Note 13 - Concentrations

The Company maintains cash balances in financial institutions that at times may exceed federally insured limits. The Company maintains its primary operating cash accounts with First Southern National Bank, an affiliate of the largest shareholder of UTG, Mr. Jesse T. Correll, the Company’s CEO and Chairman. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Because UTG serves primarily individuals located in four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of December 31, 2020 and 2019, approximately 56% of the Company’s total direct premium was collected from Illinois, Ohio, Texas and West Virginia. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life. Life insurance ceded represented 20% of total life insurance in force at December 31, 2020 and 2019, respectively. Insurance ceded represented 37% and 33% of premium income for 2020 and 2019, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represented approximately 20% and 25% of the Company’s total invested assets at December 31, 2020 and 2019, respectively. The following table provides an allocation of the oil and gas investments by type as of December 31:

2020	Land, Minerals & Royalty Interests		Transportation		Exploration		Total
Fixed maturities, at fair value	$	0	$	0	$	1,268,670	$	1,268,670
Equity securities, at fair value		41,551,468		0		0		41,551,468
Investment real estate		20,031,576		0		0		20,031,576
Notes receivable		6,000,000		0		0		6,000,000
Total	$	67,583,044	$	0	$	1,268,670	$	68,851,714

2019	Land, Minerals & Royalty Interests		Transportation		Exploration		Total
Fixed maturities, at fair value	$	0	$	3,812,565	$	2,824,810	$	6,637,375
Equity securities, at fair value		48,585,959		0		0		48,585,959
Investment real estate		21,094,898		0		0		21,094,898
Notes receivable		7,000,000		0		0		7,000,000
Total	$	76,680,857	$	3,812,565	$	2,824,810	$	83,318,232

As of December 31, 2020 and 2019, the Company owned two equity securities that represented approximately 47% and 49%, respectively, of the total investments associated with the oil and gas industry.

The Company’s results of operations and financial condition have in the past been, and may in the future be, adversely affected by the degree of certain industry specific concentrations in the Company’s investment portfolio. The Company has significant exposure to investments associated with the oil and gas industry. Events or developments that have a negative effect on the oil and gas industry may adversely affect the valuation of our investments in this specific industry. The Company’s ability to sell its investments associated with the oil and gas industry may be limited.