What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-03-08 · 409 added, 418 removed, 1973 unchanged (30% of the section changed)

14 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 8, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2024, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

15 unchanged sentences

Policy liabilities and unpaid claims include claims in the normal course of settlement and reserve estimates.

The Company estimates policy liabilities and unpaid claims reserves by applying a variety of generally accepted actuarial methods to historical loss development patterns, which require numerous assumptions and significant judgment.

The Company estimates policy liabilities and unpaid claims by applying a variety of generally accepted actuarial methods to historical loss development patterns, which require numerous assumptions and significant judgment.

We identified policy liabilities and unpaid claims as a critical audit matter because of the significant estimates and assumptions management made in forecasting ultimate losses.

1 unchanged sentence

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to policy liabilities and unpaid claims included the following, among others:

Our audit procedures related to testing management’s significant estimates and assumptions used in determining policy liabilities and unpaid claims included the following, among others:

• We tested the design and operating effectiveness of controls over policy liabilities and unpaid claims, including those related to the estimation and management’s review of the estimates as well as the selection of underlying assumptions.

• We tested the design and operating effectiveness of controls over the completeness and accuracy of the premium and claim data utilized by management and their third-party actuaries.

• We evaluated the methods and assumptions used by the Company to estimate the policy liabilities and unpaid claims reserves through the following procedures:

◦ With assistance from our actuarial specialists, we developed an independent expected range of policy liabilities and unpaid claims reserves based on historical and industry claim development factors.

◦ With assistance from our actuarial specialists, we performed retrospective procedures comparing actual loss development with expected loss development to assess the reasonableness of assumptions used, including consideration of potential bias, in the estimation of policy liabilities and unpaid claims.

• We evaluated the methods and assumptions used by the Company to estimate the policy liabilities and unpaid claims through the following procedures:

◦ With assistance from our actuarial specialists:

▪ We developed an independent expected range of policy liabilities and unpaid claims reserves based on historical and industry claim development factors or performed actuarial peer review procedures to evaluate management’s application of actuarial methods and significant assumptions.

▪ We performed retrospective procedures comparing actual loss development with expected development to assess the reasonableness of assumptions used, including consideration of potential bias, in the estimation of policy liabilities and unpaid claims.

◦ We tested the underlying data that served as the basis for the actuarial analysis, including historical claims data, to test that the inputs to the actuarial estimates were complete and accurate.

1 unchanged sentence

New York, New York

March 8, 2023

February 29, 2024

We have served as the Company's auditor since 2017.

5 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated March 8, 2023 expressed an unqualified opinion on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 29, 2024 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

14 unchanged sentences

New York, New York

March 8, 2023

February 29, 2024

AND SUBSIDIARIES

10 unchanged sentences

Notes and accounts receivable, net 684,608 502,311

Reinsurance receivables 1,176,090 880,836

Reinsurance recoverable

953,886 450,620

Prepaid reinsurance premiums

900,524 725,470

Deferred acquisition costs 565,746 498,925

2 unchanged sentences

Other assets 165,515 172,143

Assets held for sale — 250,608

Total assets $ 5,139,313 $ 4,039,563

6 unchanged sentences

Other liabilities and accrued expenses 403,744 367,748

Liabilities held for sale — 242,994

Total liabilities $ 4,562,748 $ 3,505,990

70 unchanged sentences

Balance at December 31, 2020

Adoption of accounting standard (1)

32,682,462 $ 33 $ 315,014 $ 5,674 $ 35,423 $ 356,144 $ — $ 17,394 $ 373,538

1 unchanged sentence

Vesting of share-based incentive compensation 596,601 — 3,563 — — 3,563 — ( 4,816 ) ( 1,253 )

Shares issued in exchange for vested subsidiary awards (1)

1,166,307 2 105 — — 107 — ( 1,565 ) ( 1,458 )

Shares purchased under stock purchase plan ( 528,662 ) ( 1 ) ( 2,881 ) — — ( 2,882 ) — — ( 2,882 )

Shares issued upon exercise of warrants 207,445 — — — — — — — —

Repurchase of vested subsidiary awards — — ( 770 ) — — ( 770 ) — ( 309 ) ( 1,079 )

Non-controlling interest contributions — — — — — — — 100 100

Non-controlling interest distributions — — — — — — — ( 1,095 ) ( 1,095 )

4 unchanged sentences

Balance at December 31, 2021

34,124,153 $ 34 $ 317,459 $ ( 2,685 ) $ 68,146 $ 382,954 $ — $ 17,227 $ 400,181

Amortization of share-based incentive compensation — — 6,600 — — 6,600 — 869 7,469

4 unchanged sentences

Shares issued upon exercise of warrants 1,999,989 2 13,722 — — 13,724 — — 13,724

Repurchase of vested subsidiary awards — — ( 770 ) — — ( 770 ) — ( 309 ) ( 1,079 )

Shares issued upon exercise of options 19,296 — — — — — — — —

Transfer of liability awards — — 4,847 — — 4,847 — — 4,847

WP Transaction — — 41,092 7,193 — 48,285 77,679 41,044 167,008

Non-controlling interest contributions — — — — — — — 250 250

3 unchanged sentences

Other comprehensive income (loss), net of tax — — — ( 43,937 ) — ( 43,937 ) — ( 3,731 ) ( 47,668 )

Subsidiary preferred dividends declared — — — — ( 3,384 ) ( 3,384 ) — — ( 3,384 )

Net income (loss) — — — — ( 4,890 ) ( 4,890 ) — 8,451 3,561

Balance at December 31, 2022

36,385,299 $ 36 $ 382,645 $ ( 39,429 ) $ 54,113 $ 397,365 $ 77,679 $ 58,529 $ 533,573

AND SUBSIDIARIES

7 unchanged sentences

Vesting of share-based incentive compensation 315,881 1 ( 250 ) — — ( 249 ) — ( 470 ) ( 719 )

Shares issued in exchange for vested subsidiary awards (4)

114,353 — 866 — — 866 — ( 1,047 ) ( 181 )

Shares purchased under stock purchase plan ( 165,040 ) — ( 1,727 ) — — ( 1,727 ) — — ( 1,727 )

Shares issued upon exercise of warrants 1,999,989 2 13,722 — — 13,724 — — 13,724

Shares issued upon exercise of options 55,007 — — — — — — — —

Transfer of liability awards — — 4,847 — — 4,847 — — 4,847

WP Transaction — — 41,092 7,193 — 48,285 77,679 41,044 167,008

Non-controlling interest contributions — — — — — — — 250 250

Non-controlling interest distributions — — ( 1,751 ) — — ( 1,751 ) — ( 3,208 ) ( 4,959 )

5 unchanged sentences

Balance at December 31, 2023 36,756,187 $ 37 $ 382,239 $ ( 26,073 ) $ 60,663 $ 416,866 $ 77,679 $ 82,020 $ 576,565

(1) Amounts reclassified due to adoption of ASU 2016-13.

See Note (2) Summary of Significant Accounting Policies.

(2) Includes subsidiary RSU exchanges.

See Note (19) Stock Based Compensation.

(1) Exchange included $ 1,458 in cash.

20 unchanged sentences

Change in fair value of liability classified warrants ( 1,769 ) ( 939 ) —

Net loss on extinguishment of debt 940 — 353

Other 148 1,137 291

3 unchanged sentences

(Increase) decrease in notes and accounts receivable ( 160,501 ) ( 13,227 ) ( 54,378 )

(Increase) decrease in reinsurance receivables ( 295,254 ) ( 152,827 ) ( 116,839 )

(Increase) decrease in reinsurance recoverable

( 505,700 ) ( 203,874 ) ( 78,932 )

(Increase) decrease in prepaid reinsurance premiums

( 175,054 ) ( 91,380 ) ( 73,895 )

(Increase) decrease in deferred acquisition costs ( 65,404 ) ( 119,552 ) ( 149,943 )

9 unchanged sentences

Proceeds from sales and maturities of investments 1,296,337 1,260,594 1,172,044

Proceeds from the sale of real estate, businesses and other assets 742 8,729 3,481

Purchases of property, plant and equipment ( 14,030 ) ( 10,727 ) ( 2,764 )

Proceeds from the sale of businesses and other assets — 742 8,729

Proceeds from notes receivable 117,834 85,435 56,055

5 unchanged sentences

Cash received for the exercise of warrants — 13,724 —

Net non-controlling interest (redemptions) contributions ( 5,590 ) ( 3,532 ) ( 2,134 )

Net non-controlling interest (redemptions) contributions and other ( 14,783 ) ( 5,590 ) ( 3,532 )

Issuance of Fortegra Common Stock — 98,433 —

13 unchanged sentences

Cash, cash equivalents and restricted cash – end of period 492,561 560,019 204,446

Reclassification of cash to held for sale / deconsolidation of cash previously held for sale 9,172 9,360 4,879

Reclassification of cash to held for sale — 9,172 9,360

Cash, cash equivalents and restricted cash – end of period $ 492,561 $ 550,847 $ 195,086

11 unchanged sentences

Shares issued in exchange for vested subsidiary awards $ — $ 866 $ 107

Equity securities acquired as part of a dividend reinvestment plan $ — $ — $ 953

As of December 31,

105 unchanged sentences

See Note (10) Derivative Financial Instruments and Hedging, Note (12) Fair Value of Financial Instruments and Note (17) Stockholders' Equity for additional information.

Derivative Instruments Designated as Cash Flow Hedging Instruments

The Company uses cash flow hedges from time to time to reduce the exposure to variability of cash flows from floating rate borrowings.

If a derivative instrument meets certain cash flow hedge accounting criteria, it is recorded on the consolidated balance sheet at its fair value, as either an asset or a liability, with offsetting changes in fair value recognized in AOCI.

The effective portion of the changes in fair value of derivatives are reported in AOCI and amounts previously recorded in AOCI are recognized in earnings in the period in which the hedged transaction affects earnings.

Any ineffective portions of the change in fair value of the derivative are recognized in current earnings.

Stock Based Compensation

1 unchanged sentence

See Note (19) Stock Based Compensation.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The Company initially measures the cost of all share-based compensation incentive awards at fair value on the date of grant, whether accounted for as an equity or liability award.

2 unchanged sentences

If the share-based compensation awards are accounted for as liability awards, their fair value is remeasured at each reporting period, with the compensation cost charged to expense with a corresponding credit to other liabilities.

Grants of subsidiary restricted stock units (RSUs) exchangeable into common stock of the Company are accounted for as equity based upon their expected settlement method.

The Company recognizes the cost of such awards over the vesting period using the straight-line method and uses the graded-vesting method to recognize compensation expense for the performance vesting RSUs.

Grants of restricted stock units (RSUs) and options are accounted for as equity based upon their expected settlement method.

The Company recognizes the cost of such awards over the vesting period using the straight-line method and uses the graded-

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

vesting method to recognize compensation expense for the performance vesting RSUs.

Compensation expense will be recognized to the extent that it is probable that the performance condition will be achieved.

26 unchanged sentences

Available for Sale Securities, at Fair Value (AFS)

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

AFS are securities that are not classified as trading or held-to-maturity and are intended to be held for indefinite periods of time.

2 unchanged sentences

Upon the disposition of an AFS security, the Company reclassifies the gain or loss on the security from AOCI to net realized and unrealized gains (losses) on the consolidated statements of operations.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

For AFS securities, the Company reviews its securities portfolio for impairment and determines if impairment is related to credit loss or non-credit loss.

25 unchanged sentences

Other Investments

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is based on quoted market prices.

We perform internal price verification procedures to ensure that the prices provided are reasonable.

Investments in vessels, net are carried at cost (inclusive of capitalized acquisition costs, where applicable) less accumulated depreciation.

Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning

Subsequent expenditures are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels;

otherwise, these amounts are expensed as incurred.

Vessels acquired are recognized at their fair value as of the date of the acquisition.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

capacity or improve the efficiency or safety of the vessels;

otherwise, these amounts are expensed as incurred.

Vessels acquired are recognized at their fair value as of the date of the acquisition.

Depreciation is computed using the straight-line method over the vessel’s estimated remaining useful life, after considering the estimated salvage value.

7 unchanged sentences

An impairment charge would be recognized if the estimated undiscounted future net cash flows expected to result from the operation and subsequent disposal of the vessel are less than the vessel’s carrying amount.

The Company’s estimate of future revenue is based upon time charter equivalent (TCE) rates using current market rates.

The Company uses average historical rates for periods beyond those for which rates are available.

Estimated cash flows are net of brokerage and address commissions, vessel operating expenses, and estimated costs of drydocking and include an inflation factor, as appropriate.

The projected undiscounted future cash flows are comprised of the net of these inflows and outflows, plus an estimated salvage value.

There were no impairments recognized for the years ended December 31, 2022 or 2021.

The Company concluded during its annual impairment testing its remaining two vessels were partially impaired as of December 31, 2023.

The Company had no impairment as of year ended 2022.

As of December 31, 2023, all remaining tanker and dry-bulk vessels had been sold.

1 unchanged sentence

Cash and Cash Equivalents

The Company considers all highly liquid investments of sufficient credit quality purchased with an initial maturity of three months or less to be cash equivalents.

Cash and cash equivalents consist of U.S.

denominated cash on hand, cash held in banks and investments in money market funds.

Cash and cash equivalents consist of cash on hand, cash held in banks, money market funds, and all highly liquid investments of sufficient credit quality purchased with an initial maturity of three months or less to be cash equivalents, including U.S.

and foreign government securities.

Restricted Cash

10 unchanged sentences

Accounts and Premiums Receivable, Net

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Accounts and premiums receivable, net are primarily trade receivables from the insurance business that are carried at their approximate fair value.

4 unchanged sentences

Retrospective commissions receivable, Trust receivables and Other receivables

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

Retrospective commissions receivable, trust receivables and other receivables are primarily trade receivables from the insurance business that are carried net of allowance at their approximate fair value.

Reinsurance Receivables

Reinsurance Recoverable & Prepaid Reinsurance Premiums

Through the insurance business, the Company has various reinsurance agreements in place whereby the amount of risk in excess of its retention goals is reinsured by unrelated domestic and foreign insurance companies.

14 unchanged sentences

As a result of the Company’s evaluations, no write-offs for unrecoverable deferred acquisition costs were recognized during the years ended December 31, 2023, 2022 and 2021.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Goodwill and Intangible Assets, net

9 unchanged sentences

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

Mortgage Servicing Rights

6 unchanged sentences

Unearned Premiums

Premiums written are earned over the life of the respective policy using the Rule of 78's, pro rata, or other actuarial methods as appropriate for the type of business.

Premiums written are earned over the life of the respective policy using pro rata, Rule of 78’s, modified Rule of 78’s, or other methods as appropriate for the contract.

Unearned premiums represent the portion of premiums that will be earned in the future.

12 unchanged sentences

The Company has not made any changes to its methodologies for determining claim reserves in the periods presented.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Credit life and accidental death and dismemberment (AD&D) unpaid claims reserves include claims in the course of settlement and incurred but not reported (IBNR).

9 unchanged sentences

These factors are not directly quantifiable, particularly on a prospective basis.

The Company periodically reviews and updates its methods of making such unpaid claims reserve estimates and establishing the related liabilities based on our actual experience.

The Company periodically reviews and updates its methods of making such unpaid claims reserve estimates and establishing the related

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

liabilities based on our actual experience.

The Company has not made any changes to its methodologies for determining unpaid claims reserves in the periods presented.

3 unchanged sentences

Deferred Revenue

Deferred revenues represent the portion of income that will be earned in the future attributable to motor club memberships, mobile device protection plans, and other non-insurance service contracts that are earned over the respective contract periods using the Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract.

Deferred revenues represent the portion of income that will be earned in the future attributable to motor club memberships and non-insurance service contracts that are earned over the respective contract periods using pro rata, Rule of 78’s, modified Rule of 78’s, or other methods as appropriate for the contract.

A deficiency reserve would be recorded if anticipated contract benefits, deferred acquisition costs and contract service costs exceed the recorded deferred revenues and anticipated investment income.

8 unchanged sentences

Whether direct or assumed, the premium is earned over the life of the respective policy using methods appropriate to the pattern of losses for the type of business.

Methods used include the Rule of 78's, pro rata, and other actuarial methods.

Methods used include the Rule of 78's, modified Rule of 78’s, pro rata, and other actuarial methods.

Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

1 unchanged sentence

The amount ceded is proportional to the amount of risk assumed by the reinsurer.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Service and Administrative Fees

1 unchanged sentence

Such fees are typically positively correlated with transaction volume and are recognized as revenue as they become both realized and earned.

Service Fees.

S ervice fee revenue is recognized as the services are performed.

These services include fulfillment, software development, and claims handling for our customers.

Collateral tracking fee income is recognized when the service is performed and billed.

Management reviews the financial results under each significant contract on a monthly basis.

Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable.

During the years ended December 31, 2022, 2021 and 2020, respectively, the Company did not incur a loss with respect to a specific significant service fee contract.

Administrative Fees.

Administrative fee revenue includes the administration of premium associated with our producers and their PORCs.

In addition, we also earn fee revenue from debt cancellation, motor club, and service contract products.

Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts, auto and consumer goods service contracts, and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other actuarial methods as appropriate for the contract.

Service and administrative fees are generated from non-insurance programs including warranty service contracts, motor clubs and other services.

Service and administrative fees are recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using pro rata, Rule of 78’s, modified Rule of 78’s, or other methods as appropriate for the contract.

Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

In addition, ceding fees paid by our reinsurers on ceded insurance premiums are recorded on an earned basis.

These fees reimburse us for administrative, underwriting, and acquisition expenses.

These fees are earned in subsequent periods over the remaining term of the policy.

Ceding Commissions

Ceding commissions earned under reinsurance agreements are based on contractual formulas that take into account, in part, underwriting performance and investment returns experienced by the assuming companies.

Ceding commissions earned under reinsurance agreements are based on contractual formulas that take into account, in part,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

underwriting performance and investment returns experienced by the assuming companies.

As experience changes, adjustments to the ceding commissions are reflected in the period incurred and are based on the claim experience of the related policy.

10 unchanged sentences

Member Benefit Claims

Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance and for the repair or replacement of covered products.

Member benefit claims represent claims paid on behalf of contract holders directly to third-party providers for roadside assistance as well as warranty and service contracts for the repair or replacement of covered products.

Claims can also be paid directly to contract holders as a reimbursement payment, provided supporting documentation of loss is submitted to the Company.

3 unchanged sentences

Net losses include actual claims paid and the change in unpaid claim reserves.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Commissions Payable and Expense

23 unchanged sentences

Early adoption is permitted, including in an interim period .

We early adopted this standard and applied it to all 2022 business combinations.

The Company early adopted this standard and applied it to all 2022 business combinations.

January 1, 2022 The adoption of the standard did not materially impact the Company’s consolidated financial statements.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

Simplifying the Accounting for Income Taxes

The standard eliminates the need for an organization to analyze whether the following apply in a given period (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods.

January 1, 2021 The standard makes changes to areas of tax accounting for transactions and situations which do not currently apply to the Company’s activity, so the adoption of the standard does

not currently impact the Company’s financial statements.

2016-13 Financial Instruments -Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments Topic 326 amended guidance on reporting credit losses for assets held on an amortized cost basis and AFS debt securities.

For assets held on an amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in previous GAAP and instead requires an entity to reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For AFS debt securities, credit losses should be measured in a manner similar to previous GAAP;

however, Topic 326 will require that credit losses be presented as an allowance rather than as a write-down.

Changes in the allowance account are recorded in the period of change as a credit loss expense or reversal of credit loss expense.

The measurement of credit losses is not impacted, except that credit losses recognized are limited to the amount by which fair value is below amortized cost.

January 1, 2020 The adoption of this guidance resulted in an immaterial reclassification from AOCI to retained earnings in the Company’s consolidated financial statements.

January 1, 2021 The standard makes changes to areas of tax accounting for transactions and situations which do not currently apply to the Company’s activity, so the adoption of the standard has not had an impact the Company’s financial statements.

AND SUBSIDIARIES

3 unchanged sentences

Recently Issued Accounting Pronouncements, Not Yet Adopted

Standard Description Adoption Date Impact on Financial Statements

Accounting Standard Update Description Adoption Date Impact on Financial Statements

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and 2022-06 Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 The amendments in these updates provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

Deferral of the Sunset Date of Topic 848

The amendments in these updates provide optional guidance for a limited period to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

The amendments provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met.

1 unchanged sentence

The Company is evaluating its option to adopt the guidance when it is applicable.

2023-07 (Topic 280) Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis.

This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025.

Early adoption is permitted.

Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements.

The amendments in this update are effective for annual periods beginning after December 31, 2024.

The Company does not expect the adoption of this guidance to have a material impact on our consolidated financial statements

2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures

The amendments in this Accounting Standards Update enhance the transparency and decision usefulness of income tax disclosures.

Investors, lenders, creditors, and other allocators of capital (collectively, “investors”) indicated that the existing income tax disclosures should be enhanced to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities.

While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows.

The amendments in this update are effective for annual periods beginning after December 15, 2024.

The Company is evaluating timing on when to adopt the guidance when it is applicable.

(3) Acquisitions

Acquisition of Premia Solutions Limited

On February 6, 2023, a subsidiary of Fortegra acquired a majority of the equity interests in Premia for total cash consideration of approximately $ 19,726 , net of cash acquired of $ 3,873 .

Premia is an intermediate provider of automotive protection products in the United Kingdom.

The preliminary purchase price allocation has been developed based on preliminary estimates of fair value using the historical financial statements of Premia as of the acquisition date and is subject to the completion of management’s final analysis.

Identifiable assets acquired were primarily made up of goodwill and intangible assets.

Management’s preliminary allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of $ 18,359 and $ 18,152 , respectively, which the Company may modify during the one year period allowed for purchase accounting adjustments during the measurement period.

See Note (9) Goodwill and Intangible Assets, net.

Acquisition of ITC Compliance GRP Limited

On April 1, 2022, a subsidiary in our insurance business acquired all of the equity interests in ITC for total cash consideration of approximately $ 15,000 , net of cash acquired of $ 6,123 , plus earn out payments based on achievement of specific performance metrics.

On April 1, 2022, Fortegra Europe Limited, a subsidiary of the Company, acquired all of the equity interests of ITC for total cash consideration of approximately $ 15,000 , net of cash acquired of $ 6,123 , plus earn out payments based on achievement of specific performance metrics.

ITC is a provider of regulatory support and compliance services to the retail automotive sector in the United Kingdom.

The preliminary purchase price allocation below has been developed based on preliminary estimates of fair value using the historical financial statements of ITC as of the acquisition date and is subject to the completion of management’s final analysis.

Identifiable assets acquired were primarily made up of goodwill and intangible assets.

Management’s preliminary allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of $ 8,122 and $ 10,964 , respectively, which the Company may modify during the one year period allowed for purchase accounting adjustments during the measurement period.

Management’s allocation of the purchase price to the net assets acquired resulted in the recording of goodwill and intangible assets of $ 8,044 and $ 10,964 , respectively.

See Note (9) Goodwill and Intangible Assets, net.

4 unchanged sentences

(4) Dispositions and Assets and Liabilities Held for Sale

As of December 31, 2023, all remaining tanker and dry-bulk vessels had been sold.

During the year ended December 31, 2022 , the Company completed the sale of three dry bulk vessels and two product tankers from its maritime shipping operations.

6 unchanged sentences

The transaction did not meet the requirements to be classified as a discontinued operation.

The following table presents detail of Luxury’s assets and liabilities held for sale in the consolidated balance sheets for the following periods:

December 31, 2021

Loans, at fair value $ 236,810

Other investments 2,071

Total investments 238,881

Cash, cash equivalents and restricted cash 9,360

Notes and accounts receivable, net 157

Other assets 2,210

Assets held for sale $ 250,608

Debt, net $ 227,973

Other liabilities and accrued expenses (1)

Liabilities held for sale $ 242,994

(1) Includes deferred tax liabilities of $ 659 as of December 31, 2021.

Luxury’s earni ngs had no impact to net income (loss) attributable to common stockholders for the years ended December 31, 2022 and 2021.

Luxury’s earni ngs had no impact on net income (loss) attributable to common stockholders for the years ended December 31, 2023, 2022 and 2021.

(5) Operating Segment Data

1 unchanged sentence

Tiptree’s principal operating subsidiary, Fortegra, is a leading provider of specialty insurance, service contract products and related service solutions.

Based on the ASC 280, Segment Reporting, quantitative analysis performed as of December 31, 2022, our reportable segments are Insurance and Mortgage.

Based on the quantitative analysis performed related to Accounting Standard Codification (“ASC”) 280, Segment Reporting, our reportable segments are Insurance and Mortgage.

We refer to our non-insurance operations, assets and other investments, comprised of our Mortgage reportable segment and our non-reportable operating segments and other business activities, as Tiptree Capital.

4 unchanged sentences

Descriptions of our Insurance reportable segment and Tiptree Capital, including our Mortgage reportable segment, are as follows:

Insurance operations are conducted through Fortegra, which is a leading provider of specialty insurance products and related

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Insurance operations are conducted through Fortegra, which is a leading provider of specialty insurance products and related services.

Fortegra designs, markets and underwrites specialty property and casualty insurance products incorporating value-added coverages and services for select target markets or niches.

3 unchanged sentences

The Company’s mortgage business originates loans for sale to institutional investors, including GSEs and FHA/VA and services loans on behalf of Fannie Mae, Freddie Mac, and Ginnie Mae.

Other includes our maritime shipping operations, asset management, other investments (including our Invesque shares), and Luxury mortgage operations (deconsolidated effective as of July 1, 2022).

Other includes our remaining maritime shipping operations, asset management, other investments (including our Invesque shares), and Luxury mortgage operations (deconsolidated effective as of July 1, 2022).

The tables below present the components of revenue, expense, income (loss) before taxes, and assets for our reportable segments as well as Tiptree Capital - Other for the following periods:

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

For the Year Ended December 31, 2023

1 unchanged sentence

Insurance Mortgage Other Total

Total revenues $ 1,248,796 $ 70,246 $ 78,710 $ 1,397,752

Total expenses ( 1,180,646 ) ( 69,372 ) ( 47,307 ) ( 1,297,325 )

Corporate expenses — — — ( 46,416 )

Total revenue $ 1,593,070 $ 53,864 $ 2,097 $ 1,649,031

Total expense ( 1,463,254 ) ( 57,149 ) ( 5,361 ) ( 1,525,764 )

Corporate expense — — — ( 40,214 )

Income (loss) before taxes $ 129,816 $ ( 3,285 ) $ ( 3,264 ) $ 83,053

17 unchanged sentences

Insurance Mortgage Other Total

Total revenue $ 691,061 $ 112,165 $ 7,075 $ 810,301

Total expense ( 664,113 ) ( 81,063 ) ( 68,317 ) ( 813,493 )

Corporate expense — — — ( 35,660 )

Total revenues $ 984,130 $ 111,295 $ 105,089 $ 1,200,514

Total expenses ( 914,273 ) ( 82,888 ) ( 87,879 ) ( 1,085,040 )

Corporate expenses — — — ( 50,132 )

Income (loss) before taxes $ 69,857 $ 28,407 $ 17,210 $ 65,342

4 unchanged sentences

The Company conducts its operations primarily in the U.S.

w ith 8.8 %, 7.2 % and 5.2 % of total revenues generated overseas for the years ended December 31, 2022, 2021 and 2020, respectively.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The following table presents the reportable segments.

Tiptree Capital - Other and Corporate assets for the following periods:

with 6.0 %, 8.8 %, and 7.2 % of total revenues generated overseas for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table presents the reportable segments, Tiptree Capital - Other and Corporate assets for the following periods:

As of December 31, 2023 As of December 31, 2022

2 unchanged sentences

Total assets $ 4,835,685 $ 160,147 $ 126,624 $ 16,857 $ 5,139,313 $ 3,702,577 $ 156,122 $ 86,402 $ 94,462 $ 4,039,563

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

(6) Investments

17 unchanged sentences

Available for Sale Securities, at fair value

All of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2022 and 2021 are held by subsidiaries in the insurance segment.

A majority of the Company’s investments in Available for Sale Securities, at fair value, net of allowance for credit losses (AFS securities) as of December 31, 2023 and 2022 are held by subsidiaries in the insurance segment.

The following tables present the Company's investments in AFS securities:

18 unchanged sentences

Obligations of state and political subdivisions 54,390 ( 3 ) 4 ( 4,937 ) 49,454

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Corporate securities 176,187 ( 183 ) 1 ( 14,006 ) 161,999

3 unchanged sentences

Total $ 670,836 $ ( 190 ) $ 849 $ ( 59,515 ) $ 611,980

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

(1) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in net realized and unrealized gains (losses) as a credit loss on AFS securities.

3 unchanged sentences

December 31, 2023 December 31, 2022

Amortized Cost Fair Value Amortized Cost Fair Value

Amortized cost

Due in one year or less $ 247,613 $ 246,489 $ 52,265 $ 51,315

30 unchanged sentences

Asset backed securities 10,298 ( 3,642 ) 46 5,051 ( 604 ) 34

Certificates of deposit 1,339 — 2 — — —

Obligations of foreign governments 309 ( 1 ) 1 2,054 ( 263 ) 8

1 unchanged sentence

(1) Presented in whole numbers.

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities

Management believes that it is more likely than not that the Company will be able to hold the fixed maturity AFS securities that were in an unrealized loss position as of December 31, 2023 until full recovery of their amortized cost basis.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

that were in an unrealized loss position as of December 31, 2022 until full recovery of their amortized cost basis.

The table below presents a roll-forward of the activity in the allowance for credit losses on AFS securities by type as of December 31, 2023:

2 unchanged sentences

(Increase) in allowance for credit losses ( 3 ) ( 69 ) ( 1 ) ( 1 ) ( 74 )

Reduction in credit losses due to AFS securities sold during the year — 3 — 1 4

Gains from recoveries of amounts previously written off — 127 — 2 129

Balance at December 31, 2022 $ ( 3 ) $ ( 183 ) $ ( 1 ) $ ( 3 ) $ ( 190 )

Balance at December 31, 2021 $ — $ ( 241 ) $ — $ ( 4 ) $ ( 245 )

(Increase) in allowance for credit losses — ( 33 ) ( 10 ) — ( 43 )

Additions for AFS securities purchased with credit deterioration during the year — ( 2 ) — — ( 2 )

Reduction in credit losses due to AFS securities sold during the year — 1 — — 1

Gains from recoveries of amounts previously written off 2 144 1 3 150

4 unchanged sentences

For the Year Ended December 31,

2023 2022 2021

Net gains from recoveries (credit losses) on AFS securities 106 55 ( 245 )

12 unchanged sentences

Gross proceeds from sales of AFS securities $ 89,906 $ 63,066 $ 86,981

The following table presents the gross realized gains and gross realized losses from sales and redemptions of AFS securities:

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

The following table presents the gross realized gains and gross realized losses from sales and redemptions of AFS securities:

For the Year Ended December 31,

13 unchanged sentences

(1) The cost basis of Corporate loans was approximately $ 14,671 and $ 16,032 at December 31, 2023 and 2022, respectively.

(2) As of December 31, 2023, there were three mortgage loans held for sale that were 90 days or more past due.

As of December 31, 2022, there were no mortgage loans held for sale that were 90 days or more past due.

As of December 31, 2021, t here was one mortgage loan held for sale that was 90 days or more past due, with a fair value of $ 136 .

Equity Securities

1 unchanged sentence

Included within the equity securities balance are 16.98 million shares of Invesque as of December 31, 2023 and 2022, for which the Company has elected to apply the fair value option.

The following table presents information on the cost and fair value of the Company’s equity securities related to insurance operations and other Tiptree investing activity as of the following periods:

The following table presents information on the cost and fair value of the Company’s equity securities related to Insurance and Tiptree Capital as of the following periods:

As of December 31, 2023

2 unchanged sentences

Invesque $ 23,339 $ 719 $ 111,490 $ 3,442 $ 134,829 $ 4,161

Fixed income exchange traded fund 56,263 56,256 — — 56,263 56,256

Fixed income exchange traded funds 1,339 1,349 — — 1,339 1,349

Other equity securities 22,741 25,045 29,942 37,753 52,683 62,798

4 unchanged sentences

Invesque $ 23,339 $ 2,670 $ 111,491 $ 12,784 $ 134,830 $ 15,454

Fixed income exchange traded fund 52,176 53,154 — — 52,176 53,154

Fixed income exchange traded funds 56,263 56,256 — — 56,263 56,256

Other equity securities 15,773 14,066 — — 15,773 14,066

11 unchanged sentences

$ 62,081 $ — $ — $ 62,081

Vessels, net (2)

Debentures 25,648 — — 25,648

Investment in credit fund

11,830 — — 11,830

Other 7,201 3,931 397 11,529

5 unchanged sentences

$ 42,080 $ — $ — $ 42,080

Vessels, net (2)

— — 79,368 79,368

Debentures 23,853 — — 23,853

Trade claims 19,737 — — 19,737

Other 230 4,038 2,824 7,092

1 unchanged sentence

(1) The cost basis of corporate bonds was $ 59,315 and $ 45,630 as of December 31, 2023 and 2022, respectively.

(2) Net of accumulated depreciation of $ 118 and $ 13,059 as of December 31, 2022 and 2021, respectively.

Net Investment Income - Insurance

15 unchanged sentences

2023 2022 2021

Loans, at fair value (1)

Interest income from Loans, at fair value (1)

$ 3,111 $ 5,384 $ 7,184

Dividends from equity securities — — 2,533

Loan fee income (1)

Vessel related revenue 30,144 35,562 22,697

16,449 18,132 21,834

Other 4,703 30,144 35,562

Other investment income $ 24,263 $ 53,660 $ 64,580

(1) Includes income related to Loans at fair value classified as Held for Sale for the periods prior to July 1, 2022.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

(1) Includes income related to loans at fair value classified as Held for Sale for the periods prior to July 1, 2022.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

Net Realized and Unrealized Gains (Losses)

33 unchanged sentences

Total net realized and unrealized gains (losses) $ 24,736 $ 69,983 $ 151,350

(1) Relates to Loans, at fair value classified as Held for Sale.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

(7) Notes and Accounts Receivable, net

The following table presents the total notes and accounts receivable, net:

(1) Relates to Loans, at fair value classified as Held for Sale for the periods prior to July 1, 2022.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

(7) Notes and Accounts Receivable, net

The following table presents the total notes and accounts receivable, net:

As of December 31,

1 unchanged sentence

Retrospective commissions receivable 250,788 191,092

Notes receivable, net - premium financing program 121,419 89,788

Trust receivables 18,455 41,889

Notes receivable, net 134,131 121,419

Other receivables 39,306 47,789

8 unchanged sentences

(1) As of December 31, 2023 and 2022, there were $ 219 and $ 168 in balances classified as 90 days plus past due, respectively.

(8) Reinsurance Receivables

(8) Reinsurance Recoverable and Prepaid Reinsurance Premiums

The following table presents the effect of reinsurance on premiums written and earned by our insurance business for the following periods:

13 unchanged sentences

Total premiums earned $ 1,628,041 $ 904,915 $ 404,708 $ 1,127,834 35.9 %

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

Direct Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount - Assumed to Net

As of December 31, 2022

11 unchanged sentences

Total premiums earned $ 1,315,136 $ 720,795 $ 310,424 $ 904,765 34.3 %

As of December 31, 2021

Life insurance in force $ 5,921,446 $ 3,068,761 $ — $ 2,852,685

For the Year Ended December 31, 2021

Premiums written:

Life insurance $ 91,865 $ 46,920 $ 808 $ 45,753 1.8 %

Accident and health insurance 146,256 100,717 5,790 51,329 11.3 %

Property and liability insurance 1,141,979 558,471 214,150 797,658 26.8 %

Total premiums written $ 1,380,100 $ 706,108 $ 220,748 $ 894,740 24.7 %

Premiums earned:

Life insurance 74,151 39,881 1,194 35,464 3.4 %

Accident and health insurance 126,501 85,457 7,219 48,263 15.0 %

Property and liability insurance 902,439 504,785 204,171 601,825 33.9 %

Total premiums earned $ 1,103,091 $ 630,123 $ 212,584 $ 685,552 31.0 %

The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:

Direct Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount - Assumed to Net

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

The following table presents the components of policy and contract benefits, including the effect of reinsurance on losses and loss adjustment expenses (LAE) incurred:

Direct amount Ceded to other companies Assumed from other companies Net amount Percentage of amount - assumed to net

For the Year Ended December 31, 2023

23 unchanged sentences

(1) Member benefit claims are not covered by reinsurance.

The following table presents the components of the reinsurance receivables:

The following table presents the components of the reinsurance recoverable:

As of December 31,

Prepaid reinsurance premiums:

Life insurance (1)

$ 75,553 $ 73,478

Accident and health insurance (1)

81,718 81,521

Property and liability insurance 568,199 479,091

Total 725,470 634,090

Ceded claim reserves:

4 unchanged sentences

Other reinsurance settlements recoverable 505,599 183,521

Reinsurance receivables $ 1,176,090 $ 880,836

Total reinsurance recoverable

$ 953,886 $ 450,620

The following table presents the components of prepaid reinsurance premiums:

As of December 31,

Prepaid reinsurance premiums:

Life insurance (1)

$ 74,815 $ 75,553

Accident and health insurance (1)

76,440 81,718

Property and liability insurance 749,269 568,199

Total prepaid reinsurance premiums

$ 900,524 $ 725,470

(1) Including policyholder account balances ceded.

7 unchanged sentences

As of December 31, 2023, the non-affiliated reinsurers from whom our insurance business has the largest receivable balances were:

Allianz Global Corporate & Specialty SE (A.M.

A+ rated), Canada Life Assurance Company (A.M.

A+ rated), and Canada Life International Reinsurance (Bermuda) Corporation (A.M.

Accelerant Specialty Insurance Company (A.M.

A- rated), Allianz Global Corporate & Specialty SE (A.M.

A+ rated), and Homesite Insurance Company (A.M.

A majority of the related receivables from these reinsurers are collateralized by assets on hand and letters of credit;

receivable balances from authorized reinsurers do not require collateral.

Allianz Global Corporate & Specialty SE and Canada Life Assurance Company are authorized reinsurers in the states in which Fortegra’s U.S.

Allianz Global Corporate & Specialty SE is an authorized reinsurer in the states in which Fortegra’s U.S.

based insurance entities are domiciled.

The Company monitors authorization status and A.M.

The Company monitors authorization status, financial statements and A.M.

Best ratings of its reinsurers periodically.

27 unchanged sentences

Balance at December 31, 2021

Purchase accounting adjustments ( 133 ) — ( 133 )

$ 177,395 $ 1,708 $ 179,103

Goodwill acquired (1)

8,112 — 8,112

Foreign currency translation and other ( 607 ) — ( 607 )

Balance at December 31, 2022

16 unchanged sentences

Balance at December 31, 2021

$ 121,308 $ 1,450 $ 122,758

Intangible assets acquired (1)

10,964 604 11,568

Amortization expense ( 16,229 ) ( 126 ) ( 16,355 )

Foreign currency translation and other ( 956 ) — ( 956 )

Balance at December 31, 2022

3 unchanged sentences

Amortization expense (2)

( 16,921 ) ( 80 ) ( 17,001 )

Foreign currency translation and other 1,319 — 1,319

— ( 728 ) ( 728 )

Balance at December 31, 2023 $ 117,637 $ 1,120 $ 118,757

(1) See Note (3) Acquisitions for more information.

(2) Does not include foreign currency translation adjustment of $ 60 as of December 31, 2023.

The following table presents the amortization expense on finite-lived intangible assets for the following periods:

2 unchanged sentences

Amortization expense on intangible assets $ 17,001 $ 16,355 $ 15,581

For the year ended December 31, 2023, the Company partially impaired its other indefinite lived intangible assets as a result of oversupply of fishing licenses which has driven valuations lower.

For the years ended December 31, 2022 and 2021, no impairments were recorded on the Company’s intangible assets.

18 unchanged sentences

Interest Rate Lock Commitments

Derivatives for our mortgage business are primarily comprised of interest rate lock commitments (IRLCs), forward delivery contracts, and TBA mortgage backed securities.

The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position.

Our mortgage origination subsidiary issues IRLCs to their customers, which are carried at estimated fair value on the Company’s

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

consolidated balance sheets.

Derivatives for our mortgage business are primarily comprised of interest rate lock commitments (IRLCs), forward delivery contracts, and TBA mortgage-backed securities.

The fair value of these instruments is based upon valuation pricing models, which represent the amount the Company would expect to receive or pay at the balance sheet date to exit the position.

Our mortgage origination subsidiary issues IRLCs to their customers, which are carried at estimated fair value on the Company’s consolidated balance sheets.

The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan associated with the IRLC net of costs to produce and an expected pull through assumption.

4 unchanged sentences

The fair values of TBA mortgage-backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

The remaining derivatives are generally comprised of a combination of swaps and options, which are generally classified as Level 2 in the fair value hierarchy.

The remaining derivatives are generally comprised of a combination of swaps, currency forwards and options, which are generally classified as Level 2 in the fair value hierarchy.

In addition, the Fortegra Additional Warrant (Warburg) is a derivative liability and classified as Level 3 in the fair value hierarchy.

21 unchanged sentences

As of December 31, 2023

Corporate debt Insurance Other Corporate Total

Corporate debt Insurance Mortgage Total

Secured revolving credit agreements (1)

$ 130,000 $ — $ 130,000

Secured term credit agreement

Preferred trust securities (LIBOR + 4.10 %)

4 unchanged sentences

Asset based debt

Asset based revolving financing (LIBOR + 2.75 %) (2)

Asset based revolving financing (SOFR + 2.75 %)

67,138 — 67,138

Residential mortgage warehouse borrowings ( 1.75 % to 2.75 % over SOFR) (2)(3)

2.00 % to 3.00 % over BSBY) (3)(4)

— 54,350 54,350

1 unchanged sentence

Total debt, face value 357,138 54,350 411,488

Unamortized discount, net — — — —

Unamortized deferred financing costs ( 8,950 ) ( 127 ) ( 9,077 )

1 unchanged sentence

As of December 31, 2022

Corporate debt Insurance Other Corporate Total

Corporate debt Insurance Mortgage Total

Secured revolving credit agreements (1)

$ 2,160 $ — $ — $ 2,160

Secured term credit agreement (LIBOR + 6.75 %) (5)

— — 114,063 114,063

Preferred trust securities (LIBOR + 4.10 %)

6 unchanged sentences

60,628 — 60,628

Residential mortgage warehouse borrowings (LIBOR + 1.88 % to 3.00 %) (3)(4)

— 72,518 — 72,518

Vessel backed term loan (LIBOR + 4.75 %)

Residential mortgage warehouse borrowings ( 1.88 % to 2.50 % over SOFR;

2.00 % to 3.00 % over BSBY) (2)(3)

— 47,454 47,454

1 unchanged sentence

Total debt, face value 220,628 47,454 268,082

Unamortized discount, net — — ( 1,458 ) ( 1,458 )

Unamortized deferred financing costs ( 8,703 ) ( 13 ) ( 8,716 )

Total debt, net $ 211,925 $ 47,441 $ 259,366

(1) The secured credit agreements include separate tranches with multiple rate structures which are adjustable based on Fortegra’s senior leverage ratio, which as of December 31, 2022 was SOFR + 1.50 %.

(2) On January 31, 2023, the borrowing was amended to use SOFR as the reference rate.

See Note (24) Subsequent Events.

(3) Includes SOFR floor and BSBY floor o f 0.25 % and 0.50 %, r espectively, as of December 31, 2022.

(4) The weighted average coupon rate for residential mortgage warehouse borrowings was 6.31 % a nd 2.76 % at December 31, 2022 and 2021, respectively.

(5) Includes LIBOR floor o f 1 %.

(1) The secured credit agreements include separate tranches with multiple rate structures that are adjustable based on Fortegra’s senior leverage ratio, which as of December 31, 2023 and 2022 was SOFR + 1.50 %.

(2) As of December 31, 2023, included (i) a $ 50,000 line of credit at 1.75 %, 2.00 % and 2.50 % over the one month SOFR rate, and (ii) a $ 65,000 line of credit at 1.75 %, 2.25 % and 2.75 % over the one month SOFR rate, with a floor of 4.00 %.

The balance credit rate on the $ 50,000 line of credit was 25 basis points lower than the floor.

As of December 31, 2022, included (i) a $ 60,000 line of credit at 2.00 %, 2.50 % and 3.00 % over the BSBY rate with a BSBY floor of 0.5 % and (ii) a $ 50,000 line of credit at 1.875 %, 2.00 % and 2.50 % over the one month SOFR rate.

The balance credit rate on the $ 50,000 line of credit was 25 basis points lower than the floor.

(3) The weighted average coupon rate for residential mortgage warehouse borrowings was 7.15 % and 6.31 % at December 31, 2023 and 2022, respectively.

The following table presents the amount of interest expense the Company incurred on its debt for the following periods:

17 unchanged sentences

As of December 31, 2023 and 2022, a total of $ 130,000 and $ 0 , respectively, was outstanding under the revolving line of credit in our insurance business.

The maximum borrowing capacity under the agreements as of December 31, 2022 was $ 200,000 .

On October 21, 2022, Fortegra entered into a Second Amended and Restated Credit Agreement by and among Fortegra Financial and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the Fortegra Credit Agreement).

The maximum borrowing capacity under the agreements as of December 31, 2023 and 2022 was $ 200,000 .

On October 21, 2022, a subsidiary of Fortegra entered into a Second Amended and Restated Credit Agreement by and among Fortegra, and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the “Fortegra Credit Agreement”).

The Fortegra Credit Agreement provides for a $ 200,000 revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $ 25,000 for swing loans and matures on October 1, 2027.

Secured Term Credit Agreement

The remaining balance of the corporate secured term credit agreement was fully repaid during June 2022 in connection with the WP Transaction.

As of December 31, 2021, the maximum borrowing capacity and borrowings outstanding were $ 114,063 .

Junior Subordinated Notes

15 unchanged sentences

Asset Based Revolving Financing

On October 16, 2020, subsidiaries of Fortegra entered into a three year $ 75,000 secured credit agreement, which replaced the individual agreements in its premium finance and service contract finance businesses.

On October 16, 2020, subsidiaries of Fortegra entered into a three year $ 75,000 secured credit agreement, which replaced the individual agreements in its premium finance and warranty service contract finance businesses.

The borrowers can select from various borrowing and rate options under the agreement, as well the option to convert certain borrowings to term loans, if no default or event of default exists.

The obligations under the agreement are non-recourse to Fortegra and its other subsidiaries (other than borrowers and their subsidiaries).

As of December 31, 2022 and 2021, a total of $ 60,628 and $ 42,310 , respectively, was outstanding under the borrowing related to our premium finance and service contract finance offerings in our insurance business.

The agreement extends up to $ 20,000 for the Company’s premium finance business and up to $ 55,000 for its warranty service contract finance business, and is secured by substantially all of the assets of the borrowers thereunder.

The obligations under the agreement are non-recourse to The Fortegra Group and its subsidiaries (other than the borrowers and their subsidiaries).

On January 31, 2023, subsidiaries of Fortegra amended the asset based revolving financing to increase the revolving commitment to $ 100,000 and transition to SOFR.

On October 6, 2023, subsidiaries of Fortegra entered into a three-year $ 125 million secured credit agreement that amends and restates the prior credit agreement dated October 16, 2020.

The agreement extends the maturity date of the revolving credit facility from October 2023 to October 2026 and increases the total revolving credit commitments from $ 100 million to $ 125 million.

As of December 31, 2023 and 2022, a total of $ 67,138 and $ 60,628 , respectively, was outstanding under the borrowing related to our premium finance offerings in our insurance business.

Residential Mortgage Warehouse Borrowings

In March 2021, the $ 60,000 warehouse line of credit was renewed and the maturity date was extended from April 2021 to April 2022.

In April 2022, the $ 60,000 warehouse line of credit was renewed and the maturity date was extended from April 2022 to April 2023.

In January 2023, the $ 60,000 warehouse line of credit was renewed and the maturity date was extended from January 2023 to January 2024.

In July 2021, the $ 50,000 warehouse line of credit was renewed and the maturity date was extended from August 2021 to August 2022.

In August 2022, the $ 50,000 warehouse line of credit was renewed and the maturity date was extended from August 2022 to August 2023.

In January 2023, a $ 60,000 warehouse line of credit was renewed and the maturity date was extended from January 2023 to January 2024.

In June 2023, the Company received notification that the warehouse lending partners was exiting the warehouse lending market for this renewed line.

In October 2023, the line was terminated and paid in full as the provider exited the warehouse lending market.

The Company entered into a new $ 65,000 warehouse line of credit on September 20, 2023 with similar terms with a maturity date of August 2024.

As of December 31, 2023 and 2022, a total of $ 54,350 and $ 47,454 , respectively, was outstanding under such financing agreements.

Vessel-Backed Term Loan

The remaining balance of the vessel backed term loan was fully repaid at a discount during May 2022, for a net gain of $ 1,168 .

As of December 31, 2021, the maximum borrowing capacity and borrowings outstanding were $ 13,600 .

Debt Covenants

As of December 31, 2022, the Company was in compliance with the representations and covenants for its outstanding debt or obtained waivers for any events of non-compliance.

The remaining balance of the vessel backed term loan totaling $ 13,050 was fully repaid at a discount during May 2022, for a net gain of $ 1,168 during the year ended 2022.

(12) Fair Value of Financial Instruments

7 unchanged sentences

The Company’s fair value measurements are based primarily on a market approach, which utilizes prices and other relevant information generated by market transactions involving identical or comparable financial instruments.

Sources of inputs to the market approach include third-party pricing services, independent broker quotations and pricing matrices.

Management analyzes the third-party valuation methodologies and its related inputs to perform assessments to determine the appropriate level within the fair value hierarchy and to assess reliability of values.

Further, management has a process in place to review

Sources of inputs to

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

all changes in fair value that occurred during each measurement period.

the market approach include third-party pricing services, independent broker quotations and pricing matrices.

Further, management has a process in place to review all changes in fair value that occurred during each measurement period.

Any discrepancies or unusual observations are followed through to resolution through the source of the pricing as well as utilizing comparisons, if applicable, to alternate pricing sources.

31 unchanged sentences

Our mortgage origination subsidiaries issue IRLCs to their customers, which are carried at estimated fair value on the Company’s consolidated balance sheets.

The fair values of these commitments generally fall under Level 3 in the fair value hierarchy.

Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors.

For loans not locked with investors under a

The estimated fair values of these commitments are generally calculated by reference to the value of the underlying loan

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates.

associated with the IRLC net of costs to produce and an expected pull through assumption.

The fair values of these commitments generally fall under Level 3 in the fair value hierarchy.

Our mortgage origination subsidiaries manage their exposure by entering into forward delivery commitments with loan investors.

For loans not locked with investors under a forward delivery commitment, the Company enters into hedge instruments, primarily TBAs, to protect against movements in interest rates.

The fair values of TBA mortgage-backed securities and forward delivery contracts generally fall under Level 2 in the fair value hierarchy.

The remaining derivatives are generally comprised of a combination of swaps and options, which are generally classified as Level 2 in the fair value hierarchy.

The remaining derivatives are generally comprised of a combination of swaps, currency forwards and options, which are generally classified as Level 2 in the fair value hierarchy.

In addition, the Fortegra Additional Warrants (Warburg) are a derivative liability and classified as Level 3 in the fair value hierarchy.

1 unchanged sentence

Corporate Bonds

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is provided by a third-party investment manager, based on quoted market prices.

We perform internal price verification procedures monthly to ensure that the prices provided are reasonable.

Trade claims represent unsecured claims of bankrupt companies and are generally classified under Level 3 in the fair value hierarchy.

The fair value is determined using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, current and projected operating performance, and financing transactions subsequent to the acquisition of the investment.

The inputs are intended to reflect the assumptions a market participant would use in pricing the asset or liability.

Corporate bonds are generally classified under Level 2 in the fair value hierarchy and fair value is based on quoted market prices.

We perform internal price verification procedures to ensure that the prices provided are reasonable.

Securities Sold, Not Yet Purchased

10 unchanged sentences

As of December 31, 2023

Quoted prices in active markets

Level 1 Other significant

28 unchanged sentences

Total $ 62,306 $ 942,481 $ 61,565 $ 1,066,352

Securities sold, not yet purchased $ 10,263 $ 6,312 $ — $ 16,575

Derivative liabilities — 937 44 981

36 unchanged sentences

Derivative assets 7 608 3,652 4,267

Trade claims — — 19,737 19,737

Other — — 324 324

5 unchanged sentences

Derivative liabilities — 7,910 — 7,910

Fortegra Additional Warrants (Warburg) — — 5,291 5,291

Contingent consideration payable — — 2,904 2,904

1 unchanged sentence

(1) Included in other assets.

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

(2) Included in other liabilities and accrued expenses.

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

AND SUBSIDIARIES

4 unchanged sentences

The following table presents additional information about assets that are measured at fair value on a recurring basis for which the Company has utilized Level 3 inputs to determine fair value for the following periods:

For the Year Ended December 31,

For the Year Ended

Balance at January 1, $ 63,590 $ 61,443

9 unchanged sentences

Exchange of trade receivables for equity securities — 7,360

Transfer out of Level 3 ( 41 ) —

Conversions to real estate owned 81 —

Balance at December 31, $ 61,565 $ 63,590

$ 63,590 $ 61,443

Changes in unrealized gains (losses) included in earnings related to assets still held at period end $ ( 4,824 ) $ ( 3,870 )

1 unchanged sentence

The following table presents the range and weighted average (WA) used to develop significant unobservable inputs for the fair value measurements of Level 3 assets and liabilities:

As of December 31, As of December 31,

2022 2021 Valuation technique Unobservable input(s)

As of December 31, Valuation technique Unobservable input(s) As of December 31,

2023 2022 2023 2022

Assets Fair value Range WA (1)

3 unchanged sentences

Prepayment speed 3 % to 82 % 9 % 4 % to 85 % 9 %

Trade claims — 19,737 Internal model Plan projected recovery rate N/A 15 % to 18 % 17 %

Equity securities 6,837 — Internal model Forecast EBITDAR $ 728 to $ 1,039 N/A N/A

Corporate loans and related receivables 11,208 — Internal model EBITDA $ 170,000 N/A N/A

Equity securities 7,726 6,837 Internal model Forecast EBITDAR $ 1,039,000 to $ 1,422,000 N/A $ 728,000 to $ 1,039,000 N/A

Corporate loans 9,167 11,208 External/Internal model Bid marks/EBITDA $ 71 to $ 75 $ 73 $ 170,000 N/A

Total $ 61,547 $ 63,123

Fortegra Additional Warrants (Warburg) $ 5,291 $ — External model Discount rate 3 % to 5 % 3.3 % N/A

Implied Equity Volatility 40 % to 50 % 45 %

Contingent consideration payable 2,904 — Cash Flow model Forecast Cash EBITDA $ 2,500 to $ 4,000 N/A N/A

Cash Flow model Forecast Underwriting EBITDA $ — to $ 2,000 N/A N/A

Fortegra Additional Warrants (Warburg) $ 3,522 $ 5,291 External Model Discount rate 3 % to 5 % 3.8 % 3 % to 5 % 3.3 %

Implied Equity Volatility 40 % to 50 % 45 % 40 % to 50 % 45 %

Contingent consideration payable 2,604 2,904 Cash Flow model Forecast Cash EBITDA $ 2,500 to $ 4,000 N/A $ 2,500 to $ 4,000 N/A

Forecast Underwriting EBITDA $ — to $ 2,000 N/A $ — to $ 2,000 N/A

Total $ 6,126 $ 8,195

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities that are not recorded at fair value and their respective levels within the fair value hierarchy:

6 unchanged sentences

Total assets $ 159,779 $ 159,779 $ 145,272 $ 145,272

Debt, net 3 $ 262,932 $ 268,082 3 $ 419,599 $ 403,193

Debt 3 $ 406,801 $ 411,488 3 $ 262,932 $ 268,082

Total liabilities $ 406,801 $ 411,488 $ 262,932 $ 268,082

6 unchanged sentences

See Note (7) Notes and Accounts Receivable, net.

The carrying value, which approximates fair value of LIBOR based debt, represents the total debt balance at face value excluding the unamortized discount.

The carrying value, which approximates fair value of floating rate debt, represents the total debt balance at face value excluding the unamortized discount.

The fair value of the Junior subordinated notes is determined based on dealer quotes.

43 unchanged sentences

$ 844,848 $ 567,193

The following schedule reconciles the total short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statements of operations, excluding the amount for member benefit claims:

The following schedule reconciles the total amount of losses incurred on short duration contracts per the table above to the amount of total losses incurred as presented in the consolidated statements of operations, excluding the amount for member benefit claims:

For the Year Ended December 31,

4 unchanged sentences

Total losses incurred $ 482,506 $ 361,601 $ 253,473

During the year ended December 31, 2022, the Company experienced favorable prior year development of $ 858 , primarily as a result of lower-than-expected claim severity in our commercial lines business.

During the year ended December 31, 2021, the Company experienced unfavorable prior year development of $ 2,606 , primarily as a result of higher-than-expected claim severity from business written by a small group of producers of our personal and commercial lines of business.

Management considers the prior year development for each of these years to be insignificant when considered in the context of our annual earned premiums, net as well as our net losses and loss adjustment expenses and member benefit claims expenses.

We analyze our development on a quarterly basis and given the short duration nature of our products, favorable or adverse development emerges quickly and allows for timely reserve strengthening, if necessary, or modifications to our product pricing or offerings.

The favorable prior year development of $ 858 in 2022 represented 1.3 % of our insurance business pre-tax income of $ 68,150 and 0.6 % of the opening net liability for losses and loss adjustment expenses of

During the year ended December 31, 2023, the Company experienced favorable prior year development of $ 11,187 , primarily driven by lower-than-expected claims paid development in our commercial lines of business for the 2018 and 2020 accident years.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

$ 154,412 , as of January 1, 2022.

The unfavorable prior year development of $ 2,606 in 2021 represented 3.7 % of our insurance business pretax income of $ 69,857 , and 3.1 % of the opening net liability for losses and loss adjustment expenses of $ 83,945 , as of January 1, 2021.

personal and commercial lines of business.

The favorable prior year development of $ 11,187 in the year ended December 31, 2023 represented 8.6 % of our insurance business income before taxes of $ 129,816 and 3.8 % of the opening net liability for losses and loss adjustment expenses of $ 298,057 , as of January 1, 2023.

The favorable prior year development of $ 858 in the year ended December 31, 2022 represented 1.3 % of our insurance business income before taxes of $ 68,150 , and 0.6 % of the opening net liability for losses and loss adjustment expenses of $ 154,412 , as of January 1, 2022.

The unfavorable prior year development of $ 2,606 in 2021 represented 3.7 % of pretax income of $ 69,857 and 3.1 % of the opening net liability for losses and loss adjustment expenses of $ 83,945 , as of January 1, 2021.

Based upon our internal analysis and our review of the statement of actuarial opinions provided by our actuarial consultants, we believe that the amounts recorded for policy liabilities and unpaid claims reasonably represent the amount necessary to pay all claims and related expenses which may arise from incidents that have occurred as of the balance sheet date.

21 unchanged sentences

2022 361,462 358,434 $ 44,697 542

2023 493,187 $ 179,443 539

Total $ 1,843,333

9 unchanged sentences

2021 174,334 224,193 234,328

2022 165,710 299,064

Total $ 1,449,878

25 unchanged sentences

(14) Revenue from Contracts with Customers

The Company’s revenues from insurance and contractual and liability insurance operations are primarily accounted for under Financial Services-Insurance (Topic 944) that are not within the scope of Revenue for Contracts with Customers (Topic 606).

The Company’s revenues from insurance and contractual and liability insurance operations are primarily accounted for under Financial Services-Insurance (ASC 944) that are not within the scope of Revenue for Contracts with Customers (ASC 606).

The Company’s remaining revenues that are within the scope of Topic 606 are primarily comprised of revenues from contracts with customers for monthly membership dues for motor clubs, monthly administration fees for services provided for premiums, claims and reinsurance processing revenues, vehicle service contracts, vessel related revenue and revenues for household goods and appliances service contracts (collectively, remaining contracts).

5 unchanged sentences

Motor club revenue 46,394 53,346 41,634

Vessel related revenue 30,144 35,562 22,697

Other 5,305 36,060 53,346

1 unchanged sentence

Service and Administrative Fees

Service fee revenue is recognized as the services are performed.

These services include fulfillment, software development, and claims handling for our customers.

Management reviews the financial results under each significant contract on a monthly basis.

Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined probable.

Administrative fee revenue includes the administration of premium associated with our producers and PORCs.

In addition, we also earn fee revenue from debt cancellation, motor club, and auto and consumer goods service contracts.

Related administrative fee revenue is recognized consistent with the earnings recognition pattern of the underlying insurance policies, debt cancellation contracts and motor club memberships being administered, using Rule of 78's, modified Rule of 78's, pro rata, or other methods as appropriate for the contract.

Service and administrative fees are generated from non-insurance programs including warranty service contracts, motor clubs and other services.

Service and administrative fees are recognized consistent with the earnings recognition pattern of the underlying policies, debt cancellation contracts and motor club memberships being administered, using pro rata, Rule of 78’s, modified Rule of 78’s, or other methods as appropriate for the contract.

Management selects the appropriate method based on available information, and periodically reviews the selections as additional information becomes available.

Management reviews the financial results under each significant contract on a monthly basis.

Any losses that may occur due to a specific contract would be recognized in the period in which the loss is determined to be probable.

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less.

The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of December 31, 2023.

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less.

The timing of our revenue recognition may differ from the timing of payment by our customers.

1 unchanged sentence

Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.

Vessel Related Revenue

The Company generates its revenues from charterers for the charter hire of its vessels.

Vessels are chartered under time or voyage charters, where a contract is entered into for the use of a vessel for a specific voyage or a specific period of time and at a specified daily charter rate.

Charter revenues are recognized as earned on the straight-line basis over the term of the charter as service is provided.

Revenue is recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured.

Unearned revenue includes revenue received prior to the balance sheet date relating to services to be rendered after the balance sheet date.

The following table presents the activity in the significant deferred assets and liabilities related to revenue from contracts with customers for the following period:

11 unchanged sentences

Motor club revenue 22,949 45,122 46,394 21,677

— 3,953 3,953 —

Total $ 604,831 $ 362,278 $ 340,007 $ 627,102

3 unchanged sentences

As of December 31,

Accrued investment income $ 6,269 $ 3,919

Loans eligible for repurchase 32,183 32,136

Mortgage servicing rights 40,836 41,426

Right of use asset - Operating leases (1)

Right of use assets - operating leases (1)

31,469 31,499

4 unchanged sentences

Total other assets $ 165,515 $ 172,143

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

(1) See Note (21) Commitments and Contingencies for additional information.

3 unchanged sentences

Depreciation expense related to furniture, fixtures and equipment $ 6,370 $ 3,954 $ 3,621

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

Other Liabilities and Accrued Expenses

4 unchanged sentences

Deferred tax liabilities, net 139,845 90,391

Operating lease liability (1)

Operating lease liabilities (1)

40,403 38,031

1 unchanged sentence

Securities sold, not yet purchased — 16,575

Derivative liabilities 4,503 13,201

Due to broker/trustee 17,054 39

Other 18,460 15,240

9 unchanged sentences

$ 24,263 $ 53,660 $ 64,580

Financing interest income

16,035 12,290 7,592

18,605 10,235 1,235

Total other revenue $ 58,903 $ 76,185 $ 73,407

10 unchanged sentences

Rent and related 15,871 17,635 17,009

Operating expenses from vessels 6,418 13,797 13,210

Other 17,284 22,213 23,449

7 unchanged sentences

The Board of Directors authorized the Company to make repurchases of up to $ 20,000 of shares of the Company’s outstanding common stock in the aggregate, at the discretion of the Company's Executive Committee.

During the year ended December 31, 2022, 165,040 shares were repurchased for a weighted average price per share of $ 10.44 .

There were no shares repurchased during the year ended December 31, 2023.

As of December 31, 2023, the remaining repurchase authorization was $ 11,945 .

1 unchanged sentence

In the year ended December 31, 2022, warrant s were exercised for 1,999,989 shares of Tiptree common stock, with 1,979,325 warrants exercised for $ 13,724 in cash, and 20,664 exercised cashless.

As of December 31, 2022, there were no warrants for shares of Tiptree common stock outstanding.

As of December 31, 2023 and 2022, there were no warrants for shares of Tiptree common stock outstanding.

The Company declared cash dividends per share for the following periods presented below:

10 unchanged sentences

On that date, Fortegra converted to a Delaware corporation and Warburg made a $ 200,000 investment in Fortegra in exchange for Fortegra Common Stock, Fortegra Preferred Stock, Fortegra Warrants and Fortegra Additional Warrants.

Also, in connection with the closing of the Warburg Transaction, Tiptree was issued Fortegra Additional Warrants, and management’s interests in LOTS Intermediate were exchanged for interests in Fortegra.

Also, in connection with the closing of the WP Transaction, Tiptree was issued Fortegra Additional Warrants, and management’s interests in LOTS Intermediate were exchanged for interests in Fortegra.

As of December 31, 2022, Fortegra was owned approximately 79.5 % by Tiptree Holdings, 17.4 % by Warburg and 3.1 % by management and directors of Fortegra.

As a result of the WP Transaction, the Company recorded an increase of $ 167,008 to total stockholders’ equity of which $ 48,285 impacted Tiptree Inc.

As a result of the WP Transaction, for the year ended December 31, 2022, the Company recorded an increase of $ 167,008 to total stockholders’ equity of which $ 48,285 impacted Tiptree Inc.

stockholders’ equity and $ 118,723 impacted non-controlling interests.

2 unchanged sentences

Additionally, the Company recognized $ 9,059 of net income attributable to non-controlling interests during the year ended December 31, 2022 due to the increase in non-controlling interest.

As of December 31, 2023, Fortegra was owned approximate ly 79.5 % by Tiptree Holdings, 17.5 % by Warburg and 3.0 % by management and directors of Fortegra.

Fortegra Preferred Stock

2 unchanged sentences

Any quarterly dividend may be paid in cash, at Fortegra’s option.

For the year ended December 31, 2022, the Company declared $ 3,384 of cash dividends, of which $ 2,016 was paid in cash and $ 1,368 was accrued in other liabilities and accrued expenses.

See Note (15) Other Assets and Other Liabilities and Accrued Expenses.

For the years ended December 31, 2023 and 2022, cash dividends declared were $ 6,400 and $ 3,384 , respectively .

AND SUBSIDIARIES

27 unchanged sentences

insurance subsidiaries prepare financial statements in accordance with Statutory Accounting Principles (SAP) prescribed or permitted by the insurance departments of their states of domicile.

Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (the NAIC) as well as state laws, regulations and administrative rules.

Prescribed SAP includes the Accounting Practices and Procedures Manual of the NAIC as well as state laws, regulations and administrative rules.

Statutory Capital and Surplus

8 unchanged sentences

(in thousands, except share data)

Under the National Association of Insurance Commissioners Risk-Based Capital Act of 1995, a company's Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items.

Under the NAIC Risk-Based Capital Act of 1995, a company's Risk-Based Capital (RBC) is calculated by applying certain risk factors to various asset, claim and reserve items.

If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required.

13 unchanged sentences

The Company eliminates all dividends from its subsidiaries in the consolidated financial statements.

There were no dividends paid to the Company by its U.S.

domiciled insurance company subsidiaries for the years ended December 31, 2022 and 2021.

The following table presents the combined amount available for ordinary dividends of the Company's U.S.

The following table presents the dividends paid to the Company by its U.S domiciled insurance company subsidiaries and the combined amount available for ordinary dividends of the Company's U.S.

domiciled insurance company subsidiaries for the following periods:

As of December 31,

For the Year Ended

Ordinary dividends $ 27,114 $ —

Total dividends $ 27,114 $ —

2023 December 31, 2022

Amount available for ordinary dividends of the Company's insurance company subsidiaries $ 24,327 $ 35,145

2 unchanged sentences

The Company may seek regulatory approval to pay dividends in excess of this permitted amount, but there can be no assurance that the Company would receive regulatory approval if sought.

(18) Accumulated Other Comprehensive Income (Loss)

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

(18) Accumulated Other Comprehensive Income (Loss) (AOCI)

The following table presents the activity of AFS securities in AOCI, net of tax, for the following periods:

4 unchanged sentences

Amounts reclassified from AOCI ( 843 ) — ( 843 ) — ( 843 )

WP Transaction — — — 7,193 7,193

OCI ( 40,357 ) ( 7,311 ) ( 47,668 ) 10,924 ( 36,744 )

3 unchanged sentences

Amounts reclassified from AOCI 2,182 — 2,182 — 2,182

WP Transaction — — — 7,193 7,193

OCI 10,898 7,213 18,111 ( 4,755 ) 13,356

Balance at December 31, 2023 $ ( 32,145 ) $ ( 98 ) $ ( 32,243 ) $ 6,170 $ ( 26,073 )

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

The following table presents the reclassification adjustments out of AOCI included in net income and the impacted line items on the consolidated statement of operations for the following periods:

5 unchanged sentences

(19) Stock Based Compensation

2017 Omnibus Incentive Plan

The Company adopted the Tiptree 2017 Omnibus Incentive Plan (2017 Equity Plan) on June 6, 2017, which permits the grant of restricted stock units (RSUs), stock, and stock options up to a maximum o f 6,100,000 sh ares of common stock.

The general purpose of the 2017 Equity Plan is to attract, motivate and retain selected employees and directors for the Company and its subsidiaries, to provide them with incentives and rewards for performance and to better align their interests with the interests of the Company’s stockholders.

Unless otherwise extended, the 2017 Equity Plan terminates automatically on June 6, 2027.

Amendment No.

1 to the 2017 Equity Plan, to increase the aggregate shares issuable under the pl an by 4,000,000 shares, was approved by stockholders on June 7, 2022.

The table below summarizes changes to the issuances under the Company’s 2017 Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:

Tiptree Equity Plans

The table below summarizes changes to the issuances under the Company’s 2017 Omnibus Incentive Equity Plan for the periods indicated, excluding awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock:

2017 Equity Plan Number of shares

1 unchanged sentence

RSU, stock and option awards granted ( 61,713 )

Available for issuance as of December 31, 2020 3,788,417

RSU, stock and option awards granted ( 61,713 )

PRSU awards vested ( 215,583 )

Forfeited ( 215,583 )

Exchanged for vested subsidiary awards ( 1,166,307 )

6 unchanged sentences

Available for issuance as of December 31, 2022

(1) Excludes awards granted under the Company’s subsidiary incentive plans that are exchangeable for Tiptree common stock.

Restricted Stock Units and Stock Awards

Tiptree Corporate Incentive Plans

The Company values RSUs at their grant-date fair value as measured by Tiptree’s common stock price.

Generally, the Tiptree RSUs vest and become non-forfeitable either (i) after the third anniversary, or (ii) with respect to one-third of Tiptree shares granted on each of the first, second and third year anniversaries of the date of the grant.

RSU awards are expensed using the straight-line method over the requisite service period.

The RSUs granted after 2019 include a retirement provision and are amortized over the lesser of the service condition or expected retirement date.

RSU, stock and option awards granted ( 111,427 )

Available for issuance as of December 31, 2023

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

Stock Awards - Directors’ Compensation

The Company values the stock awards at their issuance-date fair value as measured by Tiptree’s common stock price.

Upon issuance, the awards are deemed to be granted and immediately vested.

The following table presents changes to the issuances of RSUs and stock awards under the 2017 Equity Plan for the periods indicated:

Restricted Stock Units (RSUs) and Stock Awards

The Company values RSUs at their grant-date fair value as measured by Tiptree’s common stock price.

RSU awards are expensed using the straight-line method over the requisite service period.

The RSUs granted after 2019 include a retirement provision and are amortized over the lesser of the service condition or expected retirement date.

Stock awards issued as director compensation are deemed to be granted and immediately vested upon issuance.

The following table presents changes to the issuances of RSUs and stock awards under the 2017 Omnibus Incentive Equity Plan for the periods indicated:

Number of shares issuable Weighted average grant date fair value

2 unchanged sentences

Unvested units as of December 31, 2021 599,012 $ 6.59

247,093 12.83

Vested ( 339,822 ) 7.13

Forfeited ( 5,276 ) 10.10

Unvested units as of December 31, 2022

2 unchanged sentences

Vested ( 359,203 ) 8.38

Forfeited ( 5,276 ) 10.10

Unvested units as of December 31, 2023 (1)

253,231 $ 14.25

(1) Includes 62,940 shares that vest ratably over two years and 108,418 and 81,874 shares that cliff vest in 2025 and 2026, respectively.

The following tables present the detail of the granted and vested RSUs and stock awards for the periods indicated:

3 unchanged sentences

81,874 207,576 — Employees 329,650 300,305 354,133

207,576 — 469,257 Employees 300,305 354,133 474,721

Total Granted 111,427 247,093 61,713 Total Vested 359,203 339,822 415,846

1 unchanged sentence

Net Vested 315,881 292,548 381,018

(1) Includes 94,410 shares that vest ratably over three years and 113,166 shares that cliff vest in 2025 for the year ended December 31, 2022.

Tiptree Senior Management Incentive Plan

8 unchanged sentences

Original Tiptree Share Price Target Number of PRSUs that Vest

$ 45 1,033,333

$ 60 1,291,667

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

$ 45 1,033,333

$ 60 1,291,667

Upon vesting, the Company will issue shares, or if shares are not available under the 2017 Equity Plan, then the Company may in its sole discretion instead deliver cash equal to the fair market value of the underlying shares.

As of December 31, 2021, the Company did not have sufficient shares available in the 2017 Equity Plan to settle the PRSUs awarded;

as such, the PRSUs were classified as liability awards and were remeasured at each subsequent reporting date, and expensed using the straight-line method over the requisite service period.

On June 7, 2022, the Board of Directors authorized additional shares, and the Company now has sufficient shares available in the 2017 Equity Plan to settle the PRSUs awarded.

As such, the PRSUs were valued on June 7, 2022, and converted to equity awards on that date, and will be expensed using the straight-line method over the remaining derived service period.

The fair value of the PRSUs was estimated using a Black-Scholes-Merton option pricing formula embedded within a Monte Carlo model used to simulate the future stock prices of the Company, which assumes that the market requirement is achieved.

2 unchanged sentences

The current quarterly dividend rates in effect as of the reporting date are used to calculate a spot dividend yield for use in the model.

The following table presents the assumptions used to remeasure the fair value of the PRSUs issued in 2021 as of June 7, 2022, when they were converted to equity awards.

The following table presents the assumptions used to measure the fair value of the PRSUs as of June 7, 2022, when they were converted to equity awards.

Valuation Input Assumption

4 unchanged sentences

Expected term (years) 6

Subsidiary Incentive Plans

Stock Option Awards

Between 2016 and 2020, option awards were granted to the Executive Committee with an exercise price equal to the fair market value of our common stock on the date of grant.

The option awards have a 10-year term and are subject to the recipient’s continuous service, a market requirement, and vest one third on each of the three , four , and five-year anniversaries of the grant date.

As of December 31, 2023, the market requirement for all outstanding options has been achieved.

There were no stock option awards granted in 2022 or 2023.

The following table presents the Company's stock option activity for the current period:

Options outstanding Weighted average exercise price (in dollars per stock option) Weighted average grant date value (in dollars per stock option) Options exercisable

Balance, December 31, 2022

1,675,514 $ 6.50 $ 2.30 1,018,805

Balance, December 31, 2023

1,583,873 $ 6.51 $ 2.25 1,225,083

Weighted average remaining contractual term at December 31, 2023 (in years)

Subsidiary Equity Plans

Certain of the Company’s subsidiaries have established incentive plans under which they are authorized to issue equity of those subsidiaries to certain of their employees.

Such awards are accounted for as equity.

Such awards are accounted for as equity unless otherwise noted.

These awards are subject to performance-vesting criteria based on the performance of the subsidiary (performance vesting awards) and time-vesting subject to continued employment (time vesting awards).

Following the service period, certain vested awards may be exchanged at fair market value, at the option of the holder, for Tiptree common stock under the 2017 Equity Plan.

The service period for certain grants has been achieved and those vested subsidiary awards are currently eligible for exchange.

The Company has the option, but not the obligation to settle the exchange right in cash.

Fortegra Equity Incentive Plan

Fortegra adopted the 2022 Equity Incentive Plan (“Fortegra Plan”) on June 21, 2022, which permits the grant of RSUs, stock based awards and options up to 7.2 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock), of which the substantial majority is expected to be delivered in options.

As of December 31, 2023, time vesting RSUs and time and performance vesting options representing approximately 5.3 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock) have been granted and remain unvested.

The general purpose of the Fortegra Plan is to attract, motivate and retain selected employees of Fortegra, to provide them with incentives and rewards for performance and to

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2023

(in thousands, except share data)

better align their interests with those of Fortegra’s stockholders.

Unless otherwise extended, the Fortegra Plan terminates automatically on June 21, 2032.

The awards under the Fortegra Plan are not exchangeable for Tiptree common stock.

In May 2023 and November 2023, Fortegra granted management options with a strike price equal to the per share price on the date of the WP Transaction, delivered in equal portions of time and performance vested grants equal to approximately 5.0 % of Fortegra Common Stock (assuming cash exercise and after conversion of the Fortegra Preferred Stock).

The time vested options vest in equal parts over five years and expire on the ten year anniversary of the grant date.

The performance vested options vest based on specific internal rate of return targets determined at the time of a change of control of Fortegra or sale by Warburg of more than 50 % of its Fortegra securities (on an as converted basis) acquired in 2022.

The fair value option grants were estimated on the date of grant using a Black-Scholes Merton option pricing formula embedded within a Monte Carlo model used to simulate the future value of Fortegra Common Stock, which assumes the market requirement is achieved.

Key assumptions used in the model were a historical volatility of 45.0 %, a risk free rate of 3.7 %, no dividend yield and an expected term of 4.2 years.

In May 2023, Fortegra granted time vesting RSUs equal to approximately 0.1 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock).

The RSUs include a retirement provision and are amortized over the lesser of the service condition or expected retirement date.

In May 2023 and November 2023, Fortegra granted performance based restricted stock units (Fortegra PRSUs) that vest based on the achievement of specified gross written premium volume targets and underwriting ratios for selected specialty insurance lines written in 2024.

Upon vesting, the Fortegra PRSUs entitle recipients to participate in an aggregate pool of between $ 5,000 and $ 20,000 payable in shares of Fortegra.

The Fortegra PRSUs are accounted for as liability awards and were unvested as of December 31, 2023.

The following table presents changes to the issuances of subsidiary awards under the subsidiary incentive plans for the periods indicated:

9 unchanged sentences

Unvested balance as of December 31, 2022

Granted 19,930

Vested ( 808 )

Performance assumption adjustment 95

Unvested balance as of December 31, 2023

3 unchanged sentences

(in thousands, except share data)

The net vested balance of subsidiary awards eligible for exchange as of December 31, 2022 translates to 87,052 shares of Tiptree common stock.

Stock Option Awards

Tiptree Corporate Incentive Plans

Option awards have been granted to the Executive Committee with an exercise price equal to the fair market value of our common stock on the date of grant.

During the year ended December 31, 2021, the market requirement for all outstanding options was achieved.

There were no stock option awards granted in 2022 or 2021.

The following table presents the Company's stock option activity for the current period:

Options outstanding Weighted average exercise price (in dollars per stock option) Weighted average grant date value (in dollars per stock option) Options exercisable

Balance, December 31, 2021

1,715,619 $ 6.49 $ 2.29 712,542

Balance, December 31, 2022

1,675,514 $ 6.50 $ 2.30 1,018,805

Weighted average remaining contractual term at December 31, 2022 (in years)

Fortegra Equity Incentive Plan

Fortegra adopted the 2022 Equity Incentive Plan (“Fortegra Plan”) on June 21, 2022, which permits the grant of RSUs, stock based awards and options up to approximately 7 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock), of which the substantial majority is expected to be delivered in options.

The general purpose of the Fortegra Plan is to attract, motivate and retain selected employees of Fortegra, to provide them with incentives and rewards for performance and to better align their interests with those of Fortegra’s stockholders.

Unless otherwise extended, the Fortegra Plan terminates automatically on June 21, 2032.

The awards under the Fortegra Plan are not exchangeable for Tiptree common stock.

As of December 31, 2022, time vesting RSUs and options equal to approximately 0.4 % of Fortegra Common Stock (assuming conversion of the Fortegra Preferred Stock) have been granted under the Fortegra Plan.

The unvested RSUs were exchanged for prior RSUs granted to management of Fortegra under the LOTS Intermediate Co.

Restricted Stock Unit Program.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2022

(in thousands, except share data)

Stock Based Compensation Expense

12 unchanged sentences

Weighted - average recognition period (in years) 2.2 0.8 1.0

(1) Includes $ 105 of unrecognized compensation cost related to stock options at The Fortegra Group that vest ratably over three years .

(1) Includes unrecognized compensation cost of $ 17,031 related to stock options, $ 779 related to RSUs, and $ 583 related to PRSUs at The Fortegra Group.

(20) Income Taxes

15 unchanged sentences

The WP Transaction, along with Fortegra management’s ownership, reduced Tiptree’s ownership in Fortegra below 80% such that, while still consolidated for GAAP financial reporting purposes, Fortegra will no longer be included in the consolidated tax return group with Tiptree.

Tiptree has recorded deferred tax liabilities related to the basis difference in Tiptree’s investment in Fortegra as of December 31, 2022.

Tiptree recorded deferred tax liabilities related to the basis difference in Tiptree’s investment in Fortegra as of December 31, 2022.

This deferred tax liability represents the tax that would be due, before consideration of loss carryforwards, if Tiptree were to sell any of its Fortegra stock at its carrying value on the Company’s balance sheet.

The deferred tax liability as of December 31, 2022 relating to the WP Transaction is $ 39,970 , of which $ 14,064 was recorded directly in stockholders’ equity, a benefit of $ 2,424 in other comprehensive income and $ 28,330 as a provision for income taxes in the consolidated statements of operations for the year ended December 31, 2022.

The deferred tax liability as of December 31, 2022 relating to the WP Transaction was $ 39,970 , of which $ 14,064 was recorded directly in stockholders’ equity, a benefit of $ 2,424 in other comprehensive income and $ 28,330 as a provision for income taxes in the consolidated statements of operations for the year ended December 31, 2022.

Additional one time impacts from the transaction caused $ 4,803 of expense, leading to $ 33,133 of expense in the statement of operations.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted, implementing numerous changes to tax law including temporary changes regarding the prior and future utilization of net operating losses.

During the year ended December 31, 2020, the Company recorded a $ 7,293 tax benefit related to the ability to carryback net operating losses to prior periods under the CARES Act, resulting in a decrease of our deferred tax asset of $ 16,795 and an increase to our current receivable of $ 24,088 .

For the year ended December 31, 2023, the deferred tax liability relating to Fortegra was $ 61,673 , an increase of $ 21,703 , of which $ 3,819 of expense was recorded in OCI, $ 1,217 of benefit was recorded directly in stockholders’ equity, and $ 19,101 expense was recorded as a provision for income taxes.

Excluding the impact of these deferred taxes, the effective tax rates for the years ended December 31, 2023 and 2022, were 28.8 % and 32.1 %, respectively.

AND SUBSIDIARIES

12 unchanged sentences

3,376 3,292 4,518

Effect of CARES Act refund claims — — ( 7,293 )

Effect of tax deconsolidation of subsidiaries 19,101 33,133 —

12 unchanged sentences

The effective tax rate for the year ended December 31, 2022 is higher than the U.S.

statutory income tax rate of 21.0 % primarily from the impact of expected refunds arising from the CARES Act.

statutory income tax rate of 21.0 % primarily from the impact of the tax deconsolidation of Fortegra and non-deductible compensation.

For the year ended December 31, 2021, the Company’s effective tax rate on losses was equal to 32.6 %.

The effective tax rate for the year ended December 31, 2021 is higher than the U.S.

statutory income tax rate of 21.0 % primarily due to the return-to-provision, as well as ongoing state and foreign taxes.

statutory income tax rate of 21.0 % primarily from the impact of expected refunds arising from the CARES Act.

The table below presents the components of the Company’s net deferred tax assets and liabilities as of the respective balance sheet dates:

10 unchanged sentences

Deferred revenue 15,655 15,700

Claims reserve

Lease liability

Other deferred tax assets 3,311 1,966

8 unchanged sentences

Advanced commissions 48,975 43,961

Right of use asset 6,236 5,531

Intangibles 18,394 14,284

3 unchanged sentences

$ 139,845 $ 90,391

(1) Includes $ 659 classified as held for sale as of December 31, 2021.

See Note (4) Dispositions and Assets and Liabilities Held for Sale.

As of January 2016, Tiptree established a U.S.

federal consolidated income tax group and files on a consolidated basis, with limited exceptions.

federal consolidated income tax group and filed on a consolidated basis, with limited exceptions.

As of June 2022, Fortegra and its subsidiaries are no longer part of Tiptree’s consolidated income tax group and formed their own tax consolidation group.

Tiptree’s consolidated group, and certain subsidiaries on a separate basis, file returns in various state jurisdictions, and as such may have state tax obligations.

Tiptree’s consolidated group, and certain subsidiaries on a separate basis, filed returns in various state jurisdictions, and as such may have state tax obligations.

Additionally, as needed the Company will take all necessary steps to comply with any income tax withholding requirements.

22 unchanged sentences

All leases are office space leases and are classified as operating leases that expire through 2033.

Some of our office leases include the option to extend for up to five years or less at management’s discretion.

Some of our office leases include the option to extend for up to 5 years or less at management’s discretion.

Such extension options were not included in the measurement of the lease liability.

15 unchanged sentences

present value adjustment 18,969

(1) Does not include lease incentive receivable of $ 2,866 as of December 31, 2022

The following table presents rent expense for the Company’s office leases recorded on the consolidated statements of operations for the following periods:

The following table presents rent expense for the Company’s office leases recorded in other expenses on the consolidated statements of operations for the following periods:

For the Year Ended December 31,

2 unchanged sentences

$ 7,951 $ 9,301 $ 8,924

(1) Includes lease exp ense of $ 202 , $ 609 and $ 509 for the year ended December 31, 2022, 2021 and 2020, respectively, for assets held for sale.

(1) Includes lease expense of $ 0 , $ 202 , and $ 609 for the years ended December 31, 2023, 2022 and 2021, respectively, for assets classified as held for sale for the periods prior to July 1, 2022.

The Company entered into a sublease of their former corporate office space in December 2022.

As a result of the sublease, future lease payments will be offset by $ 1,842 annually beginning July 2023 through and August 2029.

As a result of the sublease, future lease payments will be offset by $ 1,842 annually from July 2023 through and August 2029.

The Company is a defendant in Mullins v.

6 unchanged sentences

In a series of orders issued in October 2022 on competing motions for partial summary judgment, the court found in favor of the plaintiffs as to the Subclass A breach of contract claim (the Subclass A Order) and, as to Subclass B, found that the Company was unjustly enriched to the extent the premium it collected exceeded the proportion of the premium for which the Company provided benefits coverage (the Subclass B Order).

The court found in favor of the Company as to the plaintiffs’ claims for common law fraud and violation of Kentucky’s insurance statutes and ordered the plaintiffs’ Motion for Sanctions for Spoliation of Evidence held in abeyance.

The Company has appealed the Subclass A Order and Subclass B Order and all interlocutory orders made final by entry of the Subclass A Order and Subclass B Order.

The court found in favor of the Company as to the plaintiffs’ claims for common law fraud and violation of Kentucky’s insurance statutes and ordered the plaintiffs’ Motion for Sanctions

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

In December 2022, the court dismissed the plaintiffs’ KCPA claims as to both Subclass A and Subclass B.

The court also dismissed the plaintiffs’ breach of covenant of good faith and fair dealing claim as to Subclass B but declined to dismiss such claim as to Subclass A pending resolution of the Company’s appeal.

A trial has been scheduled for December 2023.

for Spoliation of Evidence held in abeyance.

The Company has appealed the Subclass A Order and Subclass B Order and all interlocutory orders made final by entry of the Subclass A Order and Subclass B Order.

In December 2022, the court dismissed the plaintiffs’ KCPA claims as to both Subclass A Order and Subclass B Order.

The court also dismissed the plaintiffs’ breach of covenant of good faith and fair dealing claim as to Subclass B Order but declined to dismiss such claim as to Subclass A Order pending resolution of the Company’s appeal.

The trial, previously scheduled for December 2023 has been remanded while the matter is on appeal.

The Company considers such litigation customary in the insurance industry.

30 unchanged sentences

(23) Related Party Transactions

Corvid Peak is a related party of the Company because Corvid Peak is deemed to be controlled by Michael Barnes, the Company’s Executive Chairman.

The Company is invested in funds managed by Corvid Peak (the “Corvid Peak Funds”) and Corvid Peak manages investment portfolio accounts of Fortegra and certain of its subsidiaries under an investment advisory agreement (the “IAA”).

With respect to the Corvid Peak Funds and IAA, the Company incurred $ 3,808 , $ 1,988 and $ 2,792 of management and incentive fees for the years ended December 31, 2022, 2021 and 2020, respectively.

Beginning January 1, 2021, Tiptree has been allocated 10.2 % of certain profits interests earned by Corvid Peak with an

Corvid Peak is a related party of the Company because Corvid Peak is deemed to be controlled by Michael Barnes, the

AND SUBSIDIARIES

2 unchanged sentences

(in thousands, except share data)

additional 10.2 % interest for each of the next consecutive four years .

Beginning on January 1, 2023, Tiptree’s percentage interest increased to 31.84 % (includi ng interests acquired from former Corvid Peak equity holders).

Company’s Executive Chairman.

The Company is invested in funds managed by Corvid Peak (the Corvid Peak Funds) and Corvid Peak manages investment portfolio accounts of Fortegra and certain of its subsidiaries under an investment advisory agreement (the IAA).

With respect to the Corvid Peak Funds and IAA, the Company incurred $ 5,206 , $ 3,808 , and $ 1,988 of management and incentive fees for the years ended December 31, 2023, 2022 and 2021, respectively.

Beginning January 1, 2021, Tiptree has been allocated 10.2 % of certain profits interests earned by Corvid Peak with an additional 10.2 % interest for each of the next consecutive four years .

Beginning on January 1, 2024, Tiptree’s percentage interest increased to 42.0 % (including interests acquired from former Corvid Peak equity holders).

On November 10, 2022, the Company contributed $ 505 of cash (representing its pro rata share) to Corvid Peak to fund an escrow account for the repurchase of a revenue share by a third party effective as of January 1, 2025.

Pursuant to the Transition Services Agreement, Tiptree and Corvid Peak have mutually agreed to provide certain services to one another.

Payments under the Transition Services Agreement in the year ended December 31, 2022 and 2021 were not material.

Payments under the Transition Services Agreement in the years ended December 31, 2023 and 2022 were not material.

Pursuant to a Partner Emeritus Agreement, Tiptree agreed to provide Mr.

1 unchanged sentence

Inayatullah for a portion of benefit expenses in exchange for advice and other consulting services as requested by the Company’s Executive Committee.

Transactions related to the Partner Emeritus Agreement in the year ended December 31, 2022 and 2021 were not material.

In 2022, Michael Barnes, the Company’s Executive Chairman, exercised warrants for 979,146 shares of Tiptree common stock for $ 6,783 and Mr.

Inayatullah exercised warrants for 440,318 shares of Tiptree common stock for $ 3,050 .

Transactions related to the Partner Emeritus Agreement in the years ended December 31, 2023 and 2022 were not material.

(24) Subsequent Events

On January 31, 2023, subsidiaries of Fortegra amended the asset backed revolving financing to increase the revolving commitment to $ 100,000 and transition to SOFR.

On March 7, 2023, the Company’s board of directors declared a quarterly cash dividend of $ 0.05 per share to holders of common stock with a record date of March 20, 2023, and a payment date of March 27, 2022.

On January 1, 2024, Tiptree granted 550,000 performance restricted stock units (PRSUs) to each of Michael Barnes, Executive Chairman and Jonathan Ilany, Chief Executive Officer and awarded 183,333 PRSUs to Randy Maultsby, President and 137,500 PRSUs to Scott McKinney, Chief Financial Officer (together, the “Grantees”).

The PRSUs will generally vest upon achievement of a $ 70 Tiptree share price target (adjusted for dividends paid) prior to the tenth anniversary of the date of grant, subject to the Grantee’s continued employment with Tiptree.

This special award reflects Tiptree’s desire for Messrs.

Barnes, Ilany, Maultsby and McKinney to continue to lead the Company for a further significant number of years and to create significant shareholder value over time.

On February 27, 2024, the Company’s board of directors declared a quarterly cash dividend of $ 0.06 per share to holders of common stock with a record date of March 11, 2024, and a payment date of March 18, 2024.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data