Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2025

Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis

The estimated fair value and hierarchy classifications for assets and liabilities that are measured at fair value on a recurring basis were as follows:


	September 30, 2025
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	9,710	$	-	$	9,710
Foreign government		-		172,966		-		172,966
States and political subdivisions		-		126,707		-		126,707
Corporates		3,845		1,945,224		-		1,949,069
Mortgage- and asset-backed securities:
Residential mortgage-backed securities		-		608,317		-		608,317
Commercial mortgage-backed securities		-		86,938		-		86,938
Other asset-backed securities		-		190,940		3,000		193,940
Total available-for-sale fixed-maturity securities		3,845		3,140,802		3,000		3,147,647
Equity securities		26,186		-		-		26,186
Trading securities		-		12,803		-		12,803
Cash and cash equivalents		644,855		-		-		644,855
Separate accounts		-		2,313,874		-		2,313,874
Total fair value assets	$	674,886	$	5,467,479	$	3,000	$	6,145,365
Fair value liabilities:
Separate accounts	$	-	$	2,313,874	$	-	$	2,313,874
Total fair value liabilities	$	-	$	2,313,874	$	-	$	2,313,874


	December 31, 2024
	Level 1		Level 2		Level 3		Total
	(In thousands)
Fair value assets:
Available-for-sale fixed-maturity securities:
U.S. government and agencies	$	-	$	9,503	$	-	$	9,503
Foreign government		-		166,424		-		166,424
States and political subdivisions		-		113,569		-		113,569
Corporates		3,787		1,821,321		-		1,825,108
Mortgage-and asset-backed securities:
Residential mortgage-backed securities		-		486,557		-		486,557
Commercial mortgage-backed securities		-		99,445		-		99,445
Other asset-backed securities		-		245,520		-		245,520
Total available-for-sale fixed-maturity securities		3,787		2,942,339		-		2,946,126
Equity securities		24,598		1,003		1,543		27,144
Trading securities		-		3,011		-		3,011
Cash and cash equivalents		687,821		-		-		687,821
Separate accounts		-		2,209,287		-		2,209,287
Total fair value assets	$	716,206	$	5,155,640	$	1,543	$	5,873,389
Fair value liabilities:
Separate accounts	$	-	$	2,209,287	$	-	$	2,209,287
Total fair value liabilities	$	-	$	2,209,287	$	-	$	2,209,287

Roll forward of Level 3 Assets Measured on Recurring Basis

The roll-forward of the Level 3 assets measured at fair value on a recurring basis was as follows:


	Three months ended September 30,					Nine months ended September 30, (1)
	2025		2024			2025			2024
	(In thousands)
Level 3 assets, beginning of period	$	-	$	10,453		$	1,543		$	2,144
Net unrealized gains (losses) included in other comprehensive income (loss)		-		146			-			185
Investment gains (losses) and accretion (amortization) recognized in earnings		-		(31	)		(714	)		(72	)
Purchases		3,000		1,851			3,000			10,666
Settlements		-		-			(829	)		-
Transfers out of Level 3		-		(8,981	)		-			(9,485	)
Level 3 assets, end of period	$	3,000	$	3,438		$	3,000		$	3,438

(1)

Transfers of investments that enter and exit Level 3 in different quarters within the same fiscal year are not eliminated until the full year amounts are presented.

Carrying Values and Estimated Fair Values of Financial Instruments

The carrying values and estimated fair values of our financial instruments were as follows:


	September 30, 2025				December 31, 2024
	Carrying value		Estimated fair value		Carrying value		Estimated fair value
	(In thousands)
Assets:
Fixed-maturity securities (available-for-sale)	$	3,147,647	$	3,147,647	$	2,946,126	$	2,946,126
Fixed-maturity security (held-to-maturity) (1)		1,241,540		1,217,961		1,303,880		1,227,428
Equity securities		26,186		26,186		27,144		27,144
Trading securities		12,803		12,803		3,011		3,011
Policy loans (1)		45,159		45,159		40,884		40,884
Deposit asset underlying 10% coinsurance agreement (1)		138,908		138,908		158,913		158,913
Separate accounts		2,313,874		2,313,874		2,209,287		2,209,287
Liabilities:
Note payable (2)(3)	$	595,114	$	541,127	$	594,512	$	513,862
Surplus note (1)(2)		1,241,263		1,215,284		1,303,556		1,225,708
Separate accounts		2,313,874		2,313,874		2,209,287		2,209,287

(1)

Classified as a Level 3 fair value measurement.

(2)

Carrying value amounts shown are net of unamortized issuance costs.

(3)

Classified as a Level 2 fair value measurement.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

Primerica, Inc. 10-Q