24090--3/13/2009--CITIZENS

related topics

{operation, natural, condition}

{stock, price, share}

{condition, economic, financial}

{stock, price, operating}

{provision, law, control}

{financial, litigation, operation}

{personnel, key, retain}

{cost, regulation, environmental}

{tax, income, asset}

{control, financial, internal}

{system, service, information}

{regulation, change, law}

{loss, insurance, financial}

{cost, operation, labor}

{acquisition, growth, future}

{debt, indebtedness, cash}

{product, liability, claim}

{capital, credit, financial}

{operation, international, foreign}

CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES The United States and global financial markets have been experiencing extreme and unprecedented volatility and disruption. As a consequence, we are exposed to significant financial and capital markets risk, including changes in equity prices, which may have a material adverse effect on our results of operations, financial condition and liquidity. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Unrealized losses may be realized Our actual claims losses may exceed our reserves for claims and we may be required to establish additional reserves, which in turn may adversely impact our results of operations and financial condition. We may be required to accelerate the amortization of deferred acquisition costs and the costs of customer relationships acquired, which would increase our expenses and adversely affect our results of operations and financial condition. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES We may be required to recognize an impairment in the value of our goodwill, which would increase our expenses and materially adversely affect our results of operations and financial condition. We are a defendant in lawsuits, which may adversely affect our financial condition and detract from the time our management is able to devote to our business, and we are subject to risks related to litigation and regulatory matters. Reinsurers with which we do business could increase their premium rates and may not honor their obligations, leaving us liable for the reinsured coverage. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES We may not be able to continue our past strategy of acquiring other U.S. life insurance companies, and we may not realize improvements to our financial results as a result of our past or any future acquisitions. Our international and domestic operations face significant competition. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Sales of our products may be reduced if we are unable to (i) establish and maintain commercial relationships with independent marketing firms and consultants (ii) attract and retain employee agents or (iii) develop and maintain our distribution sources. Loss of the services of our senior management team would likely hinder development of our operating and marketing programs and our strategy for expanding our business. We are subject to extensive governmental regulation in the United States, which increases our costs of doing business and could restrict the conduct of our business. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Changes in U.S. regulation may adversely affect our results of operations and financial condition and limit our prospective growth. Our failure to maintain effective information systems could adversely affect our business. We have in the past identified material weaknesses in our disclosure controls and controls over financial reporting. To the extent that we may have not remedied these weaknesses or fail to maintain our current system of internal controls to an effective level with regard to material weaknesses, we may not be able to report our financial results accurately. As a result, we could be required to restate our financial statements and be exposed to increased regulatory scrutiny and litigation from investors and others. Our failure to protect confidential information and privacy could result in the loss of customers, subject us to fines and penalties and adversely affect our results of operations and financial condition. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES The insurance industry in which we operate may be subject to periodic negative publicity, which may negatively impact our financial results. General economic, financial market and political conditions may materially and adversely affect our results of operations and financial condition. Our insurance subsidiaries are restricted by applicable laws and regulations in the amounts of fees, dividends and other distributions they may make to us. The inability of our subsidiaries to make payments to us in sufficient amounts for us to conduct our operations could adversely affect our ability to meet our obligations or expand our business. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Adverse capital and credit market conditions may significantly affect our access to debt and equity capital and our cost of capital in seeking to expand our business. Difficult conditions in the global capital markets and the world economy, which we do not expect to improve in the near future, generally may materially adversely affect our business and results of operations. There can be no assurance that actions of the U.S. Government, the Federal Reserve and other governmental and regulatory bodies for the purpose of stabilizing the financial markets will achieve the intended effect. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES Risks Relating to Our Class A Common Stock The price of our Class A common stock may be volatile and may be affected by market conditions beyond our control. Our Class A common shareholders will not control us for the foreseeable future, will have a limited ability to influence our business policies and corporate actions and will not by themselves be able to elect any directors. Our articles of incorporation and bylaws, as well as applicable state insurance laws, may discourage takeovers and business combinations that our shareholders might consider to be in their best interests. We have never paid any cash dividends on our Class A common stock and do not anticipate doing so in the foreseeable future. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES There are a substantial number of shares of our Class A common stock eligible for future sale in the public market. The sale of a large number of these shares could cause the market price of our Class A common stock to fall. Holders of our Series A preferred stock may obtain the right to require us to redeem their Series A preferred stock and we will be required to redeem any shares of Series A preferred stock that remain outstanding on July 12, 2009. Provisions applicable to our Series A preferred stock may make it more difficult or prevent us from raising funds or taking certain other actions.

Full 10-K form ▸

24090--3/13/2009--CITIZENS_INC