Concentrations of Credit Risk

9 Months Ended

Sep. 30, 2023

Concentrations of Credit Risk [Abstract]

Note 9 – Concentrations of Credit Risk

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 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 three states, the ability of the Company's customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of September 30, 2023 and 2022, approximately 51% and 49%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. 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 22% and 20% of total life insurance in force at September 30, 2023 and December 31, 2022, respectively. Insurance ceded represented 39% of premium income for the nine months ended September 30, 2023 and 2022. 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 represent approximately 28% and 31% of the Company’s total invested assets as of September 30, 2023 and December 31, 2022, respectively. The following table provides an allocation of the oil and gas investments by type.

September 30, 2023	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,034,870	$	1,034,870
Equity securities, at fair value		81,985,219		0		81,985,219
Investment real estate		13,550,754		0		13,550,754
Notes receivable		2,000,000		0		2,000,000
Total	$	97,535,973	$	1,034,870	$	98,570,843

December 31, 2022	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,060,710	$	1,060,710
Equity securities, at fair value		93,811,806		0		93,811,806
Investment real estate		14,772,536		0		14,772,536
Notes receivable		1,950,657		0		1,950,657
Total	$	110,534,999	$	1,060,710	$	111,595,709

At September 30, 2023 and December 31, 2022, the Company owned two equity securities that represented approximately 48% and 50%, 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.