Future policy benefits and related reinsurance recoverable (Tables)

3 Months Ended

Mar. 31, 2026

Schedule Of Future Policy Benefits And Reinsurance Recoverable

Future policy benefits comprise substantially all obligations to insureds in the Company’s insurance operations. A summary of future policy benefits and reinsurance recoverable are presented below.


As of	March 31, 2026		December 31, 2025
Reinsurance recoverable
Long term care reinsurance	$	442,289	$	452,254
Other	4,448		4,466
Modco investments with Nichol International Reinsurance (S.A.C), Ltd¹	(176,942)		(183,802)
Total reinsurance recoverable	$	269,795	$	272,918

Future policy benefits
Long term care insurance	$	758,460	$	777,412
Other	4,450		4,469
Total future policy benefits	$	762,910	$	781,881

Funds held under reinsurance contracts
Funds held arrangement with Front Street Re¹	$	230,987	$	237,143

_______________

(1)The Company has a coinsurance or Modco with funds withheld arrangement with its two reinsurers. The Modco agreement with Nichol International Reinsurance (S.A.C), Ltd. (formerly known as Vista Life and Casualty Reinsurance Company) dictates that the assets held as collateral

are held with the legal right of offset to the related insurance contract liabilities. Therefore, the collateral held for this agreement is netted against the reserves under this contract. The agreement with Front Street Re does not have the legal right of offset therefore the reserves are not presented net of the collateral held, instead they are in the line item “Funds held under reinsurance contracts” in the Condensed Consolidated Statements of Financial Position.

Liability for Future Policy Benefit, Activity

The following tables summarize balances of and changes in future policy benefits reserves:


	Three months ended March 31,
Long-term care	2026		2025
Present value of expected net premiums
Beginning Balance	$	273,395	$	306,206

Beginning balance at locked-in discount rate	297,709		343,705

Effect of actual variances from expected experience	(10)		(349)
Adjusted balance	297,699		343,356
Interest accrual	1,850		1,874
Net premiums collected	(11,249)		(11,790)

Ending balance at locked-in discount rate	288,300		333,440
Effect of changes in discount rate assumptions	(25,880)		(32,689)
Ending Balance	$	262,420	$	300,751

Present value of Expected Future Policy Benefits
Beginning Balance	$	1,050,807	$	1,071,361

Beginning balance at locked-in discount rate	1,239,275		1,306,356
Change in effect in cashflow assumptions	(2,661)		—
Effect of actual variances from expected experience	1,663		4,610
Adjusted balance	1,238,277		1,310,966
Interest accrual	7,757		7,203
Benefit payments	(27,513)		(27,843)
Ending balance at locked-in discount rate	1,218,521		1,290,326
Effect of changes in discount rate assumptions	(197,641)		(217,340)
Ending Balance	$	1,020,880	$	1,072,986
Net future policy benefit reserves ¹	$	758,460	$	772,235

Less: Reinsurance recoverables, net of allowance for credit losses ²	(442,289)		(450,641)
Net future policy benefit reserves, after reinsurance recoverables	$	316,171	$	321,594

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(1)Net future policy benefit reserves excludes $4.5 million and $4.4 million as of March 31, 2026 and March 31, 2025, respectively, of Medico assumed reserves which are 100% ceded.

(2)Reinsurance recoverables, net of allowance for credit losses excludes $4.4 million of reinsurance recoverable as of March 31, 2026 and March 31, 2025, respectively.

Additional Liability, Long-Duration Insurance

The following tables provides the amount of undiscounted and discounted expected future gross premiums and expected future benefits and expenses for the LTC line of business:


As of	March 31, 2026				March 31, 2025
Long-term care	Undiscounted		Discounted¹		Undiscounted		Discounted¹

Expected future gross premiums	$	350,155	$	262,420	$	413,962	$	300,751
Benefit payments	$	1,718,620	$	1,020,880	$	1,844,288	$	1,072,986

_______________

(1)Discount was determined using the current discount rate as of March 31, 2026 and March 31, 2025.

The following table provides the weighted-average durations of and weighted-average interest rates for the liability for future policy benefits:



As of	March 31, 2026		March 31, 2025
Weighted-average duration of liability (years) at current rate	10.11		10.49
Weighted-average duration of liability (years) at original rate	12.08		12.56
Weighted-average interest rate at current rate	5.16	%	5.10	%
Weighted-average interest rate at original rate	3.11	%	3.03	%