Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2025

Basis of Presentation and Significant Accounting Policies [Abstract]

Future Adoption of New Accounting Standards

Accounting for Long-Duration Contracts. In August 2018, the FASB issued ASU No. 2018-12, Financial Services —Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (“ASU 2018-12”). This guidance (1) improves the timeliness of recognizing changes in the liability for future policy benefits and modifies the rate used to discount future cash flows, by updating the assumptions used in measuring the liability for future policy benefits for these contracts at least annually rather than establishing them at contract inception and retaining them over the life of the contracts, which will improve the timeliness of recognizing changes in the liability that are caused by deviations in experience from the assumptions, and these deviations will be recognized and reflected in the liability for future benefits as they occur, (2) improves the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts, (3) simplifies the amortization of deferred acquisition costs; amortization on a constant level basis will be used in place of a complex actuarial methodology that is in place under existing financial reporting standards, and (4) improves the effectiveness of the required disclosures, with additional disclosures required, including disaggregated rollforwards of deferred acquisition costs, liabilities for future policy benefits, market risk benefits and liability for policyholders’ account balances. ASU 2018-12 is effective for annual reporting periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025, although earlier adoption is permitted.

The Company has completed the development of the necessary actuarial models that will be used to estimate both the liability for future benefits and the amortization of deferred acquisition costs for the affected policies and is in the process of testing the models to ensure that they reflect all applicable assumptions and product parameters. This testing includes an evaluation of the components of the amounts that will be disclosed for the transition liability under ASU 2018-12 in the Company’s consolidated financial statements as of and for the year ending December 31, 2025. The Company expects its life, Medicare supplement and certain individual accident and health products to fall within the scope of this standard. The Company has selected the modified retrospective transition method, which requires the guidance to be applied as of the beginning of the earliest period presented on the financial statements, beginning on January 1, 2024 (“Transition Date”). The modified retrospective transition method generally results in applying the standard to contracts on the basis of existing carrying value as of the Transition Date. On the Transition Date, the Company calculates the ratio of expected benefits less existing carrying values to gross premiums (net premium ratio) using updated assumptions and the discount rate immediately before the Transition Date. The Company uses the net premium ratio calculated on the Transition Date (and capped at 100% if required) to calculate the liability for future policy benefits. Upon adoption, opening equity will be adjusted for the Transaction Date impacts to accumulated other comprehensive income and retained earnings and prior periods presented (2024) will be restated following ASU 2018-12. The disclosures under ASU 2018-12 will change significantly, and the impact on our consolidated financial statements is expected to be material.

Internal Use Software. In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software- Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40) (“ASU 2025-06”). This ASU was issued to improve the accounting for internal-use software under ASC 350-40. The update addresses limitations in prior guidance that did not reflect contemporary software development practices. The amendments apply to all entities that develop or acquire software for internal use and are intended to improve consistency in capitalization decisions, reduce complexity, and align accounting with real-world development processes.

Under the amendments introduced by ASU 2025-06 to ASC 350-40, entities are required to capitalize internal use software costs only when both of the following conditions are met:

Management Authorization: Management has authorized and committed to funding the software project.

Probable-to-Complete Threshold: It is probable that the project will be completed, and the software will be used to perform its intended function.

In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as “significant development uncertainty”). The two factors to consider in determining whether there is significant development uncertainty are whether:

The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing.

The entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements.

If significant development uncertainty exists, capitalization should be deferred until the uncertainty is resolved. This principles-based threshold replaces the prior reliance on development stages and introduces a more consistent and judgment-based recognition model. This clarification ensures that costs are capitalized only when the project is sufficiently stable and likely to deliver its intended functionality. The ASU is effective for public business entities for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual reporting period. Lastly, entities may choose to adopt prospectively, modified retrospectively or full retrospectively. The Company is evaluating the new guidance and any effect it will have on the Company’s consolidated financial statements.

For more information regarding accounting standards that the Company has not yet adopted, see the “Recently Issued Accounting Standards - Future Adoption of New Accounting Standards” section of Note 1 of Notes to Consolidated Financial Statements in the 2024 Annual Report.