000163598412/312021Q1FALSEus-gaap:AccountingStandardsUpdate201613Member33.33.5P3Y00016359842021-01-012021-03-31xbrli:shares0001635984us-gaap:CommonClassAMember2021-05-070001635984us-gaap:CommonClassBMember2021-05-07iso4217:USD00016359842021-03-3100016359842020-12-31iso4217:USDxbrli:shares0001635984us-gaap:CommonClassAMember2021-03-310001635984us-gaap:CommonClassAMember2020-12-310001635984us-gaap:CommonClassBMember2020-12-310001635984us-gaap:CommonClassBMember2021-03-3100016359842020-01-012020-03-310001635984us-gaap:CommonClassAMember2021-01-012021-03-310001635984us-gaap:CommonClassAMember2020-01-012020-03-310001635984us-gaap:CommonClassBMember2021-01-012021-03-310001635984us-gaap:CommonClassBMember2020-01-012020-03-310001635984us-gaap:CommonStockMember2020-12-310001635984us-gaap:CommonStockMember2019-12-310001635984us-gaap:CommonStockMember2021-01-012021-03-310001635984us-gaap:CommonStockMember2020-01-012020-03-310001635984us-gaap:CommonStockMember2021-03-310001635984us-gaap:CommonStockMember2020-03-310001635984us-gaap:AdditionalPaidInCapitalMember2020-12-310001635984us-gaap:AdditionalPaidInCapitalMember2019-12-310001635984us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001635984us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001635984us-gaap:AdditionalPaidInCapitalMember2021-03-310001635984us-gaap:AdditionalPaidInCapitalMember2020-03-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-03-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-03-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMember2020-12-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMember2019-12-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMember2021-01-012021-03-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMember2020-01-012020-03-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMember2021-03-310001635984us-gaap:AccumulatedOtherThanTemporaryImpairmentMember2020-03-310001635984nwli:AccumulatedOtherThanTemporaryImpairmentAvailableForSaleMember2020-12-310001635984nwli:AccumulatedOtherThanTemporaryImpairmentAvailableForSaleMember2019-12-310001635984nwli:AccumulatedOtherThanTemporaryImpairmentAvailableForSaleMember2021-01-012021-03-310001635984nwli:AccumulatedOtherThanTemporaryImpairmentAvailableForSaleMember2020-01-012020-03-310001635984nwli:AccumulatedOtherThanTemporaryImpairmentAvailableForSaleMember2021-03-310001635984nwli:AccumulatedOtherThanTemporaryImpairmentAvailableForSaleMember2020-03-310001635984us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001635984us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001635984us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001635984us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310001635984us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001635984us-gaap:AccumulatedTranslationAdjustmentMember2020-03-310001635984us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001635984us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001635984us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001635984us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-03-310001635984us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001635984us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-310001635984us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001635984us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001635984us-gaap:RetainedEarningsMember2020-12-310001635984us-gaap:RetainedEarningsMember2019-12-3100016359842019-01-012019-12-310001635984srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2019-12-310001635984us-gaap:RetainedEarningsMember2021-01-012021-03-310001635984us-gaap:RetainedEarningsMember2020-01-012020-03-310001635984us-gaap:RetainedEarningsMember2021-03-310001635984us-gaap:RetainedEarningsMember2020-03-3100016359842020-03-3100016359842019-12-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001635984us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001635984srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-31xbrli:pure0001635984srt:BoardOfDirectorsChairmanMemberus-gaap:CommonClassBMember2021-03-310001635984nwli:NationalWesternLifeInsuranceCompanyMember2021-03-310001635984nwli:OzarkNationalLifeInsuranceCompanyMember2021-03-310001635984nwli:NationalWesternLifeInsuranceCompanyMember2020-01-012020-03-310001635984nwli:NationalWesternLifeInsuranceCompanyMember2021-01-012021-03-310001635984nwli:NationalWesternLifeGroupIncMember2021-01-012021-03-310001635984nwli:NationalWesternLifeGroupIncMember2020-01-012020-03-310001635984us-gaap:PensionPlansDefinedBenefitMember2007-12-310001635984us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-03-310001635984us-gaap:PensionPlansDefinedBenefitMember2020-01-012020-03-310001635984us-gaap:PensionPlansDefinedBenefitMember2021-03-31nwli:benefit_plan0001635984srt:MinimumMemberus-gaap:OtherPensionPlansDefinedBenefitMember2021-01-012021-03-310001635984us-gaap:OtherPensionPlansDefinedBenefitMember2021-01-012021-03-310001635984us-gaap:OtherPensionPlansDefinedBenefitMember2020-01-012020-03-310001635984us-gaap:OtherPensionPlansDefinedBenefitMember2021-03-310001635984us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-012021-03-310001635984us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-01-012020-03-310001635984us-gaap:OperatingSegmentsMembernwli:DomesticLifeInsuranceMember2021-03-310001635984us-gaap:OperatingSegmentsMembernwli:InternationalLifeInsuranceMember2021-03-310001635984us-gaap:OperatingSegmentsMembernwli:AnnuitiesMember2021-03-310001635984us-gaap:OperatingSegmentsMembernwli:ONLAffiliatesMember2021-03-310001635984us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-03-310001635984us-gaap:OperatingSegmentsMember2021-03-310001635984us-gaap:OperatingSegmentsMembernwli:DomesticLifeInsuranceMember2020-12-310001635984us-gaap:OperatingSegmentsMembernwli:InternationalLifeInsuranceMember2020-12-310001635984us-gaap:OperatingSegmentsMembernwli:AnnuitiesMember2020-12-310001635984us-gaap:OperatingSegmentsMembernwli:ONLAffiliatesMember2020-12-310001635984us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-12-310001635984us-gaap:OperatingSegmentsMember2020-12-310001635984us-gaap:OperatingSegmentsMembernwli:DomesticLifeInsuranceMember2021-01-012021-03-310001635984us-gaap:OperatingSegmentsMembernwli:InternationalLifeInsuranceMember2021-01-012021-03-310001635984us-gaap:OperatingSegmentsMembernwli:AnnuitiesMember2021-01-012021-03-310001635984us-gaap:OperatingSegmentsMembernwli:ONLAffiliatesMember2021-01-012021-03-310001635984us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-01-012021-03-310001635984us-gaap:OperatingSegmentsMember2021-01-012021-03-310001635984us-gaap:OperatingSegmentsMembernwli:DomesticLifeInsuranceMember2020-01-012020-03-310001635984us-gaap:OperatingSegmentsMembernwli:InternationalLifeInsuranceMember2020-01-012020-03-310001635984us-gaap:OperatingSegmentsMembernwli:AnnuitiesMember2020-01-012020-03-310001635984us-gaap:OperatingSegmentsMembernwli:ONLAffiliatesMember2020-01-012020-03-310001635984us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2020-01-012020-03-310001635984us-gaap:OperatingSegmentsMember2020-01-012020-03-310001635984us-gaap:MaterialReconcilingItemsMember2021-01-012021-03-310001635984us-gaap:MaterialReconcilingItemsMember2020-01-012020-03-310001635984us-gaap:CorporateNonSegmentMember2021-03-310001635984us-gaap:CorporateNonSegmentMember2020-12-310001635984nwli:StockAndIncentivePlan2008PlanMemberus-gaap:CommonClassAMember2008-06-200001635984nwli:StockAndIncentivePlan2008PlanMember2016-06-152016-06-150001635984nwli:EmployeesMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMembernwli:EmployeeStockAppreciationRightsSARsGrantedBefore2016Member2021-01-012021-03-310001635984nwli:EmployeesMembernwli:ShareBasedPaymentArrangementTrancheFourMembernwli:EmployeeStockAppreciationRightsSARsGrantedBefore2016Member2021-01-012021-03-310001635984nwli:EmployeesMembernwli:ShareBasedPaymentArrangementTrancheFiveMembernwli:EmployeeStockAppreciationRightsSARsGrantedBefore2016Member2021-01-012021-03-310001635984us-gaap:ShareBasedCompensationAwardTrancheOneMembernwli:EmployeesMembernwli:EmployeeStockAppreciationRightsSARsGrantedBefore2016Member2021-01-012021-03-310001635984nwli:EmployeesMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMembernwli:EmployeeStockAppreciationRightsSARsGrantedBefore2016Member2021-01-012021-03-310001635984nwli:EmployeesMembernwli:EmployeeStockAppreciationRightsSARsGrantedBefore2016Member2021-01-012021-03-310001635984nwli:EmployeesMembernwli:EmployeeStockAppreciationRightsSARsMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-01-012021-03-310001635984nwli:EmployeesMembernwli:EmployeeStockAppreciationRightsSARsMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2021-01-012021-03-310001635984us-gaap:ShareBasedCompensationAwardTrancheOneMembernwli:EmployeesMembernwli:EmployeeStockAppreciationRightsSARsMember2021-01-012021-03-310001635984nwli:EmployeesMembernwli:EmployeeStockAppreciationRightsSARsMember2021-01-012021-03-310001635984nwli:EmployeeStockOptionsandStockAppreciationRightsSARsMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMembersrt:DirectorMember2021-01-012021-03-310001635984nwli:ShareBasedPaymentArrangementTrancheFiveMembernwli:EmployeeStockOptionsandStockAppreciationRightsSARsMembersrt:DirectorMember2021-01-012021-03-310001635984us-gaap:ShareBasedCompensationAwardTrancheTwoMembernwli:EmployeeStockOptionsandStockAppreciationRightsSARsMembersrt:DirectorMember2021-01-012021-03-310001635984us-gaap:ShareBasedCompensationAwardTrancheOneMembernwli:EmployeeStockOptionsandStockAppreciationRightsSARsMembersrt:DirectorMember2021-01-012021-03-310001635984nwli:ShareBasedPaymentArrangementTrancheFourMembernwli:EmployeeStockOptionsandStockAppreciationRightsSARsMembersrt:DirectorMember2021-01-012021-03-310001635984nwli:EmployeeStockOptionsandStockAppreciationRightsSARsMembersrt:DirectorMember2021-01-012021-03-310001635984nwli:EmployeesMemberus-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001635984nwli:EmployeesMemberus-gaap:RestrictedStockUnitsRSUMember2018-01-012018-12-310001635984nwli:EmployeesMemberus-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2021-01-012021-03-310001635984us-gaap:PerformanceSharesMember2021-01-012021-03-310001635984us-gaap:PerformanceSharesMemberus-gaap:CommonClassAMember2021-01-012021-03-310001635984us-gaap:PerformanceSharesMember2019-01-012019-12-310001635984us-gaap:PerformanceSharesMember2020-01-012020-12-310001635984us-gaap:RestrictedStockUnitsRSUMembersrt:DirectorMember2021-01-012021-03-310001635984us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMembersrt:DirectorMember2021-01-012021-03-310001635984nwli:OfficersAndDirectorsMember2020-01-012020-03-310001635984nwli:OfficersAndDirectorsMember2021-01-012021-03-310001635984us-gaap:StockAppreciationRightsSARSMember2020-12-310001635984us-gaap:RestrictedStockUnitsRSUMember2020-12-310001635984us-gaap:PerformanceSharesMember2020-12-310001635984us-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001635984us-gaap:StockAppreciationRightsSARSMember2021-03-310001635984us-gaap:RestrictedStockUnitsRSUMember2021-03-310001635984us-gaap:PerformanceSharesMember2021-03-310001635984nwli:ExercisePriceRange3Memberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984nwli:ExercisePriceRange3Memberus-gaap:StockAppreciationRightsSARSMember2021-03-310001635984us-gaap:StockAppreciationRightsSARSMembernwli:ExercisePriceRange4Member2021-01-012021-03-310001635984us-gaap:StockAppreciationRightsSARSMembernwli:ExercisePriceRange4Member2021-03-310001635984us-gaap:StockAppreciationRightsSARSMembernwli:ExercisePriceRange5Member2021-01-012021-03-310001635984us-gaap:StockAppreciationRightsSARSMembernwli:ExercisePriceRange5Member2021-03-310001635984nwli:ExercisePriceRange6Memberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984nwli:ExercisePriceRange6Memberus-gaap:StockAppreciationRightsSARSMember2021-03-310001635984nwli:ExercisePriceRange7Memberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984nwli:ExercisePriceRange7Memberus-gaap:StockAppreciationRightsSARSMember2021-03-310001635984us-gaap:StockAppreciationRightsSARSMembernwli:ExercisePriceRange8Member2021-01-012021-03-310001635984us-gaap:StockAppreciationRightsSARSMembernwli:ExercisePriceRange8Member2021-03-310001635984nwli:ExercisePriceRange9Memberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984nwli:ExercisePriceRange9Memberus-gaap:StockAppreciationRightsSARSMember2021-03-310001635984nwli:ExercisePriceRange10Memberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984nwli:ExercisePriceRange10Memberus-gaap:StockAppreciationRightsSARSMember2021-03-310001635984nwli:ExercisePriceRange11Memberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984nwli:ExercisePriceRange11Memberus-gaap:StockAppreciationRightsSARSMember2021-03-310001635984nwli:ExercisePriceRange3Membersrt:MaximumMemberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001635984srt:MinimumMember2021-01-012021-03-310001635984srt:MaximumMember2021-01-012021-03-310001635984srt:MinimumMember2020-01-012020-12-310001635984srt:MaximumMember2020-01-012020-12-310001635984srt:WeightedAverageMember2021-01-012021-03-310001635984srt:WeightedAverageMember2020-01-012020-12-3100016359842020-01-012020-12-310001635984us-gaap:JudicialRulingMembernwli:NationalWesternLifeInsuranceCompanyandNationalWesternLifeGroupInc.v.RossRankinMoodyet.alMember2018-11-112018-11-110001635984nwli:WilliamsvPantaleonietalMember2019-04-300001635984us-gaap:JudicialRulingMembernwli:WilliamsvPantaleonietalMember2019-07-272019-07-270001635984us-gaap:JudicialRulingMembernwli:WilliamsvPantaleonietalMember2019-11-112019-11-110001635984nwli:NewLoansMember2021-03-310001635984nwli:ExistingLoansMember2021-03-310001635984nwli:CapitalContributionsToInvestmentFundsMember2021-03-310001635984us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-03-310001635984us-gaap:USTreasurySecuritiesMember2021-03-310001635984us-gaap:USStatesAndPoliticalSubdivisionsMember2021-03-310001635984us-gaap:ForeignGovernmentDebtSecuritiesMember2021-03-310001635984us-gaap:PublicUtilitiesMember2021-03-310001635984us-gaap:CorporateDebtSecuritiesMember2021-03-310001635984us-gaap:CommercialMortgageBackedSecuritiesMember2021-03-310001635984us-gaap:ResidentialMortgageBackedSecuritiesMember2021-03-310001635984us-gaap:AssetBackedSecuritiesMember2021-03-310001635984us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001635984us-gaap:USTreasurySecuritiesMember2020-12-310001635984us-gaap:USStatesAndPoliticalSubdivisionsMember2020-12-310001635984us-gaap:ForeignGovernmentDebtSecuritiesMember2020-12-310001635984us-gaap:PublicUtilitiesMember2020-12-310001635984us-gaap:CorporateDebtSecuritiesMember2020-12-310001635984us-gaap:CommercialMortgageBackedSecuritiesMember2020-12-310001635984us-gaap:ResidentialMortgageBackedSecuritiesMember2020-12-310001635984us-gaap:AssetBackedSecuritiesMember2020-12-310001635984nwli:OzarkNationalLifeInsuranceCompanyMember2021-03-310001635984nwli:OzarkNationalLifeInsuranceCompanyMember2020-12-31nwli:issue0001635984us-gaap:DebtSecuritiesMember2021-03-31nwli:security0001635984us-gaap:DebtSecuritiesMemberus-gaap:ExternalCreditRatingInvestmentGradeMember2021-03-310001635984srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-31nwli:loan0001635984nwli:LoansInForbearanceMember2020-01-012020-12-310001635984nwli:LoansInForbearanceMember2020-12-310001635984nwli:MortgageLoansByLoansToValueRatioLessThanFiftyPercentMemberus-gaap:CommercialRealEstateMember2021-03-310001635984nwli:MortgageLoansByLoansToValueRatioLessThanFiftyPercentMemberus-gaap:CommercialRealEstateMember2020-12-310001635984nwli:MortgageLoansByLoansToValueRatioFiftyToSixtyPercentMemberus-gaap:CommercialRealEstateMember2021-03-310001635984nwli:MortgageLoansByLoansToValueRatioFiftyToSixtyPercentMemberus-gaap:CommercialRealEstateMember2020-12-310001635984us-gaap:CommercialRealEstateMembernwli:MortgageLoansByLoansToValueRatioSixtyToSeventyPercentMember2021-03-310001635984us-gaap:CommercialRealEstateMembernwli:MortgageLoansByLoansToValueRatioSixtyToSeventyPercentMember2020-12-310001635984us-gaap:CommercialRealEstateMembernwli:MortgageLoansByLoansToValueRatioSeventyToEightyPercentMember2021-03-310001635984us-gaap:CommercialRealEstateMembernwli:MortgageLoansByLoansToValueRatioSeventyToEightyPercentMember2020-12-310001635984us-gaap:CommercialRealEstateMembernwli:MortgageLoansByLoansToValueRatioEightyToNinetyPercentMember2021-03-310001635984us-gaap:CommercialRealEstateMembernwli:MortgageLoansByLoansToValueRatioEightyToNinetyPercentMember2020-12-310001635984nwli:MortgageLoansByLoansToValueRatioGreaterThanNinetyPercentMemberus-gaap:CommercialRealEstateMember2021-03-310001635984nwli:MortgageLoansByLoansToValueRatioGreaterThanNinetyPercentMemberus-gaap:CommercialRealEstateMember2020-12-310001635984us-gaap:CommercialRealEstateMember2021-03-310001635984us-gaap:CommercialRealEstateMember2020-12-310001635984srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2019-12-310001635984srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate201613Member2019-12-310001635984us-gaap:CommercialRealEstateMember2019-12-310001635984us-gaap:CommercialRealEstateMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001635984us-gaap:CommercialRealEstateMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001635984us-gaap:CommercialRealEstateMember2021-01-012021-03-310001635984us-gaap:CommercialRealEstateMember2020-01-012020-12-310001635984us-gaap:RealEstateMember2021-03-310001635984us-gaap:RealEstateMember2020-12-310001635984us-gaap:RealEstateMember2021-01-012021-03-310001635984us-gaap:RealEstateMember2020-01-012020-03-310001635984us-gaap:FairValueInputsLevel1Member2021-03-310001635984us-gaap:FairValueInputsLevel2Member2021-03-310001635984us-gaap:FairValueInputsLevel3Member2021-03-310001635984us-gaap:FairValueInputsLevel1Member2020-12-310001635984us-gaap:FairValueInputsLevel2Member2020-12-310001635984us-gaap:FairValueInputsLevel3Member2020-12-310001635984nwli:PricedByThirdPartyVendorsMember2021-03-310001635984us-gaap:FairValueInputsLevel1Membernwli:PricedByThirdPartyVendorsMember2021-03-310001635984us-gaap:FairValueInputsLevel2Membernwli:PricedByThirdPartyVendorsMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:PricedByThirdPartyVendorsMember2021-03-310001635984nwli:PricedInternallyMember2021-03-310001635984nwli:PricedInternallyMemberus-gaap:FairValueInputsLevel1Member2021-03-310001635984us-gaap:FairValueInputsLevel2Membernwli:PricedInternallyMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:PricedInternallyMember2021-03-310001635984nwli:PricedByThirdPartyVendorsMember2020-12-310001635984us-gaap:FairValueInputsLevel1Membernwli:PricedByThirdPartyVendorsMember2020-12-310001635984us-gaap:FairValueInputsLevel2Membernwli:PricedByThirdPartyVendorsMember2020-12-310001635984us-gaap:FairValueInputsLevel3Membernwli:PricedByThirdPartyVendorsMember2020-12-310001635984nwli:PricedInternallyMember2020-12-310001635984nwli:PricedInternallyMemberus-gaap:FairValueInputsLevel1Member2020-12-310001635984us-gaap:FairValueInputsLevel2Membernwli:PricedInternallyMember2020-12-310001635984us-gaap:FairValueInputsLevel3Membernwli:PricedInternallyMember2020-12-310001635984nwli:DerivativesIndexOptionsMember2020-12-310001635984nwli:PolicyholderAccountBalancesMember2020-12-310001635984us-gaap:EmployeeStockMember2020-12-310001635984nwli:DerivativesIndexOptionsMember2021-01-012021-03-310001635984nwli:PolicyholderAccountBalancesMember2021-01-012021-03-310001635984us-gaap:EmployeeStockMember2021-01-012021-03-310001635984nwli:DerivativesIndexOptionsMember2021-03-310001635984nwli:PolicyholderAccountBalancesMember2021-03-310001635984us-gaap:EmployeeStockMember2021-03-310001635984nwli:DerivativesIndexOptionsMembernwli:NetInvestmentIncomeMember2021-01-012021-03-310001635984nwli:NetInvestmentIncomeMember2021-01-012021-03-310001635984nwli:PolicyholderAccountBalancesMembernwli:NetInvestmentIncomeMember2021-01-012021-03-310001635984us-gaap:EmployeeStockMembernwli:NetInvestmentIncomeMember2021-01-012021-03-310001635984nwli:DerivativesIndexOptionsMemberus-gaap:OtherOperatingIncomeExpenseMember2021-01-012021-03-310001635984us-gaap:OtherOperatingIncomeExpenseMember2021-01-012021-03-310001635984nwli:PolicyholderAccountBalancesMemberus-gaap:OtherOperatingIncomeExpenseMember2021-01-012021-03-310001635984us-gaap:OtherOperatingIncomeExpenseMemberus-gaap:EmployeeStockMember2021-01-012021-03-310001635984nwli:DerivativesIndexOptionsMember2019-12-310001635984nwli:PolicyholderAccountBalancesMember2019-12-310001635984us-gaap:EmployeeStockMember2019-12-310001635984nwli:ContingentConsiderationMember2019-12-310001635984nwli:DerivativesIndexOptionsMember2020-01-012020-03-310001635984nwli:PolicyholderAccountBalancesMember2020-01-012020-03-310001635984us-gaap:EmployeeStockMember2020-01-012020-03-310001635984nwli:ContingentConsiderationMember2020-01-012020-03-310001635984nwli:DerivativesIndexOptionsMember2020-03-310001635984nwli:PolicyholderAccountBalancesMember2020-03-310001635984us-gaap:EmployeeStockMember2020-03-310001635984nwli:ContingentConsiderationMember2020-03-310001635984nwli:DerivativesIndexOptionsMembernwli:NetInvestmentIncomeMember2020-01-012020-03-310001635984nwli:NetInvestmentIncomeMember2020-01-012020-03-310001635984nwli:PolicyholderAccountBalancesMembernwli:NetInvestmentIncomeMember2020-01-012020-03-310001635984us-gaap:EmployeeStockMembernwli:NetInvestmentIncomeMember2020-01-012020-03-310001635984nwli:ContingentConsiderationMembernwli:NetInvestmentIncomeMember2020-01-012020-03-310001635984nwli:DerivativesIndexOptionsMemberus-gaap:OtherOperatingIncomeExpenseMember2020-01-012020-03-310001635984us-gaap:OtherOperatingIncomeExpenseMember2020-01-012020-03-310001635984nwli:PolicyholderAccountBalancesMemberus-gaap:OtherOperatingIncomeExpenseMember2020-01-012020-03-310001635984us-gaap:OtherOperatingIncomeExpenseMemberus-gaap:EmployeeStockMember2020-01-012020-03-310001635984us-gaap:OtherOperatingIncomeExpenseMembernwli:ContingentConsiderationMember2020-01-012020-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:BrokerPricesMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membersrt:MinimumMembernwli:MeasurementInputImpliedVolatilityMembernwli:BrokerPricesMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:MeasurementInputImpliedVolatilityMembersrt:MaximumMembernwli:BrokerPricesMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:MeasurementInputImpliedVolatilityMembersrt:WeightedAverageMembernwli:BrokerPricesMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:DeterministicCashFlowMember2021-03-310001635984nwli:MeasurementInputProjectedOptionCostMemberus-gaap:FairValueInputsLevel3Membersrt:MinimumMembernwli:DeterministicCashFlowMember2021-03-310001635984nwli:MeasurementInputProjectedOptionCostMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMembernwli:DeterministicCashFlowMember2021-03-310001635984nwli:MeasurementInputProjectedOptionCostMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMembernwli:DeterministicCashFlowMember2021-03-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Member2021-03-31nwli:year0001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Membersrt:MinimumMemberus-gaap:MeasurementInputExpectedTermMember2021-03-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMemberus-gaap:MeasurementInputExpectedTermMember2021-03-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Membernwli:MeasurementInputExpectedVolatilityMember2021-03-310001635984us-gaap:FairValueInputsLevel3Membernwli:BrokerPricesMember2020-12-310001635984us-gaap:FairValueInputsLevel3Membersrt:MinimumMembernwli:MeasurementInputImpliedVolatilityMembernwli:BrokerPricesMember2020-12-310001635984us-gaap:FairValueInputsLevel3Membernwli:MeasurementInputImpliedVolatilityMembersrt:MaximumMembernwli:BrokerPricesMember2020-12-310001635984us-gaap:FairValueInputsLevel3Membernwli:MeasurementInputImpliedVolatilityMembersrt:WeightedAverageMembernwli:BrokerPricesMember2020-12-310001635984us-gaap:FairValueInputsLevel3Membernwli:DeterministicCashFlowMember2020-12-310001635984nwli:MeasurementInputProjectedOptionCostMemberus-gaap:FairValueInputsLevel3Membersrt:MinimumMembernwli:DeterministicCashFlowMember2020-12-310001635984nwli:MeasurementInputProjectedOptionCostMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMembernwli:DeterministicCashFlowMember2020-12-310001635984nwli:MeasurementInputProjectedOptionCostMemberus-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMembernwli:DeterministicCashFlowMember2020-12-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Member2020-12-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Membersrt:MinimumMemberus-gaap:MeasurementInputExpectedTermMember2020-12-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Membersrt:MaximumMemberus-gaap:MeasurementInputExpectedTermMember2020-12-310001635984nwli:BlackScholesMemberus-gaap:FairValueInputsLevel3Membernwli:MeasurementInputExpectedVolatilityMember2020-12-310001635984us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-03-310001635984us-gaap:EstimateOfFairValueFairValueDisclosureMember2021-03-310001635984us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-310001635984us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-12-310001635984us-gaap:NondesignatedMembernwli:DerivativesIndexOptionsMembernwli:EquityIndexOptionsMember2021-03-310001635984us-gaap:NondesignatedMembernwli:FixedIndexProductsMembernwli:UniversalLifeAndAnnuityContractsMember2021-03-310001635984us-gaap:NondesignatedMembernwli:FundsWithheldLiabilitiesMembernwli:EmbeddedDerivativeOnReinsuranceContractsMember2021-03-310001635984us-gaap:NondesignatedMember2021-03-310001635984us-gaap:NondesignatedMembernwli:DerivativesIndexOptionsMembernwli:EquityIndexOptionsMember2020-12-310001635984us-gaap:NondesignatedMembernwli:FixedIndexProductsMembernwli:UniversalLifeAndAnnuityContractsMember2020-12-310001635984us-gaap:NondesignatedMember2020-12-310001635984us-gaap:NondesignatedMemberus-gaap:InvestmentIncomeMembernwli:EquityIndexOptionsMember2021-01-012021-03-310001635984us-gaap:NondesignatedMemberus-gaap:InvestmentIncomeMembernwli:EquityIndexOptionsMember2020-01-012020-03-310001635984us-gaap:NondesignatedMembernwli:FixedIndexProductsMembernwli:UniversalLifeAndAnnuityContractInterestMember2021-01-012021-03-310001635984us-gaap:NondesignatedMembernwli:FixedIndexProductsMembernwli:UniversalLifeAndAnnuityContractInterestMember2020-01-012020-03-310001635984us-gaap:NondesignatedMembernwli:EmbeddedDerivativeOnReinsuranceContractsMemberus-gaap:InvestmentIncomeMember2021-01-012021-03-310001635984us-gaap:NondesignatedMembernwli:EmbeddedDerivativeOnReinsuranceContractsMemberus-gaap:InvestmentIncomeMember2020-01-012020-03-310001635984us-gaap:NondesignatedMember2021-01-012021-03-310001635984us-gaap:NondesignatedMember2020-01-012020-03-310001635984us-gaap:TrademarksAndTradeNamesMember2021-01-012021-03-310001635984us-gaap:TrademarksAndTradeNamesMember2021-03-310001635984us-gaap:TrademarksAndTradeNamesMember2020-12-310001635984us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-03-310001635984us-gaap:TechnologyBasedIntangibleAssetsMember2021-03-310001635984us-gaap:TechnologyBasedIntangibleAssetsMember2020-12-310001635984us-gaap:LicensingAgreementsMember2021-03-310001635984us-gaap:LicensingAgreementsMember2020-12-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2021

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-55522

NATIONAL WESTERN LIFE GROUP, INC.
(Exact name of Registrant as specified in its charter)

Delaware  47-3339380
(State or Other Jurisdiction of Incorporation)  (IRS Employer Identification No.)
 
10801 N. Mopac Expy Bldg 3
Austin,Texas 
78759(512)836-1010
(Address of Principal Executive Offices) (Zip Code) (Telephone Number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:
Title of each class to be so registered:Trading Symbol Name of each exchange on which
each class is to be registered:
Class A Common Stock, $0.01 par valueNWLI The NASDAQ Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:   Yes    No  
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). : Yes    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See definition of "accelerated filer." "large accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated filer    Accelerated filer      Non-accelerated filer (Do not check if a smaller reporting company)    Smaller reporting company   Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No 
As of May 7, 2021, the number of shares of Registrant's common stock outstanding was: Class A – 3,436,020 and  Class B - 200,000.


Table of Contents
nwli-20210331_g1.jpg
TABLE OF CONTENTS
 Page
March 31, 2021 (Unaudited) and December 31, 2020
For the Three Months Ended March 31, 2021 and 2020 (Unaudited)
For the Three Months Ended March 31, 2021 and 2020 (Unaudited)
For the Three Months Ended March 31, 2021 and 2020 (Unaudited)
For the Three Months Ended March 31, 2021 and 2020 (Unaudited)
2

Table of Contents
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

 (Unaudited) 
ASSETSMarch 31,
2021
December 31,
2020
Investments:  
Debt securities available-for-sale, at fair value (cost: $9,447,267 and $9,874,543)
$10,014,351 10,770,923 
Debt securities trading, at fair value (cost: $668,285 and $0)
654,333  
Mortgage loans, net of allowance for credit losses ($3,033 and $2,486)
377,495 332,521 
Policy loans72,832 74,083 
Derivatives, index options137,130 132,821 
Equity securities, at fair value (cost: $12,052 and $12,069)
19,120 17,744 
Other long-term investments115,830 104,113 
Total investments11,391,091 11,432,205 
Cash and cash equivalents435,644 581,059 
Deferred policy acquisition costs497,678 382,080 
Deferred sales inducements63,149 43,845 
Value of business acquired160,417 162,968 
Cost of reinsurance98,972 102,840 
Accrued investment income90,171 88,323 
Federal income tax receivable 10,408 
Amounts recoverable from reinsurer1,695,698 1,709,232 
Other assets169,626 135,310 
Total assets$14,602,446 14,648,270 

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
3

Table of Contents
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

 (Unaudited) 
LIABILITIES AND STOCKHOLDERS’ EQUITYMarch 31,
2021
December 31,
2020
LIABILITIES:  
Future policy benefits:  
Universal life and annuity contracts (Note 1)$9,029,904 9,035,316 
   Traditional life reserves899,471 898,103 
Other policyholder liabilities148,261 138,480 
Funds withheld liability1,636,959 1,697,591 
Deferred Federal income tax liability (Note 1)107,116 145,126 
Federal income tax payable3,417  
Other liabilities326,823 193,904 
Total liabilities12,151,951 12,108,520 
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS’ EQUITY:  
Common stock:  
Class A - $0.01 par value; 7,500,000 shares authorized; 3,436,020 issued and outstanding in 2021 and 2020
34 34 
Class B - $0.01 par value; 200,000 shares authorized, issued, and outstanding in 2021 and 2020
2 2 
Additional paid-in capital41,716 41,716 
Accumulated other comprehensive income244,037 395,421 
Retained earnings (Note 1)2,164,706 2,102,577 
Total stockholders’ equity2,450,495 2,539,750 
Total liabilities and stockholders' equity$14,602,446 14,648,270 

Note:  The Condensed Consolidated Balance Sheet at December 31, 2020 has been derived from the audited Consolidated Financial Statements as of that date.

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

4

Table of Contents
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
(In thousands, except per share amounts)

 20212020
Premiums and other revenues:  
Universal life and annuity contract charges$34,889 35,306 
Traditional life premiums22,584 23,522 
Net investment income (loss)166,075 (13,478)
Other revenues5,414 3,653 
Net realized investment gains (losses):  
Total other-than-temporary impairment (“OTTI”) gains (losses) 2 
Portion of OTTI (gains) losses recognized in other comprehensive income (2)
Net OTTI losses recognized in earnings  
Other net investment gains (losses)1,416 3,485 
Total net realized investment gains (losses)1,416 3,485 
Total revenues230,378 52,488 
Benefits and expenses:  
Life and other policy benefits37,889 33,634 
Amortization of deferred transaction costs29,989 30,037 
Universal life and annuity contract interest52,845 (28,026)
Other operating expenses31,335 19,822 
Total benefits and expenses152,058 55,467 
Earnings (loss) before Federal income taxes78,320 (2,979)
Federal income taxes16,191 (917)
Net earnings (loss)$62,129 (2,062)
Basic earnings (loss) per share:  
Class A$17.57 $(0.58)
Class B$8.79 $(0.29)
Diluted earnings (loss) per share:  
Class A$17.57 $(0.58)
Class B$8.79 $(0.29)

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).


5

Table of Contents
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
(In thousands)

 20212020
Net earnings (loss)$62,129 (2,062)
Other comprehensive income (loss), net of effects of deferred costs and taxes:  
Unrealized gains (losses) on securities:  
Net unrealized holding gains (losses) arising during period(152,195)(78,153)
Net unrealized liquidity gains (losses) 1 
Reclassification adjustment for net amounts included in net earnings(1,119)(601)
Net unrealized gains (losses) on securities(153,314)(78,753)
Foreign currency translation adjustments(5)(39)
Benefit plans:  
Amortization of net prior service cost and net gain (loss)1,935 (2,066)
Other comprehensive income (loss)(151,384)(80,858)
Comprehensive income (loss)$(89,255)(82,920)

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

6

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
(In thousands)

 20212020
Common stock:  
Balance at beginning of period$36 36 
Shares exercised under stock option plan  
Balance at end of period36 36 
Additional paid-in capital:  
Balance at beginning of period41,716 41,716 
Shares exercised under stock option plan  
Balance at end of period41,716 41,716 
Accumulated other comprehensive income (loss):  
Unrealized gains (losses) on non-impaired securities:  
Balance at beginning of period418,741 70,665 
Change in unrealized gains (losses) during period, net of tax(153,314)(78,754)
Balance at end of period265,427 (8,089)
Unrealized losses on impaired held-to-maturity securities:  
Balance at beginning of period (4)
Cumulative effect of change in accounting principle  
Amortization 2 
Other-than-temporary impairments, non-credit, net of tax  
Additional credit loss on previously impaired securities  
Change in shadow deferred policy acquisition costs (1)
Balance at end of period (3)
Unrealized losses on impaired available-for-sale securities:  
Balance at beginning of period (2)
Other-than-temporary impairments, non-credit, net of tax  
Change in shadow deferred policy acquisition costs  
Recoveries, net of tax  
Balance at end of period (2)
Continued on Next Page
7

Table of Contents
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY (continued)
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
(In thousands)
20212020
Foreign currency translation adjustments:  
Balance at beginning of period5,116 5,101 
Change in translation adjustments during period(5)(39)
Balance at end of period5,111 5,062 
Benefit plan liability adjustment:  
Balance at beginning of period(28,436)(15,652)
Amortization of net prior service cost and net gain (loss), net of tax1,935 (2,066)
Balance at end of period(26,501)(17,718)
Accumulated other comprehensive income (loss) at end of period244,037 (20,750)
Retained earnings:  
Balance at beginning of period2,102,577 2,014,570 
Cumulative effect of change in accounting principle, net of tax (Note 1)— (3,032)
Net earnings (loss)62,129 (2,062)
Balance at end of period 2,164,706 2,009,476 
Total stockholders' equity$2,450,495 2,030,478 

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).




8

Table of Contents
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
(In thousands)
 20212020
Cash flows from operating activities:  
Net earnings (loss)$62,129 (2,062)
Adjustments to reconcile net earnings (loss) to net cash from operating activities:  
Universal life and annuity contract interest52,845 (28,026)
Surrender charges and other policy revenues(6,134)(7,450)
Realized (gains) losses on investments(1,416)(3,485)
Accretion/amortization of discounts and premiums, investments464 850 
Depreciation and amortization3,159 2,993 
Increase (decrease) in estimated credit losses on investments547 3,411 
(Increase) decrease in value of debt securities trading13,952  
(Increase) decrease in value of equity securities(1,627)5,816 
(Increase) decrease in value of derivative options(28,023)106,629 
(Increase) decrease in deferred policy acquisition and sales inducement costs, and value of business acquired2,876 16,681 
(Increase) decrease in accrued investment income(1,848)(2,482)
(Increase) decrease in reinsurance recoverable13,534 9,389 
(Increase) decrease in cost of reinsurance3,868  
(Increase) decrease in other assets184 (98)
Increase (decrease) in liabilities for future policy benefits17,765 6,357 
Increase (decrease) in other policyholder liabilities9,781 6,972 
Increase (decrease) in Federal income tax liability13,825 (17,030)
Increase (decrease) in deferred Federal income tax2,231 15,971 
Increase (decrease) in funds withheld liability(60,632) 
Increase (decrease) in other liabilities(41,590)(8,775)
Net cash provided by operating activities55,890 105,661 
Cash flows from investing activities:  
Proceeds from sales of:  
Debt securities available-for-sale571,117  
Other investments10,608 2,285 
Proceeds from maturities, redemptions, and prepayments of:  
Debt securities held-to-maturity 187,973 
Debt securities available-for-sale384,835 93,326 
Debt securities trading1,309  
  Other investments4,557 7,280 
Derivatives, index options34,968 52,973 
Purchases of:  
Debt securities held-to-maturity (75,836)
Debt securities available-for-sale(408,534)(92,963)
Continued on Next Page
9

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
(In thousands)
20212020
Debt securities trading(605,828) 
Equity securities(10,356)(488)
Derivatives, index options(11,511)(22,403)
Other investments(17,208)(11,446)
Property, equipment, and other productive assets(2,603)(58)
Principal payments on mortgage loans4,015 2,149 
Cost of mortgage loans acquired(49,510)(6,996)
Decrease (increase) in policy loans1,251 1,972 
Other (increases) decreases to funds withheld(39,790) 
Net cash provided by (used in) investing activities(132,680)137,768 
Cash flows from financing activities:  
Deposits to account balances for universal life and annuity contracts169,294 117,682 
Return of account balances on universal life and annuity contracts(237,814)(262,371)
Principal payments under finance lease obligation(99) 
Net cash provided by (used in) financing activities(68,619)(144,689)
Effect of foreign exchange(6)(50)
Net increase (decrease) in cash, cash equivalents, and restricted cash(145,415)98,690 
Cash, cash equivalents, and restricted cash at beginning of period581,059 253,525 
Cash, cash equivalents and restricted cash at end of period$435,644 352,215 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:  
Cash paid (received) during the period for:  
Interest$19 19 
Income taxes$5 1 
Noncash operating activities:
Net deferral and amortization of sales inducements$2,257 (3,360)

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).


10

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) CONSOLIDATION AND BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position of National Western Life Group, Inc. ("NWLGI") and its wholly owned subsidiaries (collectively, the “Company”) as of March 31, 2021, and the results of its operations and its cash flows for the three months ended March 31, 2021 and March 31, 2020. Such adjustments are of a normal recurring nature. Certain reclasses of prior year balances have been made for comparison. In addition, certain segment information disclosed in Note 6 has been revised. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year. It is recommended that these Condensed Consolidated Financial Statements be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 which is accessible free of charge through the Company's internet site at www.nwlgi.com or the Securities and Exchange Commission internet site at www.sec.gov. The Condensed Consolidated Balance Sheet at December 31, 2020 has been derived from the audited consolidated financial statements as of that date.

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of NWLGI and its wholly owned subsidiaries: National Western Life Insurance Company ("NWLIC" or "National Western"), Regent Care San Marcos Holdings, LLC, NWL Services, Inc., and N.I.S. Financial Services, Inc. ("NIS"). National Western's wholly owned subsidiaries include The Westcap Corporation, NWL Financial, Inc., NWLSM, Inc., Braker P III, LLC, and Ozark National Life Insurance Company ("Ozark National"). All significant intercorporate transactions and accounts have been eliminated in consolidation.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in the accompanying Condensed Consolidated Financial Statements include: (1) liabilities for future policy benefits, (2) valuation of derivative instruments, (3) recoverability and amortization of deferred policy acquisition costs ("DPAC"), deferred sales inducements ("DSI"), the value of business acquired ("VOBA"), and the cost of reinsurance ("COR"), (4) valuation allowances for deferred tax assets, (5) goodwill, (6) allowances for credit losses on debt securities and mortgage loans, and (7) commitments and contingencies.

As a result of executing a funds withheld coinsurance agreement at December 31, 2020, in the quarter ended March 31, 2021, the Company implemented accounting policies related to trading debt securities and the embedded derivative on reinsurance in its financial statements. Trading securities represent debt securities that are included in the fund assets withheld as part of the funds withheld coinsurance agreements to support the policyholder liability obligations ceded to the reinsurer. Trading debt securities are reported in the accompanying Condensed Consolidated Financial Statements at their fair values with changes in their fair values reflected as a component of Net investment income (loss) in the Condensed Consolidated Statements of Earnings (Loss). Since these trading debt securities pertain to investment activities related to coinsurance agreements rather than as an income strategy based on active trading, they are classified as investing activities in the Condensed Consolidated Statements of Cash Flows. Under the terms of the coinsurance funds withheld agreement, while the assets are withheld the associated interest and credit risk of these assets are transferred to the reinsurer creating an embedded derivative on reinsurance in the funds withheld liability. Accordingly, the Company is required to bifurcate the embedded derivative from the host contract in accordance with ASC 815-15. The bifurcated embedded derivative on reinsurance is computed as the fair value unrealized gain (loss) on the underlying funds withheld assets. This amount is included as a component of the funds withheld liability balance reported on the Condensed Consolidated Balance Sheets, with changes in the embedded derivative on reinsurance reported in Net investment income (loss) in the Condensed Consolidated Statements of Earnings. The embedded derivative on reinsurance is classified as a Level 2 financial instrument in the fair value hierarchy because its valuation input is the fair value market adjustments on the underlying Level 2 debt securities. See Note (10) Fair Values of Financial Instruments for further details of fair value disclosures. In the Condensed Consolidated Statements of Cash Flows, changes in the funds withheld liability are reported as operating activities. Realized gains on funds withheld assets are transferred to the reinsurer and reported as investing activities in the Condensed Consolidated Statements of Cash Flows.

11

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The table below shows the net unrealized gains and losses on available-for-sale securities that were reclassified out of accumulated other comprehensive income for the three months ended March 31, 2021 and March 31, 2020.

Affected Line Item in the
Statements of Earnings/(Loss)
Amount Reclassified From Accumulated Other Comprehensive Income
Three Months Ended March 31,
20212020
(In thousands)
Other net investment gains (losses)$1,416 761 
Earnings before Federal income taxes1,416 761 
Federal income taxes297 160 
Net earnings$1,119 601 


(2) NEW ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements not yet adopted

In August 2018, the FASB issued ASU 2018-12 Financial Services-Insurance (Topic 944) - Targeted Improvements to the Accounting for Long-Duration Contracts. This update is aimed at improving the Codification as it relates to long-duration contracts which will improve the timeliness of recognizing changes in the liability for future policy benefits, simplify accounting for certain market-based options, simplify the amortization of deferred acquisition costs, and improve the effectiveness of required disclosures. Amendments include the following:

A. Require insurance entity to (1) review and update assumptions used to measure cash flows at least annually (with changes recognized in net income) and (2) update discount rate assumption at each reporting date (with changes recognized in other comprehensive income).

B. Require insurance entity to measure all market risk benefits associated with deposit (i.e. account balance) contracts at fair value, with change in fair value attributable to change in instrument-specific credit risk recognized in other comprehensive income.

C. Simplify amortization of deferred acquisition costs and other balances amortized in proportion to premiums, gross profits, or gross margins and require those balances be amortized on constant level basis over expected term of related contract. Deferred acquisition costs are required to be written off for unexpected contract terminations but are not subject to impairment test.

D. Require insurance entity to add disclosures of disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs. Insurance entity must also disclose information about significant inputs, judgments, assumptions, and methods used in measurement, including changes in those inputs, judgments, and assumptions, and the effect of those changes on measurement.

These updates are required to be applied retrospectively to the earliest period presented in the financial statements for fiscal periods beginning after December 15, 2022, with early adoption permitted. The Company has performed a preliminary gap analysis and created a roadmap for implementation of this standard by the effective date and is evaluating the impact of the new guidance on its Consolidated Financial Statements.

12

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Accounting pronouncements adopted

In December 2019, the FASB issued ASU 2019-12 Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740), which simplifies various aspects of the income tax accounting guidance and will be applied using different approaches depending on the specific amendment. The amendments are effective for fiscal periods beginning after December 15, 2020. Early adoption is permitted. The adoption of this ASU did not have a material effect on the results of operations or financial position of the Company.

In June 2016, the FASB released ASU 2016-13, Financial Instruments - Credit Losses, which revises the credit loss recognition criteria for certain financial assets measured at amortized cost. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model ("CECL"). The objective of the CECL model is for the reporting entity to recognize its estimate of current expected credit losses for affected financial assets in a valuation allowance deducted from the amortized cost basis of the related financial assets that results in presenting the net carrying value of the financial assets at the amount expected to be collected. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments in this Update add clarification and correction to ASU 2016-13 around expected recoveries for purchased financial assets with credit deterioration, transition relief for troubled debt restructurings, disclosures related to accrued interest receivables, and financial assets secured by collateral maintenance provisions. The guidance for these pronouncements was effective for interim and annual periods beginning after December 15, 2019, and for most affected instruments must be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained earnings. Effective January 1, 2020, the Company adopted the expected loss recognition model related to mortgage loans, debt securities held to maturity, and reinsurance recoverable using a modified retrospective approach. The change in accounting, net of tax, of $3.0 million was recorded as a charge to retained earnings in the first quarter of 2020 reflecting initial allowance for estimated credit losses balances of $1.2 million on mortgage loans and $3.3 million on debt securities held to maturity. The estimated credit losses for reinsurance recoverable were immaterial to the financial statements, but are monitored on a quarterly basis for any changes. Refer to Note (9) Investments for more information. Certain disclosures required by ASU 2016-13 are not included in the Consolidated Financial Statements as the impact of this standard was not material.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future Consolidated Financial Statements.


(3) STOCKHOLDERS' EQUITY

Robert L. Moody, Sr., through the Robert L. Moody Revocable Trust, controls 99.0% of the total outstanding shares of the Company's Class B common stock as of March 31, 2021. Holders of the Company's Class A common stock elect one-third of the Board of Directors of the Company, and holders of the Class B common stock elect the remainder. Any cash or in-kind dividends paid on each share of Class B common stock are to be only one-half of the cash or in-kind dividends paid on each share of Class A common stock. In the event of liquidation of the Company, the Class A stockholders will receive the par value of their shares; then the Class B stockholders shall receive the par value of their shares; and the remaining net assets of the Company shall be divided between the stockholders of both Class A and Class B stock based upon the number of shares held.

As the sole owner of National Western, all dividends declared by National Western are payable entirely to NWLGI and are eliminated in consolidation. National Western is restricted by state insurance laws as to dividend amounts which may be paid to stockholders without prior approval from the Colorado Division of Insurance. The restrictions are based on the lesser of statutory earnings from operations, excluding capital gains, or 10% of statutory surplus of National Western as of the previous year-end. Under these guidelines the maximum dividend payment which may be made without prior approval in 2021 is $10.0 million.

13

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Ozark National is similarly restricted under the state insurance laws of Missouri as to dividend amounts which may be paid to stockholders without prior approval to the greater of 10.0% of the statutory surplus of the company from the preceding year-end or the company's net gain from operations, excluding capital gains, from the prior calendar year. Based upon this restriction, the maximum dividend payment which may be made in 2021 without prior approval is $20.0 million. All dividends declared by Ozark National are payable entirely to NWLIC as the sole owner and are eliminated in consolidation.
National Western did not declare or pay cash dividends to NWLGI during the three months ended March 31, 2021 and 2020. NWLGI also did not declare or pay cash dividends on its common shares during the three months ended March 31, 2021 and 2020.


(4) EARNINGS PER SHARE

Basic earnings (loss) per share of common stock are computed by dividing net earnings available to each class of common stockholders on an as if distributed basis by the weighted-average number of common shares outstanding for the period. Diluted earnings per share, by definition, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock, that then shared in the distributed earnings of each class of common stock. U.S. GAAP requires a two-class presentation for the Company's two classes of common stock. The Company currently has no share-based compensation awards outstanding that could be redeemed for shares of common stock.

14

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Net earnings (loss) for the periods shown below are allocated between Class A shares and Class B shares based upon (1) the proportionate number of shares issued and outstanding as of the end of the period, and (2) the per share dividend rights of the two classes under the Company's Restated Certificate of Incorporation (the Class B dividend per share is equal to one-half the Class A dividend per share).
 Three Months Ended March 31,
 20212020
 Class AClass BClass AClass B
(In thousands except per share amounts)
Numerator for Basic and Diluted Earnings (Loss) Per Share:    
Net earnings (loss)$62,129  (2,062) 
Dividends - Class A shares    
Dividends - Class B shares    
Undistributed earnings (loss)$62,129  (2,062) 
Allocation of net earnings (loss):    
Dividends$    
Allocation of undistributed earnings (loss)60,372 1,757 (2,004)(58)
Net earnings (loss)$60,372 1,757 (2,004)(58)
Denominator:    
Basic earnings (loss) per share - weighted-average shares3,436 200 3,436 200 
Effect of dilutive stock options    
Diluted earnings (loss) per share - adjusted weighted-average shares for assumed conversions3,436 200 3,436 200 
Basic earnings (loss) per share$17.57 8.79 (0.58)(0.29)
Diluted earnings (loss) per share$17.57 8.79 (0.58)(0.29)


15

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(5) PENSION AND OTHER POSTRETIREMENT PLANS

(A)Defined Benefit Pension Plans

National Western sponsors a qualified defined benefit pension plan covering employees enrolled prior to 2008. The plan provides benefits based on the participants' years of service and compensation. The Company makes annual contributions to the plan that comply with the minimum funding provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). On October 19, 2007, National Western's Board of Directors approved an amendment to freeze the pension plan as of December 31, 2007. The freeze ceased future benefit accruals to all participants and closed the plan to any new participants. In addition, all participants became immediately 100% vested in their accrued benefits as of that date. As participants are no longer earning a credit for service, future qualified defined benefit plan expense is projected to be minimal. Fair values of plan assets and liabilities are measured as of the prior December 31 for each year. The following table summarizes the components of net periodic benefit cost.

Three Months Ended
 March 31,
 20212020
 (In thousands)
Service cost$30 27 
Interest cost132 168 
Expected return on plan assets(356)(315)
Amortization of net loss134 145 
Net periodic benefit cost$(60)25 

The service cost shown above for each period represents plan expenses expected to be paid out of plan assets. Under the clarified rules of the Pension Protection Act, plan expenses paid from plan assets are to be included in the plan's service cost component.

The Company's minimum required contribution for the 2021 plan year is $0.0 million. There was $0.7 million in planned contributions remaining for the 2020 plan year as of March 31, 2021. As of March 31, 2021, the Company has made $0.2 million in contributions to the plan for the 2020 plan year and $0.0 million in contributions to the plan for the 2021 plan year.

The components of net periodic benefit cost including service cost are reported in the line item “Other operating expenses” in the Condensed Consolidated Statements of Earnings (Loss).

National Western also sponsors three non-qualified defined benefit pension plans. The first plan covers certain senior officers and provides benefits based on the participants' years of service and compensation. The primary pension obligations and administrative responsibilities of the plan are maintained by a pension administration firm, which is a subsidiary of American National Group, Inc. ("American National"), a related party. American National has guaranteed the payment of pension obligations under the plan. However, the Company has a contingent liability with respect to the plan should these entities be unable to meet their obligations under the existing agreements. Also, the Company has a contingent liability with respect to the plan in the event that a plan participant continues employment with National Western beyond age seventy, the aggregate average annual participant salary increases exceed 10% per year, or any additional employees become eligible to participate in the plan. If any of these conditions are met, the Company would be responsible for any additional pension obligations resulting from these items. Amendments were made to the plan to allow an additional employee to participate and to change the benefit formula for the then Chairman of the Company. As previously mentioned, these additional obligations are a liability to the Company. Effective December 31, 2004, this plan was frozen with respect to the continued accrual of benefits of the then Chairman and the then President of the Company in order to comply with law changes under the American Jobs Creation Act of 2004 ("Act").
16

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Effective July 1, 2005, National Western established a second non-qualified defined benefit plan for the benefit of the then Chairman of the Company. This plan is intended to provide for post-2004 benefit accruals that mirror and supplement the pre-2005 benefit accruals under the previously discussed non-qualified plan, while complying with the requirements of the Act.

Effective November 1, 2005, National Western established a third non-qualified defined benefit plan for the benefit of the then President of the Company. This plan is intended to provide for post-2004 benefit accruals that supplement the pre-2005 benefit accruals under the first non-qualified plan as previously discussed, while complying with the requirements of the Act.

The following table summarizes the components of net periodic benefit costs for the non-qualified defined benefit plans.

 Three Months Ended
March 31,
 20212020
 (In thousands)
Service cost$309 302 
Interest cost261 338 
Amortization of prior service cost15 15 
Amortization of net loss1,282 1,445 
Net periodic benefit cost$1,867 2,100 

As the plans are not funded, there is no expected return on plan assets shown in the net periodic benefit cost table above. The Company expects to contribute $2.0 million to these plans in 2021. As of March 31, 2021, the Company has contributed $0.4 million to the plans.

The components of net periodic benefit cost including service cost are reported in the line item “Other operating expenses” in the Condensed Consolidated Statements of Earnings (Loss).

Ozark National and NIS have no defined benefit plans.

(B)Postretirement Employment Plans Other Than Pension

National Western sponsors two healthcare plans that were amended in 2004 to provide postretirement benefits to certain fully-vested individuals. The plans are unfunded. The following table summarizes the components of net periodic benefit costs.

 Three Months Ended
March 31,
 20212020
 (In thousands)
Interest cost$37 41 
Amortization of net loss73 40 
Net periodic benefit cost$110 81 

17

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As the plans are not funded, there is no expected return on plan assets shown in the net periodic benefit cost table above. The Company expects to contribute minimal amounts to the plans in 2021. Ozark National and NIS do not offer postemployment benefits.

The components of net periodic benefit cost including service cost are reported in the line item “Other operating expenses” in the Condensed Consolidated Statements of Earnings (Loss).


(6)SEGMENT AND OTHER OPERATING INFORMATION

The Company defines its reportable operating segments as domestic life insurance, international life insurance, annuities, and ONL and Affiliates (previously referred to as "Acquired Businesses"). These segments are organized based on product types, geographic marketing areas, and business groupings. Ozark National and NIS have been combined into a separate segment given its inter-related marketing and sales approach which consists of a coordinated sale of a non-participating whole life insurance product (Ozark National) and a mutual fund investment product (NIS). A fifth category "All Others" primarily includes investments and earnings of non-operating subsidiaries as well as other remaining investments and assets not otherwise supporting specific segment operations.

A summary of segment information as of March 31, 2021 and December 31, 2020 for the Condensed Consolidated Balance Sheet items and for the three months ended March 31, 2021 and March 31, 2020 for the Condensed Consolidated Statements of Earnings (Loss) is provided below.

Condensed Consolidated Balance Sheet Items:
March 31, 2021
 Domestic
Life
Insurance
International
 Life
Insurance
AnnuitiesONL & AffiliatesAll
 Others
Totals
 (In thousands)
Deferred transaction costs$118,116 152,639 380,497 168,964  820,216 
Total segment assets1,669,647 1,056,287 9,742,904 1,085,932 374,454 13,929,224 
Future policy benefits1,388,377 793,066 6,977,712 770,220  9,929,375 
Other policyholder liabilities18,315 11,297 103,317 15,332  148,261 
Funds withheld liability  1,636,959   1,636,959 

December 31, 2020
 Domestic
Life
Insurance
International
 Life
Insurance
AnnuitiesONL & AffiliatesAll
 Others
Totals
 (In thousands)
Deferred transaction costs$94,100 124,480 302,397 170,756  691,733 
Total segment assets3,242,794 1,034,280 7,976,588 1,117,509 382,149 13,753,320 
Future policy benefits 1,337,174 798,952 7,028,860 768,433  9,933,419 
Other policyholder liabilities16,378 11,086 94,049 16,967  138,480 
Funds withheld liability  1,697,591   1,697,591 

18

Table of Contents

NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Condensed Consolidated Statements of Earnings (Loss):

Three Months Ended March 31, 2021
 Domestic
Life
Insurance
International
 Life
Insurance
AnnuitiesONL & AffiliatesAll
 Others
Totals
 (In thousands)
Premiums and contract revenues$13,898 20,180 3,930 19,465  57,473 
Net investment income (loss)23,843 12,116 119,724 6,574 3,818 166,075 
Other revenues21 28 1,374 2,926 1,065 5,414 
Total revenues37,762 32,324 125,028 28,965 4,883 228,962 
Life and other policy benefits6,110 4,375 10,001 17,403  37,889 
Amortization of deferred transaction costs5,460 5,392 16,447 2,690  29,989 
Universal life and annuity contract interest21,621 10,799 20,425   52,845 
Other operating expenses7,447 4,774 12,930 4,746 1,438 31,335 
Federal income taxes (benefit)(594)1,443 13,476 857 712 15,894 
Total expenses40,044 26,783 73,279 25,696 2,150 167,952 
Segment earnings (loss)$(2,282)5,541 51,749 3,269 2,733 61,010