10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934

For the quarterly period ended September 30, 2020

OR

□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File No. 0-16867

	UTG, INC.
	(Exact name of registrant as specified in its charter)
Delaware		20-2907892
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
	205 NORTH DEPOT STREET
	STANFORD, KY 40484
	(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (217) 241-6300

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each exchange on which registered
None	None

Securities registered pursuant to Section 12(g) of the Act:

Title of class

Common Stock, stated value $.001 per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧  No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company.  See the definitions of “large accelerated filer,” accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer □	Accelerated filer □
Non-accelerated filer □	Smaller reporting company ⌧
	Emerging growth company □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes □    No ⌧

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

The number of shares outstanding of the registrant’s common stock as of October 31, 2020 was 3,175,132.

UTG, Inc.

(The “Company”)

TABLE OF CONTENTS

PART I.   Financial Information	3
Item 1.  Financial Statements	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Income (Loss)	5
Condensed Consolidated Statements of Shareholders' Equity	6
Condensed Consolidated Statements of Cash Flows	8
Notes to Condensed Consolidated Financial Statements	9
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 4.  Controls and Procedures	27
PART II.  Other Information	27
Item 1.  Legal Proceedings	27
Item 1A. Risk Factors	27
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.  Defaults Upon Senior Securities	27
Item 4.  Mine Safety Disclosures	27
Item 5.  Other Information	27
Item 6.  Exhibits	27
Signatures	28

Part 1.   Financial Information.

Item 1.  Financial Statements.

UTG, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

	September 30, 2020		December 31, 2019*
ASSETS
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost $156,998,638 and $159,959,855)	$	176,720,947	$	171,629,373
Equity securities, at fair value (cost $33,521,163 and $32,578,862)		65,588,029		78,661,793
Equity securities, at cost		14,417,247		10,919,247
Mortgage loans on real estate at amortized cost		20,392,053		8,223,286
Investment real estate		36,421,627		44,344,236
Notes receivable		19,298,398		19,487,458
Policy loans		8,727,991		8,803,876
Short-term investments		7,973,910		10,442,173
Total investments		349,540,202		352,511,442
Cash and cash equivalents		24,723,191		28,787,629
Accrued investment income		1,247,946		1,679,783
Reinsurance receivables:
Future policy benefits		25,412,611		25,655,161
Policy claims and other benefits		4,262,277		4,142,142
Cost of insurance acquired		4,287,682		4,846,321
Property and equipment, net of accumulated depreciation		367,999		427,736
Income tax receivable		145,067		0
Other assets		764,344		695,517
Total assets	$	410,751,319	$	418,745,731
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Policy liabilities and accruals:
Future policyholder benefits	$	245,084,324	$	249,264,308
Policy claims and benefits payable		3,811,781		3,631,666
Other policyholder funds		402,225		404,177
Dividend and endowment accumulations		14,764,957		14,626,475
Income taxes payable		0		313,662
Deferred income taxes		11,343,548		13,222,604
Trading securities, at fair value (proceeds $5,584 and $0)		4,003		0
Other liabilities		6,172,576		5,785,933
Total liabilities		281,583,414		287,248,825
Shareholders' equity:
Common stock - no par value, stated value $0.001 per share.  Authorized 7,000,000 shares - 3,176,672 and 3,277,830 shares outstanding		3,177		3,279
Additional paid-in capital		33,056,562		36,012,401
Retained earnings		80,266,031		85,979,678
Accumulated other comprehensive income		15,218,666		8,977,914
Total UTG shareholders' equity		128,544,436		130,973,272
Noncontrolling interests		623,469		523,634
Total shareholders' equity		129,167,905		131,496,906
Total liabilities and shareholders' equity	$	410,751,319	$	418,745,731

* Balance sheet audited at December 31, 2019.

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2020		2019		2020		2019
Revenue:
Premiums and policy fees	$	2,285,170	$	2,385,113	$	7,020,901	$	7,319,807
Ceded reinsurance premiums and policy fees		(757,649)		(678,941)		(2,128,125)		(2,009,252)
Net investment income		2,231,360		2,818,669		8,083,200		8,632,402
Other income		111,775		95,141		264,589		254,898
Revenue before net investment gains (losses)		3,870,656		4,619,982		13,240,565		14,197,855
Net investment gains (losses):
Other realized investment gains, net		1,754,315		3,727,538		10,708,155		10,143,014
Change in fair value of equity securities		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Total net investment gains (losses)		(523,587)		(318,919)		(3,307,910)		20,981,336
Total revenue		3,347,069		4,301,063		9,932,655		35,179,191
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		4,460,762		4,029,261		11,423,300		12,047,346
Ceded reinsurance benefits and claims		(966,260)		(501,184)		(1,954,371)		(1,583,345)
Annuity		250,486		265,413		742,023		770,452
Dividends to policyholders		70,125		74,864		256,445		274,516
Commissions and amortization of deferred policy acquisition costs		(35,865)		(39,665)		(99,541)		(102,784)
Amortization of cost of insurance acquired		186,214		193,977		558,639		581,930
Operating expenses		2,559,653		1,940,795		6,249,951		5,875,135
Total benefits and other expenses		6,525,115		5,963,461		17,176,446		17,863,250
Income (loss) before income taxes		(3,178,046)		(1,662,398)		(7,243,791)		17,315,941
Income tax (benefit) expense		(765,421)		(578,549)		(1,629,979)		3,781,340
Net income (loss)		(2,412,625)		(1,083,849)		(5,613,812)		13,534,601
Net income attributable to noncontrolling interests		(34,081)		(32,795)		(99,835)		(294,308)
Net income (loss) attributable to common shareholders	$	(2,446,706)	$	(1,116,644)	$	(5,713,647)	$	13,240,293
Amounts attributable to common shareholders
Basic income (loss) per share	$	(0.76)	$	(0.34)	$	(1.75)	$	4.03
Diluted income (loss) per share	$	(0.76)	$	(0.34)	$	(1.75)	$	4.03
Basic weighted average shares outstanding		3,221,049		3,279,684		3,256,217		3,289,133
Diluted weighted average shares outstanding		3,221,049		3,279,684		3,256,217		3,289,133

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

	Three Months Ended				Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
		2020		2019		2020		2019
Net income (loss)	$	(2,412,625)	$	(1,083,849)	$	(5,613,812)	$	13,534,601
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax		169,058		3,184,769		8,237,909		12,044,690
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		(35,502)		(668,802)		(1,729,961)		(2,529,385)
Unrealized holding gains (losses) arising during period, net of tax		133,556		2,515,967		6,507,948		9,515,305
Less reclassification adjustment for (gains) losses included in net income		0		30,793		(338,223)		25,564
Tax expense (benefit) for gains included in net income (loss)		0		(6,466)		71,027		(5,368)
Reclassification adjustment for (gains) losses included in net income, net of tax		0		24,327		(267,196)		20,196
Subtotal:  Other comprehensive income (loss), net of tax		133,556		2,540,294		6,240,752		9,535,501
Comprehensive income (loss)		(2,279,069)		1,456,445		626,940		23,070,102
Less comprehensive income attributable to noncontrolling interests		(34,081)		(32,795)		(99,835)		(294,308)
Comprehensive income (loss) attributable to UTG, Inc.	$	(2,313,150)	$	1,423,650	$	527,105	$	22,775,794

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

Three Months Ended September 30, 2020	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at June 30, 2020	$	3,272	$	35,780,640	$	82,712,737	$	15,085,110	$	589,388	$	134,171,147
Common stock issued during year		0		0		0		0		0		0
Treasury shares acquired		(95)		(2,724,078)		0		0		0		(2,724,173)
Net income (loss) attributable to common shareholders		0		0		(2,446,706)		0		0		(2,446,706)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		0		0		0		133,556		0		133,556
Contributions		0		0		0		0		0		0
Distributions		0		0		0		0		0		0
Gain attributable to noncontrolling interest		0		0		0		0		34,081		34,081
Balance at September 30, 2020	$	3,177	$	33,056,562	$	80,266,031	$	15,218,666	$	623,469	$	129,167,905

Nine Months Ended September 30, 2020	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at December 31, 2019	$	3,279	$	36,012,401	$	85,979,678	$	8,977,914	$	523,634	$	131,496,906
Common stock issued during year		7		218,282		0		0		0		218,289
Treasury shares acquired		(109)		(3,174,121)		0		0		0		(3,174,230)
Net income (loss) attributable to common shareholders		0		0		(5,713,647)		0		0		(5,713,647)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		0		0		0		6,240,752		0		6,240,752
Contributions		0		0		0		0		0		0
Distributions		0		0		0		0		0		0
Gain attributable to noncontrolling interest		0		0		0		0		99,835		99,835
Balance at September 30, 2020	$	3,177	$	33,056,562	$	80,266,031	$	15,218,666	$	623,469	$	129,167,905

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Shareholders' Equity (Unaudited)

Three Months Ended September 30, 2019	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at June 30, 2019	$	3,286	$	36,253,067	$	84,065,838	$	7,057,702	$	749,916	$	128,129,809
Common stock issued during year		0		0		0		0		0		0
Treasury shares acquired		(9)		(287,914)		0		0		0		(287,923)
Net income attributable to common shareholders		0		0		(1,116,644)		0		0		(1,116,644)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		0		0		0		2,540,294		0		2,540,294
Contributions		0		0		0		0		0		0
Distributions		0		0		0		0		(289,912)		(289,912)
Gain attributable to noncontrolling interest		0		0		0		0		32,795		32,795
Balance at September 30, 2019	$	3,277	$	35,965,153	$	82,949,194	$	9,597,996	$	492,799	$	129,008,419

Nine Months Ended September 30, 2019	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Noncontrolling Interest		Total Shareholders' Equity
Balance at December 31, 2018	$	3,296	$	36,567,865	$	69,708,901	$	62,495	$	734,153	$	107,076,710
Common stock issued during year		7		246,527		0		0		0		246,534
Treasury shares acquired		(26)		(849,239)		0		0		0		(849,265)
Net income attributable to common shareholders		0		0		13,240,293		0		0		13,240,293
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes		0		0		0		9,535,501		0		9,535,501
Contributions		0		0		0		0		0		0
Distributions		0		0		0		0		(535,662)		(535,662)
Gain attributable to noncontrolling interest		0		0		0		0		294,308		294,308
Balance at September 30, 2019	$	3,277	$	35,965,153	$	82,949,194	$	9,597,996	$	492,799	$	129,008,419

See accompanying notes.

UTG, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	September 30,		September 30,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	(5,613,812)	$	13,534,601
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments		(87,559)		28,936
Realized investment gains, net		(10,708,155)		(10,143,014)
Unrealized trading (gains) losses included in income		(1,581)		0
Change in fair value of equity securities		14,016,065		(10,838,322)
Amortization of cost of insurance acquired		558,639		581,930
Depreciation		338,550		868,630
Stock-based compensation		218,289		246,534
Charges for mortality and administration of universal life and annuity products		(4,759,240)		(4,839,551)
Interest credited to account balances		3,014,030		3,068,614
Change in accrued investment income		431,837		375,806
Change in reinsurance receivables		122,415		460,659
Change in policy liabilities and accruals		(2,463,865)		(2,458,575)
Change in income taxes receivable (payable)		(458,729)		78,738
Change in other assets and liabilities, net		(3,373,186)		3,749,194
Net cash used in operating activities		(8,766,302)		(5,285,820)
Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		12,253,350		8,563,966
Equity securities		17,071,364		10,219,197
Mortgage loans		554,787		4,824,430
Real estate		8,513,461		11,620,038
Notes receivable		3,689,060		4,296,998
Policy loans		914,651		1,324,183
Short-term investments		10,500,000		0
Total proceeds from investments sold and matured		53,496,673		40,848,812
Cost of investments acquired:
Fixed maturities available for sale		(9,038,928)		(11,655,148)
Equity securities		(12,011,489)		(1,323,310)
Trading securities		5,584		(132,518)
Mortgage loans		(12,692,488)		(4,216,644)
Real estate		0		(1,729,000)
Notes receivable		(3,500,000)		(8,532,796)
Policy loans		(838,766)		(973,594)
Short-term investments		(7,890,228)		0
Total cost of investments acquired		(45,966,315)		(28,563,010)
Net cash provided by investing activities		7,530,358		12,285,802
Cash flows from financing activities:
Policyholder contract deposits		3,386,396		3,542,562
Policyholder contract withdrawals		(3,040,660)		(3,578,980)
Purchase of treasury stock		(3,174,230)		(849,265)
Non controlling contributions (distributions) of consolidated subsidiary		0		(535,662)
Net cash used in financing activities		(2,828,494)		(1,421,345)
Net increase (decrease) in cash and cash equivalents		(4,064,438)		5,578,637
Cash and cash equivalents at beginning of period		28,787,629		20,150,162
Cash and cash equivalents at end of period	$	24,723,191	$	25,728,799

See accompanying notes.

UTG, Inc.

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  The Company’s results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources but such impact could be material.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is Chief Executive Officer and Chairman of the Board of Directors of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates.  At September 30, 2020, Mr. Correll owns or controls directly and indirectly approximately 64.95% of UTG’s outstanding stock.

UTG’s life insurance subsidiary, Universal Guaranty Life Insurance Company (“UG”), has several wholly-owned and majority-owned subsidiaries.  The subsidiaries were formed to hold certain real estate investments.  The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Certain amounts in prior periods have been reclassified to conform with the current period presentation.

Note 2 – Recently Issued Accounting Standards

During the nine months ended September 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

The Company’s insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in available for sale securities are summarized as follows:

September 30, 2020		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,789,865	$	1,418,625	$	0	$	46,208,490
U.S. special revenue and assessments		14,356,937		1,487,743		0		15,844,680
All other corporate bonds		97,851,836		16,815,941		0		114,667,777
	$	156,998,638	$	19,722,309	$	0	$	176,720,947

December 31, 2019		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		0		15,203,363
All other corporate bonds		109,827,152		10,470,115		0		120,297,267
	$	159,959,855	$	11,705,047	$	(35,529)	$	171,629,373

The amortized cost and estimated market value of debt securities at September 30, 2020, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale September 30, 2020		Amortized Cost		Fair Value
Due in one year or less	$	26,793,810	$	27,113,305
Due after one year through five years		46,406,659		49,706,585
Due after five years through ten years		32,831,635		37,877,774
Due after ten years		24,192,862		28,870,286
Fixed maturities with no single maturity date		26,773,672		33,152,997
Total	$	156,998,638	$	176,720,947

The fair value of investments with sustained gross unrealized losses at September 30, 2020 and December 31, 2019 are as follows:

September 30, 2020	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
All other corporate bonds	$	0		0		0		0		0	$	0
Total fixed maturities	$	0		0		0		0		0	$	0

December 31, 2019	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,059,380		(35,529)		0		0		6,059,380	$	(35,529)
Total fixed maturities	$	6,059,380		(35,529)		0		0		6,059,380	$	(35,529)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of September 30, 2020
Fixed maturities	0	0	0
As of December 31, 2019
Fixed maturities	3	0	3

Substantially all of the unrealized losses on fixed maturities at December 31, 2019 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position.  Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of  September 30, 2020 and December 31, 2019.

Net Investment Gains (Losses)

The following table presents net investment gains (losses) and the change in net unrealized gains (losses) on investments. 

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Realized gains:
Sales of fixed maturities	$	0	$	0	$	403,215	$	116,690
Sales of equity securities		884,559		3,738,333		9,500,176		6,504,246
Sales of real estate		869,756		20,000		869,756		3,796,850
Other		0		0		0		0
Total realized gains		1,754,315		3,758,333		10,773,147		10,417,786
Realized losses:
Sales of fixed maturities		0		(30,795)		(64,992)		(142,254)
Sales of equity securities		0		0		0		0
Sales of real estate		0		0		0		0
Other-than-temporary impairments		0		0		0		0
Other		0		0		0		(132,518)
Total realized losses		0		(30,795)		(64,992)		(274,772)
Net realized investment gains (losses)		1,754,315		3,727,538		10,708,155		10,143,014
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Change in fair value of equity securities		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Net investment gains (losses)	$	(523,587)	$	(318,919)	$	(3,307,910)	$	20,981,336
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690
Net increase (decrease)	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690

The following table presents net gains (losses) and the change in net unrealized gains (losses) on equity securities.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2020		2019		2020		2019
Net gains (losses) recognized during the period on equity securities	$	(1,393,343)	$	(308,124)	$	(4,515,889)	$	17,342,568
Less: Net gains (losses) recognized during the period on equity securities sold during the period		884,559		3,738,333		9,500,176		6,504,246
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(2,277,902)	$	(4,046,457)	$	(14,016,065)	$	10,838,322

Other-Than-Temporary Impairments

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary.  The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company’s intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates.  If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

The Company did not recognize any other-than-temporary impairments during the nine month periods ended September 30, 2020 or 2019.

Cost Method Investments

The Company held equity investments with an aggregate cost of $14,417,247 and $10,919,247 at September 30, 2020 and December 31, 2019, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.  Based on Management's evaluation of the expected cash flow of the investments, and the Company's ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at September 30, 2020.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Condensed Consolidated Statements of Operations.  Trading securities include exchange-traded equities and exchange-traded options.  Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.  The fair value of derivatives included in trading security assets and trading security liabilities as of September 30, 2020 was $0 and $(4,003), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of  December 31, 2019 was $0 and $0, respectively.  Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

Trading revenue charged to net investment income from trading securities was:

	Three Months Ended
	September 30,
		2020		2019
Net unrealized gains (losses)	$	1,581	$	0
Net realized gains (losses)		0		0
Net unrealized and realized gains (losses)	$	1,581	$	0

	Nine Months Ended
	September 30,
		2020		2019
Net unrealized gains (losses)	$	1,581	$	0
Net realized gains (losses)		0		0
Net unrealized and realized gains (losses)	$	1,581	$	0

Mortgage Loans

The Company, from time to time, acquires mortgage loans through participation agreements with FSNB.  FSNB has been able to provide the Company with additional expertise and experience in underwriting commercial and residential mortgage loans, which provide more attractive yields than the traditional bond market.  The Company is able to receive participations from FSNB for three primary reasons:  1) FSNB has already reached its maximum lending limit to a single borrower, but the borrower is still considered a suitable risk; 2) the interest rate on a particular loan may be fixed for a long period that is more suitable for UG given its asset-liability structure; and 3) FSNB’s loan growth might at times outpace its deposit growth, resulting in FSNB participating such excess loan growth rather than turning customers away.  For originated loans, the Company’s Management is responsible for the final approval of such loans after evaluation.  Before a new loan is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  These criteria include, but are not limited to, a credit report, personal financial information such as outstanding debt, sources of income, and personal equity.  Once the loan is approved, the Company directly funds the loan to the borrower.  The Company bears all risk of loss associated with the terms of the mortgage with the borrower.

During the nine months ended September 30, 2020 and 2019, the Company acquired $12,692,488 and $4,216,644 in mortgage loans, respectively.  FSNB services the majority of the Company’s mortgage loan portfolio.  The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.82%
Residential Loans	5.50%	5.50%	5.50%	5.50%

Most mortgage loans are first position loans.  Loans issued are generally limited to no more than 80% of the appraised value of the property.

The Company has in place a monitoring system to provide Management with information regarding potential troubled loans.  Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent.  Management is provided with a monthly listing of loans that are 60 days or more past due along with a brief description of what steps are being taken to resolve the delinquency.  All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans.  Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified.  Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on Management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value.  The mortgage loan reserve was $0 at September 30, 2020 and December 31, 2019.

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

		September 30, 2020		December 31, 2019
In good standing	$	18,319,413	$	8,223,286
Overdue interest over 90 days		2,072,640		0
Total mortgage loans	$	20,392,053	$	8,223,286

Investment Real Estate

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of 3 to 30 years. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the nine month period ended September 30, 2020, no impairments were recognized on the investment real estate.

Note 4 - Fair Value Measurements of the Condensed Consolidated Financial Statements provides further information regarding the fair value of financial instruments that are not measured at fair value. The investment real estate owned by the Company is included in this portion of the Note 4 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company's investment real estate by type:

		September 30, 2020		December 31, 2019
Raw land	$	9,915,856	$	16,089,540
Commercial		5,414,238		4,908,028
Residential		2,235,678		2,251,772
Land, minerals and royalty interests		18,855,855		21,094,896
Total investment real estate	$	36,421,627	$	44,344,236

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of September 30, 2020 and December 31, 2019, investments in oil and gas royalties represented 52% and 44%, respectively, of the total investment real estate portfolio.  See Note 9 – Concentrations of Credit Risk of the Condensed Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2020 and 2019, the Company acquired $0 and $1,729,000 of investment real estate, respectively.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of  September 30, 2020 and December 31, 2019 was $0. Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the nine months ended September 30, 2020 and 2019 the Company acquired  $3,500,000 and $8,532,796 of notes receivable, respectively.

Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

Similar to the mortgage loans, FSNB services several of the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note.  The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. 

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

Dung the nine months ended September 30, 2020 and 2019, the Company acquired $7,890,228 and $0, respectively, in short-term investments.

Note 4 – Fair Value Measurements

Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

September 30, 2020		Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	46,208,490	$	0	$	0	$	0	$	46,208,490
U.S. special revenue and assessments		0		15,844,680		0		0		15,844,680
Corporate securities		0		114,667,777		0		0		114,667,777
Total fixed maturities		46,208,490		130,512,457		0		0		176,720,947
Equity securities:
Common stocks		22,790,516		16,908,050		3,051,875		22,814,521		65,564,962
Preferred stocks		0		23,066		0		0		23,066
Total equity securities		22,790,516		16,931,116		3,051,875		22,814,521		65,588,028
Total financial assets	$	68,999,006	$	147,443,573	$	3,051,875	$	22,814,521	$	242,308,975
Liabilities
Trading Securities	$	(4,003)	$	0	$	0	$	0	$	(4,003)

December 31, 2019		Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	36,128,743	$	0	$	0	$	0	$	36,128,743
U.S. special revenue and assessments		0		15,203,363		0		0		15,203,363
Corporate securities		0		120,297,267		0		0		120,297,267
Total fixed maturities		36,128,743		135,500,630		0		0		171,629,373
Equity securities:
Common stocks		29,888,281		14,258,750		10,274,810		24,239,952		78,661,793
Total equity securities		29,888,281		14,258,750		10,274,810		24,239,952		78,661,793
Total financial assets	$	66,017,024	$	149,759,380	$	10,274,810	$	24,239,952	$	250,291,166

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. There have been no significant changes in the valuation techniques utilized by the Company for the nine months ended September 30, 2020.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standard generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common stocks mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon Management's assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Equity Securities at Net Asset Value

Certain equity securities carried at fair value, which do not have readily determinable fair values, use net asset value (“NAV”) and are excluded from the fair value hierarchy. These investments are generally not readily redeemable by the investee. See Note 7 – Commitments and Contingencies for additional information regarding unfunded commitments.

Trading Securities

Trading securities are recorded at fair value. They are classified as Level 1 and utilize fair value measurements based upon quoted market prices.

Change in Level 3 Recurring Fair Value Measurements

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities.

		Fixed Maturities, Available for Sale		Equity Securities at Fair Value		Equity Securities at Net Asset Value		Total
Balance at December 31, 2019	$	0	$	10,274,810	$	24,239,952	$	34,514,762
Realized gains (losses)		0		6,284,302		0		6,284,302
Unrealized gains (losses)		0		(3,850,560)		(2,809,324)		(6,659,884)
Purchases		0		1,797,500		1,415,757		3,213,257
Sales		0		(11,454,177)		(31,864)		(11,486,041)
Balance at September 30, 2020	$	0	$	3,051,875	$	22,814,521	$	25,866,396

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above.  As a result, the unrealized gains (losses) on instruments held at September 30, 2020 and December 31, 2019 may include changes in fair value that were attributable to both observable and unobservable inputs.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and include only those instrument for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets		Fair Value at September 30, 2020		Fair Value at December 31, 2019	Valuation Technique
Common stocks	$	22,814,521	$	24,239,952	Net Asset Value
Common stocks		3,051,875		10,274,810	Pricing Model
Total	$	25,866,396	$	34,514,762

Uncertainty of Fair Value Measurements

The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of these assets as of the reporting date.

Equity Securities at Fair Value

Fair market value for equity securities is derived based on unobservable inputs, such as projected normalized revenues and industry standard multiples of revenue for the equity securities valued using pricing model.  Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement. 

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Company		Fair Value at September 30, 2020		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	18,482,622	$	0	Quarterly	45 days
Non-Reedemable		4,331,899		2,295,675	n/a	n/a
Total	$	22,814,521	$	2,295,675

Investment Company		Fair Value at September 30, 2019		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	21,270,734	$	0	Quarterly	45 days
Non-Reedemable		2,969,218		163,750	n/a	n/a
Total	$	24,239,952	$	163,750

Fair Value Measurements on a Nonrecurring Basis

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements. The Company did not recognize any re-measurements or impairments of financial instruments at September 30, 2020 or December 31, 2019.

Fair Value Information About Financial Instruments Not Measured at Fair Value

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements.

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

		Carrying	Estimated
September 30, 2020		Amount	Fair Value	Level 1	Level 2	Level 3
Common stock, at cost	$	5,860,000	5,860,000	0	0	5,860,000
Preferred stock, at cost		8,557,247	8,557,247	0	0	8,557,247
Mortgage loans on real estate		20,392,053	20,614,085	0	0	20,614,085
Investment real estate		36,421,627	81,351,608	0	0	81,351,608
Notes receivable		19,298,398	22,380,946	0	0	22,380,946
Policy loans		8,727,991	8,727,991	0	0	8,727,991

		Carrying	Estimated
December 31, 2019		Amount	Fair Value	Level 1	Level 2	Level 3
Common stock, at cost	$	7,875,145	7,875,145	0	0	7,875,145
Preferred stock, at cost		3,044,102	3,044,102	0	0	3,044,102
Mortgage loans on real estate		8,223,286	7,531,094	0	0	7,531,094
Investment real estate		44,344,236	88,483,424	0	0	88,483,424
Notes receivable		19,487,458	19,332,472	0	0	19,332,472
Policy loans		8,803,876	8,803,876	0	0	8,803,876

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange.  The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has historically purchased non-performing discounted mortgage loans at a deep discount through an auction process led by the Federal Government.  In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company.  Accordingly, the Company records its investment in the discounted loans at its original purchase price, which Management believes approximates fair value.  The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell.  The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management.  The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.  The inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2019		Borrowings		Repayments		September 30, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000		0		0		0		0
UG	6/2/2015	5/7/2021		10,000,000		0		0		0		0

The UTG line of credit carries interest at a fixed rate of  4.040% and is payable monthly. As collateral, UTG has pledged 100% of the  common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.

During May of 2020, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $12,617,556.

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock.  At a meeting of the Board of Directors in September of 2020, the Board of Directors of UTG authorized the repurchase of up to an additional $1.5 million of UTG's common stock, for a total  repurchase of up to $20 million of UTG's common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the nine months ended September 30, 2020, the Company repurchased 107,822shares through the stock repurchase program for $3,174,230. Through September 30, 2020, UTG has spent $17,947,326in the acquisition of 1,277,180shares under this program.

During 2020, the Company issued 6,664 shares of stock to management and employees as compensation at a cost of $218,289. These awards are determined at the discretion of the Board of Directors.

During the third quarter of 2020, the Company purchased 88,341 shares from Cumberland Lake Shell, Inc at a price of $29 per share for a total cost of $2,561,889. This single transaction represented a majority of the third quarter activity related to the share repurchase program.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the nine months ended September 30, 2020 and 2019, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters.  Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages.  In some states, juries have substantial discretion in awarding punitive damages in these circumstances.  In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings.  Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company’s results of operations or financial position.

Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies.  Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer's financial strength.  Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the condensed consolidated financial statements, though the Company has no control over such assessments.

The following table represents the total funding commitments and the unfunded commitment as of September 30, 2020 related to certain investments:

		Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Macritchie Storage II, LP		7,000,750		1,840,485
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		1,115,000
Modern Distributors, Inc.		7,200,000		3,700,000

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

During 2018, the Company committed to invest in Sovereign’s Capital, LP Fund III (“Sovereign’s III”), which invests in companies in emerging markets. Sovereign’s III makes capital calls to investors as funds are needed.

During 2018, the Company committed to fund a mortgage loan for Macritchie Storage II, LP ("Macritchie"). Macritchie makes draw requests on the loan as funds are needed to fund the construction project.

During 2020, the Company committed to invest in Garden City Companies, LLC (“Garden City”), which invests primarily in companies in the healthcare, inspection/testing services and maintenance service arena. Garden City makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Carrizo Springs Music, LLC (“Carrizo”), which invests in music royalties.  Carrizo makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2020, the Company committed to fund a collateral loan for Modern Distributors, Inc. (“Modern Distributors”). Modern Distributors makes draw requests on the loan as funds are needed to fund a construction project.

Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

	Three Months Ended
	September 30,
	2020		2019
Interest	$	0	$	0
Federal income tax		419,000		0

	Nine Months Ended
	September 30,
	2020		2019
Interest	$	0	$	0
Federal income tax		2,529,000		1,106,000

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 four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of September 30, 2020 and 2019 , approximately 55% and 56%, respectively, 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 September 30, 2020 and  December 31, 2019.  Insurance ceded represented 37%  of premium income for the nine months ended September 30, 2020 and 2019. 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 17% and 25% of the Company's total invested assets as of September 30, 2020 and December 31, 2019, respectively. The following table provides an allocation of the oil and gas investments by type.

		September 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	57,246,945	$	80,182,100
Transportation		0		3,812,565
Exploration		1,258,750		2,824,810
Total	$	58,505,695	$	86,819,475

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.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is Management's discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the "Company").  The following discussion of the financial condition and results of operations of the Company should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements of the Company and the related Notes thereto appearing in the Company's annual report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission, and our unaudited Condensed Consolidated Financial Statements and related Notes thereto appearing elsewhere in this quarterly report.

Cautionary Statement Regarding Forward-Looking Statements

This report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. We have based our forward-looking statements on our current expectations and projections about future events. Our forward-looking statements include information about possible or assumed future results of operations. All statements, other than statements of historical facts, included or incorporated by reference in this report that address activities, events or developments that we expect or anticipate may occur in the future, including such things as the growth of our business and operations, our business strategy, competitive strengths, goals, plans, future capital expenditures and references to future successes may be considered forward-looking statements. Also, when we use words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "probably," or similar expressions, we are making forward-looking statements.

Numerous risks and uncertainties may impact the matters addressed by our forward-looking statements, any of which could negatively and materially affect our future financial results and performance.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and, therefore, the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements that are included in this report, our inclusion of this information is not a representation by us or any other person that our objectives and plans will be achieved. In light of these risks, uncertainties and assumptions, any forward-looking event discussed in this report may not occur.  Our forward-looking statements speak only as of the date made, and we undertake no obligation to update or review any forward-looking statement, whether as a result of new information, future events or other developments, unless the securities laws require us to do so.

Overview

UTG, Inc., a Delaware corporation, is a life insurance holding company.  The Company's dominant business is individual life insurance, which includes the servicing of existing insurance policies in force, the acquisition of other companies in the life insurance business and the administration and processing of life insurance business for other entities.  The Company's focus for the future is the servicing of the existing insurance policies in force.

UTG has a strong philanthropic program.  The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor.  The Company also encourages its staff to be involved on a personal level through monetary giving, volunteerism, and use of their talents to assist those less fortunate than themselves. Through these efforts, the Company hopes to make a positive difference in the local community, state, nation and world.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ significantly from those estimates.  The Company has identified certain estimates that involve a higher degree of judgment and are subject to a significant degree of variability.  The Company’s critical accounting policies and the related estimates considered most significant by Management are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  Management has identified the accounting policies related to cost of insurance acquired, assumptions and judgments utilized in determining if declines in fair values of investments are other-than-temporary, and valuation methods for investments that are not actively traded as those, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of the Company’s Condensed Consolidated Financial Statements and this Management’s Discussion and Analysis.

During the nine months ended September 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

Results of Operations

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments reacted to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is expected to be temporary, there continues to be uncertainty around the duration or effects of resurgence of the virus. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources, but such impact could be material.

On a consolidated basis, the Company reported a net loss attributable to common shareholders’ of approximately $(5.7) million for the nine-month period ended September 30, 2020 and a net loss attributable to common shareholders’ of approximately $(2.4) million for the three-month period ended September 30, 2020.  For the nine-month period ended September 30, 2019, the Company reported net income attributable to common shareholders’ of approximately $13.2 million and a net loss attributable to common shareholders’ of approximately $(1.1) million for the three-month period ended September 30, 2019.

Revenues

The Company reported total revenues of approximately $9.9 million for the nine months ended September 30, 2020, a decrease of approximately $25.2 million as compared to the same period in 2019. The variance in total revenues from the prior year to the current year is mainly attributable to the change in the fair value of equity securities between periods. The Company reported total revenues of approximately $3.3 million for the three months ended September 30, 2020, a decrease of approximately $954,000 as compared to the three-month period ended September 30, 2019.  For the quarter, the fluctuations are also largely related to the change in the fair value of equity securities between the periods that is reported as a component of total revenue on the Condensed Consolidated Statements of Operations.

The Company reported revenue before net investment gains of approximately $13.2 million and $14.2 million for the nine months ended September 30, 2020 and 2019, respectively. Revenue before net investment gains decreased only slightly when comparing the current year and prior year results and is due to minor decreases in premium and policy fee revenue and net investment income. For the three months ended September 30, 2020, the Company reported revenue before net investment gains and losses of $3.9 million, down from $4.6 million from the same period in 2019.

Premium and policy fee revenues, net of reinsurance, are down 10% for the three months ended September 30, 2020 compared to the same period in 2019. For the nine months ended September 30, 2020, premium and policy fee revenues, net of reinsurance are down 8% compared to 2019. Premium and policy fee revenues, net of reinsurance, represented 37% of the Company’s revenues before net investment gains (losses) as of September 30, 2020 and 2019, respectively. The decline in premiums is not unusual as the Company is not actively marketing new business.

The following table summarizes our investment performance.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net investment income	$	2,231,360	$	2,818,669	$	8,083,200	$	8,632,402
Net investment gains (losses)	$	(523,587)	$	(318,919)	$	(3,307,910)	$	20,981,336
Change in net unrealized investment gains (losses) on available-for-sale securities, pre-tax	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690

The Company reported total net investment losses of approximately $(524,000) and $(3.3) million for the three- and nine-month periods ended September 30, 2020, respectively. For the three- and nine-month periods ended September 30, 2020, the Company reported approximately $1.8 million and $10.7 million, respectively, in net realized investment gains comprised mainly from the sale of equity securities.

During 2019, the Company received an offer to purchase investments in certain music royalties held in the form of equity investments.  As a result of this event, the Company elected to change its valuation methodology from using discounted cash flow models to estimate fair value to marking the investment to the offer price to estimate the fair value. The change in methodology resulted in recording an unrealized gain on investment of approximately $3.3 million during the year ended December 31, 2019.  The investments were then sold during the first quarter of 2020. The Company recognized a gain of approximately $6.3 million on the sale.

The Company also sold equity securities in the area of oil & gas that resulted in a realized gain of $3.2 million during second quarter 2020.

In addition, in the total net investment gains are unrealized gains (losses) related to the change in the fair value of equity securities. The Company reported unrealized equity gains (losses) of $(2.3) million and $(14) million for the three and nine-months ended September 30, 2020, respectively. For the three and nine-months ended September 30, 2019, the Company reported $(4.1) million and $10.8 million, respectively.

The Company holds certain investments that have been negatively impacted by ongoing market reactions to the pandemic.  These investments primarily relate to marketable equity securities, particularly in the area of oil and gas.  The drop in the markets in March, resulted in an estimated unrealized losses of approximately $(24.7) million for the three months ending March 31, 2020.  Since the end of the first quarter 2020, the Company experienced a partial rebound on these investments of approximately $11 million in unrealized gains.

The Company recognized and disclosed in prior filings that a pullback in the stock market, particularly in the oil and gas arena, could slow these gains or even result in future-period unrealized losses. Management believes these equity investments continue to be solid investments for the Company and have further growth potential. However, current market conditions remain volatile and Management anticipates the Company will continue experience significant fluctuations in this line item in future periods.

The following table reflects net investment income of the Company:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
Fixed maturities available for sale	$	1,301,923	$	1,445,341	$	4,023,342	$	4,371,895
Equity securities		238,082		287,462		1,182,308		1,256,794
Trading securities		1,581		-		1,581		-
Mortgage loans		147,202		83,528		392,286		369,132
Real estate		563,306		881,705		2,805,810		2,141,339
Notes receivable		244,473		485,288		783,406		1,435,947
Policy loans		139,602		149,979		444,280		460,995
Cash and cash equivalents		284		(1,407)		53,458		2,815
Short-term		38,429		59,980		141,509		143,620
Total consolidated investment income		2,674,882		3,391,876		9,827,980		10,182,537
Investment expenses		(443,522)		(573,207)		(1,744,780)		(1,550,135)
Consolidated net investment income	$	2,231,360	$	2,818,669	$	8,083,200	$	8,632,402

Net investment income represented 61% of the Company’s revenue before net investment gains (losses) as of September 30, 2020 and 2019, respectively.  The Company reported net investment income of approximately $8.1 million for the nine-month period ended September 30, 2020, comparable to 2019 net investment income.For the three month period ended September 30, 2020, net investment income decreased approximately 21%, compared to the same quarter in 2019.  When comparing the three and nine months ended September 30, 2020 and 2019, income from investing activities was comparable in the majority of the investment categories, with the largest variance being found in the real estate and notes receivable categories.

Earnings from the real estate portfolio are expected to vary depending on the activities of the subsidiaries and the potential distributions that will occur. For the nine-months ended September 30, 2020, real estate earnings were up approximately 31% compared to the same period in 2019. Excluding a one-time event that resulted in $1.2 million in earnings during second quarter 2020, real estate income is lower compared to that of 2019.

For the nine-months ended September 30, 2020, notes receivable income is down 45% compared to September 30, 2019. The decrease is a result of fewer average outstanding notes receivable, and consequently, a reduction in interest income.

In summary, the Company’s basis for future revenue growth is expected to come from the following primary sources: conservation of business currently in-force, the maximization of investment earnings and the acquisition of other companies or policy blocks in the life insurance business.  Management has placed a significant emphasis on the development of these revenue sources to enhance these opportunities.

Expenses

The Company reported total benefits and other expenses of approximately $17.2 million for the nine month period ended September 30, 2020, a decrease of approximately 4% from the same period in 2019.  For the three month period ended September 30, 2020, total benefits and other expenses increased approximately 9%, compared to the same quarter in 2019.  Benefits, claims and settlement expenses represented approximately 58% and 61% of the Company’s total expenses for the three and nine months ended September 30, 2020, respectively.  The other major expense category of the Company is operating expenses, which represented approximately 39% and 36% of the Company’s total expenses for the three and nine month periods ended September 30, 2020, respectively.

Life benefits, claims and settlement expenses, net of reinsurance benefits and claims, decreased approximately 9% in the nine month period ended September 30, 2020, compared to the same period in 2019.  For the three months ended September 30, 2020, life benefits, claims and settlement expenses, net of reinsurance benefits and claims are comparable to that of the same quarter in 2019. Overall, the decrease is not considered unusual by Management as fluctuations in mortality are to be expected.

Net amortization of cost of insurance acquired decreased 4% during the three month and nine month periods ended September 30, 2020 compared to the same period in 2019.  Cost of insurance acquired is established when an insurance company is acquired or when the Company acquires a block of in-force business.  The Company assigns a portion of its cost to the right to receive future profits from insurance contracts existing at the date of the acquisition.  Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates may vary due to risk analysis performed at the time of acquisition on the business acquired. The Company utilizes a 12% discount rate on the remaining unamortized business.  The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.  Amortization of cost of insurance acquired is particularly sensitive to changes in interest rate spreads and persistency of certain blocks of insurance in-force.  This expense is expected to decrease, unless the Company acquires a new block of business.

Operating expenses increased by 32% for the three-month period ended September 30, 2020 compared to that of the same period in 2019. For the nine-months ended September 30, 2020 operating expenses increased by 6% compared to that of the same period in 2019. Charitable contributions are primarily the reason for the increase during the quarter and year-to-date. Charitable contributions are a function of the Company’s taxable earnings. UTG has a strong philanthropic program and the Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company. Otherwise, expenses were comparable in the remainder of the major expense categories.

Management continues to place significant emphasis on expense monitoring and cost containment. Maintaining administrative efficiencies directly affects net income.

Financial Condition

Investment Information

Investments represent approximately 85% and 84% of total assets at September 30, 2020 and December 31, 2019, respectively. Accordingly, investments are the largest asset group of the Company.  The Company's insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments that it is permitted to make and the amount of funds that may be used for any one type of investment.  Considering these statutes and regulations, the majority of the Company’s investment portfolio is invested in a diverse set of securities.

As of September 30, 2020, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders’ equity or results from operations.  To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as "investments available for sale".  Investments available for sale are carried at market, with changes in market value charged directly to shareholders' equity.Changes in the market value of available for sale securities resulted in net unrealized gains of $169,000 and $8.2 million for the three and nine-month periods ended September 30, 2020, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations and lower interest rates.

Capital Resources

Total shareholders’ equity decreased by approximately 2% as of September 30, 2020 compared to December 31, 2019. The decrease is largely attributable to the net loss of $(5.7) million and the net decrease of additional paid-in capital of $(3.0) million for the nine-months ended September 30, 2020. However, the decrease was offset by the increase in accumulated other comprehensive income of $6.2 million, resulting in a net decrease of $(2.3) million.

The Company’s investments are predominately in fixed maturity investments such as bonds. The Company carries all of its fixed maturity holdings as available for sale, which are reported in the Condensed Consolidated Financial Statements at their market value.

During the third quarter of 2020, the Company purchased 88,341 shares from Cumberland Lake Shell, Inc. at a price of $29 per share for a total cost of $2,561,889. This single transaction represented a majority of the third quarter activity related to the share repurchase program. Note 6 – Shareholders’ Equity provides additional information regarding the Company’s stock repurchase program.

Liquidity

The Company has two principal needs for cash - the insurance company’s contractual obligations to policyholders and the payment of operating expenses.  Cash and cash equivalents represented 6% and 7% of total assets as of September 30, 2020 and December 31, 2019, respectively.  Fixed maturities, as a percentage of total assets, were approximately 43% and 41% as of September 30, 2020 and December 31, 2019, respectively.

The Company currently has access to funds for operating liquidity.  UTG has an $8,000,000 revolving credit note with Illinois National Bank.  At September 30, 2020, the Company had no outstanding borrowings against the UTG line of credit. UG has a $10 million line of credit with the Federal Home Loan Bank. At September 30, 2020, the Company had no outstanding borrowings against the UG line of credit.

Future policy benefits are primarily long-term in nature and therefore, the Company's investments are predominantly long-term and provide sufficient return to cover these obligations. Many of the Company's products contain surrender charges and other features that reward persistency and penalize the early withdrawal of funds.

Net cash used in operating activities was approximately $8.8 million and $5.3 million for the nine-months ended September 30, 2020 and 2019, respectively. The difference between periods is largely a result of change in the deferred income taxes. Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments.  Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses.  The Company has not marketed any significant new products for several years.  As such, premium revenues continue to decline.  Management anticipates future cash flows from operations to remain similar to historic trends.

Net cash provided by investing activities was approximately $7.5 million and $12.3 million for the nine-month period ended September 30, 2020 and 2019, respectively. The net cash provided by investing activities is expected to vary from quarter to quarter depending on market conditions and management’s ability to find and negotiate favorable investment arrangements.

UTG is a holding Company that has no day-to-day operations of its own.  Funds required to meet its expenses and general costs associated with maintaining the Company in good standing with states in which it does business are primarily provided by its subsidiaries.  On a parent only basis, UTG's cash flow is dependent on Management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances.  At September 30, 2020, substantially all of the consolidated shareholders’ equity represented net assets of its subsidiary.  The Company's insurance subsidiary has maintained adequate statutory capital and surplus.  The payment of cash dividends to shareholders by UTG is not legally restricted.  However, the state insurance department regulates insurance Company dividend payments where the Company is domiciled.  No dividends were paid to shareholders in 2019 or the nine months ended September 30, 2020.

UG is an Ohio domiciled insurance company, which requires notification within five business days to the insurance commissioner following the declaration of any ordinary dividend and at least ten calendar days prior to payment of such dividend.  Ordinary dividends are defined as the greater of:  a) prior year statutory net income or b) 10% of statutory capital and surplus.  For the year ended December 31, 2019, UG had statutory net income of approximately $8.3 million.  At December 31, 2019 UG’s statutory capital and surplus amounted to approximately $66 million.  Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation.  During 2019, UG paid UTG ordinary dividends of $6 million.  During the second quarter of 2020, UG paid UTG an ordinary dividend of $1 million and another $2 million dividend in the third quarter. UTG used the dividends received during 2019 and 2020 to purchase outstanding shares of UTG stock and for general operations of the Company.

ITEM 4.  CONTROLS AND PROCEDURES

The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to Management, including the principal executive officer and principal financial officer, allowing timely decisions regarding required disclosure. Under the supervision and with the participation of our Management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

NONE

ITEM 1A.  RISK FACTORS

NONE

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

NONE

ITEM 4.  MINE SAFETY DISCLOSURES

NONE

ITEM 5.  OTHER INFORMATION

NONE

ITEM 6.  EXHIBITS

Exhibit Number	Description
*31.1	Certification of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certificate of Jesse T. Correll, Chief Executive Officer and Chairman of the Board of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*32.2	Certificate of Theodore C. Miller, Chief Financial Officer, Senior Vice President and Corporate Secretary of UTG, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**101	Interactive Data File

* Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UTG, INC.

(Registrant)

Date:	November 13, 2020	By	/s/ James P. Rousey
			James P. Rousey
			President and Director

Date:	November 13, 2020	By	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President and Chief Financial Officer

EX-31.1

Exhibit 31.1 CERTIFICATIONS
I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of UTG, Inc., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:	November 13, 2020	By:	/s/ Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-31.2

Exhibit 31.2 CERTIFICATIONS
I, Theodore C. Miller,  Senior Vice President, Corporate Secretary and Chief Financial Officer of UTG, Inc., certify that:
1.	I have reviewed this quarterly report on Form 10-Q of the registrant, UTG, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

Date:	November 13, 2020	By:	/s/ Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

Date:	November 13, 2020	By:	/s/ Jesse T. Correll
			Jesse T. Correll
			Chairman of the Board and
			Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of UTG, Inc. (the "Company") for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

Date:	November 13, 2020	By:	/s/ Theodore C. Miller
			Theodore C. Miller
			Senior Vice President, Corporate Secretary and
			Chief Financial Officer

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Oct. 31, 2020
Cover [Abstract]
Entity Registrant Name	UTG INC
Entity Central Index Key	0000832480
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		3,175,132
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Address, State or Province	KY

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Investments available for sale:
Fixed maturities, at fair value (amortized cost $156,998,638 and $159,959,855)	$ 176,720,947	$ 171,629,373	[1]
Equity securities, at fair value (cost $33,521,163 and $32,578,862)	65,588,029	78,661,793	[1]
Equity securities, at cost	14,417,247	10,919,247	[1]
Mortgage loans on real estate at amortized cost	20,392,053	8,223,286	[1]
Investment real estate	36,421,627	44,344,236	[1]
Notes receivable	19,298,398	19,487,458	[1]
Policy loans	8,727,991	8,803,876	[1]
Short-term investments	7,973,910	10,442,173
Total investments	349,540,202	352,511,442	[1]
Cash and cash equivalents	24,723,191	28,787,629	[1]
Accrued investment income	1,247,946	1,679,783	[1]
Reinsurance receivables:
Future policy benefits	25,412,611	25,655,161	[1]
Policy claims and other benefits	4,262,277	4,142,142	[1]
Cost of insurance acquired	4,287,682	4,846,321	[1]
Property and equipment, net of accumulated depreciation	367,999	427,736	[1]
Income tax receivable	145,067	0	[1]
Other assets	764,344	695,517	[1]
Total assets	410,751,319	418,745,731	[1]
Policy liabilities and accruals:
Future policyholder benefits	245,084,324	249,264,308	[1]
Policy claims and benefits payable	3,811,781	3,631,666	[1]
Other policyholder funds	402,225	404,177	[1]
Dividend and endowment accumulations	14,764,957	14,626,475	[1]
Income taxes payable	0	313,662	[1]
Deferred income taxes	11,343,548	13,222,604	[1]
Trading securities, at fair value (proceeds $5,584 and $0)	4,003	0
Other liabilities	6,172,576	5,785,933	[1]
Total liabilities	281,583,414	287,248,825	[1]
Shareholders' equity:
Common stock - no par value, stated value $.001 per share. Authorized 7,000,000 shares - 3,176,672 and 3,277,830 shares outstanding	3,177	3,279	[1]
Additional paid-in capital	33,056,562	36,012,401	[1]
Retained earnings	80,266,031	85,979,678	[1]
Accumulated other comprehensive income	15,218,666	8,977,914	[1]
Total UTG shareholders' equity	128,544,436	130,973,272	[1]
Noncontrolling interests	623,469	523,634	[1]
Total shareholders' equity	129,167,905	131,496,906	[1]
Total liabilities and shareholders' equity	$ 410,751,319	$ 418,745,731	[1]

[1] Balance sheet audited at December 31, 2019.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Investments available for sale:
Fixed maturities, amortized cost	$ 156,998,638	$ 159,959,855
Equity securities, cost	33,521,163	32,578,862
Liabilities:
Trading securities, proceeds	$ 5,584	$ 0
Shareholders' equity:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, stated value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	7,000,000	7,000,000
Common stock, outstanding (in shares)	3,176,672	3,277,830

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Premiums and policy fees	$ 2,285,170	$ 2,385,113	$ 7,020,901	$ 7,319,807
Ceded reinsurance premiums and policy fees	(757,649)	(678,941)	(2,128,125)	(2,009,252)
Net investment income	2,231,360	2,818,669	8,083,200	8,632,402
Other income	111,775	95,141	264,589	254,898
Revenue before net investment gains (losses)	3,870,656	4,619,982	13,240,565	14,197,855
Net investment gains (losses):
Other realized investment gains, net	1,754,315	3,727,538	10,708,155	10,143,014
Change in fair value of equity securities	(2,277,902)	(4,046,457)	(14,016,065)	10,838,322
Total net investment gains (losses)	(523,587)	(318,919)	(3,307,910)	20,981,336
Total revenue	3,347,069	4,301,063	9,932,655	35,179,191
Benefits, claims and settlement expenses:
Life	4,460,762	4,029,261	11,423,300	12,047,346
Ceded reinsurance benefits and claims	(966,260)	(501,184)	(1,954,371)	(1,583,345)
Annuity	250,486	265,413	742,023	770,452
Dividends to policyholders	70,125	74,864	256,445	274,516
Commissions and amortization of deferred policy acquisition costs	(35,865)	(39,665)	(99,541)	(102,784)
Amortization of cost of insurance acquired	186,214	193,977	558,639	581,930
Operating expenses	2,559,653	1,940,795	6,249,951	5,875,135
Total benefits and other expenses	6,525,115	5,963,461	17,176,446	17,863,250
Income (loss) before income taxes	(3,178,046)	(1,662,398)	(7,243,791)	17,315,941
Income tax (benefit) expense	(765,421)	(578,549)	(1,629,979)	3,781,340
Net income (loss)	(2,412,625)	(1,083,849)	(5,613,812)	13,534,601
Net income attributable to noncontrolling interests	(34,081)	(32,795)	(99,835)	(294,308)
Net income (loss) attributable to common shareholders	$ (2,446,706)	$ (1,116,644)	$ (5,713,647)	$ 13,240,293
Amounts attributable to common shareholders
Basic income (loss) per share (in dollars per share)	$ (0.76)	$ (0.34)	$ (1.75)	$ 4.03
Diluted income (loss) per share (in dollars per share)	$ (0.76)	$ (0.34)	$ (1.75)	$ 4.03
Basic weighted average shares outstanding (in shares)	3,221,049	3,279,684	3,256,217	3,289,133
Diluted weighted average shares outstanding (in shares)	3,221,049	3,279,684	3,256,217	3,289,133

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) [Abstract]
Net income (loss)	$ (2,412,625)	$ (1,083,849)	$ (5,613,812)	$ 13,534,601
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax	169,058	3,184,769	8,237,909	12,044,690
Tax (expense) benefit on unrealized holding gains (losses) arising during the period	(35,502)	(668,802)	(1,729,961)	(2,529,385)
Unrealized holding gains (losses) arising during period, net of tax	133,556	2,515,967	6,507,948	9,515,305
Less reclassification adjustment for (gains) losses included in net income	0	30,793	(338,223)	25,564
Tax expense (benefit) for gains included in net income (loss)	0	(6,466)	71,027	(5,368)
Reclassification adjustment for (gains) losses included in net income, net of tax	0	24,327	(267,196)	20,196
Subtotal: Other comprehensive income (loss), net of tax	133,556	2,540,294	6,240,752	9,535,501
Comprehensive income (loss)	(2,279,069)	1,456,445	626,940	23,070,102
Less comprehensive income attributable to noncontrolling interests	(34,081)	(32,795)	(99,835)	(294,308)
Comprehensive income (loss) attributable to UTG, Inc.	$ (2,313,150)	$ 1,423,650	$ 527,105	$ 22,775,794

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2018	$ 3,296	$ 36,567,865	$ 69,708,901	$ 62,495	$ 734,153	$ 107,076,710
Common stock issued during year	7	246,527	0	0	0	246,534
Treasury shares acquired	(26)	(849,239)	0	0	0	(849,265)
Net income (loss) attributable to common shareholders	0	0	13,240,293	0	0	13,240,293
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	9,535,501	0	9,535,501
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	(535,662)	(535,662)
Gain attributable to noncontrolling interest	0	0	0	0	294,308	294,308
Balance at Sep. 30, 2019	3,277	35,965,153	82,949,194	9,597,996	492,799	129,008,419
Balance at Jun. 30, 2019	3,286	36,253,067	84,065,838	7,057,702	749,916	128,129,809
Common stock issued during year	0	0	0	0	0	0
Treasury shares acquired	(9)	(287,914)	0	0	0	(287,923)
Net income (loss) attributable to common shareholders	0	0	(1,116,644)	0	0	(1,116,644)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	2,540,294	0	2,540,294
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	(289,912)	(289,912)
Gain attributable to noncontrolling interest	0	0	0	0	32,795	32,795
Balance at Sep. 30, 2019	3,277	35,965,153	82,949,194	9,597,996	492,799	129,008,419
Balance at Dec. 31, 2019	3,279	36,012,401	85,979,678	8,977,914	523,634	131,496,906	[1]
Common stock issued during year	7	218,282	0	0	0	218,289
Treasury shares acquired	(109)	(3,174,121)	0	0	0	(3,174,230)
Net income (loss) attributable to common shareholders	0	0	(5,713,647)	0	0	(5,713,647)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	6,240,752	0	6,240,752
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	0	0
Gain attributable to noncontrolling interest	0	0	0	0	99,835	99,835
Balance at Sep. 30, 2020	3,177	33,056,562	80,266,031	15,218,666	623,469	129,167,905
Balance at Jun. 30, 2020	3,272	35,780,640	82,712,737	15,085,110	589,388	134,171,147
Common stock issued during year	0	0	0	0	0	0
Treasury shares acquired	(95)	(2,724,078)	0	0	0	(2,724,173)
Net income (loss) attributable to common shareholders	0	0	(2,446,706)	0	0	(2,446,706)
Unrealized holding income on securities net of noncontrolling interest and reclassification adjustment and taxes	0	0	0	133,556	0	133,556
Contributions	0	0	0	0	0	0
Distributions	0	0	0	0	0	0
Gain attributable to noncontrolling interest	0	0	0	0	34,081	34,081
Balance at Sep. 30, 2020	$ 3,177	$ 33,056,562	$ 80,266,031	$ 15,218,666	$ 623,469	$ 129,167,905

[1] Balance sheet audited at December 31, 2019.

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (5,613,812)	$ 13,534,601
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments	(87,559)	28,936
Realized investment gains, net	(10,708,155)	(10,143,014)
Unrealized trading (gains) losses included in income	(1,581)	0
Change in fair value of equity securities	14,016,065	(10,838,322)
Amortization of cost of insurance acquired	558,639	581,930
Depreciation	338,550	868,630
Stock-based compensation	218,289	246,534
Charges for mortality and administration of universal life and annuity products	(4,759,240)	(4,839,551)
Interest credited to account balances	3,014,030	3,068,614
Change in accrued investment income	431,837	375,806
Change in reinsurance receivables	122,415	460,659
Change in policy liabilities and accruals	(2,463,865)	(2,458,575)
Change in income taxes receivable (payable)	(458,729)	78,738
Change in other assets and liabilities, net	(3,373,186)	3,749,194
Net cash used in operating activities	(8,766,302)	(5,285,820)
Proceeds from investments sold and matured:
Fixed maturities available for sale	12,253,350	8,563,966
Equity securities	17,071,364	10,219,197
Mortgage loans	554,787	4,824,430
Real estate	8,513,461	11,620,038
Notes receivable	3,689,060	4,296,998
Policy loans	914,651	1,324,183
Short-term investments	10,500,000	0
Total proceeds from investments sold and matured	53,496,673	40,848,812
Cost of investments acquired:
Fixed maturities available for sale	(9,038,928)	(11,655,148)
Equity securities	(12,011,489)	(1,323,310)
Trading securities	5,584	(132,518)
Mortgage loans	(12,692,488)	(4,216,644)
Real estate	0	(1,729,000)
Notes receivable	(3,500,000)	(8,532,796)
Policy loans	(838,766)	(973,594)
Short-term investments	(7,890,228)	0
Total cost of investments acquired	(45,966,315)	(28,563,010)
Net cash provided by investing activities	7,530,358	12,285,802
Cash flows from financing activities:
Policyholder contract deposits	3,386,396	3,542,562
Policyholder contract withdrawals	(3,040,660)	(3,578,980)
Purchase of treasury stock	(3,174,230)	(849,265)
Non controlling contributions (distributions) of consolidated subsidiary	0	(535,662)
Net cash used in financing activities	(2,828,494)	(1,421,345)
Net increase (decrease) in cash and cash equivalents	(4,064,438)	5,578,637
Cash and cash equivalents at beginning of period	28,787,629	20,150,162
Cash and cash equivalents at end of period	$ 24,723,191	$ 25,728,799

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Basis of Presentation

9 Months Ended

Sep. 30, 2020

Basis of Presentation [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  The Company’s results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic has significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March, as federal, state, and local governments react to the public health crisis, creating significant uncertainties in the U.S. economy. The Company has not experienced a slow-down in activities, however government restrictions and client-imposed delays are evaluated daily and this could change. While the disruption is currently expected to be temporary, there is uncertainty around the duration. The Company cannot at this time predict the ultimate impact the pandemic will have on its results of operations, financial position, liquidity, or capital resources but such impact could be material.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll.  Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company.  FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”).  Banking activities are conducted through multiple locations within south-central and western Kentucky.  Mr. Correll is Chief Executive Officer and Chairman of the Board of Directors of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates.  At September 30, 2020, Mr. Correll owns or controls directly and indirectly approximately 64.95% of UTG’s outstanding stock.

UTG’s life insurance subsidiary, Universal Guaranty Life Insurance Company (“UG”), has several wholly-owned and majority-owned subsidiaries.  The subsidiaries were formed to hold certain real estate investments.  The real estate investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Certain amounts in prior periods have been reclassified to conform with the current period presentation.

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Recently Issued Accounting Standards

9 Months Ended

Sep. 30, 2020

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

Note 2 – Recently Issued Accounting Standards

During the nine months ended September 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

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Investments

9 Months Ended

Sep. 30, 2020

Investments [Abstract]

Investments

Note 3 – Investments

Available for Sale Securities – Fixed Maturity Securities

The Company’s insurance subsidiary is regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

Investments in available for sale securities are summarized as follows:

September 30, 2020		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,789,865	$	1,418,625	$	0	$	46,208,490
U.S. special revenue and assessments		14,356,937		1,487,743		0		15,844,680
All other corporate bonds		97,851,836		16,815,941		0		114,667,777
	$	156,998,638	$	19,722,309	$	0	$	176,720,947

December 31, 2019		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		0		15,203,363
All other corporate bonds		109,827,152		10,470,115		0		120,297,267
	$	159,959,855	$	11,705,047	$	(35,529)	$	171,629,373

The amortized cost and estimated market value of debt securities at September 30, 2020, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale September 30, 2020		Amortized Cost		Fair Value
Due in one year or less	$	26,793,810	$	27,113,305
Due after one year through five years		46,406,659		49,706,585
Due after five years through ten years		32,831,635		37,877,774
Due after ten years		24,192,862		28,870,286
Fixed maturities with no single maturity date		26,773,672		33,152,997
Total	$	156,998,638	$	176,720,947

The fair value of investments with sustained gross unrealized losses at September 30, 2020 and December 31, 2019 are as follows:

September 30, 2020	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
All other corporate bonds	$	0		0		0		0		0	$	0
Total fixed maturities	$	0		0		0		0		0	$	0

December 31, 2019	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,059,380		(35,529)		0		0		6,059,380	$	(35,529)
Total fixed maturities	$	6,059,380		(35,529)		0		0		6,059,380	$	(35,529)

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of September 30, 2020
Fixed maturities	0	0	0
As of December 31, 2019
Fixed maturities	3	0	3

Substantially all of the unrealized losses on fixed maturities at December 31, 2019 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase.  The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position.  Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of  September 30, 2020 and December 31, 2019.

Net Investment Gains (Losses)

The following table presents net investment gains (losses) and the change in net unrealized gains (losses) on investments. 

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Realized gains:
Sales of fixed maturities	$	0	$	0	$	403,215	$	116,690
Sales of equity securities		884,559		3,738,333		9,500,176		6,504,246
Sales of real estate		869,756		20,000		869,756		3,796,850
Other		0		0		0		0
Total realized gains		1,754,315		3,758,333		10,773,147		10,417,786
Realized losses:
Sales of fixed maturities		0		(30,795)		(64,992)		(142,254)
Sales of equity securities		0		0		0		0
Sales of real estate		0		0		0		0
Other-than-temporary impairments		0		0		0		0
Other		0		0		0		(132,518)
Total realized losses		0		(30,795)		(64,992)		(274,772)
Net realized investment gains (losses)		1,754,315		3,727,538		10,708,155		10,143,014
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Change in fair value of equity securities		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Net investment gains (losses)	$	(523,587)	$	(318,919)	$	(3,307,910)	$	20,981,336
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690
Net increase (decrease)	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690

The following table presents net gains (losses) and the change in net unrealized gains (losses) on equity securities.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2020		2019		2020		2019
Net gains (losses) recognized during the period on equity securities	$	(1,393,343)	$	(308,124)	$	(4,515,889)	$	17,342,568
Less: Net gains (losses) recognized during the period on equity securities sold during the period		884,559		3,738,333		9,500,176		6,504,246
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(2,277,902)	$	(4,046,457)	$	(14,016,065)	$	10,838,322

Other-Than-Temporary Impairments

The Company regularly reviews its investment securities for factors that may indicate that a decline in fair value of an investment is other than temporary.  The factors considered by Management in its regular review to identify and recognize other-than-temporary impairment losses on fixed maturities include, but are not limited to: the length of time and extent to which the fair value has been less than cost; the Company’s intent to sell, or be required to sell, the debt security before the anticipated recovery of its remaining amortized cost basis; the financial condition and near-term prospects of the issuer; adverse changes in ratings announced by one or more rating agencies; subordinated credit support, whether the issuer of a debt security has remained current on principal and interest payments; current expected cash flows; whether the decline in fair value appears to be issuer specific or, alternatively, a reflection of general market or industry conditions, including the effect of changes in market interest rates.  If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date would be recognized by a charge to other-than-temporary losses in the Condensed Consolidated Statements of Operations.

Management regularly reviews its real estate portfolio in comparison to appraisal valuations and current market conditions for indications of other-than-temporary impairments. If a decline in value is judged by Management to be other-than-temporary, a loss is recognized by a charge to other-than-temporary impairment losses in the Consolidated Statements of Operations.

The Company did not recognize any other-than-temporary impairments during the nine month periods ended September 30, 2020 or 2019.

Cost Method Investments

The Company held equity investments with an aggregate cost of $14,417,247 and $10,919,247 at September 30, 2020 and December 31, 2019, respectively.  These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management did not identify any events or changes in circumstances that might have a significant adverse effect on the reported value of those investments.  Based on Management's evaluation of the expected cash flow of the investments, and the Company's ability and intent to hold the investments for a reasonable period of time, the Company does not deem an other-than-temporary impairment necessary at September 30, 2020.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Condensed Consolidated Statements of Operations.  Trading securities include exchange-traded equities and exchange-traded options.  Trading securities carried as liabilities are securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.  The fair value of derivatives included in trading security assets and trading security liabilities as of September 30, 2020 was $0 and $(4,003), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of  December 31, 2019 was $0 and $0, respectively.  Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

Trading revenue charged to net investment income from trading securities was:

	Three Months Ended
	September 30,
		2020		2019
Net unrealized gains (losses)	$	1,581	$	0
Net realized gains (losses)		0		0
Net unrealized and realized gains (losses)	$	1,581	$	0

	Nine Months Ended
	September 30,
		2020		2019
Net unrealized gains (losses)	$	1,581	$	0
Net realized gains (losses)		0		0
Net unrealized and realized gains (losses)	$	1,581	$	0

Mortgage Loans

The Company, from time to time, acquires mortgage loans through participation agreements with FSNB.  FSNB has been able to provide the Company with additional expertise and experience in underwriting commercial and residential mortgage loans, which provide more attractive yields than the traditional bond market.  The Company is able to receive participations from FSNB for three primary reasons:  1) FSNB has already reached its maximum lending limit to a single borrower, but the borrower is still considered a suitable risk; 2) the interest rate on a particular loan may be fixed for a long period that is more suitable for UG given its asset-liability structure; and 3) FSNB’s loan growth might at times outpace its deposit growth, resulting in FSNB participating such excess loan growth rather than turning customers away.  For originated loans, the Company’s Management is responsible for the final approval of such loans after evaluation.  Before a new loan is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  These criteria include, but are not limited to, a credit report, personal financial information such as outstanding debt, sources of income, and personal equity.  Once the loan is approved, the Company directly funds the loan to the borrower.  The Company bears all risk of loss associated with the terms of the mortgage with the borrower.

During the nine months ended September 30, 2020 and 2019, the Company acquired $12,692,488 and $4,216,644 in mortgage loans, respectively.  FSNB services the majority of the Company’s mortgage loan portfolio.  The Company pays FSNB a .25% servicing fee on these loans and a one-time fee at loan origination of .50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.82%
Residential Loans	5.50%	5.50%	5.50%	5.50%

Most mortgage loans are first position loans.  Loans issued are generally limited to no more than 80% of the appraised value of the property.

The Company has in place a monitoring system to provide Management with information regarding potential troubled loans.  Letters are sent to each mortgagee when the loan becomes 30 days or more delinquent.  Management is provided with a monthly listing of loans that are 60 days or more past due along with a brief description of what steps are being taken to resolve the delinquency.  All loans 90 days or more past due are placed on a non-performing status and classified as delinquent loans.  Quarterly, coinciding with external financial reporting, the Company reviews each delinquent loan and determines how each delinquent loan should be classified.  Management believes the current internal controls surrounding the mortgage loan selection process provide a quality portfolio with minimal risk of foreclosure and/or negative financial impact.

Changes in the current economy could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers’ ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  Interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on Management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value.  The mortgage loan reserve was $0 at September 30, 2020 and December 31, 2019.

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

		September 30, 2020		December 31, 2019
In good standing	$	18,319,413	$	8,223,286
Overdue interest over 90 days		2,072,640		0
Total mortgage loans	$	20,392,053	$	8,223,286

Investment Real Estate

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of 3 to 30 years. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable. During the nine month period ended September 30, 2020, no impairments were recognized on the investment real estate.

Note 4 - Fair Value Measurements of the Condensed Consolidated Financial Statements provides further information regarding the fair value of financial instruments that are not measured at fair value. The investment real estate owned by the Company is included in this portion of the Note 4 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company's investment real estate by type:

		September 30, 2020		December 31, 2019
Raw land	$	9,915,856	$	16,089,540
Commercial		5,414,238		4,908,028
Residential		2,235,678		2,251,772
Land, minerals and royalty interests		18,855,855		21,094,896
Total investment real estate	$	36,421,627	$	44,344,236

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of September 30, 2020 and December 31, 2019, investments in oil and gas royalties represented 52% and 44%, respectively, of the total investment real estate portfolio.  See Note 9 – Concentrations of Credit Risk of the Condensed Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2020 and 2019, the Company acquired $0 and $1,729,000 of investment real estate, respectively.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of  September 30, 2020 and December 31, 2019 was $0. Interest accruals are analyzed based on the likelihood of repayment.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During the nine months ended September 30, 2020 and 2019 the Company acquired  $3,500,000 and $8,532,796 of notes receivable, respectively.

Before a new note is issued, the applicant is subject to certain criteria set forth by Company Management to ensure quality control.  Once the note is approved, the Company directly funds the note to the borrower. Several of the notes have participation agreements in place, whereas the Company has reduced its investment in the note receivable by participating a portion of the note to a third party.

Similar to the mortgage loans, FSNB services several of the notes receivable. The Company, and the participants in the notes, share in the risk of loss associated with the terms of the note with the borrower, based upon their ownership percentage in the note.  The Company has in place a monitoring system to provide Management with information regarding potential troubled loans. 

Short-Term Investments

Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value. The short-term investments consist of United States Treasury securities.

Dung the nine months ended September 30, 2020 and 2019, the Company acquired $7,890,228 and $0, respectively, in short-term investments.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair Value Measurements

Fair Value Measurements on a Recurring Basis

Assets and liabilities recorded at fair value in the Condensed Consolidated Balance Sheets are measured and classified in accordance with a fair value hierarchy consisting of three levels based on the observability of valuation inputs:

Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Valuation methodologies include quoted prices for similar assets and liabilities in active markets or quoted prices for identical, quoted prices for identical or similar assets or liabilities in markets that are not active, or the Company may use various valuation techniques or pricing models that use observable inputs to measure fair value.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used:

September 30, 2020		Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	46,208,490	$	0	$	0	$	0	$	46,208,490
U.S. special revenue and assessments		0		15,844,680		0		0		15,844,680
Corporate securities		0		114,667,777		0		0		114,667,777
Total fixed maturities		46,208,490		130,512,457		0		0		176,720,947
Equity securities:
Common stocks		22,790,516		16,908,050		3,051,875		22,814,521		65,564,962
Preferred stocks		0		23,066		0		0		23,066
Total equity securities		22,790,516		16,931,116		3,051,875		22,814,521		65,588,028
Total financial assets	$	68,999,006	$	147,443,573	$	3,051,875	$	22,814,521	$	242,308,975
Liabilities
Trading Securities	$	(4,003)	$	0	$	0	$	0	$	(4,003)

December 31, 2019		Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	36,128,743	$	0	$	0	$	0	$	36,128,743
U.S. special revenue and assessments		0		15,203,363		0		0		15,203,363
Corporate securities		0		120,297,267		0		0		120,297,267
Total fixed maturities		36,128,743		135,500,630		0		0		171,629,373
Equity securities:
Common stocks		29,888,281		14,258,750		10,274,810		24,239,952		78,661,793
Total equity securities		29,888,281		14,258,750		10,274,810		24,239,952		78,661,793
Total financial assets	$	66,017,024	$	149,759,380	$	10,274,810	$	24,239,952	$	250,291,166

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. There have been no significant changes in the valuation techniques utilized by the Company for the nine months ended September 30, 2020.

Available for Sale Securities

Securities classified as available for sale are recorded at fair value on a recurring basis. Securities classified as Level 1 utilized fair value measurements based upon quoted market prices, when available. If quoted market prices are not available, the Company obtains fair value measurements from recently executed transactions, market price quotations, benchmark yields and issuer spreads to value Level 2 securities. In certain instances where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair value determinations for Level 3 measurements are estimated on a quarterly basis where assumptions used are reviewed to ensure the estimated fair value complies with accounting standard generally accepted in the United States.

Equity Securities at Fair Value

Equity securities consist of common stocks mainly in private equity investments, financial institutions and publicly traded corporations. Equity securities for which there is sufficient market data are categorized as Level 1 or 2 in the fair value hierarchy.  For the equity securities in which quoted market prices are not available, the Company uses industry standard pricing methodologies, including discounted cash flow models that may incorporate various inputs such as payment expectations, risk of the investment, market data, and health of the underlying company. The inputs are based upon Management's assumptions and available market information. When evidence is believed to support a change to the carrying value from the transaction price, adjustments are made to reflect the expected cash flows, material events and market data. These investments are included in Level 3 of the fair value hierarchy.

Equity Securities at Net Asset Value

Certain equity securities carried at fair value, which do not have readily determinable fair values, use net asset value (“NAV”) and are excluded from the fair value hierarchy. These investments are generally not readily redeemable by the investee. See Note 7 – Commitments and Contingencies for additional information regarding unfunded commitments.

Trading Securities

Trading securities are recorded at fair value. They are classified as Level 1 and utilize fair value measurements based upon quoted market prices.

Change in Level 3 Recurring Fair Value Measurements

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities.

		Fixed Maturities, Available for Sale		Equity Securities at Fair Value		Equity Securities at Net Asset Value		Total
Balance at December 31, 2019	$	0	$	10,274,810	$	24,239,952	$	34,514,762
Realized gains (losses)		0		6,284,302		0		6,284,302
Unrealized gains (losses)		0		(3,850,560)		(2,809,324)		(6,659,884)
Purchases		0		1,797,500		1,415,757		3,213,257
Sales		0		(11,454,177)		(31,864)		(11,486,041)
Balance at September 30, 2020	$	0	$	3,051,875	$	22,814,521	$	25,866,396

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above.  As a result, the unrealized gains (losses) on instruments held at September 30, 2020 and December 31, 2019 may include changes in fair value that were attributable to both observable and unobservable inputs.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and include only those instrument for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets		Fair Value at September 30, 2020		Fair Value at December 31, 2019	Valuation Technique
Common stocks	$	22,814,521	$	24,239,952	Net Asset Value
Common stocks		3,051,875		10,274,810	Pricing Model
Total	$	25,866,396	$	34,514,762

Uncertainty of Fair Value Measurements

The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that if changed could result in higher or lower fair value measurements of these assets as of the reporting date.

Equity Securities at Fair Value

Fair market value for equity securities is derived based on unobservable inputs, such as projected normalized revenues and industry standard multiples of revenue for the equity securities valued using pricing model.  Significant increases (decreases) in either of those inputs in isolation would result in a significantly higher (lower) fair value measurement. 

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Company		Fair Value at September 30, 2020		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	18,482,622	$	0	Quarterly	45 days
Non-Reedemable		4,331,899		2,295,675	n/a	n/a
Total	$	22,814,521	$	2,295,675

Investment Company		Fair Value at September 30, 2019		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	21,270,734	$	0	Quarterly	45 days
Non-Reedemable		2,969,218		163,750	n/a	n/a
Total	$	24,239,952	$	163,750

Fair Value Measurements on a Nonrecurring Basis

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements. The Company did not recognize any re-measurements or impairments of financial instruments at September 30, 2020 or December 31, 2019.

Fair Value Information About Financial Instruments Not Measured at Fair Value

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements.

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

		Carrying	Estimated
September 30, 2020		Amount	Fair Value	Level 1	Level 2	Level 3
Common stock, at cost	$	5,860,000	5,860,000	0	0	5,860,000
Preferred stock, at cost		8,557,247	8,557,247	0	0	8,557,247
Mortgage loans on real estate		20,392,053	20,614,085	0	0	20,614,085
Investment real estate		36,421,627	81,351,608	0	0	81,351,608
Notes receivable		19,298,398	22,380,946	0	0	22,380,946
Policy loans		8,727,991	8,727,991	0	0	8,727,991

		Carrying	Estimated
December 31, 2019		Amount	Fair Value	Level 1	Level 2	Level 3
Common stock, at cost	$	7,875,145	7,875,145	0	0	7,875,145
Preferred stock, at cost		3,044,102	3,044,102	0	0	3,044,102
Mortgage loans on real estate		8,223,286	7,531,094	0	0	7,531,094
Investment real estate		44,344,236	88,483,424	0	0	88,483,424
Notes receivable		19,487,458	19,332,472	0	0	19,332,472
Policy loans		8,803,876	8,803,876	0	0	8,803,876

The above estimated fair value amounts have been determined based upon the following valuation methodologies. Considerable judgment was required to interpret market data in order to develop these estimates. Accordingly, the estimates are not necessarily indicative of the amounts which could be realized in a current market exchange.  The use of different market assumptions or estimation methodologies may have a material effect on the fair value amounts.

The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings.  The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 3 within the fair value hierarchy.

A portion of the mortgage loans balance consists of discounted mortgage loans. The Company has historically purchased non-performing discounted mortgage loans at a deep discount through an auction process led by the Federal Government.  In general, the discounted loans are non-performing and there is a significant amount of uncertainty surrounding the timing and amount of cash flows to be received by the Company.  Accordingly, the Company records its investment in the discounted loans at its original purchase price, which Management believes approximates fair value.  The inputs used to measure the fair value of our discounted mortgage loans are classified as Level 3 within the fair value hierarchy.

Investment real estate is recorded at the lower of the net investment in the real estate or the fair value of the real estate less costs to sell.  The determination of fair value assessments are performed on a periodic, non-recurring basis by external appraisal and assessment of property values by Management.  The inputs used to measure the fair value of our investment real estate are classified as Level 3 within the fair value hierarchy.

The fair values of notes receivable are estimated using discounted cash flow analyses and interest rates being offered for similar loans to borrowers with similar credit ratings. The inputs used to measure the fair value of the notes receivable are classified as Level 3 within the fair value hierarchy.

Policy loans are carried at the aggregate unpaid principal balances in the Condensed Consolidated Balance Sheets which approximate fair value, and earn interest at rates ranging from 4% to 8%. Individual policy liabilities in all cases equal or exceed outstanding policy loan balances.  The inputs used to measure the fair value of our policy loans are classified as Level 3 within the fair value hierarchy.

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Credit Arrangements

9 Months Ended

Sep. 30, 2020

Credit Arrangements [Abstract]

Credit Arrangements

Note 5 – Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2019		Borrowings		Repayments		September 30, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000		0		0		0		0
UG	6/2/2015	5/7/2021		10,000,000		0		0		0		0

The UTG line of credit carries interest at a fixed rate of  4.040% and is payable monthly. As collateral, UTG has pledged 100% of the  common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.

During May of 2020, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $12,617,556.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2020

Shareholders' Equity [Abstract]

Shareholders' Equity

Note 6 – Shareholders’ Equity

Stock Repurchase Program – The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG's common stock.  At a meeting of the Board of Directors in September of 2020, the Board of Directors of UTG authorized the repurchase of up to an additional $1.5 million of UTG's common stock, for a total  repurchase of up to $20 million of UTG's common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited.  During the nine months ended September 30, 2020, the Company repurchased 107,822shares through the stock repurchase program for $3,174,230. Through September 30, 2020, UTG has spent $17,947,326in the acquisition of 1,277,180shares under this program.

During 2020, the Company issued 6,664 shares of stock to management and employees as compensation at a cost of $218,289. These awards are determined at the discretion of the Board of Directors.

During the third quarter of 2020, the Company purchased 88,341 shares from Cumberland Lake Shell, Inc at a price of $29 per share for a total cost of $2,561,889. This single transaction represented a majority of the third quarter activity related to the share repurchase program.

Earnings Per Share Calculations

Earnings per share are based on the weighted average number of common shares outstanding during each period.  For the nine months ended September 30, 2020 and 2019, diluted earnings per share were the same as basic earnings per share since the Company had no dilutive instruments outstanding.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 7 – Commitments and Contingencies

The insurance industry has experienced a number of civil jury verdicts which have been returned against life and health insurers in the jurisdictions in which the Company does business involving the insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters.  Some of the lawsuits have resulted in the award of substantial judgments against the insurer, including material amounts of punitive damages.  In some states, juries have substantial discretion in awarding punitive damages in these circumstances.  In the normal course of business, the Company is involved from time to time in various legal actions and other state and federal proceedings.  Management is of the opinion that the ultimate disposition of the matters will not have a materially adverse effect on the Company’s results of operations or financial position.

Under the insurance guaranty fund laws in most states, insurance companies doing business in a participating state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies.  Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer's financial strength.  Mandatory assessments may be partially recovered through a reduction in future premium tax in some states. The Company does not believe such assessments will be materially different from amounts already provided for in the condensed consolidated financial statements, though the Company has no control over such assessments.

The following table represents the total funding commitments and the unfunded commitment as of September 30, 2020 related to certain investments:

		Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Macritchie Storage II, LP		7,000,750		1,840,485
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		1,115,000
Modern Distributors, Inc.		7,200,000		3,700,000

During 2006, the Company committed to invest in RLF III, LLC (“RLF”), which makes land-based investments in undervalued assets. RLF makes capital calls as funds are needed for continued land purchases.

During 2012, the Company committed to invest in Sovereign’s Capital, LP Fund I (“Sovereign’s”), which invests in companies in emerging markets. Sovereign’s makes capital calls to investors as funds are needed.

During 2015, the Company committed to invest in Sovereign’s Capital, LP Fund II (“Sovereign’s II”), which invests in companies in emerging markets. Sovereign’s II makes capital calls to investors as funds are needed.

During 2018, the Company committed to invest in Sovereign’s Capital, LP Fund III (“Sovereign’s III”), which invests in companies in emerging markets. Sovereign’s III makes capital calls to investors as funds are needed.

During 2018, the Company committed to fund a mortgage loan for Macritchie Storage II, LP ("Macritchie"). Macritchie makes draw requests on the loan as funds are needed to fund the construction project.

During 2020, the Company committed to invest in Garden City Companies, LLC (“Garden City”), which invests primarily in companies in the healthcare, inspection/testing services and maintenance service arena. Garden City makes capital calls to investors as funds are needed.

During 2020, the Company committed to invest in Carrizo Springs Music, LLC (“Carrizo”), which invests in music royalties.  Carrizo makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2020, the Company committed to fund a collateral loan for Modern Distributors, Inc. (“Modern Distributors”). Modern Distributors makes draw requests on the loan as funds are needed to fund a construction project.

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Other Cash Flow Disclosures

9 Months Ended

Sep. 30, 2020

Other Cash Flow Disclosures [Abstract]

Other Cash Flow Disclosures

Note 8 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses:

	Three Months Ended
	September 30,
	2020		2019
Interest	$	0	$	0
Federal income tax		419,000		0

	Nine Months Ended
	September 30,
	2020		2019
Interest	$	0	$	0
Federal income tax		2,529,000		1,106,000

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Concentrations of Credit Risk

9 Months Ended

Sep. 30, 2020

Concentrations of Credit Risk [Abstract]

Concentrations of Credit Risk

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 four states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas.  As of September 30, 2020 and 2019 , approximately 55% and 56%, respectively, 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 September 30, 2020 and  December 31, 2019.  Insurance ceded represented 37%  of premium income for the nine months ended September 30, 2020 and 2019. 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 17% and 25% of the Company's total invested assets as of September 30, 2020 and December 31, 2019, respectively. The following table provides an allocation of the oil and gas investments by type.

		September 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	57,246,945	$	80,182,100
Transportation		0		3,812,565
Exploration		1,258,750		2,824,810
Total	$	58,505,695	$	86,819,475

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.

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2020

Basis of Presentation [Abstract]

Basis of Presentation

The accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, which has been derived from audited consolidated financial statements, and the unaudited interim Condensed Consolidated Financial Statements include the accounts of UTG, Inc. (the “Parent”) and its subsidiaries (collectively with the Parent, the “Company”).  All significant intercompany accounts and transactions have been eliminated in consolidation.  The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of regulation S-X.  Accordingly, they do not include all of the information and notes required by GAAP for audited annual financial statements.  The information furnished includes all adjustments and accruals of a normal recurring nature, which in the opinion of Management, are necessary for a fair presentation of the results for the interim periods.  The unaudited Condensed Consolidated Financial Statements included herein and these related notes should be read in conjunction with the Company’s consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.  The Company’s results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any other future period.

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Recently Issued Accounting Standards (Policies)

9 Months Ended

Sep. 30, 2020

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

During the nine months ended September 30, 2020, there were no additions to or changes in the critical accounting policies disclosed in the 2019 Form 10-K.

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Investments (Tables)

9 Months Ended

Sep. 30, 2020

Investments [Abstract]

Available for Sale Securities

Investments in available for sale securities are summarized as follows:

September 30, 2020		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	44,789,865	$	1,418,625	$	0	$	46,208,490
U.S. special revenue and assessments		14,356,937		1,487,743		0		15,844,680
All other corporate bonds		97,851,836		16,815,941		0		114,667,777
	$	156,998,638	$	19,722,309	$	0	$	176,720,947

December 31, 2019		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	35,761,440	$	402,832	$	(35,529)	$	36,128,743
U.S. special revenue and assessments		14,371,263		832,100		0		15,203,363
All other corporate bonds		109,827,152		10,470,115		0		120,297,267
	$	159,959,855	$	11,705,047	$	(35,529)	$	171,629,373

Debt Securities by Contractual Maturity

The amortized cost and estimated market value of debt securities at September 30, 2020, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale September 30, 2020		Amortized Cost		Fair Value
Due in one year or less	$	26,793,810	$	27,113,305
Due after one year through five years		46,406,659		49,706,585
Due after five years through ten years		32,831,635		37,877,774
Due after ten years		24,192,862		28,870,286
Fixed maturities with no single maturity date		26,773,672		33,152,997
Total	$	156,998,638	$	176,720,947

Fair Value of Investments with Sustained Gross Unrealized Losses

The fair value of investments with sustained gross unrealized losses at September 30, 2020 and December 31, 2019 are as follows:

September 30, 2020	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
All other corporate bonds	$	0		0		0		0		0	$	0
Total fixed maturities	$	0		0		0		0		0	$	0

December 31, 2019	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	6,059,380		(35,529)		0		0		6,059,380	$	(35,529)
Total fixed maturities	$	6,059,380		(35,529)		0		0		6,059,380	$	(35,529)

Securities in Continuous Unrealized Loss Position

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of September 30, 2020
Fixed maturities	0	0	0
As of December 31, 2019
Fixed maturities	3	0	3

Net Investment Gains (Losses) and Change in Net Unrealized Gains on AFS Investments

The following table presents net investment gains (losses) and the change in net unrealized gains (losses) on investments. 

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Realized gains:
Sales of fixed maturities	$	0	$	0	$	403,215	$	116,690
Sales of equity securities		884,559		3,738,333		9,500,176		6,504,246
Sales of real estate		869,756		20,000		869,756		3,796,850
Other		0		0		0		0
Total realized gains		1,754,315		3,758,333		10,773,147		10,417,786
Realized losses:
Sales of fixed maturities		0		(30,795)		(64,992)		(142,254)
Sales of equity securities		0		0		0		0
Sales of real estate		0		0		0		0
Other-than-temporary impairments		0		0		0		0
Other		0		0		0		(132,518)
Total realized losses		0		(30,795)		(64,992)		(274,772)
Net realized investment gains (losses)		1,754,315		3,727,538		10,708,155		10,143,014
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Change in fair value of equity securities		(2,277,902)		(4,046,457)		(14,016,065)		10,838,322
Net investment gains (losses)	$	(523,587)	$	(318,919)	$	(3,307,910)	$	20,981,336
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690
Net increase (decrease)	$	169,058	$	3,184,769	$	8,237,909	$	12,044,690

The following table presents net gains (losses) and the change in net unrealized gains (losses) on equity securities.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2020		2019		2020		2019
Net gains (losses) recognized during the period on equity securities	$	(1,393,343)	$	(308,124)	$	(4,515,889)	$	17,342,568
Less: Net gains (losses) recognized during the period on equity securities sold during the period		884,559		3,738,333		9,500,176		6,504,246
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(2,277,902)	$	(4,046,457)	$	(14,016,065)	$	10,838,322

Trading Revenue Charged to Investment Income from Trading Securities

Trading revenue charged to net investment income from trading securities was:

	Three Months Ended
	September 30,
		2020		2019
Net unrealized gains (losses)	$	1,581	$	0
Net realized gains (losses)		0		0
Net unrealized and realized gains (losses)	$	1,581	$	0

	Nine Months Ended
	September 30,
		2020		2019
Net unrealized gains (losses)	$	1,581	$	0
Net realized gains (losses)		0		0
Net unrealized and realized gains (losses)	$	1,581	$	0

Maximum and Minimum Lending Rates for Mortgage Loan

During 2020 and 2019, the maximum and minimum lending rates for mortgage loans were:

	2020		2019
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.24%	7.50%	4.82%
Residential Loans	5.50%	5.50%	5.50%	5.50%

Mortgage Loan Holdings

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

		September 30, 2020		December 31, 2019
In good standing	$	18,319,413	$	8,223,286
Overdue interest over 90 days		2,072,640		0
Total mortgage loans	$	20,392,053	$	8,223,286

Investment Real Estate by Type

The following table provides an allocation of the Company's investment real estate by type:

		September 30, 2020		December 31, 2019
Raw land	$	9,915,856	$	16,089,540
Commercial		5,414,238		4,908,028
Residential		2,235,678		2,251,772
Land, minerals and royalty interests		18,855,855		21,094,896
Total investment real estate	$	36,421,627	$	44,344,236

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Measurements [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

September 30, 2020		Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	46,208,490	$	0	$	0	$	0	$	46,208,490
U.S. special revenue and assessments		0		15,844,680		0		0		15,844,680
Corporate securities		0		114,667,777		0		0		114,667,777
Total fixed maturities		46,208,490		130,512,457		0		0		176,720,947
Equity securities:
Common stocks		22,790,516		16,908,050		3,051,875		22,814,521		65,564,962
Preferred stocks		0		23,066		0		0		23,066
Total equity securities		22,790,516		16,931,116		3,051,875		22,814,521		65,588,028
Total financial assets	$	68,999,006	$	147,443,573	$	3,051,875	$	22,814,521	$	242,308,975
Liabilities
Trading Securities	$	(4,003)	$	0	$	0	$	0	$	(4,003)

December 31, 2019		Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	36,128,743	$	0	$	0	$	0	$	36,128,743
U.S. special revenue and assessments		0		15,203,363		0		0		15,203,363
Corporate securities		0		120,297,267		0		0		120,297,267
Total fixed maturities		36,128,743		135,500,630		0		0		171,629,373
Equity securities:
Common stocks		29,888,281		14,258,750		10,274,810		24,239,952		78,661,793
Total equity securities		29,888,281		14,258,750		10,274,810		24,239,952		78,661,793
Total financial assets	$	66,017,024	$	149,759,380	$	10,274,810	$	24,239,952	$	250,291,166

Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis

Change in Level 3 Recurring Fair Value Measurements

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities.

		Fixed Maturities, Available for Sale		Equity Securities at Fair Value		Equity Securities at Net Asset Value		Total
Balance at December 31, 2019	$	0	$	10,274,810	$	24,239,952	$	34,514,762
Realized gains (losses)		0		6,284,302		0		6,284,302
Unrealized gains (losses)		0		(3,850,560)		(2,809,324)		(6,659,884)
Purchases		0		1,797,500		1,415,757		3,213,257
Sales		0		(11,454,177)		(31,864)		(11,486,041)
Balance at September 30, 2020	$	0	$	3,051,875	$	22,814,521	$	25,866,396

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above.  As a result, the unrealized gains (losses) on instruments held at September 30, 2020 and December 31, 2019 may include changes in fair value that were attributable to both observable and unobservable inputs.

Quantitative Information About Level 3 Fair Value Measurements

Quantitative Information About Level 3 Fair Value Measurements

The following table presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments, and include only those instrument for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models.

Financial Assets		Fair Value at September 30, 2020		Fair Value at December 31, 2019	Valuation Technique
Common stocks	$	22,814,521	$	24,239,952	Net Asset Value
Common stocks		3,051,875		10,274,810	Pricing Model
Total	$	25,866,396	$	34,514,762

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share

Investment Company		Fair Value at September 30, 2020		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	18,482,622	$	0	Quarterly	45 days
Non-Reedemable		4,331,899		2,295,675	n/a	n/a
Total	$	22,814,521	$	2,295,675

Investment Company		Fair Value at September 30, 2019		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common Stocks
Growth Equity
Redeemable	$	21,270,734	$	0	Quarterly	45 days
Non-Reedemable		2,969,218		163,750	n/a	n/a
Total	$	24,239,952	$	163,750

Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used:

		Carrying	Estimated
September 30, 2020		Amount	Fair Value	Level 1	Level 2	Level 3
Common stock, at cost	$	5,860,000	5,860,000	0	0	5,860,000
Preferred stock, at cost		8,557,247	8,557,247	0	0	8,557,247
Mortgage loans on real estate		20,392,053	20,614,085	0	0	20,614,085
Investment real estate		36,421,627	81,351,608	0	0	81,351,608
Notes receivable		19,298,398	22,380,946	0	0	22,380,946
Policy loans		8,727,991	8,727,991	0	0	8,727,991

		Carrying	Estimated
December 31, 2019		Amount	Fair Value	Level 1	Level 2	Level 3
Common stock, at cost	$	7,875,145	7,875,145	0	0	7,875,145
Preferred stock, at cost		3,044,102	3,044,102	0	0	3,044,102
Mortgage loans on real estate		8,223,286	7,531,094	0	0	7,531,094
Investment real estate		44,344,236	88,483,424	0	0	88,483,424
Notes receivable		19,487,458	19,332,472	0	0	19,332,472
Policy loans		8,803,876	8,803,876	0	0	8,803,876

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Credit Arrangements (Tables)

9 Months Ended

Sep. 30, 2020

Credit Arrangements [Abstract]

Credit Arrangements

Instrument	Issue Date	Maturity Date	Revolving Credit Limit		December 31, 2019		Borrowings		Repayments		September 30, 2020
Lines of Credit:
UTG	11/20/2013	11/20/2020	$	8,000,000		0		0		0		0
UG	6/2/2015	5/7/2021		10,000,000		0		0		0		0

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies [Abstract]

Total Funding Commitments and Unfunded Commitment

The following table represents the total funding commitments and the unfunded commitment as of September 30, 2020 related to certain investments:

		Total Funding Commitment		Unfunded Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		20,000
Sovereign's Capital, LP Fund II		1,000,000		158,596
Sovereign's Capital, LP Fund III		3,000,000		2,137,079
Macritchie Storage II, LP		7,000,750		1,840,485
Garden City Companies, LLC		2,000,000		1,956,688
Carrizo Springs Music, LLC		2,500,000		1,115,000
Modern Distributors, Inc.		7,200,000		3,700,000

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Other Cash Flow Disclosures (Tables)

9 Months Ended

Sep. 30, 2020

Other Cash Flow Disclosures [Abstract]

Expenses Paid on a Cash Basis

On a cash basis, the Company paid the following expenses:

	Three Months Ended
	September 30,
	2020		2019
Interest	$	0	$	0
Federal income tax		419,000		0

	Nine Months Ended
	September 30,
	2020		2019
Interest	$	0	$	0
Federal income tax		2,529,000		1,106,000

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Concentrations of Credit Risk (Tables)

9 Months Ended

Sep. 30, 2020

Concentrations of Credit Risk [Abstract]

Allocation of Oil and Gas Investments by Type

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 17% and 25% of the Company's total invested assets as of September 30, 2020 and December 31, 2019, respectively. The following table provides an allocation of the oil and gas investments by type.

		September 30, 2020		December 31, 2019
Land, mineral, and royalty interests	$	57,246,945	$	80,182,100
Transportation		0		3,812,565
Exploration		1,258,750		2,824,810
Total	$	58,505,695	$	86,819,475

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.

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Basis of Presentation (Details)	Sep. 30, 2020
Chief Executive Officer and Chairman of the Board [Member]
Ownership Interest [Abstract]
Ownership interest percentage	64.95%
FSBI [Member] | FSNB [Member]
Ownership Interest [Abstract]
Ownership in subsidiary bank	100.00%

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Investments, Available for Sale Securities (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Fixed maturities [Abstract]
Original or amortized cost	$ 156,998,638	$ 159,959,855
Gross unrealized gains	19,722,309	11,705,047
Gross unrealized losses	0	(35,529)
Estimated fair value	176,720,947	171,629,373	[1]
Equity securities [Abstract]
Estimated fair value	65,588,029	78,661,793	[1]
U.S. Government and Govt. Agencies and Authorities [Member]
Fixed maturities [Abstract]
Original or amortized cost	44,789,865	35,761,440
Gross unrealized gains	1,418,625	402,832
Gross unrealized losses	0	(35,529)
Estimated fair value	46,208,490	36,128,743
U.S. Special Revenue and Assessments [Member]
Fixed maturities [Abstract]
Original or amortized cost	14,356,937	14,371,263
Gross unrealized gains	1,487,743	832,100
Gross unrealized losses	0	0
Estimated fair value	15,844,680	15,203,363
All Other Corporate Bonds [Member]
Fixed maturities [Abstract]
Original or amortized cost	97,851,836	109,827,152
Gross unrealized gains	16,815,941	10,470,115
Gross unrealized losses	0	0
Estimated fair value	$ 114,667,777	$ 120,297,267

[1] Balance sheet audited at December 31, 2019.

XML

Investments, Debt Securities by Contractual Maturity (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Amortized cost [Abstract]
Due in one year or less	$ 26,793,810
Due after one year through five years	46,406,659
Due after five years through ten years	32,831,635
Due after ten years	24,192,862
Fixed maturities with no single maturity date	26,773,672
Original or amortized cost	156,998,638	$ 159,959,855
Fair value [Abstract]
Due in one year or less	27,113,305
Due after one year through five years	49,706,585
Due after five years through ten years	37,877,774
Due after ten years	28,870,286
Fixed maturities with no single maturity date	33,152,997
Estimated fair value	$ 176,720,947	$ 171,629,373	[1]

[1] Balance sheet audited at December 31, 2019.

XML

Investments, Securities in Continuous Unrealized Loss Position (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
All Other Corporate Bonds [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	$ 0
12 months or longer, fair value	0
Total fair value	0
Less than 12 months, unrealized losses	0
12 months or longer, unrealized losses	0
Total unrealized losses	0
U.S. Government and Govt. Agencies and Authorities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value		$ 6,059,380
12 months or longer, fair value		0
Total fair value		6,059,380
Less than 12 months, unrealized losses		(35,529)
12 months or longer, unrealized losses		0
Total unrealized losses		(35,529)
Fixed Maturities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position [Abstract]
Less than 12 months, fair value	0	6,059,380
12 months or longer, fair value	0	0
Total fair value	0	6,059,380
Less than 12 months, unrealized losses	0	(35,529)
12 months or longer, unrealized losses	0	0
Total unrealized losses	$ 0	$ (35,529)

XML

Investments, Number of Securities in Unrealized Loss Position (Details) - Security	Sep. 30, 2020	Dec. 31, 2019
Fixed Maturities [Abstract]
Less than 12 months, number of securities	0	3
12 months or longer, number of securities	0	0
Total number of securities	0	3

XML

Investments, Net Investment Gains (Losses) and Change in Net Unrealized Gains on Available-for-sale Investments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Realized gains on available-for-sale investments [Abstract]
Total realized gains	$ 1,754,315	$ 3,758,333	$ 10,773,147	$ 10,417,786
Realized losses on available-for-sale investments [Abstract]
Other-than-temporary impairments	0	0	0	0
Total realized losses	0	(30,795)	(64,992)	(274,772)
Net realized investment gains (losses)	1,754,315	3,727,538	10,708,155	10,143,014
Change in fair value of equity securities [Abstract]
Net gains (losses) recognized during the period on equity securities	(1,393,343)	(308,124)	(4,515,889)	17,342,568
Less: Net gains (losses) recognized during the period on equity securities sold during the period	884,559	3,738,333	9,500,176	6,504,246
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	(2,277,902)	(4,046,457)	(14,016,065)	10,838,322
Change in fair value of equity securities	(2,277,902)	(4,046,457)	(14,016,065)	10,838,322
Total net investment gains (losses)	(523,587)	(318,919)	(3,307,910)	20,981,336
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income	169,058	3,184,769	8,237,909	12,044,690
Fixed Maturities [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	0	0	403,215	116,690
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	(30,795)	(64,992)	(142,254)
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income [Abstract]
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income	169,058	3,184,769	8,237,909	12,044,690
Equity Securities [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	884,559	3,738,333	9,500,176	6,504,246
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	0	0	0
Real Estate [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	869,756	20,000	869,756	3,796,850
Realized losses on available-for-sale investments [Abstract]
Total realized losses	0	0	0	0
Other [Member]
Realized gains on available-for-sale investments [Abstract]
Total realized gains	0	0	0	0
Realized losses on available-for-sale investments [Abstract]
Total realized losses	$ 0	$ 0	$ 0	$ (132,518)

XML

Investments, Trading Securities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Trading Securities [Abstract]
Fair value, derivatives included in trading security assets	$ 0		$ 0		$ 0
Fair value, derivative included in trading security liabilities	(4,003)		(4,003)		$ 0
Trading Revenue Charged to Net Investment Income from Trading Securities [Abstract]
Net unrealized gains (losses)	1,581	$ 0	1,581	$ 0
Net realized gains (losses)	0	0	0	0
Net unrealized and realized gains (losses)	$ 1,581	$ 0	$ 1,581	$ 0

XML

Investments, Mortgage Loans, Investment Real Estate, Notes Receivable, and Short-Term Investments (Details) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Cost Method Investments [Abstract]
Equity Securities without Readily Determinable Fair Value, Amount	$ 14,417,247		$ 10,919,247	[1]
Mortgage Loans [Abstract]
Mortgage loans acquired, including discounted mortgage loans	$ 12,692,488		4,216,644
Servicing fee on loan	0.25%
Loan origination	0.50%
Loan limit threshold for appraised property value	80.00%
Mortgage loans reserve	$ 0		0
Mortgage loan holdings [Abstract]
In good standing	18,319,413		8,223,286
Overdue interest over 90 days	2,072,640		0
Total mortgage loans	20,392,053		8,223,286	[1]
Investment Real Estate [Abstract]
Impairment on investment real estate	0
Total investment real estate	$ 36,421,627		$ 44,344,236	[1]
Investments in oil/gas royalties as a % of total investment real estate portfolio	52.00%		44.00%
Investment real estate acquired	$ 0	$ 1,729,000
Notes Receivable [Abstract]
Valuation allowance	0		$ 0
Notes receivable acquired	3,500,000	8,532,796
Short-Term Investments [Abstract]
Short-term investments acquired	7,890,228	$ 0
Raw Land [Member]
Investment Real Estate [Abstract]
Total investment real estate	9,915,856		16,089,540
Commercial [Member]
Investment Real Estate [Abstract]
Total investment real estate	5,414,238		4,908,028
Residential [Member]
Investment Real Estate [Abstract]
Total investment real estate	2,235,678		2,251,772
Land, Minerals and Royalty Interests [Member]
Investment Real Estate [Abstract]
Total investment real estate	$ 18,855,855		$ 21,094,896
Minimum [Member]
Investment Real Estate [Abstract]
Estimated useful life	3 years
Maximum [Member]
Investment Real Estate [Abstract]
Estimated useful life	30 years
Farm Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.00%		5.00%
Farm Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.00%		5.00%
Commercial Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	4.24%		4.82%
Commercial Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	7.50%		7.50%
Residential Loans [Member] | Minimum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.50%		5.50%
Residential Loans [Member] | Maximum [Member]
Mortgage Loans [Abstract]
Interest rate on mortgage loans	5.50%		5.50%

[1] Balance sheet audited at December 31, 2019.

XML

Fair Value Measurements, Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019		Sep. 30, 2019
Assets [Abstract]
Fixed maturities available for sale	$ 176,720,947	$ 171,629,373	[1]
Equity securities	65,588,029	78,661,793	[1]
Liabilities [Abstract]
Trading Securities	(4,003)	0
U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	46,208,490	36,128,743
Net Asset Value [Member]
Assets [Abstract]
Equity securities	22,814,521			$ 24,239,952
Measured on a Recurring Basis [Member]
Assets [Abstract]
Fixed maturities available for sale	176,720,947	171,629,373
Equity securities	65,588,028	78,661,793
Total financial assets	242,308,975	250,291,166
Liabilities [Abstract]
Trading Securities	(4,003)
Measured on a Recurring Basis [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	46,208,490	36,128,743
Measured on a Recurring Basis [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	15,844,680	15,203,363
Measured on a Recurring Basis [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	114,667,777	120,297,267
Measured on a Recurring Basis [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	65,564,962	78,661,793
Measured on a Recurring Basis [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities	23,066
Measured on a Recurring Basis [Member] | Net Asset Value [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Equity securities	22,814,521	24,239,952
Total financial assets	22,814,521	24,239,952
Liabilities [Abstract]
Trading Securities	0
Measured on a Recurring Basis [Member] | Net Asset Value [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Net Asset Value [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Net Asset Value [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Net Asset Value [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	22,814,521	24,239,952
Measured on a Recurring Basis [Member] | Net Asset Value [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member]
Assets [Abstract]
Fixed maturities available for sale	46,208,490	36,128,743
Equity securities	22,790,516	29,888,281
Total financial assets	68,999,006	66,017,024
Liabilities [Abstract]
Trading Securities	(4,003)
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	46,208,490	36,128,743
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	22,790,516	29,888,281
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 1 [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member]
Assets [Abstract]
Fixed maturities available for sale	130,512,457	135,500,630
Equity securities	16,931,116	14,258,750
Total financial assets	147,443,573	149,759,380
Liabilities [Abstract]
Trading Securities	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	15,844,680	15,203,363
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	114,667,777	120,297,267
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	16,908,050	14,258,750
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 2 [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities	23,066
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Equity securities	3,051,875	10,274,810
Total financial assets	3,051,875	10,274,810
Liabilities [Abstract]
Trading Securities	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | U.S. Government and Government Agencies and Authorities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | U.S. Special Revenue and Assessments [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Corporate Securities [Member]
Assets [Abstract]
Fixed maturities available for sale	0	0
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities	3,051,875	$ 10,274,810
Measured on a Recurring Basis [Member] | Estimated Fair Value [Member] | Level 3 [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities	$ 0

[1] Balance sheet audited at December 31, 2019.

XML

Fair Value Measurements, Reconciliation for Level 3 Assets Measured at Fair Value on a Recurring Basis (Details)	9 Months Ended
	Sep. 30, 2020 USD ($)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 34,514,762
Total unrealized gain or (losses) [Abstract]
Realized gains (losses)	6,284,302
Unrealized gains (losses)	(6,659,884)
Purchases	3,213,257
Sales	(11,486,041)
Ending Balance	25,866,396
Beginning Balance	34,514,762
Total unrealized gain or (losses) [Abstract]
Ending Balance	25,866,396
Fixed Maturities, Available for Sale [Member]
Total unrealized gain or (losses) [Abstract]
Beginning Balance	0
Total unrealized gain or (losses) [Abstract]
Realized gains (losses)	0
Unrealized gains (losses)	0
Purchases	0
Sales	0
Ending Balance	0
Equity Securities [Member]
Total unrealized gain or (losses) [Abstract]
Beginning Balance	10,274,810
Total unrealized gain or (losses) [Abstract]
Realized gains (losses)	6,284,302
Unrealized gains (losses)	(3,850,560)
Purchases	1,797,500
Sales	(11,454,177)
Ending Balance	3,051,875
Equity Securities at Net Asset Value [Member]
Total unrealized gain or (losses) [Abstract]
Beginning Balance	24,239,952
Total unrealized gain or (losses) [Abstract]
Realized gains (losses)	0
Unrealized gains (losses)	(2,809,324)
Purchases	1,415,757
Sales	(31,864)
Ending Balance	$ 22,814,521

XML

Fair Value Measurements, Quantitative Information About Level 3 and Investments in Certain Entities Carried at Fair Value (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]
Financial assets, fair value	$ 25,866,396		$ 34,514,762
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]
Equity securities	65,588,029		78,661,793	[1]
Unfunded commitments	2,295,675	$ 163,750
Growth Equity Redeemable [Member]
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]
Unfunded commitments	$ 0	$ 0
Redemption frequency	Quarterly
Redemption notice period	45 days	45 days
Growth Equity Non-Redeemable [Member]
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]
Unfunded commitments	$ 2,295,675	$ 163,750
Net Asset Value [Member]
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]
Equity securities	22,814,521	24,239,952
Net Asset Value [Member] | Growth Equity Redeemable [Member]
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]
Equity securities	18,482,622	21,270,734
Net Asset Value [Member] | Growth Equity Non-Redeemable [Member]
Investments in Certain Entities Carried at Fair Value Using Net Asset Value per Share [Abstract]
Equity securities	4,331,899	$ 2,969,218
Net Asset Value [Member] | Common Stock [Member]
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]
Financial assets, fair value	22,814,521		24,239,952
Pricing Model [Member] | Common Stock [Member]
Information about Significant Unobservable Inputs Used for Recurring Fair Value Measurements for Certain Level 3 Instruments [Abstract]
Financial assets, fair value	$ 3,051,875		$ 10,274,810

[1] Balance sheet audited at December 31, 2019.

XML

Fair Value Measurements, Carrying Values and Estimated Fair Values of Financial Instruments not Recorded at Fair Value (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Carrying Amount [Member]
Assets [Abstract]
Mortgage loans on real estate	$ 20,392,053	$ 8,223,286
Investment real estate	36,421,627	44,344,236
Notes receivable	19,298,398	19,487,458
Policy loans	8,727,991	8,803,876
Carrying Amount [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities, at cost	5,860,000	7,875,145
Carrying Amount [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities, at cost	8,557,247	3,044,102
Estimated Fair Value [Member]
Assets [Abstract]
Mortgage loans on real estate	20,614,085	7,531,094
Investment real estate	81,351,608	88,483,424
Notes receivable	22,380,946	19,332,472
Policy loans	8,727,991	8,803,876
Estimated Fair Value [Member] | Common Stock [Member]
Assets [Abstract]
Equity securities, at cost	5,860,000	7,875,145
Estimated Fair Value [Member] | Preferred Stock [Member]
Assets [Abstract]
Equity securities, at cost	8,557,247	3,044,102
Equity securities, at cost	$ 14,417,247	10,919,247	[1]
Minimum [Member]
Liabilities [Abstract]
Policy loan interest rate	4.00%
Maximum [Member]
Liabilities [Abstract]
Policy loan interest rate	8.00%
Level 1 [Member]
Assets [Abstract]
Mortgage loans on real estate	$ 0	0
Investment real estate	0	0
Notes receivable	0	0
Policy loans	0	0
Level 2 [Member]
Assets [Abstract]
Mortgage loans on real estate	0	0
Investment real estate	0	0
Notes receivable	0	0
Policy loans	0	0
Level 3 [Member]
Assets [Abstract]
Mortgage loans on real estate	20,614,085	7,531,094
Investment real estate	81,351,608	88,483,424
Notes receivable	22,380,946	19,332,472
Policy loans	8,727,991	8,803,876
Common Stock [Member] | Level 1 [Member]
Assets [Abstract]
Equity securities, at cost	0	0
Common Stock [Member] | Level 2 [Member]
Assets [Abstract]
Equity securities, at cost	0	0
Common Stock [Member] | Level 3 [Member]
Assets [Abstract]
Equity securities, at cost	5,860,000	7,875,145
Preferred Stock [Member] | Level 1 [Member]
Assets [Abstract]
Equity securities, at cost	0	0
Preferred Stock [Member] | Level 2 [Member]
Assets [Abstract]
Equity securities, at cost	0	0
Preferred Stock [Member] | Level 3 [Member]
Assets [Abstract]
Equity securities, at cost	$ 8,557,247	$ 3,044,102

[1] Balance sheet audited at December 31, 2019.

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Credit Arrangements (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Line of Credit Facility [Abstract]
Pledged Bonds	$ 12,617,556
Variable Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Period of interest under CMA	90 days
Fixed Rate [Member] | Maximum [Member]
Line of Credit Facility [Abstract]
Period of interest under CMA	30 days
UTG 2013-11-20 [Member]
Line of Credit Facility [Abstract]
Interest Rate	4.04%
Frequency of payments	monthly
Assets Pledged	common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company.
UTG 2013-11-20 [Member] | UG [Member]
Line of Credit Facility [Abstract]
Issue Date	Nov. 20, 2013
Maturity Date	Nov. 20, 2020
Revolving Credit Limit	$ 8,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0
Percentage of common voting stock pledged	100.00%
UG Avalon 2015-06-02 [Member] | UG [Member]
Line of Credit Facility [Abstract]
Issue Date	Jun. 02, 2015
Maturity Date	May 07, 2021
Revolving Credit Limit	$ 10,000,000
Outstanding Balance	0	$ 0
Borrowings	0
Repayments	$ 0

XML

Shareholders' Equity (Details) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019
Stock Repurchase Program [Abstract]
Stock repurchase program, additional amount authorized	$ 1,500,000
Stock repurchase program authorized amount	20,000,000	$ 20,000,000	$ 20,000,000
Stock repurchased during period (in shares)			107,822
Amount paid to repurchase shares during the year			$ 3,174,230	$ 849,265
Amount of common stock repurchased	$ 17,947,326	$ 17,947,326	$ 17,947,326
Number of common stock acquired (in shares)	1,277,180	1,277,180	1,277,180
Number of shares issued (in shares)			6,664
Cost of shares issued			$ 218,289
Earnings Per Share Calculations [Abstract]
Dilutive instruments outstanding (in shares)			0	0
Cumberland Lake Shell, Inc [Member]
Stock Repurchase Program [Abstract]
Stock repurchased during period (in shares)		88,341
Amount paid to repurchase shares during the year		$ 2,561,889
Stock purchase price (in dollars per share)		$ 29

XML

Commitments and Contingencies (Details)	Sep. 30, 2020 USD ($)
RLF III, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	$ 4,000,000
Unfunded Commitment	398,120
Sovereign's Capital, LP Fund I [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	500,000
Unfunded Commitment	20,000
Sovereign's Capital, LP Fund II [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	1,000,000
Unfunded Commitment	158,596
Sovereign's Capital, LP Fund III [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	3,000,000
Unfunded Commitment	2,137,079
Macritchie Storage II, LP [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	7,000,750
Unfunded Commitment	1,840,485
Garden City Companies, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	2,000,000
Unfunded Commitment	1,956,688
Carrizo Springs Music, LLC [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	2,500,000
Unfunded Commitment	1,115,000
Modern Distributors, Inc [Member]
Total Funding Commitments and Unfunded Commitment [Abstract]
Total Funding Commitment	7,200,000
Unfunded Commitment	$ 3,700,000

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Other Cash Flow Disclosures (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other Cash Flow Disclosures [Abstract]
Interest	$ 0	$ 0	$ 0	$ 0
Federal income tax	$ 419,000	$ 0	$ 2,529,000	$ 1,106,000

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Concentrations of Credit Risk (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2020 USD ($) State	Sep. 30, 2019	Dec. 31, 2019 USD ($)
Concentrations [Abstract]
Number of states by which entity primarily serves | State	4
Maximum retention limits per life	$ 125,000
Allocation of Oil and Gas Investments [Abstract]
Investment	349,540,202		$ 352,511,442	[1]
Oil and Gas Industry [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	58,505,695		86,819,475
Oil and Gas Industry [Member] | Land, Mineral, and Royalty Interests [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	57,246,945		80,182,100
Oil and Gas Industry [Member] | Transportation [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	0		3,812,565
Oil and Gas Industry [Member] | Exploration [Member]
Allocation of Oil and Gas Investments [Abstract]
Investment	$ 1,258,750		$ 2,824,810
Reinsurer Concentration Risk [Member] | Life Insurance Ceded [Member]
Concentrations [Abstract]
Percentage of gross insurance in force	20.00%		20.00%
Percentage of premium income	37.00%	37.00%
Direct Premium Collected [Member] | Geographic Concentration Risk [Member] | Illinois, Ohio, Texas and West Virginia [Member]
Concentrations [Abstract]
Concentration risk, percentage	55.00%	56.00%
Invested Assets [Member] | Customer Concentration Risk [Member] | Oil and Gas Industry [Member]
Concentrations [Abstract]
Concentration risk, percentage	17.00%		25.00%

[1] Balance sheet audited at December 31, 2019.