Concentrations of Credit Risk

6 Months Ended

Jun. 30, 2024

Note 9 – Concentrations of Credit Risk

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

Because UTG serves primarily individuals located in three states, the ability of the Company's customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of June 30, 2024 and 2023, approximately 51% and 50%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life. Life insurance ceded represented 21% and 20% of total life insurance in force at June 30, 2024 and December 31, 2023, respectively. Insurance ceded represented 32% and 34% of premium income for the six months ended June 30, 2024 and 2023, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represent approximately 31% and 28% of the Company’s total invested assets as of June 30, 2024 and December 31, 2023, respectively. The following table provides an allocation of the oil and gas investments by type.

June 30, 2024	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,070,090	$	1,070,090
Equity securities, at fair value		97,007,332		0		97,007,332
Equity securities, at cost		5,502,463		0		5,502,463
Investment real estate		6,691,092		0		6,691,092
Notes receivable		2,000,000		0		2,000,000
Total	$	111,200,887	$	1,070,090	$	112,270,977

December 31, 2023	Land, Minerals & Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,075,240	$	1,075,240
Equity securities, at fair value		84,066,203		0		84,066,203
Equity securities, at cost		5,826,381		0		5,826,381
Investment real estate		7,383,851		0		7,383,851
Notes receivable		2,000,000		0		2,000,000
Total	$	99,276,435	$	1,075,240	$	100,351,675

At June 30, 2024 and December 31, 2023, the Company owned 4 equity securities that represented approximately 76% and 73%, respectively, of the total investments associated with the oil and gas industry.

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