What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 213 added, 186 removed, 493 unchanged (45% of the section changed)

14 unchanged sentences

We refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations as our “MD&A”.

The objective of our MD&A is to provide investors with information in order to assess the material changes in our financial condition from December 31, 2024 to March 31, 2025 and the material changes in our results of operations for the three months ended March 31, 2025 as compared to the same period in 2024.

The objective of our MD&A is to provide investors with information in order to assess the material changes in our financial condition from December 31, 2024 to June 30, 2025 and the material changes in our results of operations for the three and six months ended June 30, 2025 as compared to the same periods in 2024.

We also discuss in the MD&A any trends that we believe may materially affect our future operations or financial condition.

7 unchanged sentences

In addition to paying and reserving for insurance benefits that we pay to our policyholders, our expenses consist primarily of the costs of selling our insurance products (e.g., commissions, underwriting, marketing expenses), operating expenses and income taxes.

March 31, 2025 | 10-Q 34

June 30, 2025 | 10-Q 37

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

We operate in two segments - Life Insurance and Home Services Insurance.

Our Life Insurance segment operates through our subsidiaries CICA Life Insurance Company of America, referred to as "CICA Domestic" and CICA Life, A.I., a Puerto Rican insurer, referred to as "CICA International".

Our Home Services Insurance operates primarily through Security Plan Life Insurance Company in Louisiana.

EVENTS THAT IMPACTED OUR BUSINESS

From time-to-time, certain events may affect our business in ways that cause current or future results to differ from past results.

In addition to (1) the factors described in Part 1.

Risk Factors in our Annual Report on Form 10-K for the period ended December 31, 2024 ("2024 Form 10-K"), as updated by Part II.

See (1) the factors described in Part 1.

Risk Factors in our Annual Report on Form 10-K for the period ended December 31, 2024 ("2024 Form 10-K");

and (2) the events described in Part 1.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Events that Impacted Our Business" in the 2024 Form 10-K ;

the following events impacted our results of operations or financial condition.

Investment Related Losses due to BlackRock write-down

Investment related gains and losses derive principally from our investments in equity securities and include unrealized gains and losses from market price changes in these equities during the period.

As evidenced, investment related gains and losses can cause significant fluctuations from period to period and while they are included in our operating revenue, we do not believe they are indicative of our operating results.

As discussed in our 2024 Form 10-K , in December 2024, BlackRock, Inc.

("BlackRock") announced a substantial write-down of its Global Renewable Power Fund III, a $4.8 billion flagship renewable fund, due to the collapse of two key investments:

Northvolt and SolarZero.

In 2025, BlackRock continued to review the valuation of this fund and reduced the net asset value further.

We had invested in this fund as part of our environmental, social and governance ("ESG") initiatives and although we did not sell this investment, we reported an investment related loss on this investment of $3.3 million in the fourth quarter of 2024 and an additional $3.1 m illion in the quarter ended March 31, 2025.

This sector has experienced market headwinds primarily driven by rising interest rates, supply chain disruption and less certain policy environment.

and (3) the discussion of the BlackRock write-down in Part 1.

Management's Discussion and Analysis of Financial Condition and Results of Operations - Events that Impacted Our Business" in our Form 10-Q for the quarter ended March 31, 2025.

FINANCIAL HIGHLIGHTS

Net income (loss) before federal income tax decreased to a loss of $1.8 million in 2025 from income of $4.9 million in 2024.

The factors that impacted this change were:

Net income before federal income tax in the three months ended June 30, 2025 increased to $6.9 million from $3.3 million in the three months ended June 30, 2024.

The factors that drove this increase were:

• $0.8 million increase in total premium revenue;

• $2.7 million increase in investment related gains and losses;

• $3.2 million decrease in general expenses due to a $3.5 million legal fee expense incurred in the second quarter of 2024;

partially offset by:

• $2.3 million increase in insurance benefits paid or provided due to increased matured endowments in our international business;

• $0.7 million increase in expenses related to restricted stock unit grants.

Net income before federal income tax in the six months ended June 30, 2025 decreased to $5.1 million from $8.2 million in the same period in 2024.

The factors that drove this decrease were:

• $1.2 million decrease in investment related gains and losses primarily related to the BlackRock write-down;

• $1.4 million increase in other general expenses;

• total premium revenues increased by $1.1 million in the three months ended March 31, 2025, but were offset by a $2.5 million increase in total insurance benefits paid or provided.

Financial Condition at March 31, 2025

• $4.8 million increase in insurance benefits paid or provided due to increased matured endowments in our international business;

partially offset by:

• $2.0 million increase in total premium revenue;

• $1.8 million decline in other general expenses.

At June 30, 2025

• Total assets of $1.7 billion

2 unchanged sentences

fixed maturity securities comprised 88% of total investments

• Diluted loss per share of Class A common stock of $0.03

• Book value per share of Class A common stock of $4.56

• Adjusted book value per share of Class A common stock of $6.22 1

• Diluted earnings per share of Class A common stock for the six months ended of $0.10

1 Adjusted book value per of Class A common share is a non-GAAP measure that is calculated by dividing actual Class A common stockholders’ equity, excluding AOCI, by the number of Class A common shares outstanding at the end of the period.

March 31, 2025 | 10-Q 35

June 30, 2025 | 10-Q 38

CITIZENS, INC.

2 unchanged sentences

We see the following as the primary factors that drive our operating results.

• Sales of our products

• Sales of our products and the premiums we receive from these sales

• Investments

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We believe sales statistics are meaningful to gain an understanding of, among other things, the attractiveness of our products, how expansion of our distribution channels affects our revenue, customer retention and the performance of our business from period-to-period.

Throughout the MD&A, we describe the actions and initiatives we are taking to increase sales and improve retention, sales performance in each period and as compared to prior year period, and how we view trends with respect to sales and retention.

Throughout the MD&A, we describe the actions and initiatives we are taking to increase sales and improve retention, sales performance in each period and as compared to prior year periods, and how we view trends with respect to sales and retention.

One sales factor that is key to our profitability is product mix.

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Throughout the MD&A, we refer to "direct" premiums as all premiums received and "net" or "total" premiums as all premiums received less premiums ceded to RGA Reinsurance Company ("RGA") and our other reinsurers.

Direct premium revenue increased 8% in the three months ended March 31, 2025, to $42.4 million from $39.1 million in the three months ended March 31, 2024.

Direct premium revenue increased 6% in the three months ended June 30, 2025, to $46.4 million from $43.9 million in the three months ended June 30, 2024 and increased 7% in the six months ended June 30, 2025, to $88.8 million from $83.0 million in the six months ended June 30, 2024.

This increase was driven by sales of CICA Domestic products.

First Year Premiums.

Direct first year premiums increased 49%, to $8.8 million in the three months ended March 31, 2025, compared to $5.9 million in the three months ended March 31, 2024, including 66% growth in our Life Insurance segment, driven by sales of our newer products and an increased number of producing agents.

First year premium growth was primarily in our new domestic final expense business, but first year premiums in our international business also increased in the three months ended March 31, 2025, as compared to the same period in 2024 as we continue to work with our distribution partners to expand sales.

March 31, 2025 | 10-Q 36

Direct first year premiums increased 20% in the three months ended June 30, 2025, to $9.4 million from $7.9 million in the three months ended June 30, 2024 and increased 32%, to $18.3 million in the six months ended June 30, 2025, compared to $13.8 million in the six months ended June 30, 2024, including 42% growth in our Life Insurance segment, driven by sales of our newer products and an increased number of producing agents.

First year premium growth was primarily in our new CICA Domestic final expense business.

June 30, 2025 | 10-Q 39

CITIZENS, INC.

1 unchanged sentence

Renewal Premiums.

Our direct renewal premium revenues in the three months ended March 31, 2025 slightly increased primarily due to strong sales in 2024 leading to higher number of policies paying renewal premiums in the current period.

Our direct renewal premium revenues in the three and six months ended June 30, 2025 increased primarily due to strong sales in 2024 leading to higher number of policies paying renewal premiums in the current periods.

Investment Income.

Our net investment income decreased slightly for the three months ended March 31, 2025 compared to the same prior year period, due primarily to lower investment income from our limited partnership investments.

Our net investment income decreased slightly for the three and six months ended June 30, 2025 compared to the same prior year periods, due primarily to lower investment income from our limited partnership investments.

Claims and Surrenders.

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The three largest components of this expense are reflected in the graphs below.

In the three months ended March 31, 2025 compared to the prior year period,

• death claim benefits decreased in our Life Insurance segment due to a combination of lower volume of claims and our coinsurance agreement with RGA alleviating some of our liability to pay these claims than in the prior year quarter,

• surrenders increased slightly, and

• matured endowments increased as expected due to many of our endowment policies reaching their contractual maturity dates.

March 31, 2025 | 10-Q 37

In the three and six months ended June 30, 2025 compared to the prior year periods,

• surrenders decreased slightly, and

• matured endowments increased as expected as many of our endowment policies reach their contractual maturity dates.

June 30, 2025 | 10-Q 40

CITIZENS, INC.

3 unchanged sentences

Operating expenses are meaningful to gain an understanding of how we manage our business, including among other things, salaries, benefits and spending on growth initiatives.

The primary reasons for the increase in the three months ended March 31, 2025 as compared to the prior year quarter were our continued investment in the growth of our business and higher costs associated with our equity compensation program as a result of increased stock price and additional participants.

Our operating expenses decreased in the three and six months ended June 30, 2025 as compared to the prior year periods.

Despite continued investment in the growth of our business and higher costs associated with our equity compensation program as a result of increased stock price and additional participants, this expense was lower due to the accrual of $3.5 million in legal fees in the prior year.

These were fees awarded to certain defendants in the trade secret lawsuit.

We have not paid any of these fees and have appealed the judgment against us.

Additionally, we receive expense allowances in CICA Domestic from RGA under our coinsurance agreement that was not in effect during the first part of 2024.

Actuarial Assumptions.

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Our results will be affected to the extent there is a variance between our actuarial assumptions and actual experience.

We expect to see a rebalancing in our mix of business arising due to the anticipated volume of maturities in our international endowment business, as well as continued domestic growth in the Life Insurance segment, which has been discussed previously.

June 30, 2025 | 10-Q 41

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

been discussed previously.

Our current profitability is affected by how closely actual experience matches our actuarial assumptions for these shifts, and by the amount of reserves we must hold.

1 unchanged sentence

OUR OPERATING SEGMENTS

We manage our business in two operating segments:

Life Insurance and Home Service Insurance.

Our insurance operations are the primary focus of the Company, as these operations generate most of our income.

See the discussion under Segment Operations below for a detailed analysis.

The amount of direct

March 31, 2025 | 10-Q 38

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

insurance, number of policies, and average face amounts for life policies issued during the periods indicated are shown below.

Three Months Ended March 31, 2025 2024

The amount of direct insurance, number of policies, and average face amounts for life policies issued during the periods indicated are shown below.

Six Months Ended June 30, 2025 2024

Issued Number of

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Total $ 517,262,265 32,247 $ 569,619,305 31,848

In the first three months of 2025, we issued $255 million in new insurance as we continued to grow our business with our newer products tailored to our specific markets and expansion of our distribution channels both domestically and internationally.

In our Life Insurance segment, we continued to experience strong sales and increased number of policies issued of our new domestic final expense products;

however, implementation of new initiatives, including use of information to enhance underwriting decisions with additional medical and lab data from third parties, resulted in higher sales of products with lower policy f ace amounts i n the first quarter of 2025 as compared to the prior year period.

Internationally, the Life Insurance segment benefited from increased sales of our whole life product, which accounted for 63% of total insurance issued internationally in this segment for the three months ended March 31, 2025.

This product tends to have higher policy face amounts than our older endowment products.

Insurance issued in our Home Service Insurance segment decreased for the three months ended March 31, 2025 compared to the prior year period largely due to strategic actions intended to improve sales quality and persistency, which led to a decrease in our agent sales force as we focus on these improvements.

These improvements did result in higher insurance issued from the fourth quarter of 2024.

We also believe the impact of inflation on the cost of living, and more recently the impact of tariffs on prices, has affected new sales since the customer demographic is primarily lower-income individuals.

The amount of direct insurance inforce for the periods indicated is shown below.

Overall insurance inforce growth has been and will be impacted by persistency rates, policy maturities and surrenders.

March 31, 2025 | 10-Q 39

In the first six months of 2025, we issued $517.3 million in new insurance as we continued to grow our inforce business with our newer products tailored to our specific markets.

In our Life Insurance segment, implementation of new initiatives in CICA Domestic, including use of information to enhance underwriting decisions with additional medical and lab data from third parties, resulted in higher sales of products with lower policy f ace amounts i n the first six months of 2025 as compared to the prior year, which led to a lower amount of insurance issued.

CICA International benefited from increased sales of our whole life product, which accounted for 67% of total insurance issued in CICA International for the six months ended June 30, 2025.

This product tends to have higher policy face amounts than our older endowment products, leading to an increase in insurance issued internationally.

Insurance issued in our Home Service Insurance segment decreased slightly for the six months ended June 30, 2025 compared to the prior year period.

We continue our strategic actions intended to improve sales quality and persistency.

These improvements did result in higher insurance issued in the second quarter of 2025 when compared to the second quarter of 2024.

We also believe growth is being impacted by inflation on the cost of living, which has affected new sales since the customer demographic is primarily lower-income individuals.

June 30, 2025 | 10-Q 42

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The amount of direct insurance inforce for the periods indicated is shown below.

Overall insurance inforce growth has been and will be impacted by persistency rates, policy maturities and surrenders.

CONSOLIDATED RESULTS OF OPERATIONS

Our revenues are generated primarily by life insurance premiums and investment income from invested assets.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

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Total revenues $ 65,086 62,084 120,738 119,796

Total revenues decreased in the three months ended March 31, 2025 as compared to the prior year period.

Despite the increase in both first year and renewal premiums, revenues decreased due to the Blackrock material adjustment in valuation, which led to a $3.9 million decrease in investment related gains (losses) which was mostly non-cash.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands)

2025 2024 2025 2024

Life and A&H premiums:

7 unchanged sentences

$ 43,388 42,559 83,185 81,234

Our first year direct premiums increased 49% in the three months ended March 31, 2025, compared to the same period in 2024, due to sales of our newer products in our Life Insurance segment and expanded domestic distribution.

Renewal premiums increased from strong first year sales in 2024 in our Life Insurance segment leading to higher number of policies paying renewal premiums in the first quarter of 2025, which more than offset the impacts from a higher level of surrenders during the last few years and increasing matured endowment benefits paid in the international portion of our Life Insurance segment.

Reinsurance premiums ceded increased in the three months ended March 31, 2025 compared to the same period in 2024 due to a coinsurance agreement we entered into with RGA in the second quarter of 2024.

March 31, 2025 | 10-Q 40

June 30, 2025 | 10-Q 43

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

Our first year direct premiums increased 20% and 32% in the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, due to sales of our newer products in our Life Insurance segment and expanded domestic distribution.

Renewal premiums increased from strong first year sales in 2024 in our Life Insurance segment leading to higher number of policies paying renewal premiums in the first half of 2025, which more than offset the impacts from the high level of surrenders during the last few years and increasing matured endowment benefits paid in the international portion of our Life Insurance segment.

Reinsurance premiums ceded increased in the three and six months ended June 30, 2025 compared to the same periods in 2024 due to a coinsurance agreement we entered into with RGA in the second quarter of 2024.

Net Investment Income.

A summary of our net investment income and annualized net investment income performance is as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands, except for %) 2025 2024 2025 2024

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Our net fixed maturity investment portfolio, primarily invested in callable securities, has faced challenges as many securities were called between 2019 and 2021, necessitating reinvestment in low interest rate fixed maturity assets, which impact net investment income and yields.

In order to enhance yields, we are investing in new opportunities, including investment grade private placement fixed income securities and other asset classes, while maintaining a prudent risk profile.

Investment Related Gains (Losses), Net.

We recorded investment related losses of $2.9 million during the three months ended March 31, 2025, compared to investment related gains of $1.0 million during the same prior year period.

The gains and losses are primarily related to the non-cash write-down of our Blackrock ESG investment.

We recorded investment related gains of $2.4 million and losses of $0.5 million during the three and six months ended June 30, 2025, respectively, compared to investment related losses of $0.3 million and gains of $0.7 million during the same prior year periods.

The losses are primarily related to the non-cash write-down of our BlackRock ESG investment that occurred in first quarter 2025.

We did not sell this investment;

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Supplemental contracts offer our policyholders the opportunity to leave their cash with us and be paid interest at a guaranteed rate or receive an annuity, at their option.

March 31, 2025 | 10-Q 41

June 30, 2025 | 10-Q 44

CITIZENS, INC.

1 unchanged sentence

BENEFITS AND EXPENSES

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

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Total benefits and expenses $ 58,172 58,782 115,611 111,569

Payments of claims and surrenders benefits and other general expenses constitute the majority of our expenses.

Payments of claims and surrenders benefits constitute the vast majority of our expenses.

Claims and Surrenders.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

Total claims and surrenders $ 40,220 34,530 80,318 67,643

Death claim benefits decreased 12% in 2025 compared to 2024 due to a combination of lower volume and our coinsurance agreement with RGA alleviating some of our liability to pay these claims.

Death claim benefits decreased in the three and six months ended June 30, 2025 compared to the same periods in 2024 due to both lower volume and our coinsurance agreement with RGA, which alleviates some of our liability to pay death claims.

We did not have this agreement during the first quarter of 2024.

Many of our endowment policies are reaching their contractual maturity dates and thus matured endowment benefits increased in the three months ended March 31, 2025 compared to the prior year quarter.

We anticipated this $6.6 million increase in the first quarter of 2025 based upon the contractual maturity dates and expect continued year-over-year increases in matured endowment benefits throughout 2025, then to remain at elevated, but slightly lower levels over the next few years, as more of these contracts expire.

Increase (Decrease) in Future Policy Benefit Reserves.

Future policy benefit reserves reflect the liability established to provide for the payment of policy benefits that we expect to pay in the future and thus generally

March 31, 2025 | 10-Q 42

Many of our endowment policies are reaching their contractual maturity dates and thus matured endowment benefits increased in the three and six months ended June 30, 2025 compared to the prior year periods.

We anticipated these increases in 2025 based upon the scheduled maturity of the contracts.

We expect continued year-over-year increases in matured endowment benefits throughout 2025, then expect the matured endowment benefits to remain at elevated, but slightly lower levels over the next few years, as more of these contracts expire.

June 30, 2025 | 10-Q 45

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

increase when we have a larger in force block of business due to higher sales and better persistency (i.e., more policies on which we expect to pay future benefits) and decrease when we have lower sales and persistency.

In the three months ended March 31, 2025, the change in future policy benefit reserves decreased as compared to the prior year period due to the amount of reserves released in connection with the high level of matured endowments.

Increase (Decrease) in Future Policy Benefit Reserves.

Future policy benefit reserves reflect the liability established to provide for the payment of policy benefits that we expect to pay in the future and thus generally increase when we have a larger in force block of business due to higher sales and better persistency (i.e., more policies on which we expect to pay future benefits) and decrease when we have lower sales and persistency.

In the three and six months ended June 30, 2025, the change in future policy benefit reserves decreased as compared to the prior year periods despite the increase in our inforce business, due to the amount of reserves released in connection with matured endowments.

Policyholder Liability Remeasurement (Gain) Loss.

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First year commission rates are higher than renewal commission rates and thus commissions fluctuate directly in relation to first year sales.

The increase in first year sales in the three months ended March 31, 2025 led to an increase in commission related expenses as compared to the prior year period.

Although first year sales increased in the three and six months ended June 30, 2025 as compared to the same periods in 2024, commissions decreased in the second quarter of 2025 and were flat in the six month ended June 30, 2025 due to our coinsurance agreement with RGA where they share in commission expenses.

Other General Expenses.

Total general expenses increased $1.4 million, or 12%, in 2025 compared to 2024.

The increase was primarily driven by costs related to our strategic growth initiatives and costs incurred associated with our equity compensation program due to higher stock price and additional participants.

Total general expenses decreased $3.2 million and $1.8 million, respectively, in 2025 compared to the same periods in 2024.

Although we continue to incur costs related to our strategic growth initiatives and costs incurred associated with our equity compensation program due to higher stock price and additional participants, we incurred a $3.5 million legal fee in the prior year periods due to the trade secret lawsuit.

We continue to work on managing controllable operating expenses while investing in growth initiatives.

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These costs vary based upon amounts of premiums received related to new and renewal business.

Capitalized DAC increased in the three months ended March 31, 2025, which is in line with the increases in new sales activity.

Capitalized DAC decreased in the three and six months ended June 30, 2025, which is in line with the increases in new sales activity.

Significantly lower amounts are capitalized related to renewal business in correlation with the lower commissions paid on that business compared to first year business, which has higher commission rates.

Amortization of Deferred Policy Acquisition Costs.

Amortization of DAC increased in the three months ended March 31, 2025, compared to the same period in 2024.

Amortization of DAC increased in the three and six months ended June 30, 2025, compared to the same periods in 2024.

DAC is amortized on a constant level basis over the expected term of the related contracts to approximate straight-line amortization.

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The Company's Other Non-Insurance Enterprises include non-insurance operations such as IT and corporate-support functions, which are included in the table presented below to properly reconcile the segment information with the consolidated financial statements of the Company.

March 31, 2025 | 10-Q 43

June 30, 2025 | 10-Q 46

CITIZENS, INC.

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The following table sets forth income (loss) before federal income tax by segment during the periods indicated.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

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Detailed results of operations in the Life Insurance segment for the periods indicated are as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

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Income before federal income tax

In our Life Insurance segment, income before federal income tax was $0.2 million during the three months ended March 31, 2025, respectively, compared to $5.8 million during the same prior year period primarily from a $3.8

March 31, 2025 | 10-Q 44

$ 8,148 7,472 8,391 13,272

June 30, 2025 | 10-Q 47

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

million decrease in investment related gains and losses related to our BlackRock investment.

In addition, our higher premiums were offset by an increase in total insurance benefits paid or provided.

Other general expenses were also higher to support our CICA Domestic growth.

In the three months ended June 30, 2025, the $0.7 million increase in income before federal income tax was driven by higher first year and renewal premiums and an increase in investment related gains (losses) partially offset by higher claims and surrenders due to the matured endowments in CICA International.

Commissions were lower despite higher first year sales due to our CICA Domestic coinsurance agreement with RGA.

In the six months ended June 30, 2025, income before federal income tax decreased despite a $2.3 million increase in premiums driven by a $0.9 million decrease in investment related gains and losses primarily related to the BlackRock write-down;

and a $5.0 million increase in insurance benefits paid or provided due to increased matured endowments in CICA International.

Life Insurance segment premium breakout is detailed below.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

5 unchanged sentences

Total premiums $ 32,643 31,605 61,797 59,466

Direct premiums increased by $3.5 million in the three months ended March 31, 2025, as compared to the same period in 2024 driven by sales of our newer products and an increased number of producing agents.

Due to the coinsurance agreement with RGA entered into in the second quarter of 2024, ceded reinsurance premiums increased.

While our domestic life insurance business drove the significant increase in first year premiums, life insurance premiums are generated largely from our international policyholders living in almost 80 different countries across the globe.

The following table sets forth our premiums by location for the three months ended March 31, 2025 and 2024.

Three Months Ended

Direct premiums increased by $2.6 million and $6.1 million in the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024.

The increase was driven by sales of our newer products and an increased number of producing agents, primarily in CICA Domestic.

Ceded reinsurance premiums increased due to the CICA Domestic coinsurance agreement with RGA entered into in the second quarter of 2024.

June 30, 2025 | 10-Q 48

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

While CICA Domestic drove the significant increase in first year premiums, life insurance premiums are generated largely from our international policyholders living in almost 80 different countries across the globe.

The following table sets forth our premiums by location for the three and six months ended June 30, 2025 and 2024.

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

5 unchanged sentences

Argentina 2,923 2,673 5,019 4,771

Other non-U.S.

Other non-United States 8,995 9,532 18,697 18,347

Total international premiums 28,234 28,673 57,022 56,470

United States premiums

6,341 3,382 12,132 5,704

Domestic premiums 5,791 2,322

Reinsurance and change in premium accruals

2 unchanged sentences

$ 32,643 31,605 61,797 59,466

Sales in Taiwan have been declining recently due to succession related difficulties within our primary distribution agency in Taiwan, regulatory challenges and geopolitical shift.

We are also starting to face some headwinds in Venezuela that may affect premiums revenues, due to the strength of the US dollar compared to the local currency and their difficulties to obtain dollars.

Investment Related Gains (Losses), Net.

We recorded investment related losses of $2.7 million during the three months ended March 31, 2025, compared to investment related gains of $1.1 million during the same prior year period, resulting primarily from the change in estimated fair market value of the ESG Blackrock investment.

March 31, 2025 | 10-Q 45

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

We recorded investment related gains of $2.6 million and losses of $0.1 million during the three and six months ended June 30, 2025, respectively, compared to investment related losses of $0.3 million and gains of $0.8 million during the same prior year periods.

These fluctuations in investment-related gains and losses were primarily influenced by changes in the estimated fair market value of our limited partnership investments.

Notably, the loss for the six months ending June 30, 2025, was largely attributed to a write-down in the estimated fair market value of our ESG BlackRock investment.

This decline was significant enough to outweigh the gains from other investments.

Claims and Surrenders.

The following table sets forth our primary claims and surrender benefits paid within our Life Insurance segment for the three months ended March 31, 2025 compared to the same period in 2024.

Three Months Ended

The following table sets forth our primary claims and surrender benefits paid within our Life Insurance segment for the three and six months ended June 30, 2025 compared to the same periods in 2024.

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

6 unchanged sentences

Total claims and surrenders $ 35,223 29,169 69,365 56,533

The majority of our claims and surrender benefits in our Life Insurance segment were related to payment of surrender benefits and matured endowment benefits.

Many of our endowment policies are reaching their contractual maturity dates and thus matured endowment benefits are increasing in 2025 as compared to 2024.

June 30, 2025 | 10-Q 49

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The majority of our claims and surrender benefits in our Life Insurance segment were related to payment of surrender benefits and matured endowment benefits in CICA International.

Many of our endowment policies are reaching their contractual maturity dates and thus matured endowment benefits are expected to be higher in each quarter of 2025 as compared to 2024.

We expect elevated trends to continue over the next few years but at a reduced level when compared to 2025.

Death claim benefits decreased for the three months ended March 31, 2025, compared to the prior year period due to a combination of lower volume and our coinsurance agreement with RGA alleviating some of our liability to pay these claims.

Mortality experience is closely monitored by the Company as a key performance indicator and these amounts were within expected levels.

Death claim benefits decreased for the three and six months ended June 30, 2025, compared to the prior year periods due to a combination of lower volume and our coinsurance agreement with RGA alleviating some of our liability to pay these claims.

Mortality experience is closely monitored and these amounts were within expected levels.

Increase (Decrease) in Future Policy Benefit Reserves.

The change in future policy benefit reserves for the three months ended March 31, 2025 and 2024 was the result of reserves released due to surrenders and higher matured endowment benefits.

The change in future policy benefit reserves for the three and six months ended June 30, 2025 and 2024 was the result of reserves released due to surrenders and higher matured endowment benefits.

These releases were partially offset by increases in reserves due to new insurance issued and the reserves that increase on our in force block of business nearing maturity.

Other General Expenses.

General expenses increased due primarily to expenses related to costs associated with continued investment in the growth of CICA domestic.

March 31, 2025 | 10-Q 46

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

HOME SERVICE INSURANCE

Detailed results of operations for the Home Service Insurance segment for the periods indicated are as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

4 unchanged sentences

Investment related gains (losses), net (218) 23 (366) (68)

Other income — 20 — 20

Total revenues 14,122 14,526 28,295 28,784

13 unchanged sentences

Income before federal income tax

In our Home Service Insurance segment, income before federal income tax was $0.1 million in the three months ended March 31, 2025, as compared to $0.6 million in the prior year period.

The decline is attributed to higher investment related losses and other general expenses.

March 31, 2025 | 10-Q 47

$ 1,607 1,411 1,727 2,034

June 30, 2025 | 10-Q 50

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

Income before federal income tax in the three months ended June 30, 2025 increased to $1.6 million from $1.4 million in the three months ended June 30, 2024.

The factors that drove this increase were lower insurance benefits paid and provided and commissions, partially offset by investment related losses.

Income before federal income tax in the six months ended June 30, 2025 decreased to $1.7 million from $2.0 million in the same period in 2024.

The factors that drove this decrease were investment related losses partially offset by lower insurance benefits paid and provided.

Home Service Insurance segment life and A&H premium breakout is detailed below.

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

3 unchanged sentences

Total direct life and A&H premiums 10,814 10,961 21,469 21,787

(69) (7) (81) (19)

Total life and A&H premiums

$ 10,745 10,954 21,388 21,768

Our life and A&H premiums declined slightly in the three months ended March 31, 2025 compared to the same prior year period.

The decrease is largely due to strategic actions intended to improve sales quality and persistency, which actions led to a decrease in our agent sales force as we focus on these improvements.

Our life and A&H premiums in the Home Service segment slightly declined in the three and six months ended June 30, 2025 compared to the same prior year periods.

The decrease is largely due to strategic actions intended to improve sales quality and persistency, which actions led to a decrease in our agent sales force as we focus on long term improvements.

Our first year sales in the second quarter of 2025 did increase over the first quarter of 2025, we believe from our strategy beginning to show positive results.

Additionally, we believe external economic pressures, such as inflation, have impacted revenue in this segment disproportionately.

1 unchanged sentence

Payments of claims and surrender benefits, which are the largest portion of our expenses, are summarized as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands) 2025 2024 2025 2024

7 unchanged sentences

The majority of claims and surrender benefits in our Home Service Insurance segment are death claim benefits.

Death claim benefits decreased slightly in the three months ended March 31, 2025 compared to the same prior year period due to lower volume of reported claims.

Death claim benefits decreased slightly in the three and six months ended June 30, 2025 compared to the same prior year periods due primarily to lower volume of reported claims.

Mortality experience is closely monitored by the Company as a key performance indicator and fluctuates from quarter-to-quarter based on reported claims.

Surrender benefits increased in the first three months of 2025 compared to the same period in 2024.

We believe the impact of inflation is negatively impacting persistency.

March 31, 2025 | 10-Q 48

June 30, 2025 | 10-Q 51

CITIZENS, INC.

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OTHER NON-INSURANCE ENTERPRISES

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(In thousands)

2025 2024 2025 2024

Loss before federal income tax

4 unchanged sentences

Revenue in this operating unit consists primarily of net investment income and investment related gains or losses, while expenses consist of other general expenses related to corporate functions.

The primary reason for the increased loss before federal income tax in the three months ended March 31, 2025 compared to the same period in 2024 is higher other general expenses, including costs incurred related to our equity incentive compensation program due to additional participants as well as an increased stock price, which increases our expense taken upon vesting of prior year grants.

The primary reason for the decreased loss before federal income tax in the three and six months ended June 30, 2025 compared to the same period in 2024 is lower other general expenses due to a $3.5 million legal fee expense incurred in the second quarter of 2024, partially offset by increase in costs incurred related to our equity incentive compensation program due to additional participants as well as an increased stock price, which increases our expense taken upon vesting of prior year grants.

Our investments are an integral part of our business success, as we invest the majority of premiums collected to pay for future benefits and rely on net investment income of our ongoing operations.

Our cash and invested assets at March 31, 2025 were $1.4 billion, of which 87% was invested in fixed maturity securities, all of which are classified as available-for-sale.

Our cash and invested assets at June 30, 2025 were $1.4 billion, of which 87% was invested in fixed maturity securities, all of which are classified as available-for-sale.

We closely monitor the duration of our fixed maturity investments, and investment purchases and sales are executed with the objective of having adequate funds available to satisfy our insurance obligations.

The following table sets forth the carrying value of our investments by investment category and cash, cash equivalents and the percentage of each to total cash, cash equivalents and invested assets.

Carrying Value March 31, 2025 December 31, 2024

Carrying Value June 30, 2025 December 31, 2024

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

16 unchanged sentences

Total cash, cash equivalents and invested assets $ 1,436,492 100.0 % $ 1,420,499 100.0 %

(1) Includes $113.8 million and $113.4 million of securities guaranteed by third parties at March 31, 2025 and December 31, 2024, respectively.

(1) Includes $112.8 million and $113.4 million of securities guaranteed by third parties at June 30, 2025 and December 31, 2024, respectively.

(2) Includes $95.0 million and $92.8 million of U.S.

Government-sponsored enterprises at March 31, 2025 and December 31, 2024, respectively.

March 31, 2025 | 10-Q 49

Government-sponsored enterprises at June 30, 2025 and December 31, 2024, respectively.

June 30, 2025 | 10-Q 52

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The carrying value of the Company’s fixed maturity securities investment portfolio at March 31, 2025 was $1.25 billion compared to $1.22 billion at December 31, 2024.

The carrying value of the Company’s fixed maturity securities investment portfolio at June 30, 2025 was $1.24 billion compared to $1.22 billion at December 31, 2024.

This increase primarily reflects the impact of interest rate sensitivity on the fair value of our fixed maturity securities.

The distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of March 31, 2025 did not materially change from December 31, 2024 – the weighted average was “A” at both dates.

Cash and cash equivalents decreased as of March 31, 2025 from December 31, 2024 and fluctuates from period-to-period primarily due to the timing of operating and investing activities.

Other long-term investments decreased by $0.3 million as of March 31, 2025 from December 31, 2024 due to additional funding and changes in the fair market value of our limited partnership investments.

The distribution of the credit ratings of our portfolio of fixed maturity securities by carrying value as of June 30, 2025 did not materially change from December 31, 2024 – the weighted average was “A” at both dates.

Cash and cash equivalents decreased as of June 30, 2025 from December 31, 2024 and fluctuates from period-to-period primarily due to the timing of operating and investing activities.

Other long-term investments increased by $2.8 million as of June 30, 2025 from December 31, 2024 due to additional funding and changes in the fair market value of our limited partnership investments.

Obligations of States and Political Subdivisions

The Company’s fixed maturity securities investment portfolio at March 31, 2025 and December 31, 2024 included $270.4 million and $268.3 million, respectively, of securities that are obligations of states and political subdivisions, including municipalities (collectively referred to as the municipal fixed maturity security portfolio).

The Company’s fixed maturity securities investment portfolio at June 30, 2025 and December 31, 2024 included $271.3 million and $268.3 million, respectively, of securities that are obligations of states and political subdivisions, including municipalities (collectively referred to as the municipal fixed maturity security portfolio).

The Company's municipal fixed maturity security portfolio includes third-party guarantees.

Detailed below is a presentation by the Nationally Recognized Statistical Rating Organization ("NRSRO") rating of these holdings by funding type as of March 31, 2025.

Detailed below is a presentation by the Nationally Recognized Statistical Rating Organization ("NRSRO") rating of these holdings by funding type as of June 30, 2025.

General Obligation Special Revenue Other Total % Based on Amortized

12 unchanged sentences

State and political subdivision fixed maturity securities excluding third-party guarantees:

AAA $ — — 3,114 3,300 3,289 3,235 6,403 6,535 2.2 %

AA 31,681 31,781 35,397 40,543 4,555 4,572 71,633 76,896 25.5

3 unchanged sentences

Total $ 63,722 64,403 195,860 224,828 11,767 11,904 271,349 301,135 100.0 %

March 31, 2025 | 10-Q 50

June 30, 2025 | 10-Q 53

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The table below shows the categories in which the Company held investments in special revenue fixed maturity securities that were greater than 10% of fair value based upon the Company's total municipal fixed maturity security portfolio at March 31, 2025.

(In thousands, except for %) Fair

4 unchanged sentences

Transportation 32,310 40,080 11.9

The Company's municipal fixed maturity security portfolio is spread across many states, however, municipal fixed maturity securities from Texas and California comprise the most significant concentration of the total municipal fixed maturity security portfolio as of March 31, 2025.

The Company holds 22% and 16% of its municipal fixed maturity security portfolio in Texas and California issuers, respectively, as of March 31, 2025.

There were no other states or individual issuer holdings that represented or exceeded 10% of the total municipal fixed maturity security portfolio as of March 31, 2025.

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in Texas at March 31, 2025.

The Company holds 21% and 16% of its municipal fixed maturity security portfolio in Texas and California issuers, respectively, as of June 30, 2025.

There were no other states or individual issuer holdings that represented or exceeded 10% of the total municipal fixed maturity security portfolio as of June 30, 2025.

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in Texas at June 30, 2025.

General Obligation Special Revenue Other Total

16 unchanged sentences

Total $ 26,606 26,528 31,328 38,245 — — 57,934 64,773

March 31, 2025 | 10-Q 51

June 30, 2025 | 10-Q 54

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in California at March 31, 2025.

The table below represents the Company's detailed exposure to municipal fixed maturity securities by credit rating in California at June 30, 2025.

General Obligation Special Revenue Other Total

15 unchanged sentences

The Company assesses available-for-sale ("AFS") fixed maturity securities in an unrealized loss position for expected credit losses.

The Company did not record any credit valuation allowances on fixed maturity securities in either of the three months ended March 31, 2025 or 2024.

Gross unrealized losses on AFS fixed maturity securities amounted to $169.3 million as of March 31, 2025 and $185.7 million as of December 31, 2024.

This decrease in gross unrealized losses during 2025 was a result of the increase in average market interest rates at the end of 2025 as compared to 2024.

The Company did not record any credit valuation allowances on fixed maturity securities in either of the three and six months ended June 30, 2025 or 2024.

Gross unrealized losses on AFS fixed maturity securities amounted to $170.2 million as of June 30, 2025 and $185.7 million as of December 31, 2024.

This decrease in gross unrealized losses during 2025 was a result of the decrease in average market interest rates at the end of 2025 as compared to 2024.

Information on both unrealized and realized gains and losses by category is set forth in Part I, Item 1, Note 3.

3 unchanged sentences

(In thousands)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Fixed maturity securities $ 1,242,271 1,220,961

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From time to time, we may raise capital by selling shares in our SIP (as defined below) and we may also access our Credit Facility if needed (also as described below).

Citizens had no debt as of March 31, 2025.

Citizens had no debt as of June 30, 2025.

Cash from Operating Activities.

Cash provided by or used in operating activities is an important liquidity metric because it reflects, during a given period, the amount of cash generated that is available to pay our operating

March 31, 2025 | 10-Q 52

June 30, 2025 | 10-Q 55

CITIZENS, INC.

1 unchanged sentence

expenses, invest in our business or make strategic acquisitions.

Cash provided by operating activities was $0.7 million in the three months ended March 31, 2025.

Cash provided by operating activities was $4.2 million in the six months ended June 30, 2025.

Cash used in Investing Activities.

We have traditionally also had significant cash flows from both scheduled and unscheduled investment security maturities, redemptions, and prepayments.

These cash flows, for the most part, are reinvested in new investments.

Net cash outflows from investing activities totaled $11.4 million in the three months ended March 31, 2025.

The investing activities fluctuate from period to period due to timing of securities activities such as calls and maturities and reinvestment of those funds.

We purchased $17.5 million of fixed maturity securities and used $2.8 million to purchase other long-term investments during the three months ended March 31, 2025.

87% of our investments consist of marketable fixed maturity securities classified as available-for-sale that could be readily converted to cash for liquidity needs.

The investing activities fluctuate from period to period due to timing of securities activities such as calls, maturities and reinvestment of those funds.

Net cash outflows from investing activities totaled $6.6 million in the six months ended June 30, 2025.

88% of total investments consist of marketable fixed maturity securities classified as available-for-sale that could be readily converted to cash for liquidity needs.

PARENT COMPANY LIQUIDITY AND CAPITAL RESOURCES

5 unchanged sentences

The ability to make payments to the holding company is limited by applicable laws of the U.S.

states of domicile and by the Puerto Rico Office of Commissioner of Insurance, which all subject insurance operations to significant regulatory restrictions.

states of domicile and by the Puerto Rico Office of Commissioner of Insurance, which subject insurance operations to significant regulatory restrictions.

These laws and regulations require, among other things, that our insurance subsidiaries maintain minimum solvency or premium to surplus ratio requirements, which limit the amount of dividends that can be paid to the holding company.

12 unchanged sentences

As we have discussed, we have been growing our domestic business by developing new products and expanding our distribution channels, which has led to an increase in first year direct premiums (i.e.

, new sales) of 71% from the year ended December 31, 2023 to the year ended December 31, 2024, and another 49% from the three months ended March 31, 2024 to the three months ended March 31, 2025.

, new sales) of 71% from the year ended December 31, 2023 to the year ended December 31, 2024, and 32% from the six months ended June 30, 2024 to the six months ended June 30, 2025.

When selling new policies, we incur upfront policy acquisition costs, such as agent commission payments.

1 unchanged sentence

Two of our insurance subsidiaries are members of the Federal Home Loan Bank ("FHLB") of Dallas.

FHLB membership provides the insurance subsidiaries with access to various

March 31, 2025 | 10-Q 53

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

low-cost collateralized borrowings and funding agreements.

FHLB membership provides the insurance subsidiaries with access to various low-cost collateralized borrowings and funding agreements.

While not the only source of additional liquidity, the FHLB could provide the insurance subsidiaries with an additional source of liquidity, if needed.

We believe that we have adequate capital resources and ability to obtain additional capital, if needed, to support the short-term and longer-term liquidity requirements of our insurance operations.

See Contractual Obligations and Off-balance Sheet Arrangements in our 2024 Form 10-K and below for a discussion of known and estimated cash needs.

See Contractual Obligations and Off-

June 30, 2025 | 10-Q 56

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

balance Sheet Arrangements in our 2024 Form 10-K and below for a discussion of known and estimated cash needs.

Cash flow projections and cash flow tests under various market interest rate scenarios are performed annually to assist in evaluating liquidity needs and adequacy.

Trends, Demands and Restrictions on our Uses of Cash

Payment of benefits for claims and surrenders are our largest use of cash.

Payments of benefits for claims and surrenders are our largest use of cash.

There are three primary components of these payments:

1 unchanged sentence

Matured Endowments.

Our endowment products have contractual maturity dates and provide the policyholder with alternatives once the policy matures - they can choose to take a lump sum payout or leave the money on deposit at interest with the Company.

Approximately 18% of the endowments in force will mature in the next five years, totaling approximately 6% of our in force business as of March 31, 2025.

Our endowment products have contractual maturity dates and provide the policyholder with alternatives once the policy matures - they can choose to take a lump sum payout, leave the money on deposit at interest with the Company or purchase another insurance policy.

Approximately 19% of the endowments in force will mature in the next five years, totaling approximately 6% of our in force business as of June 30, 2025.

The highest level of maturities will occur this year.

3 unchanged sentences

We currently anticipate that our available operating cash flow and capital resources will be adequate to meet our needs for funds, but we are closely monitoring our policyholder behavior patterns, and in 2024, introduced a new product designed to allow policyholders with maturing endowments to purchase a new life insurance policy.

Surrender benefits, which have been higher than usual the last several years, slightly increased in the first three months of 2025.

In order to mitigate the risk of early policyholder surrenders, we include provisions in our insurance policies, such as surrender charges, that help limit and discourage early withdrawals, but as many of our policies have reached the age where surrender charges have expired or significantly decreased, we have experienced high levels of surrenders.

In order to mitigate the risk of early policyholder surrenders, we include provisions in our insurance policies, such as surrender charges, that help limit and discourage early withdrawals, but as many of our older policies have reached the age where surrender charges have expired or significantly decreased, we have experienced high levels of surrenders in the past several years.

We believe that surrenders have been high due to other reasons, including the loss of one of our biggest distributors in Venezuela in 2018, increasing interest rates, which may encourage policyholders to seek higher rates of return in different investment products, post-pandemic beliefs that life insurance may not be as important as it was during the pandemic, and inflationary and tariff pressures, which may cause policyholders to want the cash values of their policies due to decreased purchasing power elsewhere.

4 unchanged sentences

Our product pricing assumes a certain mortality rate and thus a primary liquidity concern is the risk of higher than expected mortality experience.

Our death benefit payments decreased in the three ended March 31, 2025.

Our death benefit payments decreased in the six ended June 30, 2025.

Another significant use of cash is payment of commissions.

2 unchanged sentences

CICA Domestic sales have increased significantly since the third quarter of 2023.

To offset some of this strain on our capital, we entered into the coinsurance agreement with RGA in the second quarter of

March 31, 2025 | 10-Q 54

To offset some of this strain on our capital, we entered into the coinsurance agreement with RGA in the second quarter of 2024 and elected to cede 50% of our final expense business to RGA, which alleviates some of the expense strain.

We may also seek other options, such as loans at the holding company level (from the Credit Facility or otherwise) that would allow us to reduce the liquidity risk should CICA Domestic's required commission payments exceed current resources.

June 30, 2025 | 10-Q 57

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

2024 and elected to cede 50% of our final expense business to RGA, which alleviates some of the expense strain.

See Part I, Item 1, Note 8.

3 unchanged sentences

Our domestic companies are subject to minimum capital requirements set by the NAIC in the form of risk-based capital ("RBC").

RBC considers the type of business written by an insurance company, the quality of its assets, and various other aspects of an insurance company's business to develop a minimum level of capital called "Authorized Control Level Risk-Based Capital".

This level of capital is then compared to an adjusted statutory capital that includes capital and surplus as reported under statutory accounting principles, plus certain investment reserves.

1 unchanged sentence

Additionally, we have a Capital Maintenance Agreement between Citizens and CICA Domestic, Citizens' wholly-owned subsidiary domiciled in Colorado, which would require Citizens to contribute capital to CICA Domestic in order to maintain a RBC level above 350%.

At March 31, 2025, our domestic insurance subsidiaries were above the required minimum RBC levels and CICA Domestic was above 350%.

At June 30, 2025, our domestic insurance subsidiaries were above the required minimum RBC levels and CICA Domestic was above 350%.

For CICA Domestic, commission advances are non-admitted assets, which means we need capital to "replace" these assets in order to maintain required regulatory capital levels.

4 unchanged sentences

CICA International is required to maintain a minimum of $750,000 in capital and maintain a premium to surplus ratio of 7 to 1.

At March 31, 2025, CICA International exceeded the required minimum capital and related ratio.

At June 30, 2025, CICA International exceeded the required minimum capital and related ratio.

Any capital that Citizens is required to contribute to its insurance subsidiaries would negatively impact the holding Company's capital resources and liquidity.

CONTRACTUAL OBLIGATIONS AND OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2025, we have no additional contractual obligations or off-balance sheet arrangements other than those described in Part I, Item 1, Note 8.

As of June 30, 2025, we have no additional contractual obligations or off-balance sheet arrangements other than those described in Part I, Item 1, Note 8.

Commitments and Contingencies in the notes to our consolidated financial statements herein and in Part II, Item 7, Contractual Obligations and Off-Balance Sheet Arrangements in our 2024 Form 10-K .

We do not utilize special purpose entities as investment vehicles, nor are there any such entities in which we have an investment that engage in speculative activities of any nature, and we do not use such investments to hedge our investment positions.

March 31, 2025 | 10-Q 55

CITIZENS, INC.

MANAGEMENT'S DISCUSSION & ANALYSIS

CRITICAL ACCOUNTING POLICIES

1 unchanged sentence

Summary of Significant Accounting Policies of our consolidated financial statements in our 2024 Form 10-K continue to describe the significant judgments and estimates used in the preparation of our consolidated financial statements.

June 30, 2025 | 10-Q 58

CITIZENS, INC.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 2. Management’s Discussion and Analysis