NBLIC subleases general office space in Long Island City, New York, under a sublease expiring in March 2020.
New recruits increased in 2015 to 228,115 from 190,439 in 2014 and 186,251 in 2013 primarily due to continued positive momentum in the business, the impact of competition among our sales representatives to receive recognition, and new innovative sales technology including cutting-edge sales tools and real-time recognition programs that attracted a younger generation of representatives and sales force leaders. The size of our life-licensed sales force increased to 106,710 sales representatives at December 31, 2015 from 98,358 sales representatives at December 31, 2014, primarily due to the increase in recruiting in recent years, as well as our strong focus on licensing over the past several years and changes made to the licensing processes to accelerate licensing momentum simultaneously with recruiting growth.
Investment and Savings Product Sales, Asset Values and Accounts. Investment and savings products sales and average client asset values were as follows:
Corporate and Other Distributed Products segment net investment income reflects actual net investment income realized by the Company less the amount allocated to our Term Life Insurance segment based on the assumed net interest accreted to the segment’s U.S. GAAP-measured future policy benefit reserve liability less DAC. Actual net investment income reflected in the Corporate and Other Distributed Products segment is impacted by the size and performance of our invested asset portfolio, which can be influenced by interest rates, credit spreads, and the mix of invested assets.
Deferred policy acquisition costs, net. The increase in DAC was primarily a result of incremental commissions and expenses deferred as a result of new business in 2015, which was not subject to the IPO coinsurance agreements. The year-over-year increase at year-end
and interest on the LLC Note as long as we hold the LLC Note. The Company asserts its positive intent and ability to hold the LLC Note until maturity.
All reinsurance contracts in effect for the three-year period ended December 31, 2015 transfer a reasonable possibility of substantial loss to the reinsurer or are accounted for under the deposit method of accounting.
In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). Debt issuance costs related to a recognized debt liability are currently presented as a deferred charge, or asset, within the balance sheet. ASU 2015-03 requires the presentation of debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in ASU 2015-03 are effective retrospectively for the Company beginning in fiscal year 2016, with early adoption permitted. The Company intends to adopt the amendments in ASU 2015-03 beginning in the first quarter of 2016. At
(1) The Investment and Savings Products segment includes assets held in separate accounts. Excluding separate accounts, the Investment and Savings Products segment assets were approximately $93.8 million, $105.5 million, and $105.8 million as of December 31, 2015, 2014, and 2013, respectively.
All of our AFS mortgage- and asset-backed securities represent variable interests in variable interest entities (“VIEs”). We are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact the entities’ economic performance. The maximum exposure to loss as a result of our involvement in these VIEs equals the carrying value of the securities.
Under these contract offerings, benefit payments to contract holders or their designated beneficiaries are only due upon death of the annuitant or upon reaching a specific maturity date. Benefit payments are based on the value of the contract holder’s units in the portfolio at the payment date, but are guaranteed to be no less than 75% of the contract holder’s contribution, adjusted for withdrawals. Account values are not guaranteed for withdrawn units if contract holders make withdrawals prior to the maturity dates. Maturity dates for contracts investing in the Asset Builder Funds and Cash Management Fund vary by contract and range from 10 to 56 years from the contract issuance date. Contracts investing in the SRIF mature when the policyholder reaches age 100, which is a minimum of 20 years after issue. The SRIF is designed to provide periodic retirement income payments and as such, regular
A reconciliation of the change in the unrecognized income tax benefit for the years ended December 31, 2015 and 2014 is as follows:
Primerica Life’s statutory ordinary dividend capacity is based on the greater of: (1) the previous year’s statutory net gain from operations (excluding pro rata distributions of any class of the insurer’s own securities) or (2) 10% of the previous year-end statutory surplus (net of capital stock), which may only be paid out of statutory unassigned surplus. Dividends that, together with the amount of other distributions or dividends made within the preceding 12 months, exceed this statutory limitation are referred to as extraordinary dividends. Extraordinary dividends require advance notice to the Massachusetts DOI, Primerica Life’s primary state insurance regulator, and are subject to potential disapproval. For dividends exceeding these thresholds, Primerica Life must provide notice to the Massachusetts DOI and receive notice that the Massachusetts DOI does not object to the payment of such dividends.
Primerica Life’s statutory capital and surplus and statutory unassigned surplus at December 31, 2015 and 2014 was as follows:
As of December 31, 2015, the minimum aggregate rental commitments for operating leases were as follows: