What changed in this filing

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Item 1. Financial Statements

2022-05-05 compared with 2021-11-04 · 148 added, 315 removed, 575 unchanged (45% of the section changed)

3 unchanged sentences

Consolidated Balance Sheets

(In thousands) September 30, 2021 December 31, 2020

(In thousands) March 31, 2022 December 31, 2021

Assets (Unaudited)

4 unchanged sentences

Policy loans 79,345 80,307

Real estate held-for-sale — 2,571

Other long-term investments (portion measured at fair value $ 62,564 and $ 56,038 in 2022 and 2021, respectively)

less allowance for losses of $ 11 in 2021 and 2020)

63,927 57,399

2 unchanged sentences

Accrued investment income 15,755 16,197

Receivable for securities 10,000 —

Reinsurance recoverable 3,574 5,539

1 unchanged sentence

Cost of insurance acquired 10,528 10,611

Goodwill and other intangible assets 13,567 13,570

Current federal income tax receivable 589 762

Property and equipment, net 14,088 14,074

3 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 2

March 31, 2022 | 10-Q 2

CITIZENS, INC.

1 unchanged sentence

Consolidated Balance Sheets, Continued

(In thousands, except share amounts) September 30, 2021 December 31, 2020

(In thousands, except share amounts) March 31, 2022 December 31, 2021

Liabilities and Stockholders' Equity (Unaudited)

10 unchanged sentences

Commissions payable 1,816 2,285

Current federal income tax payable 45,771 43,916

Deferred federal income tax payable 6,577 15,456

7 unchanged sentences

267,442 265,561

Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2021 and 2020, including shares in treasury of 1,001,714 in 2021

Class B, no par value, 2,000,000 shares authorized, 1,001,714 shares issued and outstanding in 2022 and 2021, including shares in treasury of 1,001,714 in 2022 and 2021

Accumulated deficit ( 46,898 ) ( 45,565 )

Accumulated other comprehensive income:

Accumulated other comprehensive income (loss):

Net unrealized gains (losses) on fixed maturity securities, net of tax ( 6,725 ) 117,492

3 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 3

March 31, 2022 | 10-Q 3

CITIZENS, INC.

1 unchanged sentence

Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands, except per share amounts)

2021 2020 2021 2020

Life insurance $ 37,746 37,642

2 unchanged sentences

Net investment income 15,487 15,244

Realized investment gains (losses), net 2,126 527 7,277 669

Investment related gains (losses), net ( 582 ) 292

Other income 1,088 915

27 unchanged sentences

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 4

March 31, 2022 | 10-Q 4

CITIZENS, INC.

12 unchanged sentences

Total comprehensive income (loss) — — ( 1,333 ) ( 124,217 ) — ( 125,550 )

Common stock issuance 1,788 — — — — 1,788

Stock-based compensation 93 — — — — 93

Balance at March 31, 2022 $ 267,442 3,184 ( 46,898 ) ( 6,725 ) ( 20,101 ) 196,902

Comprehensive income (loss):

Net income (loss) — — 5,022 — — 5,022

Unrealized investment gains (losses), net — — — 32,148 — 32,148

Total comprehensive income (loss) — — 5,022 32,148 — 37,170

Acquisition of treasury stock — — — — ( 9,090 ) ( 9,090 )

Stock-based compensation 205 — — — — 205

Balance at June 30, 2021 263,060 3,184 ( 80,903 ) 103,885 ( 20,101 ) 269,125

Comprehensive income (loss):

Net income (loss) — — ( 2,799 ) — — ( 2,799 )

Unrealized investment gains (losses), net — — — ( 1,395 ) — ( 1,395 )

Total comprehensive income (loss) — — ( 2,799 ) ( 1,395 ) — ( 4,194 )

Stock-based compensation 100 — — — — 100

Balance at September 30, 2021 $ 263,160 3,184 ( 83,702 ) 102,490 ( 20,101 ) 265,031

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 5

CITIZENS, INC.

AND CONSOLIDATED SUBSIDIARIES

Consolidated Statements of Stockholders' Equity, Continued

Common Stock Accumulated

deficit Accumulated other

comprehensive

income (loss) Treasury

Stock-holders'

(In thousands) Class A Class B

Balance at December 31, 2020 $ 262,869 3,184 ( 82,352 ) 128,255 ( 11,011 ) 300,945

Accounting standards adopted January 1, 2020 — — ( 395 ) — — ( 395 )

Comprehensive income (loss):

4 unchanged sentences

Balance at March 31, 2021 $ 262,855 3,184 ( 85,925 ) 71,737 ( 11,011 ) 240,840

Comprehensive income (loss):

Net income (loss) — — ( 1,027 ) — — ( 1,027 )

Unrealized investment gains (losses), net — — — 74,647 — 74,647

Total comprehensive income (loss) — — ( 1,027 ) 74,647 — 73,620

Stock-based compensation 439 — — — — 439

Balance at June 30, 2020 261,901 3,184 ( 75,975 ) 111,694 ( 11,011 ) 289,793

Comprehensive income (loss):

Net income (loss) — — ( 7,915 ) — — ( 7,915 )

Unrealized investment gains (losses), net — — — 14,110 — 14,110

Total comprehensive income (loss) — — ( 7,915 ) 14,110 — 6,195

Stock-based compensation 766 — — — — 766

Balance at September 30, 2020 $ 262,667 3,184 ( 83,890 ) 125,804 ( 11,011 ) 296,754

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 6

March 31, 2022 | 10-Q 5

CITIZENS, INC.

1 unchanged sentence

Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

2 unchanged sentences

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Realized investment (gains) losses on sale of investments and other assets ( 7,277 ) ( 669 )

Investment related (gains) losses on sale of investments and other assets 582 ( 292 )

Net deferred policy acquisition costs 1,036 1,198

17 unchanged sentences

Maturities and calls of fixed maturity securities, available-for-sale 10,435 14,376

Purchases of equity securities — ( 4,473 )

Principal payments on mortgage loans 2 4

Funding of mortgage loans ( 1,000 ) —

(Increase) decrease in policy loans, net 962 644

Sales of other long-term investments and real estate 20,893 —

Sales of other long-term investments 1,681 15,089

Purchases of other long-term investments ( 7,940 ) ( 4,619 )

Sales of property and equipment 14 —

Purchases of property and equipment ( 34 ) ( 15 )

Maturities of short-term investments — 1,300

Purchases of short-term investments ( 5 ) —

Net cash provided by (used in) investing activities ( 19,849 ) ( 7,370 )

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 7

March 31, 2022 | 10-Q 6

CITIZENS, INC.

1 unchanged sentence

Consolidated Statements of Cash Flows, Continued

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands)

3 unchanged sentences

Acquisition of treasury stock — ( 9,090 )

Issuance of common stock 1,788 —

Other ( 39 ) ( 89 )

4 unchanged sentences

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the nine months ended September 30, 2021 and 2020, various fixed maturity issuers exchanged securities with book values of $ 10.9 million and $ 5.3 million, respectively, for securities of equal value.

The Company had $ 9.4 million net unsettled security trades at September 30, 2021 and $ 6.0 million at September 30, 2020.

The Company recognized right-of-use assets of $ 12.0 million in exchange for new operating lease liabilities during the nine months ended September 30, 2020.

None were recognized during the nine months ended September 30, 2021.

During the three months ended March 31, 2022 and 2021, various fixed maturity issuers exchanged securities with book values of $ 0.6 million and $ 2.0 million, respectively, for securities of equal value.

The Company had $ 3.8 million net unsettled security trades at March 31, 2022 and $ 0.7 million at March 31, 2021.

The Company accrued purchases of property and equipment of $ 0.8 million as of March 31, 2021 and recorded none as of March 31, 2022.

The Company recognized right-of-use assets of $ 0.4 million in exchange for new operating lease liabilities during the three months ended March 31, 2022 and none during the three months ended March 31, 2021.

See accompanying Notes to Consolidated Financial Statements.

September 30, 2021 | 10-Q 8

March 31, 2022 | 10-Q 7

CITIZENS, INC .

4 unchanged sentences

("Citizens" or the "Company"), a Colorado corporation, and its wholly-owned subsidiaries, CICA Life Insurance Company of America ("CICA"), CICA Life Ltd.

("CICA Ltd."), Citizens National Life Insurance Company ("CNLIC"), Security Plan Life Insurance Company ("SPLIC"), Security Plan Fire Insurance Company ("SPFIC"), Magnolia Guaranty Life Insurance Company ("MGLIC") and Computing Technology, Inc.

("CICA International"), Citizens National Life Insurance Company ("CNLIC"), Security Plan Life Insurance Company ("SPLIC"), Security Plan Fire Insurance Company ("SPFIC"), Magnolia Guaranty Life Insurance Company ("MGLIC") and Computing Technology, Inc.

All significant inter-company accounts and transactions have been eliminated.

Citizens and its wholly-owned subsidiaries are collectively referred to as the "Company", "we", "us" or "our".

The consolidated balance sheets as of September 30, 2021, the consolidated statements of operations and comprehensive income (loss) and stockholders' equity for the three and nine months ended September 30, 2021 and September 30, 2020 and the consolidated statements of cash flows for the nine months ended September 30, 2021 and September 30, 2020 have been prepared by the Company without audit and are not subject to audit.

In the opinion of management, all normal and recurring adjustments to present fairly the financial position, results of operations, and changes in cash flows at September 30, 2021 and for comparative periods have been made.

Citizens and its wholly-owned subsidiaries are collectively referred to as the "Company", "it", "we", "us" or "our".

The consolidated balance sheet as of March 31, 2022, the consolidated statements of operations and comprehensive income (loss) and stockholders' equity for the three months ended March 31, 2022 and March 31, 2021 and the consolidated statements of cash flows for the three months ended March 31, 2022 and March 31, 2021 have been prepared by the Company without audit and are not subject to audit.

In the opinion of management, all normal and recurring adjustments to present fairly the financial position, results of operations, and changes in cash flows at March 31, 2022 and for comparative periods have been made.

The consolidated financial statements have been prepared in accordance with U.S.

3 unchanged sentences

Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period.

Our Life Insurance segment operates through CICA Ltd., CICA and CNLIC.

Our international life insurance business, which operates through CICA Ltd., issues U.S.

Our Life Insurance segment operates through CICA International, CICA and CNLIC.

Our international life insurance business, which operates through CICA International, issues U.S.

dollar-denominated endowment contracts internationally, which are principally accumulation contracts that incorporate an element of life insurance protection and ordinary whole life insurance in U.S.

1 unchanged sentence

These contracts are designed to provide a fixed amount of insurance coverage over the life of the insured and may utilize rider benefits to provide additional increasing or decreasing coverage and annuity benefits to enhance accumulations.

Our domestic life insurance business, which operates through CICA and CNLIC, primarily focused on living needs and provided benefits toward accumulating financial benefits for the policyowners throughout the Midwest and southern U.S.

until they ceased most domestic sales beginning January 1, 2017.

We have recently developed a whole life insurance product and have begun selling this product in Florida in 2021.

Our domestic life insurance business operates through CICA and CNLIC.

CICA issues credit life and disability policies and CNLIC issues ordinary whole life policies mainly in Texas and Florida and services whole life and accident and health policies primarily in the Southern U.S., Midwest and Mountain West.

Our Home Service Insurance segment operates through our subsidiaries SPLIC, MGLIC and SPFIC, and focuses on the life insurance needs of the middle- and lower-income markets, primarily in Louisiana, Mississippi and Arkansas.

Our products in this segment consist primarily of small face amount ordinary whole life, industrial life and pre-need policies, which are designed to fund final expenses for the insured, primarily consisting of funeral and burial costs as well as property insurance policies, which are named peril property policies covering dwelling and contents.

CTI provides data processing systems and services to the Company.

We converted the small block of ordinary whole life policies of CNLIC from a legacy platform to our new actuarial valuation software solution which provides enhanced modeling capabilities as of April 1, 2021.

The impact of this system conversion reflected in the accompanying consolidated financial statements as of and for the nine months ended September 30, 2021 was an increase to pretax income of $ 0.7 million consisting of a reduced increase in future policy benefit reserves of $ 0.8 million and increased amortization of deferred policy acquisition costs of $ 0.1 million.

September 30, 2021 | 10-Q 9

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

USE OF ESTIMATES

2 unchanged sentences

Actual results could differ from those estimates.

Significant estimates include those used in the evaluation of credit allowances on fixed maturity securities, actuarially determined assets and liabilities and assumptions, tests of goodwill impairment and valuation allowance on deferred tax assets.

March 31, 2022 | 10-Q 8

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the consolidated financial statements.

3 unchanged sentences

(2) ACCOUNTING PRONOUNCEMENTS

ACCOUNTING STANDARDS RECENTLY ADOPTED

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2016-13, Financial Instruments-Credit Losses (Topic 326), with the main objective to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

The ASU requires a financial asset (or a group of financial assets) measured at amortized cost to be presented at the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted from the amortized cost of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset.

The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the increases or decreases of expected credit losses that have taken place during the period.

Credit losses on available-for-sale ("AFS") fixed maturity securities should be measured in a manner similar to current U.S.

however, the credit losses are recorded through an allowance for credit losses rather than as a write-down.

This approach is an improvement to prior U.S.

GAAP because an entity will be able to record reversals of credit losses (in situations in which the estimate of credit losses declines) in current period net income, which in turn should align the income statement recognition of credit losses with the reporting period in which changes occur.

GAAP prohibited reflecting those improvements in current-period earnings.

The Company adopted this standard effective January 1, 2020 using the modified retrospective approach.

The adoption resulted in an increase in accumulated deficit of $ 0.4 million related to agents' debit balance collectability.

September 30, 2021 | 10-Q 10

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ACCOUNTING STANDARDS NOT YET ADOPTED

In August 2018, the FASB issued ASU No.

In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2018-12, Financial Services-Insurance (Topic 944):

12 unchanged sentences

For calendar-year public companies, the changes will be effective on January 1, 2023, however, early adoption is permitted.

While it is not possible to estimate the expected impact of adoption at this time, the Company believes there is a reasonable possibility that implementation of ASU No.

2018-12 may result in a material impact on our consolidated statements of stockholders' equity and future earnings patterns.

No other new accounting pronouncement issued or effective during the year had, or is expected to have, a material impact on our consolidated financial statements.

We will adopt this ASU effective January 1, 2023 with a transition date of January 1, 2021 using a modified retrospective approach.

We continue to make progress in our implementation process that includes, but is not limited to, making significant accounting policy decisions, employing appropriate internal controls, building and updating actuarial models and systems, revising reporting processes and developing informative qualitative and quantitative disclosures.

In 2022, we will begin the process of calculating our transition adjustments and preparing for the restatement of applicable periods.

We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations and will be able to better assess the effects as we progress with our implementation efforts.

While it is not possible to estimate the expected impact of adoption at this time, the Company believes there is a reasonable possibility that implementation this ASU may result in a material impact to accumulated other comprehensive income and future earnings patterns.

No other new accounting pronouncements issued or effective during the year had, or is expected to have, a material impact on our consolidated financial statements.

March 31, 2022 | 10-Q 9

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(3) SEGMENT INFORMATION

2 unchanged sentences

Our Life Insurance segment primarily issues endowment contracts, which are principally accumulation contracts that incorporate an element of life insurance protection and ordinary whole life insurance, to non-U.S.

residents through CICA Ltd.

These contracts are designed to provide a fixed amount of insurance coverage over the life of the insured and may utilize rider benefits to provide additional coverage and annuity benefits to enhance accumulations.

CICA and CNLIC issued ordinary whole life, credit life and disability and accident and health related policies, throughout the Midwest and southern U.S.

until they ceased most domestic sales beginning January 1, 2017.

We restarted marketing domestically in Florida in 2021.

Our Home Service Insurance segment operates through our subsidiaries SPLIC, MGLIC and SPFIC, and focuses on the life insurance needs of the middle- and lower-income markets in Louisiana, Mississippi and Arkansas.

residents through CICA International These contracts are designed to provide a fixed amount of insurance coverage over the life of the insured and may utilize rider benefits to provide additional coverage and annuity benefits to enhance accumulations.

CICA issues credit life and disability and accident and health related policies throughout the Midwest and southern U.S.

CNLIC issues ordinary whole life in Florida.

Our policies are sold and serviced through funeral homes and independent agents who sell policies, collect premiums and service policyholders.

To a lesser extent, our Home Service Insurance segment also sells property insurance policies in Louisiana.

The Company also operates other non-insurance portions of the Company ("Other Non-Insurance Enterprises"), which primarily include the Company’s IT and Corporate-support functions that are included in the tables presented.

Our Home Service Insurance segment also sells property insurance policies in Louisiana and Arkansas.

The Life Insurance and Home Service Insurance portions of the company constitute separate businesses.

The Company also operates other non-insurance portions of the Company ("Other Non-Insurance Enterprises"), which primarily include the Company’s IT and corporate-support functions that are included in the tables presented below to properly reconcile the segment information with the consolidated financial statements of the Company.

The Company's Other Non-Insurance Enterprises are the only reportable difference between segments and consolidated operations.

September 30, 2021 | 10-Q 11

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accounting policies of the reportable segments and Other Non-Insurance Enterprises are presented in accordance with U.S.

1 unchanged sentence

The Company evaluates profit and loss performance based on U.S.

GAAP income before federal income taxes for its two reportable segments.

Life Insurance Home Service Insurance Other Non-Insurance Enterprises Consolidated

Three Months Ended September 30, 2021

(In thousands)

Premiums $ 32,198 11,129 — 43,327

Net investment income 11,991 3,238 225 15,454

Realized investment gains (losses), net 1,205 ( 36 ) 957 2,126

Other income 676 1 — 677

Total revenues 46,070 14,332 1,182 61,584

Benefits and expenses:

Insurance benefits paid or provided:

Claims and surrenders 22,565 9,251 — 31,816

Increase in future policy benefit reserves 9,369 1,519 — 10,888

Policyholders' dividends 1,638 12 — 1,650

Total insurance benefits paid or provided 33,572 10,782 — 44,354

Commissions 4,854 4,261 — 9,115

Other general expenses 4,900 4,146 1,496 10,542

Capitalization of deferred policy acquisition costs ( 4,201 ) ( 1,825 ) — ( 6,026 )

Amortization of deferred policy acquisition costs 5,191 852 — 6,043

Amortization of cost of insurance acquired 68 215 — 283

Total benefits and expenses 44,384 18,431 1,496 64,311

Income (loss) before federal income tax expense $ 1,686 ( 4,099 ) ( 314 ) ( 2,727 )

September 30, 2021 | 10-Q 12

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Life Insurance Home Service Insurance Other Non-Insurance Enterprises Consolidated

Nine Months Ended September 30, 2021

(In thousands)

Premiums $ 89,399 35,786 — 125,185

Net investment income 35,468 9,826 724 46,018

Realized investment gains (losses), net 5,741 393 1,143 7,277

Other income 2,142 3 — 2,145

Total revenues 132,750 46,008 1,867 180,625

Benefits and expenses:

Insurance benefits paid or provided:

Claims and surrenders 69,366 22,335 — 91,701

Increase in future policy benefit reserves 17,081 5,326 — 22,407

Policyholders' dividends 4,400 31 — 4,431

Total insurance benefits paid or provided 90,847 27,692 — 118,539

Commissions 13,483 12,590 — 26,073

Other general expenses 15,273 12,024 6,130 33,427

Capitalization of deferred policy acquisition costs ( 11,578 ) ( 5,220 ) — ( 16,798 )

Amortization of deferred policy acquisition costs 15,739 2,561 — 18,300

Amortization of cost of insurance acquired 279 680 — 959

Total benefits and expenses 124,043 50,327 6,130 180,500

Income (loss) before federal income tax expense $ 8,707 ( 4,319 ) ( 4,263 ) 125

September 30, 2021 | 10-Q 13

GAAP income or loss before federal income taxes for its two reportable segments.

March 31, 2022 | 10-Q 10

CITIZENS, INC .

1 unchanged sentence

Life Insurance Home Service Insurance Other Non-Insurance Enterprises Consolidated

Three Months Ended September 30, 2020

Three Months Ended March 31, 2022

(In thousands)

1 unchanged sentence

Net investment income 11,971 3,244 272 15,487

Realized investment gains (losses), net 133 388 6 527

Investment related gains (losses), net ( 293 ) ( 242 ) ( 47 ) ( 582 )

Other income 1,088 — — 1,088

13 unchanged sentences

Income (loss) before federal income tax expense $ 1,030 ( 1,240 ) ( 764 ) ( 974 )

September 30, 2021 | 10-Q 14

March 31, 2022 | 10-Q 11

CITIZENS, INC .

1 unchanged sentence

Life Insurance Home Service Insurance Other Non-Insurance Enterprises Consolidated

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

(In thousands)

1 unchanged sentence

Net investment income 11,598 3,345 301 15,244

Realized investment gains (losses), net 1,259 ( 405 ) ( 185 ) 669

Investment related gains (losses), net ( 108 ) 223 177 292

Other income 913 2 — 915

13 unchanged sentences

Income (loss) before federal income tax expense $ ( 106 ) ( 758 ) ( 1,884 ) ( 2,748 )

September 30, 2021 | 10-Q 15

March 31, 2022 | 10-Q 12

CITIZENS, INC .

1 unchanged sentence

(4) STOCKHOLDERS' EQUITY AND RESTRICTIONS

Our Restated and Amended Articles of Incorporation authorize the issuance of 127,000,000 shares, of which 100,000,000 shares shall be Class A common stock, 2,000,000 shares shall be Class B common stock, and 25,000,000 shall be preferred stock.

The two authorized classes of common stock are equal in all respects, except (a) each share of Class A common stock is entitled to receive twice the cash dividends paid on a per share basis to the Class B common stock, if any;

and (b) the holders of the Class B common stock have the exclusive right to elect a simple majority of the board of Directors of Citizens.

In April 2021, we repurchased all of the outstanding Class B common stock, which is now classified as treasury stock.

As a result, all of the directors are elected by the holders of the Class A common stock.

Citizens has never issued any preferred stock.

EARNINGS PER SHARE

The following tables set forth the computation of basic and diluted earnings (loss) per share.

Three Months Ended September 30, 2021 2020

(In thousands, except per share amounts)

Basic and diluted earnings (loss) per share:

Net income (loss) $ ( 2,799 ) ( 7,915 )

Net income (loss) allocated to Class A common stock $ ( 2,799 ) ( 7,836 )

Net income (loss) allocated to Class B common stock — ( 79 )

Net income (loss) $ ( 2,799 ) ( 7,915 )

Weighted average shares of Class A outstanding - basic 49,630 49,437

Weighted average shares of Class A outstanding - diluted 50,263 49,832

Weighted average shares of Class B outstanding - basic and diluted — 1,002

Basic and diluted earnings (loss) per share of Class A common stock $ ( 0.06 ) ( 0.16 )

Basic and diluted earnings (loss) per share of Class B common stock — ( 0.07 )

Nine Months Ended September 30, 2021 2020

Three Months Ended March 31, 2022 2021

(In thousands, except per share amounts)

13 unchanged sentences

National Association of Insurance Commissioners ("NAIC") and the Bermuda Monetary Authority ("BMA").

All insurance subsidiaries exceeded the minimum capital requirements at September 30, 2021.

September 30, 2021 | 10-Q 16

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

All insurance subsidiaries exceeded the minimum capital requirements at March 31, 2022.

In order to minimize the risk of a shortfall in capital arising from an unexpected adverse deviation or excess risk, the BMA has established a threshold capital level (termed the Target Capital Level ("TCL")), which is set at 120% of a company’s enhanced capital requirement.

The TCL serves as an early warning tool for the BMA.

As of September 30, 2021, CICA Ltd.

was above the TCL threshold.

At the request of the BMA, on April 15, 2021, Citizens and CICA Ltd.

entered into a Keep Well Agreement.

The Keep Well Agreement requires Citizens to contribute up to $ 10 million in capital to CICA Ltd.

as necessary to ensure that CICA Ltd.

has a minimum capital level of 120% (equal to the TCL).

Since CICA Ltd.’s capital level currently exceeds 120 %, Citizens is not currently required to make a capital contribution.

As of March 31, 2022, CICA International was above the TCL threshold.

At the request of the BMA, on April 15, 2021, Citizens and CICA International entered into a Keep Well Agreement.

The Keep Well Agreement requires Citizens to contribute up to $ 10 million in capital to CICA International as necessary to ensure that CICA International has a minimum capital level of 120% (equal to the TCL).

Since CICA International’s capital level currently exceeds 120 %, Citizens is not currently required to make a capital contribution.

March 31, 2022 | 10-Q 13

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(5) INVESTMENTS

The Company invests primarily in fixed maturity securities, which totaled 89.7 % of total cash and invested assets at September 30, 2021, as shown below.

The Company invests primarily in fixed maturity securities, which totaled 88.4 % of total cash and invested assets at March 31, 2022, as shown below.

Carrying Value

(In thousands, except for %)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount % Amount %

3 unchanged sentences

Policy loans 79,345 5.2 % 80,307 4.9 %

Real estate and other long-term investments 34,013 2.1 % 29,865 1.8 %

Other long-term investments 63,927 4.2 % 57,399 3.5 %

Cash and cash equivalents 21,298 1.3 % 27,294 1.7 %

1 unchanged sentence

The following tables represent the amortized cost, gross unrealized gains and losses and fair value of fixed maturity securities as of the dates indicated.

September 30, 2021

March 31, 2022

(In thousands)

12 unchanged sentences

Total fixed maturity securities $ 1,361,254 41,009 46,853 1,355,410

September 30, 2021 | 10-Q 17

March 31, 2022 | 10-Q 14

CITIZENS, INC .

11 unchanged sentences

All other 302,141 29,855 1,181 330,815

Commercial mortgage-backed 225 — 4 221

Residential mortgage-backed 117,755 16,046 6 133,795

4 unchanged sentences

(In thousands)

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Equity securities:

6 unchanged sentences

VALUATION OF INVESTMENTS

Available-for-sale securities are reported in the consolidated financial statements at fair value.

Available-for-sale ("AFS") fixed maturity securities are reported in the consolidated financial statements at fair value.

Equity securities are measured at fair value with the change in fair value recorded through net income.

The Company recognized net realized losses of $ 0.4 million and net realized gains of $ 0.2 million on equity securities held for the three and nine months ended September 30, 2021 and gains of $ 0.4 million and $ 0.6 million for the same periods ended September 30, 2020.

The Company recognized net investment related losses of $ 0.8 million on equity securities held for the three months ended March 31, 2022 and gains of $ 0.3 million for the same period ended March 31, 2021.

The Company considers several factors in its review and evaluation of individual investments, using the process described in Part IV, Item 15, Note 2.

Investments in the notes to the consolidated financial statements of our Form 10-K to determine whether a credit loss impairment exists.

For the three and nine months ended September 30, 2021 and 2020, the Company recorded no credit valuation losses on fixed maturity securities.

September 30, 2021 | 10-Q 18

For the three months ended March 31, 2022 and 2021, the Company recorded no credit valuation losses on fixed maturity securities.

March 31, 2022 | 10-Q 15

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables present the fair values and gross unrealized losses of fixed maturity securities that are not deemed to have credit losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position at September 30, 2021 and December 31, 2020.

September 30, 2021 Less than 12 months Greater than 12 months Total

March 31, 2022 Less than 12 months Greater than 12 months Total

(In thousands, except for # of securities) Fair

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Available-for-sale securities:

Government-sponsored enterprises $ 72 1 2 — — — 72 1 2

States and political subdivisions 21,715 692 15 — — — 21,715 692 15

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All Other 33,384 781 30 4,523 400 4 37,907 1,181 34

Commercial mortgage-backed 221 4 1 — — — 221 4 1

Residential mortgage-backed 1,084 6 6 — — — 1,084 6 6

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In each category of our fixed maturity securities described above, we do not intend to sell our investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases.

We did not recognize credit losses on securities with unrealized losses that were due to interest rate sensitivity and changes in credit spreads.

We believe that fluctuations caused by movements in interest rates and credit spreads

September 30, 2021 | 10-Q 19

These unrealized losses on fixed maturity securities are due to noncredit-related factors, including interest rate sensitivity and other market conditions, which have little bearing on the recoverability of our investments, hence they are not recognized as credit losses.

The fair value is expected to recover as the securities approach maturity or if market yields for such investments decline.

While the losses are currently unrealized, we

March 31, 2022 | 10-Q 16

CITIZENS, INC .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

have little bearing on the recoverability of our investments.

The fair value is expected to recover as the securities approach maturity.

The amortized cost and fair value of fixed maturity securities at September 30, 2021 by contractual maturity are shown in the table below.

continue to monitor all fixed maturity securities on an ongoing basis as future information may become available which could result in an allowance being recorded.

The amortized cost and fair value of fixed maturity securities at March 31, 2022 by contractual maturity are shown in the table below.

Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Securities not due at a single maturity date have been reflected based upon final stated maturity.

September 30, 2021 Amortized

March 31, 2022 Amortized

(In thousands)

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The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.

Three Months Ended Nine Months Ended

Fixed Maturity Securities, Available-for-Sale September 30, September 30,

Three Months Ended

Fixed Maturity Securities, Available-for-Sale March 31,

(In thousands) 2022 2021

2 unchanged sentences

Gross realized losses $ — 1

The Company sold 10 and 28 AFS fixed maturity securities during the three and nine months ended September 30, 2021 and 18 and 24 during the three and nine months ended September 30, 2020, respectively.

The Company sold its former training facility near Austin, Texas during the third quarter 2021 for a gross sale price of $ 3.8 million, resulting in a gain on the sale of $ 1.0 million.

The facility was owned by Citizens and was held in Other Non-Insurance Enterprises.

The Company sold 1 and 18 AFS fixed maturity securities during the three months ended March 31, 2022 and 2021, respectively.

(6) FAIR VALUE MEASUREMENTS

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We hold AFS fixed maturity securities, which are carried at fair value.

We also report our equity securities at fair value with changes in fair value reported through the consolidated statements of operations and comprehensive income (loss).

We also report our equity securities and other long-term investments at fair value with changes in fair value reported through the consolidated statements of operations and comprehensive income (loss).

Fair value measurements are generally based upon observable and unobservable inputs.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our view of market assumptions in the absence of observable market information.

We utilize valuation techniques that maximize the use of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

observable inputs and minimize the use of unobservable inputs.

We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

All assets and liabilities carried at fair value are required to be classified and disclosed in one of the following three categories:

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quoted prices for identical or similar instruments in markets that are not active;

and model-derived valuations whose inputs or whose significant value drivers are observable.

and model-derived valuations whose inputs or

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

whose significant value drivers are observable.

• Level 3 - Instruments whose significant value drivers are unobservable.

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Level 3 is comprised of financial instruments whose fair value is estimated based on non-binding broker prices utilizing significant inputs not based on or corroborated by readily available market information.

Real estate held-for-sale is in this category.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have no investments in this category.

The following tables set forth our assets that are measured at fair value on a recurring basis as of the dates indicated.

September 30, 2021 Level 1 Level 2 Level 3 Total

March 31, 2022 Level 1 Level 2 Level 3 Total

(In thousands)

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The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.

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Corporate 51 892,957 — 893,008

Commercial mortgage-backed — 221 — 221

Residential mortgage-backed — 133,795 — 133,795

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Fixed maturity securities, available-for-sale.

At September 30, 2021, our fixed maturity securities, valued using a third-party pricing source, totaled $ 1.4 billion for Level 2 assets and comprised 95.8 % of total reported fair value of our financial assets.

At March 31, 2022, fixed maturity securities, valued using a third-party pricing source, totaled $ 1.3 billion for Level 2 assets and comprised 93.9 % of total reported fair value of our financial assets.

The Level 1 and Level 2 valuations are reviewed and updated quarterly through testing by comparisons to separate pricing models, other third-party pricing services, and back tested to recent trades.

In addition, we obtain information annually relative to the third-party pricing models and review model parameters for reasonableness.

There were no Level 3 assets at September 30, 2021.

For the nine months ended September 30, 2021, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third-party prices were changed from the values received.

There were no Level 3 assets at March 31, 2022.

For the three months ended March 31, 2022, there were no material changes to the valuation methods or assumptions used to determine fair values, and no broker or third-party prices were changed from the values received.

Equity securities.

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Changes in the NAV of our limited partnerships are recorded through net income.

The Company recognized net realized gains

September 30, 2021 | 10-Q 23

The Company recognized net investment

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of $ 1.3 million and $ 5.8 million on limited partnerships held for the three and nine months ended September 30, 2021 and gains of $ 0.2 million for both the three and nine months ended September 30, 2020.

related losses of $ 0.8 million on limited partnerships held for the three months ended March 31, 2022.

These investments are included in other long-term investments on the consolidated balance sheets.

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Using NAV Per Share Unfunded Commit-

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Limited partnerships

market Investments in privately-originated, performing senior secured debt primarily in North America-based companies $ 13,847 26,645 10 $ 10,542 29,783 10

facility Investments in a facility established by the U.S.

Federal Reserve that provides financing to U.S.

company market participants for levered asset purchases with a focus on asset-backed, commercial mortgage and collateralized loan obligation markets — — 0 1,381 — 3

Middle market Investments in privately-originated, performing senior secured debt primarily in North America-based companies $ 27,336 13,593 9 $ 21,947 18,712 10

Global equity fund Investments in common stocks of U.S., international developed and emerging markets with a focus on long-term capital growth 9,890 — 0 10,607 — 0

Late-stage growth Investments in private late-stage, established companies seeking capital to accelerate growth prior to an IPO or sale 21,564 7,256 6 20,468 4,459 6

1 unchanged sentence

Total limited partnerships $ 62,564 36,819 $ 56,038 39,824

Our limited partnership investments are not redeemable because distributions will be received when the underlying investments of the partnerships are liquidated.

The majority of our limited partnership investments are not redeemable because distributions from the funds will be received when the underlying investments of the partnerships are liquidated.

The life spans indicated above may be shortened or extended at the fund manager's discretion, typically in one or two-year increments.

The global equity fund is redeemable monthly.

We initially estimate the fair value of investments in limited partnerships by reference to the transaction price.

Subsequently, we obtain the fair value of these investments from net asset value information provided by the general partner or manager of the investments, the financial statements of which are audited annually.

We carried no limited partnership investments at cost at September 30, 2021 and $ 6.2 million of limited partnership investments at cost at December 31, 2020.

We carried no limited partnership investments at cost at March 31, 2022 and December 31, 2021.

We review the fair value hierarchy classifications each reporting period.

1 unchanged sentence

Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur.

There were no transfers in or out of Level 3 during the nine months ended September 30, 2021 or 2020.

There were no transfers in or out of Level 3 during the three months ended March 31, 2022 or 2021.

FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE

1 unchanged sentence

The fair values of financial instruments presented below are not necessarily indicative of the amounts the Company might realize in actual market transactions.

September 30, 2021 | 10-Q 24

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The carrying amount and fair value for the financial assets and liabilities on the consolidated balance sheets not otherwise disclosed for the periods indicated are as follows:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In thousands) Carrying

8 unchanged sentences

Policy loans.

Policy loans had a weighted average annual interest rate of 7.7 % at September 30, 2021 and December 31, 2020, and no specified maturity dates.

The aggregate fair value of policy loans approximates the carrying value reflected on the consolidated balance sheets.

Policy loans had a weighted average annual interest rate of 7.7 % at March 31, 2022 and December 31, 2021 and no specified maturity dates.

Policy loans are an integral part of the life insurance policies we have in force, cannot be valued separately and are not marketable.

3 unchanged sentences

The loan is due in less than 1 year.

Due to the short-term nature of the loan, the carrying value approximates fair value.

Due to the short-term nature of the loan, the carrying value approximates fair value and is considered a Level 3 asset in the fair value hierarchy.

Residential mortgage loans.

Mortgage loans are secured principally by residential properties.

Weighted average interest rates for these loans were approximately 6.4 % at September 30, 2021 and December 31, 2020.

At September 30, 2021, maturities ranged from 5 to 18 years.

Management estimated the fair value using an annual interest rate of 6.25 % at September 30, 2021.

Weighted average interest rates for these loans were approximately 6.4 % at March 31, 2022 and December 31, 2021.

At March 31, 2022, maturities ranged from 5 to 18 years.

Management estimated the fair value using an annual interest rate of 6.25 % at March 31, 2022.

Our mortgage loans are considered Level 3 assets in the fair value hierarchy and are included in other long-term investments on the consolidated balance sheets.

2 unchanged sentences

Annuity liabilities.

The fair value of the Company's liabilities under annuity contract policies, which are considered Level 3 liabilities, was estimated at September 30, 2021 and December 31, 2020 using discounted cash flows based upon spot rates adjusted for various risk adjustments ranging from 0.19 % to 2.59 % and 0.22 % to 2.34 %, respectively.

The fair value of the Company's liabilities under annuity contract policies, which are considered Level 3 liabilities, was estimated at March 31, 2022 and December 31, 2021 using discounted cash flows based upon spot rates adjusted for various risk adjustments ranging from 1.57 % to 3.23 % and 0.50 % to 2.63 %, respectively.

The fair value of liabilities under all insurance contracts are taken into consideration in the overall management of interest rate risk, which seeks to minimize exposure to changing interest rates through the matching of investment maturities with amounts due under insurance contracts.

September 30, 2021 | 10-Q 25

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CITIZENS, INC .

5 unchanged sentences

(In thousands )

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Other long-term investments:

6 unchanged sentences

Our FHLB stock is carried at amortized cost, which approximates fair value.

Included in all other investments at December 31, 2020 was a Rabbi Trust holding $ 8.8 million for the benefit of our former Chief Executive Officer, which we were required to hold for his severance payment under the terms of his employment agreement in connection with his resignation following a change in control of the Company.

This amount was paid to him during the first quarter of 2021 and thus is not reflected in all other investments at September 30, 2021.

(7) COMMITMENTS AND CONTINGENCIES

QUALIFICATION OF LIFE PRODUCTS

We have previously reported that a portion of the life insurance policies issued by our subsidiary insurance companies failed to qualify for the favorable U.S.

federal income tax treatment afforded by Sections 7702 and 72(s) of the Internal Revenue Code ("IRC") of 1986.

Further, we have determined that the structure of our policies sold to non-U.S.

persons, which were novated to CICA Ltd.

effective July 1, 2018 , inadvertently generated U.S.

source income over time, which subjected the Company to certain tax withholding and information reporting requirements for the Company under Chapters 3 or 4 of the IRC.

The products have been and continue to be appropriately reported as life insurance under U.S.

GAAP for financial reporting.

To satisfy the Internal Revenue Service ("IRS") tax withholding and information reporting requirements for the novated policies sold to non-U.S.

persons as described above, the Company submitted withholding tax returns to the IRS in December 2019, and amended returns in August 2020 and paid the associated withholding tax.

The IRS processed these withholding tax returns in 2021, and the Company considers this matter closed.

LITIGATION AND REGULATORY ACTIONS

3 unchanged sentences

CONTRACTUAL OBLIGATIONS

As of September 30, 2021, CICA Ltd.

is committed to fund investments up to $ 63.0 million related to limited partnerships previously described and other investments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2022, CICA International is committed to fund investments up to $ 36.8 million related to limited partnerships previously described and other investments.

CREDIT FACILITY

7 unchanged sentences

The Credit Facility contains customary events of default and financial, affirmative and negative covenants, including but not limited to restrictions on indebtedness, liens, investments, asset dispositions and restricted payments.

As of September 30, 2021, the Company had no t borrowed any funds against the Credit Facility and was not in violation of any covenants.

CHANGE IN CONTROL

As previously disclosed, on February 5, 2021, Citizens, Inc.

(the “Company”) entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with the Harold E.

Riley Foundation (the “Foundation”) to purchase 100% of the Company’s Class B common stock (the “Class B Shares”) from the Foundation at an aggregate purchase price of $ 9.1 million (the “Class B Transaction”).

Because the Class B Shares have the right to elect a simple majority of the Board, the Foundation was able to exercise control over the Company as the holder of 100% of the Class B Shares.

Thus, in order to consummate the Class B Transaction, the Company and the Foundation were required to obtain regulatory approvals by the insurance regulators in Colorado, Louisiana, Mississippi, Texas and Bermuda, the jurisdictions in which the Company and its insurance subsidiaries are domiciled.

On April 12, 2021, the Company and the Foundation received the last of the regulatory approvals required for the Foundation to divest control of the Company and thus all of the Foundation’s Class B Shares were transferred to the Company as of such date.

In accordance with Colorado law, the Class B Shares are now classified as authorized, but unissued shares.

On March 9, 2021, the Board passed a resolution stating that as long as the Class B Shares are being held as unissued shares, the Company will not vote, nor permit any other person or entity to exercise any voting rights or other rights, with respect to the Class B Shares.

September 30, 2021 | 10-Q 27

As of March 31, 2022, the Company had no t borrowed any funds against the Credit Facility and was not in violation of any covenants.

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CITIZENS, INC .

1 unchanged sentence

(8) INCOME TAXES

Our provision for income taxes may not have the customary relationship of taxes to income.

CICA Ltd., a wholly owned subsidiary of Citizens, is considered a controlled foreign corporation for federal tax purposes.

As a result, the insurance activity of CICA Ltd.

is subject to Subpart F of the IRC and is included in Citizens’ taxable income.

For the nine months ended September 30, 2021, the Subpart F income inclusion generated $ 1.3 million of federal income tax expense.

CICA International, a wholly owned subsidiary of Citizens, is considered a controlled foreign corporation for federal tax purposes.

As a result, the insurance activity of CICA International is subject to Subpart F of the IRC and is included in Citizens’ taxable income.

Due to the 0% enacted tax rate in Bermuda, there are no deferred taxes recorded for CICA International's temporary differences.

For the three months ended March 31, 2022 and March 31, 2021, the Subpart F income inclusion generated $ 0.8 million and $ 0.4 million, respectively, of federal income tax expense.

A reconciliation between the U.S.

corporate income tax rate and the effective income tax rate is as follows:

Nine Months Ended September 30, 2021 2020

Three Months Ended March 31, 2022 2021

(In thousands, except for %) Amount % Amount %

4 unchanged sentences

Annualized effective tax rate adjustment 97 ( 10.0 ) % 655 ( 23.8 ) %

Adjustment of prior year taxes ( 7 ) ( 5.6 ) % 10 ( 0.1 ) %

Effect of uncertain tax position 12 ( 1.2 ) % 603 ( 21.9 ) %

Nondeductible costs to remediate tax compliance issue — — % ( 620 ) 6.2 %

Subpart F income 1,310 1,048.0 % 2,180 ( 21.9 ) %

Rate differential on net operating loss carryback claim 296 236.8 % — — %

CICA International Subpart F income 754 ( 77.4 ) % 392 ( 14.3 ) %

Nondeductible officer compensation 21 ( 2.2 ) % ( 73 ) 2.7 %

2 unchanged sentences

Income tax expense consists of:

Nine Months Ended

September 30,

Three Months Ended

(In thousands) 2022 2021

3 unchanged sentences

Total federal income tax expense $ 359 825

The Company previously accrued an uncertain tax position, most of which will be released during the fourth quarter of 2021 following the expiration of the statute of limitations on the tax year ended December 31, 2017.

This release will increase the carrying value of our Life Insurance segment and could potentially result in an impairment of goodwill in that segment upon the completion of our annual impairment analysis during the fourth quarter of 2021.

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CITIZENS, INC .

1 unchanged sentence

(9) OTHER COMPREHENSIVE INCOME

The changes in the components of other comprehensive income (loss) are reported net of the effects of income taxes of 21% as of the three and nine months ended September 30, 2021 and 2020, as indicated below.

Three Months Ended September 30, 2021 2020

(In thousands) Amount Tax Effect Total Amount Tax Effect Total

Unrealized gains (losses):

Unrealized holding gains (losses) arising during the period $ ( 9,561 ) 781 ( 8,780 ) 15,077 ( 1,009 ) 14,068

Reclassification adjustment for (gains) losses included in net income ( 102 ) 22 ( 80 ) 2 — 2

Effects on deferred policy acquisition costs 7,975 ( 528 ) 7,447 ( 104 ) 22 ( 82 )

Effects on cost of insurance acquired 7 ( 1 ) 6 ( 30 ) 6 ( 24 )

Effects on unearned revenue reserves 15 ( 3 ) 12 185 ( 39 ) 146

Other comprehensive income (loss) $ ( 1,666 ) 271 ( 1,395 ) 15,130 ( 1,020 ) 14,110

Nine Months Ended September 30, 2021 2020

The changes in the components of other comprehensive income (loss) are reported net of the effects of income taxes of 21% as of the three months ended March 31, 2022 and 2021, as indicated below.

Three Months Ended March 31, 2022 2021

(In thousands) Amount Tax Effect Total Amount Tax Effect Total

8 unchanged sentences

The Company has various routine related party transactions in conjunction with our holding company structure, such as a management service agreement related to costs incurred, a tax sharing agreement between entities, and inter-company dividends and capital contributions.

There were no changes related to these relationships during the nine months ended September 30, 2021.

There were no changes related to these relationships during the three months ended March 31, 2022.

See our Form 10-K for a comprehensive discussion of related party transactions.

1 unchanged sentence

The Company has evaluated the impact of subsequent events as defined by the accounting guidance through the date this report was issued and determined that no significant subsequent events need to be recognized or disclosed.

September 30, 2021 | 10-Q 29

March 31, 2022 | 10-Q 24

CITIZENS, INC.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements