There have been no material changes with respect to the risk factors as previously disclosed in our 2017 Annual Report on Form
10-K
filed with the SEC on February 28, 2018, except as set forth below.
We are subject to extensive
regulation, and potential further regulation may increase our operating costs and limit our growth.
We are subject to extensive insurance laws and regulations that affect nearly every aspect of our business. We are also subject to
additional laws and regulations administered and enforced by a number of different governmental authorities, such as state securities and workforce regulators, the SEC, the Internal Revenue Service (IRS), FINRA, the U.S. Department of
Justice, the U.S. Department of Labor (DOL), the U.S. Department of Housing and Urban Development (HUD), HHS, the Federal Trade Commission and state attorneys general, each of which exercises a degree of interpretive
latitude. We face the risk that any particular regulators or enforcement authoritys interpretation of a legal issue may conflict with that of another regulator or enforcement authority or may change over time to our detriment. Regulatory
investigations, which can be broad and unpredictable, may raise issues not identified previously and could result in new legal actions against us and industry-wide regulations that could adversely affect us. Further, we are experiencing increasing
information requests from regulators without corresponding direct regulation being applicable to us, on issues such as climate change and our investments in certain companies or industries. Responding to such requests adds to our compliance burden.
The laws and regulations applicable to us are complex and subject to change, and compliance is time consuming and personnel-intensive. Changes in these
laws and regulations, or interpretations by courts or regulators, may materially increase our costs of doing business and may result in changes to our practices that may limit our ability to grow and improve our profitability. Regulatory
developments or actions against us could have material adverse financial effects and could harm our reputation. Among other things, we could be fined, prohibited from engaging in some or all of our business activities, or made subject to limitations
or conditions on our business activities.
As insurance industry practices and legal, judicial, social, and other conditions outside of our control
change, unexpected issues related to claims and coverage may emerge. These changes may include modifications to long established business practices or policy interpretations, which may adversely affect us by extending coverage beyond our
underwriting intent or by increasing the type, number, or size of claims. For example, a growing number of states have adopted legislation that is similar to the Model Unclaimed Life Insurance Benefits Act. Such legislation imposes new requirements
on insurers to periodically compare their life insurance and annuity contracts and retained asset accounts against the U.S. Social Security Administrations Death Master File, investigate any potential matches, determine whether benefits are
payable, and attempt to locate beneficiaries. Some states are attempting to apply these laws retroactively to existing policies. A number of states have aggressively audited life insurance companies, including us and some of our subsidiaries, for
compliance with such laws, and more states could do so. Such audits have sought to identify unreported insured deaths and to determine whether any unpaid benefits, proceeds or other payments under life insurance or annuity contracts should be
treated as unclaimed property to be escheated to the state. We have modified our claims process to stay current with emerging trends. It is possible that such audits may result in regulatory actions, litigation, administrative fines and penalties,
interest, and additional changes to our procedures.
Federal regulatory changes and initiatives have a growing impact on us. For example, Dodd-Frank
provides for enhanced federal oversight of the financial services industry through multiple initiatives. Provisions of Dodd-Frank are or may become applicable to us, our competitors, or certain entities with which we do business. For example, it is
possible that regulations issued by the Consumer Financial Protection Bureau (CFPB) may extend, or be interpreted to extend, to the sale of certain insurance products by covered financial institutions, which could adversely affect sales
of such products. The Federal Insurance Office, as a result of various studies it conducts, may also recommend changes in laws or regulations that affect our business.
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