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What changed in CNO Financial Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CNO Financial Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+483 added−450 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-26)

Top changes in CNO Financial Group, Inc.'s 2025 10-K

483 paragraphs added · 450 removed · 386 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

121 edited+24 added−22 removed219 unchanged
Biggest changeCongress has considered, from time to time, possible changes to the U.S. tax laws, including elimination of the tax deferral on the accretion of value of certain annuities and life insurance products. It is possible that further tax legislation will be enacted which would contain provisions with possible adverse effects on our annuity and life insurance products.
Biggest changeIt is possible that further tax legislation will be enacted which would contain provisions with possible adverse effects on our annuity and life insurance products. Our U.S. based insurance company subsidiaries are taxed under the life insurance company provisions of the Code.
State laws regulate the use and disclosure of personal information, such as social security numbers and other identifiers, and federal and state laws require notice to affected individuals, law enforcement, regulators and others if there is a breach of the security of certain personal information, including social security numbers, financial information, and other identifiers.
State laws regulate the use and disclosure of personal information, such as social security numbers and other identifiers, and federal and state laws require notice to affected individuals, law enforcement, regulators and others if there is a breach of the security of certain personal information, including social security numbers, financial information, and certain other identifiers.
Depending on the credit option chosen, that interest is based on a fixed interest rate, guaranteed for the annual crediting period, or the price return of the underlying index (the S&P 500 index or the Morningstar US Dividend Growth Barclays 5 percent VC index) subject to a participation rate (receiving a portion of the appreciation) or a cap rate (receiving all appreciation up to the cap); any indexed option return is subject to a 0 percent floor.
Depending on the credit option chosen, that interest is based on a fixed interest rate, guaranteed for the annual crediting period, or the price return of the underlying index (typically the S&P 500 index or the Morningstar US Dividend Growth Barclays 5 percent VC index) subject to a participation rate (receiving a portion of the appreciation) or a cap rate (receiving all appreciation up to the cap); any indexed option return is subject to a 0 percent floor.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act are available free of charge on our website at www.CNOinc.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (the "SEC").
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act are available free of charge on our website at www.CNOinc.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.
The principle-based reserving approach has been adopted by all states, where it has been effective for life insurance and certain annuity products issued on or after January 1, 2020. Similar reserving requirements for additional products are expected to be implemented over time.
The principle-based reserving ("PBR") approach has been adopted by all states, where it has been effective for life insurance and certain annuity products issued on or after January 1, 2020. Similar reserving requirements for additional products are expected to be implemented over time.
CNO became the successor to Conseco, Inc., an Indiana corporation (our "Predecessor"), in connection with a bankruptcy reorganization which became effective on September 10, 2003. Our Predecessor was organized in 1979 and commenced operations in 1982. Data in Item 1. are provided as of or for the year ended December 31, 2024 (as the context implies), unless otherwise indicated.
CNO became the successor to Conseco, Inc., an Indiana corporation (our "Predecessor"), in connection with a bankruptcy reorganization, which became effective on September 10, 2003. Our Predecessor was organized in 1979 and commenced operations in 1982. Data in Item 1. are provided as of or for the year ended December 31, 2025 (as the context implies), unless otherwise indicated.
Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for purposes of measuring statutory surplus, and, in some instances, would require divestiture of such non-qualifying investments. The investments made by our insurance subsidiaries complied in all material respects with such investment regulations as of December 31, 2024.
Failure to comply with these laws and regulations would cause investments exceeding regulatory limitations to be treated as non-admitted assets for purposes of measuring statutory surplus, and, in some instances, would require divestiture of such non-qualifying investments. The investments made by our insurance subsidiaries complied in all material respects with such investment regulations as of December 31, 2025.
The Inflation Reduction Act also introduces a 1 percent excise tax on share buybacks, effective for tax years beginning in 2023. We continue to monitor developments and regulations associated with the Inflation Reduction Act for any potential future impacts on our business, results of operations and financial condition.
The Inflation Reduction Act also introduced a 1 percent excise tax on share buybacks, effective for tax years beginning in 2023. We continue to monitor developments and regulations associated with the Inflation Reduction Act for any potential future impacts on our business, results of operations and financial condition.
Graded benefit life insurance products are offered on an individual basis primarily to persons age 50 to 85, principally in face amounts of $400 to $50,000, with limited or no medical examination or evidence of insurability. Premiums are paid as frequently as monthly.
Graded benefit life insurance products are offered on an individual basis primarily to persons aged 50 to 85, principally in face amounts of $400 to $50,000, with limited or no medical examination or evidence of insurability. Premiums are paid as frequently as monthly.
In the event that we fail to maintain minimum mandated benefit ratios, our insurance subsidiaries could be required to provide retrospective refunds and/or prospective rate reductions. As of December 31, 2024, we believe that our insurance subsidiaries have provided retrospective refunds, prospective rate reductions, and/or benefit increases when required.
In the event that we fail to maintain minimum mandated benefit ratios, our insurance subsidiaries could be required to provide retrospective refunds and/or prospective rate reductions. As of December 31, 2025, we believe that our insurance subsidiaries have provided retrospective refunds, prospective rate reductions, and/or benefit increases when required.
CCPA provides for enhanced privacy rights for California consumers, including the right to know what personal information a business has collected and/or shared with third parties, the right to delete personal information held by a business, and the right to limit certain processing or use of such information.
CCPA provides for enhanced privacy rights for California consumers, including the right to know what personal information a business has collected and/or shared with third parties about the consumer, the right to delete personal information held by a business, and the right to limit certain processing or use of such information.
Further, numerous state regulatory bodies are focused on security and privacy requirements for companies that collect personal information and various state legislatures have proposed and enacted legislation and regulations regarding data protection standards and protocols, and the area of cybersecurity has also come under increased scrutiny by state insurance regulators.
Further, numerous state regulatory bodies are focused on security and privacy requirements for companies that collect personal information, and various state legislatures have proposed and enacted legislation and regulations regarding data protection standards and protocols; the area of cybersecurity has also come under increased scrutiny by state insurance regulators in recent years.
The NAIC Financial Analysis Handbook provides guidance for insurance regulators on reviewing GCC submissions. We cannot predict what impact this regulatory tool may have on our business. The NAIC is focused on enhancing regulatory oversight of insurers' investments in complex assets, such as leveraged loans and CLOs.
The NAIC Financial Analysis Handbook provides guidance for insurance regulators on reviewing GCC submissions. We cannot predict what impact this regulatory tool may have on our business. The NAIC is focused on enhancing regulatory oversight of insurers' investments in complex assets, such as leveraged loans and collateralized loan obligations ("CLOs").
We reward overall and individual performance that drives long-term success for the company and our associates. • Health and Well-being Supporting our associates' physical, emotional and financial well-being is at the center of how we engage our workforce. Our comprehensive associate benefits include medical, dental and vision insurance coverage as well as an extensive well-being program.
We reward overall and individual performance that drives long-term success for the company and our associates. • Health and Well-being Supporting associates' overall well-being is at the center of how we engage our workforce. Our comprehensive associate benefits include medical, dental and vision insurance coverage as well as an extensive well-being program.
The 2024 annual statutory financial statements of each of our U.S. based insurance subsidiaries reflect total adjusted capital in excess of the levels that would subject such subsidiaries to any regulatory action. NAIC developments related to the RBC framework are described below. • Interest Maintenance Reserve.
The 2025 annual statutory financial statements of each of our U.S. based insurance subsidiaries reflect total adjusted capital in excess of the levels that would subject such subsidiaries to any regulatory action. NAIC developments related to the RBC framework are described below. • Interest Maintenance Reserve ("IMR").
In September 2023, the California legislature passed a law that will require firms with annual revenues of over $1.0 billion that do business in the state to publicly report their greenhouse gas emissions, beginning in 2026 for calendar year 2025.
In September 2023, the California legislature passed a law that will require firms with annual revenues of over $1.0 billion that do business in the state to publicly report their greenhouse gas emissions, beginning in 2026 for calendar year 2025 subject to certain exceptions.
The top writer of individual long-term care insurance had new annualized premiums with a market share of approximately 38 percent during the period. Many of our major competitors have higher financial strength ratings than we do. Industry consolidation, including business combinations among insurance and other financial services companies, has resulted in larger competitors with even greater financial resources.
The top writer of individual long-term care insurance had new annualized premiums with a market share of 37.2 percent during the period. Many of our major competitors have higher financial strength ratings than we do. Industry consolidation, including business combinations among insurance and other financial services companies, has resulted in larger competitors with even greater financial resources.
PIPA regulates the use of personal information across all industry sectors granting individuals’ rights such as access, rectification and erasure of their personal information, and imposing organizational transparency and governance requirements including the appointment of a privacy officer. PIPA is enforced by the Office of the Privacy Commissioner.
PIPA regulates the use of personal information across all industry sectors granting individuals' 27 Table of Contents rights such as access, rectification and erasure of their personal information, and imposing organizational transparency and governance requirements including the appointment of a privacy officer. PIPA is enforced by the Office of the Privacy Commissioner.
In marketing these products, we currently concentrate on individuals who have recently become eligible for Medicare by reaching the age of 65. Approximately 58 percent of new sales of Medicare supplement policies in 2024 were within the seven month open enrollment period that begins three months before an individual reaches age 65. Long-Term Care.
In marketing these products, we currently concentrate on individuals who have recently become eligible for Medicare by reaching the age of 65. Approximately 56 percent of new sales of Medicare supplement policies in 2025 were within the seven month open enrollment period that begins three months before an individual reaches age 65. Long-Term Care.
At any time during the process, an alternate CRP credit rating may be requested and if one is received, it will be incorporated in the filing exempt process. The amendment to the P&P Manual is scheduled to become effective on January 1, 2026.
At any time during the process, an alternate CRP credit rating may be requested and if one is received, it will be incorporated in the filing exempt process. The amendment to the P&P Manual became effective on January 1, 2026.
Certain data processing which is otherwise regulated, including under the Gramm-Leach-Bliley Act ("GLBA"), is excluded from the CCPA; however, this is not an entity-wide exclusion. The California Privacy Rights Act, which established the California Privacy Protection Agency, amended the CCPA to include new rights to consumers and came into effect on January 1, 2023.
Certain data processing which is otherwise regulated, including under the Gramm-Leach-Bliley Act ("GLBA") and HIPAA, are excluded from the CCPA; however, this is not an entity-wide exclusion. The California Privacy Rights Act, which established the California Privacy Protection Agency, amended the CCPA to include new consumer rights and came into effect on January 1, 2023.
We had premium collections of $4.4 billion, $4.1 billion and $4.1 billion in 2024, 2023 and 2022, respectively. Our insurance subsidiaries collectively hold licenses to market our insurance products in all fifty states, the District of Columbia, and certain protectorates of the United States.
We had premium collections of $4.6 billion, $4.4 billion and $4.1 billion in 2025, 2024 and 2023, respectively. Our insurance subsidiaries collectively hold licenses to market our insurance products in all fifty states, the District of Columbia, and certain protectorates of the United States.
The BSCR model is a risk-based capital model which provides a method for determining an insurer’s capital requirements (statutory economic capital and surplus) by taking into account the risk characteristics of different aspects of the Class C insurer’s business.
The BSCR model is a risk-based capital model which provides a 25 Table of Contents method for determining an insurer's capital requirements (statutory economic capital and surplus) by taking into account the risk characteristics of different aspects of the Class C insurer's business.
HUMAN CAPITAL As of December 31, 2024, we employed approximately 3,500 full-time associates, nearly all of whom are located in the United States. Currently, none of our associates are represented under collective bargaining agreements and we enjoy generally favorable employee relations. CNO associates are among our most important resources.
HUMAN CAPITAL As of December 31, 2025, we employed approximately 3,300 full-time associates, nearly all of whom are located in the United States. Currently, none of our associates are represented under collective bargaining agreements and we enjoy generally favorable employee relations. CNO associates are among our most important resources.
Approximately 66 percent of the total number of our supplemental health policies inforce were sold with return of premium or cash value riders.
Approximately 64 percent of the total number of our supplemental health policies inforce were sold with return of premium or cash value riders.
Our main competitors for life insurance sold through direct marketing channels include Mutual of Omaha, Globe Life, Inc., TruStage, Gerber Life, and AAA Life Insurance. Our main competitors for supplemental health products sold through our Worksite Division include AFLAC, subsidiaries of Unum, MetLife and subsidiaries of Globe Life Inc.
Our main competitors for life insurance sold through direct marketing channels include Mutual of Omaha, Globe Life, Inc., TruStage, AAA Life Insurance, and Gerber Life. Our main competitors for supplemental health products sold through our Worksite Division include AFLAC, subsidiaries of Unum, MetLife, Chubb/Combined, and Voya.
Based on a 2023 Medicare Supplement Earned Premium report, we ranked seventh in direct premiums earned for Medicare supplement insurance with a market share of 1.7 percent. The top writer of Medicare supplement insurance had direct premiums with a market share of 34 percent during the period.
Based on a 2024 Medicare Supplement Earned Premium report, we ranked seventh in direct premiums earned for Medicare supplement insurance with a market share of 1.7 percent. The top writer of Medicare supplement insurance had direct premiums with a market share of 34.2 percent during the period.
Reinsurance ceded to third-parties by CNO represented 9 percent of gross combined life insurance inforce and reinsurance assumed represented 0.3 percent of net combined life insurance inforce.
Reinsurance ceded to third-parties by CNO represented 9.0 percent of gross combined life insurance inforce and reinsurance assumed represented 0.2 percent of net combined life insurance inforce.
Our segments are aligned based on their common characteristics, comparability of profit margins and the way the chief operating decision maker makes operating decisions and assesses the performance of the business. We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company.
Our segments are aligned based on their common characteristics, comparability of profit margins and the way the chief operating decision maker ("CODM") makes operating decisions and assesses the performance of the business. Our CODM is the Chief Executive Officer. We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company.
At December 31, 2024, we had an exclusive agency force of approximately 4,500 producing agents (monthly average of agents that have submitted at least one policy in the month) and financial representatives working from approximately 230 branch and satellite field offices throughout the United States.
At December 31, 2025, we had an exclusive agency force of approximately 4,600 producing agents (monthly average of agents that have submitted at least one policy in the month) and financial representatives working from approximately 230 branch and satellite field offices throughout the United States.
Our general account investment strategies are to: • provide largely stable investment income from a diversified high quality fixed income portfolio; 12 Table of Co n t e n t s • maximize and maintain a stable spread between our investment income and the yields we pay on insurance products; • sustain adequate liquidity levels to meet operating cash requirements, including a margin for potential adverse developments; • continually monitor and manage the relationship between our investment portfolio and the financial characteristics of our insurance liabilities such as durations and cash flows; • manage the capital efficiency of our investments through active strategic asset allocation and investment management; and • use outside managers in specialized investment classes to add value to our overall strategy.
Our general account investment strategies are to: • provide largely stable investment income from a diversified high quality fixed income portfolio; 13 Table of Contents • maximize and maintain a stable spread between our investment income and the yields we pay on insurance products; • sustain adequate liquidity levels to meet operating cash requirements, including a margin for potential adverse developments; • continually monitor and manage the relationship between our investment portfolio and the financial characteristics of our insurance liabilities such as durations and cash flows; • manage the capital efficiency of our investments through active strategic asset allocation and investment management; and • use outside managers in specialized investment classes to add value to our overall strategy.
Based on our periodic review of their financial statements, insurance industry reports and reports filed with state insurance departments, we believe the assuming companies are able to honor all material contractual commitments. As of December 31, 2024, the policy risk retention limit of our insurance subsidiaries was generally $0.8 million or less.
Based on our periodic review of their financial 16 Table of Contents statements, insurance industry reports and reports filed with state insurance departments, we believe the assuming companies are able to honor all material contractual commitments. As of December 31, 2025, the policy risk retention limit of our insurance subsidiaries was generally $0.8 million or less.
The NAIC has undertaken a principles-based bond project, which includes consideration of factors to determine whether an investment in an asset-backed security qualifies for reporting on an insurer’s statutory financial statement as a bond on Schedule D-1 as opposed to Schedule BA (other long-term investment assets), the latter of which has a higher risk charge.
The NAIC has undertaken a principles-based bond project, which includes consideration of factors to determine whether an investment in an asset-backed security, for example, qualifies for reporting on 24 Table of Contents an insurer's statutory financial statement as a bond on Schedule D-1 as opposed to Schedule BA (other long-term investment assets), the latter of which generally has a higher risk charge.
Such a designation would subject a non-bank SIFI to supervision and heightened prudential standards by the Federal Reserve. In November 2023, the FSOC adopted guidance that establishes a new process for designating certain non-bank financial companies as non-bank SIFIs.
Such a designation would subject a non-bank SIFI to supervision and heightened prudential standards by the Federal Reserve. In November 2023, the FSOC adopted guidance that establishes a new process for designating certain non-bank financial companies as non- 28 Table of Contents bank SIFIs.
In New York, the NYDFS amended Regulation – Suitability and Best Interests in Life Insurance and Annuity Transactions to add a "best interest" standard for recommendations regarding the sale of life insurance and annuity products in New York.
In New York, the NYDFS amended Regulation – Suitability and Best Interests in Life Insurance and Annuity Transactions to add a "best interest" standard for recommendations regarding 29 Table of Contents the sale of life insurance and annuity products in New York.
Penalty-free withdrawals from fixed interest annuities of up to 10 percent of either premiums or account value are available in most fixed interest annuities after the first year of the annuity's term. Other Annuities . These products include single premium immediate annuities ("SPIAs"). SPIAs accounted for $8.8 million of our total premiums collected in 2024.
Penalty-free withdrawals from fixed interest annuities of up to 10 percent of either premiums or account value are available in most fixed interest annuities after the first year of the annuity's term. Other Annuities . These products include single premium immediate annuities ("SPIAs"). SPIAs accounted for $9.1 million of our total premiums collected in 2025.
The current guaranteed rate on annuities being issued is 3 percent, and the guaranteed rates on all policies inforce range from 1.0 percent to 5.5 percent. As of December 31, 2024, the average crediting rate on our outstanding traditional annuities was 3.13 percent.
The current guaranteed rate on annuities being issued is 3 percent, and the guaranteed rates on all policies inforce range from 1.0 percent to 5.5 percent. As of December 31, 2025, the average crediting rate on our outstanding traditional annuities was 3.39 percent.
CCPA provides for a private right of action with potentially significant statutory damages, whereby a business that fails to implement reasonable security measures to protect against breaches of personal information could be liable to affected consumers.
CCPA provides for a private right of action with potentially significant statutory damages, whereby a business that fails to implement reasonable security measures to protect against breaches of personal information could be liable to affected consumers should such a breach occur.
At December 31, 2024, 65 percent of our long-term care policies have benefit periods of one year or less, 81 percent have benefit periods of two years or less, and 94 percent of our long-term care policies have benefit periods of four years or less. In 2018, we ceased sales of home health care only long-term care policies.
At December 31, 2025, 65 percent of our long-term care policies have benefit periods of one year or less, 81 percent have benefit periods of two years or less, and 95 percent of our long-term care policies have benefit periods of four years or less. In 2018, we ceased sales of home health care only long-term care policies.
This workplace environment creates benefits that are shared by our associates, customers and, ultimately, our shareholders. • Community Involvement CNO is committed to supporting community organizations that address the health and financial wellness of middle-income Americans and to providing ways for our associates to give back through our Team CNO volunteer program. 17 Table of Co n t e n t s GOVERNMENTAL REGULATION Insurance Regulation and Oversight Overview Our insurance subsidiaries are licensed to transact insurance business and are subject to extensive regulation and supervision by insurance regulators of the jurisdictions in which they operate.
This workplace environment creates benefits that are shared by our associates, customers and, ultimately, our shareholders. • Community Involvement CNO is committed to supporting community organizations that address the health and financial wellness of middle-income Americans and to providing ways for our associates to give back through our Team CNO volunteer program. 18 Table of Contents GOVERNMENTAL REGULATION Insurance Regulation and Oversight Overview Our insurance subsidiaries are licensed to transact insurance business and are subject to extensive regulation and supervision by insurance regulators of the jurisdictions in which they operate.
We have a disciplined rate-setting approach that allows the Company to set crediting rates consistent with the investment return earned on the net premiums received and (if applicable) the current option cost to fund the indexed benefit. 9 Table of Co n t e n t s In 2016, we began offering a guaranteed lifetime income rider to our fixed indexed annuity contracts, which allows policyholders the option to elect to receive a guaranteed income stream for life, without having to annuitize their policy.
We have a disciplined rate-setting approach that allows the Company to set crediting rates consistent with the investment return earned on the net premiums received and (if applicable) the current option cost to fund the indexed benefit. 10 Table of Contents In 2016, we began offering a guaranteed lifetime income rider to our fixed indexed annuity contracts, which allows policyholders the option to elect to receive a guaranteed income stream for life, without having to annuitize their policy.
Universal life products include fixed indexed universal life products. The account value of these policies is credited with interest at a guaranteed rate, plus additional interest credits based on changes in a particular index during a specified time period. Traditional Life . These products accounted for $716.4 million, or 16 percent, of our total collected premiums in 2024.
Universal life products include fixed indexed universal life products. The account value of these policies is credited with interest at a guaranteed rate, plus additional interest credits based on changes in a particular index during a specified time period. Traditional Life . These products accounted for $728.7 million, or 16 percent, of our total collected premiums in 2025.
The United States Department of Health and Human Services has issued regulations under the Health Insurance Portability and Accountability Act, as amended, relating to standardized electronic transaction formats, code sets, the privacy of member health information, and the implementation of data security controls to safeguard electronic protected health information.
The United States Department of Health and Human Services has issued rules and regulations under the Health Insurance Portability and Accountability Act ("HIPAA"), as amended, relating to standardized electronic transaction formats, code 26 Table of Contents sets, the privacy of member health information, and the implementation of data security controls to safeguard electronic protected health information.
Further, CNO Bermuda Re may not pay any dividends or make any capital distributions to its parent and/or affiliates within the five years following its initial reinsurance transaction unless approved by the BMA.
Further, CNO Bermuda Re may not pay any dividends or make any capital distributions to its parent within the five years following the 2023 reinsurance transaction unless approved by the BMA.
States have started to adopt the AI Bulletin, which sets forth insurance regulators' expectations as to how insurers should govern the development, acquisition and use of AI technologies, as well as the types of information that regulators may request during an investigation or examination of an insurer in regard to AI systems.
More than 20 states have adopted, and others may adopt, the AI Bulletin, which sets forth insurance regulators' expectations as to how insurers should govern the development, acquisition and use of AI technologies, as well as the types of information that regulators may request during an investigation or examination of an insurer in regard to AI systems.
If we are unable to raise our premium rates because we fail to obtain approval for actuarially justified rate increases in one or more states, our financial condition and results of operations could be adversely affected. 22 Table of Co n t e n t s Surplus and Capital Requirements Insurers are required to maintain their capital and surplus at or above minimum levels prescribed by the laws of their respective jurisdictions.
If we are unable to raise our premium rates because we fail to obtain approval for actuarially justified rate increases in one or more states, our financial condition and results of operations could be adversely affected. 23 Table of Contents Surplus and Capital Requirements Insurers are required to maintain their capital and surplus at or above minimum levels prescribed by the laws of their respective jurisdictions.
To support pay transparency, we provide education to associates on how pay decisions are made and share competitive market ranges for roles across the enterprise. Our compensation philosophy is focused on pay-for-performance. In 2024, we continued to offer annual cash incentives to eligible associates reflecting our performance philosophy at all levels of the organization.
To support pay transparency, we provide education to associates on how pay decisions are made and share competitive market ranges for roles across the enterprise. Our compensation philosophy is focused on pay-for-performance. In 2025, we continued to offer annual cash incentives or sales incentive programs to all associates reflecting our performance philosophy at all levels of the organization.
In connection with this initiative, the NAIC adopted amendments to the Model Holding Company System Act and Regulation in 2020 which implement an annual filing requirement for a liquidity stress- 19 Table of Co n t e n t s testing framework (the "Liquidity Stress Test") for certain large U.S. life insurers and insurance groups.
In connection with this initiative, the NAIC adopted amendments to the Model 20 Table of Contents Holding Company System Act and Regulation in 2020 which implement an annual filing requirement for a liquidity stress-testing framework (the "Liquidity Stress Test") for certain large U.S. life insurers and insurance groups.
Sales to residents of the following states accounted for at least 5 percent of our 2024 collected premiums: Florida (11 percent), Iowa (6 percent), Pennsylvania (5 percent), California (5 percent) and Texas (5 percent).
Sales to residents of the following states accounted for at least 5 percent of our 2025 collected premiums: Florida (12 percent), Iowa (6 percent), Texas (6 percent), California (5 percent), and Pennsylvania (5 percent).
We have generally been successful at hedging increases to policyholder benefits resulting from increases in the indices to which the product's return is linked. Fixed Interest Annuities . These products include fixed rate single-premium deferred annuities ("SPDAs") and flexible premium deferred annuities ("FPDAs"). These products accounted for $239.1 million, or 5 percent, of our total premium collections during 2024.
We have generally been successful at hedging increases to policyholder benefits resulting from increases in the indices to which the product's return is linked. Fixed Interest Annuities . These products include fixed rate single-premium deferred annuities ("SPDAs") and flexible premium deferred annuities ("FPDAs"). These products accounted for $194.3 million, or 4 percent, of our total premium collections during 2025.
These examinations are generally 18 Table of Co n t e n t s coordinated under the direction of the lead state regulator and typically include all insurers operating in a holding company system pursuant to guidelines promulgated by the NAIC. Existing and future changes to accounting rules may also impact our results of operations or financial condition.
These examinations are generally 19 Table of Contents coordinated under the direction of the lead state regulator and typically include all insurers operating in a holding company system pursuant to guidelines promulgated by the NAIC. Existing and future changes to accounting rules may also impact our results of operations or financial condition.
These products include universal life and other interest-sensitive life products that provide life insurance with adjustable rates of return related to current interest rates. They accounted for $244.1 million, or 6 percent, of our total collected premiums in 2024.
These products include universal life and other interest-sensitive life products that provide life insurance with adjustable rates of return related to current interest rates. They accounted for $255.8 million, or 6 percent, of our total collected premiums in 2025.
CNO Bermuda Re has entered into a Capital and Liquidity Maintenance Agreement (the "CLMA") with CDOC.
CNO Bermuda Re has entered into a Capital and Liquidity Maintenance Agreement (as amended, the "CLMA") with CDOC, Inc. ("CDOC").
They are not directed toward the protection of investors, and such ratings are not recommendations to buy, sell or hold securities. The 14 Table of Co n t e n t s current financial strength ratings of our primary insurance subsidiaries from Fitch, S&P, Moody's and AM Best are "A", "A-", "A3" and "A", respectively.
They are not directed toward the protection of investors, and such ratings are not recommendations to buy, sell or hold securities. The 15 Table of Contents current financial strength ratings of our primary insurance subsidiaries from Fitch, S&P, Moody's and AM Best are "A", "A-", "A3" and "A", respectively.
Our major source of income from fixed rate annuities is the spread between the investment income earned on the underlying general account assets and the interest credited to contractholders' accounts. The following describes our major annuity products: Fixed Indexed Annuities . These products accounted for $1,542.7 million, or 35 percent, of our total premium collections during 2024.
Our major source of income from fixed rate annuities is the spread between the investment income earned on the underlying general account assets and the interest credited to contractholders' accounts. The following describes our major annuity products: Fixed Indexed Annuities . These products accounted for $1,739.9 million, or 38 percent, of our total premium collections during 2025.
When looking at the 2023 Individual Long-Term Care Insurance Survey, one of our subsidiaries (Bankers Life and Casualty Company ("Bankers Life")) is ranked second in new annualized premiums of individual long-term care insurance with a market share of approximately 21 percent.
When looking at the 2024 Individual Long-Term Care Insurance Survey, one of our subsidiaries (Bankers Life and Casualty Company ("Bankers Life")) is ranked second in new annualized premiums of individual long-term care insurance with a market share of 25.8 percent.
The SEC is the principal regulator of our asset management operations. Our broker-dealer subsidiary, Bankers Life Securities, Inc., is registered under the Securities Exchange Act of 1934 and is subject to federal and state regulation, including, but not limited to, the Financial Industry Regulatory Authority ("FINRA").
Our broker-dealer subsidiary, Bankers Life Securities, Inc., is registered under the Securities Exchange Act of 1934 and is subject to federal and state regulation, including, but not limited to, the Financial Industry Regulatory Authority ("FINRA").
Accordingly, with respect to our deferred tax assets, we assess the need for a valuation allowance on an ongoing basis. On August 16, 2022, President Biden signed the Inflation Reduction Act into law which introduces a 15 percent minimum tax based on financial statement income which is not currently expected to have a significant impact on CNO.
Accordingly, with respect to our deferred tax assets, we assess the need for a valuation allowance on an ongoing basis. On August 16, 2022, President Biden signed the Inflation Reduction Act into law which introduces a 15 percent minimum tax based on financial statement income.
Regulatory approval is required before we can increase our premiums on these products. Life Life products include traditional and interest-sensitive life insurance products. During 2024, we collected life insurance premiums of $960.5 million, or 22 percent, of our total collected premiums. Interest-Sensitive Life .
Regulatory approval is required before we can increase our premiums on these products. Life Life products include traditional and interest-sensitive life insurance products. During 2025, we collected life insurance premiums of $984.5 million, or 21 percent, of our total collected premiums. Interest-Sensitive Life .
The profitability of our insurance products depends on pricing and other factors. Differences between our expectations when we sold these products and our actual experience could result in future losses. Liabilities for insurance products are calculated based on numerous assumptions including, but not limited to, investment yields, mortality, morbidity, withdrawals, lapses, cash flow assumptions and discount rates.
Differences between our expectations when we sold these products and our actual experience could result in future losses. Liabilities for insurance products are calculated based on numerous assumptions including, but not limited to, investment yields, mortality, morbidity, withdrawals, lapses, cash flow assumptions and discount rates. Such assumptions are based on our experience, and in cases of limited experience, industry experience.
Pursuant to the CLMA between CNO Bermuda Re and CDOC, CDOC will contribute funds to CNO Bermuda Re in the event: (i) CNO Bermuda Re's statutory economic capital and surplus is less than 150 percent of its ECR at the end of any calendar quarter; or (ii) CNO Bermuda Re's liquid assets are insufficient to meet its contractual obligations to ceding insurers, in each case, unless Bankers Life has provided notice of recapture pursuant to the terms of a modified coinsurance agreement between it and CNO Bermuda Re.
Pursuant to the CLMA, CDOC will contribute funds to CNO Bermuda Re in the event: (i) CNO Bermuda Re's statutory economic capital and surplus is less than 150 percent of its ECR at the end of any calendar quarter; or (ii) CNO Bermuda Re's liquid assets are insufficient to meet its contractual obligations to ceding insurers, in each case, unless one or more ceding insurers has provided notice of recapture pursuant to the terms of the applicable reinsurance agreement between it and CNO Bermuda Re and such recapture will cause CNO Bermuda Re to meet (i) and (ii) above.
Medicare supplement collected premiums were $625.7 million during 2024, or 14 percent, of our total collected premiums. Medicare is a federal health insurance program for disabled persons and seniors (age 65 and older).
Medicare supplement collected premiums were $626.8 million during 2025, or 14 percent, of our total collected premiums. Medicare is a federal health insurance program for disabled persons and seniors (age 65 and older).
Our commitment to our associates is demonstrated through several areas of focus: • Associate Development and Engagement CNO provides a supportive environment designed to encourage all associates to pursue their professional goals and career objectives through one-to-one coaching, mentoring, continuing education, professional education and 16 Table of Co n t e n t s training.
Our commitment to our associates is demonstrated through several areas of focus: • Associate Development and Engagement CNO provides a supportive environment designed to encourage all associates to pursue their professional goals and career objectives through one-to-one coaching, mentoring, continuing education, professional education and 17 Table of Contents training.
The general agency and insurance brokerage distribution system is comprised of independent agents licensed to sell our products in all fifty states, the District of Columbia, and certain protectorates of the United States. 7 Table of Co n t e n t s Worksite Division: The Worksite Division focuses on the sale of voluntary benefit life and health insurance products in the workplace for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually.
The general agency and insurance brokerage distribution system is comprised of independent agents licensed to sell our products in all fifty states, the District of Columbia, and certain protectorates of the United States. 8 Table of Contents Worksite Division: The Worksite Division focuses on the sale of voluntary insurance benefits, including supplemental health and life insurance products in the workplace for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually.
In 2023, the NAIC adopted a short-term solution related to the accounting treatment of an insurer’s negative interest maintenance reserve ("IMR") balance, which may occur when a rising interest rate environment causes an insurer’s IMR balance to become negative as a result of bond sales executed at a capital loss.
In 2023, the NAIC adopted an interim solution with regard to the accounting treatment of an insurer's negative IMR balance, which may occur when a rising interest rate environment causes an insurer's IMR balance to become negative as a result of bond sales executed at a capital loss.
The NAIC is developing a long-term solution for the accounting treatment of negative IMR. • RBC Revisions. In 2023, the NAIC increased the RBC factor for structured security residual tranches from 30% to 45%, which is effective for year-end 2024 RBC filings.
The NAIC is developing a long-term solution for the accounting treatment of negative IMR. • RBC Revisions. In 2023, the NAIC increased the RBC factor for structured security residual tranches from 30% to 45%, which is effective for year-end 2024 RBC filings. The NAIC is currently reviewing the RBC treatment of CLOs, as discussed below. • Bond Project.
Such business had total insurance policy liabilities of $2.2 billion at December 31, 2024. (b) In addition to life insurance, certain annuity business has been ceded to Jackson through a coinsurance agreement. Such business had total insurance policy liabilities of $686.6 million at December 31, 2024.
Such business had total insurance policy liabilities of $2.1 billion at December 31, 2025. (b) In addition to life insurance, certain annuity business has been ceded to Jackson through a coinsurance agreement. Such business had total insurance policy liabilities of $626.9 million at December 31, 2025.
The Insurance Act imposes solvency and capital requirements as well as auditing and reporting requirements. The below summarizes the capital and solvency requirements for a Class C insurer under the Insurance Act. The Insurance Act requires the value an insurer's statutory assets to exceed the value of its statutory liabilities by an amount great than their prescribed minimum solvency margin.
The capital and solvency requirements for a Class C insurer under the Insurance Act are summarized below. The Insurance Act requires the value an insurer's statutory assets to exceed the value of its statutory liabilities by an amount great than their prescribed minimum solvency margin.
COMPETITION The markets in which we operate are competitive. Compared to CNO, many companies in the financial services industry are larger, have greater capital, technological and marketing resources, have greater access to capital and other sources of liquidity at a lower cost, offer broader and more diversified product lines, have greater brand recognition, have larger staffs and higher ratings.
COMPETITION The markets in which we operate are competitive. Compared to CNO, many companies in the financial services industry are larger, have greater capital and technological and marketing resources, offer broader and more diversified product lines, have greater brand recognition, have larger staffs and higher ratings.
Department of Labor (the "DOL") issued a proposed regulation to change the definition of "fiduciary" for purposes of the Employee Retirement Income Security Act of 1974 ("ERISA") and parallel provisions of the Internal Revenue Code of 1986, as amended (the "Code"), when a financial professional, including an insurance producer, provides investment advice, and proposed amendments to various existing prohibited transaction exemptions ("PTEs"), including PTE 84-24 and PTE 2020-02, that financial professionals rely on when they make investment recommendations to retirement investors.
Department of Labor (the "DOL") issued a regulation that was intended to change the definition of "fiduciary" for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and parallel provisions of the Internal Revenue Code of 1986, as amended (the "Code"), when a financial professional, including an insurance producer, provides investment advice to plans subject to ERISA and IRAs subject to Section 4975 of the Code and issued amendments to various existing prohibited transaction exemptions ("PTEs") that financial professionals rely on when they make investment recommendations to such investors.
The North American Securities Administrators Association ("NASAA") has proposed further amendments to a model rule regarding broker-dealer conduct that states might seek to adopt and that is intended to account for revisions to federal conduct standards for broker dealers and agents arising out of the adoption of Reg BI by the SEC and other changes that have occurred in the financial services industry in recent years, including the blurring of brokerage and advisory service models.
In April 2025, the North American Securities Administrators Association ("NASAA") adopted an amendment to a model rule regarding broker-dealer conduct that is intended to account for revisions to federal conduct standards for broker dealers and agents arising out of the adoption of Reg BI by the SEC and other changes that have occurred in the financial services industry in recent years, including the blurring of brokerage and advisory service models.
The principal third-party reinsurers to whom we have ceded life, annuity and health business at December 31, 2024 were as follows (dollars in millions): Name of Reinsurer Reinsurance receivables AM Best rating Wilton Reassurance Company ("Wilton Re") (a) $ 2,457.3 A+ Jackson National Life Insurance Company ("Jackson") (b) 898.6 A RGA Reinsurance Company (c) 401.1 A+ Sagicor Life Insurance Company 35.1 A- Swiss Re Life and Health America Inc. 6.6 A+ Munich American Reassurance Company 4.4 A+ SCOR Global Life USA Reinsurance Company 2.2 A All others (d) 49.4 $ 3,854.7 ________________ (a) In addition to life insurance, certain long-term care business has been ceded to Wilton Re through a 100 percent indemnity coinsurance agreement.
The principal third-party reinsurers to whom we have ceded life, annuity and health business at December 31, 2025 were as follows (dollars in millions): Name of Reinsurer Reinsurance receivables AM Best rating Wilton Reassurance Company ("Wilton Re") (a) $ 2,350.2 A+ Jackson National Life Insurance Company ("Jackson") (b) 827.0 A RGA Reinsurance Company (c) 415.7 A+ Sagicor Life Insurance Company 34.8 A- Swiss Re Life and Health America Inc. 7.6 A+ Munich American Reassurance Company 6.0 A+ SCOR Global Life USA Reinsurance Company 2.2 A All others (d) 34.0 Total reinsurance receivables $ 3,677.5 ________________ (a) In addition to life insurance, certain long-term care business has been ceded to Wilton Re through a 100 percent indemnity coinsurance agreement.
The ability of our insurance subsidiaries to pay dividends is also impacted by various criteria established by rating agencies to maintain or receive higher ratings and by the capital levels that we target for our insurance subsidiaries. Bermuda Regulations In 2023, we formed CNO Bermuda Re, Ltd.
The ability of our insurance subsidiaries to pay dividends is also impacted by various criteria established by rating agencies to maintain or receive higher ratings and by the capital levels that we target for our insurance subsidiaries.
Such review could result in the DOL's imposition of new or different requirements on plan sponsors or on annuity providers or could make such selection process more difficult for the parties involved. 30 Table of Co n t e n t s
Such review could result in the DOL's imposition of new or different requirements on plan sponsors or on annuity providers or could make such selection process more difficult for the parties involved.
In the individual health insurance business, companies compete primarily on the basis of marketing, service and price. Pursuant to federal regulations, the Medicare supplement products offered by all companies have standardized policy features. This increases the comparability of such policies and intensifies competition based on other factors. See "Insurance Underwriting" and "Governmental Regulation" for additional information.
Pursuant to federal regulations, the Medicare supplement products offered by all companies have standardized policy features. This increases the comparability of such policies and intensifies competition based on other factors. See "Insurance Underwriting" and "Governmental Regulation" for additional information.
In addition, we have filed as exhibits to this 2024 Form 10-K the applicable 6 Table of Co n t e n t s certifications of the Company's Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002 regarding the Company's public disclosures.
In addition, we have filed as exhibits to this 2025 Form 10-K the applicable certifications of the Company's Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002 regarding the Company's public disclosures.
The Company and its insurance subsidiaries are registered as a holding company system pursuant to the laws and regulations in our domiciliary states. 21 Table of Co n t e n t s In addition, the insurance holding company system laws and regulations regulate the acquisition (or sale) of control of insurance companies.
The Company and its insurance subsidiaries are registered as a holding company system pursuant to the laws and regulations in our domiciliary states. 22 Table of Contents In addition, the insurance holding company system laws and regulations regulate the acquisition (or sale) of control of insurance companies.
Guaranteed acceptance life insurance policies are issued without medical examination or evidence of insurability. There is minimal underwriting on annuities. LIABILITIES FOR INSURANCE PRODUCTS At December 31, 2024, the total balance of our liabilities for insurance products was $29.7 billion. These liabilities are generally payable over an extended period of time.
Guaranteed acceptance life insurance policies are issued without medical examination or evidence of insurability. There is minimal underwriting on annuities. LIABILITIES FOR INSURANCE PRODUCTS At December 31, 2025, the total liabilities for insurance products was $31.1 billion. These liabilities are generally payable over an extended period of time. The profitability of our insurance products depends on pricing and other factors.
Therefore, we focus significant attention on attracting and retaining talented, experienced individuals to serve our customers and manage and support our operations. The Human Resource and Compensation Committee of our Board of Directors is actively engaged in the oversight of our human resource initiatives and receives regular updates from management on progress and developments.
Therefore, we focus significant attention on attracting and retaining talented, experienced individuals to serve our customers and manage and support our operations. The Human Resource and Compensation Committee of our Board of Directors oversees the development, implementation and effectiveness of our human capital management practices and receives regular updates from management on progress and developments.
SPIAs often are purchased by persons at or near retirement age who desire a steady stream of payments over a future period of years. The single premium is often the payout from a fixed rate contract.
SPIAs often are purchased by persons at or 11 Table of Contents near retirement age who desire a steady stream of payments over a future period of years. The single premium is often the payout from a fixed rate contract. The implicit interest rate on SPIAs is based on market conditions when the policy is issued.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeChanges to these requirements have resulted in an increase to the amount of reserves and capital we are required to hold and may adversely impact the ability of our insurance subsidiaries to pay dividends to the holding company. 40 Table of Co n t e n t s We cannot predict the requirements of the regulations ultimately adopted, the effect such regulations will have on financial markets generally, or on our businesses specifically, the additional costs associated with compliance with such regulations, or any changes to our operations that may be necessary to comply with new regulations, any of which could have a material adverse effect on our business, results of operations, cash flows or financial condition.
Biggest changeWe cannot predict whether other federal initiatives will be adopted or what impact, if any, such initiatives, if adopted, may have on financial markets generally, or on our businesses specifically, the additional costs associated with compliance with such initiatives and related regulations, or any changes to our operations that may be necessary to comply with any new regulations, any of which could have a material adverse effect on our business, results of operations, cash flows or financial condition.
CNO is a holding company and its liquidity and ability to meet its obligations may be constrained by the ability of CNO's insurance subsidiaries to distribute cash to it. CNO and CDOC, Inc. ("CDOC") are holding companies with no business operations of their own.
CNO is a holding company and its liquidity and ability to meet its obligations may be constrained by the ability of CNO's insurance subsidiaries to distribute cash to it. CNO and CDOC are holding companies with no business operations of their own.
The extent to which major health issues impact our business, results of operations or financial condition depends on future developments which are highly uncertain and cannot be predicted, including but not limited to: (i) new viruses or virus mutations; (ii) the efficacy of vaccines and other medical inventions; (iii) premature mortality impacts on our claim experience; (iv) responses by government authorities, including potential changes in monetary policy enacted by the Federal Reserve and potential fiscal stimulus measures implemented by the federal government; and (v) responses in behavior by policyholders, businesses and the population more generally.
The extent to which major health issues impact our business, results of operations or financial condition depends on future developments which 42 Table of Contents are highly uncertain and cannot be predicted, including but not limited to: (i) new viruses or virus mutations; (ii) the efficacy of vaccines and other medical inventions; (iii) premature mortality impacts on our claim experience; (iv) responses by government authorities, including potential changes in monetary policy enacted by the Federal Reserve and potential fiscal stimulus measures implemented by the federal government; and (v) responses in behavior by policyholders, businesses and the population more generally.
Currently, approximately 54 percent of our fixed interest annuities and 29 percent of our universal life products with contractually guaranteed minimum rates have crediting rates set at the minimum rate. As a result, in a low interest rate environment, reinvestment risk can place pressure on insurance product margins resulting in lower earnings.
Currently, approximately 54 percent of our fixed interest annuities and 28 percent of our universal life products with contractually guaranteed minimum rates have crediting rates set at the minimum rate. As a result, in a low interest rate environment, reinvestment risk can place pressure on insurance product margins resulting in lower earnings.
Generally, if an insurer's RBC ratio falls below specified levels, the insurer is subject to different degrees of regulatory action depending upon the magnitude of the deficiency. The 2024 statutory annual statements of each of our U.S. based insurance subsidiaries reflect RBC ratios in excess of the levels that would subject our insurance subsidiaries to any regulatory action.
Generally, if an insurer's RBC ratio falls below specified levels, the insurer is subject to different degrees of regulatory action depending upon the magnitude of the deficiency. The 2025 statutory annual statements of each of our U.S. based insurance subsidiaries reflect RBC ratios in excess of the levels that would subject our insurance subsidiaries to any regulatory action.
The recognition of a valuation allowance would increase income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future. The value of our net deferred tax assets as of December 31, 2024 reflects the current Federal corporate income tax rate of 21 percent.
The recognition of a valuation allowance would increase income tax expense and reduce shareholders' equity, and such an increase could have a significant impact upon our earnings in the future. The value of our net deferred tax assets as of December 31, 2025 reflects the current Federal corporate income tax rate 21 percent.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Comprehensive Annual Actuarial Review" for further information related to changes in certain actuarial assumptions and their impact on our operating results in 2024. The occurrence of natural or man-made disasters or climate change could adversely affect our financial condition and results of operations.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Comprehensive Annual Actuarial Review" for further information related to changes in certain actuarial assumptions and their impact on our operating results in 2025. The occurrence of natural or man-made disasters or climate change could adversely affect our financial condition and results of operations.
We regularly monitor ownership changes (as calculated for purposes of Section 382) based on available information and, as of December 31, 2024, our analysis indicated that we were well below the 50 percent ownership change threshold that could limit our ability to utilize our NOLs.
We regularly monitor ownership changes (as calculated for purposes of Section 382) based on available information and, as of December 31, 2025, our analysis indicated that we were well below the 50 percent ownership change threshold that could limit our ability to utilize our NOLs.
Certain of our insurance policies allow or require us to make changes based on experience to certain non-guaranteed elements ("NGEs") such as cost of insurance charges, expense loads, credited interest rates and policyholder bonuses. We intend to make changes to certain NGEs in the future.
Certain of our insurance policies allow or require us to make changes based on experience to certain non-guaranteed elements ("NGEs") such as cost of insurance charges, expense loads, credited interest rates and policyholder bonuses. We may make changes to certain NGEs in the future.
These systems may fail to operate properly or become disabled as a result of events or circumstances which may be wholly or partly beyond our control including cyber-attack, denial of service, viruses or other malicious activities, power outages, hardware or software malfunction, defects or degradation, lack of proper maintenance, human error or misuse, and similar events.
These systems may fail to operate properly or become disabled as a result of events or circumstances which may be wholly or partly beyond our control including cyber-attack, denial of service, viruses or other malicious activities, power outages, failure of critical infrastructure, hardware or software malfunction, defects or degradation, lack of proper maintenance, human error or misuse, and similar events.
Certain of these regulations have imposed additional requirements that may affect both the Company and its derivatives counterparties, including in the areas of reporting, recordkeeping, the mandatory exchange execution and clearing of certain derivatives, position limits with respect to certain derivatives, regulatory initial margin and variation margin requirements, and limitations on the ability to close out certain derivatives transactions with certain counterparties upon the bankruptcy of such counterparties.
Certain of these regulations have imposed additional requirements that may affect both the Company and its derivatives counterparties, including in the areas of reporting, recordkeeping, the mandatory exchange execution and clearing of certain derivatives, position limits with respect to certain derivatives, regulatory initial margin and variation 41 Table of Contents margin requirements, and limitations on the ability to close out certain derivatives transactions with certain counterparties upon the bankruptcy of such counterparties.
However, failure to maintain a reasonable and effective data protection and cybersecurity program, or any compromise of the security, confidentiality, integrity, or availability of our information systems and the sensitive, proprietary, and confidential data, including personal information, on such systems could lead to additional costs and liabilities, as well as damage our reputation or deter people from purchasing our products.
However, failure to maintain a reasonable and effective data protection and cybersecurity program, or any compromise of the security, confidentiality, integrity, or availability of our information systems and the sensitive, proprietary, and confidential data, including personal information, on such systems could lead to 43 Table of Contents additional costs and liabilities, as well as damage our reputation or deter people from purchasing our products.
If a state insurance regulatory agency determines that one of our insurance subsidiaries is not in compliance with applicable regulations, the subsidiary is subject to various potential administrative remedies including, without limitation, monetary penalties, restrictions on the subsidiary's ability to do business in that state and a return of a portion of policyholder premiums.
If a state insurance regulatory agency determines that one of our insurance subsidiaries is not in compliance with applicable regulations, the subsidiary is subject to various potential administrative remedies including, without limitation, monetary penalties, restrictions on the subsidiary's ability to do business in that state and a return of a 39 Table of Contents portion of policyholder premiums.
In determining fair value, we generally utilize market transaction data for the same or similar instruments. The degree of management judgment involved in determining fair values is inversely related to the availability of market observable information. Since significant observable market inputs are not available for certain securities, it may be difficult to value them.
In determining fair value, we generally utilize market transaction data for the same or similar instruments. The degree of management judgment involved in determining fair values is inversely related to the availability of market 34 Table of Contents observable information. Since significant observable market inputs are not available for certain securities, it may be difficult to value them.
CNO Bermuda Re may not pay any dividends or make any capital distributions to its parent and/or affiliates within the five years following the initial reinsurance transaction unless approved by the BMA. Payments from our non-insurance subsidiaries to CNO or CDOC, and payments from CDOC to CNO, do not require approval by any regulatory authority or other third party.
CNO Bermuda Re may not pay any dividends or make any capital distributions to its parent within the five years following the 2023 reinsurance transaction unless approved by the BMA. Payments from our non-insurance subsidiaries to CNO or CDOC, and payments from CDOC to CNO, do not require approval by any regulatory authority or other third party.
In addition, enhanced regulatory and other standards for the oversight of vendors and other service providers could result in higher costs and other potential exposures. In the event that one or more of our third-party service providers becomes unable to continue to provide services, we may suffer financial loss and other negative consequences.
In addition, enhanced regulatory and other standards for the oversight of vendors and other service 44 Table of Contents providers could result in higher costs and other potential exposures. In the event that one or more of our third-party service providers becomes unable to continue to provide services, we may suffer financial loss and other negative consequences.
The litigation and regulatory matters we are, have been, or may become, subject to include matters related to the classification of our exclusive agents as independent contractors, sales, marketing and underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, administration, additional premium charges for premiums paid on a periodic basis, calculation of cost of insurance charges, changes to certain non-guaranteed policy features, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, recommending unsuitable products to customers and policies from legacy business that we 39 Table of Co n t e n t s acquired or no longer write.
The litigation and regulatory matters we are, have been, or may become, subject to include matters related to the classification of our exclusive agents as independent contractors, sales, marketing and underwriting practices, payment of contingent or other sales commissions, claim payments and procedures, product design, product disclosure, administration, additional premium charges for premiums paid on a periodic basis, calculation of cost of insurance charges, changes to certain non-guaranteed policy features, denial or delay of benefits, charging excessive or impermissible fees on products, procedures related to canceling policies, recommending unsuitable products to customers and policies from legacy business that we acquired or no longer write.
Our operating results may suffer if policyholder surrender levels differ significantly from our assumptions. Surrenders of our annuities and life insurance products can result in losses and decreased revenues if surrender levels differ significantly from assumed levels. At December 31, 2024, approximately $3.4 billion of our total insurance liabilities could be surrendered by the policyholder without penalty.
Our operating results may suffer if policyholder surrender levels differ significantly from our assumptions. Surrenders of our annuities and life insurance products can result in losses and decreased revenues if surrender levels differ significantly from assumed levels. At December 31, 2025, approximately $3.9 billion of our total insurance liabilities could be surrendered by the policyholder without penalty.
We rely on a combination of contractual rights and copyright, trademark and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property.
We rely on a combination of contractual rights and copyright, trademark and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, 45 Table of Contents third parties may infringe or misappropriate our intellectual property.
Planned system upgrades may not be successful or operate as intended, may take longer than anticipated, may exceed their budget, or create or exacerbate previously unknown security vulnerabilities. Any of these outcomes could have a materially adverse impact on our business, operations, and financial condition.
Planned system upgrades (including our previously announced TechMod initiative) may not be successful or operate as intended, may take longer than anticipated, may exceed their budget, or create or exacerbate previously unknown security vulnerabilities. Any of these outcomes could have a materially adverse impact on our business, operations, and financial condition.
As of December 31, 2024, our third-party reinsurance receivables and ceded life insurance inforce totaled $3.9 billion and $2.8 billion, respectively. Our seven largest reinsurers, which are rated "A-" or higher by AM Best as of December 31, 2024, accounted for 97 percent of our ceded life insurance inforce and 99 percent of our reinsurance receivables.
As of December 31, 2025, our third-party reinsurance receivables and ceded life insurance inforce totaled $3.7 billion and $2.8 billion, respectively. Our seven largest reinsurers, which are rated "A-" or higher by AM Best as of December 31, 2025, accounted for 97 percent of our ceded life insurance inforce and 99 percent of our reinsurance receivables.
Any such claims and any resulting litigation could result in significant expense and liability for damages or we could be enjoined from providing certain products or services to our customers or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively, we could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition. 45 Table of Co n t e n t s ITEM 1B.
Any such claims and any resulting litigation could result in significant expense and liability for damages or we could be enjoined from providing certain products or services to our customers or utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses, or alternatively, we could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition. 46 Table of Contents ITEM 1B.
While we maintain insurance coverage that, subject to policy terms and conditions and a self-insured retention, is designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in the continually evolving area of cyber risk.
While we maintain insurance coverage that, subject to policy terms and conditions and a self-insured retention, is designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in the continually evolving area of cyber risk, or may be no longer available on commercially reasonable terms.
In addition, regulatory action or investigations could cause us to suffer significant reputational harm, which could have an adverse effect on our business, financial condition and results of operations. 38 Table of Co n t e n t s Our U.S. based insurance subsidiaries are required to comply with statutory accounting principles.
In addition, regulatory action or investigations could cause us to suffer significant reputational harm, which could have an adverse effect on our business, financial condition and results of operations. Our U.S. based insurance subsidiaries are required to comply with statutory accounting principles.
Our financial performance depends significantly upon the extent to which our actual claims experience and future expenses are consistent with the assumptions we used in setting our reserves.
Our financial performance depends significantly upon the extent to 35 Table of Contents which our actual claims experience and future expenses are consistent with the assumptions we used in setting our reserves.
However, as each of the U.S. based insurance subsidiaries of CDOC has negative earned surplus, any dividend payments from such insurance subsidiaries to CNO would require the prior approval of the director or commissioner of the applicable state insurance department. In 2024, our U.S. based insurance subsidiaries paid dividends of $196.0 million to CDOC.
However, as each of the U.S. based insurance subsidiaries of CDOC has negative earned surplus, any dividend payments from such insurance subsidiaries to CNO would require the prior approval of the director or commissioner of the applicable state insurance department. In 2025, our U.S. based insurance subsidiaries paid dividends of $458.4 million to CDOC.
Competitors include other life and accident and health insurers, commercial banks, thrifts, mutual funds and broker-dealers. Most of our major competitors have higher financial strength ratings than we do. Many of our competitors are larger companies that have greater capital, technological and marketing resources and have access to capital at a lower cost.
Competitors include other life and accident and health insurers, commercial banks, thrifts, mutual funds and broker-dealers. Most of our major competitors have higher financial strength ratings than we do. Many of our competitors are larger companies that have greater capital and technological and marketing resources.
The loss of intellectual property protection or the inability to secure or enforce the protection of our intellectual property assets could adversely impact our business and its ability to compete effectively. 44 Table of Co n t e n t s We also may be subject to costly litigation in the event that another party alleges our operations or activities infringe upon that party's intellectual property rights.
The loss of intellectual property protection or the inability to secure or enforce the protection of our intellectual property assets could adversely impact our business and its ability to compete effectively. We also may be subject to costly litigation in the event that another party alleges our operations or activities infringe upon that party's intellectual property rights.
Continuing significant inflation 31 Table of Co n t e n t s could have a prolonged effect on the insurance industry and U.S. economy and could in turn negatively affect our business, financial condition and results of operations. A return to a prolonged low interest rate environment may negatively impact our results of operations, financial position and cash flows.
Continuing significant inflation could have a prolonged effect on the 32 Table of Contents insurance industry and U.S. economy and could in turn negatively affect our business, financial condition and results of operations. A return to a prolonged low interest rate environment may negatively impact our results of operations, financial position and cash flows.
Moreover, the use of different valuation assumptions may have a material effect on the fair values 33 Table of Co n t e n t s of the financial assets and financial liabilities. During periods of market disruption, it may be difficult to value certain securities if trading becomes less frequent and/or market data becomes less observable.
Moreover, the use of different valuation assumptions may have a material effect on the fair values of the financial assets and financial liabilities. During periods of market disruption, it may be difficult to value certain securities if trading becomes less frequent and/or market data becomes less observable.
Errors in the modeling software we use or differences between actual experience and the assumptions in our models could materially and adversely affect our business, financial condition, results of operations, liquidity and cash flows. Our liabilities for insurance products may prove to be inadequate, requiring us to increase liabilities which results in reduced net income and shareholders' equity.
Inaccurate model calculations or differences between actual experience and the assumptions in our models could materially and adversely affect our business, financial condition, results of operations, liquidity and cash flows. Our liabilities for insurance products may prove to be inadequate, requiring us to increase liabilities which results in reduced net income and shareholders' equity.
As of December 31, 2024, we had net deferred tax assets of $791.4 million. Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and NOLs.
As of December 31, 2025, we had net deferred tax assets of $711.7 million. Our income tax expense includes deferred income taxes arising from temporary differences between the financial reporting and tax bases of assets and liabilities, capital loss carryforwards and NOLs.
If our future claims are higher than our assumptions, and our reserves prove to be insufficient to cover our actual losses and 34 Table of Co n t e n t s expenses, we would be required to increase our liabilities, and this could have a material adverse effect on our results of operations and financial condition.
If our future claims are higher than our assumptions, and our reserves prove to be insufficient to cover our actual losses and expenses, we would be required to increase our liabilities, and this could have a material adverse effect on our results of operations and financial condition.
Pursuant to the CLMA between CNO Bermuda Re and CDOC, CDOC will contribute funds to CNO Bermuda Re in the event: (i) CNO Bermuda Re's statutory economic capital and surplus is less than 150 percent of its ECR at the end of any calendar quarter; or (ii) CNO Bermuda Re's liquid assets are insufficient to meet its contractual obligations to ceding insurers, in each case, unless Bankers Life has provided notice of recapture pursuant to the terms of a modified coinsurance agreement between it and CNO Bermuda Re.
Pursuant to the CLMA, CDOC will contribute funds to CNO Bermuda Re in the event: (i) CNO Bermuda Re's statutory economic capital and surplus is less than 150 percent of its ECR at the end of any calendar quarter; or (ii) CNO Bermuda Re's liquid assets are insufficient to meet its contractual obligations to ceding insurers, in each case, unless one or more ceding insurers has provided notice of recapture pursuant to the terms of the applicable reinsurance agreement between it and CNO Bermuda Re and such recapture will cause CNO Bermuda Re to meet (i) and (ii) above.
The Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio (excluding hybrid securities, except to the extent that the aggregate amount outstanding of all such hybrid securities exceeds an amount equal to 15% of total capitalization) of not more than 35.0 percent (such ratio was 30.5 percent at December 31, 2024); and (ii) a minimum consolidated net worth of not less than the sum of $2,674.0 million plus 25.0% of the net equity proceeds received by the Company from the 35 Table of Co n t e n t s issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,869.8 million at December 31, 2024 compared to the minimum requirement of $2,698.8 million).
The Revolving Credit Agreement requires the Company to maintain (each as calculated in accordance with the Revolving Credit Agreement): (i) a debt to total capitalization ratio (excluding hybrid securities, except to the extent that the aggregate amount outstanding of all such hybrid securities exceeds an amount equal to 15% of total capitalization) of 36 Table of Contents not more than 35.0 percent (such ratio was 23.6 percent at December 31, 2025); and (ii) a minimum consolidated net worth of not less than the sum of $2,674.8 million plus 25.0% of the net equity proceeds received by the Company from the issuance and sale of equity interests in the Company (the Company's consolidated net worth was $3,753.2 million at December 31, 2025 compared to the minimum requirement of $2,674.8 million).
Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structure and could require the holding company to contribute additional capital to CNO Bermuda Re or Bankers Life to recapture the ceded business.
Future regulatory changes made by the BMA or the NAIC or other events may impact the capital efficiency of the reinsurance structures and could require the holding company to contribute additional capital to CNO Bermuda Re or the ceding reinsurers to recapture the ceded business.
Our structured securities (as defined below), which comprised 31.0 percent of our available for sale fixed maturity investments at December 31, 2024, are generally subject to variable prepayment on the assets underlying such securities, such as mortgage loans.
Our structured securities (as defined below), which comprised 30.9 percent of our available for sale fixed maturity investments at December 31, 2025, 33 Table of Contents are generally subject to variable prepayment on the assets underlying such securities, such as mortgage loans.
At December 31, 2024, $144.0 million of the indexed account values of the fixed indexed annuities were at contractual minimum participation rates and $327.0 million of the fixed fund values of the fixed indexed annuities were at contractual minimum guaranteed crediting rates.
At December 31, 2025, $226.0 million of the indexed account values of the fixed indexed annuities were at contractual minimum participation rates and $281.9 million of the fixed fund values of the fixed indexed annuities were at contractual minimum guaranteed crediting rates.
On December 13, 2023, the SEC adopted rules to require covered clearing agencies to adopt policies and procedures reasonably designed to require every direct participant of the agency to submit for clearing eligible secondary market transactions in U.S. Treasury securities, which will effectively require those participants to clear eligible cash transactions in U.S.
On December 13, 2023, the SEC adopted amendments to require covered clearing agencies to adopt policies and procedures reasonably designed to require every direct participant of the agency to submit for clearing eligible secondary market transactions in U.S. Treasury securities. These requirements will phase in such that eligible cash market transactions in U.S.
Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structure between CNO Bermuda Re and Bankers Life and could require the holding company to contribute additional capital to CNO Bermuda Re or Bankers Life to recapture the ceded business.
Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structures between CNO Bermuda Re and the ceding reinsurers and could require the holding company to contribute additional capital to CNO Bermuda Re or Bankers Life to recapture the ceded business. Our Bermuda based insurance subsidiary is subject to BSCR requirements.
Agents, insurance brokers and marketing companies who market our products and prospective purchasers of our products use the financial strength ratings of our insurance subsidiaries as an important factor in determining whether to market or purchase.
Agents, insurance brokers and marketing companies who market our products and prospective purchasers of our products use the financial strength ratings of our insurance subsidiaries as an important factor in determining whether to market or purchase. Ratings have the most impact on our annuity, interest-sensitive life insurance and long-term care products.
Our competitors may also adopt AI or generative AI more quickly or more effectively than we do, which could cause competitive harm. Our business could be interrupted or compromised if we experience difficulties arising from outsourcing relationships.
Any such misuse could expose us to legal or regulatory risk, damage customer relationships or cause reputational harm. Our competitors may also adopt AI or generative AI more quickly or more effectively than we do, which could cause competitive harm. Our business could be interrupted or compromised if we experience difficulties arising from outsourcing relationships.
In addition, we expect to recognize approximately $800 million of non-life NOLs on our tax return as a result of changes related to the tax accounting method for allocating indirect costs (pursuant to the Code) to self-constructed real estate assets upon approval from the IRS. Such NOLs will not be subject to expiration.
We recognized $797.6 million of non-life NOLs on our tax return as a result of changes related to the tax accounting method for allocating indirect costs (pursuant to the Code) to self-constructed real estate assets upon approval from the Internal Revenue Service. Such NOLs are not subject to expiration.
If interest rates were to return to low levels for an extended period of time, we may have to invest new cash flows or reinvest proceeds from investments that have matured or have been prepaid or sold at yields that have the effect of reducing our net investment income as well as the spread between interest earned on investments and interest credited to some of our products below present or planned levels.
If interest rates were to return to low levels for an extended period, we may need to invest new cash flows or reinvest proceeds from maturing, prepaid, or sold investments at lower yields, which could reduce our net investment income and narrow the spread between interest earned on investments and interest credited to certain products below current or planned levels.
Rising inflation may impact the sales and persistency of our insurance products, the reliability of our loss reserve estimates and our ability to accurately price insurance products, and may create additional volatility in the fair value of our investments.
Rising inflation may impact the sales and persistency of our insurance products, the reliability of our loss reserve estimates and our ability to accurately price insurance products, and may create additional volatility in the fair value of our investments. A portion of our insurance policy benefits may be affected by increased medical coverage costs and various operating expenses.
As of December 31, 2024, we had approximately $343.9 million of federal tax NOLs resulting in deferred tax assets of approximately $72.2 million ($63.0 million of which expire in years 2028 through 2035 and $9.2 million of which have no expiration date).
As of December 31, 2025, we had approximately $976.4 million of federal tax NOLs resulting in deferred tax assets of approximately $205.0 million ($16.5 million of which expire in years 2032 through 2035 and $959.9 million of which have no expiration date).
The determination of the allowance for credit losses related to our investments is highly subjective and could have a material adverse effect on our operating results and financial condition.
However, the rule could increase costs of trading in U.S. Treasuries and potentially negatively affect market liquidity. The determination of the allowance for credit losses related to our investments is highly subjective and could have a material adverse effect on our operating results and financial condition.
Interest payments on that surplus debenture require prior approval by the Pennsylvania Insurance Department. 36 Table of Co n t e n t s In addition, although we are generally under no obligation to do so, we may elect to contribute additional capital to strengthen the surplus of certain insurance subsidiaries for covenant compliance or regulatory purposes or to provide the capital necessary for growth.
In addition, although we are generally under no obligation to do so, we may elect to contribute additional capital to strengthen the surplus of certain insurance subsidiaries for covenant compliance or regulatory purposes or to provide the capital necessary for growth.
Litigation and regulatory investigations are inherent in our business, may harm our financial condition and reputation, and may negatively impact our financial results. Insurance companies historically have been subject to substantial litigation. In addition to the traditional policy claims associated with their businesses, insurance companies like ours face class action suits and derivative suits from policyholders and/or shareholders.
Insurance companies historically have been subject to substantial litigation. In addition to the traditional policy claims associated with their businesses, insurance companies like ours face class action suits and derivative suits from policyholders and/or shareholders. We also face significant risks related to regulatory investigations and proceedings.
In addition, we have, under an intercompany reinsurance agreement initiated in 2023, ceded approximately $7.6 billion of our fixed indexed annuity statutory reserves from Bankers Life to CNO Bermuda Re as of December 31, 2024.
In addition, we have, under intercompany reinsurance agreements initiated in 2023 and 2025, ceded approximately $8.8 billion of our fixed indexed annuity statutory reserves from Bankers Life and approximately $1.9 billion of our supplemental health statutory reserves from Washington National, respectively, to CNO Bermuda Re as of December 31, 2025.
Treasury securities by December 31, 2025, and eligible repurchase transactions in U.S. Treasury securities by June 30, 2026. As a result, certain transactions between such participants and us will be required to be cleared. Uncertainty remains regarding potential impact of the rule. However, the rule could increase costs of trading in U.S. Treasuries or potentially negatively affect market liquidity.
Treasury securities must be cleared by December 31, 2026, and eligible repurchase market transactions in U.S. Treasury securities must be cleared by June 30, 2027. As a result, certain in-scope transactions between a covered clearing agency's direct participants and us will be required to be cleared. Uncertainty remains regarding potential impact of the rule.
For a description of these ratings, see "Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations-Liquidity and Capital Resources-Financial Strength Ratings of our Insurance Subsidiaries".
The current financial strength ratings of our primary insurance subsidiaries from Fitch, S&P, Moody's and AM Best are "A", "A-", "A3" and "A", respectively. For a description of these ratings, see "Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations-Liquidity and Capital Resources-Financial Strength Ratings of our Insurance Subsidiaries".
Economic Conditions, Market Conditions and Investments: There are risks to our business associated with broad economic conditions. General factors such as the availability of credit, consumer spending, business investment, capital market conditions and inflation affect our business.
Economic Conditions, Market Conditions and Investments: There are risks to our business associated with broad economic conditions. General factors such as the availability of credit, consumer spending, business investment, capital market conditions and inflation affect our business. Threats facing the U.S. economy include the imposition of tariffs, increasing the federal debt limit and other federal budget and taxation questions.
The estimated RBC ratio of CLTX was 330 percent at December 31, 2024. CDOC also holds a surplus debenture from Colonial Penn Life Insurance Company ("Colonial Penn") with a principal balance of $160.0 million.
The estimated RBC ratio of CLTX was 323 percent at December 31, 2025. CDOC also holds a surplus debenture from Colonial Penn Life Insurance Company ("Colonial Penn") with a principal balance of $160.0 million on as 37 Table of Contents of December 31, 2025. Interest payments on that surplus debenture require prior approval by the Pennsylvania Insurance Department.
In addition, the NAIC and several states have proposed and/or enacted regulations related to required disclosures and/or standards of conduct when insurance producers provide recommendations to clients regarding sales of annuity products. These regulations and similar regulatory initiatives could have an impact on Company operations and the manner in which broker-dealers and investment advisers distribute the Company's products.
In addition, the NAIC and several states have proposed and/or enacted regulations related to required disclosures and/or standards of conduct when insurance producers provide recommendations to clients regarding sales of annuity products.
These risks are 32 Table of Co n t e n t s significantly greater with respect to below-investment grade securities and alternative investments, which comprised 4.4 percent and 2.6 percent of our total investments as of December 31, 2024.
These risks are significantly greater with respect to below-investment grade securities and alternative investments, which comprised 3.5 percent and 3.1 percent of our total investments as of December 31, 2025, respectively.
These examinations or investigations often focus on the activities of the registered representatives and investment adviser representatives doing business through such entities and the entities' supervision of those persons.
The SEC, FINRA and other governmental agencies, as well as state securities commissions, may examine or investigate the activities of broker-dealers and investment advisers. These examinations or investigations often focus on the activities of the registered representatives and investment adviser representatives doing business through such entities and the entities' supervision of those persons.
If an ownership change were to occur for purposes of Section 382, we would be required to calculate an annual limitation on the use of our NOLs to offset future taxable income.
See the note to the consolidated financial statements entitled "Income Taxes" for more information about the Section 382 Rights Agreement and the amendments included in CNO's certificate of incorporation. 38 Table of Contents If an ownership change were to occur for purposes of Section 382, we would be required to calculate an annual limitation on the use of our NOLs to offset future taxable income.
The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (3.43 percent at December 31, 2024). 37 Table of Co n t e n t s The value of our deferred tax assets may be reduced to the extent our future profits are less than we have projected or the current corporate income tax rate is reduced, and such reductions in value may have a material adverse effect on our results of operations and our financial condition.
The value of our deferred tax assets may be reduced to the extent our future profits are less than we have projected or the current corporate income tax rate is reduced, and such reductions in value may have a material adverse effect on our results of operations and our financial condition.
Threats facing the U.S. economy include the imposition of tariffs, the continued disagreement over the federal debt limit and other federal budget and taxation questions. Failure to resolve these political issues in a timely manner could result in increased costs, market disruption and volatility and impact government spending and economic activity.
Failure to resolve these political issues in a timely manner could result in federal government shutdowns, a default on government debt, increased costs, market disruption and volatility and impact government spending and economic activity.
Uncertainty remains regarding potential amendments to the Dodd-Frank Act and whether any such changes to the Dodd-Frank Act would result in a material effect on our business operations. State insurance regulators, federal regulators and the NAIC continually reexamine existing laws and regulations and may impose changes in the future.
These and other regulations under the Dodd-Frank Act could have a material adverse effect on our business, results of operations, cash flows or financial condition. State insurance regulators, federal regulators and the NAIC continually reexamine existing laws and regulations and may impose changes in the future.
Further, severe market volatility may leave us unable to react to market events in a prudent manner consistent with our historical investment practices.
Our investment portfolio may be adversely affected as a result of any delays or failures of borrowers to make payments of principal and interest when due. Further, severe market volatility may leave us unable to react to market events in a prudent manner consistent with our historical investment practices.
While no such cybersecurity event has been material, there can be no assurance that a future breach will not occur or, if any does occur, that it can be promptly detected and sufficiently remediated without materially impacting our business or our operations. 42 Table of Co n t e n t s Moreover, we invest significant time and resources towards ensuring that the capacity and reliability of our information technology systems, and those of third parties on which our operations rely, are sufficient and appropriate to support our business.
While no such cybersecurity event has been material, there can be no assurance that a future breach will not occur or, if any does occur, that it can be promptly detected and sufficiently remediated without materially impacting our business, operations, or reputation.
The relative newness of the technology, the speed at which it is being adopted, and the relative lack of laws, regulations or standards expressly and specifically governing its use increases these risks. Any such misuse could expose us to legal or regulatory risk, damage customer relationships or cause reputational harm.
The relative newness of the technology, the speed at which it is being adopted, and the relative lack of laws, regulations or standards expressly and specifically governing its use, combined with the growing interest by various legislators and regulators to address the development and deployment of AI technologies in a manner which may not be consistent across jurisdictions, increases these risks.
Our broker-dealer and investment adviser subsidiaries are subject to regulation and supervision by the SEC, FINRA and certain state regulatory bodies. The SEC, FINRA and other governmental agencies, as well as state securities commissions, may examine or investigate the activities of broker-dealers and investment advisers.
We believe the BSCR ratios will be in excess of the levels that would subject our Bermuda subsidiary to any regulatory action. Our broker-dealer and investment adviser subsidiaries are subject to regulation and supervision by the SEC, FINRA and certain state regulatory bodies.
Removed
A portion of our insurance policy benefits may be affected by increased medical coverage costs and various operating expenses including payroll have already been affected.
Added
The amount and timing of net investment income, capital contributions and distributions from alternative investments, which primarily include limited partnership interests that are typically reported to us one quarter in arrears, can fluctuate significantly due to the performance of the underlying investments or changes in market or economic conditions.
Removed
In addition, interest rates impact the liability for the benefits we provide under our agent deferred compensation plan (as it is our policy to immediately recognize changes in assumptions used to determine this liability). Interest rates in 2024 and 2023 were higher than the historically low interest rates experienced prior to 2022.
Added
Additionally, these investments, as well as our investments in private companies, are less liquid than similar, publicly traded investments and a decline in market liquidity could impact our ability to sell them at their current carrying values.
Removed
See the note to the consolidated financial statements entitled "Income Taxes" for more information about the Section 382 Rights Agreement and the amendments included in CNO's certificate of incorporation.
Added
The annual restriction would be calculated based upon the value of CNO's equity at the time of such ownership change, multiplied by a federal long-term tax exempt rate (3.58 percent at December 31, 2025).
Removed
We also face significant risks related to regulatory investigations and proceedings.
Added
These requirements evaluate the adequacy of statutory economic capital and surplus in relation to certain categories of risk, including: fixed income investment risk, equity investment risk, long-term interest rate/liquidity risk, currency risk, concentration risk, certain insurance risks, credit risk, catastrophe risk and operational risk.
Removed
These and other regulations under the Dodd-Frank Act could pose limitations and burdens on the Company and its derivatives counterparties, which could result in increased costs to the Company in connection with its derivatives transactions.
Added
The requirements are used by the BMA as an early warning tool and failure to maintain statutory economic capital and surplus above specified levels, could result in increased regulatory oversight. We are in process of completing our subsidiary’s capital and solvency return in respect of the year ended December 31, 2025, which includes the BSCR.
Removed
Our investment portfolio may be adversely affected as a result of any delays or failures of borrowers to make payments of principal and interest when due or delays or moratoriums on foreclosures, enforcement actions with respect to delinquent or defaulted mortgages imposed by governmental authorities or the failure of tenants to pay rent or tenants' demands for lease modifications.
Added
These regulations and similar regulatory initiatives could have an impact on Company operations and the manner in which broker-dealers and investment advisers distribute the Company's products. 40 Table of Contents Litigation and regulatory investigations are inherent in our business, may harm our financial condition and reputation, and may negatively impact our financial results.
Removed
Market dislocations, decreases in observable market 41 Table of Co n t e n t s activity or unavailability of information, in each case, arising from major public health issues may impact the key inputs used to derive certain estimates and assumptions made in connection with financial reporting or otherwise.
Added
Changes to these requirements have resulted in an increase to the amount of reserves and capital we are required to hold and may adversely impact the ability of our insurance subsidiaries to pay dividends to the holding company.
Removed
Ratings have the most impact on our annuity, interest-sensitive life 43 Table of Co n t e n t s insurance and long-term care products. The current financial strength ratings of our primary insurance subsidiaries from Fitch, S&P, Moody's and AM Best are "A", "A-", "A3" and "A", respectively.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also perform periodic risk assessments throughout the term of the engagements, including those third parties located outside the United States that have access to our Company and customer information. 46 Table of Co n t e n t s As of December 31, 2024, no cybersecurity threat, including from a cybersecurity incident, has materially affected our business strategy, results of operations, or financial condition.
Biggest changeWe also perform periodic risk assessments throughout the term of the engagements, including those third parties located outside the United States that have access to our Company and customer information. 47 Table of Contents As of December 31, 2025, no cybersecurity threat, including from a cybersecurity incident, has materially affected our business strategy, results of operations, or financial condition.
We have comprehensive cybersecurity assessment processes and procedures in place, including security risk questionnaires, standard documentation requests, and utilization of a third-party risk evaluation tool to provide insight on potential third-party vendors. We utilize private connections (including private VPN) and extensive use of virtual desktops to secure access to our data and systems.
We have comprehensive cybersecurity assessment processes and procedures in place, including security risk questionnaires, standard documentation requests, and utilization of a third-party risk evaluation tool to provide insight on potential third-party vendors. We utilize private connections, including a virtual private network, and extensive use of virtual desktops to secure access to our data and systems.

Item 2. Properties

Properties — owned and leased real estate

5 edited+2 added−1 removed0 unchanged
Biggest changeIn June of 2024 we sold our Philadelphia, Pennsylvania office building. Our Optavise business has three office locations: Orlando, Florida; Milwaukee, Wisconsin; and Birmingham, Alabama. In Orlando, we lease 22,000 square feet with terms through December 2028. Our Milwaukee operations occupy 7,100 square feet pursuant to a lease with terms through February 2030.
Biggest changeIn June 2024, we sold our Philadelphia, Pennsylvania office building, but for administrative purposes continue to license a 1,300 square foot office with terms through December 2028. Optavise, LLC has three office locations: Orlando, Florida; Milwaukee, Wisconsin; and Birmingham, Alabama.
ITEM 2. PROPERTIES. Our headquarters and certain administrative operations of our subsidiaries and Worksite Division are in a 125,000 leased building with terms through June 2034 located in Carmel, Indiana, immediately north of Indianapolis. In April of 2024 we moved all but our mail operations to this new location from our owned Campus.
ITEM 2. PROPERTIES. Our headquarters and certain administrative operations of our subsidiaries and Worksite Division are in a 125,000 square foot leased building with terms through June 2034 located in Carmel, Indiana, immediately north of Indianapolis. In April 2024, we moved all but our mail operations to this new location from our owned Campus.
We also lease approximately 230 branch offices in various states totaling approximately 781,000 square feet. These leases are generally short-term in length, with remaining lease terms expiring between 2025 and 2030. As a result of our success with hybrid work arrangements and evolving business needs, our direct-to-consumer products are primarily administered via remote and hybrid work arrangements.
We also lease approximately 230 branch offices in various states totaling approximately 795,000 square feet. These are generally short-term in length, with remaining lease terms expiring between 2026 and 2032. As a result of our success with hybrid work arrangements and evolving business needs, our direct-to-consumer products are primarily administered via remote and hybrid work arrangements.
Our outsourced mail operations will remain in one of the owned buildings (approximately 100,000 square feet) until a potential buyer and closing requirements are determined. Our Consumer Division is primarily administered from downtown Chicago, Illinois. We currently lease approximately 33,000 square feet with terms through August 2033.
Our outsourced mail operations will remain in one of the owned buildings (approximately 100,000 square feet) until the end of its current contract or alternative requirements are determined with a buyer. Our Consumer Division is primarily administered from downtown Chicago, Illinois. We currently lease approximately 33,000 square feet with terms through August 2033.
In December 2023, the entire 77-acre campus with six buildings (approximately 630,000 square feet) was listed for sale in preparation for our move. We are presently in discussions with potential buyers for all or portions of the campus.
In December 2023, the entire 77-acre campus with six buildings (approximately 630,000 square feet) was listed for sale in preparation for our move. In November 2025, we sold one of the six buildings (approximately 103,000 square feet).
Removed
Our Birmingham operation occupies 7,400 square feet pursuant to a lease with terms through July 2026. 47 Table of Co n t e n t s CNO Bermuda Re, moved into its 1,400 square foot Hamilton, Bermuda office in July 2024 with lease terms through June 2027.
Added
In November 2025, we announced our intention to exit the fee services side of the Worksite business, which will impact the 48 Table of Contents office locations. Our Birmingham location (7,400 square feet) will close at the end of the lease in July 2026.
Added
We have exercised our early termination option at our Milwaukee location (7,100 square feet), which moves the lease end to July 2027 from February 2030. Decisions regarding our Orlando location (22,000 square feet with terms through December 2028) are ongoing. CNO Bermuda Re leases a 1,400 square foot on-island office with terms through June 2027.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeBhojwani was a member of the board of management of Allianz SE and Chairman of Allianz of America, Allianz Life Insurance Company, and Fireman’s Fund Insurance Company from 2012 to 2015.
Biggest changeFrom April 2015 until joining CNO, chief executive officer of GCB, LLC, an insurance and financial services consulting company that he founded. Mr. Bhojwani was a member of the board of management of Allianz SE and Chairman of Allianz of America, Allianz Life Insurance Company, and Fireman's Fund Insurance Company from 2012 to 2015.
Johnson has held various investment management positions since joining CNO in 1997. Joel T. Koehneman, 40 2025 Since January 2025, chief accounting officer of CNO. Prior to joining CNO, Mr. Koehneman served as Finance Director at CDW Corporation in 2024. From 2008 to 2023, he held various positions within the audit practice at PricewaterhouseCoopers, primarily focused on life insurance clients.
Johnson has held various investment management positions since joining CNO in 1997. Joel T. Koehneman, 41 2025 Since January 2025, chief accounting officer of CNO. Prior to joining CNO, Mr. Koehneman served as Finance Director at CDW Corporation in 2024. From 2008 to 2023, he held various positions within the audit practice at PricewaterhouseCoopers, primarily focused on life insurance clients.
From 2016 until joining CNO, chief human capital officer of TCF Bank. From 2007 to 2016, Ms. Franzese held various human resources positions at Allianz, including the chief human resources role for Allianz of North America. Scott L. Goldberg, 54 2004 Since January 2020, president, Consumer Division. From September 2013 to January 2020, president of Bankers Life. Mr.
From 2016 until joining CNO, chief human capital officer of TCF Bank. From 2007 to 2016, Ms. Franzese held various human resources positions at Allianz, including the chief human resources role for Allianz of North America. Scott L. Goldberg, 55 2004 Since January 2020, president, Consumer Division. From September 2013 to January 2020, president of Bankers Life. Mr.
From September 2019 to December 2023, chief actuary and from June 2020 to June 2022, chief risk officer. From 2013 to 2019, Ms. DeToro held executive leadership positions at New York Life. From 2011 to 2013, principal at Deloitte Consulting. Yvonne K. Franzese, 66 2017 Since November 2017, chief human resources officer of CNO.
From September 2019 to December 2023, chief actuary and from June 2020 to June 2022, chief risk officer. From 2013 to 2019, Ms. DeToro held executive leadership positions at New York Life. From 2011 to 2013, principal at Deloitte Consulting. Yvonne K. Franzese, 67 2017 Since November 2017, chief human resources officer of CNO.
Goldberg has held various other positions since joining CNO in 2004. Eric R. Johnson, 64 1997 Since September 2003, chief investment officer of CNO and president and chief executive officer of 40|86 Advisors, CNO's wholly-owned registered investment advisor. Since January 2018, executive in charge of corporate development activities. Mr.
Goldberg has held various other positions since joining CNO in 2004. Eric R. Johnson, 65 1997 Since September 2003, chief investment officer of CNO and president and chief executive officer of 40|86 Advisors, CNO's wholly-owned registered investment advisor. Since January 2018, executive in charge of corporate development activities. Mr.
From November 2018 to December 2022, senior vice president and chief information officer. Prior to joining CNO, Mr. Mead held various positions at AIG Technologies from 1996 to 2018, including senior vice president and transformation executive. Rocco F. Tarasi, 53 2017 Since March 2019, chief marketing officer of CNO.
From November 2018 to December 2022, senior vice president and chief information officer. Prior to joining CNO, Mr. Mead held various positions at AIG Technologies from 1996 to 2018, including senior vice president and transformation executive. Rocco F. Tarasi, 54 2017 Since March 2019, chief marketing officer of CNO.
From 2007 to 2012, he served as chief executive officer of Allianz Life Insurance Company of North America and was president of Commercial Business, Fireman's Fund Insurance Company from 2004 to 2007. Karen J. DeToro, 53 2019 Since January 2024, president, Worksite Division.
From 2007 to 2012, he served as chief executive officer of Allianz Life Insurance Company of North America and was president of Commercial Business, Fireman's Fund Insurance Company from 2004 to 2007. Karen J. DeToro, 54 2019 Since January 2024, president, Worksite Division.
Jeanne L. Linnenbringer, 62 2015 Since January 2023, chief operations officer of CNO. From August 2017 to December 2022, senior vice president of operations. From June 2015 to August 2017, various leadership positions including senior vice president of consumer operations and vice president of customer service. Prior to joining CNO, Ms.
Jeanne L. Linnenbringer, 63 2015 Since January 2023, chief operations officer of CNO. From August 2017 to December 2022, senior vice president of operations. From June 2015 to August 2017, various leadership positions including senior vice president of consumer operations and vice president of customer service. Prior to joining CNO, Ms.
Linnenbringer held various positions at Genworth Financial from 2000 to 2015. Paul H. McDonough, 60 2019 Since March 2019, chief financial officer of CNO. From 2005 to 2017, executive vice president and chief financial officer of OneBeacon Insurance Group. Michael E. Mead, 58 2018 Since January 2023, chief information officer of CNO.
Linnenbringer held various positions at Genworth Financial from 2000 to 2015. Paul H. McDonough, 61 2019 Since March 2019, chief financial officer of CNO. From 2005 to 2017, executive vice president and chief financial officer of OneBeacon Insurance Group. Michael E. Mead, 59 2018 Since January 2023, chief information officer of CNO.
Jeremy D. Williams, 48 2003 Since January 2024, chief actuary of CNO. Mr. Williams has served in various actuarial capacities since joining CNO in 2003, including most recently as senior vice president of valuation. Matthew J. Zimpfer, 57 1998 Since June 2008, general counsel of CNO. Mr.
Jeremy D. Williams, 49 2003 Since January 2024, chief actuary of CNO. Mr. Williams has served in various actuarial capacities since joining CNO in 2003, including most recently as senior vice president of valuation. Matthew J. Zimpfer, 58 1998 Since June 2008, general counsel of CNO. Mr.
Zimpfer has held various legal positions since joining CNO in 1998. ___________________________ (a) The executive officers serve as such at the discretion of the Board of Directors and are elected annually. (b) Business experience is given for at least the last five years. 49 Table of Co n t e n t s PART II
Zimpfer has held various legal positions since joining CNO in 1998. ___________________________ (a) The executive officers serve as such at the discretion of the Board of Directors and are elected annually. (b) Business experience is given for at least the last five years. 50 Table of Contents PART II
ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 48 Table of Co n t e n t s Executive Officers of the Registrant Officer With CNO Positions with CNO Name and Age (a) Since Principal Occupation and Business Experience (b) Gary C. Bhojwani, 57 2016 Since January 2018, chief executive officer of CNO.
ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 49 Table of Contents Executive Officers of the Registrant Officer With CNO Positions with CNO Name and Age (a) Since Principal Occupation and Business Experience (b) Gary C. Bhojwani, 58 2016 Since January 2018, chief executive officer of CNO. From April 2016 to December 2017, president of CNO.
Removed
From April 2016 to December 2017, president of CNO. From April 2015 until joining CNO, chief executive officer of GCB, LLC, an insurance and financial services consulting company that he founded. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed3 unchanged
Biggest changeThe stock performance shown in this graph represents past performance and should not be considered an indication of future performance of CNO's common stock. 50 Table of Co n t e n t s *$100 invested on December 31, 2019 in stock or index, including reinvestment of dividends. 12/19 12/20 12/21 12/22 12/23 12/24 CNO Financial Group, Inc. $ 100.00 $ 125.99 $ 137.98 $ 135.77 $ 169.88 $ 231.28 S&P Life & Health Insurance Index 100.00 90.52 123.73 136.53 142.87 171.87 S&P MidCap 400 Index 100.00 113.66 141.80 123.28 143.54 163.54 51 Table of Co n t e n t s ISSUER PURCHASES OF EQUITY SECURITIES Period (in 2024) Total number of shares (or units) Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs(a) (dollars in millions) October 1 through October 31 924,471 $ 35.02 923,066 $ 299.5 November 1 through November 30 419,482 38.16 419,418 283.5 December 1 through December 31 1,136,209 38.14 1,134,898 240.3 Total 2,480,162 36.98 2,477,382 240.3 _________________ (a) In May 2011, the Company announced a securities repurchase program.
Biggest changeThe stock performance shown in this graph represents past performance and should not be considered an indication of future performance of CNO's common stock. 51 Table of Contents *$100 invested on December 31, 2020 in stock or index, including reinvestment of dividends. 12/20 12/21 12/22 12/23 12/24 12/25 CNO Financial Group, Inc. $ 100.00 $ 109.51 $ 107.76 $ 134.83 $ 183.57 $ 213.13 S&P Life & Health Insurance Index 100.00 136.68 150.82 157.83 189.87 201.00 S&P MidCap 400 Index 100.00 124.76 108.47 126.29 143.89 154.68 52 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES Period (in 2025) Total number of shares (or units) Average price paid per share (or unit) Total number of shares (or units) purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs(a) (dollars in millions) October 1 through October 31 544,848 $ 39.65 543,635 $ 458.8 November 1 through November 30 436,509 40.81 436,457 441.0 December 1 through December 31 493,726 41.94 491,662 420.4 Total 1,475,083 40.76 1,471,754 420.4 _________________ (a) In May 2011, the Company announced a securities repurchase program.
The comparison for each of the periods assumes that $100 was invested on December 31, 2019 in each of CNO common stock, the stocks included in the S&P Life and Health Insurance Index and the stocks included in the S&P MidCap 400 Index and that all dividends were reinvested.
The comparison for each of the periods assumes that $100 was invested on December 31, 2020 in each of CNO common stock, the stocks included in the S&P Life and Health Insurance Index and the stocks included in the S&P MidCap 400 Index and that all dividends were reinvested.
EQUITY COMPENSATION PLAN INFORMATION The following table summarizes information, as of December 31, 2024, relating to our common stock that may be issued under the CNO Financial Group, Inc. Amended and Restated Long-Term Incentive Plan.
EQUITY COMPENSATION PLAN INFORMATION The following table summarizes information, as of December 31, 2025, relating to our common stock that may be issued under the CNO Financial Group, Inc. Amended and Restated Long-Term Incentive Plan.
PERFORMANCE GRAPH The performance graph below compares CNO's cumulative total shareholder return on its common stock for the period from December 31, 2019 through December 31, 2024 with the cumulative total return of the Standard & Poor's Life and Health Insurance Index (the "S&P Life and Health Insurance Index") and the Standard & Poor's MidCap 400 Index (the "S&P MidCap 400 Index").
PERFORMANCE GRAPH The performance graph below compares CNO's cumulative total shareholder return on its common stock for the period from December 31, 2020 through December 31, 2025 with the cumulative total return of the Standard & Poor's Life and Health Insurance Index (the "S&P Life and Health Insurance Index") and the Standard & Poor's MidCap 400 Index (the "S&P MidCap 400 Index").
As of February 5, 2025, there were approximately 73,000 holders of the outstanding shares of common stock, including individual participants in securities position listings. We commenced the payment of a dividend on our common stock in the second quarter of 2012. The dividend on our common stock is declared each quarter by our Board of Directors.
As of February 17, 2025, there were approximately 86,709 holders of the outstanding shares of common stock, including individual participants in securities position listings. We commenced the payment of a dividend on our common stock in the second quarter of 2012. The dividend on our common stock is declared each quarter by our Board of Directors.
Number of securities to be issued upon exercise of outstanding options and rights Weighted-average exercise price of outstanding options and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 1,791,185 $ 19.48 2,874,434 Equity compensation plans not approved by security holders — — — Total 1,791,185 $ 19.48 2,874,434
Number of securities to be issued upon exercise of outstanding options and rights Weighted-average exercise price of outstanding options and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 1,359,190 $ 19.79 4,287,550 Equity compensation plans not approved by security holders — — — Total 1,359,190 $ 19.79 4,287,550

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

174 edited+63 added−32 removed122 unchanged
Biggest changeIn light of these statutes and regulations and our capital management strategy, we generally seek to invest in (i) highly rated securities such as United States government and government-agency securities and corporate securities rated investment grade by established nationally recognized rating organizations; (ii) securities of comparable investment quality, if not rated; or (iii) a limited quantity of other investments which offer differentiated return characteristics. 76 Table of Co n t e n t s Fixed Maturities, Available for Sale The following table summarizes the carrying values and gross unrealized losses of our fixed maturity securities, available for sale, by category as of December 31, 2024 (dollars in millions): Carrying value Percent of fixed maturities Gross unrealized losses Percent of gross unrealized losses States and political subdivisions $ 2,834.3 12.4 % $ 436.4 17.2 % Commercial mortgage-backed securities 2,197.5 9.6 183.7 7.2 Banks 1,832.1 8.0 191.2 7.6 Non-agency residential mortgage-backed securities 1,539.1 6.7 130.8 5.2 Asset-backed securities 1,516.4 6.6 66.5 2.6 Insurance 1,155.1 5.1 186.9 7.4 Utilities 1,152.1 5.0 160.9 6.3 Brokerage 1,041.7 4.6 102.3 4.0 Healthcare/pharmaceuticals 1,030.3 4.5 227.8 9.0 Collateralized loan obligations 1,016.8 4.5 4.0 0.2 Agency residential mortgage-backed securities 819.6 3.6 5.5 0.2 Technology 706.3 3.1 146.4 5.8 Food/beverage 581.2 2.6 90.4 3.6 Certificates of deposit 488.3 2.1 — — Energy 475.9 2.1 42.9 1.7 Cable/media 466.8 2.0 75.6 3.0 Transportation 344.3 1.5 42.7 1.7 Real estate/REITs 328.7 1.4 41.5 1.6 Telecom 302.7 1.3 33.6 1.3 Capital goods 289.9 1.3 33.5 1.3 Chemicals 277.9 1.2 35.3 1.4 Autos 239.6 1.1 23.3 0.9 Other 2,203.9 9.7 272.9 10.8 Total fixed maturities, available for sale $ 22,840.5 100.0 % $ 2,534.1 100.0 % 77 Table of Co n t e n t s The following table summarizes the gross unrealized losses of our fixed maturity securities, available for sale, by category and ratings category as of December 31, 2024 (dollars in millions): Investment grade Below-investment grade AAA/AA/A BBB BB B+ and below Total gross unrealized losses States and political subdivisions $ 426.9 $ 7.7 $ — $ 1.8 $ 436.4 Healthcare/pharmaceuticals 163.2 62.6 2.0 — 227.8 Banks 120.6 68.3 2.3 — 191.2 Insurance 102.5 81.4 3.0 — 186.9 Commercial mortgage-backed securities 136.0 21.8 14.8 11.1 183.7 Utilities 104.3 55.8 0.8 — 160.9 Technology 86.6 57.5 2.2 0.1 146.4 Non-agency residential mortgage-backed securities 95.6 26.0 0.6 8.6 130.8 Brokerage 62.9 38.5 0.6 0.3 102.3 Food/beverage 31.6 57.9 0.8 0.1 90.4 Cable/media 13.1 60.1 1.3 1.1 75.6 Asset-backed securities 25.1 31.5 9.8 0.1 66.5 Education 52.9 5.2 — — 58.1 Energy 9.8 33.1 — — 42.9 Transportation 20.1 22.6 — — 42.7 Real estate/REITs 27.1 14.3 0.1 — 41.5 Consumer products 22.9 12.5 2.9 0.5 38.8 Chemicals 2.9 32.0 0.3 0.1 35.3 Retail 23.4 2.7 1.0 6.8 33.9 Telecom 0.3 33.3 — — 33.6 Capital goods 19.3 12.6 1.6 — 33.5 United States Treasury securities and obligations of United States government corporations and agencies 28.6 — — — 28.6 Aerospace/defense 7.0 18.0 — 0.1 25.1 Autos 5.2 17.8 0.2 0.1 23.3 Building materials 5.7 15.5 0.3 0.1 21.6 Metals and mining 6.5 9.2 0.5 — 16.2 Foreign governments 6.7 8.6 — — 15.3 Paper 0.4 11.4 — 0.1 11.9 Entertainment/hotels 6.6 3.7 0.1 — 10.4 Agency residential mortgage-backed securities 5.5 — — — 5.5 Collateralized loan obligations 4.0 — — — 4.0 Business services — 1.3 0.3 0.5 2.1 Other 9.7 1.0 0.1 0.1 10.9 Total fixed maturities, available for sale $ 1,633.0 $ 823.9 $ 45.6 $ 31.6 $ 2,534.1 78 Table of Co n t e n t s Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations (Moody's, S&P or Fitch), or if not rated by such firms, the rating assigned by the NAIC.
Biggest changeFixed Maturities, Available for Sale The following table summarizes the carrying values and gross unrealized losses of our fixed maturity securities, available for sale, by category as of December 31, 2025 (dollars in millions): Carrying value Percent of fixed maturities Gross unrealized losses Percent of gross unrealized losses States and political subdivisions $ 2,954.7 12.4 % $ 378.9 18.1 % Commercial mortgage-backed securities 2,047.0 8.6 114.7 5.5 Banks 1,820.8 7.6 150.6 7.2 Asset-backed securities 1,747.3 7.3 47.4 2.3 Non-agency residential mortgage-backed securities 1,585.7 6.6 90.9 4.4 Insurance 1,383.1 5.8 162.1 7.8 Utilities 1,196.2 5.0 141.9 6.8 Collateralized loan obligations 1,142.5 4.8 2.7 0.1 Healthcare/pharma 1,087.2 4.6 205.1 9.8 Brokerage 1,013.0 4.2 61.5 2.9 Technology 866.0 3.6 150.0 7.2 Agency residential mortgage-backed securities 849.5 3.6 — — Cable/media 682.4 2.9 88.2 4.2 Food/beverage 667.3 2.8 78.7 3.8 Energy/pipelines 594.8 2.5 34.1 1.6 Transportation 405.9 1.7 44.9 2.1 Real Estate/REIT 393.2 1.6 31.2 1.5 Chemicals 252.2 1.1 31.2 1.5 Capital goods 245.2 1.0 26.8 1.3 Autos 244.5 1.0 18.2 0.9 Education 202.6 0.8 58.6 2.8 Metals and mining 196.4 0.8 9.9 0.5 Other 2,309.3 9.7 161.3 7.7 Total fixed maturities, available for sale $ 23,886.8 100.0 % $ 2,088.9 100.0 % 79 Table of Contents The following table summarizes the gross unrealized losses of our fixed maturity securities, available for sale, by category and ratings category as of December 31, 2025 (dollars in millions): Investment grade Below-investment grade AAA/AA/A BBB BB B+ and below Total gross unrealized losses States and political subdivisions $ 371.0 $ 5.9 $ 0.2 $ 1.8 $ 378.9 Healthcare/pharmaceuticals 156.3 47.9 0.1 0.8 205.1 Insurance 101.0 58.7 2.4 — 162.1 Banks 104.0 46.6 — — 150.6 Technology 90.5 57.7 1.5 0.3 150.0 Utilities 94.8 46.8 0.3 — 141.9 Commercial mortgage-backed securities 76.3 23.1 14.6 0.7 114.7 Non-agency residential mortgage-backed securities 81.1 8.4 0.2 1.2 90.9 Cable/media 7.9 67.2 12.7 0.4 88.2 Food/beverage 30.9 47.7 0.1 — 78.7 Brokerage 40.9 20.4 0.2 — 61.5 Education 53.3 5.3 — — 58.6 Asset-backed securities 16.3 29.5 1.4 0.2 47.4 Transportation 23.9 19.0 — 2.0 44.9 Energy 8.4 25.6 0.1 — 34.1 Chemicals 2.8 26.9 1.5 — 31.2 Real estate/REITs 21.6 9.5 — 0.1 31.2 United States Treasury securities and obligations of United States government corporations and agencies 30.2 — — — 30.2 Retail 24.7 1.4 0.8 — 26.9 Capital goods 20.6 6.2 — — 26.8 Consumer products 10.3 1.2 9.4 0.4 21.3 Aerospace/defense 7.2 13.8 — — 21.0 Building materials 5.4 12.9 — — 18.3 Autos 4.3 13.9 — — 18.2 Telecom 0.1 11.7 — — 11.8 Foreign governments 5.4 5.3 — — 10.7 Metals and mining 3.0 6.8 0.1 — 9.9 Entertainment/hotels 6.2 0.3 0.1 — 6.6 Paper — 6.2 — — 6.2 Business services 0.2 3.5 — — 3.7 Packaging — 3.0 — — 3.0 Collateralized loan obligations 2.5 0.2 — — 2.7 Other 1.2 0.1 0.3 — 1.6 Total fixed maturities, available for sale $ 1,402.3 $ 632.7 $ 46.0 $ 7.9 $ 2,088.9 80 Table of Contents Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations (Moody's, S&P or Fitch), or if not rated by such firms, the rating assigned by the NAIC.
Income from insurance products is the sum of the insurance margins of the annuity, health and life product lines, less expenses allocated to the insurance lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes.
Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes.
Income from insurance products is the sum of the insurance margins of the annuity, health and life product lines, less expenses allocated to the insurance lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes.
Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes.
Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities.
Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities.
Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive income (loss). Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management.
Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive loss. Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management.
Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average insurance liabilities, net of insurance intangibles, for the block in each period.
Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average net insurance liabilities for the block in each period.
Comprehensive Annual Actuarial Review: We perform an annual review of our experience and assumptions including, but not limited to, assumptions related to mortality rates, surrender rates, earned rates, credited rates and expenses.
Comprehensive Annual Actuarial Review: We perform an annual review of our experience and assumptions including, but not limited to, assumptions related to mortality rates, morbidity rates, surrender rates, earned rates, credited rates and expenses.
Risk Factors - High inflation levels could have adverse consequences for us, the insurance industry and the U.S. economy generally" for additional information on inflation.
Risk Factors - Inflation levels could have adverse consequences for us, the insurance industry and the U.S. economy generally" for additional information on inflation.
Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the funding agreement-backed note ("FABN") program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders.
Investment income not allocated to product lines represents net investment 54 Table of Contents income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the funding agreement-backed note ("FABN") program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders.
(b) Includes projected interest payments based on interest rates, as applicable, as of December 31, 2024. Refer to the note to the consolidated financial statements entitled "Notes Payable - Direct Corporate Obligations" for additional information on notes payable. (c) These borrowings represent collateralized borrowings from the FHLB and projected interest payments on such borrowings.
(b) Includes projected interest payments based on interest rates, as applicable, as of December 31, 2025. Refer to the note to the consolidated financial statements entitled "Notes Payable - Direct Corporate Obligations" for additional information on notes payable. (c) These borrowings represent collateralized borrowings from the FHLB and projected interest payments on such borrowings.
We view our operations as three insurance product lines (annuity, health and life) and the investment and fee income segments. Our segments are aligned based on their common characteristics, comparability of profit margins and the way management makes operating decisions and assesses the performance of the business.
We view our operations as three insurance product lines (annuity, health and life) and the investment and fee income segments. Our segments are aligned based on their common characteristics, comparability of profit margins and the way the CODM makes operating decisions and assesses the performance of the business.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS. In this section, we review the consolidated financial condition of CNO and its consolidated results of operations for the years ended December 31, 2024, 2023 and 2022 and, where appropriate, factors that may affect future financial performance.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS. In this section, we review the consolidated financial condition of CNO and its consolidated results of operations for the years ended December 31, 2025, 2024 and 2023 and, where appropriate, factors that may affect future financial performance.
Our estimates of future taxable income are based on evidence we consider to be objectively verifiable. At December 31, 2024, our projection of future taxable income for purposes of determining the valuation allowance is based on our estimates of such future taxable income through the date our NOLs expire.
Our estimates of future taxable income are based on evidence we consider to be objectively verifiable. At December 31, 2025, our projection of future taxable income for purposes of determining the valuation allowance is based on our estimates of such future taxable income through the date our NOLs expire.
When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits and interest credited to policyholders; and (ii) amortization of deferred acquisition costs and present value of future profits, non-deferred commissions and advertising expense.
When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits; (ii) interest credited to policyholders; (iii) amortization of deferred acquisition costs and present value of future profits, (iv) non-deferred commissions; and (v) advertising expense.
Due to differences between statutory and GAAP insurance liabilities, we were not required to recognize a similar asset adequacy or premium deficiency reserve in our consolidated financial statements prepared in accordance with GAAP. The determination of the need for and amount of asset adequacy or premium deficiency reserves is subject to numerous actuarial assumptions and state requirements.
Due to differences between statutory and GAAP insurance liabilities, we were not required to recognize a similar asset adequacy reserve in our consolidated financial statements prepared in accordance with GAAP. The determination of the need for and amount of asset adequacy reserves is subject to numerous actuarial assumptions and state requirements.
These ratings may be supplemented with numbers "1", "2", or "3" to show relative standing within a category. In Moody's view, an insurer rated "A" offers good financial security, however, certain elements may be present which suggests a susceptibility to impairment sometime in the future. Moody's has twenty-one possible ratings.
These ratings may be supplemented with numbers "1", "2", or "3" to show relative standing within a category. In Moody's view, an insurer rated "A" offers good financial security, however, certain elements may be present which suggests a susceptibility to impairment sometime in the future. Moody's has 21 possible ratings.
Many of our products include surrender charges, market interest rate adjustments or other features to encourage persistency; however, at December 31, 2024, approximately $3.4 billion of our total insurance liabilities could be surrendered by the policyholder without penalty. Finally, changes in interest rates can have significant effects on our investment portfolio.
Many of our products include surrender charges, market interest rate adjustments or other features to encourage persistency; however, at December 31, 2025, approximately $3.9 billion of our total insurance liabilities could be surrendered by the policyholder without penalty. Finally, changes in interest rates can have significant effects on our investment portfolio.
Management believes insurance product margin and income from insurance products help provide an additional understanding of the business and a more meaningful analysis of the results of our insurance product lines. We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company.
Management believes insurance product margin and income from insurance products provides an additional understanding of the business and a more meaningful analysis of the results of our insurance product lines. We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company.
This capacity may, nonetheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. Fitch ratings for the industry range from "AAA Exceptionally Strong" to "C Distressed" and some companies are not rated. Pluses and minuses show the relative standing within a category. Fitch has nineteen possible ratings.
This capacity may, nonetheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. Fitch ratings for the industry range from "AAA Exceptionally Strong" to "D Distressed" and some companies are not rated. Pluses and minuses show the relative standing within a category. Fitch has 24 possible ratings.
For example, the following events could have a material adverse effect on our cash flows: • An adverse decision in pending or future litigation. • An inability to obtain rate increases on certain of our insurance products. • Worse than anticipated claims experience. • Lower than expected dividends and/or surplus debenture interest payments from our insurance subsidiaries (resulting from inadequate earnings or capital or regulatory requirements). • An inability to meet and/or maintain the covenants in our Revolving Credit Agreement. • A significant increase in policy surrender levels. • A significant increase in investment defaults. • An inability of our reinsurers to meet their financial obligations. 84 Table of Co n t e n t s While we actively manage the relationship between the duration and cash flows of our invested assets and the estimated duration and cash flows of benefit payments arising from contract liabilities, there could be significant variations in the timing of such cash flows.
For example, the following events could have a material adverse effect on our cash flows: • An adverse decision in pending or future litigation. • An inability to obtain rate increases on certain of our insurance products. • Worse than anticipated claims experience. • Lower than expected dividends and/or surplus debenture interest payments from our insurance subsidiaries (resulting from inadequate earnings or capital or regulatory requirements). • An inability to meet and/or maintain the covenants in our Revolving Credit Agreement. • A significant increase in policy surrender levels. • A significant increase in investment defaults. • An inability of our reinsurers to meet their financial obligations. 86 Table of Contents While we actively manage the relationship between the duration and cash flows of our invested assets and the estimated duration and cash flows of benefit payments arising from contract liabilities, there could be significant variations in the timing of such cash flows.
Investment income from trading securities backing certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products and agreements. Other invested assets include options backing our fixed indexed annuity and life insurance products, COLI, FHLB common stock and certain nontraditional investments, including investments in limited partnerships, hedge funds and real estate investments.
Investment income from trading securities backing certain insurance liabilities is substantially offset by the change in insurance policy benefits related to certain products and agreements. Other invested assets include options backing our fixed indexed annuity and life insurance products, COLI, FHLB common stock and certain nontraditional investments, including investments in limited partnerships, limited liability companies and real estate investments.
(d) These borrowings represent the securities issued by VIEs and include projected interest payments based on interest rates, as applicable, as of December 31, 2024. (e) Includes benefits expected to be paid pursuant to our deferred compensation plan and postretirement plans based on numerous actuarial assumptions and interest credited at 5.50 percent.
(d) These borrowings represent the securities issued by VIEs and include projected interest payments based on interest rates, as applicable, as of December 31, 2025. (e) Includes benefits expected to be paid pursuant to our deferred compensation plan and postretirement plans based on numerous actuarial assumptions and interest credited at 5.25 percent.
We manage this risk by limiting our equity securities to a relatively small portion of our total investments. Our investment in options backing our equity-linked products is closely matched with our obligation to fixed indexed annuity holders.
We manage this risk by limiting our equity securities to a relatively small portion of our total investments. 92 Table of Contents Our investment in options backing our equity-linked products is closely matched with our obligation to fixed indexed annuity holders.
We expect to continue to manage to: (i) a consolidated RBC ratio of 375 percent for our U.S. based insurance subsidiaries; (ii) minimum holding company liquidity of $150 million; and (iii) a target debt to total capital, excluding accumulated other comprehensive income (loss), in the range of 25 percent to 28 percent.
We expect to continue to manage to: (i) a consolidated RBC ratio in the range of 360 percent to 390 percent for our U.S. based insurance subsidiaries; (ii) minimum holding company liquidity of $150 million; and (iii) a target debt to total capital, excluding accumulated other comprehensive loss, in the range of 25 percent to 28 percent.
For additional discussion regarding the liquidity and other risks that we face, see "Risk Factors". MARKET-SENSITIVE INSTRUMENTS AND RISK MANAGEMENT Our spread-based insurance business is subject to several inherent risks arising from movements in interest rates, especially if we fail to anticipate or respond to such movements.
For additional discussion regarding the liquidity and other risks that we face, see "Part 1 - Item 1A. Risk Factors". MARKET-SENSITIVE INSTRUMENTS AND RISK MANAGEMENT Our spread-based insurance business is subject to several inherent risks arising from movements in interest rates, especially if we fail to anticipate or respond to such movements.
The most significant impacts related to supplemental health and Medicare supplement products which were favorably (unfavorably) impacted by $41.9 million and $(10.6) million, respectively. The primary supplemental health changes related to lower morbidity and higher surrender assumptions.
The most significant impacts related to supplemental health and Medicare supplement products which were favorably (unfavorably) impacted by $41.9 million and $(10.6) million, respectively. The primary supplemental health changes related to lower morbidity and higher surrender assumptions. The primary Medicare supplement changes related to higher near-term morbidity and higher persistency assumptions.
We receive fee income when Medicare Advantage policies of other providers are sold, which is recorded in our Fee income segment. We continue to invest in both our Medicare supplement products and Medicare Advantage distribution to meet our customers' needs and preferences.
We receive fee income when Medicare Advantage policies of other providers are sold, which is recorded in our Fee income segment. We continue to invest in both our Medicare supplement products and Medicare Advantage distribution to ensure we are well-positioned to meet our customers' needs and preferences.
The Company first performs a qualitative assessment to determine whether it is more likely than not a goodwill impairment exists, and if an indication of potential impairment results from the qualitative assessment, a quantitative assessment is performed.
The Company first performs a qualitative assessment to determine whether it is more likely than not a goodwill impairment exists, and if an indication of potential impairment results from the qualitative 62 Table of Contents assessment, a quantitative assessment is performed.
Such estimates are subject to numerous risks and uncertainties and the extent to which actual impacts differ from the assumptions used in our deferred tax valuation model. Based on our assessment, we have concluded that it is more likely than not that all our net deferred tax assets of $791.4 million will be realized through future taxable earnings.
Such estimates are subject to numerous risks and uncertainties and the extent to which actual impacts differ from the assumptions used in our deferred tax valuation model. Based on our assessment, we have concluded that it is more likely than not that our net deferred tax assets of $711.7 million will be realized through future taxable earnings.
The following tables summarize the impacts of our comprehensive annual actuarial reviews on our operating income for the years ended December 31, 2024, 2023 and 2022 (dollars in millions): Insurance policy benefits Line of business 2024 2023 2022 Fixed indexed annuities $ 36.2 $ 9.4 $ (3.2) Other annuities — 3.5 — Supplemental health 0.3 41.9 1.9 Medicare supplement (9.4) (10.6) — Long-term care 0.9 (9.0) 16.4 Traditional life (4.5) (5.2) (13.0) Interest-sensitive life 3.8 3.9 (1.4) Favorable impact on pre-tax operating income $ 27.3 $ 33.9 $ 0.7 Summary of Operating Results: Net operating income was $429.3 million in 2024, compared to $356.1 million in 2023 and $360.4 million in 2022.
The following tables summarize the favorable (unfavorable) impacts of our comprehensive annual actuarial reviews on pre-tax operating income for the years ended December 31, 2025, 2024 and 2023 (dollars in millions): Insurance policy benefits Line of business 2025 2024 2023 Fixed indexed annuities $ 13.8 $ 36.2 $ 9.4 Other annuities 2.8 — 3.5 Supplemental health 24.8 0.3 41.9 Medicare supplement (9.2) (9.4) (10.6) Long-term care 5.5 0.9 (9.0) Traditional life 0.8 (4.5) (5.2) Interest-sensitive life 2.8 3.8 3.9 Impact on pre-tax operating income $ 41.3 $ 27.3 $ 33.9 Summary of Operating Results: Net operating income was $439.2 million in 2025, compared to $429.3 million in 2024 and $356.1 million in 2023.
The following table sets forth the aggregate amount of dividends (net of capital contributions) and other distributions that our insurance subsidiaries paid to our non-insurance subsidiaries in each of the last three fiscal years (dollars in millions): Years ended December 31, 2024 2023 2022 Dividends (net of contributions) from insurance subsidiaries $ 129.0 $ 227.1 $ 129.0 Surplus debenture interest 84.4 82.0 58.8 Fees for services provided pursuant to service agreements 119.7 116.1 124.0 Total dividends and other distributions paid by insurance subsidiaries $ 333.1 $ 425.2 $ 311.8 The ability of our U.S. based insurance subsidiaries to pay dividends is subject to state insurance department regulations and is based on the financial statements of our insurance subsidiaries prepared in accordance with statutory accounting practices prescribed or permitted by regulatory authorities, which differ from GAAP.
The following table sets forth the aggregate amount of dividends (net of paid or accrued capital contributions) and other distributions that our insurance subsidiaries paid to our non-insurance subsidiaries in each of the last three fiscal years (dollars in millions): Years ended December 31, 2025 2024 2023 Dividends (net of contributions) from insurance subsidiaries $ 250.4 $ 129.0 $ 227.1 Surplus debenture interest 75.9 84.4 82.0 Fees for services provided pursuant to service agreements 124.4 119.7 116.1 Total dividends and other distributions paid by insurance subsidiaries $ 450.7 $ 333.1 $ 425.2 The ability of our U.S. based insurance subsidiaries to pay dividends is subject to state insurance department regulations and is based on the financial statements of our insurance subsidiaries prepared in accordance with statutory accounting practices prescribed or permitted by regulatory authorities, which differ from GAAP.
As such payments are based on numerous assumptions, the actual payments may vary significantly from the amounts shown. 83 Table of Co n t e n t s In estimating the payments we expect to make to our policyholders, we considered the following: • For products such as immediate annuities and structured settlement annuities without life contingencies, the payment obligation is fixed and determinable based on the terms of the policy. • For products such as universal life, ordinary life, long-term care, supplemental health and deferred annuities, the future payments are not due until the occurrence of an insurable event (such as death or disability) or a triggering event (such as a surrender or partial withdrawal).
As such payments are based on numerous assumptions, the actual payments may vary significantly from the amounts shown. 85 Table of Contents In estimating the payments we expect to make to our policyholders, we considered the following: • For products such as immediate annuities and structured settlement annuities without life contingencies, the payment obligation is fixed and determinable based on the terms of the policy. • For products such as universal life, ordinary life, long-term care, supplemental health and deferred annuities, the future payments are not due until the occurrence of an insurable event (such as death or disability) or a triggering event (such as a surrender or partial withdrawal).
The most significant impacts related to fixed indexed annuities and Medicare supplement products which were favorably (unfavorably) impacted by $36.2 million and $(9.4) million, respectively. The primary fixed indexed annuities changes related to higher mortality assumptions. The primary Medicare supplement changes related to higher morbidity and higher persistency assumptions.
The most significant impacts related to fixed indexed annuities and Medicare supplement products which were favorably (unfavorably) impacted by $36.2 million and $(9.4) million, respectively. The primary fixed indexed 65 Table of Contents annuities changes related to higher mortality assumptions. The primary Medicare supplement changes related to higher morbidity and higher persistency assumptions.
The amount and timing of future share repurchases (if any) will be based on business and market conditions and other factors including, but not limited to, available free cash flow, the current price of our common stock and investment opportunities. In 2024, we repurchased 8.9 million shares of common stock for $281.6 million under our securities repurchase program.
The amount and timing of future share repurchases (if any) will be based on business and market conditions and other factors including, but not limited to, available free cash flow, the current price of our common stock and investment opportunities. In 2025, we repurchased 8.1 million shares of common stock for $319.9 million under our securities repurchase program.
Net investment income and interest credited exclude the change in market values of the underlying options supporting the fixed indexed annuity products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $231.8 million, $118.3 million and $(181.3) million in 2024, 2023 and 2022, respectively.
Net investment income and interest credited exclude the change in market values of the underlying options supporting the fixed indexed annuity products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $106.5 million, $231.8 million and $118.3 million in 2025, 2024 and 2023, respectively.
The increase in the supplemental health adjusted margin in 2024, compared to 2023 and 2022, reflects growth in the block and favorable morbidity. Our supplemental health products (including specified disease, accident and hospital indemnity products) generally provide fixed or limited benefits.
The increase in the supplemental health adjusted margin in 2025, compared to 2024 and 2023, reflects growth in the block and lower morbidity. Our supplemental health products (including specified disease, accident and hospital indemnity products) generally provide fixed or limited benefits.
The borrowings are collateralized by investments with an estimated fair value of $2.8 billion at December 31, 2024, which are maintained in custodial accounts for the benefit of the FHLB. Bankers Life has a FABN program pursuant to which Bankers Life may issue funding agreements to a Delaware statutory trust organized in series (the "Trust") to generate spread-based earnings.
The borrowings are collateralized by investments with an estimated fair value of $3.5 billion at December 31, 2025, which are maintained in custodial accounts for the benefit of the FHLB. Bankers Life has a FABN program pursuant to which Bankers Life may issue funding agreements to a Delaware statutory trust organized in series (the "Trust") to generate spread-based earnings.
Refer to "- Liquidity for Insurance Operations" above regarding the CLMA and limitations on CNO Bermuda Re's ability to pay dividends or other capital distributions to CDOC. At December 31, 2024, CNO, CDOC and our other non-insurance subsidiaries held $372.5 million of unrestricted cash and cash equivalents which was above our minimum target level of $150 million.
Refer to "- Liquidity for Insurance Operations" above regarding the CLMA and limitations on CNO Bermuda Re's ability to pay dividends or other capital distributions to CDOC. At December 31, 2025, CNO, CDOC and our other non-insurance subsidiaries held $351.4 million of unrestricted cash and cash equivalents which was above our minimum target level of $150 million.
Free cash flow is a measure of holding company liquidity and is calculated as: (i) dividends, management fees and surplus debenture interest payments received from our subsidiaries; plus (ii) earnings on corporate investments; less (iii) interest expense, corporate expenses and net tax payments. In 2024, we generated $284.3 million of such free cash flow.
Free cash flow is a measure of holding company liquidity and is calculated as: (i) dividends, management fees and surplus debenture interest payments received from our subsidiaries; plus (ii) earnings on corporate investments; less (iii) interest expense, corporate expenses and net tax payments. In 2025, we generated $365.5 million of such free cash flow.
There are nine ratings above CNO's "Baa3" rating and eleven ratings that are below its rating. Outlook We believe that the existing cash available to the holding company, the cash flows to be generated from operations and other transactions will be sufficient to allow us to meet our debt service obligations, pay corporate expenses and satisfy other financial obligations.
There are eight ratings above CNO's "bbb" rating and 12 ratings that are below its rating. Outlook We believe that the existing cash available to the holding company, the cash flows to be generated from operations and other transactions will be sufficient to allow us to meet our debt service obligations, pay corporate expenses and satisfy other financial obligations.
As of December 31, 2024, approximately 13 percent of our insurance liabilities had interest rates that may be reset annually; 44 percent had a fixed explicit interest rate for the duration of the contract; 39 percent are fixed indexed products where the income earned is subject to a participation rate that typically may be changed annually; and the remainder had no explicit interest rates.
As of December 31, 2025, approximately 13 percent of our insurance liabilities had interest rates that may be reset annually, 43 percent had a fixed explicit interest rate for the duration of the contract, 40 percent are fixed indexed products where the income earned is subject to a participation rate that typically may be changed annually, and the remainder had no explicit interest rates.
On October 29, 2024, Fitch affirmed its "A" financial strength ratings of our primary insurance subsidiaries and the outlook for these ratings is stable. An insurer rated "A", in Fitch's opinion, indicates a low expectation of ceased or interrupted payments and indicates strong capacity to meet policyholder and contract obligations.
On October 21, 2025, Fitch affirmed its "A" financial strength ratings of our primary insurance subsidiaries and the outlook for these ratings remains stable. An insurer rated "A", in Fitch's opinion, indicates a low expectation of ceased or interrupted payments and indicates strong capacity to meet policyholder and contract obligations.
During 2024, 2023 and 2022, we recognized an increase (decrease) in earnings of $22.8 million, $(6.3) million and $(73.2) million, respectively, due to the net change in market value of investments recognized in earnings. The change in value will fluctuate from period to period based on market conditions.
During 2025, 2024 and 2023, we recognized an increase (decrease) in earnings of $14.3 million, $22.8 million and $(6.3) million, respectively, due to the net change in market value of investments recognized in earnings. The change in value will fluctuate from period to period based on market conditions.
At December 31, 2024, there were no commercial mortgage loans in process of foreclosure.
At December 31, 2025, there were no commercial mortgage loans in process of foreclosure.
Net investment income and interest credited excludes the change in market values of the underlying options supporting the fixed indexed life products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $21.9 million, $13.2 million and $(24.0) million in 2024, 2023 and 2022, respectively.
Net investment income and interest credited excludes the change in market values of the underlying options supporting the fixed indexed life products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $12.5 million, $21.9 million and $13.2 million in 2025, 2024 and 2023, respectively.
During 2024, 2023 and 2022, we recognized an increase (decrease) in earnings of $6.6 million, $(3.5) million and $48.9 million, respectively, for the mark-to-market change in the agent deferred compensation plan liability which was impacted by changes in the underlying actuarial assumptions used to value the liability.
During 2025, 2024 and 2023, we recognized an increase (decrease) in earnings of $(1.7) million, $6.6 million and $(3.5) million, respectively, for the mark-to-market change in the agent deferred compensation plan liability which was impacted by changes in the underlying actuarial assumptions used to value the liability.
The most significant assumptions for our life and annuity business are mortality and lapse/withdrawal rates which are based on our experience and, in cases of limited experience, industry experience. Mortality and lapse/withdrawal rates also take into consideration future expectations in policyholder behavior that may vary from past experience.
The liability for future policy benefits is determined based on numerous assumptions. The most significant assumptions for our life and annuity business are mortality and lapse/withdrawal rates which are based on our experience and, in cases of limited experience, industry experience. Mortality and lapse/withdrawal rates also take into consideration future expectations in policyholder behavior that may vary from past experience.
As the policies age, insurance policy benefits will typically increase, but the increase in benefits will be partially offset by investment income earned on the accumulated assets. Margin from Medicare supplement business was $113.9 million in 2024 compared to $116.9 million in 2023 and $151.0 million in 2022.
As the policies age, insurance policy benefits will typically increase, but the increase in benefits will be partially offset by investment income earned on the accumulated assets. Margin from Medicare supplement business was $106.1 million in 2025 compared to $113.9 million in 2024 and $116.9 million in 2023.
Consistent with this strategy, investments in fixed maturity securities and mortgage loans made up 91 percent of our $27.9 billion investment portfolio at December 31, 2024. The remainder of the invested assets were trading securities, investments held by VIEs, equity securities, policy loans and other invested assets.
Consistent with this strategy, investments in fixed maturity securities and mortgage loans made up 91 percent of our $30.0 billion investment portfolio at December 31, 2025. The remainder of the invested assets were trading securities, investments held by VIEs, equity securities, policy loans and other invested assets.
At December 31, 2024, we held residential mortgage loan investments with an amortized cost of $1,018.6 million and a fair value of $1,031.8 million. Our primary credit quality indicator for these investments is whether the loan is current or non-current. We define non-current loans as those that are 90 or more days past due and/or in nonaccrual status.
At December 31, 2025, we held residential mortgage loan investments with an amortized cost of $1,481.9 million and a fair value of $1,497.8 million. Our primary credit quality indicator for these investments is whether the loan is current or non-current. We define non-current loans as those that are 90 or more days past due and/or in nonaccrual status.
Allocated net investment income reflects earned yields of 4.99 percent, 4.96 percent and 5.07 percent in 2024, 2023 and 2022, respectively. The interest margin was $2.3 million in 2024 compared to $2.8 million in 2023 and $3.3 million in 2022.
The interest margin was $2.7 million in 2025 compared to $2.3 million in 2024 and $2.8 million in 2023. Allocated net investment income reflects earned yields of 5.02 percent, 4.99 percent and 4.96 percent in 2025, 2024 and 2023, respectively.
Such earnings are not indicative of, and are unrelated to, the Company's underlying fundamentals. 73 Table of Co n t e n t s PREMIUM COLLECTIONS In accordance with GAAP, insurance policy income in our consolidated statement of operations consists of premiums earned for traditional insurance policies that have life contingencies or morbidity features.
Such earnings are not indicative of, and are unrelated to, the Company's underlying fundamentals. PREMIUM COLLECTIONS In accordance with GAAP, insurance policy income in our consolidated statement of operations consists of premiums earned for traditional insurance policies that have life contingencies or morbidity features.
At December 31, 2024, the carrying value of the FHLB common stock was $94.6 million. As of December 31, 2024, collateralized borrowings from the FHLB totaled $2.2 billion and the proceeds were used to purchase matched variable rate fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet.
At December 31, 2025, the carrying value of the FHLB common stock was $109.3 million. As of December 31, 2025, collateralized borrowings from the FHLB totaled $2.4 billion and the proceeds were used to purchase matched variable rate fixed maturity securities. The borrowings are classified as investment borrowings in the accompanying consolidated balance sheet.
The outlook for these ratings remains stable. In Moody's view, obligations rated "Baa" are subject to moderate credit risk and may possess certain speculative characteristics. A rating is supplemented with numerical modifiers "1", "2" or "3" to show the relative standing within a category. Moody's has a total of twenty-one possible ratings ranging from "Aaa" to "C".
In Moody's view, obligations rated "Baa" are subject to moderate credit risk and may possess certain speculative characteristics. A rating is supplemented with numerical modifiers "1", "2" or "3" to show the relative standing within a category. Moody's has a total of 21 possible ratings ranging from "Aaa" to "C".
General account investments exclude the value of options. 2024 2023 2022 (dollars in millions) Weighted average investments at amortized cost allocated to product lines $ 21,085.8 $ 20,567.5 $ 19,987.5 Allocated investment income 1,011.8 957.8 915.2 Average yield on allocated investments 4.80 % 4.66 % 4.58 % Insurance statutes regulate the types of investments that our insurance subsidiaries are permitted to make and limit the amount of funds that may be used for any one type of investment.
General account investments exclude the value of options. 2025 2024 2023 (dollars in millions) Weighted average investments at amortized cost allocated to product lines $ 21,890.1 $ 21,085.8 $ 20,567.5 Allocated investment income 1,074.3 1,011.8 957.8 Average yield on allocated investments 4.91 % 4.80 % 4.66 % Insurance statutes regulate the types of investments that our insurance subsidiaries are permitted to make and limit the amount of funds that may be used for any one type of investment.
We estimate that our fixed maturity securities and short-term investments would decline in fair value by $729.6 million if interest rates were to increase by 10 percent from their levels at December 31, 2024.
We estimate that our fixed maturity securities and short-term investments would decline in fair value by $691.7 million if interest rates were to increase by 10 percent from their levels at December 31, 2025.
Such non-deferred commissions are included in other operating costs and expenses on the consolidated statement of operations. 63 Table of Co n t e n t s General: CNO is the top tier holding company for a group of insurance companies that develop, market and administer health insurance, annuity, individual life insurance and other insurance and financial services products.
Such non-deferred commissions are included in other operating costs and expenses on the consolidated statement of operations. 64 Table of Contents General: CNO is the top tier holding company for a group of insurance companies that develop, market and administer health insurance, annuity, individual life insurance and other insurance and financial services products.
In addition, we have internal management compliance limits on various exposures and activities which are typically more restrictive than insurance statutes.
In addition, we have internal management 78 Table of Contents compliance limits on various exposures and activities which are typically more restrictive than insurance statutes.
At December 31, 2024, we held investments with an amortized cost of $437.0 million and an estimated fair value of $432.3 million related to VIEs that we are required to consolidate. The investment portfolio held by the VIEs is primarily comprised of commercial bank loans, the borrowers for which are almost entirely rated below-investment grade.
At December 31, 2025, we held investments with an amortized cost of $294.1 million and an estimated fair value of $293.0 million related to VIEs that we are required to consolidate. The investment portfolio held by the VIEs is primarily comprised of commercial bank loans, the borrowers for which are almost entirely rated below-investment grade.
Health products include supplemental health, Medicare supplement and long-term care products. Premiums collected on supplemental health products (including specified disease, accident and hospital indemnity insurance products) were $725.7 million in 2024, compared to $706.6 million in 2023 and $692.9 million in 2022.
Health products include supplemental health, Medicare supplement and long-term care products. Premiums collected on supplemental health products (including specified disease, accident and hospital indemnity insurance products) were $744.5 million in 2025, compared to $725.7 million in 2024 and $706.6 million in 2023.
The return of premium rider generally provides that after a policy has been inforce for a 69 Table of Co n t e n t s specified number of years or upon the policyholder reaching a specified age, we will pay to the policyholder, or a beneficiary under the policy, the aggregate amount of all premiums paid under the policy, without interest, less the aggregate amount of all claims incurred under the policy.
The return of premium rider generally provides that after a policy has been inforce for a 70 Table of Contents specified number of years or upon the policyholder reaching a specified age, we will pay to the policyholder, or a beneficiary under the policy, the aggregate amount of all premiums paid under the policy, without interest, less the aggregate amount of all claims incurred under the policy.
Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structure and could require the holding company to contribute additional capital to CNO Bermuda Re or Bankers Life to recapture the ceded business.
Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structures and could require the holding company to contribute additional capital to CNO Bermuda Re or the ceding reinsurers to recapture the ceded business.
The increase in the adjusted margin in 2024 compared to 2023 and 2022 primarily reflects lower advertising expense and growth in the block. Allocated net investment income reflects earned yields of 4.68 percent, 4.71 percent and 4.63 percent in 2024, 2023 and 2022, respectively.
The increase in the adjusted margin in 2025 compared to 2024 and 2023 primarily reflects lower advertising expense and growth in the business. Allocated net investment income reflects earned yields of 4.74 percent, 4.68 percent and 4.71 percent in 2025, 2024 and 2023, respectively.
Excluding the net unfavorable impacts of the annual actuarial review previously discussed, we recognized an increase (decrease) in earnings of $67.5 million, $(17.5) million and $440.2 million in 2024, 2023, and 2022, respectively. Such amounts include the impacts of changes in market interest rates and equity impacts used to determine the estimated fair values of the embedded derivatives and MRBs.
Excluding the net unfavorable impacts of the annual actuarial review previously discussed, we recognized an increase (decrease) in earnings of $(49.7) million, $89.1 million and $(17.5) million in 2025, 2024 and 2023, respectively. Such amounts include the impacts of changes in market interest rates and equity impacts used to determine the estimated fair values of the embedded derivatives and MRBs.
During 2024, the financial statements of three of our U.S. based insurance subsidiaries prepared in accordance with statutory accounting practices prescribed or permitted by regulatory authorities reflected asset adequacy or premium deficiency reserves.
During 2025, the financial statements of four of our U.S. based insurance subsidiaries prepared in accordance with statutory accounting practices prescribed or permitted by regulatory authorities reflected asset adequacy reserves.
The "A" rating is assigned to companies that have an excellent ability, in AM Best's opinion, to meet their ongoing obligations to policyholders. AM Best ratings for the industry currently range from "A++ (Superior)" to "F (In Liquidation)" and some companies are not rated. AM Best has sixteen possible ratings.
The "A" rating is assigned to companies that have an excellent ability, in AM Best's 88 Table of Contents opinion, to meet their ongoing obligations to policyholders. AM Best ratings for the industry currently range from "A++ (Superior)" to "D (In Liquidation)" and some companies are not rated. AM Best has 13 possible ratings.
At December 31, 2024, the estimated duration of our fixed income securities (as modified to reflect estimated prepayments and call premiums) and the estimated duration of our insurance liabilities were approximately 7.9 years and 8.4 years, respectively.
At December 31, 2025, the estimated duration of our fixed income securities (as modified to reflect estimated prepayments and call premiums) and the estimated duration of our insurance liabilities were approximately 7.5 years and 8.1 years, respectively.
As a result, total outflows for all years exceed the corresponding liabilities of $29.7 billion included in our consolidated balance sheet as of December 31, 2024.
As a result, total outflows for all years exceed the corresponding liabilities of $31.1 billion included in our consolidated balance sheet as of December 31, 2025.
Present Value of Future Profits and Deferred Acquisition Costs Amortization of the present value of future profits and deferred acquisition costs is calculated using the same contract groupings (or cohorts), mortality, surrender and lapse assumptions that are used in calculating the liability for future policy benefits, and these assumptions are reviewed and updated at least annually. 57 Table of Co n t e n t s Present value of future profits and deferred acquisition costs are sensitive to unexpected terminations, due to higher mortality, surrender and lapse experience than expected.
Present Value of Future Profits and Deferred Acquisition Costs Amortization of the present value of future profits and deferred acquisition costs is calculated using the same contract groupings (or cohorts), partial withdrawal rate, mortality, surrender and lapse assumptions that are used in calculating the liability for future policy benefits, and these assumptions are reviewed and updated at least annually. 58 Table of Contents Present value of future profits and deferred acquisition costs are sensitive to unexpected terminations, due to higher mortality, surrender and lapse experience than expected.
The weighted average crediting rates at December 31, 2024, related to such annuity and universal life account values, that were at the minimum guaranteed crediting rate were 2.66 percent and 4.17 percent, respectively.
The weighted average crediting rates at December 31, 2025, related to such annuity and universal life account values, that were at the minimum guaranteed crediting rate were 2.61 percent and 4.09 percent, respectively.
We expect our expense ratio to be in the range of 19.0 percent to 19.4 percent, with a quarterly trend similar to 2024, starting on the high end in the first quarter of the year and then grading down throughout the year.
We expect our expense ratio to be in the range of 18.8 percent to 19.2 percent, with a quarterly trend similar to 2025, starting on the high end in the first quarter of the year and then grading down throughout the year.
During 2024, we sold $1,432.0 million of fixed maturity investments which resulted in gross realized investment losses (before income taxes) of $54.9 million. Securities are generally sold at a loss following unforeseen sector or issuer-specific events or conditions, shifts in perceived credit quality relative values, or in connection with strategic asset repositionings related to changes in market conditions.
During 2025, we sold $1,562.5 million of fixed maturity investments which resulted in gross realized investment losses (before income taxes) of $79.5 million. Securities are generally sold at a loss following unforeseen sector or issuer-specific events or conditions, shifts in perceived credit quality relative values, or in connection with strategic asset repositioning related to changes in market conditions.
The Medicare supplement margin adjusted to exclude the impacts of the annual actuarial review previously discussed was $123.3 million, $127.5 million and $151.0 million in 2024, 2023 and 2022, respectively. The adjusted margin as a percentage of insurance policy income was 20 percent, 21 percent and 23 percent in 2024, 2023 and 2022, respectively.
The Medicare supplement margin adjusted to exclude the impacts of the comprehensive annual actuarial review previously discussed was $115.3 million, $123.3 million and $127.5 million in 2025, 2024 and 2023, respectively. The adjusted margin as a percentage of insurance policy income was 18 percent, 20 percent and 21 percent in 2025, 2024 and 2023, respectively.
We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change. During 2024, 2023 and 2022, we recognized an increase (decrease) in earnings of $24.7 million, $(29.9) million and $440.2 million, respectively, resulting from changes in the fair value of embedded derivative liabilities and MRBs related to our fixed indexed annuities.
We recognize the mark-to-market change in the estimated value of this liability through earnings as assumptions change. During 2025, 2024 and 2023, we recognized an increase (decrease) in earnings of $(64.0) million, $46.3 million and $(29.9) million, respectively, resulting from changes in the fair value of embedded derivative liabilities and MRBs related to our fixed indexed annuities.
Life premiums were $960.5 million, $937.0 million and $911.8 million in 2024, 2023 and 2022, respectively. Premiums collected reflect both recent sales activity and steady persistency.
Life premiums were $984.5 million, $960.5 million and $937.0 million in 2025, 2024 and 2023, respectively. Premiums collected reflect both recent sales activity and steady persistency.
At December 31, 2024, the weighted average yield, computed on the cost basis of investments allocated to our product lines, was approximately 4.8 percent, and the average interest rate credited or accruing to our total insurance liabilities (excluding interest rate bonuses for the first policy year only and excluding the effect of credited rates attributable 90 Table of Co n t e n t s to variable or fixed indexed products) was 4.3 percent.
At December 31, 2025, the weighted average yield, computed on the cost basis of investments allocated to our product lines, was approximately 4.9 percent, and the average interest rate credited or accruing to our total insurance liabilities (excluding interest rate bonuses for the first policy year only and excluding the effect of credited rates attributable to variable or fixed indexed products) was 4.3 percent.
There are six ratings above the "A-" rating of our primary insurance subsidiaries and fourteen ratings that are below that rating. On February 15, 2024, AM Best affirmed its "A" financial strength ratings of our primary insurance subsidiaries and the outlook for these ratings is stable.
There are six ratings above the "A3" rating of our primary insurance subsidiaries and 14 ratings that are below that rating. On February 26, 2025, AM Best affirmed its "A" financial strength ratings of our primary insurance subsidiaries and the outlook for these ratings is stable.
Net insurance liabilities (equal to (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities) were $9,848.9 million, $9,337.3 million and $8,788.6 million in 2024, 2023 and 2022, respectively, driven by deposits and reinvested returns in excess of withdrawals.
Net insurance liabilities (equal to (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities) were $10,582.5 million, $9,848.9 million and $9,337.3 million in 2025, 2024 and 2023, respectively.
However, as each of the immediate U.S. based insurance subsidiaries of CDOC has significant negative earned surplus, any dividend payments from the insurance subsidiaries require the prior approval of the director or commissioner of the applicable state insurance department.
However, as Washington National and CLTX, the immediate U.S. based insurance subsidiaries of CDOC, have significant negative earned surplus, any dividend payments from the insurance subsidiaries require the prior approval of the director or commissioner of the applicable state insurance department.
Our fee income segment includes the earnings generated from sales of third-party insurance products (primarily Medicare Advantage), services provided by Optavise and the operations of our broker-dealer and registered investment advisor.
Our fee income segment includes the earnings generated from sales of third-party insurance products (primarily Medicare Advantage), services provided to employers through our Worksite division and the operations of our broker-dealer and registered investment advisor.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The information included under the caption "Market-Sensitive Instruments and Risk Management" in Item 7. "Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations" is incorporated herein by reference. 91 Table of Co n t e n t s
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The information included under the caption "Market-Sensitive Instruments and Risk Management" in Item 7. "Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations" is incorporated herein by reference. 93 Table of Contents

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