political subdivisions		76,764		12		(13,437	)		63,339
Corporate and miscellaneous		174,536		664		(19,397	)		155,803
Foreign government		130		—		(5	)		125
Residential mortgage-backed		7,249		56		(685	)		6,620
Commercial mortgage-backed		21,801		6		(2,152	)		19,655
Asset-backed		36,561		71		(2,782	)		33,850
Total fixed maturities	$	334,600	$	932	$	(40,008	)	$	295,524

	December 31, 2022
Fixed maturities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		OTTI Losses (1)
U.S. government and agencies	$	9,258	$	349	$	(501	)	$	9,106	$	—
U.S. agency mortgage-backed		9,429		63		(614	)		8,878		—
State and political subdivisions		68,213		26		(12,015	)		56,224		—
Corporate and miscellaneous		171,283		1,473		(16,275	)		156,481		—
Foreign government		130		1		—			131		—
Residential mortgage-backed		4,912		140		(622	)		4,430		(709	)
Commercial mortgage-backed		21,374		2		(1,914	)		19,462		—
Asset-backed		47,347		5		(3,926	)		43,426		—
Total fixed maturities	$	331,946	$	2,059	$	(35,867	)	$	298,138	$	(709	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, OTTI is not presented in respect in the table above.

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities of mortgage-backed and asset-backed securities may be substantially shorter than their contractual maturity because they may require monthly principal installments and such loans may prepay principal. The amortized cost and fair value of fixed maturities available-for-sale by contractual maturity, are presented in the following table:

	September 30, 2023
	Amortized Cost		Fair Value
Due in one year or less	$	4,150	$	4,122
Due after one year through five years		39,652		37,578
Due after five years through ten years		73,284		68,163
Due after ten years		144,550		119,003
Securities not due at a single maturity date — primarily mortgage and asset-backed		72,964		66,658
Total fixed maturities	$	334,600	$	295,524

8

Fixed maturities with a carrying value of $2,486 and $2,680 were on deposit with governmental authorities, as required by law at September 30, 2023 and December 31, 2022, respectively.

The Company’s fixed maturities portfolio was primarily composed of investment grade securities, defined as a security having a rating of Aaa, Aa, A, or Baa from Moody’s, AAA, AA, A, or BBB from Standard & Poor’s, or National Association of Insurance Commissioners (NAIC) rating of NAIC 1 or NAIC 2. Investment grade securities comprised 96.2% and 95.1% of the Company’s total fixed maturities portfolio at September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023 and December 31, 2022, the Company had commitments to make investments in available-for-sale securities in the amount of $0 and $1,290, respectively.

Mortgage Loans

The Company makes investments in commercial mortgage loans. The Company, along with other investors, owns a pro rata share of each loan. The Company participates in 35 such investment instruments with ownership shares ranging from 0.6% to 30.0% of the trust at September 30, 2023. The Company owns a share of 319 mortgage loans with an average loan balance of $133 and a maximum exposure related to any single loan of $600. Mortgage loan holdings are diversified by geography and property type as follows:

	September 30, 2023						December 31, 2022
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
Property Type:
Retail	$	12,997			30.5	%	$	13,866			30.6	%
Office		11,276			26.5	%		11,115			24.5	%
Industrial		7,682			18.0	%		8,138			17.9	%
Mixed use		4,860			11.4	%		5,249			11.6	%
Apartments		2,100			4.9	%		2,796			6.2	%
Medical office		2,546			6.0	%		3,053			6.7	%
Other		1,115			2.7	%		1,136			2.5	%
Gross carrying value of mortgage loans		42,576			100.0	%		45,353			100.0	%
Credit loss allowance (1)		(571	)					(83	)
Net carrying value of mortgage loans	$	42,005					$	45,270

	September 30, 2023						December 31, 2022
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
U.S. Region:
West South Central	$	10,779			25.2	%	$	11,608			25.6	%
East North Central		12,457			29.3	%		12,320			27.2	%
South Atlantic		8,153			19.1	%		8,815			19.4	%
West North Central		2,477			5.8	%		2,871			6.3	%
Mountain		2,626			6.2	%		2,824			6.2	%
Middle Atlantic		2,072			4.9	%		2,310			5.1	%
East South Central		3,558			8.4	%		3,661			8.1	%
New England		—			0.0	%		34			0.1	%
Pacific		454			1.1	%		910			2.0	%
Gross carrying value of mortgage loans		42,576			100.0	%		45,353			100.0	%
Credit loss allowance (1)		(571	)					(83	)
Net carrying value of mortgage loans	$	42,005					$	45,270

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses.

During the nine months ended September 30, 2023 and September 30, 2022, $964 and $3,965 of new mortgage loans were purchased, respectively, which did not include second lien mortgage loans. There were no taxes, assessments, or any amounts advanced that were not included in the mortgage loan balances at September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, the Company had 2 and 3 mortgage loans with a total carrying value of $358 and $692 that were in a restructured status, respectively. There was 1 impairment for mortgage loans during the three months ended September 30, 2023 and zero impairment of mortgage loans during the three months ended September 30, 2022 and December 31, 2022.

9

The changes in the allowances for credit losses (includes $237 related to adoption of ASU 2016-13) for commercial mortgage loans were as follows:

	Nine Months Ended September 30, 2023		Year Ended December 31, 2022
Beginning balance	$	83	$	69
Net increase in allowances for credit losses related to change in accounting standards (See Note 1)		237		—
Net (decrease) increase in allowances for credit losses		251		14
Ending balance	$	571	$	83

At September 30, 2023 and December 31, 2022, the Company had no mortgage loans that were on non-accrual status.

At September 30, 2023 and December 31, 2022, the Company had commitments to make investments in mortgage loans in the amount of $3,023 and $2,575, respectively.

Net Investment Income

The sources of net investment income are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income from:
Fixed maturities	$	3,684		$	3,763		$	11,690		$	10,385
Policyholder loans		88			90			268			272
Mortgage loans		509			594			1,815			1,830
Cash, cash equivalents and restricted cash		47			32			110			34
Gross investment income		4,328			4,479			13,883			12,521
Investment expenses		(318	)		(353	)		(1,037	)		(1,131	)
Net investment income	$	4,010		$	4,126		$	12,846		$	11,390

Investment expenses include investment management fees, some of which include incentives based on market performance, custodial fees and internal costs for investment-related activities.

Net Investment (Losses) Gains

The sources of net investment gains (losses) are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Investment (losses) gains from sales:
Fixed maturities	$	(373	)	$	(61	)	$	(462	)	$	(191	)
Mortgage loans		56			(134	)		56			(80	)
Gains and losses from sales		(317	)		(195	)		(406	)		(271	)
Valuation change of other invested assets - (decline) appreciation:		(271	)		(1,087	)		(1,080	)		779
Change in allowance for credit losses (1)		(295	)		(288	)		(273	)		(419	)
Total net gains (losses) on investments	$	(883	)	$	(1,570	)	$	(1,759	)	$	89

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

Change in Allowance for Credit Losses

The Company regularly reviews its fixed income portfolio to identify and evaluate whether a security may require a credit loss allowance. For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses recorded in earnings. For all other securities in an unrealized loss position in which the Company does not expect to recover the entire amortized cost basis, the security is deemed to have a credit loss.

10

Significant judgment is required in the determination of whether a credit loss has occurred for a security. The Company has developed a consistent methodology and has identified significant inputs for determining whether a credit loss has occurred. Some of the factors considered in evaluating whether a decline in fair value is a credit loss are the financial condition and prospects of the issuer, payment status, the probability of collecting scheduled principal and interest payments when due, credit ratings of the securities, and the duration and severity of the decline.

The credit loss component of fixed maturity impairment is calculated as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective rate implicit to the security at the date of purchase or prior impairment. The methodology and assumptions for estimating the cash flows vary depending on the type of security. For mortgage-backed and asset-backed securities, cash flow estimates, including prepayment assumptions, are based on data from widely accepted third-party sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral characteristics, expectations of delinquency and default rates, and structural support, including subordination and guarantees. If the present value of the modeled expected cash flows equals or exceeds the amortized cost of a security, no credit loss exists, and the security is considered to be temporarily impaired. If the present value of the expected cash flows is less than amortized cost, the security is determined to be impaired for credit reasons and a credit loss is recognized in earnings. The non-credit component, determined as the difference between the adjusted amortized cost basis and fair value, is recognized a credit loss in other comprehensive (loss) income.

The measurement of credit losses for available-for-sale fixed income securities measured at fair value is not affected except that credit losses recognized are limited to the amount by which fair value is below amortized cost and the credit loss adjustment is recognized through an allowance which may change over time but once recorded cannot subsequently be reduced to an amount below zero. Previously these credit loss adjustments were recorded as OTTI and were not reversed once recorded.

A roll-forward of the cumulative credit losses on fixed maturities are as follows:

	September 30,		December 31,
	2023		2022
Beginning balance of credit losses on fixed maturities	$	1,263	$	837
Additional credit loss not previously recognized (1)		—		394
Additional credit loss that was previously recognized (1)		21		48
Reduction of credit losses related to securities sold during period		—		(16	)
Ending balance of credit losses on fixed maturities	$	1,284	$	1,263

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, additional credit losses for OTTI is now presented as an additional credit loss.

Unrealized Losses for Fixed Maturities

The Company’s fair value and gross unrealized losses for fixed maturities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous gross unrealized loss position are as follows:

	12 months or less					Longer than 12 months					Total
September 30, 2023	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. government and agencies	$	977	$	(22	)	$	2,527	$	(693	)	$	3,504	$	(715	)
U.S. agency mortgage-backed		780		(23	)		4,712		(812	)		5,492		(835	)
State and political subdivisions		19,634		(1,108	)		42,635		(12,329	)		62,269		(13,437	)
Corporate and miscellaneous		46,767		(3,546	)		64,833		(15,851	)		111,600		(19,397	)
Foreign Government		125		(5	)		—		—			125		(5	)
Residential mortgage-backed		3,009		(69	)		2,786		(616	)		5,795		(685	)
Commercial mortgage-backed		1,711		(61	)		17,499		(2,091	)		19,210		(2,152	)
Asset-backed		5,262		(417	)		26,143		(2,365	)		31,405		(2,782	)
Total fixed maturities	$	78,265	$	(5,251	)	$	161,135	$	(34,757	)	$	239,400	$	(40,008	)

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	12 months or less					Longer than 12 months					Total
December 31, 2022	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. agency mortgage-backed	$	2,722	$	(501	)	$	—	$	—		$	2,722	$	(501	)
State and political subdivisions		5,297		(578	)		216		(36	)		5,513		(614	)
Corporate and miscellaneous		38,252		(7,036	)		15,057		(4,979	)		53,309		(12,015	)
Foreign government		94,461		(13,479	)		8,322		(2,796	)		102,783		(16,275	)
Residential mortgage-backed		3,286		(554	)		344		(68	)		3,630		(622	)
Commercial mortgage-backed		16,218		(1,611	)		2,655		(303	)		18,873		(1,914	)
Asset-backed		20,465		(1,726	)		21,069		(2,200	)		41,534		(3,926	)
Total fixed maturities	$	180,701	$	(25,485	)	$	47,663	$	(10,382	)	$	228,364	$	(35,867	)

The indicated gross unrealized losses in all fixed maturity categories decreased to $40,008 from $35,867 at September 30, 2023 and December 31, 2022, respectively. Based on the Company’s current evaluation of its fixed maturities in an unrealized loss position, in accordance with our impairment policy and the Company’s current intentions to hold these securities, the Company concluded that these securities do not have credit losses.

Information and concentrations related to fixed maturities in an unrealized loss position are included below. The tables below include fixed maturities and number of securities in an unrealized loss position for greater than and less than 12 months and the percentage that were investment grade at September 30, 2023.

	Unrealized Losses 12 months or less
	Gross Unrealized Losses			Impairment is Less than 10% of Amortized Cost			Impairment is Between 10% and 20% of Amortized Cost			Impairment is Greater than 20% of Amortized Cost			Percent Investment Grade
Fixed maturities
U.S. government and agencies	$	(22	)	$	(22	)	$	—		$	—			100	%
U.S. agency mortgage-backed		(23	)		(23	)		—			—			100	%
State and political subdivisions		(1,108	)		(948	)		(160	)		—			100	%
Corporate and miscellaneous		(3,546	)		(1,607	)		(960	)		(979	)		84	%
Foreign Government		(5	)		(5	)		—			—			100	%
Residential mortgage-backed		(69	)		(69	)		—			—			75	%
Commercial mortgage-backed		(61	)		(51	)		(10	)		—			100	%
Asset-backed		(417	)		(271	)		(85	)		(61	)		100	%
Gross unrealized losses	$	(5,251	)	$	(2,996	)	$	(1,215	)	$	(1,040	)
Total number of fixed maturities	300				257			33			10

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	Unrealized Losses greater than 12 months
	Gross Unrealized Losses			Impairment is Less than 10% of Amortized Cost			Impairment is Between 10% and 20% of Amortized Cost			Impairment is Greater than 20% of Amortized Cost			Percent Investment Grade
Fixed maturities
U.S. government and agencies	$	(693	)	$	(95	)	$	—		$	(598	)		100	%
U.S. agency mortgage-backed		(812	)		(44	)		(752	)		(16	)		100	%
State and political subdivisions		(12,329	)		(563	)		(1,822	)		(9,944	)		100	%
Corporate and miscellaneous		(15,851	)		(835	)		(3,348	)		(11,668	)		87	%
Residential mortgage-backed		(616	)		(56	)		(306	)		(254	)		89	%
Commercial mortgage-backed		(2,091	)		(487	)		(1,376	)		(228	)		100	%
Asset-backed		(2,365	)		(789	)		(1,172	)		(404	)		97	%
Gross unrealized losses	$	(34,757	)	$	(2,869	)	$	(8,776	)	$	(23,112	)
Total number of fixed maturities		587			145			201			241

	Investment Grade		Below Investment Grade		Total
Fixed income securities with unrealized loss position less than or equal to 20% of amortized cost, net (1) (2)	$	15,251	$	604	$	15,855
Fixed income securities with unrealized loss position greater than 20% of amortized cost, net (3) (4)		23,704		449		24,153
Total unrealized losses	$	38,955	$	1,053	$	40,008

(1) Below investment grade fixed income securities include $150 that have been in an unrealized loss position for less than twelve months.

(2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.

(3) Below investment grade fixed income securities include $902 that have been in an unrealized loss position for a period of twelve or more consecutive months.

(4) Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.

Note 3 – Policy Liabilities

Future Policy Benefits

Future policy benefits represent the reserve for direct and assumed traditional life insurance policies and annuities in payout status.

The annuities in payout status are certain structured settlement contracts. The policy liability for structured settlement contracts of $12,198 and $13,118 at September 30, 2023 and December 31, 2022, respectively, is computed as the present value of contractually specified future benefits. The amounts included in the policy liability for structured settlements that are life contingent at September 30, 2023 and December 31, 2022, is $9,499 and $10,097, respectively.

To the extent that unrealized gains on fixed maturities would result in a premium deficiency had those gains actually been realized, a premium deficiency reserve is recorded. A liability of $0 and $470 is included as part of the liability for structured settlements with respect to this deficiency at September 30, 2023 and December 31, 2022, respectively. The offset to this liability is recorded as a reduction of the unrealized capital gains included in AOCI.

Participating life insurance in-force was 2.5% and 3.9% of the face value of total life insurance at September 30, 2023 and December 31, 2022, respectively.

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Note 4 – Reinsurance

The Company uses reinsurance to mitigate exposure to potential losses, provide additional capacity for growth, and provide greater diversity of business. For ceded reinsurance, the Company remains liable to the extent that reinsuring companies may not be able to meet their obligations under the reinsurance agreements. To manage the risk from failure of a reinsurer to meet its obligations, the Company periodically evaluates the financial condition of all of its reinsurers.

In the first quarter 2022, Fidelity Life entered into a reinsurance contract with Swiss Re Life & Health America Inc. (Swiss Re). This new treaty is in addition to existing coinsurance agreements, largely with Swiss Re on certain policies issued through and including December 31, 2020. The impact of this transaction to our segment results included an initial ceded premium in 2022 of $6.5 million based on the statutory reserves at January 1, 2022. The impact to pre-tax income in 2022 was nominal, however various income statement lines were impacted.

On July 18, 2023, the Liquidation Order of Scottish Re was approved by the Delaware Court specifying the effective date of the liquidation as September 30, 2023. The Liquidation Order specifies that all reinsurance agreements of Scottish Re are cancelled effective September 30, 2023. Accordingly, ceded future policy benefits of $657 were taken down as of the effective date of the order.

Reinsurance recoverables are as follows:

	September 30,		December 31,
	2023		2022
Ceded future policy benefits	$	192,968	$	173,904
Claims and other amounts recoverables		37,617		40,958
Ending balance	$	230,585	$	214,862

The reconciliation of direct insurance premiums to net insurance premiums is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Direct premiums	$	46,413		$	44,740		$	135,613		$	131,792
Assumed premiums		8,960			10,838			27,493			35,512
Ceded premiums		(31,939	)		(31,110	)		(91,591	)		(93,830	)
Net insurance premiums	$	23,434		$	24,468		$	71,515		$	73,474

The reconciliation of direct life, annuity, and health claim benefits to life, annuity, and health claim benefits as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Direct	$	34,658		$	36,963		$	93,623		$	105,673
Assumed		10,209			5,656			16,136			15,911
Ceded		(22,284	)		(25,114	)		(58,192	)		(73,962	)
Life, annuity, and health claim benefits	$	22,583		$	17,505		$	51,567		$	47,622

Net policy charges on universal life products were $41 and $44 for the three months ended September 30, 2023 and 2022, respectively and $135 and $136 for the nine months ended September 30, 2023 and 2022, respectively, and are included in other income.

At September 30, 2023 and December 31, 2022, reserves related to fixed‑rate annuity deposits assumed from a former affiliate company amounted to approximately $64,095 and $69,070, respectively, and are included with policyholder account balances in the Interim Condensed Consolidated Balance Sheets.

Note 5 – Closed Block

The Closed Block was formed at October 1, 2006 and contains all participating policies issued or assumed by Fidelity Life. The assets and future net cash flows of the Closed Block are available only for purposes of paying benefits, expenses and dividends of the Closed Block and are not available to the Company, except for an amount of additional funding that was established at the inception of the Closed Block. The additional funding was designed to protect the block against future experience, and if the funding is not required for that purpose, is subject to reversion to the Company in the future. Any reversion of Closed Block assets to the Company must be approved by the Illinois Department of Insurance (IDOI).

14

In October 2011, the IDOI approved a reversion of a portion of the initial funding that the Company had determined was not required to fund the Closed Block. The carrying value of the assets transferred from the Closed Block on October 31, 2011, the date of transfer, was $4,397.

The assets and liabilities within the Closed Block are included in the Company’s condensed consolidated financial statements on the same basis as other accounts of the Company. The maximum future earnings and accumulated other comprehensive income to be recognized from Closed Block assets and liabilities represent the estimated future Closed Block profits that will accrue to the Company and is calculated as the excess of Closed Block assets over Closed Block liabilities. Included in Closed Block assets at September 30, 2023 and December 31, 2022 is $11,058 and $10,792 of additional Closed Block funding, plus accrued interest, that is eligible for reversion to the Company if not needed to fund Closed Block experience, respectively.

The Closed Block was funded based on a model developed to forecast the future cash flows of the Closed Block, which is referred to as the actuarial calculation. The actuarial calculation projected the anticipated future cash flows of the Closed Block as established at the initial funding. We compare the actual results of the Closed Block to expected results from the actuarial calculation as part of the annual assessment of the current level of policyholder dividends. The assessment of policyholder dividends includes projections of future experience of the Closed Block. The review of Closed Block experience also includes consideration of whether a policy dividend obligation should be recorded to reflect favorable Closed Block experience that has not yet been reflected in the dividend scales. At September 30, 2023 and December 31, 2022, the Company recognized a policyholder dividend obligation of $9,544 and $9,515, respectively, resulting from the excess of actual cumulative earnings over the expected cumulative earnings and from accumulated net unrealized investment gains (losses) that have arisen subsequent to the establishment of the Closed Block.

Information regarding the Closed Block liabilities (assets) designated to the Closed Block is as follows:

	September 30,			December 31,
Closed Block Liabilities	2023			2022
Future policy benefits and claims	$	29,216		$	29,382
Policyholder account balances		6,567			6,731
Other policyholder liabilities		3,436			5,298
Policyholder dividend obligations		9,544			9,515
Other liabilities		38			586
Total Closed Block liabilities		48,801			51,512
Assets Designated to the Closed Block
Investments:
Fixed maturities - available-for-sale (amortized cost $41,673 and    $40,522, respectively)		36,464			36,625
Policyholder loans		1,238			1,132
Total investments		37,702			37,757
Cash and Cash Equivalents		365			—
Premiums due and uncollected		382			1,852
Accrued investment income		490			457
Reinsurance recoverables		10,834			13,885
Deferred income tax assets, net		4,712			4,263
Total assets designated to the Closed Block		54,485			58,214
Excess of Closed Block assets over liabilities		5,684			6,702
Amounts included in accumulated other comprehensive income:
Unrealized investment loss (gains), net of income tax		(4,116	)		(3,079	)
Total amounts included in accumulated other comprehensive income		(4,116	)		(3,079	)
Maximum future earnings and accumulated other comprehensive income to    be recognized from Closed Block assets and liabilities (includes excess    assets of $11,058 and $10,792, respectively)	$	(9,800	)	$	(9,781	)

	September 30,		December 31,
Policyholder Dividend Obligations	2023		2022
Beginning balance	$	9,515	$	12,669
Impact from earnings allocable to policyholder dividend obligations		29		(165	)
Change in net unrealized investment gains (losses) allocated to policyholder    dividend obligations		—		(2,989	)
Ending balance	$	9,544	$	9,515

15

Information regarding the Closed Block revenues and expenses is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023		2022
Revenues
Net insurance premiums	$	769		$	329		$	3,351	$	2,357
Net investment income		456			375			1,361		1,157
Net Realized Investment Gains (Losses)		5			—			8		—
Total revenues		1,230			704			4,720		3,514
Benefits and expenses
Life and annuity benefits - including policyholder dividends    of $452, $498, $1,474 and $1,102, respectively		1,353			1,072			4,258		3,588
Interest credited to policyholder account balances		42			44			124		128
Operating costs and expenses		(38	)		(356	)		314		(482	)
Total expenses		1,357			760			4,696		3,234
Revenues, net of expenses before provision for income tax    expense (benefit)		(127	)		(56	)		24		280
Income tax expense (benefit)		(27	)		(12	)		5		59
Revenues, net of expenses and provision for income tax    expense (benefit)	$	(100	)	$	(44	)	$	19	$	221

The Company charges the Closed Block with federal income taxes and state and local premium taxes, policy maintenance costs and investment management expenses relating to the Closed Block as provided in the Closed Block Memorandum.

The following table presents the amortized cost and fair value of the Closed Block fixed maturities portfolio by contractual maturity at September 30, 2023. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

	Amortized Cost		Fair Value
Due in one year or less	$	1,100	$	1,093
Due after one year through five years		6,615		6,482
Due after five years through ten years		6,836		6,374
Due after ten years		23,683		19,193
Securities not due at a single maturity date — primarily mortgage and asset-    backed		3,439		3,322
Total fixed maturities	$	41,673	$	36,464

Note 6 – Commitments and Contingencies

Litigation

The Company is subject to legal and regulatory actions in the course of our business. Management does not believe such litigation will have a material impact on the Company’s interim condensed consolidated financial statements. The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible but not probable or, is probable but not reasonably able to be estimated, no accrual is established, but the matter, if material, is disclosed. The Company is not aware of any material legal or regulatory matters threatened or pending against the Company.

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Note 7 – Assets and Liabilities Measured at Fair Value

Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company attempts to establish fair value as an exit price consistent with transactions taking place under normal market conventions. The Company utilizes market observable information to the extent possible and seeks to obtain quoted market prices for all securities. If quoted market prices in active markets are not available, the Company uses a number of methodologies to establish fair value estimates including discounted cash flow models, prices from recently executed transactions of similar securities, or broker/dealer quotes.

Fair values for the Company’s fixed maturity and equity securities are determined by management, utilizing prices obtained from third-party pricing services. Management reviews on an ongoing basis the reasonableness of the methodologies used by the pricing services to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. The main procedure the Company employs in fulfillment of this objective includes back-testing transactions, where past fair value estimates are compared to actual transactions executed in the market on similar dates.

The Company’s assets and liabilities have been classified into a three-level hierarchy based on the priority of the inputs to the respective valuation technique. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Level 1 and Level 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

Level 1 – Unadjusted quoted prices for identical assets in active markets the Company can access. Level 1 assets include securities that are traded in an active exchange market.

Level 2 – This level includes fixed maturities priced principally by independent pricing services using observable inputs other than Level 1 prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments on inactive markets; and model-derived valuations for which all significant inputs are observable market data. Level 2 instruments include most corporate debt securities and U.S. government and agency mortgage-backed securities that are valued by models using inputs that are derived principally from or corroborated by observable market data.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Level 3 instruments include less liquid assets for which significant inputs are unobservable in the market, such as structured securities with complex features that require significant management assumptions or estimation in the fair value measurement.

This hierarchy requires the use of observable market data when available.

Certain assets and liabilities are not carried at fair value on a recurring basis, including investments such as mortgage loans, intangible assets, future policy benefits excluding term life reserves and policyholder account balances. Accordingly, such items are only included in the fair value hierarchy disclosure when the items are subject to re-measurement at fair value after initial recognition (for example, when there is evidence of impairment) and the resulting re-measurement is reflected in the consolidated financial statements at the reporting date.

Recurring and Non-Recurring Fair Value Measurements

The Company’s assets that are carried at fair value on a recurring and non-recurring basis, by fair value hierarchy level, are as follows:

September 30, 2023	Level 1		Level 2		Level 3		Total Fair Value
Recurring fair value measurements
Financial instruments recorded as assets:
Fixed maturities
U.S. government and agencies	$	—	$	9,599	$	—	$	9,599
U.S. agency mortgage-backed		—		6,533		—		6,533
State and political subdivisions		—		62,895		444		63,339
Corporate and miscellaneous		2,231		127,012		26,560		155,803
Foreign government		—		125		—		125
Residential mortgage-backed		—		6,620		—		6,620
Commercial mortgage-backed		—		19,655		—		19,655
Asset-backed		—		30,512		3,338		33,850
Total fixed maturities		2,231		262,951		30,342		295,524
Total recurring assets	$	2,231	$	262,951	$	30,342	$	295,524

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December 31, 2022	Level 1		Level 2		Level 3		Total Fair Value
Recurring fair value measurements
Financial instruments recorded as assets:
Fixed maturities
U.S. government and agencies	$	—	$	9,106	$	—	$	9,106
U.S. agency mortgage-backed		—		8,878		—		8,878
State and political subdivisions		—		55,782		442		56,224
Corporate and miscellaneous		2,847		126,644		26,990		156,481
Foreign government		—		131		—		131
Residential mortgage-backed		—		4,430		—		4,430
Commercial mortgage-backed		—		19,462		—		19,462
Asset-backed		—		40,293		3,133		43,426
Total fixed maturities		2,847		264,726		30,565		298,138
Total recurring assets	$	2,847	$	264,726	$	30,565	$	298,138

Summary of Significant Valuation Techniques for Assets on a Recurring Basis

Level 1 securities include principally exchange‑traded funds that are valued based on quoted market prices for identical assets.

Level 2 securities are based on prices obtained from independent pricing services. All of the Company’s prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type and region of the world, based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type and region. For fixed maturities that do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications which incorporate a variety of inputs including, but not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, and U.S. Treasury curves. Specifically, for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Securities with validated quotes from pricing services are reflected within Level 2 of the fair value hierarchy, as they generally are based on observable pricing for similar assets or other market significant observable inputs.

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Level 3 fair value classification consists of investments in securities where the fair value of the security is determined by a pricing service using internal pricing models where one or more of the significant inputs is unobservable in the marketplace, or there is a single broker/dealer quote. The fair value of a broker-quoted asset is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant. The fair value of Level 3 liabilities is estimated on the discounted cash flows of contractual payments.

If the Company believes the pricing information received from third-party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service. Historically, the Company has not challenged or updated the prices provided by third-party pricing services. However, any such updates by a pricing service to be more consistent with the presented market observations, or any adjustments made by the Company to prices provided by third-party pricing services would be reflected in the balance sheet for the current period.

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into and/or out of Level 3 are reported as having occurred at the beginning of the period and are based on observable inputs received from pricing sources; therefore, all net realized and unrealized gains and losses on these securities for the period are reflected in the table that follows. A summary of changes in fair value of Level 3 assets held at fair value on a recurring basis is as follows:

			Total gains (losses) included in:
	Balance at January 1, 2023		Net Income (loss)		OCI			Purchases		Sales			Settlements		Net Transfers		Balance at September 30, 2023
Financial Assets
Fixed maturities
State and political subdivision	$	442	$	—	$	2		$	—	$	—		$	—	$	—	$	444
Corporate and miscellaneous		26,991		2		(31	)		2,449		(2,989	)		—		138		26,560
Asset-backed		3,133		90		80			145		(610	)		—		500		3,338
Total assets	$	30,566	$	92	$	51		$	2,594	$	(3,599	)	$	—	$	638	$	30,342

			Total gains (losses) included in:
	Balance at January 1, 2022		Net Income			OCI			Purchases		Sales			Settlements		Net Transfers		Balance at December 31, 2022
Financial Assets
Fixed maturities
State and political subdivisions	$	498	$	—		$	(56	)	$	—	$	—		$	—	$	—	$	442
Corporate and miscellaneous		24,740		2			(398	)		3,198		(2,582	)		1,468		563		26,991
Asset-backed		2,838		(122	)		(325	)		1,907		(1,260	)		—		95		3,133
Total assets	$	28,076	$	(120	)	$	(779	)	$	5,105	$	(3,842	)	$	1,468	$	658	$	30,566

There were 4 transfers from Level 3 to Level 2 and 5 transfers from level 2 to level 3 in 2023. There were 2 transfers from Level 3 to Level 2 and 6 transfers from level 2 to level 3 in 2022.

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Financial Instruments not Measured at Fair Value

The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude cash and cash equivalents and accrued investment income, that are not securities and therefore are not included in the three-level hierarchy table disclosed in the “Recurring and Non-Recurring Fair Value Measurements” section. The carrying amount and estimated fair values of the Company’s financial instruments that are not measured at fair value on the Interim Condensed Consolidated Balance Sheets are as follows:

			Estimated Fair Value
September 30, 2023	Carrying Value		Level 1		Level 2		Level 3		Total
Financial instruments recorded as assets:
Mortgage loans	$	42,005	$	—	$	—	$	38,074	$	38,074
Policyholder loans	$	7,062	$	—	$	—	$	8,136	$	8,136
Financial instruments recorded as liabilities:
Future policy benefits, excluding term life reserves	$	15,776	$	—	$	—	$	14,511	$	14,511
Long/short-term debt	$	46,483	$	—	$	—	$	47,762	$	47,762
Policyholder account balances	$	72,245	$	—	$	—	$	65,459	$	65,459

			Estimated Fair Value
December 31, 2022	Carrying Value		Level 1		Level 2		Level 3		Total
Financial instruments recorded as assets:
Mortgage loans	$	45,270	$	—	$	—	$	41,622	$	41,622
Policyholder loans	$	6,699	$	—	$	—	$	7,722	$	7,722
Financial instruments recorded    as liabilities:
Future policy benefits, excluding term    life reserves	$	16,555	$	—	$	—	$	15,192	$	15,192
Long/short-term debt	$	37,189	$	—	$	—	$	36,763	$	36,763
Policyholder account balances	$	77,443	$	—	$	—	$	70,157	$	70,157

The following methods and assumptions were used to estimate the fair value of these financial assets and liabilities.

Mortgage Loans — Fair value was based on the discounted value of future cash flows for all first mortgage loans adjusted for specific loan risk. The discount rate was based on the rate that would be offered for similar loans at the reporting date. Fair value excludes $974 and $1,952 of second and mezzanine mortgages carried at cost for which fair value is not measurable at September 30, 2023 and December 31, 2022, respectively.

Policyholder Loans — Fair value of policyholder loans was estimated using discounted cash flows using risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash value of the underlying insurance policy.

Future Policy Benefits and Policyholder Account Balances — Liabilities with interest rate guarantees greater than one year or with defined maturities, the fair value was estimated by calculating an average present value of expected cash flows over a broad range of interest rate scenarios using the current market risk‑free interest rates adjusted for spreads required for publicly traded bonds issued by comparably rated insurers. Certain non-interest sensitive reserves are at carrying value, which approximates fair value.

Long and Short-Term Debt — Fair value was calculated using the discounted value of future cash flows method. The discount rate was based on the rate that is commensurable to the level of risk. The carrying amounts reported on the Interim Condensed Consolidated Balance Sheets have been divided in to short and long-term based upon expected maturity dates.

Note 8 – Long and Short-Term Debt

In 2022 and subsequent amendments in 2023, Efinancial entered into a new commission financing arrangement and is taking new advances on this financing arrangement. Efinancial’s ability to receive advances under this arrangement will terminate when the aggregate amount advanced under the arrangement equals or exceeds $46.0 million. At September 30, 2023 and December 31, 2022,

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the Company had a net advance of $38,618 and $31,100, respectively, under this arrangement. At September 30, 2023, the Company expects to pay back the aggregate amounts as presented in the following table.

	September 30, 2023
Due in one year or less	$	9,172
Due after one year through two years		6,328
Due after two years through three years		5,891
Due after three years through four years		5,493
Due after four years through five years		5,014
Due after five years		38,411
Less discount		(23,826	)
Total long/short-term debt	$	46,483

Federal Home Loan Bank of Chicago

The Company is a member of the Federal Home Loan Bank of Chicago (FHLBC). As a member, the Company is able to borrow on a collateralized basis from the FHLBC which can be used as an alternative source of liquidity. The FHLBC membership requires the Company to own member stock. At September 30, 2023 and December 31, 2022, the Company held $270 and $180 of FHLBC common stock, which is included in Other invested assets, respectively. The Company's ability to borrow under this facility is subject to the FHLBC's discretion and requires the availability of qualifying assets. As of September 30, 2023 and December 31, 2022, the Company had not pledged any assets and there were no outstanding borrowings.

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Note 9 – Accumulated Other Comprehensive (Loss) Income

Changes in accumulated other comprehensive (loss) income, net of taxes are as follows:

	2023								2022
	Net Unrealized Gains (Losses) on Investments with Credit Losses		Net Unrealized Gains (Losses) on Other Investments			Total			Net Unrealized Gains (Losses) on Investments with Credit Losses		Net Unrealized Gains (Losses) on Other Investments			Total
Balance at beginning of year	$	362	$	(30,534	)	$	(30,172	)	$	362	$	10,567		$	10,929
Third Quarter
Other comprehensive income (loss)
Unrealized holding (losses) gains from changes in the market value of securities		—		(10,166	)		(10,166	)		—		(15,424	)		(15,424	)
Impact on policy benefit liabilities of changes in market value of securities		—		340			340			—		1,545			1,545
Change in net unrealized investment (losses) gains allocated to policyholder dividend obligations		—		—			—			—		—			—
Deferred income tax (expense) benefit		—		1,744			1,744			—		2,915			2,915
Third Quarter, net		—		(8,082	)		(8,082	)		—		(10,964	)		(10,964	)
Year to Date
Other comprehensive (loss) income
Unrealized holding (losses) gains from changes in the market value of securities		—		(5,268	)		(5,268	)		—		(60,944	)		(60,944	)
Impact on policy benefit liabilities of changes in market value of securities		—		469			469			—		6,065			6,065
Change in net unrealized investment (losses) gains allocated to policyholder dividend obligations		—		—			—			—		2,989			2,989
Deferred income tax benefit (expense)		—		843			843			—		10,897			10,897
Year to Date, net		—		(3,956	)		(3,956	)		—		(40,993	)		(40,993	)
Balance at end of period	$	362	$	(34,490	)	$	(34,128	)	$	362	$	(30,426	)	$	(30,064	)

Note 10 – Business Segments

Our Chief Operating Decision Maker makes decisions by analyzing our segment information. For internal decision-making purposes and external reporting purposes, we do not disaggregate revenue beyond our segment information and believe that any further disaggregation is immaterial. The Company’s current operations were organized into three reportable segments: Insurance, Agency, and Corporate & Other.

The Insurance Segment is composed of three broad lines consisting of Traditional Life, Closed Block, and Assumed Life and Annuities. Traditional Life and the Closed Block are distinct operations; the Assumed life and annuities business and the small amount of structured settlements are all blocks in runoff from a prior management arrangement.

The Agency Segment includes the insurance distribution operations of the Company and includes commission revenue from the sale of Fidelity Life products.

The Corporate & Other Segment includes expenses that will benefit the overall organization, which are not allocated to a segment. This segment recognizes net investment income on cash and invested assets held mainly as a result of the IPO and interest expense related to our recently announced merger transaction and commission financing agreement.

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All intercompany accounts and transactions have been eliminated in consolidation, including any profit or loss from the sale of Insurance Segment products through the Agency Segment.

The segment results are as follows:

	Three Months Ended September 30, 2023											Three Months Ended September 30, 2022
	Insurance			Agency		Corporate & Other			Total Consolidated			Insurance			Agency			Corporate & Other			Total Consolidated
Net insurance premiums	$	23,434		$	—	$	—		$	23,434		$	24,468		$	—		$	—		$	24,468
Net investment income		3,931			—		79			4,010			3,927			—			199			4,126
Net (losses) gains on investments (1)		(883	)		—		—			(883	)		(1,100	)		—			(470	)		(1,570	)
Earned commissions		—			15,354		—			15,354			—			11,379			(112	)		11,267
Other income		274			1,472		—			1,746			144			1,259			—			1,403
Total revenues		26,756			16,826		79			43,661			27,439			12,638			(383	)		39,694
Life, annuity, and health claim benefits		23,210			—		—			23,210			18,151			—			—			18,151
Operating costs and expenses		7,914			16,564		2,277			26,755			7,957			14,110			1,066			23,133
Amortization of deferred policy acquisition    costs		3,283			—		—			3,283			4,086			—			—			4,086
Total benefits and expenses		34,407			16,564		2,277			53,248			30,194			14,110			1,066			45,370
Income (loss) before income taxes	$	(7,651	)	$	262	$	(2,198	)	$	(9,587	)	$	(2,755	)	$	(1,472	)	$	(1,449	)	$	(5,676	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

	Nine Months Ended September 30, 2023											Nine Months Ended September 30, 2022
	Insurance			Agency		Corporate & Other			Total Consolidated			Insurance			Agency			Corporate & Other			Total Consolidated
Net insurance premiums	$	71,515		$	—	$	—		$	71,515		$	73,474		$	—		$	—		$	73,474
Net investment income		12,618			—		228			12,846			10,982			—			408			11,390
Net realized investment gains (losses) (1)		(1,395	)		—		(364	)		(1,759	)		(267	)		—			356			89
Earned commissions		—			45,880		(345	)		45,535			—			33,105			(313	)		32,792
Other income		804			4,079		—			4,883			419			3,773			—			4,192
Total revenues		83,542			49,959		(481	)		133,020			84,608			36,878			451			121,937
Life, annuity, and health claim benefits		53,567			—		—			53,567			49,722			—			—			49,722
Operating costs and expenses		23,843			48,636		5,760			78,239			25,143			42,573			5,143			72,859
Amortization of deferred policy    acquisition costs		9,913			—		—			9,913			13,237			—			—			13,237
Total benefits and expenses		87,323			48,636		5,760			141,719			88,102			42,573			5,143			135,818
(Loss) income before income tax	$	(3,781	)	$	1,323	$	(6,241	)	$	(8,699	)	$	(3,494	)	$	(5,695	)	$	(4,692	)	$	(13,881	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

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	September 30, 2023								December 31, 2022
	Insurance		Agency		Corporate & Other		Total Consolidated		Insurance		Agency		Corporate & Other		Total Consolidated
Investments and cash	$	351,240	$	800	$	2,979	$	355,019	$	358,620	$	1,094	$	3,862	$	363,576
Commissions and agent balances		8,550		41,865		—		50,415		4,751		30,015		—		34,766
Deferred policy acquisition costs		88,171		—		—		88,171		90,189		—		—		90,189
Intangible assets		—		1,635		—		1,635		—		1,635		—		1,635
Reinsurance recoverables net		230,585		—		—		230,585		214,862		—		—		214,862
Deferred income tax assets, net		18,361		—		13,642		32,003		13,489		—		14,948		28,437
Other		28,635		9,068		654		38,357		26,800		5,869		3,944		36,613
Total assets	$	725,542	$	53,368	$	17,275	$	796,185	$	708,711	$	38,613	$	22,754	$	770,078

All the Company’s significant revenues and long-lived assets are located in the United States, which is the Company’s country of domicile.

Note 11 –Subsequent Events

On October 3, 2023, Vericity, Inc. announced that it entered into an Agreement and Plan of Merger with iA American Holdings Inc. Please refer to Note 1 - Summary of Significant Accounting Policies for additional details.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2023 and 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Form 10-Q contains “forward-looking” statements that are intended to enhance the reader’s ability to assess our future financial and business performance. Forward-looking statements include, but are not limited to, statements that represent our beliefs concerning future operations, strategies, financial results or other developments, and contain words and phrases such as “may,” “expects,” “should,” “believes,” “anticipates,” “estimates,” “intends” or similar expressions. In addition, statements that refer to our future financial performance, anticipated growth and trends in our business and in our industry and other characterizations of future events or circumstances are forward-looking statements. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual results could be materially different.

Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs with respect to, among other things, future events and financial performance. Except as required under the federal securities laws, we do not intend, and do not undertake, any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.

The forward-looking statements include, among other things, those items listed below:

•future economic conditions in the markets in which we compete that could be less favorable than expected and could have impacts on demand for our products and services;

•our ability to grow and develop our Agency business through expansion of retail call centers, online sales, wholesale operations and other areas of opportunity;

•our ability to grow and develop our insurance business and successfully develop and market new products;

•our ability to enter new markets successfully and capitalize on growth opportunities either through acquisitions or organically;

•financial market conditions, including, but not limited to, changes in interest rates and the level and trends of stock market prices causing a reduction of net investment income or realized losses and reduction in the value of our investment portfolios;

•increased competition in our businesses, including the potential impacts of aggressive price competition by other insurance companies, payment of higher commissions to agents that could affect demand for our insurance products and impact the ability to grow and retain agents in our Agency Segment and the entry of new competitors and the development of new products by new or existing competitors, resulting in a reduction in the demand for our products and services;

•the effect of legislative, judicial, economic, demographic, and regulatory events in the jurisdictions where we do business;

•the effect of challenges to our patents and other intellectual property;

•costs, availability, and collectability of reinsurance;

•the potential impact on our reported net income that could result from the adoption of future accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies;

•the inability to maintain or grow our strategic partnerships or our inability to realize the expected benefits from our relationship with the Standby Purchaser;

•the inability to manage future growth and integration of our operations; and

•changes in industry trends and financial strength ratings assigned by nationally recognized statistical rating organizations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes included in Item 1 of this Form 10-Q. Some of the information contained in this discussion and analysis and set forth elsewhere in this Form 10-Q constitutes forward looking information that involves risks and uncertainties. You should review “Forward Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described, or implied by, the forward-looking statements contained herein.

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Overview

We provide life insurance protection targeted to the middle American market. We believe there is a substantial unmet need for life insurance, particularly among domestic households with annual incomes of between $50,000 and $125,000, a market we refer to as our target Middle Market. We differentiate our product and service offerings through innovative product design and sales processes, with an emphasis on rapidly issued products that are not medically underwritten at the time of sale.

We conduct our business through our two operating subsidiaries, Fidelity Life, an Illinois-domiciled life insurance company, and Efinancial, a call center-based insurance agency. Efinancial sells Fidelity Life products through its own call center distribution platform, independent agents and other marketing organizations. Efinancial, in addition to offering Fidelity Life products, sells insurance products of unaffiliated carriers. We report our operating results in three segments: Agency, Insurance and Corporate & Other.

COVID-19

The stress and disruption placed on the global economy and financial markets from the outbreak of COVID-19 may continue to have near and long-term negative effects on investment valuations, returns, and credit allowance exposure. The Company will continue to closely monitor the situation, including potential negative impacts on sales of new policies and mortality; however, due to the highly uncertain nature of these conditions, it is not possible to reliably estimate the length and severity of COVID-19 or its impact to the Company’s operations, but the effect could be material.

War in Ukraine and Israel

The Company believes the wars in Ukraine and in and around Israel do not have a material impact on the interim condensed consolidated financial statements of the Company at September 30, 2023.

National Service Group of AmeriLife, LLC

In the second quarter 2020, Fidelity Life entered into a General Agent’s agreement with an unaffiliated third party, National Service Group of AmeriLife, LLC (“AmeriLife”). The President of this entity, Scott Perry also sits on the Company’s Board of Directors. This agreement provides Fidelity Life access to AmeriLife distribution channels, its commission systems and assists in streamlining administrative processes related to commissions. This agreement also allows Efinancial to operate as a sub agent to AmeriLife. On May 15, 2020, the Company began selling products using this new distribution arrangement. Due to the large amount of the Company’s insurance policies now being sold through AmeriLife, dissolution of this agency arrangement could have a material impact on the Company’s financial statements. The Company has additional arrangements with AmeriLife wherein Efinancial’s sub agents may sell third party products through AmeriLife. To date it is not believed that any of these arrangements will exceed the related party thresholds described in 17 CFR § 229.404. Should these or other arrangements change or exceed the aforementioned threshold, after review by the CFO and General Counsel, the Company’s Chairman will be advised and written sign-off will be required from the Company's Chairman.

Agency Segment

This segment primarily consists of the operations of Efinancial. Efinancial is a call center-based insurance agency that markets life insurance for Fidelity Life and unaffiliated insurance companies. Efinancial’s primary operations are conducted through employee agents from three call center locations, which we refer to as our retail channel. In addition, Efinancial operates as a wholesale agency, assisting independent agents that seek to produce business for the carriers that Efinancial represents, which we refer to as our wholesale channel. The Agency Segment’s main source of revenue is commissions earned on the sale of insurance policies sold through our retail and wholesale channels. Efinancial also generates data and click-through revenue (reported as part of Insurance Lead Sales on the related Interim Condensed Consolidated Statements of Operations) through its eCoverage web presence.

Agency Segment expenses consist of marketing costs to acquire potential customers, salary and bonuses paid to our employee agents, salary and other costs of employees involved in managing the underwriting process for our insurance applications, sales management, agent licensing, training and compliance costs. Other Agency Segment expenses include costs associated with financial and administrative employees, facilities rent, and information technology. After payroll, the most significant Agency Segment expense is the cost of acquiring leads. We partially offset our sales leads expense through advertising revenues from individuals who click on specific advertisements while viewing one of our web pages, and through the resale of leads that are not well suited for our call center.

Insurance Segment

This segment consists of the operations of Fidelity Life. Fidelity Life underwrites primarily term life insurance through Efinancial and a diverse group of independent insurance distributors. Fidelity Life specializes in life insurance products that can be issued immediately or within a short period following a sales call, using non-medical underwriting at the time of policy issuance.

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Fidelity Life engages in the following business lines:

Core Life - Our Core Life insurance business is the primary business of the Insurance Segment. Core Life represents a significant portion of the insurance business written by Fidelity Life since it resumed independent operations in 2005. Our Core Life business consists of in­force policies that are considered to be of high strategic importance to Fidelity Life.

Non ­Core Life - Our Non­ Core Life business consists of: products that are currently being marketed but are not deemed to be of high strategic importance to the Company in­force policies from product lines introduced since Fidelity Life resumed independent operations in 2005 but were subsequently discontinued and an older annuity block of business that was not included in the Closed Block.

Closed Block - Our Closed Block represents all in­force participating insurance policies of Fidelity Life. The Closed Block was established in connection with our 2007 reorganization into a mutual holding company structure.

Annuities and Assumed Life - We have assumed reinsurance commitments with respect to annuity contract holder deposits and a block of life insurance contracts that were ceded by former affiliates of Fidelity Life. Under an agreement with Protective Life Insurance Company (Protective Life), the successor to a former affiliate of Fidelity Life, Fidelity Life had assumed a portion of risk on a group of life insurance contracts primarily written in the 1980s and early 1990s.

Insurance Segment revenues consist of net insurance premiums, net investment income, and net realized gains (losses) on investments. We recognize premium revenue from our policyholders. We purchase reinsurance coverage to help manage the risk on our insurance policies by paying, or ceding, a portion of the policyholder premiums to the reinsurance company. Our net insurance premiums reflect amounts collected from policyholders, plus premiums assumed under reinsurance agreements less premiums ceded to reinsurance companies. Net investment income represents primarily interest income earned on fixed maturity investments. We also realize gains and losses on sales of investment securities.

Insurance Segment expenses consist of benefits paid to policyholders or their beneficiaries under life insurance policies. Benefit expenses also include additions to the reserve for future policyholder benefits to recognize our estimated future obligations under the policies. Benefit expenses are shown net of amounts ceded under our reinsurance contracts. Our Insurance Segment also incurs policy acquisition costs that consist of commissions paid to agents, policy underwriting, issue costs and variable sales costs. A portion of these policy acquisition costs are deferred and expensed over the life of the insurance policies acquired during the period. In addition to policy acquisition costs, we incur expenses that vary based on the number of contracts that we have in-force, or variable policy administrative costs. These variable costs consist of expenses paid to third-party administrators based on rates for each policy administered. Our insurance operations also incur overhead costs for functional and administrative staff to support insurance operations, financial reporting and information technology.

In the first quarter 2022, Fidelity Life entered into a reinsurance contract with Swiss Re Life & Health America Inc. (Swiss Re). This new treaty is in addition to existing coinsurance agreements, largely with Swiss Re on certain policies issued through and including December 31, 2020. The impact of this transaction to our segment results included an initial ceded premium of $6.5 million based on the statutory reserves at January 1, 2022. The impact to pre-tax income is nominal, however various income statement lines are impacted. The impact is discussed in the segment results of this Management Discussion and Analysis of Financial Condition and results of Operations.

Corporate & Other Segment

The results of this segment consist of net investment income and net gains (losses) on investments earned on invested assets. We also include certain corporate expenses, including severance costs that are not allocated to our other segments, including expenses of Vericity, Inc., board of director's expenses, allocation of executive management time spent on corporate matters, and financial reporting and auditing costs related to our consolidation and internal controls. Our Corporate & Other Segment recognizes income (loss) to the extent that net investment income and net gains (losses) on investments exceed (are less than) corporate expenses.

Included in the Corporate & Other Segment is the elimination of intercompany transactions which primarily consists of the sales by our Agency Segment of life products of our Insurance Segment. The eliminations represent the amounts required to eliminate the intercompany transactions as recorded in our segment results, and in particular, to eliminate any intersegment profits resulting from such transactions. Our segment results follow the accounting principles and methods applicable to each segment as if the intercompany transactions were with unaffiliated organizations: See "Corporate & Other" segment results included in this Management Discussion & Analysis for further discussion.

Critical Accounting Policies

Our critical accounting policies are described in “Note 1—Basis of Presentation and Summary of Significant Accounting Policies” to our Consolidated Financial Statements as of and for the year ended December 31, 2022 included in the Form 10-K. The preparation of the Interim Condensed Consolidated Financial Statements in conformity with GAAP requires management to use judgment in making

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estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and related disclosures. We regularly evaluate our estimates and judgments based on historical experience, market indicators and other relevant factors and circumstances. Actual results may differ from these estimates under different assumptions or conditions and may affect our financial position and results of operations. Accordingly, these Interim Condensed Consolidated Financial Statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2022, and notes thereto, included in the Form 10-K.

Results of Operations

The major components of operating revenues, benefits and expenses and net (loss) income were as follows (certain prior year values have been re-classified due to the adoption of ASU 2016-02, see footnote 1 in this form 10-Q):

Vericity, Inc. Consolidated Results of Operations

(dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)
Revenues	2023			2022			2023			2022
Net insurance premiums	$	23,434		$	24,468		$	71,515		$	73,474
Net investment income		4,010			4,126			12,846			11,390
Net (losses) gains on investments		(883	)		(1,570	)		(1,759	)		89
Earned commissions		15,354			11,267			45,535			32,792
Insurance lead sales		1,026			1,259			3,052			3,773
Other income		720			144			1,831			419
Total revenues		43,661			39,694			133,020			121,937
Benefits and expenses
Life, annuity, and health claim benefits		22,583			17,505			51,567			47,622
Interest credited to policyholder account balances		627			646			2,000			2,100
Operating costs and expenses		26,755			23,133			78,239			72,859
Amortization of deferred policy acquisition costs		3,283			4,086			9,913			13,237
Total benefits and expenses		53,248			45,370			141,719			135,818
Income (loss) before income taxes		(9,587	)		(5,676	)		(8,699	)		(13,881	)
Income tax expense (benefit)		(1,612	)		(591	)		(822	)		(785	)
Net income (loss)	$	(7,975	)	$	(5,085	)	$	(7,877	)	$	(13,096	)

Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

Total Revenues

For the three months ended September 30, 2023, total revenues were $43.7 million compared to $39.7 million for the three months ended September 30, 2022. This increase of $4.0 million resulted primarily from an increase in earned commissions and lower net losses on investments, partially offset by a decrease in net insurance premiums, net investment income and a decrease in insurance lead sales.

Benefits and Expenses

For the three months ended September 30, 2023, total benefits and expenses were $53.2 million compared to $45.4 million for the three months ended September 30, 2022. This increase of $7.8 million is driven by higher operating expenses and claim benefits, partially offset by lower amortization of deferred policy acquisition costs.

Income (loss) Before Income Taxes

For the three months ended September 30, 2023, net loss before taxes was $9.6 million compared to net loss before taxes of $5.7 million for the three months ended September 30, 2022. This increase in net loss of $3.9 million was primarily due to higher claim benefits and operating expenses and lower net insurance premiums and net investment income, partially offset by higher earned commissions, lower net loss on investments, and lower amortization of deferred policy acquisition costs.

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Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

Total Revenues

For the nine months ended September 30, 2023, total revenues were $133.0 million compared to $121.9 million for the nine months ended September 30, 2022. This increase of $11.1 million resulted primarily from higher earned commissions and net investment income, partially offset by a decrease in net insurance premiums, lower net gains on investments and a decrease in insurance lead sales.

Benefits and Expenses

For the nine months ended September 30, 2023, total benefits and expenses were $141.7 million compared to $135.8 million for the nine months ended September 30, 2022. This increase of $5.9 million is driven by higher operating expenses and claim benefits, partially offset by lower amortization of deferred policy acquisition costs.

Income (loss) Before Income Taxes

For the nine months ended September 30, 2023, net loss before taxes was $8.7 million compared to net loss before taxes of $13.9 million for the nine months ended September 30, 2022. This decrease in net loss of $5.2 million was primarily due to increases in earned commissions and net investment income, lower deferred policy acquisition costs, partially offset with an increase in claim benefits and operating expenses, lower net insurance premiums and higher net losses on investments.

Consolidated Results

The following analysis reconciles the reported segment results to the Company’s total consolidated results.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(dollars in thousands)						(dollars in thousands)
Income (loss) before income tax by segment
Agency	$	262		$	(1,472	)	$	1,323		$	(5,695	)
Insurance		(7,651	)		(2,755	)	$	(3,781	)		(3,494	)
Corporate & Other		(2,198	)		(1,449	)	$	(6,241	)		(4,692	)
Income (loss) from operations before income tax		(9,587	)		(5,676	)		(8,699	)		(13,881	)
Income tax expense (benefit)		(1,612	)		(591	)		(822	)		(785	)
Net income (loss)	$	(7,975	)	$	(5,085	)	$	(7,877	)	$	(13,096	)

Agency Segment

The results of our Agency Segment were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023		2022			2023		2022
(dollars in thousands)	(dollars in thousands)					(dollars in thousands)
Revenues
Earned commissions	$	15,354	$	11,379		$	45,880	$	33,105
Insurance lead sales & Other		1,472		1,259			4,079		3,773
Total revenues		16,826		12,638			49,959		36,878
Expenses
Operating costs and expenses		16,564		14,110			48,636		42,573
Total expenses		16,564		14,110			48,636		42,573
Income (loss) before income taxes	$	262	$	(1,472	)	$	1,323	$	(5,695	)

Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

Earned Commissions

For the three months ended September 30, 2023, earned commissions were $15.4 million compared to $11.4 million for the three months ended September 30, 2022. This increase of $4.0 million resulted from increased sales in the retail channel.

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Insurance Lead Sales

For the three months ended September 30, 2023 insurance lead sales were $1.5 million compared to $1.3 million for the three months ended September 30, 2022. This increase of $0.2 million was primarily due to higher click-through revenue.

Operating Costs and Expenses

For the three months ended September 30, 2023, operating costs and expenses were $16.6 million compared to $14.1 million for the three months ended September 30, 2022. This increase of $2.5 million was primarily due to an increase in variable costs.

Income (Loss) Before Income Taxes

For the three months ended September 30, 2023, the Agency Segment net income was $0.3 million compared to net loss of $1.5 million for the three months ended September 30, 2022. This increase in net income of $1.8 million was the result of higher earned commissions, partially offset by increased operating expenses.

Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

Earned Commissions

For the nine months ended September 30, 2023, earned commissions were $45.9 million compared to $33.1 million for the nine months ended September 30, 2022. This increase of $12.8 million resulted from increased sales in the retail channel.

Insurance Lead Sales

For the nine months ended September 30, 2023 insurance lead sales were $4.1 million compared to $3.8 million for the nine months ended September 30, 2022. This increase of $0.3 million was primarily due to higher click-through revenue.

Operating Costs and Expenses

For the nine months ended September 30, 2023, operating costs and expenses were $48.6 million compared to $42.6 million for the nine months ended September 30, 2022. This increase of $6.0 million was primarily due to an increase in variable costs.

Income (Loss) Before Income Taxes

For the nine months ended September 30, 2023, the Agency Segment net income was $1.3 million compared to net loss of $5.7 million for the nine months ended September 30, 2022. This increase in net income of $7.0 million was the result of higher earned commissions, partially offset by increased operating expenses.

Insurance Segment

The results of our Insurance Segment were as follows (certain prior period values have been re-classified due to the adoption of ASU 2016-02, see footnote 1 in this form 10-Q):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
(dollars in thousands)							(dollars in thousands)
Revenues
Net insurance premiums	$	23,434		$	24,468		$	71,515		$	73,474
Net investment income		3,931			3,927			12,618			10,982
Net (losses) gains on investments		(883	)		(1,100	)		(1,395	)		(267	)
Other income		274			144			804			419
Total revenues	$	26,756		$	27,439			83,542			84,608
Benefits and expenses
Life, annuity, and health claim benefits		22,583			17,505			51,567			47,622
Interest credited to policyholder account balances		627			646			2,000			2,100
Operating costs and expenses		7,914			7,957			23,843			25,143
Amortization of deferred policy acquisition costs		3,283			4,086			9,913			13,237
Total benefits and expenses		34,407			30,194			87,323			88,102
Income (loss) before income taxes	$	(7,651	)	$	(2,755	)	$	(3,781	)	$	(3,494	)

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Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

Net Insurance Premiums

For the three months ended September 30, 2023, net insurance premiums were $23.4 million compared to $24.5 million for the three months ended September 30, 2022. This decrease of $1.1 million in net insurance premiums was primarily due to decreases in our Core lines of $1.3 million, primarily due to our LifeTime benefit Term (LBT) product, and a decrease of $0.1 million in our Non-core lines, partially offset by an increase in Closed Block of $0.4 million.

Net (Losses) Gains on Investments

For the three months ended September 30, 2023, net losses on investments was $0.9 million compared to net losses of $1.1 million for the three months ended September 30, 2022. The $0.2 million decrease in net loss was mainly due to lower valuation losses in our other invested assets, partially offset by higher losses in our fixed maturity portfolio. For more information on net (losses) gains on investments, see “Note 2 – Investments” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

Other Income

For the three months ended September 30, 2023, other income increased to $0.3 million compared to $0.1 million for the three months ended September 30, 2022. The $0.2 million increase was mainly due to higher licensing fees on our patented LifeTime Benefit term product.

Life, Annuity and Health Claim Benefits

For the three months ended September 30, 2023, life, annuity and health claim benefits were $22.6 million compared with $17.5 million for the three months ended September 30, 2022. This increase of $5.0 million was primarily due to an increases in our Core lines of $4.9 million that included a reserve increase related to our assumed worksite business, and Closed Block of $0.3 million, partially offset by a decrease in our Non-core lines of $0.5 million.

Operating Costs and Expenses

For the three months ended September 30, 2023, operating costs and expenses were $7.9 million compared to $8.0 million for the three months ended September 30, 2022. The $0.1 million decrease was attributable to higher ceded commissions of $0.1 million.

Amortization of Deferred Policy Acquisition Costs

For the three months ended September 30, 2023, amortization of deferred policy acquisition costs was $3.3 million compared to $4.1 million for the three months ended September 30, 2022. This decrease of $0.8 million is primarily related to a decrease of $0.5 million in Closed Block and a decrease in Core of $0.3 million.

Income (Loss) Before Income Taxes

For the three months ended September 30, 2023, net loss was $7.7 million compared to net loss of $2.8 million for the three months ended September 30, 2022. This increase in net loss of $4.9 million resulted primarily from an increase in claim benefits of $5.1 million and a decrease in net insurance premiums of $1.0 million, partially offset by a decrease in amortization of deferred policy acquisition costs of $0.8 million, a decrease in net losses on investments of $0.3 million and an increase in other income of $0.1 million.

Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

Net Insurance Premiums

For the nine months ended September 30, 2023, net insurance premiums were $71.5 million compared to $73.5 million for the nine months ended September 30, 2022. The decrease of $2.0 million was primarily due to a 2022 reinsurance agreement with Swiss Re in 2022, (see discussion earlier in this Management Discussion and Analysis of Financial Condition and results of Operations) which reduced 2022 net insurance premiums by $6.5 million. Excluding the impact of the Swiss Re agreement, the decrease in net insurance premiums decreased by $8.5 million, which was primarily driven by a $8.1 million decrease in Core lines, mainly in the LBT product, and a $1.3 million decrease in Non-core lines, partially offset by $1.0 million increase in Closed Block.

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Net Investment Income

For the nine months ended September 30, 2023, net investment income increased to $12.6 million compared to $11.0 million for the nine months ended September 30, 2022. The $1.6 million increase was mainly due to higher reinvestment yields in the fixed maturities portfolio. For more information on net investment income, see “Note 2 – Investments” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

Net (Losses) Gains on Investments

For the nine months ended September 30, 2023, net losses on investments were $1.4 million compared to net losses of $0.3 million for the nine months ended September 30, 2022. The $1.1 million increase in net losses was mainly due to valuation changes of other invested assets. For more information on net (losses) gains on investments, see “Note 2 – Investments” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

Other Income

For the nine months ended September 30, 2023, other income increased to $0.8 million compared to $0.4 million for the nine months ended September 30, 2022. The $0.4 million increase was mainly due to higher licensing fees on our patented LifeTime Benefit term product.

Life, Annuity and Health Claim Benefits

For the nine months ended September 30, 2023, life, annuity and health claim benefits were $51.6 million compared with $47.6 million for the nine months ended September 30, 2022. This $4.0 million increase was primarily due to a $5.1 million increase in our Core lines and a $0.7 million increase in Closed Block, partially offset by $2.2 million decrease in Non-core lines. The 2022 life, annuity and health claim benefits were reduced $6.5 million by the impact of the reinsurance agreement with Swiss Re (see discussion earlier in this Management Discussion and Analysis of Financial Condition and results of Operations). Excluding the impact of the Swiss Re agreement, life, annuity and health claim benefits decreased by $2.5 million, primarily driven by lower claim benefits in Core lines and Non-core lines of $1.4 million and $2.2 million respectively, partially offset by an increase in Closed Block of $0.8 million .

Operating Costs and Expenses

For the nine months ended September 30, 2023, operating costs and expenses were $23.8 million compared to $25.1 million for the nine months ended September 30, 2022. The $1.3 million decrease was attributable to higher ceded commissions of $3.0 million, partially offset by a decrease of $1.7 million in other operating expenses.

Amortization of Deferred Policy Acquisition Costs

For the nine months ended September 30, 2023, amortization of deferred policy acquisition costs was $9.9 million compared to $13.2 million for the nine months ended September 30, 2022. The decrease of $3.3 million primarily relates to a decrease of $4.2 million in Core and Closed Block of $1.2 million, partially offset by an increase in Non-Core of $2.1 million.

Income (Loss) Before Income Taxes

For the nine months ended September 30, 2023, net loss was $3.8 million compared to net loss of $3.5 million for the nine months ended September 30, 2022. This increase in net loss of $0.3 million resulted primarily from an increase in claim benefits of $4.0 million, a decrease in net insurance premiums of $2.0 million and an increase in net losses on investments of $1.0 million, partially offset by a decrease in amortization of deferred policy acquisition costs of $3.3 million, an increase in net investment income of $1.6 million, a decrease in operating expenses of $1.3 million and an increase in other income of $0.4 million.

Closed Block

The Closed Block was formed as of October 1, 2006 and contains all participating policies issued or assumed by Fidelity Life. The assets and future net cash flows of the Closed Block are available only for purposes of paying benefits, expenses and dividends of the Closed Block and are not available to the Company, except for an amount of additional funding that was established at inception. The additional funding was designed to protect the block against future adverse experience, and if the funding is not required for that purpose, it is subject to reversion to the Company in the future. Any reversion of Closed Block assets to the Company must be approved by the Illinois Department of Insurance.

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The maximum future earnings to be recognized from Closed Block assets and liabilities represent the estimated future Closed Block profits that will accrue to the Company and is calculated as the excess of Closed Block assets over Closed Block liabilities. Included in Closed Block assets at September 30, 2023 and December 31, 2022, are $11.0 million and $10.8 million, respectively, of additional Closed Block funding, plus accrued interest, that is eligible for reversion to the Company if not needed to fund Closed Block experience.

The Closed Block was funded based on a model developed to forecast the future cash flows of the Closed Block which is referred to as the “glide path.” The glide path model projected the anticipated future cash flows of the Closed Block as established at the initial funding. We compare the actual results of the Closed Block to expected results from the glide path as part of the annual assessment of the current level of policyholder dividends. The assessment of policyholder dividends includes projections of future experience of the Closed Block policies and the investment experience of the Closed Block assets. The review of Closed Block experience also includes consideration of whether a policy dividend obligation should be recorded to reflect favorable Closed Block experience that has not yet been reflected in the dividend scales. See “Note 5—Closed Block” in the accompanying Notes to the Interim Condensed Consolidated Financial Statements.

Corporate & Other Segment

The results of the Corporate & Other Segment were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
	(dollars in thousands)						(dollars in thousands)
Revenues
Net investment income	$	79		$	199		$	228		$	408
Net (losses) gains on investments		—			(470	)		(364	)		356
Earned commissions		—			(112	)		(345	)		(313	)
Total revenues		79			(383	)		(481	)		451
Expenses
Operating costs and expenses		2,277			1,066			5,760			5,143
Total expenses		2,277			1,066			5,760			5,143
(Loss) income from operations before income tax	$	(2,198	)	$	(1,449	)	$	(6,241	)	$	(4,692	)

Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

Net (Losses) Gains on Investments

For the three months ended September 30, 2023, net (losses) on investments were zero compared to $0.5 million for the three months ended September 30, 2022. The change is attributable to net asset valuation changes of other invested assets.

Earned Commissions

For the three months ended September 30, 2023, earned commissions were zero compared to ($0.1) million for the three months ended September 30, 2022. This change is attributable to reduced intersegment earned commissions, which are eliminated within the Corporate and Other segment.

Operating Expenses

For the three months ended September 30, 2023, operating expenses were $2.3 million compared to $1.1 million for the three months ended September 30, 2022. This increase of $1.2 million is attributable to transaction costs related to the recent merger agreement with iA American Holdings, Inc.

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(Loss) Income Before Income Taxes

For the three months ended September 30, 2023, net loss increased $2.2 million from $1.4 million for the three months ended September 30, 2022. The increased loss is primarily due to an increase in operating expenses and a decrease in net investment income, partially offset by lower losses on investments.

Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

Net (Losses) Gains on Investments

For the nine months ended September 30, 2023, net losses on investments were $0.4 million compared to net gains on investments of $0.4 million for the nine months ended September 30, 2022. The change is attributable to net asset valuation changes of other invested assets.

Operating Expenses

For the nine months ended September 30, 2023, operating expenses were $5.8 million compared to $5.1 million for the nine months ended September 30, 2022. The increase of $0.7 million is primarily related to $1.8 million in transaction costs related to the recent merger agreement with iA American Holdings, Inc., partially offset with lower salaries and related expenses.

(Loss) Income Before Income Taxes

For the nine months ended September 30, 2023, net loss increased to $6.2 million from $4.7 million for the nine months ended September 30, 2022. The increased loss is primarily due to an increase in net losses on investments, higher operating expenses and a decrease in net investment income.

Investments

Investment Returns

We invest available cash and funds that support our regulatory capital, surplus requirements and policy reserves in investment securities that are included in the Insurance and Corporate & Other Segments. We earn income on these investments in the form of interest on fixed maturities (bonds and mortgage loans) and dividends (equity holdings). Net investment income is recorded as revenue, net of investment related expenses. The amount of net investment income that we recognize will vary depending on the amount of invested assets that we own, the types of investments, the interest rates earned, and amount of dividends received on our investments.

Gains and losses on sales of investments are classified as “realized investment gains (losses)” and are recorded as revenue. Capital appreciation and depreciation caused by changes in the market value of investments classified as “available-for-sale” is recorded in accumulated other comprehensive income. The amount of investment gains and losses that we recognize depends on the amount of and the types of invested assets we own, and the market conditions related to those investments. Our cash needs can vary from time to time and could require that we sell invested assets to fund cash needs.

Investment Guidelines

Our investment strategy and guidelines are developed by management and approved by the Investment Committee of Fidelity Life’s board of directors. Our investment strategy related to the Insurance Segment is designed to maintain a well-diversified, high quality fixed income portfolio that will provide adequate levels of net investment income and liquidity to meet our policyholder obligations under our life insurance policies and our assumed annuity deposits. To help maintain liquidity, we establish the duration of invested assets within a tolerance to the policy liability duration. The investments of the Insurance Segment are managed with an emphasis on current income within quality and diversification constraints. The focus is on book yield of the fixed income portfolio as the anticipated portfolio yield is a key element used in pricing our insurance products and establishing policyholder crediting rates on our annuity contracts.

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We apply our overall investment strategy and guidelines on a consolidated basis for purposes of monitoring compliance with our overall guidelines. All of our investments are owned by Fidelity Life and are maintained in compliance with insurance regulations. Critical guidelines of our investment plan include:

•Asset concentration guidelines that limit the amount that we hold in any one issuer of securities,

•Asset quality guidelines applied on a portfolio basis and for individual issues that establish a minimum asset quality standard for portfolios and establish minimum asset quality standards for investment purchases and investment holdings,

•Liquidity guidelines that limit the amount of illiquid assets that can be held at any time, and

•Diversification guidelines that limit the exposure at any time to the total portfolio by investment sectors.

Our investment portfolios are all managed by third-party investment managers that specialize in insurance company asset management. These managers are selected based upon their expertise in the particular asset classes that we own. We contract with an investment management firm to provide overall assistance with oversight of our portfolio managers, evaluation of investment performance and assistance with development and implementation of our investment strategy. This investment management firm reports to our Chief Financial Officer and to the Investment Committee of Fidelity Life’s board of directors. On a quarterly basis, or more frequently if circumstances require, we review the performance of all portfolios and portfolio managers with the Investment Committee.

The following table shows the distribution of the fixed maturities classified as available-for-sale by quality rating using the rating assigned by Standard & Poor’s (S&P), a nationally recognized statistical rating organization. For securities where the S&P rating is not available (not rated), the NAIC rating is used. Over the periods presented, we have maintained a consistent weighted average bond quality rating of “A.” The percentage allocation of total investment grade securities was 96.2% and 95.1% at September 30, 2023 and December 31, 2022, respectively.

	Estimated Fair Value
	September 30, 2023				December 31, 2022
	(dollars in thousands)
S&P Rating
AAA	$	34,948	11.8	%	$	53,065	17.8	%
AA		76,013	25.7	%		66,283	22.2	%
A		67,635	22.9	%		64,018	21.5	%
BBB		48,281	16.4	%		56,194	18.8	%
Not rated		57,370	19.4	%		44,163	14.8	%
Total investment grade		284,247	96.2	%		283,723	95.1	%
BB		3,190	1.1	%		5,520	1.9	%
B		3,270	1.1	%		4,778	1.6	%
CCC		406	0.1	%		492	0.2	%
Not Rated		4,411	1.5	%		3,625	1.2	%
Total below investment grade		11,277	3.8	%		14,415	4.9	%
Total	$	295,524	100.0	%	$	298,138	100.0	%

The following table sets forth the maturity profile of our fixed maturities at September 30, 2023 from December 31, 2022. Expected maturities could differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without penalty.

	September 30, 2023										December 31, 2022
(dollars in thousands)	Amortized Cost		%			Fair Value		%			Amortized Cost		%			Fair Value		%
Due in one year or less	$	4,150		1.2	%	$	4,122		1.4	%	$	6,239		1.9	%	$	6,207		2.1	%
Due after one year through five years		39,652		11.9	%		37,578		12.7	%		34,330		10.3	%		32,719		11.0	%
Due after five years through ten years		73,284		21.9	%		68,163		23.1	%		72,312		21.8	%		67,472		22.6	%
Due after ten years		144,550		43.2	%		119,003		40.3	%		136,004		41.0	%		115,545		38.7	%
Securities not due at a single    maturity date-primarily mortgage    and asset-backed securities		72,964		21.8	%		66,658		22.6	%		83,061		25.0	%		76,195		25.6	%
Total fixed maturities	$	334,600		100.0	%	$	295,524		100.0	%	$	331,946		100.0	%	$	298,138		100.0	%

Every quarter, we review all investments where the market value is less than the carrying value to ascertain if the impairment of the security’s value has credit losses. The quarterly review is targeted to focus on securities with larger impairments and that have been in an impaired status for longer periods of time. See “Note 2 – Investments” in the accompanying Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

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Net Investment Income

One key measure of our net investment income is the book yield on our holdings of fixed maturities classified as available-for-sale. Fair value of these securities totaled $295.5 million and $298.1 million as of September 30, 2023 and December 31, 2022, respectively. Book yield is the effective interest rate, before investment expenses, that we earn on these investments. Book yield is calculated as the percent of net investment income to the average amortized cost of the underlying investments for the period. For the nine months ended September 30, 2023 and 2022, our book yield on fixed maturities available-for-sale was 4.7% and 4.3%, respectively. See “Note 2 – Investments” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

Interest Credited to Policyholder Account Balances

Included with the future policy benefits is the liability for contract holder deposits on deferred annuity contracts assumed through two reinsurance agreements effective in 1991 and 1992 and certain other policy funds left on deposit with the Company. The aggregate liability for deposits is as follows:

	September 30, 2023		December 31, 2022		September 30, 2023		September 30, 2022
	Ending Balance		Ending Balance		Year to Date Interest Credited		Year to Date Interest Credited
	(dollars in thousands)
Annuity contract holder deposits—assumed	$	64,095	$	69,070	$	1,849	$	1,946
Dividends left on deposit		6,567		6,731		124		128
Other		1,583		1,642		27		26
Total	$	72,245	$	77,443	$	2,000	$	2,100

The liability for deferred annuity deposits represents the contract holder account balances. Due to the declines in market interest rates and the book yield on our investment portfolio, we credit interest on all contract holder deposit liabilities at contractual rates that are currently at the minimum rate allowed by the contract or by state regulations.

Our Insurance Segment realizes operating profit from the excess of our book yield realized on fixed maturities that support our contract holder deposits over the amount of interest that we credit to the contract holder. We refer to this operating profit as the “spread” we earn on contract holder deposits. If book yields decline further, the amount of spread between the interest earned and credited will be reduced.

Net Gains (Losses) on Investments

Net gains (losses) on investments are subject to general economic trends and generally correlate with movements in major market indexes. The amounts classified as net realized gains (losses) in our Interim Condensed Consolidated Statements of Operations include amounts realized from sales of investments, mark-to-market adjustments and allowances for credit loss of individual securities related to credit impairment. See “Note 2 – Investments” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

Unrealized Holding Gains (Losses)

The Company records capital appreciation/depreciation on the available-for-sale fixed maturities. At September 30, 2023 and 2022, accumulated other comprehensive income (loss), from mark-to-market adjustments of our available-for-sale fixed income securities, net of federal income taxes and reserves was ($4.0) million and ($41.0) million, respectively. See “Note 9 – Accumulated other comprehensive (loss) income” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

At September 30, 2023 our fixed maturity securities had an unrealized loss of $39.1 million compared to an unrealized loss of $33.8 million at December 31, 2022. The Company’s unrealized loss incurred in 2023 was $5.3 million in our fixed maturities portfolio which has a duration of 6.9 years, convexity of 0.795, and current yield of 6.2%, is primarily accounted for the increase in the 10-year treasury bill yield for the first nine months of 2023 of 71 basis points.

Financial Position

At September 30, 2023, we had total assets of $796.2 million compared to total assets at December 31, 2022 of $770.1 million, an increase of $26.1 million.

Reinsurance recoverables increased $15.7 million as a result of a $15.5 million increase in ceded policy and claim reserves and $0.3 million related to timing of settlements of reinsured claims. Commission and agent balances increased $15.6 million due to

36

increased commission receivables in the Agency segment and increased agent debit balances in the insurance segment. The invested asset base decreased $6.4 million, mainly due to $5.3 million in net unrealized losses in fixed maturity securities, partially offset by valuation losses in Other invested assets and net sales. Deferred income tax assets increased $3.6 million due to a tax credit of $2.7 million on net income and $0.9 million increase as a result of a tax on unrealized investment gains.

Accrued investment income increased $1.1 million due to the timing of receipt of investment income. Other assets increased $0.7 million, primarily due to an increase in prepaid. The above increases were partially offset by a decrease in deferred policy acquisition costs of $2.0 million, resulting from deferrals on new business of $7.9 million and amortization of $10.0 million, and a decrease in Cash and cash equivalents of $2.2 million, primarily used in investing activities. See Cash Flows section for further discussion on changes in cash.

At September 30, 2023, we had total liabilities of $696.9 million compared to total liabilities of $658.7 million at December 31, 2022, an increase of $38.2 million. Future policy benefits and claims increased $36.7 million, primarily due to a $38.2 million increase in Core Life and Non-Core Life lines, resulting from growth of the underlying blocks of business, partially offset by decreases in Annuities and assumed life of $1.7 million and Closed Block of $0.1 million. Debt increased $9.3 million related to an increase in net borrowing of $7.5 million and interest accrued of $1.8 million under our commission financing agreement with Hannover Life. Other liabilities increased $3.0 million, primarily due to an increase in other operating liabilities. The above increases were partially offset by decreases in Other policyholder liabilities of $6.5 million due to a decrease in claim liabilities, and a $5.2 million decrease in Policyholder account balances largely due to annuity payments.

At September 30, 2023, total equity decreased to $99.3 million from $111.3 million at December 31, 2022. This decrease in equity of $12.0 million was attributable to a decrease in Other comprehensive income of $3.9 million related to market declines in fixed maturities, net of tax and retained earnings of $8.1 million due to net loss.

Liquidity and Capital Resources

Our principal sources of funds are from premium revenues, commission revenues, net investment income and proceeds from the sale or maturity of investments and net borrowings. The Company’s primary uses of funds are for payment of life, annuity and health claim benefits, contract holder withdrawals on assumed annuity contracts, new business acquisition costs for our insurance operations (i.e., commissions, underwriting and issue costs), cost of sales for Agency operations (i.e., agent compensation, purchased lead and lead generation costs), operating costs and expenses and purchases of investments. Our investment portfolio is structured to provide funds periodically over time, through net investment income and maturities, for the payment of policy benefits and contract holder withdrawals.

Under our commission financing arrangement with Hannover Life, Fidelity Life is able to pay level annual commissions instead of first year only commissions to Efinancial for sales of RAPIDecision® Life policies and Hannover Life advances to Efinancial amounts approximately equal to first year only commissions for sales of those policies. This arrangement reduces Fidelity Life’s surplus strain associated with issuing RAPIDecision® Life business while helping to provide liquidity for Efinancial through the receipt of larger first year only commissions. As of September 30, 2023 and December 31, 2022, we had net advances of $38.6 million and $31.1 million, respectively, under this arrangement.

We are a member of the Federal Home Loan Bank of Chicago (the “FHLBC”). As a member, we are able to borrow on a collateralized basis from the FHLBC. At September 30, 2023 and December 31, 2022, the Company held $270 and $180 of FHLBC common stock, which is included in Other invested assets, respectively. The Company's ability to borrow under this facility is subject to the FHLBC's discretion and requires the availability of qualifying assets. Interest on borrowed funds is charged at variable rates established from time to time by the FHLBC based on the interest rate option selected at the time of the borrowing. The Company borrowed and repaid $18.0 million and $4.0 million in the nine months ended September 30, 2023 and the twelve months ended December 31, 2022, respectively.

Cash Flows

For the nine months ended September 30, 2023, the Company had a net decrease in cash of $2.2 million compared to a net decrease of $9.7 million for the nine months ended September 30, 2022.

The current year increase in cash flows from operating activities is primarily due to lower net claims, partially offset by higher operating costs and expenses.

Cash flows from investing activities mainly includes our fixed maturities and mortgage loans. Period to period, the cash flows associated with the changes in these portfolios will vary between cash sources and cash uses depending on the need for cash or the excess of cash from operating activities, as well as portfolio trading due to investment market conditions. In the first nine months of 2023, cash of $4.5 million was used by investing activities and includes $3.9 million of capitalized software, partially offset by $0.6 million of investment purchases net of sales and maturities.

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Cash flows from financing activities were $0.5 million which includes $7.5 million, net proceeds from our commission financing program, partially offset by $7.1 million in cash withdrawals, net of deposits, by contract holders of annuities that were primarily written in the late 1980s.

The following table summarizes our cash flows for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023			2022
	(dollars in thousands)
Consolidated Summary of Cash Flows
Net cash (used) provided by operating activities	$	1,877		$	(7,094	)
Net cash (used) provided by investing activities		(4,483	)		(6,128	)
Net cash (used) provided by financing activities		455			3,526
Net (decrease) in cash, cash equivalents and restricted cash	$	(2,151	)	$	(9,696	)

Recent Accounting Pronouncements

All applicable adopted accounting pronouncements have been reflected in our Interim Condensed Consolidated Financial Statements as of and for the nine months ended September 30, 2023. including the adoption ASU No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, See “Note 1 – Summary of Significant Accounting Policies” in the Notes to the Interim Condensed Consolidated Financial Statements included in this Form 10-Q.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with GAAP.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

We are, from time to time, involved in various legal proceedings in the ordinary course of business. While it is not possible to forecast the outcome of such legal proceedings, in light of existing insurance, reinsurance, and established reserves, we believe that there is no individual case pending that is likely to have a material adverse effect on our financial condition or results of operations.

In advance of the effective date of the recently adopted Securities and Exchange Commission rules regarding cybersecurity disclosure, we are disclosing a recent security incident involving unauthorized access to approximately 250,000 Fidelity Life customers’ personally identifiable information. This incident was caused by our vendor’s subcontractor using the MOVEit Transfer software. As

38

has been documented extensively in the media, this software contained a zero-day vulnerability that a threat actor exploited to gain access to hundreds of companies’ data. Fidelity Life itself did not and does not use the MOVEit application and our computer systems and infrastructure were not impacted by the incident.

We have worked with the vendor to ensure this incident was appropriately remediated. We have also worked with the vendor to mail notices to all impacted Fidelity Life customers and while we are unaware of any actual misuse of the compromised data, free credit monitoring was offered to each impacted customer. We have also provided notice of this third party vendor’s security incident to all appropriate regulators. While the breach was not directly related to our systems or infrastructure, as a result of or otherwise related to the incident, we did receive a notice of filed litigation related to this matter (which we believe has no merit) and we may be subject to subsequent investigations, claims or actions.

While the event did not impact our systems we are working with our cybersecurity insurance carrier. While we intend to continue to carry cybersecurity insurance, future cybersecurity insurance coverage may be difficult to obtain or may only be available at significantly higher costs to us.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Use of IPO Proceeds

None since initial public offering of August 7, 2019

Item 3. Default upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

Rule 16a-1(f)

During the nine months ended September 30, 2023, none of the officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) or directors of the Company adopted or, terminated or, modified any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as such term is defined in Item 408(a) of Regulation S-K.

Cybersecurity, Privacy and Data Protection Regulation

In July 2023, the U.S. Securities and Exchange Commission adopted the Risk Management, Strategy, Governance, and Incident Disclosure Final Rule (the “Cybersecurity Final Rule”) enhancing disclosure requirements for registered companies covering cybersecurity risk and management. The Cybersecurity Final Rule requires registrants to disclose material cybersecurity incidents on Form 8-K within four business days of a determination that a cybersecurity incident is material, and such materiality determination must be made without unreasonable delay. The rule also requires periodic disclosures of, among other things, details on the company’s processes to assess, identify, and manage cybersecurity risks, cybersecurity governance, and management’s role in overseeing such a compliance program, including the board of directors’ oversight of cybersecurity risks. Certain reporting requirements under the Cybersecurity Final Rule become effective as early as December 2023.

39

Item 6. Exhibits

31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended
32.1	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

40

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Vericity, Inc.
Date: November 14, 2023	By:	/s/ Chris S. Kim
		Chris S. Kim
		Executive Vice President, Chief Financial Officer and Treasurer

41

EX-31.1

Exhibit 31.1

I, James Hohmann, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Vericity Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2023

/s/ James E. Hohmann

James E. Hohmann

Chief Executive Officer and President, Vericity, Inc.

EX-31.2

Exhibit 31.2

I, Chris Kim, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Vericity Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2023

/s/ Chris S. Kim

Chris S. Kim

Executive Vice President, Chief Financial Officer and Treasurer, Vericity, Inc.

EX-32.1

Exhibit 32.1

Vericity, Inc.

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned officer of Vericity, Inc. (“Vericity”) certifies, to his knowledge and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Vericity for the period ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Vericity.

Dated: November 14, 2023	By:	/s/ James E. Hohmann
		James E. Hohmann
		Chief Executive Officer and President, Vericity, Inc.

EX-32.2

Exhibit 32.2

Vericity, Inc.

Certification of Periodic Financial Report

Pursuant to 18 U.S.C. Section 1350

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

The undersigned officer of Vericity, Inc. (“Vericity”) certifies, to his knowledge and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Vericity for the period ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Vericity.

Dated: November 14, 2023	By:	/s/ Chris S. Kim
		Chris S. Kim
		Executive Vice President, Chief Financial Officer and Treasurer, Vericity, Inc.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Nov. 10, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Registrant Name	VERICITY, INC.
Trading Symbol	VERY
Entity Central Index Key	0001575434
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		14,875,000
Entity Current Reporting Status	Yes
Entity File Number	001-38945
Entity Tax Identification Number	46-2348863
Entity Address, Address Line One	1350 E Touhy Avenue
Entity Address, Address Line Two	Suite 205W
Entity Address, City or Town	Des Plaines
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60018
City Area Code	312
Local Phone Number	288-0073
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, Par Value $0.001 per share
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	DE
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Interim Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investments:
Fixed maturities - available-for-sale - at fair value (amortized cost; $334,600 and $331,946, net of allowances for credit losses of $0 and $0)	$ 295,524	$ 298,138
Mortgage loans (net of allowances for credit losses of $285 and $83)	42,005	45,270
Policyholder loans	7,062	6,699
Other invested assets	2,803	3,693
Total investments	347,394	353,800
Cash, cash equivalents and restricted cash	7,625	9,776
Accrued investment income	4,064	3,006
Reinsurance recoverables (net of allowances for credit losses of $126 and $126)	230,585	214,862
Deferred policy acquisition costs	88,171	90,189
Commissions and agent balances (net of allowances for credit losses of $337 and $338)	50,415	34,766
Intangible assets	1,635	1,635
Deferred income tax assets, net	32,003	28,437
Other assets	34,293	33,607
Total assets	796,185	770,078
Liabilities
Future policy benefits and claims	490,506	453,763
Policyholder account balances	72,245	77,443
Other policyholder liabilities	41,012	47,486
Policy dividend obligations	9,544	9,515
Reinsurance liabilities and payables	6,959	6,246
Long-term debt	37,311	30,213
Short-term debt	9,172	6,976
Other liabilities	30,113	27,093
Total liabilities	696,862	658,735
Commitments and Contingencies (Note 6)
Shareholders' Equity
Common stock, $.001 par value, 30,000,000 shares authorized, 14,875,000 shares, issued and outstanding	15	15
Additional paid-in capital	39,840	39,840
Retained earnings	93,596	101,660
Accumulated other comprehensive (loss) income	(34,128)	(30,172)
Total shareholders' equity	99,323	111,343
Total liabilities and shareholders' equity	$ 796,185	$ 770,078

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Interim Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Fixed maturities - available-for-sale -amortized cost	$ 334,600	$ 331,946
Fixed maturities - available-for-sale, allowances for credit losses	21	0
Mortgage loans, allowances for credit losses	571	83
Reinsurance recoverable, allowances for credit losses	126	126
Commissions and agent balances, allowances for credit losses	$ 337	$ 338
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	30,000,000	30,000,000
Common stock, shares issued	14,875,000	14,875,000
Common stock, shares outstanding	14,875,000	14,875,000

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Interim Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2023		Sep. 30, 2022		Sep. 30, 2023		Sep. 30, 2022
Revenues
Net insurance premiums	$ 23,434		$ 24,468		$ 71,515		$ 73,474
Net investment income	4,010		4,126		12,846		11,390
Net (losses) gains on investments	(883)	[1]	(1,570)	[1]	(1,759)	[2]	89	[2]
Earned commissions	15,354		11,267		45,535		32,792
Insurance lead sales	1,026		1,259		3,052		3,773
Other income	720		144		1,831		419
Total revenues	43,661		39,694		133,020		121,937
Benefits and expenses
Life, annuity, and health claim benefits	22,583		17,505		51,567		47,622
Interest credited to policyholder account balances	627		646		2,000		2,100
Operating costs and expenses	26,755		23,133		78,239		72,859
Amortization of deferred policy acquisition costs	3,283		4,086		9,913		13,237
Total benefits and expenses	53,248		45,370		141,719		135,818
Income (loss) before income tax	(9,587)		(5,676)		(8,699)		(13,881)
Income tax expense (benefit)	(1,612)		(591)		(822)		(785)
Net income (loss)	$ (7,975)		$ (5,085)		$ (7,877)		$ (13,096)
Weighted average shares outstanding, basic	14,875,000		14,875,000		14,875,000		14,875,000
Weighted average shares outstanding,diluted	14,875,000		14,875,000		14,875,000		14,875,000
Basic earnings per share	$ (0.54)		$ (0.34)		$ (0.53)		$ (0.88)
Diluted earnings per share	$ (0.54)		$ (0.34)		$ (0.53)		$ (0.88)

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

[2] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

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Interim Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (7,975)	$ (5,085)	$ (7,877)	$ (13,096)
Other comprehensive (loss) income, net of tax:
Change in net unrealized (losses) gains	(8,082)	(10,964)	(3,956)	(40,993)
Total other comprehensive (loss) income	(8,082)	(10,964)	(3,956)	(40,993)
Total comprehensive (loss) income	$ (16,057)	$ (16,049)	$ (11,833)	$ (54,089)

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Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Cumulative Effect Adjustment from Changes in Accounting Guidance, Net of Tax	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Cumulative Effect Adjustment from Changes in Accounting Guidance, Net of Tax	Retained Earnings Balance After Adjustments	Accumulated Other Comprehensive (Loss) Income
Balance – beginning of period at Dec. 31, 2021			$ 15	$ 39,840	$ 122,120		$ 122,120	$ 10,929
Net income (loss)	$ (13,096)				(13,096)
Other comprehensive income (loss)								(40,993)
Balance – end of period at Sep. 30, 2022	118,815		15	39,840	109,024			(30,064)
Balance – beginning of period at Jun. 30, 2022			15	39,840	114,109		114,109	(19,100)
Net income (loss)	(5,085)				(5,085)
Other comprehensive income (loss)								(10,964)
Balance – end of period at Sep. 30, 2022	118,815		15	39,840	109,024			(30,064)
Balance – beginning of period at Dec. 31, 2022	111,343		15	39,840	101,660	$ (187)	101,473	(30,172)
Net income (loss)	(7,877)				(7,877)
Other comprehensive income (loss)								(3,956)
Balance – end of period at Sep. 30, 2023	99,323	$ 187	15	39,840	93,596			(34,128)
Balance – beginning of period at Jun. 30, 2023			15	39,840	101,571		$ 101,571	(26,046)
Net income (loss)	(7,975)				(7,975)
Other comprehensive income (loss)								(8,082)
Balance – end of period at Sep. 30, 2023	$ 99,323	$ 187	$ 15	$ 39,840	$ 93,596			$ (34,128)

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Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net income (loss)		$ (7,877)	$ (13,096)
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities:
Depreciation and amortization and other non-cash items		3,899	3,187
Interest credited to policyholder account balances		2,000	2,100
Deferred income tax		(2,673)	(3,908)
Net investment losses (gains)	[1]	1,759	(89)
Interest expense		1,775	931
Change in:
Accrued investment income		(1,058)	(957)
Reinsurance recoverables, net		(15,723)	(27,932)
Deferred policy acquisition costs		2,018	3,529
Commissions and agent balances		(15,649)	(4,719)
Other assets		1,638	(2,407)
Insurance liabilities		30,766	30,687
Other liabilities		1,002	5,580
Net cash (used) provided by operating activities		1,877	(7,094)
Sales, maturities and repayments of:
Fixed maturities		39,190	33,176
Mortgage loans		3,796	4,515
Purchases of:
Fixed maturities		(42,018)	(34,685)
Mortgage loans		(964)	(3,965)
Other invested assets		(190)	(724)
Change in policyholder loans, net		(363)	(289)
Other, net		(3,934)	(4,156)
Net cash (used) provided by investing activities		(4,483)	(6,128)
Cash flows from financing activities
Debt issued		35,321	13,600
Debt repaid		(27,803)	(6,127)
Deposits to policyholder account balances		387	294
Withdrawals from policyholder account balances		(7,450)	(4,241)
Net cash (used) provided by financing activities		455	3,526
Net (decrease) increase in cash, cash equivalents and restricted cash		(2,151)	(9,696)
Cash, cash equivalents and restricted cash – beginning of period		9,776	22,399
Cash, cash equivalents and restricted cash – end of period		$ 7,625	$ 12,703

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1 – Summary of Significant Accounting Policies

Description of Business

Vericity, Inc. (the Company) is a Delaware corporation organized to be the stock holding company for Members Holding Company (Members) and its subsidiaries. On August 7, 2019, the Company completed the initial public offering of 14,875,000 shares of its common stock at a price of $10.00 per share (the IPO). The IPO was conducted in connection with the conversion of Members Mutual Holding Company from mutual to stock form and the acquisition by the Company of all of the capital stock of Members following its conversion to stock form after its plan of conversion and amended and restated articles of incorporation were approved at a special meeting of eligible members on August 6, 2019 (the Conversion). As a result of the Conversion, the Company became the holding company for converted Members Mutual Holding Company and its indirect subsidiaries, including Fidelity Life Association (Fidelity Life) and Efinancial, LLC (Efinancial).

On October 3, 2023, the Company, announced that it entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, iA American Holdings Inc. (“iA” or “Parent”), Long Grove Acquisition Corp., a wholly owned subsidiary of Parent (“Merger Sub”), and, solely for purposes of Section 6.03 and Article IX thereof, iA Financial Corporation, Inc. (“Guarantor”).

On the terms and subject to the conditions of the Merger Agreement, at the closing, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving entity, which will become a wholly-owned subsidiary of Parent. The time that the Merger becomes effective is referred to as the “Effective Time.” The Merger was unanimously approved by the Company’s board of directors.

Following execution of the Merger Agreement, Apex Holdco L.P. (the “Consenting Stockholder” or “Apex”) executed and delivered to the Company a written consent (the “Stockholder Written Consent”), adopting the Merger Agreement and the transactions contemplated thereby, including the Merger.

As a result of the execution and delivery of the Stockholder Written Consent, the holders of at least a majority of the outstanding shares of Common Stock have adopted the Merger Agreement. No further approval of the stockholders of the Company is required to adopt the Merger Agreement.

As a result of the Merger, each share of Common Stock outstanding immediately prior to the Effective Time (subject to certain exceptions, including shares of Common Stock owned by stockholders of the Company who have not voted in favor of the adoption of the Merger Agreement and have properly exercised appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) will, at the Effective Time, automatically be converted into the right to receive $11.43 in cash, without interest and subject to applicable withholding taxes (the “Merger Consideration”). The aggregate equity value of the Common Stock acquired by Parent will be approximately $170 million.

If the Merger is consummated, the Company’s Common Stock will be delisted from The Nasdaq Capital Market and deregistered under the Securities Exchange Act of 1934, as amended. The completion of the Merger is subject to satisfaction or waiver of certain closing conditions, including: (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), and receipt of certain regulatory approvals; (ii) there being no law or injunction prohibiting consummation of the Merger; (iii) subject to specified materiality standards, the accuracy of the representations and warranties of the other party; and (iv) compliance by the other party in all material respects with its covenants. Parent’s and Merger Sub’s obligations are also conditioned upon the absence of a material adverse effect on the Company and the absence of any burdensome condition (as defined in the Merger Agreement) imposed by any regulators as part of the regulatory approval process.

On October 3, 2023, the Company issued a Form 8-K and press release announcing the execution of the Merger Agreement and the Form 8-K is incorporated into this filing by reference. The Merger is expected to close in the first half of 2024.

The Company operates as a holding company and currently has no other business operations. Fidelity Life is an Illinois‑domiciled life insurance company that was founded in 1896. Fidelity Life markets life insurance products through independent and affiliated distributors and is licensed in the District of Columbia and all states, except New York and Wyoming. Efinancial markets life and other products for non‑affiliated insurance companies and sells life products for Fidelity Life.

The accompanying interim condensed consolidated financial statements present the accounts of the Company and subsidiaries for the three and nine months ended September 30, 2023 and at September 30, 2022 and December 31, 2022. These interim condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report in the Form 10-K for the year ended December 31, 2022. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

Basis of Presentation

These interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The unaudited interim condensed consolidated financial information furnished herein reflects all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. All such adjustments are of a normal recurring nature. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this report, as is permitted by such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2022, and notes thereto, included in the Form 10-K.

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more significant estimates employed in the preparation of the interim condensed consolidated financial statements include the determination of the valuation of investments in fixed maturity, investment impairments, the valuation of deferred tax assets, future policy benefits and other policyholder liabilities.

Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance requires that Other-Than-Temporary Impairment (OTTI) on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through net gains (losses) on investments. The guidance also requires enhanced disclosures. In March 2022, the FASB issued ASU 2022-02 – Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosure. This ASU was issued to eliminate the troubled debt restructuring recognition and measurement guidance for creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. The Company has assessed the impact of ASU 2016-13 and has established an additional for credit losses on our mortgage portfolio of $237. The tax effected amount of $187 is reflected as a beginning of year equity as a Cumulative effect adjustment from changes in accounting guidance, net of tax. The Company has also assessed fixed maturities - available-for-sale, reinsurance recoverables and commissions and agent balances and determined no additional allowance for credit losses is needed. We also adopted the required disclosures within Note 2 Investments, Note 4 Reinsurance, Note 9 Accumulated Other Comprehensive Income and Note 10 Business Segments. Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

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Investments

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

Note 2 – Investments

The Company continuously monitors its investment strategies and individual holdings with consideration of current and projected market conditions, the composition of the Company’s liabilities, projected liquidity and capital investment needs, and compliance with investment policies and state regulatory guidelines.

Fixed Maturities

The amortized cost, gross unrealized gains, gross unrealized losses, fair value, and net of allowances for credit losses are included in accumulated other comprehensive income (AOCI) of fixed maturities available-for-sale are as follows:

	September 30, 2023
Fixed maturities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government and agencies	$	10,206	$	108	$	(715	)	$	9,599
U.S. agency mortgage-backed		7,353		15		(835	)		6,533
State and political subdivisions		76,764		12		(13,437	)		63,339
Corporate and miscellaneous		174,536		664		(19,397	)		155,803
Foreign government		130		—		(5	)		125
Residential mortgage-backed		7,249		56		(685	)		6,620
Commercial mortgage-backed		21,801		6		(2,152	)		19,655
Asset-backed		36,561		71		(2,782	)		33,850
Total fixed maturities	$	334,600	$	932	$	(40,008	)	$	295,524

	December 31, 2022
Fixed maturities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		OTTI Losses (1)
U.S. government and agencies	$	9,258	$	349	$	(501	)	$	9,106	$	—
U.S. agency mortgage-backed		9,429		63		(614	)		8,878		—
State and political subdivisions		68,213		26		(12,015	)		56,224		—
Corporate and miscellaneous		171,283		1,473		(16,275	)		156,481		—
Foreign government		130		1		—			131		—
Residential mortgage-backed		4,912		140		(622	)		4,430		(709	)
Commercial mortgage-backed		21,374		2		(1,914	)		19,462		—
Asset-backed		47,347		5		(3,926	)		43,426		—
Total fixed maturities	$	331,946	$	2,059	$	(35,867	)	$	298,138	$	(709	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, OTTI is not presented in respect in the table above.

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities of mortgage-backed and asset-backed securities may be substantially shorter than their contractual maturity because they may require monthly principal installments and such loans may prepay principal. The amortized cost and fair value of fixed maturities available-for-sale by contractual maturity, are presented in the following table:

	September 30, 2023
	Amortized Cost		Fair Value
Due in one year or less	$	4,150	$	4,122
Due after one year through five years		39,652		37,578
Due after five years through ten years		73,284		68,163
Due after ten years		144,550		119,003
Securities not due at a single maturity date — primarily mortgage and asset-backed		72,964		66,658
Total fixed maturities	$	334,600	$	295,524

Fixed maturities with a carrying value of $2,486 and $2,680 were on deposit with governmental authorities, as required by law at September 30, 2023 and December 31, 2022, respectively.

The Company’s fixed maturities portfolio was primarily composed of investment grade securities, defined as a security having a rating of Aaa, Aa, A, or Baa from Moody’s, AAA, AA, A, or BBB from Standard & Poor’s, or National Association of Insurance Commissioners (NAIC) rating of NAIC 1 or NAIC 2. Investment grade securities comprised 96.2% and 95.1% of the Company’s total fixed maturities portfolio at September 30, 2023 and December 31, 2022, respectively.

At September 30, 2023 and December 31, 2022, the Company had commitments to make investments in available-for-sale securities in the amount of $0 and $1,290, respectively.

Mortgage Loans

The Company makes investments in commercial mortgage loans. The Company, along with other investors, owns a pro rata share of each loan. The Company participates in 35 such investment instruments with ownership shares ranging from 0.6% to 30.0% of the trust at September 30, 2023. The Company owns a share of 319 mortgage loans with an average loan balance of $133 and a maximum exposure related to any single loan of $600. Mortgage loan holdings are diversified by geography and property type as follows:

	September 30, 2023						December 31, 2022
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
Property Type:
Retail	$	12,997			30.5	%	$	13,866			30.6	%
Office		11,276			26.5	%		11,115			24.5	%
Industrial		7,682			18.0	%		8,138			17.9	%
Mixed use		4,860			11.4	%		5,249			11.6	%
Apartments		2,100			4.9	%		2,796			6.2	%
Medical office		2,546			6.0	%		3,053			6.7	%
Other		1,115			2.7	%		1,136			2.5	%
Gross carrying value of mortgage loans		42,576			100.0	%		45,353			100.0	%
Credit loss allowance (1)		(571	)					(83	)
Net carrying value of mortgage loans	$	42,005					$	45,270

	September 30, 2023						December 31, 2022
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
U.S. Region:
West South Central	$	10,779			25.2	%	$	11,608			25.6	%
East North Central		12,457			29.3	%		12,320			27.2	%
South Atlantic		8,153			19.1	%		8,815			19.4	%
West North Central		2,477			5.8	%		2,871			6.3	%
Mountain		2,626			6.2	%		2,824			6.2	%
Middle Atlantic		2,072			4.9	%		2,310			5.1	%
East South Central		3,558			8.4	%		3,661			8.1	%
New England		—			0.0	%		34			0.1	%
Pacific		454			1.1	%		910			2.0	%
Gross carrying value of mortgage loans		42,576			100.0	%		45,353			100.0	%
Credit loss allowance (1)		(571	)					(83	)
Net carrying value of mortgage loans	$	42,005					$	45,270

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses.

During the nine months ended September 30, 2023 and September 30, 2022, $964 and $3,965 of new mortgage loans were purchased, respectively, which did not include second lien mortgage loans. There were no taxes, assessments, or any amounts advanced that were not included in the mortgage loan balances at September 30, 2023 and December 31, 2022. At September 30, 2023 and December 31, 2022, the Company had 2 and 3 mortgage loans with a total carrying value of $358 and $692 that were in a restructured status, respectively. There was 1 impairment for mortgage loans during the three months ended September 30, 2023 and zero impairment of mortgage loans during the three months ended September 30, 2022 and December 31, 2022.

The changes in the allowances for credit losses (includes $237 related to adoption of ASU 2016-13) for commercial mortgage loans were as follows:

	Nine Months Ended September 30, 2023		Year Ended December 31, 2022
Beginning balance	$	83	$	69
Net increase in allowances for credit losses related to change in accounting standards (See Note 1)		237		—
Net (decrease) increase in allowances for credit losses		251		14
Ending balance	$	571	$	83

At September 30, 2023 and December 31, 2022, the Company had no mortgage loans that were on non-accrual status.

At September 30, 2023 and December 31, 2022, the Company had commitments to make investments in mortgage loans in the amount of $3,023 and $2,575, respectively.

Net Investment Income

The sources of net investment income are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income from:
Fixed maturities	$	3,684		$	3,763		$	11,690		$	10,385
Policyholder loans		88			90			268			272
Mortgage loans		509			594			1,815			1,830
Cash, cash equivalents and restricted cash		47			32			110			34
Gross investment income		4,328			4,479			13,883			12,521
Investment expenses		(318	)		(353	)		(1,037	)		(1,131	)
Net investment income	$	4,010		$	4,126		$	12,846		$	11,390

Investment expenses include investment management fees, some of which include incentives based on market performance, custodial fees and internal costs for investment-related activities.

Net Investment (Losses) Gains

The sources of net investment gains (losses) are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Investment (losses) gains from sales:
Fixed maturities	$	(373	)	$	(61	)	$	(462	)	$	(191	)
Mortgage loans		56			(134	)		56			(80	)
Gains and losses from sales		(317	)		(195	)		(406	)		(271	)
Valuation change of other invested assets - (decline) appreciation:		(271	)		(1,087	)		(1,080	)		779
Change in allowance for credit losses (1)		(295	)		(288	)		(273	)		(419	)
Total net gains (losses) on investments	$	(883	)	$	(1,570	)	$	(1,759	)	$	89

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

Change in Allowance for Credit Losses

The Company regularly reviews its fixed income portfolio to identify and evaluate whether a security may require a credit loss allowance. For each fixed income security in an unrealized loss position, the Company assesses whether management with the appropriate authority has made the decision to sell or whether it is more likely than not the Company will be required to sell the security before recovery of the amortized cost basis for reasons such as liquidity, contractual or regulatory purposes. If a security meets either of these criteria, any existing credit loss allowance would be written-off against the amortized cost basis of the asset along with any remaining unrealized losses, with incremental losses recorded in earnings. For all other securities in an unrealized loss position in which the Company does not expect to recover the entire amortized cost basis, the security is deemed to have a credit loss.

Significant judgment is required in the determination of whether a credit loss has occurred for a security. The Company has developed a consistent methodology and has identified significant inputs for determining whether a credit loss has occurred. Some of the factors considered in evaluating whether a decline in fair value is a credit loss are the financial condition and prospects of the issuer, payment status, the probability of collecting scheduled principal and interest payments when due, credit ratings of the securities, and the duration and severity of the decline.

The credit loss component of fixed maturity impairment is calculated as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective rate implicit to the security at the date of purchase or prior impairment. The methodology and assumptions for estimating the cash flows vary depending on the type of security. For mortgage-backed and asset-backed securities, cash flow estimates, including prepayment assumptions, are based on data from widely accepted third-party sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral characteristics, expectations of delinquency and default rates, and structural support, including subordination and guarantees. If the present value of the modeled expected cash flows equals or exceeds the amortized cost of a security, no credit loss exists, and the security is considered to be temporarily impaired. If the present value of the expected cash flows is less than amortized cost, the security is determined to be impaired for credit reasons and a credit loss is recognized in earnings. The non-credit component, determined as the difference between the adjusted amortized cost basis and fair value, is recognized a credit loss in other comprehensive (loss) income.

The measurement of credit losses for available-for-sale fixed income securities measured at fair value is not affected except that credit losses recognized are limited to the amount by which fair value is below amortized cost and the credit loss adjustment is recognized through an allowance which may change over time but once recorded cannot subsequently be reduced to an amount below zero. Previously these credit loss adjustments were recorded as OTTI and were not reversed once recorded.

A roll-forward of the cumulative credit losses on fixed maturities are as follows:

	September 30,		December 31,
	2023		2022
Beginning balance of credit losses on fixed maturities	$	1,263	$	837
Additional credit loss not previously recognized (1)		—		394
Additional credit loss that was previously recognized (1)		21		48
Reduction of credit losses related to securities sold during period		—		(16	)
Ending balance of credit losses on fixed maturities	$	1,284	$	1,263

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, additional credit losses for OTTI is now presented as an additional credit loss.

Unrealized Losses for Fixed Maturities

The Company’s fair value and gross unrealized losses for fixed maturities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous gross unrealized loss position are as follows:

	12 months or less					Longer than 12 months					Total
September 30, 2023	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. government and agencies	$	977	$	(22	)	$	2,527	$	(693	)	$	3,504	$	(715	)
U.S. agency mortgage-backed		780		(23	)		4,712		(812	)		5,492		(835	)
State and political subdivisions		19,634		(1,108	)		42,635		(12,329	)		62,269		(13,437	)
Corporate and miscellaneous		46,767		(3,546	)		64,833		(15,851	)		111,600		(19,397	)
Foreign Government		125		(5	)		—		—			125		(5	)
Residential mortgage-backed		3,009		(69	)		2,786		(616	)		5,795		(685	)
Commercial mortgage-backed		1,711		(61	)		17,499		(2,091	)		19,210		(2,152	)
Asset-backed		5,262		(417	)		26,143		(2,365	)		31,405		(2,782	)
Total fixed maturities	$	78,265	$	(5,251	)	$	161,135	$	(34,757	)	$	239,400	$	(40,008	)

	12 months or less					Longer than 12 months					Total
December 31, 2022	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. agency mortgage-backed	$	2,722	$	(501	)	$	—	$	—		$	2,722	$	(501	)
State and political subdivisions		5,297		(578	)		216		(36	)		5,513		(614	)
Corporate and miscellaneous		38,252		(7,036	)		15,057		(4,979	)		53,309		(12,015	)
Foreign government		94,461		(13,479	)		8,322		(2,796	)		102,783		(16,275	)
Residential mortgage-backed		3,286		(554	)		344		(68	)		3,630		(622	)
Commercial mortgage-backed		16,218		(1,611	)		2,655		(303	)		18,873		(1,914	)
Asset-backed		20,465		(1,726	)		21,069		(2,200	)		41,534		(3,926	)
Total fixed maturities	$	180,701	$	(25,485	)	$	47,663	$	(10,382	)	$	228,364	$	(35,867	)

The indicated gross unrealized losses in all fixed maturity categories decreased to $40,008 from $35,867 at September 30, 2023 and December 31, 2022, respectively. Based on the Company’s current evaluation of its fixed maturities in an unrealized loss position, in accordance with our impairment policy and the Company’s current intentions to hold these securities, the Company concluded that these securities do not have credit losses.

Information and concentrations related to fixed maturities in an unrealized loss position are included below. The tables below include fixed maturities and number of securities in an unrealized loss position for greater than and less than 12 months and the percentage that were investment grade at September 30, 2023.

	Unrealized Losses 12 months or less
	Gross Unrealized Losses			Impairment is Less than 10% of Amortized Cost			Impairment is Between 10% and 20% of Amortized Cost			Impairment is Greater than 20% of Amortized Cost			Percent Investment Grade
Fixed maturities
U.S. government and agencies	$	(22	)	$	(22	)	$	—		$	—			100	%
U.S. agency mortgage-backed		(23	)		(23	)		—			—			100	%
State and political subdivisions		(1,108	)		(948	)		(160	)		—			100	%
Corporate and miscellaneous		(3,546	)		(1,607	)		(960	)		(979	)		84	%
Foreign Government		(5	)		(5	)		—			—			100	%
Residential mortgage-backed		(69	)		(69	)		—			—			75	%
Commercial mortgage-backed		(61	)		(51	)		(10	)		—			100	%
Asset-backed		(417	)		(271	)		(85	)		(61	)		100	%
Gross unrealized losses	$	(5,251	)	$	(2,996	)	$	(1,215	)	$	(1,040	)
Total number of fixed maturities	300				257			33			10

	Unrealized Losses greater than 12 months
	Gross Unrealized Losses			Impairment is Less than 10% of Amortized Cost			Impairment is Between 10% and 20% of Amortized Cost			Impairment is Greater than 20% of Amortized Cost			Percent Investment Grade
Fixed maturities
U.S. government and agencies	$	(693	)	$	(95	)	$	—		$	(598	)		100	%
U.S. agency mortgage-backed		(812	)		(44	)		(752	)		(16	)		100	%
State and political subdivisions		(12,329	)		(563	)		(1,822	)		(9,944	)		100	%
Corporate and miscellaneous		(15,851	)		(835	)		(3,348	)		(11,668	)		87	%
Residential mortgage-backed		(616	)		(56	)		(306	)		(254	)		89	%
Commercial mortgage-backed		(2,091	)		(487	)		(1,376	)		(228	)		100	%
Asset-backed		(2,365	)		(789	)		(1,172	)		(404	)		97	%
Gross unrealized losses	$	(34,757	)	$	(2,869	)	$	(8,776	)	$	(23,112	)
Total number of fixed maturities		587			145			201			241

	Investment Grade		Below Investment Grade		Total
Fixed income securities with unrealized loss position less than or equal to 20% of amortized cost, net (1) (2)	$	15,251	$	604	$	15,855
Fixed income securities with unrealized loss position greater than 20% of amortized cost, net (3) (4)		23,704		449		24,153
Total unrealized losses	$	38,955	$	1,053	$	40,008

(1) Below investment grade fixed income securities include $150 that have been in an unrealized loss position for less than twelve months.

(2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.

(3) Below investment grade fixed income securities include $902 that have been in an unrealized loss position for a period of twelve or more consecutive months.

(4) Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.

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Policy Liabilities

9 Months Ended

Sep. 30, 2023

Insurance [Abstract]

Policy Liabilities

Note 3 – Policy Liabilities

Future Policy Benefits

Future policy benefits represent the reserve for direct and assumed traditional life insurance policies and annuities in payout status.

The annuities in payout status are certain structured settlement contracts. The policy liability for structured settlement contracts of $12,198 and $13,118 at September 30, 2023 and December 31, 2022, respectively, is computed as the present value of contractually specified future benefits. The amounts included in the policy liability for structured settlements that are life contingent at September 30, 2023 and December 31, 2022, is $9,499 and $10,097, respectively.

To the extent that unrealized gains on fixed maturities would result in a premium deficiency had those gains actually been realized, a premium deficiency reserve is recorded. A liability of $0 and $470 is included as part of the liability for structured settlements with respect to this deficiency at September 30, 2023 and December 31, 2022, respectively. The offset to this liability is recorded as a reduction of the unrealized capital gains included in AOCI.

Participating life insurance in-force was 2.5% and 3.9% of the face value of total life insurance at September 30, 2023 and December 31, 2022, respectively.

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Reinsurance

9 Months Ended

Sep. 30, 2023

Insurance [Abstract]

Reinsurance

Note 4 – Reinsurance

The Company uses reinsurance to mitigate exposure to potential losses, provide additional capacity for growth, and provide greater diversity of business. For ceded reinsurance, the Company remains liable to the extent that reinsuring companies may not be able to meet their obligations under the reinsurance agreements. To manage the risk from failure of a reinsurer to meet its obligations, the Company periodically evaluates the financial condition of all of its reinsurers.

In the first quarter 2022, Fidelity Life entered into a reinsurance contract with Swiss Re Life & Health America Inc. (Swiss Re). This new treaty is in addition to existing coinsurance agreements, largely with Swiss Re on certain policies issued through and including December 31, 2020. The impact of this transaction to our segment results included an initial ceded premium in 2022 of $6.5 million based on the statutory reserves at January 1, 2022. The impact to pre-tax income in 2022 was nominal, however various income statement lines were impacted.

On July 18, 2023, the Liquidation Order of Scottish Re was approved by the Delaware Court specifying the effective date of the liquidation as September 30, 2023. The Liquidation Order specifies that all reinsurance agreements of Scottish Re are cancelled effective September 30, 2023. Accordingly, ceded future policy benefits of $657 were taken down as of the effective date of the order.

Reinsurance recoverables are as follows:

	September 30,		December 31,
	2023		2022
Ceded future policy benefits	$	192,968	$	173,904
Claims and other amounts recoverables		37,617		40,958
Ending balance	$	230,585	$	214,862

The reconciliation of direct insurance premiums to net insurance premiums is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Direct premiums	$	46,413		$	44,740		$	135,613		$	131,792
Assumed premiums		8,960			10,838			27,493			35,512
Ceded premiums		(31,939	)		(31,110	)		(91,591	)		(93,830	)
Net insurance premiums	$	23,434		$	24,468		$	71,515		$	73,474

The reconciliation of direct life, annuity, and health claim benefits to life, annuity, and health claim benefits as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Direct	$	34,658		$	36,963		$	93,623		$	105,673
Assumed		10,209			5,656			16,136			15,911
Ceded		(22,284	)		(25,114	)		(58,192	)		(73,962	)
Life, annuity, and health claim benefits	$	22,583		$	17,505		$	51,567		$	47,622

Net policy charges on universal life products were $41 and $44 for the three months ended September 30, 2023 and 2022, respectively and $135 and $136 for the nine months ended September 30, 2023 and 2022, respectively, and are included in other income.

At September 30, 2023 and December 31, 2022, reserves related to fixed‑rate annuity deposits assumed from a former affiliate company amounted to approximately $64,095 and $69,070, respectively, and are included with policyholder account balances in the Interim Condensed Consolidated Balance Sheets.

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Closed Block

9 Months Ended

Sep. 30, 2023

Closed Block Disclosure [Abstract]

Closed Block

Note 5 – Closed Block

The Closed Block was formed at October 1, 2006 and contains all participating policies issued or assumed by Fidelity Life. The assets and future net cash flows of the Closed Block are available only for purposes of paying benefits, expenses and dividends of the Closed Block and are not available to the Company, except for an amount of additional funding that was established at the inception of the Closed Block. The additional funding was designed to protect the block against future experience, and if the funding is not required for that purpose, is subject to reversion to the Company in the future. Any reversion of Closed Block assets to the Company must be approved by the Illinois Department of Insurance (IDOI).

In October 2011, the IDOI approved a reversion of a portion of the initial funding that the Company had determined was not required to fund the Closed Block. The carrying value of the assets transferred from the Closed Block on October 31, 2011, the date of transfer, was $4,397.

The assets and liabilities within the Closed Block are included in the Company’s condensed consolidated financial statements on the same basis as other accounts of the Company. The maximum future earnings and accumulated other comprehensive income to be recognized from Closed Block assets and liabilities represent the estimated future Closed Block profits that will accrue to the Company and is calculated as the excess of Closed Block assets over Closed Block liabilities. Included in Closed Block assets at September 30, 2023 and December 31, 2022 is $11,058 and $10,792 of additional Closed Block funding, plus accrued interest, that is eligible for reversion to the Company if not needed to fund Closed Block experience, respectively.

The Closed Block was funded based on a model developed to forecast the future cash flows of the Closed Block, which is referred to as the actuarial calculation. The actuarial calculation projected the anticipated future cash flows of the Closed Block as established at the initial funding. We compare the actual results of the Closed Block to expected results from the actuarial calculation as part of the annual assessment of the current level of policyholder dividends. The assessment of policyholder dividends includes projections of future experience of the Closed Block. The review of Closed Block experience also includes consideration of whether a policy dividend obligation should be recorded to reflect favorable Closed Block experience that has not yet been reflected in the dividend scales. At September 30, 2023 and December 31, 2022, the Company recognized a policyholder dividend obligation of $9,544 and $9,515, respectively, resulting from the excess of actual cumulative earnings over the expected cumulative earnings and from accumulated net unrealized investment gains (losses) that have arisen subsequent to the establishment of the Closed Block.

Information regarding the Closed Block liabilities (assets) designated to the Closed Block is as follows:

	September 30,			December 31,
Closed Block Liabilities	2023			2022
Future policy benefits and claims	$	29,216		$	29,382
Policyholder account balances		6,567			6,731
Other policyholder liabilities		3,436			5,298
Policyholder dividend obligations		9,544			9,515
Other liabilities		38			586
Total Closed Block liabilities		48,801			51,512
Assets Designated to the Closed Block
Investments:
Fixed maturities - available-for-sale (amortized cost $41,673 and    $40,522, respectively)		36,464			36,625
Policyholder loans		1,238			1,132
Total investments		37,702			37,757
Cash and Cash Equivalents		365			—
Premiums due and uncollected		382			1,852
Accrued investment income		490			457
Reinsurance recoverables		10,834			13,885
Deferred income tax assets, net		4,712			4,263
Total assets designated to the Closed Block		54,485			58,214
Excess of Closed Block assets over liabilities		5,684			6,702
Amounts included in accumulated other comprehensive income:
Unrealized investment loss (gains), net of income tax		(4,116	)		(3,079	)
Total amounts included in accumulated other comprehensive income		(4,116	)		(3,079	)
Maximum future earnings and accumulated other comprehensive income to    be recognized from Closed Block assets and liabilities (includes excess    assets of $11,058 and $10,792, respectively)	$	(9,800	)	$	(9,781	)

	September 30,		December 31,
Policyholder Dividend Obligations	2023		2022
Beginning balance	$	9,515	$	12,669
Impact from earnings allocable to policyholder dividend obligations		29		(165	)
Change in net unrealized investment gains (losses) allocated to policyholder    dividend obligations		—		(2,989	)
Ending balance	$	9,544	$	9,515

Information regarding the Closed Block revenues and expenses is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023		2022
Revenues
Net insurance premiums	$	769		$	329		$	3,351	$	2,357
Net investment income		456			375			1,361		1,157
Net Realized Investment Gains (Losses)		5			—			8		—
Total revenues		1,230			704			4,720		3,514
Benefits and expenses
Life and annuity benefits - including policyholder dividends    of $452, $498, $1,474 and $1,102, respectively		1,353			1,072			4,258		3,588
Interest credited to policyholder account balances		42			44			124		128
Operating costs and expenses		(38	)		(356	)		314		(482	)
Total expenses		1,357			760			4,696		3,234
Revenues, net of expenses before provision for income tax    expense (benefit)		(127	)		(56	)		24		280
Income tax expense (benefit)		(27	)		(12	)		5		59
Revenues, net of expenses and provision for income tax    expense (benefit)	$	(100	)	$	(44	)	$	19	$	221

The Company charges the Closed Block with federal income taxes and state and local premium taxes, policy maintenance costs and investment management expenses relating to the Closed Block as provided in the Closed Block Memorandum.

The following table presents the amortized cost and fair value of the Closed Block fixed maturities portfolio by contractual maturity at September 30, 2023. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

	Amortized Cost		Fair Value
Due in one year or less	$	1,100	$	1,093
Due after one year through five years		6,615		6,482
Due after five years through ten years		6,836		6,374
Due after ten years		23,683		19,193
Securities not due at a single maturity date — primarily mortgage and asset-    backed		3,439		3,322
Total fixed maturities	$	41,673	$	36,464

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 6 – Commitments and Contingencies

Litigation

The Company is subject to legal and regulatory actions in the course of our business. Management does not believe such litigation will have a material impact on the Company’s interim condensed consolidated financial statements. The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible but not probable or, is probable but not reasonably able to be estimated, no accrual is established, but the matter, if material, is disclosed. The Company is not aware of any material legal or regulatory matters threatened or pending against the Company.

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Assets and Liabilities Measured at Fair Value

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value

Note 7 – Assets and Liabilities Measured at Fair Value

Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company attempts to establish fair value as an exit price consistent with transactions taking place under normal market conventions. The Company utilizes market observable information to the extent possible and seeks to obtain quoted market prices for all securities. If quoted market prices in active markets are not available, the Company uses a number of methodologies to establish fair value estimates including discounted cash flow models, prices from recently executed transactions of similar securities, or broker/dealer quotes.

Fair values for the Company’s fixed maturity and equity securities are determined by management, utilizing prices obtained from third-party pricing services. Management reviews on an ongoing basis the reasonableness of the methodologies used by the pricing services to ensure prices received represent a reasonable estimate of fair value and to confirm representations regarding whether inputs are observable or unobservable. The main procedure the Company employs in fulfillment of this objective includes back-testing transactions, where past fair value estimates are compared to actual transactions executed in the market on similar dates.

The Company’s assets and liabilities have been classified into a three-level hierarchy based on the priority of the inputs to the respective valuation technique. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Level 1 and Level 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:

Level 1 – Unadjusted quoted prices for identical assets in active markets the Company can access. Level 1 assets include securities that are traded in an active exchange market.

Level 2 – This level includes fixed maturities priced principally by independent pricing services using observable inputs other than Level 1 prices, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments on inactive markets; and model-derived valuations for which all significant inputs are observable market data. Level 2 instruments include most corporate debt securities and U.S. government and agency mortgage-backed securities that are valued by models using inputs that are derived principally from or corroborated by observable market data.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Level 3 instruments include less liquid assets for which significant inputs are unobservable in the market, such as structured securities with complex features that require significant management assumptions or estimation in the fair value measurement.

This hierarchy requires the use of observable market data when available.

Certain assets and liabilities are not carried at fair value on a recurring basis, including investments such as mortgage loans, intangible assets, future policy benefits excluding term life reserves and policyholder account balances. Accordingly, such items are only included in the fair value hierarchy disclosure when the items are subject to re-measurement at fair value after initial recognition (for example, when there is evidence of impairment) and the resulting re-measurement is reflected in the consolidated financial statements at the reporting date.

Recurring and Non-Recurring Fair Value Measurements

The Company’s assets that are carried at fair value on a recurring and non-recurring basis, by fair value hierarchy level, are as follows:

September 30, 2023	Level 1		Level 2		Level 3		Total Fair Value
Recurring fair value measurements
Financial instruments recorded as assets:
Fixed maturities
U.S. government and agencies	$	—	$	9,599	$	—	$	9,599
U.S. agency mortgage-backed		—		6,533		—		6,533
State and political subdivisions		—		62,895		444		63,339
Corporate and miscellaneous		2,231		127,012		26,560		155,803
Foreign government		—		125		—		125
Residential mortgage-backed		—		6,620		—		6,620
Commercial mortgage-backed		—		19,655		—		19,655
Asset-backed		—		30,512		3,338		33,850
Total fixed maturities		2,231		262,951		30,342		295,524
Total recurring assets	$	2,231	$	262,951	$	30,342	$	295,524

December 31, 2022	Level 1		Level 2		Level 3		Total Fair Value
Recurring fair value measurements
Financial instruments recorded as assets:
Fixed maturities
U.S. government and agencies	$	—	$	9,106	$	—	$	9,106
U.S. agency mortgage-backed		—		8,878		—		8,878
State and political subdivisions		—		55,782		442		56,224
Corporate and miscellaneous		2,847		126,644		26,990		156,481
Foreign government		—		131		—		131
Residential mortgage-backed		—		4,430		—		4,430
Commercial mortgage-backed		—		19,462		—		19,462
Asset-backed		—		40,293		3,133		43,426
Total fixed maturities		2,847		264,726		30,565		298,138
Total recurring assets	$	2,847	$	264,726	$	30,565	$	298,138

Summary of Significant Valuation Techniques for Assets on a Recurring Basis

Level 1 securities include principally exchange‑traded funds that are valued based on quoted market prices for identical assets.

Level 2 securities are based on prices obtained from independent pricing services. All of the Company’s prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type and region of the world, based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type and region. For fixed maturities that do not trade on a daily basis, the pricing services prepare estimates of fair value measurements using their pricing applications which incorporate a variety of inputs including, but not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, and U.S. Treasury curves. Specifically, for asset-backed securities, key inputs include prepayment and default projections based on past performance of the underlying collateral and current market data. Securities with validated quotes from pricing services are reflected within Level 2 of the fair value hierarchy, as they generally are based on observable pricing for similar assets or other market significant observable inputs.

Level 3 fair value classification consists of investments in securities where the fair value of the security is determined by a pricing service using internal pricing models where one or more of the significant inputs is unobservable in the marketplace, or there is a single broker/dealer quote. The fair value of a broker-quoted asset is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant. The fair value of Level 3 liabilities is estimated on the discounted cash flows of contractual payments.

If the Company believes the pricing information received from third-party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service. Historically, the Company has not challenged or updated the prices provided by third-party pricing services. However, any such updates by a pricing service to be more consistent with the presented market observations, or any adjustments made by the Company to prices provided by third-party pricing services would be reflected in the balance sheet for the current period.

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). Net transfers into and/or out of Level 3 are reported as having occurred at the beginning of the period and are based on observable inputs received from pricing sources; therefore, all net realized and unrealized gains and losses on these securities for the period are reflected in the table that follows. A summary of changes in fair value of Level 3 assets held at fair value on a recurring basis is as follows:

			Total gains (losses) included in:
	Balance at January 1, 2023		Net Income (loss)		OCI			Purchases		Sales			Settlements		Net Transfers		Balance at September 30, 2023
Financial Assets
Fixed maturities
State and political subdivision	$	442	$	—	$	2		$	—	$	—		$	—	$	—	$	444
Corporate and miscellaneous		26,991		2		(31	)		2,449		(2,989	)		—		138		26,560
Asset-backed		3,133		90		80			145		(610	)		—		500		3,338
Total assets	$	30,566	$	92	$	51		$	2,594	$	(3,599	)	$	—	$	638	$	30,342

			Total gains (losses) included in:
	Balance at January 1, 2022		Net Income			OCI			Purchases		Sales			Settlements		Net Transfers		Balance at December 31, 2022
Financial Assets
Fixed maturities
State and political subdivisions	$	498	$	—		$	(56	)	$	—	$	—		$	—	$	—	$	442
Corporate and miscellaneous		24,740		2			(398	)		3,198		(2,582	)		1,468		563		26,991
Asset-backed		2,838		(122	)		(325	)		1,907		(1,260	)		—		95		3,133
Total assets	$	28,076	$	(120	)	$	(779	)	$	5,105	$	(3,842	)	$	1,468	$	658	$	30,566

There were 4 transfers from Level 3 to Level 2 and 5 transfers from level 2 to level 3 in 2023. There were 2 transfers from Level 3 to Level 2 and 6 transfers from level 2 to level 3 in 2022.

Financial Instruments not Measured at Fair Value

The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude cash and cash equivalents and accrued investment income, that are not securities and therefore are not included in the three-level hierarchy table disclosed in the “Recurring and Non-Recurring Fair Value Measurements” section. The carrying amount and estimated fair values of the Company’s financial instruments that are not measured at fair value on the Interim Condensed Consolidated Balance Sheets are as follows:

			Estimated Fair Value
September 30, 2023	Carrying Value		Level 1		Level 2		Level 3		Total
Financial instruments recorded as assets:
Mortgage loans	$	42,005	$	—	$	—	$	38,074	$	38,074
Policyholder loans	$	7,062	$	—	$	—	$	8,136	$	8,136
Financial instruments recorded as liabilities:
Future policy benefits, excluding term life reserves	$	15,776	$	—	$	—	$	14,511	$	14,511
Long/short-term debt	$	46,483	$	—	$	—	$	47,762	$	47,762
Policyholder account balances	$	72,245	$	—	$	—	$	65,459	$	65,459

			Estimated Fair Value
December 31, 2022	Carrying Value		Level 1		Level 2		Level 3		Total
Financial instruments recorded as assets:
Mortgage loans	$	45,270	$	—	$	—	$	41,622	$	41,622
Policyholder loans	$	6,699	$	—	$	—	$	7,722	$	7,722
Financial instruments recorded    as liabilities:
Future policy benefits, excluding term    life reserves	$	16,555	$	—	$	—	$	15,192	$	15,192
Long/short-term debt	$	37,189	$	—	$	—	$	36,763	$	36,763
Policyholder account balances	$	77,443	$	—	$	—	$	70,157	$	70,157

The following methods and assumptions were used to estimate the fair value of these financial assets and liabilities.

Mortgage Loans — Fair value was based on the discounted value of future cash flows for all first mortgage loans adjusted for specific loan risk. The discount rate was based on the rate that would be offered for similar loans at the reporting date. Fair value excludes $974 and $1,952 of second and mezzanine mortgages carried at cost for which fair value is not measurable at September 30, 2023 and December 31, 2022, respectively.

Policyholder Loans — Fair value of policyholder loans was estimated using discounted cash flows using risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash value of the underlying insurance policy.

Future Policy Benefits and Policyholder Account Balances — Liabilities with interest rate guarantees greater than one year or with defined maturities, the fair value was estimated by calculating an average present value of expected cash flows over a broad range of interest rate scenarios using the current market risk‑free interest rates adjusted for spreads required for publicly traded bonds issued by comparably rated insurers. Certain non-interest sensitive reserves are at carrying value, which approximates fair value.

Long and Short-Term Debt — Fair value was calculated using the discounted value of future cash flows method. The discount rate was based on the rate that is commensurable to the level of risk. The carrying amounts reported on the Interim Condensed Consolidated Balance Sheets have been divided in to short and long-term based upon expected maturity dates.

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Long and Short-Term Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Long and Short-Term Debt

Note 8 – Long and Short-Term Debt

In 2022 and subsequent amendments in 2023, Efinancial entered into a new commission financing arrangement and is taking new advances on this financing arrangement. Efinancial’s ability to receive advances under this arrangement will terminate when the aggregate amount advanced under the arrangement equals or exceeds $46.0 million. At September 30, 2023 and December 31, 2022,

the Company had a net advance of $38,618 and $31,100, respectively, under this arrangement. At September 30, 2023, the Company expects to pay back the aggregate amounts as presented in the following table.

	September 30, 2023
Due in one year or less	$	9,172
Due after one year through two years		6,328
Due after two years through three years		5,891
Due after three years through four years		5,493
Due after four years through five years		5,014
Due after five years		38,411
Less discount		(23,826	)
Total long/short-term debt	$	46,483

Federal Home Loan Bank of Chicago

The Company is a member of the Federal Home Loan Bank of Chicago (FHLBC). As a member, the Company is able to borrow on a collateralized basis from the FHLBC which can be used as an alternative source of liquidity. The FHLBC membership requires the Company to own member stock. At September 30, 2023 and December 31, 2022, the Company held $270 and $180 of FHLBC common stock, which is included in Other invested assets, respectively. The Company's ability to borrow under this facility is subject to the FHLBC's discretion and requires the availability of qualifying assets. As of September 30, 2023 and December 31, 2022, the Company had not pledged any assets and there were no outstanding borrowings.

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Accumulated Other Comprehensive (Loss) Income

9 Months Ended

Sep. 30, 2023

Equity, Attributable to Parent [Abstract]

Accumulated Other Comprehensive (Loss) Income

Note 9 – Accumulated Other Comprehensive (Loss) Income

Changes in accumulated other comprehensive (loss) income, net of taxes are as follows:

	2023								2022
	Net Unrealized Gains (Losses) on Investments with Credit Losses		Net Unrealized Gains (Losses) on Other Investments			Total			Net Unrealized Gains (Losses) on Investments with Credit Losses		Net Unrealized Gains (Losses) on Other Investments			Total
Balance at beginning of year	$	362	$	(30,534	)	$	(30,172	)	$	362	$	10,567		$	10,929
Third Quarter
Other comprehensive income (loss)
Unrealized holding (losses) gains from changes in the market value of securities		—		(10,166	)		(10,166	)		—		(15,424	)		(15,424	)
Impact on policy benefit liabilities of changes in market value of securities		—		340			340			—		1,545			1,545
Change in net unrealized investment (losses) gains allocated to policyholder dividend obligations		—		—			—			—		—			—
Deferred income tax (expense) benefit		—		1,744			1,744			—		2,915			2,915
Third Quarter, net		—		(8,082	)		(8,082	)		—		(10,964	)		(10,964	)
Year to Date
Other comprehensive (loss) income
Unrealized holding (losses) gains from changes in the market value of securities		—		(5,268	)		(5,268	)		—		(60,944	)		(60,944	)
Impact on policy benefit liabilities of changes in market value of securities		—		469			469			—		6,065			6,065
Change in net unrealized investment (losses) gains allocated to policyholder dividend obligations		—		—			—			—		2,989			2,989
Deferred income tax benefit (expense)		—		843			843			—		10,897			10,897
Year to Date, net		—		(3,956	)		(3,956	)		—		(40,993	)		(40,993	)
Balance at end of period	$	362	$	(34,490	)	$	(34,128	)	$	362	$	(30,426	)	$	(30,064	)

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Business Segments

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Business Segments

Note 10 – Business Segments

Our Chief Operating Decision Maker makes decisions by analyzing our segment information. For internal decision-making purposes and external reporting purposes, we do not disaggregate revenue beyond our segment information and believe that any further disaggregation is immaterial. The Company’s current operations were organized into three reportable segments: Insurance, Agency, and Corporate & Other.

The Insurance Segment is composed of three broad lines consisting of Traditional Life, Closed Block, and Assumed Life and Annuities. Traditional Life and the Closed Block are distinct operations; the Assumed life and annuities business and the small amount of structured settlements are all blocks in runoff from a prior management arrangement.

The Agency Segment includes the insurance distribution operations of the Company and includes commission revenue from the sale of Fidelity Life products.

The Corporate & Other Segment includes expenses that will benefit the overall organization, which are not allocated to a segment. This segment recognizes net investment income on cash and invested assets held mainly as a result of the IPO and interest expense related to our recently announced merger transaction and commission financing agreement.

All intercompany accounts and transactions have been eliminated in consolidation, including any profit or loss from the sale of Insurance Segment products through the Agency Segment.

The segment results are as follows:

	Three Months Ended September 30, 2023											Three Months Ended September 30, 2022
	Insurance			Agency		Corporate & Other			Total Consolidated			Insurance			Agency			Corporate & Other			Total Consolidated
Net insurance premiums	$	23,434		$	—	$	—		$	23,434		$	24,468		$	—		$	—		$	24,468
Net investment income		3,931			—		79			4,010			3,927			—			199			4,126
Net (losses) gains on investments (1)		(883	)		—		—			(883	)		(1,100	)		—			(470	)		(1,570	)
Earned commissions		—			15,354		—			15,354			—			11,379			(112	)		11,267
Other income		274			1,472		—			1,746			144			1,259			—			1,403
Total revenues		26,756			16,826		79			43,661			27,439			12,638			(383	)		39,694
Life, annuity, and health claim benefits		23,210			—		—			23,210			18,151			—			—			18,151
Operating costs and expenses		7,914			16,564		2,277			26,755			7,957			14,110			1,066			23,133
Amortization of deferred policy acquisition    costs		3,283			—		—			3,283			4,086			—			—			4,086
Total benefits and expenses		34,407			16,564		2,277			53,248			30,194			14,110			1,066			45,370
Income (loss) before income taxes	$	(7,651	)	$	262	$	(2,198	)	$	(9,587	)	$	(2,755	)	$	(1,472	)	$	(1,449	)	$	(5,676	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

	Nine Months Ended September 30, 2023											Nine Months Ended September 30, 2022
	Insurance			Agency		Corporate & Other			Total Consolidated			Insurance			Agency			Corporate & Other			Total Consolidated
Net insurance premiums	$	71,515		$	—	$	—		$	71,515		$	73,474		$	—		$	—		$	73,474
Net investment income		12,618			—		228			12,846			10,982			—			408			11,390
Net realized investment gains (losses) (1)		(1,395	)		—		(364	)		(1,759	)		(267	)		—			356			89
Earned commissions		—			45,880		(345	)		45,535			—			33,105			(313	)		32,792
Other income		804			4,079		—			4,883			419			3,773			—			4,192
Total revenues		83,542			49,959		(481	)		133,020			84,608			36,878			451			121,937
Life, annuity, and health claim benefits		53,567			—		—			53,567			49,722			—			—			49,722
Operating costs and expenses		23,843			48,636		5,760			78,239			25,143			42,573			5,143			72,859
Amortization of deferred policy    acquisition costs		9,913			—		—			9,913			13,237			—			—			13,237
Total benefits and expenses		87,323			48,636		5,760			141,719			88,102			42,573			5,143			135,818
(Loss) income before income tax	$	(3,781	)	$	1,323	$	(6,241	)	$	(8,699	)	$	(3,494	)	$	(5,695	)	$	(4,692	)	$	(13,881	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

	September 30, 2023								December 31, 2022
	Insurance		Agency		Corporate & Other		Total Consolidated		Insurance		Agency		Corporate & Other		Total Consolidated
Investments and cash	$	351,240	$	800	$	2,979	$	355,019	$	358,620	$	1,094	$	3,862	$	363,576
Commissions and agent balances		8,550		41,865		—		50,415		4,751		30,015		—		34,766
Deferred policy acquisition costs		88,171		—		—		88,171		90,189		—		—		90,189
Intangible assets		—		1,635		—		1,635		—		1,635		—		1,635
Reinsurance recoverables net		230,585		—		—		230,585		214,862		—		—		214,862
Deferred income tax assets, net		18,361		—		13,642		32,003		13,489		—		14,948		28,437
Other		28,635		9,068		654		38,357		26,800		5,869		3,944		36,613
Total assets	$	725,542	$	53,368	$	17,275	$	796,185	$	708,711	$	38,613	$	22,754	$	770,078

All the Company’s significant revenues and long-lived assets are located in the United States, which is the Company’s country of domicile.

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Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

Note 11 –Subsequent Events

On October 3, 2023, Vericity, Inc. announced that it entered into an Agreement and Plan of Merger with iA American Holdings Inc. Please refer to Note 1 - Summary of Significant Accounting Policies for additional details.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Description of Business

Description of Business

Vericity, Inc. (the Company) is a Delaware corporation organized to be the stock holding company for Members Holding Company (Members) and its subsidiaries. On August 7, 2019, the Company completed the initial public offering of 14,875,000 shares of its common stock at a price of $10.00 per share (the IPO). The IPO was conducted in connection with the conversion of Members Mutual Holding Company from mutual to stock form and the acquisition by the Company of all of the capital stock of Members following its conversion to stock form after its plan of conversion and amended and restated articles of incorporation were approved at a special meeting of eligible members on August 6, 2019 (the Conversion). As a result of the Conversion, the Company became the holding company for converted Members Mutual Holding Company and its indirect subsidiaries, including Fidelity Life Association (Fidelity Life) and Efinancial, LLC (Efinancial).

On October 3, 2023, the Company, announced that it entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, iA American Holdings Inc. (“iA” or “Parent”), Long Grove Acquisition Corp., a wholly owned subsidiary of Parent (“Merger Sub”), and, solely for purposes of Section 6.03 and Article IX thereof, iA Financial Corporation, Inc. (“Guarantor”).

On the terms and subject to the conditions of the Merger Agreement, at the closing, Merger Sub will merge with and into the Company (the “Merger”), with the Company continuing as the surviving entity, which will become a wholly-owned subsidiary of Parent. The time that the Merger becomes effective is referred to as the “Effective Time.” The Merger was unanimously approved by the Company’s board of directors.

Following execution of the Merger Agreement, Apex Holdco L.P. (the “Consenting Stockholder” or “Apex”) executed and delivered to the Company a written consent (the “Stockholder Written Consent”), adopting the Merger Agreement and the transactions contemplated thereby, including the Merger.

As a result of the execution and delivery of the Stockholder Written Consent, the holders of at least a majority of the outstanding shares of Common Stock have adopted the Merger Agreement. No further approval of the stockholders of the Company is required to adopt the Merger Agreement.

As a result of the Merger, each share of Common Stock outstanding immediately prior to the Effective Time (subject to certain exceptions, including shares of Common Stock owned by stockholders of the Company who have not voted in favor of the adoption of the Merger Agreement and have properly exercised appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) will, at the Effective Time, automatically be converted into the right to receive $11.43 in cash, without interest and subject to applicable withholding taxes (the “Merger Consideration”). The aggregate equity value of the Common Stock acquired by Parent will be approximately $170 million.

If the Merger is consummated, the Company’s Common Stock will be delisted from The Nasdaq Capital Market and deregistered under the Securities Exchange Act of 1934, as amended. The completion of the Merger is subject to satisfaction or waiver of certain closing conditions, including: (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), and receipt of certain regulatory approvals; (ii) there being no law or injunction prohibiting consummation of the Merger; (iii) subject to specified materiality standards, the accuracy of the representations and warranties of the other party; and (iv) compliance by the other party in all material respects with its covenants. Parent’s and Merger Sub’s obligations are also conditioned upon the absence of a material adverse effect on the Company and the absence of any burdensome condition (as defined in the Merger Agreement) imposed by any regulators as part of the regulatory approval process.

On October 3, 2023, the Company issued a Form 8-K and press release announcing the execution of the Merger Agreement and the Form 8-K is incorporated into this filing by reference. The Merger is expected to close in the first half of 2024.

The Company operates as a holding company and currently has no other business operations. Fidelity Life is an Illinois‑domiciled life insurance company that was founded in 1896. Fidelity Life markets life insurance products through independent and affiliated distributors and is licensed in the District of Columbia and all states, except New York and Wyoming. Efinancial markets life and other products for non‑affiliated insurance companies and sells life products for Fidelity Life.

The accompanying interim condensed consolidated financial statements present the accounts of the Company and subsidiaries for the three and nine months ended September 30, 2023 and at September 30, 2022 and December 31, 2022. These interim condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report in the Form 10-K for the year ended December 31, 2022. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.

Basis of Presentation

Basis of Presentation

These interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The unaudited interim condensed consolidated financial information furnished herein reflects all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. All such adjustments are of a normal recurring nature. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this report, as is permitted by such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2022, and notes thereto, included in the Form 10-K.

Use of Estimates

Use of Estimates

The preparation of interim condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The more significant estimates employed in the preparation of the interim condensed consolidated financial statements include the determination of the valuation of investments in fixed maturity, investment impairments, the valuation of deferred tax assets, future policy benefits and other policyholder liabilities.

Adopted Accounting Pronouncements

Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new guidance requires that Other-Than-Temporary Impairment (OTTI) on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through net gains (losses) on investments. The guidance also requires enhanced disclosures. In March 2022, the FASB issued ASU 2022-02 – Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructuring and Vintage Disclosure. This ASU was issued to eliminate the troubled debt restructuring recognition and measurement guidance for creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. The Company has assessed the impact of ASU 2016-13 and has established an additional for credit losses on our mortgage portfolio of $237. The tax effected amount of $187 is reflected as a beginning of year equity as a Cumulative effect adjustment from changes in accounting guidance, net of tax. The Company has also assessed fixed maturities - available-for-sale, reinsurance recoverables and commissions and agent balances and determined no additional allowance for credit losses is needed. We also adopted the required disclosures within Note 2 Investments, Note 4 Reinsurance, Note 9 Accumulated Other Comprehensive Income and Note 10 Business Segments. Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

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Investments (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Fixed Maturities

The amortized cost, gross unrealized gains, gross unrealized losses, fair value, and net of allowances for credit losses are included in accumulated other comprehensive income (AOCI) of fixed maturities available-for-sale are as follows:

	September 30, 2023
Fixed maturities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government and agencies	$	10,206	$	108	$	(715	)	$	9,599
U.S. agency mortgage-backed		7,353		15		(835	)		6,533
State and political subdivisions		76,764		12		(13,437	)		63,339
Corporate and miscellaneous		174,536		664		(19,397	)		155,803
Foreign government		130		—		(5	)		125
Residential mortgage-backed		7,249		56		(685	)		6,620
Commercial mortgage-backed		21,801		6		(2,152	)		19,655
Asset-backed		36,561		71		(2,782	)		33,850
Total fixed maturities	$	334,600	$	932	$	(40,008	)	$	295,524

	December 31, 2022
Fixed maturities	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		OTTI Losses (1)
U.S. government and agencies	$	9,258	$	349	$	(501	)	$	9,106	$	—
U.S. agency mortgage-backed		9,429		63		(614	)		8,878		—
State and political subdivisions		68,213		26		(12,015	)		56,224		—
Corporate and miscellaneous		171,283		1,473		(16,275	)		156,481		—
Foreign government		130		1		—			131		—
Residential mortgage-backed		4,912		140		(622	)		4,430		(709	)
Commercial mortgage-backed		21,374		2		(1,914	)		19,462		—
Asset-backed		47,347		5		(3,926	)		43,426		—
Total fixed maturities	$	331,946	$	2,059	$	(35,867	)	$	298,138	$	(709	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, OTTI is not presented in respect in the table above.

Schedule of Amortized Cost and Fair Value of Fixed Maturities Available-for-sale by Contractual Maturity

The amortized cost and fair value of fixed maturities available-for-sale by contractual maturity, are presented in the following table:

	September 30, 2023
	Amortized Cost		Fair Value
Due in one year or less	$	4,150	$	4,122
Due after one year through five years		39,652		37,578
Due after five years through ten years		73,284		68,163
Due after ten years		144,550		119,003
Securities not due at a single maturity date — primarily mortgage and asset-backed		72,964		66,658
Total fixed maturities	$	334,600	$	295,524

Schedule of Mortgage Loan Holdings Diversified by Geography and Property

Mortgage loan holdings are diversified by geography and property type as follows:

	September 30, 2023						December 31, 2022
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
Property Type:
Retail	$	12,997			30.5	%	$	13,866			30.6	%
Office		11,276			26.5	%		11,115			24.5	%
Industrial		7,682			18.0	%		8,138			17.9	%
Mixed use		4,860			11.4	%		5,249			11.6	%
Apartments		2,100			4.9	%		2,796			6.2	%
Medical office		2,546			6.0	%		3,053			6.7	%
Other		1,115			2.7	%		1,136			2.5	%
Gross carrying value of mortgage loans		42,576			100.0	%		45,353			100.0	%
Credit loss allowance (1)		(571	)					(83	)
Net carrying value of mortgage loans	$	42,005					$	45,270

	September 30, 2023						December 31, 2022
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
U.S. Region:
West South Central	$	10,779			25.2	%	$	11,608			25.6	%
East North Central		12,457			29.3	%		12,320			27.2	%
South Atlantic		8,153			19.1	%		8,815			19.4	%
West North Central		2,477			5.8	%		2,871			6.3	%
Mountain		2,626			6.2	%		2,824			6.2	%
Middle Atlantic		2,072			4.9	%		2,310			5.1	%
East South Central		3,558			8.4	%		3,661			8.1	%
New England		—			0.0	%		34			0.1	%
Pacific		454			1.1	%		910			2.0	%
Gross carrying value of mortgage loans		42,576			100.0	%		45,353			100.0	%
Credit loss allowance (1)		(571	)					(83	)
Net carrying value of mortgage loans	$	42,005					$	45,270

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses.

Schedule of Changes in Valuation Allowance for Commercial Mortgage Loans

The changes in the allowances for credit losses (includes $237 related to adoption of ASU 2016-13) for commercial mortgage loans were as follows:

	Nine Months Ended September 30, 2023		Year Ended December 31, 2022
Beginning balance	$	83	$	69
Net increase in allowances for credit losses related to change in accounting standards (See Note 1)		237		—
Net (decrease) increase in allowances for credit losses		251		14
Ending balance	$	571	$	83

Schedule of Net Investment Income

The sources of net investment income are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income from:
Fixed maturities	$	3,684		$	3,763		$	11,690		$	10,385
Policyholder loans		88			90			268			272
Mortgage loans		509			594			1,815			1,830
Cash, cash equivalents and restricted cash		47			32			110			34
Gross investment income		4,328			4,479			13,883			12,521
Investment expenses		(318	)		(353	)		(1,037	)		(1,131	)
Net investment income	$	4,010		$	4,126		$	12,846		$	11,390

Schedule of Net Investment Gains (Losses)

The sources of net investment gains (losses) are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Investment (losses) gains from sales:
Fixed maturities	$	(373	)	$	(61	)	$	(462	)	$	(191	)
Mortgage loans		56			(134	)		56			(80	)
Gains and losses from sales		(317	)		(195	)		(406	)		(271	)
Valuation change of other invested assets - (decline) appreciation:		(271	)		(1,087	)		(1,080	)		779
Change in allowance for credit losses (1)		(295	)		(288	)		(273	)		(419	)
Total net gains (losses) on investments	$	(883	)	$	(1,570	)	$	(1,759	)	$	89

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

Rollforward of Cumulative Credit Losses on Fixed Maturities

A roll-forward of the cumulative credit losses on fixed maturities are as follows:

	September 30,		December 31,
	2023		2022
Beginning balance of credit losses on fixed maturities	$	1,263	$	837
Additional credit loss not previously recognized (1)		—		394
Additional credit loss that was previously recognized (1)		21		48
Reduction of credit losses related to securities sold during period		—		(16	)
Ending balance of credit losses on fixed maturities	$	1,284	$	1,263

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, additional credit losses for OTTI is now presented as an additional credit loss.

Fair Value and Gross Unrealized Losses for Fixed Maturities Available-for-sale in Continuous Gross Unrealized Loss Position

The Company’s fair value and gross unrealized losses for fixed maturities available-for-sale, aggregated by investment category and length of time that individual securities have been in a continuous gross unrealized loss position are as follows:

	12 months or less					Longer than 12 months					Total
September 30, 2023	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. government and agencies	$	977	$	(22	)	$	2,527	$	(693	)	$	3,504	$	(715	)
U.S. agency mortgage-backed		780		(23	)		4,712		(812	)		5,492		(835	)
State and political subdivisions		19,634		(1,108	)		42,635		(12,329	)		62,269		(13,437	)
Corporate and miscellaneous		46,767		(3,546	)		64,833		(15,851	)		111,600		(19,397	)
Foreign Government		125		(5	)		—		—			125		(5	)
Residential mortgage-backed		3,009		(69	)		2,786		(616	)		5,795		(685	)
Commercial mortgage-backed		1,711		(61	)		17,499		(2,091	)		19,210		(2,152	)
Asset-backed		5,262		(417	)		26,143		(2,365	)		31,405		(2,782	)
Total fixed maturities	$	78,265	$	(5,251	)	$	161,135	$	(34,757	)	$	239,400	$	(40,008	)

	12 months or less					Longer than 12 months					Total
December 31, 2022	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
Fixed maturities
U.S. agency mortgage-backed	$	2,722	$	(501	)	$	—	$	—		$	2,722	$	(501	)
State and political subdivisions		5,297		(578	)		216		(36	)		5,513		(614	)
Corporate and miscellaneous		38,252		(7,036	)		15,057		(4,979	)		53,309		(12,015	)
Foreign government		94,461		(13,479	)		8,322		(2,796	)		102,783		(16,275	)
Residential mortgage-backed		3,286		(554	)		344		(68	)		3,630		(622	)
Commercial mortgage-backed		16,218		(1,611	)		2,655		(303	)		18,873		(1,914	)
Asset-backed		20,465		(1,726	)		21,069		(2,200	)		41,534		(3,926	)
Total fixed maturities	$	180,701	$	(25,485	)	$	47,663	$	(10,382	)	$	228,364	$	(35,867	)

Schedule of Number of Fixed Maturities in Unrealized Loss Position and Percentage Investment Grade

Information and concentrations related to fixed maturities in an unrealized loss position are included below. The tables below include fixed maturities and number of securities in an unrealized loss position for greater than and less than 12 months and the percentage that were investment grade at September 30, 2023.

	Unrealized Losses 12 months or less
	Gross Unrealized Losses			Impairment is Less than 10% of Amortized Cost			Impairment is Between 10% and 20% of Amortized Cost			Impairment is Greater than 20% of Amortized Cost			Percent Investment Grade
Fixed maturities
U.S. government and agencies	$	(22	)	$	(22	)	$	—		$	—			100	%
U.S. agency mortgage-backed		(23	)		(23	)		—			—			100	%
State and political subdivisions		(1,108	)		(948	)		(160	)		—			100	%
Corporate and miscellaneous		(3,546	)		(1,607	)		(960	)		(979	)		84	%
Foreign Government		(5	)		(5	)		—			—			100	%
Residential mortgage-backed		(69	)		(69	)		—			—			75	%
Commercial mortgage-backed		(61	)		(51	)		(10	)		—			100	%
Asset-backed		(417	)		(271	)		(85	)		(61	)		100	%
Gross unrealized losses	$	(5,251	)	$	(2,996	)	$	(1,215	)	$	(1,040	)
Total number of fixed maturities	300				257			33			10

	Unrealized Losses greater than 12 months
	Gross Unrealized Losses			Impairment is Less than 10% of Amortized Cost			Impairment is Between 10% and 20% of Amortized Cost			Impairment is Greater than 20% of Amortized Cost			Percent Investment Grade
Fixed maturities
U.S. government and agencies	$	(693	)	$	(95	)	$	—		$	(598	)		100	%
U.S. agency mortgage-backed		(812	)		(44	)		(752	)		(16	)		100	%
State and political subdivisions		(12,329	)		(563	)		(1,822	)		(9,944	)		100	%
Corporate and miscellaneous		(15,851	)		(835	)		(3,348	)		(11,668	)		87	%
Residential mortgage-backed		(616	)		(56	)		(306	)		(254	)		89	%
Commercial mortgage-backed		(2,091	)		(487	)		(1,376	)		(228	)		100	%
Asset-backed		(2,365	)		(789	)		(1,172	)		(404	)		97	%
Gross unrealized losses	$	(34,757	)	$	(2,869	)	$	(8,776	)	$	(23,112	)
Total number of fixed maturities		587			145			201			241

Schedule of Gross Unrealized Losses By Unrealized Loss Position and Credit Quality

	Investment Grade		Below Investment Grade		Total
Fixed income securities with unrealized loss position less than or equal to 20% of amortized cost, net (1) (2)	$	15,251	$	604	$	15,855
Fixed income securities with unrealized loss position greater than 20% of amortized cost, net (3) (4)		23,704		449		24,153
Total unrealized losses	$	38,955	$	1,053	$	40,008

(1) Below investment grade fixed income securities include $150 that have been in an unrealized loss position for less than twelve months.

(2) Related to securities with an unrealized loss position less than 20% of amortized cost, net, the degree of which suggests that these securities do not pose a high risk of having credit losses.

(3) Below investment grade fixed income securities include $902 that have been in an unrealized loss position for a period of twelve or more consecutive months.

(4) Evaluated based on factors such as discounted cash flows and the financial condition and near-term and long-term prospects of the issue or issuer and were determined to have adequate resources to fulfill contractual obligations.

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Reinsurance (Tables)

9 Months Ended

Sep. 30, 2023

Insurance [Abstract]

Schedule of Reinsurance Recoverables

Reinsurance recoverables are as follows:

	September 30,		December 31,
	2023		2022
Ceded future policy benefits	$	192,968	$	173,904
Claims and other amounts recoverables		37,617		40,958
Ending balance	$	230,585	$	214,862

Reconciliation of Direct Premiums to Net Premiums

The reconciliation of direct insurance premiums to net insurance premiums is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Direct premiums	$	46,413		$	44,740		$	135,613		$	131,792
Assumed premiums		8,960			10,838			27,493			35,512
Ceded premiums		(31,939	)		(31,110	)		(91,591	)		(93,830	)
Net insurance premiums	$	23,434		$	24,468		$	71,515		$	73,474

The reconciliation of direct life, annuity, and health claim benefits to life, annuity, and health claim benefits as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Direct	$	34,658		$	36,963		$	93,623		$	105,673
Assumed		10,209			5,656			16,136			15,911
Ceded		(22,284	)		(25,114	)		(58,192	)		(73,962	)
Life, annuity, and health claim benefits	$	22,583		$	17,505		$	51,567		$	47,622

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Closed Block (Tables)

9 Months Ended

Sep. 30, 2023

Closed Block Disclosure [Abstract]

Schedule of Information Regarding Closed Block Liabilities (Assets) Designated to Closed Block

Information regarding the Closed Block liabilities (assets) designated to the Closed Block is as follows:

	September 30,			December 31,
Closed Block Liabilities	2023			2022
Future policy benefits and claims	$	29,216		$	29,382
Policyholder account balances		6,567			6,731
Other policyholder liabilities		3,436			5,298
Policyholder dividend obligations		9,544			9,515
Other liabilities		38			586
Total Closed Block liabilities		48,801			51,512
Assets Designated to the Closed Block
Investments:
Fixed maturities - available-for-sale (amortized cost $41,673 and    $40,522, respectively)		36,464			36,625
Policyholder loans		1,238			1,132
Total investments		37,702			37,757
Cash and Cash Equivalents		365			—
Premiums due and uncollected		382			1,852
Accrued investment income		490			457
Reinsurance recoverables		10,834			13,885
Deferred income tax assets, net		4,712			4,263
Total assets designated to the Closed Block		54,485			58,214
Excess of Closed Block assets over liabilities		5,684			6,702
Amounts included in accumulated other comprehensive income:
Unrealized investment loss (gains), net of income tax		(4,116	)		(3,079	)
Total amounts included in accumulated other comprehensive income		(4,116	)		(3,079	)
Maximum future earnings and accumulated other comprehensive income to    be recognized from Closed Block assets and liabilities (includes excess    assets of $11,058 and $10,792, respectively)	$	(9,800	)	$	(9,781	)

Schedule of Policyholder Dividend Obligation

	September 30,		December 31,
Policyholder Dividend Obligations	2023		2022
Beginning balance	$	9,515	$	12,669
Impact from earnings allocable to policyholder dividend obligations		29		(165	)
Change in net unrealized investment gains (losses) allocated to policyholder    dividend obligations		—		(2,989	)
Ending balance	$	9,544	$	9,515

Schedule of Information Regarding Closed Block Revenues and Expenses

Information regarding the Closed Block revenues and expenses is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023		2022
Revenues
Net insurance premiums	$	769		$	329		$	3,351	$	2,357
Net investment income		456			375			1,361		1,157
Net Realized Investment Gains (Losses)		5			—			8		—
Total revenues		1,230			704			4,720		3,514
Benefits and expenses
Life and annuity benefits - including policyholder dividends    of $452, $498, $1,474 and $1,102, respectively		1,353			1,072			4,258		3,588
Interest credited to policyholder account balances		42			44			124		128
Operating costs and expenses		(38	)		(356	)		314		(482	)
Total expenses		1,357			760			4,696		3,234
Revenues, net of expenses before provision for income tax    expense (benefit)		(127	)		(56	)		24		280
Income tax expense (benefit)		(27	)		(12	)		5		59
Revenues, net of expenses and provision for income tax    expense (benefit)	$	(100	)	$	(44	)	$	19	$	221

Schedule of Amortized Cost and Fair Value of Closed Block Fixed Maturity Portfolio by Contractual Maturity

The following table presents the amortized cost and fair value of the Closed Block fixed maturities portfolio by contractual maturity at September 30, 2023. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

	Amortized Cost		Fair Value
Due in one year or less	$	1,100	$	1,093
Due after one year through five years		6,615		6,482
Due after five years through ten years		6,836		6,374
Due after ten years		23,683		19,193
Securities not due at a single maturity date — primarily mortgage and asset-    backed		3,439		3,322
Total fixed maturities	$	41,673	$	36,464

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Assets and Liabilities Measured at Fair Value (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Summary of Assets Carried at Fair Value on Recurring and Non-recurring Basis

The Company’s assets that are carried at fair value on a recurring and non-recurring basis, by fair value hierarchy level, are as follows:

September 30, 2023	Level 1		Level 2		Level 3		Total Fair Value
Recurring fair value measurements
Financial instruments recorded as assets:
Fixed maturities
U.S. government and agencies	$	—	$	9,599	$	—	$	9,599
U.S. agency mortgage-backed		—		6,533		—		6,533
State and political subdivisions		—		62,895		444		63,339
Corporate and miscellaneous		2,231		127,012		26,560		155,803
Foreign government		—		125		—		125
Residential mortgage-backed		—		6,620		—		6,620
Commercial mortgage-backed		—		19,655		—		19,655
Asset-backed		—		30,512		3,338		33,850
Total fixed maturities		2,231		262,951		30,342		295,524
Total recurring assets	$	2,231	$	262,951	$	30,342	$	295,524

December 31, 2022	Level 1		Level 2		Level 3		Total Fair Value
Recurring fair value measurements
Financial instruments recorded as assets:
Fixed maturities
U.S. government and agencies	$	—	$	9,106	$	—	$	9,106
U.S. agency mortgage-backed		—		8,878		—		8,878
State and political subdivisions		—		55,782		442		56,224
Corporate and miscellaneous		2,847		126,644		26,990		156,481
Foreign government		—		131		—		131
Residential mortgage-backed		—		4,430		—		4,430
Commercial mortgage-backed		—		19,462		—		19,462
Asset-backed		—		40,293		3,133		43,426
Total fixed maturities		2,847		264,726		30,565		298,138
Total recurring assets	$	2,847	$	264,726	$	30,565	$	298,138

Summary of Changes in Fair Value of Level 3 Assets Held at Fair Value on Recurring Basis

A summary of changes in fair value of Level 3 assets held at fair value on a recurring basis is as follows:

			Total gains (losses) included in:
	Balance at January 1, 2023		Net Income (loss)		OCI			Purchases		Sales			Settlements		Net Transfers		Balance at September 30, 2023
Financial Assets
Fixed maturities
State and political subdivision	$	442	$	—	$	2		$	—	$	—		$	—	$	—	$	444
Corporate and miscellaneous		26,991		2		(31	)		2,449		(2,989	)		—		138		26,560
Asset-backed		3,133		90		80			145		(610	)		—		500		3,338
Total assets	$	30,566	$	92	$	51		$	2,594	$	(3,599	)	$	—	$	638	$	30,342

			Total gains (losses) included in:
	Balance at January 1, 2022		Net Income			OCI			Purchases		Sales			Settlements		Net Transfers		Balance at December 31, 2022
Financial Assets
Fixed maturities
State and political subdivisions	$	498	$	—		$	(56	)	$	—	$	—		$	—	$	—	$	442
Corporate and miscellaneous		24,740		2			(398	)		3,198		(2,582	)		1,468		563		26,991
Asset-backed		2,838		(122	)		(325	)		1,907		(1,260	)		—		95		3,133
Total assets	$	28,076	$	(120	)	$	(779	)	$	5,105	$	(3,842	)	$	1,468	$	658	$	30,566

Summary of Carrying Amount and Estimated Fair Values of Financial Instruments not Measured at Fair Value

The carrying amount and estimated fair values of the Company’s financial instruments that are not measured at fair value on the Interim Condensed Consolidated Balance Sheets are as follows:

			Estimated Fair Value
September 30, 2023	Carrying Value		Level 1		Level 2		Level 3		Total
Financial instruments recorded as assets:
Mortgage loans	$	42,005	$	—	$	—	$	38,074	$	38,074
Policyholder loans	$	7,062	$	—	$	—	$	8,136	$	8,136
Financial instruments recorded as liabilities:
Future policy benefits, excluding term life reserves	$	15,776	$	—	$	—	$	14,511	$	14,511
Long/short-term debt	$	46,483	$	—	$	—	$	47,762	$	47,762
Policyholder account balances	$	72,245	$	—	$	—	$	65,459	$	65,459

			Estimated Fair Value
December 31, 2022	Carrying Value		Level 1		Level 2		Level 3		Total
Financial instruments recorded as assets:
Mortgage loans	$	45,270	$	—	$	—	$	41,622	$	41,622
Policyholder loans	$	6,699	$	—	$	—	$	7,722	$	7,722
Financial instruments recorded    as liabilities:
Future policy benefits, excluding term    life reserves	$	16,555	$	—	$	—	$	15,192	$	15,192
Long/short-term debt	$	37,189	$	—	$	—	$	36,763	$	36,763
Policyholder account balances	$	77,443	$	—	$	—	$	70,157	$	70,157

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Long and Short-Term Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long Term and Short Term Debt Pay Back

At September 30, 2023, the Company expects to pay back the aggregate amounts as presented in the following table.

	September 30, 2023
Due in one year or less	$	9,172
Due after one year through two years		6,328
Due after two years through three years		5,891
Due after three years through four years		5,493
Due after four years through five years		5,014
Due after five years		38,411
Less discount		(23,826	)
Total long/short-term debt	$	46,483

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Accumulated Other Comprehensive (Loss) Income (Tables)

9 Months Ended

Sep. 30, 2023

Equity, Attributable to Parent [Abstract]

Changes in Accumulated Other Comprehensive (Loss) Income, Net of Taxes

Changes in accumulated other comprehensive (loss) income, net of taxes are as follows:

	2023								2022
	Net Unrealized Gains (Losses) on Investments with Credit Losses		Net Unrealized Gains (Losses) on Other Investments			Total			Net Unrealized Gains (Losses) on Investments with Credit Losses		Net Unrealized Gains (Losses) on Other Investments			Total
Balance at beginning of year	$	362	$	(30,534	)	$	(30,172	)	$	362	$	10,567		$	10,929
Third Quarter
Other comprehensive income (loss)
Unrealized holding (losses) gains from changes in the market value of securities		—		(10,166	)		(10,166	)		—		(15,424	)		(15,424	)
Impact on policy benefit liabilities of changes in market value of securities		—		340			340			—		1,545			1,545
Change in net unrealized investment (losses) gains allocated to policyholder dividend obligations		—		—			—			—		—			—
Deferred income tax (expense) benefit		—		1,744			1,744			—		2,915			2,915
Third Quarter, net		—		(8,082	)		(8,082	)		—		(10,964	)		(10,964	)
Year to Date
Other comprehensive (loss) income
Unrealized holding (losses) gains from changes in the market value of securities		—		(5,268	)		(5,268	)		—		(60,944	)		(60,944	)
Impact on policy benefit liabilities of changes in market value of securities		—		469			469			—		6,065			6,065
Change in net unrealized investment (losses) gains allocated to policyholder dividend obligations		—		—			—			—		2,989			2,989
Deferred income tax benefit (expense)		—		843			843			—		10,897			10,897
Year to Date, net		—		(3,956	)		(3,956	)		—		(40,993	)		(40,993	)
Balance at end of period	$	362	$	(34,490	)	$	(34,128	)	$	362	$	(30,426	)	$	(30,064	)

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Information

The segment results are as follows:

	Three Months Ended September 30, 2023											Three Months Ended September 30, 2022
	Insurance			Agency		Corporate & Other			Total Consolidated			Insurance			Agency			Corporate & Other			Total Consolidated
Net insurance premiums	$	23,434		$	—	$	—		$	23,434		$	24,468		$	—		$	—		$	24,468
Net investment income		3,931			—		79			4,010			3,927			—			199			4,126
Net (losses) gains on investments (1)		(883	)		—		—			(883	)		(1,100	)		—			(470	)		(1,570	)
Earned commissions		—			15,354		—			15,354			—			11,379			(112	)		11,267
Other income		274			1,472		—			1,746			144			1,259			—			1,403
Total revenues		26,756			16,826		79			43,661			27,439			12,638			(383	)		39,694
Life, annuity, and health claim benefits		23,210			—		—			23,210			18,151			—			—			18,151
Operating costs and expenses		7,914			16,564		2,277			26,755			7,957			14,110			1,066			23,133
Amortization of deferred policy acquisition    costs		3,283			—		—			3,283			4,086			—			—			4,086
Total benefits and expenses		34,407			16,564		2,277			53,248			30,194			14,110			1,066			45,370
Income (loss) before income taxes	$	(7,651	)	$	262	$	(2,198	)	$	(9,587	)	$	(2,755	)	$	(1,472	)	$	(1,449	)	$	(5,676	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

	Nine Months Ended September 30, 2023											Nine Months Ended September 30, 2022
	Insurance			Agency		Corporate & Other			Total Consolidated			Insurance			Agency			Corporate & Other			Total Consolidated
Net insurance premiums	$	71,515		$	—	$	—		$	71,515		$	73,474		$	—		$	—		$	73,474
Net investment income		12,618			—		228			12,846			10,982			—			408			11,390
Net realized investment gains (losses) (1)		(1,395	)		—		(364	)		(1,759	)		(267	)		—			356			89
Earned commissions		—			45,880		(345	)		45,535			—			33,105			(313	)		32,792
Other income		804			4,079		—			4,883			419			3,773			—			4,192
Total revenues		83,542			49,959		(481	)		133,020			84,608			36,878			451			121,937
Life, annuity, and health claim benefits		53,567			—		—			53,567			49,722			—			—			49,722
Operating costs and expenses		23,843			48,636		5,760			78,239			25,143			42,573			5,143			72,859
Amortization of deferred policy    acquisition costs		9,913			—		—			9,913			13,237			—			—			13,237
Total benefits and expenses		87,323			48,636		5,760			141,719			88,102			42,573			5,143			135,818
(Loss) income before income tax	$	(3,781	)	$	1,323	$	(6,241	)	$	(8,699	)	$	(3,494	)	$	(5,695	)	$	(4,692	)	$	(13,881	)

(1) Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

	September 30, 2023								December 31, 2022
	Insurance		Agency		Corporate & Other		Total Consolidated		Insurance		Agency		Corporate & Other		Total Consolidated
Investments and cash	$	351,240	$	800	$	2,979	$	355,019	$	358,620	$	1,094	$	3,862	$	363,576
Commissions and agent balances		8,550		41,865		—		50,415		4,751		30,015		—		34,766
Deferred policy acquisition costs		88,171		—		—		88,171		90,189		—		—		90,189
Intangible assets		—		1,635		—		1,635		—		1,635		—		1,635
Reinsurance recoverables net		230,585		—		—		230,585		214,862		—		—		214,862
Deferred income tax assets, net		18,361		—		13,642		32,003		13,489		—		14,948		28,437
Other		28,635		9,068		654		38,357		26,800		5,869		3,944		36,613
Total assets	$	725,542	$	53,368	$	17,275	$	796,185	$	708,711	$	38,613	$	22,754	$	770,078

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Aug. 07, 2019	Sep. 30, 2023	Oct. 03, 2023	Dec. 31, 2022	Sep. 30, 2022
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle, accounting standards update, adopted [true false]		true
Common stock acquired by parent		$ 15		$ 15
Accounting Standards Update [Extensible Enumeration]		Accounting Standards Update 2016-13 [Member]
Equity, tax effected amount		$ 99,323		$ 111,343	$ 118,815
Additional credit losses on mortgage portfolio		237
Subsequent event [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Common stock outstanding converted into right to receive in cash			$ 11.43
Parent [Member] | Subsequent event [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Common stock acquired by parent			$ 170,000
Mortgage Loans
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Additional credit losses on mortgage portfolio		237
Cumulative Effect Adjustment from Changes in Accounting Guidance, Net of Tax
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Equity, tax effected amount		$ 187
Initial Public Offering
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Common stock issued	14,875,000
Common stock per share	$ 10

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Investments - Schedule of Fixed Maturities (Details) - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		$ 334,600	$ 331,946
Fixed maturities, available-for-sale, Unrealized Gains		932	2,059
Fixed maturities, available-for-sale, Unrealized Losses		(40,008)	(35,867)
Fixed maturities, available-for-sale, Fair Value		295,524	298,138
Fixed maturities, available-for-sale, OTTI Losses	[1]		(709)
U.S. Government and Agencies
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		10,206	9,258
Fixed maturities, available-for-sale, Unrealized Gains		108	349
Fixed maturities, available-for-sale, Unrealized Losses		(715)	(501)
Fixed maturities, available-for-sale, Fair Value		9,599	9,106
U.S. Agency Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		7,353	9,429
Fixed maturities, available-for-sale, Unrealized Gains		15	63
Fixed maturities, available-for-sale, Unrealized Losses		(835)	(614)
Fixed maturities, available-for-sale, Fair Value		6,533	8,878
State and Political Subdivisions
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		76,764	68,213
Fixed maturities, available-for-sale, Unrealized Gains		12	26
Fixed maturities, available-for-sale, Unrealized Losses		(13,437)	(12,015)
Fixed maturities, available-for-sale, Fair Value		63,339	56,224
Corporate and Miscellaneous
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		174,536	171,283
Fixed maturities, available-for-sale, Unrealized Gains		664	1,473
Fixed maturities, available-for-sale, Unrealized Losses		(19,397)	(16,275)
Fixed maturities, available-for-sale, Fair Value		155,803	156,481
Foreign Government
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		130	130
Fixed maturities, available-for-sale, Unrealized Gains			1
Fixed maturities, available-for-sale, Unrealized Losses		(5)
Fixed maturities, available-for-sale, Fair Value		125	131
Residential Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		7,249	4,912
Fixed maturities, available-for-sale, Unrealized Gains		56	140
Fixed maturities, available-for-sale, Unrealized Losses		(685)	(622)
Fixed maturities, available-for-sale, Fair Value		6,620	4,430
Fixed maturities, available-for-sale, OTTI Losses	[1]		(709)
Commercial Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		21,801	21,374
Fixed maturities, available-for-sale, Unrealized Gains		6	2
Fixed maturities, available-for-sale, Unrealized Losses		(2,152)	(1,914)
Fixed maturities, available-for-sale, Fair Value		19,655	19,462
Asset-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturities, available-for-sale, Amortized Cost		36,561	47,347
Fixed maturities, available-for-sale, Unrealized Gains		71	5
Fixed maturities, available-for-sale, Unrealized Losses		(2,782)	(3,926)
Fixed maturities, available-for-sale, Fair Value		$ 33,850	$ 43,426

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, OTTI is not presented in respect in the table above.

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Investments - Schedule of Amortized Cost and Fair Value of Fixed Maturities Available-for-sale by Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Due in one year or less, Amortized Cost	$ 4,150
Due after one year through five years, Amortized Cost	39,652
Due after five years through ten years, Amortized Cost	73,284
Due after ten years, Amortized Cost	144,550
Securities not due at a single maturity date - primarily mortgage and asset-backed, Amortized Cost	72,964
Fixed maturities, available-for-sale, Amortized Cost	334,600	$ 331,946
Due in one year or less, Fair Value	4,122
Due after one year through five years, Fair Value	37,578
Due after five years through ten years, Fair Value	68,163
Due after ten years, Fair Value	119,003
Securities not due at a single maturity date -primarily mortgage and asset-backed, Fair Value	66,658
Total fixed maturities, Fair Value	$ 295,524	$ 298,138

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Investments - Additional Information (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Loan Investment	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) Loan
Schedule Of Investments [Line Items]
Commitments to investment in available for sale securities	$ 0		$ 0		$ 1,290,000
Number of investment instruments | Investment			35
Number of mortgage loan | Loan			319
Additional valuation allowance on mortgage portfolio			$ 237,000
Accounting Standards Update [Extensible Enumeration]			Accounting Standards Update 2016-13 [Member]
Average loan balance			$ 133,000
Maximum exposure related to a single loan			600,000
New mortgage loans purchased			$ 964,000	$ 3,965,000
Number of mortgage loans in restructured status | Loan			2		3
Total carrying value of mortgage loans in restructured status	358,000		$ 358,000		$ 692,000
Impairments for mortgage loans	1,000	$ 0			0
Mortgage loans, nonaccrual status	0		0		0
Commitments to investment in mortgage loans	3,023,000		3,023,000		2,575,000
Gross unrealized losses	40,008,000		$ 40,008,000		$ 35,867,000
Minimum
Schedule Of Investments [Line Items]
Commercial mortgage loan ownership percent			0.60%
Maximum
Schedule Of Investments [Line Items]
Commercial mortgage loan ownership percent			30.00%
Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio			100.00%		100.00%
Mortgage Loans Receivable | Credit Concentration Risk | Investment Grade Securities
Schedule Of Investments [Line Items]
Fixed maturities portfolio			96.20%		95.10%
Fixed Maturities
Schedule Of Investments [Line Items]
Deposit with governmental authorities	$ 2,486,000		$ 2,486,000		$ 2,680,000

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Investments - Schedule of Mortgage Loan Holdings Diversified by Geography and Property (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Schedule Of Investments [Line Items]
Credit loss allowance		$ (571)	$ (83)	$ (69)
Net carrying value of mortgage loans		$ 42,005	$ 45,270
Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		100.00%	100.00%
Mortgage Loans Receivable | Geographic Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		100.00%	100.00%
Mortgage Loans Receivable | Geographic Concentration Risk | West South Central
Schedule Of Investments [Line Items]
Fixed maturities portfolio		25.20%	25.60%
Mortgage Loans Receivable | Geographic Concentration Risk | East North Central
Schedule Of Investments [Line Items]
Fixed maturities portfolio		29.30%	27.20%
Mortgage Loans Receivable | Geographic Concentration Risk | South Atlantic
Schedule Of Investments [Line Items]
Fixed maturities portfolio		19.10%	19.40%
Mortgage Loans Receivable | Geographic Concentration Risk | West North Central
Schedule Of Investments [Line Items]
Fixed maturities portfolio		5.80%	6.30%
Mortgage Loans Receivable | Geographic Concentration Risk | Mountain
Schedule Of Investments [Line Items]
Fixed maturities portfolio		6.20%	6.20%
Mortgage Loans Receivable | Geographic Concentration Risk | Middle Atlantic
Schedule Of Investments [Line Items]
Fixed maturities portfolio		4.90%	5.10%
Mortgage Loans Receivable | Geographic Concentration Risk | East South Central
Schedule Of Investments [Line Items]
Fixed maturities portfolio		8.40%	8.10%
Mortgage Loans Receivable | Geographic Concentration Risk | New England
Schedule Of Investments [Line Items]
Fixed maturities portfolio		0.00%	0.10%
Mortgage Loans Receivable | Geographic Concentration Risk | Pacific
Schedule Of Investments [Line Items]
Fixed maturities portfolio		1.10%	2.00%
Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 42,576	$ 45,353
Credit loss allowance	[1]	(571)	(83)
Net carrying value of mortgage loans		42,005	45,270
Mortgage Loans | West South Central
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		10,779	11,608
Mortgage Loans | East North Central
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		12,457	12,320
Mortgage Loans | South Atlantic
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		8,153	8,815
Mortgage Loans | West North Central
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		2,477	2,871
Mortgage Loans | Mountain
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		2,626	2,824
Mortgage Loans | Middle Atlantic
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		2,072	2,310
Mortgage Loans | East South Central
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		3,558	3,661
Mortgage Loans | New England
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans			34
Mortgage Loans | Pacific
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 454	$ 910
Retail | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		30.50%	30.60%
Retail | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 12,997	$ 13,866
Office | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		26.50%	24.50%
Office | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 11,276	$ 11,115
Industrial | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		18.00%	17.90%
Industrial | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 7,682	$ 8,138
Mixed Use | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		11.40%	11.60%
Mixed Use | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 4,860	$ 5,249
Apartments | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		4.90%	6.20%
Apartments | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 2,100	$ 2,796
Medical Office | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		6.00%	6.70%
Medical Office | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 2,546	$ 3,053
Other | Mortgage Loans Receivable | Credit Concentration Risk
Schedule Of Investments [Line Items]
Fixed maturities portfolio		2.70%	2.50%
Other | Mortgage Loans
Schedule Of Investments [Line Items]
Gross carrying value of mortgage loans		$ 1,115	$ 1,136

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior valuation allowance is now presented as an allowance for expected credit losses

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Investments - Schedule of Changes in Valuation Allowance for Commercial Mortgage Loans (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Beginning balance	$ 83	$ 69
Net increase in allowances for credit losses related to change in accounting standards (See Note 1)	$ 237
Accounting Standards Update [Extensible Enumeration]	Accounting Standards Update 2016-13 [Member]
Net (decrease) increase in allowances for credit losses	$ (251)	14
Ending balance	$ 571	$ 83

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Investments - Schedule of Net Investment Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Gross investment income	$ 4,328	$ 4,479	$ 13,883	$ 12,521
Investment expenses	(318)	(353)	(1,037)	(1,131)
Net investment income	4,010	4,126	12,846	11,390
Fixed Maturities
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Interest	3,684	3,763	11,690	10,385
Policyholder Loans
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Interest	88	90	268	272
Mortgage Loans
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Interest	509	594	1,815	1,830
Cash and Cash Equivalents and Restricted Cash
Schedule Of Investment Income Reported Amounts By Category [Line Items]
Interest	$ 47	$ 32	$ 110	$ 34

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Investments - Schedule of Net Investment Gains (Losses) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items]
Gains and losses from sales		$ (317)	$ (195)	$ (406)	$ (271)
Change in allowance for credit losses	[1]	(295)	(288)	(273)	(419)
Total net gains (losses) on investments		(883)	(1,570)	(1,759)	89
Fixed Maturities
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items]
Gains and losses from sales		(373)	(61)	(462)	(191)
Mortgage Loans
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items]
Gains and losses from sales		56	(134)	56	(80)
Other Invested Assets
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items]
Valuation change of other invested assets - (decline) appreciation:		$ (271)	$ (1,087)	$ (1,080)	$ 779

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, prior change in valuation allowance is now presented as a change in allowance for credit losses.

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Investments - Rollforward of Cumulative Credit Losses on Fixed Maturities (Details) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Sep. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Beginning balance of credit losses on fixed maturities		$ 1,263	$ 837
Additional credit loss not previously recognized	[1]		394
Additional credit loss that was previously recognized	[1]	21	48
Reduction of credit losses related to securities sold during period			(16)
Ending balance of credit losses on fixed maturities		$ 1,284	$ 1,263

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, additional credit losses for OTTI is now presented as an additional credit loss.

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Investments - Fair Value and Gross Unrealized Losses for Fixed Maturities Available-for-sale in Continuous Gross Unrealized Loss Position (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	$ 78,265	$ 180,701
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(5,251)	(25,485)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	161,135	47,663
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(34,757)	(10,382)
Fixed maturity securities, Total, Estimated Fair Value	239,400	228,364
Fixed maturity securities, Total, Gross Unrealized Losses	(40,008)	(35,867)
U.S. Government and Agencies
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	977
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(22)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	2,527
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(693)
Fixed maturity securities, Total, Estimated Fair Value	3,504
Fixed maturity securities, Total, Gross Unrealized Losses	(715)
U.S. Agency Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	780	2,722
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(23)	(501)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	4,712
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(812)
Fixed maturity securities, Total, Estimated Fair Value	5,492	2,722
Fixed maturity securities, Total, Gross Unrealized Losses	(835)	(501)
State and Political Subdivisions
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	19,634	5,297
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(1,108)	(578)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	42,635	216
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(12,329)	(36)
Fixed maturity securities, Total, Estimated Fair Value	62,269	5,513
Fixed maturity securities, Total, Gross Unrealized Losses	(13,437)	(614)
Corporate and Miscellaneous
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	46,767	38,252
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(3,546)	(7,036)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	64,833	15,057
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(15,851)	(4,979)
Fixed maturity securities, Total, Estimated Fair Value	111,600	53,309
Fixed maturity securities, Total, Gross Unrealized Losses	(19,397)	(12,015)
Foreign Government
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	125	94,461
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(5)	(13,479)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value		8,322
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses		(2,796)
Fixed maturity securities, Total, Estimated Fair Value	125	102,783
Fixed maturity securities, Total, Gross Unrealized Losses	(5)	(16,275)
Residential Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	3,009	3,286
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(69)	(554)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	2,786	344
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(616)	(68)
Fixed maturity securities, Total, Estimated Fair Value	5,795	3,630
Fixed maturity securities, Total, Gross Unrealized Losses	(685)	(622)
Commercial Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	1,711	16,218
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(61)	(1,611)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	17,499	2,655
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(2,091)	(303)
Fixed maturity securities, Total, Estimated Fair Value	19,210	18,873
Fixed maturity securities, Total, Gross Unrealized Losses	(2,152)	(1,914)
Asset-backed
Schedule Of Available For Sale Securities [Line Items]
Fixed maturity securities, 12 months or less, Estimated Fair Value	5,262	20,465
Fixed maturity securities, 12 months or less, Gross Unrealized Losses	(417)	(1,726)
Fixed maturity securities, Longer than 12 months, Estimated Fair Value	26,143	21,069
Fixed maturity securities, Longer than 12 months, Gross Unrealized Losses	(2,365)	(2,200)
Fixed maturity securities, Total, Estimated Fair Value	31,405	41,534
Fixed maturity securities, Total, Gross Unrealized Losses	$ (2,782)	$ (3,926)

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Investments - Schedule of Fixed Maturities and Number of Fixed Maturities in Unrealized Loss Position and Percentage Investment Grade (Details)	Sep. 30, 2023 Security
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(5,251)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(2,996)
Unrealized Losses 12 months or less, Impairment is Between 10% and 20% of Amortized Cost	(1,215)
Unrealized Losses 12 months or less, Impairment is Greater than 20% of Amortized Cost	(1,040)
Unrealized Losses 12 months or less, Number of Fixed Maturities Total	300
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost Number of Fixed Maturities	257
Unrealized Losses 12 months or less, Impairment is Between 10% and 20% of Amortized Cost, Number of Fixed Maturities Total	33
Unrealized Losses 12 months or less, Impairment is Greater than 20% of Amortized Cost Number Fixed Maturities Total	10
Unrealized Losses greater than 12 months, Total	(34,757)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(2,869)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(8,776)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(23,112)
Unrealized Losses greater than 12 months, Number of Fixed Maturities, Total	587
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost Number of Fixed Maturities Total	145
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost Number of Fixed Maturities Total	201
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost Number of Fixed Maturities Total	241
U.S. Government and Agencies
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(22)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(22)
Unrealized Losses 12 months or less, Percent Investment Grade	100.00%
Unrealized Losses greater than 12 months, Total	(693)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(95)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(598)
Unrealized Losses greater than 12 months, Percent Investment Grade	100.00%
U.S. Agency Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(23)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(23)
Unrealized Losses 12 months or less, Percent Investment Grade	100.00%
Unrealized Losses greater than 12 months, Total	(812)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(44)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(752)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(16)
Unrealized Losses greater than 12 months, Percent Investment Grade	100.00%
State and Political Subdivisions
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(1,108)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(948)
Unrealized Losses 12 months or less, Impairment is Between 10% and 20% of Amortized Cost	(160)
Unrealized Losses 12 months or less, Percent Investment Grade	100.00%
Unrealized Losses greater than 12 months, Total	(12,329)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(563)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(1,822)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(9,944)
Unrealized Losses greater than 12 months, Percent Investment Grade	100.00%
Corporate and Miscellaneous
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(3,546)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(1,607)
Unrealized Losses 12 months or less, Impairment is Between 10% and 20% of Amortized Cost	(960)
Unrealized Losses 12 months or less, Impairment is Greater than 20% of Amortized Cost	(979)
Unrealized Losses 12 months or less, Percent Investment Grade	84.00%
Unrealized Losses greater than 12 months, Total	(15,851)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(835)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(3,348)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(11,668)
Unrealized Losses greater than 12 months, Percent Investment Grade	87.00%
Foreign Government
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(5)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(5)
Unrealized Losses 12 months or less, Percent Investment Grade	100.00%
Residential Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(69)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(69)
Unrealized Losses 12 months or less, Percent Investment Grade	75.00%
Unrealized Losses greater than 12 months, Total	(616)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(56)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(306)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(254)
Unrealized Losses greater than 12 months, Percent Investment Grade	89.00%
Commercial Mortgage-backed
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(61)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(51)
Unrealized Losses 12 months or less, Impairment is Between 10% and 20% of Amortized Cost	(10)
Unrealized Losses 12 months or less, Percent Investment Grade	100.00%
Unrealized Losses greater than 12 months, Total	(2,091)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(487)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(1,376)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(228)
Unrealized Losses greater than 12 months, Percent Investment Grade	100.00%
Asset-backed
Schedule Of Available For Sale Securities [Line Items]
Unrealized Losses 12 months or less, Total	(417)
Unrealized Losses 12 months or less, Impairment is Less than 10% of Amortized Cost	(271)
Unrealized Losses 12 months or less, Impairment is Between 10% and 20% of Amortized Cost	(85)
Unrealized Losses 12 months or less, Impairment is Greater than 20% of Amortized Cost	(61)
Unrealized Losses 12 months or less, Percent Investment Grade	100.00%
Unrealized Losses greater than 12 months, Total	(2,365)
Unrealized Losses greater than 12 months, Impairment is Less than 10% of Amortized Cost	(789)
Unrealized Losses greater than 12 months, Impairment is Between 10% and 20% of Amortized Cost	(1,172)
Unrealized Losses greater than 12 months, Impairment is Greater than 20% of Amortized Cost	(404)
Unrealized Losses greater than 12 months, Percent Investment Grade	97.00%

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Investments - Schedule of Gross Unrealized Losses By Unrealized Loss Position and Credit Quality (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale [Line Items]
Total unrealized losses	$ 40,008	$ 35,867
Investment Grade
Debt Securities, Available-for-Sale [Line Items]
Fixed income securities with unrealized loss position less than or equal to 20% of amortized cost, net	15,251
Fixed income securities with unrealized loss position greater than 20% of amortized cost, net	23,704
Total unrealized losses	38,955
Below Investment Grade Fixed Income Securities
Debt Securities, Available-for-Sale [Line Items]
Fixed income securities with unrealized loss position less than or equal to 20% of amortized cost, net	604
Fixed income securities with unrealized loss position greater than 20% of amortized cost, net	449
Total unrealized losses	1,053
Fixed Income Securities
Debt Securities, Available-for-Sale [Line Items]
Fixed income securities with unrealized loss position less than or equal to 20% of amortized cost, net	15,855
Fixed income securities with unrealized loss position greater than 20% of amortized cost, net	24,153
Total unrealized losses	$ 40,008

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Investments - Schedule of Gross Unrealized Losses By Unrealized Loss Position and Credit Quality (Parenthetical) (Details) - Below Investment Grade Fixed Income Securities $ in Thousands	Sep. 30, 2023 USD ($)
Debt Securities, Available-for-Sale [Line Items]
Unrealized losses having loss of less than or equal to twenty percent	$ 150
Unrealized losses having loss of greater than twenty percent	$ 902

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Policy Liabilities - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Liability For Future Policy Benefit By Product Segment [Line Items]
Percentage of participating life insurance in force	2.50%	3.90%
Structured Settlement Contract
Liability For Future Policy Benefit By Product Segment [Line Items]
Policy liability	$ 12,198	$ 13,118
Policy liability that are life contingent	9,499	10,097
Structured Settlement Annuity Deficiency
Liability For Future Policy Benefit By Product Segment [Line Items]
Policy liability	$ 0	$ 470

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Reinsurance - Schedule of Reinsurance Recoverables (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Insurance [Abstract]
Ceded future policy benefits	$ 192,968	$ 173,904
Claims and other amounts recoverables	37,617	40,958
Ending balance	$ 230,585	$ 214,862

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Reinsurance - Schedule of Reconciliation of Direct Premiums to Net Premiums (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Insurance [Abstract]
Direct premiums	$ 46,413	$ 44,740	$ 135,613	$ 131,792
Assumed premiums	8,960	10,838	27,493	35,512
Ceded premiums	(31,939)	(31,110)	(91,591)	(93,830)
Net insurance premiums	$ 23,434	$ 24,468	$ 71,515	$ 73,474

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Reinsurance - Schedule of Reconciliation of Direct Life, Annuity, And Health Claim Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Insurance [Abstract]
Direct	$ 34,658	$ 36,963	$ 93,623	$ 105,673
Assumed	10,209	5,656	16,136	15,911
Ceded	(22,284)	(25,114)	(58,192)	(73,962)
Life, annuity, and health claim benefits	$ 22,583	$ 17,505	$ 51,567	$ 47,622

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Reinsurance - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Jan. 01, 2022
Effects Of Reinsurance [Line Items]
Transaction to initial ceded premium						$ 6,500
Ceded reserve amount	$ 657		$ 657
Fixed-Rate Annuity | Policyholder Account Balances
Effects Of Reinsurance [Line Items]
Reserves related to fixed-rate annuity deposits	64,095		64,095		$ 69,070
Other Income
Effects Of Reinsurance [Line Items]
Net policy charges on universal life products	$ 41	$ 44	$ 135	$ 136

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Closed Block - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021	Oct. 31, 2011
Closed Block Disclosure [Abstract]
Assets transferred from closed block				$ 4,397
Additional closed block funding and accrued interest	$ 11,058	$ 10,792
Policyholder dividend obligation	$ 9,544	$ 9,515	$ 12,669

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Closed Block - Schedule of Information Regarding Closed Block Liabilities (Assets) Designated to Closed Block (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Closed Block Liabilities
Future policy benefits and claims	$ 29,216	$ 29,382
Policyholder account balances	6,567	6,731
Other policyholder liabilities	3,436	5,298
Policyholder dividend obligation	9,544	9,515	$ 12,669
Other liabilities	38	586
Total Closed Block liabilities	48,801	51,512
Investments:
Fixed maturities - available-for-sale (amortized cost $41,673 and $40,522, respectively)	36,464	36,625
Policyholder loans	1,238	1,132
Total investments	37,702	37,757
Cash and Cash Equivalents	365
Premiums due and uncollected	382	1,852
Accrued investment income	490	457
Reinsurance recoverables	10,834	13,885
Deferred income tax assets, net	4,712	4,263
Total assets designated to the Closed Block	54,485	58,214
Excess of Closed Block assets over liabilities	5,684	6,702
Amounts included in accumulated other comprehensive income:
Unrealized investment loss (gains), net of income tax	(4,116)	(3,079)
Total amounts included in accumulated other comprehensive income	(4,116)	(3,079)
Maximum future earnings and accumulated other comprehensive income to be recognized from Closed Block assets and liabilities	$ (9,800)	$ (9,781)

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Closed Block - Schedule of Information Regarding Closed Block Liabilities (Assets) Designated to Closed Block (Parenthetical) (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Closed Block Disclosure [Abstract]
Fixed maturity securities available for sale amortized cost	$ 41,673	$ 40,522
Excess assets	$ 11,058	$ 10,792

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Closed Block - Schedule of Information Regarding Policyholder Dividend Obligations (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Policyholder Dividend Obligations
Beginning balance	$ 9,515	$ 12,669
Impact from earnings allocable to policyholder dividend obligations	29	(165)
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligations		(2,989)
Ending balance	$ 9,544	$ 9,515

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Closed Block - Schedule of Information Regarding Closed Block Revenues and Expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues
Net insurance premiums	$ 769	$ 329	$ 3,351	$ 2,357
Net investment income	456	375	1,361	1,157
Net Realized Investment Gains (Losses)	5		8
Total revenues	1,230	704	4,720	3,514
Benefits and expenses
Life and annuity benefits - including policyholder dividends of $452, $498, $1,474 and $1,102, respectively	1,353	1,072	4,258	3,588
Interest credited to policyholder account balances	42	44	124	128
Operating costs and expenses	(38)	(356)	314	(482)
Total expenses	1,357	760	4,696	3,234
Revenues, net of expenses before provision for income tax expense (benefit)	(127)	(56)	24	280
Income tax expense (benefit)	(27)	(12)	5	59
Revenues, net of expenses and provision for income tax expense (benefit)	$ (100)	$ (44)	$ 19	$ 221

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Closed Block - Schedule of Information Regarding Closed Block Revenues and Expenses (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Closed Block Disclosure [Abstract]
Policyholders dividends	$ 452	$ 498	$ 1,474	$ 1,102

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Closed Block - Schedule of Amortized Cost and Fair Value of Closed Block Fixed Maturity Portfolio by Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Closed Block Disclosure [Abstract]
Amortized Cost, Due in one year or less	$ 1,100
Amortized Cost, Due after one year through five years	6,615
Amortized Cost, Due after five years through ten years	6,836
Amortized Cost, Due after ten years	23,683
Amortized Cost, Securities not due at a single maturity date - primarily mortgage and asset-backed	3,439
Amortized Cost, Total fixed maturities	41,673	$ 40,522
Fair Value, Due in one year or less	1,093
Fair Value, Due after one year through five years	6,482
Fair Value, Due after five years through ten years	6,374
Fair Value, Due after ten years	19,193
Fair Value, Securities not due at a single maturity date - primarily mortgage and asset-backed	3,322
Fair Value, Total fixed maturities	$ 36,464	$ 36,625

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Assets and Liabilities Measured at Fair Value - Summary of Assets Carried at Fair Value on Recurring and Non-recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Recurring fair value measurements
Fixed maturities	$ 295,524	$ 298,138
Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	295,524	298,138
Total recurring assets	295,524	298,138
Fair Value, Measurements, Recurring | Level 1
Recurring fair value measurements
Fixed maturities	2,231	2,847
Total recurring assets	2,231	2,847
Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	262,951	264,726
Total recurring assets	262,951	264,726
Fair Value, Measurements, Recurring | Level 3
Recurring fair value measurements
Fixed maturities	30,342	30,565
Total recurring assets	30,342	30,565
U.S. Government and Agencies
Recurring fair value measurements
Fixed maturities	9,599	9,106
U.S. Government and Agencies | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	9,599	9,106
U.S. Government and Agencies | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	9,599	9,106
U.S. Agency Mortgage-backed
Recurring fair value measurements
Fixed maturities	6,533	8,878
U.S. Agency Mortgage-backed | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	6,533	8,878
U.S. Agency Mortgage-backed | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	6,533	8,878
State and Political Subdivisions
Recurring fair value measurements
Fixed maturities	63,339	56,224
State and Political Subdivisions | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	63,339	56,224
State and Political Subdivisions | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	62,895	55,782
State and Political Subdivisions | Fair Value, Measurements, Recurring | Level 3
Recurring fair value measurements
Fixed maturities	444	442
Corporate and Miscellaneous
Recurring fair value measurements
Fixed maturities	155,803	156,481
Corporate and Miscellaneous | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	155,803	156,481
Corporate and Miscellaneous | Fair Value, Measurements, Recurring | Level 1
Recurring fair value measurements
Fixed maturities	2,231	2,847
Corporate and Miscellaneous | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	127,012	126,644
Corporate and Miscellaneous | Fair Value, Measurements, Recurring | Level 3
Recurring fair value measurements
Fixed maturities	26,560	26,990
Foreign Government
Recurring fair value measurements
Fixed maturities	125	131
Foreign Government | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	125	131
Foreign Government | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	125	131
Residential Mortgage-backed
Recurring fair value measurements
Fixed maturities	6,620	4,430
Residential Mortgage-backed | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	6,620	4,430
Residential Mortgage-backed | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	6,620	4,430
Commercial Mortgage-backed
Recurring fair value measurements
Fixed maturities	19,655	19,462
Commercial Mortgage-backed | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	19,655	19,462
Commercial Mortgage-backed | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	19,655	19,462
Asset-backed
Recurring fair value measurements
Fixed maturities	33,850	43,426
Asset-backed | Fair Value, Measurements, Recurring
Recurring fair value measurements
Fixed maturities	33,850	43,426
Asset-backed | Fair Value, Measurements, Recurring | Level 2
Recurring fair value measurements
Fixed maturities	30,512	40,293
Asset-backed | Fair Value, Measurements, Recurring | Level 3
Recurring fair value measurements
Fixed maturities	$ 3,338	$ 3,133

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Assets and Liabilities Measured at Fair Value - Summary of Changes in Fair Value of Level 3 Assets Held at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Net Income (Loss)	Net Income (Loss)
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration]	OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, after Tax	OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, after Tax
Fixed Maturities, Available-for-Sale | Level 3
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Financial Assets, Beginning Balance	$ 30,566	$ 28,076
Total gains (losses) included in: Net Income (loss)	92	(120)
Total gains (losses) included in: OCI	51	(779)
Purchases	2,594	5,105
Sales	(3,599)	(3,842)
Settlements		1,468
Net Transfers	638	658
Financial Assets, Ending Balance	30,342	30,566
State and Political Subdivisions | Fixed Maturities, Available-for-Sale | Level 3
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Financial Assets, Beginning Balance	442	498
Total gains (losses) included in: OCI	2	(56)
Financial Assets, Ending Balance	444	442
Corporate and Miscellaneous | Fixed Maturities, Available-for-Sale | Level 3
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Financial Assets, Beginning Balance	26,991	24,740
Total gains (losses) included in: Net Income (loss)	2	2
Total gains (losses) included in: OCI	(31)	(398)
Purchases	2,449	3,198
Sales	(2,989)	(2,582)
Settlements		1,468
Net Transfers	138	563
Financial Assets, Ending Balance	26,560	26,991
Asset-backed | Fixed Maturities, Available-for-Sale | Level 3
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Financial Assets, Beginning Balance	3,133	2,838
Total gains (losses) included in: Net Income (loss)	90	(122)
Total gains (losses) included in: OCI	80	(325)
Purchases	145	1,907
Sales	(610)	(1,260)
Net Transfers	500	95
Financial Assets, Ending Balance	$ 3,338	$ 3,133

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Assets and Liabilities Measured at Fair Value - Additional Information (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) Investment	Dec. 31, 2022 USD ($) Investment
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of investments transferred from level 3 to level 2 | Investment	4	2
Number of investments transferred from level 2 to 3 | Investment	5	6
Mortgage loans | $	$ 42,005	$ 45,270
Second and Mezzanine Mortgages
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Mortgage loans | $	$ 974	$ 1,952

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Assets and Liabilities Measured at Fair Value - Summary of Carrying Amount and Estimated Fair Values of Financial Instruments not Measured at Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Carrying Value
Financial instruments recorded as assets:
Mortgage loans	$ 42,005	$ 45,270
Policyholder loans	7,062	6,699
Financial instruments recorded as liabilities:
Future policy benefits, excluding term life reserves	15,776	16,555
Long/short-term debt	46,483	37,189
Policyholder account balances	72,245	77,443
Estimated Fair Value
Financial instruments recorded as assets:
Mortgage loans	38,074	41,622
Policyholder loans	8,136	7,722
Financial instruments recorded as liabilities:
Future policy benefits, excluding term life reserves	14,511	15,192
Long/short-term debt	47,762	36,763
Policyholder account balances	65,459	70,157
Estimated Fair Value | Level 3
Financial instruments recorded as assets:
Mortgage loans	38,074	41,622
Policyholder loans	8,136	7,722
Financial instruments recorded as liabilities:
Future policy benefits, excluding term life reserves	14,511	15,192
Long/short-term debt	47,762	36,763
Policyholder account balances	$ 65,459	$ 70,157

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Long and Short-Term Debt - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Minimum aggregate amount advanced under arrangement	$ 46,000,000
Net advance from external party	38,618,000	$ 31,100,000
Federal Home Loan Bank of Chicago
Debt Instrument [Line Items]
Pledged assets	0	0
Outstanding borrowings	0	0
Federal Home Loan Bank of Chicago | Other Invested Assets
Debt Instrument [Line Items]
Common stock held	$ 270,000	$ 180,000

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Long and Short-Term Debt - Schedule of Long Term and Short Term Debt Pay Back (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Debt Disclosure [Abstract]
Due in one year or less	$ 9,172
Due after one year through two years	6,328
Due after two years through three years	5,891
Due after three years through four years	5,493
Due after four years through five years	5,014
Due after five years	38,411
Less discount	(23,826)
Total long/short-term debt	$ 46,483

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Accumulated Other Comprehensive (Loss) Income - Changes in Accumulated Other Comprehensive (Loss) Income, Net of Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accumulated Other Comprehensive Income Loss [Line Items]
Balance – beginning of period			$ 111,343
Other comprehensive income (loss)
Unrealized holding (losses) gains from changes in the market value of securities	$ (10,166)	$ (15,424)	(5,268)	$ (60,944)
Impact on policy benefit liabilities of changes in market value of securities	340	1,545	469	6,065
Change in net unrealized investment (losses) gains on allocated to policyholder dividend obligations				2,989
Deferred income tax (expense) benefit	1,744	2,915	843	10,897
Total other comprehensive (loss) income	(8,082)	(10,964)	(3,956)	(40,993)
Balance – end of period	99,323	118,815	99,323	118,815
Net Unrealized Gains (Losses) on Investments with Credit Losses
Accumulated Other Comprehensive Income Loss [Line Items]
Balance – beginning of period			362	362
Other comprehensive income (loss)
Balance – end of period	362	362	362	362
Net Unrealized Gains (Losses) on Other Investments
Accumulated Other Comprehensive Income Loss [Line Items]
Balance – beginning of period			(30,534)	10,567
Other comprehensive income (loss)
Unrealized holding (losses) gains from changes in the market value of securities	(10,166)	(15,424)	(5,268)	(60,944)
Impact on policy benefit liabilities of changes in market value of securities	340	1,545	469	6,065
Change in net unrealized investment (losses) gains on allocated to policyholder dividend obligations				2,989
Deferred income tax (expense) benefit	1,744	2,915	843	10,897
Total other comprehensive (loss) income	(8,082)	(10,964)	(3,956)	(40,993)
Balance – end of period	(34,490)	(30,426)	(34,490)	(30,426)
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive Income Loss [Line Items]
Balance – beginning of period	(26,046)	(19,100)	(30,172)	10,929
Other comprehensive income (loss)
Balance – end of period	$ (34,128)	$ (30,064)	$ (34,128)	$ (30,064)

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Business Segments - Additional Information (Details)	9 Months Ended
	Sep. 30, 2023 Segment
Segment Reporting [Abstract]
Number of reportable segments	3

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Business Segments - Schedule of Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2023		Sep. 30, 2022		Sep. 30, 2023		Sep. 30, 2022		Dec. 31, 2022
Segment Reporting Information [Line Items]
Net insurance premiums	$ 23,434		$ 24,468		$ 71,515		$ 73,474
Net investment income	4,010		4,126		12,846		11,390
Net (losses) gains on investments	(883)	[1]	(1,570)	[1]	(1,759)	[2]	89	[2]
Earned commissions	15,354		11,267		45,535		32,792
Other income	1,746		1,403		4,883		4,192
Total revenues	43,661		39,694		133,020		121,937
Life, annuity, and health claim benefits	23,210		18,151		53,567		49,722
Operating costs and expenses	26,755		23,133		78,239		72,859
Amortization of deferred policy acquisition costs	3,283		4,086		9,913		13,237
Total benefits and expenses	53,248		45,370		141,719		135,818
Income (loss) before income tax	(9,587)		(5,676)		(8,699)		(13,881)
Investments and cash	355,019				355,019				$ 363,576
Commissions and agent balances	50,415				50,415				34,766
Deferred policy acquisition costs	88,171				88,171				90,189
Intangible assets	1,635				1,635				1,635
Reinsurance recoverables	230,585				230,585				214,862
Deferred income tax assets, net	32,003				32,003				28,437
Other	38,357				38,357				36,613
Total assets	796,185				796,185				770,078
Operating Segments | Insurance
Segment Reporting Information [Line Items]
Net insurance premiums	23,434		24,468		71,515		73,474
Net investment income	3,931		3,927		12,618		10,982
Net (losses) gains on investments	(883)	[1]	(1,100)	[1]	(1,395)	[2]	(267)	[2]
Other income	274		144		804		419
Total revenues	26,756		27,439		83,542		84,608
Life, annuity, and health claim benefits	23,210		18,151		53,567		49,722
Operating costs and expenses	7,914		7,957		23,843		25,143
Amortization of deferred policy acquisition costs	3,283		4,086		9,913		13,237
Total benefits and expenses	34,407		30,194		87,323		88,102
Income (loss) before income tax	(7,651)		(2,755)		(3,781)		(3,494)
Investments and cash	351,240				351,240				358,620
Commissions and agent balances	8,550				8,550				4,751
Deferred policy acquisition costs	88,171				88,171				90,189
Reinsurance recoverables	230,585				230,585				214,862
Deferred income tax assets, net	18,361				18,361				13,489
Other	28,635				28,635				26,800
Total assets	725,542				725,542				708,711
Operating Segments | Agency
Segment Reporting Information [Line Items]
Earned commissions	15,354		11,379		45,880		33,105
Other income	1,472		1,259		4,079		3,773
Total revenues	16,826		12,638		49,959		36,878
Operating costs and expenses	16,564		14,110		48,636		42,573
Total benefits and expenses	16,564		14,110		48,636		42,573
Income (loss) before income tax	262		(1,472)		1,323		(5,695)
Investments and cash	800				800				1,094
Commissions and agent balances	41,865				41,865				30,015
Intangible assets	1,635				1,635				1,635
Other	9,068				9,068				5,869
Total assets	53,368				53,368				38,613
Operating Segments | Corporate & Other
Segment Reporting Information [Line Items]
Net investment income	79		199		228		408
Net (losses) gains on investments			(470)	[1]	(364)	[2]	356	[2]
Earned commissions			(112)		(345)		(313)
Total revenues	79		(383)		(481)		451
Operating costs and expenses	2,277		1,066		5,760		5,143
Total benefits and expenses	2,277		1,066		5,760		5,143
Income (loss) before income tax	(2,198)		$ (1,449)		(6,241)		$ (4,692)
Investments and cash	2,979				2,979				3,862
Deferred income tax assets, net	13,642				13,642				14,948
Other	654				654				3,944
Total assets	$ 17,275				$ 17,275				$ 22,754

[1] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.

[2] Due to the adoption of the measurement of credit losses on financial instruments accounting standard, items previously reported as OTTI, are now included in net (losses) gains on investments.