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What Changed
Risk factors · Mar 13, 2025 → Mar 12, 2026
399 added · 418 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
Total benefits and expenses increased primarily due to: • $6.4 million increase in total insurance benefits paid or provided due to increased matured endowments in our International Insurance segment, partially offset by ◦ a decrease in future policy benefit reserves, and ◦ a decrease in policyholder liability remeasurement loss due to better than expected experience in our Domestic Insurance segment; and • $0.8 million increase in other general expenses due to strategic growth initiatives and increased participation in our equity compensation program in addition to being negatively impacted in 2024 by the accrual of $3.5 million in legal fees awarded to the certain defendants in the trade secret lawsuit.
BENEFITS AND EXPENSES Years ended December 31, (In thousands) 2025 2024 Benefits and expenses: Insurance benefits paid or provided: Claims and surrenders $ 165,025 146,082 Increase (decrease) in future policy benefit reserves (14,857) (4,286) Policyholder liability remeasurement (gain) loss 2,573 4,756 Policyholders' dividends 5,550 5,355 Total insurance benefits paid or provided 158,291 151,907 Commissions 47,265 49,118 Other general expenses 53,041 52,266 Capitalization of deferred policy acquisition costs (39,801) (41,302) Amortization of deferred policy acquisition costs 18,899 17,435 Amortization of cost of insurance acquired 451 597 Total benefits and expenses $ 238,146 230,021 Payments of claims and surrenders benefits constitute the vast majority of our expenses.
In the year ended December 31, 2025, December 31, 2025 | 10-K 33 Table of Contents CITIZENS, INC. the change in future policy benefit reserves decreased significantly as compared to 2024 despite the increase in our inforce business, due to the amount of reserves released in connection with matured endowments.
Although we continue to incur costs related to our strategic growth initiatives and costs incurred associated with our equity compensation program due to higher stock price and additional participants, we incurred a $3.5 million legal fee in the 2024 due to the trade secret lawsuit.
Years ended December 31, (In thousands) 2025 2024 Income before federal income taxes: Segments: International $ 14,382 23,512 Domestic 12,133 1,914 Total Segments 26,515 25,426 Other Non-Insurance Enterprises (9,045) (10,446) Total income before federal income taxes $ 17,470 14,980 INTERNATIONAL INSURANCE Detailed results of operations for the International Insurance segment for the periods indicated are as follows: Years ended December 31, (In thousands) 2025 2024 Revenues: Premiums: Life insurance $ 117,646 118,042 Accident and health insurance 709 761 Net investment income 50,869 49,174 Investment related gains (losses), net (478) (1,929) Other income 6,913 4,534 Total revenues 175,659 170,582 Benefits and expenses: Insurance benefits paid or provided: Claims and surrenders 139,017 117,730 Increase (decrease) in future policy benefit reserves (27,310) (15,364) Policyholder liability remeasurement (gain) loss 7,175 4,400 Policyholders' dividends 5,214 4,891 Total insurance benefits paid or provided 124,096 111,657 Commissions 22,381 22,333 Other general expenses 22,154 20,818 Capitalization of deferred policy acquisition costs (21,371) (21,232) Amortization of deferred policy acquisition costs 14,017 13,494 Total benefits and expenses 161,277 147,070 Income (loss) before federal income taxes $ 14,382 23,512 In our International Insurance segment, income before federal income tax was $14.4 million in 2025, as compared to $23.5 million in 2024.
DOMESTIC INSURANCE Detailed results of operations for the Domestic Insurance segment for the periods indicated are as follows: Years ended December 31, (In thousands) 2025 2024 Revenues: Premiums: Life insurance $ 56,965 53,519 Accident and health insurance 1,051 1,024 Property insurance — (18) Net investment income 20,420 19,654 Investment related gains (losses), net 587 (680) Other income (loss) 28 (30) Total revenues 79,051 73,469 Benefits and expenses: Insurance benefits paid or provided: Claims and surrenders 26,008 28,352 Increase in future policy benefit reserves 12,453 11,078 Policyholder liability remeasurement (gain) loss (4,602) 356 Policyholders' dividends 336 464 Total insurance benefits paid or provided 34,195 40,250 Commissions 24,884 26,785 Other general expenses 20,936 20,052 Capitalization of deferred policy acquisition costs (18,430) (20,070) Amortization of deferred policy acquisition costs 4,882 3,941 Amortization of cost of insurance acquired 451 597 Total benefits and expenses 66,918 71,555 Income (loss) before federal income taxes $ 12,133 1,914 In our Domestic Insurance segment, income before federal income tax was $12.1 million in 2025, as compared to $1.9 million in 2024.
Many securities were called between 2019 and 2021, necessitating December 31, 2025 | 10-K 40 Table of Contents CITIZENS, INC. reinvestment in lower interest rate fixed maturity assets, which has begun and will continue to impact net investment income and yields.
Years ended December 31, (In thousands) 2025 2024 Direct premiums $ 188,766 178,836 Reinsurance assumed 51 67 Reinsurance ceded (12,446) (5,575) Net premiums $ 176,371 173,328 Our insurance subsidiaries monitor the solvency of their reinsurers to minimize the risk of loss in the event of default by a reinsurer.
Such costs include the incremental direct costs of contract acquisition, such as sales commissions; the portion of employees’ total compensation and payroll-related fringe benefits related directly to time spent performing acquisition activities, such as underwriting, issuing, and processing December 31, 2025 | 10-K 48 Table of Contents CITIZENS, INC. policies for contracts that have actually been acquired; and other costs related directly to acquisition activities that would not have been incurred if the contract had not been acquired.
Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K.
Based on such evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2025 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and such information is accumulated and reported to management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding disclosure.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may December 31, 2025 | 10-K 51 Table of Contents CITIZENS, INC. become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Fort Lauderdale, Florida March 12, 2026 (d) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
No longer disclosed
Therefore, under the terms of the reinsurance agreements, the reinsurers December 31, 2024 | 10-K 6 Table of Contents CITIZENS, INC. agree to reimburse us for the ceded amount (i.e., the death benefit amount less our retained risk) in the event a claim is paid.
The extent of this regulation varies, but most U.S. jurisdictions have laws and regulations based upon the National Association of Insurance Commissioners ("NAIC") model rules governing the financial condition of insurers, including standards of solvency, types and concentration of investments, establishment and maintenance of reserves, credit for reinsurance and requirements of capital adequacy; and the business conduct of insurers, December 31, 2024 | 10-K 8 Table of Contents CITIZENS, INC. including marketing and sales practices and claims handling.
Although the Company believes that these foreign regulators do not have jurisdiction over the Company and that any actions, including fines, may be unenforceable against the Company, any regulatory action could otherwise December 31, 2024 | 10-K 12 Table of Contents CITIZENS, INC. absorb Company time and resources (including independent consultants) away from its business operations or the Company may choose to pay such fines in order to do business in a particular country.
The availability of financing December 31, 2024 | 10-K 18 Table of Contents CITIZENS, INC. will depend on a variety of factors such as market conditions, the general availability of credit, the overall availability of credit to the financial services industry, and the possibility that customers or lenders could develop a negative perception of our financial prospects.
Global or regional changes in the financial markets or economic conditions could adversely affect our business in many ways, including the following: • Inflation, recession, an increase in unemployment rates or declines in consumer confidence could lead people to conserve cash, thereby causing a decrease in new sales and renewal premiums, or an December 31, 2024 | 10-K 19 Table of Contents CITIZENS, INC. increase in surrenders and lapses, which would cause a decline in our premium revenue or increase in benefit expenses paid out. • Market volatility, specifically declining equity markets, negatively impact the fair market value of our equity securities, leading to investment-related losses that negatively affect our GAAP operating revenue and profitability. • We are subject to credit risk in our investment portfolio.
CYBERSECURITY RISKS, THE FAILURE OF OUR SYSTEMS TO OPERATE PROPERLY AND/OR THE FAILURE TO MAINTAIN THE CONFIDENTIALITY, INTEGRITY, AND AVAILABILITY OF POLICYHOLDER AND CLAIMS DATA, INCLUDING December 31, 2024 | 10-K 20 Table of Contents CITIZENS, INC.
Criminals may overpay premiums, surrender policies prematurely, or make fictitious claims to cycle the illicit December 31, 2024 | 10-K 13 Table of Contents CITIZENS, INC. funds back as legitimate payout.
We also make available, free of charge, through our Internet website (http://www.citizensinc.com), our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Section 16 Reports filed by officers and directors, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC.
The Company has registered the shares of Class A common stock issuable to participants under the SIP on a Form S-3 registration statement under the Securities Act of 1933, as amended, (the "Securities Act") that is on file with the SEC.
The Class A common stock sold under the SIP is registered with the SEC pursuant to a Form S-3 registration statement under the Securities Act of 1933 but is not registered under the laws of any foreign jurisdiction.
In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Form 10-K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
The Company’s failure to pay claims fairly, accurately, and in a timely manner, to recognize fraudulent claims, or to deploy claims resources appropriately, could result in unanticipated costs, lead to material litigation or regulatory fines, undermine customer goodwill and the Company’s reputation in the marketplace, impair its brand image and, as a result, materially and adversely affect its competitiveness, financial results, prospects, and liquidity.