PRIMERICA, INC. – 10-K – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") is intended to inform the reader about matters affecting the
financial condition and results of operations of Primerica, Inc. (the "Parent
Company") and its subsidiaries (collectively, "we", "us" or the "Company") for
the three-year period ended December 31, 2022. As a result, the following
discussion should be read in conjunction with the consolidated financial
statements and accompanying notes that are included herein. This discussion
contains forward-looking statements that constitute our plans, estimates and
beliefs. These forward-looking statements involve numerous risks and
uncertainties, including, but not limited to, those discussed in "Item 1A. Risk
Factors". Actual results may differ materially from those contained in any
forward-looking statements.

This section generally discusses 2022 and 2021 items and comparisons between
2022 and 2021 financial results. Discussions of 2020 items and comparisons
between 2021 and 2020 financial results can be found in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in Part II, Item
7 of the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2021 (the "2021 MD&A").

This MD&A is divided into the following sections:

•

Business Trends and Conditions
•
Factors Affecting Our Results
•
Critical Accounting Estimates
•
Results of Operations
•
Financial Condition
•
Liquidity and Capital Resources

Business Trends and Conditions

The relative strength and stability of financial markets and economies in the
United States and Canada affect our growth and profitability. Our business is,
and we expect will continue to be, influenced by a number of industry-wide and
product-specific trends and conditions. Economic conditions, including
unemployment levels and consumer confidence, influence investment and spending
decisions by middle-income consumers, who are generally our primary clients.
These conditions and factors also impact prospective recruits' perceptions of
the business opportunity that becoming an independent sales representative
offers, which can drive or dampen recruiting. Consumer spending and borrowing
levels affect how consumers evaluate their savings and debt management plans. In
addition, interest rates and equity market returns impact consumer demand for
the savings and investment products we distribute. Our customers' perception of
the strength of the capital markets may also influence their decisions to invest
in the investment and savings products we distribute.

The financial and distribution results of our operations in Canada, as reported
in U.S. dollars, are affected by changes in the currency exchange rate. As a
result, changes in the Canadian dollar exchange rate may significantly affect
the result of our business for all amounts translated and reported in U.S.
dollars.

The COVID-19 pandemic ("COVID-19") continued to impact our business in 2022, but
to a much lesser extent than in 2021, as discussed in more detail later in this
section, the Results of Operations section, and the Financial Condition section.
Since March 2022, we have experienced fewer COVID-19 related claims than in
prior periods. In addition, throughout the second half of 2021 and the entirety
of 2022, policy sales and persistency have trended toward pre-COVID-19 levels.

Significant volatility in capital markets during 2022 has also impacted our
business. This volatility led to declines in the capital markets which adversely
impacted revenue generated by the Investments and Savings Products segment. The
sharp rise in market interest rates during 2022 resulted in unrealized losses in
our investment portfolio. We have not recognized losses caused by interest rate
volatility in the income statement 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.

During 2022, inflation reached levels not seen since the 1980s, which led to an
increased cost of living for middle-income families. If elevated inflation
continues it could impact demand for our products.

The effects of these trends and conditions are discussed below, in the Results
of Operations section and in the Financial Condition section.

Size of the Independent Sales Force. Our ability to increase the size of the
independent sales force ("independent sales representatives" or "independent
sales force") is largely based on the success of the sales force's recruiting
efforts as well as training and motivating recruits to get licensed to sell life
insurance. We believe that recruitment and licensing levels are important to
independent sales force trends, and growth in recruiting and licensing is
usually indicative of future growth in the overall size of the independent sales
force. Recruiting changes do not always result in commensurate changes in the
size of the licensed independent sales force because new recruits may obtain the
requisite licenses at rates above or below historical levels.

Details on new recruits activity and life-licensed independent sales
representative activity were as follows:

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                                                       Year ended December 31,
                                                2022            2021            2020
New recruits                                     359,735        349,374          400,345
New life-licensed independent sales
representatives                                   45,147         39,622     

48,106

Life-licensed independent sales
representatives, at period end                   135,208        129,515     

134,907

The number of new recruits increased in 2022 compared to 2021 primarily due to
strong recruiting efforts and the offering of special recruiting incentives
following our biennial convention held in June 2022. Approximately 83,000
individuals were recruited while the special incentives were in place. Various
recruiting incentives in both 2022 and 2021 also positively impacted recruiting
results during each year.

New life-licensed independent sales representatives increased in 2022 compared
to 2021 primarily due to the elevated recruiting volume discussed above combined
with licensing process improvements throughout 2022. These improvements included
new licensing progress-tracking tools and additional in-person licensing
classes.

The number of life-licensed independent sales representatives grew to 135,208 as
of December 31, 2022 and reflects recent improvements to the licensing process
and the elevated recruiting volume discussed above.

Term Life Insurance Product Sales and Face Amount In Force. The average number
of life-licensed independent sales representatives and the number of term life
insurance policies issued, as well as the average monthly rate of new policies
issued per life-licensed independent sales representative (historically between
0.18 and 0.22), were as follows:

                                                       Year ended December 

31,

                                                2022            2021        

2020

Average number of life-licensed
independent sales representatives                132,077        131,315     

133,302

Number of new policies issued                    291,918        323,855     

352,868

Average monthly rate of new policies
issued per life-licensed
  independent sales representative                  0.18           0.21     

0.22

New policies issued during 2022 decreased compared to 2021 due to elevated
demand during 2021 from COVID-19. As deaths associated with the COVID-19
pandemic subsided during 2022, the demand for life insurance products moderated.
In addition, the impact from higher costs of living on middle-income families
may have contributed to softer demand for life insurance products during the
second half of 2022.

Productivity in 2022, measured by the average monthly rate of new policies
issued per life-licensed independent sales representative, remained within our
historical range, although lower than 2021 primarily due to the elevated demand
for protection products in 2021 as described above.

The changes in the face amount of our in-force book of term life insurance
policies were as follows:

                                                                         Year ended December 31,
                                               % of beginning                     % of beginning                     % of beginning
                                   2022            balance            2021            balance            2020            balance
                                                                         (Dollars in millions)
Face amount in-force,
beginning of period              $ 903,404                          $ 858,818                          $ 808,262
Net change in face amount:
Issued face amount                 103,822                  11 %      108,521                  13 %      109,436                  14 %
Terminations                       (82,894 )                (9 )%     (64,798 )                (8 )%     (60,848 )                (8 )%
Foreign currency                    (7,524 )                 *            862                   *          1,968                   *
Net change in face amount           13,404                   1 %       44,585                   5 %       50,556                   6 %
Face amount in-force, end of
period                           $ 916,808                          $ 903,403                          $ 858,818




* Less than 1%.


The face amount of term life policies in-force increased from 2021 to 2022 as
the level of face amount issued continued to exceed the face amount terminated.
The increase was partially offset by movement in the foreign exchange rate as
the U.S. dollar strengthened in relation to the Canadian dollar, which
negatively impacted the translated face amount in force as of December 31, 2022.
Issued face amount during 2022 decreased versus 2021 due to a decrease in the
number of new policies issued partially offset by higher average issued face
amounts. Policy terminations were higher during 2022 as persistency normalized
towards pre-pandemic levels.

Our average issued face amount per policy increased to approximately $260,100 in
2022 compared to $251,500 in 2021 and $240,600 in 2020. The average issued face
amount was higher in 2022 compared with 2021, as the product mix in 2021 favored
our rapidly issued term life product that provides for lower maximum face
amounts.

Investment and Savings Product Sales, Asset Values and Accounts/Positions.
Investment and savings products sales and average client asset values were as
follows:

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                                  Year ended December 31,              2022 vs. 2021 change           2021 vs. 2020 change
                              2022          2021          2020             $               %              $               %
                                                                 (Dollars in millions)
Product sales:
U.S. retail mutual funds    $   4,266     $   5,146     $  3,499     $        (880 )       (17 )%   $       1,647          47 %
Canada retail mutual
funds - with upfront
sales commissions                 912         1,439     $    892     $        (527 )       (37 )%   $         547          61 %
Annuities and other             2,629         3,076        2,210              (447 )       (15 )%             866          39 %
Total sales-based revenue
generating product sales        7,807         9,661        6,601            (1,854 )       (19 )%           3,060          46 %
Managed investments             1,513         1,506          900                 7           *                606          67 %
Canada retail mutual
funds - no upfront sales
commissions                       494           318          146               176          55 %              172         118 %
Segregated funds                  195           219          196               (24 )       (11 )%              23          12 %
Total product sales         $  10,009     $  11,704     $  7,843     $      (1,695 )       (14 )%   $       3,861          49 %
Average client asset
values:
Retail mutual funds         $  53,822     $  55,997     $ 42,570     $      (2,175 )        (4 )%   $      13,427          32 %
Annuities and other            23,947        25,211       20,524            (1,264 )        (5 )%           4,687          23 %
Managed investments             6,951         6,086        4,201               865          14 %            1,885          45 %
Segregated funds                2,474         2,698        2,413              (224 )        (8 )%             285          12 %
Total average client
asset values                $  87,194     $  89,992     $ 69,708     $      (2,798 )        (3 )%   $      20,284          29 %




* Less than 1%.

The rollforward of asset values in client accounts was as follows:

Year ended December 31,

                                2022         % of beginning balance       2021         % of beginning balance        2020         % of beginning balance
                                                                                  (Dollars in millions)
Asset values, beginning of
period                        $  97,312                                 $ 81,533                                   $ 70,537
Net change in asset values:
Inflows                          10,009                  10 %             11,703                14 %                  7,843                11 %
Redemptions                      (6,587 )                (7 )%            (7,161 )              (9 )%                (5,538 )              (8 )%
Net flows                         3,422                   4 %              4,542                 6 %                  2,305                 3 %
Change in fair value, net       (15,855 )               (16 )%            11,146                14 %                  8,521                12 %
Foreign currency, net              (930 )                 *                   91                 *                      170                 *
Net change in asset values      (13,363 )               (14 )%            15,779                19 %                 10,996                16 %
Asset values, end of period   $  83,949                                 $ 97,312                                   $ 81,533




* Less than 1%.

Average number of fee-generating positions was as follows:

                                   Year ended December 31,               2022 vs. 2021 change            2021 vs. 2020 change
                               2022          2021         2020        Positions              %         Positions             %
                                                                  (Positions in thousands)
Average number of
fee-generating
  positions (1):
Recordkeeping and
custodial                        2,281        2,171        2,060              110               5 %           111               5 %
Recordkeeping only                 814          749          678               65               9 %            71              10 %
Total average number of
fee-
  generating positions           3,095        2,920        2,738              175               6 %           182               7 %




(1)

We receive transfer agent recordkeeping fees by mutual fund positions. An
individual client account may include multiple mutual fund positions. We may
also receive fees, which are earned on a per account basis, for custodial
services that we provide to clients with retirement plan accounts that hold
positions in these mutual funds.

Product sales. The decrease in investment and savings product sales in 2022 from
2021 was led by lower sales of retail mutual funds and variable annuities as
investor demand during 2022 deteriorated in response to negative market
conditions.

Average client asset values. Average client asset values decreased in 2022
compared to 2021 primarily due to negative equity market conditions during 2022.
Net flows remained positive for 2022, albeit to a lesser extent than in 2021.

Rollforward of client asset values. Ending client asset values decreased in 2022
from 2021 primarily due to negative market performance in 2022. Also
contributing to the decrease was movement in the foreign exchange rate as the
U.S. dollar strengthened in relation to the Canadian dollar, which negatively
impacted client asset values as of December 31, 2022. Net flows remained
positive for 2022, albeit to a lesser extent than in 2021.

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Average number of fee-generating positions. The average number of fee-generating
positions increased in 2022 from 2021 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.

Senior Health Key Performance Indicators.

Submitted Policies and Approved Policies

Submitted policies. Submitted policies represent the number of completed
applications that, with respect to each application, the applicant has
authorized us to submit to the health insurance carrier. The applicant may need
to take additional action, including providing subsequent information, before
the application is reviewed by the health insurance carrier.

Approved policies. Approved policies represent an estimate of submitted policies
approved by the health insurance carriers for the identified product during the
indicated period. Not all approved policies will go in force. In general, the
relationship between submitted policies and approved policies has been
seasonally consistent. Therefore, factors impacting the number of submitted
policies generally impact the number of approved policies.

The number of Senior Health submitted policies and approved policies were as
follows:

                                               Year ended December 31,
                                                 2022            2021(1)

Number of Senior Health submitted policies 85,038 60,009
Number of Senior Health approved policies 77,086 50,323

(1) From the acquisition date of July 1, 2021.

The Senior Health segment experiences notable seasonality with the strongest
demand occurring in the fourth quarter due to the Medicare Annual Election
Period ("AEP") from October 15th to December 7th. We also experience seasonally
higher demand in the first quarter due to the Medicare Open Enrollment Period
from January 1st to March 31st, which allows individuals to switch Medicare
Advantage plans. Meanwhile, the second and third quarters experience seasonally
lower demand as the focus for submitted policies is limited to participants that
are dual eligible (Medicare and Medicaid), qualify for a special enrollment
period, recently aged into Medicare or are enrolling off of an
employer-sponsored plan, and other less common situations.

The number of submitted and approved policies in 2022 compared to 2021 is
primarily impacted by the timing of the acquisition of e-TeleQuote on July 1,
2021. A full year of submitted and approved policies are included in 2022
compared to only six months for 2021. The number of submitted and approved
policies in 2022 also reflects the Company's efforts to scale back growth and
limit the number of agents in favor of developing more efficient lead
procurement. Approved policies as a percentage of submitted policies increased
during 2022 due in part to our strategic decision to limit our agent count to
the most productive agents.

Senior Health Policies Sourced by Primerica Independent Sales Representatives

Primerica independent sales representatives are eligible to refer Medicare
participants to e-TeleQuote licensed agents for potential enrollment in policies
distributed by e-TeleQuote after completion of a brief certification course
offered by Primerica. At December 31, 2022, there were 93,348 Primerica
independent sales representatives certified to refer participants for enrollment
in Senior Health policies compared to 26,441 at December 31, 2021.

The number of submitted policies by e-TeleQuote sourced from Primerica
independent sales representatives measures the number of Senior Health policies
submitted by e-TeleQuote to its third-party health insurance carriers that
originated through the Primerica independent sales force.

                                                        Year ended December 

31,

                                                     2022                   

2021(1)

Submitted policies sourced by Primerica
independent sales representatives                          8,501                    4,494

(1) From the acquisition date of July 1, 2021.

The number of submitted policies sourced by Primerica independent sales
representatives during 2022 increased compared to 2021 primarily due to the
timing of our acquisition of e-TeleQuote on July 1, 2021. A full year of
submitted policies sourced by Primerica independent sales representatives are
included during 2022 compared to only six months for 2021.

Lifetime Value of Commissions and Contract Acquisition Costs

Lifetime value of commissions ("LTV"). LTV represents the cumulative total of
commissions and administrative fees estimated to be collected over the expected
life of a policy for policies approved during the period. For more information
on LTV, refer to Note 18 (Revenue from Contracts with Customers) of our
consolidated financial statements included elsewhere in this report and the
Factors Affecting our Results - Senior Health Segment section.

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Contract acquisition costs ("CAC"). CAC represents the total direct costs
incurred to acquire approved policies. CAC are primarily comprised of the costs
associated with acquiring leads, including fees paid to Primerica Senior Health
certified independent sales representatives, as well as compensation, licensing,
and training costs associated with our team of e-TeleQuote licensed health
insurance agents. The number of e-TeleQuote licensed health insurance agents,
agent tenure, attrition rate and productivity all impact CAC. Other than costs
incurred to assist beneficiaries who are switching plans with the same carrier,
we incur the entire cost of approved policies prior to enrollment and prior to
receiving our first commission-related payment.

Per policy metrics for LTV and CAC measure our ability to profitably distribute
Senior Health insurance products.

The LTV per approved policy, CAC per approved policy, and ratio of LTV to CAC
per approved policy were as follows:

                                               Year ended December 31,
                                               2022             2021(1)

LTV per policy approved during the period $ 860 $ 1,109
CAC per policy approved during the period $ 888 $ 1,049
LTV/CAC per approved policy

                        0.97               1.10

(1) From the acquisition date of July 1, 2021.

LTV per approved policy reflects current estimates for renewal rates, policy
retention and chargeback activity taking into consideration the most recent
experience through December 31, 2022. The Company saw lower renewal retention
rates during 2022 compared to historical experience due to an increased number
of consumers who changed plans and increased plan offerings by carriers. This
dynamic led to the lower LTV estimated per approved policy in 2022 compared to
2021. The LTV per approved policy estimated in 2021 was higher than what we
subsequently expect to realize due to the impact of the lower renewal activity
experienced in 2022.

The reduction in CAC per approved policy in 2022 reflects a number of other
factors including revised lead acquisition strategies, improved lead routing,
and enhancements in agent training. This led to a decrease in CAC per approved
policy in 2022 compared to 2021.

Regulatory Changes.

Worker classification standards. There has been a trend toward administrative
and legislative activity around worker classification. For example, in January
2021, the Department of Labor ("DOL") under the prior presidential
administration issued a rulemaking interpreting the "economic realities" worker
classification standard applicable to the Fair Labor Standards Act ("FLSA"). In
October 2022, the DOL under the current presidential administration proposed a
new rule that would rescind the 2021 rule and replace it with its own
interpretation of the "economic realities" standard under the FLSA. Other
federal and state legislative and regulatory proposals regarding worker
classification have also come under consideration. It is difficult to predict
what the outcome of worker classification activity may be. Changes to worker
classification laws could impact our business as sales representatives (other
than those hired by e-TeleQuote) are independent contractors.

Restrictions on compensation models in Canada. The organization of provincial
and territorial securities commissions throughout Canada (collectively referred
to as the "Canadian Securities Administrators" or "CSA") published final rule
amendments to prohibit upfront sales commissions by fund companies for the sale
of mutual funds offered under a prospectus in Canada ("DSC Ban"). The final
amendments became effective on June 1, 2022. These rules resulted in changes in
compensation arrangements with both the fund companies that offer the mutual
fund products we distribute and the independent sales representatives. In
particular, we entered into agreements with two third-party mutual fund
companies to develop and offer a broad range of funds that are sold exclusively
by our independent sales representatives. These agreements provide for the
payment to us of asset-based revenue by the mutual fund companies. We also earn
revenue through an asset-based fee charged to clients. As part of our new model
(the "Principal Distributor model") we are funding an advance of compensation at
the time of sale to our independent sales representatives, taken at their
option, to partially replace upfront sales commission cash flow from fund
companies paid under the deferred sales charge compensation model. We expect
that these changes to our mutual fund model will have the impact of initially
decreasing our pre-tax operating income in the short term due to the elimination
of upfront commissions. Over the long term, we expect pre-tax operating income
to recover through the collection of asset-based commissions over time. We began
offering our new Principal Distributor model on July 6, 2022. Although we
received the requisite approval, the CSA has indicated that it intends to
closely examine the model, including potentially through a public consultation
on sales practices, and may require undertakings or consider future amendments
that would require modifications to the model, including with respect to its
advance and chargeback features. At this time we cannot quantify the financial
impact, if any, of future changes to our business that may be necessary in order
to comply if our Principal Distributor model is required to be modified or
discontinued. During the year ended December 31, 2022, Canadian mutual funds
represented approximately 14% of our total investment and savings product sales
and approximately 13% of our average client asset values.

In an announcement on February 10, 2022, and in line with the DSC Ban for the
sale of mutual funds, the organization of provincial and territorial insurance
regulators in Canada (collectively referred to as the "Canadian Council of
Insurance Regulators" or "CCIR") urged insurers to refrain from new deferred
sales charges in segregated fund contracts beginning June 1, 2022, and to expect
a transition to a cessation of such deferred sales charges by June 1, 2023. In
addition, on September 8, 2022, the CCIR issued a

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discussion paper for consultation to consider other changes to upfront
compensation, including advance compensation and chargeback features such as
those used in our Principal Distributor model. The consultation period on the
discussion paper is now closed and the CCIR is now considering the comments that
were submitted, including ours, to determine whether they will require changes
to segregated funds compensation practices. We expect that changes, if any, to
segregated funds compensation practices, will also be adopted by securities
regulators, which may impact our Principal Distributor model. Currently, our
Canadian segregated fund products are primarily sold on a deferred sales charge
basis and we pay upfront commissions to the independent agents for the sale of
these products. At this time, without further clarity from regulators on
allowable segregated fund compensation practices, we expect a decline in
segregated fund product sales beginning in June 2023. We earn revenue from
Canadian segregated fund products based on a percentage of client assets under
management. During the year ended December 31, 2022, Canadian segregated funds
represented approximately 2% of our total investment and savings product sales
and approximately 3% of our average client asset values.

Factors Affecting Our Results

Refer to the Business Trends and Conditions section for discussion of the
potential impact on our business from the COVID-19 pandemic.

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.

Sales and policies in-force. Sales of term policies and the size and
characteristics of our in-force book of policies are vital to our results over
the long term. Premium revenue is recognized as it is earned over the term of
the policy, and eligible acquisition expenses are deferred and amortized ratably
with the level premiums of the underlying policies. However, because we incur
significant cash outflows at or about the time policies are issued, including
the payment of sales commissions and underwriting costs, changes in life
insurance sales volume in a period will have a more immediate impact on our cash
flows than on revenue and expense recognition in that period.

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 0.18 and 0.22). 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.

Pricing assumptions. Our pricing methodology is intended to provide us with
appropriate profit margins for the risks we assume. We determine pricing
classifications based on the coverage sought, such as the size and term of the
policy, and certain policyholder attributes, such as age and health. In
addition, we generally utilize unisex rates for term life insurance policies.
The pricing assumptions that underlie our rates are based upon our best
estimates of mortality, persistency, disability, and interest rates at the time
of issuance, sales force commission rates, issue and underwriting expenses,
operating expenses and the characteristics of the insureds, including the
distribution of sex, age, underwriting class, product and amount of coverage.
Our results will be affected to the extent there is a variance between our
pricing assumptions and actual experience.

•

Persistency. Persistency is a measure of how long our insurance policies stay
in-force. As a general matter, persistency that is lower than our pricing
assumptions adversely affects our results over the long term because we lose the
recurring revenue stream associated with the policies that lapse. Determining
the near-term effects of changes in persistency is more complicated. When actual
persistency is lower than our pricing assumptions, we must accelerate the
amortization of deferred policy acquisition costs ("DAC"). The resultant
increase in amortization expense is offset by a corresponding release of
reserves associated with lapsed policies, which causes a reduction in benefits
and claims expense. The future policy benefit reserves associated with any given
policy will change over the term of such policy. As a general matter, future
policy benefit reserves are lowest at the inception of a policy term and rise
steadily to a peak before declining to zero at the expiration of the policy
term. Accordingly, depending on when the lapse occurs in relation to the overall
policy term, the reduction in benefits and claims expense may be greater or less
than the increase in amortization expense, and, consequently, the effects on
earnings for a given period could be positive or negative. Persistency levels
will impact results to the extent actual experience deviates from the
persistency assumptions that are locked-in at time of issue.
•
Mortality. Our profitability will fluctuate to the extent actual mortality rates
differ from the assumptions that are locked-in at time of issue. We mitigate a
significant portion of our mortality exposure through reinsurance.
•
Disability. Our profitability will fluctuate to the extent actual disability
rates, including recovery rates for individuals currently disabled, differ from
the assumptions that are locked-in at the time of issue or time of disability.
•
Interest Rates. We use an assumption for future interest rates that initially
reflects the portfolio's current reinvestment rate gradually increasing over
seven years to a level consistent with our expectation of future yield growth.
Both DAC and the future policy benefit reserve liability increase with the
assumed interest rate. Since DAC is higher than the future policy benefit
reserve liability in the early years of a policy, a lower assumed interest rate
generally will result in lower profits. In the later years, when the future
policy benefit reserve liability is higher than DAC, a lower assumed interest
rate generally will result in higher profits. These assumed interest rates,
which like other pricing assumptions are locked-in at issue, impact the timing
but not the aggregate amount of DAC and future policy benefit reserve changes.
We allocate net investment income generated by the investment portfolio to the
Term Life Insurance segment in an amount equal to the assumed net interest
accreted to the segment's U.S. generally accepted accounting principles ("U.S.
GAAP")-measured

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future policy benefit reserve liability less DAC. All remaining net investment
income, and therefore the impact of actual interest rates, is attributed to the
Corporate and Other Distributed Products segment.

Reinsurance. We use reinsurance extensively, which has a significant effect on
our results of operations. We have generally reinsured between 80% and 90% of
the mortality risk on term life insurance (excluding coverage under certain
riders) on a quota share yearly renewable term ("YRT") basis. To the extent
actual mortality experience is more or less favorable than the contractual rate,
the reinsurer will earn incremental profits or bear the incremental cost, as
applicable. In contrast to coinsurance, which is intended to eliminate all risks
(other than counterparty risk of the reinsurer) and rewards associated with a
specified percentage of the block of policies subject to the reinsurance
arrangement, the YRT reinsurance arrangements we enter into are intended only to
reduce volatility associated with variances between estimated and actual
mortality rates.

In 2010, as part of our corporate reorganization and the initial public offering
of our common stock, we entered into significant coinsurance transactions (the
"IPO coinsurance transactions") with entities then affiliated with Citigroup,
Inc. (collectively, the "IPO coinsurers") and ceded between 80% and 90% of the
risks and rewards of term life insurance policies that were in-force at year-end
2009. We administer all such policies subject to these coinsurance agreements.
Policies reaching the end of their initial level term period are no longer ceded
under the IPO coinsurance transactions.

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

•

Ceded premiums. Ceded premiums are the premiums we pay to reinsurers. These
amounts are deducted from the direct premiums we earn to calculate our net
premium revenues. Similar to direct premium revenues, ceded coinsurance premiums
remain level over the initial term of the insurance policy. Ceded YRT premiums
increase over the period that the policy has been in-force. Accordingly, ceded
YRT premiums generally constitute an increasing percentage of direct premiums
over the policy term.
•
Benefits and claims. Benefits and claims include incurred claim amounts and
changes in future policy benefit reserves. Reinsurance reduces incurred claims
in direct proportion to the percentage ceded. Coinsurance also reduces the
change in future policy benefit reserves in direct proportion to the percentage
ceded, while YRT reinsurance does not significantly impact the change in these
reserves.
•
Amortization of DAC. DAC, and therefore amortization of DAC, is reduced on a
pro-rata basis for the coinsured business, including the business reinsured with
the IPO coinsurers. There is no impact on amortization of DAC associated with
our YRT contracts.
•
Insurance expenses. Insurance expenses are reduced by the allowances received
from coinsurance. There is no impact on insurance expenses associated with our
YRT contracts.

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 presently intend to continue ceding approximately
90% of our U.S. and Canadian mortality risk on new business.

Expenses. Results are also affected by variances in client acquisition,
maintenance and administration expense levels.

Investment and Savings Products Segment. The Investment and Savings Products
segment results are primarily driven by sales, the value of assets in client
accounts for which we earn ongoing management, marketing and support, and
distribution fees, and the number of transfer agent recordkeeping positions and
non-bank custodial fee-generating accounts we administer.

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.

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 in turn impact the revenue we earn on those assets.

Positions. We earn transfer agent recordkeeping fees for administrative
functions we perform on behalf of several of our mutual fund providers. An
individual client account may include multiple fund positions for which we earn
transfer agent recordkeeping fees. We may also receive fees earned for non-bank
custodial services that we provide to clients with retirement plan accounts.

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Sales mix. While our investment and savings products all provide similar
long-term economic returns to the Company, our results in a given fiscal period
will be affected by changes in the overall mix of products within these
categories. Examples of changes in the sales mix that influence our results
include the following:

•

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 upfront revenues or, in the case of managed investments and
segregated funds, no upfront revenues;
•
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 upfront revenues based on product sales; and
•
sales of a higher proportion of mutual fund products sold will impact the timing
and amount of revenue we earn given the distinct transfer agent recordkeeping
and non-bank custodial services we provide for certain mutual fund products we
distribute.

Senior Health Segment. The Senior Health segment results are primarily driven by
approved policies, LTV per approved policy and tail revenue adjustments, CAC per
approved policy, and other revenue.

Approved policies. Approved policies represent submitted policies approved by
health insurance carriers for the identified product during the indicated
period. Not all approved policies will go in force. In general, the relationship
between submitted policies and approved policies has been seasonally consistent.
Therefore, factors impacting the number of submitted policies generally impact
the number of approved policies. Revenue is primarily generated from approved
policies and LTVs are recorded when the enrollment is approved by the applicable
health insurance carrier. Medicare Advantage plans make up the substantial
portion of the approved policies we distribute. The number of approved policies
are influenced by the following:

•

the size and growth of the population of senior citizens in the United States;
•
the appeal of government-funded Medicare Advantage plans that provide privately
administered healthcare coverage with enhanced benefits relative to original
Medicare;
•
our ability to generate and obtain leads for our team of e-TeleQuote licensed
health insurance agents;
•
our ability to staff and train our team of e-TeleQuote licensed health insurance
agents to manage leads and help eligible Medicare participants through the
enrollment process; and
•
our health insurance carrier relationships that allow us to offer plans that
most appropriately meet eligible Medicare participants' needs.

LTV per approved policy and tail revenue adjustments. When a policy is approved
by the health insurance carrier, commission revenue is recognized based on an
estimated LTV per approved policy. LTV per approved policy is the cumulative
total of commissions estimated to be collected over the expected life of a
policy, subject to constraints applied in accordance with our revenue
recognition policy. Specifically, LTV per approved policy is equal to the sum of
the initial commissions, less an estimate of chargebacks for paid policies that
are disenrolled in the first policy year, plus forecasted renewal commissions.
This estimate is driven by a number of factors including, but not limited to,
contracted commission rates from carriers, expected policy turnover, emerging
chargeback activity and applied constraints. These factors may result in varying
values from period to period.

We recognize adjustments to revenue outside of LTV for approved policies from
prior periods when our cash collections are, or are expected to be, different
from the estimated constrained LTVs, which we refer to as tail revenue
adjustments. The recognition of tail revenue adjustments results from a change
in the estimate of expected cash collections when actual cash collections or
communicated rate increases have indicated a trend that is different from the
estimated constrained LTV. Tail revenue adjustments can be positive or negative
and we recognize positive adjustments to revenue when we do not believe it is
probable that a significant reversal of cumulative revenue will occur.

CAC per approved policy. Results are also driven by the costs of acquisition,
which is defined as the total direct costs incurred per approved policy. Our
costs of acquisition are primarily comprised of the cost to generate and acquire
leads, including fees paid to Primerica Senior Health certified independent
sales representatives, and the labor, benefits, bonus compensation, licensing
and training costs associated with our team of e-TeleQuote licensed health
insurance agents. Other than costs incurred to assist beneficiaries with
switching plans within the same carrier, we incur our entire cost of approved
policies prior to enrollment and prior to receiving our first commission related
payment. Factors that impact our costs of acquisition per approved policy
include:

•

the market price of externally-generated leads;
•
our ability to efficiently procure internally-generated leads; and
•
the productivity of our e-TeleQuote licensed health insurance agents in
converting procured leads into approved policies.

Other revenue. Other revenue recognized in the Senior Health segment includes
marketing development revenues received for providing marketing services to
certain health insurance carriers. Marketing development revenue provides
additional revenue to deliver approved policies and are based on meeting
agreed-upon objectives with certain health insurance carriers. Marketing

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development revenue serves to offset contract acquisition costs associated with
distribution of approved policies. Agreements for marketing development revenue
are generally short-term in nature and can vary from period to period.

Corporate and Other Distributed Products Segment. We earn revenues and pay
commissions and referral fees within the Corporate and Other Distributed
Products segment for mortgage loan originations, prepaid legal services, auto
and homeowners' insurance referrals, and other financial products, all of which
are originated by third parties. The Corporate and Other Distributed Products
segment also includes in-force policies from several discontinued lines of
insurance underwritten by National Benefit Life Insurance Company ("NBLIC").

Corporate and Other Distributed Products segment net investment income reflects
actual net investment income recognized by the Company less the amount allocated
to the Term Life Insurance segment based on the assumed net interest accreted to
the segment's U.S. GAAP-measured future policy benefit reserve liability less
DAC. Actual net investment income reflected in the Corporate and Other
Distributed Products segment is impacted by the size and performance of our
invested asset portfolio, which can be influenced by interest rates, credit
spreads, and the mix of invested assets.

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 or Investment and Savings Products segments), interest expense on
notes payable, redundant reserve financing transactions and our revolving credit
facility ("Revolving Credit Facility"), as well as realized gains and losses on
our invested asset portfolio.

Capital Structure. Our financial results are affected by our capital structure,
which includes our senior unsecured notes (the "Senior Notes"), redundant
reserve financing transactions, our Revolving Credit Facility, and our common
stock. See Note 10 (Debt), Note 12 (Stockholders' Equity) and Note 16
(Commitments and Contingent Liabilities) to our consolidated financial
statements included elsewhere in this report for more information on changes in
our capital structure.

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.

The year-end exchange rates (USD per CAD) used by the Company to translate our
Canadian dollar functional currency assets and liabilities into U.S. dollars
decreased by 7% in 2022 from 2021. Also, the average exchange rates used by the
Company in 2022 to translate our Canadian dollar functional currency revenues
and expenses into U.S. dollars decreased 4% compared to 2021.

See the Results of Operations section, the Financial Condition section, and
"Quantitative and Qualitative Disclosures About Market Risk - Canadian Currency
Risk" and Note 3 (Segment and Geographical Information) to our 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.

Income Taxes. The profitability of the Company and its subsidiaries is affected
by income taxes assessed by federal, state, and U.S. territorial jurisdictions
in the U.S. and federal and provincial jurisdictions in Canada. Changes in tax
legislation may impact the measurement of our deferred tax assets and
liabilities and the amount of income tax expense we incur.

Critical Accounting Estimates

We prepare our financial statements in accordance with U.S. GAAP. These
principles are established primarily by the Financial Accounting Standards
Board. The preparation of financial statements in conformity with U.S. GAAP
requires us to make estimates and assumptions based on currently available
information when recording transactions resulting from business operations. Our
significant accounting policies are described in Note 1 (Description of
Business, Basis of Presentation, and Summary of Significant Accounting Policies)
to our consolidated financial statements included elsewhere in this report. The
most significant items on our consolidated balance sheets are based on fair
value determinations, accounting estimates and actuarial determinations, which
are susceptible to changes in future periods and could affect our results of
operations and financial position.

The estimates that we deem to be most critical to an understanding of our
results of operations and financial position are those related to DAC, future
policy benefit reserves and corresponding amounts recoverable from reinsurers,
income taxes, renewal commissions receivable, goodwill and the valuation of
investments. The preparation and evaluation of these critical accounting
estimates involve the use of various assumptions developed from management's
analyses and judgments. Subsequent experience or use of other assumptions could
produce significantly different results.

Deferred Policy Acquisition Costs. We defer incremental direct costs of
successful contract acquisitions that result directly from and are essential to
the contract transaction(s) and that would not have been incurred had the
contract transaction(s) not occurred. These costs include commissions and policy
issue expenses. Deferrable term life insurance policy acquisition costs are
amortized over the initial level premium-paying period of the related policies
in proportion to premium income and include assumptions made by us regarding
persistency, expenses, interest rates and claims, which are updated on new
business to reflect recent experience. In accordance with current U.S. GAAP,
assumptions are not allowed to be modified, or unlocked on in-force term life
insurance business, unless recoverability testing deems estimated future cash
flows to be inadequate. DAC is subject to recoverability testing annually and
when circumstances indicate that recoverability is uncertain.

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The DAC balance in the Term Life Insurance segment is susceptible to differences
between estimated and actual persistency experience, which could impact the DAC
amortization expense. The impact is more pronounced for early duration lapse
variance than later durations.

Beginning in 2023, we will be reporting under Accounting Standards Update No.
2018-12, Financial Services-Insurance (Topic 944) - Targeted Improvements to the
Accounting for Long-Duration Contracts ("ASU 2018-12" or "LDTI"). We will adopt
ASU 2018-12 when we issue our condensed consolidated financial statements as of
and for the three months ending March 31, 2023 via the modified retrospective
method, which will allow us to carryover our historical DAC balance as of the
January 1, 2021 adoption date. ASU 2018-12 includes changes to how insurance
companies that issue long-duration contracts amortize DAC by eliminating the
accretion of interest and providing for amortization on a straight-line basis
over the coverage period. We have determined that we will use current face
amount as the unit of measure to amortize DAC for our term life insurance
products and will use policy count as the unit of measure to amortize DAC for
our Canadian segregated funds products. We will also amortize DAC under LDTI
based on policy cohorts rather than on a seriatim basis. As a result of these
changes, we expect the DAC amortization on our term life insurance products to
be slower and less volatile under LDTI compared to current U.S. GAAP. For
Canadian segregated funds products, we also expect DAC amortization under LDTI
to be less volatile than under current U.S. GAAP. The standard no longer locks
in assumptions and also removes the DAC recoverability testing requirement. For
additional information on DAC, see Note 1 (Description of Business, Basis of
Presentation, and Summary of Significant Accounting Policies) and Note 7
(Deferred Policy Acquisition Costs) to our consolidated financial statements
included elsewhere in this report.

Future Policy Benefit Reserves and Reinsurance. Liabilities for future policy
benefits on our term life insurance products are reserves established for death
claims and waiver of premium benefits and have been computed using a net level
method and include assumptions as to mortality, persistency, interest rates,
disability rates, and other assumptions based on our historical experience,
modified as necessary for new business to reflect anticipated trends and to
include provisions for possible adverse deviation. Reserves related to reinsured
policies are accounted for using assumptions consistent with those used to
determine the future policy benefit reserves and are included in reinsurance
recoverables in our consolidated balance sheets. Similar to the term life
insurance DAC discussion above, we do not modify the assumptions used to
establish future policy benefit reserves during the policy term under current
U.S. GAAP unless recoverability testing deems them to be inadequate and there is
no remaining DAC associated with the underlying policies. Our results depend
significantly upon the extent to which our actual experience is consistent with
the assumptions we used in determining our future policy benefit reserves. Our
future policy benefit reserve assumptions and estimates require significant
judgment and, therefore, are inherently uncertain. We cannot determine with
precision the ultimate amounts that we will pay for actual claims or the timing
of those payments.

Similar to DAC, the balances of future policy benefit reserves and reinsurance
recoverables have been susceptible to differences between estimated and actual
persistency experience.

As noted above, the Company will adopt ASU 2018-12 effective January 1, 2023 via
the modified retrospective method. The amendments in this update change
accounting guidance for insurance companies that issue long-duration contracts,
including term life insurance. ASU 2018-12 requires companies that issue
long-duration insurance contracts to update cash flow assumptions used in
measuring future policy benefits, including mortality, disability, and
persistency, at least annually instead of locking those assumptions at contract
inception and reflecting differences in assumptions and actual cash flows as the
experience occurs. The impact of assumption changes and experience variances
will be partly reflected in the period of the change and partly spread to future
periods, based on the remaining duration of the impacted policy cohort(s), by
unlocking the net premium ratio used to measure future policy benefits for the
impacted policy cohort(s) (referred to as a "cohort").

ASU 2018-12 also includes changes to how insurance companies that issue
long-duration contracts update the discount rate assumptions used in measuring
future policy benefits reserves while increasing the level of financial
statement disclosures required. Changes in the future policy benefit reserves as
a result of updating current market observable rates are recorded through
accumulated other comprehensive income. The adoption of ASU 2018-12 will have an
impact on our consolidated financial statements and related disclosures and will
require changes to our processes, systems, and controls. We anticipate a
reduction of approximately $1.2 billion to $1.5 billion (net of income tax) in
accumulated other comprehensive income in the equity section of our consolidated
balance sheet on the transition date, January 1, 2021 (the "Transition Date").
The expected impact on our consolidated balance sheet is the net effect of
revaluing future policy benefits liabilities and reinsurance recoverables using
current interest rates prescribed by the standard as of the Transition Date
versus interest rate assumptions locked in when the policies were issued. We
maintain a large volume of policies in our term life business written over
several decades and policies written several years ago include interest rate
assumptions that were made when rates were much higher than they were on the
Transition Date. Since the Transition Date, market observable rates have
increased and the impact to accumulated other comprehensive income as of
December 31, 2022 will be much less significant. As observed since the
Transition Date, changes in current interest rates from period to period will
create volatility in the amount of accumulated other comprehensive income
recognized. For additional information on future policy benefits, reinsurance
and the impact to accumulated other comprehensive income see Note 1 (Description
of Business, Basis of Presentation, and Summary of Significant Accounting
Policies) and Note 6 (Reinsurance) to our consolidated financial statements
included elsewhere in this report.

Income Taxes. We account for income taxes using the asset and liability method.
We recognize deferred tax assets and liabilities for the future tax consequences
attributable to (i) temporary differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and (ii) operating loss and tax credit carryforwards. Deferred tax assets
are

                                       57
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recognized subject to management's judgment that realization is more likely than
not applicable to the periods in which we expect the temporary difference will
reverse. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

In light of the multiple tax jurisdictions in which we operate, our tax returns
are subject to routine audit by the Internal Revenue Service and other taxation
authorities. These audits at times may produce alternative views regarding
particular tax positions taken in the year(s) of review. As a result, the
Company records uncertain tax positions, which require recognition at the time
when it is deemed more likely than not that the position in question will be
upheld. Although management believes that the judgment and estimates involved
are reasonable and that the necessary provisions have been recorded, changes in
circumstances or unexpected events could adversely affect our financial
position, results of operations, and cash flows.

For additional information on income taxes, see Note 1 (Description of Business,
Basis of Presentation, and Summary of Significant Accounting Policies) and Note
11 (Income Taxes) to our consolidated financial statements included elsewhere in
this report.

Renewal commissions receivable. We earn commissions when e-TeleQuote enrolls
individual insurance policies on behalf of its customers, third-party health
insurance carriers. We have no further obligations to our customers once an
eligible Medicare participant is enrolled. We are entitled to commissions at the
time the initial policy is approved by the health insurance carrier and are
entitled to renewal commissions for as long as the policy renews. The estimate
of renewal commissions is part of the variable consideration recognized and
requires significant judgment including determining the number of periods in
which a renewal will occur and the value of those renewal commissions to be
received if renewed. We utilize the expected value approach to do this,
incorporating a combination of historical lapse data and effective commission
rates to estimate forecasted renewal consideration. We apply a constraint on our
estimate of renewal commissions so that it is probable that a significant
reversal in the amount of cumulative revenue will not occur. Variable
consideration in excess of the amount constrained is recognized in subsequent
reporting periods when the uncertainty is resolved.

We utilize a practical expedient to estimate renewal commissions revenue by
applying the use of a portfolio approach to policies grouped together by health
insurance carrier, Medicare product type, and policy effective date. This
provides a practical approach to estimating the renewal commissions expected to
be collected by evaluating various factors, including but not limited to,
contracted commission rates, disenrollment experience and renewal persistency
rates. We continuously evaluate the assumptions and inputs into our calculation
of renewal commissions revenue and refine our estimates based on current
information. There could be situations where new facts or circumstances, that
were not available at the time of the initial estimate, may indicate that the
renewal commissions receivable recognized is higher or lower than our original
expectation of renewal commissions that will be collected. In those situations,
the renewal commissions receivable will be written down or up to its revised
expected value by recording tail revenue adjustments. During 2022, we recorded
$18.9 million in net negative tail revenue adjustments as retention for policies
scheduled to renew was lower than expected.

During 2022, we also recorded a $11.9 million measurement period adjustment to
reduce the acquisition date balance of renewal commissions receivable upon the
expiration of the purchase price measurement period on June 30, 2022, one year
subsequent to the acquisition date of e-TeleQuote. The adjustment resulted from
the Company's reassessment of the estimates made by e-TeleQuote for variable
consideration expected for approved policies as of the acquisition date. The
reassessment of estimates involved the implementation of an enhanced algorithmic
model for processing historical lapse data and forecasting future policy
duration curves. For additional information on measurement period adjustments,
see Note 20 (Acquisition) to our consolidated financial statements included
elsewhere in this report.

Goodwill. In applying the acquisition method of accounting for the e-TeleQuote
business combination, amounts assigned to identifiable assets and liabilities
acquired are based on estimated fair values as of the date of acquisition,
subject to certain exceptions, with the remainder recorded as goodwill.
Significant judgment is used to determine the value of the acquired assets and
liabilities as well as the purchase consideration for non-controlling interests.
Key assumptions used to develop these estimates include projected revenue,
expenses, and cash flows, weighted average cost of capital, estimates of
customer turnover rates, estimates of terminal values, forward-looking estimates
of peer company values, and assessment of the probabilities of the earnout
metrics.

Goodwill is tested at the reporting unit level, all of which is attributable to
the Senior Health segment (which is defined as the reporting unit). The annual
date used by the Company to test goodwill for impairment is July 1. The Company
will also test goodwill for impairment between annual tests if an event occurs
or circumstances change that would more likely than not result in the fair value
of the Senior Health reporting unit being lower than its carrying value.

As of July 1, 2022, the Company performed a quantitative impairment analysis
using the income approach by preparing a discounted cash flow analysis to
determine the reporting unit's fair value. The discounted cash flow analysis
included key assumptions such as the weighted average cost of capital ("WACC"),
long-term growth rate, and projected operating results such as approved
policies, lifetime value of commissions, contract acquisition costs, operating
expenses, collections of renewal commissions receivable, and utilization of net
operating losses for income tax purposes. We did not utilize a market approach
as part of the quantitative impairment analysis because we believe management's
expectation of the cash flows generated by the reporting unit were more relevant
in determining the fair value given inherent limitations in the credibility of
available peer company data.

After the fair value of the reporting unit was determined, the Company
calculated its carrying value by taking the reporting unit's assets minus its
liabilities. The carrying value of the reporting unit was than compared to its
fair value to determine the extent of any goodwill impairment. Based on this
analysis, we recognized goodwill impairment charges of $60.0 million, which
represent the excess of the Senior Health reporting unit's carrying value over
its estimated fair value at July 1, 2022. The goodwill impairment charges

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recognized did not impact the Company's income tax expense as the goodwill
acquired from the e-TeleQuote acquisition does not have any tax basis. The
decline in the reporting unit's fair value below its carrying value was
primarily attributable to an increase in the market-based WACC used to discount
the forecasted cash flows. The increase in the WACC was driven by recent
increases in the equity market risk premium and higher interest rates. The
determination of whether the carrying value of the reporting unit exceeds its
fair value involves a high degree of estimation and can be affected by a number
of industry and company-specific risk factors that are subject to change over
time.

For additional information on goodwill, see Note 1 (Description of Business,
Basis of Presentation, and Summary of Significant Accounting Policies) and Note
21 (Goodwill) to our consolidated financial statements included elsewhere in
this report.

Invested Assets. We hold primarily fixed-maturity securities, including bonds
and redeemable preferred stocks. We have classified these invested assets as
available-for-sale, except for the securities of our U.S. broker-dealer
subsidiary, which we have classified as trading securities. We also hold a
credit-enhanced note, which we classified as a held-to-maturity security that
was issued in exchange for a surplus note (the "Surplus Note") with an equal
principal amount as part of a redundant reserve financing transaction. All of
these securities are carried at fair value, except for the held-to-maturity
security, which is carried at amortized cost. Unrealized gains and losses on
available-for-sale securities are included as a separate component of other
comprehensive income in our consolidated statements of comprehensive income.

We also hold equity securities, including common and non-redeemable preferred
stock. These equity securities are measured at fair value and changes in
unrealized gains and losses are recognized in net income. Changes in fair value
of trading securities are included in net income in the accompanying
consolidated statements of income in the period in which the change occurred.

Fair value. Fair value is the price that would be received upon the sale of an
asset in an orderly transaction between market participants at the measurement
date. Fair value measurements are based upon observable and unobservable inputs.
Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect our view of market assumptions in the absence of
observable market information. We classify and disclose all invested assets
carried at fair value in one of the three fair value measurement categories
prescribed by U.S. GAAP.

As of each reporting period, we classify all invested assets in their entirety
based on the lowest level of input that is significant to the fair value
measurement. Significant levels of estimation and judgment are required to
determine the fair value of certain of our investments. The factors influencing
these estimations and judgments are subject to change in subsequent reporting
periods.

Credit Losses for Available-for-sale Fixed-maturity Securities. For
available-for-sale securities in an unrealized loss position that we intend to
sell or would more-likely-than-not be required to sell before the expected
recovery of the amortized cost basis, we recognize the impairment as a credit
loss in our consolidated statements of income by writing down the amortized cost
basis to the fair value. For available-for-sale securities in an unrealized loss
position that we do not intend to sell or it is not more-likely-than-not that we
will be required to sell before the expected recovery of the amortized cost
basis, we recognize the portion of the impairment that is due to a credit loss
in our consolidated statements of income through an allowance. We reverse credit
losses previously recognized in the allowance in situations where the estimate
of credit losses on those securities has declined. We do not consider the length
of time an available-for-sale security has been in an unrealized loss position
when estimating credit losses.

Analyses that we perform to determine whether an impairment is due to a credit
loss or other factors involve the use of estimates, assumptions, and
subjectivity. We evaluate a number of quantitative and qualitative factors when
determining the credit loss on individual securities, including issuer-specific
risks as well as relevant macroeconomic risks. If these factors or future events
change, we could experience material credit losses recognized in our
consolidated statements of income for available-for-sale securities in future
periods, which could adversely affect our financial condition, results of
operations and the size and quality of our invested assets portfolio.

For additional information on our invested assets, see Note 1 (Description of
Business, Basis of Presentation, and Summary of Significant Accounting
Policies), Note 4 (Investments) and Note 5 (Fair Value of Financial Instruments)
to our consolidated financial statements included elsewhere in this report.

Results of Operations

Revenues. Our revenues consist of the following:
•
Net premiums. Reflects direct premiums payable by our policyholders on our
in-force insurance policies, primarily term life insurance, net of reinsurance
premiums that we pay to reinsurers.
•
Commissions and fees. Consists primarily of dealer re-allowances earned on the
sales of investment and savings products, trail commissions and management fees
based on the asset values of client accounts, marketing and distribution fees
from product originators, fees for non-bank custodial services rendered in our
capacity as nominee on client retirement accounts funded by mutual funds on our
servicing platform, transfer agent recordkeeping fees for mutual funds on our
servicing platform, and fees associated with the sale of other distributed
products. Also consists of commissions and fees earned from the distribution of
Medicare-related insurance products on behalf of health insurance carriers.

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•

Net investment income. Represents income, net of investment-related expenses,
generated by our invested asset portfolio, which consists primarily of interest
income earned on fixed-maturity investments. Investment income recorded on our
held-to-maturity invested asset and the offsetting interest expense recorded for
our Surplus Note are included in net investment income.
•
Investment gains (losses). Primarily reflects the difference between amortized
cost and amounts realized on the sale of available-for-sale securities, credit
losses recognized on available-for-sale securities and changes in the fair value
of equity securities.
•
Other, net. Reflects revenues generated from the fees charged for access to
Primerica Online ("POL"), our primary sales force support tool, marketing
development revenue received from health insurance carriers, as well as revenues
from the sale of other miscellaneous items.

Benefits and Expenses. Our operating expenses consist of the following:
•
Benefits and claims. Reflects the benefits and claims payable on insurance
policies, changes in our reserves for future policy claims and reserves for
other benefits payable, net of reinsurance.
•
Amortization of DAC. Represents the amortization of capitalized costs directly
associated with the sale of an insurance policy or segregated fund, including
sales commissions, medical examination and other underwriting costs, and other
eligible policy issuance costs.
•
Sales commissions. Represents commissions to the sales representatives in
connection with the sale of investment and savings products, and products other
than insurance products.
•
Insurance expenses. Reflects non-capitalized insurance expenses, including staff
compensation, technology and communications, insurance independent sales
force-related costs, printing, postage and distribution of insurance sales
materials, outsourcing and professional fees, premium taxes, and other corporate
and administrative fees and expenses related to our insurance operations.
Insurance expenses also include both indirect policy issuance costs and costs
associated with unsuccessful efforts to acquire new policies.
•
Insurance commissions. Reflects sales commissions with respect to insurance
products that are not eligible for deferral.
•
Contract acquisition costs. Reflects the total direct costs incurred to acquire
an approved policy during the period on Senior Health products. Contract
acquisition costs are primarily comprised of the cost to generate and acquire
compliant leads and the labor, benefits, incentive compensation and training
costs associated with our team of e-TeleQuote licensed health insurance agents.
The number of e-TeleQuote licensed health insurance agents, agent tenure and
attrition rate all impact CAC.
•
Interest expense. Reflects interest on our notes payable, any interest and the
commitment fee on our Revolving Credit Facility, the financing charges related
to the letter of credit issued under the credit facility agreement with Deutsche
Bank, fees paid for the credit enhancement feature on our held-to-maturity
invested asset, and a finance charge incurred pursuant to one of our coinsurance
agreements with an IPO coinsurer.
•
Goodwill impairment loss. Represents the excess of the Senior Health reporting
unit's carrying value over its estimated fair value.
•
Loss on extinguishment of debt. Consists primarily of the make whole premium
paid in 2021 to extinguish senior notes issued in 2012 prior to the scheduled
2022 maturity date.
•
Other operating expenses. Consists primarily of expenses that are unrelated to
the distribution of life insurance products, including staff compensation,
technology and communications, various sales force-related costs, non-bank
custodial and transfer agent recordkeeping administrative costs, outsourcing and
professional fees, and other corporate and administrative fees and expenses.

Insurance expenses and other operating expenses directly attributable to the
Term Life Insurance, Investment and Savings Products and Senior Health segments
are recorded directly to the applicable segment. We allocate certain other
revenue and operating expenses that are not directly attributable to a specific
operating segment using methods expected to reasonably measure the benefit
received by each reporting segment. Such methods include time studies, recorded
usage, revenue distribution, and sales force representative distribution. These
allocated items include fees charged for access to POL and costs incurred for
technology, sales force support, occupancy and other general and administrative
costs. Costs that are not directly charged or allocated to our three primary
operating segments are included in the Corporate and Other Distributed Products
segment.

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Primerica, Inc. and Subsidiaries Results. Our results of operations for the
years ended December 31, 2022, 2021, and 2020 were as follows:

                                            Year ended December 31,         

2022 vs. 2021 change 2021 vs. 2020 change (1)

                                     2022             2021           2020(1)              $              %             $               %
                                                                           (Dollars in thousands)
Revenues:
Direct premiums                  $  3,230,120     $  3,122,148     $  2,907,149     $     107,972           3 %    $  214,999             7 %
Ceded premiums                     (1,629,892 )     (1,616,264 )     (1,580,766 )          13,628           *          35,498             2 %
Net premiums                        1,600,228        1,505,884        1,326,383            94,344           6 %       179,501            14 %
Commissions and fees                  944,676        1,042,813          751,271           (98,137 )        (9 )%      291,542            39 %
Investment income net of
investment expenses                   156,987          142,795          141,287            14,192          10 %         1,508             1 %
Interest expense on surplus
note                                  (63,922 )        (62,207 )        (57,473 )           1,715           3 %         4,734             8 %
Net investment income                  93,065           80,588           83,814            12,477          15 %        (3,226 )          (4 )%
Realized investment gains
(losses)                                1,444            4,665            1,359            (3,221 )         *           3,306             *
Other investment gains
(losses)                               (2,439 )          1,207           (6,355 )          (3,646 )         *           7,562             *
Investment gains (losses)                (995 )          5,872           (4,996 )          (6,867 )         *          10,868             *
Other, net                             83,159           74,575           61,069             8,584          12 %        13,506            22 %
Total revenues                      2,720,133        2,709,732        2,217,541            10,401           *         492,191            22 %

Benefits and expenses:
Benefits and claims                   665,749          722,753          615,569           (57,004 )        (8 )%      107,184            17 %
Amortization of DAC                   356,143          251,179          224,321           104,964          42 %        26,858            12 %
Sales commissions                     462,764          522,308          376,636           (59,544 )       (11 )%      145,672            39 %
Insurance expenses                    235,405          202,605          188,117            32,800          16 %        14,488             8 %
Insurance commissions                  30,261           34,532           32,134            (4,271 )       (12 )%        2,398             7 %
Contract acquisition costs             68,431           52,788                -            15,643          30 %        52,788             *
Interest expense                       27,237           30,618           28,839            (3,381 )       (11 )%        1,779             6 %
Goodwill impairment loss               60,000           76,000                -           (16,000 )       (21 )%       76,000             *
Loss on extinguishment of debt              -            8,927                -            (8,927 )         *           8,927             *
Other operating expenses              320,394          296,851          245,195            23,543           8 %        51,656            21 %
Total benefits and expenses         2,226,384        2,198,561        1,710,811            27,823           1 %       487,750            29 %
Income before income taxes            493,749          511,171          506,730           (17,422 )        (3 )%        4,441             1 %
Income taxes                          125,775          139,191          120,566           (13,416 )       (10 )%       18,625            15 %
Net income                            367,974          371,980          386,164            (4,006 )        (1 )%      (14,184 )          (4 )%
Net income (loss) attributable
to noncontrolling interests            (5,038 )         (1,377 )              -            (3,661 )      (266 )%       (1,377 )           *
Net income attributable to
Primerica, Inc.                  $    373,012     $    373,357     $    386,164     $        (345 )         *      $  (12,807 )          (3 )%




(1)
Refer to the 2021 MD&A for discussions of 2020 items and comparisons between
2021 and 2020 financial results.
* Less than 1% or not meaningful

Total revenues. Total revenues increased in 2022 from 2021 primarily driven by
growth in net premiums in the Term Life segment. The increase in Term Life
segment net premiums was driven by incremental premiums on term life insurance
policies that are not subject to the IPO coinsurance transactions as well as the
layering effect of life insurance sales. Commissions and fees decreased due to
lower sales-based revenues driven by lower demand for variable annuity and
mutual funds investment products.

Net investment income increased in 2022 from 2021 due to $9.0 million from
higher yields in the invested asset portfolio and $5.4 million from a larger
invested asset portfolio compared to 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, 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 10 (Debt) to
our unaudited consolidated financial statements included elsewhere in this
report.

Investment gains (losses) decreased to a loss during 2022 compared to a gain in
2021 primarily due to a $2.4 million negative mark-to-market adjustment on
equity securities held within our investment portfolio in 2022 as a result of
negative equity market performance compared to a $2.4 million positive
mark-to-market adjustment on equity securities held within our investment
portfolio in the comparable 2021 period.

Other, net revenues increased in 2022 from 2021 primarily due to the timing of
the acquisition of e-TeleQuote on July 1, 2021. A full year of marketing
development revenue was included in the Senior Health segment in 2022 compared
to only six months in 2021. Also contributing to the increase in Other, net
revenues was an increase in fees received for access to POL, our primary sales
force support tool, consistent with subscriber growth.

Total benefits and expenses. Total benefits and expenses increased in 2022 from
2021 primarily due to growth in the amortization of DAC as a result of lower
year-over-year persistency in the Term Life Insurance segment's in-force book of
business, as well as higher

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contract acquisitions costs in the Senior Health segment as a result of the
acquisition of e-TeleQuote on July 1, 2021. Insurance and other operating
expenses were also higher during 2022 due to growth in the business and higher
costs associated with sales force leadership events, which included the biennial
convention. These increases were partially offset by lower COVID-19 related
claims experience in the Term Life Insurance segment, lower sales commissions in
line with lower commissions and fees revenue in the Investment and Savings
Products segment as discussed above and a lower non-cash goodwill impairment
charge in the Senior Health segment. In addition, total benefits and expenses in
2021 was negatively impacted by a $8.9 million loss on extinguishment of debt as
a result of the accelerated repayment of senior notes issued in 2012 that were
scheduled to mature in 2022.

Income taxes. Our effective income tax rate for 2022 was 25.5% compared to 27.2%
in 2021. The decrease in the effective tax rate in 2022 was driven by a smaller
non-cash goodwill impairment charge that is not deductible for income tax
purposes, state income tax benefits at e-TeleQuote and revaluation of Canadian
deferred tax assets as a result of a Canadian statutory rate increase.

Net income (loss) attributable to noncontrolling interests. The net loss
attributable to noncontrolling interest increased during 2022 compared to 2021
primarily due to higher operating losses incurred by the Senior Health segment
prior to the redemption of the noncontrolling interest on July 1, 2022.

For additional information, see the discussions of results of operations by
segment below.

Term Life Insurance Segment. Our results for the Term Life Insurance segment for
the years ended December 31, 2022, 2021, and 2020 were as follows:

                                             Year ended December 31,                    2022 vs. 2021 change         2021 vs. 2020 change(1)
                                      2022             2021           2020(1)              $               %             $               %
                                                                            (Dollars in thousands)
Revenues:
Direct premiums                   $  3,209,088     $  3,099,828     $  2,883,583     $     109,260            4 %    $  216,245             7 %
Ceded premiums                      (1,623,442 )     (1,609,598 )     (1,573,922 )          13,844            *          35,676             2 %
Net Premiums                         1,585,646        1,490,230        1,309,661            95,416            6 %       180,569            14 %
Allocated net investment income         51,160           36,486           27,030            14,674           40 %         9,456            35 %
Other, net                              50,320           48,970           46,079             1,350            3 %         2,891             6 %
Total revenues                       1,687,126        1,575,686        1,382,770           111,440            7 %       192,916            14 %
Benefits and expenses:
Benefits and claims                    649,530          703,897          593,948           (54,367 )         (8 )%      109,949            19 %
Amortization of DAC                    342,925          241,451          216,208           101,474           42 %        25,243            12 %
Insurance expenses                     230,796          197,262          182,471            33,534           17 %        14,791             8 %
Insurance commissions                   15,335           18,457           17,592            (3,122 )        (17 )%          865             5 %
Total benefits and expenses          1,238,586        1,161,067        1,010,219            77,519            7 %       150,848            15 %
Income before income taxes        $    448,540     $    414,619     $    372,551            33,921            8 %        42,068            11 %




(1)
Refer to the 2021 MD&A for discussions of 2020 items and comparisons between
2021 and 2020 financial results.
* Less than 1% or not meaningful

Net premiums. Direct premiums increased in 2022 from 2021 largely due to sales
of new policies that contributed to growth in the in-force book of business.
This is partially offset by an increase in ceded premiums, which includes $55.5
million in higher non-level YRT reinsurance ceded premiums as business not
subject to the IPO coinsurance transactions ages, reduced by $41.6 million in
lower coinsurance ceded premiums due to the run-off of business subject to the
IPO coinsurance transactions.

Allocated net investment income. Allocated net investment income increased in
2022 from 2021 due to an increase in the assumed net interest accreted to the
Term Life Insurance segment's future policy benefit reserve liability less
deferred acquisition costs as the Term Life Insurance segment's in-force
business continues to grow.

Benefits and claims. Benefits and claims decreased in 2022 from 2021 primarily
due to lower COVID-19 related claims experience. Total benefits and claims
during 2022 includes approximately $11 million of excess claims, net of
reinsurance compared to approximately $63 million of excess claims, net of
reinsurance in 2021.

Amortization of DAC. The amortization of DAC increased in 2022 from 2021
primarily due to higher policy lapse rates. During 2022, lapses on policies that
were issued during the height of the COVID-19 pandemic were higher than
historical trends. Lapses on policies issued prior to the onset of the COVID-19
pandemic continue to be moderately lower than historical trends.

Insurance expenses. Insurance expenses increased in 2022 from 2021 due to higher
costs associated with growth in the sales force and the business and higher
employee compensation costs. Also contributing to the increase were higher costs
associated with adding the previously postponed biennial convention to our
normal cycle of sales force leadership events.

Insurance commissions. Insurance commissions decreased in 2022 from 2021 as a
result of higher non-deferrable sales force promotional activities offered in
2021 to incentivize the independent sales force during the COVID-19 pandemic.



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Investment and Savings Products Segment. Our results of operations for the
Investment and Savings Products segment for the years ended December 31, 2022,
2021, and 2020 were as follows:

                                      Year ended December 31,               2022 vs. 2021 change         2021 vs. 2020 change(1)
                                 2022          2021         2020(1)            $               %             $              %
                                                                    (Dollars in thousands)
Revenues:
Commissions and fees:
Sales-based revenues           $ 326,378     $ 401,508     $ 284,651     $     (75,130 )        (19 )%   $  116,857           41 %
Asset-based revenues             434,053       441,303       339,904            (7,250 )         (2 )%      101,399           30 %
Account-based revenues            90,391        86,939        83,041             3,452            4 %         3,898            5 %
Other, net                        12,610        12,097        11,271               513            4 %           826            7 %
Total revenues                   863,432       941,847       718,867           (78,415 )         (8 )%      222,980           31 %
Expenses:
Amortization of DAC               12,141         8,668         7,055             3,473           40 %         1,613           23 %
Insurance commissions             13,834        14,904        13,184            (1,070 )         (7 )%        1,720           13 %
Sales commissions:
Sales-based                      234,711       287,359       201,148           (52,648 )        (18 )%       86,211           43 %
Asset-based                      206,838       206,201       154,572               637            *          51,629           33 %
Other operating expenses         156,578       150,130       140,264             6,448            4 %         9,866            7 %
Total expenses                   624,102       667,262       516,223           (43,160 )         (6 )%      151,039           29 %
Income before income taxes     $ 239,330     $ 274,585     $ 202,644     $     (35,255 )        (13 )%   $   71,941           36 %





(1)
Refer to the 2021 MD&A for discussions of 2020 items and comparisons between
2021 and 2020 financial results.
* Less than 1% or not meaningful

Commissions and fees. Commissions and fees decreased in 2022 from 2021 driven by
lower sales-based revenues in 2022 as investor demand for mutual fund products
and variable annuity products weakened due to volatility in capital markets.
Also contributing to the decrease in 2022 were lower asset-based revenues,
driven by negative equity market performance, partially offset by positive net
flows.

Amortization of DAC. Amortization of DAC increased in 2022 from 2021 due to
unfavorable market performance of the funds underlying our Canadian segregated
funds in 2022 compared to favorable market performance of such funds in 2021.

Sales commissions. The decrease in sales-based commissions in 2022 from 2021 was
generally in line with the decrease in sales-based revenue. Asset-based
commissions were relatively flat for 2022 and were consistent with the movement
in asset-based revenues, excluding the Canadian segregated funds revenue.
Asset-based expenses for our Canadian segregated funds are reflected within
insurance commissions and amortization of DAC.

Other operating expenses. Other operating expenses increased in 2022 from 2021
due to higher costs associated with adding the previously postponed biennial
convention to our normal cycle of sales force leadership events and higher
expenses to support growth in managed accounts assets.

Senior Health Segment. Our results of operations for the Senior Health segment
for the years ended December 31, 2022 and 2021 were as follows:

                                           Year ended December 31,                 2022 vs. 2021 change
                                          2022                  2021                 $                %
                                                            (Dollars in thousands)
Revenues:
Commissions and fees                $         47,420       $        50,903     $      (3,483 )           (7 )%
Other, net                                    15,262                 9,537             5,725             60 %
Total revenues                                62,682                60,440             2,242              4 %

Benefits and expenses:
Contract acquisition costs                    68,431                52,788            15,643             30 %
Goodwill impairment loss                      60,000                76,000           (16,000 )          (21 )%
Other operating expenses                      32,924                16,702            16,222             97 %
Total benefits and expenses                  161,355               145,490            15,865             11 %

Income (loss) before income taxes $ (98,673 ) $ (85,050 ) $ (13,623 ) (16 )%

Commissions and fees. Excluding the impact of tail revenue adjustments,
commissions and fees increased during 2022 compared to 2021 primarily due to the
timing of the acquisition of e-TeleQuote on July 1, 2021. As a result, 2022
includes a full year of operations compared to only six months in 2021. This
increase was completely offset by the recognition of $18.9 million of net
negative tail

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revenue adjustments in 2022 as a result of lower than expected renewals and
refined renewal estimates on policies approved in prior periods. The negative
tail revenue adjustment offset commissions and fees revenue of $66.3 million
recognized for the lifetime value of commissions for policies approved during
2022. In comparison, a negative tail adjustment of $4.9 million was recognized
during 2021. Also contributing to the year-over-year change in commissions and
fees in 2022 compared to 2021 was lower sales volume during AEP due to our
strategic initiative to limit the number of licensed health insurance agents.

Other, net. Marketing development revenue increased during 2022 compared to 2021
primarily due to the timing of the acquisition of e-TeleQuote on July 1, 2021.
As a result, 2022 includes a full year of operations compared to only six months
in 2021. Partially offsetting the increase in marketing development revenue was
lower year-over-year amounts earned during AEP in connection with lower
year-over-year AEP sales volumes in 2022 versus 2021.

Contract acquisition costs. Contract acquisition costs increased during 2022
compared to 2021 primarily due to the timing of the acquisition of e-TeleQuote
on July 1, 2021. As a result, a full year of operations are included in 2022
compared to only six months in 2021. This increase was partially offset by lower
costs in 2022 from reduced sales volumes as well as lower unit contract
acquisition costs attributable to a number of factors including revised lead
acquisition strategies, improved lead routing, and enhancements in agent
training.

Goodwill impairment loss. Goodwill impairment loss reflects the non-cash
goodwill impairment charge, which represents the excess of the Senior Health
reporting unit's carrying value over its estimated fair value.

Other operating expenses. Other operating expenses increased during 2022
compared to 2021 primarily due to the timing of the acquisition of e-TeleQuote
on July 1, 2021. As a result, 2022 includes a full year of operations compared
to only six months in 2021. Other operating expenses includes $11.0 million and
$5.8 million of amortization expense for acquired intangible assets and
internally developed software for 2022 and 2021, respectively.

Corporate and Other Distributed Products Segment. Our results of operations for
the Corporate and Other Distributed Products segment for the years ended
December 31, 2022, 2021, and 2020 were as follows:

                                       Year ended December 31,              2022 vs. 2021 change           2021 vs. 2020 change(1)
                                  2022          2021         2020(1)            $               %               $                %
                                                                       (Dollars in thousands)
Revenues:
Direct premiums                 $  21,032     $  22,320     $  23,566     $      (1,288 )        (6 )%   $        (1,246 )         (5 )%
Ceded premiums                     (6,450 )      (6,666 )      (6,844 )            (216 )        (3 )%              (178 )         (3 )%
Net Premiums                       14,582        15,654        16,722            (1,072 )        (7 )%            (1,068 )         (6 )%
Commissions and fees               46,434        62,160        43,675           (15,726 )       (25 )%            18,485           42 %
Allocated investment income
net of investment expenses        105,827       106,309       114,257              (482 )         *               (7,948 )         (7 )%
Interest expense on surplus
note                              (63,922 )     (62,207 )     (57,473 )           1,715           3 %              4,734            8 %
Allocated net investment
income                             41,905        44,102        56,784            (2,197 )        (5 )%           (12,682 )        (22 )%
Realized investment gains
(losses)                            1,444         4,665         1,359            (3,221 )         *                3,306            *
Other investment gains
(losses)                           (2,439 )       1,207        (6,355 )          (3,646 )         *                7,562            *
Investment gains (losses)            (995 )       5,872        (4,996 )          (6,867 )         *               10,868            *
Other, net                          4,967         3,971         3,719               996          25 %                252            7 %
Total revenues                    106,893       131,759       115,904           (24,866 )       (19 )%            15,855           14 %
Benefits and expenses:
Benefits and claims                16,219        18,856        21,621            (2,637 )       (14 )%            (2,765 )        (13 )%
Amortization of DAC                 1,077         1,060         1,058                17           2 %                  2            *
Insurance expenses                  4,609         5,343         5,646              (734 )       (14 )%              (303 )         (5 )%
Insurance commissions               1,092         1,171         1,358               (79 )        (7 )%              (187 )        (14 )%
Sales commissions                  21,215        28,748        20,916            (7,533 )       (26 )%             7,832           37 %
Interest expense                   27,237        30,618        28,839            (3,381 )       (11 )%             1,779            6 %
Loss on extinguishment of
debt                                    -         8,927             -            (8,927 )         *                8,927            *

Other operating expenses 130,892 130,019 104,931

         873           *               25,088           24 %

Total benefits and expenses 202,341 224,742 184,369

     (22,401 )       (10 )%            40,373           22 %

Loss before income taxes $ (95,448 ) $ (92,983 ) $ (68,465 ) $

      2,465           3 %    $        24,518           36 %




(1)
Refer the 2021 MD&A for discussions of 2020 items and comparisons between 2021
and 2020 financial results.
* Less than 1% or not meaningful

Total revenues. Total revenues decreased in 2022 from 2021 primarily due to
lower commissions and fees from our mortgage distribution business as a result
of rising interest rates. Also contributing to the decrease is investment
losses, which are discussed in the Primerica, Inc. and Subsidiaries Results
section above, and a decrease in net investment income as more net investment
income was allocated to the Term Life Insurance segment, which is discussed in
the Term Life Insurance Segment Results section above.

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Total Benefits and Expenses. Total benefits and expenses decreased in 2022 from
2021 due to lower sales commissions from our mortgage distribution business and
lower benefits and claims experienced on closed blocks of non-term life
insurance business underwritten by NBLIC. In addition, other operating expenses
in 2021 were higher due to transaction related expenses incurred in connection
with e-TeleQuote, the loss on extinguishment of debt as a result of the
accelerated repayment of senior notes scheduled to mature in 2022 and higher
interest expense. Interest expense in 2021 was higher than 2022 as a result of
borrowings on the Revolving Credit Facility to fund the e-TeleQuote acquisition
and an overlap of interest obligations due to the issuance of the Senior Notes
in November 2021 before the early extinguishment of our previous senior notes.

Financial Condition

Investments. Our insurance business is primarily focused on selling term life
insurance, which does not include an investment component for the policyholder.
The invested asset portfolio funded by premiums from our term life insurance
business does not involve the substantial asset accumulations and spread
requirements that exist with other non-term life insurance products. As a
result, the profitability of our term life insurance business is not as
sensitive to the impact that interest rates have on our invested asset portfolio
and investment income as the profitability of other companies that distribute
non-term life insurance products.

We follow a conservative investment strategy designed to emphasize the
preservation of our invested assets and provide adequate liquidity for the
prompt payment of claims. To meet business needs and mitigate risks, our
investment guidelines provide restrictions on our portfolio's composition,
including limits on asset type, per issuer limits, credit quality limits,
portfolio duration, limits on the amount of investments in approved countries
and permissible security types. We also manage and monitor our allocation of
investments to limit the accumulation of any disproportionate concentrations of
risk among industry sectors or issuer countries outside of the U.S. and Canada.
In addition, as of December 31, 2022, we did not hold any country of issuer
concentrations outside of the U.S. or Canada that represented more than 5% of
the fair value of our available-for-sale invested asset portfolio or any
industry concentrations of corporate bonds that represented more than 10% of the
fair value of our available-for-sale invested asset portfolio.

We invest a portion of our portfolio in assets denominated in Canadian dollars
to support our Canadian operations. Additionally, to ensure adequate liquidity
for payment of claims, we take into account the maturity and duration of our
invested asset portfolio and our general liability profile.

We also hold within our invested asset portfolio a credit enhanced note ("LLC
Note") issued by a limited liability company owned by a third-party service
provider which is classified as a held-to-maturity security. The LLC Note, which
is scheduled to mature on December 31, 2030, was obtained in exchange for the
Surplus Note of equal principal amount issued by Vidalia Re, a special purpose
financial captive insurance company and wholly owned subsidiary of Primerica
Life Insurance Company ("Primerica Life"). For more information on the LLC Note,
see Note 4 (Investments) to our consolidated financial statements included
elsewhere in this report.

We have an investment committee composed of members of our senior management
team that is responsible for establishing and maintaining our investment
guidelines and supervising our investment activity. Our investment committee
regularly monitors our overall investment results and our compliance with our
investment objectives and guidelines. We use a third-party investment advisor to
assist us in the management of our investing activities. Our investment advisor
reports to our investment committee.

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. For example, the significant increase in interest
rates during 2022 resulted in the invested asset portfolio having an unrealized
loss of $305.9 million as of December 31, 2022 compared to an unrealized gain of
$81.2 million as of December 31, 2021. 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.

Details on asset mix (excluding our held-to-maturity security) were as follows:

                                  December 31, 2022           December 31, 2021
                                              Cost or                     Cost or
                                             amortized                   amortized
                              Fair value       cost       Fair value       cost
U.S. government and
agencies                          1%            1%            1%            1%
Foreign government                5%            5%            5%            5%
States and political
subdivisions                      4%            4%            5%            5%
Corporates                        48%           49%           53%           52%
Mortgage- and asset-backed
securities                        22%           23%           20%           20%
Short-term investments            2%            2%            2%            3%
Equity securities                 1%            1%            1%            1%
Trading securities                1%            1%            1%            1%
Cash and cash equivalents         16%           14%           12%           12%
Total                            100%          100%          100%          100%




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The composition and duration of our portfolio will vary depending on several
factors, including the yield curve and our opinion of the relative value among
various asset classes. The proportion of the invested asset portfolio invested
in corporate bonds decreased and the proportion invested in mortgage- and
asset-backed securities increased from 2021 to 2022 as a result of our view of
the relative value between those asset classes. The year-end average rating,
duration and book yield of our fixed-maturity portfolio (excluding our
held-to-maturity security) were as follows:

                                               December 31, 2022   December 31, 2021
Average rating of our fixed-maturity
portfolio                                              A                   A
Average duration of our fixed-maturity
portfolio                                          4.7 years           4.8 

years

Average book yield of our fixed-maturity
portfolio                                            3.44%               3.12%

The increase in the average book yield of our fixed-maturity portfolio as of
December 31, 2022 reflects the rise in market interest rates in 2022.

Ratings for our investments in fixed-maturity securities are determined using
Nationally Recognized Statistical Rating Organizations designations and/or
equivalent ratings. The distribution of our investments in fixed-maturity
securities (excluding our held-to-maturity security) by rating, including those
classified as trading securities, were as follows:

                               December 31, 2022                  December 31, 2021
                          Amortized cost (1)        %        Amortized cost (1)        %
                                              (Dollars in thousands)
AAA                      $            606,982        22 %   $            495,055        19 %
AA                                    321,450        11 %                312,418        12 %
A                                     688,936        25 %                644,775        24 %
BBB                                 1,120,096        40 %              1,079,123        41 %
Below investment grade                 67,450         2 %                 93,294         4 %
Not rated                                 199         *                   21,078         *
Total                    $          2,805,113       100 %   $          2,645,743       100 %




(1)
Includes trading securities at carrying value and available-for-sale securities
at amortized cost.
* Less than 1%.

The ten largest holdings within our fixed-maturity securities invested asset
portfolio (excluding our held-to-maturity security) were as follows:

                                                                 December 31, 2022
                                                              Amortized        Unrealized       Credit
Issuer                                       Fair value        cost (1)        gain (loss)      rating
                                                              (Dollars in thousands)
Government of Canada                         $    20,709     $     22,122     $      (1,413 )    AAA
Province of Quebec Canada                         16,052           16,658              (606 )     A+
Province of Ontario Canada                        14,139           14,708              (569 )     AA
Ontario Teachers' Pension Plan                    12,538           14,327            (1,789 )    AA+
Province of Alberta Canada                        11,727           12,819            (1,092 )    BBB+
Morgan Stanley                                    11,304           11,782              (478 )    BBB+
Manulife Financial Corp                           10,603           11,592              (989 )     A
TC Energy Corp                                    10,240           11,656            (1,416 )    BBB+
ConocoPhillips                                     9,249           10,697            (1,448 )     A
Province of Saskatchewan Canada                    9,247            9,634              (387 )     AA
Total - ten largest holdings                 $   125,808     $    135,995     $     (10,187 )
Total - fixed-maturity securities            $ 2,499,154     $  2,805,113
Percent of total fixed-maturity securities             5 %              5 %

(1)

Includes trading securities at carrying value and available-for-sale securities
at amortized cost.

For additional information on our invested asset portfolio, see Note 4
(Investments) and Note 5 (Fair Value of Financial Instruments) to our
consolidated financial statements included elsewhere in this report.

Other Significant Assets and Liabilities. The balances of and changes in other
significant assets and liabilities were as follows:

                                                December 31,                   Change
                                            2022            2021             $           %
                                                       (Dollars in thousands)
Assets:
Reinsurance recoverables                 $ 4,015,909     $ 4,268,419     $ (252,510 )     (6 )%
Deferred policy acquisition costs, net     3,081,886       2,943,782        138,104        5 %
Liabilities:
Future policy benefits                   $ 7,390,800     $ 7,138,649     $  252,151        4 %




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Reinsurance recoverables. Reinsurance recoverables reflects future policy
benefit reserves and claim reserves ceded to reinsurers, including the IPO
coinsurers. Reinsurance recoverables as of December 31, 2022 decreased compared
with December 31, 2021 primarily due to lower pending COVID-19 claims ceded to
reinsurers, the translation impact on Canadian reinsurance recoverables due to
the strengthening U.S. dollar, and the continued runoff of the IPO book of
business.

Deferred policy acquisition costs, net. The increase in DAC was primarily a
result of the cumulative impact of incremental commissions and expenses deferred
as a result of new business in 2022 not subject to the IPO coinsurance
agreements, partially offset by higher year-over-year amortization due to the
decline in term life insurance persistency.

Future policy benefits. The increase in future policy benefits was a result of
continued growth in our in-force book of business, partially offset by releases
in reserves due to weaker year-over-year persistency.

For additional information, see the notes to our consolidated financial
statements included elsewhere in this report.

Liquidity and Capital Resources

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. During 2022, our life insurance underwriting companies declared and
paid ordinary dividends of $277.9 million to the Parent Company. See Note 15
(Statutory Accounting and Dividend Restrictions) to our consolidated financial
statements included elsewhere in this report for more information on insurance
subsidiary dividends and statutory restrictions. In addition, in 2022 our
non-life insurance subsidiaries declared and paid dividends of $173.0 million to
the Parent Company. At December 31, 2022, the Parent Company had cash and
invested assets of $306.9 million.

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, Medicare-related insurance plans 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, contract acquisition
costs, insurance and other operating expenses, interest expense for future
policy benefit reserves financing transactions, and income taxes.

The distribution and underwriting of term life insurance requires upfront cash
outlays at the time the policy is issued as we pay a substantial majority of the
sales commission during the first year following the sale of a policy and incur
costs for underwriting activities at the inception of a policy's term. During
the early years of a policy's term, we generally receive level term premiums in
excess of claims paid. We invest the excess cash generated during earlier policy
years in fixed-maturity and equity securities held in support of future policy
benefit reserves. In later policy years, cash received from the maturity or sale
of invested assets is used to pay claims in excess of level term premiums
received.

e-TeleQuote is a senior health insurance distributor of Medicare-related
insurance plans. e-Tele-Quote collects cash receipts over a number of years
after selling a plan, while the cash outflow for commission expense and other
acquisition costs to sell the plans are generally recognized at the time of
enrollment. Therefore, in periods of growth, net cash flows at e-TeleQuote are
expected to be negative, which may require the Parent Company to provide working
capital to e-TeleQuote. During the year ended December 31 2022, as a result of
the Company's efforts to scale back e-TeleQuote's growth in favor of developing
more efficient lead procurement and limiting the number of licensed health
insurance agents, the Parent Company did not provide funding to e-TeleQuote as
cash tax benefits from net operating losses were sufficient to cover operating
needs.

Historically, cash flows generated by our businesses, primarily from our
existing block of term life policies and our investment and savings products,
have provided us with sufficient liquidity to meet our operating requirements.
We anticipate that cash flows from our businesses will continue to provide
sufficient operating liquidity over the next 12 months.

If necessary, we could seek to enhance our liquidity position or capital
structure through sales of our available-for-sale investment portfolio, changes
in the timing or amount of share repurchases, borrowings against our revolving
credit facility, or some combination of these sources. Additionally, we believe
that cash flows from our businesses and potential sources of funding will
sufficiently support our long-term liquidity needs.

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Cash Flows. The components of the changes in cash and cash equivalents were as
follows:

                                                         Year ended December 31,
                                                   2022           2021          2020(1)
                                                             (In thousands)
Net cash provided by (used in) operating
activities                                      $  757,665     $  656,956     $   643,417
Net cash provided by (used in) investing
activities                                        (200,048 )     (923,383 )       (53,529 )
Net cash provided by (used in) financing
activities                                        (457,850 )      107,974        (301,790 )
Effect of foreign exchange rate changes on
cash                                                (3,028 )        3,385   

2,595

Change in cash and cash equivalents             $   96,739     $ (155,068 )   $   290,693



(1)

Refer to the 2021 MD&A for discussions of 2020 items and comparisons between
2021 and 2020 financial results.

Operating Activities. Cash provided by operating activities increased in 2022
from 2021. Although net income decreased slightly during 2022, cash generated
from operating activities increased as it excludes non-cash charges such as
amortization of deferred policy acquisition costs, goodwill impairments and
renewal commissions tail adjustments. Also contributing to the year-over-year
increase in cash provided by operating activities were lower cash outlays for
deferred acquisition costs due to lower term life policy sales.

Investing Activities. Cash used in investing activities decreased in 2022 from
2021 primarily due to funding the acquisition of e-TeleQuote on July 1, 2021.
Also contributing to the decrease were lower purchases of securities in the
invested assets portfolio. In 2021, purchases of securities were higher as the
Company deployed the net cash received from the issuance of the Senior Notes.

Financing Activities. Financing activities was a use of cash during 2022
compared to a source of cash during 2021. This movement is primarily due to cash
used to fund share repurchases during 2022. By comparison, the Company paused
share repurchases during 2021 to accumulate cash to fund the acquisition of
e-TeleQuote. In addition, during 2021 cash provided by financing activities
included cash received from the issuance of the Senior Notes partially offset by
the early extinguishment of our previous senior notes that were scheduled to
mature in 2022.

Risk-Based Capital ("RBC"). The National Association of Insurance Commissioners
("NAIC") has established RBC standards for U.S. life insurers, as well as a
risk-based capital model act (the "RBC Model Act") that has been adopted by the
insurance regulatory authorities. The RBC Model Act requires that life insurers
annually submit a report to state regulators regarding their RBC based upon four
categories of risk: asset risk; insurance risk; interest rate risk and business
risk. The capital requirement for each is determined by applying factors that
vary based upon the degree of risk to various asset, premiums and policy benefit
reserve items. The formula is an early warning tool to identify possible weakly
capitalized companies for purposes of initiating further regulatory action.

As of December 31, 2022, our U.S. life insurance subsidiaries maintained
statutory capital and surplus substantially in excess of the applicable
regulatory requirements and remain well positioned to support existing
operations and fund future growth.

In Canada, an insurer's minimum capital requirement is overseen by the Office of
the Superintendent of Financial Institutions ("OSFI") and determined as the sum
of the capital requirements for five categories of risk: asset default risk;
mortality/morbidity/lapse risks; changes in interest rate environment risk;
segregated funds risk; and foreign exchange risk. As of December 31, 2022,
Primerica Life Insurance Company of Canada was in compliance with Canada's
minimum capital requirements as determined by OSFI.

For more information regarding statutory capital requirements and dividend
capacities of our insurance subsidiaries, see Note 15 (Statutory Accounting and
Dividend Restrictions) to our consolidated financial statements included
elsewhere in this report.

Redundant Reserve Financings. The Model Regulation entitled Valuation of Life
Insurance Policies, commonly known as Regulation XXX, requires insurers to carry
statutory policy benefit reserves for term life insurance policies with
long-term premium guarantees which are often significantly in excess of the
future policy benefit reserves that insurers deem necessary to satisfy claim
obligations ("redundant policy benefit reserves"). Accordingly, many insurance
companies have sought ways to reduce their capital needs by financing redundant
policy benefit reserves through bank financing, reinsurance arrangements and
other financing transactions.

We have established Peach Re, Inc. ("Peach Re") and Vidalia Re as special
purpose financial captive insurance companies and wholly owned subsidiaries of
Primerica Life. Primerica Life has ceded certain term life policies issued prior
to 2011 to Peach Re as part of a Regulation XXX redundant reserve financing
transaction (the "Peach Re Redundant Reserve Financing Transaction") and has
ceded certain term life policies issued in 2011 through 2017 to Vidalia Re as
part of a Regulation XXX redundant reserve financing transaction (the "Vidalia
Re Redundant Reserve Financing Transaction"). These redundant reserve financing
transactions allow us to more efficiently manage and deploy our capital.

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
date. See Note 4 (Investments), Note 10

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(Debt) and Note 16 (Commitments and Contingent Liabilities) to our consolidated
financial statements included elsewhere in this report for more information on
these redundant reserve financing transactions.

Notes Payable - Long term. The Company has $600.0 million of publicly-traded
Senior Notes outstanding issued at a price of 99.550% with an annual interest
rate of 2.80%, payable semi-annually in arrears on May 19 and November 19. The
Senior Notes are scheduled to mature on November 19, 2031. We were in compliance
with the covenants of the Senior Notes at December 31, 2022. No events of
default occurred on the Senior Notes during the year ended December 31, 2022.

Notes Payable - Short term. On July 1, 2021, as part of the acquisition of
e-TeleQuote, Primerica Health, Inc. ("Primerica Health") issued a $15.0 million
majority shareholder note due July 1, 2022. This note was retired during the
year ended December 31, 2022.

Financial Ratings. As of December 31, 2022, the investment grade credit ratings
for our Senior Notes were as follows:

     Agency         Senior Notes rating
Moody's             Baa1, stable outlook
Standard & Poor's   A-, stable outlook
A.M. Best Company   a-, stable outlook


As of December 31, 2022, Primerica Life's financial strength ratings were as
follows:

     Agency         Financial strength rating
Moody's             A1, stable outlook
Standard & Poor's   AA-, stable outlook
A.M. Best Company   A+, stable outlook

Securities Lending. We participate in securities lending transactions with
brokers to increase investment income with minimal risk. See Note 4
(Investments) to our consolidated financial statements included elsewhere in
this report for additional information.

Surplus Note. Vidalia Re issued a Surplus Note in exchange for the LLC Note as a
part of the Vidalia Re Redundant Reserve Financing Transaction. The Surplus Note
has a principal amount equal to the LLC Note and is scheduled to mature on
December 31, 2030. For more information on the Surplus Note, see Note 10 (Debt)
to our consolidated financial statements included elsewhere in this report.

Off-Balance Sheet Arrangements. We have no transactions, agreements or other
contractual arrangements to which an entity unconsolidated with the Company is a
party, under which the Company maintains any off-balance sheet obligations or
guarantees as of December 31, 2022.

Credit Facility Agreement. We maintain an unsecured $200.0 million Revolving
Credit Facility with a syndicate of commercial banks that has a scheduled
termination date of June 22, 2026. Amounts outstanding under the Revolving
Credit Facility bear interest at a periodic rate equal to the London Interbank
Offered Rate ("LIBOR") or the base rate, plus in either case an applicable
margin. The Revolving Credit Facility contains language that allows for the
Company and the lenders to agree on a comparable or successor reference rate in
the event LIBOR is no longer available. The Revolving Credit Facility also
permits the issuance of letters of credit. The applicable margins are based on
our debt rating with such margins for LIBOR rate loans and letters of credit
ranging from 1.000% to 1.625% per annum and for base rate loans ranging from
0.000% to 0.625% per annum. Under the Revolving Credit Facility, we incur a
commitment fee that is payable quarterly in arrears and is determined by our
debt rating. This commitment fee ranges from 0.100% to 0.225% per annum of the
aggregate $200.0 million commitment of the lenders under the Revolving Credit
Facility. As of December 31, 2022, no amounts were outstanding under the
Revolving Credit Facility and we were in compliance with its covenants.
Furthermore, no events of default occurred under the Revolving Credit Facility
in 2022.

Contractual Obligations. Our material cash requirements from known contractual
and other obligations primarily consist of following:

Future Policy Benefits. Our liability for future policy benefits, which is
presented in the consolidated balance sheets, represents the present value of
estimated future policy benefits to be paid, less the present value of estimated
future net benefit premiums to be collected. Net benefit premiums represent the
portion of gross premiums required to provide for all benefits and associated
expenses. These benefit payments are contingent on policyholders continuing to
renew their policies and make their premium payments. We expect to fully fund
the obligations for future policy benefits from cash flows from general account
invested assets, claims reimbursed by reinsurers, and from future premiums.

Policy Claims. Policy claims, which is presented in the consolidated balance
sheets and Note 9 (Policy Claims and Other Benefits Payable) to our consolidated
financial statements included elsewhere in this report, represents claims and
benefits that have been incurred but not paid to policyholders and are assumed
to be due within a year.

Other Policyholder Funds. Other policyholders' funds, which is presented in the
consolidated balance sheet, primarily represent claim payments left on deposit
with us that are payable on demand.

Notes Payable and Interest Obligations. We have debt obligations for the
principal balance of our Senior Notes, which is presented in the consolidated
balance sheets and described further in Note 10 (Debt) to our consolidated
financial statements included elsewhere in

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the report. We also maintain interest obligations for interest on our Senior
Notes, the commitment fee on our Revolving Credit Facility, the financing
charges related to an issued letter of credit, fees paid for the credit
enhancement feature on the LLC Note and a finance charge incurred pursuant to
one of our IPO coinsurance agreements as of December 31, 2022. We did not expect
the principal or interest on the Surplus Note will result in any cash
requirements as the payments due for these items are contractually offset by the
principal and interest on the LLC Note as long as we hold the LLC Note. The
Company asserts its positive intent and ability to hold the LLC Note until
maturity.

Lease Obligations. Our lease obligations primarily represent payments for
operating leases related to office space. For additional information on leases
see Note 19 (Leases) to our consolidated financial statements included elsewhere
in this report.

For additional information concerning our commitments and contingencies, see
Note 16 (Commitments and Contingent Liabilities) to our consolidated financial
statements included elsewhere in this report.