Related Party

12 Months Ended

Dec. 31, 2025

Related Party Transactions [Abstract]

Related Party

Related Party

Management fee

A management fee is retained for services we provide under the subscriber's agreement with subscribers at the Exchange. The fee is a percentage of direct and affiliated assumed premiums written by the Exchange. This percentage rate is set at least annually by our Board of Directors but cannot exceed 25%. The management fee rate charged the Exchange was 25% in 2025, 2024, and 2023. The Board of Directors elected to maintain the fee at 25% beginning January 1, 2026.

There is no provision in the subscriber's agreement for termination of our appointment as attorney-in-fact by the subscribers at the Exchange and the appointment is not affected by a policyholder's disability or incapacity.

Insurance holding company system

Most states have enacted legislation that regulates insurance holding company systems, defined as two or more affiliated persons, one or more of which is an insurer. The Exchange has the following wholly owned property and casualty insurance subsidiaries: Erie Insurance Company, Erie Insurance Company of New York, Erie Insurance Property & Casualty Company, and Flagship City Insurance Company, and a wholly owned life insurance company, Erie Family Life Insurance Company. Indemnity and the Exchange, and its wholly owned subsidiaries, meet the definition of an insurance holding company system.

Transactions within a holding company system affecting the member insurers of the holding company system must be fair and reasonable and any charges or fees for services performed must be reasonable.  Approval by the applicable insurance commissioner is required prior to the consummation of certain transactions affecting the members within a holding company system.

Shared facilities

The Exchange and its insurance subsidiaries have a service agreement with Indemnity to use space in Indemnity-owned properties. The amount charged is based on rental rates of like property in Erie, Pennsylvania and the square footage occupied. Income earned from the Exchange and its insurance subsidiaries for the use of space totaled $3.0 million, $2.9 million, and $2.6 million in 2025, 2024, and 2023, respectively. Operating expenses for Indemnity-owned properties under this service agreement include utilities, cleaning, repairs, real estate taxes, property insurance, and leasehold improvements. These expenses totaled $25.2 million, $21.9 million, and $20.0 million in 2025, 2024, and 2023, respectively.  The Exchange and its insurance subsidiaries reimbursed us for operating expenses of shared facilities used to perform administrative services, which are allocated based upon square footage occupied. Reimbursements related to the use of this space totaled $6.9 million, $5.9 million, and $5.2 million in 2025, 2024, and 2023, respectively.

Other loans receivable

In 2023, we issued two senior secured loans totaling $13.6 million to fund a real estate development project supporting revitalization efforts in our community. Ownership in the project consists of related party investors, including affiliate entities and two Indemnity directors, as well as other unrelated investors. The first loan issued for $4.6 million accrues paid-in-kind interest at a fixed rate of 5% and matures December 15, 2027, with both principal and accrued interest due at maturity. The second loan issued for $9.0 million accrues paid-in-kind interest at a fixed rate of 5% and matures December 15, 2033, with both principal and accrued interest due at maturity. The loans, net of current expected credit loss allowances totaling $8.8 million and $8.0 million as of December 31, 2025 and 2024, respectively, are reported in "Other assets, net" in our Consolidated Statements of Financial Position, with changes in credit loss allowances reported in "Net impairment losses recognized in earnings" in our Consolidated Statements of Operations.

Erie Insurance Foundation

In 2025, we made a $100 million charitable contribution to the Erie Insurance Foundation (the "Foundation"). The Foundation is a separate entity from Indemnity. It is a tax-exempt private charitable foundation formed to create long-term sustainability for charitable contributions and grantmaking. Certain of Indemnity's directors and employees serve as directors and officers of the Foundation. The $100 million contribution is reported as non-operating expense in the Consolidated Statements of Operations.