Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity File Number | 001-39812 | ||
Entity Registrant Name | MIDWEST HOLDING INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-0362426 | ||
Entity Address, Address Line One | 2900 S. 70th, Suite 400 | ||
Entity Address, City or Town | Lincoln | ||
Entity Address, State or Province | NE | ||
Entity Address, Postal Zip Code | 68506 | ||
City Area Code | 402 | ||
Local Phone Number | 817-5701 | ||
Title of 12(b) Security | Voting Common Stock, $0.001 par value | ||
Trading Symbol | MDWT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 3,737,564 | ||
Entity Public Float | $ 111 | ||
Auditor Name | Mazars USA LLP | ||
Auditor Firm ID | 339 | ||
Auditor Location | Fort Washington, Pennsylvania | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000355379 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | $ 683,296 | $ 377,163 |
Mortgage loans on real estate, held for investment | 183,203 | 94,990 |
Derivative instruments (See Note 5) | 23,022 | 11,361 |
Equity securities, at fair value (cost: $22,158 in 2021 and zero in 2020) | 21,869 | |
Other invested assets | 35,293 | 21,897 |
Investment escrow | 3,611 | 3,174 |
Federal Home Loan Bank (FHLB) stock | 500 | |
Preferred stock | 18,686 | 3,898 |
Notes receivable | 5,960 | 5,666 |
Policy loans | 87 | 46 |
Total investments | 975,527 | 518,195 |
Cash and cash equivalents | 142,013 | 151,679 |
Deferred acquisition costs, net | 24,530 | 13,456 |
Premiums receivable | 354 | 314 |
Accrued investment income | 13,623 | 6,807 |
Reinsurance recoverables (See Note 9) | 38,579 | 32,146 |
Intangible assets | 700 | 700 |
Property and equipment, net | 386 | 104 |
Operating lease right of use assets | 2,360 | 348 |
Receivable for securities sold | 19,732 | |
Other assets | 2,113 | 1,533 |
Assets associated with business held for sale (See Note 2) | 1,119 | |
Total assets | 1,219,917 | 726,401 |
Liabilities: | ||
Benefit reserves | 12,941 | 12,776 |
Policy claims | 237 | 162 |
Deposit-type contracts (See note 11) | 1,075,439 | 597,868 |
Advance premiums | 1 | 2 |
Deferred gain on coinsurance transactions | 28,589 | 18,199 |
Lease liabilities (See Note 13): | ||
Operating lease | 2,364 | 397 |
Payable for securities purchased | 5,546 | |
Other liabilities | 9,044 | 9,553 |
Liabilities associated with business held for sale (See Note 2) | 1,114 | |
Total liabilities | 1,134,161 | 640,071 |
Contingencies and Commitments (See Note 12) | ||
Stockholders' Equity: | ||
Preferred stock, $0.001 par value; authorized 2,000,000 shares; no shares issued and outstanding as of December 31, 2021 or December 31, 2020 | ||
Voting common stock, $0.001 par value; authorized 20,000,000 shares; 3,737,564 shares issued and outstanding as of December 31, 2021 and 2020, respectively; non-voting common stock, $0.001 par value, 2,000,000 shares authorized; no shares issued and outstanding December 31, 2021 and 2020, respectively | 4 | 4 |
Additional paid-in capital | 138,452 | 133,592 |
Treasury stock | (175) | (175) |
Accumulated deficit | (70,159) | (53,522) |
Accumulated other comprehensive income | 2,634 | 6,431 |
Total Midwest Holding Inc.'s stockholders' equity | 70,756 | 86,330 |
Noncontrolling interests | 15,000 | |
Total stockholders' equity | 85,756 | 86,330 |
Total liabilities and stockholders' equity | $ 1,219,917 | $ 726,401 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Financial Position [Abstract] | ||
Amortized Cost | $ 679,921 | $ 369,156 |
Equity Securities, Amortized Cost | $ 22,158 | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 3,737,564 | 3,737,564 |
Common stock, shares outstanding | 3,737,564 | 3,737,564 |
Non Voting Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Non Voting Common Stock, Shares Authorized | 2,000,000 | 2,000,000 |
Non Voting Common Stock, Shares Issued | 0 | 0 |
Non Voting Common Stock, Shares Outstanding | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Investment income, net of expenses | $ 15,737 | $ 4,047 |
Net realized gain on investments (See Note 4) | 7,752 | 2,550 |
Amortization of deferred gain on reinsurance transactions | 3,022 | 1,836 |
Service fee revenue, net of expenses | 2,343 | 1,960 |
Other revenue | 1,209 | 189 |
Total revenue | 30,063 | 10,582 |
Expenses | ||
Interest credited | 7,012 | 4,225 |
Benefits | 6 | (5) |
Amortization of deferred acquisition costs | 2,886 | 670 |
Salaries and benefits | 16,926 | 6,347 |
Other operating expenses | 15,104 | 10,200 |
Total expenses | 41,934 | 21,437 |
Loss from continuing operations before taxes | (11,871) | (10,855) |
Income tax expense (See Note 8) | (4,766) | (1,585) |
Net loss attributable to Midwest Holding, Inc. | (16,637) | (12,440) |
Comprehensive income (loss): | ||
Unrealized gains on investments arising during the year ended December 31, 2021 and 2020, net of offsets, (net of tax ($378) and $1.7 million, respectively) | (1,422) | 7,398 |
Unrealized losses on foreign currency | (146) | |
Less: Reclassification adjustment for net realized gains on investments, net of offsets (net of tax $631 and $383, respectively) | (2,375) | (1,441) |
Other comprehensive (loss) income | (3,797) | 5,811 |
Comprehensive loss | $ (20,434) | $ (6,629) |
Loss per common share | ||
Basic (in dollars per share) | $ (4.45) | $ (4.88) |
Diluted (in dollars per share) | $ (4.45) | $ (4.42) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Unrealized (losses) gains on investments arising during period, net of tax | $ (378) | $ 1,700 |
Reclassification adjustment for net realized gains on investments, net of tax | $ 631 | $ 383 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Treasury Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | AOCI [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2019 | $ 2 | $ 54,494 | $ (41,082) | $ 620 | $ 124 | $ 14,158 | |
Net loss | (12,440) | (12,440) | |||||
Capital raise, net of $285 related expenses | 2 | 79,310 | 79,312 | ||||
Reverse stock split fractions retired | $ (175) | (175) | |||||
Employee stock options | 164 | 164 | |||||
Purchase of remaining 49% of 1505 Capital LLC | (376) | (124) | (500) | ||||
Unrealized gains (losses) on investments, net of taxes | 5,957 | 5,957 | |||||
Unrealized losses on foreign currency | (146) | (146) | |||||
Balance at Dec. 31, 2020 | (175) | 4 | 133,592 | (53,522) | 6,431 | 86,330 | |
Net loss | (16,637) | (16,637) | |||||
Additional capital raise related expenses | (121) | (121) | |||||
Employee stock options | 4,981 | 4,981 | |||||
Noncontrolling interest | 15,000 | 15,000 | |||||
Unrealized gains (losses) on investments, net of taxes | (3,797) | (3,797) | |||||
Balance at Dec. 31, 2021 | $ (175) | $ 4 | $ 138,452 | $ (70,159) | $ 2,634 | $ 15,000 | $ 85,756 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 15, 2020 | Apr. 02, 2019 | |
Issuance costs | $ 5.9 | ||
1505 Capital LLC | |||
Ownership percentage acquired | 49.00% | 49.00% | 51.00% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Loss attributable to Midwest Holding, Inc. | $ (16,637) | $ (12,440) |
Adjustments to arrive at cash provided by operating activities: | ||
Net premium and discount on investments | (1,244) | (423) |
Depreciation and amortization | 50 | 57 |
Stock options | 4,981 | 164 |
Amortization of deferred acquisition costs | 2,886 | 464 |
Deferred acquisition costs capitalized | (14,018) | (13,975) |
Net realized gain on investments | (7,752) | (2,550) |
Deferred gain on coinsurance transactions | 10,390 | 10,621 |
Changes in operating assets and liabilities: | ||
Reinsurance recoverables | (6,434) | (4,477) |
Interest and dividends due and accrued | (6,816) | (5,296) |
Premiums receivable | (40) | 42 |
Deposit-type liabilities | 24,371 | |
Policy liabilities | 239 | 10,042 |
Receivable and payable for securities | (14,185) | |
Other assets and liabilities | (1,133) | 1,525 |
Other assets and liabilities - discontinued operations | 4 | 2 |
Net cash used in operating activities | (25,338) | (16,244) |
Fixed maturities available for sale: | ||
Purchases | (660,059) | (339,282) |
Proceeds from sale or maturity | 356,820 | 89,136 |
Mortgage loans on real estate, held for investment | ||
Purchases | (160,714) | (99,356) |
Proceeds from sale | 72,064 | 18,392 |
Derivatives | ||
Purchases | (23,944) | (8,589) |
Proceeds from sale | 14,578 | 1,269 |
Purchase of equity securities | (22,097) | |
Other invested assets | ||
Purchases | (95,529) | (73,997) |
Proceeds from sale | 82,272 | 54,517 |
Purchase of restricted common stock in FHLB | (500) | |
Preferred stock | (14,926) | (3,898) |
Notes receivable | (5,665) | |
Net change in policy loans | (41) | 60 |
Net purchases of property and equipment | (331) | (69) |
Net cash used in investing activities | (452,407) | (367,482) |
Cash Flows from Financing Activities: | ||
Net transfer to noncontrolling interest | 15,000 | |
Capital contribution | (121) | 79,312 |
Repurchase of common stock | (175) | |
Acquisition of noncontrolling interest | (500) | |
Receipts on deposit-type contracts | 471,646 | 415,561 |
Withdrawals on deposit-type contracts | (18,446) | (2,509) |
Net cash provided by financing activities | 468,079 | 491,689 |
Net (decrease) increase in cash and cash equivalents | (9,666) | 107,963 |
Cash and cash equivalents: | ||
Beginning | 151,679 | 43,716 |
Ending | 142,013 | 151,679 |
Supplementary information | ||
Cash paid for taxes | $ 6,450 | $ 350 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature of Operations and Summary of Significant Accounting Policies | Note 1. Nature of Operations and Summary of Significant Accounting Policies Nature of operations: Midwest Holding Inc. (“Midwest,” “the Company,” “we,” “our,” or “us”) was incorporated in Nebraska on October 31, 2003 for the primary purpose of operating a financial services company. The Company redomesticated from the State of Nebraska to the State of Delaware on August 27, 2020. The Company is in the life and annuity insurance business and operates through its wholly owned subsidiaries, American Life & Security Corp. (“American Life”), and 1505 Capital LLC (“1505 Capital”) as well as through its sponsored captive reinsurance company, Seneca Reinsurance Company, LLC (“Seneca Re”). American Life is a Nebraska-domiciled life insurance company, which is also commercially domiciled in Texas, that is currently licensed to sell, underwrite, and market life insurance and annuity products in 22 states and the District of Columbia. Effective March 12, 2020, Seneca Re, a Vermont limited liability company, was formed by Midwest to operate as a sponsored captive insurance company for the purpose of insuring and reinsuring various types of risks of its participants through one or more protected cells and to conduct any other business or activity that is permitted for sponsored captive insurance companies under Vermont insurance regulations. On March 30, 2020, Seneca Re received its Certification of Authority to transact the business of a captive insurance company. On April 15, 2020, Midwest entered into an operating agreement with Seneca Re and as of December 31, 2021, Seneca Re has two incorporated cells, Seneca Incorporated Cell, LLC 2020-01 (“SRC1”) and Seneca Re Protected Cell 2021-03 (“SRC3”) which are consolidated in our financial statements. On May 12, 2020, Midwest contributed $300,000 to Seneca Re for a 100% ownership interest. On April 2, 2019, we obtained a 51% ownership in 1505 Capital, a Delaware limited liability company, that was established in 2018 to provide financial and investment advisory and management services to clients and related investment activities. On June 15, 2020, we purchased the remaining 49% ownership in 1505 Capital for $500,000. 1505 Capital’s financial results have been consolidated with the Company’s since the date of its acquisition. On April 24, 2020, Midwest entered into a Securities Purchase Agreement with Crestline Assurance Holdings LLC, a Delaware limited liability company (“Crestline Assurance”), Xenith Holdings LLC, and Vespoint LLC, pursuant to which Crestline Assurance purchased 444,444 shares of the Company’s voting common stock, par value $0.001 per share (“common stock”), at a purchase price of $22.50 per share for $10.0 million. Under the agreement, the Company contributed $5.0 million to American Life. Also, effective as of April 24, 2020, in a separate transaction, Midwest sold 231,655 shares of common stock to various investors in a private placement at $22.50 per share for $5.227 million. On July 27, 2020, American Life entered into a reinsurance agreement (the “Reinsurance Agreement”) with a new protected cell formed by Seneca Re (Seneca Incorporated Cell, LLC 2020-02 (“SRC2”)). SRC2 was capitalized by Crestline Management, L.P. (“Crestline”), a significant shareholder of Midwest via a Crestline subsidiary, Crestline Re SPC1. The Reinsurance Agreement, which was effective as of April 24, 2020, and was entered into pursuant to a Master Letter Agreement (the “Master Agreement”) dated and effective as of April 24, 2020, among American Life, Seneca Re and Crestline. The Reinsurance Agreement supports American Life’s new business production by providing reinsurance capacity for American Life to write certain kinds of fixed and multi-year guaranteed annuity products. Concurrently with the Reinsurance Agreement: ● American Life and SRC2 each entered into investment management agreements with Crestline, pursuant to which Crestline manages the assets that support the reinsured business; and ● American Life and SRC2 entered into a trust agreement whereby SRC2 maintains for American Life’s benefit a trust account that supports the reinsured business. Under the Master Agreement, Crestline agreed to provide reinsurance funding for a quota share percentage of 25% of the liabilities of American Life arising from its multi-year guaranteed annuities (“MYGA”) and a quota share percentage of 40% for American Life’s fixed indexed annuity (“FIA”) products. The Master Agreement expires on April 24, 2023. In addition, pursuant to the Master Agreement, the parties thereto have agreed to enter into a separate agreement whereby, among other things and subject to certain conditions, American Life will agree to reinsure additional new business production to one or more reinsurers formed and/or capitalized by Crestline, Midwest or an appropriate affiliate will refer potential advisory clients to Crestline, and American Life will consider investing in certain assets originated or sourced by Crestline. Effective December 8, 2020, American Life entered into a novation agreement with SRC2 and Crestline Re SPC, for and on behalf of Crestline Re SP1, under which the above-described reinsurance, trust and related asset management agreements were novated and replaced with substantially similar agreements entered into by American Life and Crestline Re SP1. In December 2020, the Company completed a public offering of its common stock for gross proceeds of $70.0 million (see Note 17). In connection therewith, the Company's common stock was approved for listing and began trading on the Nasdaq Capital Market (“NASDAQ”) upon the closing of the offering. On June 26, 2021, the Nebraska Department of Insurance (‘NDOI”) issued its non-disapproval of the Modified Coinsurance Agreement (“Modco AEG Agreement”) of American Life with American Republic Insurance Company (“AEG”), an Iowa domiciled reinsurance company. The agreement closed on June 30, 2021. Under the Modco AEG Agreement, American Life cedes to AEG, on a modified coinsurance basis, 20% quota share of certain liabilities with respect to its MYGA-5 business and an initial 20% quota share of certain liabilities with respect to its FIA products. American Life has established a Modco Deposit Account to hold the assets for the Modco Agreement. The initial settlement included net premium income of $37.5 million and net statutory reserves of $34.8 million for the modified coinsurance account. The amount paid to the Modified Deposit Account from AEG was $2.4 million. On November 10, 2021, Midwest purchased 1,000 shares of Common Stock, $.01 par value per share for a total purchase price of $5.7 million for 100% ownership in an intermediary holding company. The intermediary holding company contributed capital of $5.5 million to purchase 100% of SRC3 Class A and B capital stock. Also, on November 10, 2021, American Life and SRC3 entered into a Funds Withheld and Modified Coinsurance Agreement, whereby, SRC3 agreed to provide reinsurance funding for a quota share percentage of 45% of the liabilities of American Life arising from its MYGA and quota share percentage of 45% of American Life’s FIA products. As discussed above, Midwest owned 100% in SRC1 by contributing a total of $21.4 million. On December 30, 2021, Midwest closed the sale of approximately 70% of Seneca Incorporate Cell, LLC 2020-01 (“SRC1”) to a subsidiary of ORIX Corporation USA “ORIX USA”) for $15.0 million. Under the terms of the agreement, Midwest holds a 30% ownership interest in SRC1. ORIX Advisers, LLC, another subsidiary of ORIX USA, will be the manager of the assets underlying SRC1’s reinsurance obligations going forward, replacing Midwest’s asset management arm, 1505 Capital LLC. Management evaluates the Company as one reporting segment in the life insurance industry. The Company is primarily engaged in the underwriting and marketing of annuity products through American Life, and then reinsuring such products with third-party reinsurers, and since May 13, 2020, with Seneca Re protected cells. American Life’s legacy product offerings consisted of a multi-benefit life insurance policy that combined cash value life insurance with a tax deferred annuity and a single premium term life product. American Life presently offers five annuity products, two MYGAs, two FIAs, and two bonus plans associated with the FIA product. It is not presently offering any traditional life insurance products. Basis of presentation: These consolidated financial statements for the year ended December 31, 2021 and 2020 have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The following is a summary of our significant accounting policies and estimates. These accounting policies inherently require significant judgment and assumptions, and actual operating results could differ significantly from management’s estimates determined using these policies. We believe the following accounting policies, judgments and estimates are the most critical to the understanding of our results of operations and financial position. All intercompany accounts and transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform to the current period’s presentation with no impact on results of operations or total stockholders’ equity. Fixed Maturities All fixed maturities owned by the Company are considered available-for-sale and are included in the consolidated financial statements at their fair value as of the financial statement date. Premiums and discounts on fixed maturity instruments are amortized using the scientific-yield method over the term of the bonds, trust preferred, and redeemable preferred stock. Realized gains and losses on securities sold during the year are determined using the specific identification method. Unrealized holding gains and losses, net of applicable income taxes, are included in accumulated other comprehensive income. Declines in the fair value of available-for-sale fixed maturity securities below their amortized cost are evaluated to assess whether any other-than-temporary impairment loss should be recorded. In determining if these losses are expected to be other-than-temporary, the Company considers severity of impairment, duration of impairment, forecasted recovery period, industry outlook, the financial condition of the issuer, issuer credit ratings, and the intent and ability of the Company to hold the investment until the recovery of the cost. The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If the Company intends to sell a security or it is more likely than not that the Company would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the statement of comprehensive income as an impairment. If the Company does not expect to recover the amortized basis, does not plan to sell the security, and if it is not more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the recognition of the impairment is bifurcated. The Company recognizes the credit loss portion as realized losses and the noncredit loss portion in accumulated other comprehensive loss. The credit component of other-than-temporary impairment is determined by comparing the net present value of projected cash flows with the amortized cost basis of the debt security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed income security at the date of acquisition. Cash flow estimates are driven by assumptions regarding probability of default, including changes in credit ratings, and estimates regarding timing and amount of recoveries associated with a default. As of December 31, 2020, the Company analyzed its securities portfolio and determined that an impairment of approximately $35,000 should be recorded for one debt security, an impairment of $500,000 was recognized on a preferred stock, and a valuation allowance of $777,000 established on one lease. The valuation allowance on the lease of $777,000 was released as of March 31, 2021 due to the sale of the investment. The Company believed the remaining investments were not impaired as of December 31, 2020. The Company had no impairment to recognize as of December 31, 2021. Investment income consists of interest, dividends, gains and losses from equity method investments, and real estate income, which are recognized on an accrual basis along with the amortization of premiums and discounts. Certain available-for-sale investments are maintained as collateral under FW and Modco agreements but the assets and total returns or losses on the asset portfolios belong to the third-party reinsurers. American Life has treaties with several third-party reinsurers that have FW and Modco provisions. In a Modco agreement, the ceding entity retains the assets equal to the modified coinsurance reserves retained. In a FW agreement, assets that would normally be paid over to a reinsurer are withheld by the ceding company to permit statutory credit for unauthorized reinsurers to reduce the potential credit risk. The unrealized gains/losses on those investments are passed through to the third-party reinsurers as either a realized gain or loss on the Consolidated Statements of Comprehensive Loss. Mortgage loans on real estate, held for investment Mortgage loans on real estate, held for investment are carried at unpaid principal balances. Interest income on mortgage loans on real estate, held for investment is recognized in net investment income at the contract interest rate when earned. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the mortgage agreement. Valuation allowances on mortgage loans are established based upon losses expected by management to be realized in connection with future dispositions or settlements of mortgage loans, including foreclosures. The Company establishes valuation allowances for estimated impairments on an individual loan basis as of the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan’s original effective interest rate. These evaluations are revised as conditions change and new information becomes available. No such valuation allowance was established as of December 31, 2021 or 2020, respectively. Derivative Instruments Derivatives are used to hedge the risks experienced in our ongoing operations, such as equity, interest rate and cash flow risks, or for other risk management purposes, which primarily involve managing liability risks associated with our indexed annuity products and reinsurance agreements. Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, or other underlying notional amounts. Derivative assets and liabilities are carried at fair value on the consolidated balance sheets. To qualify for hedge accounting, at the inception of the hedging relationship, we would formally document our designation of the hedge as a cash flow or fair value hedge and our risk management objective and strategy for undertaking the hedging transaction. In this documentation, we would identify how the hedging instrument is expected to hedge the designated risks related to the hedged item, the method that would be used to retrospectively and prospectively assess the hedging instrument’s effectiveness and the method which would be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. In the late 2019, the Company began investing in options to hedge our interest rate risks on our FIA product. We did not have the formal documentation and hedge effectiveness completed at the time we entered into those equity options; therefore, they do not qualify for hedge accounting. The options fair market values were recorded on our consolidated statement of comprehensive loss as realized gains or (losses). During the last quarter of 2020, the Company began investing in foreign currency futures to hedge the fluctuations in the foreign currency. The formal documentation and hedge effectiveness was also not completed at the date we entered into those futures contracts; therefore, they do not qualify for hedge accounting. The futures fair market values were recorded on our consolidated statement of comprehensive loss as realized gains or (losses). Additionally, reinsurance agreements written on a FW or Modco basis contain embedded derivatives on our fixed indexed annuity product. Gains or (losses) associated with the performance of assets maintained in the modified coinsurance deposit and funds withheld accounts are reflected as realized gains or (losses) in the consolidated statement of comprehensive loss. Equity Securities Equity securities at December 31, 2021, consisted of exchange traded funds (“ETFs”). The ETF’s are carried at fair value with the change in fair value recorded through realized gains and losses in Consolidated Statements of Comprehensive Loss. As of December 31, 2021, we held $21.9 million of ETFs and zero as of December 31, 2020. Federal Home Loan Bank (FHLB) stock American Life purchased Federal Home Loan Bank of Topeka (“FHLB”) common stock on May 5, 2021. This investment was to solidify our membership with FHLB Topeka. The carrying value of FHLB stock approximates fair value since the Company can redeem the stock with FHLB at cost. As a member of the FHLB, the Company is required to purchase this stock, which is carried at cost and classified as restricted equity securities. Membership allows access to various funding arrangements to provide a source of additional liquidity. As of December 31, 2021, there were no outstanding funding arrangements. Other Invested Assets Other invested assets consists of approximately $35.3 million of various investments. Of this total, approximately $18.9 million are primarily collateral loans, private credit, and equipment leases. Also, at December 31, 2020, we had a $19.7 million investment in a private fund. Effective January 2021, this investment was repackaged into a special purpose vehicle between American Life and an unaffiliated entity, PF Collinwood Holdings, LLC (“PFC”), with American Life owning 100% of the entity. No gain or loss was recognized from the repackaging of PFC. The fair value or statement value of PFC as of December 31, 2021 was $14.5 million with gains and losses being recorded in equity on the balance sheet. Investment escrow The Company held in escrow $3.6 million and $3.2 million as of December 31, 2021 and 2020, respectively. The cash held at year end was used to purchased mortgages in January 2022 and 2021, respectively. Preferred Stock The Company impaired in full a preferred stock investment as of December 31, 2020. This was recorded as a reduction of the asset on the Consolidated balance sheets of $500,000 and a corresponding loss on impairment on the Consolidated Statements of Comprehensive Loss. The company held a perpetual preferred stock investment of $10.0 million as of December 31, 2021. This investment is carried at fair market value. In 2020 American Life entered into a series of transactions with an unaffiliated entity, Ascona Group Holdings Ltd (“AGH”). One of the transactions involved the acquisition of Pound Sterling (“GBP”) 3.6 million of preferred equity in Ascona Group Holdings Limited (“the Preferred Equity”) along with warrants bearing no initial assigned value (the “Warrants”). American Life initially created a special purpose vehicle, Ascona Asset Holding LLC (“AAH”), to hold the Preferred Equity and Warrants, and later created Ascona Collinwood HoldCo LLC (“ACH”) to be the sole member of AAH. American Life and Crestline Re SP1 own 74% and 26%, respectively, of ACH. We are carrying the preferred equity at a market value of $8.7 million as of December 31, 2021 and $3.9 million of December 31, 2020. The preferred stock and warrants had a market value of $4.9 million and $3.8 million, respectively, as of December 31, 2021 and no value as of December Notes receivable The Company held notes receivable carried at fair value of $6.0 million and $5.7 million as of December 31, 2021 and 2020, respectively, between American Life and a related party. The note receivable has an annual interest rate of 5% which is paid in kind (“PIK”) interest per annum that increases the outstanding note balance. This note was rated BBB+ by a nationally recognized statistical rating organization. This note matures on June 18, 2050. Policy loans Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. No valuation allowance is established for these policy loans as the amount of the loan is fully secured by the death benefit of the policy and cash surrender value. Cash and cash equivalents The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of December 31, 2021 and 2020, the Company held approximately GBP 2.2 million and GBP 500,000 in custody accounts, respectively. The USD equivalent held was approximately $3.0 million and $700,000, respectively. As of December 31, 2021 and 2020, the Company held approximately Euro 9.3 million and 90,000, respectively. The USD equivalent held was approximately $10.6 million and $110,000, respectively. As of December 31, 2021 and 2020, we had gains of approximately $2.0 million and approximately $50,000, respectively, related to the change in the foreign currency exchange rate of the GBP and Euro that were recorded in realized (losses) gains on investments in the Consolidated Statements of Comprehensive Loss. The Company had no money market investments as of December 31, 2021 and $100.6 million at December 31, 2021 and 2020, respectively. Deferred acquisition costs Deferred acquisition costs (“DAC”) consist of incremental direct costs, net of amounts ceded to third-party reinsurers, that result directly from and are essential to the contract acquisition transaction and would not have been incurred by the Company had the contract acquisition not occurred. These costs are capitalized, to the extent recoverable, and amortized over the life of the premiums produced. The Company evaluates the types of acquisition costs it capitalizes. The Company capitalizes agent compensation and benefits and other expenses that are directly related to the successful acquisition of contracts. The Company also capitalizes expenses directly related to activities performed by the Company, such as underwriting, policy issuance, and processing fees incurred in connection with successful contract acquisitions. Recoverability of deferred acquisition costs is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense. The Company performs a recoverability analysis annually in the fourth quarter unless events occur which require an immediate review. A recovery analysis is completed by our Company third-party actuaries during their year-end processes and have found that no impairment existed in conjunction with the recovery of the DAC balances. Property and equipment Property and equipment are stated at cost net of accumulated depreciation. Annual depreciation is primarily computed using straight-line methods for financial reporting and straight-line and accelerated methods for tax purposes. Furniture and equipment is depreciated over three During the first quarter of 2021, the Company began the implementation of a new cloud-based enterprise resource planning and enterprise performance management system. The Company expects to capitalize related consultation and support expenses relating to this system and will begin amortizing these fees over a period of five years from the date of implementation. The useful life of the system has been estimated at five years in accordance with guidance in ASC 350, Intangibles – Goodwill and Other Maintenance and repairs are expensed as incurred. Replacements and improvements which extend the useful life of the asset are capitalized. The net book value of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in earnings. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds estimated future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset to its fair value. The Company determined that no such events occurred that would indicate the carrying amounts may not be recoverable. Reinsurance In the normal course of business, the Company seeks to limit any single exposure to losses on large risks by purchasing reinsurance. The amounts reported in the Consolidated balance sheets as reinsurance recoverable include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverable on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverable. Management believes the recoverables are appropriately established. The Company generally strives to diversify its credit risks related to reinsurance ceded. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers including their activities with respect to claim settlement practices and commutations, and establishes allowances for uncollectible reinsurance recoverables as appropriate. There were no allowances established as of December 31, 2021 or 2020. We expect to reinsure substantially all of our new insurance policies with a variety of reinsurers in exchange for upfront ceding commissions, expense reimbursements and administrative fees. Under these reinsurance agreements, we expect there will be a monthly or quarterly settlement of premiums, claims, surrenders, collateral, and other administration fees. We believe this strategy will help preserve American Life’s capital while supporting its growth because American Life will have lower capital requirements when its business is reinsured due to lower overall financial exposure versus retaining the insurance policy business itself. See Note 9 below for further discussion of our reinsurance activities. There are two main categories of reinsurance transactions: 1) “indemnity,” where we cede a portion of our risk but retain the legal responsibility to our policyholders should our reinsurers not meet their financial obligations; and 2) “assumption,” where we transfer the risk and legal responsibilities to the reinsurers. The reinsurers are required to acquire the appropriate regulatory and policyholder approvals to convert indemnity policies to assumption policies. Our reinsurers may be domestic or foreign capital markets investors or traditional reinsurance companies seeking to assume U.S. insurance business. We plan to mitigate the credit risk relating to reinsurers generally by requiring other financial commitments from the reinsurers to secure the reinsured risks, such as posting substantial collateral. It should be noted that under indemnity reinsurance agreements American Life remains exposed to the credit risk of its reinsurers. If one or more reinsurers become insolvent or are otherwise unable or unwilling to pay claims under the terms of the applicable reinsurance agreement, American Life retains legal responsibility to pay policyholder claims, which, in such event would likely materially and adversely affect the capital and surplus of American Life. Midwest formed Seneca Re in early 2020. Seneca Incorporated Cell, LLC 2020-01 (“SRC1”) and Seneca Incorporate Cell, LLC 2021-03 (“SRC3”) which were consolidated in our financial statements. Midwest sold 70% of SRC1 to a ORIX Corporation USA on December 30, 2021 and retained 30% ownership. Midwest maintains control over SRC1 so we are still consolidating in our financial statements. American Life entered into a novation agreement with SRC2 and Crestline Re SPC, for and on behalf of Crestline Re SP1, under which the above-described reinsurance, trust and related asset management agreements were novated and replaced with substantially similar agreements entered into by American Life and Crestline Re SP1. Some reinsurers are not and may not be “accredited” or qualified as reinsurers under Nebraska law and regulations. In order to enter into reinsurance agreements with such reinsurers and to reduce potential credit risk, American Life holds a deposit or withholds funds from the reinsurer or requires the reinsurer to maintain a trust that holds assets backing up the reinsurer’s obligation to pay claims on the business it assumes. The reinsurer may also appoint an investment manager for such funds, which in some cases may be our investment adviser subsidiary, 1505 Capital, to manage these assets pursuant to guidelines adopted by us that are consistent with Nebraska investment statutes and reinsurance regulations. American Life currently has treaties with several third-party reinsurers and one related party reinsurer. Of the third-party reinsurers, only four have FW or Modco provisions. In a Modco agreement, the ceding entity retains the assets equal to the modified coinsurance reserves retained. In a FW agreement, assets that would normally be paid over to a reinsurer are withheld by the ceding company to permit statutory credit for unauthorized reinsurers, to reduce the potential credit risk. Under those provisions with third-party reinsurers, the assets backing the treaties are maintained by American Life as investments but the assets and total returns or losses on the investments are owned by the reinsurers. Under GAAP, this arrangement is considered an embedded derivative as discussed in Comprehensive Loss and Note 5 below. Assets carried as investments on American Life’s financial statements for the third-party reinsurers contained unrealized gains of approximately $161,000 and $2.9 million as of December 31, 2021 and 2020, respectively. The terms of the contracts with the third-party reinsurers provide that unrealized gains on the portfolios accrue to the third-party reinsurers. Accordingly, the unrealized gains on the assets held by American Life were offset by gains in the embedded derivative of $2.7 million and losses of $2.9 million as of December 31, 2021 and 2020, respectively. We account for this unrealized gain (loss) pass-through by recording equivalent realized gains or (losses) on our Consolidated Statements of Comprehensive Loss and in amount payable to our third-party reinsurers on the Consolidated balance sheets. For further discussion see Note 5. Derivative Instruments below. Benefit reserves The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by a net level premium method based upon estimates at the tim |
Assets and Liabilities Associat
Assets and Liabilities Associated with Business Held for Sale | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Associated with Business Held for Sale | Note 2. Assets and Liabilities Associated with Business Held for Sale On November 30, 2018, American Life entered into an Assumption and Indemnity Reinsurance Agreement (“Reinsurance Agreement”) with Unified Life Insurance Company (“Unified”), a Texas domiciled stock insurance company. The Reinsurance Agreement provides that American Life ceded and Unified agreed to reinsure, on an indemnity reinsurance basis, 100% of the liabilities and obligations under substantially all of American Life’s life, annuity and health policies (“Policies”). The Agreement closed on December 10, 2018. After the closing of the Reinsurance Agreement, Unified prepared and delivered certificates of assumption and other materials to policyholders of American Life in order to effect an assumption of the Policies by Unified. Unified is obligated to indemnify American Life against all liabilities and claims and all of its policy obligations from and after July 1, 2018. Unified estimated that 80% to 90% of the policyholder would convert to assumptive by the end of 2019. The consideration paid by Unified to American Life under the Reinsurance Agreement upon closing was $3.5 million (“Ceding Commission”), subject to minor settlement adjustments. At closing, American Life transferred the Statutory Reserves and Liabilities, as defined in the Reinsurance Agreement, directly related to the policies, to Unified. The Ceding Commission is being amortized on a straight-line basis over the life of the policies. When the policies are converted to assumptive, meaning American Life has no liability exposure for those policies, the remaining Ceding Commission will be recognized in our consolidated statement of comprehensive loss. As of December 31, 2021, and 2020, 90% of the indemnity policies were converted to assumptive policies thereby releasing American Life from its legal obligations related to those policies. An assessment of the assets and liabilities held for sale was performed as of December 31, 2021 and management believes that the remaining policyholder contracts will not be converted; therefore, those remaining policy contracts should be reclassified to continuing operations and no longer called out as discontinued operations. The table below summarizes the assets and liabilities that were included in discontinued operations as of December 31, 2021 and 2020: As of December 31, As of December 31, (In thousands) 2021 2020 Carrying amounts of major classes of assets included as part of discontinued operations: Policy loans $ — $ 33 Reinsurance recoverables — 1,062 Premiums receivable — 24 Total assets held for sale in the consolidated balance sheets $ — $ 1,119 Carrying amounts of major classes of liabilities included as part of discontinued operations: Benefit reserves $ — $ 595 Policy claims — 35 Deposit-type contracts — 483 Accounts payable and accrued expenses — 1 Total assets held for sale in the consolidated balance sheets $ — $ 1,114 There were no items in 2021 or 2020 that were reclassified as discontinued operations in the consolidated statement of comprehensive loss. |
Non-controlling Interest
Non-controlling Interest | 12 Months Ended |
Dec. 31, 2021 | |
Non-controlling Interest | |
Non-controlling Interest | Note 3. Non-controlling Interest Purchase On April 2, 2019, Midwest entered into a contract to acquire a 51% controlling ownership in 1505 Capital. 1505 Capital was organized to provide financial and investment advisory and management services to clients and any related investment, trading, or financial activities. Midwest purchased for $1.00 its 51% ownership and on June 15, 2020, purchased the remaining 49% ownership in 1505 Capital for $500,000. Disposal On December 30, 2021, Midwest closed the sale of approximately 70% of SRC1 to a subsidiary of ORIX Corporation USA for $15.0 million. Under the terms of the agreement, Midwest holds a 30% ownership interest in SRC1. ORIX Advisers, LLC, another subsidiary of ORIX USA, will be the manager of the assets underlying SRC1’s reinsurance obligations going forward, replacing Midwest’s asset management arm, 1505 Capital LLC. Midwest is recognizing the $15.0 million as Noncontrolling interest in the equity section of the Consolidated balance sheets. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2021 | |
Marketable Securities [Abstract] | |
Investments | Note 4. Investments The amortized cost and estimated fair value of investments classified as available-for-sale as of December 31, 2021 and 2020 are as follows: Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value December 31, 2021: Fixed maturities: Bonds: U.S. government obligations $ 1,855 $ 32 $ 5 $ 1,882 Mortgage-backed securities 55,667 368 755 55,280 Asset-backed securities 24,675 443 167 24,951 Collateralized loan obligation 272,446 2,928 851 274,523 States and political subdivisions -- general obligations 105 9 — 114 States and political subdivisions -- special revenue 4,487 1,129 4 5,612 Corporate 35,392 1,846 99 37,139 Term Loans 268,794 441 1,767 267,468 Trust preferred 2,218 19 — 2,237 Redeemable preferred stock 14,282 53 245 14,090 Total fixed maturities $ 679,921 $ 7,268 $ 3,893 $ 683,296 Mortgage loans on real estate, held for investment 183,203 — — 183,203 Derivatives 18,654 6,391 2,023 23,022 Federal Home Loan Bank (FHLB) stock 500 — — 500 Equity securities 22,158 — 289 21,869 Other invested assets 34,491 813 11 35,293 Investment escrow 3,611 - — 3,611 Preferred stock 14,885 3,801 — 18,686 Notes receivable 5,960 — — 5,960 Policy loans 87 — — 87 Total investments $ 963,470 $ 18,273 $ 6,216 $ 975,527 December 31, 2020: Fixed maturities: Bonds: U.S. government obligations $ 5,744 $ 426 $ 6 $ 6,164 Mortgage-backed securities 14,638 276 157 14,757 Asset-backed securities 7,277 173 — 7,450 Collateralized loan obligation 209,224 5,450 350 214,324 States and political subdivisions -- general obligations 107 11 — 118 States and political subdivisions -- special revenue 5,293 909 — 6,202 Corporate 17,401 1,379 171 18,609 Term Loans 107,254 — — 107,254 Trust preferred 2,218 67 — 2,285 Total fixed maturities $ 369,156 $ 8,691 $ 684 $ 377,163 Mortgage loans on real estate, held for investment 94,990 — — 94,990 Derivatives 8,532 3,257 428 11,361 Other invested assets 21,897 — — 21,897 Investment escrow 3,174 — — 3,174 Preferred stock 3,898 — — 3,898 Notes receivable 5,666 — — 5,666 Policy loans 46 — — 46 Total investments $ 507,359 $ 11,948 $ 1,112 $ 518,195 The following table shows the distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of December 31, 2021 and 2020. December 31, 2021 December 31, 2020 Carrying Carrying (In thousands) Value Percent Value Percent AAA and U.S. Government $ 2,674 0.4 % $ 3,071 0.8 % AA 482 0.1 5,818 1.5 A 168,141 24.6 49,445 13.1 BBB 462,699 67.7 247,636 65.7 Total investment grade 633,996 92.8 305,970 81.1 BB and other 49,300 7.2 71,193 18.9 Total $ 683,296 100.0 % $ 377,163 100.0 % Reflecting the quality of securities maintained by us, as of December 31, 2021 and 2020, 92.8% and 81.1%, respectively, of all fixed maturity securities were investment grade. The following table summarizes, for all securities in an unrealized loss position at December 31, 2021 and 2020 the estimated fair value, pre-tax gross unrealized loss and number of securities by length of time that those securities have been continuously in an unrealized loss position. December 31, 2021 December 31, 2020 Gross Number Gross Number Estimated Unrealized of Estimated Unrealized of (In thousands) Fair Value Loss Securities (1) Fair Value Loss Securities (1) Fixed Maturities: Less than 12 months: U.S. government obligations $ 104 $ 2 1 $ 55 $ — 2 Mortgage-backed securities 35,403 755 35 5,708 157 5 Asset-backed securities 12,355 167 13 14,878 247 19 Collateralized loan obligation 90,731 851 115 — — — States and political subdivisions -- special revenue 217 4 0 6 — 1 Term loans 105,677 1,767 — — — Redeemable preferred stock 10,837 245 6 — — — Corporate 2,367 73 9 3,860 104 7 Greater than 12 months: U.S. government obligations 66 3 3 120 6 4 Collateralized loan obligations — — — 7,020 103 6 Corporate 324 26 2 287 67 3 Total fixed maturities $ 258,081 $ 3,893 184 $ 31,934 $ 684 47 (1) Our securities positions resulted in a gross unrealized loss position as of December 31, 2021 that was greater than the gross unrealized loss position at December 31, 2020 due to a decline in market values. We performed an analysis and determined that there were no indicators that we should perform a cash flow testing analysis and no impairment was required as of December 31, 2021. During the impairment analysis performed as of December 31, 2020 one of our assets had been in a loss position for over two years and had a decrease in its credit rating since 2019; cashflow testing on that security determined an impairment existed so we recorded an impairment of $35,000. As of December 31, 2021, management believed the Company would fully recover its cost basis in the remaining securities and management did not have the intent to sell, nor was it more likely than not that the Company will be required to sell, such securities until they recover or mature. See the discussion above under “Comprehensive loss” in Note 1 regarding unrealized gains/losses on investments that are owned by our reinsurers and the corresponding offset carried as a gain in the associated embedded derivatives. The Company purchases and sells equipment leases in its investment portfolio. As of December 31, 2021, the Company owned several leases. An impairment analysis was completed on the only non-performing lease in the portfolio as of June 30, 2020 and it was determined that the underlying collateral value was less than the outstanding remaining lease payments of $3.6 million. The Company recognized a valuation allowance as of June 30, 2020 of $777,000 on that asset. During March 2021, the non-performing asset was sold for a loss of $2.4 million. The valuation allowance was released and a loss of $2.4 million was recognized; however, this asset was held on behalf of a third-party reinsurer. Therefore, due to the terms of the reinsurance agreements, the loss was passed through to the third-party reinsurer by reducing its investment income earned. The amortized cost and estimated fair value of fixed maturities at December 31, 2021, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Estimated (In thousands) Cost Fair Value Due in one year or less $ 43,011 $ 42,868 Due after one year through five years 286,283 286,068 Due after five years through ten years 240,093 242,341 Due after ten years through twenty years 63,986 64,206 Due after twenty years 44,748 46,076 No maturity 1,800 1,737 $ 679,921 $ 683,296 The Company is required to hold assets on deposit for the benefit of policyholders in accordance with insurance rules and regulations. At December 31, 2021 and 2020, these required deposits had a total amortized cost of $3.0 million and $3.4 million, respectively, and fair values of $3.0 million and $3.6 million, respectively. Mortgage loans consist of the following: (In thousands) December 31, 2021 December 31, 2020 Industrial $ — $ 1,250 Commercial mortgage loan - multi-family 101,809 66,916 Residential 50,000 — Retail 13,824 — Other 17,570 26,824 Total mortgage loans $ 183,203 $ 94,990 Geographic Locations: As of December 31, 2021, the commercial mortgages loans were secured by properties geographically dispersed (with the largest concentrations in loans secured by properties in Delaware (34%) New York (32%), Arizona (4%), California (4%), and non-US (9%). As of December 31, 2020, the commercial mortgages loans were secured by properties geographically dispersed (with the largest concentrations in New York (28%), Pennsylvania (14%), California (14%) and Europe (12%)). The loan-to-value ratio is expressed as a percentage of the amount of the loan relative to the value of the underlying property. A loan-to-value ratio in excess of 100% indicates the unpaid loan amount exceeds the underlying collateral. The following represents the loan-to-value ratio of the commercial mortgage loan portfolio, excluding those under development, net of valuation allowances. Commercial Mortgage Loans (In thousands) December 31, 2021 December 31, 2020 Loan-to-Value Ratio: 0%-59.99% $ 91,104 $ 49,280 60%-69.99% 42,819 22,349 70%-79.99% 44,106 23,361 80% or greater 5,174 — Total mortgage loans $ 183,203 $ 94,990 The components of net investment income for the years ended December 31, 2021 and 2020 are as follows: Year ended December 31, (In thousands) 2021 2020 Fixed maturities $ 16,443 $ 3,661 Mortgage loans 185 992 Other invested assets 665 103 Other interest income 298 — Gross investment income 17,591 4,756 Less: investment expenses (1,854) (709) Investment income, net of expenses $ 15,737 $ 4,047 Proceeds for the years ended December 31, 2021 and 2020 from sales of investments classified as available-for-sale were $356.8 million, and $89.1 million, respectively. Gross gains of $6.0 million and $2.2 million and gross losses of $1.4 million and $388,000 were realized on sales and the realized losses on sales during the years ended December 31, 2021 and 2020, respectively. The proceeds included those assets associated with the third-party reinsurers. The gains and losses relate only to the assets retained by Midwest. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 5. Derivative Instruments The Company entered into derivative instruments to hedge fixed indexed annuity products that guarantee the return of principal to the policyholders and credit interest based on a percentage of the gain in a specified market index. To hedge against adverse changes in equity indices, the Company entered into contracts to buy equity indexed options. The following is a summary of the asset derivatives not designated as hedges embedded derivatives in our FIA product as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Location in the (In thousands, except number of contracts) Consolidated Derivatives Not Designated Statement of Notional Number of Estimated Notional Number of Estimated as Hedging Instruments Balance Sheets Amount Contracts Fair Value Amount Contracts Fair Value Equity-indexed options Derivatives $ 526,096 482 $ 23,766 $ 272,854 252 $ 11,361 Equity-indexed embedded derivatives Deposit-type 525,548 4,205 123,692 311,964 2,101 84,501 At December 31, 2021, the value of the embedded derivative considers all amounts projected to be paid in excess of the minimum guarantee (the amounts payable without any indexation increases) over future periods. The host contract reflects the minimum guaranteed values. Due to price changes in the capital markets, our securities positions resulted in decreased unrealized gains at December 31, 2021, compared to 2020, reported in accumulated other comprehensive income on the balance sheet. The embedded derivative related to the asset portfolio belonging to the third-party reinsurers offset these unrealized gains. The unrealized gains as of December 31, 2021 was $161,000 compared to unrealized gains of $2.9 million as of December 31, 2020. The following table summarizes the impact of those embedded derivatives related to the funds withheld provision where the total return on the asset portfolio belongs to the third-party reinsurers: December 31, 2021 December 31, 2020 (In thousands, except number of contracts) Book Value Market Value Total Return Book Value Market Value Total Return Portfolio Assets Assets Swap Value Assets Assets Swap Value American Republic Insurance Company $ 74,983 $ 74,670 $ 313 $ — $ — $ — Crestline Re SP1 228,560 228,450 110 62,163 63,131 (968) Ironbound 154,867 155,755 (888) 98,714 99,748 (1,034) Ascendent Re 56,246 56,078 168 27,224 27,480 (256) US Alliance 46,221 46,085 136 35,707 36,360 (653) Total $ 560,877 $ 561,038 $ (161) $ 223,808 $ 226,719 $ (2,911) The total return swap value was recorded as a decrease in our amounts recoverable from reinsurers of $161,000 compared to an increase of $2.9 million on our balance sheet as of December 31, 2021 and 2020, respectively, and a realized gain of $2.7 million compared to realized loss of $2.9 million on our income statement for the years ended December 31, 2021 and 2020. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
Fair Values of Financial Instruments | Note 6. Fair Values of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. We use valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. ● Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ● Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the valuation inputs, or their ability to be observed, may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur. A description of the valuation methodologies used for assets measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Level 1 measurements Cash equivalents: Level 2 measurements Investment escrow: Fixed maturity securities: Derivatives: Equity securities Notes receivable Level 3 measurements Term loans: Mortgage loans on real estate, held for investment: loans are generally stated at principal amounts outstanding, net of deferred expenses and allowance for loan loss. Interest on loans is recognized on an accrual basis at the applicable interest rate on the principal amount outstanding. Loan origination fees and direct costs, as well as premiums and discounts, are amortized as level yield adjustments over the respective loan terms. Unamortized net fees or costs are recognized upon early repayment of the loans. Loan commitment fees are generally deferred and amortized on an effective yield basis over the term of the loan. Impaired loans are generally carried on a non-accrual status. Loans are ordinarily placed on non-accrual status when, in management’s opinion, the collection of principal or interest is unlikely, or when the collection of principal or interest is 90 days or more past due. Other invested assets: Federal Home Loan Bank (FHLB) stock: Preferred stock: Policy loans: Deposit-type contracts: Embedded derivative for equity-indexed contracts The following table presents the Company’s fair value hierarchy for those financial instruments measured at fair value on a recurring basis as of December 31, 2021 and 2020. Significant Quoted Other Significant In Active Observable Unobservable Estimated Markets Inputs Inputs Fair (In thousands, except number of contracts) (Level 1) (Level 2) (Level 3) Value December 31, 2021 Financial assets Fixed maturity securities: Bonds U.S. government obligations $ — $ 1,882 $ — $ 1,882 Mortgage-backed securities — 55,280 — 55,280 Asset-backed securities — 24,951 — 24,951 Collateralized loan obligation — 274,523 — 274,523 States and political subdivisions — general obligations — 114 — 114 States and political subdivisions — special revenue — 5,612 — 5,612 Corporate — 37,139 — 37,139 Term Loans — — 267,468 267,468 Trust preferred — 2,237 — 2,237 Redeemable preferred stock — 14,090 — 14,090 Total fixed maturity securities — 415,828 267,468 683,296 Mortgage loans on real estate, held for investment — — 183,203 183,203 Derivatives — 23,022 — 23,022 Equity securities — 21,869 — 21,869 Other invested assets — — 35,293 35,293 Investment escrow — 3,611 — 3,611 Federal Home Loan Bank (FHLB) stock — — 500 500 Preferred stock — — 18,686 18,686 Notes receivable — 5,960 — 5,960 Policy loans — — 87 87 Total Investments $ — $ 470,290 $ 505,237 $ 975,527 Financial liabilities Embedded derivative for equity-indexed contracts $ — $ — $ 123,692 123,692 December 31, 2020 Fixed maturity securities: Bonds U.S. government obligations $ — $ 6,164 $ — $ 6,164 Mortgage-backed securities — 14,757 — 14,757 Asset-backed securities — 7,450 — 7,450 Collateralized loan obligation — 214,324 — 214,324 States and political subdivisions — general obligations — 118 — 118 States and political subdivisions — special revenue — 6,202 — 6,202 Corporate — 18,609 — 18,609 Term loans — — 107,254 107,254 Trust preferred — 2,285 — 2,285 Total fixed maturity securities — 269,909 107,254 377,163 Mortgage loans on real estate, held for investment — — 94,990 94,990 Derivatives — 11,361 — 11,361 Other invested assets — — 21,897 21,897 Investment escrow — 3,174 — 3,174 Preferred stock — — 3,898 3,898 Notes receivable — 5,666 — 5,666 Policy loans — — 46 46 Total Investments $ — $ 290,110 $ 228,085 $ 518,195 Financial liabilities Embedded derivative for equity-indexed contracts $ — $ — $ 84,501 84,501 There were no transfers of financial instruments between any Accounting standards require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring basis are discussed above. There were no financial assets or financial liabilities measured at fair value on a non-recurring basis. The following disclosure contains the carrying values, estimated fair values and their corresponding placement in the fair value hierarchy, for financial assets and financial liabilities as of December 31, 2021 and 2020, respectively: December 31, 2021 Fair Value Measurements Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Unobservable Carrying and Liabilities Inputs Inputs Fair (In thousands, except number of contracts) Amount (Level 1) (Level 2) (Level 3) Value Assets: Policy loans $ 87 $ — $ — $ 87 $ 87 Cash equivalents 142,013 — 142,013 — 142,013 Liabilities: Policyholder deposits (deposit-type contracts) 1,075,439 — — 1,075,439 1,075,439 December 31, 2020 Fair Value Measurements Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Unobservable Carrying and Liabilities Inputs Inputs Fair (In thousands, except number of contracts) Amount (Level 1) (Level 2) (Level 3) Value Assets: Policy loans $ 46 $ — $ — $ 46 $ 46 Cash equivalents 151,679 100,567 51 — 151,679 Liabilities: Policyholder deposits (deposit-type contracts) 597,868 — — 597,868 597,868 The following table presents a reconciliation from the opening balances to the closing balances with separate disclosure of changes during the period attributable to (a) total gains or losses for the period recognized in earnings and the line item(s) in the statement of comprehensive income in which such gains or losses are recognized; (b) total gains or losses for the period recognized in other comprehensive income and the line item(s) in other comprehensive income in which such gains or losses are recognized; (c) purchases, sales, issues, and settlements, with each type disclosed separately; and (d) the amounts of any transfers into or out of Level 3, the reasons for such transfers, and the policy for determining when transfers between levels have occurred during the year ended December 31, 2021: As of As of December 31, December 31, (In thousands, except number of contracts) 2020 Additions Sales 2021 Assets Term loans $ 107,254 $ 231,089 $ 70,875 267,468 Mortgage loans on real estate, held for investment 94,990 160,277 72,064 183,203 Federal Home Loan Bank (FHLB) stock — 500 — 500 Other invested assets 21,897 96,339 82,943 35,293 Preferred stock 3,898 14,788 - 18,686 Total Investments $ 228,039 $ 502,993 $ 225,882 $ 505,150 The following tables present a reconciliation of the beginning balance for all investments measured at fair value on a recurring basis using level three inputs during the year ended December 31, 2020: As of As of December 31, Valuation December 31, (In thousands, except number of contracts) 2019 Additions Sales Allowance Impairment 2020 Assets Term loans $ — $ 107,254 $ — $ — $ — $ 107,254 Mortgage loans on real estate, held for investment 13,810 99,357 18,177 — — 94,990 Other invested assets 2,469 74,723 54,518 (777) — 21,897 Preferred stock 500 3,898 — — (500) 3,898 Total Investments $ 16,779 $ 285,232 $ 72,695 $ (777) $ (500) $ 228,039 Significant Unobservable Inputs —Significant unobservable inputs occur when we could not obtain or corroborate the quantitative detail of the inputs. This applies to fixed maturity securities, preferred stock, mortgage loans and certain derivatives, as well as embedded derivatives in liabilities. Additional significant unobservable inputs are described below. Interest sensitive contract liabilities – embedded derivative – Significant unobservable inputs we use in the fixed indexed annuities embedded derivative of the interest sensitive contract liabilities valuation include: ● Nonperformance risk – For contracts we issue, we use the credit spread, relative to the US Department of the Treasury (Treasury) curve based on our public credit rating as of the valuation date. This represents our credit risk for use in the estimate of the fair value of embedded derivatives. ● Option budget – We assume future hedge costs in the derivative’s fair value estimate. The level of option budgets determines the future costs of the options and impacts future policyholder account value growth. ● Policyholder behavior – We regularly review the lapse and withdrawal assumptions (surrender rate). These are based on our initial pricing assumptions updated for actual experience. Actual experience may be limited for recently issued products. Preferred equity and warrants – Significant unobservable inputs we use in include surrender rate, discount rates, and EBITA Multiples. The following summarizes the unobservable inputs for the embedded derivatives of fixed indexed annuities and preferred stock (with associated datable warrants): December 31, 2021 (In millions, except for percentages) Fair value Valuation technique Unobservable inputs Minimum Maximum Weighted average* Impact of an increase in the input on fair value Interest sensitive contract liabilities - fixed indexed annuities embedded derivatives $123.7 Option Budget Method Nonperformance risk 0.3% 1.1% 0.6% Decrease Option budget 1.1% 3.4% 2.4% Increase Surrender rate 0.5% 15% (base) 7.7% Decrease Preferred equity $4.9 Yield analysis Discount rates 17.5% 19.5% 18.5% Increase Detachable warrants $2.8 Market Approach - GPCM EBITA Multiple 9.0x 10.0x 100.0% Increase * Weighted by account value December 31, 2020 (In millions, except for percentages) Fair value Valuation technique Unobservable inputs Minimum Maximum Weighted average* Impact of an increase in the input on fair value Interest sensitive contract liabilities - fixed indexed annuities embedded derivatives $84.5 Option Budget Method Nonperformance risk 0.3% 1.3% 0.7% Decrease Option budget 2.6% 3.4% 2.7% Increase Surrender rate 0.5% 15% (base) 7.6% Decrease * Weighted by account value |
Earnings Loss Per Share
Earnings Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Loss Per Share | Note 7. Earnings Loss Per Share The Company has 20.0 million voting common shares authorized, two million non-voting common shares authorized, and two million preferred shares authorized. There were 3,737,564 voting common shares issued and outstanding as of December 31, 2021 and 2020. Year ended December 31, 2021 2020 (in thousands, except per share amounts) Numerator: Net loss attributable to Midwest Holding, Inc. $ (16,637) $ (12,440) Denominator: Weighted average common shares outstanding 3,737,564 2,547,003 Effect of dilutive securities: Stock options and deferred compensation agreements — 40,850 Denominator for earnings (loss) per common share 3,737,564 2,587,853 Loss per common share $ (4.45) $ (4.88) |
Income Tax Matters
Income Tax Matters | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Tax Matters | Note 8. Income Tax Matters Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows: (in thousands) December 31, 2021 December 31, 2020 Deferred tax assets: Loss carryforwards $ 2,244 $ 1,557 Capitalized costs 127 175 Stock option granted 1,060 14 Unrealized losses on investments 1,534 1,534 Policy acquisition costs 3,640 2,243 Charitable contribution carryforward — 2 General business credits 6 — Derivative option allowance 510 — Sec 163(j) limitation 171 154 Benefit reserves 5,186 3,569 Property and equipment 33 — Other 1,464 — Total deferred tax assets 15,975 9,248 Less valuation allowance (14,431) (7,002) Total deferred tax assets, net of valuation allowance 1,544 2,246 Deferred tax liabilities: Unrealized losses on investments 1,084 1,994 Due premiums — 82 Intangible assets 147 147 Bond Discount 313 20 Property and equipment — 3 Total deferred tax liabilities 1,544 2,246 Net deferred tax assets $ — $ — At December 31, 2021 and 2020, the Company recorded a valuation allowance of $14.4 million and $7.0 million, respectively, on the deferred tax assets to reduce the total to an amount that management believes will ultimately be realized. Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry forwards are expected to be available to reduce taxable income. There was income tax expense of $4.8 million and $1.6 million for the years ended December 31, 2021, and 2020. This differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% to pretax income, as a result of the following: Year ended December 31, (in thousands) 2021 2020 Computed expected income tax benefit $ (2,815) $ (2,238) Increase (reduction) in income taxes resulting from: State tax net of federal benefit — 158 IMR and reinsurance 157 26 Nondeductible expenses 9 5 Gain on sale of SRC1 368 — Change in valuation allowance 7,429 4,049 Dividends received deduction — (10) Amended Return - 2019/2020 339 Adjustment to payable (110) — Deferred tax adjustment (382) — Prior year true-up (229) (405) Subtotal of increases 7,581 3,823 Tax expense $ 4,766 $ 1,585 Section 382 of the Internal Revenue Code limits the utilization of U.S. net operating loss (“NOL”) carryforwards following a change of control, which occurred on June 28, 2018. As of December 31, 2021, the deferred tax assets included the expected tax benefit attributable to federal NOLs of $9.8 million. The federal NOLs generated prior to June 28, 2018 which are subject to Section 382 limitation can be carried forward. If not utilized, the NOLs of $907,363 prior to 2017 will expire through the year of 2032, and the NOLs generated from June 28, 2018 to December 31, 2021 do not expire and will carry forward indefinitely, but their utilization in any carry forward year is limited to 80% of taxable income in that year. The Company believes that it is more likely than not that the benefit from federal NOL carryforwards will not be realized; thus, we have recorded a full valuation allowance of $2.1 million on the deferred tax assets related to these federal NOL carryforwards. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Note 9. Reinsurance A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of December 31, 2021 and 2020 and for the years ended December 31, 2021 and 2020, is as follows: (in thousands) December 31, 2021 December 31, 2020 Assets: Reinsurance recoverables $ 38,579 $ 32,146 Liabilities: Deposit-type contracts Direct $ 1,075,439 597,868 Reinsurance ceded (647,632) (405,981) Retained deposit-type contracts $ 427,807 $ 191,887 Year ended December 31, 2021 2020 (in thousands) Premiums Direct $ 258 $ 884 Reinsurance ceded (258) (884) Total Premiums $ — $ — Future policy and other policy benefits Direct $ 159 $ 233 Reinsurance ceded (159) (233) Total future policy and other policy benefits $ — $ — The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurer except for Unified as it is accounted for as discontinued operations as of December 31, 2021: Recoverable/ Total Amount Recoverable Recoverable (Payable) on Benefit Ceded Recoverable/ (in thousands) AM Best on Paid on Unpaid Reserves/Deposit- Due (Payable) to/from Reinsurer Rating Losses Losses type Contracts Premiums Reinsurer Ironbound Reinsurance Company Limited NR $ — $ — $ (3,561) $ — $ (3,561) Optimum Re Insurance Company A — — 561 — 561 Sagicor Life Insurance Company A- — 157 10,901 303 10,755 Ascendant Re NR — — 1,550 — 1,550 Crestline SP1 NR — — 18,288 — 18,288 American Republic Insurance Company A — — 4,885 — 4,885 Unified Life Insurance Company NR — 45 1,013 21 1,037 US Alliance Life and Security Company NR — — 5,090 26 5,064 $ — $ 202 $ 38,727 $ 350 $ 38,579 The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurer except for Unified as it is accounted for as discontinued operations as of December 31, 2020: Recoverable on Total Amount Recoverable Recoverable Benefit Ceded Recoverable (in thousands) AM Best on Paid on Unpaid Reserves/Deposit- Due from Reinsurer Rating Losses Losses type Contracts Premiums Reinsurer Optimum Re Insurance Company A $ — $ — $ 525 $ — $ 525 Sagicor Life Insurance Company A- — 141 11,286 277 11,150 Ascendant Re NR — — 3,541 — 3,541 Crestline SP1 NR — — 9,695 — 9,695 US Alliance Life and Security Company NR — — 7,264 29 7,235 $ — $ 141 $ 32,311 $ 306 $ 32,146 Our securities positions resulted in changes in the unrealized gains position as of December 31, 2021 compared to December 31, 2020, reported in accumulated other comprehensive income on the Consolidated balance sheets. As discussed in Note 1, American Life has treaties with several third-party reinsurers that have FW and Modco provisions. Under those provisions, the assets backing the treaties are maintained by American Life as collateral but the assets and total returns or losses on the asset portfolios belong to the third-party reinsurers. Under GAAP this arrangement is considered an embedded derivative as discussed in Note 5. The assets had unrealized gains of approximately $161,000 and $2.9 million as of December 31, 2021 and 2020, respectively. The terms of the contracts with the third-party reinsurers provide that unrealized gains on the portfolios accrue to the third-party reinsurers. Accordingly, the unrealized gains on the assets held by American Life were offset by a gain in the embedded derivative of $2.7 million and a loss of $2.9 million, respectively. We account for this gain pass through by recording equivalent realized losses on our Consolidated Statements of Comprehensive Loss. Effective April 15, 2020, American Life entered into a Funds Withheld and Funds Paid Coinsurance Agreement (“US Alliance Agreement”) with US Alliance Life and Security Company, a Kansas reinsurance company (“US Alliance”). Under the US Alliance Agreement, American Life will cede to US Alliance, on a funds withheld and funds paid coinsurance basis, an initial 49% quota share of certain liabilities with respect to American Life’s FIA business effective January 1, 2020 through March 31, 2020. Effective from March 1, 2020 through March 10, 2020, American Life ceded a 45.5% quota share of certain liabilities with respect to its MYGA business to US Alliance. Effective March 11, 2020 through March 31, 2020, on a funds withheld and funds paid coinsurance basis, the quota share increased to 66.5% of certain liabilities with respect to its MYGA business. Effective April 1, 2020, the FIA quota share was reduced to 40% and the MYGA quota share was reduced to 25%. American Life established a US Alliance Funds Withheld Account to hold the assets for the US Alliance Agreement. In addition, a trust account was established among American Life, US Alliance and Capitol Federal Savings Bank, for the sole benefit of American Life to fund the Funds Withheld Account for any shortage in required reserves. The initial settlement included net premium income of $13.5 million and net statutory reserves of $14.7 million. The initial settlement for the Funds Withheld Account was $12.7 million and to the trust account was $800,000 from American Life and $5.0 million from US Alliance. Effective June 30, 2020, the FIA quota share was reduced to zero and effective July 1, 2020, the MYGA quota share was reduced to zero. Effective April 24, 2020, American life entered into a Master Letter Agreement with Seneca Re and Crestline Management regarding a flow of annuity reinsurance and related asset management, whereby Crestline Management agreed to provide reinsurance funding for a quota share percentage of 25% of the liabilities of American Life arising from the MYGA and a quota share percentage of 40% of the FIA products. This agreement expires on April 24, 2023. On July 24, 2020, the Nebraska Department of Insurance (“NDOI”) issued its non-disapproval of the Funds Withheld Coinsurance and Modified Coinsurance Agreement with Seneca Incorporated Cell, LLC 2020-02 (“SRC2”) of Seneca Re, now known as Crestline RE SP1. The agreement closed on July 27, 2020. Under the agreement, American Life ceded to SRC2, on a Funds Withheld and Modified Coinsurance basis, an initial 25% quota share of certain liabilities with respect to American Life’s MYGA business and 40% quota share of certain liabilities with respect to American Life’s FIA business effective April 24, 2020. Effective July 1, 2021, the quota share for FIA decreased from 40% to 25%. American Life established a SRC2 Funds Withheld Account and a Modified Coinsurance Account to hold the assets pursuant to the agreement. The NDOI approved the inclusion of the SRC2 coinsurance in American Life’s March 31, 2020 statutory financial statements. In addition, a trust account was established on July 23, 2020 among American Life, SRC2 and U.S. Bank, National Association for the sole benefit of American Life to fund the SRC2 Funds Withheld Account and the SRC2 Modco deposit account for any shortage in required reserves. On June 26, 2021, the NDOI issued its non-disapproval of the Modified Coinsurance Agreement (“Modco AEG Agreement”) with American Republic Insurance Company (“AEG”), an Iowa domiciled reinsurance company. The agreement closed on June 30, 2021. Under the Modco AEG Agreement, American Life cedes to AEG, on a modified coinsurance basis, 20% quota share of certain liabilities with respect to its multi-year guaranteed annuity MYGA-5 business and an initial 20% quota share of certain liabilities with respect to its fixed indexed annuity FIA. American Life has established a Modco Deposit Account to hold the assets for the Modco Agreement. The initial settlement included net premium income of $37.5 million and net statutory reserves of $34.8 million for the modified coinsurance account. The amount paid to the Modified coinsurance deposit account from AEG was $2.4 million. On November 10, 2021, the NDOI issued its non-disapproval of the Funds Withheld and Modified Coinsurance Agreement SRC3, whereby, SRC3 agreed to provide reinsurance funding for a quota share percentage of 45% of the liabilities of American Life arising from its MYGA products and a quota share percentage of 45% of American Life’s FIA products. American Life has established a FW and Modco Deposit Account to hold the assets for the FW and Modco Agreement. The initial settlement included net premium income of $37.5 million and net statutory reserves of $43.6 million. Under GAAP, ceding commissions are deferred on the Consolidated balance sheets and are amortized over the period of the policyholder contracts. The tables below shows the ceding commissions from the reinsurers excluding SRC1 and what was earned on a GAAP basis for the years ended December 31, 2021 and 2020: Year ended December 31, (in thousands) 2021 2020 Reinsurer Gross Ceding Commission Expense Allowance (1) Interest on Ceding Commission Earned Ceding Commission Gross Ceding Commission Expense Allowance Interest on Ceding Commission Earned Ceding Commission Unified Life Insurance Company $ - $ — $ — $ 35 $ — $ — $ — $ — Ironbound Reinsurance Company Limited — (461) 211 684 688 703 221 435 Ascendant Re 498 904 93 367 1,354 2,617 67 78 US Alliance Life and Security Company 2 (75) 60 401 2,279 4,030 39 139 Crestline SP1 6,699 12,321 255 1,185 6,243 11,799 48 191 American Republic Insurance Company 3,971 7,039 26 350 — — — — $ 11,170 $ 19,728 $ 645 $ 3,022 $ 10,564 $ 19,149 $ 375 $ 843 (1) Includes: acquisition and administrative expenses, commission expense allowance and product development fees. The tables below shows the ceding commissions deferred on each reinsurance transaction on a GAAP basis: (in thousands) December 31, 2021 December 31, 2020 Reinsurer Deferred Gain on Reinsurance Transactions Deferred Gain on Reinsurance Transactions US Alliance Life and Security Company (1) $ 162 $ 172 Unified Life Insurance Company (1) 242 277 Ironbound Reinsurance Company Limited (2) 5,137 5,642 Ascendant Re 3,101 2,703 US Alliance Life and Security Company (2) 2,286 2,473 American Republic Insurance Company (2) 4,146 — Crestline SP1 (2) 13,515 6,932 $ 28,589 $ 18,199 1) These reinsurance transactions on our legacy life insurance business received gross ceding commissions on the effective dates of the transaction. The difference between the statutory net adjusted reserves and the GAAP adjusted reserves plus the elimination of DAC and value of business acquired related to these businesses reduces the gross ceding commission with the remaining deferred and amortized over the lifetime of the blocks of business. 2) These reinsurance transactions include the ceding commissions and expense allowances which are accounted for as described in (1). The use of reinsurance does not relieve American Life of its primary liability to pay the full amount of the insurance benefit in the event of the failure of a reinsurer to honor its contractual obligation for all blocks of business except what is included in the Unified transaction. The reinsurance agreement with Unified discharges American Life’s responsibilities once all the policies have changed from indemnity to assumptive reinsurance. No reinsurer of business ceded by American Life has failed to pay policy claims (individually or in the aggregate) with respect to our ceded business. American Life monitors several factors that it considers relevant to satisfy itself as to the ongoing ability of a reinsurer to meet all obligations of the reinsurance agreements. These factors include the credit rating of the reinsurer, the financial strength of the reinsurer, significant changes or events of the reinsurer, and any other relevant factors. If American Life believes that any reinsurer would not be able to satisfy its obligations with American Life, separate contingency reserves may be established. At December 31, 2021 and 2020, no contingency reserves were established. American Life expects to reinsure substantially all of its new insurance policies with a variety of reinsurers in exchange for upfront ceding commissions, expense reimbursements and administrative fees. American Life may retain some business with the intent to reinsure some or all at a future date. Retained and Reinsurer Balance Sheets The tables below shows the retained and reinsurance consolidated balance sheets: December 31, 2021 December 31, 2020 (in thousands) Retained Reinsurance Consolidated Retained Reinsurance Consolidated Assets Total investments $ 414,418 $ 561,109 $ 975,527 $ 185,368 $ 332,827 $ 518,195 Cash and cash equivalents 95,406 46,607 142,013 102,335 49,344 151,679 Accrued investment income 3,853 9,770 13,623 1,956 4,851 6,807 Deferred acquisition costs, net 24,530 — 24,530 13,456 — 13,456 Reinsurance recoverables — 38,579 38,579 — 32,146 32,146 Other assets 27,834 (2,189) 25,645 2,685 1,433 4,118 Total assets $ 566,041 $ 653,876 $ 1,219,917 $ 305,800 $ 420,601 $ 726,401 Liabilities and Stockholders’ Equity Liabilities: Policyholder liabilities $ 427,807 $ 660,811 $ 1,088,618 $ 191,887 $ 418,921 $ 610,808 Deferred gain on coinsurance transactions 28,589 — 28,589 18,199 — 18,199 Other liabilities 23,889 (6,935) 16,954 9,384 1,680 11,064 Total liabilities $ 480,285 $ 653,876 $ 1,134,161 $ 219,470 $ 420,601 $ 640,071 Stockholders’ Equity: Voting common stock 4 — 4 4 — 4 Additional paid-in capital 138,277 — 138,277 133,417 — 133,417 Accumulated deficit (70,159) — (70,159) (53,522) — (53,522) Accumulated other comprehensive income 2,634 — 2,634 6,431 — 6,431 Total Midwest Holding Inc.'s stockholders' equity $ 70,756 $ — $ 70,756 $ 86,330 $ — $ 86,330 Noncontrolling interest 15,000 — 15,000 — — — Total stockholders' equity 85,756 — 85,756 86,330 — 86,330 Total liabilities and stockholders' equity $ 566,041 $ 653,876 $ 1,219,917 $ 305,800 $ 420,601 $ 726,401 |
Long-Term Incentive Plans
Long-Term Incentive Plans | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Long-Term Incentive Plans | Note 10. Long-Term Incentive Plans On June 11, 2019, our Board of Directors approved the Midwest Holding Inc. Long-Term Incentive Plan (the “2019 Plan”) that reserves up to 102,000 shares of our voting common stock for award issuances. It provides for the grant of options, restricted stock awards, restricted stock units, stock appreciation rights, performance units, performance bonuses, stock awards and other incentive awards to eligible employees, consultants and eligible directors, subject to the conditions set forth in the 2019 Plan. Shareholder approval of the plan occurred on June 11, 2019. All awards are required to be established, approved, and/or granted by the compensation committee of our Board. On November 16, 2020, our Board of Directors adopted a new equity incentive plan titled the 2020 Long-Term Incentive Plan (the "2020 Plan") that reserves up to 350,000 shares of voting common stock for award issuances. The terms of the 2020 Plan are essentially the same as the 2019 Plan. On June 29, 2021, the 2020 Plan was approved by the shareholders. In accordance with the stockholder-approved equity incentive plans above, we granted stock options to employees and directors for the purchase of common stock at exercise prices at the date of the grants. We calculate the fair value and compensation at grant date using the Black Scholes Model. Stock options become exercisable under various vesting schedules (typically two The table below identifies the assumptions used in the Black Scholes Model to calculate the compensation expense: December 31, 2021 2020 Expected volatility 4.4% - 66.3% 60% - 200% Weighted-average volatility 38.9% 98.1% Expected term (in years) 2 7 2 5 Risk-free rate .8% - 1.5% .9% - 1.8% For the years ended December 31, 2021 and 2020, we amortized the compensation expense related to the 2019 and 2020 Plans, from the stock grants on the dates above, over the vesting tranches which resulted in expenses and an increase in additional paid in capital of approximately $5.0 million and $164,000, respectively. The tables below shows the remaining non-vested shares under the 2019 and 2020 Plans as of December 31, 2021 and 2020, respectively: Decmeber 31, 2021 Stock Options/ Restricted Stock Outstanding Weighted Average Grant-Date Fair Value Weighted Average Excise Price Nonvested stock options at December 31, 2020 100,972 $ 22.91 $ 34.70 Options granted 333,880 19.25 42.84 Restricted stock granted 5,089 24.34 24.34 Vested (85,957) 17.32 30.20 Forfeited (36,767) 23.91 40.42 Ending Balance at December 31, 2021 317,217 $ 25.80 $ 40.13 Decmeber 31, 2020 Stock Options/ Restricted Stock Outstanding Weighted Average Grant-Date Fair Value Weighted Average Excise Price Nonvested stock options at December 31, 2019 17,900 $ 8.00 $ 25.00 Options granted 68,025 21.85 33.13 Restricted stock granted 18,597 41.02 41.02 Vested (200) 8.00 25.00 Forfeited (3,350) 11.25 25.00 Ending Balance at December 31, 2020 100,972 $ 22.91 $ 34.70 |
Deposit-Type Contracts
Deposit-Type Contracts | 12 Months Ended |
Dec. 31, 2021 | |
Separate Accounts Disclosure [Abstract] | |
Deposit-Type Contracts | Note 11. Deposit-Type Contracts The Company’s deposit-type contracts represent the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. Liabilities for these deposit-type contracts are included without reduction for potential surrender charges. This liability is equal to the accumulated account deposits, plus interest credited, and less policyholder withdrawals. The following table provides information about deposit-type contracts for the years ended December 31, 2021 and 2020: As of As of (In thousands) December 31, 2021 December 31, 2020 Beginning balance $ 597,868 $ 171,169 US Alliance 1,873 (3,308) Unified Life Insurance Company 468 — Ironbound Reinsurance Company Limited 6,579 6,080 Ascendant Re 2,880 3,053 Crestline SP1 4,834 3,607 American Republic Insurance Company 1,567 — Deposits received 471,646 415,561 Investment earnings (includes embedded derivative) 7,012 4,215 Withdrawals (18,446) (2,509) Policy charges (842) — Ending balance $ 1,075,439 $ 597,868 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12. Commitments and Contingencies Contingent Commitments: Unfunded (In thousands) Commitment Due in one year or less $ 19,245 Due in two years 26,753 Due in three years 4,705 Due in four years 8,741 Due in five years and after 86,497 $ 145,941 Legal Proceedings: Regulatory Matters: |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 13. Leases Our operating lease activities consist of leases for office space and equipment. Our finance lease activities consist of leases for hardware which we will own at the end of the lease agreement. None of our lease agreements include variable lease payments. As of December 31, 2021, we have one remaining lease related to our office space. An amendment to the office space lease for additional space was effective October 16, 2021 extending the term on the lease another ten years. Supplemental balance sheet information for our leases for the years ended December 31, 2021 and 2020, are as follows: (In thousands) As of As of Leases Classification December 31, 2021 December 31, 2020 Assets Operating Operating lease right-of-use assets $ 2,360 $ 348 Liabilities Operating lease Operating lease liabilities $ 2,364 $ 397 Our operating and finance leases expenses for the years ended December 31, 2021 and 2020, are as follows: (In thousands) Year ended December 31, Leases Classification 2021 2020 Operating General and administrative expense $ 8 $ 9 Finance lease cost: Amortization expense — 3 Minimum contractual obligations for our leases as of December 31, 2021 are as follows: (in thousands) Operating Leases 2022 $ 342 2023 342 2024 342 2025 342 2026 345 2027 353 2028 362 2029 371 2030 380 2031 292 Total remaining lease payments $ 3,471 Supplemental cash flow information related to leases was as follows: Year ended December 31, (in thousands) 2021 2020 Cash payments Operating cash flows from operating leases $ (12) $ (5) Operating cash flows from finance leases — 1 The weighted average remaining lease terms of our operating leases were approximately ten years and one and half years |
Statutory Net Income and Surplu
Statutory Net Income and Surplus | 12 Months Ended |
Dec. 31, 2021 | |
Statutory Net Income and Surplus [Abstract] | |
Statutory Net Income and Surplus | Note 14. Statutory Net Income and Surplus American Life is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Nebraska Department of Insurance and the Vermont Department of Insurance. Statutory practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a different basis. The following table represents the net gains or (losses) as filed in the statutory-basis annual statement with the Nebraska Department of Insurance for American Life and the Vermont Department of Insurance for SRC1 and SRC3: (In thousands) Statutory Net Income/(Loss) as of December 31, 2021 2020 American Life $ (6,355) $ 3,893 SRC1 $ (1,004) $ (9,482) SRC3 $ (6,851) $ — The following table represents the Capital and Surplus as filed in the statutory-basis annual statement with the Nebraska Department of Insurance for American Life and the Vermont Department of Insurance for SRC1 and SRC3: (In thousands) Statutory Capital and Surplus as of December 31, American Life $ 74,011 $ 77,447 SRC1 $ 8,415 $ 5,518 SRC3 $ 3,150 $ - The following table represents the premiums sales as filed in the statutory-basis annual statement with the Nebraska Department of Insurance for American Life and the Vermont Department of Insurance for SRC1 and SRC3: Premiums Sales as of December 31, (In thousands) 2021 2020 American Life $ 107,767 $ 39,934 SRC1 $ 37,764 $ 147,502 SRC3 $ 88,704 $ — State insurance laws require American Life to maintain certain minimum capital and surplus amounts on a statutory basis. Our insurance subsidiary is subject to regulations that restrict the payment of dividends from statutory surplus and may require prior approval from its domiciliary insurance regulatory authorities. American Life is also subject to risk-based capital (“RBC”) requirements that may further affect its ability to pay dividends. American Life’s statutory capital and surplus as of December 31, 2021 and 2020, exceeded the amount of statutory capital and surplus necessary to satisfy regulatory requirements, including the RBC requirements as of those dates. As of December 31, 2020, American Life had an invested asset that was impaired as a result of the fair market of the underlying collateral being valued less that the book value. This was a non-admitted asset for statutory accounting purposes. This asset was held in our modified coinsurance account for Ironbound so it was passed through to the third-party reinsurer through as a reduction of the investment income earned by the third-party reinsurer. As of March 31, 2021, this invested asset was sold for a loss of $2.4 million that was passed through to the third-party reinsurer as a reduction of its investment income earned. As of December 31, 2021 and 2020, American Life did not hold any participating policyholder contracts where dividends were required to be paid. |
Third-party Administration
Third-party Administration | 12 Months Ended |
Dec. 31, 2021 | |
Related Party | |
Third Party Administration | Note 15. Third-party Administration The Company commenced its third-party administrative (“TPA”) services in 2012 as an additional revenue source. These services are offered to non-affiliated entities. These agreements, for various levels of administrative services on behalf of each company, generate fee income for the Company. Services provided vary and can include some or all aspects of back-office accounting and policy administration. TPA fee income earned for TPA services for the year ended December 31, 2021 and 2020 were $523,000 and $142,000, respectively. |
Reverse Stock Split
Reverse Stock Split | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Reverse Stock Split | Note 16. Reverse Stock Split On August 10, 2020, Midwest filed Articles of Amendment of Amended and Restated Articles of Incorporation (“Amendment”) that changed the total number of shares that the Company is authorized to issue to 22 million shares of common stock, of which 20 million were designated as voting common stock with a par value of $0.001 per share and two million designated as non-voting common stock with a par value of $0.001 per share. The Amendment also provides for two million shares of preferred stock with a par value of $0.001 per share. The Amendment provided that each 500 shares of voting common stock either issued or outstanding would be converted into one share of voting common stock through a reverse stock split. Fractional shares were not issued in connection with the reverse stock split but were paid out in cash. The Company paid approximately $175,000 for those fractional shares and is now holding treasury stock represented by that amount. The effective date, August 27, 2020, for the reverse stock split was retrospectively applied to these financial statements. Outstanding shares of voting common stock as of December 31, 2021 and 2020, were 3,737,564. |
Capital Raise
Capital Raise | 12 Months Ended |
Dec. 31, 2021 | |
Capital Raise [Abstract] | |
Capital Raise | Note 17. Capital Raise On December 21, 2020, Midwest completed a public offering of one million shares of its voting common stock at a price of $70.00 per share. The Midwest voting common stock was concurrently approved for listing on the Nasdaq Capital Market under the ticker symbol “MDWT.” Midwest raised $70.0 million of gross proceeds from the public offering and incurred commissions and expenses of approximately $6.0 million that were offset against those proceeds. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | Note 18. Equity Preferred stock As of December 31, 2021 and 2020, the Company had two million shares of preferred stock authorized but none were issued or outstanding. Common Stock The voting common stock is traded on The Nasdaq Capital Market under the symbol “MDWT.” Midwest has authorized 20 million shares of voting common stock and two million shares of non-voting common stock. As of December 31, 2021 and 2020, Midwest had 3,737,564 shares of voting common stock issued and outstanding. As of those dates, there were no shares of Midwest’s non-voting common stock issued or outstanding. Midwest holds approximately 4,500 shares of voting common stock in its treasury due to the reverse stock split discussed in Note 16 above. Additional paid-in capital Additional paid-in capital is primarily comprised of the cumulative cash that exceeds the par value received by the Company in conjunction with past issuances of its shares. It also is increased by the amortization expense of the consideration calculated at inception of the stock option grants as discussed in Note 10 – Long-Term Incentive Plans above. Accumulated Other Comprehensive Income (AOCI) AOCI represents the cumulative Other Comprehensive Income (OCI) items that are reported separate from net loss and detailed on the Consolidated Statements of Comprehensive Loss. AOCI includes the unrealized gains and losses on investments and DAC, net of offsets and taxes are as follows: (In thousands) Unrealized investment gains (losses) on fixed maturities, net of offsets Unrealized gains on foreign currency Accumulated other comprehensive income (loss) Balance at December 31, 2019 $ 474 $ 146 $ 620 Other comprehensive income before Reclassifications 7,398 — 7,398 Unrealized gains on foreign currency — (146) (146) Less: Reclassification adjustments for losses realized in net income (1,441) — (1,441) Balance at December 31, 2020 6,431 — 6,431 Other comprehensive income (loss) before reclassifications, net of tax (1,422) — (1,422) Less: Reclassification adjustments for losses realized in net income, net of tax (2,375) — (2,375) Balance, December 31, 2021 $ 2,634 $ — $ 2,634 |
Deferred Acquisition Costs
Deferred Acquisition Costs | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Acquisition Costs | |
Deferred Acquisition Costs | Note 19. Deferred Acquisition Costs The following table represents a roll forward of DAC, net of reinsurance: (In thousands) December 31, 2021 December 31, 2020 Beginning balance $ 13,456 $ — Additions 13,402 13,919 Amortization (2,886) (670) Interest 632 138 Impact of unrealized investment losses (74) 69 Ending Balance $ 24,530 $ 13,456 |
Related Party
Related Party | 12 Months Ended |
Dec. 31, 2021 | |
Related Party | |
Related Party | Note 20. Related Party Crestline On April 24, 2020, we entered into a Securities Purchase Agreement with Crestline Assurance Holdings LLC (“Crestline”) an institutional alternative investment management firm under which we issued 444,444 shares of our voting common stock to Crestline. We contributed $5.0 million of the net proceeds to American Life and used $3.3 million of the proceeds to capitalize Seneca Re and its first protected cell. We also entered into a Stockholders Agreement along with Xenith and Vespoint that grants Crestline certain rights. Also, Douglas K. Bratton, a principal of Crestline, was appointed as a director of both our board of directors and the American Life board of directors. In addition, on April 24, 2020, American Life entered into a three-year master letter agreement and related reinsurance, trust and asset management agreement with Seneca Re and a Crestline affiliate regarding the flow of annuity reinsurance and related asset management, whereby Crestline agreed to provide reinsurance funding for a quota share percentage of 25% of the liabilities of American Life arising from its MYGA and quota share percentage of 40% of American Life’s FIA products. The Crestline affiliate contributed $40.0 million of assets to capitalize SRC2 now known as Crestline Re SP1 (“Crestline SP1”). Through December 31, 2021, American Life had ceded $227.2 million face amount of annuities to Crestline SP1. American Life received total ceding commissions of $12.9 million and expense reimbursements of $24.1 million in connection with these transactions for the year ended December 31, 2021. Effective December 8, 2020, American Life entered into a novation agreement with SRC2 and Crestline Re SPC, an exempted segregated portfolio company incorporated under the laws of the Cayman Islands, for and on behalf of Crestline SP1, a segregated portfolio company of Crestline Re SPC, under which the above described reinsurance, trust and related asset management agreements were novated and replaced with substantially similar agreements entered into by American Life and Crestline SP1. The Reinsurance Agreement also contains the following agreements: ● American Life and Crestline SP1 each entered into investment management agreements with Crestline, pursuant to which Crestline manages the assets that support the reinsured business; and ● American Life and Crestline SP1 entered into a trust agreement whereby SRC2 maintains for American Life’s benefit a trust account that supports the reinsured business. Currently, Crestline has approximately $228 million assets under management and is a subadvisor on approximately $351 million of additional investments. Chelsea On June 29, 2020, Midwest’s subsidiary, American Life, purchased a 17% interest in Financial Guaranty UK Limited through an economic interest in Chelsea Holdings Midwest LLC. American Life has a note receivable from Chelsea Holdings Midwest LLC with an interest rate of 5% per annum that was rated BBB+ by a nationally recognized statistical rating organization (“NRSRO”). This note is being carried at fair market value of $5.9 million as of December 31, 2021. |
Schedule I Summary of Investmen
Schedule I Summary of Investments - Other Than Investments in Related Parties | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Summary of Investments - Other Than Investments in Related Parties | Midwest Holding Inc. and Subsidiaries Summary of Investments — Other Than Investments in Related Parties December 31, 2021 Amount Recognized in Amortized Consolidated (In thousands) Cost Fair Value Balance Sheets Type of Investment Fixed maturities: U.S. government obligations $ 1,855 $ 1,882 $ 1,882 Mortgage-backed securities 55,667 55,280 55,280 Asset-backed securities 24,675 24,951 24,951 Collateralized loan obligation 272,446 274,523 274,523 States and political subdivisions -- general obligations 105 114 114 States and political subdivisions -- special revenue 4,487 5,612 5,612 Corporate 35,392 37,139 37,139 Term Loans 268,794 267,468 267,468 Trust preferred 2,218 2,237 2,237 Redeemable preferred stock 14,282 14,090 14,090 Total fixed maturity securities $ 679,921 $ 683,296 $ 683,296 Mortgage loans on real estate, held for investment 183,203 183,203 183,203 Derivatives 18,654 23,022 23,022 Federal Home Loan Bank (FHLB) stock 500 500 500 Equity securities 22,158 21,869 21,869 Other invested assets 34,491 35,293 35,293 Investment escrow 3,611 3,611 3,611 Preferred stock 14,885 18,686 18,686 Notes receivable 5,960 5,960 5,960 Policy loans 87 87 87 Total Investments $ 963,470 975,527 $ 975,527 |
Schedule II Condensed Financial
Schedule II Condensed Financial Information of Registrant Balance Sheets | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Registrant Balance Sheets | Midwest Holding Inc. (Parent Company) Condensed Financial Information of Parent Balance Sheets As of December 31, (In thousands) 2021 2020 Assets: Investment in subsidiaries (1) $ 79,532 $ 78,736 Cash and cash equivalents 7,540 7,682 Notes receivable 31 29 Property and equipment, net 334 39 Right of use assets 2,360 337 Other assets 3,257 1,590 Total assets $ 93,054 $ 88,413 Liabilities and Stockholders’ Equity Liabilities: Notes payable 500 500 Lease liability 2,364 386 Accounts payable and accrued expenses 4,434 1,197 Total liabilities 7,298 2,083 Stockholders’ Equity: Preferred stock, $0.001 par value; authorized 2,000,000 shares; no shares issued and outstanding as of December 31, 2021 or December 31, 2020 — — Voting common stock, $0.001 par value; authorized 20,000,000 shares; 3,737,564 shares issued and outstanding December 31, 2021 and 2020 and outstanding December 31, 2021 and 2020, respectively 4 4 Additional paid-in capital 138,452 133,592 Treasury stock (175) (175) Accumulated deficit (70,159) (53,522) Accumulated other comprehensive loss 2,634 6,431 Total Midwest Holding Inc.'s stockholders' equity 70,756 86,330 Noncontrolling interest 15,000 — Total stockholders' equity $ 85,756 $ 86,330 Total liabilities and stockholders' equity 93,054 88,413 (1) |
Schedule II Condensed Financi_2
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Loss | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Registrant Statements of Comprehensive Loss | Midwest Holding Inc. (Parent Company) Condensed Financial Information of Parent Statements of Comprehensive Loss As of December 31, (In thousands) 2021 2020 Income: Investment loss, net of expenses $ — $ — Miscellaneous income 23 32 23 32 Expenses: General 7,193 969 Loss from continuing operations before taxes (7,170) (937) Income tax expense (See Note 8) (4,766) 37 Loss before equity in loss of consolidated subsidiaries (11,936) (900) Equity in loss of consolidated subsidiaries (4,701) (11,540) Net loss (16,637) (12,440) Less: Gain attributable to noncontrolling interest — — Net loss (16,637) (12,440) Comprehensive Income: Unrealized gains on investments arising during period, net of tax (1,422) 7,398 Unrealized gains on foreign currency, net of tax — (146) Less: reclassification adjustment for net realized gains on investments (2,375) (1,441) Other comprehensive income, net of tax (3,797) 5,811 Comprehensive loss $ (20,434) $ (6,629) |
Schedule II Condensed Financi_3
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Registrant Statements of Cash Flows | Midwest Holding Inc. (Parent Company) Condensed Financial Information of Parent Statements of Cash Flows Year Ended December 31, (In thousands) 2021 2020 Cash Flows from Operating Activities: Net loss $ (16,637) $ (12,440) Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: Equity in net loss of consolidated subsidiaries 9,506 11,541 Depreciation (295) (8) Stock options 4,982 164 Net transfers to noncontrolling interest — — Other assets and liabilities 1,525 84 Net cash used by operating activities (919) (659) Cash Flows from Investing Activities: Purchase of preferred stock — — Net (purchases) disposals of property and equipment — — Net cash used by investing activities — — Cash Flows from Financing Activities: Capital contribution (14,102) 79,312 Repurchase of common stock — (70,300) Treasury stock — (175) Additional capital raise related expenses (121) — Net transfers to noncontrolling interest 15,000 (500) Net cash provided by financing activities 777 8,337 Net (decrease) increase in cash and cash equivalents (142) 7,678 Cash and cash equivalents: Beginning 7,682 4 Ending $ 7,540 $ 7,682 Supplementary information Cash paid for taxes $ — $ — |
Schedule III Supplementary Insu
Schedule III Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Supplementary Insurance Information | Midwest Holding Inc. and Subsidiaries Supplementary Insurance Information (In thousands) As of December 31, 2021 For the Year Ended December 31, 2021 Future Policy Death and Benefits, Deferred Other Benefits Claims and Gain on Net and Increase Other Deposit-type Advance Coinsurance Premium Investment in Benefit Operating Contracts Premiums Transaction Revenue Income Reserves Expenses Life Insurance $ 1,088,617 $ 1 $ 28,589 $ — $ 15,737 $ 9,904 $ 32,030 (In thousands) As of December 31, 2020 For the Year Ended December 31, 2020 Future Policy Death and Benefits, Deferred Other Benefits Claims and Gain on Net and Increase Other Deposit-type Advance Coinsurance Premium Investment in Benefit Operating Contracts Premiums Transaction Revenue Income Reserves Expenses Life Insurance $ 610,806 $ 3 $ 18,199 $ — $ 2,362 $ 4,890 $ 16,547 |
Schedule IV Reinsurance Informa
Schedule IV Reinsurance Information | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Reinsurance Information | Midwest Holding Inc. and Subsidiaries Reinsurance Information Ceded to Other (In thousands) Gross Amount Companies Net Amount Year ended December 31, 2021 Life insurance in force $ 45,930 $ 44,090 $ 1,840 Life insurance premiums $ 1,055 $ 1,055 $ — Year ended December 31, 2020 Life insurance in force $ 92,403 $ 90,565 $ 1,838 Life insurance premiums $ 1,851 1,851 $ — |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Midwest Holding Inc. and Subsidiaries Valuation and Qualifying Accounts Year Ended December 31, (In thousands) 2021 2020 Accumulated Depreciation: Beginning of the year 1,023 975 Depreciation expense 49 48 Disposals — — End of the year $ 1,072 $ 1,023 |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature of operations | Nature of operations: Midwest Holding Inc. (“Midwest,” “the Company,” “we,” “our,” or “us”) was incorporated in Nebraska on October 31, 2003 for the primary purpose of operating a financial services company. The Company redomesticated from the State of Nebraska to the State of Delaware on August 27, 2020. The Company is in the life and annuity insurance business and operates through its wholly owned subsidiaries, American Life & Security Corp. (“American Life”), and 1505 Capital LLC (“1505 Capital”) as well as through its sponsored captive reinsurance company, Seneca Reinsurance Company, LLC (“Seneca Re”). American Life is a Nebraska-domiciled life insurance company, which is also commercially domiciled in Texas, that is currently licensed to sell, underwrite, and market life insurance and annuity products in 22 states and the District of Columbia. Effective March 12, 2020, Seneca Re, a Vermont limited liability company, was formed by Midwest to operate as a sponsored captive insurance company for the purpose of insuring and reinsuring various types of risks of its participants through one or more protected cells and to conduct any other business or activity that is permitted for sponsored captive insurance companies under Vermont insurance regulations. On March 30, 2020, Seneca Re received its Certification of Authority to transact the business of a captive insurance company. On April 15, 2020, Midwest entered into an operating agreement with Seneca Re and as of December 31, 2021, Seneca Re has two incorporated cells, Seneca Incorporated Cell, LLC 2020-01 (“SRC1”) and Seneca Re Protected Cell 2021-03 (“SRC3”) which are consolidated in our financial statements. On May 12, 2020, Midwest contributed $300,000 to Seneca Re for a 100% ownership interest. On April 2, 2019, we obtained a 51% ownership in 1505 Capital, a Delaware limited liability company, that was established in 2018 to provide financial and investment advisory and management services to clients and related investment activities. On June 15, 2020, we purchased the remaining 49% ownership in 1505 Capital for $500,000. 1505 Capital’s financial results have been consolidated with the Company’s since the date of its acquisition. On April 24, 2020, Midwest entered into a Securities Purchase Agreement with Crestline Assurance Holdings LLC, a Delaware limited liability company (“Crestline Assurance”), Xenith Holdings LLC, and Vespoint LLC, pursuant to which Crestline Assurance purchased 444,444 shares of the Company’s voting common stock, par value $0.001 per share (“common stock”), at a purchase price of $22.50 per share for $10.0 million. Under the agreement, the Company contributed $5.0 million to American Life. Also, effective as of April 24, 2020, in a separate transaction, Midwest sold 231,655 shares of common stock to various investors in a private placement at $22.50 per share for $5.227 million. On July 27, 2020, American Life entered into a reinsurance agreement (the “Reinsurance Agreement”) with a new protected cell formed by Seneca Re (Seneca Incorporated Cell, LLC 2020-02 (“SRC2”)). SRC2 was capitalized by Crestline Management, L.P. (“Crestline”), a significant shareholder of Midwest via a Crestline subsidiary, Crestline Re SPC1. The Reinsurance Agreement, which was effective as of April 24, 2020, and was entered into pursuant to a Master Letter Agreement (the “Master Agreement”) dated and effective as of April 24, 2020, among American Life, Seneca Re and Crestline. The Reinsurance Agreement supports American Life’s new business production by providing reinsurance capacity for American Life to write certain kinds of fixed and multi-year guaranteed annuity products. Concurrently with the Reinsurance Agreement: ● American Life and SRC2 each entered into investment management agreements with Crestline, pursuant to which Crestline manages the assets that support the reinsured business; and ● American Life and SRC2 entered into a trust agreement whereby SRC2 maintains for American Life’s benefit a trust account that supports the reinsured business. Under the Master Agreement, Crestline agreed to provide reinsurance funding for a quota share percentage of 25% of the liabilities of American Life arising from its multi-year guaranteed annuities (“MYGA”) and a quota share percentage of 40% for American Life’s fixed indexed annuity (“FIA”) products. The Master Agreement expires on April 24, 2023. In addition, pursuant to the Master Agreement, the parties thereto have agreed to enter into a separate agreement whereby, among other things and subject to certain conditions, American Life will agree to reinsure additional new business production to one or more reinsurers formed and/or capitalized by Crestline, Midwest or an appropriate affiliate will refer potential advisory clients to Crestline, and American Life will consider investing in certain assets originated or sourced by Crestline. Effective December 8, 2020, American Life entered into a novation agreement with SRC2 and Crestline Re SPC, for and on behalf of Crestline Re SP1, under which the above-described reinsurance, trust and related asset management agreements were novated and replaced with substantially similar agreements entered into by American Life and Crestline Re SP1. In December 2020, the Company completed a public offering of its common stock for gross proceeds of $70.0 million (see Note 17). In connection therewith, the Company's common stock was approved for listing and began trading on the Nasdaq Capital Market (“NASDAQ”) upon the closing of the offering. On June 26, 2021, the Nebraska Department of Insurance (‘NDOI”) issued its non-disapproval of the Modified Coinsurance Agreement (“Modco AEG Agreement”) of American Life with American Republic Insurance Company (“AEG”), an Iowa domiciled reinsurance company. The agreement closed on June 30, 2021. Under the Modco AEG Agreement, American Life cedes to AEG, on a modified coinsurance basis, 20% quota share of certain liabilities with respect to its MYGA-5 business and an initial 20% quota share of certain liabilities with respect to its FIA products. American Life has established a Modco Deposit Account to hold the assets for the Modco Agreement. The initial settlement included net premium income of $37.5 million and net statutory reserves of $34.8 million for the modified coinsurance account. The amount paid to the Modified Deposit Account from AEG was $2.4 million. On November 10, 2021, Midwest purchased 1,000 shares of Common Stock, $.01 par value per share for a total purchase price of $5.7 million for 100% ownership in an intermediary holding company. The intermediary holding company contributed capital of $5.5 million to purchase 100% of SRC3 Class A and B capital stock. Also, on November 10, 2021, American Life and SRC3 entered into a Funds Withheld and Modified Coinsurance Agreement, whereby, SRC3 agreed to provide reinsurance funding for a quota share percentage of 45% of the liabilities of American Life arising from its MYGA and quota share percentage of 45% of American Life’s FIA products. As discussed above, Midwest owned 100% in SRC1 by contributing a total of $21.4 million. On December 30, 2021, Midwest closed the sale of approximately 70% of Seneca Incorporate Cell, LLC 2020-01 (“SRC1”) to a subsidiary of ORIX Corporation USA “ORIX USA”) for $15.0 million. Under the terms of the agreement, Midwest holds a 30% ownership interest in SRC1. ORIX Advisers, LLC, another subsidiary of ORIX USA, will be the manager of the assets underlying SRC1’s reinsurance obligations going forward, replacing Midwest’s asset management arm, 1505 Capital LLC. Management evaluates the Company as one reporting segment in the life insurance industry. The Company is primarily engaged in the underwriting and marketing of annuity products through American Life, and then reinsuring such products with third-party reinsurers, and since May 13, 2020, with Seneca Re protected cells. American Life’s legacy product offerings consisted of a multi-benefit life insurance policy that combined cash value life insurance with a tax deferred annuity and a single premium term life product. American Life presently offers five annuity products, two MYGAs, two FIAs, and two bonus plans associated with the FIA product. It is not presently offering any traditional life insurance products. |
Basis of presentation | Basis of presentation: These consolidated financial statements for the year ended December 31, 2021 and 2020 have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The following is a summary of our significant accounting policies and estimates. These accounting policies inherently require significant judgment and assumptions, and actual operating results could differ significantly from management’s estimates determined using these policies. We believe the following accounting policies, judgments and estimates are the most critical to the understanding of our results of operations and financial position. All intercompany accounts and transactions have been eliminated in consolidation and certain immaterial reclassifications have been made to the prior period results to conform to the current period’s presentation with no impact on results of operations or total stockholders’ equity. |
Fixed Maturities | Fixed Maturities All fixed maturities owned by the Company are considered available-for-sale and are included in the consolidated financial statements at their fair value as of the financial statement date. Premiums and discounts on fixed maturity instruments are amortized using the scientific-yield method over the term of the bonds, trust preferred, and redeemable preferred stock. Realized gains and losses on securities sold during the year are determined using the specific identification method. Unrealized holding gains and losses, net of applicable income taxes, are included in accumulated other comprehensive income. Declines in the fair value of available-for-sale fixed maturity securities below their amortized cost are evaluated to assess whether any other-than-temporary impairment loss should be recorded. In determining if these losses are expected to be other-than-temporary, the Company considers severity of impairment, duration of impairment, forecasted recovery period, industry outlook, the financial condition of the issuer, issuer credit ratings, and the intent and ability of the Company to hold the investment until the recovery of the cost. The recognition of other-than-temporary impairment losses on debt securities is dependent on the facts and circumstances related to the specific security. If the Company intends to sell a security or it is more likely than not that the Company would be required to sell a security prior to recovery of the amortized cost, the difference between amortized cost and fair value is recognized in the statement of comprehensive income as an impairment. If the Company does not expect to recover the amortized basis, does not plan to sell the security, and if it is not more likely than not that the Company would be required to sell a security before the recovery of its amortized cost, the recognition of the impairment is bifurcated. The Company recognizes the credit loss portion as realized losses and the noncredit loss portion in accumulated other comprehensive loss. The credit component of other-than-temporary impairment is determined by comparing the net present value of projected cash flows with the amortized cost basis of the debt security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed income security at the date of acquisition. Cash flow estimates are driven by assumptions regarding probability of default, including changes in credit ratings, and estimates regarding timing and amount of recoveries associated with a default. As of December 31, 2020, the Company analyzed its securities portfolio and determined that an impairment of approximately $35,000 should be recorded for one debt security, an impairment of $500,000 was recognized on a preferred stock, and a valuation allowance of $777,000 established on one lease. The valuation allowance on the lease of $777,000 was released as of March 31, 2021 due to the sale of the investment. The Company believed the remaining investments were not impaired as of December 31, 2020. The Company had no impairment to recognize as of December 31, 2021. Investment income consists of interest, dividends, gains and losses from equity method investments, and real estate income, which are recognized on an accrual basis along with the amortization of premiums and discounts. Certain available-for-sale investments are maintained as collateral under FW and Modco agreements but the assets and total returns or losses on the asset portfolios belong to the third-party reinsurers. American Life has treaties with several third-party reinsurers that have FW and Modco provisions. In a Modco agreement, the ceding entity retains the assets equal to the modified coinsurance reserves retained. In a FW agreement, assets that would normally be paid over to a reinsurer are withheld by the ceding company to permit statutory credit for unauthorized reinsurers to reduce the potential credit risk. The unrealized gains/losses on those investments are passed through to the third-party reinsurers as either a realized gain or loss on the Consolidated Statements of Comprehensive Loss. |
Mortgage loans on real estate, held for investment | Mortgage loans on real estate, held for investment Mortgage loans on real estate, held for investment are carried at unpaid principal balances. Interest income on mortgage loans on real estate, held for investment is recognized in net investment income at the contract interest rate when earned. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the mortgage agreement. Valuation allowances on mortgage loans are established based upon losses expected by management to be realized in connection with future dispositions or settlements of mortgage loans, including foreclosures. The Company establishes valuation allowances for estimated impairments on an individual loan basis as of the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan’s original effective interest rate. These evaluations are revised as conditions change and new information becomes available. No such valuation allowance was established as of December 31, 2021 or 2020, respectively. |
Derivative Instruments | Derivative Instruments Derivatives are used to hedge the risks experienced in our ongoing operations, such as equity, interest rate and cash flow risks, or for other risk management purposes, which primarily involve managing liability risks associated with our indexed annuity products and reinsurance agreements. Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices, or other underlying notional amounts. Derivative assets and liabilities are carried at fair value on the consolidated balance sheets. To qualify for hedge accounting, at the inception of the hedging relationship, we would formally document our designation of the hedge as a cash flow or fair value hedge and our risk management objective and strategy for undertaking the hedging transaction. In this documentation, we would identify how the hedging instrument is expected to hedge the designated risks related to the hedged item, the method that would be used to retrospectively and prospectively assess the hedging instrument’s effectiveness and the method which would be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. In the late 2019, the Company began investing in options to hedge our interest rate risks on our FIA product. We did not have the formal documentation and hedge effectiveness completed at the time we entered into those equity options; therefore, they do not qualify for hedge accounting. The options fair market values were recorded on our consolidated statement of comprehensive loss as realized gains or (losses). During the last quarter of 2020, the Company began investing in foreign currency futures to hedge the fluctuations in the foreign currency. The formal documentation and hedge effectiveness was also not completed at the date we entered into those futures contracts; therefore, they do not qualify for hedge accounting. The futures fair market values were recorded on our consolidated statement of comprehensive loss as realized gains or (losses). Additionally, reinsurance agreements written on a FW or Modco basis contain embedded derivatives on our fixed indexed annuity product. Gains or (losses) associated with the performance of assets maintained in the modified coinsurance deposit and funds withheld accounts are reflected as realized gains or (losses) in the consolidated statement of comprehensive loss. |
Equity Securities | Equity Securities Equity securities at December 31, 2021, consisted of exchange traded funds (“ETFs”). The ETF’s are carried at fair value with the change in fair value recorded through realized gains and losses in Consolidated Statements of Comprehensive Loss. As of December 31, 2021, we held $21.9 million of ETFs and zero as of December 31, 2020. |
Federal Home Loan Bank (FHLB) stock | Federal Home Loan Bank (FHLB) stock American Life purchased Federal Home Loan Bank of Topeka (“FHLB”) common stock on May 5, 2021. This investment was to solidify our membership with FHLB Topeka. The carrying value of FHLB stock approximates fair value since the Company can redeem the stock with FHLB at cost. As a member of the FHLB, the Company is required to purchase this stock, which is carried at cost and classified as restricted equity securities. Membership allows access to various funding arrangements to provide a source of additional liquidity. As of December 31, 2021, there were no outstanding funding arrangements. |
Other invested assets | Other Invested Assets Other invested assets consists of approximately $35.3 million of various investments. Of this total, approximately $18.9 million are primarily collateral loans, private credit, and equipment leases. Also, at December 31, 2020, we had a $19.7 million investment in a private fund. Effective January 2021, this investment was repackaged into a special purpose vehicle between American Life and an unaffiliated entity, PF Collinwood Holdings, LLC (“PFC”), with American Life owning 100% of the entity. No gain or loss was recognized from the repackaging of PFC. The fair value or statement value of PFC as of December 31, 2021 was $14.5 million with gains and losses being recorded in equity on the balance sheet. |
Investment escrow | Investment escrow The Company held in escrow $3.6 million and $3.2 million as of December 31, 2021 and 2020, respectively. The cash held at year end was used to purchased mortgages in January 2022 and 2021, respectively. |
Preferred Stock | Preferred Stock The Company impaired in full a preferred stock investment as of December 31, 2020. This was recorded as a reduction of the asset on the Consolidated balance sheets of $500,000 and a corresponding loss on impairment on the Consolidated Statements of Comprehensive Loss. The company held a perpetual preferred stock investment of $10.0 million as of December 31, 2021. This investment is carried at fair market value. In 2020 American Life entered into a series of transactions with an unaffiliated entity, Ascona Group Holdings Ltd (“AGH”). One of the transactions involved the acquisition of Pound Sterling (“GBP”) 3.6 million of preferred equity in Ascona Group Holdings Limited (“the Preferred Equity”) along with warrants bearing no initial assigned value (the “Warrants”). American Life initially created a special purpose vehicle, Ascona Asset Holding LLC (“AAH”), to hold the Preferred Equity and Warrants, and later created Ascona Collinwood HoldCo LLC (“ACH”) to be the sole member of AAH. American Life and Crestline Re SP1 own 74% and 26%, respectively, of ACH. We are carrying the preferred equity at a market value of $8.7 million as of December 31, 2021 and $3.9 million of December 31, 2020. The preferred stock and warrants had a market value of $4.9 million and $3.8 million, respectively, as of December 31, 2021 and no value as of December |
Notes receivable | Notes receivable The Company held notes receivable carried at fair value of $6.0 million and $5.7 million as of December 31, 2021 and 2020, respectively, between American Life and a related party. The note receivable has an annual interest rate of 5% which is paid in kind (“PIK”) interest per annum that increases the outstanding note balance. This note was rated BBB+ by a nationally recognized statistical rating organization. This note matures on June 18, 2050. |
Policy loans | Policy loans Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned. No valuation allowance is established for these policy loans as the amount of the loan is fully secured by the death benefit of the policy and cash surrender value. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of December 31, 2021 and 2020, the Company held approximately GBP 2.2 million and GBP 500,000 in custody accounts, respectively. The USD equivalent held was approximately $3.0 million and $700,000, respectively. As of December 31, 2021 and 2020, the Company held approximately Euro 9.3 million and 90,000, respectively. The USD equivalent held was approximately $10.6 million and $110,000, respectively. As of December 31, 2021 and 2020, we had gains of approximately $2.0 million and approximately $50,000, respectively, related to the change in the foreign currency exchange rate of the GBP and Euro that were recorded in realized (losses) gains on investments in the Consolidated Statements of Comprehensive Loss. The Company had no money market investments as of December 31, 2021 and $100.6 million at December 31, 2021 and 2020, respectively. |
Deferred acquisition costs | Deferred acquisition costs Deferred acquisition costs (“DAC”) consist of incremental direct costs, net of amounts ceded to third-party reinsurers, that result directly from and are essential to the contract acquisition transaction and would not have been incurred by the Company had the contract acquisition not occurred. These costs are capitalized, to the extent recoverable, and amortized over the life of the premiums produced. The Company evaluates the types of acquisition costs it capitalizes. The Company capitalizes agent compensation and benefits and other expenses that are directly related to the successful acquisition of contracts. The Company also capitalizes expenses directly related to activities performed by the Company, such as underwriting, policy issuance, and processing fees incurred in connection with successful contract acquisitions. Recoverability of deferred acquisition costs is evaluated periodically by comparing the current estimate of the present value of expected pretax future profits to the unamortized asset balance. If this current estimate is less than the existing balance, the difference is charged to expense. The Company performs a recoverability analysis annually in the fourth quarter unless events occur which require an immediate review. A recovery analysis is completed by our Company third-party actuaries during their year-end processes and have found that no impairment existed in conjunction with the recovery of the DAC balances. |
Property and equipment | Property and equipment Property and equipment are stated at cost net of accumulated depreciation. Annual depreciation is primarily computed using straight-line methods for financial reporting and straight-line and accelerated methods for tax purposes. Furniture and equipment is depreciated over three During the first quarter of 2021, the Company began the implementation of a new cloud-based enterprise resource planning and enterprise performance management system. The Company expects to capitalize related consultation and support expenses relating to this system and will begin amortizing these fees over a period of five years from the date of implementation. The useful life of the system has been estimated at five years in accordance with guidance in ASC 350, Intangibles – Goodwill and Other Maintenance and repairs are expensed as incurred. Replacements and improvements which extend the useful life of the asset are capitalized. The net book value of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in earnings. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized if the carrying amount of an asset may not be recoverable and exceeds estimated future undiscounted cash flows of the asset. A recognized impairment loss reduces the carrying amount of the asset to its fair value. The Company determined that no such events occurred that would indicate the carrying amounts may not be recoverable. |
Reinsurance | Reinsurance In the normal course of business, the Company seeks to limit any single exposure to losses on large risks by purchasing reinsurance. The amounts reported in the Consolidated balance sheets as reinsurance recoverable include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverable on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverable. Management believes the recoverables are appropriately established. The Company generally strives to diversify its credit risks related to reinsurance ceded. Reinsurance premiums are generally reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. Therefore, the Company regularly evaluates the financial condition of its reinsurers including their activities with respect to claim settlement practices and commutations, and establishes allowances for uncollectible reinsurance recoverables as appropriate. There were no allowances established as of December 31, 2021 or 2020. We expect to reinsure substantially all of our new insurance policies with a variety of reinsurers in exchange for upfront ceding commissions, expense reimbursements and administrative fees. Under these reinsurance agreements, we expect there will be a monthly or quarterly settlement of premiums, claims, surrenders, collateral, and other administration fees. We believe this strategy will help preserve American Life’s capital while supporting its growth because American Life will have lower capital requirements when its business is reinsured due to lower overall financial exposure versus retaining the insurance policy business itself. See Note 9 below for further discussion of our reinsurance activities. There are two main categories of reinsurance transactions: 1) “indemnity,” where we cede a portion of our risk but retain the legal responsibility to our policyholders should our reinsurers not meet their financial obligations; and 2) “assumption,” where we transfer the risk and legal responsibilities to the reinsurers. The reinsurers are required to acquire the appropriate regulatory and policyholder approvals to convert indemnity policies to assumption policies. Our reinsurers may be domestic or foreign capital markets investors or traditional reinsurance companies seeking to assume U.S. insurance business. We plan to mitigate the credit risk relating to reinsurers generally by requiring other financial commitments from the reinsurers to secure the reinsured risks, such as posting substantial collateral. It should be noted that under indemnity reinsurance agreements American Life remains exposed to the credit risk of its reinsurers. If one or more reinsurers become insolvent or are otherwise unable or unwilling to pay claims under the terms of the applicable reinsurance agreement, American Life retains legal responsibility to pay policyholder claims, which, in such event would likely materially and adversely affect the capital and surplus of American Life. Midwest formed Seneca Re in early 2020. Seneca Incorporated Cell, LLC 2020-01 (“SRC1”) and Seneca Incorporate Cell, LLC 2021-03 (“SRC3”) which were consolidated in our financial statements. Midwest sold 70% of SRC1 to a ORIX Corporation USA on December 30, 2021 and retained 30% ownership. Midwest maintains control over SRC1 so we are still consolidating in our financial statements. American Life entered into a novation agreement with SRC2 and Crestline Re SPC, for and on behalf of Crestline Re SP1, under which the above-described reinsurance, trust and related asset management agreements were novated and replaced with substantially similar agreements entered into by American Life and Crestline Re SP1. Some reinsurers are not and may not be “accredited” or qualified as reinsurers under Nebraska law and regulations. In order to enter into reinsurance agreements with such reinsurers and to reduce potential credit risk, American Life holds a deposit or withholds funds from the reinsurer or requires the reinsurer to maintain a trust that holds assets backing up the reinsurer’s obligation to pay claims on the business it assumes. The reinsurer may also appoint an investment manager for such funds, which in some cases may be our investment adviser subsidiary, 1505 Capital, to manage these assets pursuant to guidelines adopted by us that are consistent with Nebraska investment statutes and reinsurance regulations. American Life currently has treaties with several third-party reinsurers and one related party reinsurer. Of the third-party reinsurers, only four have FW or Modco provisions. In a Modco agreement, the ceding entity retains the assets equal to the modified coinsurance reserves retained. In a FW agreement, assets that would normally be paid over to a reinsurer are withheld by the ceding company to permit statutory credit for unauthorized reinsurers, to reduce the potential credit risk. Under those provisions with third-party reinsurers, the assets backing the treaties are maintained by American Life as investments but the assets and total returns or losses on the investments are owned by the reinsurers. Under GAAP, this arrangement is considered an embedded derivative as discussed in Comprehensive Loss and Note 5 below. Assets carried as investments on American Life’s financial statements for the third-party reinsurers contained unrealized gains of approximately $161,000 and $2.9 million as of December 31, 2021 and 2020, respectively. The terms of the contracts with the third-party reinsurers provide that unrealized gains on the portfolios accrue to the third-party reinsurers. Accordingly, the unrealized gains on the assets held by American Life were offset by gains in the embedded derivative of $2.7 million and losses of $2.9 million as of December 31, 2021 and 2020, respectively. We account for this unrealized gain (loss) pass-through by recording equivalent realized gains or (losses) on our Consolidated Statements of Comprehensive Loss and in amount payable to our third-party reinsurers on the Consolidated balance sheets. For further discussion see Note 5. Derivative Instruments below. |
Benefit reserves | Benefit reserves The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period of time. Liabilities for future policy benefits of traditional life insurance have been computed by a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. |
Policy claims | Policy claims |
Deposit-type contracts | Deposit-type contracts Deposit-type contracts consist of amounts on deposit associated with deferred annuity riders, premium deposit funds and supplemental contracts without life contingencies. |
Deferred gain on reinsurance transactions | Deferred gain on reinsurance transactions American Life has entered into several indemnity reinsurance contracts where it is earning ceding commissions. These ceding commissions are recorded as a deferred liability and amortized over the life of the business ceded. American Life receives commission, administrative, and option allowances from reinsurance transactions that represent recovery of acquisition costs. These allowances first reduce the DAC associated with that reinsured block of business with the remainder being included in the deferred gain on reinsurance transactions to also be amortized. |
Income taxes | Income taxes The Company is subject to income taxes in the U.S. federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state, or local tax examinations by tax authorities for the years before 2018. The Company is not currently under examination for any open years. The provision for income taxes is based on income as reported in the financial statements. The income tax provision is calculated under the asset and liability method. Deferred tax assets are recorded based on the differences between the financial statement and tax basis of assets and liabilities at the enacted tax rates. The principal assets and liabilities giving rise to such differences are investments, insurance reserves, and deferred acquisition costs. A deferred tax asset valuation allowance is established when there is uncertainty that such assets would be realized. The Company has no uncertain tax positions that it believes are more-likely-than not that the benefit will not to be realized. When applicable, the Company recognizes interest accrued related to unrecognized tax benefits and penalties in income tax expense. |
Revenue recognition and related expenses | Revenue recognition and related expenses Amounts received as payment for annuities are recognized as deposits to policyholder account balances and included in future insurance policy benefits. Revenues from these contracts are comprised of fees earned for administrative and contract-holder services and cost of insurance, which are recognized over the period of the contracts, and included in revenue. Deposits are shown as a financing activity in the consolidated statements of cash flows. Revenues on traditional life insurance products consist of direct and assumed premiums reported as earned when due. Liabilities for future policy benefits are provided and acquisition costs are amortized by associating benefits and expenses with earned premiums to recognize related profits over the life of the contracts. Acquisition costs are amortized over the expected life of the annuity contracts. Service fee revenue is comprised of third-party administration (“TPA”) fees and investment management fees: ● The TPA fees are related to accounting services performed based on service agreements with varying lengths. Revenue associated with TPA fees are only recognized when the services are performed, which is typically on a monthly or quarterly basis. ● Fees for investment management fees are based on the total assets managed for each client at a contracted rate. The length of term on the contracts varies by client. The Company accrues investment advisory fees and recognizes revenue based on the market value of the client’s assets at the end of the applicable period, at the client’s contracted rate. |
Comprehensive Loss | Comprehensive loss Comprehensive Loss is comprised of net loss and other comprehensive loss. Other comprehensive loss includes unrealized gains and losses from fixed maturities classified as available for sale and unrealized gains and losses from foreign currency transactions, net of applicable taxes. American Life has treaties with several third-party reinsurers that have FW and Modco provisions. Under those provisions, the assets backing the treaties are maintained by American Life as collateral but are owned by the third-party reinsurers, thus, the total return on the asset portfolio belongs to the third-party reinsurers. Under GAAP this is considered an embedded derivative as discussed above under “Reinsurance” and in Note 5 below. The investments carried by American Life for the third-party reinsurers contained unrealized gains of approximately $161,000 and $2.9 million as of December 31, 2021 and 2020, respectively. The terms of the contracts with the third-party reinsurers provided that unrealized gains and losses on the portfolios accrue to the third-party reinsurers. We account for a gain as a pass through to the third-party reinsurer by booking equivalent embedded derivative realized losses or gains in our Consolidated Statements of Comprehensive Loss. For the years ended December 31, 2021 and 2020, such realized gains of $2.7 million and losses of $2.9 million, respectively, were recorded. The remaining investments retained by American Life as of December 31, 2021 and 2020, had unrealized gains of approximately $1.2 million and $5.1 million, respectively, that included unrealized gains from assets held for SRC1 and SRC3. Basic loss per share for the year ended December 31, 2021 and 2020 was ($4.24) and ($4.86), respectively, which included the aforementioned gain of $2.7 million and loss of $2.9 million, respectively. |
New Accounting Standards | Adoption of New Accounting Standards In January 2020, the FASB issued ASU No. 2020-1, Equity Securities Investments-Equity Method and Joint Ventures and Derivatives and Hedging -Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computer Arrangement That is a Service Contract Future adoption of New Accounting Standards In August 2018, the FASB issued ASU No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as amended by ASU 2019-09, Financial Services —Insurance (Topic 944). The new guidance (i) prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts, and requires assumptions for those liability valuations to be updated after contract inception, (ii) requires more market-based product guarantees on certain separate account and other account balance long-duration contracts to be accounted for at fair value, (iii) simplifies the amortization of DAC for virtually all long duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The new standard becomes effective after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2024 for companies eligible as smaller reporting companies. Early application of the amendments in Update 2018-12 is permitted. We anticipate that the adoption of ASU 2018-12 will have a broad impact on our consolidated financial statements and related disclosures and will require us to make changes to certain of our processes, systems and controls. We are unable to determine the impact at this time of ASU No. 2018-12 as we are still in the process of evaluating the standard In November 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The amendments in this update include items brought to the FASB’s attention by stakeholders to clarify the guidance in the amendments in ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) which was issued in June 2016. These updated amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Under ASU 2016-13, this replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to perform credit loss estimates. This update changes the methodology from an incurred loss to an expected credit loss. An allowance for the expected credit loss will be set up and the net income will be impacted. The credit losses will be evaluated in the current period and an adjustment to the allowance can be made. The new standard becomes effective after December 15, 2022. |
Assets and Liabilities Associ_2
Assets and Liabilities Associated with Business Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities Discontinued Operations | The table below summarizes the assets and liabilities that were included in discontinued operations as of December 31, 2021 and 2020: As of December 31, As of December 31, (In thousands) 2021 2020 Carrying amounts of major classes of assets included as part of discontinued operations: Policy loans $ — $ 33 Reinsurance recoverables — 1,062 Premiums receivable — 24 Total assets held for sale in the consolidated balance sheets $ — $ 1,119 Carrying amounts of major classes of liabilities included as part of discontinued operations: Benefit reserves $ — $ 595 Policy claims — 35 Deposit-type contracts — 483 Accounts payable and accrued expenses — 1 Total assets held for sale in the consolidated balance sheets $ — $ 1,114 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Schedule of Available for Sale Investments | Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value December 31, 2021: Fixed maturities: Bonds: U.S. government obligations $ 1,855 $ 32 $ 5 $ 1,882 Mortgage-backed securities 55,667 368 755 55,280 Asset-backed securities 24,675 443 167 24,951 Collateralized loan obligation 272,446 2,928 851 274,523 States and political subdivisions -- general obligations 105 9 — 114 States and political subdivisions -- special revenue 4,487 1,129 4 5,612 Corporate 35,392 1,846 99 37,139 Term Loans 268,794 441 1,767 267,468 Trust preferred 2,218 19 — 2,237 Redeemable preferred stock 14,282 53 245 14,090 Total fixed maturities $ 679,921 $ 7,268 $ 3,893 $ 683,296 Mortgage loans on real estate, held for investment 183,203 — — 183,203 Derivatives 18,654 6,391 2,023 23,022 Federal Home Loan Bank (FHLB) stock 500 — — 500 Equity securities 22,158 — 289 21,869 Other invested assets 34,491 813 11 35,293 Investment escrow 3,611 - — 3,611 Preferred stock 14,885 3,801 — 18,686 Notes receivable 5,960 — — 5,960 Policy loans 87 — — 87 Total investments $ 963,470 $ 18,273 $ 6,216 $ 975,527 December 31, 2020: Fixed maturities: Bonds: U.S. government obligations $ 5,744 $ 426 $ 6 $ 6,164 Mortgage-backed securities 14,638 276 157 14,757 Asset-backed securities 7,277 173 — 7,450 Collateralized loan obligation 209,224 5,450 350 214,324 States and political subdivisions -- general obligations 107 11 — 118 States and political subdivisions -- special revenue 5,293 909 — 6,202 Corporate 17,401 1,379 171 18,609 Term Loans 107,254 — — 107,254 Trust preferred 2,218 67 — 2,285 Total fixed maturities $ 369,156 $ 8,691 $ 684 $ 377,163 Mortgage loans on real estate, held for investment 94,990 — — 94,990 Derivatives 8,532 3,257 428 11,361 Other invested assets 21,897 — — 21,897 Investment escrow 3,174 — — 3,174 Preferred stock 3,898 — — 3,898 Notes receivable 5,666 — — 5,666 Policy loans 46 — — 46 Total investments $ 507,359 $ 11,948 $ 1,112 $ 518,195 |
Schedule of credit ratings of fixed maturity securities | December 31, 2021 December 31, 2020 Carrying Carrying (In thousands) Value Percent Value Percent AAA and U.S. Government $ 2,674 0.4 % $ 3,071 0.8 % AA 482 0.1 5,818 1.5 A 168,141 24.6 49,445 13.1 BBB 462,699 67.7 247,636 65.7 Total investment grade 633,996 92.8 305,970 81.1 BB and other 49,300 7.2 71,193 18.9 Total $ 683,296 100.0 % $ 377,163 100.0 % |
Schedule of Unrealized Loss of Securities | December 31, 2021 December 31, 2020 Gross Number Gross Number Estimated Unrealized of Estimated Unrealized of (In thousands) Fair Value Loss Securities (1) Fair Value Loss Securities (1) Fixed Maturities: Less than 12 months: U.S. government obligations $ 104 $ 2 1 $ 55 $ — 2 Mortgage-backed securities 35,403 755 35 5,708 157 5 Asset-backed securities 12,355 167 13 14,878 247 19 Collateralized loan obligation 90,731 851 115 — — — States and political subdivisions -- special revenue 217 4 0 6 — 1 Term loans 105,677 1,767 — — — Redeemable preferred stock 10,837 245 6 — — — Corporate 2,367 73 9 3,860 104 7 Greater than 12 months: U.S. government obligations 66 3 3 120 6 4 Collateralized loan obligations — — — 7,020 103 6 Corporate 324 26 2 287 67 3 Total fixed maturities $ 258,081 $ 3,893 184 $ 31,934 $ 684 47 (1) |
Schedule of Fixed Maturities | Amortized Estimated (In thousands) Cost Fair Value Due in one year or less $ 43,011 $ 42,868 Due after one year through five years 286,283 286,068 Due after five years through ten years 240,093 242,341 Due after ten years through twenty years 63,986 64,206 Due after twenty years 44,748 46,076 No maturity 1,800 1,737 $ 679,921 $ 683,296 |
Schedule of investment in mortgage loans | (In thousands) December 31, 2021 December 31, 2020 Loan-to-Value Ratio: 0%-59.99% $ 91,104 $ 49,280 60%-69.99% 42,819 22,349 70%-79.99% 44,106 23,361 80% or greater 5,174 — Total mortgage loans $ 183,203 $ 94,990 |
Components of net investment income | Year ended December 31, (In thousands) 2021 2020 Fixed maturities $ 16,443 $ 3,661 Mortgage loans 185 992 Other invested assets 665 103 Other interest income 298 — Gross investment income 17,591 4,756 Less: investment expenses (1,854) (709) Investment income, net of expenses $ 15,737 $ 4,047 |
Mortgage-back securities | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Schedule of Mortgage Loan Activity | (In thousands) December 31, 2021 December 31, 2020 Industrial $ — $ 1,250 Commercial mortgage loan - multi-family 101,809 66,916 Residential 50,000 — Retail 13,824 — Other 17,570 26,824 Total mortgage loans $ 183,203 $ 94,990 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the derivatives not designated as hedges | The following is a summary of the asset derivatives not designated as hedges embedded derivatives in our FIA product as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Location in the (In thousands, except number of contracts) Consolidated Derivatives Not Designated Statement of Notional Number of Estimated Notional Number of Estimated as Hedging Instruments Balance Sheets Amount Contracts Fair Value Amount Contracts Fair Value Equity-indexed options Derivatives $ 526,096 482 $ 23,766 $ 272,854 252 $ 11,361 Equity-indexed embedded derivatives Deposit-type 525,548 4,205 123,692 311,964 2,101 84,501 |
Summary of embedded derivatives related to the funds withheld provision | The following table summarizes the impact of those embedded derivatives related to the funds withheld provision where the total return on the asset portfolio belongs to the third-party reinsurers: December 31, 2021 December 31, 2020 (In thousands, except number of contracts) Book Value Market Value Total Return Book Value Market Value Total Return Portfolio Assets Assets Swap Value Assets Assets Swap Value American Republic Insurance Company $ 74,983 $ 74,670 $ 313 $ — $ — $ — Crestline Re SP1 228,560 228,450 110 62,163 63,131 (968) Ironbound 154,867 155,755 (888) 98,714 99,748 (1,034) Ascendent Re 56,246 56,078 168 27,224 27,480 (256) US Alliance 46,221 46,085 136 35,707 36,360 (653) Total $ 560,877 $ 561,038 $ (161) $ 223,808 $ 226,719 $ (2,911) |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | |
Schedule of Financial Instruments at Fair Value Measured on a Recurring Basis | The following table presents the Company’s fair value hierarchy for those financial instruments measured at fair value on a recurring basis as of December 31, 2021 and 2020. Significant Quoted Other Significant In Active Observable Unobservable Estimated Markets Inputs Inputs Fair (In thousands, except number of contracts) (Level 1) (Level 2) (Level 3) Value December 31, 2021 Financial assets Fixed maturity securities: Bonds U.S. government obligations $ — $ 1,882 $ — $ 1,882 Mortgage-backed securities — 55,280 — 55,280 Asset-backed securities — 24,951 — 24,951 Collateralized loan obligation — 274,523 — 274,523 States and political subdivisions — general obligations — 114 — 114 States and political subdivisions — special revenue — 5,612 — 5,612 Corporate — 37,139 — 37,139 Term Loans — — 267,468 267,468 Trust preferred — 2,237 — 2,237 Redeemable preferred stock — 14,090 — 14,090 Total fixed maturity securities — 415,828 267,468 683,296 Mortgage loans on real estate, held for investment — — 183,203 183,203 Derivatives — 23,022 — 23,022 Equity securities — 21,869 — 21,869 Other invested assets — — 35,293 35,293 Investment escrow — 3,611 — 3,611 Federal Home Loan Bank (FHLB) stock — — 500 500 Preferred stock — — 18,686 18,686 Notes receivable — 5,960 — 5,960 Policy loans — — 87 87 Total Investments $ — $ 470,290 $ 505,237 $ 975,527 Financial liabilities Embedded derivative for equity-indexed contracts $ — $ — $ 123,692 123,692 December 31, 2020 Fixed maturity securities: Bonds U.S. government obligations $ — $ 6,164 $ — $ 6,164 Mortgage-backed securities — 14,757 — 14,757 Asset-backed securities — 7,450 — 7,450 Collateralized loan obligation — 214,324 — 214,324 States and political subdivisions — general obligations — 118 — 118 States and political subdivisions — special revenue — 6,202 — 6,202 Corporate — 18,609 — 18,609 Term loans — — 107,254 107,254 Trust preferred — 2,285 — 2,285 Total fixed maturity securities — 269,909 107,254 377,163 Mortgage loans on real estate, held for investment — — 94,990 94,990 Derivatives — 11,361 — 11,361 Other invested assets — — 21,897 21,897 Investment escrow — 3,174 — 3,174 Preferred stock — — 3,898 3,898 Notes receivable — 5,666 — 5,666 Policy loans — — 46 46 Total Investments $ — $ 290,110 $ 228,085 $ 518,195 Financial liabilities Embedded derivative for equity-indexed contracts $ — $ — $ 84,501 84,501 |
Schedule of Financial Assets and Liabilities at Fair Value | The following disclosure contains the carrying values, estimated fair values and their corresponding placement in the fair value hierarchy, for financial assets and financial liabilities as of December 31, 2021 and 2020, respectively: December 31, 2021 Fair Value Measurements Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Unobservable Carrying and Liabilities Inputs Inputs Fair (In thousands, except number of contracts) Amount (Level 1) (Level 2) (Level 3) Value Assets: Policy loans $ 87 $ — $ — $ 87 $ 87 Cash equivalents 142,013 — 142,013 — 142,013 Liabilities: Policyholder deposits (deposit-type contracts) 1,075,439 — — 1,075,439 1,075,439 December 31, 2020 Fair Value Measurements Using Quoted Prices in Active Markets Significant Other Significant for Identical Assets Observable Unobservable Carrying and Liabilities Inputs Inputs Fair (In thousands, except number of contracts) Amount (Level 1) (Level 2) (Level 3) Value Assets: Policy loans $ 46 $ — $ — $ 46 $ 46 Cash equivalents 151,679 100,567 51 — 151,679 Liabilities: Policyholder deposits (deposit-type contracts) 597,868 — — 597,868 597,868 |
Schedule of Recurring Basis Using Level Three Inputs | As of As of December 31, December 31, (In thousands, except number of contracts) 2020 Additions Sales 2021 Assets Term loans $ 107,254 $ 231,089 $ 70,875 267,468 Mortgage loans on real estate, held for investment 94,990 160,277 72,064 183,203 Federal Home Loan Bank (FHLB) stock — 500 — 500 Other invested assets 21,897 96,339 82,943 35,293 Preferred stock 3,898 14,788 - 18,686 Total Investments $ 228,039 $ 502,993 $ 225,882 $ 505,150 As of As of December 31, Valuation December 31, (In thousands, except number of contracts) 2019 Additions Sales Allowance Impairment 2020 Assets Term loans $ — $ 107,254 $ — $ — $ — $ 107,254 Mortgage loans on real estate, held for investment 13,810 99,357 18,177 — — 94,990 Other invested assets 2,469 74,723 54,518 (777) — 21,897 Preferred stock 500 3,898 — — (500) 3,898 Total Investments $ 16,779 $ 285,232 $ 72,695 $ (777) $ (500) $ 228,039 |
Summary of unobservable inputs for AFS and trading securities | The following summarizes the unobservable inputs for the embedded derivatives of fixed indexed annuities and preferred stock (with associated datable warrants): December 31, 2021 (In millions, except for percentages) Fair value Valuation technique Unobservable inputs Minimum Maximum Weighted average* Impact of an increase in the input on fair value Interest sensitive contract liabilities - fixed indexed annuities embedded derivatives $123.7 Option Budget Method Nonperformance risk 0.3% 1.1% 0.6% Decrease Option budget 1.1% 3.4% 2.4% Increase Surrender rate 0.5% 15% (base) 7.7% Decrease Preferred equity $4.9 Yield analysis Discount rates 17.5% 19.5% 18.5% Increase Detachable warrants $2.8 Market Approach - GPCM EBITA Multiple 9.0x 10.0x 100.0% Increase * Weighted by account value December 31, 2020 (In millions, except for percentages) Fair value Valuation technique Unobservable inputs Minimum Maximum Weighted average* Impact of an increase in the input on fair value Interest sensitive contract liabilities - fixed indexed annuities embedded derivatives $84.5 Option Budget Method Nonperformance risk 0.3% 1.3% 0.7% Decrease Option budget 2.6% 3.4% 2.7% Increase Surrender rate 0.5% 15% (base) 7.6% Decrease * Weighted by account value |
Earnings Loss Per Share (Tables
Earnings Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per share | Year ended December 31, 2021 2020 (in thousands, except per share amounts) Numerator: Net loss attributable to Midwest Holding, Inc. $ (16,637) $ (12,440) Denominator: Weighted average common shares outstanding 3,737,564 2,547,003 Effect of dilutive securities: Stock options and deferred compensation agreements — 40,850 Denominator for earnings (loss) per common share 3,737,564 2,587,853 Loss per common share $ (4.45) $ (4.88) |
Income Tax Matters (Tables)
Income Tax Matters (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows: (in thousands) December 31, 2021 December 31, 2020 Deferred tax assets: Loss carryforwards $ 2,244 $ 1,557 Capitalized costs 127 175 Stock option granted 1,060 14 Unrealized losses on investments 1,534 1,534 Policy acquisition costs 3,640 2,243 Charitable contribution carryforward — 2 General business credits 6 — Derivative option allowance 510 — Sec 163(j) limitation 171 154 Benefit reserves 5,186 3,569 Property and equipment 33 — Other 1,464 — Total deferred tax assets 15,975 9,248 Less valuation allowance (14,431) (7,002) Total deferred tax assets, net of valuation allowance 1,544 2,246 Deferred tax liabilities: Unrealized losses on investments 1,084 1,994 Due premiums — 82 Intangible assets 147 147 Bond Discount 313 20 Property and equipment — 3 Total deferred tax liabilities 1,544 2,246 Net deferred tax assets $ — $ — |
Schedule of effective tax rate reconciliation | There was income tax expense of $4.8 million and $1.6 million for the years ended December 31, 2021, and 2020. This differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% to pretax income, as a result of the following: Year ended December 31, (in thousands) 2021 2020 Computed expected income tax benefit $ (2,815) $ (2,238) Increase (reduction) in income taxes resulting from: State tax net of federal benefit — 158 IMR and reinsurance 157 26 Nondeductible expenses 9 5 Gain on sale of SRC1 368 — Change in valuation allowance 7,429 4,049 Dividends received deduction — (10) Amended Return - 2019/2020 339 Adjustment to payable (110) — Deferred tax adjustment (382) — Prior year true-up (229) (405) Subtotal of increases 7,581 3,823 Tax expense $ 4,766 $ 1,585 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Summary of significant reinsurance amounts | A summary of significant reinsurance amounts affecting the accompanying consolidated financial statements as of December 31, 2021 and 2020 and for the years ended December 31, 2021 and 2020, is as follows: (in thousands) December 31, 2021 December 31, 2020 Assets: Reinsurance recoverables $ 38,579 $ 32,146 Liabilities: Deposit-type contracts Direct $ 1,075,439 597,868 Reinsurance ceded (647,632) (405,981) Retained deposit-type contracts $ 427,807 $ 191,887 Year ended December 31, 2021 2020 (in thousands) Premiums Direct $ 258 $ 884 Reinsurance ceded (258) (884) Total Premiums $ — $ — Future policy and other policy benefits Direct $ 159 $ 233 Reinsurance ceded (159) (233) Total future policy and other policy benefits $ — $ — |
Schedule of significant reinsurance balances | The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurer except for Unified as it is accounted for as discontinued operations as of December 31, 2021: Recoverable/ Total Amount Recoverable Recoverable (Payable) on Benefit Ceded Recoverable/ (in thousands) AM Best on Paid on Unpaid Reserves/Deposit- Due (Payable) to/from Reinsurer Rating Losses Losses type Contracts Premiums Reinsurer Ironbound Reinsurance Company Limited NR $ — $ — $ (3,561) $ — $ (3,561) Optimum Re Insurance Company A — — 561 — 561 Sagicor Life Insurance Company A- — 157 10,901 303 10,755 Ascendant Re NR — — 1,550 — 1,550 Crestline SP1 NR — — 18,288 — 18,288 American Republic Insurance Company A — — 4,885 — 4,885 Unified Life Insurance Company NR — 45 1,013 21 1,037 US Alliance Life and Security Company NR — — 5,090 26 5,064 $ — $ 202 $ 38,727 $ 350 $ 38,579 The following table provides a summary of the significant reinsurance balances recoverable on paid and unpaid policy claims by reinsurer except for Unified as it is accounted for as discontinued operations as of December 31, 2020: Recoverable on Total Amount Recoverable Recoverable Benefit Ceded Recoverable (in thousands) AM Best on Paid on Unpaid Reserves/Deposit- Due from Reinsurer Rating Losses Losses type Contracts Premiums Reinsurer Optimum Re Insurance Company A $ — $ — $ 525 $ — $ 525 Sagicor Life Insurance Company A- — 141 11,286 277 11,150 Ascendant Re NR — — 3,541 — 3,541 Crestline SP1 NR — — 9,695 — 9,695 US Alliance Life and Security Company NR — — 7,264 29 7,235 $ — $ 141 $ 32,311 $ 306 $ 32,146 |
Schedule of ceding commissions from the reinsurers | Year ended December 31, (in thousands) 2021 2020 Reinsurer Gross Ceding Commission Expense Allowance (1) Interest on Ceding Commission Earned Ceding Commission Gross Ceding Commission Expense Allowance Interest on Ceding Commission Earned Ceding Commission Unified Life Insurance Company $ - $ — $ — $ 35 $ — $ — $ — $ — Ironbound Reinsurance Company Limited — (461) 211 684 688 703 221 435 Ascendant Re 498 904 93 367 1,354 2,617 67 78 US Alliance Life and Security Company 2 (75) 60 401 2,279 4,030 39 139 Crestline SP1 6,699 12,321 255 1,185 6,243 11,799 48 191 American Republic Insurance Company 3,971 7,039 26 350 — — — — $ 11,170 $ 19,728 $ 645 $ 3,022 $ 10,564 $ 19,149 $ 375 $ 843 (1) Includes: acquisition and administrative expenses, commission expense allowance and product development fees. |
Schedule of ceding commissions deferred on each reinsurance transaction | (in thousands) December 31, 2021 December 31, 2020 Reinsurer Deferred Gain on Reinsurance Transactions Deferred Gain on Reinsurance Transactions US Alliance Life and Security Company (1) $ 162 $ 172 Unified Life Insurance Company (1) 242 277 Ironbound Reinsurance Company Limited (2) 5,137 5,642 Ascendant Re 3,101 2,703 US Alliance Life and Security Company (2) 2,286 2,473 American Republic Insurance Company (2) 4,146 — Crestline SP1 (2) 13,515 6,932 $ 28,589 $ 18,199 1) These reinsurance transactions on our legacy life insurance business received gross ceding commissions on the effective dates of the transaction. The difference between the statutory net adjusted reserves and the GAAP adjusted reserves plus the elimination of DAC and value of business acquired related to these businesses reduces the gross ceding commission with the remaining deferred and amortized over the lifetime of the blocks of business. 2) These reinsurance transactions include the ceding commissions and expense allowances which are accounted for as described in (1). |
Schedule of retained and reinsurance balance sheets | The tables below shows the retained and reinsurance consolidated balance sheets: December 31, 2021 December 31, 2020 (in thousands) Retained Reinsurance Consolidated Retained Reinsurance Consolidated Assets Total investments $ 414,418 $ 561,109 $ 975,527 $ 185,368 $ 332,827 $ 518,195 Cash and cash equivalents 95,406 46,607 142,013 102,335 49,344 151,679 Accrued investment income 3,853 9,770 13,623 1,956 4,851 6,807 Deferred acquisition costs, net 24,530 — 24,530 13,456 — 13,456 Reinsurance recoverables — 38,579 38,579 — 32,146 32,146 Other assets 27,834 (2,189) 25,645 2,685 1,433 4,118 Total assets $ 566,041 $ 653,876 $ 1,219,917 $ 305,800 $ 420,601 $ 726,401 Liabilities and Stockholders’ Equity Liabilities: Policyholder liabilities $ 427,807 $ 660,811 $ 1,088,618 $ 191,887 $ 418,921 $ 610,808 Deferred gain on coinsurance transactions 28,589 — 28,589 18,199 — 18,199 Other liabilities 23,889 (6,935) 16,954 9,384 1,680 11,064 Total liabilities $ 480,285 $ 653,876 $ 1,134,161 $ 219,470 $ 420,601 $ 640,071 Stockholders’ Equity: Voting common stock 4 — 4 4 — 4 Additional paid-in capital 138,277 — 138,277 133,417 — 133,417 Accumulated deficit (70,159) — (70,159) (53,522) — (53,522) Accumulated other comprehensive income 2,634 — 2,634 6,431 — 6,431 Total Midwest Holding Inc.'s stockholders' equity $ 70,756 $ — $ 70,756 $ 86,330 $ — $ 86,330 Noncontrolling interest 15,000 — 15,000 — — — Total stockholders' equity 85,756 — 85,756 86,330 — 86,330 Total liabilities and stockholders' equity $ 566,041 $ 653,876 $ 1,219,917 $ 305,800 $ 420,601 $ 726,401 |
Long-Term Incentive Plans (Tabl
Long-Term Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of assumptions used to calculate compensation expense | December 31, 2021 2020 Expected volatility 4.4% - 66.3% 60% - 200% Weighted-average volatility 38.9% 98.1% Expected term (in years) 2 7 2 5 Risk-free rate .8% - 1.5% .9% - 1.8% |
Schedule of remaining non-vested shares | Decmeber 31, 2021 Stock Options/ Restricted Stock Outstanding Weighted Average Grant-Date Fair Value Weighted Average Excise Price Nonvested stock options at December 31, 2020 100,972 $ 22.91 $ 34.70 Options granted 333,880 19.25 42.84 Restricted stock granted 5,089 24.34 24.34 Vested (85,957) 17.32 30.20 Forfeited (36,767) 23.91 40.42 Ending Balance at December 31, 2021 317,217 $ 25.80 $ 40.13 Decmeber 31, 2020 Stock Options/ Restricted Stock Outstanding Weighted Average Grant-Date Fair Value Weighted Average Excise Price Nonvested stock options at December 31, 2019 17,900 $ 8.00 $ 25.00 Options granted 68,025 21.85 33.13 Restricted stock granted 18,597 41.02 41.02 Vested (200) 8.00 25.00 Forfeited (3,350) 11.25 25.00 Ending Balance at December 31, 2020 100,972 $ 22.91 $ 34.70 |
Deposit-Type Contracts (Tables)
Deposit-Type Contracts (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deposit Type Contracts [Abstract] | |
Schedule of deposit-type contracts | As of As of (In thousands) December 31, 2021 December 31, 2020 Beginning balance $ 597,868 $ 171,169 US Alliance 1,873 (3,308) Unified Life Insurance Company 468 — Ironbound Reinsurance Company Limited 6,579 6,080 Ascendant Re 2,880 3,053 Crestline SP1 4,834 3,607 American Republic Insurance Company 1,567 — Deposits received 471,646 415,561 Investment earnings (includes embedded derivative) 7,012 4,215 Withdrawals (18,446) (2,509) Policy charges (842) — Ending balance $ 1,075,439 $ 597,868 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of other commitments | Unfunded (In thousands) Commitment Due in one year or less $ 19,245 Due in two years 26,753 Due in three years 4,705 Due in four years 8,741 Due in five years and after 86,497 $ 145,941 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information for our leases for the years ended December 31, 2021 and 2020, are as follows: (In thousands) As of As of Leases Classification December 31, 2021 December 31, 2020 Assets Operating Operating lease right-of-use assets $ 2,360 $ 348 Liabilities Operating lease Operating lease liabilities $ 2,364 $ 397 |
Schedule of Components of Lease Expenses | Our operating and finance leases expenses for the years ended December 31, 2021 and 2020, are as follows: (In thousands) Year ended December 31, Leases Classification 2021 2020 Operating General and administrative expense $ 8 $ 9 Finance lease cost: Amortization expense — 3 |
Schedule of Finance and Operating Leases Minimum | Minimum contractual obligations for our leases as of December 31, 2021 are as follows: (in thousands) Operating Leases 2022 $ 342 2023 342 2024 342 2025 342 2026 345 2027 353 2028 362 2029 371 2030 380 2031 292 Total remaining lease payments $ 3,471 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: Year ended December 31, (in thousands) 2021 2020 Cash payments Operating cash flows from operating leases $ (12) $ (5) Operating cash flows from finance leases — 1 |
Statutory Net Income and Surp_2
Statutory Net Income and Surplus (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Statutory Net Income and Surplus [Abstract] | |
Statutory Accounting Practices Disclosure | The following table represents the net gains or (losses) as filed in the statutory-basis annual statement with the Nebraska Department of Insurance for American Life and the Vermont Department of Insurance for SRC1 and SRC3: (In thousands) Statutory Net Income/(Loss) as of December 31, 2021 2020 American Life $ (6,355) $ 3,893 SRC1 $ (1,004) $ (9,482) SRC3 $ (6,851) $ — The following table represents the Capital and Surplus as filed in the statutory-basis annual statement with the Nebraska Department of Insurance for American Life and the Vermont Department of Insurance for SRC1 and SRC3: (In thousands) Statutory Capital and Surplus as of December 31, American Life $ 74,011 $ 77,447 SRC1 $ 8,415 $ 5,518 SRC3 $ 3,150 $ - The following table represents the premiums sales as filed in the statutory-basis annual statement with the Nebraska Department of Insurance for American Life and the Vermont Department of Insurance for SRC1 and SRC3: Premiums Sales as of December 31, (In thousands) 2021 2020 American Life $ 107,767 $ 39,934 SRC1 $ 37,764 $ 147,502 SRC3 $ 88,704 $ — |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Summary of Balance of and Changes in Each Component of AOCI | (In thousands) Unrealized investment gains (losses) on fixed maturities, net of offsets Unrealized gains on foreign currency Accumulated other comprehensive income (loss) Balance at December 31, 2019 $ 474 $ 146 $ 620 Other comprehensive income before Reclassifications 7,398 — 7,398 Unrealized gains on foreign currency — (146) (146) Less: Reclassification adjustments for losses realized in net income (1,441) — (1,441) Balance at December 31, 2020 6,431 — 6,431 Other comprehensive income (loss) before reclassifications, net of tax (1,422) — (1,422) Less: Reclassification adjustments for losses realized in net income, net of tax (2,375) — (2,375) Balance, December 31, 2021 $ 2,634 $ — $ 2,634 |
Deferred Acquisition Costs (Tab
Deferred Acquisition Costs (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Acquisition Costs | |
Schedule of Deferred Acquisition Costs | (In thousands) December 31, 2021 December 31, 2020 Beginning balance $ 13,456 $ — Additions 13,402 13,919 Amortization (2,886) (670) Interest 632 138 Impact of unrealized investment losses (74) 69 Ending Balance $ 24,530 $ 13,456 |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, £ in Thousands | Dec. 30, 2021USD ($) | Nov. 10, 2021USD ($)$ / sharesshares | Jul. 01, 2021 | Dec. 30, 2020USD ($) | Sep. 28, 2020USD ($) | Jul. 23, 2020 | Jul. 01, 2020 | Jun. 15, 2020USD ($) | Apr. 24, 2020USD ($)$ / sharesshares | Apr. 01, 2020 | Mar. 30, 2020USD ($) | Mar. 10, 2020 | Dec. 31, 2020USD ($)securitylease$ / shares | Mar. 31, 2020 | Dec. 31, 2021USD ($)segment$ / sharesshares | Dec. 31, 2020USD ($)leasesegmentsecurity$ / sharesshares | Jun. 30, 2021 | Dec. 31, 2021GBP (£) | Dec. 31, 2021EUR (€) | Jan. 31, 2021 | Dec. 31, 2020GBP (£)securitylease | Dec. 31, 2020EUR (€)securitylease | Aug. 10, 2020$ / shares | Jun. 30, 2020USD ($) | Apr. 02, 2019 |
Shares issued | shares | 231,655 | ||||||||||||||||||||||||
Shares sold, value | $ 79,312,000 | ||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||
Share Price | $ / shares | $ 22.50 | ||||||||||||||||||||||||
Proceeds from issuance of common shares | $ 5,227,000 | ||||||||||||||||||||||||
Proceeds from IPO | $ 70,000,000 | ||||||||||||||||||||||||
Number of reporting segment | segment | 1 | ||||||||||||||||||||||||
Number of Products | segment | 5 | ||||||||||||||||||||||||
Number of Bonus Plans | segment | 2 | ||||||||||||||||||||||||
Valuation allowances on mortgage loans | $ 0 | ||||||||||||||||||||||||
Equity securities | 21,869,000 | ||||||||||||||||||||||||
Escrow Deposit | 3,174,000 | 3,611,000 | $ 3,174,000 | ||||||||||||||||||||||
Fund investments | 95,529,000 | 73,997,000 | |||||||||||||||||||||||
Other investments in fund | 19,700,000 | 19,700,000 | |||||||||||||||||||||||
Gain or loss on investment | 0 | ||||||||||||||||||||||||
Other invested assets | $ 21,897,000 | 35,293,000 | 21,897,000 | ||||||||||||||||||||||
Impairment allowance on investment | 0 | $ 35,000 | |||||||||||||||||||||||
Number of securities | security | 1 | 1 | 1 | 1 | |||||||||||||||||||||
Valuation Allowance on Leased Asset | $ 777,000 | $ 777,000 | $ 777,000 | ||||||||||||||||||||||
Number of leases, valuation allowance | lease | 1 | 1 | 1 | 1 | |||||||||||||||||||||
Fair value of preferred stock | 4,900,000 | ||||||||||||||||||||||||
Warrants market value | $ 0 | 3,800,000 | $ 0 | ||||||||||||||||||||||
Perpetual Preferred Stock | 10,000,000 | ||||||||||||||||||||||||
Impairment on preferred stock | 500,000 | 500,000 | |||||||||||||||||||||||
Notes receivable | 5,666,000 | 5,960,000 | 5,666,000 | ||||||||||||||||||||||
Realized gains (losses) on foreign exchange translation | 2,000,000 | 50,000 | |||||||||||||||||||||||
Money market investments | 100,600,000 | 0 | 100,600,000 | ||||||||||||||||||||||
Depreciation | 49,000 | 48,000 | |||||||||||||||||||||||
Accumulated depreciation | 1,000,000 | 1,100,000 | 1,000,000 | ||||||||||||||||||||||
Reinsurance recoverables on unpaid losses, allowance | 0 | 0 | 0 | ||||||||||||||||||||||
Unrealized gains | 161,000 | 2,900,000 | |||||||||||||||||||||||
Embedded derivative gains | 2,700,000 | 2,900,000 | |||||||||||||||||||||||
Embedded derivative losses | 2,900,000 | ||||||||||||||||||||||||
Unrealized gains (losses) on investments, net of taxes | $ (3,797,000) | $ 5,957,000 | |||||||||||||||||||||||
Basic loss per share (in dollars per share) | $ / shares | $ (4.45) | $ (4.88) | |||||||||||||||||||||||
Weighted Average Number of Shares Outstanding, Basic (in shares) | shares | 3,737,564,000 | 2,547,003,000 | |||||||||||||||||||||||
Weighted average number of shares outstanding, Diluted (in shares) | shares | 3,737,564,000 | 2,587,853,000 | |||||||||||||||||||||||
BBB+ | |||||||||||||||||||||||||
Interest rate | 5.00% | 5.00% | 5.00% | ||||||||||||||||||||||
Ascona Group Holdings Ltd | |||||||||||||||||||||||||
Preferred equity | $ 3,600,000 | ||||||||||||||||||||||||
Market value | 3,900,000 | $ 8,700,000 | $ 3,900,000 | ||||||||||||||||||||||
Fair value of preferred stock | 0 | 0 | |||||||||||||||||||||||
PF Collinwood Holdings LLC | |||||||||||||||||||||||||
Other invested assets | 14,500,000 | ||||||||||||||||||||||||
SRC1 | |||||||||||||||||||||||||
Ownership (as a percent) | 100.00% | ||||||||||||||||||||||||
Payments to acquire SRC | $ 21,400,000 | ||||||||||||||||||||||||
United Kingdom, Pounds | |||||||||||||||||||||||||
Cash held in custody accounts | 700,000 | 3,000,000 | 700,000 | £ 2,200 | £ 500 | ||||||||||||||||||||
Euro Member Countries, Euro | |||||||||||||||||||||||||
Cash held in custody accounts | 110,000 | $ 10,600,000 | 110,000 | € 9,300,000 | € 90,000 | ||||||||||||||||||||
Computer Software, Intangible Asset [Member] | |||||||||||||||||||||||||
Useful life of intangible assets | 5 years | ||||||||||||||||||||||||
Capitalized software | $ 1,200,000 | ||||||||||||||||||||||||
Furniture and Fixtures [Member] | Minimum | |||||||||||||||||||||||||
Useful life | 3 years | ||||||||||||||||||||||||
Furniture and Fixtures [Member] | Maximum | |||||||||||||||||||||||||
Useful life | 7 years | ||||||||||||||||||||||||
Computer Software, Intangible Asset [Member] | |||||||||||||||||||||||||
Useful life | 3 years | ||||||||||||||||||||||||
Voting common share | |||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||||||||||||||||||||||||
Non-voting common shares [Member] | |||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||||||||||||||||||||||||
FW, Modco Agreement | MYGA | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 0.00% | ||||||||||||||||||||||||
Securities Purchase Agreement | SRC1 | |||||||||||||||||||||||||
Ownership (as a percent) | 30.00% | 30.00% | 30.00% | ||||||||||||||||||||||
Seneca Re Agreement | |||||||||||||||||||||||||
Embedded derivative gains | $ 2,700,000 | ||||||||||||||||||||||||
Embedded derivative losses | 2,900,000 | ||||||||||||||||||||||||
Unrealized gains (losses) on investments, net of taxes | $ 1,200,000 | $ 5,100,000 | |||||||||||||||||||||||
Basic loss per share (in dollars per share) | $ / shares | $ (4.24) | $ (4.86) | |||||||||||||||||||||||
Seneca Re Agreement | MYGA | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 25.00% | 25.00% | |||||||||||||||||||||||
Seneca Re Agreement | FIA | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 40.00% | 40.00% | |||||||||||||||||||||||
SRC1 | |||||||||||||||||||||||||
Sale of non controlling interest | $ 15,000,000 | ||||||||||||||||||||||||
SRC3 | |||||||||||||||||||||||||
Shares issued | shares | 1,000 | ||||||||||||||||||||||||
Shares sold, value | $ 5,700,000 | ||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | ||||||||||||||||||||||||
Proceeds from capital contribution | $ 5,500,000 | ||||||||||||||||||||||||
Ownership interest | 100.00% | ||||||||||||||||||||||||
Crestline Assurance Holdings LLC | Securities Purchase Agreement | |||||||||||||||||||||||||
Shares issued | shares | 444,444 | ||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||||||||||||||||||||||||
Share Price | $ / shares | $ 22.50 | ||||||||||||||||||||||||
Proceeds from issuance of common shares | $ 10,000,000 | ||||||||||||||||||||||||
American Life and Security National Life Insurance [Member] | |||||||||||||||||||||||||
Net premium income | $ 37,500,000 | ||||||||||||||||||||||||
Net statutory reserves | 34,800,000 | ||||||||||||||||||||||||
Amount owed deposit account | $ 2,400,000 | ||||||||||||||||||||||||
American Life and Security National Life Insurance [Member] | US Alliance Agreement | MYGA | |||||||||||||||||||||||||
Percentage of multi year guaranteed annuity | 20.00% | ||||||||||||||||||||||||
Percentage of indemnity coinsurance | 25.00% | ||||||||||||||||||||||||
American Life and Security National Life Insurance [Member] | US Alliance Agreement | FIA | |||||||||||||||||||||||||
Percentage of fixed indexed annuity | 20.00% | ||||||||||||||||||||||||
Percentage of indemnity coinsurance | 25.00% | 40.00% | 45.50% | 66.50% | 40.00% | ||||||||||||||||||||
Multi Year Guaranteed Annuity | SRC3 | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 45.00% | ||||||||||||||||||||||||
Multi Year Guaranteed Annuity | Crestline Assurance Holdings LLC | Master Letter Agreement | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 25.00% | ||||||||||||||||||||||||
Fixed Index Annuity | |||||||||||||||||||||||||
Number of Products | segment | 2 | ||||||||||||||||||||||||
Fixed Index Annuity | SRC3 | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 45.00% | ||||||||||||||||||||||||
Fixed Index Annuity | Crestline Assurance Holdings LLC | Master Letter Agreement | |||||||||||||||||||||||||
Percentage of indemnity coinsurance | 40.00% | ||||||||||||||||||||||||
Exchange Traded Funds | |||||||||||||||||||||||||
Equity securities | $ 0 | $ 21,900,000 | $ 0 | ||||||||||||||||||||||
1505 Capital LLC | |||||||||||||||||||||||||
Business Combination, Consideration Transferred | $ 500,000 | ||||||||||||||||||||||||
ORIX Corporation USA | SRC1 | |||||||||||||||||||||||||
Ownership (as a percent) | 30.00% | 30.00% | |||||||||||||||||||||||
Sale of non controlling interest | $ 15,000,000 | ||||||||||||||||||||||||
Percentage of ownership interest sold | 70.00% | ||||||||||||||||||||||||
ORIX Corporation USA | Securities Purchase Agreement | |||||||||||||||||||||||||
Percentage of ownership interest sold | 70.00% | ||||||||||||||||||||||||
ORIX Corporation USA | SRC1 | |||||||||||||||||||||||||
Percentage of ownership interest sold | 70.00% | ||||||||||||||||||||||||
American Life [Member] | PF Collinwood Holdings LLC | |||||||||||||||||||||||||
Ownership (as a percent) | 100.00% | ||||||||||||||||||||||||
American Life [Member] | Crestline Assurance Holdings LLC | |||||||||||||||||||||||||
Capital contribution | $ 5,000,000 | ||||||||||||||||||||||||
Investment Manager | |||||||||||||||||||||||||
Other investments in fund | $ 18,900,000 | ||||||||||||||||||||||||
Other invested assets | $ 35,300,000 | ||||||||||||||||||||||||
1505 Capital LLC | |||||||||||||||||||||||||
Ownership percentage acquired | 49.00% | 49.00% | 49.00% | 49.00% | 49.00% | 51.00% | |||||||||||||||||||
American Life [Member] | Ascona Group Holdings Ltd | |||||||||||||||||||||||||
Ownership interest | 74.00% | 74.00% | 74.00% | ||||||||||||||||||||||
Seneca Reinsurance Company, LLC | |||||||||||||||||||||||||
Contributions made | $ 300,000 | ||||||||||||||||||||||||
Ownership percentage acquired | 100.00% | ||||||||||||||||||||||||
Crestline Assurance Holdings LLC | Ascona Group Holdings Ltd | |||||||||||||||||||||||||
Ownership interest | 26.00% | 26.00% | 26.00% |
Assets and Liabilities Associ_3
Assets and Liabilities Associated with Business Held for Sale (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Percentage of indemnity reinsurance basis of liabilities and obligations | 100.00% | ||
Ceding commission | $ 3.5 | ||
Percentage of indemnity policies | 90.00% | 90.00% | 80.00% |
Assets and Liabilities Associ_4
Assets and Liabilities Associated with Business Held for Sale (Schedule of Assets and Liabilities Discontinued Operations) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Carrying amounts of major classes of assets included as part of discontinued operations: | |
Policy loans | $ 33 |
Reinsurance recoverables | 1,062 |
Premiums receivable | 24 |
Total assets held for sale in the Consolidated Balance Sheets | 1,119 |
Carrying amounts of major classes of liabilities included as part of discontinued operations: | |
Benefit reserves | 595 |
Policy claims | 35 |
Deposit-type contracts | 483 |
Accounts payable and accrued expenses | 1 |
Total liabilities held for sale in the Consolidated Balance Sheets | $ 1,114 |
Non-controlling Interest (Detai
Non-controlling Interest (Details) - USD ($) | Dec. 30, 2020 | Jun. 15, 2020 | Apr. 02, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 30, 2021 | Nov. 10, 2021 |
Net loss | $ (16,637,000) | $ (12,440,000) | |||||
SRC1 | |||||||
Ownership (as a percent) | 100.00% | ||||||
1505 Capital LLC | |||||||
Business Combination, Consideration Transferred | $ 500,000 | ||||||
ORIX Corporation USA | SRC1 | |||||||
Percentage of ownership interest sold | 70.00% | ||||||
Sale of non controlling interest | $ 15,000,000 | ||||||
Ownership (as a percent) | 30.00% | 30.00% | |||||
1505 Capital LLC | |||||||
Ownership percentage acquired | 49.00% | 51.00% | 49.00% | ||||
Capital units acquired, purchase price | $ 1,000,000 |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Cost and Estimated Fair Value of Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Amortized Cost | $ 679,921 | $ 369,156 |
Total fixed maturities | 683,296 | 377,163 |
Mortgage loans on real estate, held for investment | 183,203 | 94,990 |
Derivatives, Cost | 18,654 | 8,532 |
Derivatives, Gross Unrealized Gains | 6,391 | 3,257 |
Derivatives, Gross Unrealized Losses | 2,023 | 428 |
Estimated Fair Value | 23,022 | 11,361 |
Federal Home Loan Bank (FHLB) stock | 500 | |
Equity Securities, Amortized Cost | 22,158 | 0 |
Equity securities, Gross Unrealized Losses | 289 | |
Equity securities, at fair value (cost: $22,158 in 2021 and zero in 2020) | 21,869 | |
Other invested assets, Cost | 34,491 | |
Other invested assets, Gross Unrealized Gains | 813 | |
Other invested assets, Gross Unrealized Losses | 11 | |
Other invested assets | 35,293 | 21,897 |
Investment escrow | 3,611 | 3,174 |
Preferred stock , Amortized cost | 14,885 | 3,898 |
Preferred stock, Gross Unrealized Gains | 3,801 | |
Preferred stock, Fair value | 18,686 | 3,898 |
Notes receivable | 5,960 | 5,666 |
Policy Loans | 87 | 46 |
Total investments, Amortized Cost | 963,470 | 507,359 |
Investments, Gross Unrealized Gains | 18,273 | 11,948 |
Investments, Gross Unrealized Losses | 6,216 | 1,112 |
Investments, Fair Value Disclosure | 975,527 | 518,195 |
Estimated Fair Value | 975,527 | |
Fixed Maturities | ||
Amortized Cost | 679,921 | 369,156 |
Gross Unrealized Gains | 7,268 | 8,691 |
Gross Unrealized Losses | 3,893 | 684 |
Total fixed maturities | 683,296 | 377,163 |
Redeemable preferred stock | Fixed Maturities | ||
Amortized Cost | 14,282 | |
Gross Unrealized Gains | 53 | |
Gross Unrealized Losses | 245 | |
Total fixed maturities | 14,090 | |
U.S. government obligations | Fixed Maturities | ||
Amortized Cost | 1,855 | 5,744 |
Gross Unrealized Gains | 32 | 426 |
Gross Unrealized Losses | 5 | 6 |
Total fixed maturities | 1,882 | 6,164 |
Mortgage-back securities | Fixed Maturities | ||
Amortized Cost | 55,667 | 14,638 |
Gross Unrealized Gains | 368 | 276 |
Gross Unrealized Losses | 755 | 157 |
Total fixed maturities | 55,280 | 14,757 |
Asset-backed securities | Fixed Maturities | ||
Amortized Cost | 24,675 | 7,277 |
Gross Unrealized Gains | 443 | 173 |
Gross Unrealized Losses | 167 | |
Total fixed maturities | 24,951 | 7,450 |
Collateralized loan obligation | Fixed Maturities | ||
Amortized Cost | 272,446 | 209,224 |
Gross Unrealized Gains | 2,928 | 5,450 |
Gross Unrealized Losses | 851 | 350 |
Total fixed maturities | 274,523 | 214,324 |
States and Political Subdivisions - general obligations | Fixed Maturities | ||
Amortized Cost | 105 | 107 |
Gross Unrealized Gains | 9 | 11 |
Total fixed maturities | 114 | 118 |
States and Political Subdivisions - special revenue | Fixed Maturities | ||
Amortized Cost | 4,487 | 5,293 |
Gross Unrealized Gains | 1,129 | 909 |
Gross Unrealized Losses | 4 | |
Total fixed maturities | 5,612 | 6,202 |
Corporate | Fixed Maturities | ||
Amortized Cost | 35,392 | 17,401 |
Gross Unrealized Gains | 1,846 | 1,379 |
Gross Unrealized Losses | 99 | 171 |
Total fixed maturities | 37,139 | 18,609 |
Term Loans | Fixed Maturities | ||
Amortized Cost | 268,794 | 107,254 |
Gross Unrealized Gains | 441 | |
Gross Unrealized Losses | 1,767 | |
Total fixed maturities | 267,468 | 107,254 |
Trust preferred. | Fixed Maturities | ||
Amortized Cost | 2,218 | 2,218 |
Gross Unrealized Gains | 19 | 67 |
Total fixed maturities | $ 2,237 | $ 2,285 |
Investments (Schedule of Credit
Investments (Schedule of Credit Ratings of Fixed Maturity Securities) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 683,296 | $ 377,163 |
Fixed Maturities | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 683,296 | $ 377,163 |
Percent | 100.00% | 100.00% |
Fixed Maturities | Investment grade | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 633,996 | $ 305,970 |
Percent | 92.80% | 81.10% |
Fixed Maturities | Investment grade | AAA and U.S. Government | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 2,674 | $ 3,071 |
Percent | 0.40% | 0.80% |
Fixed Maturities | Investment grade | AA | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 482 | $ 5,818 |
Percent | 0.10% | 1.50% |
Fixed Maturities | Investment grade | A | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 168,141 | $ 49,445 |
Percent | 24.60% | 13.10% |
Fixed Maturities | Investment grade | BBB | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 462,699 | $ 247,636 |
Percent | 67.70% | 65.70% |
Fixed Maturities | Non investment grade | BB and other | ||
Marketable Securities [Line Items] | ||
Total fixed maturities | $ 49,300 | $ 71,193 |
Percent | 7.20% | 18.90% |
Investments (Schedule of Unreal
Investments (Schedule of Unrealized Loss of Securities) (Details) - Fixed Maturities $ in Thousands | Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($)security |
Estimated Fair Value, Total | $ 258,081 | $ 31,934 |
Gross Unrealized Loss, Total | $ 3,893 | $ 684 |
Number of Securities, Total | security | 184 | 47 |
Redeemable preferred stock | ||
Estimated Fair Value, Less than 12 months | $ 10,837 | |
Gross Unrealized Loss, Less than 12 months | $ 245 | |
Number of Securities, Less than 12 months | security | 6 | |
U.S. government obligations | ||
Estimated Fair Value, Less than 12 months | $ 104 | $ 55 |
Gross Unrealized Loss, Less than 12 months | $ 2 | |
Number of Securities, Less than 12 months | security | 1 | 2 |
Estimated Fair value, Greater than 12 months | $ 66 | $ 120 |
Gross Unrealized Loss, Greater than 12 months | $ 3 | $ 6 |
Number of Securities, Greater than 12 months | security | 3 | 4 |
Mortgage-back securities | ||
Estimated Fair Value, Less than 12 months | $ 35,403 | $ 5,708 |
Gross Unrealized Loss, Less than 12 months | $ 755 | $ 157 |
Number of Securities, Less than 12 months | security | 35 | 5 |
Asset-backed securities | ||
Estimated Fair Value, Less than 12 months | $ 12,355 | $ 14,878 |
Gross Unrealized Loss, Less than 12 months | $ 167 | $ 247 |
Number of Securities, Less than 12 months | security | 13 | 19 |
Collateralized loan obligation | ||
Estimated Fair Value, Less than 12 months | $ 90,731 | |
Gross Unrealized Loss, Less than 12 months | $ 851 | |
Number of Securities, Less than 12 months | security | 115 | |
Estimated Fair value, Greater than 12 months | $ 7,020 | |
Gross Unrealized Loss, Greater than 12 months | $ 103 | |
Number of Securities, Greater than 12 months | security | 6 | |
States and Political Subdivisions - special revenue | ||
Estimated Fair Value, Less than 12 months | $ 217 | $ 6 |
Gross Unrealized Loss, Less than 12 months | $ 4 | |
Number of Securities, Less than 12 months | security | 0 | 1 |
Term Loans | ||
Estimated Fair Value, Less than 12 months | $ 105,677 | |
Gross Unrealized Loss, Less than 12 months | 1,767 | |
Corporate | ||
Estimated Fair Value, Less than 12 months | 2,367 | $ 3,860 |
Gross Unrealized Loss, Less than 12 months | $ 73 | $ 104 |
Number of Securities, Less than 12 months | security | 9 | 7 |
Estimated Fair value, Greater than 12 months | $ 324 | $ 287 |
Gross Unrealized Loss, Greater than 12 months | $ 26 | $ 67 |
Number of Securities, Greater than 12 months | security | 2 | 3 |
Investments (Schedule of Fixed
Investments (Schedule of Fixed Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Marketable Securities [Abstract] | ||
Amortized Cost, Due in one year or less | $ 43,011 | |
Amortized Cost, Due after one year through five years | 286,283 | |
Amortized Cost, Due after five years through ten years | 240,093 | |
Amortized Cost, , Due after ten years through twenty years | 63,986 | |
Amortized Cost, Due after twenty years | 44,748 | |
Amortized Cost, No maturity | 1,800 | |
Amortized Cost | 679,921 | $ 369,156 |
Estimated Fair Value, Due in one year or less | 42,868 | |
Estimated Fair Value, Due after one year through five years | 286,068 | |
Estimated Fair Value, Due after five years through ten years | 242,341 | |
Estimated Fair Value, Due after ten years through twenty years | 64,206 | |
Estimated Fair Value, Due after twenty years | 46,076 | |
Estimated Fair Value, No maturity | 1,737 | |
Estimated Fair Value | $ 683,296 | $ 377,163 |
Investments (Schedule of Invest
Investments (Schedule of Investments Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | $ 183,203 | $ 94,990 |
Industrial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | 1,250 | |
Commercial mortgage loan - multi-family | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | 101,809 | 66,916 |
Residential Mortgage Backed Securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | 50,000 | |
Retail Mortgage Loans | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | 13,824 | |
Other. | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | 17,570 | 26,824 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Carrying Value | $ 183,203 | $ 94,990 |
Investments (Schedule of Mortga
Investments (Schedule of Mortgage Loan Investments) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Mortgage loans on real estate, held for investment | $ 183,203 | $ 94,990 |
0%-59.99% | ||
Mortgage loans on real estate, held for investment | 91,104 | 49,280 |
60%-69.99% | ||
Mortgage loans on real estate, held for investment | 42,819 | 22,349 |
70%-79.99% | ||
Mortgage loans on real estate, held for investment | 44,106 | $ 23,361 |
80% or greater | ||
Mortgage loans on real estate, held for investment | $ 5,174 |
Investments (Components of Net
Investments (Components of Net Investment Income) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Net investment income | $ 17,591 | $ 4,756 |
Less: investment (expenses) refund | (1,854) | (709) |
Investment income, net of expenses | 15,737 | 4,047 |
Fixed Maturities | ||
Net investment income | 16,443 | 3,661 |
Mortgage loans | ||
Net investment income | 185 | 992 |
Other invested assets | ||
Net investment income | 665 | $ 103 |
Other interest income | ||
Net investment income | $ 298 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | |
Impairment on fixed maturities | $ 0 | $ 35,000 | ||
Outstanding remaining lease payments | $ 3,600,000 | |||
Valuation allowance on leased assets | 777,000 | $ 777,000 | ||
Loss on sale of non-performing asset | $ 2,400,000 | |||
Amortized cost | 3,000,000 | 3,400,000 | ||
Fair value | 3,000,000 | 3,600,000 | ||
Proceeds from sales of available-for-sale investments | 356,800,000 | 89,100,000 | ||
Gross realized gain | 6,000,000 | 2,200,000 | ||
Gross realized losses | $ 1,400,000 | $ 388,000 | ||
Mortgage Loans Secured by Property | Delaware | Geographic Concentration Risk [Member] | ||||
Concentration risk percentage | 34.00% | |||
Mortgage Loans Secured by Property | New York | Geographic Concentration Risk [Member] | ||||
Concentration risk percentage | 32.00% | 28.00% | ||
Mortgage Loans Secured by Property | Pennsylvania | Geographic Concentration Risk [Member] | ||||
Concentration risk percentage | 14.00% | |||
Mortgage Loans Secured by Property | Arizona | Geographic Concentration Risk [Member] | ||||
Concentration risk percentage | 4.00% | |||
Mortgage Loans Secured by Property | California | Geographic Concentration Risk [Member] | ||||
Concentration risk percentage | 4.00% | 14.00% | ||
Mortgage Loans Secured by Property | Europe | Geographic Concentration Risk [Member] | ||||
Concentration risk percentage | 9.00% | 12.00% |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Thousands | Dec. 31, 2021USD ($)contract | Dec. 31, 2020USD ($)contract |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Estimated Fair Value | $ 23,022 | $ 11,361 |
Derivatives not designated as hedge | Equity options | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 526,096 | $ 272,854 |
Number of Contracts | contract | 482 | 252 |
Estimated Fair Value | $ 23,766 | $ 11,361 |
Derivatives not designated as hedge | Equity-indexed embedded derivative | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 525,548 | $ 311,964 |
Number of Contracts | contract | 4,205 | 2,101 |
Estimated Fair Value | $ 123,692 | $ 84,501 |
Derivative Instruments - Funds
Derivative Instruments - Funds Withheld Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Reinsurance recoverables (See Note 9) | $ 38,579 | $ 32,146 |
Embedded derivative losses | 2,900 | |
Embedded derivative gains | 2,700 | 2,900 |
American Republic Insurance Company | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Reinsurance recoverables (See Note 9) | 4,885 | |
Crestline SP 1 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Reinsurance recoverables (See Note 9) | 18,288 | 9,695 |
US Alliance Life and Security Company [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Reinsurance recoverables (See Note 9) | 5,064 | 7,235 |
Funds With held Provision Agreement | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Book value of assets | 560,877 | 223,808 |
Market value of assets | 561,038 | 226,719 |
Total return swap value | (161) | (2,911) |
Increase in realized gain (loss) | 161 | (2,900) |
Unrealized gain (loss) on embedded derivatives | 161 | 2,900 |
Embedded derivative losses | 2,900 | |
Embedded derivative gains | 2,700 | |
Funds With held Provision Agreement | American Republic Insurance Company | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Book value of assets | 74,983 | |
Market value of assets | 74,670 | |
Total return swap value | 313 | |
Funds With held Provision Agreement | Crestline SP 1 | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Book value of assets | 228,560 | 62,163 |
Market value of assets | 228,450 | 63,131 |
Total return swap value | 110 | (968) |
Funds With held Provision Agreement | Ironbound Reinsurance Company Limited | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Book value of assets | 154,867 | 98,714 |
Market value of assets | 155,755 | 99,748 |
Total return swap value | (888) | (1,034) |
Funds With held Provision Agreement | Ascendent Re | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Book value of assets | 56,246 | 27,224 |
Market value of assets | 56,078 | 27,480 |
Total return swap value | 168 | (256) |
Funds With held Provision Agreement | US Alliance Agreement | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Book value of assets | 46,221 | 35,707 |
Market value of assets | 46,085 | 36,360 |
Total return swap value | $ 136 | $ (653) |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments (Schedule of Financial Instruments at Fair Value Measured on a Recurring Basis) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | $ 683,296,000 | $ 377,163,000 | |
Mortgage loans on real estate, held for investment | 183,203,000 | 94,990,000 | |
Derivative instruments (See Note 5) | 23,022,000 | 11,361,000 | |
Equity securities | 21,869,000 | ||
Other Investments | 35,293,000 | 21,897,000 | |
Investment escrow | 3,611,000 | 3,174,000 | |
Federal Home Loan Bank Stock | 500,000 | ||
Preferred stock | 18,686,000 | 3,898,000 | |
Notes receivable | 5,960,000 | 5,666,000 | |
Policy Loans | 87,000 | 46,000 | |
Policy Loans Receivable | 87,000 | 46,000 | |
Investments, Fair Value Disclosure | 975,527,000 | 518,195,000 | |
Embedded derivative for equity-indexed contracts | 123,692,000 | 84,501,000 | |
Valuation allowance on leased assets | 777,000 | $ 777,000 | |
Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative instruments (See Note 5) | 23,022,000 | 11,361,000 | |
Equity securities | 21,869,000 | ||
Investment escrow | 3,611,000 | 3,174,000 | |
Notes receivable | 5,960,000 | 5,666,000 | |
Investments, Fair Value Disclosure | 470,290,000 | 290,110,000 | |
Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Mortgage loans on real estate, held for investment | 183,203,000 | 94,990,000 | |
Other Investments | 35,293,000 | 21,897,000 | |
Federal Home Loan Bank Stock | 500,000 | ||
Preferred stock | 18,686,000 | 3,898,000 | |
Policy Loans | 87,000 | ||
Policy Loans Receivable | 46,000 | ||
Investments, Fair Value Disclosure | 505,237,000 | 228,085,000 | |
Embedded derivative for equity-indexed contracts | 123,692,000 | 84,501,000 | |
Fixed Maturities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 683,296,000 | 377,163,000 | |
Fixed Maturities | Redeemable preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 14,090,000 | ||
Fixed Maturities | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 415,828,000 | 269,909,000 | |
Fixed Maturities | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 267,468,000 | 107,254,000 | |
Fixed Maturities | U.S. government obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 1,882,000 | 6,164,000 | |
Fixed Maturities | U.S. government obligations | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 1,882,000 | 6,164,000 | |
Fixed Maturities | Mortgage-back securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 55,280,000 | 14,757,000 | |
Fixed Maturities | Mortgage-back securities | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 55,280,000 | 14,757,000 | |
Fixed Maturities | Asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 24,951,000 | 7,450,000 | |
Fixed Maturities | Asset-backed securities | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 24,951,000 | 7,450,000 | |
Fixed Maturities | Collateralized loan obligation | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 274,523,000 | 214,324,000 | |
Fixed Maturities | Collateralized loan obligation | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 274,523,000 | 214,324,000 | |
Fixed Maturities | States and Political Subdivisions - general obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 114,000 | 118,000 | |
Fixed Maturities | States and Political Subdivisions - general obligations | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 114,000 | 118,000 | |
Fixed Maturities | States and Political Subdivisions - special revenue | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 5,612,000 | 6,202,000 | |
Fixed Maturities | States and Political Subdivisions - special revenue | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 5,612,000 | 6,202,000 | |
Fixed Maturities | Trust preferred. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 2,237,000 | 2,285,000 | |
Fixed Maturities | Trust preferred. | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 2,237,000 | 2,285,000 | |
Fixed Maturities | Term Loans | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 267,468,000 | 107,254,000 | |
Fixed Maturities | Term Loans | Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 267,468,000 | 107,254,000 | |
Fixed Maturities | Corporate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 37,139,000 | 18,609,000 | |
Fixed Maturities | Corporate | Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 37,139,000 | $ 18,609,000 | |
Fixed Maturities | Preferred Stock | Redeemable preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 14,090,000 | ||
Fixed Maturities | Preferred Stock | Fair Value, Inputs, Level 2 | Redeemable preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 14,090,000 | ||
Investment escrow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 3,611,000 | ||
Other invested assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | 35,293,000 | ||
Preferred Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total fixed maturities | $ 18,686,000 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments (Schedule of Financial Assets and Liabilities at Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash | $ 142,013 | $ 151,679 |
Fair Value, Inputs, Level 1 | ||
Assets | ||
Cash | 100,567 | |
Fair Value, Inputs, Level 2 | ||
Assets | ||
Cash | 142,013 | 51 |
Fair Value, Inputs, Level 3 | ||
Assets | ||
Policy loans | 87 | 46 |
Liabilities: | ||
Policyholder deposits (Deposit-type contracts) | 1,075,439 | 597,868 |
Carrying Amount | ||
Assets | ||
Policy loans | 87 | 46 |
Cash | 142,013 | 151,679 |
Liabilities: | ||
Policyholder deposits (Deposit-type contracts) | 1,075,439 | 597,868 |
Fair Value | ||
Assets | ||
Policy loans | 87 | 46 |
Cash | 142,013 | 151,679 |
Liabilities: | ||
Policyholder deposits (Deposit-type contracts) | $ 1,075,439 | $ 597,868 |
Fair Values of Financial Inst_5
Fair Values of Financial Instruments (Recurring Basis Level 3) (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Beginning Balance | $ 228,039 | $ 16,779 |
Additions | 502,993 | 285,232 |
Sales | 225,882 | 72,695 |
Valuation Allowance | (777) | |
Realized gain/(loss) | (500) | |
Ending Balance | 505,150 | 228,039 |
Fixed Maturities | ||
Beginning Balance | 107,254 | |
Additions | 231,089 | 107,254 |
Sales | 70,875 | |
Ending Balance | 267,468 | 107,254 |
Mortgage loans on real estate, held for investment | ||
Beginning Balance | 94,990 | 13,810 |
Additions | 160,277 | 99,357 |
Sales | 72,064 | 18,177 |
Ending Balance | 183,203 | 94,990 |
Federal Home Loan Bank (FHLB) stock | ||
Additions | 500 | |
Ending Balance | 500 | |
Other invested assets | ||
Beginning Balance | 21,897 | 2,469 |
Additions | 96,339 | 74,723 |
Sales | 82,943 | 54,518 |
Valuation Allowance | (777) | |
Ending Balance | 35,293 | 21,897 |
Preferred Stock | ||
Beginning Balance | 3,898 | 500 |
Additions | 14,788 | 3,898 |
Realized gain/(loss) | (500) | |
Ending Balance | $ 18,686 | $ 3,898 |
Fair Values of Financial Inst_6
Fair Values of Financial Instruments (Summary of unobservable inputs) (Details) $ in Millions | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Surrender rate | Maximum | Base | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.15 | |
Surrender rate | Maximum | Additional Shock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.30 | |
Fair Value, Inputs, Level 3 | Non performance risk | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total fixed maturities | $ 123.7 | $ 84.5 |
Embedded Derivative Liability, Valuation Technique [Extensible List] | us-gaap:ValuationTechniqueOptionPricingModelMember | us-gaap:ValuationTechniqueOptionPricingModelMember |
Fair Value, Inputs, Level 3 | Non performance risk | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.003 | 0.003 |
Fair Value, Inputs, Level 3 | Non performance risk | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.011 | 0.013 |
Fair Value, Inputs, Level 3 | Non performance risk | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.006 | 0.007 |
Fair Value, Inputs, Level 3 | Option budget | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.011 | 0.026 |
Fair Value, Inputs, Level 3 | Option budget | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.034 | 0.034 |
Fair Value, Inputs, Level 3 | Option budget | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.024 | 0.027 |
Fair Value, Inputs, Level 3 | Discount rates | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total fixed maturities | $ 4.9 | |
Fair Value, Inputs, Level 3 | Discount rates | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.175 | |
Fair Value, Inputs, Level 3 | Discount rates | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.195 | |
Fair Value, Inputs, Level 3 | Discount rates | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.185 | |
Fair Value, Inputs, Level 3 | EBITDA Multiple | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 9 | |
Fair Value, Inputs, Level 3 | EBITDA Multiple | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 10 | |
Fair Value, Inputs, Level 3 | Surrender rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.005 | 0.005 |
Fair Value, Inputs, Level 3 | Surrender rate | Maximum | Base | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.15 | |
Fair Value, Inputs, Level 3 | Surrender rate | Maximum | Additional Shock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.30 | |
Fair Value, Inputs, Level 3 | Surrender rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest sensitive contract liabilities, embedded derivative (as a percent) | 0.077 | 0.076 |
Fair Values of Financial Inst_7
Fair Values of Financial Instruments (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Investment escrow | $ 3,611,000 | $ 3,174,000 |
Equity securities | 21,869,000 | |
Notes receivable | 5,960,000 | 5,666,000 |
Other Investments in Fund | 19,700,000 | |
Warrants Market Value | 3,800,000 | 0 |
Perpetual preferred stock | 10,000,000 | |
Fair value of preferred stock | 4,900,000 | |
Other Investments | 35,293,000 | 21,897,000 |
Fair value of assets from Level 1 to Level 2 | 0 | |
Fair value of assets, Transfers into Level 3 | 0 | |
Fair value of assets, Transfers out of Level 3 | 0 | |
Fair value of liability, Transfers into Level 3 | 0 | |
Fair value of liability, Transfers out of Level 3 | $ 0 | |
BBB+ | ||
Interest rate | 5.00% | |
Exchange Traded Funds | ||
Equity securities | $ 21,900,000 | $ 0 |
Third party corporate bonds | ||
Fair value of assets, Transfers into Level 3 | $ 107,200,000 |
Earnings Loss Per Share (Detail
Earnings Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 10, 2020 | |
Earnings Per Share [Abstract] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 20,000,000 | 20,000,000 | 22,000,000 |
Non-voting common shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Common stock, shares issued | 3,737,564 | 3,737,564 | |
Common stock, shares outstanding | 3,737,564 | 3,737,564 | |
Net loss attributable to Midwest Holding, Inc. | $ (16,637) | $ (12,440) | |
Weighted average common shares outstanding | 3,737,564,000 | 2,547,003,000 | |
Stock options and deferred compensation agreements | 40,850,000 | ||
Denominator for earnings (loss) per common share | 3,737,564,000 | 2,587,853,000 | |
Basic loss per share (in dollars per share) | $ (4.45) | $ (4.88) |
Income Tax Matters (Schedule of
Income Tax Matters (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Loss carryforwards | $ 2,244 | $ 1,557 |
Capitalized costs | 127 | 175 |
Stock option. granted | 1,060 | 14 |
Unrealized losses on investments | 1,534 | 1,534 |
Policy acquisition costs | 3,640 | 2,243 |
Charitable contribution carryforward | 2 | |
General business credits | 6 | |
Derivative option allowance | 510 | |
Sec 163(j) limitation | 171 | 154 |
Benefit reserves | 5,186 | 3,569 |
Property and equipment | 33 | |
Other | 1,464 | |
Total deferred tax assets | 15,975 | 9,248 |
Less valuation allowance | (14,431) | (7,002) |
Total deferred tax assets, net of valuation allowance | 1,544 | 2,246 |
Deferred tax liabilities: | ||
Unrealized losses on investments | 1,084 | 1,994 |
Due premiums | 82 | |
Intangible assets | 147 | 147 |
Bond Discount | 313 | 20 |
Property and equipment | 3 | |
Total deferred tax liabilities | 1,544 | 2,246 |
Net deferred tax assets |
Income Tax Matters (Schedule _2
Income Tax Matters (Schedule of Effective Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Computed expected income tax benefit | $ (2,815) | $ (2,238) |
Increase (reduction) in income taxes resulting from: | ||
State tax net of federal benefit | 158 | |
IMR and reinsurance | 157 | 26 |
Non deductible expenses | 9 | 5 |
Gain on sale of SRC1 | 368 | |
Change in valuation allowance | 7,429 | 4,049 |
Dividends received deduction | (10) | |
Amended Return - 2019/2020 | 339 | |
Adjustment to payable | (110) | |
Deferred tax adjustment | (382) | |
Prior year true-up | (229) | (405) |
Subtotal of increases | 7,581 | 3,823 |
Tax expense (benefit) | $ 4,766 | $ 1,585 |
Income Tax Matters (Narrative)
Income Tax Matters (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2016 | |
Income Tax Matters Narrative Details Abstract | |||
Deferred Tax Assets, Valuation Allowance | $ 14,431,000 | $ 7,002,000 | |
U.S. federal income tax rate | 21.00% | ||
Net operating loss ("NOL") carryforwards | $ 9,800,000 | $ 907,363 | |
Percentage of carry forward year limited taxable income | 80.00% | ||
NOLs carryforwards, valuation allowance | $ 2,100,000 | ||
Income tax expense | $ 4,766,000 | $ 1,585,000 |
Reinsurance (Summary of Signifi
Reinsurance (Summary of Significant Reinsurance Amounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |||
Reinsurance recoverables | $ 38,579 | $ 32,146 | |
Deposit-type contracts | 1,075,439 | 597,868 | $ 171,169 |
Deposit-type contracts Reinsurance ceded | (647,632) | (405,981) | |
Retained deposit-type contracts | 427,807 | 191,887 | |
Premiums | |||
Direct | 258 | 884 | |
Reinsurance ceded | (258) | (884) | |
Future policy and other policy benefits | |||
Direct | 159 | 233 | |
Reinsurance ceded | $ (159) | $ (233) |
Reinsurance (Schedule of Signif
Reinsurance (Schedule of Significant Reinsurance Balances) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Recoverable on Unpaid Losses | $ 202 | $ 141 |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | 38,727 | 32,311 |
Ceded Due Premiums | 350 | 306 |
Reinsurance recoverables | $ 38,579 | $ 32,146 |
Ironbound Reinsurance Company Limited [Member] | ||
AM Best Rating | NR | |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | $ (3,561) | |
Reinsurance payable | $ (3,561) | |
Optimum Reinsurance Company [Member] | ||
AM Best Rating | A | A |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | $ 561 | $ 525 |
Reinsurance recoverables | $ 561 | $ 525 |
Sagicor Life Insurance Company [Member] | ||
AM Best Rating | A- | A- |
Recoverable on Unpaid Losses | $ 157 | $ 141 |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | 10,901 | 11,286 |
Ceded Due Premiums | 303 | 277 |
Reinsurance recoverables | $ 10,755 | $ 11,150 |
Ascendant Re | ||
AM Best Rating | NR | NR |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | $ 1,550 | $ 3,541 |
Reinsurance recoverables | $ 1,550 | $ 3,541 |
Crestline SP 1 | ||
AM Best Rating | NR | NR |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | $ 18,288 | $ 9,695 |
Reinsurance recoverables | $ 18,288 | $ 9,695 |
American Republic Insurance Company | ||
AM Best Rating | A | |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | $ 4,885 | |
Reinsurance recoverables | $ 4,885 | |
Unified Life Insurance Company [Member] | ||
AM Best Rating | NR | |
Recoverable on Unpaid Losses | $ 45 | |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | 1,013 | |
Ceded Due Premiums | 21 | |
Reinsurance recoverables | $ 1,037 | |
US Alliance Life and Security Company [Member] | ||
AM Best Rating | NR | NR |
Recoverable/(Payable) on Benefit Reserves/Deposit-type Contracts | $ 5,090 | $ 7,264 |
Ceded Due Premiums | 26 | 29 |
Reinsurance recoverables | $ 5,064 | $ 7,235 |
Reinsurance (Narrative) (Detail
Reinsurance (Narrative) (Details) - USD ($) | Jul. 01, 2021 | Jul. 23, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Apr. 24, 2020 | Apr. 15, 2020 | Apr. 01, 2020 | Mar. 10, 2020 | Nov. 07, 2019 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 |
Reinsurance recoverables (See Note 7) | $ 38,579,000 | $ 32,146,000 | |||||||||||
Unrealized gains | 161,000 | 2,900,000 | |||||||||||
Embedded derivative gains | 2,700,000 | 2,900,000 | |||||||||||
Embedded derivative losses | 2,900,000 | ||||||||||||
Deferred acquisition cost | (74,000) | 69,000 | |||||||||||
FW, Modco SDA Agreement | |||||||||||||
Initial settlement | $ 13,500,000 | ||||||||||||
Net statutory reserves | 14,700,000 | ||||||||||||
FW, Modco SDA Agreement | Funds Withheld Account [Member] | |||||||||||||
Initial settlement | 12,700,000 | ||||||||||||
US Alliance Agreement | |||||||||||||
Initial settlement | 5,000,000 | ||||||||||||
FW, Modco Agreement | MYGA | |||||||||||||
Percentage of indemnity coinsurance | 0.00% | ||||||||||||
Seneca Re Agreement | |||||||||||||
Embedded derivative gains | 2,700,000 | ||||||||||||
Embedded derivative losses | 2,900,000 | ||||||||||||
Seneca Re Agreement | MYGA | |||||||||||||
Percentage of indemnity coinsurance | 25.00% | 25.00% | |||||||||||
Seneca Re Agreement | FIA | |||||||||||||
Percentage of indemnity coinsurance | 40.00% | 40.00% | |||||||||||
Statutory Revenue | FIA | |||||||||||||
Percentage of indemnity coinsurance | 0.00% | ||||||||||||
US Alliance Life and Security Company [Member] | |||||||||||||
Reinsurance recoverables (See Note 7) | 5,064,000 | 7,235,000 | |||||||||||
US Alliance Life and Security Company [Member] | US Alliance Agreement | FIA | |||||||||||||
Percentage of indemnity coinsurance | 49.00% | ||||||||||||
American Life [Member] | |||||||||||||
Net premium income | 37,500,000 | ||||||||||||
Net statutory reserves | 43,600,000 | ||||||||||||
Contingency reserves | $ 0 | 0 | |||||||||||
American Life [Member] | FW, Modco SDA Agreement | |||||||||||||
Initial settlement | $ 800,000 | ||||||||||||
American Life [Member] | FW, Modco Agreement | MYGA | |||||||||||||
Percentage of multi year guaranteed annuity | 45.00% | ||||||||||||
American Life [Member] | FW, Modco Agreement | FIA | |||||||||||||
Percentage of fixed indexed annuity | 45.00% | ||||||||||||
Unified Life Insurance Company [Member] | |||||||||||||
Reinsurance recoverables (See Note 7) | $ 1,037,000 | ||||||||||||
Optimum Reinsurance Company [Member] | |||||||||||||
Reinsurance recoverables (See Note 7) | 561,000 | 525,000 | |||||||||||
Sagicor Life Insurance Company [Member] | |||||||||||||
Reinsurance recoverables (See Note 7) | 10,755,000 | 11,150,000 | |||||||||||
American Life and Security National Life Insurance [Member] | |||||||||||||
Net premium income | 37,500,000 | ||||||||||||
Net statutory reserves | 34,800,000 | ||||||||||||
Amount owed deposit account | $ 2,400,000 | ||||||||||||
American Life and Security National Life Insurance [Member] | US Alliance Agreement | MYGA | |||||||||||||
Percentage of indemnity coinsurance | 25.00% | ||||||||||||
Percentage of multi year guaranteed annuity | 20.00% | ||||||||||||
American Life and Security National Life Insurance [Member] | US Alliance Agreement | FIA | |||||||||||||
Percentage of indemnity coinsurance | 25.00% | 40.00% | 45.50% | 66.50% | 40.00% | ||||||||
Percentage of fixed indexed annuity | 20.00% | ||||||||||||
Crestline SP 1 | |||||||||||||
Reinsurance recoverables (See Note 7) | $ 18,288,000 | $ 9,695,000 |
Reinsurance (Ceding commissions
Reinsurance (Ceding commissions deferred) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Ceded Commission Earned | $ 11,170 | $ 10,564 |
Expense Allowances | 19,728 | 19,149 |
Interest On Ceding Commissions | 645 | 375 |
Earned Ceding Commission | 3,022 | 843 |
Deferred gain on coinsurance transactions | 28,589 | 18,199 |
Unified Life Insurance Company [Member] | ||
Earned Ceding Commission | 35 | |
Deferred gain on coinsurance transactions | 242 | 277 |
Ironbound Reinsurance Company Limited [Member] | ||
Ceded Commission Earned | 688 | |
Expense Allowances | (461) | 703 |
Interest On Ceding Commissions | 211 | 221 |
Earned Ceding Commission | 684 | 435 |
Deferred gain on coinsurance transactions | 5,137 | 5,642 |
Ascendant Re | ||
Ceded Commission Earned | 498 | 1,354 |
Expense Allowances | 904 | 2,617 |
Interest On Ceding Commissions | 93 | 67 |
Earned Ceding Commission | 367 | 78 |
Deferred gain on coinsurance transactions | 3,101 | 2,703 |
US Alliance Life and Security Company [Member] | ||
Ceded Commission Earned | 2 | 2,279 |
Expense Allowances | (75) | 4,030 |
Interest On Ceding Commissions | 60 | 39 |
Earned Ceding Commission | 401 | 139 |
Deferred gain on coinsurance transactions | 162 | 172 |
Crestline SP 1 | ||
Ceded Commission Earned | 6,699 | 6,243 |
Expense Allowances | 12,321 | 11,799 |
Interest On Ceding Commissions | 255 | 48 |
Earned Ceding Commission | 1,185 | 191 |
Deferred gain on coinsurance transactions | 13,515 | 6,932 |
American Republic Insurance Company | ||
Ceded Commission Earned | 3,971 | |
Expense Allowances | 7,039 | |
Interest On Ceding Commissions | 26 | |
Earned Ceding Commission | 350 | |
Deferred gain on coinsurance transactions | 4,146 | |
US Alliance Life and Security Company(3) | ||
Deferred gain on coinsurance transactions | $ 2,286 | $ 2,473 |
Reinsurance (Retained and Reins
Reinsurance (Retained and Reinsurer Balance Sheets) (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets [Abstract] | |||
Total investments | $ 975,527 | $ 518,195 | |
Cash and cash equivalents | 142,013 | 151,679 | |
Accrued investment income | 13,623 | 6,807 | |
Deferred acquisition costs, net | 24,530 | 13,456 | $ 0 |
Reinsurance recoverables | 38,579 | 32,146 | |
Other assets | 25,645 | 4,118 | |
Total assets | 1,219,917 | 726,401 | |
Liabilities: | |||
Policyholder liabilities | 1,088,618 | 610,808 | |
Deferred gain on coinsurance transactions | 28,589 | 18,199 | |
Other liabilities | 16,954 | 11,064 | |
Total liabilities | 1,134,161 | 640,071 | |
Stockholders' Equity: | |||
Voting common stock | 4 | 4 | |
Additional paid-in capital | 138,277 | 133,417 | |
Accumulated deficit | (70,159) | (53,522) | |
Accumulated other comprehensive income (loss) | 2,634 | 6,431 | |
Total Midwest Holding Inc.'s stockholders' equity | 70,756 | 86,330 | |
Noncontrolling interests | 15,000 | ||
Total stockholders' equity | 85,756 | 86,330 | $ 14,158 |
Total liabilities and stockholders' equity | 1,219,917 | 726,401 | |
Retained | |||
Assets [Abstract] | |||
Total investments | 414,418 | 185,368 | |
Cash and cash equivalents | 95,406 | 102,335 | |
Accrued investment income | 3,853 | 1,956 | |
Deferred acquisition costs, net | 24,530 | 13,456 | |
Other assets | 27,834 | 2,685 | |
Total assets | 566,041 | 305,800 | |
Liabilities: | |||
Policyholder liabilities | 427,807 | 191,887 | |
Deferred gain on coinsurance transactions | 28,589 | 18,199 | |
Other liabilities | 23,889 | 9,384 | |
Total liabilities | 480,285 | 219,470 | |
Stockholders' Equity: | |||
Voting common stock | 4 | 4 | |
Additional paid-in capital | 138,277 | 133,417 | |
Accumulated deficit | (70,159) | (53,522) | |
Accumulated other comprehensive income (loss) | 2,634 | 6,431 | |
Total Midwest Holding Inc.'s stockholders' equity | 70,756 | 86,330 | |
Noncontrolling interests | 15,000 | ||
Total stockholders' equity | 85,756 | 86,330 | |
Total liabilities and stockholders' equity | 566,041 | 305,800 | |
Reinsurance | |||
Assets [Abstract] | |||
Total investments | 561,109 | 332,827 | |
Cash and cash equivalents | 46,607 | 49,344 | |
Accrued investment income | 9,770 | 4,851 | |
Reinsurance recoverables | 38,579 | 32,146 | |
Other assets | (2,189) | 1,433 | |
Total assets | 653,876 | 420,601 | |
Liabilities: | |||
Policyholder liabilities | 660,811 | 418,921 | |
Other liabilities | (6,935) | 1,680 | |
Total liabilities | 653,876 | 420,601 | |
Stockholders' Equity: | |||
Total liabilities and stockholders' equity | $ 653,876 | $ 420,601 |
Long-Term Incentive Plans (Deta
Long-Term Incentive Plans (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Nov. 16, 2020 | Jun. 11, 2019 | |
Share based compensation | $ 4,981,000 | $ 164,000 | ||
Fair value assumptions | ||||
Weighted-average volatility (as a percent) | 38.90% | 98.10% | ||
Stock Options | ||||
Fair value assumptions | ||||
Expiration period | 10 years | |||
Minimum | ||||
Fair value assumptions | ||||
Expected volatility (as a percent) | 4.40% | 60.00% | ||
Expected term (in years) | 2 years | 2 years | ||
Risk free rate (as a percent) | 0.80% | 0.90% | ||
Minimum | Stock Options | ||||
Fair value assumptions | ||||
Vesting period | 2 years | |||
Maximum | ||||
Fair value assumptions | ||||
Expected volatility (as a percent) | 66.30% | 200.00% | ||
Expected term (in years) | 7 years | 5 years | ||
Risk free rate (as a percent) | 1.50% | 1.80% | ||
Maximum | Stock Options | ||||
Fair value assumptions | ||||
Vesting period | 4 years | |||
Long-Term Incentive Plans | ||||
Nonvested stock options at beginning (in shares) | 100,972 | 17,900 | ||
Options granted (in shares) | 333,880 | 68,025 | ||
Restricted stock granted (in shares) | 5,089 | 18,597 | ||
Vested (in shares) | (85,957) | (200) | ||
Forfeited (in shares) | (36,767) | (3,350) | ||
Nonvested stock options at ending (in shares) | 317,217 | 100,972 | ||
Nonvested stock options at beginning (in dollars per share) | $ 22.91 | $ 8 | ||
Options granted (in dollars per share) | 19.25 | 21.85 | ||
Restricted stock granted (in dollars per share) | 24.34 | 41.02 | ||
Vested (in dollars per share) | 17.32 | 8 | ||
Forfeited (in dollars per share) | 23.91 | 11.25 | ||
Nonvested stock options at ending (in dollars per share) | 25.80 | 22.91 | ||
Nonvested stock options at beginning (in dollars per share) | 34.70 | 25 | ||
Grants, weighted average exercise price (in dollars per share) | 42.84 | 33.13 | ||
Restricted stock granted, weighted average exercise price (in dollars per share) | 24.34 | 41.02 | ||
Vested, weighted average exercise price (in dollars per share) | 30.20 | 25 | ||
Forfeited, weighted average exercise price (in dollars per share) | 40.42 | 25 | ||
Nonvested stock options at ending (in dollars per share) | $ 40.13 | $ 34.70 | ||
2019 LTIP | Stock Options | ||||
Share based compensation | $ 5,000,000 | $ 5,000,000 | ||
2019 LTIP | Maximum | Stock Options | ||||
Shares authorized | 102,000 | |||
2020 LTIP | Stock Options | ||||
Share based compensation | $ 164,000 | $ 164,000 | ||
2020 LTIP | Maximum | Stock Options | ||||
Shares authorized | 350,000 |
Deposit-Type Contracts (Details
Deposit-Type Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Beginning balance | $ 597,868 | $ 171,169 |
US Alliance | 1,873 | (3,308) |
Unified Life Insurance Company | 468 | |
Deposits received | 471,646 | 415,561 |
Investment earnings (includes embedded derivative) | 7,012 | 4,215 |
Withdrawals | (18,446) | (2,509) |
Policy charges | (842) | |
Ending balance | 1,075,439 | 597,868 |
Ironbound Reinsurance Company Limited | ||
Ironbound Reinsurance Company Limited | 6,579 | 6,080 |
Ascendant Re | ||
Deposit contract | 2,880 | 3,053 |
Crestline SP 1 | ||
Deposit contract | 4,834 | $ 3,607 |
American Republic Insurance Company | ||
Deposit contract | $ 1,567 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - Unfunded Commitments $ in Thousands | Dec. 31, 2021USD ($) |
Other Commitments [Line Items] | |
Commitments | $ 145,941 |
Commitments reinsurance | 122,600 |
Unfunded Commitment | |
Due in one year or less | 19,245 |
Due in two years | 26,753 |
Due in three years | 4,705 |
Due in four years | 8,741 |
Due in five years and after | 86,497 |
Total | 145,941 |
American Life and Security Corporation | |
Other Commitments [Line Items] | |
Commitments | 23,300 |
Unfunded Commitment | |
Total | $ 23,300 |
Leases (Schedule of Supplementa
Leases (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) $ in Thousands | Dec. 31, 2021USD ($)lease | Dec. 31, 2020USD ($) |
Leases [Abstract] | ||
Number of lease agreements that include variable lease payments | lease | 0 | |
Remaining operating lease | lease | 1 | |
Lease extending | 10 years | |
Noncurrent: | ||
Operating lease right of use assets | $ | $ 2,360 | $ 348 |
Liabilities | ||
Operating lease | $ | $ 2,364 | $ 397 |
Leases (Schedule of Components
Leases (Schedule of Components of Leases Expenses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost (General and administrative expense) | $ 8 | $ 9 |
Finance lease cost: | ||
Amortization expense | $ 3 |
Leases (Schedule of Finance and
Leases (Schedule of Finance and Operating Leases Mature) (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Operating Leases | |
2022 | $ 342 |
2023 | 342 |
2024 | 342 |
2025 | 342 |
2026 | 345 |
2027 | 353 |
2028 | 362 |
2029 | 371 |
2030 | 380 |
2031 | 292 |
Total remaining lease payments | $ 3,471 |
Leases (Schedule of Supplemen_2
Leases (Schedule of Supplemental Cash Flow Information Related to Leases) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash payments | ||
Operating cash flows from operating leases | $ (12) | $ (5) |
Operating cash flows from finance leases | $ 1 |
Leases (Schedule of Weighted Av
Leases (Schedule of Weighted Average Lease Term And Discount Rate) (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Weighted Average Remaining Term - Operating lease | 10 years | 1 year 6 months |
Weighted Average Discount Rate - Finance lease | 6.00% | |
Weighted Average Discount Rate - Operating lease | 8.00% |
Statutory Net Income and Surp_3
Statutory Net Income and Surplus (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Net realized loss on investments | $ 7,752 | $ 2,550 | |
SRC1 | |||
Statutory Net Income/(Loss) | (1,004) | (9,482) | |
Statutory Capital and Surplus | 8,415 | 5,518 | |
Premiums Sales | 37,764 | 147,502 | |
SRC3 | |||
Statutory Net Income/(Loss) | (6,851) | ||
Statutory Capital and Surplus | 3,150 | ||
Premiums Sales | 88,704 | ||
Ironbound Reinsurance Company Limited | FW, Modco Agreement | |||
Net realized loss on investments | $ 2,400 | ||
American Life and Security Corporation | |||
Statutory Net Income/(Loss) | (6,355) | 3,893 | |
Statutory Capital and Surplus | 74,011 | 77,447 | |
Premiums Sales | $ 107,767 | $ 39,934 |
Third-party Administration (Det
Third-party Administration (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
TPA [Member] | ||
Related Party Transaction [Line Items] | ||
Amount of transaction | $ 523,000 | $ 142,000 |
Reverse Stock Split (Details)
Reverse Stock Split (Details) | Aug. 10, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2021$ / sharesshares |
Common stock, shares authorized | 22,000,000 | 20,000,000 | 20,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 |
Reverse stock split ratio | 1 | ||
Reverse stock split fractions retired | $ | $ 175,000 | $ 175,000 | |
Common stock, shares outstanding | 3,737,564 | 3,737,564 | |
Voting common share | |||
Common stock, shares authorized | 20,000,000 | 20,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||
Non-voting common shares [Member] | |||
Common stock, shares authorized | 2,000,000 | 2,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Capital Raise (Details)
Capital Raise (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 21, 2020 | Apr. 24, 2020 | Dec. 31, 2020 |
Capital Raise | |||
Shares issued | 231,655 | ||
Public offering | |||
Capital Raise | |||
Shares issued | 1,000,000 | ||
Price per share | $ 70 | ||
Capital contribution | $ 70 | ||
Deal expenses incurred | $ 6 |
Equity (Narrative) (Details)
Equity (Narrative) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 10, 2020 | |
Preferred stock | |||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common Stock | |||
Common stock, shares authorized | 20,000,000 | 20,000,000 | 22,000,000 |
Common stock, shares issued | 3,737,564 | 3,737,564 | |
Common stock, shares outstanding | 3,737,564 | 3,737,564 | |
Non Voting Common Stock, Shares Issued | 0 | 0 | |
Non Voting Common Stock, Shares Outstanding | 0 | 0 | |
Reverse stock split fractions retired (in shares) | 4,500 | ||
Voting common share | |||
Common Stock | |||
Common stock, shares authorized | 20,000,000 | 20,000,000 | |
Non-voting common shares [Member] | |||
Common Stock | |||
Common stock, shares authorized | 2,000,000 | 2,000,000 |
Equity (AOCI) (Details)
Equity (AOCI) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ 86,330 | $ 14,158 |
Unrealized gains losses on investments arising during period | (1,422) | 7,398 |
Unrealized gains on foreign currency | (146) | |
Less: Reclassification adjustments for losses realized in net income, net of tax | (2,375) | (1,441) |
Balance | 85,756 | 86,330 |
Unrealized investment gains (losses) on fixed maturities, net of offsets | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 6,431 | 474 |
Unrealized gains losses on investments arising during period | (1,422) | 7,398 |
Less: Reclassification adjustments for losses realized in net income, net of tax | (2,375) | (1,441) |
Balance | 2,634 | 6,431 |
Unrealized gains on foreign currency | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 146 | |
Unrealized gains on foreign currency | (146) | |
Accumulated other comprehensive income (loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 6,431 | 620 |
Unrealized gains losses on investments arising during period | (1,422) | 7,398 |
Unrealized gains on foreign currency | (146) | |
Less: Reclassification adjustments for losses realized in net income, net of tax | (2,375) | (1,441) |
Balance | $ 2,634 | $ 6,431 |
Deferred Acquisition Costs (Det
Deferred Acquisition Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Acquisition Costs | ||
Deferred Policy Acquisition Cost, Beginning Balance | $ 13,456 | $ 0 |
Additions | 13,402 | 13,919 |
Amortization | (2,886) | (670) |
Interest | 632 | 138 |
Impact of unrealized investment losses | (74) | 69 |
Deferred Policy Acquisition Cost, Ending Balance | $ 24,530 | $ 13,456 |
Related Party (Details)
Related Party (Details) - USD ($) $ in Millions | Jul. 23, 2020 | Apr. 24, 2020 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | |||
Shares issued | 231,655 | ||
BBB+ | |||
Related Party Transaction [Line Items] | |||
Interest rate | 5.00% | ||
Seneca Re Agreement | |||
Related Party Transaction [Line Items] | |||
Reinsurance term | 3 years | ||
Seneca Re Agreement | MYGA | |||
Related Party Transaction [Line Items] | |||
Percentage of indemnity coinsurance | 25.00% | 25.00% | |
Seneca Re Agreement | FIA | |||
Related Party Transaction [Line Items] | |||
Percentage of indemnity coinsurance | 40.00% | 40.00% | |
Crestline Assurance Holdings LLC | |||
Related Party Transaction [Line Items] | |||
Assets under management | $ 228 | ||
Additional investments | $ 351 | ||
Crestline Assurance Holdings LLC | Securities Purchase Agreement | |||
Related Party Transaction [Line Items] | |||
Shares issued | 444,444 | ||
American Life [Member] | |||
Related Party Transaction [Line Items] | |||
Capital contribution | $ 5 | ||
American Life [Member] | UK Limited | |||
Related Party Transaction [Line Items] | |||
Percentage of interest acquired in financial guarantee | 17.00% | ||
SRC1 | |||
Related Party Transaction [Line Items] | |||
Capital contribution | 3.3 | ||
Chelsea Holdings Midwest LLC | BBB+ | |||
Related Party Transaction [Line Items] | |||
Interest rate | 5.00% | ||
Fair market value | $ 5.9 | ||
Crestline SP 1 | |||
Related Party Transaction [Line Items] | |||
Capital contribution | $ 40 | ||
Reinsurance ceded amount | 227.2 | ||
Reinsurance ceded commissions | 12.9 | ||
Reinsurance ceded expense reimbursements | $ 24.1 |
Schedule I Summary of Investm_2
Schedule I Summary of Investments - Other Than Investments in Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Amortized Cost | $ 679,921 | $ 369,156 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 683,296 | 377,163 |
Total fixed maturities | 683,296 | 377,163 |
Total investments, Amortized Cost | 963,470 | |
Estimated Fair Value | 975,527 | |
Investments [Default Label] | 975,527 | 518,195 |
Fixed Maturities | ||
Amortized Cost | 679,921 | 369,156 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 683,296 | 377,163 |
Total fixed maturities | 683,296 | 377,163 |
Fixed Maturities | U.S. government obligations | ||
Amortized Cost | 1,855 | 5,744 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 1,882 | 6,164 |
Total fixed maturities | 1,882 | 6,164 |
Fixed Maturities | Mortgage-back securities | ||
Amortized Cost | 55,667 | 14,638 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 55,280 | 14,757 |
Total fixed maturities | 55,280 | 14,757 |
Fixed Maturities | Asset-backed securities | ||
Amortized Cost | 24,675 | 7,277 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 24,951 | 7,450 |
Total fixed maturities | 24,951 | 7,450 |
Fixed Maturities | Collateralized loan obligation | ||
Amortized Cost | 272,446 | 209,224 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 274,523 | 214,324 |
Total fixed maturities | 274,523 | 214,324 |
Fixed Maturities | States and Political Subdivisions - general obligations | ||
Amortized Cost | 105 | 107 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 114 | 118 |
Total fixed maturities | 114 | 118 |
Fixed Maturities | States and Political Subdivisions - special revenue | ||
Amortized Cost | 4,487 | 5,293 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 5,612 | 6,202 |
Total fixed maturities | 5,612 | 6,202 |
Fixed Maturities | Trust preferred | ||
Amortized Cost | 2,218 | |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 2,237 | |
Total fixed maturities | 2,237 | |
Fixed Maturities | Redeemable preferred stock | ||
Amortized Cost | 14,282 | |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 14,090 | |
Total fixed maturities | 14,090 | |
Fixed Maturities | Term Loans | ||
Amortized Cost | 268,794 | 107,254 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 267,468 | 107,254 |
Total fixed maturities | 267,468 | 107,254 |
Fixed Maturities | Corporate | ||
Amortized Cost | 35,392 | 17,401 |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 37,139 | 18,609 |
Total fixed maturities | 37,139 | $ 18,609 |
Mortgage loans on real estate, held for investment | ||
Total investments, Amortized Cost | 183,203 | |
Estimated Fair Value | 183,203 | |
Investments [Default Label] | 183,203 | |
Derivatives | ||
Total investments, Amortized Cost | 18,654 | |
Estimated Fair Value | 23,022 | |
Investments [Default Label] | 23,022 | |
Federal Home Loan Bank (FHLB) stock | ||
Amortized Cost | 500 | |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 500 | |
Total fixed maturities | 500 | |
Equity Securities [Member] | ||
Total investments, Amortized Cost | 22,158 | |
Estimated Fair Value | 21,869 | |
Investments [Default Label] | 21,869 | |
Other invested assets | ||
Amortized Cost | 34,491 | |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 35,293 | |
Total fixed maturities | 35,293 | |
Investment escrow | ||
Amortized Cost | 3,611 | |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 3,611 | |
Total fixed maturities | 3,611 | |
Preferred Stock | ||
Amortized Cost | 14,885 | |
Fixed maturities, available for sale, at fair value (amortized cost: $689,922 and $369,156, respectively) (See Note 4) | 18,686 | |
Total fixed maturities | 18,686 | |
Notes receivable | ||
Total investments, Amortized Cost | 5,960 | |
Estimated Fair Value | 5,960 | |
Investments [Default Label] | 5,960 | |
Policy loans. | ||
Total investments, Amortized Cost | 87 | |
Estimated Fair Value | 87 | |
Investments [Default Label] | $ 87 |
Schedule II Condensed Financi_4
Schedule II Condensed Financial Information of Registrant Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets [Abstract] | |||
Equity securities, at fair value (cost: $22,158 in 2021 and zero in 2020) | $ 21,869 | ||
Cash and cash equivalents | 142,013 | $ 151,679 | |
Notes receivable | 5,960 | 5,666 | |
Property and equipment, net | 386 | 104 | |
Operating lease right of use assets | 2,360 | 348 | |
Other assets | 2,113 | 1,533 | |
Total assets | 1,219,917 | 726,401 | |
Liabilities: | |||
Lease Liability | 2,364 | 397 | |
Total liabilities | 1,134,161 | 640,071 | |
Stockholders' Equity: | |||
Preferred stock, $0.001 par value; authorized 2,000,000 shares; no shares issued and outstanding as of December 31, 2021 or December 31, 2020 | |||
Voting common stock, $0.001 par value; authorized 20,000,000 shares; 3,737,564 shares issued and outstanding as of December 31, 2021 and 2020, respectively; non-voting common stock, $0.001 par value, 2,000,000 shares authorized; no shares issued and outstanding December 31, 2021 and 2020, respectively | 4 | 4 | |
Additional paid-in capital | 138,452 | 133,592 | |
Treasury stock | (175) | (175) | |
Accumulated deficit | (70,159) | (53,522) | |
Accumulated other comprehensive income (loss) | 2,634 | 6,431 | |
Total Midwest Holding Inc.'s stockholders' equity | 70,756 | 86,330 | |
Noncontrolling interests | 15,000 | ||
Total stockholders' equity | 85,756 | 86,330 | $ 14,158 |
Total liabilities and stockholders' equity | 1,219,917 | 726,401 | |
Parent Company [Member] | |||
Assets [Abstract] | |||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | 79,532 | 78,736 | |
Cash and cash equivalents | 7,540 | 7,682 | $ 4 |
Notes receivable | 31 | 29 | |
Property and equipment, net | 334 | 39 | |
Operating lease right of use assets | 2,360 | 337 | |
Other assets | 3,257 | 1,590 | |
Total assets | 93,054 | 88,413 | |
Liabilities: | |||
Notes payable | 500 | 500 | |
Lease Liability | 2,364 | 386 | |
Accounts payable and accrued expenses | 4,434 | 1,197 | |
Total liabilities | 7,298 | 2,083 | |
Stockholders' Equity: | |||
Preferred stock, $0.001 par value; authorized 2,000,000 shares; no shares issued and outstanding as of December 31, 2021 or December 31, 2020 | |||
Voting common stock, $0.001 par value; authorized 20,000,000 shares; 3,737,564 shares issued and outstanding as of December 31, 2021 and 2020, respectively; non-voting common stock, $0.001 par value, 2,000,000 shares authorized; no shares issued and outstanding December 31, 2021 and 2020, respectively | 4 | 4 | |
Additional paid-in capital | 138,452 | 133,592 | |
Treasury stock | (175) | (175) | |
Accumulated deficit | (70,159) | (53,522) | |
Accumulated other comprehensive income (loss) | 2,634 | 6,431 | |
Total Midwest Holding Inc.'s stockholders' equity | 70,756 | 86,330 | |
Noncontrolling interests | 15,000 | ||
Total stockholders' equity | 85,756 | 86,330 | |
Total liabilities and stockholders' equity | $ 93,054 | $ 88,413 |
Schedule II Condensed Financi_5
Schedule II Condensed Financial Information of Registrant Balance Sheets (Parenthetical) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 10, 2020 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 20,000,000 | 20,000,000 | 22,000,000 |
Common stock, shares issued | 3,737,564 | 3,737,564 | |
Common stock, shares outstanding | 3,737,564 | 3,737,564 | |
Non Voting Common Stock, Shares Authorized | 2,000,000 | 2,000,000 | |
Non Voting Common Stock, Shares Issued | 0 | 0 | |
Non Voting Common Stock, Shares Outstanding | 0 | 0 | |
Non-voting common shares [Member] | |||
Common stock, par value (in dollars per share) | $ 0.001 | ||
Common stock, shares authorized | 2,000,000 | 2,000,000 | |
Parent Company [Member] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 20,000,000 | 20,000,000 | |
Common stock, shares issued | 3,737,564 | 3,737,564 | |
Common stock, shares outstanding | 3,737,564 | 3,737,564 | |
Non Voting Common Stock, Shares Authorized | 2,000,000 | 2,000,000 | |
Non Voting Common Stock, Shares Issued | 0 | 0 | |
Non Voting Common Stock, Shares Outstanding | 0 | 0 | |
Parent Company [Member] | Non-voting common shares [Member] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Schedule II Condensed Financi_6
Schedule II Condensed Financial Information of Registrant Statements of Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Investment income, net of expenses | $ 15,737 | $ 4,047 |
Fee income and other revenues | 1,209 | 189 |
Revenues [Default Label] | 30,063 | 10,582 |
Expenses | ||
Federal income tax | 4,766 | 1,585 |
Net loss attributable to Midwest Holding, Inc. | (16,637) | (12,440) |
Comprehensive Income: | ||
Unrealized gains on investments arising during the year ended December 31, 2021 and 2020, net of offsets, (net of tax ($378) and $1.7 million, respectively) | (1,422) | 7,398 |
Unrealized gains on foreign currency | (146) | |
Less: Reclassification adjustments for losses realized in net income, net of tax | (2,375) | (1,441) |
Other comprehensive income, net of tax | (3,797) | 5,811 |
Comprehensive loss | (20,434) | (6,629) |
Parent Company [Member] | ||
Revenues | ||
Fee income and other revenues | 23 | 32 |
Revenues [Default Label] | 23 | 32 |
Expenses | ||
General | 7,193 | 969 |
Loss from continuing operations before taxes | (7,170) | (937) |
Federal income tax | (4,766) | 37 |
Loss before equity in loss of consolidated subsidiaries | (11,936) | (900) |
Equity in loss of consolidated subsidiaries | (4,701) | (11,540) |
Net income, including portion attributable to non-controlling interest | (16,637) | (12,440) |
Net loss attributable to Midwest Holding, Inc. | (16,637) | (12,440) |
Comprehensive Income: | ||
Unrealized gains on investments arising during the year ended December 31, 2021 and 2020, net of offsets, (net of tax ($378) and $1.7 million, respectively) | (1,422) | 7,398 |
Unrealized gains on foreign currency | (146) | |
Less: Reclassification adjustments for losses realized in net income, net of tax | (2,375) | (1,441) |
Other comprehensive income, net of tax | (3,797) | 5,811 |
Comprehensive loss | $ (20,434) | $ (6,629) |
Schedule II Condensed Financi_7
Schedule II Condensed Financial Information of Registrant Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (16,637) | $ (12,440) |
Adjustments to arrive at cash provided by operating activities: | ||
Depreciation and amortization | 50 | 57 |
Stock options | 4,981 | 164 |
Other assets and liabilities | (1,133) | 1,525 |
Net cash used in operating activities | (25,338) | (16,244) |
Cash Flows from Investing Activities: | ||
Net (purchases) disposals of property and equipment | (331) | (69) |
Net cash used in investing activities | (452,407) | (367,482) |
Cash Flows from Financing Activities: | ||
Capital contribution | (121) | 79,312 |
Common stock purchased | (175) | |
Additional capital raise related expenses | (5,900) | |
Net transfer to noncontrolling interest | 15,000 | |
Net cash provided by financing activities | 468,079 | 491,689 |
Net (decrease) increase in cash and cash equivalents | (9,666) | 107,963 |
Cash and cash equivalents: | ||
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 151,679 | |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | 142,013 | 151,679 |
Supplementary information | ||
Cash paid for taxes | 6,450 | 350 |
Parent Company [Member] | ||
Cash Flows from Operating Activities: | ||
Net loss | (16,637) | (12,440) |
Adjustments to arrive at cash provided by operating activities: | ||
Equity in net loss of consolidated subsidiaries | 9,506 | 11,541 |
Depreciation and amortization | (295) | (8) |
Stock options | 4,982 | 164 |
Other assets and liabilities | 1,525 | 84 |
Net cash used in operating activities | (919) | (659) |
Cash Flows from Financing Activities: | ||
Capital contribution | (14,102) | 79,312 |
Common stock purchased | (70,300) | |
Treasury stock | (175) | |
Additional capital raise related expenses | (121) | |
Net transfer to noncontrolling interest | 15,000 | (500) |
Net cash provided by financing activities | 777 | 8,337 |
Net (decrease) increase in cash and cash equivalents | (142) | 7,678 |
Cash and cash equivalents: | ||
Cash and Cash Equivalents, at Carrying Value, Beginning Balance | 7,682 | 4 |
Cash and Cash Equivalents, at Carrying Value, Ending Balance | $ 7,540 | $ 7,682 |
Schedule III Supplementary In_2
Schedule III Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred gain on coinsurance transactions | $ 28,589 | $ 18,199 |
Life Insurance Premiums [Member] | ||
Future Policy Benefits, Claims and Deposit-type Contracts | 1,088,617 | 610,806 |
Advance Premiums | 1 | 3 |
Deferred gain on coinsurance transactions | 28,589 | 18,199 |
Net Investment Income | 15,737 | 2,362 |
Death and Other Benefits and Increase in Benefit Reserves | 9,904 | 4,890 |
Other Operating Expenses | $ 32,030 | $ 16,547 |
Schedule IV Reinsurance Infor_2
Schedule IV Reinsurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Life Insurance Force [Member] | ||
Direct Premiums Earned | $ 45,930 | $ 92,403 |
Premiums ceded | 44,090 | 90,565 |
Insurance premiums | 1,840 | 1,838 |
Life Insurance Premiums [Member] | ||
Direct Premiums Earned | 1,055 | 1,851 |
Premiums ceded | $ 1,055 | $ 1,851 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Details) - Reduced Depreciation [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning of the year | $ 1,023 | $ 975 |
Depreciation expense | 49 | 48 |
End of the year | $ 1,072 | $ 1,023 |