Note 3 - Derivative Instruments

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 3.    Derivative Instruments

Types of Derivatives used by the Company

The Company’s derivatives consists of embedded derivatives on funds withheld on coinsurance assets which was eliminated in October 2022 and a reinsurance contract allocated hedge which was acquired in October 2022.

Summary of Derivative Positions

The fair value of the Company’s derivative financial instruments on the consolidated balance sheets is as follows:

	June 30, 2023				December 31, 2022
	Derivative				Derivative				Balance
	Asset		Liability		Asset		Liability		Reported In
Derivatives:	(Unaudited)
Embedded derivatives:
Reinsurance contract allocated hedge	$	1,013,677		-	$	724,998	$	-	Reinsurance related assets

The following table shows the change in the fair value of the derivative financial instruments in the consolidated statements of comprehensive income:

	Six Months Ending		Six Months Ending			Balance
	June 30, 2023		June 30, 2022			Reported In
	(unaudited)		(unaudited)
Derivatives:
Embedded derivatives:
Change in funds withheld embedded derivative	$	-	$	(691,300	)	Net investment gains (losses)
Change in reinsurance contract allocated hedge	$	497,153	$	-		Net investment gains (losses)

US Alliance Corporation

Notes to Consolidated Financial Statements (unaudited)