Statutory Information and Dividend Limitations

12 Months Ended

Dec. 31, 2024

Statutory Financial Information and Dividend Limitations

STATUTORY FINANCIAL INFORMATION AND DIVIDEND LIMITATIONS

Kemper’s insurance subsidiaries are required to file financial statements in conformity with accounting practices prescribed or permitted by domestic and foreign insurance regulatory authorities.

Prescribed statutory accounting practices for domestic insurance companies include a variety of publications of the NAIC, as well as state laws, regulations and general administrative rules. All states require domiciled insurance companies to prepare statutory-basis financial statements in conformity with the NAIC Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable insurance commissioner or director. Statutory accounting practices differ from GAAP primarily since they require charging policy acquisition costs to expense as incurred, establishing life insurance

NOTE 19. STATUTORY FINANCIAL INFORMATION AND DIVIDEND LIMITATIONS (Continued)

reserves based on different actuarial assumptions, and valuing certain investments and establishing deferred taxes on a different basis.

Kemper’s foreign subsidiary, Kemper Bermuda Ltd., is required to file with its insurance regulator financial statements prepared in accordance with US GAAP and presented in conformity with the financial reporting provisions of the Insurance Act of 1978, amendments thereto and the Insurance Account Rules 2016 with respect to Condensed Consolidated General Purpose Financial Statements (the “Legislation”).

The estimated combined statutory net income (loss), excluding intercompany dividends and surplus note interest, and estimated combined capital and surplus of the Company’s insurance subsidiaries is as follows:


	Year Ended December 31,
DOLLARS IN MILLIONS	2024		2023		2022
Property and casualty companies:
Domestic	$	440.7	$	(150.4)	$	(226.7)
Life and health companies
Domestic	17.1		(136.0)		174.4
Foreign	(73.9)		140.0		36.0
Total Life and health companies	(56.8)		4.0		210.4
Total statutory net income (loss)	$	383.9	$	(146.4)	$	(16.3)


DOLLARS IN MILLIONS	2024		2023
Property and casualty companies
Domestic	$	1,761.2	$	1,587.8
Life and health companies
Domestic	124.3		113.7
Foreign	197.9		111.9
Total Life and health companies	322.2		225.6
Total statutory capital and surplus	$	2,083.4	$	1,813.4

The Company has non-insurance subsidiaries that are not subject to statutory accounting practices (“SAP”) as described above. The statutory net income and statutory capital and surplus amounts presented above do not include non-insurance subsidiaries in accordance with SAP.

Kemper’s insurance subsidiaries are also required to hold minimum levels of statutory capital and surplus to satisfy regulatory requirements. The minimum statutory capital and surplus for US subsidiaries, or company action level risk-based capital (“RBC”), necessary to satisfy regulatory requirements for the Company’s US based life and health insurance subsidiaries collectively was estimated to be approximately $31.6 million and $36.4 million at December 31, 2024 and 2023, respectively. The estimated minimum statutory capital and surplus necessary to satisfy regulatory requirements for the Company’s property and casualty insurance subsidiaries collectively was approximately $574.9 million and $574.3 million at December 31, 2024 and 2023, respectively. Company action level RBC is the level at which a US based insurance company is required to file a corrective action plan with its regulators and is equal to 200% of the authorized control level RBC.

Capital and surplus requirements of Kemper Bermuda Ltd. are regulated by the Bermuda Monetary Authority (“BMA”) and differ from those applicable to the US subsidiaries. On July 1, 2022, Kemper entered into an indefinite agreement with its subsidiary, Kemper Bermuda Ltd., that provides financial guarantees of up to $300.0 million in contributed capital to maintain a minimum target capital ratio of 150% Enhance Capital Requirement, as described in Bermuda’s Insurance Act 1978. As of December 31, 2024 and 2023, Kemper had cumulatively contributed $40.0 million under this agreement.

At December 31, 2024, all insurance subsidiaries individually are expected to exceed the minimum required statutory capital and surplus requirements.

Various insurance laws restrict the amount that a US based insurance subsidiary may pay in the form of dividends, loans or advances without the prior approval of regulatory authorities. Such insurance laws applicable to the Company’s US based

NOTE 19. STATUTORY FINANCIAL INFORMATION AND DIVIDEND LIMITATIONS (Continued)

subsidiaries generally restrict the amount of dividends paid in an annual period to the greater of statutory net income from the previous year or 10% of statutory capital and surplus. Also, that portion of a US based insurance subsidiary’s net equity which results from differences between statutory insurance accounting practices and GAAP would not be available for cash dividends, loans or advances. Kemper’s US based insurance subsidiaries paid dividends of $213.3 million, $640.9 million and $311.7 million to Kemper in 2024, 2023 and 2022, respectively. In 2025, Kemper’s US based insurance subsidiaries capacity to pay dividends to Kemper without prior regulatory approval is estimated to be $211.7 million as of the filing date. Kemper’s US based insurance subsidiaries had net assets of approximately $3.2 billion and $3.5 billion, determined in accordance with GAAP, that were restricted from payment to Kemper without prior regulatory approval at December 31, 2024 and 2023, respectively.

Additionally, Kemper Bermuda Ltd. is subject to minimum solvency requirements on its statutory and economic capital that limits its ability to declare and pay dividends. Kemper Bermuda Ltd. did not authorize or pay dividends to the Company for the years ended December 31, 2024, 2023 or 2022.