November 15, 2019
Brian M. Pribyl
Senior Vice President, Chief Financial Officer and Treasurer
National Western Life Group, Inc.
10801 N. Mopac Expressway
Building 3
Austin, Texas 78759
Re: National Western Life Group, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2018
Filed March 1, 2019
Form 8-K Dated November 7, 2019
Filed November 7, 2019
File No. 000-55522
Dear Mr. Pribyl:
We have reviewed your filing and have the following comments. In some of
our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within 10 business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended December 31, 2018
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
(F) Insurance Revenues and Expenses, page 97
1. You disclose that you defer certain expenses related to policy issuance
and underwriting
which vary with and are related to the production of new business. This
language appears
to be consistent with the definition of acquisition costs prior to the
adoption of ASU 2010-
26. Please confirm that your policy defers only those incremental direct
costs that are
directly related to the successful acquisition of new or renewal
insurance contracts
consistent with the guidance in ASC 944-30-25-1A. If so, represent to us
that you will
revise your policy disclosure in future filings to be consistent with the
current guidance.
Brian M. Pribyl
National Western Life Group, Inc.
November 15, 2019
Page 2
If not, tell us the impact of applying the guidance in ASU 2010-26 on
your deferred
acquisition costs at December 31, 2016, 2017 and 2018 and at June 30,
2019.
(5) Federal Income Taxes, page 117
2. At the top of page 120 you disclose the impact of tax law changes that
limit life insurance
reserves resulting from the 2017 Tax Cuts and Jobs Act (the Tax Act)
that took effect on
January 1, 2018. Please address the following:
Tell us why you recorded a $83.9 million deferred tax asset (DTA) at
December 31,
2017 that offsets the deferred tax liability (DTL) associated with
the incremental tax
payable over an eight year period and why this DTA does not exist
at December 31,
2018.
Tell us how you considered the DTA and/or DTL in the preceding
bullet in deriving
the $17.1 million benefit recorded in 2017 associated with the
remeasurment of
deferred taxes as a result of the Tax Act as disclosed in your
rate reconciliation on
page 118. In this regard we note that they appear to have no net
impact on your tax
provision in 2017.
Tell us why the $69.9 million change in the DTA in 2018 after
considering the $14.0
million remeasurement from your provisional estimate is not
reflected as an impact of
the Tax Act in your rate reconciliation on page 118.
In conjunction with your response to the preceding bullet, tell us
why the $14.0
million increase in net DTLs from your table on page 119 does not
agree with the
$26.4 million deferred tax provision depicted in the table on page
117. Reconcile the
difference for us.
Confirm our understanding from disclosure in the last paragraph on
page 74 of your
September 30, 2019 Form 10-Q that the $8.7 million annual increase
in current tax
expense associated with the life insurance reserve limitation over
eight years is offset
by a corresponding annual deferred tax benefit of the same amount
relating to the
unwinding of the associated DTL and therefore has no impact on
your overall tax
rate. If this is true, tell us your consideration for explicitly
disclosing the offsetting
deferred tax benefit.
(13) Segment and Other Operating Information
(A) Operating Segment Information, page 143
3. Please tell us why you characterize your measures that exclude realized
investment gains
and losses as being non-GAAP when these measures appear to be your
segment profit and
segment revenue measures required under ASC 280-10-50-22. See Compliance
and
FirstName LastNameBrian M. Pribyl
Disclosure Interpretations 104.01 and 104.04 on Non-GAAP Financial
Measures and the
Comapany NameNational Westernnon-GAAP measures in your financial statements
under Item
prohibition from providing Life Group, Inc.
November 15, 2019 PageRegulation S-K.
10(e)(1)(ii)(C) of 2
FirstName LastName
Brian M. Pribyl
FirstName LastNameBrian M. Inc.
National Western Life Group, Pribyl
November NameNational Western Life Group, Inc.
Comapany 15, 2019
Page 3
November 15, 2019 Page 3
FirstName LastName
Form 8-K Filed November 7, 2019
Exhibits
4. In your earnings release furnished as Exhibit 99.1 you present a
measure entitled
"earnings from operations." This measure excludes realized gains and
losses on
investments and is a non-GAAP measure. Please represent to us that in
future earnings
releases you will identify this measure as a non-GAAP measure and that
you will change
its title given that it is confusingly similar to GAAP measures used
by many companies.
In this regard, we note that the investment function of any insurance
company and its
related financial performance is integral to the operations of an
insurance company.
Similarly, represent to us that you will retitle your operating
revenues non-GAAP measure
disclosed on page 37 and elsewhere in your 2018 Form 10-K.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Mark Brunhofer at (202) 551-3638 or Sharon Blume at
(202) 551-
3474 if you have any questions.
Sincerely,
Division of
Corporation Finance
Office of Finance