Primerica, Inc.

Previous wording

Investment and Savings Products. In the United States, we distribute mutual funds, managed investments, variable annuity, and fixed annuity products of several third-party companies. We provide investment advisory and administrative services for client assets invested in our managed investments program. We also perform distinct transfer agent recordkeeping services and non-bank custodial services for investors purchasing certain mutual funds we distribute. In Canada, we offer mutual funds of other companies and segregated funds, which are underwritten by Primerica Life Canada.

Current wording

Investment and Savings Products. In the United States, we distribute mutual funds, managed investments, variable annuity, and fixed annuity products of several third-party companies. We provide investment advisory and administrative services for client assets invested in our managed investments program. We also perform distinct transfer agent recordkeeping services and non-bank custodial services for investors purchasing certain mutual funds we distribute. In Canada, we offer mutual funds of other companies and segregated funds. Our segregated funds product offerings consist of (1) our legacy segregated funds product, which is underwritten by Primerica Life Canada, and (2) a new segregated funds product underwritten by a third-party that we are in the process of rolling out in 2025.

Previous wording

Volatility in capital markets in recent periods has continued to impact our business. Strong equity market performance has influenced product sales and client asset values that drive revenue in the Investment and Savings Products segment. In addition, the sharp rise in market interest rates during 2022 has largely driven the unrealized losses that have accumulated in our investment portfolio. We have not recognized losses caused by interest rate volatility in the income statement for securities where we have no present intention to dispose of them and we have the ability to hold these investments until maturity or a market price recovery. Elevated interest rates have also led to increases in net investment income as we are able to earn higher returns on our new debt securities purchases and cash balances.

Current wording

Volatility in capital markets in recent periods has continued to impact our business. Strong equity market performance in 2023 and 2024 influenced product sales and client asset values that drive revenue in the Investment and Savings Products segment. In addition, the rise in market interest rates in 2022 and further rate increases in 2023 have largely driven the unrealized losses that have accumulated in our investment portfolio. We have not recognized losses caused by interest rate volatility in the income statement for securities where we have no present intention to dispose of them and we have the ability to hold these investments until maturity or a market price recovery. Elevated interest rates have also led to increases in net investment income as we are able to earn higher returns on our new debt securities purchases and cash balances.

Previous wording

Significant inflation that followed the peak of the COVID-19 pandemic has led to an elevated cost of living for middle-income families. We believe that the higher cost of living has adversely impacted persistency for term life insurance policies. While the rate of inflation has been normalizing from its peak in 2022, lapses of term life insurance policies have remained above long-term historical levels. The continuation of the elevated cost of living could adversely impact demand for our products.

Current wording

The cumulative impact of inflation in recent years has led to an elevated cost of living for middle-income families. We believe that cost of living pressures have adversely impacted persistency for term life insurance policies. Policy lapse rates of term life insurance products remained above long-term historical levels, although policy lapse rates have recently trended modestly lower. In addition, recent economic uncertainty in 2025 has had an impact on consumer behavior. The continuation of these cost of living pressures as well as economic uncertainty could adversely impact demand for our products.

Previous wording

The average number of life-licensed independent sales representatives increased for the three and nine months ended September 30, 2024 from the same periods in 2023 as a result of strong recruiting and licensing activity that drove growth in the size of the independent sales force as discussed above.

Current wording

The average number of life-licensed independent sales representatives increased for the three months ended March 31, 2025 from the same period in 2024 as a result of strong recruiting and licensing activity in 2024 that drove growth in the size of the independent sales force.

Previous wording

Productivity in the three and nine months ended September 30, 2024 and 2023, measured by the average monthly rate of new policies issued per life-licensed independent sales representative, was in line with our historical range.

Current wording

Productivity in the three months ended March 31, 2025, measured by the average monthly rate of new policies issued per life-licensed independent sales representative, was slightly below our historical range and a slight decrease from the same period in 2024. Economic uncertainties in 2025 along with the continued cost of living pressures appear to be contributing factors to the decline in productivity.

Previous wording

The face amount of term life insurance policies in-force increased for the three and nine months ended September 30, 2024 as the face amount issued continued to exceed the face amount terminated. Issued face amount during the three and nine months ended September 30, 2024 increased due to the increase in the number of new policies issued as discussed above. Policy terminations increased year-over-year but were consistent when measured as a percentage of beginning face amount in-force. Policy terminations were elevated in all periods with the high cost of living a likely key contributing factor.

Current wording

The face amount of term life insurance policies in-force increased for the three months ended March 31, 2025 as the face amount issued continued to exceed the face amount terminated. Issued face amount was generally consistent during the two periods. Policy terminations increased year-over-year but were relatively consistent when measured as a percentage of beginning face amount in-force. A stronger U.S. dollar in relation to the Canadian dollar unfavorably impacted the translated face amount in-force in the 2024 period and had an insignificant impact in the 2025 period.

Previous wording

Product sales. Investment and savings product sales increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to our ability to leverage increased demand across all product lines except for Canadian segregated funds. The increase in demand was driven by strong equity market performance in the period leading up to and including the first nine months of 2024. In particular, variable annuity product sales continued to lead the growth in sales as the guarantees offered by these products have become more appealing to investors given strong equity market performance and elevated interest rates. The increase in product sales for managed investments was also impacted by a favorable comparison to the prior year. Sales during the third quarter of 2023 were temporarily disrupted by the transition of our managed accounts platform to a different third-party clearing broker. Marginally offsetting the increase in product sales were lower year-over-year sales of Canadian segregated funds as sales of investments in new Canadian segregated funds accounts have effectively been discontinued after May 2023 due to new regulations in Canada. Refer to the MD&A section of the 2023 Annual Report for more information on regulations impacting Canadian segregated funds.

Current wording

Product sales. Investment and savings product sales increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to continued positive investor sentiment that followed strong equity market performance in 2023 and 2024. In particular, variable annuity product sales continued to lead the growth in sales as the guarantees offered by these products became more appealing to investors given strong equity market performance and elevated interest rates leading up to 2025. The increase in product sales for managed investments resulted from continued strength in investor demand for these products as well as the expansion of investment strategies offered on our platform.

Previous wording

Rollforward of client asset values. Ending client asset values increased during the three months ended September 30, 2024 and decreased during the three months ended September 30, 2023 primarily due to the difference in market performance during each respective period.

Current wording

Rollforward of client asset values. Ending client asset values decreased during the three months ended March 31, 2025 compared to an increase during the three months ended March 31, 2024 primarily due to the difference in equity market performance during each respective period.

Previous wording

Average client asset values. Average client asset values were higher for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 driven by the cumulative effect of market increases and net client inflows.

Current wording

Average client asset values. Average client asset values were higher for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by the cumulative effect of strong market performance and net client inflows in 2024.

Previous wording

Average number of fee-generating positions. The average number of fee-generating positions was higher during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to the cumulative effect of retail mutual fund sales in recent periods that led to an increase in the number of retail mutual fund positions serviced on our transfer agent recordkeeping platform.

Current wording

Average number of fee-generating positions. The average number of fee-generating positions was higher during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the continued cumulative effect of retail mutual fund sales in recent periods that led to an increase in the number of retail mutual fund positions serviced on our transfer agent recordkeeping platform.

Previous wording

Restrictions on compensation models in Canada. In response to regulatory changes in Canada by the Canadian Securities Administrators (“CSA,” the provincial and territorial securities commissions), we developed a set of mutual fund products with two third-party mutual fund companies that are sold exclusively by our independent sales representatives (the “Principal Distributor funds”). The revenue we receive is primarily in the form of asset-based distribution fees from the mutual fund companies and asset-based service fees that are charged to investors. In turn, the primary compensation we offer independent sales representatives is the option of an up-front sales commission or higher asset-based commissions over time. Although we received the requisite approval, the CSA, as they indicated to us at the outset, is closely examining the model, and we expect there will be a public consultation on related sales practices, and may require undertakings or consider future amendments that would require modifications to the model, including with respect to its up-front commission features. At this time, we cannot quantify the financial impact, if any, of future changes to our business that may be necessary if our Principal Distributor funds model is required to be modified or discontinued.

Current wording

Restrictions on compensation models in Canada. In response to regulatory changes in Canada by the Canadian Securities Administrators (“CSA,” the provincial and territorial securities commissions), we developed a set of mutual fund products with two third-party mutual fund companies that are sold exclusively by the independent sales representatives (the “Principal Distributor funds”). The revenue we receive is primarily in the form of asset-based distribution fees from the mutual fund companies and asset-based service fees that are charged to investors. In turn, the primary compensation we offer independent sales representatives is the option of an up-front sales commission or higher asset-based commissions over time. Although we received the requisite approval, the CSA indicated to us at the time of such approval that the CSA would be closely examining the Principal Distributor funds model. The CSA launched a public consultation on the model and related sales practices. In response to its public consultation, the CSA may consider future amendments that would require modifications to our Principal Distributor model, including with respect to its up-front commission features paid to independent sales representatives. At this time, we cannot quantify the financial impact, if any, of future changes to our business that may be necessary if our Principal Distributor funds model is required to be modified or discontinued.

Previous wording

Term Life Insurance Segment. The Term Life Insurance segment results are primarily driven by sales volumes, how closely actual experience matches our pricing assumptions, terms and use of reinsurance, and expenses.

Current wording

Term Life Insurance Segment. The Term Life Insurance segment results are primarily driven by sales volumes, how closely actual experience matches our actuarial assumptions, terms and use of reinsurance, and expenses.

Previous wording

Historically, we have found that while sales volume of term life insurance products between fiscal periods may vary based on a variety of factors, the productivity of sales representatives generally remains within a range (i.e., an average monthly rate of new policies issued per life-licensed independent sales representative between 0.20 and 0.24). The volume of term life insurance products sales will fluctuate in the short term, but over the longer term, our sales volume generally correlates to the size of the independent sales force.

Current wording

Historically, we have found that while sales volume of term life insurance products between fiscal periods may vary based on a variety of factors, the productivity of independent sales representatives generally remains within a range (i.e., an average monthly rate of new policies issued per life-licensed independent sales representative between 0.20 and 0.24). The volume of term life insurance products sales will fluctuate in the short term, but over the longer term, our sales volume generally correlates to the size of the independent sales force.

Previous wording

The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our statements of income follows:

Current wording

The effect of our reinsurance arrangements on ceded premiums and benefits and expenses on our unaudited condensed consolidated statements of income follows:

Previous wording

We may alter our reinsurance practices at any time due to the unavailability of YRT reinsurance at attractive rates or the availability of alternatives to reduce our risk exposure. We intend to continue ceding approximately 90% of our U.S. and Canadian mortality risk on new business.

Current wording

We may alter our reinsurance practices at any time due to the unavailability of YRT reinsurance at attractive rates or the availability of alternatives to reduce our risk exposure. We intend to continue ceding approximately 90% of our mortality risk on new business.

Previous wording

Sales. We earn commissions and fees, such as dealer re-allowances and marketing and distribution fees, based on sales of mutual fund products and annuities in the United States and sales of certain mutual fund products in Canada. Sales of investment and savings products are influenced by the overall demand for investment products in the United States and Canada, as well as by the size and productivity of the independent sales force. We generally experience seasonality in the Investment and Savings Products segment results due to our high concentration of sales of retirement account products. These accounts are typically funded in February through April, coincident with our clients’ tax return preparation season. While we believe the size of the independent sales force is a factor in driving sales volume in this segment, there are a number of other variables, such as economic and market conditions, which may have a significantly greater effect on sales volume in any given fiscal period.

Current wording

Sales. We earn commissions and fees, such as dealer re-allowances and marketing and distribution fees, based on sales of mutual fund products and annuities in the United States and sales of certain mutual fund products in Canada. Sales of investment and savings products are influenced by the overall demand for investment and savings products in the United States and Canada, as well as by the size and productivity of the independent sales force. We generally experience seasonality in the Investment and Savings Products segment results due to our high concentration of sales of retirement account products. These accounts are typically funded in February through April, coincident with our clients’ tax return preparation season. While we believe the size of the independent sales force is a factor in driving sales volume in this segment, there are a number of other variables, such as economic and market conditions, which may have a significantly greater effect on sales volume in any given fiscal period.

Previous wording

Asset values in client accounts. We earn marketing and distribution fees (trail commissions or, with respect to U.S. mutual funds, 12b-1 fees) on mutual fund and annuity assets in the United States and Canada. In the United States, we also earn investment advisory and administrative fees on assets in managed investments. In Canada, we earn marketing, distribution, and shareholder services fees on mutual fund assets for which we serve as the principal distributor and management fees on the segregated funds for which we serve as investment manager. Asset values are influenced by new product sales, ongoing contributions to existing accounts, redemptions and the change in market values in existing accounts. While we offer a wide variety of asset classes and investment styles, our clients’ accounts are primarily invested in equity funds. Volatility in equity markets will impact the value of assets in client accounts and, as a result, the revenue we earn on those assets.

Current wording

Asset values in client accounts. We earn marketing and distribution fees (trail commissions or, with respect to U.S. mutual funds, 12b-1 fees) on mutual fund and annuity assets in the United States and Canada. In the United States, we also earn investment advisory and administrative fees on assets in managed investments. In Canada, we earn marketing, distribution, and shareholder services fees on mutual fund assets for which we serve as the principal distributor and management fees on our legacy segregated funds product offerings. Asset values are influenced by new product sales, ongoing contributions to existing accounts, redemptions and the change in market values in existing accounts. While we offer a wide variety of asset classes and investment styles, our clients’ accounts are primarily invested in equity funds. Volatility in equity markets will impact the value of assets in client accounts and, as a result, the revenue we earn on those assets.

Previous wording

sales of annuity products in the United States will generate higher revenues in the period such sales occur than sales of other investment products that either generate lower up-front revenues or, in the case of managed investments and segregated funds, no up-front revenues;

Current wording

sales of annuity products in the United States will generate higher revenues in the period when such sales occur than sales of other investment products that either generate lower up-front revenues or, in the case of managed investments, no up-front revenues;

Previous wording

sales of a higher proportion of managed investments, Canadian mutual funds, and segregated funds products will spread the revenues generated over time because we earn higher revenues based on assets under management for these accounts each period as opposed to earning up-front revenues based on product sales; and

Current wording

sales of a higher proportion of managed investments and Canadian mutual funds will spread the revenues generated over time because we earn higher revenues based on assets under management for these accounts each period as opposed to earning up-front revenues based on product sales; and

Previous wording

The Corporate and Other Distributed Products segment also includes corporate income and expenses not allocated to our other segments, general and administrative expenses (other than expenses that are allocated to the Term Life Insurance and Investment and Savings Products segments), interest expense on notes payable, a redundant reserve financing transaction and our revolving credit facility (“Revolving Credit Facility”), as well as realized gains and losses on our invested asset portfolio.

Current wording

The Corporate and Other Distributed Products segment also includes corporate income and expenses not allocated to our other segments, general and administrative expenses (other than expenses that are allocated to the Term Life Insurance and Investment and Savings Products segments), interest expense on note payable, a redundant reserve financing transaction and our revolving credit facility (“Revolving Credit Facility”), as well as recognized gains and losses on our invested asset portfolio.

Previous wording

Capital Structure. Our financial results are affected by our capital structure, which includes our senior unsecured notes (the “Senior Notes”), a redundant reserve financing transaction, our Revolving Credit Facility, and our common stock. See Note 11 (Stockholders’ Equity), Note 14 (Commitments and Contingent Liabilities), and Note 16 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report for more information on changes in our capital structure.

Current wording

Capital Structure. Our financial results are affected by our capital structure, which includes our senior unsecured notes (the “Senior Notes”), a redundant reserve financing transaction, our Revolving Credit Facility, and our common stock. See our condensed consolidated balance sheets and Note 12 (Stockholders’ Equity) and Note 15 (Commitments and Contingent Liabilities) to our unaudited condensed consolidated financial statements included elsewhere in this report for more information on changes in our capital structure.

Previous wording

Foreign Currency. The Canadian dollar is the functional currency for our Canadian subsidiaries and our consolidated financial results, reported in U.S. dollars, are affected by changes in the currency exchange rate. As such, the translated amount of revenues, expenses, assets and liabilities attributable to our Canadian subsidiaries will be higher or lower in periods where the Canadian dollar appreciates or weakens relative to the U.S. dollar, respectively. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Canadian Currency Risk included in our 2023 Annual Report and Note 3 (Segment and Geographical Information) to our unaudited condensed consolidated financial statements included elsewhere in this report for more information on our Canadian subsidiaries and the impact of foreign currency on our financial results.

Current wording

Foreign Currency. The Canadian dollar is the functional currency for our Canadian subsidiaries, and our consolidated financial results, reported in U.S. dollars, are affected by changes in the currency exchange rate. As such, the translated amount of revenues, expenses, assets and liabilities attributable to our Canadian subsidiaries will be higher or lower in periods where the Canadian dollar appreciates or weakens relative to the U.S. dollar, respectively. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk – Canadian Currency Risk and Note 4 (Segment and Geographical Information) to our consolidated financial statements included in our 2024 Annual Report for more information on our Canadian subsidiaries and the impact of foreign currency on our financial results.

Previous wording

Total revenues. Total revenues increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to increases in commissions and fees earned in our Investment and Savings Products segment, net premiums earned in our Term Life Insurance segment, and net investment income and investment gains earned in our Corporate and Other Distributed Products segment. These movements are further discussed in detail in the Segment Results sections below.

Current wording

Total revenues. Total revenues increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to increases in commissions and fees earned in our Investment and Savings Products segment, net premiums earned in our Term Life Insurance segment, and net investment income earned in our Corporate and Other Distributed Products segment. These movements are further discussed in detail in the Segment Results sections below.

Previous wording

Total benefits and expenses. Total benefits and expenses increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 largely due to higher sales commissions in our Investment and Savings Products segment, and higher insurance expenses and other operating expenses. Insurance expenses and other operating expenses were higher in the three months ended September 30, 2024 due to higher variable growth-related costs, infrastructure technology investments, and employee-related costs, which includes higher incentive compensation given current year results. Also contributing to the year-over-year increase are higher benefits and claims and amortization of DAC in our Term Life Insurance segment. Partially offsetting these increases was a future policy benefits remeasurement gain compared to a small remeasurement loss in the comparative period. These movements are discussed in further detail in the Segment Results section below.

Current wording

Total benefits and expenses. Total benefits and expenses increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 largely due to higher sales commissions and other operating expenses in our Investment and Savings Products segment. Also contributing to the year-over-year increase are higher benefits and claims (net of remeasurement (gain) loss) and amortization of DAC in our Term Life Insurance segment. These movements are discussed in further detail in the Segment Results section below.

Previous wording

Income taxes. Our effective income tax rate from continuing operations of 23.5% for the three months ended September 30, 2024 was largely consistent compared to 23.7% for the three months ended September 30, 2023. Refer to Note 18 (Income Taxes) to our unaudited condensed consolidated financial statements included elsewhere in this report for a comparison of the year-over-year effective income tax rate.

Current wording

Income taxes. The effective income tax rate of 23.6% for the three months ended March 31, 2025 was largely consistent with the comparable effective income tax rate from continuing operations of 23.3% for the three months ended March 31, 2024.

Previous wording

Loss from discontinued operations, net of income taxes. Loss from discontinued operations, net of income taxes relates to the Senior Health business, which was disposed of as of September 30, 2024 and is reported in discontinued operations for all periods presented. Refer to Note 2 (Discontinued Operations) to our unaudited condensed consolidated financial statements included elsewhere in this report for further details.

Current wording

Loss from discontinued operations, net of income taxes. Loss from discontinued operations, net of income taxes relates to the Senior Health business, which was disposed of as of September 30, 2024 and is reported in discontinued operations in the 2024 period. Refer to Note 2 (Discontinued Operations) to our unaudited condensed consolidated financial statements included elsewhere in this report for further details.

Previous wording

Net premiums. Direct premiums increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 largely due to the layering effect of new policy sales that contributed to growth in the in-force book of business. This increase was partially offset by an increase in ceded premiums, which includes $6.2 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages, reduced by $4.5 million in lower coinsurance ceded premiums due to the run-off of business subject to the IPO coinsurance transactions.

Current wording

Net premiums. Direct premiums increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 largely due to the layering effect of new policy sales that contributed to growth in the in-force book of business. This increase was partially offset by a slight increase in ceded premiums, which includes $6.7 million in higher non-level YRT reinsurance ceded premiums as business not subject to the IPO coinsurance transactions ages, reduced by $5.9 million in lower coinsurance ceded premiums due to the run-off of business subject to the IPO coinsurance transactions.

Previous wording

Benefits and claims. Benefits and claims increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Direct benefits and claims increased with the growth in the business. Year-over-year claims incurred during the three month period in 2024 were higher compared to the three month period in 2023 and in line with the growth in the in-force book of business.

Current wording

Benefits and claims. Benefits and claims increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Direct benefits and claims increased with the growth in the business. Year-over-year claims incurred during the 2025 period were higher compared to the same period in 2024 and in line with the growth in the in-force book of business.

Previous wording

Future policy benefits remeasurement (gain) loss. Future policy benefits remeasurement gain increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and represents the impact of long-term assumption changes made during the third quarter in connection with the annual assumption review as well as differences in experience variances that occurred in each period. The gain recognized in the 2024 period is primarily due to an assumption change related to the reduction of the expected cost of waiver of premium benefits. Refer to Note 10 (Future Policy Benefits) to our unaudited condensed consolidated financial statements included elsewhere in this report for further details.

Current wording

Future policy benefits remeasurement (gain) loss. Future policy benefits remeasurement gain increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 and represents differences in experience variances that occurred in each period. The remeasurement adjustment recognized in each period was not significant relative to the total benefits and claims recognized in each period. Refer to Note 11 (Future Policy Benefits) to our unaudited condensed consolidated financial statements included elsewhere in this report for further details.

Previous wording

Insurance expenses. Insurance expenses increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 due to higher costs resulting from growth in the business, employee-related costs, and higher variable expenses to support recruiting and licensing.

Current wording

Insurance expenses. Insurance expenses increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to higher costs resulting primarily from growth in the business.

Previous wording

Commissions and fees. Commissions and fees increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily driven by higher sales-based and asset-based revenues. The increase in sales-based revenue was largely the result of higher product sales for variable annuities and U.S. mutual fund product sales. Higher asset-based revenues were driven by an increase in average client assets in the 2024 period versus the prior year period.

Current wording

Commissions and fees. Commissions and fees increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by higher sales-based and asset-based revenues. The increase in sales-based revenue was largely the result of higher product sales for variable annuities and U.S. mutual funds. Higher asset-based revenues were driven by an increase in average client assets in the 2025 period compared to the same period in 2024 as well as a higher mix of assets under management that earn higher asset-based commissions, namely managed investments and Canadian mutual funds sold under the principal distributor model.

Previous wording

Sales commissions. The increase in sales-based commissions for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was generally in line with the increases in sales-based revenues although modestly lower due to a mix shift towards higher margin variable annuity sales. Asset-based commissions were up for the three months ended September 30, 2024 and were consistent with the movement in asset-based revenues when excluding Canadian segregated funds revenue. Asset-based expenses for our Canadian segregated funds are reflected within insurance commissions and amortization of DAC.

Current wording

Sales commissions. The increase in sales-based commissions for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was generally in line with the increases in sales-based revenues. The increase in asset-based commissions for the three months ended March 31, 2025 compared to the same period in 2024 was relatively consistent with the movement in asset-based revenues.

Previous wording

Other operating expenses. Other operating expenses for the three months ended September 30, 2024 increased compared to the three months ended September 30, 2023 primarily due to higher growth-related costs and employee-related costs.

Current wording

Other operating expenses. Other operating expenses for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024 primarily due to higher growth-related costs and investments in technology.

Previous wording

Total revenues. Total revenues increased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to higher net investment income and investment gains. Net investment income increased $2.2 million from higher yields in the invested asset portfolio, $2.0 million from a larger invested asset portfolio, and a $1.9 million higher total return on the deposit asset backing our 10% coinsurance agreement compared to the same period in the prior year. Investment income net of investment expenses includes interest earned on our held-to-maturity asset, which is offset by interest expense on the surplus note (“Surplus Note”), thereby eliminating any impact on net investment income. Amounts recognized for each line item will remain offsetting and will fluctuate from period to period along with the principal amounts of the held-to-maturity asset and the Surplus Note based on the balance of reserves being contractually supported under a redundant reserve financing transaction used by Vidalia Re, Inc. (“Vidalia Re”). For more information on the Surplus Note, see Note 4 (Investments) and Note 16 (Debt) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Current wording

Total revenues. Total revenues increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to higher net investment income. Net investment income increased primarily due to growth of the invested asset portfolio. Investment income net of investment expenses includes interest earned on our held-to-maturity asset, which is offset by interest expense on the surplus note (“Surplus Note”), thereby eliminating any impact on net investment income. Amounts recognized for each line item will remain offsetting and will fluctuate from period to period along with the principal amounts of the held-to-maturity asset and the Surplus Note based on the balance of reserves being contractually supported under a redundant reserve financing transaction used by Vidalia Re, Inc. (“Vidalia Re”). For more information on the Surplus Note, see Note 12 (Debt) to our consolidated financial statements in our 2024 Annual Report and Note 5 (Investments) to our unaudited condensed consolidated financial statements included elsewhere in this report.

Previous wording

Our invested asset portfolio is subject to a variety of risks, including risks related to general economic conditions, market volatility, interest rate fluctuations, liquidity risk and credit and default risk. Investment guideline restrictions have been established to minimize the effect of these risks but may not always be effective due to factors beyond our control. Interest rates and credit spreads are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. A significant increase in interest rates or credit spreads could result in significant losses in the value of our invested asset portfolio. We believe that fluctuations caused by movement in interest rates and credit spreads generally have little bearing on the recoverability of our investments as we have the ability to hold these investments until maturity or a market price recovery and we have no present intention to dispose of them.

Current wording

Our invested asset portfolio is subject to a variety of risks, including risks related to general economic conditions, market volatility, interest rate fluctuations, liquidity risk and credit and default risk. Investment guideline restrictions have been established to minimize the effect of these risks but may not always be effective due to factors beyond our control. Interest rates and credit spreads are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. A significant increase in interest rates or credit spreads could result in significant unrealized losses in the value of our invested asset portfolio. We believe that fluctuations caused by movement in interest rates and credit spreads generally have little bearing on the recoverability of our investments as we have the ability to hold these investments until maturity or a market price recovery and we have no present intention to dispose of them.

Previous wording

Dividends and other payments to the Parent Company from its subsidiaries are our principal sources of cash. The amount of dividends paid by the subsidiaries is dependent on their capital needs to fund future growth and applicable regulatory restrictions. The primary uses of funds by the Parent Company include the payments of stockholder dividends, interest on notes payable, general operating expenses, and income taxes, as well as repurchases of shares of our common stock outstanding. As of September 30, 2024, the Parent Company had cash and invested assets of $382.5 million.

Current wording

Dividends and other payments to the Parent Company from its subsidiaries are our principal sources of cash. The amount of dividends paid by the subsidiaries is dependent on their capital needs to fund future growth and applicable regulatory restrictions. The primary uses of funds by the Parent Company include the payments of stockholder dividends, interest on note payable, general operating expenses, and income taxes, as well as repurchases of shares of our common stock outstanding. As of March 31, 2025, the Parent Company had cash and invested assets of $407.0 million.

Previous wording

The Parent Company’s subsidiaries generate operating cash flows primarily from term life insurance premiums (net of premiums ceded to reinsurers), income from invested assets, commissions and fees collected from the distribution of investment and savings products, as well as other financial products. The subsidiaries’ principal operating cash outflows include the payment of insurance claims and benefits (net of ceded claims recovered from reinsurers), commissions to the sales force, insurance and other operating expenses, interest expense for future policy benefit reserves financing transactions, and income taxes.

Current wording

The Parent Company’s subsidiaries generate operating cash flows primarily from term life insurance premiums (net of premiums ceded to reinsurers), income from invested assets, commissions and fees collected from the distribution of investment and savings products, as well as other financial products. The subsidiaries’ principal operating cash outflows include the payment of insurance claims and benefits (net of ceded claims recovered from reinsurers), commissions to the independent sales force, insurance and other operating expenses, interest expense for future policy benefit reserves financing transactions, and income taxes.

Previous wording

Investing Activities. Cash flows used in investing activities increased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to fluctuations in the timing of maturities and reinvestments of debt securities held in our available-for-sale investment portfolio as well as an overall increase in the size of the portfolio given the increase in our Term Life insurance in force. In addition, $18.6 million of cash was included in the disposal of the Senior Health business. The $50.0 million received under a Representation and Warranty insurance policy partially offset the increase in cash used in investing activities in the 2024 period.

Current wording

Investing Activities. Cash flows used in investing activities increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to fluctuations in the timing of maturities and reinvestments of debt securities held in our available-for-sale investment portfolio as well as an overall increase in the size of the portfolio given the increase in our Term Life insurance in force.

Previous wording

Financing Activities. Cash flows used in financing activities increased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Contributing to the increase in cash flows used in financing activities was primarily due to the increase in the size of the share repurchase program in 2024 as well as differences in the timing of share repurchases during each period. In addition, the increase in the per share dividend paid by the Company in the first nine months of 2024 contributed to the increase in cash used in financing activities.

Current wording

Financing Activities. Cash flows used in financing activities increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the increase in the size of our share repurchase program and higher per share stockholder dividend payments.

Previous wording

The NAIC has adopted a model regulation for determining reserves using a principle-based approach (“principle-based reserves” or “PBR”), which is designed to reflect each insurer’s own experience in calculating reserves and move away from a single prescriptive reserving formula. Primerica Life adopted PBR as of January 1, 2018 and NBLIC adopted the New York amended version of PBR effective January 1, 2021. PBR significantly reduced the redundant statutory policy benefit reserve requirements while still ensuring adequate liabilities are held. The regulation only applies for business issued after the effective dates. See Note 4 (Investments), Note 11 (Debt) and Note 17 (Commitments and Contingent Liabilities) to our consolidated financial statements within our 2023 Annual Report for more information on the Vidalia Re Redundant Reserve Financing Transaction.

Current wording

The NAIC has adopted a model regulation for determining reserves using a principle-based approach (“principle-based reserves” or “PBR”), which is designed to reflect each insurer’s own experience in calculating reserves and move away from a single prescriptive reserving formula. Primerica Life adopted PBR as of January 1, 2018 and NBLIC adopted the New York amended version of PBR effective January 1, 2021. PBR significantly reduced the redundant statutory policy benefit reserve requirements while still ensuring adequate liabilities are held. The regulation only applies for business issued after the effective dates. See Note 5 (Investments), Note 12 (Debt) and Note 18 (Commitments and Contingent Liabilities) to our consolidated financial statements in our 2024 Annual Report for more information on the Vidalia Re Redundant Reserve Financing Transaction.