FBL Financial signs agreement with EMC National Life Company

US-based FBL Financial Group has signed an agreement with EMC National Life Company, whereby EMC will recapture a block of annuities and life insurance policies with reserves totaling $250 million. The transaction is expected to be closed by October 30, 2009.

As a result of this recapture transaction, EquiTrust Life Insurance Company, a subsidiary of FBL Financial Group, expects to record an after-tax gain of $9 million on a generally accepted accounting principles basis and an after-tax gain of $20 million on a statutory basis.

This business includes annuities, universal life and permanent life insurance originally written by National Travelers Life Company, a company which merged with Employers Modern Life Company in 2003 to create EMC National Life Company. EquiTrust Life originally assumed this business as part of a closed block transaction in 2001.

James Hohmann, CEO of FBL Financial, said: "We are pleased to announce this transaction as one of many steps that FBL Financial Group is taking to strengthen its capital position. This transaction increases EquiTrust Life's statutory capital and is expected to increase its company action level risk-based capital ratio by approximately 20 percentage points."

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