LEGAL PROCEEDINGS
−Removed: Part I, Item 3.
−Removed: Legal Proceedings of our Form 10-K includes a discussion of our legal proceedings.
−Removed: There have been no material developments in the three months ended September 30, 2023 from the legal proceedings described in our Form 10-K except that the trial in the Trade Secret Lawsuit (as defined and described in Part I, Item 3.
−Removed: Legal Proceedings of our Form 10-K ), which was delayed in October 2022 due to the death of one of the defendants, has been rescheduled for February 2024.
+Added: Trade Secret Lawsuit
+Added: In the first quarter of 2024, a jury trial was held in the “trade secret lawsuit”.
+Added: The trade secret lawsuit was filed in 2018 by Citizens, CICA Life Ltd.
+Added: (Bermuda) and CICA Life Insurance Company of America (collectively, the “Citizens Companies,” “we,” "us" or "our") against certain former employees and independent consultants who we alleged unlawfully took Citizens’ confidential information in order to unfairly compete with us.
+Added: Our claims against these parties included various unfair competition, tortious interference, breach of contract and other related claims.
+Added: The jury found that (i) Defendant Carlos Nalsen Landa (“Landa”), a former independent consultant, misappropriated the Citizens’ Companies policyholder information, (ii) Citizens’ former chief underwriter, Michael P.
+Added: Buchweitz (“Buchweitz”) and Randall Riley (“Riley”), a former Citizens executive and son of Citizens’ founder Harold E.
+Added: Riley, failed to comply with their Citizens’ confidentiality agreements, and (iii) both Buchweitz and Riley intentionally interfered with former Chief Actuary Jonathan Pollio’s ("Pollio") Citizens’ confidentiality agreement.
+Added: For Buchweitz, the jury also found that he did not have a good faith belief that he was acting in the bona fide exercise of his own rights when he interfered with Pollio’s Citizens’ confidentiality agreement.
+Added: Despite these findings, the jury did not believe that the above-mentioned actions damaged the Citizens Companies economically and thus did not assess any monetary damages against any of the above parties.
+Added: Additionally, the jury found that Citizens should pay Alexis Delgado (“Delgado”, a former independent consultant) and Landa approximately $1.3 million for “money had and received”, an equitable theory that claimed that the Citizens Companies would be unjustly enriched if they didn’t pay past and future commissions to Delgado and Landa, which was accrued at December 31, 2023.
+Added: On April 30, 2024, Defendants Riley (through his estate), Buchweitz and Delgado filed a motion against the Citizens Companies seeking approximately $3.9 million in legal fees.
+Added: We do not believe that their claim has merit because they were found to have breached the contracts whose fee shifting provisions they seek to invoke and we intend to contest this motion, which is set for hearing on May 10, 2024, therefore no amounts have been accrued for this claim.
+Added: We also do not believe the jury properly found that Delgado or Landa were entitled to any prior or future commissions and intend to contest this verdict.
Part I, Item 1A.
Risk Factors of our Form 10-K includes a discussion of our risk factors.
−Removed: There have been no material changes in the three months ended September 30, 2023 from the risk factors included in our Form 10-K .
+Added: There have been no material changes in the three months ended March 31, 2024 from the risk factors included in our Form 10-K .
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
3 unchanged sentences
Not applicable.
+Added: March 31, 2024 | 10-Q 53
+Added: CITIZENS, INC.
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.