Federal Life (FLFG) 10-Q/A 2018 Q3 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q/A

(Amendment No. 1)

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

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:001-38718

Federal Life Group, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	82-4944172
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3750 West Deerfield Road

Riverwoods, Illinois 60015

(Address of principal executive offices, including zip code)

(847)520-1900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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-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 a large accelerated filer, an accelerated filer, anon-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-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 is a shell company (as defined in Rule12b-2 of the Exchange Act).    Yes  ☐    No  ☒

APPLICABLE TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

As of January 22, 2019, there were 3,530,250 shares of the registrant’s common stock, $.01 par value, outstanding.

EXPLANATORY NOTE

This Amendment No. 1 (this “Amendment”) to Federal Life Group Inc.’s Quarterly Report onForm 10-Q for the quarter ended September 30, 2018 which was originally filed on December 26, 2018 (the “Original Filing”) is being filed for the purpose of furnishing Exhibit 101 to theForm 10-Q in accordance with Rule 405 ofRegulation S-T and to correct two immaterial errors included in the consolidated financial statements.

Exhibit 101 to this Amendment No. 1 provides the consolidated financial statements and related notes from theForm 10-Q formatted in XBRL (eXtensible Business Reporting Language). This Amendment is being filed within the time period provided by Rule 405(a)(2) ofRegulation S-T.

In addition, this Amendment corrects two immaterial errors contained in the Original Filing.

The first appeared in Item 1 of the Original Filing, in the Liabilities section of the Consolidated Balance Sheet. The line item entitled “Other Liabilities” as at September 30, 2018 should appear as $999 thousand rather than $2,049 thousand. The total Liabilities figure remains unchanged. Below is the corrected Consolidated Balance Sheet:

FEDERAL LIFE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	Predecessor			Predecessor
	9/30/2018			12/31/2017
	(unaudited)
Assets
Investments
Securities available for sale, at fair value:
Fixed maturities (amortized cost; 2018, $184,995; 2017, $183,432)	$	181,497		$	188,452
Equity securities		6,620			6,209
Policy loans		9,599			9,852
Derivative instruments, at fair value		517			395
Total investments		198,233			204,908
Cash and cash equivalents		3,466			4,085
Real estate, property and equipment, net		2,172			2,151
Accrued investment income		1,999			1,886
Accounts receivable		2,489			538
Reinsurance recoverables		3,571			3,727
Prepaid reinsurance premiums		1,387			1,358
Deferred policy acquisition costs, net		13,617			12,179
Deferred sales inducement costs, net		1,192			867
Deferred tax asset, net		495			458
Other assets		249			202
Separate account asset		24,434			24,779
Total Assets		253,304			257,138
Liabilities
Policy liabilities and accruals
Policyholder account balance		115,142			109,823
Future life policy benefits		72,227			71,927
Future accident and health policy benefits		343			386
Reserve for deposit type contracts		10,885			10,850
Other policyholder funds		3,099			1,970
Unearned revenue		1,366			1,387
Deferred reinsurance settlements		2,727			2,949
Taxes payable		6			7
Promissory note		1,050
Other liabilities		999			1,703
Separate account liability		24,434			24,779
Total Liabilities		232,278			225,781
Equity
Retained earnings		23,165			26,600
Accumulated other comprehensive income (loss)		(2,139	)		4,757
Total Equity		21,026			31,357
Total Liabilities and Equity	$	253,304		$	257,138

See full notes to unaudited consolidated financial statements contained in the Original Filing, as defined herein.

The second appeared in Note 6 to the consolidated financial statements on page 18 in the table entitled “Predecessor—Recurring Fair Value Measurements at December 31, 2017…” In that table the column headed “Significant Other Observable Inputs (Level 2)” should total $184,290 thousand rather than $179,219 thousand. Below is the corrected table:

	Predecessor Recurring Fair Value Measurements at December 31, 2017 Using:
Description	Fair Values		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Dollars in thousands)
Fixed maturity securities:
U.S. government	$	4,162	$	4,162	$	—	$	—
States, political subdivisions, other		27,614		—		27,614
Corporate		109,395		—		109,395
Residential mortgage-backed securities		43,086		—		43,086
Commercial mortgage-backed securities		4,195		—		4,195
Total fixed maturities		188,452		4,162		184,290
Equities		6,209		4,027		—		2,182
Derivative instruments		395		395		—		—
Cash equivalents (1)		4,085		4,085
Separate accounts (2)		24,779		24,779
Total	$	223,920	$	37,448	$	184,290	$	2,182

No other changes have been made to the Original Filing. This Amendment does not reflect subsequent events occurring after the date of the Original Filing.

Item 6. Exhibits

Exhibit No	Description
3.1*	Amended and Restated Articles of Incorporation of Federal Life Group, Inc.
3.2*	Bylaws of Federal Life Group, Inc.
31.1**	Certification of Chief Executive Officer, pursuant to Rule13a-14(a) and Rule15d-14(a) of the Securities Exchange Act, as amended
31.2**	Certification of Chief Financial Officer, pursuant to Rule13a-14(a) and Rule15d-14(a) of the Securities Exchange Act, as amended
32.1***	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2***	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.

* Incorporated by reference from the Company’s FormS-1 filed with the SEC on October 11, 2018.

** Filed herewith.

*** Furnished herewith (such certification shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FEDERAL LIFE GROUP, INC.
By:	/s/ William S. Austin
	William S. Austin
	President and Chief Executive Officer

January 22, 2019