Policyholder Contract Liabilities

12 Months Ended

Dec. 31, 2022

Insurance [Abstract]

Policyholder Contract Liabilities

POLICYHOLDER OBLIGATIONS

Policyholder Obligations at December 31, 2022 and 2021 were as follows:

DOLLARS IN MILLIONS	December 31,
	2022		2021
FHLB Funding Agreements	$	601.0	$	401.9
Universal Life-type Policyholder Account Balances	100.3		102.1
Total	$	701.3	$	504.0

Kemper’s subsidiary, United Insurance Company of America (“United Insurance”) has entered into funding agreements with the FHLB of Chicago in exchange for cash, which it uses for spread lending purposes. United Insurance received advances of

NOTE 20. POLICYHOLDER OBLIGATIONS (Continued)

$334.8 million from the FHLB of Chicago and made repayments of $135.7 million under the spread lending program in 2022. United Insurance received advances of $300.4 million and made repayments of $306.3 million from the FHLB of Chicago in 2021 under the spread lending program.

When a funding agreement is issued, United Insurance is then required to post collateral in the form of eligible securities including mortgage-backed, government, and agency debt instruments for each of the advances that are entered. The fair value of the collateral pledged must be maintained at certain specified levels above the borrowed amount, which can vary depending on the assets pledged. If the fair value of the collateral declines below these specified levels of the amount borrowed, United Insurance would be required to pledge additional collateral or repay outstanding borrowings. Upon any event of default by United Insurance, the FHLB’s recovery on the collateral is limited to the amount of United Insurance’s liability under the funding agreements to the FHLB of Chicago.

United Insurance’s liability under the funding agreements with the FHLB of Chicago, the amount of collateral pledged under such agreements and FHLB of Chicago common stock owned by United Insurance at December 31, 2022 and 2021 is presented below.

DOLLARS IN MILLIONS	2022		2021
Liability under Funding Agreements	$	601.0	$	401.9
Fair Value of Collateral Pledged	744.6		556.6
FHLB of Chicago Common Stock Owned at Cost	17.5		11.8