10-K - UTGN - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2022
	or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________ to ______________

Commission File Number 000-16867

	UTG, INC.
	(Exact name of registrant as specified in its charter)
Delaware		20-2907892
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
205 North Depot Street, Stanford, KY	40484
---	---
(Address of principal executive offices)	(Zip code)

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

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

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

Title of class

Common Stock, stated value $.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

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

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

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

Large accelerated filer ☐Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to 240.10D-1(b). ☐

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

As of June 30, 2022, shares of the Registrant’s common stock held by non-affiliates (based upon the price of the last sale of $26.50 per share), had an aggregate market value of approximately $24,576,630.

At January 31, 2023 the Registrant had 3,190,306 outstanding shares of common stock, stated value $.001 per share.

Documents incorporated by reference: None

UTG, Inc.

Form 10-K

Year Ended December 31, 2022

TABLE OF CONTENTS

PART I	4
Item 1. Business	4
Item 1A. Risk Factors	8
Item 1B. Unresolved Staff Comment	8
Item 2. Properties	9
Item 3. Legal Proceedings	9
Item 4. Mine Safety Disclosures	9
PART II	9
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6. Reserved	10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	20
Item 8. Financial Statements and Supplementary Data	20
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	49
Item 9A. Controls and Procedures	49
Item 9B. Other Information	50
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	50
PART III	50
Item 10. Directors, Executive Officers and Corporate Governance	54
Item 11. Executive Compensation	55
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13. Certain Relationships and Related Transactions, and Director Independence	58
Item 14. Principal Accountant Fees and Services	59
PART IV	59
Item 15. Exhibit and Financial Statement Schedules	59
Item 16. Form 10-K Summary	61

Forward-Looking Statements

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

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

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

PART I

Item 1. Business

General

The Holding Company - UTG, Inc. (the “Registrant”, “Company” or “UTG”) is an insurance holding company incorporated in the state of Delaware in 2005 and headquartered in Stanford, KY. The Company’s principal subsidiary is Universal Guaranty Life Insurance Company (“UG”). The Registrant and its primary subsidiary have only one significant segment, insurance.

The holding company has no significant business operations of its own and relies on fees, dividends and other distributions from its operating subsidiary as the principal source of cash flows to meet its obligations. The Company may explore supplemental sources of income in the future. The cash outlays of the Company mainly consist of operational costs and the costs of repurchasing Company common stock.

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

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll. Mr. Correll holds a majority ownership of First Southern Funding LLC, a Kentucky corporation, (“FSF”) and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company. FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”). Banking activities are conducted through multiple locations within south-central and western Kentucky. Mr. Correll is Chief Executive Officer and Chairman of the Board of Directors of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At December 31, 2022, Mr. Correll owns or controls directly and indirectly approximately 65% of UTG’s outstanding stock.

At December 31, 2022, the Company had consolidated assets of $448 million, consolidated liabilities of $290 million and total shareholders’ equity of $158 million. The Company’s consolidated liabilities include policyholder liabilities and accruals of $249 million.

The Company’s principal executive office is located at 205 North Depot Street, Stanford, Kentucky 40484. The Company’s telephone number is 217-241-6300.

The Insurance Company - Universal Guaranty Life Insurance Company is an Ohio domiciled life insurance company and is licensed in 37 states. The Company’s dominant business is individual life insurance, which includes the servicing of existing insurance business in-force, the acquisition of other companies in the insurance business, and the administration processing of life insurance business for other entities. The Insurance Company’s operations are conducted through its administrative office located in Stanford, Kentucky.

UG has several wholly-owned and majority-owned subsidiaries. The subsidiaries were formed to hold certain real estate and other investments. The investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Reinsurance - As is customary in the insurance industry, the insurance subsidiary cedes insurance to, and assumes insurance from, other insurance companies under reinsurance agreements. Reinsurance agreements are intended to limit a life insurer’s maximum loss on a large or unusually hazardous risk or to obtain a greater diversification of risk. The ceding insurance company remains primarily liable with respect to ceded insurance should any reinsurer be unable to meet the obligations assumed by it. However, it is the practice of insurers to reduce their exposure to loss to the extent that they have been reinsured with other insurance companies. The Company sets a limit on the amount of insurance retained on the life of any one person. The Company will not retain more than $125,000, including accidental death benefits, on any one life.

The Company’s reinsured business is ceded to numerous reinsurers. The Company monitors the solvency of its reinsurers in seeking to minimize the risk of loss in the event of a failure by one of the parties. The Company is primarily liable to the insureds even if the reinsurers are unable to meet their obligations. The primary reinsurers of the Company are large, well-capitalized entities. See Note 4 - Reinsurance in the Notes to the Consolidated Financial Statements for additional information regarding the Company’s reinsurance activities.

Reserves - The applicable insurance laws under which the insurance subsidiary operates require that the insurance company report policy reserves as liabilities to meet future obligations on the policies in-force. These reserves are the amounts which, with the additional premiums to be received and interest thereon compounded annually at certain assumed rates, are calculated in accordance with applicable laws to be sufficient to meet the various policy and contract obligations as they mature. These laws specify that the reserves shall not be less than reserves calculated using certain mortality tables and interest rates.

The liabilities for traditional life insurance and accident and health insurance policy benefits are computed using a net level method. These liabilities include assumptions as to investment yields, mortality, withdrawals, and other assumptions based on the life insurance subsidiary’s experience adjusted to reflect anticipated trends and to include provisions for possible unfavorable deviations. The Company makes these assumptions at the time the contract is issued or, in the case of contracts acquired by purchase, at the purchase date. Future policy benefits for individual life insurance and annuity policies are computed using interest rates ranging from 2% to 6% for life insurance and 2.5% to 7.5% for annuities. Benefit reserves for traditional life insurance policies include certain deferred profits on limited-payment policies that are being recognized in income over the policy term. Policy benefit claims are charged to expense in the period that the claims are incurred. The mortality rate assumptions for policies currently issued by the Company are based on 2017 CSO Ultimate tables. Withdrawal rate assumptions are based upon Linton B or Linton C, which are industry standard actuarial tables for forecasting assumed policy lapse rates.

Benefit reserves for universal life insurance and interest sensitive life insurance products are computed under a retrospective deposit method and represent policy account balances before applicable surrender charges. Policy benefits and claims that are charged to expense include benefit claims in excess of related policy account balances.

Business Strategy

UG’s product portfolio consists of a limited number of life insurance product offerings. All of the products are individual life insurance products, with design variations from each other to provide choices to the customer. These variations generally center around the length of the premium paying period, length of the coverage period and whether the product accumulates cash value or not.

While the Company does not actively sell any new policies today, it has the following products available for issue:

Tradition – The Tradition policy is a fixed premium whole life insurance policy. Premiums are level and payable for life. Issue ages are 0-75. The minimum face amount is the greater of $10,000 or the amount of coverage provided by a $100 annual premium.

Annuity - The annuity product is a 5-year, single premium product. The product offers a guaranteed minimum rate of 1% and the rate can be adjusted at any time. The maximum surrender charge is 5% and subject to waiver for certain qualifying events. The annuity product offers a 10% free withdrawal each year beginning in year 2.

Business Concentrations

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

Because UG serves primarily individuals located in three states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of December 31, 2022 and 2021, respectively, approximately 50% and 51% of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. Thus, results of operations are heavily dependent upon the strength of these economies.

The majority of the investments included in the Consolidated Balance Sheets are owned by UTG’s subsidiary, UG. As an insurance company, UG is subject to applicable state insurance laws and regulations, which limit the concentration of investments in any one category or class and further limit the investment in any one issuer. Generally, these limitations are imposed as a percentage of statutory assets or percentage of statutory capital and surplus of each company.

See Note 13 - Concentrations of the Consolidated Financial Statements for additional disclosures regarding concentrations that have been identified by the Company.

Competition

The insurance business is a highly competitive industry and there are a number of other companies, both stock and mutual, doing business in areas where the Company operates. Many of these competing insurers are larger, have more diversified and established lines of insurance coverage, have substantially greater financial resources and brand recognition, as well as a greater number of agents. Other significant competitive factors in the insurance industry include policyholder benefits, service to policyholders, and premium rates.

In recent years, the Company has not placed an emphasis on new business production. Costs associated with supporting new business can be significant. Current sales primarily represent sales to existing customers through additional insurance needs or conservation efforts. The Company currently encourages policy retention as opposed to new sales in an attempt to maintain or improve current persistency levels.

The Company performs administrative work as a third-party administrator (“TPA”) for unaffiliated life insurance companies. The Company provides TPA services to insurance companies seeking business process outsourcing solutions. Revenue generated from TPA services is considered insignificant to the overall financial statements.

Human Capital

As of December 31, 2022, UTG and its subsidiaries had 40 full-time employees located in Kentucky and Illinois. These individuals are further supported by certain employees of First Southern National Bank (an affiliated entity) through a shared services arrangement. Under this arrangement, the two entities utilize the services of the other’s staff in certain instances for the betterment of both entities. Personnel within departments such as accounting, human resources and information technology are shared between the entities. UTG’s operations are headquartered in Stanford, Kentucky. The Company respects, values and invites diversity in our team members, customers, suppliers, and community. We seek to recognize the unique contribution each individual brings to our Company, and we are fully committed to supporting a rich culture of diversity as a cornerstone to our success. The Company strives to attract, develop, and retain talented individuals. To attract such individuals, we provide professional and personal development opportunities to team members. In addition, we seek to improve retention, development, and job satisfaction of team members from diverse groups by providing career skills training, peer mentoring and opportunities to interact with senior leaders. We encourage our team members to take initiative, accept challenges and achieve goals, all of which enables our team to work efficiently while providing excellent customer service which supports the Company’s strong performance.

UTG offers competitive compensation and benefits. Our pay for performance compensation philosophy is designed to reward employees for achievement and to align employee interests with the Company’s long-term growth. The Company’s benefits program includes health care, wellness initiatives, retirement offerings and paid time off.

Workplace health and safety is a vital aspect of running our business. We believe that safety must always be an integral part of any function or service performed, and the protection of our employees and visitors is our utmost priority. We have a business continuity plan in place that allows us to respond to threats to our health and safety, while ensuring that we can continue to provide quality service to our clients and shareholders at all times.

Code of Ethics

The Board of Directors has adopted a code of ethics for directors, officers, and financial personnel.

Regulation

Holding Company - States have enacted legislation requiring registration and periodic reporting by insurance companies domiciled within their respective jurisdictions that control or are controlled by other corporations so as to constitute a holding company system. Insurance holding company system statutes and regulations impose various limitations on investments in subsidiaries and may require prior regulatory approval for material transactions between insurers and affiliates and for the payment of certain dividends and other distributions.

Insurance - Insurance companies are subject to regulation and supervision in the states in which they do business. Generally the state supervisory agencies have broad administrative powers relating to granting and revoking licenses to transact business, licensing agents, approving policy forms, regulating trade practices, approving certain premium rates, setting minimum reserve and loss ratio requirements, determining the form and content of required financial statements, and prescribing the type and amount of investments permitted. Insurance companies are also required to file detailed annual reports with supervisory agencies, and records of their business are subject to examination at any time. Under the rules of the National Association of Insurance Commissioners (“NAIC”), insurance companies are examined periodically by one or more of the supervisory agencies.

Statutory Restrictions – Restrictions exist on the flow of funds to UTG from its insurance subsidiary. Statutory regulations require life insurance subsidiaries to maintain certain minimum amounts of capital and surplus. UG is required to maintain minimum statutory surplus of $2,500,000. At December 31, 2022, substantially all of the consolidated shareholders’ equity represents net assets of UTG’s subsidiaries.

Risk-Based Capital - The NAIC requires a risk-based capital formula be applied to all life and health insurers. The risk-based capital formula is a threshold formula rather than a target capital formula. It is designed only to identify companies that require regulatory attention and is not to be used to rate or rank companies that are adequately capitalized. UTG’s insurance subsidiary, UG, is more than adequately capitalized under the risk-based capital formula.

Guaranty Assessments – State guaranty laws provide for assessments from insurance companies to be placed into a fund which is used, in the event of failure or insolvency of an insurance company, to fulfill the obligations of that company to its policyholders. The amount which a company is assessed is determined according to the extent of these unsatisfied obligations in each state. Assessments are recoverable to a great extent as offsets against state premium taxes.

Stock Repurchase Program

The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG’s common stock. At a meeting of the Board of Directors in March of 2022, the Board of Directors of UTG authorized the repurchase of up to an additional $2 million of UTG’s common stock, for a total repurchase of $22 million of UTG’s common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited. During 2022, the Company repurchased 24,308 shares through the stock repurchase program for $685,808. Through December 31, 2022, UTG has spent $19,309,437 in the acquisition of 1,326,213 shares under this program.

Transactions with Affiliates

The articles of incorporation of UG contain the following language under item 12 relative to related party transactions:

A director shall not be disqualified from-dealing with or contracting with the corporation as vendor, purchaser; employee, agent or otherwise; nor, in the absence of fraud, shall any transaction or contract or act of this corporation be void or in any way affected or invalidated by the fact that any director or any firm of which any director is a member or any corporation of which any director is a shareholder, director or officer is in any way interested in such transaction or contract or act, provided the fact that such director or such firm or such corporation so interested shall be disclosed or shall be known to the Board of Directors or such members thereof as shall be present at any meeting of the Board of Directors at which action upon any such contract or transaction or act shall be taken: nor shall any such director be accountable or responsible to the company for or in respect to such transaction or contract or act of. this corporation or for any gains or profits realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director or officer is interested in such action or contract; and any such director may be counted in determining the existence of a quorum of any meeting of the Board of Directors of the company which shall authorize or take action in respect to any such contract or transaction or act and may vote thereat to authorize, ratify, or approve any such contract or transaction or act, with like force and effect as if he or any firm of which he is a member or any corporation of which he is a shareholder, director or officer were not interested in such transaction or contract or act.

Note 11 – Related Party Transactions of the Consolidated Financial Statements provides disclosures regarding transactions with related parties.

Anti-Money Laundering Laws

A series of laws and regulations beginning with the Bank Secrecy Act of 1970 require financial institutions to prevent, detect, and report illicit or illegal financial activities to the federal government to prevent money laundering, international drug trafficking, and terrorism. Under the US PATRIOT Act of 2001, financial institutions are subject to prohibitions against specified financial transactions and account relationships, requirements regarding the Customer Identification Program, as well as enhanced due diligence and “know your customer” standards in their dealings with high-risk customers, foreign financial institutions, and foreign individuals and entities. These rules also mandate a variety of record keeping, reporting and employee training requirements.

Data Security

Increased global IT security threats and more sophisticated and targeted computer crime pose a risk to the security of systems and networks and the confidentiality, availability and integrity of data. Although the Company makes efforts to maintain the security and integrity of the networks and systems, there can be no assurance that the security efforts will be effective or that attempted security breaches or disruptions would not be successful or damaging. In the event a security breach or failure results in the disclosure of sensitive third-party data or the transmission of harmful/malicious code to third parties, the Company could be subject to liability claims. Depending on their nature and scope, such threats also could potentially lead to improper use of our systems and networks, manipulation and destruction of data, loss of trade secrets, system downtimes and operational disruptions, which in turn, could adversely affect our reputation, competitiveness and results of operations.

Available Information

The Company files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports with the Securities and Exchange Commission (“SEC”) pursuant to section 13(a) or 15(d) of the Securities and Exchange Act of 1934.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on its website at www.sec.gov. The Company’s website is www.utgins.com.

Item 1A. Risk Factors

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and Item 10(f)(1) of Regulation S-K, the Company has elected to comply with certain scaled disclosure reporting obligations, and therefore does not have to provide the information required by this item.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

The Company owned an office complex in Springfield, Illinois, which housed a portion of the insurance operations. The Company sold this office complex during the fourth quarter of 2021. The employees located in Illinois now work from home.

The Company rents a portion of the first floor and second floor of an 8,000 square foot, two-story office building, located in Stanford, KY. The first floor of the building is occupied by UTG and FSNB employees that are included in the shared services agreement between the two entities. The second floor is occupied by the customer service call centers for both UTG and FSNB employees. The building is owned by FSNB and UTG pays $2,000 per month in rent to FSNB for the portion of the building occupied by UTG employees. The Company paid rent of $24,000 to FSNB in 2022 and 2021.

Item 3. Legal Proceedings

In the normal course of business the Company is involved, from time to time, in various legal actions and other state and federal proceedings. Management is of the opinion that the ultimate disposition of these matters will not have a material adverse effect on the Company’s results of operations or financial position.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Registrant is a public company whose common stock is traded in the over-the-counter market. Over-the-counter quotations can be obtained using the UTGN stock symbol.

The following table shows the high and low closing prices for each quarterly period during the past two years, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. The quotations below were acquired from the Yahoo Finance web site, which also provides quotes for over-the-counter traded securities such as UTG.

	2022		2021
Period	High	Low	High	Low
First quarter	30.00	27.10	34.00	26.00
Second quarter	29.00	23.00	28.00	24.56
Third quarter	33.28	23.60	34.00	26.01
Fourth quarter	33.28	25.06	30.00	27.00

UTG has not declared or paid any dividends on its common stock in the past two fiscal years, and has no current plans to pay dividends on its common stock as it intends to retain all earnings for investment in and growth of the Company’s business. See Note 9 – Shareholders’ Equity in the Notes to the Consolidated Financial Statements for information regarding dividend restrictions, including applicable restrictions on the ability of the Company’s life insurance subsidiary to pay dividends.

As of January 31, 2023 there were 4,321 record holders of UTG common stock.

Purchases of Equity Securities

The following table provides information with respect to purchases we made of our common stock during the three months ended December 31, 2022 and total repurchases:

	Total Number of Shares Purchased		Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares That May Yet Be Purchased Under the Program		Approximate Dollar Value That May Yet Be Purchased Under the Program
Oct. 1 through Oct. 31, 2022	964	$	33.28	964	N/A	$	2,739,059
Nov. 1 through Nov. 30, 2022	1,347	$	28.24	1,347	N/A	$	2,701,014
Dec. 1 through Dec. 31, 2022	376	$	27.79	376	N/A	$	2,690,563
Total	2,687			2,687

Stock Performance Graph

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is Management’s discussion and analysis of the financial condition and results of operations of UTG, Inc. and its subsidiaries (collectively with the Parent, the “Company”) for the years ended December 31, 2022 and 2021. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report.

Cautionary Statement Regarding Forward-Looking Statements

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

Overview

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

On February 21, 2023 Mr. James Rousey submitted a letter of resignation stating his desire to retire. In this regard, he retired as President of UTG, Inc. and its subsidiary, Universal Guaranty Life Insurance Company as well as his position as a Director of both entities. This was effective as of the date of the letter. The Board of Directors of UTG, Inc. and Universal Guaranty Life Insurance Company formally accepted the resignation letter on February 22, 2023. Mr. Jesse Correll, CEO and Chairman of the Board of the companies, will assume the title of President initially. This information was filed on Form 8-K with the SEC on February 24, 2023.

Critical Accounting Policies

We have identified the accounting policies below as critical to the understanding of our results of operations and our financial condition. The application of these critical accounting policies in preparing our consolidated financial statements requires Management to use significant judgments and estimates concerning future results or other developments including the likelihood, timing or amount of one or more future transactions or amounts. Actual results may differ from these estimates under different assumptions or conditions. On an on-going basis, we evaluate our estimates, assumptions and judgments based upon historical experience and various other information that we believe to be reasonable under the circumstances. For a detailed discussion of other significant accounting policies, see Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

Future Policy Benefits – Because of the long-term nature of insurance contracts, the insurance company is liable for policy benefit payments that will be made in the future. The liability for future policy benefits is determined by standard actuarial procedures common to the life insurance industry. The accounting policies for determining this liability are disclosed in Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

Cost of Insurance Acquired – The costs of acquiring blocks of insurance from other companies or through the acquisition of other companies are deferred and recorded as deferred acquisition costs. The deferred amounts are recorded as an asset and amortized to expense in a systematic manner as indicated in Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements.

Valuation of Securities – The Company’s investment portfolio consists of fixed maturities, equity securities, trading securities, mortgage loans, notes receivable and real estate to provide funding of future policy contractual obligations. The Company’s fixed maturities are classified as available-for-sale. Available-for-sale fixed maturity investments are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) in the Consolidated Balance Sheets.

Equity securities reported at fair value, which include common and preferred stocks, are reported at fair value with unrealized gains and losses reported as a component of net income (loss).

Equity securities reported at cost are reported at their cost basis, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Mortgage loans on real estate are carried at their unpaid principal balances, adjusted for amortization of premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected.

Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line-basis for financial reporting purposes using estimated useful lives of 3 to 30 years. The Company periodically reviews its real estate held-for-investment for impairment and test for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition, for a reasonable price, in comparison to its estimated fair value, is classified as held-for-sale. Real estate held-for-sale is stated at lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated.

Notes receivable are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. Interest accruals are analyzed based on the likelihood of repayment. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

The Company’s trading securities and equity securities are carried at fair value with unrealized gains and losses reported in income in the Consolidated Statements of Operations. Fair value is the price that the Company would expect to receive upon sale of the asset in an orderly transaction.

While the available-for-sale fixed maturity securities are generally expected to be held to maturity, they are classified as available-for-sale and are sold periodically to manage risk. Although all of the fixed maturity securities are classified as available-for-sale, the Company has the ability and intent to hold the securities until maturity. See Note 2 – Investments in the Notes to the Consolidated Financial Statements for detailed disclosures regarding the Company’s investment portfolio.

Impairment of Investments – The Company continually monitors the investment portfolio for investments that have become impaired; where fair value has declined below carrying value. While the value of the investments in the Company’s portfolio continuously fluctuates due to market conditions, an other-than-temporary impairment charge is recorded only when a security has experienced a decline in fair market value which is deemed to be other than temporary. The policies and procedures the Company uses to evaluate and account for impairments of investments are disclosed in Note 1 – Summary of Significant Accounting Policies and Note 2 – Investments in the Notes to the Consolidated Financial Statements. The Company makes every effort to appropriately assess the status and value of the securities with the information available regarding an other-than-temporary impairment. However, it is difficult to predict the future prospects of a distressed or impaired security.

Deferred Income Taxes – The provision for deferred income taxes is based on the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized by applying enacted statutory tax rates to temporary differences between amounts reported in the Consolidated Financial Statements and the tax basis of existing assets and liabilities. A valuation allowance is recognized for the portion of deferred tax assets that, in Management’s judgment, is not likely to be realized.

Results of Operations

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March 2020, as federal, state, and local governments reacted to the public health crisis, creating significant uncertainties in the U.S. economy. Over the ensuing months, the economy slowly began to return to a pre-pandemic norm. At this time, it appears the pandemic is behind us, though there continues to be mutating variants of the virus and regional outbreaks around the world. The impact of this seems to have been lessened by vaccines and immunity build up. During this time the Company did not experience any significant slow-down in activities, however, the Company did see an increase in mortality experience. The Company reported 138 Covid claims totaling $1,246,373 in 2020, 166 Covid claims totaling $1,293,625 in 2021 and 80 Covid claims totaling $1,229,875 in 2022. The latter part of 2022 saw a significant decline in Covid claims. While we believe our mortality experience has returned to pre-pandemic norms, we cannot be absolutely certain at this time.

On a consolidated basis, the Company had net income attributable to common shareholders of approximately $34.3 million and $9.7 million in 2022 and 2021, respectively. In 2022, income before income taxes was approximately $44 million compared to $11.8 million in 2021. Total revenues were approximately $70 million in 2022 and $35.6 million in 2021.

One-time events, primarily reflected in realized gains, comprise a substantial portion of the net income and revenue reported by the Company during 2022 and 2021. The magnitude of realized investment gains and losses in a given year is a function of the timing of trades of investments relative to the markets themselves as well as the recognition of any impairments on investments. Future earnings will be significantly negatively impacted should earnings from these one-time items not be realizable in a future period. While Management believes there remain additional investments with such one-time earnings, when or if realized remains uncertain.

The Company reported a change in fair value of equity securities of approximately $33.7 million and $14.1 million for the years ended December 31, 2022 and 2021, respectively. This line item is material to the results reported in the Consolidated Statements of Operations. This line item can also be extremely volatile, reflecting changes in the stock market. These results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

While the Company has seen significant positive results on its equity investments in the last two years, a pull back or downward market adjustment could slow these gains or even result in losses in future periods. Management believes its current equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could cause volatility in market prices.

Total benefits and other expenses paid in 2022 were approximately $25.8 million compared to $23.8 million in 2021.

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

Revenues

Premiums and policy fee revenues, net of reinsurance premiums and policy fees, declined approximately 11% when comparing 2022 to 2021. The Company writes very little new business. Unless the Company acquires a new company or a block of in-force business, Management expects premium revenue to continue to decline on the existing block of business at a rate consistent with prior experience. The Company’s average persistency rate for all policies in-force for 2022 and 2021 was approximately 96.8% and 95.7%, respectively. Persistency is a measure of insurance in-force retained in relation to the previous year. A positive impact on premium income is the consistency of the lapse percentage. Persistency of the business has been consistent over the last several years. The lapse percentages were 3.2% and 4.3% for 2022 and 2021, respectively.

The following table summarizes the Company’s investment performance for the years ended December 31:

		2022		2021
Net investment income	$	20,811,471	$	9,050,325
Net realized investment gains		14,168,911		6,021,653
Change in fair value of equity securities		33,690,712		14,121,883

The following table reflects net investment income of the Company for the years ended December 31:

		2022		2021
Fixed maturities	$	4,153,453	$	4,566,293
Equity securities		2,539,579		1,274,147
Trading securities		(13,283)		22,568
Mortgage loans		1,580,647		706,883
Real estate		15,424,260		3,241,689
Notes receivable		933,886		1,558,406
Policy loans		489,823		606,347
Cash and cash equivalents		203,250		2,567
Short-term investments		5,056		0
Total consolidated investment income		25,316,671		11,978,900
Investment expenses		(4,505,200)		(2,928,575)
Consolidated net investment income	$	20,811,471	$	9,050,325

Net investment income represented approximately 30% and 25% of the Company’s total revenues as of December 31, 2022 and 2021, respectively. Income from the fixed maturities, equity securities, and real estate portfolios represented 87% and 76%, respectively, of the gross investment income reported by the Company for 2022 and 2021. Income from the fixed maturities portfolio declined in 2022 as compared to 2021. The equity securities portfolio and the real estate portfolio performed very well in 2022, representing 71% of the total consolidated investment income.

In March 2020, with the onset of the pandemic in America, financial markets became jittery experiencing a significant drop in the major market indices. In response, the Federal Reserve dropped interest rates to near zero. This action resulted in a drop in all other interest rates in the marketplace. While this increased the fair value of the Company’s current fixed income holdings, it made finding investments to acquire, with any type of historic yield, nearly impossible. In recent periods our economy has heated up with inflation running at higher than desired levels by Federal Reserve standards. In this regard, the Federal Reserve began increasing interest rates in 2022. This has resulted in an increase in the yields available in the bond market and drives the unrealized loss on the bond portfolio.

Since the start of 2022, we have seen more volatility in the U.S. markets in general and have seen an increase in bonds yields. This is due to the Federal Open Market Committee (“FOMC”) aggressively raising interest rates to fight the inflation that is currently being experienced. The interest rate environment experienced seven rate changes totaling 4.25% during 2022 and are expected to continue into early 2023. While these actions had a negative impact on some of our investments that we currently own, this will also allow for better yields on future investments acquired as current investments mature.

Income from the fixed maturities investment portfolio represented 16% and 38% of the total consolidated investment income for the years ended December 31, 2022 and 2021, respectively. When comparing earnings from the fixed maturities portfolio for the years ended December 31, 2022 and 2021 income was down approximately 9%. The decrease is due to the maturity of certain fixed maturity investments during 2022. The Company’s investment in fixed maturities continues to decline as we have, for the most part, chosen not to reinvest in fixed maturities and any reinvestment has been at lower rates. As of December 31, 2022 and 2021, fixed maturities represented 30% and 38%, respectively, of the total investments owned by the Company.

Income from the equity securities portfolio was approximately double that of the prior year and represents approximately 10% of the total consolidated investment income for 2022. Distributions from four securities represented 62% of the 2022 income from the equity securities income. These four securities are associated with the oil and gas industry. During 2022, the Company disposed of a significant portion of two of these securities. Future results are expected to vary based upon these disposals and other investing decisions made by Management. The equity securities investment portfolio represents 45% and 37% of the total investment portfolio as of December 31, 2022 and 2021, respectively.

Income from the real estate portfolio represented 61% of the consolidated investment income for 2022 and is approximately $12.2 million higher than the amount reported in 2021. During 2022, the Company received $2.3 million of income from timber sales as compared to $217,000 in the prior year. Included in the 2022 real estate income is $10.4 million of income from oil and gas royalty distributions, which represents approximately 67% of the current year total income from the real estate portfolio. In 2021, the Company recorded less than $1 million of income from oil and gas royalties. During the latter part of 2021 and in 2022, several of the royalty interests fully depleted and there was in an increase in the number of wells coming online for production. As a result of the Russian invasion of the Ukraine, the United States placed a ban on Russian oil. This ban caused the price of oil to increase dramatically from an average price of $69 per barrel in 2021 to an average price per barrel of $97 in 2022. In 2021, total cash flows from oil and gas royalties were approximately $5.3 million of which $930,000 was reported as income. In 2022, total cash flows from oil and gas royalties were approximately $13.1 million of which $10.4 million was reported as income. In the first quarter of 2023, the average price per barrel of oil has declined to $80. While Management anticipates continued distributions from the oil and gas royalties, they are expected to vary depending on market conditions.

The earnings from the real estate investment portfolio are expected to vary depending on the real estate activities and market conditions. The real estate investment portfolio represents 10% and 11% of the total investment portfolio as of December 31, 2022 and 2021, respectively.

The following table reflects net realized investment gains (losses) for the years ended December 31:

		2022		2021
Fixed maturities available for sale	$	(528)	$	55,867
Equity securities		8,877,148		3,087,978
Real estate		5,292,291		2,877,808
Fixed maturities available for sale – OTTI		0		(393,455)
Equity securities - OTTI		(5,000,000)		0
Consolidated net realized investment gains		9,168,911		5,628,198
Change in fair value of equity securities - held		19,212,045		12,584,561
Change in fair value of equity securities - sold		14,478,667		1,537,322
Total change in fair value of equity securities		33,690,712		14,121,883
Net investment gains	$	42,859,623	$	19,750,081

Realized gains and losses from equity securities represent the difference between the fair value at the beginning of the reporting period and the fair value at the time of sale. The total gains from equity securities sold in 2022 were approximately $23.4 million, of which $8.9 million is being reported as gains from equity securities and $14.5 million is reported as a component of the change in the fair value of equity securities. The disposal of two equity securities represented 89% of the total gains from the equity securities portfolio. The Company fully disposed of one equity security that produced a realized gain of $6.6 million in 2022. The Company disposed of 7,500 shares of an equity security, associated with the oil and gas industry, producing a realized gain of $14.3 million. The Company still owns 5,000 shares of this equity security as of December 31, 2022. This disposal will impact future dividend earnings of the Company as it represented a significant portion of the 2022 investment income from equity securities.

The total gains from equity securities sold in 2021 were approximately $4.6 million, of which $3.1 million is being reported as gains from equity securities and $1.5 million is reported as a component of the change in the fair value of equity securities. The Company disposed of 2,500 shares of an equity security, associated with the oil and gas industry, producing a realized gain of $2.2 million. During the year ended December 31, 2021, the Company also reported additional gains of approximately $851,000 from the sales of the music royalties.

The Company reported a change in fair value of equity securities of approximately $33.7 million and $14.1 million for the years ended December 31, 2022 and 2021, respectively. This line item is material to the results reported in the Consolidated Statements of Operations. This line item can also be extremely volatile, reflecting changes in the stock market. While both 2021 and 2022 reflected positive results, 2022 results were more than double of that of 2021. While these results can be material and volatile, most of the equity holdings of the Company were acquired with a long-term view, thus making these intermediate changes in value of less concern to Management. Management monitors its equity holdings looking more at the specific entity and market it is in relative to performance and less to changes due to general market swings that occur over the holding period of the investment.

While the Company has seen significant positive results from its equity investments in the last two years, a pull back or downward market adjustment could slow these gains or even result in losses in future periods. Management believes its current equity investments continue to be solid investments for the Company and have further growth potential; however, changes in market conditions could cause volatility in market prices.

Included in the 2022 and 2021 net investment gains are other-than-temporary impairments of $5 million and $393,000, respectively. The other-than-temporary impairments recognized during 2022 and 2021 were taken as a result of Management’s assessment and determination of value of the investment. The investments were written down to better reflect their current expected value.

During 2022, the Company sold real estate located in Kentucky and recognized a gain of approximately $3.7 million from the sale. The 2021 real estate gains are mainly the result of the sale of real estate located in Illinois and Florida. During 2021, the Company sold its home office building located in Springfield, IL. The sale of this property produced a gain of approximately $1 million and represented approximately 36% of the investment gains from real estate. The Company sold real estate in Florida and recognized a gain of approximately $1.3 million, which represents approximately 44% of the gains reported for the real estate investment portfolio.

Realized investment gains are the result of one-time events and are expected to vary from year to year.

Expenses

The Company reported total benefits and other expenses of approximately $25.8 million and $23.8 million for the years ended December 31, 2022 and 2021, respectively. Benefits, claims and settlement expenses represented approximately 57% and 68% of the Company’s total expenses for 2022 and 2021, respectively. The other major expense category of the Company is operating expenses, which represented 41% and 30% of the Company’s total expenses for 2022 and 2021, respectively.

Benefits, claims and settlement expenses, net of reinsurance benefits, were down approximately 9% when comparing 2022 and 2021 activity. Policy claims vary from year to year and therefore, fluctuations in mortality are to be expected and are not considered unusual by Management.

Early in the COVID-19 pandemic, the Company implemented a process to monitor death claims resulting from COVID-19. Prior to the pandemic, death benefits were $12.6 million, $12.8 million and $12.4 million in 2017, 2018 and 2019, respectively. During the two years of the pandemic, total death benefits were $14.3 million and $16 million in 2020 and 2021, respectively. In 2022, total death benefits, net of reinsurance, declined to $13.3 million. Death benefits of the Company have been higher than recent past experience, even when adjusting for the identified COVID-19 claims. This anomaly is showing throughout the entire U.S. insurance industry. Industry experts believe this increase is death benefits while not always directly related to COVID-19, are caused indirectly by the pandemic due to delays in medical care as a result of the lockdown in 2020 and then later, people’s fears of seeking out treatment and trouble making up appointments. This is further compounded by depression from isolation. While we believe our mortality experience has returned to pre-pandemic norms, we cannot be absolutely certain at this time.

Changes in policyholder reserves, or future policy benefits, also impact this line item. Reserves are calculated on an individual policy basis and generally increase over the life of the policy as a result of additional premium payments and acknowledgment of increased risk as the insured continues to age.

The short-term impact of policy surrenders is negligible since a reserve for future policy benefits payable is held which is, at a minimum, equal to and generally greater than the cash surrender value of a policy. The benefit of fewer policy surrenders is primarily received over a longer time period through the retention of the Company’s asset base.

Overall, the Company’s persistency for business in-force remained relatively steady at 96.8% in 2022 compared to 95.7% in 2021. The Company’s actual experience for earned interest, persistency, and mortality varies from the assumptions applied to pricing and for determining premiums. Accordingly, differences between the Company’s actual experience and those assumptions applied may affect the profitability of the Company. The Company monitors investment yields, and when necessary adjusts credited interest rates on its insurance products to preserve targeted interest spreads.

Operating expenses increased approximately 48% or $3.4 million in 2022 as compared to that of the same period in 2021. Bonuses paid to employees were approximately $600,000 higher in 2022 as compared to 2021 and were driven by the Company’s 2022 performance.

As mentioned above in the Overview section of the Management Discussion and Analysis, UTG has a strong philanthropic program. The Company generally allocates a portion of its earnings to be used for its philanthropic efforts primarily targeted to Christ-centered organizations or organizations that help the weak or poor. Charitable contributions made by the Company are expected to vary from year to year depending on the earnings of the Company. In 2022, the Company paid approximately $2 million in charitable donations.

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

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

Financial Condition

Investment Information

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

The following table reflects, by investment category, the investments held by the Company as of December 31:

		2022	As a % of Total Investments	As a % of Total Assets
Fixed maturities	$	108,313,059	30%	24%
Equity securities, at fair value		150,053,686	41%	33%
Equity securities, at cost		15,683,343	4%	4%
Mortgage loans		30,698,694	8%	7%
Real estate		34,934,352	10%	8%
Notes receivable		14,424,127	4%	3%
Policy loans		6,567,434	2%	1%
Short-term investments		3,596,941	1%	1%
Total investments	$	364,271,636	100%	81%
		2021	As a % of Total Investments	As a % of Total Assets
---	---	---	---	---
Fixed maturities	$	140,963,881	38%	32%
Equity securities, at fair value		122,229,121	33%	28%
Equity securities, at cost		14,543,343	4%	3%
Trading securities		(1,116)	0%	0%
Mortgage loans		29,183,562	8%	7%
Real estate		39,748,261	10%	9%
Notes receivable		17,722,976	5%	4%
Policy loans		7,390,497	2%	2%
Total investments	$	371,780,525	100%	85%

The Company’s investments are generally managed to match related insurance and policyholder liabilities. The comparison of investment return with insurance or investment product crediting rates establishes an interest spread. Interest crediting rates on adjustable rate policies have been reduced to their guaranteed minimum rates, and as such, cannot be lowered any further. Policy interest crediting rate changes and expense load changes become effective on an individual policy basis on the next policy anniversary. Therefore, it takes a full year from the time the change was determined for the full impact of such change to be realized. If interest rates decline in the future, the Company will not be able to lower rates and both net investment income and net income will be impacted negatively.

The Company’s total investments represented 81% and 85% of the Company’s total assets as of December 31, 2022 and 2021, respectively. Fixed maturities and equity securities, at fair value, consistently represent the majority, of the Company’s total investments – 71% in 2022 and 2021.

As of December 31, 2022, the carrying value of fixed maturity securities in default as to principal or interest was immaterial in the context of consolidated assets, shareholders’ equity or results from operations. To provide additional flexibility and liquidity, the Company has identified all fixed maturity securities as “investments available-for-sale”. Investments available-for-sale are carried at market value, with changes in market value charged directly to the other comprehensive income component of shareholders’ equity. Changes in the market value of available for sale securities resulted in net unrealized gains (losses) of approximately $(27.8) million and $(7.1) million as of December 31, 2022 and 2021, respectively. The variance in the net unrealized gains and losses is the result of normal market fluctuations mainly related to changes in interest rates in the marketplace.

Management continues to view the Company’s investment portfolio with utmost priority. Significant time has been spent internally researching the Company’s risk and communicating with outside investment advisors about the current investment environment and ways to ensure preservation of capital and mitigate losses. Management has put extensive efforts into evaluating the investment holdings. Additionally, members of the Company’s Board of Directors and investment committee have been solicited for advice and provided with information. Management reviews the Company’s entire portfolio on a security level basis to be sure all understand our holdings, potential risks and underlying credit supporting the investments. Management intends to continue its close monitoring of its bond holdings and other investments for possible deterioration or market condition changes. Future events may result in Management’s determination that certain current investment holdings may need to be sold which could result in gains or losses in future periods. Such future events could also result in other than temporary declines in value that could result in future period impairment losses.

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if impairment is other-than-temporary. These risks and uncertainties related to Management’s assessment of other-than-temporary declines in value include but are not limited to: the risk that Company’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; the risk that fraudulent information could be provided to the Company’s investment professionals who determine the fair value estimates.

Liquidity

Liquidity provides the Company with the ability to meet on demand the cash commitments required by its business operations and financial obligations. The Company’s liquidity is primarily derived from cash balances, a portfolio of marketable securities and line of credit facilities. The Company has two principal needs for cash – the insurance company’s contractual obligations to policyholders and the payment of operating expenses.

Parent Company Liquidity

UTG is a holding company that has no day-to-day operations of its own. Cash flows from UTG’s insurance subsidiary, UG, are used to pay costs associated with maintaining the Company in good standing with states in which it does business and purchasing outstanding shares of UTG stock. UTG’s cash flow is dependent on management fees received from its insurance subsidiary, stockholder dividends from its subsidiary and earnings received on cash balances. As of December 31, 2022 and 2021, substantially all of the consolidated shareholders’ equity represents net assets of its subsidiaries. In 2022, the Parent company received $3 million in dividends from its insurance subsidiary and $5 million in 2021. Certain restrictions exist on the payment of dividends from the insurance subsidiary to the Parent company. For further information regarding the restrictions on the payment of dividends by the insurance subsidiary, see Note 9 – Shareholders’ Equity in the Notes to the Consolidated Financial Statements. Although these restrictions exist, dividend availability from the insurance subsidiary has historically been sufficient to meet the cash flow needs of the Parent company.

Insurance Subsidiary Liquidity

Sources of cash flows for the insurance subsidiary primarily consist of premium and investment income. Cash outflows from operations include policy benefit payments, administrative expenses, taxes and dividends to the Parent company.

Short-Term Borrowings

During October of 2022, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA is a source of overnight liquidity utilized to address the day-to-day cash needs of a Company. The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $2.3 million. During the fourth quarter of 2022, the Company borrowed $19 million and planned to utilize the funds for investing activities. The interest rate on the borrowed funds is variable and currently is 4.42%. During the first quarter of 2023, the Company repaid the entire outstanding principal balance.

Consolidated Liquidity

Cash used in operating activities was approximately $5.3 million and $12.5 million in 2022 and 2021, respectively. Sources of operating cash flows of the Company, as with most insurance entities, is comprised primarily of premiums received on life insurance products and income earned on investments. Uses of operating cash flows consist primarily of payments of benefits to policyholders and beneficiaries and operating expenses. The Company has not marketed any significant new products for several years. As such, premium revenues continue to decline. Management anticipates future cash flows from operations to remain similar to historic trends.

During 2022 and 2021, the Company’s investing activities provided (used) net cash of approximately $26.2 million and $(18.1) million, respectively. The Company recognized proceeds of approximately $79.7 million and $59.3 million from investments sold and matured in 2022 and 2021, respectively. The Company used approximately $53.5 million and $78.7 million to acquire investments during 2022 and 2021, respectively. The net cash provided by investing activities is expected to vary from year to year depending on market conditions and management’s ability to find and negotiate favorable investment contracts.

Net cash provided by (used in) financing activities was approximately $(6.4) million and $22.3 million during 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company had $19 million and $24 million in debt outstanding with third parties, respectively.

The Company had cash and cash equivalents of approximately $45.3 million and $30.8 million as of December 31, 2022 and 2021, respectively. The Company has a portfolio of marketable fixed maturity securities that could be sold, if an unexpected event were to occur. These securities had a fair value of approximately $108.3 million and $141 million at December 31, 2022 and 2021, respectively. However, the strong cash flows from investing activities, investment maturities and the availability of the line of credit facilities make it unlikely that the Company would need to sell securities for liquidity purposes. See Note 2 – Investments in the Notes to the Consolidated Financial Statements for detailed disclosures regarding the Company’s investment portfolio.

Management believes the overall sources of liquidity available will be sufficient to satisfy its financial obligations.

Capital Resources

The Company’s capital structure consists of available short-term debt, long-term debt and shareholders’ equity. A complete analysis and description of the short-term and long-term debt issues available as of December 31, 2022 and 2021 are presented in Note 7 – Credit Arrangements in the Notes to the Consolidated Financial Statements.

The Company had $19 million and $24 million of debt outstanding as of December 31, 2022 and 2021, respectively.

The NAIC’s risk-based capital requirements require insurance companies to calculate and report information under a risk-based capital formula. The risk-based capital (RBC) formula measures the adequacy of statutory capital and surplus in relation to investment and insurance risks such as asset quality, mortality and morbidity, asset and liability matching and other business factors. The RBC formula is used by state insurance regulators as an early warning tool to identify, for the purpose of initiating regulatory action, insurance companies that potentially are inadequately capitalized.

At December 31, 2022, UG has a ratio of approximately 6.10, which is 610% of the authorized control level. Accordingly, the Company meets the RBC requirements.

Shareholders’ equity was approximately $157.6 million and $140.8 million as of December 31, 2022 and 2021, respectively. Total shareholders’ equity increased approximately 12% in 2022 as compared to 2021. The increase is primarily attributable to net income from operations. As of December 31, 2022 and 2021, the Company reported accumulated other comprehensive income (loss) of approximately $(7.1) million and $10.3 million, respectively.

For the periods ended December 31, 2022 and 2021, the decrease in accumulated other comprehensive income was approximately $(17.4) million and $(5.3) million, respectively, as a result of unrealized losses on fixed maturity securities. The variance in the net unrealized gains and losses is the result of normal market fluctuations mainly related to changes in interest rates in the marketplace.

The Company’s investments provide sufficient return to cover future obligations. The Company carries all of its fixed maturity holdings as available for sale, which are reported in the Consolidated Financial Statements at their fair value.

New Accounting Pronouncements

See Note 1 – Summary of Significant Account Policies in the Notes to the Consolidated Financial Statements for information regarding new accounting pronouncements.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements, financing activities or other relationships with unconsolidated entities or other persons.

Contractual Obligations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

	Page No.
UTG, Inc. and Consolidated Subsidiaries
Report of Independent Registered Public Accounting Firm (PCAOB ID #32)	19
Consolidated Balance Sheets	23
Consolidated Statements of Operations	24
Consolidated Statements of Comprehensive Income	25
Consolidated Statements of Shareholders’ Equity	26
Consolidated Statements of Cash Flows	27
Notes to Consolidated Financial Statements	28

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

UTG, Inc. and Subsidiaries

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of UTG, Inc. and Subsidiaries (the "Company") as of December 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes to the consolidated financial statements (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement, whether due to error or fraud, of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Future Policy Benefits

Critical Audit Matter Description

The estimated valuation of future policy benefits is measured based on actuarial methodologies and underlying economic and future policyholder behavior assumptions. The Company makes these assumptions at the time the contract is issued or, in the case of contracts acquired by purchase, at the purchase date.

As described in Note 1, the liability for future policy benefits on traditional life insurance products and accident and health insurance policy benefits are calculated using a net level method, including assumptions as to investment yields, mortality, withdrawals and other assumptions based on the Company's experience. The liability for future policy benefits for universal life contracts is calculated using a retrospective deposit method and represents the policy account balances.

Auditing estimates for future policy benefits required a high degree of judgment, including the need to involve an actuarial specialist, due to the nature of the data utilized in the complex actuarial models and the significant amount of judgment applied by management in determining these liabilities.

How the Critical Audit Matter was Addressed in the Audit

Our audit procedures related to the liability for future policy benefits included the following procedures, among others:

•	We obtained an understanding and evaluated the design of controls, including those related to the performance of experience studies and the setting of best estimate assumptions.
•	Procedures also included, among others, testing the completeness and accuracy of data provided by management and the involvement of professionals with specialized skill and knowledge to assist in evaluating the appropriateness of management's actuarial techniques and evaluating the reasonableness of assumptions used in those techniques.
---	---
•	Engaging an independent actuarial specialist to evaluate whether the methodologies and assumptions used by management in developing the liabilities were appropriate and reasonable.
---	---

Valuation of Non-Marketable Investments Reported at Fair Value

Critical Audit Matter Description

The Company holds certain investments that are not actively traded and are classified as Level 3 assets. These investments include equity securities, valued using either the Company's pricing models to estimate future cash flows or net asset value. Since such securities trade infrequently and have little or no price transparency, the Company's techniques for determining the estimated fair value of such securities rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. The determination of these unobservable inputs involves significant management judgment and estimation and typically cannot be supported by reference to market activity.

The principal considerations for our determination that performing procedures relating to the valuation of Level 3 investments is a critical audit matter are that there was significant judgment by management to determine the fair value of these Level 3 investments, which included significant unobservable inputs related to comparable market data and discount rates.

Auditing of unobservable inputs used by management to estimate the fair value of Level 3 securities required a high degree of auditor judgement, subjectivity and an increased extent of effort.

How the Critical Audit Matter was Addressed in the Audit

Our audit procedures related to the proprietary models and unobservable inputs used by management to estimate the fair value of Level 3 securities included the following, among others:

•	We obtained an understanding and evaluated the appropriateness of the Company's pricing sources.
•	We tested the completeness, accuracy, reliability, and relevance of key data used in the models.
---	---
•	We assessed the consistency by which management has applied significant unobservable valuation assumptions.
---	---
•	For a selection of securities, we compared the accuracy of the Company's estimated fair value price to a price independently developed by the audit team.
---	---

We have served as the Company's auditor since 2005.

/s/ Armanino LLP

St. Louis, Missouri

March 24, 2023

UTG, Inc.

Consolidated Balance Sheets

As of December 31, 2022 and 2021

ASSETS
			2021
Investments:
Investments available for sale:
Fixed maturities, at fair value (amortized cost 117,279,820 and 127,949,963)	108,313,059		$	140,963,881
Equity securities, at fair value (cost 77,015,688 and 68,403,168)	150,053,686			122,229,121
Equity securities, at cost	15,683,343			14,543,343
Mortgage loans on real estate at amortized cost	30,698,694			29,183,562
Investment real estate, net	34,934,352			39,748,261
Notes receivable	14,424,127			17,722,976
Policy loans	6,567,434			7,390,497
Short-term investments	3,596,941			0
Total investments	364,271,636			371,781,641
Cash and cash equivalents	45,290,385			30,787,278
Accrued investment income	1,371,677			1,264,159
Reinsurance receivables:
Future policy benefits	24,318,030			24,740,562
Policy claims and other benefits	4,638,857			4,426,997
Cost of insurance acquired	2,698,153			3,386,501
Income taxes receivable	0			975,373
Other assets	4,945,627			1,097,246
Total assets	447,534,365		$	438,459,757
LIABILITIES AND SHAREHOLDERS' EQUITY
Policy liabilities and accruals:
Future policy benefits	229,582,664		$	235,367,680
Policy claims and benefits payable	4,072,879			3,941,305
Other policyholder funds	318,096			345,248
Dividend and endowment accumulations	14,802,746			14,686,166
Income taxes payable	4,189,081			0
Deferred income taxes	11,582,138			13,680,396
Notes payable	19,000,000			24,000,000
Trading securities, at fair value (proceeds 0 and 2,202)	0			1,116
Other liabilities	5,958,385			5,193,039
Total liabilities	289,505,989			297,214,950
Shareholders' equity:
Common stock - no par value, stated value 0.001 per share. Authorized 7,000,000 shares - 3,164,809 and 3,166,669 shares issued and outstanding
	3,166			3,167
Additional paid-in capital	32,693,972			32,780,587
Retained earnings	131,989,352			97,731,347
Accumulated other comprehensive income (loss)	(7,111,586	)		10,253,151
Total UTG shareholders' equity	157,574,904			140,768,252
Noncontrolling interest	453,472			476,555
Total shareholders' equity	158,028,376			141,244,807
Total liabilities and shareholders' equity	447,534,365		$	438,459,757

All values are in US Dollars.

See accompanying notes.

UTG, Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2022 and 2021

	2022			2021
Revenue:
Premiums and policy fees	$	8,384,604		$	9,080,039
Ceded reinsurance premiums and policy fees		(2,697,382	)		(2,680,050	)
Net investment income		20,811,471			9,050,325
Other income		350,519			412,982
Revenues before net investment gains (losses)		26,849,212			15,863,296
Net investment gains (losses):
Other-than-temporary impairments		(5,000,000	)		(393,455	)
Other realized investment gains, net		14,168,911			6,021,653
Change in fair value of equity securities		33,690,712			14,121,883
Total net investment gains		42,859,623			19,750,081
Total revenues		69,708,835			35,613,377
Benefits and other expenses:
Benefits, claims and settlement expenses:
Life		15,703,526			17,137,166
Ceded reinsurance benefits and claims		(2,449,533	)		(2,380,366	)
Annuity		1,029,156			993,937
Dividends to policyholders		311,400			324,543
Commissions		(116,571	)		(121,287	)
Amortization of cost of insurance acquired		688,348			714,970
Operating expenses		10,497,302			7,115,530
Interest expense		108,722			4,051
Total benefits and other expenses		25,772,350			23,788,544
Income before income taxes		43,936,485			11,824,833
Income tax expense		9,572,139			2,069,673
Net income		34,364,346			9,755,160
Net income attributable to noncontrolling interest		(106,341	)		(92,097	)
Net income attributable to common shareholders	$	34,258,005		$	9,663,063
Amounts attributable to common shareholders:
Basic income per share	$	10.81		$	3.05
Diluted income per share	$	10.81		$	3.05
Basic weighted average shares outstanding		3,167,719			3,171,919
Diluted weighted average shares outstanding		3,167,719			3,171,919

See accompanying notes.

UTG, Inc.

Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended December 31, 2022 and 2021

	2022			2021
Net income	$	34,364,346		$	9,755,160
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during period, pre-tax		(27,824,173	)		(7,085,803	)
Tax (expense) benefit on unrealized holding gains (losses) arising during the period		5,843,076			1,488,019
Unrealized holding gains (losses) arising during period, net of tax		(21,981,097	)		(5,597,784	)
Less reclassification adjustment for (gains) losses included in net income		528			337,587
Tax expense (benefit) for (gains) losses included in net income		(111	)		(70,893	)
Reclassification adjustment for (gains) losses included in net income, net of tax		417			266,694
Subtotal: Other comprehensive income (loss), net of tax		(21,980,680	)		(5,331,090	)
Comprehensive income		12,383,666			4,424,070
Less comprehensive income attributable to noncontrolling interests		(106,341	)		(92,097	)
Comprehensive income attributable to UTG, Inc.	$	12,277,325		$	4,331,973

See accompanying notes.

UTG, Inc.

Consolidated Statements of Shareholders’ Equity

Year ended December 31, 2022	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total Shareholders' Equity
Balance at January 1, 2022	$	3,167			32,780,587			97,731,347		10,253,151			476,555			141,244,807
Common stock issued during year		23			599,169			0		0			0			599,192
Treasury shares acquired and retired		(24	)		(685,784	)		0		0			0			(685,808	)
Net income attributable to common shareholders		0			0			34,258,005		0			0			34,258,005
Unrealized holding gain (loss) on securities net of noncontrolling interest and reclassification adjustment and taxes		0			0			0		(17,364,737	)		0			(17,364,737	)
Distributions		0			0			0		0			(128,824	)		(128,824	)
Gain attributable to noncontrolling interest		0			0			0		0			105,741			105,741
Balance at December 31, 2022	$	3,166			32,693,972			131,989,352		(7,111,586	)		453,472			158,028,376
Year ended December 31, 2021	Common Stock			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total Shareholders' Equity
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance at December 31, 2020	$	3,176			33,025,018			88,068,284		15,584,241			460,772			137,141,491
Common stock issued during year		10			292,929			0		0			0			292,939
Treasury shares acquired and retired		(19	)		(537,360	)		0		0			0			(537,379	)
Net income attributable to common shareholders		0			0			9,663,063		0			0			9,663,063
Unrealized holding gain (loss) on securities net of noncontrolling interest and reclassification adjustment and taxes		0			0			0		(5,331,090	)		0			(5,331,090	)
Distributions		0			0			0		0			(76,314	)		(76,314	)
Gain attributable to noncontrolling interest		0			0			0		0			92,097			92,097
Balance at December 31, 2021	$	3,167			32,780,587			97,731,347		10,253,151			476,555			141,244,807

See accompanying notes.

UTG, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2022 and 2021

	2022			2021
Cash flows from operating activities:
Net income	$	34,364,346		$	9,755,160
Adjustments to reconcile net income to net cash used in operating activities:
Amortization (accretion) of investments		138,587			210,665
Other-than-temporary impairments		5,000,000			393,455
Realized investment gains, net		(14,168,911	)		(6,021,653	)
Change in fair value of equity securities		(33,690,712	)		(14,121,883	)
Unrealized trading (gains) losses included in income		1,086			(2,059	)
Realized trading (gains) losses included in income		12,197			(20,509	)
Amortization of cost of insurance acquired		688,348			714,970
Depreciation and depletion		2,032,627			2,757,522
Stock-based compensation		599,192			287,934
Charges for mortality and administration of universal life and annuity products		(5,943,417	)		(6,325,818	)
Interest credited to account balances		3,767,177			3,896,162
Change in accrued investment income		(107,518	)		77,484
Change in reinsurance receivables		210,672			88,449
Change in policy liabilities and accruals		(2,836,498	)		(5,470,342	)
Change in income taxes receivable (payable)		5,164,454			(1,243,870	)
Change in other assets and liabilities, net		(565,949	)		2,570,898
Net cash used in operating activities		(5,334,319	)		(12,453,435	)
Cash flows from investing activities:
Proceeds from investments sold and matured:
Fixed maturities available for sale		13,128,136			21,581,106
Equity securities		36,126,454			5,892,777
Trading securities		17,983			41,708
Mortgage loans		3,655,779			12,270,055
Real estate		12,659,854			8,370,848
Notes receivable		12,329,505			8,639,320
Policy loans		1,752,613			2,503,273
Total proceeds from investments sold and matured		79,670,324			59,299,087
Cost of investments acquired:
Fixed maturities available for sale		(2,614,165	)		(4,078,459	)
Equity securities		(27,523,161	)		(32,991,005	)
Trading securities		(32,382	)		(30,243	)
Mortgage loans		(5,158,911	)		(20,634,252	)
Real estate		(4,586,280	)		(10,960,910	)
Notes receivable		(9,030,657	)		(8,680,000	)
Policy loans		(929,549	)		(1,303,246	)
Short-term investments		(3,591,885	)		0
Total cost of investments acquired		(53,466,990	)		(78,678,115	)
Sale of property and equipment		0			1,324,647
Net cash provided by (used in) investing activities		26,203,334			(18,054,381	)
Cash flows from financing activities:
Policyholder contract deposits		4,555,115			4,466,422
Policyholder contract withdrawals		(5,106,391	)		(5,588,394	)
Proceeds from notes payable/line of credit		58,500,000			24,000,000
Payments of principal on notes payable/line of credit		(63,500,000	)		0
Purchase of treasury stock		(685,808	)		(537,379	)
Issuance of stock		0			5,005
Noncontrolling contributions/(distributions) of consolidated subsidiary		(128,824	)		(76,314	)
Net cash provided by (used in) financing activities		(6,365,908	)		22,269,340
Net increase (decrease) in cash and cash equivalents		14,503,107			(8,238,476	)
Cash and cash equivalents at beginning of year		30,787,278			39,025,754
Cash and cash equivalents at end of year	$	45,290,385		$	30,787,278

See accompanying notes.

UTG, Inc.

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Business – UTG, Inc. is an insurance holding company. The Company’s dominant business is individual life insurance, which includes the servicing of existing insurance in-force and the acquisition of other companies in the life insurance business. UTG and its subsidiaries are collectively referred to as the “Company”.

During March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain of coronavirus (COVID-19). The pandemic significantly impacted the economic conditions in the U.S. and globally, accelerating during the first half of March 2020, as federal, state, and local governments reacted to the public health crisis, creating significant uncertainties in the U.S. economy. Over the ensuing months, the economy slowly began to return to a pre-pandemic norm. At this time, it appears the pandemic is behind us, though there continues to be mutating variants of the virus and regional outbreaks around the world. The impact of this seems to have been lessened by vaccines and immunity build up. During this time the Company did not experience any significant slow-down in activities, however, the Company did see an increase in mortality experience. While we believe our mortality experience has returned to pre-pandemic norms, we cannot be absolutely certain at this time.

This document at times will refer to the Registrant’s largest shareholder, Mr. Jesse T. Correll and certain companies controlled by Mr. Correll. Mr. Correll holds a majority ownership of First Southern Funding, LLC (“FSF”), a Kentucky corporation, and First Southern Bancorp, Inc. (“FSBI”), a financial services holding company. FSBI operates through its 100% owned subsidiary bank, First Southern National Bank (“FSNB”). Banking activities are conducted through multiple locations within south-central and western Kentucky. Mr. Correll is Chief Executive Officer, President, and Chairman of the Board of Directors of UTG and is currently UTG’s largest shareholder through his ownership control of FSF, FSBI and affiliates. At December 31, 2022, Mr. Correll owns or controls directly and indirectly approximately 65% of UTG’s outstanding stock.

UTG’s life insurance subsidiary has several wholly-owned and majority-owned subsidiaries. The subsidiaries were formed to hold certain real estate and other investments. The investments were placed into the limited liability companies and partnerships to provide additional protection to the policyholders and to UG.

Basis of Presentation – The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), under guidance issued by the Financial Accounting Standards Board (“FASB”). The preparation of financial statements in accordance with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of the Registrant and its wholly and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated during consolidation.

Business Segments – The Company has only one business segment – life insurance.

Investments – The Company reports its investments as follows:

Fixed Maturity Investments – The Company classifies its fixed maturity investments, which include bonds, as available for sale. Investments classified as available for sale are carried at fair value with unrealized gains and losses, net of deferred taxes, reflected directly in accumulated other comprehensive income. Premiums and discounts on debt securities purchased at other than par value are amortized and accreted, respectively, to interest income in the Consolidated Statements of Operations, using the constant yield method over the period to maturity. Net realized gains and losses on sales of available for sale securities, and unrealized losses considered to be other-than-temporary, are recorded to net realized investment gains (losses) in the Consolidated Statements of Operations.

Equity Securities at Fair Value – Investments in equity securities, which include common and preferred stocks, are reported at fair value with unrealized gains and losses reported as a component of net income (loss).

Equity Securities at Cost – These investments are reported at their cost basis, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

Mortgage Loans on Real Estate – Mortgage loans on real estate are reported at their unpaid principal balances, adjusted for amortization of premium or discount and valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected.

Investment Real Estate – Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is computed on a straight-line-basis for financial reporting purposes using estimated useful lives of 3 to 30 years. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition, for a reasonable price, in comparison to its estimated fair value, is classified as held-for-sale. Real estate held-for-sale is stated at lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated.

Notes Receivable – Notes receivable are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. Interest accruals are analyzed based on the likelihood of repayment. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

Policy Loans – Policy loans are reported at their unpaid balances, including accumulated interest, but not in excess of the cash surrender value of the related policy.

Short-Term Investments – Short-term investments have remaining maturities exceeding three months and under 12 months at the time of purchase and are stated at amortized cost, which approximates fair value.

Gains and Losses – Realized gains and losses include sales of investments and investment impairments. If any, other-than-temporary impairments in fair value are recognized in net income on the specific identification basis.

Fair Value – Fair values for cash, short-term investments, short-term debt, receivables and payables approximate carrying value. Fair values for fixed maturities, equity securities and certain other assets are determined in accordance with specific accounting guidance. Fair values are based on quoted market prices, where available. Otherwise, fair values are based on quoted market prices of comparable instruments in active markets, quotes in inactive markets, or other observable criteria. Mortgage loans on real estate and notes receivable are estimated using discounted cash flow analyses. For more specific information regarding the Company’s measurements and procedures in valuing financial instruments, see Note 3 – Fair Value Measurements.

Impairment of Investments – The Company evaluates its investment portfolio for other-than-temporary impairments as described in Note 2 – Investments. If a security is deemed to be other-than-temporarily impaired, the cost basis of the security is written down to fair value and is treated as a realized loss.

Current accounting guidance states that if an entity intends to sell or if it is more likely than not that it will be required to sell an impaired security prior to recovery of its cost basis, the security is to be considered other-than-temporarily impaired and the full amount of impairment must be charged to earnings. Otherwise, losses on fixed maturities which are other-than-temporarily impaired are separated into two categories, the portion of the loss which is considered credit loss and the portion of the loss which is due to other factors. The credit loss portion is charged to earnings while the loss due to other factors is charged to other comprehensive income.

Cash Equivalents – Cash equivalents consist of money market accounts and investments with maturities of three months or less when purchased.

Cash – Cash consists of balances on hand and on deposit in banks and financial institutions.

Reinsurance - In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding reinsurance to other insurance enterprises or reinsurers under excess coverage and coinsurance contracts. The Company retains a maximum of $125,000 of coverage per individual life.

Reinsurance receivables are recognized in a manner consistent with the liabilities relating to the underlying reinsured contracts. The cost of reinsurance related to long-duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies.

Cost of Insurance Acquired - When an insurance company is acquired, the Company assigns a portion of its cost to the right to receive future cash flows from insurance contracts existing at the date of the acquisition. The cost of policies purchased represents the actuarially determined present value of the projected future profits from the acquired policies. Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.

Property and Equipment - Company-occupied property, data processing equipment and furniture and office equipment are stated at cost less accumulated depreciation of $2,123,831 at December 31, 2022 and 2021. Depreciation is computed on a straight-line basis for financial reporting purposes using estimated useful lives of 3 to 30 years. Depreciation expense was $0 and $66,517 for the years ended December 31, 2022 and 2021, respectively.

Future Policy Benefits and Expenses - The liabilities for traditional life insurance and accident and health insurance policy benefits are computed using a net level method. These liabilities include assumptions as to investment yields, mortality, withdrawals, and other assumptions based on the life insurance subsidiary’s experience adjusted to reflect anticipated trends and to include provisions for possible unfavorable deviations. The Company makes these assumptions at the time the contract is issued or, in the case of contracts acquired by purchase, at the purchase date. Future policy benefits for individual life insurance and annuity policies are computed using interest rates ranging from 2.0% to 6.0% for life insurance and 2.5% to 7.5% for annuities. Benefit reserves for traditional life insurance policies include certain deferred profits on limited-payment policies that are being recognized in income over the policy term. Policy benefit claims are charged to expense in the period that the claims are incurred. The mortality rate assumptions for policies currently issued by the Company are based on 2017 CSO Ultimate tables. Withdrawal rate assumptions are based upon Linton B or C, which are industry standard actuarial tables for forecasting assumed policy lapse rates.

Policy Claims and Benefits Payable - Policy and contract claims include provisions for reported claims in process of settlement, valued in accordance with the terms of the policies and contracts, as well as provisions for claims incurred and unreported. The estimate of incurred and unreported claims is based on prior experience. The Company makes an estimate after careful evaluation of all information available to the Company. There is no certainty the stated liability for policy claims and benefits payable, including the estimate for incurred but unreported claims, will be the Company’s ultimate obligation.

Income Taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax impact attributable to differences between the financial statement book values and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. More information concerning income taxes is provided in Note 6 – Income Taxes.

Earnings Per Share – The objective of both basic earnings per share (“EPS”) and diluted EPS is to measure the performance of an entity over the reporting period. The Company presents basic and diluted EPS on the face of the Consolidated Statements of Operations. Basic EPS is computed by dividing income available to common shareholders by the weighted average common shares outstanding for the period. Diluted EPS is calculated by adding to shares outstanding the additional net effect of potentially dilutive securities or contracts, such as stock options, which could be exercised or converted into common shares.

Recognition of Revenues and Related Expenses - Premiums for traditional life insurance products, which include those products with fixed and guaranteed premiums and benefits, consist principally of whole life insurance policies, and certain annuities with life contingencies are recognized as revenues when due. Limited payment life insurance policies defer gross premiums received in excess of net premiums, which is then recognized in income in a constant relationship with insurance in-force. Accident and health insurance premiums are recognized as revenue pro rata over the terms of the policies. Benefits and related expenses associated with the premiums earned are charged to expense proportionately over the lives of the policies through a provision for future policy benefit liabilities and through deferral and amortization of deferred policy acquisition costs. For universal life and investment products, generally there is no requirement for payment of premium other than to maintain account values at a level sufficient to pay mortality and expense charges. Consequently, premiums for universal life policies and investment products are not reported as revenue, but as deposits. Policy fee revenue for universal life policies and investment products consists of charges for the cost of insurance and policy administration fees assessed during the period. Expenses include interest credited to policy account balances and benefit claims incurred in excess of policy account balances.

Recently Issued Accounting Standards

In December of 2022, the FASB issued Accounting Standards Update No. 2022-05, Financial Services-Insurance (Topic 944): Transition for Sold Contracts. ASU 2022-05 amends transition guidance in ASU No. 2018-12, Financial Services - Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI), for contracts that have been derecognized because of a sale or disposal of individual or a group of contracts or legal entities before the LDTI effective date. This ASU amends the LDTI transition guidance to allow an insurance entity to make an accounting policy election to exclude certain contracts or legal entities from applying the LDTI guidance when, as of the LDTI effective date, (a) the insurance contracts have been derecognized because of a sale or disposal and (b) the insurance entity has no significant continuing involvement with the derecognized contracts. See below for further analysis regarding ASU No. 2018-12.

In July of 2022, the FASB issued Accounting Standards Update No. 2022-03, Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 is intended to improve financial reporting for investors and other financial statement users by increasing comparability of financial information across reporting entities that have investments in equity securities measured at fair value that are subject to contractual restrictions preventing the sale of those securities. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. ASU 2022-03 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2024 for smaller reporting companies. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

In August 2018, the FASB issued Accounting Standards Update No. 2018-12, Financial Services-Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts or ASU 2018-12. ASU 2018-12 significantly changes how insurers account for long-duration insurance contracts. The new guidance will require insurers to review and update, if necessary, the assumptions used to measure insurance liabilities periodically, rather than retain assumptions used at contract inception. The updated guidance also changes the recognition and measurement of deferred acquisition costs (DAC) and created a new category of benefit features called market risk benefits (MRB) that will be measured at fair value. The guidance also significantly expands the disclosure requirements for long-duration contracts. The ASU was originally effective for fiscal years, and interim periods within those years, for years beginning after December 15, 2020 and early adoption is permitted. The guidance on measuring the liabilities for future policy benefits and DAC will be adopted on a modified retrospective basis as of the earliest period presented in the year of adoption. The guidance on MRB will be adopted on a retrospective basis as of the earliest period presented in the year of adoption. In November of 2019, the FASB issued ASU 2019-09, which delayed the effective date of ASU 2018-12 to fiscal years beginning after December 15, 2024 for smaller reporting companies. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

Note 2 – Investments

Available for Sale Securities – Fixed Maturity Securities

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

Investments in available for sale securities are summarized as follows for the years ended December 31:

2022	Original or Amortized<br><br>Cost		Gross<br><br>Unrealized<br><br>Gains		Gross<br><br>Unrealized<br><br>Losses			Estimated<br><br>Fair<br><br>Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	18,315,321	$	0	$	(1,104,146	)	$	17,211,175
U.S. special revenue and assessments		7,535,018		0		(335,918	)		7,199,100
All other corporate bonds		91,429,481		65,529		(7,592,226	)		83,902,784
Total	$	117,279,820	$	65,529	$	(9,032,290	)	$	108,313,059
2021	Original or Amortized<br><br>Cost		Gross<br><br>Unrealized<br><br>Gains		Gross<br><br>Unrealized<br><br>Losses			Estimated<br><br>Fair<br><br>Value
---	---	---	---	---	---	---	---	---	---
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	25,312,358	$	355,623	$	(17,078	)	$	25,650,903
U.S. special revenue and assessments		7,540,867		982,668		0			8,523,535
All other corporate bonds		95,096,738		11,692,705		0			106,789,443
Total	$	127,949,963	$	13,030,996	$	(17,078	)	$	140,963,881

The amortized cost and estimated market value of debt securities at December 31, 2022, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale<br><br>December 31, 2022	Amortized<br><br>Cost		Estimated<br><br>Fair Value
Due in one year or less	$	7,501,489	$	7,393,130
Due after one year through five years		45,914,985		43,837,255
Due after five years through ten years		14,876,371		14,341,653
Due after ten years		22,013,592		19,389,980
Fixed maturities with no single maturity date		26,973,383		23,351,041
Total	$	117,279,820	$	108,313,059

By insurance statute, the majority of the Company’s investment portfolio is invested in investment grade securities to provide ample protection for policyholders.

Below investment grade debt securities generally provide higher yields and involve greater risks than investment grade debt securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers. In addition, the trading market for these securities is usually more limited than for investment grade debt securities. Debt securities classified as below-investment grade are those that receive a Standard & Poor’s rating of BB+ or below.

The Company held below investment grade investments with an estimated market value of $0 as of December 31, 2022 and 2021.

The fair value of investments with sustained gross unrealized losses are as follows as of December 31:

2022	Less than 12 months			12 months or longer			Total
	Fair value		Unrealized losses	Fair value		Unrealized losses	Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	17,211,175	(1,104,146)	$	0	0	$	17,211,175	(1,104,146)
U.S. special revenue and assessments		7,199,100	(335,918)		0	0		7,199,100	(335,918)
All other corporate bonds		80,144,564	(7,592,226)		0	0		80,144,564	(7,592,226)
Total fixed maturities	$	104,554,839	(9,032,290)	$	0	0	$	104,554,839	(9,032,290)
2021	Less than 12 months			12 months or longer			Total
---	---	---	---	---	---	---	---	---	---
	Fair value		Unrealized losses	Fair value		Unrealized losses	Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	4,042,825	(17,078)	$	0	0	$	4,042,825	(17,078)
Total fixed maturities	$	4,042,825	(17,078)	$	0	0	$	4,042,825	(17,078)

The following table provides additional information regarding the number of securities that were in an unrealized loss position for greater than or less than twelve months:

	Less than 12 months	12 months or longer	Total
As of December 31, 2022
Fixed maturities	57	0	57
As of December 31, 2021
Fixed maturities	3	0	3

Substantially all of the unrealized losses on fixed maturities available for sale at December 31, 2022 and 2021 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company’s expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company’s evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of December 31, 2022 and 2021.

Cost Method Investments

The Company held equity investments with an aggregate cost of $15,683,343 and $14,543,343 at December 31, 2022 and 2021, respectively. These equity investments were not reported at fair value because it is not practicable to estimate their fair values due to insufficient information being available. Management reviews and considers events or changes in circumstances that might have a significant adverse effect on the reported value of those investments. Based on Management’s evaluation of the equity securities reported at cost, the Company reported an other-than-temporary impairment of $5 million on one security during the fourth quarter of 2022. The other-than-temporary impairment was taken as a result of Management’s assessment and determination of value of the investment.

During 2022 and 2021, the Company acquired $7 million and $0, respectively, in equity securities reported at cost.

Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the Consolidated Statements of Operations. Trading Securities included exchange-traded equities and exchange-traded options. Trading securities carried as liabilities were securities sold short. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2022 was $0 and $0, respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2021 was $1,116 and $0, respectively. Earnings from trading securities are classified in cash flows from operating activities. The derivatives held by the Company are for income generation purposes only.

The following table reflects trading securities revenue charged to net investment income for the periods ended December 31:

	2022			2021
Net unrealized gains (losses)	$	(1,086	)	$	2,059
Net realized gains (losses)		(12,197	)		20,509
Net unrealized and realized gains (losses)	$	(13,283	)	$	22,568

Mortgage Loans

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

During 2022 and 2021, the Company acquired $5,158,911 and $20,634,252 in mortgage loans, respectively. FSNB services the majority of the Company’s mortgage loan portfolio. The Company pays FSNB a 0.25% servicing fee on these loans and a one-time fee at loan origination of 0.50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan.

During 2022 and 2021, the maximum and minimum lending rates for mortgage loans were:

	2022		2021
	Maximum<br><br>rate	Minimum<br><br>rate	Maximum<br><br>rate	Minimum<br><br>rate
Farm loans	5.00 %	4.50 %	6.00 %	4.50 %
Commercial loans	7.00 %	4.00 %	5.50 %	4.10 %
Residential loans	5.00 %	4.15 %	5.00 %	4.15 %

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

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

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

A mortgage loan reserve is established and adjusted based on Management’s quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value. The mortgage loan reserve was $0 at December 31, 2022 and 2021.

The following table summarizes the mortgage loan holdings of the Company for the periods ended December 31:

	2022		2021
In good standing	$	30,698,694	$	27,102,789
Overdue interest over 90 days		0		2,080,773
Total mortgage loans	$	30,698,694	$	29,183,562
Total foreclosed loans during the year	$	0	$	0

Investment Real Estate

Note 3 - Fair Value Measurements of the Consolidated Financial Statements provides further information regarding the fair value of financial instruments that are not measured at fair value. The investment real estate owned by the Company is included in this portion of the Note 3 - Fair Value Measurements disclosure.

The following table provides an allocation of the Company’s investment real estate by type for the periods ended December 31:

	2022		2021
Raw land	$	11,634,472	$	14,538,507
Commercial		5,124,847		4,347,423
Residential		3,402,502		3,813,936
Land, minerals and royalty interests		14,772,531		17,048,395
Total investment real estate	$	34,934,352	$	39,748,261

The Company’s investment real estate portfolio includes ownership in oil and gas royalties. As of December 31, 2022 and 2021, investments in oil and gas royalties represented 42% and 43%, respectively, of the total investment real estate portfolio. See Note 13 - Concentrations of the Consolidated Financial Statements for additional information regarding the allocation of the oil and gas investment real estate holdings by industry type.

Gains and losses recognized on the disposition of the properties are recorded as realized gains and losses in the Consolidated Statements of Operations. During 2022 and 2021, the Company acquired $4,586,280 and $10,960,910 of investment real estate, respectively.

Notes Receivable

Notes receivable represent collateral loans and promissory notes issued by the Company and are reported at their unpaid principal balances, adjusted for valuation allowances. Valuation allowances are established for impaired loans when it is probable that contractual principal and interest will not be collected. The valuation allowance as of December 31, 2022 and 2021 was $0. Interest accruals are analyzed based on the likelihood of repayment. The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status. During 2022 and 2021, the Company acquired $9,030,657 and $8,680,000 of notes receivable, respectively.

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

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

Short-Term Investments

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

During 2022 and 2021, the Company acquired $3,591,885 and $0, respectively, in short-term investments.

Analysis of Investment Operations

The following table reflects the Company’s net investment income for the periods ended December 31:

	2022			2021
Fixed maturities	$	4,153,453		$	4,566,293
Equity securities		2,539,579			1,274,147
Trading securities		(13,283	)		22,568
Mortgage loans		1,580,647			706,883
Real estate		15,424,260			3,241,689
Notes receivable		933,886			1,558,406
Policy loans		489,823			606,347
Cash and cash equivalents		203,250			2,567
Short-term investments		5,056			0
Total consolidated investment income		25,316,671			11,978,900
Investment expenses		(4,505,200	)		(2,928,575	)
Consolidated net investment income	$	20,811,471		$	9,050,325

The following table presents net investment gains (losses) and the change in net unrealized gains on investments for the periods ended December 31:

	2022		2021
Realized gains:
Sales of fixed maturities	$	4,683	$	55,867
Sales of equity securities		8,986,784		3,142,720
Sales of real estate		5,326,838		2,877,808
Total realized gains		14,318,305		6,076,395
Realized losses:
Sales of fixed maturities		(5,211)		0
Sales of equity securities		(109,636)		(54,742)
Sales of real estate		(34,547)		0
Other-than-temporary impairments		(5,000,000)		(393,455)
Total realized losses		(5,149,394)		(448,197)
Net realized investment gains (losses)		9,168,911		5,628,198
Change in fair value of equity securities:
Change in fair value of equity securities held at the end of the period		33,690,712		14,121,883
Change in fair value of equity securities		33,690,712		14,121,883
Net investment gains (losses)	$	42,859,623	$	19,750,081
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	(27,824,173)	$	(7,085,803)
Net increase (decrease)	$	(27,824,173)	$	(7,085,803)

Other-Than-Temporary Impairments

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

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

Based on Management’s review of the investment portfolio, the Company recorded the following losses for other-than-temporary impairments in the Consolidated Statements of Operations for the periods ended December 31:

	2022		2021
Other than temporary impairments:
Fixed maturities	$	0	$	393,455
Equity securities, at cost		5,000,000		0
Total other than temporary impairments	$	5,000,000	$	393,455

The other-than-temporary impairments recognized during 2022 and 2021 were taken as a result of Management’s assessment and determination of value of the investments. The investments were written down to better reflect their current expected value.

Investments on Deposit

The Company had investments with a fair value of $7,771,724 and $8,401,031 on deposit with various state insurance departments as of December 31, 2022 and 2021, respectively.

Note 3 – Fair Value Measurements

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

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

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

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

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

The following table presents information about assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value measurement based on the observability of the inputs used as of December 31:

2022	Level 1		Level 2		Level 3		Net Asset Value		Total
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	17,211,175	$	0	$	0	$	0	$	17,211,175
U.S. special revenue and assessments		0		7,199,100		0		0		7,199,100
Corporate securities		0		83,902,784		0		0		83,902,784
Total fixed maturities		17,211,175		91,101,884		0		0		108,313,059
Equity securities:
Common stocks		45,999,477		6,651,800		6,720,643		89,434,766		148,806,686
Preferred stocks		0		0		1,247,000		0		1,247,000
Total equity securities		45,999,477		6,651,800		7,967,643		89,434,766		150,053,686
Total financial assets	$	63,210,652	$	97,753,684	$	7,967,643	$	89,434,766	$	258,366,745
Liabilities
Trading Securities	$	0	$	0	$	0	$	0	$	0
2021	Level 1			Level 2		Level 3		Net Asset Value		Total
---	---	---	---	---	---	---	---	---	---	---	---	---
Financial assets:
Fixed maturities available for sale:
U.S. Government and government agencies and authorities	$	25,650,903		$	0	$	0	$	0	$	25,650,903
U.S. special revenue and assessments		0			8,523,535		0		0		8,523,535
Corporate securities		0			106,789,443		0		0		106,789,443
Total fixed maturities		25,650,903			115,312,978		0		0		140,963,881
Equity securities:
Common stocks		40,784,660			16,711,180		5,861,486		57,603,597		120,960,923
Preferred stocks		0			21,198		1,247,000		0		1,268,198
Total equity securities		40,784,660			16,732,378		7,108,486		57,603,597		122,229,121
Total financial assets	$	66,435,563		$	132,045,356	$	7,108,486	$	57,603,597	$	263,193,002
Liabilities
Trading Securities	$	(1,116	)	$	0	$	0	$	0	$	(1,116	)

The following is a description of the valuation techniques used the by Company to measure assets reported at fair value on a recurring basis. There have been no significant changes in the valuation techniques utilized by the Company during 2022 or 2021.

Available for Sale Securities

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

Equity Securities at Fair Value

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

Equity Securities at Net Asset Value

Certain equity securities carried at fair value, which do not have readily determinable fair values, use net asset value (“NAV”) and are excluded from the fair value hierarchy. These investments are generally not readily redeemable by the investee. See Note 8 – Commitments and Contingencies for additional information regarding unfunded commitments.

Trading Securities

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

Change in Level 3 Recurring Fair Value Measurements

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

	Equity Securities,<br><br>Fair Value			Equity Securities,<br><br>Net Asset Value			Total
Balance at December 31, 2021	$	7,108,486		$	57,603,597		$	64,712,083
Realized gains (losses)		198,125			327,863			525,988
Unrealized gains (losses)		202,208			19,628,294			19,830,502
Purchases		866,668			14,394,717			15,261,385
Sales		(407,844	)		(2,519,705	)		(2,927,549	)
Balance at December 31, 2022	$	7,967,643		$	89,434,766		$	97,402,409

Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3 in the tables above. As a result, the unrealized gains (losses) on instruments held at December 31, 2022 and 2021 may include changes in fair value that were attributable to both observable and unobservable inputs.

Quantitative Information About Level 3 Fair Value Measurements

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

Financial Assets		Fair Value at December 31, 2022		Fair Value at December 31, 2021	Valuation Technique
Common stocks	$	89,434,766	$	57,603,597	Net Asset Value
Common stocks		7,967,643		7,108,486	Pricing Model
Total	$	97,402,409	$	64,712,083

Uncertainty of Fair Value Measurements

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

Equity Securities at Fair Value

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

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

Investment Category		Fair Value at December 31, 2022		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
Common stocks
Growth equity
Redeemable	$	43,724,562	$	0	Quarterly	45 days
Non-redeemable		45,710,204		7,779,867	n/a	n/a
Total	$	89,434,766	$	7,779,867
Investment Category		Fair Value at December 31, 2021		Unfunded Commitments	Redemption Frequency	Redemption Notice Period
---	---	---	---	---	---	---
Common stocks
Growth equity
Redeemable	$	28,546,227	$	0	Quarterly	45 days
Non-redeemable		29,057,370		5,288,967	n/a	n/a
Total	$	57,603,597	$	5,288,967

Fair Value Measurements on a Nonrecurring Basis

Certain assets are not carried at fair value on a recurring basis. Accordingly, such investments are only included in the fair value hierarchy disclosure when the investment is subject to re-measurement at fair value after initial recognition and the resulting re-measurement is reflected in the Consolidated Financial Statements. The Company did not recognize any re-measurements or impairments of financial instruments during the years ended December 31, 2022 and 2021.

Fair Value Information About Financial Instruments Not Measured at Fair Value

The following table presents the carrying amount and estimated fair values of the Company’s financial instruments not measured at fair value and indicates the level in the fair value hierarchy of the estimated fair value measurement based on the observability of the inputs used as of December 31:

2022	Carrying<br><br>Amount		Estimated<br><br>FairValue		Level 1		Level 2		Level 3
Assets
Preferred stock, at cost	$	15,683,343	$	15,683,343	$	0		0	$	15,683,343
Mortgage loans on real estate		30,698,694		29,735,873		0		0		29,735,873
Investment real estate		34,934,352		92,425,241		0		0		92,425,241
Notes receivable		14,424,127		14,812,523		0		0		14,812,523
Policy loans		6,567,434		6,567,434		0		0		6,567,434
Liabilities
Notes payable		19,000,000		19,000,000		0		19,000,000		0
2021	Carrying<br><br>Amount		Estimated<br><br>FairValue		Level 1		Level 2		Level 3
---	---	---	---	---	---	---	---	---	---	---
Assets
Common stock, at cost	$	5,860,000	$	5,860,000	$	0	$	0	$	5,860,000
Preferred stock, at cost		8,683,343		8,683,343		0		0		8,683,343
Mortgage loans on real estate		29,183,562		29,183,562		0		0		29,183,562
Investment real estate		39,748,261		96,463,112		0		0		96,463,112
Notes receivable		17,722,976		17,722,976		0		0		17,722,976
Policy loans		7,390,497		7,390,497		0		0		7,390,497
Liabilities
Notes payable		24,000,000		24,000,000		0		24,000,000		0

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

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

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

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

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

The carrying value for notes payable is a reasonable estimate of fair value subject to floating rates of interest. The fair value of notes payable with fixed rate borrowings is determined based on the borrowing rates currently available to the Company for loans with similar terms and average maturities. The inputs used to measure the fair value of our notes payable are classified as Level 2 within the fair value hierarchy.

Note 4 - Reinsurance

As is customary in the insurance industry, the insurance subsidiary cedes insurance to, and assumes insurance from, other insurance companies under reinsurance agreements. Reinsurance agreements are intended to limit a life insurer’s maximum loss on a large or unusually hazardous risk or to obtain a greater diversification of risk. The ceding insurance company remains primarily liable with respect to ceded insurance should any reinsurer be unable to meet the obligations assumed by it. However, it is the practice of insurers to reduce their exposure to loss to the extent that they have been reinsured with other insurance companies. The Company sets a limit on the amount of insurance retained on the life of any one person. The Company will not retain more than $125,000, including accidental death benefits, on any one life. As December 31, 2022, the Company had gross insurance in-force of approximately $897 million of which approximately $184 million was ceded to reinsurers. As December 31, 2021, the Company had gross insurance in-force of approximately $948 million of which approximately $193 million was ceded to reinsurers.

Most recently, UG utilized reinsurance agreements with Optimum Re Insurance Company (“Optimum”), and Swiss Re Life and Health America Incorporated (“SWISS RE”). Optimum and SWISS RE currently hold an “A” (Excellent) and “A+” (Superior) rating, respectively, from A.M. Best, an industry rating company. The reinsurance agreements were effective December 1, 1993 and covered most new business of UG. Under the terms of the agreements, UG cedes risk amounts above its retention limit of $100,000 with a minimum cession of $25,000. Ceded amounts are shared equally between the two reinsurers on a yearly renewable term (“YRT”) basis, a common industry method. The treaty is self-administered; meaning the Company records the reinsurance results and reports them to the reinsurers.

Also, Optimum is the reinsurer of 100% of the accidental death benefits (“ADB”) in force of UG. This coverage is renewable annually at the Company’s option. Optimum specializes in reinsurance agreements with small to mid-size carriers such as UG.

UG entered into a coinsurance agreement with Park Avenue Life Insurance Company (“PALIC”) effective September 30, 1996. Under the terms of the agreement, UG ceded to PALIC substantially all of its then in-force paid-up life insurance policies. Paid-up life insurance generally refers to non-premium paying life insurance policies. Under the terms of the agreement, UG sold 100% of the future results of this block of business to PALIC through a coinsurance agreement. UG continues to administer the business for PALIC and receives a servicing fee through a commission allowance based on the remaining in-force policies each month. PALIC has the right to assumption reinsure the business, at its option, and transfer the administration. The Company is not aware of any such plans. PALIC’s ultimate parent, The Guardian Life Insurance Company of America (“Guardian”), currently holds an “A++” (Superior) rating from A.M. Best. The PALIC agreement accounts for approximately 64% of UG’s reinsurance reserve credit, as of December 31, 2022 and 2021.

The Company does not have any short-duration reinsurance contracts. The effect of the Company’s long-duration reinsurance contracts on premiums earned in 2022 and 2021 were as follows:

	2022			2021
	Premiums Earned			Premiums Earned
Direct	$	8,384,604		$	9,080,076
Assumed		0			(37	)
Ceded		(2,697,382	)		(2,680,050	)
Net Premiums	$	5,687,222		$	6,399,989

Note 5 – Cost of Insurance Acquired

When an insurance company is acquired, the Company assigns a portion of its cost to the right to receive future cash flows from insurance contracts existing at the date of the acquisition. The cost of policies purchased represents the actuarially determined present value of the projected future profits from the acquired policies. Cost of insurance acquired is amortized with interest in relation to expected future profits, including direct charge-offs for any excess of the unamortized asset over the projected future profits. The interest rates utilized may vary due to differences in the blocks of business. The interest rate utilized in the amortization calculation of the remaining cost of insurance acquired is 12%. The amortization is adjusted retrospectively when estimates of current or future gross profits to be realized from a group of products are revised.

	2022			2021
Cost of insurance acquired, beginning of year	$	3,386,501		$	4,101,471
Interest accretion		501,324			587,120
Amortization		(1,189,672	)		(1,302,090	)
Net amortization		(688,348	)		(714,970	)
Cost of insurance acquired, end of year	$	2,698,153		$	3,386,501

Estimated net amortization expense of cost of insurance acquired for the next five years is as follows:

	Interest<br><br>Accretion	Amortization	Net<br><br>Amortization
2023	418,722	1,079,979	661,257
2024	339,372	975,187	635,815
2025	263,074	877,240	614,166
2026	189,374	799,520	610,146
2027	116,157	292,926	176,769

Note 6 – Income Taxes

UTG and UG file separate federal income tax returns.

Income tax expense (benefit) consists of the following components:

	2022		2021
Current tax	$	7,054,454	$	(32,134	)
Deferred tax		2,517,685		2,101,807
Income tax expense	$	9,572,139	$	2,069,673

The expense for income taxes differed from the amounts computed by applying the applicable United States statutory rate of 21% as of December 31, 2022 and 2021, before income taxes as a result of the following differences:

	2022			2021
Tax computed at statutory rate	$	9,226,662		$	2,483,215
Changes in taxes due to:
Non-controlling interest		(22,332	)		(19,340	)
Dividend received deduction		(142,790	)		(107,180	)
Oil and gas royalty's depletion		(170,123	)		(60,969	)
Other, including prior year true up		680,722			(226,053	)
Income tax expense	$	9,572,139		$	2,069,673

The following table summarizes the major components that comprise the net deferred tax liability as reflected in the balance sheets:

	2022			2021
Investments	$	10,794,061		$	12,159,338
Cost of insurance acquired		566,612			711,165
Management/consulting fees		(8,206	)		(8,518	)
Future policy benefits		(718,338	)		(447,958	)
Deferred gain on sale of subsidiary		1,387,490			1,387,490
Other assets (liabilities)		(330,488	)		(57,783	)
Reserves adjustment		144,158			192,212
Federal tax DAC		(253,151	)		(255,550	)
Deferred tax liability	$	11,582,138		$	13,680,396

At December 31, 2022 and 2021, the Company had gross deferred tax assets of $1,808,474 and $1,292,790, respectively, and gross deferred tax liabilities of $13,390,612 and $14,973,186, respectively, resulting from temporary differences primarily related to the life insurance subsidiary. A valuation allowance is to be provided when it is more likely than not that deferred tax assets will not be realized by the Company. No valuation allowance has been recorded relating to the Company’s deferred tax assets since, in Management’s judgment, the Company will more likely than not have sufficient taxable income in future periods to fully realize its existing deferred tax assets.

The Company’s Federal income tax returns are periodically audited by the Internal Revenue Service (“IRS”). There are currently no examinations in process, nor is Management aware of any pending examination by the IRS. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more-likely-than-not the position will be sustained upon examination by the tax authorities. Such tax positions initially and subsequently need to be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company has evaluated its tax positions, expiring statutes of limitations, changes in tax law and new authoritative rulings and believes that no disclosure relative to a provision of income taxes is necessary, at this time, to cover any uncertain tax positions. Tax years that remain subject to examination are the years ended December 31, 2019, 2020, 2021 and 2022.

The Company classifies interest and penalties on underpayment of income taxes as income tax expense. No interest or penalties were included in the reported income taxes for the years presented. The Company is not aware of any potential or proposed changes to any of its tax filings.

Note 7 – Credit Arrangements

At December 31, 2022 and 2021, the Company had the following lines of credit available:

Instrument	Issue Date	Maturity Date	Revolving Credit Limit					December 31, 2022
Lines of Credit:
UTG	11/20/2013	11/20/2023	$	8,000,000	0	0	0	$	0
UG - CMA	10/21/2021	10/6/2023		25,000,000	24,000,000	58,500,000	63,500,000		19,000,000

The UTG line of credit carries interest at a fixed rate of 6.500% and is payable monthly. As collateral, UTG has pledged 100% of the common voting stock of its wholly owned subsidiary, Universal Guaranty Life Insurance Company ("UG").

During October of 2022, the Federal Home Loan Bank approved UG’s Cash Management Advance Application (“CMA”). The CMA gives the Company the option of selecting a variable rate of interest for up to 90 days or a fixed rate for a maximum of 30 days. The variable rate CMA is prepayable at any time without a fee, while the fixed CMA is not prepayable prior to maturity. The Company has pledged bonds with a collateral lendable value of $22,250,086. During the fourth quarter of 2022, the Company borrowed $19 million and planned to utilize the funds for investing activities. The interest rate on the borrowed funds is variable and currently is 4.42%. During the first quarter of 2023, the Company repaid the entire outstanding principal balance.

Note 8 – Commitments and Contingencies

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

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

The following table represents the total funding commitments and the unfunded commitment as of December 31, 2022 related to certain investments:

	Total Funding<br><br>Commitment		Unfunded<br><br>Commitment
RLF III, LLC	$	4,000,000	$	398,120
Sovereign’s Capital, LP Fund I		500,000		13,000
Sovereign's Capital, LP Fund II		1,000,000		92,034
Sovereign's Capital, LP Fund III		3,000,000		505,453
Garden City Companies, LLC		2,000,000		1,090,531
Carrizo Springs Music, LLC		5,000,000		189,711
Legacy Venture X, LLC		3,000,000		1,620,000
QCC Investment Co., LLC		1,500,000		150,000
Great American Media Group, LLC		4,000,000		2,510,000
Sovereign's Capital Evergreen Fund I, LLC		3,000,000		150,967
PBEX, LLC		2,000,000		49,343
Sovereign's Capital Lower Middle Market Fund II, LP		3,000,000		2,188,539
Elisha's Properties, LLC		1,096,750		491,823
Granite Shoals Music, LLC		6,500,000		5,633,332
Legacy Venture XI, LLC		2,000,000		1,920,000
SFR X Holdings, LLC		1,550,000		1,550,000

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

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

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

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

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

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

During 2020, the Company committed to invest in Legacy Venture X, LLC (“Legacy Venture X”), which is a fund of funds. Legacy Venture X makes capital calls to its investors as funds are needed.

During 2021, the Company committed to invest in QCC Investment Co., LLC (“QCC”). The funds are being utilized to purchase a manufacturing entity. QCC makes capital calls to its investors as funds are needed.

During 2021, the Company committed to fund a collateral loan for Great American Media Group, LLC (“GAM”). GAM makes draw requests on the loan as funds are needed to fund the operating needs of the Company.

During 2021, the Company committed to invest in Sovereign’s Capital Evergreen Fund I, LLC (“Evergreen”), which invests in companies in emerging markets. Evergreen makes capital calls to investors as funds are needed.

During 2022, the Company committed to fund a collateral loan for PBEX, LLC (“PBEX”). PBEX makes draw requests on the loan as funds are needed to fund the operating needs of the Company.

During 2022, the Company committed to invest in Sovereign’s Capital Lower Middle Market Fund II, LP (“Sovereign’s LMM”), which invests in companies in emerging markets. Sovereign’s LMM makes capital calls to investors as funds are needed.

During 2022, the Company committed to invest in Elisha’s Properties, LLC (“Elisha’s”), which investment in real estate properties. Elisha’s makes capital calls as funds are needed.

During 2022, the Company committed to invest in Granite Shoals Music, LLC (“Granite”), which invests in music royalties. Granite makes capital calls to its investors as funds are needed to acquire the royalty rights.

During 2022, the Company committed to invest in Legacy Venture XI, LLC (“Legacy Venture XI”), which is a fund of funds. Legacy Venture XI makes capital calls to its investors as funds are needed.

During 2022, the Company issued a letter of credit to SFR X Holdings, LLC (“SFR”). SFR will make draw requests on the loan as funds are needed to meet the operational needs of the LLC.

Note 9 – Shareholders’ Equity

Stock Repurchase Program - The Board of Directors of UTG has authorized the repurchase in the open market or in privately negotiated transactions of UTG’s common stock. At a meeting of the Board of Directors in March of 2022, the Board of Directors of UTG authorized the repurchase of up to an additional $2 million of UTG’s common stock, for a total repurchase of $22 million of UTG’s common stock in the open market or in privately negotiated transactions. Company Management has broad authority to operate the program, including the discretion of whether to purchase shares and the ability to suspend or terminate the program. Open market purchases are made based on the last available market price but may be limited. During 2022, the Company repurchased 24,308 shares through the stock repurchase program for $685,808. Through December 31, 2022, UTG has spent $19,309,437 in the acquisition of 1,326,213 shares under this program.

Director Compensation - Effective January 1, 2018, a compensation arrangement was approved whereby each outside Director annually received $5,000 as a retainer and $2,500 per meeting attended. The compensation is be paid in the form of UTG, Inc. common stock. The value is determined annually on the close of business December 20th or the next business day should December 20th be a weekend or holiday, based on the activity of the year just ending. Reasonable travel expenses are reimbursed in cash as incurred. UTG’s Director Compensation policy provides that Directors who are employees of UTG or its affiliates do not receive any compensation for their services as Directors except for reimbursement for reasonable travel expenses for attending each meeting.

In December of 2022, the Company issued 4,485 shares of its common stock as compensation to the Directors. The shares were valued at $25.06 per share, the market value at the date of issue. During 2022, the Company recorded $112,394 in operating expense related to the stock issuance. In December of 2021, the Company issued 4,269 shares of its common stock as compensation to the Directors. The shares were valued at $27.50 per share, the market value at the date of issue. During 2021, the Company recorded $117,398 in operating expense related to the stock issuance.

Other Compensation - During 2022, the Company issued 17,963 shares of stock to management and employees as compensation at a cost of $486,798. During 2021, The Company issued 6,294 shares of stock to management and employees as compensation at a cost of $170,537. These awards are determined at the discretion of the Board of Directors.

Earnings Per Share - The following is a reconciliation of basic and diluted weighted average shares outstanding used in the computation of basic and diluted earnings per share:


Basic weighted average shares outstanding	3,167,719	3,171,919
Weighted average dilutive options outstanding	0	0
Diluted weighted average shares outstanding	3,167,719	3,171,919

The computation of diluted earnings per share is the same as basic earnings per share for the years ending December 31, 2022 and 2021, as there were no outstanding securities, options or other offers that give the right to receive or acquire common shares of UTG.

Statutory Restrictions - Restrictions exist on the flow of funds to UTG from its insurance subsidiary. Statutory regulations require life insurance subsidiaries to maintain certain minimum amounts of capital and surplus. UG is required to maintain minimum statutory surplus of $2,500,000. At December 31, 2022, substantially all of the consolidated shareholders’ equity represents net assets of UTG’s subsidiaries.

UG is domiciled in the state of Ohio. Ohio requires notification within 5 business days to the insurance commissioner following the declaration of any ordinary dividend and at least ten calendar days prior to payment of such dividend. Ordinary dividends are defined as the greater of: a) prior year statutory net income or b) 10% of statutory capital and surplus. Extraordinary dividends (amounts in excess of ordinary dividend limitations) require prior approval of the insurance commissioner and are not restricted to a specific calculation. UG paid ordinary dividends of $3 million and $5 million to UTG in 2022 and 2021, respectively. No extraordinary dividends were paid during the two year period. UTG used the dividends received during 2022 and 2021 to purchase outstanding shares of UTG stock and for general operations of the Company.

Note 10 - Statutory Accounting

The insurance subsidiary prepares its statutory-based financial statements in accordance with accounting practices prescribed or permitted by the Ohio Department of Insurance. These principles differ significantly from accounting principles generally accepted in the United States of America. “Prescribed” statutory accounting practices include state laws, regulations, and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). “Permitted” statutory accounting practices encompass all accounting practices that are not prescribed; such practices may differ from state to state, from company to company within a state, and may change in the future.

The following table reflects UG’s statutory basis net income and capital and surplus (shareholders’ equity) as of December 31:

	2022		2021
Net income	$	18,782,335	$	450,976
Capital and surplus		93,269,301		64,726,088

Note 11 – Related Party Transactions

The articles of incorporation of UG contain the following language under item 12 relative to related party transactions:

On March 30, 2009, UG purchased $1 million of FSBI common stock. The sale and transfer of this security is restricted by the provisions of a stock restriction and buy-sell agreement.

UTG has a 30.10% ownership interest in an aircraft that is jointly owned with First Southern National Bank and Bandyco, LLC. Bandyco, LLC is affiliated with the Estate of Ward F. Correll. Mr. Correll is the father of Jesse Correll and a former director of the Company. The aircraft is used for business related travel by various officers and employees of the Company. For years 2022 and 2021, UTG paid $553,533 and $248,977 for costs associated with the aircraft, respectively.

Effective January 1, 2007, UTG entered into administrative services and cost sharing agreements with its subsidiary. Under this arrangement, the subsidiary pays its proportionate share of expenses, based on an allocation formula. During 2022 and 2021, UG paid $7,862,902 and $6,824,829, respectively, in expenses. The Ohio Department of Insurance has approved the cost sharing agreement and it is Management’s opinion that where applicable, costs have been allocated fairly and such allocations are based upon accounting principles generally accepted in the United States of America.

The Company from time to time acquires mortgage loans through participation agreements with FSNB. FSNB services the Company’s mortgage loans including those covered by the participation agreements. The Company pays a 0.25% servicing fee on these loans and a one-time fee at loan origination of 0.50% of the original loan cost to cover costs incurred by FSNB relating to the processing and establishment of the loan. The Company paid $24,146 and $23,508 in servicing fees and $0 and $48,901 in origination fees to FSNB during 2022 and 2021, respectively.

Effective January 1, 2017, UTG entered into a shared services contract with FSNB. Pursuant to the terms of the agreement, UTG and FSNB will utilize the services of the other’s staff in certain instances for the betterment of both entities. Personnel within departments, such as accounting, human resources, and information technology, are shared between the entities. Costs of these resources are then reimbursed between the companies. The shared services arrangement provides benefits to both parties such as access to a greater pool of knowledgeable staff, efficiencies from elimination of redundancies and more streamlined operations.

The Company reimbursed expenses incurred by employees of FSNB relating to salaries, travel and other costs incurred on behalf of or relating to the Company and received reimbursements from FSNB. The Company paid $895,317 and $895,100 in 2022 and 2021, respectively to FSNB in net reimbursement of such costs.

Effective July 1, 2018, the Company assumed the employees of several smaller entities owned or associated with UTG. The purpose of this was to support the continued efforts to further streamline operations amongst associated entities. The salaries, benefits, and payroll related processing fees are 100% reimbursed by the associated entities on a monthly basis. During 2022 and 2021, the Company received reimbursements of $1,134,315 and $947,689, respectively.

As previously disclosed in the Notes Receivable section of Note 2 - Investments, several of the Company’s notes have participation agreements in place with third parties. Certain participation agreements are with FSF, a related party. The participation agreements are sold without recourse and assigned to the participant based on their pro-rata share of the principal, interest and collateral as specified in the participation agreements. The undivided participations in the notes receivable range from 20% - 50%. The total amount of loans participated to FSF was $79,674 and $111,869 as of December 31, 2022 and 2021, respectively.

During 2022, FSF sold all of its membership interest in three limited liability companies (“LLC”) to a wholly-owned subsidiary of UTG at a price of $1 per entity. The three LLCs are listed on the Company’s organization chart as wholly-owned subsidiaries of Stanford Wilderness Road, LLC.

During 2021, UG purchased several real estate parcels from FSF at a cost of $1,502,035. UG also purchased one real estate parcel from FSNB in 2021 at a cost of $80,000.

Note 12 – Other Cash Flow Disclosures

On a cash basis, the Company paid the following expenses for the periods ended December 31:

	2022		2021
Interest	$	83,995	$	785
Federal income tax		1,890,000		1,202,000

Note 13 - Concentrations

Because UTG serves primarily individuals located in three states, the ability of our customers to pay their insurance premiums is impacted by the economic conditions in these areas. As of December 31, 2022 and 2021, approximately 50% and 51%, respectively, of the Company’s total direct premium was collected from Illinois, Ohio, and Texas. Thus, results of operations are heavily dependent upon the strength of these economies.

The Company reinsures that portion of insurance risk which is in excess of its retention limits. Retention limits range up to $125,000 per life. Life insurance ceded represented 20% of total life insurance in-force at December 31, 2022 and 2021. Insurance ceded represented 40% and 36% of premium income for 2022 and 2021, respectively. The Company would be liable for the reinsured risks ceded to other companies to the extent that such reinsuring companies are unable to meet their obligations.

The Company owns a variety of investments associated with the oil and gas industry. These investments represented approximately 31% and 22% of the Company’s total invested assets at December 31, 2022 and 2021, respectively. The following table provides an allocation of the oil and gas investments by type as of December 31:

2022	Land, Minerals &<br><br>Royalty Interests		Exploration		Total
Fixed maturities, at fair value	$	0	$	1,060,710	$	1,060,710
Equity securities, at fair value		93,811,806		0		93,811,806
Investment real estate		14,772,536		0		14,772,536
Notes receivable		1,950,657		0		1,950,657
Total	$	110,534,999	$	1,060,710	$	111,595,709
2021	Land, Minerals &<br><br>Royalty Interests		Exploration		Total
---	---	---	---	---	---	---
Fixed maturities, at fair value	$	0	$	1,249,040	$	1,249,040
Equity securities, at fair value		60,932,033		0		60,932,033
Investment real estate		16,351,500		0		16,351,500
Notes receivable		5,000,000		0		5,000,000
Total	$	82,283,533	$	1,249,040	$	83,532,573

As of December 31, 2022 and 2021, the Company owned two equity securities that represented approximately 50% and 53%, respectively, of the total investments associated with the oil and gas industry.

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

Note 14 – Selected Quarterly Financial Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) that are designed to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in our Exchange Act reports is accumulated and communicated to Management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our Management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2022 and, based on this evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective at a reasonable assurance level.

Management’s Report on Internal Controls Over Financial Reporting

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

The Company’s Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making the assessment, Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on Management’s assessment, Management concluded that, as of December 31, 2022, the Company’s internal control over financial reporting was effective.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only Management’s report in this Annual Report.

Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting since December 31, 2022, in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15(e) and 15d-15(e), that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies, which may be identified during this process.

Item 9B. Other Information

None

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not Applicable

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The Board of Directors

In accordance with the laws of Delaware and the Certificate of Incorporation and Bylaws of UTG, as amended, UTG is managed by its executive officers under the direction of the Board of Directors. The Board elects executive officers, evaluates their performance, works with management in establishing business objectives and considers other fundamental corporate matters, such as the issuance of stock or other securities, the purchase or sale of a business and other significant corporate business transactions. In the fiscal year ended December 31, 2022, the Board met four times. During 2022, all Directors attended at least 75% of all meetings of the Board and meetings of committees of the Board, except for April R. Chapman, who attended 50% of all meetings. Our Board of Directors does not have a policy requiring directors to attend annual meetings of shareholders. All Board members attended our 2022 annual shareholders’ meeting, except for April R. Chapman and Peter L. Ochs.

The Board of Directors has an Audit Committee consisting of Messrs. Molnar, Harmon, and Cortines. Our Board has determined that each of the members of the Audit Committee meets the criteria for independence under the NASDAQ listing standards. The Audit Committee performs such duties as outlined in the Company’s Audit Committee Charter. The Audit Committee reviews and acts or reports to the Board with respect to various auditing and accounting matters, the scope of the audit procedures and the results thereof, internal accounting and control systems of UTG, the nature of services performed for UTG and the fees to be paid to the independent auditors, the performance of UTG’s independent and internal auditors and the accounting practices of UTG. The Audit Committee also recommends to the full Board of Directors the auditors to be appointed by the Board. The Audit Committee met four times in 2022.

The Board has reviewed the qualifications of each member of the audit committee and determined one member of the committee, Gabriel Molnar, meets the definition of an “audit committee financial expert” as defined in Item 407 of Regulation S-K.

The Board of Directors has a Compensation Committee consisting of Messrs. Darden, Dayton and Ochs. Our Board has determined that each of the members of the Compensation Committee meets the criteria for independence under the NASDAQ listing standards. The Compensation Committee performs such duties as outlined in the Company’s Compensation Committee Charter. The Compensation Committee reviews and acts or reports to the Board with respect to various compensation matters relative to the Company’s executive officers. The Compensation Committee has the authority to delegate appropriate matters to subcommittees as the Committee may determine in its discretion. The Compensation Committee met one time in 2022.

Under UTG’s By-Laws, the Board of Directors should be comprised of at least six and no more than eleven Directors. At December 31, 2022, the Board consisted of ten Directors. Shareholders elect Directors to serve for a period of one year at UTG’s annual shareholders’ meeting. As of February 21, 2023, the Board of Directors consisted of nine Directors due to the resignation and retirement of James Rousey.

The Board of Directors does not have a formal nominating committee, or a committee that performs similar functions, and does not have a nominating committee charter. The Board has concluded that the nominating process should not be limited to certain members so that a comprehensive selection of candidates can be considered. Therefore, the nomination process is conducted by the full Board of Directors. The Board of Directors has not adopted a formal policy with regard to the consideration of Director candidates recommended by shareholders. Candidates for nomination have been recommended by an executive officer or director and considered by the Board of Directors. Generally, candidates have been persons who have been known to one or more of our Board members. The Board of Directors will, however, consider nominees recommended by shareholders. Shareholders wishing to recommend candidates for Board membership must submit the recommendations in writing to the Secretary of the Company at least 90 days prior to a date corresponding to the previous year’s Annual Meeting, with the submitting shareholder’s name and address and pertinent information about the proposed nominee similar to that set forth for directors named herein. The Board does not evaluate potential nominees for director differently based on whether they are recommended by a shareholder.

The Board of Directors has not adopted specific minimum qualifications that it believes must be met by a person it recommends for nomination as a director. Proposed nominees will be considered in light of their potential contributions to the Board, their backgrounds, their independence and such other factors as the Board considers appropriate. We do not have a specific policy relating to the consideration of diversity in identifying director candidates. However, the Board of Directors does consider the diversity of our Board when identifying director candidates. The amount of consideration given to diversity varies with the Boards’ determination of whether we would benefit from expanding the Board’s diversity in a particular area. We believe this policy has been effective in identifying candidates with the diverse business experience necessary to lead our Company.

Our directors have demonstrated significant achievement and generally have significant management experience in one or more fields of business, professional, governmental, community or academic endeavors. Our directors have sound judgement as a result of their management or policy making experience and demonstrate an ability to function effectively in an oversight role. Given the tenure of most of the directors on our Board, they have a general appreciation regarding major issues facing the Company. These experiences make each of our directors well qualified to be a member of the Company’s Board of Directors.

The Board of Directors has provided a process for shareholders to send communications directly to the Board. These communications can be sent to Jesse Correll, Chairman of the Board, CEO, and President of UTG, at the corporate headquarters at 205 North Depot Street, Stanford, Kentucky 40484.

Our Board of Directors is led by Jesse Correll, our Chairman of the Board, CEO, and President. The decision as to who should serve as Chairman of the Board, and who should serve as Chief Executive Officer, and whether those offices should be combined or separate, is properly the responsibility of our Board of Directors. The Board of Directors believes that the most effective leadership structure for us at this time is for Mr. Correll to serve as both Chairman of the Board and Chief Executive Officer. Our Board does not have a lead independent director and does not believe that designating a lead independent director would be necessary or helpful at this time.

Our Board of Directors oversees our risk management in cooperation with management. The Board and management regularly assess and communicate regarding risks confronting the Company, including transaction specific risks, macroeconomic trends, industry developments, and risk factors unique to our business. The members of the Audit Committee also discuss various financial reporting and accounting risk factors with our independent audit firm.

Section 16(a) Beneficial Ownership Reporting Compliance

Directors and officers of UTG file periodic reports regarding ownership of Company securities with the Securities and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of 1934 as amended, and the rules promulgated there under. UTG is not aware of any individuals who filed late with the Securities and Exchange Commission during 2022. SEC filings may be viewed from the Company’s Web site www.utgins.com.

Audit Committee Report to Shareholders

In connection with the December 31, 2022 financial statements, the audit committee: (1) reviewed and discussed the audited financial statements with Management; (2) discussed with the independent auditors the matters required by Statement on Auditing Standards No. 61, Communications with Audit Committees, as amended, (AICPA, Professional Standards, Vol. 1 AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and (3) received the written disclosures and the letter from its independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the audit committee concerning independence, and has discussed with the independent auditors their independence. Based upon these reviews and discussions, the audit committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K filed with the SEC for the last fiscal year.

Members of the Company’s Audit Committee:

Gabriel J. Molnar	Committee Chairman
Thomas E. Harmon
John M. Cortines

The following information with respect to business experience of the Board of Directors has been furnished by the respective Directors or obtained from the records of UTG.

Name, Age	Position with the Company, Business Experience and Other Directorships
April R. Chapman, 57	Mrs. Chapman is the CEO of Generous Giving, an organization focused on inspiring generosity that shapes our culture and impacts the world for extraordinary good. Previously, April worked in the tech industry for 20 years including a tenure at Microsoft. April left Microsoft to start a consulting firm to advise non-profits on Internet strategy. April serves on several non-profit boards including Praxis, Impact Foundation and National Christian Foundation Northwest. She was also previously the Co-Chair of the World Vision Innovation Fund. April holds an Oxford Diploma in Strategy & Innovation and a BS in Computer Science from UC, Irvine.
Jesse T. Correll, 66	Chairman of UTG and Universal Guaranty Life Insurance Company since 2000; Director of UTG since 1999; Chairman of First Southern Bancorp, Inc. since 1988; CEO of First Southern Bancorp, Inc. from 1988-2015; Manager and President of First Southern Funding, LLC since 1992; President, Director of The River Foundation since 1990; Board member of Crown Financial Ministries from 2004 to 2009; Friends of the Good Samaritans since 2005; Generous Giving from 2006 to 2009; the National Christian Foundation since 2006; Centre Board of Trustees from 2015 to 2022; and Cumberland Lake Shell, Inc. since 2017.
Preston H. Correll, 42	Founder of Marksbury Farm Market based in Bryantsville, Kentucky. He also owns and operates St. Asaph Farm in Stanford, Kentucky and focuses on sustainable farming and raising natural meat. He spent a year and a half in India working with the Good Samaritans ministry and now serves on the board of the Friends of the Good Samaritans. Director of UTG, Inc. since December 2018.
John M. Cortines, 34	Mr. Cortines serves as the Director of Generosity at the Maclellan Foundation. He is the co-author of two books on money, faith, and generosity. Prior to entering the nonprofit sector, he worked in the oil and gas industry as an engineer for Chevron Corporation. Mr. Cortines is a graduate of Harvard Business School (MBA), King Abdullah University of Science and Technology (MS), and Texas A&M University (BS). Director of UTG, Inc. since December 2018.
Thomas F Darden, II, 68	Mr. Darden is the Founder and Chief Executive Officer of Cherokee, an investment company that invests in both private equity and venture capital. Beginning in 1984, Mr. Darden served for 16 years as the Chairman of Cherokee Sanford Group, a brick manufacturing and soil remediation company. From 1981 to 1983, he was a consultant with Bain & Company in Boston. From 1977 to 1978, he worked as an environmental planner for the Korea Institute of Science and Technology in Seoul, where he was a Henry Luce Foundation Scholar. Mr. Darden is on the Boards of Shaw University, the Institute for The Environment at the University of North Carolina and the Board of Governors of the Research Triangle Institute. Mr. Darden earned a Masters in Regional Planning from the University of North Carolina, a Juris Doctor from Yale Law School and a Bachelor of Arts from the University of North Carolina, where he was a Morehead Scholar.
Howard L. Dayton, Jr., 79	In 1985, Mr. Dayton founded Crown Ministries in Longwood, Florida. Crown Ministries merged with Christian Financial Concepts in September 2000 to form Crown Financial Ministries, the world’s largest financial ministry. He served as Chief Executive Officer from 1985 to 2007 and in 2009 founded Compass - Finances God’s Way. Mr. Dayton is a graduate of Cornell University. He developed The Caboose, a successful railroad-themed restaurant in Orlando, FL in 1969. In 1972 he began his commercial real estate development career, specializing in office development in the Central Florida area. He has authored five popular small group studies, produced several video series, and was the host for the nationally syndicated radio programs MoneyWise and HeyHoward. Asbury University named their business school the Howard Dayton School of Business. Mr. Dayton became a Director of UTG, Inc. in December 2005.
Thomas E. Harmon, 68	Director of UTG and Universal Guaranty Life Insurance Company since March 2016. Mr. Harmon is the owner and President of Harmon Foods, Inc., a chain of retail supermarkets, for the past 40 years. Mr. Harmon has been active in many charitable organizations over the years, most recently serving as a Board Member with Amigos En Cristo Ministries, an organization serving one of the most disadvantaged parts of the world – Juarez, Mexico.
Gabriel J. Molnar, 36	Mr. Molnar is the Chief Financial Officer at Capstone Realty Inc., a commercial real estate development company in Louisville, Kentucky. Mr. Molnar is a licensed CPA and real estate broker in Kentucky. Prior to Capstone, Mr. Molnar worked as a Financial Analyst with Procter & Gamble and as a public company auditor and healthcare consultant with PricewaterhouseCoopers. Mr. Molnar received a MBA from the Owen Graduate School of Management at Vanderbilt University and is also a graduate of Asbury University in Wilmore, Kentucky.
Peter L. Ochs, 71	Mr. Ochs is founder of Capital III, a private equity investment firm located in Wichita, Kansas. Capital III provides impact investment capital and management with investments in manufacturing, real estate, energy, and education with a geographical focus on the US and Latin America. Prior to founding Capital III, Mr. Ochs spent 8 years in the commercial banking industry. Mr. Ochs graduated from the University of Kansas with a degree in business and finance. He currently serves on the boards of UTG, Inc., the American Independence Funds, and Trinity Academy.
James P. Rousey, 64	As of the date of this Form 10-K, Mr. Rousey was the President of UTG and Universal Guaranty Life Insurance Company since September 2006; Director of UTG and Universal Guaranty Life Insurance Company since September 2001; Chief Executive Officer of First Southern Bancorp, Inc. since 2016; Chair of ACLI Forum 500 from 2015-2016; Member of Board of Governors of ACLI from 2014 to 2017; Regional CEO and Director of First Southern National Bank from 1988 to 2001. Board Member with the Illinois Fellowship of Christian Athletes from 2001-2005; Board Member with Contact Ministries from 2007-2011; Board Member with Amigos En Cristo, Inc. from 2007-2009; Advisory Board Member with Natalie’s Sister since 2018; Board Member with Hustonville Cemetery since 2019; Serge Board Member since 2019.<br><br><br><br>On February 21, 2023 Mr. James Rousey submitted a letter of resignation stating his desire to retire. In this regard, he retired as President of UTG, Inc. and its subsidiary, Universal Guaranty Life Insurance Company as well as his position as a Director of both entities. This was effective as of the date of the letter. The Board of Directors of UTG, Inc. and Universal Guaranty Life Insurance Company formally accepted the resignation letter on February 22, 2023. Mr. Jesse Correll, CEO and Chairman of the Board of the companies, will assume the title of President initially. This information was filed on Form 8-K with the SEC on February 24, 2023.

Executive Officers of UTG

More detailed information on the following executive officers of UTG appears under “Directors”:

Jesse T. Correll	Chairman of the Board, Chief Executive Officer, and President
James P. Rousey	Former President (Resigned and retired effective February 21, 2023)

Other executive officers of UTG are set forth below:

Name, Age	Position with UTG and Business Experience
Theodore C. Miller, 60	Senior Vice President and Chief Financial Officer of UTG, Inc. and Universal Guaranty Life Insurance Company since 1997; Senior Vice President and Chief Financial Officer of subsidiary companies since 1997; and Chief Financial Officer of First Southern Bancorp, Inc. and First Southern National Bank since 2016.
Douglas P. Ditto, 67	Vice President of UTG, Inc. and Universal Guaranty Life Insurance Company since June 2009; Chief Investment Officer from 2009 to 2012; Assistant Vice President from June 2003 to June 2009; Executive Vice President of First Southern Bancorp, Inc. since March 1985.

Code of Ethics

The Company has adopted a Code of Ethics and Business Conduct for our Directors, officers (including our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller, and persons performing similar function) and employees. The Code of Business Conduct and Ethics is available to our shareholders by requesting a free copy of the Code of Business Conduct and Ethics by writing to us at UTG, Inc., 205 North Depot Street, Stanford, Kentucky 40484.

Item 11. Executive Compensation

Executive Compensation Table

The following table sets forth certain information regarding compensation paid to or earned by UTG’s Chief Executive Officer, and each of UTG’s two most highly compensated executive officers whose salary plus bonus exceeded $100,000 during UTG’s last fiscal year:

Name and Principal position	Year		Salary		Bonus		Stock Awards<br><br>(1)		All Other Compensation<br><br>(2)		Total
Jesse T. Correll<br><br>Chief Executive Officer	2022	$	217,500	$	2	$	199,998	$	11,681	$	429,181
	2021		195,000		150,000		0		7,725		352,725
James P. Rousey<br><br>President	2022		130,000		125,000		50,000		6,962		311,962
	2021		115,000		150,000		0		4,525		269,525
Douglas P. Ditto<br><br>Vice President	2022		187,500		15		174,985		9,984		372,484
	2021		161,250		15		149,985		6,356		317,606
(1)	Stock awards in the form of an annual bonus of 15,682 and 4,511 shares were issued in 2022 and 2021, respectively.
---	---
(2)	All Other Compensation consists of matching contributions to an Employee Savings Trust 401(k) Plan

Outstanding Equity Awards at Fiscal Year End

As of December 31, 2022, there were no unexercised options, stock that has not vested or equity incentive plan awards outstanding for any of the above named executive officers.

Compensation of Directors

Effective January 1, 2018 a new compensation arrangement was approved whereby each outside Director annually receives $5,000 as a retainer and $2,500 per meeting attended. The compensation, however, is paid in UTG Common Stock. The value is determined annually on the close of business December 20th or the next business day should December 20^th^ be a weekend or holiday, based on the activity of the year just ending. Reasonable travel expenses are reimbursed in cash as incurred. UTG’s Director Compensation policy provides that Directors who are employees of UTG or its affiliates do not receive any compensation for their services as Directors except for reimbursement for reasonable travel expenses for attending each meeting. The following table reflects compensation paid to all Directors who served in 2022.

Name			Stock Awards<br><br>(1)		All Other Compensation<br><br>(2)		Total
Jesse T. Correll, Chief Executive Officer	$	$	0	$	0	$	0
James P. Rousey, President			0		0		0
April R. Chapman, Director			10,000		0		10,000
Preston H. Correll, Director			15,000		0		15,000
John M. Cortines, Director			15,000		0		15,000
Thomas F. Darden, II, Director			15,000		0		15,000
Howard L. Dayton, Director			15,000		2,500		17,500
Thomas E. Harmon, Director			15,000		0		15,000
Gabriel J. Molnar, Director			15,000		1,000		16,000
Peter L. Ochs, Director			12,500		0		12,500

(1) Market value of stock on earned date was $25.06 per share.

(2) Other Compensation represents payment for consulting services performed relative to management enrichment.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Principal Holders of Securities

The following tabulation sets forth the name and address of the entity known to be the beneficial owners of more than 5% of UTG’s Common Stock and shows: (i) the total number of shares of Common Stock beneficially owned by such person as of February 1, 2022 and the nature of such ownership; and (ii) the percent of the issued and outstanding shares of Common Stock so owned as of the same date.

Title		Amount	Percent
of	Name and Address	and Nature of	Of
Class	of Beneficial Owner (2)	Beneficial Ownership	Class (1)
Common	Jesse T. Correll	146,505	3)(5	4.6%
---	---	---	---	---
Stock, no	First Southern Bancorp, Inc.	1,406,785	3)(4)(5	44.1%
par value	First Southern Funding, LLC	400,000	3)(4)(5	12.5%
	First Southern Holdings, LLC	1,201,876	3)(4)(5	37.7%
	WCorrell, Limited Partnership	72,750	3)(5	2.3%
	Cumberland Lake Shell, Inc.	128,750	(5)	4.0%
(1) The percentage of shares owned is based on 3,190,306 shares of Common Stock outstanding as of February 1, 2023.
---
(2) The address for each of Jesse Correll, First Southern Bancorp, Inc. (“FSBI”), First Southern Funding, LLC (“FSF”), First Southern Holdings, LLC (“FSH”), and WCorrell, Limited Partnership (“WCorrell LP”), is 205 North Depot Street, Stanford, Kentucky 40484. The address for Cumberland Lake Shell, Inc. (“CLS”) is P.O. Box 430, 150 Railroad Drive, Somerset, Kentucky 42502.
(3) The share ownership of Jesse Correll listed includes 73,755 shares of Common Stock owned by him individually. The share ownership of Mr. Correll also includes 72,750 shares of Common Stock held by WCorrell, Limited Partnership, a limited partnership in which Jesse Correll serves as managing general partner and as such, has sole voting and dispositive power over the shares held by the entity. In addition, by virtue of his ownership of voting securities of FSF and FSBI, and in turn, their ownership of 100% of the outstanding membership interests of FSH (the holder of 1,201,876 shares of Common Stock), Mr. Correll may be deemed to beneficially own the total number of shares of Common Stock owned by FSH, and may be deemed to share with FSH the right to vote and to dispose of such shares. Mr. Correll owns approximately 74% of the outstanding membership interests of FSF. Additionally, Mr. Correll owns directly approximately 44%, companies he controls own approximately 16%, and he has the power to vote but does not own an additional 2% of the outstanding voting stock of FSBI. FSBI and FSF in turn own 99% and 1%, respectively, of the outstanding membership interests of FSH.
(4) The share ownership of FSBI consists of 204,909 shares of Common Stock held by FSBI directly and 1,201,876 shares of Common Stock held by FSH of which FSBI is a 99% member and FSF is a 1% member. As a result, FSBI may be deemed to share the voting and dispositive power over the shares held by FSH.
(5) According to the Schedule 13D, as amended, filed August 27, 2020, Jesse Correll, FSBI, FSF and FSH, have agreed in principle to act together for the purpose of acquiring or holding equity securities of UTG. In addition, because of their relationship with these Reporting Persons, Cumberland Lake Shell, Inc. and WCorrell Limited Partnership may also be deemed to be members of this group. Therefore, each may be deemed to have acquired beneficial ownership of the equity securities of UTG beneficially owned by each of the Reporting Persons.

Security Ownership of Management of UTG

The following tabulation shows with respect to each of the Directors of UTG, UTG’s Chief Executive Officer and each of UTG’s two most highly compensated executive officers whose salary plus bonus exceeded $100,000 for fiscal 2022, and with respect to all executive officers and Directors of UTG as a group: (i) the total number of shares of Common Stock beneficially owned by such person as of February 1, 2023 and the nature of such ownership; and (ii) the percent of the issued and outstanding shares of stock so owned as of the same date.

Title of	Name and Address of	Amount and Nature of	Percent of
Class	Beneficial Owner	Beneficial Ownership	Class (1)
UTG’s	April R. Chapman	Redmond, WA	1,129		*
---	---	---	---	---	---
Common	Jesse T. Correll	Stanford, KY	2,082,040	(2)	65.3%
Stock, no	Preston H. Correll	Stanford, KY	2,276	(3)	*
Par value	John M. Cortines	Georgetown, TN	4,911	(4)	*
	Thomas F. Darden, II	Raleigh, NC	62,892		2.0%
	Howard L. Dayton, Jr.	Sanford, FL	10,591	(5)	*
	Douglas P. Ditto	Danville, KY	50,394	(6)	1.6%
	Thomas E. Harmon	Springfield, IL	3,437		*
	Theodore C. Miller	Stanford, KY	15,292		*
	Gabriel J. Molnar	Louisville, KY	2,861		*
	Peter L. Ochs	Valley Center, KS	7,495	(7)	*
	James P. Rousey	Hustonville, KY	14,509	(8)	*
	All Directors and executive officers as a group (twelve in number)		2,257,827		70.6%

* Less than 1

(1) The percentage of outstanding shares for UTG is based on 3,190,306 shares of Common Stock outstanding as of February 1, 2023.

(2) The share ownership of Jesse Correll listed includes 73,755 shares of Common Stock owned by him individually. The share ownership of Mr. Correll also includes 72,750 shares of Common Stock held by WCorrell, Limited Partnership, a limited partnership in which Jesse Correll serves as managing general partner and as such, has sole voting and dispositive power over the shares held by the entity. In addition, by virtue of his ownership of voting securities of FSF and FSBI, and in turn, their ownership of 100% of the outstanding membership interests of FSH (the holder of 1,201,876 shares of Common Stock), Mr. Correll may be deemed to beneficially own the total number of shares of Common Stock owned by FSH, and may be deemed to share with FSH the right to vote and to dispose of such shares. Mr. Correll owns approximately 74% of the outstanding membership interests of FSF. Additionally, Mr. Correll owns directly approximately 44%, companies he controls own approximately 16%, and he has the power to vote but does not own an additional 2% of the outstanding voting stock of FSBI. FSBI and FSF in turn own 99% and 1%, respectively, of the outstanding membership interests of FSH.

(3) Includes 3 shares held in street name.

(4) Includes 848 shares held in spouse’s IRA and 1,881 shares held in street name.

(5) Includes 473 shares held in street name.

(6) Includes 1,600 shares held in a retirement account, 800 shares in street name, and 2,000 shares held by each of his children, and 1,000 held by a third child.

(7) Includes 2,000 shares held in a trust for benefit of named individual.

(8) Includes 2,077 shares held in street name.

Except as indicated above, the foregoing persons hold sole voting and investment power.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The Board of Directors determined that eight of the ten current Directors are “independent” as defined by Rule 5605 of the NASDAQ listing standards. The independent Directors are April R. Chapman, Preston H. Correll, John M. Cortines, Thomas F. Darden, Howard L. Dayton, Jr., Thomas E. Harmon, Gabriel J. Molnar, and Peter L. Ochs.

The articles of incorporation of UG contain the following language under item 12 relative to related party transactions:

A director shall not be disqualified from-dealing with or contracting with the corporation as vendor, purchaser; employee, agent or otherwise; nor, in the absence of fraud, shall any transaction or contract or act of this corporation be void or in any way affected or invalidated by the fact that any director or any firm of which any director is a member or any corporation of which any director is a shareholder, director or officer is in any way interested in such transaction or contract or act, provided the fact that such director or such firm or such corporation so interested shall be disclosed or shall be known to the Board of Directors or such members thereof as shall be present at any meeting of the Board of Directors at which action upon any such contract or transaction or act shall be taken: nor shall any such director be accountable .or responsible to the company for or in respect to such transaction or contract or act of. this corporation or for any gains or profits realized by him by reason of the fact that he or any firm of which he is a member or any corporation of which he is a shareholder, director or officer is interested in such action or contract; and any such director may be counted in determining the existence of a quorum of any meeting of the Board of Directors of the company which shall authorize or take action in respect to any such contract or transaction or act and may vote thereat to authorize, ratify, or approve any such contract or transaction or act, with like force and effect as if he or any firm of which he is a member or any corporation of which he is a shareholder, director or officer were not interested in such transaction or contract or act.

On February 20, 2003, UG purchased $4 million of a trust preferred security offering issued by First Southern Bancorp, Inc. (“FSBI”). The security has a mandatory redemption after 30 years with a call provision after 5 years. The security pays a quarterly dividend at a fixed rate of 6.515%. The Company received dividends of $165,137 during 2022 and 2021. On March 30, 2009, UG purchased $1 million of FSBI common stock. The sale and transfer of this security is restricted by the provisions of a stock restriction and buy-sell agreement.

Effective July 1, 2018, the Company assumed the employees of several smaller entities associated with UTG. The purpose of this was to support the continued efforts to further streamline operations amongst associated entities. The salaries, benefits, and payroll related processing fees are 100% reimbursed by the associated entities on a monthly basis. During 2022 and 2021, the Company received reimbursements of $1,134,315 and $947,689, respectively.

The Company rents a portion of the first floor and second floor of an 8,000 square foot, 8,000 two-story office building, located in Stanford, KY. The first floor of the building is occupied by UTG and FSNB employees that are included in the shared services agreement between the two entities. The second floor is occupied by the customer service call centers for both UTG and FSNB employees. The building is owned by FSNB and UTG pays $2,0002,000 per month in rent to FSNB for the portion of the building occupied by UTG employees. The Company paid rent of $24,00024,000 to FSNB in 2022 and 2021.

During 2022, FSF sold all of its membership interest in limited liability companies (“LLC”) to a wholly-owned subsidiary of UTG at a price of $1 per entity. The three LLCs are listed on the Company’s organization chart as wholly-owned subsidiaries of Stanford Wilderness Road, LLC.

During 2021, UG purchased several real estate parcels from FSF at a cost of $1,502,035. UG also purchased one real estate parcel from FSNB in 2021 at a cost of $80,000.

Item 14. Principal Accountant Fees and Services

The Audit Committee is required to be directly responsible for the appointment, compensation and retention of the Company’s independent registered public accounting firm. The Audit Committee appointed Brown Smith Wallace, LLP (“BSW”) as the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2022 and 2021.

On July 13, 2021, we were notified that the audit practice of Brown Smith Wallace, LLP (“Brown Smith Wallace”) our independent registered public accounting firm, was combined with Armanino LLP (“Armanino”) in a transaction pursuant to which Brown Smith Wallace combined its operations with Armanino and certain of the professional staff and partners of Brown Smith Wallace joined Armanino either as employees or partners of Armanino. On August 1, 2021, Brown Smith Wallace resigned as the auditors of the Company and with the approval of the Audit Committee of the Company’s Board of Directors, Armanino was engaged as its independent registered public accounting firm (Auditor Firm ID: 32).

Amounts paid to, or billed by, the Company’s principal accountant, during the two most recent fiscal years by category were as follows:

Audit Fees - Audit fees paid for these audit services in the fiscal years ended December 31, 2022 and 2021 totaled $120,000 and $123,050 respectively. Fees billed for the quarterly reviews of the Company’s financial statements totaled $34,500 and $33,000 for the years 2022 and 2021, respectively.

Audit Related Fees - No audit related fees were incurred by the Company from Armanino for the years ended December 31, 2022 and 2021.

Tax Fees – For the years ended December 31, 2022 and 2021, the Company paid $16,500 and $21,750, respectively, to Armanino relating to certain tax advice and electronic filing of certain federal and state income tax returns of the Company.

All Other Fees – During 2022 and 2021, the Company paid no other fees to Armanino.

PART IV

Item 15. Exhibit and Financial Statement Schedules

(a)	The following documents are filed as a part of the report:
(1)	Financial Statements:
---	---
	Included in Part II, Item 8 of this Report.
(2)	Financial Statement Schedules
	The financial statement schedules have been omitted as they are deemed inapplicable or not required by Regulation S-X.
(a)(3) & (b)	Exhibits<br><br>The following are exhibits to this report, and if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included:
---	---
Exhibit<br><br>Number	Description
---	---
3.1	Certificate of Incorporation of the Registrant and all amendments thereto [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 3.1].
3.2	By-Laws for the Registrant and all amendments thereto [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 3.2].
4.1	UTG’s Agreement pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K with respect to long-term debt instruments [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 4.1].
10.1	Amendment to Reinsurance Agreement between Universal Guaranty Life Insurance Company and Optimum Re Insurance Company originally with Business Men’s Assurance Company of America. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2015 originally filed as Exhibit 10.2].
10.2	Reinsurance Agreement between Universal Guaranty Life Insurance Company and Swiss RE originally with Life Reassurance Corporation of America. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2015 originally filed as Exhibit 10.3].
10.3	Assumption Reinsurance Agreement between Universal Guaranty Life Insurance Company and Park Avenue Life Insurance Company formerly known as First International Life Insurance Company. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2015 originally filed as Exhibit 10.4].
10.5	Commercial pledge agreement dated November 20, 2012, between UTG, Inc. and Illinois National Bank. [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2012 originally filed as Exhibit 10.20].
10.6	Administrative Services and Cost Sharing Agreement dated as of January 1, 2007 between UTG, Inc. and Universal Guaranty Life Insurance Company [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.11].
10.7	Agreement regarding Mortgage Loans by and between First Southern National Bank and Universal Guaranty Life Insurance Company [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.12].
10.8	Universal Guaranty Participation Agreement-Purchased Loan [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.13].
10.9	Universal Guaranty Participation Agreement-Originated Loan [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2013 originally filed as Exhibit 10.14].
10.10	Management Data, Inc. Software License Agreement [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2014 originally filed as Exhibit 10.16].
10.12	Aircraft Joint Ownership Agreement by and among Bandyco, LLC, First Southern National Bank and UTG, Inc. dated August 11, 2014 [Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2014 originally filed as Exhibit 10.18].
*10.13	Promissory Note dated November 20, 2022, between UTG, Inc. and Illinois National Bank.
10.14	Shared Services Agreement between UTG, Inc. and FSNB effective January 1, 2017.<br><br>[Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2018 originally filed as Exhibit 10.14].
10.15	Amendment #1 to the Shared Services Agreement between UTG, Inc. and FSNB effective January 1, 2018<br><br>[Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2018 originally filed as Exhibit 10.15].
10.16	Amendment #2 to the Shared Services Agreement between UTG, Inc. and FSNB effective September 1, 2018.<br><br>[Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2018 originally filed as Exhibit 10.16].
10.17	Amendment #3 to the Shared Services Agreement between UTG, Inc. and FSNB effective January 1, 2019.<br><br>[Incorporated by reference to the Registrant’s form 10-K, for the year ended December 31, 2018 originally filed as Exhibit 10.17].
*14.1	Code of Ethics and Business Conduct
*14.2	Code of Ethical Conduct for Senior Financial Officers
*21.1	List of Subsidiaries of the Registrant.
*23	Consent of Armanino LLP independent registered accounting firm
*31.1	Certificate of Jesse T. Correll, Chairman of the Board Chief Executive Officer, and President of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certificate of Theodore C. Miller, Chief Financial Officer and Senior Vice President of UTG, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certificate of Jesse T. Correll, Chairman of the Board, Chief Executive Officer, and President of UTG, as required pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
*32.2	Certificate of Theodore C. Miller, Chief Financial Officer and Senior Vice President of UTG, as required pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
*99.1	Audit Committee Charter.
*99.2	Whistleblower Policy
*99.3	Compensation Committee Charter.
*99.4	Investment Committee Charter.
*101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
*101.SCH	Inline XBRL Taxonomy Extension Schema Document.
*101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
*101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
*101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith

Item 16. Form 10-K Summary

None

SIGNATURES

Pursuant to the requirements of Section 13 or 15(D) of the Securities Exchange Act of 1934, UTG, Inc. has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		UTG, Inc.
By:		/s/ Jesse T. Correll
		Jesse T. Correll
	Chief Executive Officer and President

Date: March 24, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ April R. Chapman	By: /s/ Howard L. Dayton
April R. Chapman<br><br>Director	Howard L. Dayton<br><br>Director
By: /s/ Jesse T. Correll	By: /s/ Thomas E. Harmon
Jesse T. Correll<br><br>Chairman of the Board, Chief Executive Officer and President<br><br>(Principal Executive Officer)	Thomas E. Harmon<br><br>Director
By: /s/ Preston H. Correll	By: /s/ Gabriel J. Molnar
Preston H. Correll<br><br>Director	Gabriel J. Molnar<br><br>Director
By: /s/ John M. Cortines	By: /s/ Peter L. Ochs
John M. Cortines<br><br>Director	Peter L. Ochs<br><br>Director
By:	By: /s/ Theodore C. Miller
Thomas F. Darden II<br><br>Director	Theodore C. Miller<br><br>Chief Financial Officer and Senior Vice President<br><br>(Principal Financial and Accounting Officer)

Exhibit 10.13

PROMISSORY NOTE

Principal<br> 8,000,000.00	Loan Date<br><br> <br>11-20-2022	Maturity<br><br> <br>11-20-2023	Loan No.<br><br> <br>72957158-40000	Call / Coll<br><br> <br>C / 3	Account<br><br> <br>72957158	Officer<br><br> <br>TWG	Initials

All values are in US Dollars.

Borrower:		INB NATIONAL ASSOCIATION
		MAIN BRANCH
		322 E. CAPITOL
		SPRINGFIELD, IL 62701
Principal Amount: 8,000,000.00	Interest Rate: 6.500%	Date of Note: November 20, 2022

All values are in US Dollars.

Principal Amount: $8,000,000.00 Interest Rate: 6.500% Date of Note: November 20, 2022

PROMISE TO PAY. UTG, INC. ("Borrower") promises to pay to INB, National Association ("Lender"), or order, in lawful money of the United States of America, the principal amount of Eight Million & 00/100 Dollars ($8,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance, calculated as described in the "INTEREST CALCULATION METHOD" paragraph using an interest rate of 6.500%. Interest shall be calculated from the date of each advance until repayment of each advance. The interest rate may change under the terms and conditions of the "INTEREST AFTER DEFAULT" section.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on November 20, 2023. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning December 20, 2022, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs; and then to any late charges. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/365 simple interest basis; that is, by applying the ratio of the interest rate over the number of days in a year (366 during leap years), multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: INB, National Association, 322 E. Capitol

Springfield, IL 62701.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $25.00, whichever is greater.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased by 9.000 percentage points. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in

any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or

a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

Cure Provisions. if any default, other than a default in payment, is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice to

Borrower demanding cure of such default: (1) cures the default within ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other.

GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of

the State of Illinois without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Illinois.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of SANGAMON County, State of Illinois.

CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any attorney-at-law to appear in any court of record and to confess judgment against Borrower for the unpaid amount of this Note as evidenced by an affidavit signed by an officer of Lender setting forth the amount then due, attorneys' fees plus costs of suit, and to release all errors, and waive all rights of appeal. If a copy of this Note, verified by an affidavit, shall have been filed in the proceeding, it will not be necessary to file the original as a warrant of attorney. Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect. No single exercise of the foregoing warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable, or void; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this Note have been paid in full. Borrower hereby waives and releases any and all claims or causes of action which Borrower

might have against any attorney acting under the terms of authority which Borrower has granted herein arising out of or connected with the confession of judgment hereunder.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However. this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any

and all such accounts, and, at Lender's option, to administratively freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in this paragraph.

COLLATERAL. Borrower acknowledges this Note is secured by a Commercial Pledge Agreement dated November 20, 2013.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs.

SECURITY INTEREST IN DEPOSIT ACCOUNTS. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all Borrower's right, title and interest in and to, Borrower's deposit accounts with Lender (whether checking, savings, or some other account), including without limitation all deposit accounts held jointly with someone else and all deposit accounts Borrower may open in the future, excluding however all IRA and Keogh accounts, and all trust accounts for which the grant of a

security interest would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such deposit accounts.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored. If your payment is returned unpaid, you authorize INB, National Association to make a one-time electronic fund transfer from your account to collect a fee of $25.00.

LOAN AGREEMENT. This Note is issued in connection with a Business Loan Agreement dated November 20, 2022 between Borrower and Lender and the terms and conditions of said Business Loan Agreement are expressly incorporated herein and made a part of this Note by reference.

UNCONDITIONAL CANCELABLE COMMITMENT. The line of credit feature provided for in this Note and the Related Documents, including the

Business Loan Agreement (Asset Based). may be unconditionally cancelable, without cause, at any time by the Lender, to the extent permitted by applicable law.

PRIOR NOTE. This Promissory Note is a renewal of, extension of, refinancing of, modification of and substitution for Promissory Note dated November 20, 2021, in the original principal amount of $8,000,000.00, which was a renewal of, extension of, refinancing of, modification of and substitution for Promissory Note November 20, 2012 in the original principal amount of $8,000,000.00, as amended from time to time

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. BORROWER:

BORROWER:<br><br> <br><br><br> <br><br><br> <br>UTG, INC.
By:	/s/ Theodore C. Miller	By:	/s/ James P. Rousey
	THEODORE C. MILLER, CFO/Secretary of UTG, INC.		JAMES P ROUSEY President of UTG, INC.

Exhibit 21.1

LIST OF SUBSIDIARIES
Subsidiary Name	State of Incorporation
BCG Land, LLC		Kentucky
Bella Terra, LLC		Alabama
Bluebird, Ltd Co		Kentucky
Bluegrass Land & Minerals, LLC		Kentucky
Cerulean at the Bluebird, LLC		Kentucky
Collier Beach, LLC		South Carolina
Consolidated Timberland, LLC		Georgia
Cumberland Woodlands, LLC		Kentucky
Esther's Wellhouse, LLC		Kentucky
Imperial Plan, Inc.		Texas
Mama Devechio's Pizzeria, LLC		Kentucky
Midland Superblock Partners, LLC		Texas
Red River Gorge Properties, LLC		Kentucky
Stanford Wilderness Road, LLC		Kentucky
The Inn at Wilderness Road, LLC		Kentucky
UG-Cam, LLC		Kentucky
Universal Guaranty Flight Enterprises, LLC		Kentucky
Universal Guaranty Life Insurance Company		Ohio

Exhibit 31.1

	CERTIFICATIONS
	I, Jesse T. Correll, Chairman of the Board, Chief Executive Officer, and President of UTG, Inc., certify that:
	1.	I have reviewed this annual report on Form 10-K of the registrant, UTG, Inc.;
	2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to<br> make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects<br> the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined<br> in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
		a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to<br> ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
		c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the<br> effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		d.	Disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most<br> recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
	5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
		a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably<br> likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls<br> over financial reporting.
Date: March 24, 2023				By	/s/ Jesse T. Correll
					Chairman of the Board, Chief Executive Officer, and President

Exhibit 31.2

CERTIFICATIONS
I, Theodore C. Miller, Senior Vice President and Chief Financial Officer of UTG, Inc., certify that:
1.	I have reviewed this annual report on Form 10-K of the registrant, UTG, Inc.;
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to<br> make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects<br> the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined<br> in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to<br> ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the<br> effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most<br> recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial<br> reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably<br> likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls<br> over financial reporting.
Date: March 24, 2023	By	/s/ Theodore C. Miller
---	---	---
		Senior Vice President and
		Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of UTG, Inc. (the "Company") for the period ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Jesse T. Correll, Chairman of the Board, Chief Executive Officer, and President of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date:	March 24, 2023	By:	/s/ Jesse T. Correll
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			Jesse T. Correll
			Chairman of the Board,
			Chief Executive Offiers, and President

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of UTG, Inc. (the "Company") for the period ended December 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Theodore C. Miller, Senior Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date:	March 24, 2023	By:	/s/ Theodore C. Miller
---	---	---	---
			Theodore C. Miller
			Senior Vice President
			and Chief Financial Officer

We consent to the incorporation by reference in the Registration Statement on Form 8-K of UTG, Inc. and Subsidiaries of the Brown Smith Wallace, LLP report dated March 24, 2023, relating to the Company’s consolidated financial statements, which appears in UTG, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022.

/S/ Armanino LLP

St. Louis, Missouri

March 24, 2023

POLICY NAME: Code of Ethics and Conduct

BOARD APPROVED: December 7, 2022

Code of Ethics and Conduct

UTG, Inc. (“UTG” or the “Company”) is committed to operating its business with honesty, integrity and the highest level of ethical conduct. This Code of Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles to guide the directors, officers, and employees of the Company. All Company directors, officers, and employees should conduct themselves accordingly and seek to avoid even the appearance of improper behavior in any way relating to the Company. In appropriate circumstances, this Code should also be provided to an followed by the Company’s agents and representatives, including consultants.

Any director or officer who has questions about this Code should consult with the Chief Executive Officer, the Chief Financial Officer, or legal counsel as appropriate in the circumstances. If an employee has any questions about this Code, the employee should ask his or her supervisor how to handle the situation.

This Code is supplemented by other policies, some of which are referenced throughout this document. The Company may change the Code and these other policies without advance notice at any time. The Company also retains the sole right to administer and interpret all such policies.

Scope of Code

This Code is intended to deter wrongdoing and to promote the following:

•	Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional<br> relationships;
•	Full, fair, accurate, timely, and understandable disclosure in reports and documents the Company files with, or submits to, the Securities and<br> Exchange Commissions (the “SEC”), the state Departments of Insurance (the “DOI”), other regulatory bodies, and other communications made by the Company;
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•	Compliance with applicable governmental laws, rules, and regulations;
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•	The prompt internal reporting of violations of this Code to the appropriate person or persons identified in this Code;
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•	Accountability for adherence to this Code; and
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•	Adherence to a high standard of business ethics.
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Compliance with Laws, Rules and Regulations

The Company is committed to full compliance with the laws of all jurisdictions in which UTG conducts business. All directors, officers, and employees should respect and obey all laws, rules, and regulations applicable to the business and operations of the Company. Although directors, officers, and employees are not expected to know all of the details of these laws, rules, and regulations, it is important to know enough to determine when to seek advice from supervisors, managers, officers or other appropriate Company personnel. Engaging in unfair or dishonest conduct is a violation of this Code and will negatively affect the Company’s reputation.

Conflicts of Interest

A “conflict of interest” exists when an individual’s private interest interferes in any way – or even appears to conflict – with the interests of the Company. A conflict of interest situation can arise when a director, officer, or employee takes actions or has interests that may make it difficult to perform his or her work on behalf of the Company in an objective and effective manner. Conflicts of interest may also arise when a director, officer, or employee, or a member of his or her family, receives improper personal benefits as a result of his or her position with the Company. Loans to, or guarantees of obligations of, employees and their family members may create conflicts of interest.

Service to the Company should never be subordinated to personal gain and advantage. Conflicts of interest, whenever possible, should be avoided. In particular, clear conflict of interest situations involving directors, officers, and employees who occupy supervisory positions or who have discretionary authority in dealing with any third party may include the following:

•	Any consulting or employment relationship with any customer, supplier, or competitor;
•	Any outside business activity that detracts from an individual’s ability to devote appropriate time and attention to his or her responsibilities<br> to the Company;
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•	Any action that will require payment from corporate funds if such expenditure is not authorized or reimbursable under Company policy;
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•	Any use of Company property, information, resource or position for personal gain or to compete with the Company in any way;
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•	The receipt of non-nominal gifts or excessive entertainment from any organization with which the Company has current or prospective business<br> dealings;
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•	Being in the position of supervising, reviewing, or having any influence on the job evaluation, pay, or benefit of any family member; and
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•	Selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable directors, officers,<br> or employees are permitted to so purchase or sell.
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Conflicts of interest are prohibited as a matter of Company policy, except under guidelines approved by the Board of Directors. Conflicts of interest may not always be clear-cut and further review and discussion may be appropriate. Any director or officer who becomes aware of a conflict or potential conflict should bring it to the attention of the Chief Executive Officer, the Chief Financial Officer, or legal counsel as appropriate in the circumstances. Any employee who becomes aware of conflict or potential conflict should bring it to the attention of a supervisor, manager, or other appropriate personnel.

Insider Trading

Directors, officers, and employees who have access to confidential information relating to the Company are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of the Company’s business. All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical and against Company policy but is also illegal. Directors, officers, and employees also should comply with insider trading standards and procedures adopted by the Company. If a question arises, the directors, officer, or employee should consult with the Company’s Chief Financial Officer.

Corporate Opportunities

Directors, officers, and employees are prohibited from taking for themselves personally or directing to a third party any opportunity that is discovered through the use of corporate property, information, or position without the consent of the Board of Directors. No director, officer, or employee may use corporate property, information, or position for improper personal gain, and no director, officer, or employee may compete with the Company directly or indirectly. Directors, officers, and employees owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

Competition and Fair Dealing

Each director, officer, or employee should endeavor to respect the rights of and deal fairly with the Company’s customers, suppliers, service providers, competitors, and employees. No director, officer, or employee should take unfair advantage of anyone relating to the Company’s business or operations through manipulation, concealment, or abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice.

Antitrust –Any conduct that constitutes price fixing or agreeing with competitors as to the nature, extent or means of competition, or boycotting a vendor or customer in any market, is prohibited. Other conduct such as (1) making false statements about competitors or their products or services; (2) entering into an agreement (in certain circumstances) that requires a customer to use a Company product on an exclusive basis or tying the purchase of one company product to the purchase of another product; or (3) illegally obtaining the confidential information of a competitor, is inconsistent with UTG’s commitment to honesty and integrity and is a violation of this Code.

Violation of U.S. antitrust laws is a serious offense and can result in severe disciplinary action including termination, as well as prosecution leading to fines and imprisonment. All employees are responsible for full compliance with these antitrust laws.

Gifts and Entertainment –The purpose of business gifts and entertainment is a commercial setting is to create good will and sound working relationships, not to gain unfair advantage.

Gifts – No director, officer, or employee, family member of a director, officer, or employee, or agent shall accept any gift from or give any gift to any third party beyond those courtesies deemed to be customary, reasonable and proper under the particular business circumstances. As a general rule, accepting or giving a gift having a value in excess of US $250, in any individual situation, is considered beyond what is customary, reasonable and proper. Inexpensive gifts of a promotional nature or social invitations that are considered customary, reasonable and proper under the business circumstances (such as a business meal) may be accepted. However, employees must decline:

•	Anything offered as a “quid pro quo” (as part of an agreement to do, or not to do, anything in return for the gift);
•	Any gift of cash or cash equivalents (such as gift certificates, loans, stock, stock options, etc.); or
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•	Participating in any activity that they know would cause the person or party offering the gift or entertainment to violate any law, rule,<br> regulation or the specific ethical standards of their own employer.
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Entertainment – Providing or accepting entertainment in the course of an employee’s work-related activities must always have a legitimate business purpose and should not compromise the business judgment, impartiality or loyalty of those being entertained.

Directors, officers, and employees, family members of directors, officers, or employees, or agents may accept a reasonable level of entertainment from business partners with whom UTG has or is seeking a business relationship. The term “reasonable” can vary depending upon the situation and the level and/or corporate positions of the parties involved, but in no event should the value of such entertainment, in any individual situation, exceed $250. Directors, officers, or employees may provide a reasonable level of entertainment to business partners, customers or other third parties with whom UTG has or is seeking a business relationship. Any entertainment, in any individual situation, with a value exceeding $250 shall be approved, in advance whenever possible, by a member of management Such entertainment must not be offered if the director, officer, or employee knows that it would be prohibited by the specific policies of the other party. Frequent business entertainment or gifts, given to or received from the same party, even if within the acceptable monetary threshold in each instance, may still be considered a conflict of interest.

A director or officer should discuss with the Chief Executive Officer or Chief Financial Officer, and an employee should discuss with his or her supervisor, any entertainment, gifts or proposed gifts that the individual is not certain are appropriate.

Maintaining an Appropriate and Secure Work Environment

Human Capital– UTG is committed to protecting human resource assets by providing a work environment that is safe and free from discrimination and harassment that may affect an employee's terms or conditions of employment. The Company is committed to providing equal opportunity in all aspects of employment and will not tolerate any illegal discrimination or harassment of any kind.

Violence-Free Workplace –. Violence and threatening behavior are not permitted. The Violent Crime Control Act – Federal law makes it a crime for a financial institution to employ or do business with persons who have been convicted of certain crimes including felonies involving dishonesty or a breach of trust. Any director, officer, or employee who has been convicted of a felony after the commencement of his employment at UTG must notify the Company of that fact. Failure to notify the Company is a serious violation of this Code and is grounds for termination of employment.

Safety – UTG is dedicated to providing a secure working environment for officers, directors, and employees and establishing programs to ensure protection of employees, property and other assets. Employees should secure all personal and Company valuables at all times and report incidences of theft to a supervisor. Emergency situations should be reported immediately to a supervisor or Human Resources.

Drug-Free Workplace and Workforce – Directors, officers, and employees should report to work to perform their duties, free from the influence of illegal drugs or alcohol. The selling, distributing, purchasing, possessing, or consuming of illegal drugs in the workplace or while otherwise engaged in Company business will not be tolerated.

Privacy – UTG values the trust of its customers and is committed to the responsible management, use and protection of data it maintains about them. Respecting the privacy of the Company’s customers and protecting the security and confidentiality of their personal information is a top priority. Federal and state laws, including the Gramm-Leach-Bliley Act and the Health Insurance Portability and Accountability Act, restrict the ways in which UTG can share customer information within and outside the Company. UTG has adopted a privacy policy to comply with these laws, to which the Company and all employees must adhere.

Company Funds and Assets – Maintaining Accurate and Complete Records

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.

It is the responsibility of each director, officer, and employee to ensure and protect the integrity of all Company assets. The Company is committed to maintaining a system of internal controls) that ensures compliance with all applicable laws, rules and regulations and promotes the full, fair, accurate, timely and understandable disclosure of information in all of the periodic reports and documents that the Company is required to file with regulatory and governmental authorities or that is contained in communications to the public.

Travel and Expense Reimbursement – Directors, officers, and employees must maintain accurate and complete records of all transactions in connection with personal reimbursement of business expenses.. Employees must never misrepresent facts or falsify records. If a director, officer or employee is not sure whether a certain expense is legitimate, the officer or employee should ask his or her supervisor or the Financial Accounting Department.

Financial Reporting – All payments and other financial transactions must be properly authorized by management, and accurately and completely recorded in the books and records of the Company consistent with generally accepted accounting principles and established Company policies and procedures. No undisclosed or unrecorded funds may be established for any purpose, nor may Company funds be placed in any personal or non-corporate account. Any deviation from generally accepted accounting standards and established Company policies is strictly prohibited. Any attempt to fraudulently influence, coerce, mislead, manipulate or interfere with the auditing of the Company’s financial statements is a violation of this Code and federal law.

The Company maintains orderly processes and procedures that must be followed to assure full, fair, accurate and timely disclosures to its shareholders and regulatory authorities and other public communications in keeping with its obligation under applicable law. In the event that any existing or proposed Company policy, procedure, or practice, including all financial, accounting and auditing practices, causes a concern regarding any possible non-compliance, the employee should immediately bring that issue to the attention of his or her supervisor or other management.

Company Records – All of the Company’s books, records, accounts, and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions, and must conform to both the applicable legal requirements and the Company’s system of internal controls. Officers and employees are prohibited from tampering with, manipulating, altering, removing or destroying records prior to the prescribed retention periods specified in the Company’s record retention policies or as required by law. Business agreements should be documented properly in writing, signed by the appropriate parties, and contain all terms agreed upon in accordance with all applicable corporate policies and applicable law.

Directors, officers and employees are prohibited from:

•	Violating any laws, external accounting requirements and Company procedures for reporting information of all types;
•	Making a false or misleading entry in a Company report or record;
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•	Knowingly altering, destroying, mutilating or concealing any record or document, or attempting to do so, in order to impair the record’s<br> integrity or availability for use in an official proceeding; and
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•	Selling, transferring or disposing of Company assets without proper documentation and authorization.
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Business records and communications often become public, and the Company and its officers and employees in their capacity with the Company should avoid exaggeration, derogatory remarks, guesswork, or inappropriate characterizations of people and companies that can be misunderstood. Officers and employees should use care and good judgment when creating all correspondence, voicemail, e-mail, and written documents on behalf of the Company to avoid inaccuracy or offensive language.

Officers and employees should create and maintain documents and records in the normal course of business as required by applicable laws, rules and regulations or a specific Company policy. Company records should be kept for the appropriate time period needed to comply with applicable laws and regulations, as well as the Company’s record retention policies. In accordance with those policies, in the event of litigation or governmental investigation, directors, officers, and employees should consult with the Company’s Chief Financial Officer or legal counsel before taking any action because it is critical that any impropriety or possible appearance of impropriety be avoided.

Protection and Proper Use of Company Assets

The Company has many valuable assets — including its people, property, information and reputation. It is the responsibility of the directors, officers, and employees to preserve and protect these assets, and to use them only in ways that promote the best interests of the Company. Theft, carelessness, and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Company assets should be used for legitimate business purposes and should not be used for non-Company business. The Company’s Acceptable Use of Assets Policy provides clear parameters for the appropriate use of information technology provided by the Company and its subsidiaries.

The obligation to protect the Company’s assets includes its proprietary information. Proprietary information includes intellectual property, marketing plans, databases, records, salary information, and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.

Directors, officers, or employees leaving the Company, voluntarily or otherwise, are prohibited from removing, copying or disclosing any Company information, in whatever form, that is proprietary and/or confidential. Directors, officers and employees must not permit the unauthorized reproduction of software or other copyrighted or trademarked materials, or any other unauthorized use or misuse of any intellectual property belonging to or used by the Company.

Confidentiality

Directors, officers, and employees must maintain the confidentiality of confidential information entrusted to them by the Company or its employees, customers, suppliers, joint venture partners, or others with who the Company is considering a business or other transaction except when disclosure is authorized by an executive officer or required or mandated by laws or regulations. Confidential information includes all non-public information that might be useful or helpful to competitors or harmful to the Company or its customers and suppliers, if disclosed.

Anyone given access to such records must safeguard them and maintain the confidentiality of any information contained in those records. The obligation to preserve confidential information continues even after employment ends.

Integrity in Government Relationships

The U.S. Foreign Corrupt Practices Act prohibits giving anything of value, directly or indirectly, to officials of foreign government or foreign political candidates in order to obtain or retain business. It is strictly prohibited to make illegal payments to government officials of any country.

In addition, the U.S. government has a number of laws and regulations regarding business gratuities that may be accepted by U.S. government personnel. The promise, offer, or delivery to an official or employee of the U.S. government of a gift, favor, or other gratuity in violation of these rules would not only violate Company policy but could also be a criminal offense. State and local governments, as well as foreign governments, may have similar rules.

When representing the Company, directors, officers, and employees must use care in all contacts and dealings with government officials and their employees and must comply with all applicable laws, rules, regulations and corporate policies.

Economic and Trade Sanctions/OFAC

UTG must also comply with the various economic and trade sanctions programs administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”). These sanctions programs prohibit a variety of commercial activities, including specific rules relating to insurance transactions, with specified countries as well as specific entities and individuals included on OFAC’s list entitled “Specially Designated Nationals and Blocked Persons” which can be found at the OFAC website at http://www.treas.gov/ofac/. All employees must understand the obligations under these policies to ensure that prohibited transactions do not occur.

Anti-Money Laundering (USA PATRIOT Act)

UTG is committed to complying with all applicable laws and regulations aimed at deterring terrorists and other criminals from using our free enterprise system to fund terrorist and other criminal activities, including the USA PATRIOT Act of 2001. Money laundering is the process of engaging in a financial transaction, or a series of transactions, that involves funds used for or derived from criminal activities. The USA PATRIOT Act makes it mandatory for financial services companies to have an anti-money laundering program that contains four basic components:

•	Internal Policies, Procedures and Controls;
•	Designation of a Compliance Officer;
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•	An Independent Audit Function; and
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•	Ongoing Employee Training
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UTG is committed to meeting these requirements. All employees and business partners must comply fully with the laws and regulations designed to combat money laundering and the financing of terrorism. Under no circumstances may any employee knowingly facilitate or participate in any money laundering activity. Any employee who does so will be subject to severe disciplinary action, including possible termination of employment, and may be referred to federal or state law enforcement and regulatory agencies for consideration of civil and criminal penalties.

Investigations and Legal Proceedings

Employees who become aware of a governmental investigation that concerns any business operation of the Company must not conduct their own investigations. It is the responsibility of the Company’s senior management to determine whether to conduct an internal investigation, as well as to determine the scope and methods to be employed in conducting any such investigation. Most investigations involve complex legal and business issues and an employee attempting to investigate such matters may compromise the integrity of the investigation. If the results of any internal or governmental investigation warrant corrective action, senior management will determine the appropriate steps to be taken and will be responsible for implementation of any such remedial or preventative measures.

Participation in an Investigation – All directors, officers, and employees have the duty to cooperate fully with any internal investigation conducted by the Company. Directors, officers and employees must be truthful in all dealings with internal or governmental investigators, and must not:

•	Destroy, alter, or conceal any documents or other potentially relevant evidence in anticipation of, or in reaction to, a<br> request from any governmental or regulatory authority or any court;
•	Lie or otherwise make misleading statements in connection with any federal, state or local government or law enforcement agency investigation, or<br> any internal investigation by the Company;
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•	Obstruct, fraudulently influence or impede any external or internal investigation or inquiry or make any improper attempt to do so; and
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•	Attempt to cause any other Company employee or any third party to destroy evidence, to provide false or misleading information or otherwise to<br> obstruct any investigation.
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This Code does not prohibit a director, officer or employee from providing information or assisting in an investigation conducted by a federal regulatory or law enforcement agency, any member of Congress or any committee of Congress, or a supervisor of the employee (or another Company official who has the authority to investigate the alleged misconduct) in connection with conduct that the employee reasonably believes constitutes a violation of criminal fraud statutes or any rule or regulation of the Securities and Exchange Commission. If any employee becomes involved as a third party in any federal, state or local law enforcement agency investigation or inquiry, in a matter not related to Company business (e.g., as a witness to a crime or accident), the director, officer, or employee is encouraged to cooperate fully with the proper authorities.

Communications

Contact with the News Media – All requests for interviews and/or comments from national and local news media should be referred immediately to the Executive Department.

Contact with Investors – All requests for financial information about UTG and its subsidiaries received from investors should be directed to the Executive Department.

Reporting Violations of the Code

Violations of this Code of Ethics could result in discipline up to and including termination.

Where to Report Violations – Violations of this Code may be reported using one or more of the following methods:

1.	Talk to a supervisor. Whenever possible, employees should discuss the matter<br> with their supervisor. Employees and supervisors are encouraged to work together to achieve a fair resolution of the alleged violation, problem or issue. Supervisors also have a responsibility to document the reported issue and to provide a<br> copy of the report to senior management. If the issue remains unresolved to the satisfaction of the reporting person, or if a particular situation does not allow that employee to seek assistance from his direct supervisor, he should contact<br> senior management.
2.	Operating Committee. If an employee’s supervisor is involved in the<br> reportable incident or if the supervisor is otherwise unapproachable, the employee should seek out a member of the UTG Operating Committee.
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3.	Contact the Audit Committee of the UTG Board of Directors. <br> The Audit Committee members and their phone numbers are listed below:
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John Cortines	Thomas Harmon	Gabriel Molnar
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7728 Strawberry Estates Drive	13 Forest Ridge	12910 Shelbyville Rd. #200
Georgetown, TN 37336	Springfield, IL 62712	Louisville, KY 40243
407-650-3663	217-243-8615	502-254-5001

IN ALL CASES, REPORTS WILL BE TREATED AS CONFIDENTIALLY AS POSSIBLE.

Prohibition Against Retaliation – The Company prohibits retaliation against an individual for reporting an activity that the director, officer, or employee, in good faith, believes to be a violation of any law, rule, regulation or provision of this Code. Retaliation or reprisals against employees are considered a violation of this Code. Any director, officer, or employee who believes he or she is the subject of any form of retaliation should report the matter to a supervisor, a member of the Operating Committee or a member of the Audit Committee. Further, federal law makes it a crime to retaliate against a person (including with respect to their employment) for providing truthful information to a law enforcement agency or officer relating to the possible commission of any federal crime.

Certification Requirements

Every employee is responsible for maintaining the standards of ethical conduct as set forth in this Code. To help ensure compliance with the Code, UTG requires all employees to certify, upon initial employment and at the time a new or substantially revised code is distributed, that they have received and read the Code and fully understand their responsibilities to comply with the Code.

An initial certification form will be distributed for completion soon after employees complete Company-provided training on the Code. New employees will receive training on the Code upon joining the Company. Employees also will receive additional training on the Code whenever a new or substantially enhanced version of the Code is adopted. Periodic training will be conducted for all employees as necessary. Managers and supervisors are responsible for ensuring that all employees under their supervision have undergone any required training.

The UTG senior management will monitor the training and certification process for adequacy and compliance. Failure to comply with the required certification process or the requirements of the Code will result in appropriate disciplinary action, up to and including termination of employment. The Certification Form is immediately following.

UTG and Subsidiaries

Code of Ethics and Business Conduct

Certification Form

THE SIGNING OF THIS FORM IS A REQUIREMENT FOR ALL DIRECTORS, OFFICERS, AND EMPLOYEES UPON INITIAL EMPLOYMENT AND AT THE TIME A NEW OR SUBSTANTIALLY REVISED CODE IS DISTRIBUTED.

I hereby certify and acknowledge that:

I have received and read UTG’s Code of Ethics and Conduct. I fully understand my responsibility to comply with the Code.

I recognize that failure to comply with the provisions of the Code may subject me to appropriate disciplinary action, up to and including termination of employment.

____________________________________ ____________________________________

(Date) (Signature of Director, Officer, or Employee)

Please return this form to your immediate supervisor or the person otherwise designated by the Company to collect this document.

POLICY NAME: Code of Ethics and Conduct

BOARD APPROVED: December

    7, 2022

Code of Ethics and Conduct

Scope of Code

This Code is intended to deter wrongdoing and to promote the following:

•	Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional<br> relationships;
•	Full, fair, accurate, timely, and understandable disclosure in reports and documents the Company files with, or submits to, the Securities and<br> Exchange Commissions (the “SEC”), the state Departments of Insurance (the “DOI”), other regulatory bodies, and other communications made by the Company;
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•	Compliance with applicable governmental laws, rules, and regulations;
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•	The prompt internal reporting of violations of this Code to the appropriate person or persons identified in this Code;
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•	Accountability for adherence to this Code; and
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•	Adherence to a high standard of business ethics.
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Compliance with Laws, Rules and Regulations

Conflicts of Interest

•	Any consulting or employment relationship with any customer, supplier, or competitor;
•	Any outside business activity that detracts from an individual’s ability to devote appropriate time and attention to his or her responsibilities<br> to the Company;
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•	Any action that will require payment from corporate funds if such expenditure is not authorized or reimbursable under Company policy;
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•	Any use of Company property, information, resource or position for personal gain or to compete with the Company in any way;
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•	The receipt of non-nominal gifts or excessive entertainment from any organization with which the Company has current or prospective business<br> dealings;
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•	Being in the position of supervising, reviewing, or having any influence on the job evaluation, pay, or benefit of any family member; and
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•	Selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable directors, officers,<br> or employees are permitted to so purchase or sell.
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Insider Trading

Corporate Opportunities

Competition and Fair Dealing

Gifts and Entertainment –The purpose of business gifts and entertainment is a commercial setting is to create good will and sound working relationships, not to gain unfair advantage.

•	Anything offered as a “quid pro quo” (as part of an agreement to do, or not to do, anything in return for the gift);
•	Any gift of cash or cash equivalents (such as gift certificates, loans, stock, stock options, etc.); or
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•	Participating in any activity that they know would cause the person or party offering the gift or entertainment to violate any law, rule,<br> regulation or the specific ethical standards of their own employer.
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Maintaining an Appropriate and Secure Work Environment

Company Funds and Assets – Maintaining Accurate and Complete Records

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions.

Directors, officers and employees are prohibited from:

•	Violating any laws, external accounting requirements and Company procedures for reporting information of all types;
•	Making a false or misleading entry in a Company report or record;
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•	Knowingly altering, destroying, mutilating or concealing any record or document, or attempting to do so, in order to impair the record’s<br> integrity or availability for use in an official proceeding; and
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•	Selling, transferring or disposing of Company assets without proper documentation and authorization.
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Protection and Proper Use of Company Assets

Confidentiality

Integrity in Government Relationships

Economic and Trade Sanctions/OFAC

Anti-Money Laundering (USA PATRIOT Act)

•	Internal Policies, Procedures and Controls;
•	Designation of a Compliance Officer;
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•	An Independent Audit Function; and
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•	Ongoing Employee Training
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Investigations and Legal Proceedings

•	Destroy, alter, or conceal any documents or other potentially relevant evidence in anticipation of, or in reaction to, a<br> request from any governmental or regulatory authority or any court;
•	Lie or otherwise make misleading statements in connection with any federal, state or local government or law enforcement agency investigation, or<br> any internal investigation by the Company;
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•	Obstruct, fraudulently influence or impede any external or internal investigation or inquiry or make any improper attempt to do so; and
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•	Attempt to cause any other Company employee or any third party to destroy evidence, to provide false or misleading information or otherwise to<br> obstruct any investigation.
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Communications

Contact with the News Media – All requests for interviews and/or comments from national and local news media should be referred immediately to the Executive Department.

Contact with Investors – All requests for financial information about UTG and its subsidiaries received from investors should be directed to the Executive Department.

Reporting Violations of the Code

Violations of this Code of Ethics could result in discipline up to and including termination.

Where to Report Violations – Violations of this Code may be reported using one or more of the following methods:

1.	Talk to a supervisor. Whenever possible, employees should discuss the matter<br> with their supervisor. Employees and supervisors are encouraged to work together to achieve a fair resolution of the alleged violation, problem or issue. Supervisors also have a responsibility to document the reported issue and to provide a<br> copy of the report to senior management. If the issue remains unresolved to the satisfaction of the reporting person, or if a particular situation does not allow that employee to seek assistance from his direct supervisor, he should contact<br> senior management.
2.	Operating Committee. If an employee’s supervisor is involved in the<br> reportable incident or if the supervisor is otherwise unapproachable, the employee should seek out a member of the UTG Operating Committee.
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3.	Contact the Audit Committee of the UTG Board of Directors. <br> The Audit Committee members and their phone numbers are listed below:
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John Cortines	Thomas Harmon	Gabriel Molnar
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7728 Strawberry Estates Drive	13 Forest Ridge	12910 Shelbyville Rd. #200
Georgetown, TN 37336	Springfield, IL 62712	Louisville, KY 40243
407-650-3663	217-243-8615	502-254-5001

IN ALL CASES, REPORTS WILL BE TREATED AS CONFIDENTIALLY AS POSSIBLE.

Certification Requirements

UTG and Subsidiaries

Code of Ethics and Business Conduct

Certification Form

THE SIGNING OF THIS FORM IS A REQUIREMENT FOR ALL DIRECTORS, OFFICERS, AND EMPLOYEES UPON INITIAL EMPLOYMENT AND AT THE TIME A NEW OR SUBSTANTIALLY REVISED CODE IS DISTRIBUTED.

I hereby certify and acknowledge that:

I have received and read UTG’s Code of Ethics and Conduct. I fully understand my responsibility to comply with the Code.

I recognize that failure to comply with the provisions of the Code may subject me to appropriate disciplinary action, up to and including termination of employment.

____________________________________ __________________________________

(Date) (Signature of Director, Officer, or Employee)

Please return this form to your immediate supervisor or the person otherwise designated by the Company to collect this document.

CHARTER NAME: Audit Charter

BOARD APPROVED: December 7, 2022

Charter of the Audit Committee of the Board of Directors

I.	Purpose

The Audit Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) to assist the Board in fulfilling its responsibility to oversee the quality and integrity of the Company’s financial reporting and the audits of the financial statements of the Company. The Audit Committee’s primary purpose is to assist the Board in oversight of:

◾	The integrity of the Company’s financial statements and internal controls;
◾	The Company’s compliance with legal and regulatory requirements;
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◾	The qualifications and independence of the Company’s independent registered public accounting firm; and
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◾	The performance of the Company’s internal audit function and independent registered public accounting firm.
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II.	Composition
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The Audit Committee shall be comprised of one or more members of the Board. Committee members will be appointed by the Board to serve until their successors are elected. Unless a chairperson is elected by the full Board, the members of the Committee may designate a chairperson by majority vote. All members of the Committee shall meet the independence criteria and have the qualifications set forth in Rule 10A-3 of the Securities Exchange Act of 1934 (the “Exchange Act”).

Accordingly, all of the members of the Committee shall be directors:

◾	Who do not accept any direct or indirect consulting, advisory or compensatory fee from the Company other than for board<br> service or in respect of retirement or deferred compensation for prior service, who are not an “affiliated person” within the meaning of Rule 10A-3 under the Exchange Act; and
◾	Who have a basic understanding of finance and accounting and are able to read and understand fundamental financial statements and the regulatory<br> requirements of the Company’s industry.
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It is desirable, but not mandatory that at least one member of the Committee shall have accounting or related financial management expertise, or any other comparable experience or background which results in the individual’s financial sophistication, including being or having

been a chief executive officer, chief financialofficer or other senior officer with financial oversight responsibilities. The above is not intended to require a Committee member to meet the SEC definition of a “financial expert”.

III.	Meetings

The Committee shall meet as often as deemed necessary or appropriate in its judgment, generally at least twice annually, either in person or by phone. Any member of the Committee may call meetings of the Committee.

At least annually, the Committee should meet privately in executive session with management, the independent auditors, and as a Committee to discuss any matters that the Committee or each of the groups believes should be discussed. The Committee may ask members of management or others to attend meetings and provide pertinent information as necessary.

In addition, the Committee, or at least its Chair, should communicate with management and the independent auditors annually, at a minimum, to review the Company’s financial statements and significant audit findings.

IV.	Responsibilities and Duties

Documents/Reports/Accounting Information Review

◾	Review and reassess the adequacy of this Charter at least annually and submit the charter to the Board of Directors for<br> approval.
◾	Review the Company’s annual audited financial statements prior to filing or distribution. Review should include discussion<br> with management and independent auditors of significant issues regarding accounting principles, practices, and judgments.
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◾	Recommend to the board whether the financial statements should be included in the annual report on Form 10-K.
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Independent Registered Public Accounting Firm and Audit Process

◾	Appoint, compensate, retain, and oversee the work performed by the independent auditor retained for the purpose of preparing<br> or issuing an audit report or related work. Review the performance and independence of the independent auditor and remove the independent auditor if circumstances warrant. The independent auditor will report directly to the Audit Committee<br> and the Audit Committee will oversee the resolution of disagreements between management and the independent auditor if they arise.
◾	On an annual basis, the Committee should review and discuss with the independent auditors all significant relationships they<br> have with the Company that could impair the auditors’ independence.
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◾	Review and approve both audit and nonaudit services to be provided by the independent auditor. The authority to grant<br> approvals may be delegated to one or more designated members of the Audit Committee, whose decisions will be presented to the full Audit Committee at its next meeting.
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◾	Discuss with the independent auditor the matters required to be discussed under the standards of the PCAOB.
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◾	Review with the independent auditor any problems or difficulties and management’s response.
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◾	Hold timely discussions with the independent auditor regarding the following:
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o	Critical accounting policies and practices
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o	Other material written communications between the independent auditor and management, including, but not limited to, the<br> management letter and schedule of unadjusted differences.
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◾	At least annually, obtain and review a report by the independent auditor describing:
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o	The independent auditor’s internal quality-control procedures
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o	Any material issues raised by the most recent internal quality-control review or peer review, or by any inquiry or<br> investigation by governmental or professional authorities within the preceding five years with respect to independent audits carried out by the independent auditor, and any steps taken to deal with such issues
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o	All relationships between the independent auditor and the Company, addressing the matters set forth in PCAOB Rule 3526.
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Financial Reporting Processes, Accounting Policies, and Internal Control Structure

◾	Periodically review the adequacy and effectiveness of the Company’s disclosure controls and procedures and the Company’s<br> internal control over financial reporting, including any significant deficiencies and significant changes in internal controls.
◾	Understand the scope of the internal auditor’s review of internal control over financial reporting and obtain a report on<br> significant findings and recommendations, together with management responses.
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◾	Receive and review any disclosure from the Company’s CEO and CFO made in connection with the certification of the Company’s<br> quarterly and annual reports filed with the SEC of: a) significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s<br> ability to record, process, summarize, and report financial data; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control.
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◾	Review major issues regarding accounting principles and financial statement presentations, including any significant changes<br> in the Company’s selection or application of accounting principles; major issues as to the adequacy of the Company’s internal controls; and any special audit steps adopted in light of material control deficiencies.
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◾	Annually review a summary of director and officers’ related party transactions and potential conflicts of interest.
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◾	Oversee the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing<br> matters, including the confidential, anonymous submission by Company employees regarding questionable accounting or auditing matters.
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Ethical Compliance, Legal Compliance, and Risk Management

◾	Review, with the Company’s counsel or other appropriate individuals, legal compliance and legal matters that could have a<br> significant impact on the Company’s financial statements.
◾	Discuss policies with respect to risk assessment and risk management, including appropriate guidelines and policies to govern<br> the process, as well as the Company’s major financial risk exposures and the steps management has undertaken to control them.
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Reporting and Other Responsibilities

◾	Review, with management, the Company’s finance function, including its annual Plan, organization, and quality of personnel.
◾	Perform other activities consistent with this Charter, the Company’s bylaws, and governing laws that the Board or Audit Committee determines are<br> necessary or appropriate.
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V.	Procedures
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The Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee shall have the authority and sufficient funding to retain outside legal counsel, accountants or other experts as it determines necessary and appropriate to assist the Committee in carrying out its functions, without obtaining the approval of the Board or management.

VI.	Limitation of Audit Committee’s Role

While the Committee has the oversight responsibility set forth in this Charter, it does not have the duty to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibility of management and the independent registered public accounting firm. In addition, the Committee recognizes that the Company’s management, internal audit staff and the independent registered public accounting firm, devote more time to reviewing or analyzing the Company’s business and its operations and as a result, have more knowledge and detailed information concerning the Company than members of the Committee. Consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the quality or adequacy of the independent registered public accounting firm.

POLICY NAME: Whistleblower Policy

BOARD APPROVED: June 29, 2022

All UTG, Inc. employees are encouraged to report either orally or in writing to their immediate supervisor, or alternate line of authority as hereinafter described, all evidence of activity by a UTG department or employee that may constitute:

•	Instances of Corporate fraud;
•	Unethical business conduct;
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•	A violation of State or Federal law; or
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•	Substantial and specific danger to the employee’s or public’s health and safety
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Any UTG employee who in good faith reports such incidents as described above will be protected from threats of retaliation, discharge, or other types of discrimination including but not limited to compensation or terms and conditions of employment that are directly related to the disclosure of such reports. In addition, no employee may be adversely affected because the employee refused to carry out a directive which, in fact, constitutes corporate fraud or is a violation of State or Federal law.

Any employee who wants to report evidence of alleged improper activity as described should contact his/her immediate supervisor, or the supervisor’s manager. In instances where the employee is not satisfied with the supervisor or manager’s response, or is uncomfortable for any reason addressing such concerns to their supervisor or the manager of such supervisor, the employee may contact any Executive Officer of the Company. If the employee is uncomfortable for any reason contacting an Executive Officer, the employee may contact a member of the Audit Committee of the Board of Directors. The contact information for the Audit Committee members will be posted on the Company web site. Employees are encouraged to provide as much specific information as possible including names, dates, places, and events that took place, the employee’s perception of why the incident(s) may be a violation, and what action the employee recommends be taken. Anonymous written or telephonic communications will be accepted. Employees who choose to identify themselves will receive a reply to their report within 20 working days or as soon as practicable thereafter.

Audit Committee Members
John Cortines<br><br> <br>7728 Strawberry Estates Drive<br><br> <br>Georgetown, TN 37336<br><br> <br>972-832-1062	Gabriel Molnar<br><br> <br>12910 Shelbyville Rd. #200<br><br> <br>Louisville, KY 40243<br><br> <br>502-254-5001
Thomas Harmon<br><br> <br>13 Forest Ridge<br><br> <br>Springfield, IL 62712<br><br> <br>217-243-8615

CHARTER NAME: Charter of the Compensation Committee of the Board of Directors

BOARD APPROVED: December 7, 2022

I. Compensation Committee Purpose

The Compensation Committee of the Board of Directors (the “Board”) of UTG, Inc. (“UTG” or the “Company”) is appointed by the Board to discharge the Board’s responsibilities relating to compensation of the Company’s Chief Executive Officer (the “CEO”), the Company’s executive officers and other senior executives of the Company (the “Senior Executives”). The Committee has overall responsibility for approving and evaluating all compensation plans, policies and programs of the Company as they affect the CEO, the Executive Officers, and the Senior Executives.

II. Compensation Committee Composition

The Committee shall have at least two members. The members of the Committee shall be determined at the first meeting of the Board to be held following the annual general meeting of shareholders or as soon thereafter as practicable. Vacancies on the Committee shall be filled by like vote of the Board at the next meeting of the Board following the occurrence of the vacancy or as soon thereafter as practicable. A member may be removed from the Committee at any time, with or without cause, by the Board.

Each member of the Committee must satisfy such criteria of independence as the Board may establish and such additional regulatory or listing requirements as the Board may determine to be applicable or appropriate. Accordingly, each member must qualify as a “non-employee director” under Rule 16b-3 of the Securities and Exchange Commission (the “SEC”) and may not be part of a compensation committee interlock within the meaning of SEC Regulation S-K. Members of the Committee should be suitably knowledgeable in matters pertaining to executive compensation.

The Committee may form, and delegate its authority to subcommittees as it deems appropriate. The Committee also may delegate compensation functions to the Company’s human resources personnel and to external advisors, as it deems appropriate. The Board may appoint the Committee’s Chairperson, but if the Board has not appointed a Chairperson, the Committee shall elect a Chairperson from among its members.

III. Compensation Committee Meetings

The Compensation Committee shall meet as often as may be deemed necessary or appropriate in its judgment, but not less frequently than 1 time annually, either in person or telephonically, and at such times and places as the Committee shall determine. The Committee may request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Compensation Committee or to meet with any members of, or consultants to, the Committee. The Compensation Committee shall report its activities to the Board regularly.

V. Compensation Committee Responsibilities and Duties

The Committee shall have the following responsibilities:

•	Annually review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals<br> and objectives, and recommend to the Board the CEO’s overall compensation levels based on this evaluation. In evaluating the incentive components of CEO

compensation, the Compensation Committee shall consider the Company’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the CEO in past years. Notwithstanding the foregoing, if any grant or award to the CEO is intended to qualify for the performance-based compensation exemption from the limitations on deductibility of executive compensation imposed by Section 162(m) of the Internal Revenue Code or any successor thereto, the Compensation Committee, or any independent subcommittee thereof, rather than the Board, shall approve such award, but it may refer such award to the Board for ratification.

•	At least annually, review and approve the annual base salaries and annual incentive opportunities of the CEO and the Senior Executives. In<br> addition, periodically and as and when appropriate, review and approve the following as they affect the CEO and the Senior Executives: (a) all other incentive awards and opportunities, including both cash-based and equity-based awards and<br> opportunities; (b) any employment agreements and severance arrangements; and (c) any change-in-control agreements and change-in-control provisions affecting any elements of compensation and benefits. Finally, the Compensation Committee<br> shall review and approve any special or supplemental compensation and benefits for the CEO and the Senior Executives and persons who formerly served as the CEO and/or as Senior Executives, including supplemental retirement benefits and the<br> perquisites provided to them during and after employment.
•	Monitor the Company’s compliance with the requirements under the Sarbanes-Oxley Act of 2002 relating to 401(k) plans and loans to directors and<br> officers and with all other applicable laws affecting employee compensation and benefits.
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•	Monitor and evaluate matters relating to the compensation and benefits structure of the Company as the Compensation Committee deems appropriate,<br> including: (a) provide guidance to senior management on significant issues affecting compensation philosophy or policy, and (b) evaluate whether the risks arising from the Company’s compensation policies and practices for its employees<br> would be reasonably likely to have a material adverse effect on the Company.
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•	May form and delegate authority to subcommittees when appropriate.
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•	Review and reassess the adequacy of this Charter periodically and recommend any proposed changes to the Board for approval.
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•	Consult with the Chief Executive Officer and advise the Board with respect to senior management succession planning.
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V. Outside Advisors

The Compensation Committee shall have the authority to retain such outside consultants or advisors as it determines appropriate to assist it in the performance of its functions, or to advise or inform the Committee, including sole authority to retain and terminate any compensation consultant used to assist the Committee in the evaluation of director, CEO or senior executive compensation, and to approve the consultant’s fees and other retention terms.

POLICY NAME: Charter of the Investment Committee of the Board of Directors

BOARD APPROVED: December 7, 2021

I. Investment Committee Purpose

The purpose of the Investment Committee (the “Committee”) of the Board of Directors (the “Board”) of UTG, Inc. (the “Company”) shall be to oversee the Company’s investment transactions, management, policies and guidelines, including review of investment manager selection, establishment of investment benchmarks, review of investment performance and oversight of investment risk management exposure policies and guidelines.

II. Investment Committee Composition

The Committee shall be comprised of three or more directors. The members of the Committee shall be determined at the first meeting of the Board to be held following the annual general meeting of shareholders or as soon thereafter as practicable. Vacancies on the Committee shall be filled by like vote of the Board at the next meeting of the Board following the occurrence of the vacancy or as soon thereafter as practicable. A member may be removed from the Committee at any time, with or without cause, by the Board.

The Committee may form, and delegate its authority to subcommittees as it deems appropriate. The Committee also may delegate investment functions to the Company’s investment personnel and to external managers, as it deems appropriate. The Board may appoint the Committee’s Chairperson, but if the Board has not appointed a Chairperson, the Committee shall elect a Chairperson from among its members.

III. Investment Committee Meetings

The Committee shall establish a regular meeting schedule, which shall be a least two times annually or more frequently as circumstances require. The Chairperson of the Committee or a majority of the members of the Committee may also call a special meeting of the Committee.

A majority of the members of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum. All actions of the Committee will require the vote of a majority of its members present at the meeting of the Committee at which a quorum is present. The Committee shall maintain minutes of its meetings and shall regularly report on its actions to the Board.

The Committee may form subcommittees for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee deems appropriate; provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Committee shall not delegate to the subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the Committee as a whole.

The Committee shall have access to any of the books and records of the Company that the Committee shall consider relevant to carrying out its duties and may require any officer or employee of the Company to attend meetings of the Committee and provide to it any information available to the Company relevant to the Committee’s activities, except as the Board may otherwise direct.

IV. Investment Committee Responsibilities and Duties

The Committee shall have the following responsibilities:

•	Establish and periodically review the Company’s investment policies and guidelines.
•	Oversee and periodically review the performance of the Company’s investments, including the impact on such performance of the Company’s investment<br> policies and guidelines.
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•	Periodically review the structure, approach and effectiveness of the Company’s investment function, including the performance of, and allocation of<br> responsibilities between, Company personnel and third-party advisers.
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•	Select the Company’s money managers and investment advisers, monitor their performance and, when appropriate, terminate their engagement.
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•	Authorize investments, either on an ad hoc basis or as standing authorities, and ratifying investments made pursuant to delegated authorities.
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•	Monitor on an ongoing basis the performance of the Company’s investment advisers and retain and terminate such advisers as it deems appropriate.
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V. Outside Advisors

The Committee may conduct or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and may retain, at the Company’s expense, such independent counsel or other advisers as it deems necessary for the proper performance of its responsibilities. The Company’s Chief Investment Officer, with the approval of the Chief Executive Officer, and the Committee shall each have the authority to retain or terminate any consultant or adviser retained at the direction of the Committee or the Company’s Chief Investment Officer to assist the Committee in carrying out its responsibilities, including authority to approve the fees or other compensation, and other retention terms, of such consultant or adviser, such fees or other compensation to be borne by the Company.