National Western Life Group Profile
National Western Life Group, Inc. (NWLGI), through its subsidiary, National Western Life Insurance Company (National Western), operates as a stock life insurance company.
National Western is licensed to do business in all U.S. states (except for New York), the District of Columbia, as well as four U.S. territories or possessions. National Western is also licensed in Haiti. As of December 31, 2022, National Western maintained 81,917 policies for its life insurance products and 99,041 annuity contracts.
Effective January 31, 2019, National Western acquired Ozark National Life Insurance Company (‘Ozark National’), a Missouri domiciled, stock life insurance company licensed to conduct business in thirty states. As of December 31, 2022, Ozark National maintained 171,915 policies for its life insurance products. As part of this acquisition, NWLGI acquired N.I.S. Financial Services, Inc. (‘NIS’), a broker-dealer affiliated with Ozark National providing mutual fund investment products.
National Western distributes its life and annuity products through independent broker-agents. In addition to marketing products through independent broker-agents, National Western has recently begun marketing insurance products through financial institutions, such as banks and wire houses.
Products
National Western offers a broad portfolio of individual whole life, universal life and term insurance plans, and annuities, including supplementary riders.
Life Products
National Western's life products provide protection for the life of the insured and, in some cases, allow for cash value accumulation on a tax-deferred basis. These product offerings include universal life insurance (‘UL’), interest-sensitive whole life, and traditional products, such as term insurance coverage. Interest sensitive products, such as UL, accept premiums that are applied to an account value. These products offer both flexible and fixed premium modes and provide policyholders with flexibility in the available coverage, the timing and amount of premium payments and the amount of the death benefit, provided there are sufficient policy funds to cover all policy charges for the coming year. Traditional products generally provide for a fixed death benefit payable in exchange for regular premium payments.
Annuity Products
Annuity products sold include flexible premium and single premium deferred annuities, equity-index (fixed-index) annuities, and single premium immediate annuities. These products can be tax qualified or nonqualified annuities. A fixed single premium deferred annuity (‘SPDA’) provides for a single premium payment at the time of issue, an accumulation period, and an annuity payout period commencing at some future date. A flexible premium deferred annuity (‘FPDA’) provides the same features but allows, generally with some conditions, additional payments into the contract.
Ozark National utilizes a unique distribution system to market its flagship Balanced Program, which consists of a coordinated sale of a non-participating whole life insurance product with a mutual fund investment product offered through its affiliated broker-dealer, NIS. Its largest markets by state are Missouri, Iowa, Minnesota, Nebraska, and Louisiana.
Operating Segments
The company defines its reportable operating segments as Domestic Life Insurance, International Life Insurance, Annuities, and ONL and Affiliates. These segments are organized based on product types, geographic marketing areas, and business groupings. Ozark National and NIS have been combined into a separate segment given their inter-related marketing and sales approach, which consists of a coordinated sale of a non-participating whole life insurance product (Ozark National) and a mutual fund investment product (NIS). A fifth category ‘All Others’ primarily includes investments and earnings of non-operating subsidiaries, as well as other remaining investments and assets not otherwise supporting specific segment operations.
Domestic Life Insurance
National Western is licensed to do business in all U.S. states (except New York) and the District of Columbia. Products marketed are annuities, universal life insurance, and traditional life insurance, which include both term and whole life products. Nearly 100% of National Western's life premium sales come from single premium life products. National Western markets and distributes its domestic products primarily through independent national marketing organizations (‘NMOs’). These NMOs assist in recruiting, contracting, and managing independent agents. These agents are independent contractors who are compensated on a commission basis. As of December 31, 2022, NWLIC's NMO relationships had contracted approximately 29,300 independent agents. As of December 31, 2022, National Western had 44,556 domestic life insurance policies in force representing nearly $3.65 billion in face amount of coverage and 99,041 annuity contracts representing account balances of $6.2 billion.
Although reported separately for segment disclosure purposes, domestic insurance operations include the activities of Ozark National. As of December 31, 2022, Ozark National maintained 171,915 life insurance policies in force representing $5.7 billion in face amount of coverage. There were 211 agents contracted as of December 31, 2022 who solely market Ozark National products. Due to Ozark National's coordinated sale of a non-participating whole life insurance with a mutual fund investment product its agents hold a securities license in addition to an insurance license.
Ozark National's sales were consisted entirely of traditional life product sales for the year ended December 31, 2022.
International Life Insurance
National Western's international operations consists solely of a closed block of in force policies. National Western accepted applications from foreign nationals of other countries in upper socioeconomic classes who had substantial financial resources. This targeted customer base, coupled with National Western's conservative underwriting practices, historically resulted in claims experience, due to natural causes, similar to that in the United States. In addition, the company adopted an extensive anti-money laundering compliance program in order to fully comply with all applicable U.S. monitoring and reporting requirements pertaining to anti-money laundering and other illegal activities.
Approximately seven years ago, National Western began the process of phasing out new policies in various countries outside the U.S., ultimately ceasing all application for new policies from all remaining countries by the end of 2018. As of December 31, 2022, the company had 37,361 international life insurance policies in force representing approximately $10.3 billion in face amount of coverage.
National Western's average face amount of insurance coverage per policy for domestic contracts has exhibited an upward trend reflecting the shift in sales toward single premium life products, primarily fixed-index, as part of its wealth transfer strategy for domestic life sales.
Regulation
For National Western, statutory financial statements are prepared in accordance with accounting practices prescribed or permitted by the Colorado Division of Insurance, the company's principal insurance regulator, while for Ozark National the statutory financial statements are prepared in accordance with accounting practices prescribed or permitted by the Missouri Department of Commerce and Insurance, its principal insurance regulator.
The USA Patriot Act of 2001 (‘Patriot Act’) amended the Money Laundering Control Act of 1986 and the Bank Secrecy Act of 1970 to expand anti-money laundering (‘AML’) and financial transparency laws applicable to financial services companies, including insurance companies. Among other things, the Patriot Act seeks to identify parties involved in terrorism, money laundering or other illegal activities. It is the policy of the company to comply fully with all applicable U.S. anti-money laundering laws and regulations and to maintain company-wide awareness of the importance of these laws and regulations.
Competition
For National Western, domestic market competitors have included, among others, Allianz Life, American Equity Investment Life, Sammons Financial Group (Midland, NACOLAH), Great American Life, Security Benefit Life, Fidelity and Guaranty Life, Athene USA, Jackson National Life, Equitrust Life Insurance Company, Pacific Life, National Life Group (Life of the Southwest) and Global Atlantic.
History
National Western Life Group, Inc. was founded in 1956. The company was incorporated in 2015.
