Core Viewpoint - AM Best has revised the outlooks for Kansas City Life Insurance Company to negative from stable while affirming its Financial Strength Rating (FSR) of A- and Long-Term Issuer Credit Rating (ICR) of "a-" [1] - Grange Life Insurance Company has been downgraded by AM Best, with its FSR reduced to B+ from B++ and Long-Term ICR downgraded to "bbb-" from "bbb" [1] Group 1 - Kansas City Life Insurance Company maintains an FSR of A- (Excellent) despite the negative outlook revision [1] - The Long-Term ICR for Kansas City Life is affirmed at "a-" (Excellent) [1] - Grange Life Insurance Company has seen a downgrade in its FSR to B+ (Good) [1] Group 2 - The Long-Term ICR for Grange Life is downgraded to "bbb-" (Good) [1] - The changes reflect AM Best's assessment of the companies' financial strength and market conditions [1]

Core Insights - Kansas City Life Insurance Company reported a net income of $3.2 million or $0.33 per share for Q3 2025, an increase from $1.3 million or $0.14 per share in Q3 2024, driven by higher investment revenues and lower policyholder benefits due to a decline in death benefits, net of reinsurance [1] - For the first nine months of 2025, the company recorded a net loss of $23.0 million or $2.38 per share, compared to a net income of $7.6 million or $0.79 per share in the same period of 2024, primarily due to a legal settlement accrual of $35.5 million, net of tax [1] - Excluding the legal settlement accrual, net income for the first nine months of 2025 would have been $12.5 million or $1.29 per share, with the increase attributed to lower policyholder benefits, although this was partially offset by a decrease in insurance revenues [1] Financial Performance - Revenues for Q3 2025 were $123.8 million, slightly down from $125.1 million in Q3 2024, while revenues for the first nine months of 2025 were $365.1 million, down from $375.0 million in the same period of 2024 [3] - The average number of shares outstanding remained constant at 9,683,414 for both Q3 2025 and Q3 2024 [3] - The company declared a quarterly dividend of $0.14 per share on October 27, 2025, consistent with the previous quarter [5]

Financial Performance - Kansas City Life Insurance Company reported a net loss of $28.1 million or $2.90 per share in Q2 2025, a significant decline from a net income of $4.7 million or $0.49 per share in Q2 2024 [1] - For the first six months of 2025, the company recorded a net loss of $26.2 million or $2.71 per share, compared to a net income of $6.3 million or $0.65 per share in the same period of 2024 [3] Legal Settlement Impact - The primary reason for the decrease in net income in both Q2 and the first half of 2025 was the establishment of a legal settlement accrual of $35.5 million, net of tax, related to potential class action lawsuits [1][3] - Excluding the legal settlement accrual, net income for Q2 2025 would have been $7.5 million or $0.77 per share, and for the first six months, it would have been $9.3 million or $0.96 per share [2][4] Revenue Analysis - Total revenues for Q2 2025 were $122.3 million, slightly down from $122.5 million in Q2 2024, while revenues for the first six months of 2025 were $241.3 million, down from $249.8 million in the same period of 2024 [6] - The improvement in net income, when excluding the legal settlement accrual, was attributed to higher investment revenues and lower policyholder benefits, although this was partially offset by a decline in insurance revenues [2][4] Company Overview - Kansas City Life Insurance Company, established in 1895, is based in Kansas City, Missouri, and primarily provides financial protection through life insurance and annuities [5]

Core Viewpoint - Kansas City Life Insurance Company ("KCL") has entered into a settlement agreement to resolve claims related to the cost of insurance rates in certain universal life and variable universal life policies, agreeing to pay $45 million to approximately 88,000 policyholders [1][2]. Summary by Sections Settlement Agreement - The proposed nationwide Settlement Agreement is subject to preliminary and final court approval, with KCL agreeing to pay $45 million to settle claims from around 88,000 policyholders [2]. - The settlement aims to resolve all current and potential claims regarding the cost of insurance rates for various universal life and variable universal life policies issued and administered by KCL since January 1, 2002 [3]. Ongoing Litigation - The settlement will also address claims from ongoing cases, including van Zanten and Vittetoe v. KCL, Sheldon v. KCL, and others, as well as claims from any policyholder with a Class Policy not involved in existing litigation [4]. Court Proceedings - Settlement proceedings for the Sheldon litigation will occur in the 16th Circuit Court, Jackson County Missouri, while other claims will be handled in the United States District Court for the Western District of Missouri [5]. Company Position - KCL does not admit any liability or wrongdoing in entering the Settlement Agreement and will continue to defend against any actions if the settlement is not approved [6]. - The CEO of KCL stated that the settlement is intended to eliminate future uncertainty and legal expenses, benefiting policyholders, the company, and shareholders [7].

Core Insights - Kansas City Life Insurance Company reported a net income of $1.9 million or $0.19 per share for Q1 2025, an increase from $1.6 million or $0.16 per share in Q1 2024 [1][4] Financial Performance - The company experienced a $4.2 million or 6% decrease in policyholder benefits, net of reinsurance, in Q1 2025 compared to Q1 2024 [2] - Operating expenses declined by $0.9 million or 3% in Q1 2025 compared to the same period in 2024 [2] - An income tax benefit of $4.2 million was recorded in Q1 2025, contrasting with an income tax expense of $0.4 million in Q1 2024, attributed to a one-time tax benefit [2] - Insurance revenues decreased by $3.1 million or 4%, while total investment revenues fell by $5.3 million or 13%, primarily due to changes in the fair value of certain investments [2] Company Overview - Kansas City Life Insurance Company, established in 1895, is based in Kansas City, Missouri, and provides financial protection through life insurance and annuities [3] - The company operates in 49 states and the District of Columbia [3]