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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2019	Mar. 30, 2020	Aug. 07, 2019
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Registrant Name	VERICITY, INC.
Trading Symbol	VERY
Entity Central Index Key	0001575434
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		14,875,000
Entity Public Float			$ 18,411,600
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity File Number	001-38945
Entity Tax Identification Number	46-2348863
Entity Address, Address Line One	8700 W Bryn Mawr Avenue
Entity Address, Address Line Two	Suite 900 S
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60631
City Area Code	312
Local Phone Number	379-2397
Entity Incorporation, State or Country Code	DE
Document Annual Report	true
Document Transition Report	false
Title of 12(b) Security	Common Stock, Par Value $0.001 per share
Security Exchange Name	NASDAQ
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Investments:
Fixed maturities – available-for-sale – at fair value (amortized cost; $294,402 and $304,303)	$ 314,921	$ 306,586
Equity securities – trading – at fair value (cost; $6,350 and $6,328)	5,231	4,823
Short-term investments – at fair value (amortized cost; $29,742 and $0)	29,757
Mortgage loans (net of valuation allowances of $53 and $236)	51,835	50,830
Limited partnership interests		118
Policyholder loans	6,040	5,623
Other invested assets	104	99
Total investments	407,888	368,079
Cash and cash equivalents	37,842	20,984
Accrued investment income	2,780	2,985
Reinsurance recoverables	132,870	136,601
Deferred policy acquisition costs	85,776	84,567
Commissions and agent balances (net of allowances of $545 and $562)	11,270	1,864
Intangible assets	1,635	1,716
Deferred income tax assets, net	9,440	10,663
Other assets	32,281	27,511
Total assets	721,782	654,970
Liabilities
Future policy benefits and claims	335,766	320,397
Policyholder account balances	87,517	93,051
Other policyholder liabilities	25,063	25,738
Policyholder dividend obligations	11,453	9,383
Reinsurance liabilities and payables	15,382	6,167
Long-term debt	16,601	10,294
Short-term debt	3,999	3,072
Other liabilities	13,584	14,678
Total liabilities	509,365	482,780
Commitments and Contingencies (Note 10)
Shareholders' Equity
Common stock, $.001 par value, 30,000,000 shares authorized, 14,875,000 shares, issued and outstanding	15
Additional paid-in capital	39,840
Retained earnings	163,805	174,558
Accumulated other comprehensive income (loss)	8,757	(2,368)
Total shareholders' equity	212,417	172,190
Total liabilities and shareholders' equity	$ 721,782	$ 654,970

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Fixed maturities – available-for-sale – amortized cost	$ 294,402	$ 304,303
Equity securities – trading - cost	6,350	6,328
Short-term investments - amortized cost	29,742	0
Mortgage loans, valuation allowances	53	236
Commissions and agent balances, allowances	$ 545	$ 562
Common stock, par value	$ 0.001
Common stock, authorized shares	30,000,000
Common stock, shares issued	14,875,000
Common stock, shares outstanding	14,875,000

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenues
Net insurance premiums	$ 94,370	$ 88,573
Net investment income	16,076	15,101
Net realized investment gains (losses)	691	(967)
Other than temporary impairment	(41)	0
Earned commissions	17,688	13,404
Insurance lead sales	6,229	7,633
Other income	287	236
Total revenues	135,300	123,980
Benefits and expenses
Life, annuity, and health claim benefits	61,851	56,556
Interest credited to policyholder account balances	3,199	3,598
Operating costs and expenses	76,953	68,353
Amortization of deferred policy acquisition costs	13,410	11,506
Other expenses	83	164
Total benefits and expenses	155,496	140,177
(Loss) income from operations before income tax	(20,196)	(16,197)
Income tax (benefit) expense	(872)	(2,350)
Net (loss) income	$ (19,324)	$ (13,847)
Weighted average shares outstanding, basic and diluted	14,875,000	14,875,000
Basic earnings per share	$ (1.30)	$ (0.93)
Diluted earnings per share	$ (1.30)	$ (0.93)

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (19,324)	$ (13,847)
Comprehensive income (loss), net of tax:
Net unrealized gains (losses) on investments	11,125	(10,166)
Total comprehensive income (loss)	11,125	(10,166)
Total comprehensive income (loss)	$ (8,199)	$ (24,013)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance – beginning of period at Dec. 31, 2017				$ 188,405	$ 7,798
Balance after adjustments – beginning of period at Dec. 31, 2017				188,405
Net (loss) income	$ (13,847)			(13,847)
Other comprehensive income (loss) attributable to the Company					(10,166)
Balance – end of period at Dec. 31, 2018	172,190			174,558	(2,368)
Common stock issued		$ 15
Proceeds net of offering costs			$ 132,809
Return of capital			(92,969)
Cumulative effect adjustment from changes in accounting guidance, net of tax	8,571			8,571
Balance after adjustments – beginning of period at Dec. 31, 2018				183,129
Net (loss) income	(19,324)			(19,324)
Other comprehensive income (loss) attributable to the Company					11,125
Balance – end of period at Dec. 31, 2019	$ 212,417	$ 15	$ 39,840	$ 163,805	$ 8,757

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net (loss) income	$ (19,324)	$ (13,847)
Adjustments to reconcile net (loss) to net cash provided (used) by operating activities:
Depreciation and amortization and other non-cash items	1,439	1,445
Interest credited to policyholder account balances	3,199	3,598
Deferred income tax	(1,732)	(3,033)
Net realized investment (losses) gains	(691)	967
Other than temporary impairment	41	0
Interest expense	998	514
Change in:
Trading securities	(394)	(367)
Accrued investment income	205	338
Reinsurance recoverables	3,731	7,314
Deferred policy acquisition costs	(1,209)	(2,248)
Commissions and agent balances	(836)	169
Other assets	(8,924)	(129)
Insurance liabilities	12,599	9,028
Other liabilities	8,108	454
Net cash (used) provided by operating activities	(2,790)	4,203
Sales, maturities and repayments of:
Fixed maturity securities	92,176	75,663
Short-term investments	41,722
Equity securities		10
Mortgage loans	3,717	4,383
Limited partnership interests	147	840
Purchases of:
Fixed maturity securities	(82,253)	(61,151)
Short-term investments	(71,001)
Mortgage loans	(4,508)	(12,328)
Limited partnership interests	(38)
Change in policyholder loans, net	(417)	312
Other investments, net	(5,160)	(5,189)
Net cash (used) provided by investing activities	(25,615)	2,540
Cash flows from financing activities
Proceeds from issuance of common stock in initial public offering, net of underwriting commission and offering costs	140,563
Return of capital	(92,969)
Debt issued	13,330	17,013
Debt repaid	(7,093)	(5,261)
Deposits to policyholder account balances	794	612
Withdrawals from policyholder account balances	(9,362)	(9,889)
Net cash provided (used) by financing activities	45,263	2,475
Net increase (decrease) in cash and cash equivalents	16,858	9,218
Cash, cash equivalents and restricted cash – beginning of period	20,984	11,766
Cash, cash equivalents and restricted cash – end of period	37,842	$ 20,984
Non-cash transactions
Cumulative effect adjustment from changes in accounting guidance, net of tax	8,571
Registration costs included in other assets at December 31, 2018	$ 7,739

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

Description of Business

Vericity, Inc. is a Delaware corporation organized to be the stock holding company for Members Mutual Holding Company (Members Mutual) and its subsidiaries. On August 7, 2019, Vericity, Inc. completed the initial public offering of 14,875,000 shares of its common stock at a price of $10.00 per share (the IPO). The IPO was conducted in connection with the conversion of Members Mutual from mutual to stock form and the acquisition by Vericity, Inc. of all of the capital stock of Members Mutual following its conversion to stock form after its plan of conversion and amended and restated articles of incorporation were approved at a special meeting of eligible members on August 6, 2019 (the Conversion). As a result of the Conversion, Vericity, Inc. became the holding company for converted Members Mutual and its indirect subsidiaries, including Fidelity Life Association (Fidelity Life) and Efinancial, LLC (Efinancial).

Vericity, Inc. operates as a holding company and currently has no other business operations. Fidelity Life is an Illinois domiciled life insurance company that was founded in 1896. Fidelity Life markets life insurance products through independent and affiliated distributors and is licensed in the District of Columbia and all states, except New York and Wyoming. Efinancial markets life and other products for non-affiliated insurance companies and sells life products for Fidelity Life.

The accompanying consolidated financial statements present the accounts of Vericity, Inc. and subsidiaries at December 31, 2019 and December 31, 2018, and for the years ended December 31, 2019 and 2018.

Basis of Presentation

These consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications

In 2019, we began reporting our holdings of FHLBC, which we are required to hold as a member of the FHLBC system, as other investments rather than equity securities as the stock is restricted in nature. The 2018 consolidated financial statements have been reclassified to conform to the current financial statement presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Unconsolidated Variable Interest Entities

In the normal course of investing activities, the Company enters into relationships with variable interest entities (VIEs), as an investor in limited partnership interests and asset-backed securities. The Company is not the primary beneficiary of these VIEs, and therefore does not consolidate them. The Company determines whether it is the primary beneficiary of a VIE based on a qualitative assessment of the relative power and benefits of the Company and the other participants in the VIE. The Company’s maximum exposure to loss with respect to these investments is limited to the investment carrying values included in the Company’s Consolidated Balance Sheets and any unfunded commitments.

Fixed Maturities and Equity Securities

Fixed maturities and equity securities classified as available-for-sale are reported at fair value. Changes in fair value are reported as unrealized gains or losses as discussed below. Fixed maturity securities include bonds, residential mortgage-backed securities, commercial mortgage-backed securities and asset-backed securities.

Equity securities that are classified as trading securities include master limited partnerships. Securities that are classified as trading are reported at fair value with changes in fair value reported as net realized investment gains (losses) in the Consolidated Statements of Operations.

Fair value is based on quoted market prices, when available. When quoted market prices are not available, fair value is estimated by discounting fixed maturity securities cash flows to reflect interest rates currently being offered on similar terms to borrowers of similar credit quality, by quoted market prices of comparable instruments, and by independent pricing sources. See Note 12 for further discussion on inputs and assumptions used to estimate fair value.

Unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive income (AOCI), net of applicable deferred income taxes.

The amortized cost of fixed maturity securities is determined based on cost, adjustments for previously recorded other-than-temporary impairment (OTTI) losses, and the cumulative effect of amortization of premiums and accretion of discounts using the effective interest method. Such amortization and accretion are included in net investment income on the Consolidated Statements of Operations. For mortgage-backed and asset-backed securities, the Company considers estimates of future prepayments in the calculation of the effective yield used to apply the interest method. If a difference arises between the anticipated prepayments and the actual prepayments, the Company recalculates the effective yield based on actual prepayments and the currently anticipated future prepayments. The amortized costs of such securities are adjusted to the amount that would have resulted had the recalculated effective yields been applied since the acquisition of the securities with a corresponding charge or credit to net investment income. Interest income on lower rated asset-backed securities is determined using the prospective yield method. Prepayment estimates are based on the structural elements of specific securities, interest rates, and generally recognized prepayment speed indices.

For OTTI losses on fixed maturity securities, credit losses are recognized in earnings and losses resulting from factors other than credit of the issuer are recognized in other comprehensive income. See “Note 2–Investments” for further information on factors reviewed to assess OTTIs.

Mortgage Loans

Mortgage loans are held on commercial real estate and are stated at the aggregate unpaid principal balances, net of any write-downs and valuation allowances. The Company identifies loans for evaluation of impairment primarily based on the collection experience of each loan. Mortgage loans are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect principal or interest amounts according to the contractual terms of the loan agreement. Impairment is measured on a loan-by-loan basis based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral. Impairments are included in net realized investment gains (losses) in the Consolidated Statements of Operations.

Interest income from mortgage loans is recognized on an accrual basis using the effective yield method. Accrual of income is generally suspended for mortgage loans that are in default or when full and timely collection of principal and interest payments is not probable.

Short-Term Investments

Short-term investments include highly liquid securities and other investments with remaining maturities of one year or less, but greater than three months from the date of purchase. Securities included within short-term investments are classified as available-for-sale and are reported at fair value. Changes in fair value are reported as unrealized gains or losses and are a component of AOCI, net of applicable deferred income taxes. Fair value is based on quoted market prices, when available. When quoted market prices are not available, fair value is estimated by discounting fixed maturity securities cash flows to reflect interest rates currently being offered on similar terms to borrowers of similar credit quality, by quoted market prices of comparable instruments, and by independent pricing sources. See “Note 11–Assets and Liabilities Measured at Fair Value” for further discussion on inputs and assumptions used to estimate fair value.

Limited Partnership Interests

Limited partnership interests consist of investments in hedge funds that are of a passive nature in that the Company does not take an active role in the management of these assets. The Company’s carrying value of investments in limited partnership interests is the Company’s proportionate share of the net asset value of each partnership, as determined by the general partner. Certain partnerships for which results are not available on a timely basis are reported on a lag, generally one month. Changes in net asset values are accounted for under the equity method and recorded as net realized investment gains (losses) in the Consolidated Statements of Operations.

Policyholder Loans

Policyholder loans are carried at the aggregate of the unpaid balance. Interest income on such loans is recorded as earned in net investment income using the contractually agreed-upon interest rate.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, amounts due from banks and highly liquid investments that are both readily convertible into known amounts of cash and have maturities of three months or less at the time of acquisition such that they present insignificant risk of changes in value due to changing interest rates and lack of credit exposure. The carrying value of these securities approximates their fair value.

Reinsurance

The Company enters into reinsurance agreements to diversify risk and limit its overall financial exposure. Although these reinsurance agreements contractually obligate the reinsurers to reimburse the Company, they do not discharge the Company from its primary liability and obligation to policyholders. Risk transfer criteria are reviewed for each reinsurance contract to determine if the contract will be accounted for as reinsurance or under the deposit method of accounting.

The Company estimates the amount of uncollectible reinsurance recoverables based on periodic evaluations of balances due from reinsurers, reinsurer solvency, and management’s experience. Changes in the estimated amounts for uncollectible reinsurance recoverables are presented as a component of life, annuity, and health claim benefits in the Consolidated Statements of Operations. Amounts owed by reinsurers are considered past due based on the terms of the reinsurance contract. Reinsurance recoverables and any related allowance are written off after collection efforts have been exhausted or a negotiated settlement is reached with the reinsurer.

Deferred Policy Acquisition Costs (DAC)

Incremental direct costs of acquiring new business, principally commissions on sales, underwriting, policy issuance and processing, and medical inspection costs, are deferred for successfully placed contracts. DAC for the life insurance business is amortized over the life of the business; for traditional life products, the DAC is amortized as a level percentage of gross premiums; for universal life (UL) products, the DAC is amortized as a level percentage based on estimated gross profits (EGPs). DAC for the assumed block of deferred annuities is amortized over 20 years. For UL and the deferred annuities, amortization amounts are adjusted when revisions are made to the estimates of current or future EGPs. DAC balances are evaluated periodically to assess whether there are sufficient gross margins or gross profits to recover the remaining unamortized balances.

Intangible Assets

Intangible assets with definite lives are amortized over their expected useful lives using a method that best reflects the pattern in which the economic benefits of the intangible assets will be consumed or on a straight line basis ranging from four to ten years. Software intangible assets are amortized over four years using an accelerated amortization method. Intangible assets with indefinite useful lives are not amortized.

Interim impairment testing may be performed when events or changes in circumstances indicate that the carrying amount of the intangible assets may not be recoverable. Amortizable intangible assets are tested for impairment based on undiscounted cash flows, which requires the use of estimates and judgment, and, if impaired, are written down to fair value based on discounted cash flows. For years ended December 31, 2019 and December 31, 2018, we have not recorded an impairment of intangible assets.

Future Policy Benefits, Policyholder Account Balances, and Other Policyholder Liabilities

Future policy benefits represent the reserve for traditional life insurance policies and annuities in payout status. Reserves for traditional life insurance policies are computed using the net level premium method on the basis of actuarial assumptions at the issue date of the contracts, including mortality, policy lapse assumptions, and rates of interest. The reserves for annuities in payout status (structured settlements) represent the present value of assumed future payments based on contract terms for the future payouts and can include assumptions for mortality. To the extent that unrealized gains on available-for-sale fixed income securities would result in a premium deficiency had those gains actually been realized, an increase in reserves for certain immediate annuities with life contingencies is recorded net of tax as an increase (decrease) of unrealized capital gains included in AOCI. For years ended December 31, 2019 and 2018, this adjustment, net of tax, was $1,960 and $1,297, respectively.

Policyholder account balances include the liability for assumed deferred annuity and universal life contracts and the liabilities for policyholder dividends and death benefits on life insurance contracts that have been left on deposit with the Company. These liabilities represent the account value of the policyholder as there are no other benefits due. This liability is equal to the balance that accrues to the benefit of the policyholder, which includes the accumulation of deposits, plus interest credited, less withdrawals.

Other policyholder liabilities include the amounts estimated for claims that have been reported but not settled and estimates for claims incurred but not reported.

Long and Short-Term Debt

Debt represents upfront commission payments received on certain term life products that are to be repaid as level commissions over the life of the underlying policies issued. The debt liability is accounted for under the interest method, which requires the imputation of interest resulting in the recognition of a discount as the difference between the cash payments received and the level commissions expected to be repaid based on current policy lapse assumptions. Under the interest method, the discount is amortized as interest expense over the period that level commissions are repaid resulting in a constant rate of interest when applied to the amount outstanding at the beginning of any given period. The amount to be repaid as level commissions are dependent on the level of expected policy lapses assumed for the underlying commissions financed; therefore, the debt liability may be adjusted in periods where revisions to policy lapse assumptions are made, which may result in the recognition of a gain or loss.

Income Taxes

The current receivable for federal income tax is recognized based on the estimated amounts to be reflected on the filed tax returns. Federal income tax expense or benefit is recognized based on amounts reported in the consolidated financial statements and using the applicable current federal income tax rate. Income taxes are allocated to operations and other comprehensive (loss) income based on the source of the taxable event. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effects of changes in tax rates or laws are recognized in the period that includes the enactment date. If necessary, a valuation allowance is established to reduce the carrying amount of deferred tax assets to amounts that are more likely than not to be realized. See “Note 4 – Income Taxes” for further detail.

Revenue Recognition

Life and health insurance contract premiums are recognized as income when due from policyholders. Deposits on deposit-type contracts are entered directly as a liability when cash is received.

We adopted Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 606”) on January 1, 2019. The majority of our revenue-generating arrangements are premiums received from insurance contracts and therefore are excluded from the scope of ASU 606. Life and health insurance contract premiums are recognized as income when due from policyholders. Deposits on deposit-type contracts are entered directly as a liability when cash is received.

Commission revenue from the sale of insurance products by Efinancial is recognized once the insurance policy is issued by the insurance company and accepted by the customer (policy placement) and recorded as commission receivable, net of any advances received. Provision is made for commission revenue that, based on experience, will ultimately not be earned due to the customer discontinuing the underlying insurance policy. Commission revenue that Efinancial earns from the sale of insurance products where Efinancial acts as the general agent (wholesale distribution) is recorded net of related commission expense paid to the writing agency.

Our primary revenue-generating arrangements that are within the scope of ASU 606 are our brokerage arrangements with third-parties. In these arrangements, our customer is the insurance carrier and we have a single performance obligation to place a policy for the insurance carrier. Our performance obligation is satisfied at the point in time when the policy is placed, which is the point in time when the customer obtains control over the policy and has the right to use and obtain the benefits from the policy. In these arrangements, depending on the number of years the policy is in force, a significant majority of our consideration is received in the first year. In addition to the first-year consideration, depending on the specific carrier and product involved, we may also be entitled to renewal commissions over the period of time the policy remains in force. Our consideration is variable based on the amount of time we estimate a policy will remain in force. We estimate the amount of variable consideration that we expect to receive based on our historical experience or carrier experience to the extent available, industry data and our expectations as to future persistency rates. Additionally, we consider application of the constraint and only recognize the amount of variable consideration that we believe is probable to be received and will not be subject to a significant revenue reversal. We monitor and update this estimate at each reporting date.

Because we recognize revenue prior to being entitled to the payment for these renewal commissions, we recognize a contract asset; however, we have determined that the amount of our contract asset is immaterial. Additionally, because our brokerage arrangements consist of a single performance obligation that is satisfied at the point in time that policies are placed, we do not have any remaining performance obligations in our contracts with customers. We have evaluated our arrangements and concluded that none of our brokerage arrangements include a significant financing component, and therefore do not adjust revenue for the time value of money. We have determined that any contract costs (e.g., costs to obtain or costs to fulfill) related to our brokerage arrangements are immaterial.

Our Chief Operating Decision Maker makes decisions by analyzing our segment information, which is included in Note 14. For internal decision-making purposes and external reporting purposes, we do not disaggregate revenue beyond our segment information and believe that any further disaggregation is immaterial.

Insurance lead sales include the sale of potential life insurance customer leads to outside parties including agencies and unaffiliated insurers. Sales of leads are recorded at the time the lead data is transferred to the customer and recorded as a receivable, net of allowance for returns.

Net Investment Income and Net Realized Investment Gains (Losses)

Net investment income consists primarily of interest and dividends. Interest is recognized on an accrual basis and reflects amortization of premiums and accretion of discounts on an effective yield basis, based on expected cash flows. Dividends are recorded on the ex-dividend date. Net realized investment gains (losses), resulting from sales or calls of investments and representing the difference between the net proceeds and the carrying value of investments sold, are determined on a specific identification basis. Net realized investment gains (losses) are also recognized when declines in the fair value of invested assets are considered to be other-than-temporary. Changes in value reported for investments accounted for using the equity method of accounting are classified within net realized investment gains (losses).

Policyholder Dividend Obligations

Dividends payable to policyholders are determined annually based on the experience of the Closed Block policies and are payable only upon declaration by the Board of Directors of Fidelity Life. At December 31, 2019 and 2018, a provision has been made for dividends expected to be paid in the following calendar year of $1,194 and $1,233, respectively. The provision is recorded in other policyholder liabilities in the consolidated balance sheets.

The Company also establishes a policyholder dividend obligation when cumulative actual earnings of the Closed Block are in excess of the cumulative expected earnings that were determined at the inception of the Closed Block. See “Note 8 – Closed Block” for further discussion.

Accounting Standards Adopted

The core principle of the updated ASU 606 guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments, changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The standard excludes from its scope the accounting for insurance contracts, financial instruments, and certain other agreements that are governed under other GAAP guidance. The Company adopted the new revenue guidance effective January 1, 2019 using the modified retrospective approach.

The cumulative effect changes to the Consolidated Balance Sheet for the adoption of the updated guidance were as follows:

	Balance at December 31,		Adoption Adjustment		Balance at January 1,
Assets	2018		Topic 606		2019
Commissions and agent balances	$	1,864	$	8,571	$	10,435
Deferred income tax assets, net	$	10,663	$	-	$	10,663
Shareholders' Equity
Retained earnings	$	174,558	$	8,571	$	183,129

The impact of adoption on the Consolidated Statements of Operations for the year ended December 31, 2019 and Consolidated Balance Sheets as of December 31, 2019 were as follows:

	Year Ended December 31, 2019
Revenues	Before Adoption Adjustment			Adoption Adjustment Effect		After Adoption Adjustment
Earned commissions	$	17,552		$	136	$	17,688
Total revenues	$	135,164		$	136	$	135,300

(Loss) income from operations before income tax	$	(20,332	)	$	136	$	(20,196	)
Income tax (benefit) expense		(872	)		—		(872	)
Net (loss) income	$	(19,460	)	$	136	$	(19,324	)

	As of December 31, 2019
Assets	Before Adoption Adjustment			Adoption Adjustment Effect		After Adoption Adjustment
Commissions and agent balances	$	2,563		$	8,707	$	11,270
Deferred income tax assets, net	$	9,440		$	-	$	9,440
Shareholders' Equity
Retained earnings	$	155,098		$	8,707	$	163,805

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The updated guidance requires changes to the current financial instruments reporting model. The effects of the new guidance are around the accounting for equity investments. All equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) are measured at fair value through earnings. There is no longer an available-for-sale classification for changes in fair value reported in other comprehensive income (loss) for equity securities with readily determinable fair values. Under the new guidance, changes in the fair value of equity securities are reported as net realized investment gains (losses) in the Company's Consolidated Statements of Operations. The impact to the Company was not material.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. GAAP requires the remeasurement of deferred tax assets and liabilities due to a change in the tax rate to be included in net income (loss), even if the related income tax effects were originally recognized in AOCI. The ASU allows a reclassification from AOCI to Retained earnings for stranded tax effects resulting from the new U.S. Federal corporate income tax rate enacted on December 22, 2017. The guidance is effective for interim and annual periods beginning on or after January 1, 2019. The Company’s policy to reclassify the stranded tax effects from AOCI at the time all such securities have been sold or matured will not have a material impact on the Company’s consolidated financial statements.

Accounting Standards Pending Adoption

Pursuant to the Jumpstart Our Business Startups Act (“JOBS Act”), an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by the FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to use the extended transition period for complying with any new or revised financial accounting standards. Accordingly, the information contained herein may be different than the information you receive from other public companies. We also intend to continue to take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases. The guidance is effective for interim and annual periods beginning on or after January 1, 2021. The new guidance requires a lessee to recognize “right-of-use” assets and liabilities for leases with lease terms of more than 12 months including those historically accounted for as operating leases. The effect of the new guidance will be an increase for the present value of remaining lease payments for leases in place at the adoption date in assets and liabilities. This is not expected to have a material impact to the Company’s results of operations or financial position, based on the magnitude of our current two operating leases.

In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments, ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The guidance is effective for interim and annual periods beginning on or after January 1, 2023. For substantially all financial assets, the ASU should be applied on a modified retrospective basis through a cumulative effect adjustment to Retained earnings. For previously impaired debt securities and certain debt securities acquired with evidence of credit quality deterioration since origination, the new guidance should be applied prospectively. This ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance requires that OTTI on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through net realized investment gains (losses). The guidance also requires enhanced disclosures. The Company has assessed the asset classes impacted by the new guidance and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-12, Targeted Improvements to the Accounting for Long-Duration Insurance Contracts (Topic 944). The guidance is effective for interim and annual periods beginning on or after January 1, 2024. The FASB issue amends the accounting model under GAAP for certain long-duration insurance contracts and requires insurers to provide additional disclosures in annual and interim reporting periods. The amendments are aimed at improving the following four key areas of financial reporting, measurement of the liability for future policy benefits related to nonparticipating traditional and limited-payment contracts, measurement and presentation of market risk benefits, amortization of deferred acquisition costs (DAC), and presentation and disclosures. The Company expects the impact to be material and is in the process of quantifying the impact of this standard.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The guidance is effective for interim and annual periods beginning on or after January 1, 2020. The FASB issued these amendments as part of its disclosure framework project, which has an objective and primary focus to improve the effectiveness of disclosures in the notes to financial statements. The guidance modifies fair value disclosures for both public and private companies, removing some disclosure requirements and modifying others. In addition, public companies are subject to some new disclosure requirements. The Company is in the process of evaluating the impact of this standard.

In August 2018, the FASB issued new guidance on implementation costs in a cloud computing arrangement that is a service contract, ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (Subtopic 350-40). The guidance is effective for interim and annual periods beginning on or after January 1, 2021. The new guidance can be applied either prospectively to eligible costs incurred on or after the guidance is first applied, or retrospectively to all periods presented. The new guidance requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets. The Company is in the process of evaluating the impact of this standard.

Investments

12 Months Ended

Dec. 31, 2019

Investments Debt And Equity Securities [Abstract]

Investments

Note 2—Investments

The Company continuously monitors its investment strategies and individual holdings with consideration of current and projected market conditions, the composition of the Company’s liabilities, projected liquidity and capital investment needs, and compliance with investment policies and state regulatory guidelines.

Available-for-Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses, fair value, and OTTI loss included in AOCI of fixed maturities are as follows:

	December 31, 2019
	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value		OTTI Losses
Fixed maturities
U.S. government and agencies	$	14,195	$	1,907	$	—		$	16,102	$	—
U.S. agency mortgage-backed		38,542		1,044		(52	)		39,534		—
State and political subdivisions		23,246		1,561		(64	)		24,743		—
Corporate and miscellaneous		132,108		15,311		(280	)		147,139		—
Foreign government		131		40		—			171		—
Residential mortgage-backed		8,820		421		(26	)		9,215		(306	)
Commercial mortgage-backed		18,685		681		(31	)		19,335		—
Asset-backed		58,675		306		(299	)		58,682		—
Total fixed maturities	$	294,402	$	21,271	$	(752	)	$	314,921	$	(306	)

	December 31, 2018
	Amortized Cost		Unrealized Gain		Unrealized Loss			Fair Value		OTTI Losses
Fixed maturities
U.S. government and agencies	$	11,459	$	1,181	$	(129	)	$	12,511	$	—
U.S. agency mortgage-backed		32,811		332		(562	)		32,581		—
State and political subdivisions		23,334		694		(117	)		23,911		—
Corporate and miscellaneous		155,372		5,972		(4,428	)		156,916		—
Foreign government		131		11		—			142		—
Residential mortgage-backed		9,786		374		(75	)		10,085		(269	)
Commercial mortgage-backed		16,409		56		(313	)		16,152		—
Asset-backed		55,001		117		(830	)		54,288		—
Total fixed maturities	$	304,303	$	8,737	$	(6,454	)	$	306,586	$	(269	)

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities of mortgage-backed and asset-backed securities may be substantially shorter than their contractual maturity because they may require monthly principal installments and such loans may prepay principal. The amortized cost and fair value of fixed maturities by contractual maturity, are presented in the following table:

	December 31, 2019
	Amortized Cost		Fair Value
Due in one year or less	$	10,746	$	10,839
Due after one year through five years		37,668		39,506
Due after five years through ten years		23,760		25,695
Due after ten years		97,506		112,115
Securities not due at a single maturity date—primarily mortgage and asset-backed securities		124,722		126,766
Total fixed maturities	$	294,402	$	314,921

Fixed maturities with a carrying value of $3,398 and $4,678 were on deposit with governmental authorities, as required by law at December 31, 2019 and 2018, respectively.

The Company’s fixed maturities portfolio was primarily composed of investment grade securities, defined as a security having a rating of Aaa, Aa, A, or Baa from Moody’s, AAA, AA, A, or BBB from S&P or NAIC rating of NAIC 1 or NAIC 2. Investment grade securities comprised 98.1% and 94.0% of the Company’s total fixed maturities portfolio at December 31, 2019 and 2018, respectively.

Short-Term Investments

The Company owns $29,757 of U.S. Treasury Bills which mature in the first quarter 2020. These bills were purchased after completion of the IPO and the amortized cost of these securities at December 31, 2019 was $29,742.

Mortgage Loans

The Company makes investments in commercial mortgage loans. The Company, along with other investors, owns a pro rata share of each loan. The Company participates in 32 such investment instruments with ownership shares ranging from 3.1% to 30.0% of the trust at December 31, 2019. The Company owns a share of 287 mortgage loans with a loan average balance of $181 and a maximum exposure related to any single loan of $555. Mortgage loan holdings are diversified by geography and property type as follows:

	December 31, 2019						December 31, 2018
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
Property Type:
Retail	$	16,892			32.6	%	$	16,081			31.5	%
Office		12,160			23.4	%		12,446			24.4	%
Industrial		8,517			16.4	%		7,742			15.2	%
Mixed use		6,240			12.0	%		6,526			12.8	%
Apartments		3,713			7.2	%		4,118			8.1	%
Medical office		3,163			6.1	%		2,905			5.7	%
Other		1,203			2.3	%		1,248			2.3	%
Gross carrying value of mortgage loans		51,888			100.0	%		51,066			100.0	%
Valuation allowance		(53	)					(236	)
Net carrying value of mortgage loans	$	51,835					$	50,830

	December 31, 2019						December 31, 2018
	Gross Carrying Value			% of Total			Gross Carrying Value			% of Total
U.S. Region:
West South Central	$	12,498			24.1	%	$	12,223			23.9	%
East North Central		12,080			23.3	%		11,262			22.1	%
South Atlantic		11,637			22.4	%		12,105			23.7	%
West North Central		4,241			8.2	%		4,067			8.0	%
Mountain		4,153			8.0	%		4,357			8.5	%
Middle Atlantic		2,831			5.5	%		2,714			5.3	%
East South Central		3,133			6.0	%		2,903			5.7	%
New England		110			0.2	%		144			0.3	%
Pacific		1,205			2.3	%		1,291			2.5	%
Gross carrying value of mortgage loans		51,888			100.0	%		51,066			100.0	%
Valuation allowance		(53	)					(236	)
Net carrying value of mortgage loans	$	51,835					$	50,830

During the years ended December 31, 2019 and 2018, $4,508 and $12,328 of new mortgage loans were purchased, respectively, which did not include second lien mortgage loans. There were no taxes, assessments, or any amounts advanced that were not included in the mortgage loan balances at December 31, 2019 and 2018. At December 31, 2019 and 2018, the Company had 5 and 6 mortgage loans with a total carrying value of $528 and $617 that were in a restructured status, respectively. There were no impairments for mortgage loans in 2019 and 2018.

The changes in the valuation allowance for commercial mortgage loans were as follows:

	Year Ended December 31, 2019			Year Ended December 31, 2018
Beginning balance	$	236		$	268
Net decrease in valuation allowance		(183	)		(32	)
Ending balance	$	53		$	236

At December 31, 2019 and 2018, the Company had no mortgage loans that were on nonaccrual status.

At December 31, 2019 and 2018, the Company had a commitment to make investments in mortgage loans in the amount of $359 and $4,397, respectively.

Limited Partnership Interests

In 2019, the Company sold all outstanding positions in limited partnership interests, which were $118 at December 31, 2018. The Company has no outstanding funding commitments as of December 31, 2019.

Net Investment Income

The sources of net investment income are as follows:

	Year Ended December 31,
	2019			2018
Interest from:
Fixed maturities	$	12,977		$	13,567
Policyholder loans		373			335
Mortgage loans		2,714			2,224
Short-term investments		441		—
Cash and cash equivalents		646			125
Dividends on equity securities		409			397
Gross investment income		17,560			16,648
Investment expense		(1,484	)		(1,547	)
Net investment income	$	16,076		$	15,101

Investment expenses include investment management fees, some of which include incentives based on market performance, custodial fees and internal costs for investment-related activities.

Net Realized Investment Gains (Losses)

The sources of realized investment (losses) gains are as follows:

	Year Ended December 31,
	2019			2018
Investment (losses) gains from:
Fixed maturities	$	487		$	134
Equity securities		14			(1,140	)
Mortgage loans		214			32
Limited partnership interests		(4	)		59
Cash and cash equivalents		21			—
Investment expenses		(41	)		(52	)
Total net realized investment (losses) gains	$	691		$	(967	)

Other-Than-Temporary Impairment

The Company regularly reviews its investments portfolio for factors that may indicate that a decline in the fair value of an investment is other-than-temporary. A fixed maturity security is other-than-temporarily impaired if the fair value of the security is less than its amortized cost basis and the Company either intends to sell the fixed maturity security or it is more likely than not the Company will be required to sell the fixed maturity security before recovery of its amortized cost basis. For all other securities in an unrealized loss position in which the Company does not expect to recover the entire amortized cost basis, the security is deemed to be other-than-temporarily impaired for credit reasons.

Significant judgment is required in the determination of whether an OTTI loss has occurred for a security. The Company has developed a consistent methodology and has identified significant inputs for determining whether an OTTI loss has occurred. Some of the factors considered in evaluating whether a decline in fair value is other-than-temporary are the financial condition and prospects of the issuer, payment status, the probability of collecting scheduled principal and interest payments when due, credit ratings of the securities, and the duration and severity of the decline.

The credit loss component of a fixed maturity security impairment is calculated as the difference between amortized cost and the present value of the expected cash flows of the security. The present value is determined using the best estimate of cash flows discounted at the effective rate implicit to the security at the date of purchase or prior impairment. The methodology and assumptions for estimating the cash flows vary depending on the type of security. For mortgage-backed and asset-backed securities, cash flow estimates, including prepayment assumptions, are based on data from widely accepted third-party sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral characteristics, expectations of delinquency and default rates, and structural support, including subordination and guarantees. If the present value of the modeled expected cash flows equals or exceeds the amortized cost of a security, no credit loss exists and the security is considered to be temporarily impaired. If the present value of the expected cash flows is less than amortized cost, the security is determined to be other-than-temporarily impaired for credit reasons and is recognized as an OTTI loss in earnings. The non-credit component, determined as the difference between the adjusted amortized cost basis and fair value, is recognized as OTTI in other comprehensive (loss) income.

A rollforward of the cumulative credit losses on fixed maturity securities is as follows:

	Year Ended December 31,
	2019		2018
Beginning balance of credit losses on fixed maturities	$	828	$	828
Additional credit losses for which an OTTI was not previously recognized		41		—
Ending balance of credit losses on fixed maturities