Note 11 - Statutory Net Income and Surplus

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Statutory Accounting Practices Disclosure [Text Block]

Note 11. Statutory Net Income and Surplus

US Alliance Life and Security Company is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Kansas Insurance Department. Dakota Capital Life Insurance Company is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the North Dakota Insurance Department. US Alliance Life and Security Company - Montana is required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the Montana Insurance Department. Statutory practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a different basis.

The following table summarizes the statutory net income (loss) and statutory capital and surplus of US Alliance Life and Security Company, Dakota Capital Life Insurance Company, and US Alliance Life and Security Company - Montana for the years ended December 31, 2022 and 2021.

	Statutory Capital and Surplus as of
	December 31,		December 31,
	2022		2021
US Alliance Life and Security Company	$	5,617,538	$	7,377,352
Dakota Capital Life Insurance Company		3,840,701		3,946,357
US Alliance Life and Security Company - Montana		1,840,134		1,709,322

	Statutory Net Income (loss) for the years ended December 31,
	2022			2021
US Alliance Life and Security Company	$	(2,229,098	)	$	792,748
Dakota Capital Life Insurance Company		(219,601	)		73,953
US Alliance Life and Security Company - Montana		133,180			(1,179	)

The payment of dividends to US Alliance Corporation by US Alliance Life and Security Company is subject to limitations imposed by applicable insurance laws. For example, “extraordinary” dividends may not be paid without permission of the Kansas Insurance Department. An “extraordinary” dividend is defined, in general, as any dividend or distribution of cash or other property whose fair market value, compared with that of other dividends or distributions made within the preceding 12 months, exceeds the greater of (i) 10% of the policyholders’ surplus (total statutory capital stock and surplus) as of December 31 of the preceding year or (ii) the statutory net gain from operations excluding realized gains on investments) of the insurer for the 12 month period ending December 31 of the preceding year.

The payment of dividends to US Alliance Life and Security Company by Dakota Capital Life Insurance Company and US Alliance Life and Security Company – Montana is subject to similar limitations.  No dividends were paid in 2022 or 2021.