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Stockholders' Equity and Restrictions | 12 Months Ended
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Dec. 31, 2022
Stockholders' Equity Note [Abstract] |
Stockholders' Equity and Restrictions | STOCK Our Restated and Amended Articles of Incorporation authorize the issuance of 127,000,000 shares, of which 100,000,000 shares shall be Class A common stock, 2,000,000 shares shall be Class B common stock, and 25,000,000 shall be preferred stock. The two authorized classes of common stock are equal in all respects, except (a) each share of Class A common stock is entitled to receive twice the cash dividends paid on a per share basis to the Class B common stock, if any; and (b) the holders of the Class B common stock have the exclusive right to elect a simple majority of the Board of Directors of Citizens. In April 2021, we repurchased all of the outstanding Class B common stock and it is now classified as treasury stock. As a result, all of the directors are elected by the holders of the Class A common stock. Citizens has never issued any preferred stock. A summary of the change in number of shares of Class A and Class B common stock and treasury stock issued is as follows:
(In thousands) | Common Stock |  | Treasury
Class A |  | Class B |  | Stock
Balance at December 31, 2020 | 52,654 |  |  | 1,002 |  |  | 3,136 |
Stock issued under stock investment plan | 404 |  |  | — |  |  | — |
Stock issued for compensation | 112 |  |  | — |  |  | — |
Acquisition of Class B shares | — |  |  | — |  |  | 1,002 |
Balance at December 31, 2021 | 53,170 |  |  | 1,002 |  |  | 4,138 |
Stock issued under stock investment plan | 475 |  |  | — |  |  | — |
Stock issued for compensation | 91 |  |  | — |  |  | — |
Acquisition of Class A shares | — |  |  | — |  |  | 799 |
Other share issuance | 22 |  |  | — |  |  | — |
Balance at December 31, 2022 | 53,758 |  |  | 1,002 |  |  | 4,937 |
EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share.
Years ended December 31, (In thousands, except per share amounts) |  | 2022 |  | 2021 |  |
Net income (loss) |  | $ | (6,638) |  |  | 36,787 |  |  |
Numerator for Basic Earnings Per Share: |  |  |  |  |  |
Net income (loss) allocated to Class A common stock |  | $ | (6,638) |  |  | 36,673 |  |  |
Net income (loss) allocated to Class B common stock |  | — |  |  | 114 |  |  |
Net income (loss) |  | $ | (6,638) |  |  | 36,787 |  |  |
Denominator for Basic Earnings Per Share: |  |  |  |  |  |
Weighted average shares of Class A outstanding |  | 50,139 |  |  | 49,664 |  |  |
Weighted average shares of Class B outstanding |  | — |  |  | 308 |  |  |
Total weighted average shares outstanding |  | 50,139 |  |  | 49,972 |  |  |
Basic earnings (loss) per share of Class A common stock |  | $ | (0.13) |  |  | 0.74 |  |  |
Basic earnings (loss) per share of Class B common stock |  | — |  |  | 0.37 |  |  |
Numerator for Diluted Earnings Per Share: |  |  |  |  |  |
Net income (loss) allocated to Class A common stock |  | $ | (6,638) |  |  | 36,675 |  |  |
Net income (loss) allocated to Class B common stock |  | — |  |  | 112 |  |  |
Net income (loss) |  | $ | (6,638) |  |  | 36,787 |  |  |
Denominator for Diluted Earnings Per Share: |  |  |  |  |  |
Weighted average shares of Class A outstanding |  | 50,867 |  |  | 50,337 |  |  |
Weighted average shares of Class B outstanding |  | — |  |  | 308 |  |  |
Total weighted average shares outstanding |  | 50,867 |  |  | 50,645 |  |  |
Diluted earnings (loss) per share of Class A common stock |  | $ | (0.13) |  |  | 0.73 |  |  |
Diluted earnings (loss) per share of Class B common stock |  | — |  |  | 0.36 |  |  |
STATUTORY CAPITAL AND SURPLUS The table below shows the combined total of all of our domestic insurance subsidiaries' statutory capital and surplus and statutory net income (loss) for life insurance operations and property insurance operations, although these amounts are not all available as dividends to Citizens because only CICA is directly owned by Citizens. All other domestic subsidiaries are owned by CICA.
As of December 31, (In thousands) | 2022 |  | 2021
Combined statutory capital and surplus |  |  |
Life insurance operations | $ | 35,433 |  |  | 43,138 |
Property insurance operations | 6,912 |  |  | 5,298 |
Total combined statutory capital and surplus | $ | 42,345 |  |  | 48,436 |
Years ended December 31, (In thousands) | 2022 |  | 2021 |  |
Combined statutory net income (loss) |  |  |  |  |
Life insurance operations | $ | (1,885) |  |  | 5,280 |  |  |
Property insurance operations | 1,615 |  |  | (1,512) |  |  |
Total combined statutory net income (loss) | $ | (270) |  |  | 3,768 |  |  |
Generally, the net assets of the domestic insurance subsidiaries available for transfer to their immediate parent are limited to the lesser of the subsidiary's net gain from operations during the preceding year or 10% of the subsidiary's net statutory surplus as of the end of the preceding year as determined in accordance with accounting practices prescribed or permitted by insurance regulatory authorities. Under these practices, total surplus at December 31, 2022 was $32.3 million and net gain from operations was $0.7 million for CICA for the year ended December 31, 2022. Based upon these amounts, a $0.7 million dividend could be paid to the Company without prior regulatory approval in 2023. Payments of dividends in excess of such amounts would generally require approval by regulatory authorities. Our domestic insurance subsidiaries have calculated their risk-based capital ("RBC") in accordance with the National Association of Insurance Commissioners' ("NAIC") Model Rule and the RBC rules as adopted by their respective states of domicile. As part of the novation transaction with CICA International, the Company agreed to infuse capital into CICA as required by the Colorado Department of Insurance to maintain CICA's RBC above 350% in any future calendar year-end periods. All domestic insurance subsidiaries exceeded RBC minimum levels at December 31, 2022. Under the Bermuda Insurance Act 1978 (the "Insurance Act"), an insurer is prohibited from declaring or paying a dividend if it is in breach of its Enhanced Capital Requirement (“ECR”) or Minimum Margin of Solvency (“MMS”) or if the declaration or payment of such dividend would cause such a breach. Where an insurer fails to meet its MMS on the last day of any financial year, it is prohibited from declaring or paying any dividends during the next financial year without the approval of the Bermuda Monetary Authority (the “BMA” or the "Authority"). Insurers are also prohibited from paying a dividend in an amount exceeding 25% of the prior year’s total statutory capital and surplus, unless at least two members of the board of directors and its principal representative sign and submit to the BMA an affidavit attesting that a dividend in excess of this amount would not cause such insurer to fail to meet its relevant margins. In certain instances, the insurer would also be required to provide prior notice to the BMA in advance of the payment of dividends. In the event that such an affidavit is submitted to the BMA in accordance with the Insurance Act, and further subject to CICA International meeting its MMS and ECR requirements, CICA International would be permitted to distribute a dividend not exceeding 25% of its prior year's total statutory capital and surplus. Distributions in excess of this amount require the approval of the BMA. Further, CICA International must obtain the BMA’s prior approval before reducing its total statutory capital as shown in its previous financial year statutory balance sheet by 15% or more. CICA International is also prohibited from declaring or paying any dividends unless the value of its long-term business assets exceeds its long-term business liabilities, as certified by its approved actuary, by the amount of the dividend and at least the MMS. These restrictions on declaring or paying dividends and distributions under the Insurance Act are in addition to those under Bermuda’s Companies Act 1981, which apply to all Bermuda-domiciled companies. Based upon these rules, CICA International can pay a dividend of $4.6 million without prior regulatory approval in 2023. However, the BMA has requested that CICA International notify it in advance of any potential dividend payments and any intercompany related payments or transactions.
As of December 31, (In thousands) | 2022 |  | 2021
CICA International capital and surplus | $ | 61,801 |  |  | 141,931 |
Years ended December 31, (In thousands) | 2022 |  | 2021 |  |
CICA International net income (loss) | $ | (1,024) |  |  | 14,029 |  |  |
The BMA established risk-based regulatory capital adequacy and solvency margin requirements for Bermuda insurers that require us to calculate our ECR by using the Bermuda Solvency Capital Requirement ("BSCR"). CICA International held capital in excess of the BSCR requirements at December 31, 2022. At the request of the BMA, on April 15, 2021, Citizens and CICA International entered into a Keep Well Agreement. The Keep Well Agreement requires Citizens to contribute up to $10 million in capital to CICA International as necessary to ensure that CICA International has a minimum capital level of 120% (equal to the TCL). Since CICA International's capital level currently exceeds 120%, Citizens is not currently required to make a capital contribution. As the Insurance Act permits, we requested a modification under Section 6C of the Insurance Act to remove the impact of unrealized gains or losses from the MMS requirement. On January 19, 2023, the BMA granted CICA International a permitted practice, effective December 31, 2022, pursuant to Section 6C (1) of the Insurance Act to report its fixed income maturity securities at amortized cost in its unconsolidated statutory financial statements.

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