MISSISSIPPI INSURANCE DEPARTMENT
Report of Examination
of
AMERICAN FEDERATED LIFE
INSURANCE COMPANY
as of
December 31, 2019
TABLE OF CONTENTS
Examiner’s Affidavit ............................................................................................................................... 1
Salutation ................................................................................................................................................. 2
Scope of Examination .............................................................................................................................. 3
Comments and Recommendations of Previous Examination .................................................................. 3
History of the Company ........................................................................................................................... 3
Corporate Records ................................................................................................................................... 4
Management and Control ......................................................................................................................... 4
Stockholder ................................................................................................................................. 4
Board of Directors ...................................................................................................................... 4
Officers ....................................................................................................................................... 4
Conflict of Interest ...................................................................................................................... 5
Holding Company Structure .................................................................................................................... 5
Organizational Chart .................................................................................................................. 6
Parent and Affiliated Companies………………………………………………………….........6
Related Party Transactions ................................................................................................... 7
Administrative Expense Allocation Agreement between AFIC and AFLIC ....................... 8
General and Administrative Expense Allocation Agreement with FT
and its Subsidiaries ............................................................................................................. 8
Commission Agreement with FT and its Subsidiaries ......................................................... 8
Fidelity Bond and Other Insurance .......................................................................................................... 8
Pensions, Stock Ownership and Insurance Plans ..................................................................................... 9
Reinsurance……………………………………………………………………………………………...9
Territory and Plan of Operation ............................................................................................................... 9
Growth of Company……………………………………………………………………………………..9
Accounts and Records……………………………………………………………………………….....10
Statutory Deposits……………………………………………………………………………...……....10
Financial Statements .............................................................................................................................. 11
Introduction .............................................................................................................................. 11
Statement of Assets, Liabilities, Surplus and Other Funds ...................................................... 12
Summary of Operations ............................................................................................................ 13
Reconciliation of Capital and Surplus ...................................................................................... 14
Reconciliation of Examination Adjustments to Surplus ........................................................... 14
Market Conduct Activities ..................................................................................................................... 15
Policyholder Service ................................................................................................................. 15
Underwriting and Rating ........................................................................................................... 15
Claims Handling ....................................................................................................................... 15
Producer Licensing ................................................................................................................... 15
Privacy………………………………………………………………………………… ……...15
Commitments and Contingent Liabilities .............................................................................................. 16
Subsequent Events ................................................................................................................................. 16
Comments and Recommendations ......................................................................................................... 17
Acknowledgment ................................................................................................................................... 18
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 2
April 28, 2021
Honorable Mike Chaney
Commissioner of Insurance
Mississippi Insurance Department
1001 Woolfolk Building
501 North West Street
Jackson, Mississippi 39201
Dear Commissioner Chaney:
Pursuant to your instructions and authorization and in compliance with statutory provisions, an
examination has been conducted as of December 31, 2019, of the affairs and financial condition of:
AMERICAN FEDERATED LIFE INSURANCE COMPANY
406 Liberty Park Court
Flowood, MS 39232
License #
NAIC Group #
NAIC #
FEETS#
MATS#
8200016
0641
98736
98736-MS-2019-2
MS099-28
This examination was commenced in accordance with Miss. Code Ann. § 83-5-201 et seq. and
was performed in Flowood, Mississippi, at the statutory home office of the Company. The report
of examination is herewith submitted.
MIKE CHANEY
Commissioner of Insurance
State Fire Marshal
MARK HAIRE
Deputy Commissioner of
Insurance
MAILING ADDRESS
Post Office Box 79
Jackson, MS 39205-0079
TELEPHONE: (601) 359-3569
FAX: (601) 576-2568
501 N. WEST STREET, SUITE 1001
WOOLFOLK BUILDING
JACKSON, MISSISSIPPI 39201
www.mid.ms.gov
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 3
SCOPE OF EXAMINATION
We have performed a multi-state examination of American Federated Life Insurance Company
(“Company” or “AFLIC”). The last examination covered the period of January 1, 2011, through
December 31, 2014. This examination covers the period January 1, 2015, through December 31,
2019.
We conducted our examination in accordance with the NAIC Financial Condition Examiners
Handbook. The Handbook requires that we plan and perform the examination to evaluate the
financial condition, assess corporate governance, identify current and prospective risks of the
Company and evaluate system controls and procedures used to mitigate those risks. An
examination also includes identifying and evaluating significant risks that could cause an
insurer’s surplus to be materially misstated both currently and prospectively.
All accounts and activities of the Company were considered in accordance with the risk-focused
examination process. This may include assessing significant estimates made by management and
evaluating management’s compliance with Statutory Accounting Principles. The examination
does not attest to the fair presentation of the financial statements included herein. If, during the
course of the examination an adjustment is identified, the impact of such adjustment will be
documented separately following the Company’s financial statements.
This examination report includes significant findings of fact, as mentioned in the Miss. Code
Ann. §83-5-201, and general information about the insurer and its financial condition. There may
be other items identified during the examination that, due to their nature (e.g., subjective
conclusions, proprietary information, etc.), are not included within the examination report but
separately communicated to other regulators and/or the Company.
COMMENTS AND RECOMMENDATIONS OF PREVIOUS
EXAMINATION
The comment and recommendation included in the previous examination report was addressed
by the Company in a manner deemed acceptable by the Mississippi Insurance Department
(“MID”).
HISTORY OF THE COMPANY
AFLIC was incorporated in March 1983 as a life, accident and health insurer under the laws
of the state of Mississippi with 1,000,000 shares of $1 par value common stock authorized
and 200,000 shares issued. In June 1994 and April 2006, the Company’s board of directors
(“Board”) issued an additional 200,000 shares of $1 par value common stock. In December
2012, the Board declared a common stock dividend of the remaining 400,000 authorized
shares.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 4
The Company made ordinary and extraordinary dividends to an upstream affiliate totaling
$7,568,000 during the examination period. AFLIC distributed $2,680,069 during 2017 and
$5,000,000 during 2018.
CORPORATE RECORDS
The minutes of the meetings of the Board of Directors (“Board”), prepared during the period
under examination, were reviewed along with the Articles of Incorporation and Bylaws, along
with any amendments thereto. The minutes appeared to be complete with regard to the matters
brought up at the meetings for deliberation, which included approval of the Company’s
investment portfolio and actions of the Company’s officers.
MANAGEMENT AND CONTROL
Stockholder
The Company is 100% owned by American Federated Holding Company.
Board of Directors
The Articles of Association and Bylaws vest the management and control of the Company's
business affairs with the Board. The members of the duly elected Board, along with their place
of residence, year appointed as a Director, and principal occupation, at December 31 2019, were
as follows:
Name and Residence
Year Elected/Appointed
Principal Occupation
Francis Clark Lee
Brandon, Mississippi
1995
President & Chief Executive Officer
Tower Loan of MS, LLC
James Leland Martin, Jr.
Jackson, Mississippi
2000
President
American Federated Insurance Co.
Steven Terry Page
Flowood, Mississippi
2017
Director, Accounting & Financial
Reporting
Tower Loan of Mississippi, LLC
Officers
The officers duly elected by the Board and holding office at December 31, 2019, are as follows:
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 5
Name and Residence
Year Elected/Appointed
Title
James Leland Martin, Jr.
2000
President
Francis Clark Lee
1995
Secretary/Treasurer
Robert Morris Berry
2019
Vice President
Steven Terry Page
2019
Vice President
Conflict of Interest
The Company had formal procedures whereby disclosure was made to the Board of any material
interest or affiliation on the part of any officer or director that was, or would likely be, a conflict
with the official duties of such persons. The statements were reviewed, and no conflicts or
exceptions to the Company’s policies were noted.
HOLDING COMPANY STRUCTURE
The Company is a member of an insurance holding company system as defined in Miss. Code
Ann. §83-6-1. Holding Company Registration Statements were filed during the examination
period with the MID in accordance with Miss. Code Ann. §§ 83-6-5 and 83-6-9. The statements
and applicable amendments were reviewed, and it appeared that any changes and material
transactions by and between the Company and its affiliates were disclosed appropriately.
The following chart depicts the Company’s ownership as of December 31, 2019:
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 6
Organizational Chart
*Effective 1/1/2020, 100% of the shares owned by the Mary Katherine Lee Gift Trust of First
Tower Finance Company, LLC was transferred to Lee Investment Partners, LLC.
Parent and Affiliated Companies
The organizational chart above denotes the direct line of ownership of the Company. See
Schedule Y – Part 1 of the Annual Statement for the complete organizational chart.
Prospect Capital Corporation (“Prospect” or “Parent”): On June 15, 2012, Prospect acquired
an 80.0544% majority interest in First Tower Finance Company, LLC (f/k/a First Tower
Holdings, LLC, f/k/a First Tower Corporation), and its subsidiaries, through its wholly-owned
subsidiary, First Tower Holdings of Delaware, LLC.
Prospect Capital
Corporation
(100%)
First Tower
Holdings of
Delaware, LLC
(80.0544%)
First Tower Finance
Company, LLC
(100%)
First Tower, LLC
(100%)
Tower Loan of
Mississippi, LLC
(100%)
American
Federated Holding
Company
(100%)
American
Federated
Insurance Company
(MS Insurance
Company)
American
Federated Life
Insurance Company
(MS Insurance
Company)
Jack R. Lee 2006 Gift
Turst (14.0601%)
Mary Katherine Lee
2006 Gift Trust
(5.8286%)*
Jody Macon (.0569%)
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 7
Prospect is a publically-traded, closed-end investment company that has elected to be regulated
as a business development company under the Investment Company Act of 1940. Prospect
invests primarily in first and second-lien senior loans and mezzanine debt and provides capital to
middle-market companies and private equity financial sponsors for refinancing, leveraged
buyouts, acquisitions, recapitalizations, later-stage growth investments and capital expenditures.
First Tower Holdings of Delaware, LLC (“FT Delaware”): FT Delaware is a wholly-owned
subsidiary of Prospect. FT Delaware operates as a holding company which owns 80.0544 % of
First Tower Finance Company, LLC.
First Tower Finance Company, LLC (“FT Finance”): FT Finance is owned 80.0544% by FT
Delaware and 19.8887% by the Jack R. Lee and Mary Katherine Lee Gift Trusts. FT Delaware
and the Jack R. Lee and Katherine Lee Gift Trusts are Class A (voting) members with one Class
B (non-voting) member owning .0569%. FT Finance operates as a holding company which
wholly-owns First Tower, LLC.
First Tower, LLC (“FT”): FT is wholly-owned by FT Finance and is engaged in consumer
lending and related insurance activities through its wholly-owned subsidiaries, Tower Loan of
Mississippi, LLC, Tower Loan of Illinois, LLC, First Tower Loan, LLC, Gulfco of Mississippi,
LLC, Gulfco of Alabama, LLC, Gulfco or Louisiana, LLC, Tower Loan of Missouri, LLC, and
Tower Auto Loan, LLC.
Tower Loan of Mississippi, LLC (“TL of MS”): TL of MS is wholly-owned by First Tower
and is engaged in consumer lending in the states of Mississippi and Louisiana. TL of MS
provides insurance services through its wholly-owned subsidiary, American Federated Holding
Company.
American Federated Holding Company (“AFHC”): AFHC is wholly-owned by TL of MS
and acts as an insurance holding company for two insurance subsidiaries, the Company and
American Federated Insurance Company (“AFIC”).
American Federated Insurance Company (“AFIC”): AFIC is wholly-owned by AFHC. AFIC
provides credit property insurance on consumer loans issued by consumer finance subsidiaries of
TL of MS.
Related Party Transactions:
Premiums: Premiums are collected for credit life and accident and health insurance at each of the
consumer finance branch offices and remitted by TL of MS to the Company on a monthly basis.
At December 31, 2019, the Company reported a receivable from parent, subsidiaries and
affiliates in the amount of $2,029,300 related to premiums owed for December.
Claims: Upon submission of appropriate claim documentation and proof of loss, the Company
pays claims to affiliated consumer finance branch offices to be applied to the insured’s
outstanding loan balances.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 8
Administrative Expense Allocation Agreement between AFIC and AFLIC:
The Company was party to an expense allocation agreement amended January 1, 2013. Pursuant
to this agreement, certain shared expenses are initially paid out of AFIC and subsequently
reimbursed to AFIC by AFLIC. At December 31, 2019 the amounts payable to AFIC pursuant to
this agreement was $22,617. The agreement dictates that payment by AFLIC to AFIC of the
monthly expense allocation will occur by the end of the month following the monthly expenses
incurred by the Company.
General and Administrative Expense Allocation Agreement with FT and its Subsidiaries:
Effective June 15, 2012, the Company entered into a General and Administrative Expense
Allocation Agreement with FT and each of its wholly-owned subsidiaries. Pursuant to this
agreement, FT will prepare monthly a calculation of general and administrative expenses and the
pro rata share to be allocated to the Company based on the ratio of the Company’s total revenues
in any calendar month to the total revenue generated in any calendar month by each of FT’s
finance company subsidiaries. The Company is required to remit payment within fifteen (15)
days after receiving a monthly statement from FT. At December 31, 2019, amounts payable
pursuant to this agreement were $294,342.
Commission Agreement with FT and its Subsidiaries:
Effective June 15, 2012, the Company entered into a Commission Agreement with FT and each
of its wholly-owed finance company subsidiaries. Pursuant to this agreement, once the Company
has received all premiums for any given month, the Company shall calculate the commissions
due to each of the finance company subsidiaries and shall remit any commissions owed no later
than the last day of the month following the month in which the commissions are earned.
Commissions paid shall be reasonable and shall be equal to a percentage of the premium of each
insurance policy written but shall be no higher than the maximum rate permitted under the
applicable state statute. At December 31, 2019, amounts payable pursuant to this agreement were
$843,708.
The consumer finance operating subsidiaries of FT agree to assist the Company to ensure that the
proper licenses are maintained for all finance company employees authorized to place insurance
policies and that such persons are appropriately appointed in accordance with applicable laws.
FIDELITY BOND AND OTHER INSURANCE
The Company maintained a commercial insurance policy for employee theft with a limit of
$500,000. This amount meets the NAIC suggested minimum fidelity coverage for a company of
its size. The Company also maintained an insurance program that appeared to provide adequate
coverage to protect it from hazards that it may encounter.
The Company had additional types of coverage in-force at December 31, 2019, including, but
not limited to, directors and officers, excess liability and excess financial products insurance.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 9
PENSIONS, STOCK OWNERSHIP AND INSURANCE PLANS
The Company's employees have the opportunity to participate in a qualified defined contribution
plan that is sponsored by an affiliate. In addition to pension benefits, an affiliate provides certain
health and dental benefits.
REINSURANCE
The Company was not a party to any reinsurance contracts during the examination period.
TERRITORY AND PLAN OF OPERATION
The Company provides credit life and accident and health insurance on consumer loans issued by
consumer finance operating subsidiaries of FT. The Company's customer base is comprised of
mostly individuals unable to secure loans through conventional lending channels. The loans are
fully collateralized and average $3,400 with an average life of twenty (20) months (average term
at loan issuance is twenty-six (26) months).
The Company markets its products exclusively through the consumer financial branches of
the FT. FT owns several consumer finance companies with over two hundred and thirty (230)
branches throughout Alabama, Louisiana, Illinois, Mississippi and Missouri.
As of December 31, 2019, the Company was authorized to write the following lines of business
in the state of Mississippi:
Accident and health Life
Credit life, credit accident and health
GROWTH OF COMPANY
The review of the growth of the Company was performed based on balances as reported in the
annual statements filed with the MID during the period under examination.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 10
ACCOUNTS AND RECORDS
The Company's 2019 trial balance was tied to the financial statements within the statutory annual
statement filed with the MID, with no material exceptions noted. The Company was audited
annually by an independent CPA firm and its Aggregate reserve for life and accident and health
contracts and contract claims liabilities were reviewed by an consulting actuary who issued an
actuarial opinion for each of the years under examination.
Marc Altschull from Merlinos was engaged as the Examination Consulting Actuary to review
that Company’s loss and loss adjustment reserves.
The Company utilized internally developed software, Progress, to manage policies, process
claims and prepare certain financial information. FT maintains an IT department that
encompassed a hardware and software technology group, branch application support group and
quality assurance group.
The Company was licensed as a single-line insurance company pursuant to Miss. Code Ann.
§ 83-19-31(a), which required the Company to maintain a minimum capital of $400,000 and
surplus of $600,000. Pursuant to Miss. Code Ann. § 83-5-55, the Company was required to file
an NAIC Life and Health Annual Statement. The Company was also required to file a risk-based
capital (RBC) report pursuant to Miss. Code Ann. § 83-5-401 through § 83-5-427.
STATUTORY DEPOSITS
The Company's statutory deposits with the state of Mississippi complied with Miss. Code Ann.
§83-19-31(2) and §83-7-21. The following chart displays the Company's deposits at
December 31, 2019:
Description of Security
Par Value
Fair Value
US Treasury Notes
$ 1,595,000
$ 1,595,628
Total
$ 1,595,000
$ 1,595,628
2019
2018
2017
2016
2015
Change in surplus
$884,601
$(1,574,349)
$(223,843)
$2,929,534
$(1,120,645)
Ratio of premiums earned
to capital and surplus
1.67 to 1
1.75 to 1
1.28 to 1
1.26 to 1
1.70 to 1
Ratio of assets to
liabilities
1.61 to 1
1.57 to 1
1.59 to 1
1.53 to 1
1.37 to 1
Ratio of revenues to
expenses
1.04 to 1
1.07 to 1
1.19 to 1
1.23 to 1
0.93 to 1
Cash flows from
operations
$1,514,794
$1,525,585
$ 1,114,909
$1,685,907
$2,709,129
Net income (loss)
$791,640
$1,180,321
$2,436,717
$2,898,820
$(1,168,353)
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 11
FINANCIAL STATEMENTS
Introduction
The financial statements consist of a Statement of Assets, Liabilities, Surplus and Other Funds as
of December 31, 2019, a Summary of Operations for year ended December 31, 2019, and a
Reconciliation of Capital and Surplus for the examination period ended December 31, 2019.
The following financial statements are based on the statutory financial statements filed by the
Company with the Mississippi Insurance Department and present the financial condition of the
Company for the period ending December 31, 2019.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 12
Statement of Assets, Liabilities, Surplus and Other Funds
December 31, 2019
Assets
Bonds
$ 23,051,344
Cash and short-term investments
3,024,246
Investment income due and accrued
207,079
Current federal and foreign income tax recoverable
56,103
Net deferred tax asset
234,879
Receivables from parent, subsidiaries and affiliates
2,029,300
Aggregate write-ins for other-than-invested assets
2,880
Total assets
$ 28,605,831
Liabilities, Capital and Surplus
Aggregate reserve for life contracts
$ 7,954,654
Aggregate reserve for accident and health contracts
7,419,814
Contract claims: life
772,222
Contract claims: accident and health
186,000
Interest maintenance reserve
10,463
General expenses due or accrued
16,857
Taxes, licenses, fees, and other expenses due or accrued
109,883
Asset valuation reserve
88,179
Payable to parent, subsidiaries and affiliates
1,160,667
Total liabilities
17,718,739
Common capital stock, $1 par value; 1,000,000 shares
authorized, issued and outstanding
1,000,000
Gross paid in and
contributed surplus
300,000
Unassigned funds (surplus)
9,587,092
Total capital and surplus
10,887,092
Total liabilities, capital and surplus
$ 28,605,831
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 13
Summary of Operations
For the Examination Period Ended December 31, 2019
Revenue
Premiums and annuity considerations for life and accident and health contracts
$ 18,212,081
Net investment income
666,385
Amortization of interest maintenance reserve
(6,835)
Aggregate write-ins for miscellaneous income
6,961
Total revenues
18,878,592
Expenses
Death benefits
$ 3,667,414
Disability benefits and benefits under accident and health contracts
1,535,284
Increase in aggregate reserves for life and health contracts
1,088,066
Commissions
7,563,738
General insurance expenses
3,838,313
Insurance taxes, licenses and fees, excluding federal income taxes
579,625
Total benefits and expenses
18,272,440
Federal and foreign income taxes incurred
(153,570)
Net realized capital gains
31,918
Net income
$ 791,640
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 14
Reconciliation of Capital and Surplus
For the Examination Period Ended December 31, 2019
2019
2018
2017
2016
2015
Capital and surplus,
December 31, prior
year
$10,002,493
$11,576,842
$11,800,685
$8,871,171
$9,991,796
Net income
791,640
1,180,321
2,436,717
2,898,820
(1,168,333)
Change in asset
valuation reserve
(7,667)
9,780
10,194
(10,889)
(12,296)
Change in reserves on
account of change in
valuation basis
-
2,760,627
-
-
-
Change in net
deferred income tax
(15,819)
(408,632)
8,834
40,843
59,193
Dividends to
stockholders
-
(5,000,000)
(2,680,069)
-
-
Change in non-
admitted assets
116,445
(116,445)
481
740
811
Capital and surplus,
December 31, current
year
$10,887,092
$10,002,493
$11,576,842
$11,800,685
$8,871,171
Reconciliation of Examination Adjustments to Surplus
For the Examination Period Ended December 31, 2019
There were no changes made to the assets, liabilities or surplus balances reported by the
Company for the year ended December 31, 2019. The capital and surplus reported by the
Company of $10,887,092 is accepted as reasonably stated for purposes of the balance sheet per
the examination and in compliance with Miss. Code Ann. §83-19-31.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 15
MARKET CONDUCT ACTIVITIES
A full market conduct examination was not conducted; however, specific areas of the market
conduct activities were reviewed. The specific areas reviewed included those items as indicated
below. No significant exceptions with regard to limited procedures performed were noted.
Policyholder Service
The Company maintained a complaint log during the period under examination. All complaints
appeared to have been appropriately resolved and no policyholder abuse was noted.
Underwriting and Rating
The Company appeared to be appropriately applying premium rates for insured policies based on
application data.
It appeared that all applicable policy forms had been appropriately approved by the MID.
Claims Handling
Claim files were reviewed for general indicators of policyholder treatment concerns noting no
material exceptions.
Producer Licensing
The Company appeared to have the appropriate licensure to issue its products, and agents
appeared to be properly licensed and appointed.
Privacy
Privacy notices were sent to the Company's policyholders annually which appeared to be in
compliance with applicable laws and standards.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 16
COMMITMENTS AND CONTINGENT LIABILITIES
Procedures performed during the course of the examination revealed no pending litigation,
commitments or other contingent liabilities to which the Company was a party.
SUBSEQUENT EVENTS
Effective January 1, 2020, 100% of the shares owned by the Mary Katherine Lee Gift Trust of
First Tower Finance Company, LLC was transferred to Lee Investment Partners, LLC. First
Tower Finance Company, LLC is an upstream affiliate of the Company.
The Company ceased writing new business in the State of Illinois effective the first quarter of
2021.
The Company did not receive any funds under the Paycheck Protection Program provided under
the Coronavirus Aid, Relief, and Economic Security Act.
Subsequent to the year ending December 31, 2019, the Company submitted an attestation
requesting exemption from the filing requirements of the Insurance Data Security Law on the
grounds the Company had less than fifty (50) employees. The Company’s request for exemption
from the filing requirements was accepted by the MID.
On March 11, 2020, the World Health Organization declared the spreading coronavirus
(COVID-19) outbreak as a pandemic. On March 13, 2020, U.S. President Donald J. Trump
declared the coronavirus pandemic a national emergency in the United States. The
epidemiological threat posed by COVID-19 had disruptive effects on the economy, including
disruption of the global supply of goods, reduction in the demand for labor, and reduction in the
demand for U.S. products and services, resulting in a sharp increase in unemployment. The
economic disruptions caused by COVID-19 and the uncertainty about the magnitude of the
economic slowdown caused extreme volatility in the financial markets.
The Company has been in communication with the Mississippi Insurance Department regarding
the impact of COVID-19 on its business operations and financial position. The Company has
experienced losses in 2020 and 2021 due to COVID-19 with losses expected to subside during
the remainder of 2021. No losses incurred have had a material impact on the Company’s
financial position.
American Federated Life Insurance Company
MID Examination as of December 31, 2019 Page 17
COMMENTS AND RECOMMENDATIONS
The examination did not identify any material comments and recommendations.