Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2016 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you, Mr. Adam Auvil. You may begin your conference.
Good morning. Thank you for joining us on CNO Financial Group's second quarter 2016 earnings conference call. Today's presentation will include remarks from Ed Bonach, Chief Executive Officer, Gary Bhojwani, President, and Erik Helding, Chief Financial Officer. Following the presentation, we will also have several other business leaders available for the question and answer period. During this conference call, we will be referring to information contained in yesterday's press release. You could obtain the release by visiting the media section of our website at www.cnoinc.com. This morning's presentation is also available in the investors section of our website and was filed in a Form 8-K earlier today. We expect to file our Form 10-Q and post it to our website on August 2nd.
Let me remind you that any forward-looking statements we make today are subject to a number of factors which may cause actual results to be materially different than those contemplated by the forward-looking statements. Today's presentation contains a number of non-GAAP measures, which should not be considered as substitutes for the most directly comparable GAAP measures. You'll find a reconciliation of the non-GAAP measures to the corresponding GAAP measures in the appendix. Throughout this presentation, we'll be making performance comparisons, unless otherwise specified, any comparisons will be referring to changes between second quarter 2015 and second quarter 2016. With that, I'll turn the call over to Ed.
Thanks, Adam. Good morning, everyone. CNO posted another solid quarter with growth in several key metrics. First-year collected premiums were up 5% on strong annuity sales. New annualized premium or NAP was down 3% with continued growth in Colonial Penn, offset by declines at Bankers Life and Washington National. Gary will go into this in more detail. Total collected premiums, policies in force, and annuity account values were all up in the quarter, highlighting the value our agents provide to our customers, along with the resilience and diversification in our business model despite a continuing low interest rate environment and increasing political uncertainty. Operating earnings per share excluding significant items were $0.34, flat over the prior year. We continued our strong track record of returning capital to shareholders.
During the quarter, we repurchased $61 million of common stock and paid $14 million in dividends after increasing the dividend for a fourth consecutive year. Lastly, CNO announced the launch of our wholly owned broker-dealer, Bankers Life Securities Inc., and registered investment advisor, Bankers Life Advisory Services Inc. We're excited to be able to better serve our middle-market customers' needs with this launch, and we'll continue to expand the platform and build out our advisor base. With that, I'll now turn it over to Gary to discuss our distribution results. Gary?
Thanks, Ed. Turning to slide six and our segment results. Beginning with Bankers Life, first-year collected premiums were up 6% on higher sales of annuities and long-term care policies with shorter benefit periods. NAP was down 5%, driven by a decrease in life sales. As a reminder, NAP includes 6% of annuity deposits, 10% of single premium whole life deposits, and 100% of all other new premiums on an annualized basis. Total collected premiums were up 4% as annuity collections grew $19 million or 10%, and we experienced favorable persistency in our Medicare supplement and life blocks. Annuity account values on which spread income is earned increased 2% to $7.6 billion. Total policies in force increased 1%, including 9% growth in the number of third-party policies. New agent recruiting increased 8% in the quarter as process and technology investments made last year begin to yield positive results.
The total average number of producing agents was down 7%. This was partially offset by a 2% increase in productivity. Third-party fee income, which is primarily derived from the sale of Medicare Advantage plans, was up 11% on a trailing four-quarter basis, driven by steady persistency. Turning to slide seven in Washington National. First-year collected premiums and NAP were down 5% and 6% respectively. Total collected premiums were up 2%, driven by a 4% increase in supplemental health. The decrease in individual market sales reflects the impact of recent product changes, coupled with a more difficult sales environment in farming communities. The combination of these factors has led to a reduction in agent count. We are focused on regaining momentum in the individual market with initiatives to broaden our customer base and increase agent recruiting and productivity.
Worksite market sales were up 8% with contributions from PMA and our independent partner channel. Worksite sales continue to benefit from investments we have made in new agent recruiting, field leader and agent development, and geographic expansion. We are also in the process of rolling out our new OneSource enrollment and benefit servicing platform in time for the fourth-quarter enrollment season.
In total, the average producing agent count at PMA was up 5%, driven by growth in worksite agents. Moving on to slide eight. Colonial Penn's first-year collected premiums were up 8%, reflecting strong sales results over the last several quarters. Colonial Penn posted 4% NAP growth in the quarter and 9% growth for the first half of the year. The quarter's positive results were mainly driven by strong TV leads. Total collected premiums were up 7% due to continued growth, both in first-year premiums from new sales and steady persistency in our in-force block. In-force adjusted EBIT was $14.1 million, up 6% from the prior year due to continued growth in the block. For the full year, we expect Colonial Penn total adjusted EBIT to be in the breakeven to $6 million range.
This range reflects uncertainty related to how the U.S. presidential election will impact the cost of television advertising. I'll now turn it over to Erik to discuss our financial results. Erik?
Thanks, Gary. CNO had another solid quarter on the earnings and capital fronts. We reported operating earnings per share of $0.35, up from $0.31 in the prior year. Excluding significant items, operating earnings per share of $0.34 was flat to prior year, with a slight decline in earnings offset by lower average shares outstanding as a result of our continued strong return of capital to shareholders. Earnings in our Bankers Life, Colonial Penn, and Corporate segments were largely in line with expectations, while Washington National results were below expectations. Operating return on equity was 9%, consistent with results in recent periods. We reported estimated consolidated risk-based capital of 448%, up from 441% in the first quarter. Leverage was 19.9%, and cash and investments at the holding company totaled $376 million. We repurchased $61 million of common stock at an average price of $18.70.
This was down from the first quarter due to the elevated price of the stock in the second quarter. Through the first half of the year, we have repurchased $151 million at an average price of $17.57. We have been taking advantage of recent weakness in the share price, and through yesterday, repurchased an additional $29 million in the month of July. We expect to repurchase between $275 million and $375 million of stock for the full year. The amount of stock we repurchase will depend upon the trading price during the second half of the year, as well as compelling alternatives, including reinvestment in organic and non-organic growth initiatives, and to fund potential LTC reinsurance transactions. During the quarter, we utilized substantially all of our life NOLs and will become a taxpayer in the third quarter.
As previously disclosed, we expect this to result in a $15 million-$20 million decrease to quarterly statutory income. Turning to slide 10 and our segment earnings results. Earnings excluding significant items in our Bankers Life segment were up slightly, with improved margins in our long-term care business partially offset by lower Medicare supplement margins. Washington National's results reflect approximately $5 million of unfavorable supplemental health impacts that I'll discuss in the next slide. Colonial Penn's results were in line with our seasonal expectations and reflect higher marketing costs to drive NAP growth. Lastly, Corporate segment results reflect slightly higher expenses, but were still in line with our expectations. Turning to slide 11 and our key health benefit ratios. Bankers Life Medicare supplement benefit ratio was 73% in the quarter.
Current period results were elevated relative to the past three quarters, but still within our range of expectations and consistent with pricing. We continue to expect the Medicare supplement benefit ratio to be in the 70%-73% range for the remainder of 2016. Bankers Life long-term care interest adjusted benefit ratio was 77.9% on a reported basis and reflects a $5 million impact from policyholder actions following the implementation of rate increases. Excluding these impacts, the interest-adjusted benefit ratio was 82.1%, in line with our expectations. We continue to expect the long-term care interest-adjusted benefit ratio, excluding the impact of rate increases, to be in the 81%-86% range for the remainder of 2016. Washington National supplemental health interest adjusted benefit ratio was 61.6%.
The benefit ratio was negatively impacted by $2 million due to higher persistency on older policies and $2 million of higher claims on certain products providing lump sum benefits upon occurrence of a covered illness. While these results were outside of expectations, at this time, we believe this was largely period-to-period volatility. As such, we continue to expect the interest-adjusted benefit ratio to be in the 56%-59% range for the remainder of 2016. Turning to slide 12 and our investment results. We earned 5.5% on new money in the quarter. While yields were largely lower, we opportunistically put money to work in certain high yield and alternative asset classes, including an initial allocation to Tennenbaum Capital Partners. We experienced a sequential decline in call and prepayment income, but this was offset by higher alternative investment returns.
Gross realized gains and losses moderated in the quarter, and impairments were limited to two securities. With that, I'll now turn it back over to Ed.
Thanks, Erik. We continue to invest across the enterprise to drive growth and efficiencies. On the product front, we recently announced a guaranteed lifetime income annuity. Gary touched on process and technology investments positively impacting recruiting.
Other technology investments like the Washington National OneSource platform, which is aimed at providing fully integrated application and enrollment, are also important. Providing more options for customer interaction and service help to enhance the customer experience. We are committed to investing in CNO, as we believe that these investments are important ways to increase long-term shareholder value. Our middle market focus, diversification, and resilience of our business model, along with the value our agents provide to customers, are important competitive advantages and enable us to adapt to changing business and regulatory environments. With that, we'll now open it up for questions. Operator?
At this time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Randy Binner with FBR.
Good morning. Thanks. It's Randy Binner. I guess first, I have a question for Gary, and that is I guess I appreciate all the comments around process and IT improvement, mostly in Bankers but across the organization. The question is, where do you see yourself in that process? What inning are you in in that process? Particularly, when do you think we can see the producing agent count inflect back up?
Thanks, Randy, for the question. First of all, I want to emphasize I've been here for 90 days, I'm not sure I'm going to comment too much on what inning we're in. What I would like to respond to specifically is your question about the Bankers Life recruiting. We expect that by the end of the third quarter of this year that our agent count, both active and producing, will exceed the levels we were at in 2015.
That's specifically for Bankers.
Yeah, I believe that was the question, correct?
Yeah. No, that's fine. On Washington National, there was a comment in the script about the farming community having depressed sales. I guess I'm not super in touch with that community. Are commodity prices low? What is the issue? Is it a macro thing or is it just an issue of reaching out to people?
I think it's a combination of a couple factors in reference to that comment. First of all, it is a macro thing in terms of what we're seeing with the farming community struggle with. The other issue is on the individual sales, we have seen a reduction in our agents there. We expect to see that normalize here. It'll be a few quarters before that happens, to be clear about that. However, I would also emphasize that our work site agent counts have been strong, and we anticipate that to continue as well.
Okay. The kind of outlook for Washington National producing agent counts would not be as clear as Bankers. That's going to take a little bit longer. Is that the right takeaway there?
I think that's correct. I don't have the same level of visibility at this point in time.
Now, Randy, this is Ed. To be clear, the total producing agent count of Washington National is up. It just happens to be down on the individual side and up on the work site. In total, it's up.
Right. Okay. Understood. One more production question, and that's around the launch of the BD and the advisory business in Bankers. Can you just elaborate on two things? One, how do you think of this launch in the context of the new DOL rules? I think some of the products that you advise on there are going to touch some of the new fiduciary rule. Is your timing good there? How do you think about it kind of exposing a little more of the company to that rule? Because you don't have a lot of exposure there. Are these initiatives that can really move the needle on overall production in the next year or so?
First of all, I appreciate you acknowledging that the DOL rule doesn't touch us in a lot of places. I think that's an accurate way to think about it for CNO overall. As respects the broker-dealer, to be honest with you, I don't think this has to do with us positioning ourselves for DOL per se. It has to do with what the needs are of our middle-market consumers. We see a clear trend where they will need more guidance and advice, and I can't envision a circumstance where doing this will hurt us, particularly as we look at the rest of our business and the way it's structured. I do anticipate it helping us. We've just launched it June 1st, 2016, so it's quite early in the process yet to make too many comments about it.
I do expect it would help us going forward for the main reason that this is the type of service that our middle-market consumers continue to need.
Yeah, Randy, I'll add to that we've been talking for several quarters about there are different metrics to assess our growth, and reaching more customers is an important aspect of that. BD, RIA in particular will be in our fee income. Products and services through those entities are not going to be in NAP. Another reason for why we are looking at growth in the enterprise on metrics well beyond NAP.
Yeah. Then just to the extent that that's fee-based income, does that become non-life income then out of those initiatives?
Yes.
Yeah. Okay.
Yes.
Super. Thanks a lot.
Your next question comes from the line of Michael Kovac with Goldman Sachs.
Great. Good morning. Thanks for taking the question. Wanted to dig a little bit deeper into the $5 million negative impact in Washington National. Can you give us a little more color in terms of what gives you conviction that's one time, and sort of where those claims emerged?
Hey, Mike, this is Erik. The conviction that it's one time is really rooted in the fact that this is really the first time that we've seen this uptick in these types of claims. Let me just make a couple of general statements. One is the $5 million impact is obviously broken into three distinct pieces, which we outlined in the press release and I talked about in my prepared remarks. In isolation, any one of those really wasn't a terribly material item, but it was still $5 million. When you look at the three components, the increased incidence of claim was about $2 million. This is the first quarter that we saw that. We had higher claim levels this time last year, but it was specifically related to cancer products.
This time around, there was a slight uptick in cancer claims, but it was largely other critical illness products. With respect to kind of the persistency, the divergent persistency that we saw, the higher persistency in some of the older products, this was also the first time in those durations that we've seen that. Now on the lower persistency in the newer products, this is the second quarter in a row that we've seen it. Our view is that one or even two quarters does not make a trend. We need time to kind of continue to see how this emerges and explore what's going on here. That was really the rationale for sticking with the 56 to 59 guidance.
Okay, that's helpful. Similarly in the Medicare supplement in Bankers, I think you mentioned that it was at 73% benefit ratio near the top of the range. Is there anything specific that you're seeing related to CNO in that block, or are there some industry trends that are potentially driving the increase we've seen over the last several quarters?
No, Mike, we think it's really more of an industry trend. If you recall from my comments, we actually price our products, specifically the newer products that we're selling, to about a 72.5%. We're pretty close to where we expect, albeit a little bit at the higher end of the range. We did actually have a little bit of an uptick in claims on our Washington National Closed Block Medicare Supplement as well. This does seem to be consistent with the industry, we think it's more a trend across companies rather than something specific to our blocks.
Great. Thanks. One last one. In terms of thinking about capital uses going forward, I believe you mentioned buybacks, then also I thought I heard you say thinking about funding of potential LTC transactions. Any updated conversations you're having on this topic that you can share with us?
Mike, this is Ed. We have ongoing interactions with the capital and reinsurance markets, that's a priority for us, but again, on a three to six year window. We're looking to do this in the right time.
Thanks. That's helpful.
Your next question comes from the line of Ryan Krueger with KBW.
Hey, thanks. Good morning. I had a question on life insurance sales at Bankers Life. I know you saw growth in other products, but life insurance sales have been more pressured in recent quarters. Was just hoping you could dig in a little bit more on what's going on there specifically?
Sure. I think that if we look at what happened with life, the first comment I'd make is that the total collected premiums are up 3%. I think it's very important to recognize that. The second point I would make, the life sales have been correlated historically more heavily with the agent count, and we've already made some comments on that and taken action on that. The third thing I would say is that there's a clear consumer preference that we're seeing right now for annuities and other products that really produce long-term income and accumulation benefits. We think it's a reasonable trend, per se.
Got it. Okay, thanks. Then separate long-term care question, I think for Erik. Last, you had been working on various claims management initiatives, and if you incorporated a piece of the potential positive impact to your margin testing last year. I was just wondering, as you've continued to go through this year, have you made further progress that might give you more confidence to assume more of that increase going forward?
Yeah. Hey, Ryan, Erik here. Yes, we continue to pilot additional initiatives, claims initiatives. At this point in time, I think it's a little bit early to say whether or not we'll be able to incorporate any of the results into our year-end loss recognition testing, though. I'm going to defer that one here for another quarter, and we can probably give you an update in the third quarter.
Okay. Understood. Thank you.
Your next question comes from the line of Humphrey Lee with Dowling & Partners.
Good morning, and thank you for taking my questions. Related to the new money yields, given the drop in kind of year to date, can you talk about what you're getting for your Long-Term Care cash flows, and how do they compare to your assumptions that you put in place at the end of last year?
Humphrey, this is Erik. We don't typically talk about individual lines of business and the new money rate that we're earning. I can tell you that the assumption that we have embedded in our testing is for roughly a 5.5% new money rate this year, and that growing over a couple of years to 6.5%. I think to the extent you see our new money rate across on an aggregate basis on the slide that covers the investment results, that is an aggregate number. The Long-Term Care rate's going to be a little bit higher than that, obviously, because it's going to have a longer duration. I would say that since we're largely hitting our new money rate in aggregate, it's fair to say that we're largely hitting our new money rate on the Long-Term Care block.
Okay. Thank you for that. Looking at the current round of Long-Term Care rate increase implementation, can you talk about roughly what portion of the targeted blocks have you already gone through the rate increase?
Humphrey, Erik again. We've made essentially all of the filings. I think we've recognized probably about 90%-95% of the economic benefit that we were expecting to recognize at this point in time. In the context of this is the 40% success rate on the blocks that we were seeking rate increases on. We've largely accomplished that. There's going to continue to be additional rate increase approvals and implementations here over the next probably three or four quarters. It's difficult to assess exactly how much more incremental benefit we'll get, but we've largely achieved what we set out to achieve.
In terms of kind of sending the notices to your policyholders and all that, does that kind of reflected in the, I guess, the rate actions impact in the past three quarters?
Yes. That certainly has impacted the last three quarters results, and it will continue to impact the next several quarters results as well. We continue to receive notification from states with respect to our rate increase requests. Even the ones that we received in the past, we have to go through the implementation process, so they have to be loaded into the system. Once a policyholder reaches their next premium due date, the rate increase would then go into effect. Typically, that's monthly, sometimes that's quarterly. In rarer cases, it's annually. It's a process that takes quite a bit of time. We'll be realizing this impact over the next year.
I guess my question is more like what portion of the block has already received these notices?
Yeah, I guess I'm not sure. What portion of the block has already received these notices?
Yes.
Yeah, Humphrey, this is Ed. As far as a specific number, I mean, that changes daily. To Erik's point, with the modality of the premiums, it's roughly 75%. There again, they've received the notices, that doesn't mean that the policyholders made their decision yet. It's really hard to give a precise number. For example, once the premium rate increase is communicated to the policyholder, they've got a grace period. Until that grace period is expired, and they haven't paid their premium, that's how we then know that, okay, they're terminating, as opposed to accepting the rate increase or requesting a reduced benefit and keep their premium level. It's hard to give a precise number for those reasons, but hopefully, that ballpark number helps you.
Yeah. That's very helpful. Thank you.
Your next question comes from the line of Tom Gallagher with Evercore ISI.
Good morning, guys. I had a question on Beechwood Re. There was a Wall Street Journal article within the last few days here, which discusses there being some relationship with Beechwood Re and this Platinum Partners, which I guess is a troubled investment manager. If so, would it require a potential reserve or not?
Hey, Tom, this is Erik. Let me take a crack at answering this. Yes, we're aware of the article that you're referring to, and we are concerned about it, obviously. Just as a reminder, this is the block, the long-term care block was about $550 million that we ceded a couple of years ago to Beechwood. The structure is that the assets are held in a trust, and that they're over-collateralized by 7%, and that the assets in the trust are actually subject to some rigorous guidelines. Those facts there give us some comfort about the structure of the deal, and help to mitigate some of the counterparty risks that we would have had going in. What I'll tell you is that in recent weeks, we actually have increased the level of review and oversight related to this important relationship.
On an ongoing basis, we closely monitor compliance under these reinsurance agreements. Where we stand today as of 6/30, Beechwood Re appears to be in compliance with the agreements.
Got it. Erik, have you been able to due diligence at all the asset quality in the trust, like whether it owns any Platinum Partners investments or anything like that? I just want to get a sense for whether there is a connection here that we should be thinking about.
Yeah, Tom, fair question. At this point, we don't really have anything else that we can comment on with respect to Beechwood Re.
Okay. Fair enough. I guess I can follow up more offline. Actually, no, one last follow-up on that. Just to frame it, I think it's good you're mentioning it's only a little over $500 million of reserves, I don't think it would be a really big problem even if you had to recapture it. Can you just sort of frame the downside for us? If there is a situation that would require you to recapture this, could you help dimension what the range of outcomes here would be for you in terms of would that require additional capital reserving or otherwise?
Yeah, Tom, I think the way I'd answer the question is first remember that we've got the 7% over-collateralization protection. That would certainly mitigate any downside to this. Beyond that, I think it's nearly impossible to estimate what potential downside would be from there. I don't want to leave you hanging out there with that answer, so let me say it this way. We are very cautious about our capital structure. We constantly monitor things like macroeconomic conditions, credit cycle, our RBC ratio, reinsurance counterparties, reinsurance agreements. We do things to help mitigate some of those risks, and some of those things are we hold extra capital in our subsidiaries. We have a 450% roughly consolidated RBC ratio. That's arguably higher than we think we need to run at.
Because we have some of these issues to contend with, we feel that's the right level to run at. Additionally, we have $376 million of holding company cash and investments, $225 million of that we consider to be excess. I think wherever this shakes out, I think we're going to be well-positioned to withstand it from a balance sheet perspective.
Understood. Just a last question on just thinking about short-term care versus long-term care in Bankers. I think you guys have certainly highlighted there's really different risks there, and the short-term care, I think, certainly a much lower risk business. Can you dimension a bit what the split is there when you think about your Bankers business, whether it's in premium, whether it's in earnings contribution between the two different lines of business, and do you have any thoughts in terms of breaking this out in a way that we can better appreciate the differences in those risks?
Yeah, Tom, Erik again. Fair question, and we can think about ways to enhance our disclosure with respect to the split of our various products that fall under kind of the long-term care umbrella. What we have disclosed in the past, I think it was at maybe an investor day a couple of years ago, or the first one back in 2012, is the split of reserves. When you look at the comprehensive and nursing home business, and then the home healthcare business and the short-term care business separately you'll see that the preponderance of our reserves are in that nursing home comprehensive long-term care bucket. I'm going to ballpark it here about two-thirds. The short-term care reserves are probably in the 5%-10% range in terms of reserves.
Got you. Okay, that's helpful. Thanks.
Your next question comes from the line of Daniel Bergman with UBS.
Hi, good morning. Following up on an earlier question, I was hoping you could expand a little in terms of your thinking around how the recent decline in interest rates might impact the potential for a reinsurance deal for the long-term care block, either in terms of the likelihood of such a transaction or the timing. Separately, I was hoping you could provide any additional color around maybe what areas or types of opportunities you might consider for acquisitions or inorganic growth opportunities.
Yeah, Dan, this is Ed. On long-term care potential reinsurance, certainly low interest rates negatively impact the pricing from our CNO perspective. That doesn't mean it's not a possibility because pricing is impacted by a lot of things like claim experience and expectations, persistency, et cetera, as well. Net low interest rates is a negative for pricing. As far as potential corporate development, M&A, distribution is one of the main areas, but that can be in a couple of different ways. The example that we use most frequently is looking at independent distribution IMOs that are out there that potentially need capital to expand, are focused on the middle market, and remind people that at one point, PMA, which we now wholly own, wasn't wholly owned years ago by CNO. Another is certainly in the asset management space.
The strategic investment we did this year in Tennenbaum Capital Partners is an example of that. Those are the two primary areas that we cite, but it's not the full gamut of what we might consider
That's very helpful. Thanks. Maybe just to follow up on that, as I think about what you're saying in terms of independent distribution and IMOs, are you seeing any incremental opportunities or dislocation given what's going on with DOL?
I'll say there's some signs. I can't see anything that's significant. Certainly, IMO organizations, just like us, have to be assessing what does this mean for them and their business model. How do they need to change? Could there be some ways that with our structure, our practices of operating in compliance and related matters, could that be attractive or of benefit to some of these organizations? Potentially, but still too early to tell.
Great. Thanks. Maybe just one more quick one, switching gears. It looked like the corporate operating expenses ticked up a little bit in the second quarter, which I think has been a little bit of a trend for the past few quarters. I just wanted to see if there's any color you can give on what drove that and maybe the outlook for the operating expenses in corporate going forward.
Yeah. Erik here. The corporate segment returned a loss of about $7 million in the quarter. That was up a little bit from the prior year. There was some favorability in the prior year, that accounts for a little bit of the difference. I think here in the second quarter, we did have some additional expenses, some non-capitalized expenses related to things that we're looking at in terms of organic investments and growth. I will also add that there was some expenses related to some legal and advisory expenses related to our investment in TCP as well. I think the seven that you're seeing here is a pretty good proxy on a go-forward basis.
That's very helpful. Thank you.
Your final question comes from the line of Ron Bobman with Capital Returns.
Hi. I had another question on the Beechwood Re situation, I don't think you answered one of Tom's questions on the sort of transparency on the invested assets that are backing the reserves in the trust. Do you have transparency as to those all the way look-through assets or not?
Yes. This is Erik again. There are strict investment guidelines that Beechwood is required to follow. Those are reviewed on a periodic basis.
I'm sorry, not the guidelines. The actual securities is my question.
Are we reviewing individual securities?
Yeah. Do you see the portfolio?
Is that your question?
Yeah. Do you see the individual securities that comprise this portfolio?
Yes, that's right.
What frequency?
On an ongoing basis. It's at least quarterly, I believe.
Okay. Thank you.
Operator, are there any more questions?
There are no further questions at this time.
All right. Thank you everyone for your interest and support of CNO.
We'll now turn it over for closing remarks.
That was it, operator.
Okay, this concludes today's conference call. You may now disconnect.