There's a lot of talk that management should buy back shares because the stock trades below its book value. However, as of the last annual report there was approximately $835 million in deferred policy acquisition costs and deferred sales inducement. I understand its common practice to count these as assets but I think its important to realize that these costs are not tangible assets. If we subtract these assets then I come up with a book value of around $375 million as of the last annual report which was nearly a year ago. That being said, I do think the company is undervalued.
If you take a look at their 10-K, there is quite a discussion on the DAC. Basically, if policy holders cancel their policy, the penalties are such that the DAC will essentially be forfeited to the company. If they keep the policy, it is designed to included this cost as part of the policy admin fee.
They've done a good job of manging these costs in the past, so I am confident they will continue to do so.