In this section, we review the consolidated financial condition of CNO as of June 30, 2026, and its consolidated results of operations for the six months ended June 30, 2026 and 2025, and, where appropriate, factors that may affect future financial performance. Please read this discussion in conjunction with the accompanying consolidated financial statements and notes. Results for interim periods are not necessarily indicative of the results that may be expected for a full year. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Our statements, trend analyses and other information contained in this report and elsewhere (such as in filings by CNO with the SEC, press releases, presentations by CNO or its management or oral statements) relative to markets for CNO's products and trends in CNO's operations or financial results, as well as other statements, contain forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by the use of terms such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic," "guidance," "outlook," "sustainable," "repeatable," "confident in" and similar words, although some forward-looking statements are expressed differently. You should consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our results of operations, financial position, and our business outlook or they state other "forward-looking" information based on currently available information. The "Risk Factors" section of our 2025 Annual Report on Form 10-K provides examples of risks, uncertainties and events that could cause our actual results to differ materially from the expectations expressed in our forward-looking statements. A wide variety of factors continue to impact financial and economic conditions. Consumer and economic uncertainty due to rapid changes in global trade policies, including the imposition of tariffs and potential changes to existing tariffs, and geopolitical actions are also causing market volatility and heightening inflationary concerns. Reactions to these factors and fluctuations in the value of the U.S. dollar compared to foreign currencies may result in reduced economic growth in the United States, the targeted nations and globally, increase inflation, disrupt global supply chains and increase volatility in financial markets, including currency and interest rate markets. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: •general economic, market and political conditions and uncertainties, including the performance and fluctuations of the financial markets (including the impact of inflation, market volatility, tariffs, changes in tax laws, changes in commodity prices, fluctuations in foreign currency exchange rates and the impact of a U.S. federal government shutdown), which may affect the value of our investments as well as our ability to raise capital or refinance existing indebtedness and the cost of doing so; •exposure to interest rate risk, including interest rate volatility, may negatively impact our results of operations, financial position or cash flow; •future investment results, including the impact of realized losses (including other-than-temporary impairment charges) may diminish the value of our invested assets and negatively impact our profitability, our financial condition and our liquidity; •the ultimate outcome of lawsuits filed against us and other legal and regulatory proceedings to which we are subject; •our ability to make anticipated changes to certain non-guaranteed elements of our life insurance products; •our ability to obtain adequate and timely rate increases on our health products; •the receipt of any required regulatory approvals for dividend and surplus debenture interest payments from our insurance subsidiaries; 63 •mortality, morbidity, the increased cost and usage of health care services, persistency, the adequacy of our previous reserve estimates, changes in the health care market and other factors which may affect the profitability of our insurance products; •the recoverability of our deferred tax assets and the effect of potential ownership changes and tax rate changes on their value; •our assumption that the positions we take on our tax return filings will not be successfully challenged by the IRS; •changes in accounting principles and the interpretation thereof; •our ability to continue to satisfy the financial ratio and balance requirements and other covenants of our debt agreements; •our ability to identify products and markets in which we can compete effectively against competitors with greater market share, higher ratings, greater financial resources and stronger brand recognition; •our ability to generate sufficient liquidity to meet our debt service obligations and other cash needs; •changes in capital deployment opportunities; •our ability to maintain effective controls over financial reporting and modeling; •our ability to continue to recruit and retain productive agents and distribution partners; •customer response to new products, distribution channels and marketing initiatives; •inflation or other unfavorable economic or business conditions may impact the sales and persistency of insurance products, a portion of our insurance policy benefits affected by increased medical coverage costs and various selling, general and administrative expenses; •our ability to maintain the financial strength ratings of CNO and our insurance company subsidiaries as well as the impact of our ratings on our business, our ability to access capital, and the cost of capital; •regulatory changes or actions, now or in the future, including, but not limited to: those relating to regulation of the financial affairs of our insurance companies, such as the calculation of risk-based capital and minimum capital requirements, and payment of dividends and surplus debenture interest to us; regulation of the sale, underwriting and pricing of products; health care regulation affecting health insurance products; and privacy laws and regulations; •changes in the Federal income tax laws and regulations which may affect or eliminate the relative tax advantages of some of our products or affect the value of our deferred tax assets; •availability and effectiveness of reinsurance arrangements, as well as the impact of any defaults or failure of reinsurers to perform; •the use or anticipated use of artificial intelligence ("AI") technologies, including generative AI, by us or third-parties; •the performance of third-party service providers (both domestic and international) and potential difficulties arising from outsourcing arrangements; •expectations for the growth rate of sales, collected premiums, annuity deposits and assets; •interruption in telecommunication, information technology or other operational systems or failure to maintain the security, confidentiality or privacy of sensitive data on such systems; 64 •events of terrorism, natural disasters or other catastrophic events, including potential adverse impacts from climate change which may increase the frequency or severity of weather-related disasters; •the impact of pandemics and major public health issues and the resulting financial market, economic and other impacts; •cybersecurity attacks, risk of data loss and other security breaches; •ineffectiveness of risk management policies and procedures in identifying, monitoring and managing risks; and •the risk factors or uncertainties listed from time to time in our filings with the SEC. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement. Our forward-looking statements speak only as of the date made. We assume no obligation to update or to publicly announce the results of any revisions to any of the forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. The reporting of risk-based capital ("RBC") measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities. OVERVIEW We are a holding company for a group of insurance companies that develop, market and administer health insurance, annuity, individual life insurance and other insurance and financial services products. We focus on serving middle-income pre-retiree and retired Americans, which we believe are attractive, underserved, high growth markets. We sell our products through exclusive agents, independent producers (some of whom sell one or more of our product lines exclusively) and direct marketing. We view our operations as three insurance product lines (annuity, health and life) and the investment and fee income segments. Our segments are aligned based on their common characteristics, comparability of profit margins and the way the chief operating decision maker ("CODM") makes operating decisions and assesses the performance of the business. Our CODM is the Chief Executive Officer. Our insurance product line segments (annuity, health and life) include marketing, underwriting and administration of the policies our insurance subsidiaries sell. The business written in each of the three product categories through all of our insurance subsidiaries is aggregated allowing management and investors to assess the performance of each product category. When analyzing profitability of these segments, we use insurance product margin as the measure of profitability, which is: (i) insurance policy income; and (ii) net investment income allocated to the insurance product lines; less (i) insurance policy benefits; (ii) interest credited to policyholders; (iii) amortization of deferred acquisition costs and present value of future profits; (iv) non-deferred commissions; and (v) advertising expense. Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average insurance liabilities, net of insurance intangibles, for the block in each period. Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities. Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products provides an additional understanding of the business and a more meaningful analysis of the results of our insurance product lines. 65 We market our products through the Consumer and Worksite Divisions that reflect the customers served by the Company. The Consumer and Worksite Divisions are primarily focused on marketing insurance products, several types of which are sold in both divisions and underwritten in the same manner. The Consumer Division serves individual consumers, engaging with them on the phone, virtually, online, face-to-face with agents, or through a combination of sales channels. This structure unifies consumer capabilities into a single division and integrates the strength of our agent sales forces with one of the largest direct-to-consumer insurance businesses with proven experience in advertising, web/digital and call center support. The Worksite Division focuses on the sale of voluntary insurance benefits, including supplemental health and life insurance products in the workplace for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually. Through our Optavise brand, we guide employers and their employees through their healthcare choices with a suite of voluntary insurance products. In November 2025, we announced our intention to exit the fee services business (which included benefits administration technology, education, and advocacy, and communications services) within our Worksite Division to sharpen our focus on the core insurance business. The exit of the fee services business was substantially complete as of June 30, 2026. The investment segment involves the management of our capital resources, including investments and the management of corporate debt and liquidity. Our measure of profitability of this segment is the total net investment income not allocated to the insurance products. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the FABN program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our FHLB investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from COLI and alternative investment income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program. Our fee income segment includes the earnings generated from sales of third-party insurance products (primarily Medicare Advantage), services provided to employers through our Worksite Division and the operations of our broker-dealer and registered investment advisor. As a result of exiting the fee services business within our Worksite Division, beginning in the fourth quarter of 2025, the net results of this business are no longer presented within the fee income segment, but are presented within net loss related to divested business within non-operating income. The exit of the fee services business was substantially complete as of June 30, 2026. Expenses not allocated to product lines primarily include the expenses of our corporate operations, excluding interest expense on debt. 66 The following summarizes our earnings for the three and six months ended June 30, 2026 and 2025 (dollars in millions, except per share data): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Insurance product margin Annuity margin $ 60.6 $ 54.8 $ 119.1 $ 109.3 Health margin 147.2 134.0 279.8 260.2 Life margin 71.2 63.6 137.0 131.8 Total insurance product margin 279.0 252.4 535.9 501.3 Allocated expenses (152.9) (149.4) (312.8) (310.6) Income from insurance products 126.1 103.0 223.1 190.7 Fee income (1.2) 0.8 9.4 — Investment income not allocated to product lines 49.4 33.8 91.1 71.8 Expenses not allocated to product lines (23.3) (25.3) (42.7) (45.6) Operating earnings before taxes 151.0 112.3 280.9 216.9 Income tax expense on operating income (31.5) (24.8) (60.1) (48.3) Net operating income (a) 119.5 87.5 220.8 168.6 Net realized investment losses from disposals, impairments and change in allowance for credit losses (13.6) (21.8) (28.8) (35.0) Net change in market value of investments recognized in earnings (1.1) 3.4 (8.6) 9.8 Changes in fair value of embedded derivative liabilities and market risk benefits 34.6 25.2 (7.8) (44.4) Expenses related to TechMod initiative (9.7) (3.2) (23.4) (3.2) Net loss related to divested business (1.1) — (3.0) — Other (0.4) 2.1 (1.2) 1.7 Net non-operating income (loss) before taxes 8.7 5.7 (72.8) (71.1) Income tax (expense) benefit on non-operating income (loss) (2.3) (1.4) 15.6 15.8 Net non-operating income (loss) 6.4 4.3 (57.2) (55.3) Net income $ 125.9 $ 91.8 $ 163.6 $ 113.3 Per diluted share Net operating income $ 1.26 $ 0.87 $ 2.31 $ 1.66 Net non-operating income (loss) 0.07 0.04 (0.60) (0.55) Net income $ 1.33 $ 0.91 $ 1.71 $ 1.11 ____________ (a)Management believes that an analysis of net income applicable to common stock before: (i) net realized investment gains or losses from disposals, impairments and the change in allowance for credit losses, net of taxes; (ii) net change in market value of investments recognized in earnings, net of taxes; (iii) changes in fair value of embedded derivative liabilities and MRBs related to our fixed indexed annuities, net of taxes; (iv) fair value changes related to the agent deferred compensation plan, net of taxes; (v) gains or losses related to material reinsurance transactions, net of taxes; (vi) loss on extinguishment of debt, net of taxes; (vii) changes in the valuation allowance for deferred tax assets and other tax items; (viii) costs related to our three-year project to modernize certain elements of our technology ("TechMod") that are incremental to our normal spend and will not recur following implementation, net of taxes; (ix) goodwill and other asset impairment expenses, net of taxes; (x) gains or losses related to divested business, net of taxes, and (xi) other non-operating items including earnings attributable to variable interest entities, net of taxes ("net operating income," a non-GAAP financial measure) is important to evaluate the financial performance of the company, and is a key measure commonly used in the life insurance industry. The income tax expense or benefit allocated to the items included in net non-operating income (loss) represents the current and deferred income tax expense or benefit 67 allocated to the items included in non-operating earnings. Management believes this information provides a better understanding of the business and a more meaningful analysis of results of our insurance product lines. The table above reconciles the non-GAAP measure to the corresponding GAAP measure. In addition, management uses these non-GAAP financial measures in its budgeting process, financial analysis of segment performance and in assessing the allocation of resources. We believe these non-GAAP financial measures enhance an investor's understanding of our financial performance and allow them to make more informed judgments about the Company as a whole. These measures also highlight operating trends that might not otherwise be apparent. However, net operating income is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities, as measures of liquidity, or as an alternative to net income as measures of our operating performance or any other measures of performance derived in accordance with GAAP. In addition, net operating income should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Net operating income has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Our definition and calculation of net operating income are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation. GOVERNMENTAL REGULATION Refer to "Governmental Regulation" in our 2025 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 for information on our insurance and other governmental regulatory matters, other than those amended or supplemented here. Big Data and Artificial Intelligence The National Association of Insurance Commissions' ("NAIC") Big Data and Artificial Intelligence (H) Working Group is evaluating AI-use outcomes and how well the current regulatory framework addresses potential harms from the use of AI. The goal is to develop an overall AI regulatory framework that could be incorporated into the NAIC regulatory handbook. For example, the (H) working group aims to finalize during 2026 a tool to collect information about an insurer’s use of AI during an examination or investigation. To that end, in March 2026, the (H) Working Group announced a pilot program, to run through September 2026, to field-test the AI Systems Evaluation Tool; 12 states are participating in the pilot program. CRITICAL ACCOUNTING ESTIMATES Refer to "Critical Accounting Estimates" in our 2025 Annual Report on Form 10-K for information on our other accounting policies that we consider critical in preparing our consolidated financial statements. 68 RESULTS OF OPERATIONS The following tables and narratives summarize the operating results of our segments (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Insurance product margin Annuity: Insurance policy income $ 10.2 $ 8.4 $ 18.9 $ 18.2 Net investment income 163.9 155.3 324.9 303.3 Insurance policy benefits (9.0) (10.0) (20.6) (20.3) Interest credited (75.7) (73.4) (147.5) (141.7) Amortization and non-deferred commissions (a) (28.8) (25.5) (56.6) (50.2) Annuity margin 60.6 54.8 119.1 109.3 Health: Insurance policy income 436.4 412.5 868.4 824.5 Net investment income 75.8 75.9 150.3 151.0 Insurance policy benefits (322.3) (313.3) (653.5) (633.6) Amortization and non-deferred commissions (a) (42.7) (41.1) (85.4) (81.7) Health margin 147.2 134.0 279.8 260.2 Life: Insurance policy income 234.1 230.4 466.8 459.3 Net investment income 38.4 37.8 76.4 75.4 Insurance policy benefits (139.3) (144.5) (282.7) (282.6) Interest credited (14.2) (13.8) (27.9) (26.8) Amortization and non-deferred commissions (a) (30.3) (27.6) (59.8) (53.6) Advertising expense (17.5) (18.7) (35.8) (39.9) Life margin 71.2 63.6 137.0 131.8 Total insurance product margin 279.0 252.4 535.9 501.3 Allocated expenses: Branch office expenses (16.8) (15.9) (36.8) (36.6) Other allocated expenses (136.1) (133.5) (276.0) (274.0) Income from insurance products 126.1 103.0 223.1 190.7 Fee income (1.2) 0.8 9.4 — Investment income not allocated to product lines 49.4 33.8 91.1 71.8 Expenses not allocated to product lines (23.3) (25.3) (42.7) (45.6) Operating earnings before taxes 151.0 112.3 280.9 216.9 Income tax expense on operating income (31.5) (24.8) (60.1) (48.3) Net operating income $ 119.5 $ 87.5 $ 220.8 $ 168.6 ____________ (a)Amortization and non-deferred commissions are comprised of: (i) the amortization of deferred acquisition costs and present value of future profits; and (ii) commission expenses that are not directly related to the successful acquisition of new or renewal insurance contracts and, therefore, are not eligible to be deferred. Such non-deferred commissions are included in other operating costs and expenses on the consolidated statement of operations. 69 General: CNO is the top tier holding company for a group of insurance companies that develop, market and administer health insurance, annuity, individual life insurance and other insurance and financial services products. We view our operations by segments, which consist of insurance product lines. These products are distributed by our two divisions. The Consumer Division serves individual consumers, engaging with them on the phone, virtually, online, face-to-face with agents, or through a combination of sales channels. The Worksite Division focuses on the sale of voluntary benefit life and health insurance products in the workplace for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually. Insurance product margin is management's measure of the profitability of its annuity, health and life product lines' performance and consists of insurance policy income plus allocated investment income less insurance policy benefits, interest credited, commissions, advertising expense and amortization of acquisition costs. Income from insurance products is the sum of the insurance product margins of the annuity, health and life product lines, less expenses allocated to the insurance product lines. It excludes the income from our fee income business, investment income not allocated to product lines, net expenses not allocated to product lines (primarily holding company expenses) and income taxes. Management believes insurance product margin and income from insurance products provides an additional understanding of the business and a more meaningful analysis of the results of our insurance product lines. Net investment income is allocated to the product lines using the book yield of investments backing the block of business, which is applied to the average insurance liabilities, net of insurance intangibles, for the block in each period. Net insurance liabilities for the purpose of allocating investment income to product lines are equal to: (i) policyholder account values for interest sensitive products; (ii) total reserves before the fair value adjustments reflected in accumulated other comprehensive income (loss), if applicable, for all other products; less (iii) amounts related to reinsured business; (iv) deferred acquisition costs; (v) the present value of future profits; and (vi) the value of unexpired options credited to insurance liabilities. Investment income not allocated to product lines represents net investment income less: (i) equity returns credited to policyholder account balances; (ii) the investment income allocated to our product lines; (iii) interest expense on notes payable, investment borrowings and financing arrangements; (iv) expenses related to the FABN program; and (v) certain expenses related to benefit plans that are offset by special-purpose investment income; plus (vi) the impact of annual option forfeitures related to fixed indexed annuity surrenders. Investment income not allocated to product lines includes investment income on investments in excess of amounts allocated to product lines, investments held by our holding companies, the spread we earn from our FHLB investment borrowing and FABN programs and variable components of investment income (including call and prepayment income, adjustments to returns on structured securities due to cash flow changes, income (loss) from COLI and alternative investment income not allocated to product lines), net of interest expense on corporate debt and financing arrangements. The spread earned from our FHLB investment borrowing and FABN programs includes the investment income on the matched assets less: (i) interest on investment borrowings related to the FHLB investment borrowing program; (ii) interest credited on funding agreements; and (iii) amortization of deferred acquisition costs related to the FABN program. Summary of Operating Results: Net operating income was $119.5 million in the second quarter of 2026 compared to $87.5 million in the second quarter of 2025, and was $220.8 million in the first six months of 2026 compared to $168.6 million in the first six months of 2025. Return on equity ("ROE") is equal to the trailing four quarters of net income divided by average shareholders' equity. As of June 30, 2026, our ROE was 10.9 percent compared to 11.9 percent as of June 30, 2025. Operating ROE (a non-GAAP measure) is equal to the trailing four quarters of net operating income divided by average shareholders' equity, excluding accumulated other comprehensive income (loss) and net operating loss carryforwards. As of June 30, 2026, our operating ROE, excluding significant items, was 13.1 percent compared to 11.2 percent as of June 30, 2025. Our 2026 operating ROE is expected to exceed the three-year target of 12 percent we had previously established for year-end 2027. Insurance product margin was $279.0 million in the second quarter of 2026 compared to $252.4 million in the second quarter of 2025, and was $535.9 million in the first six months of 2026 compared to $501.3 million in the first six months of 2025. Total net investment income (comprised of investment income allocated and not allocated to products) increased 8 percent to $327.5 million in the second quarter of 2026 as compared to $302.7 million in the second quarter of 2025, and 7 percent to $642.7 million in the first six months of 2026 compared to $601.4 million in the first six months of 2025 as a result of growth in the business and higher alternative investment income. Fluctuations by product line and investment income not allocated to products are discussed in greater detail in the narratives that follow. The effective tax rate for the six months ended June 30, 2026 was 21.4 percent. 70 Total allocated and unallocated expenses are summarized in the table below (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Expenses allocated to product lines $ 152.9 $ 149.4 $ 312.8 $ 310.6 Expenses not allocated to product lines 23.3 25.3 42.7 45.6 Adjusted total $ 176.2 $ 174.7 $ 355.5 $ 356.2 Total allocated and unallocated expenses in the first six months of 2026 were down slightly as compared to the same period in the prior year. Our expense ratio was 18.7 percent and 19.4 percent for the six months ended June 30, 2026 and 2025, respectively. We generally experience seasonally higher expenses during the first quarter; however, timing of certain expenses incurred during the six months ended June 30, 2026 offset the seasonal increases historically experienced in the first half of the year. The expense ratio is defined as total allocated and unallocated expenses (excluding any significant items) divided by the sum of insurance policy income and net investment income allocated to products. The fee income segment is summarized below (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Consumer Division fee income: Fee revenue $ 18.5 $ 26.7 $ 61.3 $ 66.1 Operating costs and expenses (19.7) (19.3) (51.9) (54.4) Net Consumer Division fee income (loss) (1.2) 7.4 9.4 11.7 Worksite Division fee income: Fee revenue — 6.8 — 14.8 Operating costs and expenses — (13.4) — (26.5) Net Worksite Division fee loss — (6.6) — (11.7) Total fee income segment: Fee revenue 18.5 33.5 61.3 80.9 Operating costs and expenses (19.7) (32.7) (51.9) (80.9) Net fee income (loss) $ (1.2) $ 0.8 $ 9.4 $ — Net Consumer Division fee income decreased from income of $7.4 million in the second quarter of 2025 to a loss of $1.2 million in the second quarter of 2026 primarily due to a decrease in Medicare Advantage third-party sales resulting from a continued shift in customer preference towards Medicare supplement products. In addition, fee income decreased $3.0 million for an experience adjustment in the second quarter of 2026. Net Consumer Division fee income decreased $2.3 million for the six months ended June 30, 2026 compared to the same period in 2025 due to decreased Medicare Advantage third-party sales, partially offset by lower experience adjustments. Beginning in the fourth quarter of 2025, as a result of exiting the fee services business within our Worksite Division, the net results of this business are no longer reflected within operating income, but are reflected within non-operating income. 71 Margin from Annuity Products (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Annuity margin: Fixed indexed annuities Insurance policy income $ 7.7 $ 6.7 $ 14.0 $ 13.9 Net investment income 137.2 127.8 271.5 248.7 Insurance policy benefits (6.3) (5.0) (10.9) (10.5) Interest credited (63.0) (60.8) (123.2) (116.5) Amortization and non-deferred commissions (26.4) (23.3) (52.0) (45.7) Margin from fixed indexed annuities $ 49.2 $ 45.4 $ 99.4 $ 89.9 Average net insurance liabilities $ 11,316.3 $ 10,543.4 $ 11,210.2 $ 10,314.6 Margin/average net insurance liabilities 1.74 % 1.72 % 1.77 % 1.74 % Fixed interest annuities Insurance policy income $ 0.5 $ 0.2 $ 0.5 $ 0.7 Net investment income 21.4 21.8 42.7 43.4 Insurance policy benefits 0.3 (0.1) (0.5) 0.1 Interest credited (12.2) (11.8) (23.3) (23.9) Amortization and non-deferred commissions (2.2) (2.1) (4.3) (4.2) Margin from fixed interest annuities $ 7.8 $ 8.0 $ 15.1 $ 16.1 Average net insurance liabilities $ 1,568.4 $ 1,591.7 $ 1,574.4 $ 1,595.6 Margin/average net insurance liabilities 1.99 % 2.01 % 1.92 % 2.02 % Other annuities Insurance policy income $ 2.0 $ 1.6 $ 4.4 $ 3.7 Net investment income 5.3 5.6 10.7 11.1 Insurance policy benefits (3.0) (5.0) (9.2) (10.0) Interest credited (0.5) (0.7) (1.0) (1.2) Amortization and non-deferred commissions (0.2) (0.1) (0.3) (0.3) Margin from other annuities $ 3.6 $ 1.4 $ 4.6 $ 3.3 Average net insurance liabilities $ 382.7 $ 398.5 $ 385.8 $ 400.4 Margin/average net insurance liabilities 3.76 % 1.41 % 2.38 % 1.65 % Total annuity margin $ 60.6 $ 54.8 $ 119.1 $ 109.3 Average net insurance liabilities $ 13,267.4 $ 12,533.6 $ 13,170.4 $ 12,310.6 Margin/average net insurance liabilities 1.83 % 1.75 % 1.81 % 1.78 % 72 Margin from fixed indexed annuities increased $3.8 million in the second quarter of 2026 compared to the second quarter of 2025, and $9.5 million in the first six months of 2026 compared to the first six months of 2025 due to increased spread income, partially offset by higher amortization from growth in the block. Spread income has increased due to growth in the block and increased spread rates. Average net insurance liabilities (policyholder account balances less: (i) amounts related to reinsured business; (ii) deferred acquisition costs; (iii) present value of future profits; and (iv) the value of unexpired options credited to insurance liabilities) were $11,316.3 million and $10,543.4 million in the second quarters of 2026 and 2025, respectively, and $11,210.2 million and $10,314.6 million in the first six months of 2026 and 2025, respectively, driven by deposits and reinvested returns in excess of withdrawals. The increase in net insurance liabilities results in higher net investment income allocated. The earned yield was 4.85 percent in the second quarter of 2026 which was flat to second quarter of 2025, and was 4.85 percent in the first six months of 2026 up from 4.82 percent in the first six months of 2025, reflecting higher portfolio yields. Net investment income and interest credited exclude the change in market values of the underlying options supporting the fixed indexed annuity products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $146.8 million and $70.4 million in the second quarters of 2026 and 2025, respectively, and were $88.1 million and $6.9 million in the first six months of 2026 and 2025, respectively. Margin from fixed interest annuities decreased $0.2 million in the second quarter of 2026 compared to the second quarter of 2025, and $1.0 million in the first six months of 2026 compared to the first six months of 2025. Average net insurance liabilities were $1,568.4 million in the second quarter of 2026 compared to $1,591.7 million in the second quarter of 2025, and were $1,574.4 million in the first six months of 2026 compared to $1,595.6 million in the first six months of 2025, driven by withdrawals in excess of deposits and reinvested returns. The decrease in investment income results from the decrease in the average net insurance liabilities and the slight decrease in the earned yield. The earned yield was 5.46 percent and 5.48 percent in the second quarter of 2026 and 2025, respectively, and was 5.43 percent in the first six months of 2026, down from 5.44 percent in the first six months of 2025. Margin from other annuities increased $2.2 million in the second quarter of 2026 compared to the second quarter of 2025, and increased $1.3 million in the first six months of 2026 compared to the first six months of 2025. The margin on this relatively small block of business is sensitive to annuitant mortality related to contracts with life contingencies. An increase in mortality in this block will result in a decrease in insurance liabilities and insurance policy benefits. In the second quarter of 2026, we experienced higher annuitant mortality on a few larger policies in a closed block of payout annuities which reduced insurance policy benefits. 73 Margin from Health Products (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Health margin: Supplemental health Insurance policy income $ 190.5 $ 185.0 $ 380.9 $ 370.1 Net investment income 41.7 40.5 82.6 80.3 Insurance policy benefits (133.3) (128.7) (264.5) (260.3) Amortization and non-deferred commissions (28.8) (28.2) (57.7) (55.9) Margin from supplemental health $ 70.1 $ 68.6 $ 141.3 $ 134.2 Margin/insurance policy income 37 % 37 % 37 % 36 % Medicare supplement Insurance policy income $ 169.7 $ 155.9 $ 335.6 $ 312.2 Net investment income 1.0 1.2 2.1 2.4 Insurance policy benefits (124.6) (119.5) (258.8) (239.5) Amortization and non-deferred commissions (9.6) (9.4) (19.3) (18.8) Margin from Medicare supplement $ 36.5 $ 28.2 $ 59.6 $ 56.3 Margin/insurance policy income 22 % 18 % 18 % 18 % Long-term care Insurance policy income $ 76.2 $ 71.6 $ 151.9 $ 142.2 Net investment income 33.1 34.2 65.6 68.3 Insurance policy benefits (64.4) (65.1) (130.2) (133.8) Amortization and non-deferred commissions (4.3) (3.5) (8.4) (7.0) Margin from long-term care $ 40.6 $ 37.2 $ 78.9 $ 69.7 Margin/insurance policy income 53 % 52 % 52 % 49 % Total health margin $ 147.2 $ 134.0 $ 279.8 $ 260.2 Margin/insurance policy income 34 % 32 % 32 % 32 % Margin from supplemental health business increased $1.5 million in the second quarter of 2026 compared to the second quarter of 2025, and $7.1 million in the first six months of 2026 compared to the first six months of 2025, reflecting the growth in the block. As a result of a handful of large claims on older policies in the second quarter of 2026, morbidity was slightly higher than the prior year period. For the first six months of 2026, morbidity was lower than the prior year period. The margin as a percentage of insurance policy income was 37 percent in the second quarter of 2026 and in the prior year period, and was 37 percent in the first six months of 2026 and 36 percent in the first six months of 2025. 74 Our supplemental health products (including specified disease, accident and hospital indemnity products) generally provide fixed or limited benefits. For example, payments under cancer insurance policies are generally made directly to, or at the direction of, the policyholder following diagnosis of, or treatment for, a covered type of cancer. Approximately two-thirds of our supplemental health policies inforce (based on policy count) are sold with return of premium or cash value riders. The return of premium rider generally provides that after a policy has been inforce for a specified number of years or upon the policyholder reaching a specified age, we will pay to the policyholder, or a beneficiary under the policy, the aggregate amount of all premiums paid under the policy, without interest, less the aggregate amount of all claims incurred under the policy. The cash value rider is similar to the return of premium rider, but also provides for payment of a graded portion of the return of premium benefit if the policy terminates before the return of premium benefit is earned. Accordingly, the net cash flows from these products generally result in the accumulation of amounts in the early years of a policy (reflected in our earnings as reserve increases which is a component of insurance policy benefits) which will be paid out as benefits in later policy years (reflected in our earnings as reserve decreases which offset the recording of benefit payments). As the policies age, insurance policy benefits will typically increase, but the increase in benefits will be partially offset by investment income earned on the accumulated assets. Margin from Medicare supplement business increased $8.3 million in the second quarter of 2026 compared to the second quarter of 2025, and $3.3 million in the first six months of 2026 compared to the first six months of 2025. The margin as a percentage of insurance policy income was 22 percent in the second quarter of 2026 compared to 18 percent in the prior year period, and was 18 percent in the first six months of 2026 and 2025. The increase in the Medicare supplement margin is primarily due to growth in the block, favorable morbidity and the implementation of rate increases during the first half of the year. In addition, the second quarter of 2026 margin included favorable morbidity from better than expected first quarter claims development. We are able to re-rate our Medicare Supplement business annually. Each year we review experience and regulatory requirements to arrive at appropriate rate actions. We continue to invest in both our Medicare supplement products and Medicare Advantage distribution to meet our customers' needs and preferences. We receive fee income when Medicare Advantage policies of other carriers are sold, which is recorded in our fee income segment. Medicare supplement business consists of both individual and group policies. Government regulations generally require we attain and maintain a ratio of total benefits incurred to total premiums earned (excluding changes in policy benefits reserves which is a component of insurance policy benefits) of not less than 65 percent on individual products and not less than 75 percent on group products. The ratio is determined after three years from the original issuance of the policy and over the lifetime of the policy and measured in accordance with statutory accounting principles. Since the insurance product liabilities we establish for Medicare supplement business are subject to significant estimates, the ultimate claim liability we incur for a particular period is likely to be different than our initial estimate. Changes to our estimates are reflected in insurance policy benefits in the period the change is determined. Margin from Long-term care products increased $3.4 million in the second quarter of 2026 compared to the second quarter of 2025, and $9.2 million in the first six months of 2026 when compared to the first six months of 2025. The margin as a percentage of insurance policy income was 53 percent in the second quarter of 2026 compared to 52 percent in the second quarter of 2025, and was 52 percent in the first six months of 2026 and 49 percent in the first six months of 2025. The increase in margin in the second quarter and the first six months of 2026 is primarily due to growth in the business from sales of our short duration Long-Term Care Fundamental product, as well as lower morbidity. The average benefit period for policies sold in the second quarter of 2026 is 13 months and 99 percent are policies with two years or less in benefits. In addition, effective October 1, 2024, we retain 100 percent of our long-term care new business as we discontinued ceding 25 percent of long-term care new business under a reinsurance agreement (this did not impact the inforce business that we previously ceded). As a result, margins have increased since October 2024 and we expect them to continue to grow in future years as earnings emerge from the sales. 75 Margin from Life Products (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Life margin: Interest-sensitive life Insurance policy income $ 50.1 $ 48.0 $ 99.5 $ 96.1 Net investment income 14.3 13.9 28.5 27.8 Insurance policy benefits (18.0) (20.7) (39.0) (40.6) Interest credited (14.0) (13.7) (27.6) (26.6) Amortization and non-deferred commissions (6.0) (5.6) (12.2) (10.7) Margin from interest-sensitive life $ 26.4 $ 21.9 $ 49.2 $ 46.0 Average net insurance liabilities $ 1,146.2 $ 1,106.9 $ 1,139.5 $ 1,101.5 Interest margin $ 0.3 $ 0.2 $ 0.9 $ 1.2 Interest margin/average net insurance liabilities 0.10 % 0.07 % 0.16 % 0.22 % Underwriting margin $ 26.1 $ 21.7 $ 48.3 $ 44.8 Underwriting margin/insurance policy income 52 % 45 % 49 % 47 % Traditional life Insurance policy income $ 184.0 $ 182.4 $ 367.3 $ 363.2 Net investment income 24.1 23.9 47.9 47.6 Insurance policy benefits (121.3) (123.8) (243.7) (242.0) Interest credited (0.2) (0.1) (0.3) (0.2) Amortization and non-deferred commissions (24.3) (22.0) (47.6) (42.9) Advertising expense (17.5) (18.7) (35.8) (39.9) Margin from traditional life $ 44.8 $ 41.7 $ 87.8 $ 85.8 Margin/insurance policy income 24 % 23 % 24 % 24 % Margin excluding advertising expense/insurance policy income 34 % 33 % 34 % 35 % Total life margin $ 71.2 $ 63.6 $ 137.0 $ 131.8 Margin from interest-sensitive life business increased $4.5 million in the second quarter of 2026 compared to the second quarter of 2025, and $3.2 million in the first six months of 2026 compared to the first six months of 2025. The increases in margins in 2026, as compared to the same periods in 2025 reflect lower insurance policy benefits and higher insurance policy income from modest growth in the block. The interest margin was $0.3 million in the second quarter of 2026, compared to $0.2 million in the second quarter of 2025, and was $0.9 million in the first six months of 2026, compared to $1.2 million in the first six months of 2025. The earned yield was 4.99 percent and 5.02 percent in the second quarter of 2026 and 2025, respectively, and 5.00 percent and 5.05 percent in the first six months of 2026 and 2025, respectively. Interest credited to policyholders may be changed annually but is subject to minimum guaranteed rates and, as a result, any reduction in our earned rate may not be fully reflected in the rate credited to policyholders. Net investment income and interest credited exclude the change in market values of the underlying options supporting the fixed indexed life products and corresponding offsetting amount credited to policyholder account balances. Such amounts were $15.0 million and $9.1 million in the second quarter of 2026 and 2025, respectively, and were $9.2 million and $2.4 million in the first six months of 2026 and 2025, respectively. Margin from traditional life business increased $3.1 million in the second quarter of 2026 compared to the second quarter of 2025, and increased $2.0 million in the first six months of 2026 compared to the first six months of 2025. Excluding the impacts of a model refinement during the first quarter of 2025, the adjusted margin for the six months ended June 30, 2025 76 was $79.0 million. The increases in the margins in 2026 compared to the margin in the second quarter of 2025 and the adjusted margin in the first six months of 2025 primarily reflect lower advertising expense, growth in the business and lower mortality. Advertising expense was $17.5 million in the second quarter of 2026, down from $18.7 million in the comparable period in 2025, and was $35.8 million in the first six months of 2026, down from $39.9 million in the comparable period in 2025. We are disciplined with our marketing expenditures and will increase or decrease our marketing spend depending on the current economics of the purchase or other factors, including the effectiveness of advertising spend. Lower advertising expenses reflect a shift to lower cost and more effective advertising alternatives, which include web, digital, and commission based third-party distribution channels. Collected Premiums From Annuity and Interest-Sensitive Life Products (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Annuities $ 536.0 $ 520.5 $ 969.8 $ 962.5 Interest-sensitive life 67.3 63.6 133.0 126.5 Total collected premiums from annuity and interest-sensitive life products $ 603.3 $ 584.1 $ 1,102.8 $ 1,089.0 Collected premiums from annuity and interest-sensitive products increased 3.3 percent in the second quarter of 2026 compared to the second quarter of 2025 and increased 1.3 percent in the first six months of 2026 compared to first six months of 2025 due to higher premium collections from both fixed indexed annuity and interest-sensitive life products. 77 Investment Income Not Allocated to Product Lines (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Investment income not allocated: Excluding variable components: From general account assets $ 23.5 $ 24.1 $ 46.9 $ 52.1 Other investment income 3.0 6.6 6.2 17.5 Spread income: FHLB program: Investment income 42.6 36.6 79.5 72.0 Interest expense (a) (30.3) (27.7) (56.2) (53.7) Net spread income on FHLB program 12.3 8.9 23.3 18.3 FABN program: Investment income 49.3 36.9 95.8 71.2 Expenses (a)(b) (37.5) (27.7) (74.2) (55.6) Net spread income on FABN program 11.8 9.2 21.6 15.6 Interest expense on corporate debt (a) (20.4) (24.6) (40.7) (51.8) Interest expense on financing arrangements (a) (0.7) (1.0) (1.4) (2.0) Total excluding variable components 29.5 23.2 55.9 49.7 Variable components: Net income from assets supporting deferred compensation plans: Investment income 17.5 15.0 11.6 12.9 Expenses (a) (19.9) (14.9) (15.9) (12.1) Net income from assets supporting deferred compensation plans (2.4) 0.1 (4.3) 0.8 Alternative investment income (loss): Total alternative income 21.2 11.7 38.9 24.6 Allocated to product lines (6.1) (6.0) (11.3) (12.0) Allocated to FABN program (1.1) (0.7) (1.9) (0.7) Excess alternative investment income (loss) 14.0 5.0 25.7 11.9 Trading account income 1.5 2.0 2.7 3.6 Hedge variance related to fixed indexed products (a) (0.7) 1.5 (0.8) 1.0 Impact of annual option forfeitures related to fixed indexed annuity surrenders (a) 5.4 1.5 9.6 5.0 Impacts of change in projected cash flows, prepayment and call income and other 2.1 0.5 2.3 (0.2) Total variable components 19.9 10.6 35.2 22.1 Total investment income not allocated to product lines $ 49.4 $ 33.8 $ 91.1 $ 71.8 ________________ (a)Amounts reported as benefits and expenses. (b)Comprised of interest credited and amortization of deferred acquisition costs. 78 Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Reconciliation to net investment income: Total investment income not allocated to product lines $ 49.4 $ 33.8 $ 91.1 $ 71.8 Amounts allocated to products 278.1 268.9 551.6 529.6 Total allocated and not allocated to products investment income 327.5 302.7 642.7 601.4 Investment income on variable interest entities reported as non-operating income 4.3 7.0 8.3 14.2 Add back amounts reported as benefits and expenses 104.1 92.9 179.6 169.2 Change in market values of the underlying options supporting fixed indexed products 161.1 81.1 96.5 10.4 Net investment income $ 597.0 $ 483.7 $ 927.1 $ 795.2 The above table reconciles investment income not allocated to product lines to net investment income. Net investment income is made up of net investment income from general account assets and policyholder and other special-purpose portfolios. Investment income not allocated to product lines will generally fluctuate from period to period based on the performance of our alternative investments (which are typically reported one quarter in arrears); the earnings related to the investments underlying our COLI; the spread we earn from our FHLB investment borrowing and FABN programs; the level of prepayment income (including call premiums) and trading account income; and the impact of annual option forfeitures related to fixed indexed annuity surrenders. The increases in the 2026 periods compared to the same periods in 2025, are primarily due to an increase in alternative investment results, increased spread income on the FHLB and FABN programs, and higher gains on option forfeitures from annuity surrenders, partially offset by unfavorable changes in other components of investment income not allocated to product lines. Net Non-Operating Income (Loss): The following summarizes our net non-operating income (loss) for the three and six months ended June 30, 2026 and 2025 (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Net realized investment losses from disposals, impairments and change in allowance for credit losses $ (13.6) $ (21.8) $ (28.8) $ (35.0) Net change in market value of investments recognized in earnings (1.1) 3.4 (8.6) 9.8 Changes in fair value of embedded derivative liabilities and market risk benefits 34.6 25.2 (7.8) (44.4) Expenses related to TechMod initiative (9.7) (3.2) (23.4) (3.2) Net loss related to divested business (1.1) — (3.0) — Other (0.4) 2.1 (1.2) 1.7 Net non-operating loss before taxes $ 8.7 $ 5.7 $ (72.8) $ (71.1) Net realized investment losses for the three and six months ended June 30, 2026 were $13.6 million and $28.8 million, including a net increase in the allowance for credit losses of $3.4 million and $12.8 million, respectively. Net realized investment losses in the three and six months ended June 30, 2025, were $21.8 million and $35.0 million, respectively, including increases in the allowance for credit losses of $1.0 million and $10.5 million, respectively. The change in market value of investments recognized in earnings was $(1.1) million and $3.4 million during the three months ended June 30, 2026 and June 30, 2025, respectively, and was $(8.6) million and $9.8 million for the six months ended 79 June 30, 2026 and June 30, 2025, respectively. The change in value will fluctuate from period to period based on market conditions. During the second quarter of 2026, we recognized an increase in pre-tax earnings of $34.6 million, resulting from changes in the fair value of embedded derivative liabilities and MRBs related to our fixed indexed annuities, compared to $25.2 million in the second quarter of 2025. We recognized a decrease in pre-tax earnings of $7.8 million and $44.4 million in the first six months of 2026 and 2025, respectively. Such amounts include the impacts of changes in market interest rates, equity impacts and equity volatility used to determine the estimated fair values of the embedded derivatives and MRBs. During the second quarter of 2026, we incurred $9.7 million of expenses related to TechMod, compared to $3.2 million in the second quarter of 2025. For the six months ended June 30, 2026, we incurred $23.4 million of TechMod-related expenses, compared to $3.2 million in the prior year period. TechMod is a three-year initiative that began in 2025 to modernize certain elements of our technology. These expenses relate primarily to data conversion and migration activities associated with the implementation of our modernized insurance administrative platforms. The costs also include discrete external consulting fees for project management support specialized implementation capabilities that we do not maintain internally, as well as certain temporary duplicate vendor costs incurred while legacy and modernized systems operate in parallel. These costs were incremental to our normal spend and will not recur following implementation. We exclude these costs from operating income because they are directly attributable to a defined, finite modernization initiative and are not expected to continue once the project is completed. Management believes this presentation provides meaningful information to investors by improving period-over-period comparability and by facilitating an assessment of our ongoing operating performance absent the temporary impact of these project-specific costs. During the six months ended June 30, 2026, we incurred a $3.0 million loss related to our exit from the fee services side of the Worksite Division business, of which $1.1 million was incurred during the second quarter. In addition to exit costs, this loss includes operating losses for the quarter. Operating losses prior to the fourth quarter of 2025 were reported in operating income as a component of fee income. The exit of the fee services business was substantially complete as of June 30, 2026. 2026 OUTLOOK We are raising full-year operating earnings per share guidance and either improving or reaffirming our previously disclosed 2026 guidance, as discussed below. Given our strong first-half results and confidence in the underlying performance of the business, we are increasing our operating earnings per diluted share guidance to be in the range of $4.60 to $4.80, excluding any significant items in the year (as compared to our previous guidance of $4.25 to $4.45). We are narrowing our expense ratio to be in the range of 18.8 percent to 19.0 percent (as compared to our previous guidance of 18.8 percent to 19.2 percent), reflecting improved operating leverage from continued strong sales results. We expect fee income of approximately $30 million for the year with roughly a third in the first half of the year, minimal contribution in the third quarter, and the balance in the fourth quarter. Fee income will benefit from the exit of the Worksite Division fee services business as explained below. We are lowering the effective tax rate assumption to approximately 21.5 percent (as compared to our previous guidance of 22.5 percent), primarily driven by favorable non-recurring tax deductions and the continued benefit of tax planning initiatives executed during the first half of the year. In November 2025, the Company announced its intention to exit the fee services business within its Worksite Division to sharpen its focus on the core insurance business. The Worksite Division fee services business includes benefits administration technology, education, advocacy, and communications services. The exit was substantially complete as of June 30, 2026. The Company expects the exit from this business to reduce annual fee revenue by roughly $30 million (less than 1 percent of total revenue) and increase annual pre-tax income by roughly $20 million. Our 2026 operating ROE is expected to exceed the three-year target of 12 percent we had previously established for year-end 2027. We expect free cash flows to be in the range of $200 million to $250 million. We expect to continue to manage to: (i) a consolidated RBC ratio in the range of 360 percent to 390 percent for our U.S. based insurance subsidiaries; (ii) minimum holding company liquidity of $150 million; and (iii) a target debt to total capital, excluding accumulated other comprehensive loss, in the range of 25 percent to 28 percent. 80 In the second quarter of 2025, we began TechMod, a three-year initiative to modernize certain elements of our technology, enabling continued growth of the business over the long-term. The initiative is expected to cost approximately $170 million over three years, including approximately $76 million in 2026. The outlook metrics previously described include the expected impact of this initiative. We expect to establish new operating ROE targets when we update our outlook in February 2027. LIQUIDITY AND CAPITAL RESOURCES Our capital structure as of June 30, 2026 and December 31, 2025 was as follows (dollars in millions): June 30, 2026 December 31, 2025 Total capital: Corporate notes payable $ 1,336.3 $ 1,335.6 Shareholders’ equity: Common stock 0.9 0.9 Additional paid-in capital 1,227.4 1,336.3 Accumulated other comprehensive loss (1,182.8) (1,115.0) Retained earnings 2,546.1 2,416.0 Total shareholders’ equity 2,591.6 2,638.2 Total capital $ 3,927.9 $ 3,973.8 The following table summarizes certain financial ratios as of and for the six months ended June 30, 2026 and as of and for the year ended December 31, 2025: June 30, 2026 December 31, 2025 Book value per common share $ 27.96 $ 27.92 Book value per common share, excluding accumulated other comprehensive loss (a) 40.72 39.72 Debt to total capital ratios: Corporate debt to total capital 34.0 % 33.6 % Corporate debt to total capital, excluding accumulated other comprehensive loss (a) 26.1 % 26.2 % ________________ (a)This non-GAAP measure differs from the corresponding GAAP measure presented immediately above, because accumulated other comprehensive loss has been excluded from the value of capital used to determine this measure. Management believes this non-GAAP measure is useful because it removes the volatility that arises from changes in accumulated other comprehensive loss. Such volatility is often caused by changes in the estimated fair value of our investment portfolio resulting from changes in general market interest rates rather than the business decisions made by management. However, this measure does not replace the corresponding GAAP measure. Liquidity for Insurance Operations Our insurance companies generally receive adequate cash flows from premium collections and investment income to meet their obligations. Life insurance, long-term care and supplemental health insurance and annuity liabilities are generally long-term in nature. Life and annuity policyholders may, however, withdraw funds or surrender their policies, subject to any applicable penalty provisions; there are generally no withdrawal or surrender benefits for long-term care insurance. We actively manage the relationship between the duration of our invested assets and the estimated duration of benefit payments arising from contract liabilities. 81 Three of the Company's insurance subsidiaries (Bankers Life, Washington National and Colonial Penn) are members of the FHLB. As members of the FHLB, our insurance subsidiaries have the ability to borrow from the FHLB on a collateralized basis. As of June 30, 2026, collateralized borrowings from the FHLB totaled $2.9 billion and are classified as investment borrowings in the accompanying consolidated balance sheet. The borrowings are collateralized by investments with an estimated fair value of $3.6 billion at June 30, 2026, which are maintained in custodial accounts for the benefit of the FHLB. The proceeds from these borrowings were used to purchase variable rate fixed maturity securities with similar durations to generate spread-based earnings. We are required to hold certain minimum amounts of FHLB common stock as a condition of membership in the FHLB, and additional amounts based on the amount of the borrowings. As of June 30, 2026, the carrying value of the FHLB common stock was $128.5 million. Bankers Life has a FABN program pursuant to which Bankers Life may issue funding agreements to a Delaware statutory trust organized in series (the "Trust") to generate spread-based earnings. Under current authorizations, the maximum aggregate principal amount of funding agreements permitted to be outstanding at any one time under the FABN program is $4 billion. Bankers Life issued funding agreements each to a series of the Trust in a principal amount of $300 million in June 2026 and $350 million and $400 million in September and December 2025, respectively. During January 2025, a $400 million funding agreement was repaid at maturity. The aggregate principal amount of funding agreements outstanding at June 30, 2026 was $3.7 billion. The activity related to the funding agreements is reported in investment income not allocated to product lines. State laws generally give state insurance regulatory agencies broad authority to protect policyholders in their jurisdictions. Regulators have used this authority in the past to restrict the ability of our insurance subsidiaries to pay any dividends or other amounts without prior approval. We cannot be assured that the regulators will not seek to assert greater supervision and control over our insurance subsidiaries' businesses and financial affairs. Our estimated consolidated statutory RBC ratio of our U.S. based insurance subsidiaries was 377 percent at June 30, 2026, compared to 380 percent at December 31, 2025. In the first six months of 2026, the RBC ratio reflected our estimated consolidated statutory operating income of $58.4 million. Our RBC ratio at June 30, 2026 was within our targeted RBC ratio range of 360 percent to 390 percent that is reflected in our risk appetite statement that we share and discuss with rating agencies and insurance regulators. We believe that the target RBC ratio range continues to adequately support our financial strength and credit ratings. In 2023, we formed CNO Bermuda Re, Ltd. ("CNO Bermuda Re"), a Bermuda exempted company, which is an indirect wholly owned subsidiary of CNO. CNO Bermuda Re is registered by and subject to the supervision of the Bermuda Monetary Authority ("BMA") as a Class C insurer under the Bermuda Insurance Act 1978 and its related rules and regulations, each as amended. Pursuant to the Capital and Liquidity Maintenance Agreement (as amended, "CLMA") between CNO Bermuda Re and CDOC, CDOC will contribute funds to CNO Bermuda Re in the event: (i) CNO Bermuda Re's statutory economic capital and surplus is less than 150 percent of its enhanced capital requirement at the end of any calendar quarter; or (ii) CNO Bermuda Re's liquid assets are insufficient to meet its contractual obligations to ceding insurers, in each case, unless one or more ceding insurers has provided notice of recapture pursuant to the terms of the applicable reinsurance agreement between it and CNO Bermuda Re and such recapture will cause CNO Bermuda Re to meet (i) and (ii) above. Further, CNO Bermuda Re may not pay any dividends or make any capital distributions to its parent within the five years following the 2023 reinsurance transaction unless approved by the BMA. CNO Bermuda Re is subject to regulation in Bermuda where the BMA has broad supervisory and administrative powers relating to granting and revoking licenses to transact reinsurance business, the approval of specific reinsurance transactions, capital requirements and solvency standards, limitations on dividends or distributions to shareholders, the nature of and limitations on investments, and the filing of financial statements in accordance with prescribed or permitted accounting practices. Future regulatory changes made by the BMA or other events may impact the capital efficiency of the reinsurance structures and could require the holding company to contribute additional capital to CNO Bermuda Re or the ceding reinsurers to recapture the ceded business. Our insurance subsidiaries transfer exposure to certain risk to others through reinsurance arrangements. When we obtain reinsurance, we are still liable for those transferred risks in the event the reinsurer defaults on its obligations. The failure, insolvency, inability or unwillingness of one or more of the Company's reinsurers to perform in accordance with the terms of its reinsurance agreement could negatively impact our earnings or financial position and our consolidated statutory RBC ratio. 82 Financial Strength Ratings of our Insurance Subsidiaries Financial strength ratings provided by Fitch Ratings ("Fitch"), S&P, Moody's Investor Services, Inc. ("Moody's"), and AM Best Company ("AM Best") are the rating agency's opinions of the ability of our insurance subsidiaries to pay policyholder claims and obligations when due. Moody's affirmed its "A3" financial strength ratings of our primary insurance subsidiaries on June 19, 2026. The outlook for these ratings remains stable. Moody’s financial strength ratings range from "Aaa" to "C". These ratings may be supplemented with numbers "1", "2", or "3" to show relative standing within a category. In Moody's view, an insurer rated "A" offers good financial security, however, certain elements may be present which suggests a susceptibility to impairment in the future. Moody's has 21 possible ratings. There are six ratings above the "A3" rating of our primary insurance subsidiaries and 14 ratings that are below that rating. On April 8, 2026, AM Best affirmed its "A" financial strength ratings of our primary insurance subsidiaries and the outlook for these ratings remains stable. The "A" rating is assigned to companies that have an excellent ability, in AM Best's opinion, to meet their ongoing obligations to policyholders. AM Best ratings for the industry currently range from "A++ (Superior)" to "D (In Liquidation)" and some companies are not rated. AM Best has 13 possible ratings. There are two ratings above the "A" rating of our primary insurance subsidiaries and ten ratings that are below that rating. Fitch affirmed its "A" financial strength ratings of our primary insurance subsidiaries on October 21, 2025. The outlook for these ratings remains stable. An insurer rated "A", in Fitch's opinion, indicates a low expectation of ceased or interrupted payments and indicates strong capacity to meet policyholder and contract obligations. This capacity may, nonetheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. Fitch ratings for the industry range from "AAA Exceptionally Strong" to "D Distressed" and some companies are not rated. Pluses and minuses show the relative standing within a category. Fitch has 24 possible ratings. There are five ratings above the "A" rating of our primary insurance subsidiaries and 18 ratings that are below that rating. S&P affirmed its "A-" financial strength ratings of our primary insurance subsidiaries on June 24, 2025. The outlook for these ratings remains stable. S&P financial strength ratings range from "AAA" to "D" and some companies are not rated. An insurer rated "A", in S&P's opinion, has strong financial security characteristics, but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings. Pluses and minuses show the relative standing within a category. S&P has 22 possible ratings. There are six ratings above the "A-" rating of our primary insurance subsidiaries and 15 ratings that are below that rating. Rating agencies have increased the frequency and scope of their credit reviews and requested additional information from the companies that they rate, including us. They may also adjust upward the capital and other requirements employed in their rating models for maintenance of certain ratings levels. We cannot predict what actions rating agencies may take, or what actions we may take in response. Accordingly, downgrades and outlook revisions related to us or the life insurance industry may occur in the future at any time and without notice by any rating agency. These could increase policy surrenders and withdrawals, adversely affect relationships with our distribution channels, reduce new sales, reduce our ability to borrow and increase our future borrowing costs. Liquidity of the Holding Companies Availability and Sources and Uses of Holding Company Liquidity; Limitations on Ability of Insurance Subsidiaries to Make Dividend and Surplus Debenture Interest Payments to the Holding Companies; Limitations on Holding Company Activities CNO and CDOC, Inc. ("CDOC", our wholly owned subsidiary and the immediate parent of Washington National and Conseco Life Insurance Company of Texas ("CLTX")) are holding companies with no business operations of their own; they depend on their operating subsidiaries for cash to make principal and interest payments on debt, and to pay administrative expenses and income taxes. CNO and CDOC receive cash from insurance subsidiaries, consisting of dividends and distributions, interest payments on surplus debentures and tax-sharing payments, as well as cash from non-insurance subsidiaries consisting of dividends, distributions, loans and advances. The principal non-insurance subsidiaries that provide cash to CNO and CDOC are 40|86 Advisors, Inc., which receives fees from the insurance subsidiaries for investment services, and CNO Services, LLC which receives fees from the insurance subsidiaries for providing administrative services. The 83 agreements between our insurance subsidiaries and CNO Services, LLC and 40|86 Advisors, Inc., respectively, were previously approved by the domestic insurance regulator for each insurance company, and any payments thereunder do not require further regulatory approval. Refer to "Liquidity for Insurance Operations" above regarding the CLMA and limitations on CNO Bermuda Re's ability to pay dividends to CDOC. At June 30, 2026, CNO, CDOC and our other non-insurance subsidiaries held $233.2 million of unrestricted cash and cash equivalents, which was above our minimum target level of $150 million. The ability of our U.S. based insurance subsidiaries to pay dividends is subject to state insurance department regulations and is based on the financial statements of our insurance subsidiaries prepared in accordance with statutory accounting practices prescribed or permitted by regulatory authorities, which differ from GAAP. These regulations generally permit dividends to be paid from statutory earned surplus of the insurance company without regulatory approval for any 12-month period in amounts equal to the greater of (or in some states, the lesser of): (i) statutory net gain from operations or net income for the prior year; or (ii) 10 percent of statutory capital and surplus as of the end of the preceding year. However, as Washington National and CLTX, the immediate U.S. based insurance subsidiaries of CDOC, have significant negative earned surplus, any dividend payments from the insurance subsidiaries require the prior approval of the director or commissioner of the applicable state insurance department. Washington National and CLTX receive funds to pay dividends primarily from: (i) the earnings of their direct businesses; (ii) tax sharing payments received from subsidiaries (if applicable); and (iii) with respect to CLTX, dividends received from subsidiaries. Bankers Conseco Life Insurance Company, Bankers Life and Colonial Penn are wholly-owned subsidiaries of CLTX. Colonial Penn has significant negative earned surplus, and would therefore require prior approval to pay a dividend. Colonial Penn has not paid dividends in recent years. Bankers Life has modest earned surplus at June 30, 2026 and, depending on the size of the dividend, could require prior approval to pay a dividend. Bankers Conseco Life Insurance Company has minimal earned surplus, but consistently has positive earnings. As a result, a limited amount of dividends can be paid without prior approval. CNO Bermuda Re may not pay any dividends or make any capital distributions to its parent within the five years following the 2023 reinsurance transaction unless approved by the BMA. In the first six months of 2026, our U.S. based insurance subsidiaries paid dividends to CDOC totaling $55.5 million. We expect to receive regulatory approval for future dividends from our subsidiaries, but there can be no assurance that such payments will be approved or that the financial condition of our insurance subsidiaries will not change, making future approvals less likely. In the first six months of 2026, CDOC made capital contributions of $35.5 million to its insurance subsidiaries. CDOC holds surplus debentures from CLTX with an aggregate principal amount of $749.6 million. Interest payments on those surplus debentures do not require additional approval provided the RBC ratio of CLTX exceeds 100 percent (but do require prior written notice to the Texas Department of Insurance). The estimated RBC ratio of CLTX was 331 percent at June 30, 2026. CDOC also holds a surplus debenture from Colonial Penn with a principal balance of $160.0 million. Interest payments on that surplus debenture require prior approval by the Pennsylvania Insurance Department. Dividends and other payments from our non-insurance subsidiaries, including 40|86 Advisors, Inc. and CNO Services, LLC, to CNO or CDOC do not require approval by any regulatory authority or other third party. However, insurance regulators may prohibit payments by our insurance subsidiaries to parent companies if they determine that such payments could be adverse to our policyholders or contractholders. A significant deterioration in the financial condition, earnings or cash flow of the material subsidiaries of CNO or CDOC for any reason could hinder such subsidiaries' ability to pay cash dividends or other disbursements to CNO and/or CDOC, which, in turn, could limit CNO's ability to meet debt service requirements and satisfy other financial obligations. In addition, we may choose to retain capital in our insurance subsidiaries or to contribute additional capital to our insurance subsidiaries to maintain or strengthen their surplus or fund reinsurance transactions, and these decisions could limit the amount available at our top tier insurance subsidiaries to pay dividends to the holding companies. At June 30, 2026, there were no amounts outstanding under our $250.0 million Credit Agreement and there are no scheduled repayments of our direct corporate obligations until May 2029. Free cash flow is a measure of holding company liquidity and is calculated as: (i) dividends, management fees and surplus debenture interest payments received from our subsidiaries; plus (ii) earnings on corporate investments; less (iii) interest expense, corporate expenses and net tax payments. During the twelve months ended June 30, 2026, we generated approximately $354.2 million of such free cash flow, of which $36.6 million was generated during the first six months of 2026. The Company expects to deploy its free cash flow into investments to accelerate profitable growth, common stock dividends and share repurchases. The amount and timing of future share repurchases (if any) will be based on business and market conditions and 84 other factors including, but not limited to, available free cash flow, the current price of our common stock and investment opportunities. In the first six months of 2026, we repurchased 2.7 million shares of common stock for $120.0 million under our securities repurchase program. The Company had remaining repurchase authority of $300.4 million as of June 30, 2026. In the first six months of 2026, dividends declared on common stock totaled $33.5 million ($0.35 per common share). In May 2026, the Company increased its quarterly common stock dividend to $0.18 per share from $0.17 per share. Moody's affirmed its "Baa3" rating on our senior unsecured debt on June 19, 2026. The outlook for these ratings remains stable. In Moody's view, obligations rated "Baa" are subject to moderate credit risk and may possess certain speculative characteristics. A rating is supplemented with numerical modifiers "1", "2" or "3" to show the relative standing within a category. Moody's has a total of 21 possible ratings ranging from "Aaa" to "C". There are nine ratings above CNO's "Baa3" rating and 11 ratings that are below its rating. On April 8, 2026, AM Best affirmed its "bbb" rating on our issuer credit and senior unsecured debt and the outlook for these ratings is stable. In AM Best's view, a company rated "bbb" has an adequate ability to meet the terms of its obligations; however, the issuer is more susceptible to changes in economic or other conditions. Pluses and minuses show the relative standing within a category. AM Best has a total of 21 possible ratings ranging from "aaa (Exceptional)" to "c (In default)". There are eight ratings above CNO's "bbb" rating and 12 ratings that are below its rating. Fitch affirmed its "BBB+" and "BBB" ratings on our issuer credit and senior unsecured debt ratings, respectively, on October 21, 2025. The outlook for these ratings is stable. In Fitch's view, an obligation rated "BBB" indicates that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. Pluses and minuses show the relative standing within a category. Fitch has a total of 24 possible ratings ranging from "AAA" to "D". There are seven ratings above CNO's "BBB+" rating and 16 ratings that are below its rating. There are eight ratings above CNO's "BBB" rating and 15 ratings that are below its rating. S&P affirmed its "BBB-" rating on our issuer credit and senior unsecured debt on June 24, 2025. The outlook for these ratings remains stable. In S&P's view, an obligation rated "BBB" exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. Pluses and minuses show the relative standing within a category. S&P has a total of 22 possible ratings ranging from "AAA (Extremely Strong)" to "D (Payment Default)". There are nine ratings above CNO's "BBB-" rating and 12 ratings that are below its rating. We believe that the existing cash available to the holding company, the cash flows to be generated from operations and other transactions will be sufficient to allow us to meet our debt service obligations, pay corporate expenses and satisfy other financial obligations. However, our cash flow is affected by a variety of factors, many of which are outside of our control, including insurance regulatory issues, competition, financial markets and other general business conditions. We cannot provide assurance that we will possess sufficient income and liquidity to meet all of our debt service requirements and other holding company obligations. 85 INVESTMENTS At June 30, 2026, the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and estimated fair value of fixed maturities, available for sale, were as follows (dollars in millions): Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses Estimated fair value Investment grade (a): Corporate securities $ 14,261.1 $ 33.0 $ (1,434.0) $ (28.2) $ 12,831.9 United States Treasury securities and obligations of United States government corporations and agencies 211.5 — (32.6) — 178.9 States and political subdivisions 3,246.7 19.6 (380.9) (0.5) 2,884.9 Foreign governments 133.5 0.6 (11.5) (1.0) 121.6 Asset-backed securities 1,959.1 6.0 (47.6) (0.1) 1,917.4 Agency residential mortgage-backed securities 711.5 6.7 (0.9) — 717.3 Non-agency residential mortgage-backed securities 1,267.1 11.7 (77.3) — 1,201.5 Collateralized loan obligations 1,597.7 2.7 (2.6) — 1,597.8 Commercial mortgage-backed securities 2,099.4 2.9 (95.7) — 2,006.6 Total investment grade fixed maturities, available for sale 25,487.6 83.2 (2,083.1) (29.8) 23,457.9 Below-investment grade (a) (b): Corporate securities 738.5 5.0 (46.8) (7.1) 689.6 States and political subdivisions 22.5 0.1 (2.1) (2.3) 18.2 Asset-backed securities 30.7 — (1.2) — 29.5 Non-agency residential mortgage-backed securities 207.4 18.3 (1.0) — 224.7 Commercial mortgage-backed securities 93.5 — (15.4) (2.3) 75.8 Total below-investment grade fixed maturities, available for sale 1,092.6 23.4 (66.5) (11.7) 1,037.8 Total fixed maturities, available for sale $ 26,580.2 $ 106.6 $ (2,149.6) $ (41.5) $ 24,495.7 ________________ (a)Investment ratings are assigned the second lowest rating by Nationally Recognized Statistical Rating Organizations ("NRSROs") (Moody's, S&P or Fitch), or if not rated by such firms, the rating assigned by the NAIC. NAIC designations of "1" or "2" include fixed maturities generally rated investment grade (rated "Baa3" or higher by Moody's or rated "BBB-" or higher by S&P and Fitch). NAIC designations of "3" through "6" are referred to as below-investment grade (which generally are rated "Ba1" or lower by Moody's or rated "BB+" or lower by S&P and Fitch). References to investment grade or below-investment grade throughout our consolidated financial statements are determined as described above. (b) Certain structured securities rated below-investment grade by NRSROs may be assigned a NAIC 1 or NAIC 2 designation based on the cost basis of the security relative to estimated recoverable amounts as determined by the NAIC. Refer to the table below for a summary of our fixed maturity securities, available for sale, by NAIC designations. 86 The NAIC evaluates the fixed maturity investments of insurers for regulatory and capital assessment purposes and assigns securities to one of six credit quality categories called NAIC designations, which are used by insurers when preparing their annual statements based on statutory accounting principles. The NAIC designations are generally similar to the credit quality designations of the NRSROs for marketable fixed maturity securities, except for certain structured securities. However, certain structured securities rated below investment grade by the NRSROs can be assigned NAIC 1 or NAIC 2 designations depending on the cost basis of the holding relative to estimated recoverable amounts as determined by the NAIC. The following summarizes the NAIC designations and NRSRO equivalent ratings: NAIC Designation NRSRO Equivalent Rating 1 AAA/AA/A 2 BBB 3 BB 4 B 5 CCC and lower 6 In or near default A summary of our fixed maturity securities, available for sale, by NAIC designations (or for fixed maturity securities held by non-regulated entities, based on NRSRO ratings) as of June 30, 2026 is as follows (dollars in millions): NAIC designation Amortized cost Estimated fair value Percentage of total estimated fair value 1 $ 16,007.5 $ 14,628.4 59.7 % 2 9,700.6 9,062.1 37.0 Total NAIC 1 and 2 (investment grade) 25,708.1 23,690.5 96.7 3 665.6 625.8 2.5 4 182.6 162.1 0.7 5 17.8 13.5 0.1 6 6.1 3.8 — Total NAIC 3, 4, 5 and 6 (below-investment grade) 872.1 805.2 3.3 Total $ 26,580.2 $ 24,495.7 100.0 % 87 Fixed Maturity Securities, Available for Sale The following table summarizes the carrying values and gross unrealized losses of our fixed maturity securities, available for sale, by category as of June 30, 2026 (dollars in millions): Carrying value Percent of fixed maturities Gross unrealized losses Percent of gross unrealized losses States and political subdivisions $ 2,903.1 11.9 % $ 383.0 17.8 % Commercial mortgage-backed securities 2,082.4 8.5 111.1 5.2 Asset-backed securities 1,946.9 7.9 48.8 2.3 Banks 1,877.2 7.7 161.6 7.5 Insurance 1,654.6 6.8 173.3 8.1 Collateralized loan obligations 1,597.8 6.5 2.6 0.1 Non-agency residential mortgage-backed securities 1,426.2 5.8 78.3 3.6 Utilities 1,170.0 4.8 145.5 6.8 Brokerage 1,113.2 4.5 67.0 3.1 Healthcare/pharmaceuticals 961.0 3.9 203.8 9.5 Technology 909.7 3.7 160.6 7.5 Agency residential mortgage-backed securities 717.3 2.9 0.9 — Cable/media 675.9 2.8 101.7 4.7 Food/beverage 641.7 2.6 84.7 3.9 Energy 625.9 2.6 34.0 1.6 Real estate/REITs 459.6 1.9 36.2 1.7 Transportation 370.7 1.5 42.2 2.0 Retail 261.0 1.1 29.5 1.4 Building materials 253.7 1.0 19.1 0.9 Autos 234.7 1.0 19.9 0.9 Chemicals 200.7 0.8 26.2 1.2 Other 2,412.4 9.8 219.6 10.2 Total fixed maturities, available for sale $ 24,495.7 100.0 % $ 2,149.6 100.0 % Below-Investment Grade Securities At June 30, 2026, the amortized cost of the Company's below-investment grade fixed maturity securities, available for sale, was $1,092.6 million, or 4 percent, of the Company's fixed maturity portfolio. The estimated fair value of the below-investment grade portfolio was $1,037.8 million, or 95 percent, of the amortized cost. Based on the credit quality ratings assigned by the NAIC: (i) the amortized cost of our below-investment grade fixed maturities was $872.1 million, or 3 percent, of our fixed maturity portfolio; and (ii) the estimated fair value of such below-investment grade fixed maturities was $805.2 million, or 92 percent, of the amortized cost. Below-investment grade corporate debt securities typically have different characteristics than investment grade corporate debt securities. Based on historical performance, probability of default by the borrower is significantly greater for below-investment grade corporate debt securities and in many cases severity of loss is relatively greater as such securities are generally unsecured and often subordinated to other indebtedness of the issuer. Also, issuers of below-investment grade corporate debt securities frequently have higher levels of debt relative to investment-grade issuers, hence, all other things being equal, are generally more sensitive to adverse economic conditions. The Company attempts to reduce the overall risk related to its investment in below-investment grade securities, as in all investments, through careful credit analysis, strict investment policy guidelines, and diversification by issuer and/or guarantor and by industry. 88 Structured Securities At June 30, 2026, fixed maturity investments included structured securities with an estimated fair value of $7.8 billion, which represents 32 percent of all fixed maturity securities. The yield characteristics of structured securities generally differ in some respects from those of traditional corporate fixed-income securities or government securities. For example, interest and principal payments on structured securities may occur more frequently, often monthly. In many instances, we are subject to variability in the amount and timing of principal and interest payments. For example, in many cases, partial prepayments may occur at the option of the issuer and prepayment rates are influenced by a number of factors that cannot be predicted with certainty, including: the relative sensitivity of prepayments on the underlying assets backing the security to changes in interest rates and asset values; the availability of alternative financing; a variety of economic, geographic and other factors; the timing, pace and proceeds of liquidations of defaulted collateral; and various security-specific structural considerations (for example, the repayment priority of a given security in a securitization structure). In addition, the total amount of payments for non-agency structured securities may be affected by changes to cumulative default rates or loss severities of the related collateral. The amortized cost and estimated fair value of structured securities at June 30, 2026, summarized by type of security, were as follows (dollars in millions): Estimated fair value Amortized cost Amount Percent of fixed maturities Asset-backed securities $ 1,989.8 $ 1,946.9 7.9 % Agency residential mortgage-backed securities 711.5 717.3 2.9 Non-agency residential mortgage-backed securities 1,474.5 1,426.2 5.8 Collateralized loan obligations 1,597.7 1,597.8 6.5 Commercial mortgage-backed securities 2,192.9 2,082.4 8.5 Total structured securities $ 7,966.4 $ 7,770.6 31.6 % Residential mortgage-backed securities ("RMBS") include transactions collateralized by agency-guaranteed and non-agency mortgage obligations. Non-agency RMBS investments are primarily categorized by underlying borrower credit quality: Prime, Alt-A, Non-Qualified Mortgage ("Non-QM"), and Subprime. Prime borrowers typically default with the lowest frequency, Alt-A and Non-QM default at higher rates, and Subprime borrowers default with the highest frequency. In addition to borrower credit categories, RMBS investments include Re-Performing Loan ("RPL") and Credit Risk Transfer ("CRT") transactions. RPL transactions include borrowers with prior difficulty meeting the original mortgage terms and were subsequently modified, resulting in a sustainable payback arrangement. CRT securities are collateralized by Government-Sponsored Enterprise ("GSE") conforming mortgages and Prime borrowers, but without an agency guarantee against default losses. Commercial mortgage-backed securities ("CMBS") are secured by commercial real estate mortgages, generally income producing properties that are managed for profit. Property types include, but are not limited to, multi-family dwellings including apartments, retail centers, hotels, restaurants, hospitals, nursing homes, warehouses, and office buildings. While most CMBS have call protection features whereby underlying borrowers may not prepay their mortgages for stated periods of time without incurring prepayment penalties, recoveries on defaulted collateral may result in involuntary prepayments. Net Realized and Unrealized Investment Losses During the six months ended June 30, 2026, the $89.2 million of gross realized losses on sales of $2,793.4 million of fixed maturity securities, available for sale, primarily related to various corporate securities. During the six months ended June 30, 2025, we recognized $24.6 million of realized losses on sales of $525.1 million of fixed maturity securities, available for sale, primarily related to various corporate securities and commercial mortgage-backed securities. 89 The following summarizes the investments sold at a loss during the first six months of 2026 which had been continuously in an unrealized loss position exceeding 20 percent of the amortized cost basis prior to the sale for the period indicated (dollars in millions): At date of sale Number of issuers Amortized cost Fair value Less than 6 months prior to sale 2 $ 8.6 $ 5.3 Greater than or equal to 6 months and less than 12 months prior to sale 3 8.0 5.9 Greater than 12 months prior to sale 4 8.5 6.2 $ 25.1 $ 17.4 Future events may occur, or additional information may become available, which may necessitate future realized losses in our portfolio. Significant losses could have a material adverse effect on our consolidated financial statements in future periods. The following table sets forth the amortized cost and estimated fair value of those fixed maturities, available for sale, with unrealized losses at June 30, 2026, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Structured securities frequently include provisions for periodic principal payments and permit periodic unscheduled payments. Amortized cost Estimated fair value (Dollars in millions) Due in one year or less $ 110.7 $ 110.3 Due after one year through five years 1,442.4 1,419.9 Due after five years through ten years 2,314.1 2,262.6 Due after ten years 11,022.4 9,149.8 Subtotal 14,889.6 12,942.6 Structured securities 4,303.3 4,059.2 Total $ 19,192.9 $ 17,001.8 The following summarizes the investments in our portfolio rated below-investment grade not deemed to have credit losses which have been continuously in an unrealized loss position exceeding 20 percent of the cost basis as of June 30, 2026 (dollars in millions): Number of issuers Cost basis Unrealized loss Estimated fair value Less than 6 months 1 $ 3.0 $ (0.7) $ 2.3 Greater than or equal to 6 months and less than 12 months 1 0.1 — 0.1 Greater than 12 months 5 27.2 (8.5) 18.7 Total $ 30.3 $ (9.2) $ 21.1 90 The following table summarizes the gross unrealized losses of our fixed maturity securities, available for sale, by category and ratings category as of June 30, 2026 (dollars in millions): Investment grade Below-investment grade AAA/AA/A BBB BB B+ and below Total gross unrealized losses States and political subdivisions $ 375.2 $ 5.7 $ 0.2 $ 1.9 $ 383.0 Healthcare/pharmaceuticals 155.9 46.7 — 1.2 203.8 Insurance 106.4 64.1 2.8 — 173.3 Banks 113.1 48.5 — — 161.6 Technology 100.4 58.1 1.9 0.2 160.6 Utilities 97.0 48.2 0.3 — 145.5 Commercial mortgage-backed securities 71.8 24.0 10.2 5.1 111.1 Cable/media 11.0 65.5 24.3 0.9 101.7 Food/beverage 31.8 52.8 0.1 — 84.7 Non-agency residential mortgage-backed securities 69.1 8.2 0.2 0.8 78.3 Brokerage 45.4 21.5 0.1 — 67.0 Education 53.0 5.2 — — 58.2 Asset-backed securities 16.6 31.1 1.1 — 48.8 Transportation 24.0 16.5 — 1.7 42.2 Real estate/REITs 20.9 15.3 — — 36.2 Energy 8.3 25.7 — — 34.0 United States Treasury securities and obligations of United States government corporations and agencies 32.6 — — — 32.6 Retail 25.8 2.6 1.1 — 29.5 Chemicals 2.9 23.3 — — 26.2 Capital goods 19.9 5.6 — — 25.5 Consumer products 10.5 0.8 — 11.3 22.6 Aerospace/defense 7.3 13.6 — — 20.9 Autos 4.9 15.0 — — 19.9 Building materials 4.8 14.2 0.1 — 19.1 Telecom 0.2 12.0 — — 12.2 Foreign governments 6.0 5.5 — — 11.5 Metals and mining 2.2 7.0 0.1 — 9.3 Paper — 7.8 0.1 — 7.9 Entertainment/hotels 6.2 0.5 0.1 — 6.8 Business services — 3.4 0.1 0.1 3.6 Packaging — 3.2 0.1 — 3.3 Collateralized loan obligations 2.2 0.4 — — 2.6 Other 5.3 0.4 0.3 0.1 6.1 Total fixed maturities, available for sale $ 1,430.7 $ 652.4 $ 43.2 $ 23.3 $ 2,149.6 Our investment strategy is to manage, over a sustained period and within acceptable parameters of quality and risk, capital efficiency through active strategic asset allocation and investment management. Accordingly, we may sell securities at a gain or a loss to enhance the projected total return of the portfolio as market opportunities change, to reflect changing 91 perceptions of risk, or to better match certain characteristics of our investment portfolio with the corresponding characteristics of our insurance liabilities. INVESTMENTS IN VARIABLE INTEREST ENTITIES The following table provides supplemental information about the revenues and expenses of the VIEs which have been consolidated in accordance with authoritative guidance, after giving effect to the elimination of our investment in the VIEs and investment management fees earned by a subsidiary of the Company (dollars in millions): Three months ended Six months ended June 30, June 30, 2026 2025 2026 2025 Revenues: Net investment income – policyholder and other special-purpose portfolios $ 4.2 $ 7.3 $ 8.2 $ 14.8 Fee revenue and other income (0.4) 0.9 (0.6) 2.4 Total revenues 3.8 8.2 7.6 17.2 Expenses: Interest expense 4.0 5.9 7.8 13.7 Other operating expenses 0.2 1.3 1.0 2.3 Total expenses 4.2 7.2 8.8 16.0 Income before net investment losses and income taxes (0.4) 1.0 (1.2) 1.2 Net investment losses (0.8) (0.9) (2.1) (4.4) Income (loss) before income taxes $ (1.2) $ 0.1 $ (3.3) $ (3.2) 92 Supplemental Information on Investments Held by VIEs The following table summarizes the carrying values and gross unrealized losses of the investments held by the VIEs by category as of June 30, 2026 (dollars in millions): Carrying value Percent of fixed maturities Gross unrealized losses Percent of gross unrealized losses Technology $ 36.5 12.5 % $ 1.1 38.5 % Brokerage 31.7 10.8 0.3 9.3 Healthcare/pharmaceuticals 27.8 9.5 0.2 7.6 Building materials 20.7 7.1 0.1 2.3 Cable/media 20.5 7.0 0.4 14.5 Food/beverage 19.9 6.8 0.1 2.8 Paper 16.9 5.8 0.1 2.6 Chemicals 15.6 5.3 0.1 4.5 Aerospace/defense 14.7 5.0 — 1.7 Autos 13.2 4.5 — 1.1 Transportation 12.7 4.3 — 0.3 Insurance 12.2 4.2 0.2 7.8 Utilities 10.6 3.6 — 1.2 Capital goods 9.7 3.3 — 0.6 Business services 7.6 2.7 0.2 2.1 Consumer products 6.7 2.3 — 1.4 Retail 4.4 1.5 — 0.3 Energy/pipelines 3.5 1.2 — 0.1 Other 7.4 2.6 0.1 1.3 Total $ 292.3 100.0 % $ 2.9 100.0 % The following table sets forth the amortized cost and estimated fair value of those investments held by the VIEs with unrealized losses at June 30, 2026, by contractual maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties. Amortized cost Estimated fair value (Dollars in millions) Due in one year or less $ — $ — Due after one year through five years 117.6 114.8 Due after five years through ten years 97.2 95.5 Total $ 214.8 $ 210.3 93 NEW ACCOUNTING STANDARDS See "Recently Adopted Accounting Standards" and "Recently Issued Accounting Standards" in Note 1 to the Consolidated Financial Statements (unaudited) included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recently adopted and issued accounting standards.