United States securities and exchange commission logo
June 6, 2024
Thomas Kalmbach
Chief Financial Officer
Globe Life Inc.
3700 South Stonebridge Drive
McKinney, TX 75070
Re: Globe Life Inc.
Form 10-K for
Fiscal Year Ended December 31, 2023
File No. 001-08052
Dear Thomas Kalmbach:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2023
Business, page 1
1. Please revise future
filings in this section or in MD&A to explain the typical timing of
premium payments (e.g.,
weekly, monthly, annually) and the typical method of payment
(auto-draft, check,
cash, etc.) for life and health insurance policies. Please provide us your
proposed disclosure.
Legal Proceedings, page 17
2. Please ensure you
describe in future filings any material pending legal proceedings
including proceedings
contemplated by governmental authorities. Refer to Item 103 of
Regulation S-K for
guidance.
Management's Discussion and Analysis of Financial Condition and Results
of Operations, page
21
3. Given the material
impact on financial results from lapses, please revise future filings to
provide additional
quantified information regarding lapses for each period presented,
Thomas Kalmbach
FirstName
Globe Life LastNameThomas Kalmbach
Inc.
Comapany
June 6, 2024NameGlobe Life Inc.
June 6,
Page 2 2024 Page 2
FirstName LastName
discuss/quantify the impact on revenue and other relevant financial
metrics and discuss
relevant trends. Please provide us your proposed disclosure.
4. We note your discussion on page 26 related to cancellations in the
first thirty days after
issuance of a policy. Please revise future filings to clarify if
cancellations are included in
lapses. If not and if material, please revise future filings to
disclose cancellations by
distribution channel for each period presented and discuss relevant
trends. Please provide
us your proposed disclosure.
Summary of Operations, page 23
5. We note your discussion of net sales on page 26. In future filings,
please explain why
management considers net sales to be a better indicator of the rate of
premium growth as
compared to annualized premium issued. Please provide us your proposed
disclosure.
6. In future filings, please revise your discussion of net sales and
first-year collected
premium on page 25 to more clearly explain why first-year collected
premium is
significantly less than net sales. Please provide us your proposed
disclosure.
Direct to Consumer Division, page 29
7. Please revise future filings to provide relevant information related
to the introductory offer
period. If material, please revise to clarify the impact of
introductory offer periods on
revenue recognition in your accounting policy disclosure. Please
provide us your proposed
disclosure.
Critical Accounting Policies - Future Policy Benefits, page 48
8. Please explain to us why changes to cash flow assumptions (e.g.,
Mortality, Morbidity,
Lapses) impact OCI, including a discussion of any relevant accounting
guidance
considered. Please also revise future filings as needed to clarify why
changes to cash flow
assumptions impact OCI.
Notes to Consolidated Financial Statements, page 62
9. Please revise future filings to disclose quantitative detail of the
costs presented in the
Commissions, premium taxes, and non-deferred acquisition costs
line item for each
period presented. Please provide us your proposed disclosure.
Other Receivables, page 67
10. Please revise future filings here, in the business section and/or in
MD&A to clearly
describe the key terms and the structure of agent commissions. Also,
discuss the key
accounting policies and how agent commissions impact financial
results. Specifically
discuss the following:
how commissions are calculated (e.g., based on annualized
premium, based on
Thomas Kalmbach
FirstName
Globe Life LastNameThomas Kalmbach
Inc.
Comapany
June 6, 2024NameGlobe Life Inc.
June 6,
Page 3 2024 Page 3
FirstName LastName
expected lifetime premiums, etc.);
the difference in commissions for new policies and renewed
policies;
when an agent is contractually due a commission (e.g., when a
policy is sold, after a
certain number of payments, etc.);
the timing of when commissions are actually paid;
the frequency of advancing a commission before it is
contractually due;
the distribution channels in which commissions are typically
deferred and the reasons
why certain commissions are not deferred;
by distribution channel if materially different, the estimated
percentage of
commissions that are deferred and the percentage that are
expensed; and
explain to us how you account for an advanced commission over
time, including the
accounting at the initial payment and how you determine when the
commission is
deferred as DAC or expensed.
Please provide us your proposed disclosure.
Effect of New Accounting Standards on Previously Reported Results - ASU
2018-12, page 76
11. We note your disclosure in the December 31, 2022 Form 10-K that for
businesses with
deferrals of renewal commissions, as is the case with your captive
agency channels, the
expected amortization rate of DAC as a percentage of premium will no
longer be level but
will increase over the period of time during which commissions are
deferred and that this
will result in lower annual amortization of DAC. Please provide to us
a simplified
example that details the deferral and amortization of DAC before and
after the adoption of
ASC 2018-12 that clearly illustrates the decrease in annual
amortization of DAC. Please
reference the relevant accounting guidance that supports your new
policies.
12. Please explain to us why Commissions, premium taxes, and
non-deferred acquisition
costs increased significantly during 2021 and 2022 after adoption
of ASU 2018-12. To
the extent needed, please provide a simplified example to illustrate
the change in amounts
recognized before and after adoption.
Note 6 - Policy Liabilities, page 96
13. Please revise your rollforward of the present value of expected future
policy benefits for
each period presented to separately present lapses and any other
material derecognition
item that does not represent a cash benefit payment. Please provide us
your proposed
disclosure.
Thomas Kalmbach
Globe Life Inc.
June 6, 2024
Page 4
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Please contact Michael Volley at 202-551-3437 or Amit Pande at
202-551-3423 with any
questions.
FirstName LastNameThomas Kalmbach Sincerely,
Comapany NameGlobe Life Inc.
Division of
Corporation Finance
June 6, 2024 Page 4 Office of Finance
FirstName LastName