##### Table of Contents



UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
  Form 10-K
  þ Annual
    Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934
        o Transition
    Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934
   
  001-15166
  AmerUs Group Co.
 (Exact name of Registrant as
    specified in its charter)
  Iowa

42-1458424(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)699 Walnut Street, Des Moines,
    Iowa

50309-3948(Address of principal executive
    offices)

(Zip
    code)   Registrants
    telephone number, including area code
    (515) 362-3600
    Name of Each ExchangeTitle of Each Class

on Which RegisteredCommon Stock (no par value)


New York Stock ExchangeSeries A Non-cumulative
    Perpetual Preferred Stock (no par value)


New York Stock ExchangeIncome
    PRIDESsm


New York Stock Exchange     þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 þ
  Rule 12b-2 o þ
      Common Stock


38,772,132 shares   DOCUMENTS
    INCORPORATED BY REFERENCE:
  Form 10-K.




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##### 



TABLE OF
    CONTENTS
  Part IItem 1.

Business

2Item 1A.

Risk Factors

17Item 1B.

Unresolved Staff
    Comments

25Item 2.

Properties

25Item 3.

Legal
    Proceedings

25Item 4.

Submission of
    Matters to a Vote of Security Holders

27Part IIItem 5.

Market for
    Registrants Common Equity, Related Stockholder Matters,
    and Issuer Purchases of Equity Securities

27Item 6.

Selected Financial
    Data

29Item 7.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation

31Item 7A.

Quantitative and
    Qualitative Disclosures About Market Risk

62Item 8.

Financial
    Statements and Supplementary Data

63Item 9.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure

64Item 9A.

Controls and
    Procedures

64Item 9B

Other
    Information

66Part IIIItem 10.

Directors and
    Executive Officers of the Registrant

66Item 11.

Executive
    Compensation

66Item 12.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters

66Item 13.

Certain
    Relationships and Related Transactions

66Item 14.

Principal
    Accounting Fees and Services

67Part IVItem 15.

Exhibits, Financial
    Statement Schedules

67Index to
    Exhibits

68Signatures

72Power of
    Attorney

72Index to
    Consolidated Financial Statements

F-1Index to
    Consolidated Financial Statement Schedules

S-1Form of Restricted Stock AgreementForm of Restricted Stock Unit AgreementComputation of Ratios of EarningsList of SubsidiariesConsent of Independent Registered Public Accounting FirmCertification of Chief Executive OfficerCertification of Chief Financial OfficerSection 1350 Certification of Chief Executive OfficerSection 1350 Certification of Chief Financial Officer   i




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SAFE
    HARBOR STATEMENT
  Form 10-K,
   1




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##### Table of Contents



PART I  ITEM 1.
    Business  Web
    Access to Reports
    Definitions
    General
        
    In 1994, Central Life Assurance Company and American Mutual Life
    Insurance Co. merged providing us with significant scale in our
    life insurance operations. The merger resulted in our becoming
    one of the 25 largest mutual insurers in America at that
    time.
    In October 1997, the acquisition of Delta Life Corporation
    launched our annuity business. At the time of the acquisition,
    Delta Life had about $2.0 billion in assets and specialized
    in single-premium deferred annuity and indexed annuity products.
    In December 1997, we acquired AmVestors Financial Corporation,
    predecessor to AmerUs Annuity Group Co., which specialized in
    the sale of individual fixed annuity products. The acquisition
    further strengthened our presence in asset accumulation and
    retirement and savings markets.
    In 2001, we acquired Indianapolis Life Insurance Company, an
    Indiana life insurance company, and its subsidiaries which had
    approximately $6 billion in consolidated assets at the time
    of the acquisition. The acquisition allowed us to strengthen our
    life insurance business and ultimately provided us with a better
    balance of annuity and life insurance product sales. 2




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Subsidiaries
        Organization
    as of December 31, 2005
  
  Reorganization
       3




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Closed
    Block
    Dispositions
    Financial
    Information
     4




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##### Table of Contents



Protection
    Products Segment
  Products
    Sales Activity by ProductFor the Years Ended
    December 31,2005


2004


2003($ in thousands)Traditional life insurance:Interest-sensitive whole life

$
532


$
6,230


$
19,691Term and other life


11,046



13,878



14,824Universal lifeFlexible premium without no lapse
    guarantee


12,145



29,326



32,476Single premium


15







Indexed life:Flexible premium without no lapse
    guarantee


70,570



53,261



47,287Flexible premium with no lapse
    guarantee


14,554



7,054



Fixed premium excess interest
    whole life


8,895



14,314



4,357Single premium


91







Direct


117,848



124,063



118,635Private label term life premiums










4,206Total

$
117,848


$
124,063


$
122,841   Traditional Life Insurance
    Products.
        Universal Life Insurance Products.
 5




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Indexed Life Products. ®
     6




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##### Table of Contents



Collected Premiums by ProductFor The Years Ended
    December 31,2005


2004


2003($ in thousands)Individual life premiums collected:Traditional life:First year and single

$
68,480


$
92,354


$
116,252Renewal


311,637



333,255



343,067Total


380,117



425,609



459,319Universal life:First year and single


41,454



93,848



94,158Renewal


146,238



138,579



132,833Total


187,692



232,427



226,991Indexed life:First year and single


204,584



118,535



84,478Renewal


106,023



62,061



35,344Total


310,607



180,596



119,822Total individual life


878,416



838,632



806,132Reinsurance assumed


38,572



45,266



49,706Reinsurance ceded


(217,928
)


(227,862
)


(187,860
)Total individual life, net of
    reinsurance

$
699,060


$
656,036


$
667,978      7




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##### Table of Contents



Individual Life Insurance in
    ForceAs of
    December 31,2005


2004


2003($ in thousands)Traditional lifeNumber of policies


410,994



433,011



446,961GAAP life reserves

$
3,636,832


$
3,551,648


$
3,465,853Face amounts

$
68,386,000


$
67,769,000


$
70,904,000Universal lifeNumber of policies


135,904



142,370



145,525GAAP life reserves

$
1,618,755


$
1,587,787


$
1,517,227Face amounts

$
19,271,000


$
19,848,000


$
20,780,000Indexed lifeNumber of policies


63,156



46,350



35,133GAAP life reserves

$
595,087


$
364,282


$
224,874Face amounts

$
14,797,000


$
9,918,000


$
6,878,000Total life insuranceNumber of policies


610,054



621,731



627,619GAAP life reserves

$
5,850,674


$
5,503,717


$
5,207,954Face amounts

$
102,454,000


$
97,535,000


$
98,562,000   Distribution
    Systems
         8




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##### Table of Contents



Accumulation
    Products Segment
  Products
      Deposits by ProductFor The Years Ended
    December 31,2005


2004


2003($ in thousands)AnnuitiesDeferred fixed annuities:Traditional fixed annuities

$
238,366


$
312,652


$
443,220Indexed annuities


2,393,716



1,527,587



1,311,409Variable annuities


2,514



2,805



3,254Total annuities


2,634,596



1,843,044



1,757,883Funding agreements


26,200



85,000



Total


2,660,796



1,928,044



1,757,883Reinsurance ceded


(7,648
)


(10,054
)


(25,080
)Total deposits, net of reinsurance

$
2,653,148


$
1,917,990


$
1,732,803   Traditional Annuity Products.
 9




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Indexed Annuities.
  
      Variable Annuities.
  Funding Agreements.
 10




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##### Table of Contents



Annuities in ForceAs of
    December 31,2005


2004


2003($ in thousands)Deferred fixed annuitiesNumber of policies


144,505



162,489



176,280GAAP annuity reserves

$
6,019,545


$
6,780,234


$
7,257,387Indexed annuitiesNumber of policies


140,608



110,488



91,550GAAP annuity reserves

$
7,526,798


$
5,551,184


$
4,439,836Total fixed annuitiesNumber of policies


285,113



272,977



267,830GAAP annuity reserves

$
13,546,343


$
12,331,418


$
11,697,223   Distribution
    Systems
          Ameritas
    Joint Venture
    Competition
   11




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##### Table of Contents



Ratings
    Company

Rating Service

Rating Type

RatingAmerican

Standard & Poors

insurer financial strength

A+ (strong)American

A. M. Best

financial condition

A (excellent)American

Moodys

insurance financial strength

A3 (good)American

Fitch

insurance financial strength

A (strong)ALIC

Standard & Poors

insurer financial strength

A+ (strong)ALIC

A. M. Best

financial condition

A (excellent)ALIC

Moodys

insurance financial strength

A3 (good)ALIC

Fitch

insurance financial strength

A (strong)Bankers Life

Standard & Poors

insurer financial strength

A+ (strong)Bankers Life

A. M. Best

financial condition

A (excellent)Bankers Life

Fitch

insurance financial strength

A (strong)ILICO

Standard & Poors

insurer financial strength

A+ (strong)ILICO

A. M. Best

financial condition

A (excellent)ILICO

Moodys

insurance financial strength

A3 (good)ILICO

Fitch

insurance financial strength

A (strong)      12




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Insurance
    Underwriting
    Reinsurance
          % of totalFace


A.M. Best

face amountReinsurer

amount ceded


rating

reinsured(in billions)RGA Reinsurance Company

$
24.9


A+


31
%Swiss Re Life & Health
    America, Inc.


23.1


A+


28Transamerica Occidental Life
    Insurance Company


16.8


A+


21Employers Reassurance Corporation


4.3


A


5Generali USA Life Reinsurance
    Company


4.0


A


5Security Life of Denver Insurance
    Company


3.4


A+


4  13




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##### Table of Contents



% of totalA.M. Best

face amountReinsurer

Reserves ceded

rating

reinsured(in billions)Transamerica Occidental Life
    Insurance Company

$
0.5



A+



61
%RGA Reinsurance Company


0.3



A+



34   Employees
    Government
    Regulation
  and/or
     14




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Executive
    Officers of the Company
    Name of Individual

Age

TitleThomas C. Godlasky


50


Chairman of the Board of
    Directors, President and Chief Executive Officer of AmerUs Group
    Co.Gregory D. Boal


47


Executive Vice President and Chief
    Investment Officer of AmerUs Group Co.Michael D. Boltz


47


Executive Vice President and Chief
    Information Officer of AmerUs Group Co.Brian J. Clark


40


Executive Vice President and Chief
    Product Officer of AmerUs Group Co.Mark V. Heitz


53


President and Chief Executive
    Officer of AmerUs Annuity Group, American Investors Life
    Insurance Company, Inc., and Financial Benefit Life Insurance
    CompanyChristopher J. Littlefield


39


Executive Vice President and
    General Counsel of AmerUs Group Co.Gary R. McPhail


57


President and Chief Executive
    Officer of AmerUs Life Insurance Company and Indianapolis Life
    Insurance CompanyMelinda S. Urion


52


Executive Vice President, Chief
    Financial Officer and Treasurer of AmerUs Group Co.     THOMAS
    C. GODLASKY  Des Moines, Iowa.
    GREGORY
    D. BOAL  Des Moines, Iowa.
    MICHAEL
    D. BOLTZ  Des Moines, Iowa.
   15




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BRIAN
    J. CLARK  Des Moines, Iowa.
    MARK
    V. HEITZ  Topeka, Kansas.
    CHRISTOPHER
    J. LITTLEFIELD  Des Moines, Iowa.
    GARY
    R. McPHAIL  Des Moines, Iowa.
    MELINDA
    S. URION  Des Moines, Iowa.
    Code of
    Ethics
  www.amerus.com Form 8-K
 16




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ITEM 1A.
    RISK
    FACTORS  Risks
    Relating to Our Business
  Severe
    interest rate fluctuations could (i) have a negative impact
    on policyowner behavior, (ii) adversely affect our ability
    to pay policyowner benefits and other business expenses and
    (iii) negatively impact our financial condition and
    operations.
      Form 10-K
  Our
    investment portfolio is subject to risks, including market
    fluctuations and general economic, market and political
    conditions which may diminish the value of our invested assets
    and affect our sales and profitability.
       17




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We
    face competition from other insurance companies, banks and
    non-insurance financial service companies for customers and
    sales agents.
      If we
    are unable to attract and retain sales representatives and
    develop new distribution channels, sales of our products and
    services may be reduced.
       18




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Future
    downgrades in the ratings of our life insurance subsidiaries or
    in our credit ratings could adversely affect sales of our life
    insurance and annuity products and our financial condition and
    results of operations.
      
    materially increase the number of policy or contract surrenders
    for all or a portion of their net cash values and withdrawals by
    policyholders of cash values from their policies;
    result in the termination of our relationships with
    broker-dealers, banks, agents, wholesalers and other
    distributors of our products and services;
    adversely affect our ability to obtain reinsurance at reasonable
    prices or at all;
    reduce new sales, particularly with respect to general account
    guarantees and funding agreements purchased by financial
    institutions; and
    result in higher interest rates becoming payable on outstanding
    loans under our existing revolving credit facility.      Litigation
    and regulatory investigations may harm our financial strength
    and reduce our profitability.
   19




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Our
    sales and profitability could be adversely affected by
    regulatory changes applicable to our indexed
    products.
        We may
    be exposed to unidentifiable or unanticipated liabilities if we
    cannot effectively manage our operational, legal, regulatory and
    other risks, which could negatively affect the amounts that our
    subsidiaries may distribute to us as dividends.
  up-to-date
   20




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Our
    insurance subsidiaries are heavily regulated, and changes in
    insurance, securities and other regulation in the United States
    may reduce our profitability.
      Our
    reserves established for future policy benefits and claims may
    prove inadequate, requiring us to increase
    liabilities.
    If
    reinsurance becomes unavailable or more costly, our
    profitability could suffer.
     21




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Payment
    of dividends by our life insurance subsidiaries to us is
    regulated by state insurance laws.
      We may
    experience volatility in net income due to accounting for
    derivatives.
          Changes
    in tax laws or their interpretation could make some of our
    products less attractive to consumers.
   22




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We may
    need to fund deficiencies in our closed blocks; assets allocated
    to the closed blocks benefit only the holders of closed block
    policies.
        The
    continued threat of terrorism and military actions may adversely
    affect our investment portfolio.
     23




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The
    occurrence of events unanticipated in our disaster recovery
    systems and management continuity planning could impair our
    ability to conduct business effectively.
    We may
    experience volatility in net income due to recent changes in
    accounting for share-based payments.
    We are
    exposed to potential risks from legislation requiring companies
    to evaluate their internal controls over financial
    reporting.
  and/or
  Future
    acquisitions that we make may result in certain risks for our
    business and operations.
   24




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Applicable
    laws and our Amended and Restated Articles of Incorporation and
    Amended and Restated By-laws may discourage takeovers and
    business combinations that our stockholders and other security
    holders might consider in their best interests.
    and/or
    
    permitting our board of directors to issue one or more series of
    preferred stock;
    dividing our board of directors into three classes;
    permitting our board of directors to fill vacancies on our board
    of directors; and
    imposing advance notice requirements for stockholder proposals
    and nominations of directors to be considered at stockholder
    meetings. ITEM 1B.  UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS   25




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and/or and/or
         26




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES    AmerUs Common StockHigh


Low


Dividends2004First Quarter

$
41.00


$
34.73


$
0.00Second Quarter

$
41.70


$
36.73


$
0.00Third Quarter

$
41.51


$
37.31


$
0.00Fourth Quarter

$
45.68


$
38.60


$
0.402005First Quarter

$
49.08


$
43.36


$
0.00Second Quarter

$
48.50


$
45.06


$
0.00Third Quarter

$
57.57


$
48.91


$
0.00Fourth Quarter

$
60.14


$
54.83


$
0.40   Holders
    Number ofHoldersCommon stock


95,468   Issuer
    Purchases of Equity Securities
    (c) Total number


(d) Maximum numberof shares (or


(or approximate dollar(a) Total


(b) Average


units) purchased


value) of shares (ornumber of shares


price paid


as part of publicly


units) that may yet be(or units)


per share


announced plans


purchased under thePeriod

purchased(1)


(or units)


or programs


plans or programs(2)10/01/2005-10/31/2005





$








3,530,50011/01/2005-11/30/2005


65,000



58.52







3,465,50012/01/2005-12/31/2005














3,465,500Total


65,000



58.52



     (1)
    
    Does not include shares withheld from employee stock awards to
    satisfy applicable tax withholding obligations.(2)
    
    On June 24, 2005, our board of directors authorized a
    repurchase program of up to 6 million shares of our
    outstanding common stock. The program replaced and terminated a
    previous program which authorized repurchase of up to
    3 million shares. There is no expiration date for this
    program. 27




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Equity
    Compensation Plan Information
    (c) Number of securities(a) Number of securities





remaining available Forto be issued upon





future issuance underexercise


(b) Weighted average


equity compensationof outstanding


exercise price of


plans (excludingoptions, warrants and


outstanding options,


securities reflected inPlan Category

rights


warrants and rights


column (a))Equity compensation plans approved
    by security holders (1)


3,318,035


$
32.67



572,116Equity compensation plans not
    approved by security holders (2)


51,755



34.77



9,600Total (3)


3,369,790


$
33.13



581,716     (1)
    
    Securities to be issued upon exercise of outstanding items
    include 2,754,287 stock options; 57,296 non-vested stock units;
    210,600 long-term incentive awards (assuming maximum pay-out)
    and 295,852 management incentive payment deferral awards.(2)
    
    Includes stock appreciation rights under the Non-Employee Plan
    which may be paid in cash or Company common stock. The
    Companys practice has been to pay such awards in cash on
    exercise thereof.(3)
    
    The options and SARS have a weighted average exercise price of
    $32.05 and a weighted average life of 5.8 years.  Equity
    Compensation Plans not Approved by Security Holders
  and/or and/or and/or
  Dividends
        SM.
   28




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA    As of or for the Year Ended
    December 31,2005


2004


2003


2002


2001(A)($ in millions, except share
    data)Consolidated Income Statement Data:Revenues:Insurance premiums

$
237.0


$
267.7


$
297.2


$
351.3


$
305.9Product charges


238.4



220.5



181.4



144.5



146.1Net investment income


1,109.5



1,037.4



1,001.9



1,001.3



873.2Realized/unrealized capital gains
    (losses)


(14.9
)


18.1



131.3



(149.9
)


(90.6
)Other income


45.2



46.4



41.7



39.3



30.2Total revenues


1,615.2



1,590.1



1,653.5



1,386.5



1,264.8Benefits and expenses:Policyowner benefits


858.5



888.7



953.9



879.8



757.5Total insurance and other expenses


358.5



360.0



331.8



287.2



263.1Dividends to policyowners


86.5



81.1



98.4



104.9



98.9Total benefits and expenses


1,303.5



1,329.8



1,384.1



1,271.9



1,119.5Income from continuing operations


311.7



260.3



269.4



114.6



145.3Interest expense


32.2



32.1



30.2



25.5



26.0Early extinguishment of debt


19.1















Income before tax expense and
    minority interest


260.4



228.2



239.2



89.1



119.3Income tax expense


69.2



39.0



78.6



28.3



39.5Minority interest


















Net income from continuing
    operations


191.2



189.2



160.6



60.8



79.8 29




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##### Table of Contents



As of or for the Year Ended
    December 31,2005


2004


2003


2002


2001(A)($ in millions, except share
    data)Discontinued operations (net of
    tax):Income (loss) from discontinued
    operations










1.8



2.1



1.3Gain on sale of discontinued
    operations






3.9











Net income before cumulative
    effect of change in accounting


191.2



193.1



162.4



62.9



81.1Cumulative effect of change in
    accounting, net of tax






(0.5
)


(1.3
)






(8.2
)Net income


191.2



192.6



161.1



62.9



72.9Dividends on preferred stock


2.4















Net income available to common
    stockholders

$
188.8


$
192.6


$
161.1


$
62.9


$
72.9Net income from continuing
    operations available to common stockholders per common share:Basic

$
4.84


$
4.81


$
4.10


$
1.52


$
2.16Diluted

$
4.43


$
4.60


$
4.05


$
1.50


$
2.13Weighted average number of shares
    outstanding (in millions):Basic


39.0



39.3



39.2



40.0



36.9Diluted


42.6



41.1



39.6



40.4



37.5Dividends declared per common share

$
0.40


$
0.40


$
0.40


$
0.40


$
0.40Dividends declared per preferred
    share

$
0.40


$



$



$



$
Consolidated Balance Sheet Data:Total invested assets

$
20,037.3


$
19,186.3


$
17,984.3


$
16,932.5


$
15,052.4Total assets

$
24,830.0


$
23,170.9


$
21,583.7


$
20,293.7


$
18,299.2Notes payable

$
556.1


$
571.2


$
621.9


$
511.4


$
384.6Total liabilities

$
23,127.7


$
21,547.4


$
20,173.9


$
19,030.7


$
17,060.6Total stockholders equity

$
1,702.3


$
1,623.5


$
1,409.8


$
1,262.9


$
1,238.5Other Operating Data:Ratio of earnings to combined
    fixed charges and preferred stock dividends(B)


1.44



1.40



1.40



1.19



1.33     (A)
    
    Financial data for 2001 includes the results for ILICO,
    subsequent to the acquisition date of May 18, 2001.(B)
    
    For purposes of computing the ratio of earnings to combined
    fixed charges and preferred stock dividends,
    earnings consist of income from operations before
    income taxes and combined fixed charges and preferred stock
    dividends. Fixed charges consist of interest
    credited on annuity and universal life contracts, interest
    expense on debt, amortization of debt expense, early
    extinguishment of debt and preferred stock dividends, including
    the gross-up
    for income taxes. 30




---



##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATION    Nature of
    Operations
    Financial
    Highlights
    For The Years Ended
    December 31,2005


2004


2003Segment pre-tax operating income:Protection Products

$
165,561


$
140,212


$
128,290Accumulation Products


183,830



163,883



130,890Other operations


(22,637
)


(19,309
)


(7,725
)Total segment pre-tax operating
    income


326,754



284,786



251,455Non-segment expense, net(A)


135,575



92,144



90,308Net income


191,179



192,642



161,147Dividends on preferred stock


2,417







Net income available to common
    stockholders

$
188,762


$
192,642


$
161,147Diluted net income available to
    common stockholders per common share

$
4.43


$
4.68


$
4.07Total assets

$
24,830,000


$
23,170,869


$
21,583,688Stockholders equity

$
1,702,315


$
1,623,469


$
1,409,811     (A)
    
    Non-segment expense, net consists primarily of open block
    realized/unrealized gains and losses, derivative related market
    value adjustments, litigation following class certification,
    restructuring costs, non-insurance operations, interest expense,
    early extinguishment of debt, income taxes, discontinued
    operations and cumulative effect of change in accounting.     31




---



##### Table of Contents



available-for-sale
  Segment
    Income
    1)
    Realized/unrealized gains and losses on open block assets.2)
    Market value changes and amortization of assets and liabilities
    associated with the accounting for derivatives, such as:  
    Unrealized gains and losses on open block options and securities
    held-for-trading.
    Change in option value of indexed products and market value
    adjustments on total return strategy annuities.
    Cash flow hedge amortization.  3)
    Amortization of deferred policy acquisition costs (DAC) and
    value of business acquired (VOBA) related to the unrealized and
    realized gains and losses on the open block investments and the
    derivative adjustments.                      Protection
    Products
   32




---



##### Table of Contents



For The Years Ended
    December 31,2005


2004


2003($ in thousands)Revenues:Insurance premiums

$
231,841


$
263,050


$
290,707Product charges


183,997



167,585



138,215Net investment income


358,133



333,477



321,532Realized gains (losses) on closed
    block investments


(1,249
)


(1,693
)


9,326Other income


3,463



3,573



4,224Total revenues


776,185



765,992



764,004Benefits and expenses:Policyowner benefits


353,988



379,749



387,068Underwriting, acquisition and
    other expenses


75,597



73,750



76,042Amortization of DAC and VOBA, net
    of open block gain/loss adjustment


94,577



91,193



74,211Dividends to policyowners


86,462



81,088



98,393Total benefits and expenses


610,624



625,780



635,714Pre-tax operating
    income  Protection Products segment

$
165,561


$
140,212


$
128,290     Sales, Premiums and Product Charges.
 33




---



##### Table of Contents



Persistency.
  Net Investment Income.
  Mortality and Benefit Expense.
  Underwriting, Acquisition and Other
    Expenses.
  Amortization of DAC and VOBA.
  Dividends to Policyowners.
   34




---



##### Table of Contents



Outlook.
  Accumulation
    Products
    For the Years Ended
    December 31,2005


2004


2003($ in thousands)Revenues:Immediate annuity and
    supplementary contract premiums

$
3,028


$
2,602



4,114Product charges


54,361



52,969



43,139Net investment income


748,887



697,363



672,141Other income


10,343



10,730



11,635Total revenues


816,619



763,664



731,029Benefits and expenses:Policyowner benefits


515,290



472,208



491,932Underwriting, acquisition and
    other expenses


28,639



27,225



29,423Amortization of DAC and VOBA


94,221



104,602



89,196Dividends to policyowners


5



4



Total benefits and expenses


638,155



604,039



610,551IMO Operations:Other income


29,077



28,495



23,657Other expenses


23,711



24,237



13,245Net IMO operating income


5,366



4,258



10,412Pre-tax operating
    income  Accumulation Products segment

$
183,830


$
163,883


$
130,890     Deposits.
 35




---



##### Table of Contents



Persistency.
  Product Spread.
  For The Years Ended
    December 31,2005


2004


2003Asset earned rate


5.72
%


5.78
%


5.91
%Liability credited rate


3.61
%


3.55
%


3.93
%Product spread


2.11
%


2.23
%


1.98
%       Underwriting, Acquisition and Other
    Expenses.
 36




---



##### Table of Contents



Amortization of DAC and VOBA.
  IMO Operations.
  Outlook.
  Other
   37




---



##### Table of Contents



Income
    Statement Reconciliation
    For the Years Ended
    December 31,2005


2004


2003($ in thousands)Segment pre-tax operating income:Protection Products

$
165,561


$
140,212


$
128,290Accumulation Products


183,830



163,883



130,890Other operations


(22,637
)


(19,309
)


(7,725
)Total segment pre-tax operating
    income


326,754



284,786



251,455Non-segment
    items  increases (decreases) to income:Realized and unrealized gains
    (losses) on assets and liabilities:Realized/unrealized gains (losses)
    on open block assets


(4,762
)


(36,786
)


32,196Unrealized gains (losses) on open
    block options and trading investments


(8,897
)


56,547



89,769Change in option value of indexed
    products and market value adjustments on total return strategy
    annuities


10,475



(35,652
)


(65,741
)Cash flow hedge amortization


143



(908
)


(3,827
)Amortization of DAC and VOBA due
    to open block gains and losses


(2,783
)


(9,068
)


(16,257
)Reinsurance adjustments










3,854Litigation following class
    certification, net


(9,380
)






Restructuring costs










(23,294
)Other income from non-insurance
    operations


52



1,495



1,237Income from continuing operations


311,602



260,414



269,392Interest expense


(32,173
)


(32,120
)


(30,154
)Early extinguishment of debt


(19,082
)






Income tax expense


(69,168
)


(39,041
)


(78,610
)Net income from continuing
    operations


191,179



189,253



160,628Income from discontinued
    operations, net of tax






3,899



1,815Cumulative effect of change in
    accounting, net of tax






(510
)


(1,296
)Net income


191,179



192,642



161,147Dividends on preferred stock


(2,417
)






Net income available to common
    stockholders

$
188,762


$
192,642


$
161,147   Realized and Unrealized Gains (Losses) on Assets and
    Liabilities.
 38




---



##### Table of Contents



Reinsurance Adjustments. true-up
  Litigation Following Class Certification,
    Net.
  Restructuring Costs.
    Interest Expense.
  Early Extinguishment of Debt.
 39




---



##### Table of Contents



Income Tax Expense.
          Discontinued Operations.
  Change in Accounting. 03-1 (SOP 03-1), SOP 03-1
  available-for-sale
  Liquidity
    and Capital Resources
  AmerUs
    Group Co.
   40




---



##### Table of Contents



Form S-3 and/or
       41




---



##### Table of Contents



20-day
   42




---



##### Table of Contents



Insurance
    Subsidiaries
    available-for-sale, held-for-trading
       43




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
  Guarantee
    Obligations
     44




---



##### Table of Contents



Summary
    of Contractual Obligations and Commitments
    Payments due by periodObligation

Total


2006


2007


2008


2009


2010


Thereafter($ in thousands)Notes payable

$
556,051


$
1,952


$
1,063


$
144,891


$
987


$
1,252


$
405,906Operating leases


13,792



5,188



4,912



2,907



785







Interest payable (1)


315,547



35,333



35,247



27,735



26,289



26,615



164,328Derivatives in payable
    position (2)


708



15











595



4



94Securities lending and borrowing
    obligations (3)


612,803



612,803



















Future life and annuity policy
    benefits(4)


19,486,854



1,958,715



1,691,179



1,607,199



1,551,195



1,485,000



11,193,566Policyowner funds(4)


1,483,873



207,125



315,979



239,004



158,858



117,616



445,291Purchase obligations


























Total

$
22,469,628


$
2,821,131


$
2,048,380


$
2,021,736


$
1,738,709


$
1,630,487


$
12,209,185     (1)
    
    Future interest payments on notes payable at December 31,
    2005.(2)
    
    The obligation is included in other investments on the
    consolidated balance sheet.(3)
    
    The obligation is included in accrued expenses and other
    liabilities on the consolidated balance sheet.(4)
    
    Payments for future life and annuity policy benefits and
    policyowner funds represent managements estimate of
    surrenders, mortality and morbidity activity associated with the
    policies.  Critical
    Accounting Policies
    Valuation
    of Financial Instruments
  available-for-sale,
  available-for-sale.
 45




---



##### Table of Contents



other-than-temporary other-than-temporary,
    Accounting
    for Derivatives
            Amortization
    of DAC, VOBA and Deferred Sales Inducements
   46




---



##### Table of Contents



Increased Amortization
    Expensefor DAC, VOBA, and DeferredSales Inducments, Net ofChange in Significant
    Assumption

Unearned Revenue
    Reserves($ in thousands)Protection products segment:10% increase in assumed mortality

$
7,1005% increase in assumed lapses

$
2,00010% increase in assumed expenses

$
1,900Accumulation products segment:5% increase in assumed lapses

$
8,10010% increase in assumed expenses

$
2,200   Investment
    Portfolio
  General
   47




---



##### Table of Contents



Investment
    Strategy
      Invested
    Assets
      Invested Assets
    December 31,2005


2004Carrying


% of


Carrying


% ofValue


Total


Value


Total($ in millions)Fixed maturity securitiesPublic

$
15,559.2



77.7
%

$
15,147.6



79.0
%Private


2,583.0



12.8
%


2,217.2



11.5
%Subtotal


18,142.2



90.5
%


17,364.8



90.5
%Equity securities


78.0



0.4
%


92.5



0.5
%Mortgage loans


976.1



4.9
%


865.7



4.5
%Policy loans


483.4



2.4
%


486.1



2.5
%Other investments


347.6



1.8
%


374.2



2.0
%Short-term investments


10.0







3.0



Total invested assets

$
20,037.3



100.0
%

$
19,186.3



100.0
%   Fixed
    Maturity Securities
   48




---



##### Table of Contents



Composition of Fixed Maturity
    SecuritiesDecember 31,2005


2004Carrying


% of


Carrying


% ofValue


Total


Value


Total($ in millions)U.S. government/agencies

$
487.2



2.7
%

$
548.4



3.2
%State and political subdivisions


78.4



0.4
%


66.0



0.4
%Foreign government bonds


190.9



1.1
%


118.6



0.7
%Corporate bonds


13,142.9



72.5
%


12,359.0



71.2
%Redeemable preferred stocks


20.3



0.1
%


40.2



0.2
%Indexed debt instruments


568.9



3.1
%


564.7



3.3
%Asset-backed bonds


327.4



1.8
%


528.1



3.0
%Collateralized mortgage-backed
    securities


1,204.9



6.6
%


1,119.2



6.4
%Mortgage-backed securities:U.S. government/agencies


1,805.2



10.0
%


1,772.1



10.2
%Non-agency


316.1



1.7
%


248.5



1.4
%Subtotal-MBS


2,121.3



11.7
%


2,020.6



11.6
%Total

$
18,142.2



100.0
%

$
17,364.8



100.0
%  49




---



##### Table of Contents



Remaining
    Maturity of Fixed Maturity Securities
  Carrying


% of


Unrealized


% ofValue


Total


Loss


Total($ in millions)Available-for-SaleDue:In one year or less (2006)

$
354.0



2.1
%

$
0.2



0.1
%One to five years
    (2007-2011)


3,528.4



21.1
%


28.3



12.5
%Five to 10 years
    (2012-2016)


5,170.8



30.9
%


77.8



34.3
%10 to 20 years
    (2017-2026)


2,176.2



13.0
%


30.8



13.6
%Over 20 years (2027 and after)


3,453.0



20.7
%


55.0



24.2
%Subtotal


14,682.4



87.8
%


192.1



84.7
%Mortgage-backed securities


2,045.5



12.2
%


34.7



15.3
%Total

$
16,727.9



100.0
%

$
226.8



100.0
%Held-for-TradingDue:In one year or less (2006)

$
34.5



2.4
%One to five years
    (2007-2011)


611.5



43.2
%Five to 10 years
    (2012-2016)


252.5



17.9
%10 to 20 years
    (2017-2026)


216.2



15.3
%Over 20 years (2027 and after)


224.0



15.9
%Subtotal


1,338.7



94.7
%Mortgage-backed securities


75.6



5.3
%Total

$
1,414.3



100.0
%      50




---



##### Table of Contents



Fixed
    Maturity Securities  Public and
    Private
  Public


Private


TotalNAIC



Carrying


% of


Carrying


% of


Carrying


% ofDesignation

Standard & Poors
    Equivalent Designation

Value


Total


Value


Total


Value


Total($ in millions)1

A- or higher

$
9,928.3



63.7
%

$
1,409.1



54.6
%

$
11,337.4



62.5
%2

BBB- to BBB+


4,339.7



27.9
%


1,073.8



41.6
%


5,413.5



29.9
%Total investment grade


14,268.0



91.6
%


2,482.9



96.2
%


16,750.9



92.4
%3

BB- to BB+


744.2



4.8
%


73.4



2.8
%


817.6



4.5
%4

B- to B+


508.0



3.3
%


26.5



1.0
%


534.5



2.9
%5 & 6

CCC+ or lower


39.0



0.3
%


0.2



0.0
%


39.2



0.2
%Total below investment grade


1,291.2



8.4
%


100.1



3.8
%


1,391.3



7.6
%Total

$
15,559.2



100.0
%

$
2,583.0



100.0
%

$
18,142.2



100.0
%     Fixed
    Maturity Securities  Unrealized Losses
  NAIC



Carrying


% of


Unrealized


% ofDesignation

Standard & Poors
    Equivalent Designation

Value


Total


Loss


Total($ in millions)1

A- or higher

$
11,337.4



62.5
%

$
140.6



62.0
%2

BBB- to BBB+


5,413.5



29.9
%


64.3



28.4
%Total investment grade


16,750.9



92.4
%


204.9



90.4
%3

BB- to BB+


817.6



4.5
%


13.2



5.8
%4

B- to B+


534.5



2.9
%


8.2



3.6
%5 & 6

CCC+ or lower


39.2



0.2
%


0.5



0.2
%Total below investment grade


1,391.3



7.6
%


21.9



9.6
%Total

$
18,142.2



100.0
%

$
226.8



100.0
%    51




---



##### Table of Contents



Derivatives
      Mortgage
    Loans
      Other
        Structured
    Securities Arrangements
   52




---



##### Table of Contents



Impairments
      
    Company description, industry characteristics and trends,
    company-to-industry
    profile, quality of management, etc.
    Ability and intent to hold the security.
    Severity and duration of the impairment, if any.
    Industry factors.
    Financial factors such as earnings trends, asset quality,
    liquidity, subsequent events, enterprise valuation, fair value
    and volatility (among others).       53




---



##### Table of Contents



and/or
  Material
    OTTIs
  Impairment Loss




Impact on OtherGeneral Description

($ in millions)


Circumstances

Material Investments2004Major US Airline

$
3.0


High probability of restructuring
    and threat of bankruptcy

Negative industry trends with
    analysis done on an issue-by-issue basis concluding no impact on
    other material investments other than those written down2003Major US Airline

$
11.6


High probability of restructuring
    and threat of bankruptcy

Negative industry trends with
    analysis done on an issue-by-issue basis concluding no impact on
    other material investments other than those written downMerchant Energy Generator


3.6


High probability of restructuring
    and threat of bankruptcy

Negative industry trends with
    analysis done on an issue-by-issue basis concluding no impact on
    other material investments other than those written down     Composition
    of Fixed Maturity Securities
  December 31, 2005Carrying





UnrealizedValue


% Total


Losses


% Total($ in millions)U.S. government/agencies

$
487.2



2.7
%

$
4.6



2.0
%State and political subdivisions


78.4



0.4
%


0.5



0.2
%Foreign government bonds


190.9



1.1
%


2.2



1.0
%Corporate bonds


13,142.9



72.5
%


144.2



63.7
%Redeemable preferred stocks


20.3



0.1
%






Indexed debt instruments


568.9



3.1
%


13.2



5.8
%Asset-backed bonds


327.4



1.8
%


3.5



1.5
%Collateralized mortgage-backed
    securities


1,204.9



6.6
%


23.9



10.5
%Mortgage-backed securities:U.S. government/agencies


1,805.2



10.0
%


27.9



12.3
%Non-agency


316.1



1.7
%


6.8



3.0
%Subtotal-MBS


2,121.3



11.7
%


34.7



15.3
%Total

$
18,142.2



100.0
%

$
226.8



100.0
%   54




---



##### Table of Contents



December 31, 2004Carrying





UnrealizedValue


% Total


Losses


% Total($ in millions)U.S. government/agencies

$
548.4



3.2
%

$
1.2



2.4
%State and political subdivisions


66.0



0.4
%


0.7



1.4
%Foreign governments


118.6



0.7
%


0.1



0.2
%Corporate bonds


12,359.0



71.2
%


29.1



59.0
%Redeemable preferred stocks


40.2



0.2
%






Indexed debt instruments


564.7



3.3
%


9.0



18.2
%Asset-backed bonds


528.1



3.0
%


1.2



2.4
%Collateralized mortgage-backed
    securities


1,119.2



6.4
%


4.3



8.5
%Mortgage-backed securities:U.S. government/agencies


1,772.1



10.2
%


3.6



7.3
%Non-agency


248.5



1.4
%


0.3



0.6
%Subtotal-MBS


2,020.6



11.6
%


3.9



7.9
%Total

$
17,364.8



100.0
%

$
49.5



100.0
%   December 31, 2005Carrying





UnrealizedValue


% Total


Loss


% Total($ in millions)Basic industry

$
905.3



5.0
%

$
14.8



6.5
%Capital goods


974.4



5.3
%


9.4



4.2
%Communications


1,372.7



7.6
%


23.0



10.2
%Consumer cyclical


1,106.3



6.1
%


18.2



8.0
%Consumer non-cyclical


1,577.2



8.7
%


15.9



7.0
%Energy


1,139.2



6.3
%


5.9



2.6
%Technology


261.7



1.4
%


3.9



1.7
%Transportation


599.0



3.3
%


4.5



2.0
%Industrial other


221.5



1.2
%


2.5



1.1
%Utilities


2,193.6



12.1
%


24.7



10.9
%Financial institutions


3,045.5



16.8
%


33.4



14.7
%Subtotal


13,396.4



73.8
%


156.2



68.9
%Other


4,745.8



26.2
%


70.6



31.1
%Total

$
18,142.2



100.0
%

$
226.8



100.0
%   55




---



##### Table of Contents



December 31, 2004Carrying





UnrealizedValue


% Total


Loss


% Total($ in millions)Basic industry

$
916.9



5.3
%

$
2.9



5.9
%Capital goods


902.3



5.2
%


1.4



2.8
%Communications


1,304.2



7.5
%


2.9



5.9
%Consumer cyclical


1,247.6



7.2
%


2.1



4.3
%Consumer non-cyclical


1,691.2



9.7
%


4.5



9.1
%Energy


1,059.9



6.1
%


1.3



2.6
%Technology


229.0



1.3
%


0.7



1.4
%Transportation


539.7



3.1
%


2.3



4.7
%Industrial other


146.9



0.9
%


0.4



0.8
%Utilities


1,795.0



10.3
%


4.5



9.1
%Financial institutions


2,704.5



15.6
%


14.4



29.0
%Subtotal


12,537.2



72.2
%


37.4



75.6
%Other


4,827.6



27.8
%


12.1



24.4
%Total

$
17,364.8



100.0
%

$
49.5



100.0
%     AFS
    Unrealized Loss
  December 31, 2005($ in millions)Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedvalue


loss


value


loss


value


loss


value


lossTotal Temporarily Impaired
    Securities:Corporate bonds

$
5,188.2


$
107.2


$
441.3


$
21.7


$
325.0


$
15.3


$
5,954.5


$
144.2U.S. government bonds


121.3



2.2



12.8



0.3



54.9



2.1



189.0



4.6State and political subdivisions


32.0



0.5



















32.0



0.5Foreign government bonds


79.4



1.5



5.1



0.1



14.2



0.6



98.7



2.2Asset-backed bonds


161.2



2.8



18.6



0.3



9.1



0.4



188.9



3.5Collateralized mortgage-backed
    securities


935.4



18.5



60.2



2.1



62.8



3.3



1,058.4



23.9Mortgage-backed securities


1,326.5



25.2



170.0



4.1



152.6



5.4



1,649.1



34.7Indexed debt instruments


80.3



1.8











319.8



11.4



400.1



13.2Total

$
7,924.3


$
159.7


$
708.0


$
28.6


$
938.4


$
38.5


$
9,570.7


$
226.8   56




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##### Table of Contents



Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedvalue


loss


value


loss


value


loss


value


lossLess Than 20% Loss
    Position:Corporate bonds

$
5,188.2


$
107.2


$
440.0


$
21.3


$
325.0


$
15.3


$
5,953.2


$
143.8U.S. government bonds


121.3



2.2



12.8



0.3



54.9



2.1



189.0



4.6State and political subdivisions


32.0



0.5



















32.0



0.5Foreign government bonds


79.4



1.5



5.1



0.1



14.2



0.6



98.7



2.2Asset-backed bonds


161.2



2.8



18.6



0.3



9.1



0.4



188.9



3.5Collateralized mortgage-backed
    securities


935.4



18.5



60.2



2.1



62.8



3.3



1,058.4



23.9Mortgage-backed securities


1,326.5



25.2



170.0



4.1



152.6



5.4



1,649.1



34.7Indexed debt instruments


80.3



1.8











319.8



11.4



400.1



13.2Total

$
7,924.3


$
159.7


$
706.7


$
28.2


$
938.4


$
38.5


$
9,569.4


$
226.4   Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedvalue


loss


value


loss


value


loss


value


loss20%-50% Loss
    Position:Corporate bonds

$



$



$
1.3


$
0.4


$



$



$
1.3


$
0.4Total

$



$



$
1.3


$
0.4


$



$



$
1.3


$
0.4     AFS
    Unrealized Loss
  December 31, 2004($ in millions)Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedvalue


loss


value


loss


value


loss


value


lossTotal Temporarily Impaired
    Securities:Corporate bonds

$
1,094.3


$
8.5


$
396.1


$
7.7


$
379.8


$
12.9


$
1,870.2


$
29.1U.S. government bonds


37.0



0.2



47.4



1.0



0.4







84.8



1.2State and political subdivisions










1.5







18.0



0.7



19.5



0.7Foreign government bonds


12.4







1.9







0.2







14.5



Asset-backed bonds


75.8



0.2



49.5



0.9



5.5



0.1



130.8



1.2Collateralized mortgage-backed
    securities


257.6



2.4



76.6



1.6



8.5



0.3



342.7



4.3Mortgage-backed securities


287.3



1.0



115.4



1.5



104.6



1.5



507.3



4.0Indexed debt instruments










242.5



2.5



239.5



6.5



482.0



9.0Equity securities


0.3



0.2



















0.3



0.2Short-term investments


12.9























12.9



Total

$
1,777.6


$
12.5


$
930.9


$
15.2


$
756.5


$
22.0


$
3,465.0


$
49.7  57




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##### Table of Contents



Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedvalue


loss


value


loss


value


loss


value


lossLess Than 20% Loss
    Position:Corporate bonds

$
1,094.3


$
8.5


$
396.1


$
7.7


$
375.7


$
11.8


$
1,866.1


$
28.0U.S. government bonds


37.0



0.2



47.4



1.0



0.4







84.8



1.2State and political subdivisions










1.5







18.0



0.7



19.5



0.7Foreign government bonds


12.4







1.9







0.2







14.5



Asset-backed bonds


75.8



0.2



49.5



0.9



5.5



0.1



130.8



1.2Collateralized mortgage-backed
    securities


257.6



2.4



76.6



1.6



8.5



0.3



342.7



4.3Mortgage-backed securities


287.3



1.0



115.4



1.5



104.6



1.5



507.3



4.0Indexed debt instruments










242.5



2.5



239.5



6.5



482.0



9.0Short-term investments


12.9























12.9



Total

$
1,777.3


$
12.3


$
930.9


$
15.2


$
752.4


$
20.9


$
3,460.6


$
48.4   Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedvalue


loss


value


loss


value


loss


value


loss20%-50% Loss
    Position:Corporate bonds

$



$



$



$



$
4.1


$
1.1


$
4.1


$
1.1Equity securities


0.3



0.2



















0.3



0.2Total

$
0.3


$
0.2


$



$



$
4.1


$
1.1


$
4.4


$
1.3       Material
    Unrealized Losses
  Year Ended December 31,
    2005Market


UnrealizedGeneral Description

Value


Loss($ in millions)Major European Telephone Company

$
30.3


$
3.0   Year Ended December 31,
    2003Market


UnrealizedGeneral Description

Value


Loss($ in millions)Government Sponsored Entity

$
313.0


$
3.5Government Sponsored Entity


355.0



3.5    58




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##### Table of Contents



other-than-temporary
      Year Ended December 31,
    2004Time in


Time inProceeds/


Realized


Months Below


Months < 80%General Description

Market Value


Loss on Sale


Book


of Book($ in millions)Equity Indexed Notes

$
108.1


$
35.6



Over 12 months



Over 12 monthsGlobal Communications Service
    Provider


29.5



5.1



7 to 12 months



6 months or less   Year Ended December 31,
    2003Time in


Time inProceeds/


Realized


Months Below


Months < 80%General Description

Market Value


Loss on Sale


Book


of Book($ in millions)U.S. Treasury

$
1,082.6


$
9.9



6 months or less



6 months or lessSecuritized manufactured housing
    loans


31.8



6.3



Over 12 months



7 to 12 monthsCollateralized debt obligation


136.3



5.7



Over 12 months



6 months or lessGovernment sponsored entity


860.7



5.5



6 months or less



6 months or lessForeign oil revenue financing
    entity


49.4



4.4



7 to 12 months



6 months or lessMajor United States airline


49.4



4.2



Over 12 months



6 months or lessCollateralized debt obligation


31.7



4.1



6 months or less



6 months or lessAircraft securitization


25.7



4.0



Over 12 months



7 to 12 monthsElectric generator


20.3



4.0



7 to 12 months



6 months or lessNatural gas supplier


42.3



3.9



7 to 12 months



6 months or lessHealthcare service provider


20.3



3.8



7 to 12 months



6 months or lessMajor United States airline


21.5



3.7



Over 12 months



6 months or lessMajor United States airline


17.0



3.4



Over 12 months



7 to 12 monthsGovernment sponsored entity


493.3



3.3



6 months or less



6 months or less     Effects
    of Inflation and Interest Rate Changes
     59




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##### Table of Contents



Federal
    Income Tax Matters
    Emerging
    Accounting Matters
  Other-Than-Temporary
    Impairment
  Issue 03-1, Other-Than-Temporary (EITF 03-1). EITF 03-1 EITF 03-1 EITF 03-1
  EITF 03-1-a, Issue 03-1, (EITF 03-1-a) FAS 124-1, Other-Than-Temporary FAS 115-1). EITF 03-1, No. D-44, Other-Than-Temporary
 60




---



##### Table of Contents



FAS 115-1 FAS 115-1. FAS 115-1
  Share-Based
    Payment
  Classification
    and Measurement of Freestanding Financial Instruments Originally
    Issued in Exchange for Employee Services under FASB Statement
    No. 123(R) SFAS 123-R Practical Accommodation to the Application of Grant
    Date as Defined in FASB Statement No. 123(R)
    Deferred
    Acquisition Costs for Modifications or Exchanges of Insurance
    Contracts
  (SOP 05-1), Accounting by Insurance Enterprises for Deferred
    Acquisition Costs in Connection with Modifications or Exchanges
    of Insurance
    Contracts. SOP 05-1 Accounting and Reporting by Insurance
    Enterprises for Certain Long-Duration Contracts and for Realized
    Gains and Losses from the Sale of Investments. SOP 05-1 SOP 05-1 SOP 05-1
 61




---



##### Table of Contents



Accounting
    Changes and Error Corrections
  Accounting Changes and Error Corrections, a replacement
    of APB Opinion No. 20, Accounting Changes, and FASB
    Statement No. 3, Reporting Accounting Changes in Interim
    Financial Statements.
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK         62




---



##### Table of Contents



ExpectedCash


Fair2006


2007


2008


2009


2010


Thereafter


Flows


Value($s in millions)Fixed maturity securities
    available-for-sale

$
870


$
1,041


$
1,202


$
895


$
682


$
11,932


$
16,622


$
16,728Average interest rate


7.0
%


6.2
%


6.0
%


6.2
%


5.8
%


5.7
%Fixed maturity securities
    held-for-trading
    purposes

$
94


$
269


$
253


$
153


$
187


$
458


$
1,414


$
1,414Average interest rate


3.3
%


2.6
%


2.8
%


3.0
%


2.5
%


4.8
%Mortgage loans

$
60


$
59


$
73


$
65


$
75


$
644


$
976


$
981Average interest rate


6.9
%


6.9
%


6.9
%


6.8
%


6.8
%


6.5
%Total

$
1,024


$
1,369


$
1,528


$
1,113


$
944


$
13,034


$
19,012


$
19,123         year-to-year
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1. page F-1
 63




---



##### Table of Contents



page S-1. page S-1
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  (a)
    Based upon their evaluation as of the end of the period covered
    by this Annual Report on
    Form 10-K,
    our Chief Executive Officer and Chief Financial Officer have
    concluded that our disclosure controls and procedures as defined
    in
    Rule 13a-15(e)
    under the Securities Exchange Act of 1934, as amended, are
    effective for recording, processing, summarizing and reporting
    the information we are required to disclose in our reports filed
    under such act.  (b)
    There was no change in our internal control over financial
    reporting during our last fiscal quarter that has materially
    affected, or is reasonably likely to materially affect, our
    internal control over financial reporting.  Managements
    Report on Internal Control Over Financial
    Reporting
  Rule 13a-15(f)
    Form 10-K,
 64




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
                     65




---



##### Table of Contents



ITEM 9B.
    OTHER INFORMATION   PART III  Form 10-K Form 10-K,
  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT  (a)
    Information concerning directors of AmerUs Group Co. appears in
    the Proxy Statement, under Election of Directors.
    This portion of the Proxy Statement is incorporated herein by
    reference.  (b)
    For information with respect to Executive Officers, see
    Part I of this Annual Report on
    Form 10-K,
    under Executive Officers of the Company.  (c)
    Information concerning Section 16(a) beneficial ownership
    reporting compliance appears in the Proxy Statement, under
    Section 16(a) Beneficial Ownership Reporting
    Compliance. This portion of the Proxy Statement is
    incorporated herein by reference.  (d)
    Information concerning the identification of the audit committee
    and the audit committee financial expert appears in the Proxy
    Statement, under Board and Corporate Governance
    Matters. This portion of the Proxy Statement is
    incorporated herein by reference.  (e)
    Information describing any material changes to the procedures by
    which security holders may recommend nominees to the board of
    directors appears in the Proxy Statement, under Board and
    Corporate Governance Matters. This portion of the Proxy
    Statement is incorporated herein by reference.  (f)
    For information with respect to the Companys code of
    ethics that applies to the principal executive officer,
    principal financial officer, and principal accounting officer,
    see Part I of this Annual Report on
    Form 10-K,
    under Code of Ethics.  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS   66




---



##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS,
    FINANCIAL STATEMENT SCHEDULES  page F-1
  S-1
   67




---



##### Table of Contents



AMERUS
    GROUP CO. AND SUBSIDIARIES
  INDEX TO
    EXHIBITS
  ExhibitNo.

Description3
.1

Amended and Restated Articles of
    Incorporation of the Registrant filed as Exhibit 3.1 on
    Form 10-Q,
    on November 8, 2005, is hereby incorporated by reference.3
.2

Amended and Restated Bylaws of the
    Registrant, filed as Exhibit 3.2 on
    Form 10-Q,
    dated August 6, 2004, is hereby incorporated by reference.4
.1

Amended and Restated
    Trust Agreement dated as of February 3, 1997 among
    AmerUs Life Holdings, Inc., Wilmington Trust Company, as
    property trustee, and the administrative trustees named therein
    (AmerUs Capital I business trust), filed as Exhibit 3.6 to
    the registration statement of AmerUs Life Holdings, Inc. and
    AmerUs Capital I on
    Form S-1,
    Registration
    Number 333-13713,
    is hereby incorporated by reference.4
.2

Indenture dated as of
    February 3, 1997 between AmerUs Life Holdings, Inc. and
    Wilmington Trust Company relating to the Companys 8.85%
    Junior Subordinated Debentures, Series A, filed as
    Exhibit 4.1 to the registration statement of AmerUs Life
    Holdings, Inc. and AmerUs Capital I on
    Form S-1,
    Registration Number,
    333-13713,
    is hereby incorporated by reference.4
.3

Guaranty Agreement dated as of
    February 3, 1997 between AmerUs Life Holdings, Inc., as
    guarantor, and Wilmington Trust Company, as trustee, relating to
    the 8.85% Capital Securities, Series A, issued by AmerUs
    Capital I, filed as Exhibit 4.4 to the registration
    statement on
    Form S-1,
    Registration Number,
    333-13713,
    is hereby incorporated by reference.4
.4

Senior Indenture, dated as of
    June 16, 1998, by and between AmerUs Life Holdings, Inc.
    and First Union National Bank, as Indenture Trustee, relating to
    the AmerUs Life Holdings, Inc.s 6.95% Senior Notes,
    filed as Exhibit 4.14 on
    Form 10-Q,
    dated August 13, 1998, is hereby incorporated by reference.4
.5

First Supplement to Indenture
    dated February 3, 1997 among American Mutual Holding
    Company, AmerUs Life Holdings, Inc. and Wilmington Trust Company
    as Trustee, relating to the Companys 8.85% Junior
    Subordinated Debentures, Series A, dated September 20,
    2000, filed as Exhibit 4.14 on
    Form 10-Q
    dated November 14, 2000, is hereby incorporated by
    reference.4
.6

Assignment and Assumption
    Agreement to Amended and Restated Trust Agreement, dated
    February 3, 1997 between American Mutual Holding Company
    and AmerUs Life Holdings, Inc., dated September 20, 2000,
    filed as Exhibit 4.15 on
    Form 10-Q
    dated November 14, 2000, is hereby incorporated by
    reference.4
.7

Assignment and Assumption to
    Guaranty Agreement, dated February 3, 1997 between American
    Mutual Holding Company and AmerUs Life Holdings, Inc., dated
    September 20, 2000, filed as Exhibit 4.16 on
    Form 10-Q,
    dated November 14, 2000, is hereby incorporated by
    reference.4
.8

First Supplement to Senior
    Indenture dated June 16, 1998, relating to AmerUs Life
    Holdings, Inc.s 6.95% Senior Notes, among American
    Mutual Holding Company, AmerUs Life Holdings, Inc. and First
    Union National Bank, as Trustee, dated September 20, 2000,
    filed as Exhibit 4.23 on
    Form 10-Q,
    dated November 14, 2000, is hereby incorporated by
    reference.4
.9

Form of Purchase Contract
    Agreement between AmerUs Group Co. and Wachovia Bank, National
    Association (formerly known as First Union National Bank), as
    Purchase Contract Agent, filed as Exhibit 4.1 on
    Form 8-A12B,
    dated May 22, 2003, is hereby incorporated by reference.4
.10

Form of Pledge Agreement among
    AmerUs Group Co., BNY Midwest Trust Company, as Collateral
    Agent, Custodial Agent and Securities Intermediary and Wachovia
    Bank, National Association (formerly known as First Union
    National Bank), as Purchase Contract Agent, filed as
    Exhibit 4.2 on
    Form 8-A12B
    dated May 22, 2003, is hereby incorporated by reference.4
.11

Form of Remarketing Agreement
    among AmerUs Group Co., Wachovia Bank, National Association
    (formerly known as First Union National Bank), as Purchase
    Contract Agent, and the Remarketing Agent named therein, filed
    as Exhibit 4.3 on
    Form 8-A12B
    dated May 22, 2003, is hereby incorporated by reference.4
.12

Form of Income PRIDES (included in
    Exhibit 4.1 as Exhibit A thereto), filed as
    Exhibit 4.1 on
    Form 8-A12B,
    dated May 22, 2003, is hereby incorporated by reference. 68




---



##### Table of Contents



ExhibitNo.

Description4
.13

Officers Certificate
    attaching form of Senior Notes initially due 2008, filed as
    Exhibit 4.7 on
    Form 8-A12B,
    dated May 22, 2003, is hereby incorporated by reference.4
.14

Officers Certificate dated
    August 5, 2005 providing for issuance of 5.95% Senior
    Notes, filed as Exhibit 4.1 on
    Form 8-K
    dated August 8, 2005, is hereby incorporated by reference.4
.15

Senior Indenture between AmerUs
    Group Co. and The Bank of New York Trust Company, N.A., filed as
    Exhibit 4.2 on
    Form 8-K
    on August 8, 2005, is hereby incorporated by reference.4
.16

Form of Global Note for
    5.95% Senior Notes filed as Exhibit 4.3 on
    Form 8-K
    on August 8, 2005, is hereby incorporated by reference.4
.17

Certificate of Series A
    Non-Cumulative Perpetual Preferred Stock, filed as
    Exhibit 4.1 on
    Form 8-K
    on September 27, 2005, is hereby incorporated by reference.10
.1

Joint Venture Agreement, dated as
    of June 30, 1996, between American Mutual Insurance Company
    and Ameritas Life Insurance Corp., filed as Exhibit 10.2 on
    Form 10-K,
    dated March 25, 1998, is hereby incorporated by reference.10
.2

Management and Administration
    Service Agreement, dated as of April 1, 1996, among
    American Mutual Life Insurance Company, Ameritas Variable Life
    Insurance Company and Ameritas Life Insurance Corp., filed as
    Exhibit 10.3 to the registration statement of AmerUs Life
    Holdings, Inc. on
    Form S-1,
    Registration
    Number 333-12239,
    is hereby incorporated by reference.10
.3

AmerUs Life Stock Incentive Plan,
    filed as Exhibit 10.11 to the registration statement of
    AmerUs Life Holdings, Inc. on
    Form S-1,
    Registration
    Number 333-12239,
    is hereby incorporated by reference.10
.4

AmerUs Life Non-Employee Director
    Stock Plan, filed as Exhibit 10.13 to the registration
    statement of AmerUs Life Holdings, Inc. on
    Form S-1,
    Registration
    Number 333-12239,
    is hereby incorporated by reference.10
.5

Form of Indemnification Agreement
    executed with directors and certain named executive officers,
    filed as Exhibit 10.33 to the registration statement of
    AmerUs Life Holdings, Inc. on
    Form S-1,
    Registration
    Number 333-12239,
    is hereby incorporated by reference.10
.6

AmVestors Financial Corporation
    1996 Incentive Stock Option Plan, filed as
    Exhibit (4) (a) to Registration Statement of AmVestors
    Financial Corporation on
    Form S-8,
    Registration
    Number 333-14571
    dated October 21, 1996, is hereby incorporated by reference.10
.7

Open Line of Credit Application
    and Terms Agreement, dated March 5, 1999, between Federal
    Home Loan Bank of Des Moines and AmerUs Life Insurance
    Company, filed as Exhibit 10.34 on
    Form 10-Q
    dated May 14, 1999, is hereby incorporated by reference.10
.8

Form of Reimbursement Agreement,
    dated February 15, 1999, among AmerUs Life Holdings, Inc.
    and certain named executive officers, filed as
    Exhibit 10.40 on
    Form 10-Q
    dated May 14, 1999, is hereby incorporated by reference.10
.9

1999 Non-Employee Stock Option
    Plan, dated April 19, 1999, filed on
    Form S-3,
    Registration
    Number 333-72643,
    is hereby incorporated by reference.10
.10

Irrevocable Standby Letter of
    Credit Application and Terms Agreement, dated February 1,
    2000, between Federal Home Loan Bank of Des Moines and
    AmerUs Life Insurance Company, filed as Exhibit 10.45 on
    Form 10-K,
    dated March 8, 2000, is hereby incorporated by reference.10
.11

Investment Advisory Agreements by
    and between Indianapolis Life Insurance Company, Bankers Life
    Insurance Company of New York and AmerUs Capital Management
    Group, Inc. dated as of May 18, 2001 and February 18,
    2000, respectively, filed as Exhibits 10.1,10.3 and 10.2,
    respectively, to AmerUs Life Holdings, Inc.s report
    on
    Form 8-K/A
    on March 6, 2000, are hereby incorporated by reference.10
.12

Advance, Pledge and Security
    Agreement, dated April 12, 2000, by and between the Federal
    Home Loan Bank of Topeka and American Investors Life
    Insurance Company, Inc., filed as Exhibit 10.48 on
    Form 10-Q,
    dated May 15, 2000, is hereby incorporated by reference.10
.13

Institutional Custody Agreement,
    dated April 12, 2000, by and between the Federal Home
    Loan Bank of Topeka and American Investors Life Insurance
    Company, Inc., filed as Exhibit 10.49 on
    Form 10-Q,
    dated May 15, 2000, is hereby incorporated by reference. 69




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##### Table of Contents



ExhibitNo.

Description10
.14

Line of Credit Application, dated
    April 12, 2000, by and between the Federal Home
    Loan Bank of Topeka and American Investors Life Insurance
    Company, Inc., filed as Exhibit 10.50 on
    Form 10-Q,
    dated May 15, 2000, is hereby incorporated by reference.10
.15

Agreement for Advances, Pledge and
    Security Agreement, dated March 12, 1992, by and between
    Central Life Assurance Company and the Federal Home
    Loan Bank of Des Moines, filed as Exhibit 10.53 on
    Form 10-Q,
    dated May 15, 2000, is hereby incorporated by reference.10
.16

Agreement for Advances, Pledge and
    Security Agreement, dated September 1, 1995, by and between
    American Vanguard Life Insurance Company and the Federal Home
    Loan Bank of Des Moines, filed as Exhibit 10.54 on
    Form 10-Q,
    dated May 15, 2000, is hereby incorporated by reference.10
.17

AmerUs Group Co. 2000 Stock
    Incentive Plan, dated November 15, 2000, filed as
    Exhibit 99.9 to the registration statement of AmerUs Group
    Co. on
    Form S-8,
    Registration
    Number 333-50030,
    is hereby incorporated by reference.10
.18

Credit Agreement dated
    December 8, 2003, among AmerUs Group Co., Various Lending
    Institutions, the Bank of New York, Bank One, NA, Fleet National
    Bank and Mellon Bank, N.A. as Co-Syndication Agents and J P
    Morgan Chase Bank as Administrative Agent, filed as
    Exhibit 10.29 on
    Form 10-K
    dated March 12, 2004 is hereby incorporated by reference.10
.19

Amendment No. 1 to Joint
    Venture Agreement, dated April 1, 2002, by and between
    Ameritas Life Insurance Corp. and AmerUs Life Insurance Company
    filed as Exhibit 10.37 on
    Form 10-Q
    dated August 12, 2002 is hereby incorporated by reference.10
.20

Distribution Commitment Agreement
    for Variable Business, dated April 1, 2002, by and between
    AmerUs Group Co. and Ameritas Variable Life Insurance Company
    filed as Exhibit 10.38 on
    Form 10-Q
    dated August 12, 2002 is hereby incorporated by reference.10
.21

Employment Agreement, dated as of
    September 19, 1997, among Mark V. Heitz, AmVestors
    Financial Corporation, American Investors Life Insurance
    Company, Inc., AmVestors Investment Group, Inc., and American
    Investors Sales Group, Inc. filed as Exhibit 99.3 to the
    registration statement of the Registrant on
    Form S-4,
    Registration
    Number 333-40065,
    is hereby incorporated by reference.10
.22

First Amendment to Employment
    Agreement, dated as of April 15, 1999, to the Employment
    Agreement dated as of September 19, 1997, among Mark V.
    Heitz, AmVestors Financial Corporation, American Investors Life
    Insurance Company, Inc., AmVestors Investment Group, Inc.,
    American Investors Sales Group, Inc., and AmerUs Life Holdings,
    Inc., filed as Exhibit 99.4 on
    Form 10-Q
    dated August 13, 1999, is hereby incorporated by reference.10
.23

All*AmerUs Supplemental Executive
    Retirement Plan filed as Exhibit 4.3 to the registration
    statement on
    Form S-8,
    Registration
    Number 333-101961,
    is hereby incorporated by reference.10
.24

Form of Supplemental Benefit
    Agreement, dated February 3, 2003, among AmerUs Group Co.
    and certain named executive officers, filed as Exhibit 10.1
    on
    Form 10-Q
    dated May 15, 2003 is hereby incorporated by reference.10
.25

Tax Allocation and Indemnification
    Agreement dated as of July 1, 2000, filed as
    Exhibit 10.2 on
    Form 10-Q
    dated May 15, 2003 is hereby incorporated by reference.10
.26

Form of Stock Option Agreement for
    Employees Award Plan, dated February 11, 2005, filed as
    Exhibit 99.1 on
    Form 8-K
    dated February 17, 2005 is hereby incorporated by reference.10
.27

Amended and Restated All*AmerUs
    Excess Benefit Plan, filed as Exhibit 10.34 on
    Form 10-K
    on March 7, 2005, is hereby incorporated by reference.10
.28

Post-Retirement Consulting and
    Noncompetition Agreement between AmerUs Group Co. and Roger K.
    Brooks effective December 31, 2005, filed as
    Exhibit 10.35 on
    Form 10-K
    on March 7, 2005, is hereby incorporated by reference.10
.29

Confirmation between
    J.P. Morgan Securities Inc., as agent for JPMorgan Chase
    bank, National Association, London Branch and AmerUs Group Co.
    dated August 18, 2005 for purchase of 2,230,000 shares
    of common stock filed as Exhibit 99.1 on
    Form 8-K
    on August 24, 2005, is hereby incorporated by reference.10
.30

Declaration of Covenant, dated as
    of September 26, 2005, by AmerUs Group Co., filed as
    Exhibit 99.1 on
    Form 8-K
    on September 27, 2005, is hereby incorporated by reference. 70




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##### Table of Contents



ExhibitNo.

Description10
.31

Named executive officer and
    director compensation arrangements filed in Item 1.01 of
    the Companys Current Report on
    Form 8-K
    dated February 17, 2005.10
.32

Performance Based Compensation
    Procedures, filed as Exhibit 99.1 on
    Form 8-K
    dated May 4, 2005 is hereby incorporated by reference.10
.33

Forms of Long Term Incentive Plan
    Awards, filed as Exhibit 99.2 on
    Form 8-K
    dated May 4, 2005 is hereby incorporated by reference.10
.34

Amendment to AmerUs Group Co. MIP
    Deferral Plan, filed as Exhibit 99.4 on
    Form 8-K
    dated May 4, 2005, is hereby incorporated by reference.10
.35

AmerUs Group Co. MIP Deferral
    Plan, filed as Exhibit 4.3 on Form S-8 dated June 27, 2003, is
    hereby incorporated by reference.10
.36

Management Incentive Plan, filed
    as Exhibit 99.5 on
    Form 8-K
    dated May 4, 2005 is hereby incorporated by reference.10
.37

AmerUs Group Co. 2003 Stock
    Incentive Plan as amended, filed as Exhibit 99.6 on
    Form 8-K
    dated May 4, 2005 is hereby incorporated by reference.10
.38*

Form of AmerUs Group Co.
    Restricted Stock Agreement.10
.39*

Form of AmerUs Group Co.
    Restricted Stock Unit Agreement.11
.1*

Statement Re: Computation of Per
    Share Earnings is included in note 16 to the consolidated
    financial statements.12*


Computation of Ratios of Earnings
    to Combined Fixed Charges and Preferred Stock Dividends.21
.1*

List of Subsidiaries of the
    Registrant.23
.1*

Consent of Independent Registered
    Public Accounting Firm.31
.1*

Certification of Chief Executive
    Officer of Periodic Report Pursuant to
    Rule 13(a)-15(e)
    or
    Rule 15(d)-15(e).31
.2*

Certification of Chief Financial
    Officer of Periodic Report Pursuant to
    Rule 13(a)-15(e)
    or
    Rule 15(d)-15(e).32
.1*

Certification of Chief Executive
    Officer of Periodic Report Pursuant to 18 U.S.C.
    Section 1350.32
.2*

Certification of Chief Financial
    Officer of Periodic Report Pursuant to 18 U.S.C.
    Section 1350.     *
    
    included herein 71




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##### Table of Contents



SIGNATURES      Thomas
    C. Godlasky
       POWER OF
    ATTORNEY  Form 10-K
    /s/  Thomas
    C. GodlaskyThomas
    C. Godlasky

Chairman, President and Chief
    Executive Officer (principal executive officer) and Director

March 14, 2006/s/  Melinda
    S. UrionMelinda
    S. Urion

Executive Vice President, Chief
    Financial Officer and Treasurer (principal financial officer)

March 14, 2006/s/  Brenda
    J. CushingBrenda
    J. Cushing

Senior Vice President and
    Controller (principal accounting officer)

March 14, 2006/s/  David
    A. ArledgeDavid
    A. Arledge

Director

March 14, 2006/s/  Roger
    K. BrooksRoger
    K. Brooks

Director

March 14, 2006/s/  Thomas
    F. GaffneyThomas
    F. Gaffney

Director

March 14, 2006 72




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##### Table of Contents



/s/  Louis
    A. HollandLouis
    A. Holland

Director

March 14, 2006/s/  Ward
    M. KleinWard
    M. Klein

Director

March 14, 2006/s/  John
    W. Norris, Jr.John
    W. Norris, Jr.

Director

March 14, 2006/s/  Andrew
    J. Paine, Jr.Andrew
    J. Paine, Jr.

Director

March 14, 2006/s/  Jack
    C. PesterJack
    C. Pester

Director

March 14, 2006/s/  Heidi
    L. SteigerHeidi
    L. Steiger

Director

March 14, 2006/s/  Stephen
    StromeStephen
    Strome

Director

March 14, 2006/s/  John
    A. WingJohn
    A. Wing

Director

March 14, 2006/s/  F.
    A. Wittern, Jr.F.
    A. Wittern, Jr.

Director

March 14, 2006  73




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##### Table of Contents



AMERUS
    GROUP CO.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS  Report of Independent Registered
    Public Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2005 and 2004


F-3 through F-4Consolidated Statements of Income
    for the Years Ended December 31, 2005, 2004 and 2003


F-5Consolidated Statements of
    Comprehensive Income for the Years Ended December 31, 2005,
    2004 and 2003


F-6Consolidated Statements of
    Stockholders Equity for the Years Ended December 31,
    2005, 2004 and 2003


F-7Consolidated Statements of Cash
    Flows for the Years Ended December 31, 2005, 2004 and 2003


F-8 through F-9Notes to Consolidated Financial
    Statements


F-10 through F-60    F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               Ernst &
    Young LLP
    F-2




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONSOLIDATED BALANCE SHEETS
    ($ in thousands)
  December 31,2005


2004AssetsInvestments:Securities
    available-for-sale
    at fair value:Fixed maturity securities

$
16,727,933


$
15,646,653Equity securities


75,658



77,024Short-term investments


9,998



2,979Securities
    held-for-trading
    purposes at fair value:Fixed maturity securities


1,414,225



1,718,125Equity securities


2,358



15,468Mortgage loans


976,135



865,733Policy loans


483,441



486,071Other investments


347,552



374,240Total investments


20,037,300



19,186,293Cash and cash equivalents


600,160



478,441Accrued investment income


237,221



222,294Premiums, fees and other
    receivables


40,667



39,688Income taxes receivable


9,005



Reinsurance receivables


730,532



666,493Deferred policy acquisition costs


1,755,159



1,248,009Deferred sales inducements


261,322



137,538Value of business acquired


356,949



374,792Goodwill


228,869



226,291Property and equipment


44,467



46,114Other assets


306,655



296,409Separate account assets


221,694



248,507Total assets

$
24,830,000


$
23,170,869    F-3




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONSOLIDATED
    BALANCE SHEETS (Continued)
 ($ in
    thousands)
  December 31,2005


2004Liabilities and
    Stockholders EquityLiabilities:Policy reserves and policyowner
    funds:Future life and annuity policy
    benefits

$
19,486,854


$
17,923,329Policyowner funds


1,483,873



1,419,76220,970,727



19,343,091Accrued expenses and other
    liabilities


975,419



837,514Dividends payable to policyowners


278,839



322,037Policy and contract claims


66,137



70,465Income taxes payable






9,299Deferred income taxes


58,818



145,332Notes payable


556,051



571,155Separate account liabilities


221,694



248,507Total liabilities


23,127,685



21,547,400Stockholders equity:Preferred Stock, no par value,
    20,000,000 shares authorized, 6,000,000 shares issued
    and outstanding in 2005


144,830



Common Stock, no par value,
    230,000,000 shares authorized; 46,675,811 shares
    issued and 38,612,874 shares outstanding in 2005;
    44,225,902 shares issued and 39,400,663 shares
    outstanding in 2004


46,676



44,226Additional paid-in
    capital  common stock


1,231,533



1,198,379Accumulated other comprehensive
    income (loss)


(3,612
)


114,670Unearned compensation


(3,783
)


(1,238
)Retained earnings


604,747



431,911Treasury stock, at cost
    (8,062,937 shares in 2005 and 4,825,239 shares in 2004)


(318,076
)


(164,479
)Total stockholders equity


1,702,315



1,623,469Total liabilities and
    stockholders equity

$
24,830,000


$
23,170,869    F-4




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONSOLIDATED STATEMENTS OF INCOME
    ($ in thousands, except share data)
  For The Years Ended
    December 31,2005


2004


2003Revenues:Insurance premiums

$
236,969


$
267,666


$
297,188Product charges


238,358



220,554



181,354Net investment income


1,109,503



1,037,447



1,001,914Realized/unrealized capital gains
    (losses)


(14,908
)


18,068



131,291Other income


45,198



46,394



41,7411,615,120



1,590,129



1,653,488Benefits and expenses:Policyowner benefits


858,528



888,696



953,834Underwriting, acquisition and
    other expenses


157,562



155,064



128,911Litigation following class
    certification, net


9,380







Restructuring costs










23,294Amortization of deferred policy
    acquisition costs and value of business acquired


191,581



204,863



179,664Dividends to policyowners


86,467



81,092



98,3931,303,518



1,329,715



1,384,096Income from continuing operations


311,602



260,414



269,392Interest expense


32,173



32,120



30,154Early extinguishment of debt


19,082







Income before income tax expense


260,347



228,294



239,238Income tax expense


69,168



39,041



78,610Net income from continuing
    operations


191,179



189,253



160,628Income from discontinued
    operations, net of tax






3,899



1,815Net income before cumulative
    effect of change in accounting


191,179



193,152



162,443Cumulative effect of change in
    accounting, net of tax






(510
)


(1,296
)Net income


191,179



192,642



161,147Dividends on preferred stock


2,417







Net income available to common
    stockholders

$
188,762


$
192,642


$
161,147Net income from continuing
    operations available to common stockholders per common share:Basic

$
4.84


$
4.81


$
4.10Diluted

$
4.43


$
4.60


$
4.05Net income available to common
    stockholders per common share:Basic

$
4.84


$
4.90


$
4.11Diluted

$
4.43


$
4.68


$
4.07Weighted average common shares
    outstanding:Basic


39,020,987



39,334,798



39,175,924Diluted


42,602,375



41,135,188



39,618,217    F-5




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE
    INCOME
    ($ in thousands)
  For The Years Ended
    December 31,2005


2004


2003Net income

$
191,179


$
192,642


$
161,147Other comprehensive income (loss),
    before tax:Unrealized gains (losses) on
    securities:Unrealized holding gains (losses)
    arising during period


(186,326
)


88,450



35,051Reclassification adjustment for
    (gains) losses included in net income


4,353



(35,559
)


(28,210
)Minimum pension liability
    adjustment






(6,505
)


(4,993
)Other comprehensive income (loss),
    before tax


(181,973
)


46,386



1,848Income tax (expense) benefit
    related to items of other comprehensive income


63,691



(16,235
)


(647
)(118,282
)


30,151



1,201Amounts attributable to change in
    accounting for derivatives










(5,204
)Other comprehensive income (loss),
    net of taxes


(118,282
)


30,151



(4,003
)Comprehensive income

$
72,897


$
222,793


$
157,144    F-6




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##### Table of Contents



AMERUS
    GROUP CO.
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITY
    For the Years Ended December 31, 2005, 2004 and 2003
    ($ in thousands)
  Additional


AccumulatedPaid-In


Other





Unallocated








TotalPreferred


Common


Capital


Comprehensive


Unearned


ESOP


Retained


Treasury


StockholdersStock


Stock


Common Stock


Income (Loss)


Compensation


Shares


Earnings


Stock


EquityBalance at December 31, 2002

$



$
43,656


$
1,179,646


$
88,522


$
(458
)

$
(1,443
)

$
109,517


$
(156,492
)

$
1,262,9482003:Net income


























161,147







161,147Net unrealized gain on securities














1,971



















1,971Net unrealized gain on derivatives
    designated as cash flow hedges














2,476



















2,476Change in accounting transfer of
    unrealized gain on
    available-for-sale
    securities to trading














(5,204
)


















(5,204
)Stock issued under various
    incentive plans, net of forfeitures






180



11,717







(903
)










66



11,060PRIDES purchase contract
    adjustments and allocated fees and expenses










(7,280
)






















(7,280
)Purchase of treasury stock


































Dividends on common stock


























(15,658
)






(15,658
)Allocation of shares in leveraged
    ESOP










154











1,443











1,597Minimum pension liability adjustment














(3,246
)


















(3,246
)Balance at December 31, 2003

$



$
43,836


$
1,184,237


$
84,519


$
(1,361
)

$



$
255,006


$
(156,426
)

$
1,409,8112004:Net income


























192,642







192,642Net unrealized gain on securities














33,959



















33,959Net unrealized gain on derivatives
    designated as cash flow hedges














420



















420Stock issued under various
    incentive plans, net of forfeitures






390



14,142







123











1,100



15,755Purchase of treasury stock






























(9,153
)


(9,153
)Dividends on common stock


























(15,737
)






(15,737
)Minimum pension liability adjustment














(4,228
)


















(4,228
)Balance at December 31, 2004






44,226



1,198,379



114,670



(1,238
)






431,911



(164,479
)


1,623,4692005:Net income


























191,179







191,179Net unrealized loss on securities














(118,034
)


















(118,034
)Net unrealized loss on derivatives
    designated as cash flow hedges














(248
)


















(248
)Issuance of preferred stock


144,830































144,830Conversion of OCEANs






1,675



9,069























10,744Stock issued under various
    incentive plans, net of forfeitures






775



24,085







(2,545
)










958



23,273Purchase of treasury stock






























(154,555
)


(154,555
)Dividends on preferred stock


























(2,417
)






(2,417
)Dividends on common stock


























(15,926
)






(15,926
)Balance at December 31, 2005

$
144,830


$
46,676


$
1,231,533


$
(3,612
)

$
(3,783
)

$



$
604,747


$
(318,076
)

$
1,702,315    F-7




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
    ($ in thousands)
  For The Years Ended
    December 31,2005


2004


2003Cash flows from operating
    activitiesNet income

$
191,179


$
192,642


$
161,147Adjustments to reconcile net
    income to net cash provided by operating activities:Cumulative effect of change in
    accounting






510



1,296Gain on sale of discontinued
    operations






(3,899
)


Early extinguishment of debt


19,082







Product charges


(238,358
)


(220,554
)


(181,354
)Interest credited to policyowner
    account balances


517,087



487,579



472,881Change in option value of indexed
    products and market value adjustments on total return strategy
    annuities


(10,475
)


35,652



65,741Realized/unrealized capital
    (gains) losses


14,908



(18,068
)


(131,291
)DAC and VOBA amortization


191,581



204,863



179,664DAC and VOBA capitalized


(496,524
)


(390,236
)


(357,348
)Change in:Accrued investment income


(14,927
)


(16,802
)


(19,832
)Reinsurance receivables


(157,942
)


(77,765
)


279,552Securities
    held-for-trading
    purposes:Fixed maturities


278,778



394,090



(219,310
)Equity securities


13,088



(13,899
)


(1,606
)Short-term investments






579



(596
)Liabilities for future policy
    benefits


(119,959
)


(189,635
)


(243,613
)Accrued expenses and other
    liabilities


139,667



371,880



181,595Policy and contract claims and
    other policyowner funds


57,529



129,060



111,374Income taxes:Current


(18,303
)


(43,546
)


(11,051
)Deferred


(11,020
)


48,492



66,849Other, net


46,628



39,444



40,785Net cash provided by operating
    activities


402,019



930,387



394,883Cash flows from investing
    activities:Purchase of fixed maturities
    available-for-sale


(4,969,786
)


(5,624,235
)


(10,430,571
)Proceeds from sale of fixed
    maturities
    available-for-sale


1,909,699



2,525,792



7,467,468Maturities, calls and principal
    reductions of fixed maturities
    available-for-sale


1,512,296



1,389,431



2,354,539Purchase of equity securities


(11,141
)


(47,509
)


(12,721
)Proceeds from sale of equity
    securities


11,634



47,093



14,926Change in short-term investments,
    net


(6,298
)


26,233



(108
)Purchase of mortgage loans


(220,808
)


(133,673
)


(202,721
)  F-8




---



##### Table of Contents



AMERUS
    GROUP CO.
   CONSOLIDATED STATEMENTS OF CASH
    FLOWS  (Continued)
    ($ in thousands)
  For The Years Ended
    December 31,2005


2004


2003Proceeds from repayment and sale
    of mortgage loans


108,293



244,702



123,033Purchase of other invested assets


(152,890
)


(84,769
)


(323,676
)Proceeds from sale of other
    invested assets


196,694



131,162



328,002Change in policy loans, net


2,630



8,576



2,107Proceeds from sale of discontinued
    operations






15,000



Other assets, net


(12,476
)


7,740



(9,800
)Net cash used in investing
    activities


(1,632,153
)


(1,494,457
)


(689,522
)Cash flows from financing
    activities:Deposits to policyowner account
    balances


3,283,839



2,404,255



2,220,545Withdrawals from policyowner
    account balances


(1,895,122
)


(1,576,963
)


(1,825,472
)Change in debt, net


129



(49,796
)


(61,596
)Dividends to preferred shareholders


(2,417
)






Dividends to common shareholders


(15,926
)


(15,737
)


(15,658
)Stock issued under various
    incentive plans, net of forfeitures


23,273



15,755



11,060Purchase of treasury stock


(154,555
)


(9,153
)


Proceeds from issuance of senior
    notes


297,522







Proceeds from issuance of
    preferred stock


144,830







Proceeds from issuance of PRIDES










135,701Retirement of OCEANs


(204,720
)






Adoption and allocation of shares
    in leveraged ESOP










1,597Retirement of senior notes


(125,000
)






Net cash provided by financing
    activities


1,351,853



768,361



466,177Net increase in cash


121,719



204,291



171,538Cash and cash equivalents at
    beginning of period


478,441



274,150



102,612Cash and cash equivalents at end
    of period

$
600,160


$
478,441


$
274,150Supplemental disclosure of cash
    activities:Interest paid

$
27,888


$
30,965


$
32,516Income taxes paid

$
87,068


$
31,510


$
25,422Supplemental disclosure of
    non-cash operating activities:Capitalization of deferred sales
    inducements

$
120,416


$
60,495


$
43,454    F-9




---



##### Table of Contents



AMERUS
    GROUP CO.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Nature of
    Operations
    Consolidation
    and Basis of Presentation
          Cash and
    Cash Equivalents
    Closed
    Block
   F-10




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Investments
  available-for-sale held-for-trading other-than-temporary
  other-than-temporary, other-than-temporary,
   F-11




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Derivative
    Instruments and Hedging Activities
       F-12




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         Call Options
  Futures
  Interest Rate Swaps
  Interest Rate Caps and Floors
  Credit Default Swaps and
    Swaptions
  Total Rate of Return Swaps
  Derivative Instruments Embedded in Modified Coinsurance and
    Coninsurance with Funds Withheld
    Arrangements
   F-13




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Deferred
    Policy Acquisition Costs
    Deferred
    Sales Inducements
    Value of
    Business Acquired
         F-14




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
  fair-value-based
  Property
    and Equipment
    Separate
    Account
    Recognition
    of Revenues
    Future
    Policy Benefits
     F-15




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      ®
  held-for-trading.
    Reinsurance
   F-16




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Participating
    Policies
    Stock-Based
    Compensation
    Years Ended
    December 31,2005


2004


2003Net income available to common
    stockholders, as reported

$
188,762


$
192,642


$
161,147Add: Stock-based compensation
    expense included in reported net income, net of related tax
    effects


1,839







Deduct: Total stock-based employee
    compensation expense determined under fair value based method
    for all awards, net of related tax effects


(4,464
)


(3,986
)


(4,087
)Pro forma net income available to
    common stockholders

$
186,137


$
188,656


$
157,060Earnings per common share:Basic  as reported

$
4.84


$
4.90


$
4.11Basic  pro forma

$
4.77


$
4.80


$
4.01Diluted  as
    reported

$
4.43


$
4.68


$
4.07Diluted  pro forma

$
4.37


$
4.59


$
3.96   Guaranty
    Fund Assessments
    Income
    Taxes
   F-17




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comprehensive
    Income (Loss)
    Earnings
    Per Share
  sm sm )
    Issue 04-8 (EITF 04-8), EITF 04-8 EITF 04-8
  Accounting
    Changes
  03-1 (SOP 03-1), SOP 03-1 SOP 03-1
 F-18




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   SOP 03-1
    Emerging
    Accounting Matters
  Other-Than-Temporary
    Impairment
  Issue 03-1, Other-Than-Temporary (EITF 03-1). EITF 03-1 EITF 03-1 EITF 03-1
  EITF 03-1-a, Issue 03-1, (EITF 03-1-a) FAS 124-1, Other-Than-Temporary FAS 115-1). EITF 03-1, No. D-44, Other-Than-Temporary FAS 115-1 FAS 115-1. FAS 115-1
  Share-Based
    Payment
  Classification
    and Measurement of Freestanding Financial Instruments Originally
    Issued in Exchange for Employee Services under FASB Statement
    No. 123(R) SFAS 123-R
 F-19




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Practical Accommodation to the
    Application of Grant Date as Defined in FASB Statement
    No. 123(R)
    Deferred
    Acquisition Costs for Modifications or Exchanges of Insurance
    Contracts
  (SOP 05-1), Accounting by Insurance Enterprises for Deferred
    Acquisition Costs in Connection with Modifications or Exchanges
    of Insurance
    Contracts. SOP 05-1 Accounting and Reporting by Insurance
    Enterprises for Certain Long-Duration Contracts and for Realized
    Gains and Losses from the Sale of Investments. SOP 05-1 SOP 05-1 SOP 05-1
  Accounting
    Changes and Error Corrections
  Accounting Changes and Error Corrections, a replacement
    of APB Opinion No. 20, Accounting Changes, and FASB
    Statement No. 3, Reporting Accounting Changes in Interim
    Financial Statements.
 F-20




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (2)
    CLOSED
    BLOCK    2005


2004


2003($ in thousands)Liabilities:Future life and annuity policy
    benefits

$
2,765,095


$
2,804,222


$
2,845,365Policyowner funds


7,835



8,096



9,232Accrued expenses and other
    liabilities


6,420



32,140



44,473Dividends payable to policyowners


154,793



161,475



173,703Policy and contract claims


17,986



14,705



22,694Policyowner dividend obligation


116,684



152,975



134,386Total Liabilities


3,068,813



3,173,613



3,229,853Assets:Fixed maturity securities
    available-for-sale
    at fair value


1,916,052



2,028,790



2,027,177Mortgage loans


60,541



70,686



80,170Policy loans


331,561



335,573



346,823Other investments






34



Cash and cash equivalents


63,506



8,473



3,492Accrued investment income


32,972



32,637



32,629Premiums and fees receivable


58,778



59,369



55,134Other assets






17



17Total Assets


2,463,410



2,535,579



2,545,442Maximum future earnings to be
    recognized from assets and liabilities of the Closed Block

$
605,403


$
638,034


$
684,411   F-21




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2005


2004


2003($ in thousands)Change in policyowner dividend
    obligation:Balance at beginning of year

$
152,975


$
134,386


$
118,623Impact on net income before income
    taxes


13,588



2,795



8,345Unrealized investment gains
    (losses)


(49,879
)


15,794



7,418Balance at end of year

$
116,684


$
152,975


$
134,386Operations:Insurance premiums

$
163,616


$
193,313


$
211,966Product charges


6,065



5,190



9,789Net investment income


146,460



146,545



151,769Realized gains (losses) on
    investments


(1,249
)


(1,693
)


9,326Policyowner benefits


(197,369
)


(225,408
)


(251,872
)Underwriting, acquisition and
    other expenses


(3,391
)


(4,896
)


(4,114
)Dividends to policyowners


(78,519
)


(76,256
)


(87,388
)Contribution from the Closed Block
    before income taxes

$
35,613


$
36,795


$
39,476Maximum future earnings from
    Closed Block assets and liabilities:Beginning of year

$
638,034


$
684,411


$
669,744Pretax contribution from the
    Closed Block


(35,613
)


(36,795
)


(39,476
)Federal income taxes funded by the
    Closed Block


2,982



(9,582
)


54,143Balance at end of year

$
605,403


$
638,034


$
684,411  F-22




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (3)
    INVESTMENTS  Investment
    Assets
  available-for-sale,
  2005Gross


GrossAmortized


unrealized


unrealizedcost


gains


losses


Fair value($ in thousands)Fixed maturity securities
    available-for-sale:Corporate bonds

$
11,922,049


$
307,175


$
144,162


$
12,085,062U.S. government bonds


262,710



759



4,560



258,909State and political subdivisions


76,639



1,163



531



77,271Foreign government bonds


179,805



8,425



2,237



185,993Asset-backed bonds


321,708



2,615



3,505



320,818Collateralized mortgage-backed
    securities


1,205,341



3,833



23,891



1,185,283Mortgage-backed securities


2,074,406



5,928



34,652



2,045,682Indexed debt instruments


579,073



3,063



13,221



568,915Total fixed maturities
    available-for-sale


16,621,731



332,961



226,759



16,727,933Equity securities
    available-for-sale


74,951



707







75,658Short-term investments
    available-for-sale


9,990



8







9,998Total
    available-for-sale
    securities

$
16,706,672


$
333,676


$
226,759


$
16,813,589   2004Gross


GrossAmortized


unrealized


unrealizedcost


gains


losses


Fair value($ in thousands)Fixed maturity securities
    available-for-sale:Corporate bonds

$
10,585,934


$
527,780


$
29,123


$
11,084,591U.S. government bonds


283,064



5,181



1,186



287,059State and political subdivisions


63,818



1,801



692



64,927Foreign government bonds


110,337



5,124



89



115,372Asset-backed bonds


509,059



10,620



1,228



518,451Collateralized mortgage-backed
    securities


1,088,296



17,660



4,258



1,101,698Mortgage-backed securities


1,889,249



24,522



3,937



1,909,834Indexed debt instruments


571,965



1,728



8,973



564,720Redeemable preferred stock


1











1Total fixed maturities
    available-for-sale


15,101,723



594,416



49,486



15,646,653Equity securities
    available-for-sale


74,769



2,468



213



77,024Short-term investments
    available-for-sale


2,951



51



23



2,979Total
    available-for-sale
    securities

$
15,179,443


$
596,935


$
49,722


$
15,726,656  F-23




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   available-for-sale
  Amortizedcost


Fair value($ in thousands)Fixed maturities
    available-for-sale:Due in 2006

$
350,086


$
353,976Due in 2007 - 2011


3,461,676



3,528,419Due in 2012 - 2016


5,181,504



5,170,772Due after 2016


5,554,059



5,629,084Mortgage-backed securities


2,074,406



2,045,682$
16,621,731


$
16,727,933     available-for-sale
    available-for-sale
     F-24




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Years ended
    December 31,2005


2004


2003($ in thousands)Fixed maturity securities

$
1,001,403


$
924,146


$
874,185Equity securities


857



723



817Mortgage loans


68,352



69,144



74,739Policy loans


29,886



30,147



30,473Other


27,943



30,761



36,846Gross investment income


1,128,441



1,054,921



1,017,060Investment expenses


18,938



17,474



15,146Net investment income

$
1,109,503


$
1,037,447


$
1,001,914  F-25




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Realized
    and Unrealized Gains (Losses)
    Years ended
    December 31,2005


2004


2003($ in thousands)Available-for-sale
    securities:Fixed maturity securitiesGross realized gains

$
24,358


$
27,374


$
184,996Gross realized losses


(29,218
)


(66,700
)


(143,097
)Equity securitiesGross realized gains


1,156



1,555



89Gross realized losses


(335
)






(211
)Other investments


(1,971
)


(7,358
)


(8,979
)Reduction in provision for loan
    losses






6,650



8,723Realized/unrealized gains/(losses)
    on swaps






(2,620
)


3,852Realized/unrealized gains on
    option assets


7,058



50,634



59,098Realized/unrealized gains/(losses)
    on
    held-for-trading
    securities


(15,956
)


8,533



26,820Total

$
(14,908
)

$
18,068


$
131,291   available-for-sale
    December 31,2005


2004($ in thousands)Unrealized appreciation:Available-for-sale
    securities:Fixed maturity securities

$
106,202


$
544,930Equity securities


707



2,255Short-term investments


8



28Other investments


228



1,030Adjustments for assumed change in
    amortization of:DAC, deferred sales inducements,
    and VOBA


(22,770
)


(233,210
)Policy reserves and policyowner
    funds


510



2,765Minimum pension liability
    adjustment


(16,973
)


(16,973
)Policyowner dividend obligation


(74,775
)


(124,655
)Deferred income taxes


3,251



(61,500
)$
(3,612
)

$
114,670  F-26




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       AFS UnrealizedLoss December 31,
    2005($ in millions)Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedTotal Temporarily Impaired
    Securities:

value


loss


value


loss


value


loss


value


lossCorporate bonds

$
5,188.2


$
107.2


$
441.3


$
21.7


$
325.0


$
15.3


$
5,954.5


$
144.2U.S. government bonds


121.3



2.2



12.8



0.3



54.9



2.1



189.0



4.6State and political subdivisions


32.0



0.5



















32.0



0.5Foreign government bonds


79.4



1.5



5.1



0.1



14.2



0.6



98.7



2.2Asset-backed bonds


161.2



2.8



18.6



0.3



9.1



0.4



188.9



3.5Collateralized mortgage-backed
    securities


935.4



18.5



60.2



2.1



62.8



3.3



1,058.4



23.9Mortgage-backed securities


1,326.5



25.2



170.0



4.1



152.6



5.4



1,649.1



34.7Indexed debt instruments


80.3



1.8











319.8



11.4



400.1



13.2Total

$
7,924.3


$
159.7


$
708.0


$
28.6


$
938.4


$
38.5


$
9,570.7


$
226.8   Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedLess Than 20% Loss
    Position:

value


loss


value


loss


value


loss


value


lossCorporate bonds

$
5,188.2


$
107.2


$
440.0


$
21.3


$
325.0


$
15.3


$
5,953.2


$
143.8U.S. government bonds


121.3



2.2



12.8



0.3



54.9



2.1



189.0



4.6State and political subdivisions


32.0



0.5



















32.0



0.5Foreign government bonds


79.4



1.5



5.1



0.1



14.2



0.6



98.7



2.2Asset-backed bonds


161.2



2.8



18.6



0.3



9.1



0.4



188.9



3.5Collateralized mortgage-backed
    securities


935.4



18.5



60.2



2.1



62.8



3.3



1,058.4



23.9Mortgage-backed securities


1,326.5



25.2



170.0



4.1



152.6



5.4



1,649.1



34.7Indexed debt instruments


80.3



1.8











319.8



11.4



400.1



13.2Total

$
7,924.3


$
159.7


$
706.7


$
28.2


$
938.4


$
38.5


$
9,569.4


$
226.4 Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealized20%-50% Loss Position:

value


loss


value


loss


value


loss


value


lossCorporate bonds

$



$



$
1.3


$
0.4


$



$



$
1.3


$
0.4  F-27




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   available-for-sale
    AFS Unrealized LossDecember 31, 2004($ in millions)Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedTotal Temporarily Impaired
    Securities:

value


loss


value


loss


value


loss


value


lossCorporate bonds

$
1,094.3


$
8.5


$
396.1


$
7.7


$
379.8


$
12.9


$
1,870.2


$
29.1U.S. government bonds


37.0



0.2



47.4



1.0



0.4







84.8



1.2State and political subdivisions










1.5







18.0



0.7



19.5



0.7Foreign government bonds


12.4







1.9







0.2







14.5



Asset-backed bonds


75.8



0.2



49.5



0.9



5.5



0.1



130.8



1.2Collateralized mortgage-backed
    securities


257.6



2.4



76.6



1.6



8.5



0.3



342.7



4.3Mortgage-backed securities


287.3



1.0



115.4



1.5



104.6



1.5



507.3



4.0Indexed debt instruments










242.5



2.5



239.5



6.5



482.0



9.0Equity securities


0.3



0.2



















0.3



0.2Short-term investments


12.9























12.9



Total

$
1,777.6


$
12.5


$
930.9


$
15.2


$
756.5


$
22.0


$
3,465.0


$
49.7   Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealizedLess Than 20% Loss
    Position:

value


loss


value


loss


value


loss


value


lossCorporate bonds

$
1,094.3


$
8.5


$
396.1


$
7.7


$
375.7


$
11.8


$
1,866.1


$
28.0U.S. government bonds


37.0



0.2



47.4



1.0



0.4







84.8



1.2State and political subdivisions










1.5







18.0



0.7



19.5



0.7Foreign government bonds


12.4







1.9







0.2







14.5



Asset-backed bonds


75.8



0.2



49.5



0.9



5.5



0.1



130.8



1.2Collateralized mortgage-backed
    securities


257.6



2.4



76.6



1.6



8.5



0.3



342.7



4.3Mortgage-backed securities


287.3



1.0



115.4



1.5



104.6



1.5



507.3



4.0Indexed debt instruments










242.5



2.5



239.5



6.5



482.0



9.0Short-term investments


12.9























12.9



Total

$
1,777.3


$
12.3


$
930.9


$
15.2


$
752.4


$
20.9


$
3,460.6


$
48.4   F-28




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Less than
    7 months


7-12 months


More than
    12 months


TotalGross





Gross





Gross





GrossFair


unrealized


Fair


unrealized


Fair


unrealized


Fair


unrealized20%-50% Loss Position:

value


loss


value


loss


value


loss


value


lossCorporate bonds

$



$



$



$



$
4.1


$
1.1


$
4.1


$
1.1Equity securities


0.3



0.2



















0.3



0.2Total

$
0.3


$
0.2


$



$



$
4.1


$
1.1


$
4.4


$
1.3   available-for-sale
      
    Company description, industry characteristics and trends,
    company-to-industry
    profile, quality of management, etc.
    Ability and intent to hold the security.
    Severity and duration of the impairment, if any.
    Industry factors.
    Financial factors such as earnings trends, asset quality,
    liquidity, subsequent events, enterprise valuation, fair value
    and volatility (among others).      Variable
    Interest Entities
   F-29




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (4)
    DERIVATIVE
    INSTRUMENTS AND HEDGING ACTIVITIES    December 31, 2005


December 31, 2004Notional


Carrying


Notional


Carryingamount


value


amount


value($ in thousands)Equity derivatives:Call options

$
4,624,001


$
185,735


$
3,180,051


$
158,857Futures






2,755







1,171Interest rate derivatives:Interest rate swaps


681,000



(650
)


464,000



422Caps


350,000



349







Floors


50,000



42







Other


30,000



225







Credit derivatives:Credit default swaps


62,000



131



115,000



536Credit default swaptions


10,000



(15
)


20,000



(31
)Total rate of return swaps










93,500



513Other










225,000



(482
)Total

$
5,807,001


$
188,572


$
4,097,551


$
160,986     Maturity Schedule by Year for
    Derivative Products2006


2007


2008


2009


2010


2011


2012


2013


2014


Thereafter


Table($ in thousands)Equity derivatives:Call options

$
144,007


$
30,766


$
276


$
37


$
417


$
2,232


$
4,960


$
3,040


$



$



$
185,735Futures


2,755







































2,755Interest rate derivatives:Interest rate swaps






43







(595
)










(4
)










(94
)


(650
)Caps






50



141



158



























349Floors














42



























42Other






57



74



94



























225Credit derivatives:Credit default swaps


5



19







55



52























131Credit default swaptions


(15
)






































(15
)Total rate of return swaps










































Total

$
146,752


$
30,935


$
491


$
(209
)

$
469


$
2,232


$
4,956


$
3,040


$



$
(94
)

$
188,572    F-30




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,
    2005Total Return


IndexedProducts


Products


Other


Total($ in thousands)Fixed maturity securities
    held-for-trading

$
(11,947
)

$



$
(4,008
)

$
(15,955
)Options






7,042



16



7,058Market value adjustment to
    liabilities


2,133



4,282



4,060



10,475Cash flow hedge amortization










143



143DAC amortization impact of net
    adjustments above


696



(5,205
)






(4,509
)Pre-tax total


(9,118
)


6,119



211



(2,788
)Income taxes


3,192



(2,142
)


(74
)


976After-tax total

$
(5,926
)

$
3,977


$
137


$
(1,812
)   Year Ended December 31,
    2004Total Return


IndexedProducts


Products


Other


Total($ in thousands)Fixed maturity securities
    held-for-trading

$
7,522


$



$
1,011


$
8,533Options






50,082



(2,068
)


48,014Market value adjustment to
    liabilities


(9,291
)


(27,657
)


1,296



(35,652
)Cash flow hedge amortization










(908
)


(908
)DAC amortization impact of net
    adjustments above


103



(8,595
)






(8,492
)Pre-tax total


(1,666
)


13,830



(669
)


11,495Income taxes


583



(4,840
)


234



(4,023
)After-tax total

$
(1,083
)

$
8,990


$
(435
)

$
7,472   Year Ended December 31,
    2003Total Return


IndexedProducts


Products


Other


Total($ in thousands)Fixed maturity securities
    held-for-trading

$
24,593


$



$
2,227


$
26,820Options






58,711



4,238



62,949Market value adjustment to
    liabilities


(17,894
)


(50,454
)


2,607



(65,741
)Cash flow hedge amortization










(3,827
)


(3,827
)DAC amortization impact of net
    adjustments above


751



(4,563
)


(3,231
)


(7,043
)Pre-tax total


7,450



3,694



2,014



13,158Income taxes


(2,607
)


(1,293
)


(705
)


(4,605
)After-tax total

$
4,843


$
2,401


$
1,309


$
8,553  F-31




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   available-for-sale
  (5)
    MORTGAGE
    LOANS    December 31,2005


2004($ in thousands)Single-family real estate

$
288


$
381Multi-family real estate


84,874



83,528Commercial real estate


889,899



780,660Commercial


1,074



1,164976,135



865,733Allowance for credit losses






$
976,135


$
865,733        F-32




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years ended
    December 31,2005


2004


2003($ in thousands)Balance at beginning of year

$



$
6,650


$
15,373Reduction in provision for loan
    losses, net






(6,650
)


(8,723
)Balance at end of year

$



$



$
6,650   (6)
    DEFERRED
    POLICY ACQUISITION COSTS    Years ended
    December 31,2005


2004


2003($ in thousands)Balance at beginning of year

$
1,394,484


$
1,140,528


$
897,762Policy acquisition costs deferred


496,524



384,342



348,130Policy acquisition costs amortized


(142,827
)


(132,571
)


(105,364
)Amortization impact of adopting
    SOP 03-1






2,185



1,748,181



1,394,484



1,140,528Unrealized (gain) loss on
    available-for-sale
    securities


6,978



(146,475
)


(118,672
)Balance at end of year

$
1,755,159


$
1,248,009


$
1,021,856   (7)
    VALUE OF
    BUSINESS ACQUIRED    Years ended
    December 31,2005


2004


2003($ in thousands)Balance at beginning of the year

$
440,448


$
506,845


$
571,926VOBA established during the year






5,895



9,219Amortization of VOBA asset


(48,754
)


(72,292
)


(74,300
)391,694



440,448



506,845Unrealized gain on
    available-for-sale
    securities


(34,745
)


(65,656
)


(87,263
)Balance at end of year

$
356,949


$
374,792


$
419,582    F-33




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006

$
48,2842007


45,5822008


43,0382009


39,2152010


33,578   (8)
    NOTES PAYABLE    December 31,2005


2004($ in thousands)OCEANs converted in September
    2005(A)

$



$
189,212PRIDES notes with an initial
    maturity date of August 16, 2008(B)


143,750



143,750Senior notes bearing interest at
    5.95% due August 2015(C)


300,000



Senior notes bearing interest at
    6.95% due June 2005(D)






125,000AmerUs Capital I 8.85% Capital
    Securities Series A due February 1, 2027(E)


50,755



50,755Revolving credit agreement(F)






Surplus notes bearing interest at
    8.66% due on April 11, 2011(G)


25,000



25,000Federal Home Loan Bank
    community investment long-term and short-term advances with a
    weighted average interest rate of 6.37% at December 31,
    2005 and 6.38% at December 31, 2004, maturing at various
    dates through June 12, 2012(H)


12,005



12,588Other notes bearing interest at
    rates ranging from 3.00% to 8.75% due from 2009 to 2028


24,541



24,850$
556,051


$
571,155     (A)
    
    On March 6, 2002, the Company issued $185.0 million
    aggregate original principal amount of OCEANs. In September
    2005, holders of the $185.0 million aggregate original
    principal amount of OCEANs exercised their conversion rights
    which resulted in the Companys issuance of
    1.7 million shares of common stock and a cash payment of
    $203 million, including a $12.7 million prepayment
    premium. The prepayment premium and a write-off of
    $6.4 million of remaining unamortized debt issuance costs
    have been reported as early extinguishment of debt expense in
    the consolidated statement of income. In addition, the
    conversion resulted in the reclassification of an associated
    deferred tax liability of $10.7 million to additional
    paid-in capital on common stock.(B)
    
    On May 28, 2003, the Company issued $125.0 million of
    PRIDES which were registered on
    Form S-3
    filed with the Securities and Exchange Commission. On
    June 5, 2003, the underwriters exercised their
    over-allotment option in full and the Company issued an
    additional $18.8 million of PRIDES. The PRIDES initially
    consist of a $25 senior note and a contract requiring the holder
    to purchase the Companys common stock. The note has a
    minimum term of 4.75 years, which may be extended by the
    Company in certain circumstances. In addition, the Company
    entered into a remarketing agreement which requires the Company
    to remarket the notes in 2006. The PRIDES have quarterly
    payments of interest at an annual rate of 5.5% and quarterly
    contract adjustment payments at an annual rate of 0.75%, both
    payable on February 16, May 16, August 16, and
    November 16 of each year, commencing August 16, 2003. Under
    the purchase contract, holders of each contract are required to
    purchase the Companys common stock on the settlement date
    of August 16, 2006 based on a specified settlement rate,
    which will vary according to the applicable market value of the
    Companys common stock at the settlement date. The value of
    the common stock to be issued upon settlement F-34




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  of each purchase contract will not exceed $25, the stated value
    of the PRIDES, unless the applicable market value of the
    Companys common stock (which is measured by the common
    stock price over a
    20-day
    trading day period) increases to more than $33.80 per
    share. The present value of the contract adjustment payment,
    amounting to $2.9 million, has been reflected as an other
    liability with a corresponding charge to additional paid-in
    capital. Subsequent contract adjustment payments will be
    allocated between the liability and interest expense based on a
    constant rate over the life of the PRIDES. Expenses incurred
    with the offering were allocated between the senior notes and
    the purchase contracts. The expenses allocated to the senior
    notes, amounting to $0.8 million, have been capitalized and
    will be recognized as interest expense over the term of the
    notes. The expense allocated to the purchase contracts, totaling
    $4.4 million, was charged to additional paid-in capital.
    The Company has agreed, with certain limited exceptions, not to
    declare or pay dividends on or make distributions with respect
    to the Companys capital stock during any period in which
    the contract adjustment payments to holders have been deferred.(C)
    
    On August 5, 2005, the Company issued $300.0 million
    of senior notes under its shelf registration filed with the
    Securities and Exchange Commission. The senior notes bear
    interest at 5.95% per year payable semi-annually on
    February 15 and August 15 of each year commencing on
    February 15, 2006. The senior notes mature on
    August 15, 2015 and may be redeemed at the Companys
    option at any time, in whole or in part, subject to payment of a
    redemption premium.(D)
    
    The Company repaid the $125.0 million senior notes in June
    2005.(E)
    
    The Capital Securities were issued through a wholly-owned
    subsidiary trust, AmerUs Capital I. The sole asset of the trust
    is the junior subordinated debentures of the Company in the
    principal amount of $50.8 million with interest at 8.85%
    maturing February 1, 2027. The Company has fully and
    unconditionally guaranteed the obligation of the trust under the
    Capital Securities and is obligated to mandatorily redeem the
    securities on February 1, 2027. The Company may prepay the
    securities at anytime after February 1, 2007. Dividends on
    capital stock cannot be paid until all accrued interest on the
    Capital Securities has been paid.  (F)
    
    The revolving credit agreement provides for a maximum borrowing
    of $200 million with the balance maturing in December 2007.
    The interest rate is variable; however, the Company may elect to
    fix the rate for periods from 30 days to six months. The
    loan agreement contains various financial and operating
    covenants which, among other things, limit future indebtedness
    and restrict the amount of future dividend payments.  (G)
    
    Payment of interest and principal on the surplus note, may only
    be paid from ILICs earnings, subject to approval by the
    Indiana Department of Insurance.(H)
    
    The Company has multiple credit arrangements with the Federal
    Home Loan Bank (FHLB). The carrying value of the securities
    pledged to the FHLB under all agreements was $12.6 million
    at December 31, 2005.    Year ending December 31,2006

$
1,9522007


1,0632008


144,8912009


9872010


1,252Thereafter


405,906$
556,051  F-35




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (9)
    INCOME
    TAXES    Years ended
    December 31,2005


2004


2003($ in thousands)Income tax expense (benefit)Continuing operations

$
69,168


$
39,041


$
78,610Other comprehensive income


(63,691
)


16,235



647Cumulative effect of change in
    accounting






(275
)


(698
)Discontinued operations






2,571



1,238$
5,477


$
57,572


$
79,797     Years ended
    December 31,2005


2004


2003Corporate federal income tax rate


35.0
%


35.0
%


35.0
%Dividend received deduction


(0.5
)%


(0.7
)%


(0.8
)%Tax exempt income


(1.7
)%


(2.1
)%


(2.1
)%Prior year overpayments






(1.6
)%


Provision releases


(7.7
)%


(7.3
)%


Deferred income tax asset
    valuation allowance change


(1.8
)%


(7.2
)%


Additional tax incurred on joint
    venture investment sale


2.5
%






Other items, net


0.8
%


1.0
%


0.8
%Effective tax rate


26.6
%


17.1
%


32.9
%          F-36




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Years ended
    December 31,2005


2004


2003($ in thousands)Current

$
80,187


$
(9,176
)

$
11,841Deferred


(11,019
)


48,217



66,769Total income tax expense

$
69,168


$
39,041


$
78,610     December 31,2005


2004($ in thousands)Deferred income tax assets:Policy reserves, policyowner funds
    and dividends

$
908,431


$
791,179DAC, capitalized bonus interest,
    and VOBA related to unrealized appreciation on
    available-for-sale
    securities and investments reflected in AOCI


7,791



81,273Employee benefits and deferred
    compensation


61,966



40,303Net operating loss carryover


13,888



3,098Capital loss carryover


13,079



16,249Tax credit carryover


8,298



19,350Other


9,230



14,204Total gross deferred income tax
    asset


1,022,683



965,656Valuation allowance


1,401



5,8991,021,282



959,757Deferred income tax liabilities:DAC and capitalized bonus interest


(596,392
)


(449,964
)Net unrealized appreciation on
    available-for-sale
    securities and investments reflected in AOCI


(11,330
)


(142,773
)VOBA


(137,069
)


(154,133
)Reinsurance receivables


(260,344
)


(241,340
)Other invested assets


(58,199
)


(88,517
)Other


(16,766
)


(28,362
)Total gross deferred income tax
    liability


(1,080,100
)


(1,105,089
)Net deferred income tax liability

$
(58,818
)

$
(145,332
)    F-37




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       (10)
    EMPLOYEE
    BENEFIT PLANS  Defined
    Benefit Plans
      December 31,2005


2004($ in thousands)Change in benefit obligation:Benefit obligation at beginning of
    year

$
92,880


$
86,911Service cost






Interest cost


4,877



5,148Actuarial loss


(1,465
)


6,961Actual benefits paid


(5,463
)


(6,140
)Benefit obligation at end of year

$
90,829


$
92,880Change in plan assets:Fair value of plan assets at
    beginning of year

$
68,300


$
68,515Actual return on plan assets


3,407



5,195Company contribution


740



730Benefits paid and transfers


(5,463
)


(6,140
)Fair value of plan assets at end
    of year

$
66,984


$
68,300   F-38




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2005


2004($ in thousands)Reconciliation of funded statusAccumulated benefit obligation

$
(90,829
)

$
(92,880
)Projected benefit obligation

$
(90,829
)

$
(92,880
)Market value of plan assets


66,984



68,300Funded status


(23,845
)


(24,580
)Unrecognized transition obligation


(2
)


(3
)Unrecognized prior service cost


365



390Unrecognized net loss


16,636



16,990Accrued benefit cost

$
(6,846
)

$
(7,203
)Amounts recognized in the
    consolidated balance sheet consist of:LiabilitiesAccrued pension cost

$
(9,496
)

$
(9,450
)Additional minimum liability


(16,999
)


(17,378
)AssetsPrepaid pension cost


2,650



2,247Intangible asset


378



405Accumulated other comprehensive
    income


16,621



16,973Net accrued pension cost

$
(6,846
)

$
(7,203
)Weighted-average assumptions used
    to determine obligations at December 31:Discount rate


5.50
%


5.50
%Expected return on plan assets


7.50
%


7.50
%Rate of compensation increase


N/A



N/AWeighted-average assumptions used
    to determine net periodic pension cost for fiscal year:Discount rate


5.50
%


6.00
%Expected return on plan assets


7.50
%


7.50
%Rate of compensation increase


N/A



N/A   F-39




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years ended
    December 31,2005


2004


2003($ in thousands)Components of net periodic benefit
    cost:Service cost

$



$



$
Interest cost


4,877



5,148



5,178Expected return on plan assets


(4,944
)


(4,959
)


(4,905
)Amortization of transition
    obligation


(1
)


(1
)


(1
)Amortization of prior service cost


25



25



(24
)Amortizaton of actuarial loss


426



223



44Net periodic benefit cost


383



436



292Settlement cost










1,570Total expense

$
383


$
436


$
1,862       December 31,2005


2004Debt securities


36
%


53
%Equity securities


63
%


44
%Other


1
%


3
%Benefit obligation at end of year


100
%


100
%       Defined
    Contribution Pension Plans
   F-40




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Employee
    Stock Ownership Plan
  earnings-per-share
  Nonqualified
    and Deferred Compensation Plans
   F-41




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Postretirement
    Benefit Plans
    December 31,2005


2004($ in thousands)Change in benefit obligation:Benefit obligation at beginning of
    year

$
17,120


$
17,647Service cost


271



267Interest cost


784



956Plan participants
    contributions


220



421Amendments


(2,542
)


Actuarial (gain) loss


(2,029
)


615Curtailments






(953
)Actual benefits paid


(1,755
)


(1,833
)Benefit obligation at end of year

$
12,069


$
17,120Change in plan assets:Fair value of plan assets at
    beginning of year

$



$
Company contribution


1,535



1,412Plan participant contribution


220



421Benefits paid


(1,755
)


(1,833
)Fair value of plan assets at end
    of year

$



$
Reconciliation of funded status:Accumulated postretirement benefit
    obligation

$
(12,069
)

$
(17,120
)Market value of plan assets






Funded status


(12,069
)


(17,120
)Unrecognized prior service cost


(2,214
)


391Unrecognized net loss


834



2,863Accrued benefit cost

$
(13,449
)

$
(13,866
)   F-42




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2005


2004Weighted-average assumptions for
    year end obligation determination as of December 31:Discount rate


5.50
%


5.50
%Initial weighted health care cost
    trend rate


10.00
%


11.00
%Ultimate health care cost trend
    rate


5.00
%


5.00
%Years to ultimate trend


5



6Weighted-average assumptions for
    expense determination for fiscal year:Discount rate


5.50
%


6.00
%Initial weighted health care cost
    trend rateUltimate health care cost trend
    rateYears to ultimate trend   Years ended
    December 31,2005


2004


2003($ in thousands)Components of benefit expense:Service cost

$
271


$
267


$
283Interest cost


784



956



1,021Amortization of prior service cost


64



64



64Amortization of net loss






43



Net periodic benefit cost


1,119



1,330



1,368Curtailment charges






(953
)


Total expense

$
1,119


$
377


$
1,368     1% Point


1% PointIncrease


(Decrease)($ in thousands)Effect on total of service and
    interest cost components

$
22.9


$
(20.8
)Effect of postretirement benefit
    obligation

$
394.6


$
(352.8
)     (11)
    REINSURANCE   F-43




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years ended
    December 31,2005


2004


2003($ in thousands)Direct premiums and product charges

$
668,644


$
668,319


$
642,136Reinsurance assumed


36,141



40,188



45,854Reinsurance ceded


(229,458
)


(220,287
)


(209,448
)Net premiums and product charges

$
475,327


$
488,220


$
478,542     (12)
    COMMITMENTS
    AND CONTINGENCIES      Year ending December 31,2006

$
5,1882007


4,9122008


2,9072009


7852010


Thereafter


$
13,792    F-44




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   and/or and/or
          (13)
    STOCKHOLDERS
    EQUITY   F-45




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Preferred
    Stock
    Common
    Stock
    Stock
    Option Plans
     F-46




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended
    December 31,2005


2004


2003Weighted





Weighted





Weightedaverage





average





averageNumber of


exercise


Number of


exercise


Number of


exerciseshares


price


shares


price


shares


priceOutstanding, beginning of year


3,239,558


$
28.97



3,299,770


$
27.91



2,900,363


$
27.64Granted at market price


295,500



43.17



359,555



37.44



531,082



27.03Exercised


(760,338
)


21.33



(377,615
)


28.03



(131,065
)


17.10Forfeited


(20,433
)


33.15



(42,152
)


31.91



(610
)


32.26Outstanding, end of year


2,754,287


$
32.00



3,239,558


$
28.97



3,299,770


$
27.91Exercisable, end of year


2,041,669


$
29.78



2,342,544


$
27.27



2,324,777


$
26.48     Options OutstandingWeighted


WeightedRange

Remaining


average


averageof exercise

options


contractual


exerciseprices

outstanding


life in years


price$17.22 - $22.96


431,336



3.2


$
20.16$22.96 - $28.70


616,660



5.5



26.66$28.70 - $34.44


524,250



4.9



30.23$34.44 - $40.18


894,541



6.6



37.52$40.18 - $45.92


35,000



9.0



44.55$45.92 - $51.66


242,500



9.1



47.29$51.66 - $57.40


10,000



9.7



57.402,754,287



5.8


$
32.00     
 Operations ExercisableWeightedRange




averageof exercise

Options


exerciseprices

exercisable


price$17.22 - $22.96


431,336


$
20.16$22.96 - $28.70


421,912



26.59$28.70 - $34.44


510,381



30.23$34.44 - $40.18


678,040



37.542,041,669


$
29.78    F-47




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2005


2004


2003Expected Volatility


30.11
%


28.00
%


34.00
%Risk-free Interest Rate


4.31
%


4.47
%


4.31
%Dividend Yield


0.88
%


1.11
%


1.48
%Weighted average fair value of
    options granted

$
20.25


$
15.26


$
11.43   Non-vested
    Stock
  and/or
    Years Ended
    December 31,2005


2004


2003Weighted





Weighted





WeightedNumber


average


Number


average


Number


averageof


exercise


of


exercise


of


exerciseshares


price


shares


price


shares


priceOutstanding, beginning of year


50,900


$
32.91



57,374


$
29.72



31,927


$
33.51Granted at market price


14,093



49.06



19,070



40.20



36,110



27.39Exercised


(16,716
)


27.30



(18,544
)


32.79



(10,663
)


33.15Forfeited










(7,000
)


26.97







Outstanding, end of year


48,277


$
39.57



50,900


$
32.91



57,374


$
29.72Compensation expense ($ in
    thousands)





$
684






$
504






$
521   Non-vested
    Stock Units
    Stock
    Appreciation Rights
   F-48




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Years Ended
    December 31,2005


2004


2003Number


Weighted


Number


Weighted


Number


Weightedof


average


of


average


of


averageshares


value


shares


value


shares


valueOutstanding, beginning of year


54,899


$
31.16



54,567


$
28.20



46,400


$
27.28Granted at market price


12,000



48.46



12,999



39.66



16,000



27.80Exercised


(15,144
)


32.54



(11,167
)


26.05



(7,833
)


21.80Forfeited










(1,500
)


35.30







Outstanding, end of year


51,755


$
34.77



54,899


$
31.16



54,567


$
28.20Compensation expense ($ in
    thousands)





$
310






$
332






$
166   Long-term
    Incentive Plan
    Management
    Incentive Payment Deferral Plan
    (14)
    STATUTORY
    ACCOUNTING PRACTICES   F-49




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       (15)
    RESTRUCTURING
    CHARGES         F-50




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accrual at








Payments


Accrual atDecember 31,


2004


Other


and


December 31,2003


Charge


Adjustments


Write-downs


2004($ in thousands)Severance and termination benefits

$
2,799


$



$



$
(2,799
)

$
Other costs


1,214











(1,214
)


$
4,013


$



$



$
(4,013
)

$
   Accrual at











Accrual atDecember 31,


2003


Other


Cash


December 31,2002


Charge


Adjustments


Payments


2003($ in thousands)Severance and termination benefits

$
5,133


$
3,494


$
(486
)

$
(5,342
)

$
2,799Other costs


1,012



20,332



(46
)


(20,084
)


1,214$
6,145


$
23,826


$
(532
)

$
(25,426
)

$
4,013   (16)
    EARNINGS
    PER SHARE (EPS)  Years Ended
    December 31,2005


2004


2003Number of


Per Share





Number of


Per Share





Number of


Per ShareNet Income


Shares


Amount


Net Income


Shares


Amount


Net Income


Shares


Amount($ in thousands, except share
    data)Basic EPSNet income available to common
    stockholders from continuing operations

$
188,762



39,021


$
4.84


$
189,253



39,335


$
4.81


$
160,628



39,176


$
4.10Effect of dilutive securitiesOptions






876



(0.10
)






672



(0.08
)






370



(0.04
)PRIDES






1,836



(0.20
)






834



(0.10
)






72



(0.01
)OCEANs






796



(0.10
)






294



(0.03
)










Accelerated stock buyback






73



(0.01
)






















Diluted EPS

$
188,762



42,602


$
4.43


$
189,253



41,135


$
4.60


$
160,628



39,618


$
4.05   (17)
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS   F-51




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Valuation
    Methods and Assumptions
    Cash and cash equivalents, short-term investments, policy
    loans and other investments:
  Fixed maturities and equity securities:
  Mortgage loans:
  Derivative instruments:
  Policy reserves:
  Notes payable:
  Separate account assets and liabilities:
 F-52




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,2005


2004Carrying


Estimated fair


Carrying


Estimated fairamount


value


amount


value($ in thousands)Financial assets:Securities
    available-for-sale:Fixed maturity securities

$
16,727,933


$
16,727,933


$
15,646,653


$
15,646,653Equity securities


75,658



75,658



77,024



77,024Short-term investments


9,998



9,998



2,979



2,979Securities
    held-for-trading
    purposes:Fixed maturity securities


1,414,225



1,414,225



1,718,125



1,718,125Equity securities


2,358



2,358



15,468



15,468Mortgage loans


976,135



980,702



865,733



909,761Policy loans


483,441



483,441



486,071



486,071Other investments (excluding
    derivatives)


347,364



347,364



374,079



374,079Derivatives:Credit










1



1Equity


188



188



160



160Cash and cash equivalents


600,160



600,160



478,441



478,441Separate account assets


217,565



217,565



248,507



248,507Financial
    liabilities:Policy reserves for annuities

$
13,283,986


$
12,081,261


$
12,400,576


$
11,443,678Notes payable


556,051



601,328



571,155



494,713Separate account liabilities


221,694



221,694



248,507



248,507  F-53




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (18)
    DISCONTINUED
    OPERATIONS    Years Ended
    December 31,2004


2003($ in thousands, exceptshare data)Operating income from discontinued
    operations, net of income taxes of $1,238 in 2003

$



$
1,815Gain on sale of discontinued
    operations, net of income taxes of $2,571 in 2004


3,899



$
3,899


$
1,815Net income from discontinued
    operations per common share:Basic

$
0.10


$
0.05Diluted

$
0.09


$
0.05Weighted average common shares
    outstanding:Basic


39,334,798



39,175,924Diluted


41,135,188



39,618,217   (19)
    OPERATING
    SEGMENTS    Protection
    Products
    Accumulation
    Products
       F-54




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2)
    Market value changes and amortization of assets and liabilities
    associated with the accounting for derivatives, such as:  
    Unrealized gains and losses on open block options and securities
    held-for-trading.
    Change in option value of indexed products and market value
    adjustments on total return strategy annuities.
    Cash flow hedge amortization.  3)
    Amortization of deferred policy acquisition costs (DAC) and
    value of business acquired (VOBA) related to the unrealized and
    realized gains and losses on the open block investments and the
    derivative adjustments.                         F-55




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Operating
    Segment Income
    ($ in thousands)
  Year Ended December 31,
    2005Protection


Accumulation





TotalProducts


Products


All Other


ConsolidatedRevenues:Insurance premiums

$
231,841


$
3,028


$
2,100


$
236,969Product charges


183,997



54,361







238,358Net investment income


358,133



748,887



2,483



1,109,503Realized/unrealized losses on
    closed block investments


(1,249
)










(1,249
)Other income:Income from Independent Marketing
    Organizations






29,077







29,077Other


3,463



10,343



2,263



16,069776,185



845,696



6,846



1,628,727Benefits and expenses:Policyowner benefits


353,988



515,290



(132
)


869,146Underwriting, acquisition, and
    other expenses:Operating expenses


75,597



28,639



29,615



133,851Expenses from Independent
    Marketing Organizations






23,711







23,711Amortization of DAC and VOBA, net
    of open block gain adjustment of $2,783


94,577



94,221







188,798Dividends to policyowners


86,462



5







86,467610,624



661,866



29,483



1,301,973Segment pre-tax operating income

$
165,561


$
183,830


$
(22,637
)


326,754Realized/unrealized losses on open
    block assets














(4,762
)Unrealized losses on open block
    options and trading investments














(8,897
)Change in option value of indexed
    products and market value adjustments on total return strategy
    annuities














10,475Cash flow hedge amortization














143Amortization of DAC and VOBA due
    to open block gains and losses














(2,783
)Litigation following class
    certification, net














(9,380
)Other income from non-insurance
    operations














52Income from continuing operations














311,602Interest (expense)














(32,173
)Early extinguishment of debt














(19,082
)Income tax (expense)














(69,168
)Net income














191,179Dividends on preferred stock














(2,417
)Net income available to common
    stockholders













$
188,762  F-56




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Operating
    Segment Income
    ($ in thousands)
  Year Ended December 31,
    2004Protection


Accumulation





TotalProducts


Products


All Other


ConsolidatedRevenues:Insurance premiums

$
263,050


$
2,602


$
2,014


$
267,666Product charges


167,585



52,969







220,554Net investment income


333,477



697,363



6,607



1,037,447Realized/unrealized losses on
    closed block investments


(1,693
)










(1,693
)Other income:Income from Independent Marketing
    Organizations






28,495







28,495Other


3,573



10,730



2,101



16,404765,992



792,159



10,722



1,568,873Benefits and expenses:Policyowner benefits


379,749



472,208



179



852,136Underwriting, acquisition, and
    other expenses:Operating expenses


73,750



27,225



29,852



130,827Expenses from Independent Marketing
    Organizations






24,237







24,237Amortization of DAC and VOBA, net
    of open block loss adjustment of $9,068


91,193



104,602







195,795Dividends to policyowners


81,088



4







81,092625,780



628,276



30,031



1,284,087Segment pre-tax operating income

$
140,212


$
163,883


$
(19,309
)


284,786Realized/unrealized losses on open
    block assets














(36,786
)Unrealized gains on open block
    options and trading investments














56,547Change in option value of indexed
    products and market value adjustments on total return strategy
    annuities














(35,652
)Cash flow hedge amortization














(908
)Amortization of DAC and VOBA due to
    open block gains and losses














(9,068
)Other income from non-insurance
    operations














1,495Income from continuing operations














260,414Interest (expense)














(32,120
)Income tax (expense)














(39,041
)Income from discontinued
    operations, net of tax














3,899Cumulative effect of change in
    accounting, net of tax














(510
)Net income














192,642Dividends on preferred stock














Net income available to common
    stockholders













$
192,642  F-57




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Operating
    Segment Income
    ($ in thousands)
  Year Ended December 31,
    2003Protection


Accumulation





TotalProducts


Products


All Other


ConsolidatedRevenues:Insurance premiums

$
290,707


$
4,114


$
787


$
295,608Product charges


138,215



43,139







181,354Net investment income


321,532



672,141



8,241



1,001,914Realized/unrealized gains on closed
    block investments


9,326











9,326Other income:Income from Independent Marketing
    Organizations






23,657







23,657Other


4,224



11,635



988



16,847764,004



754,686



10,016



1,528,706Benefits and expenses:Policyowner benefits


387,068



491,932



(626
)


878,374Underwriting, acquisition, and
    other expenses:Operating expenses


76,042



29,423



18,367



123,832Expenses from Independent Marketing
    Organizations






13,245







13,245Amortization of DAC and VOBA, net
    of open block gain adjustment of $16,257


74,211



89,196







163,407Dividends to policyowners


98,393











98,393635,714



623,796



17,741



1,277,251Segment pre-tax operating income

$
128,290


$
130,890


$
(7,725
)


251,455Realized/unrealized gains on open
    block assets














32,196Unrealized gains on open block
    options and trading investments














89,769Change in option value of indexed
    products and market value adjustments on total return strategy
    annuities














(65,741
)Cash flow hedge amortization














(3,827
)Amortization of DAC and VOBA due to
    open block gains and losses














(16,257
)Reinsurance adjustments














3,854Restructuring costs














(23,294
)Other income from non-insurance
    operations














1,237Income from continuing operations














269,392Interest (expense)














(30,154
)Income tax (expense)














(78,610
)Income from discontinued
    operations, net of tax














1,815Cumulative effect of change in
    accounting, net of tax














(1,296
)Net income














161,147Dividends on preferred stock














Net income available to common
    stockholders













$
161,147  F-58




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Operating
    Segment Assets
    ($ in thousands)
  Protection


Accumulation





TotalProducts


Products


All Other


ConsolidatedDecember 31, 2005Investments

$
5,635,172


$
14,348,947


$
53,181


$
20,037,300DAC, deferred sales inducements,
    and VOBA


988,414



1,385,016







2,373,430Other assets


953,738



1,347,794



117,738



2,419,270Total assets

$
7,577,324


$
17,081,757


$
170,919


$
24,830,000December 31, 2004Investments

$
5,616,464


$
13,470,899


$
98,930


$
19,186,293DAC, deferred sales inducements,
    and VOBA


868,309



892,030







1,760,339Other assets


762,179



1,375,881



86,177



2,224,237Total assets

$
7,246,952


$
15,738,810


$
185,107


$
23,170,869December 31, 2003Investments

$
5,143,441


$
12,780,990


$
59,854


$
17,984,285DAC, deferred sales inducements,
    and VOBA


789,725



749,987







1,539,712Other assets


556,171



1,412,895



90,625



2,059,691Total assets

$
6,489,337


$
14,943,872


$
150,479


$
21,583,688  F-59




---



##### Table of Contents



AMERUS
    GROUP CO.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (20)
    QUARTERLY
    RESULTS (UNAUDITED)  2005
    Quarterly Data
  Quarter EndedMarch 31


June 30


September 30


December 31($ in thousands, except share
    data)Total revenues

$
353,902


$
410,174


$
433,032


$
418,012Total benefits and expenses

$
282,937


$
349,544


$
338,929


$
332,108Net income available to common
    stockholders from continuing operations

$
61,488


$
35,567


$
38,619


$
53,088Weighted average number of shares:Basic


39,575,696



39,264,504



38,488,294



38,780,027Diluted


42,930,905



42,751,912



42,525,870



42,181,113Net income available to common
    stockholders from continuing operations per shareBasic

$
1.55


$
0.91


$
1.00


$
1.38Diluted

$
1.43


$
0.83


$
0.91


$
1.26   2004
    Quarterly Data
  Quarter EndedMarch 31


June 30


September 30


December 31($ in thousands, except share
    data)Total revenues

$
388,791


$
337,040


$
401,996


$
462,302Total benefits and expenses

$
344,524


$
276,407


$
335,300


$
373,484Net income available to common
    stockholders from continuing operations

$
29,740


$
48,776


$
42,862


$
67,875Weighted average number of shares:Basic


39,263,367



39,327,182



39,237,840



39,390,532Diluted


40,466,149



40,977,178



41,053,772



41,986,455Net income available to common
    stockholders from continuing operations per shareBasic

$
0.76


$
1.24


$
1.09


$
1.72Diluted

$
0.73


$
1.20


$
1.04


$
1.63  F-60




---



##### Table of Contents



AMERUS
    GROUP CO.
  INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
  Schedule

PageReport of
    Independent Registered Public Accounting Firm


S-2I

Summary of
    Investments  Other than Investments in Related
    Parties


S-3II

Condensed Financial
    Information of Registrant


S-4
    through S-9III

Supplementary
    Insurance Information


S-10IV

Reinsurance


S-11    S-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Form 10-K). page S-1 Form 10-K.
        S-2




---



##### Table of Contents



AMERUS
    GROUP CO.SCHEDULE ISUMMARY OF INVESTMENTS -
    OTHER THAN INVESTMENTS IN RELATED PARTIES
  December 31, 2005Amount atwhich ShownAmortized


Market


in the BalanceType of Investment

Cost (1)


Value


Sheet($ in thousands)Fixed Maturities:BondsUnited States Government and
    government agencies and authorities

$
2,532,372


$
2,576,366


$
2,576,366States, municipalities and
    political subdivisions


77,684



78,315



78,315Foreign governments


184,667



190,855



190,855Public utilities


2,157,644



2,192,985



2,192,985Convertibles and bonds with
    warrants attached


663,210



718,154



718,154Indexed debt instruments


579,073



568,916



568,916All other corporate bonds


11,821,031



11,796,290



11,796,290Redeemable preferred stock


20,277



20,277



20,277Total fixed maturities


18,035,958



18,142,158



18,142,158Equity securities:Common stocksBanks, trust and insurance
    companies


65,001



65,003



65,003Industrial, miscellaneous and all
    other


2,185



2,185



2,185Non-redeemable preferred stocks


10,123



10,828



10,828Total equity securities


77,309



78,016



78,016Mortgage loans


976,135



XXXXXXX



976,135Policy loans


483,441



XXXXXXX



483,441Other long-term investments


347,472



XXXXXXX



347,552Short-term investments


9,990



XXXXXXX



9,998Total investments

$
19,930,305






$
20,037,300     (1)
    
    On the basis of cost adjusted for repayments and amortization of
    premiums and accrual of discounts for fixed maturities, other
    long-term investments and short-term investments; original cost
    for equity securities; and unpaid principal balance for mortgage
    loans and policy loans. S-3




---



##### Table of Contents



AMERUS
    GROUP CO.SCHEDULE IICONDENSED FINANCIAL INFORMATION OF REGISTRANT
    CONDENSED BALANCE SHEETS
    (Parent Company)
  December 31,2005


2004($ in thousands)ASSETSInvestments:Fixed maturity securities
    available-for-sale
    at fair value

$



$
45,030Equity securities
    available-for-sale
    at fair value






262Other investments


52,785



52,771Investments in subsidiaries, at
    equity


2,205,807



2,149,772Cash and cash equivalents


42,738



32,880Property and equipment


17,535



15,846Income taxes receivable


10,995



16,862Deferred income taxes


32,734



Other assets


37,339



25,964Total assets

$
2,399,933


$
2,339,387    S-4




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##### Table of Contents



AMERUS
    GROUP CO.
  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
  CONDENSED
    BALANCE SHEETS
 (Parent
    Company)
  December 31,2005


2004($ in thousands)Liabilities and
    Stockholders EquityLiabilities:Accrued expenses and other
    liabilities

$
198,630


$
200,485Deferred income taxes






2,233Notes payable


498,988



513,200Total liabilities


697,618



715,918Stockholders equity:Preferred Stock, no par value,
    20,000,000 shares authorized, 6,000,000 shares issued
    and outstanding in 2005


144,830



Common Stock, no par value,
    230,000,000 shares authorized; 46,675,811 shares
    issued and 38,612,874 shares outstanding in 2005;
    44,225,902 shares issued and 39,400,663 shares
    outstanding in 2004


46,676



44,226Additional paid-in
    capital  common stock


1,231,533



1,198,379Accumulated other comprehensive
    income (loss)


(3,612
)


114,670Unearned compensation


(3,783
)


(1,238
)Retained earnings


604,747



431,911Treasury stock


(318,076
)


(164,479
)Total stockholders equity


1,702,315



1,623,469Total liabilities and
    stockholders equity

$
2,399,933


$
2,339,387    S-5




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
  CONDENSED
    STATEMENTS OF INCOME
 (Parent
    Company)
  For the Years Ended
    December 31,2005


2004


2003($ in thousands)Revenues:Equity in earnings of subsidiaries

$
232,806


$
201,948


$
186,633Net investment income


224



2,756



4,647Realized/unrealized capital gains
    (losses)


405



(1,653
)


(42
)Other income


281



2,787



274233,716



205,838



191,512Expenses:Operating expenses


22,267



22,310



12,919Restructuring costs










3,034Interest expense


28,700



28,484



26,635Early extinguishment of debt


19,082







70,049



50,794



42,588Income from continuing operations


163,667



155,044



148,924Income tax benefit


27,512



33,699



15,072Minority interest










(2,849
)Net income from continuing
    operations


191,179



188,743



161,147Income from discontinued
    operations, net of tax






3,899



Net income


191,179



192,642



161,147Dividends on preferred stock


2,417







Net income available for common
    stockholders

$
188,762


$
192,642


$
161,147    S-6




---



##### Table of Contents



AMERUS
    GROUP CO.
  CONDENSED
    FINANCIAL INFORMATION OF REGISTRANT
  CONDENSED
    STATEMENTS OF CASH FLOWS
 (Parent
    Company)
  For the Years Ended
    December 31,2005


2004


2003($ in thousands)Cash flows from operating
    activities:Net income

$
191,179


$
192,642


$
161,147Adjustments to reconcile net
    income to net cash provided by operating activities:Equity in undistributed earnings


(232,806
)


(201,948
)


(186,633
)Dividends from subsidiaries


89,302



49,732



83,758Realized investment (gains) losses


(405
)


1,653



42Early extinguishment of debt


19,082Minority interest










2,849Change in:Accrued expenses and other
    liabilities


913



135,338



(15,601
)Income taxes


(17,624
)


(18,650
)


16,265Other, net


(4,153
)


7,220



(15,040
)Net cash provided by operating
    activities


45,488



165,987



46,787Cash flows from investing
    activities:Purchase of investments






(44,429
)


Sale of investments


45,088







Purchase of real estate






(2,016
)


Other assets, net


(8,058
)


7,155



Net cash provided by (used in)
    investing activities


37,030



(39,290
)


Cash flows from financing
    activities:Change in other notes payable, net


1,021



(25,511
)


(84,664
)Allocation of shares in leveraged
    ESOP










1,597Proceeds from issuance of senior
    notes


297,522







Proceeds from issuance of
    preferred stock


144,830







Proceeds from issuance of PRIDES










135,701Retirement of OCEANs


(204,720
)






Retirement of senior notes


(125,000
)






Capital contribution to
    subsidiaries


(36,688
)


(66,745
)


(102,696
)Purchase of treasury stock, net of
    issuance


(154,555
)


(9,153
)


Dividends paid to common
    stockholders


(15,926
)


(15,737
)


(15,658
)Dividends paid to preferred
    stockholders


(2,417
)






Stock issued under various
    incentive plans, net of forfeitures


23,273



15,755



11,060Other, net










(65
)Net cash used in financing
    activities


(72,660
)


(101,391
)


(54,725
)Net increase (decrease) in cash


9,858



25,306



(7,938
)Cash at beginning of period


32,880



7,574



15,512Cash at end of period

$
42,738


$
32,880


$
7,574    S-7




---



##### Table of Contents



AMERUS
    GROUP CO.
  Condensed
    Financial Information of Registrant
  NOTES TO
    CONDENSED FINANCIAL STATEMENTS
 (Parent
    Company)
  (1)
    Basis of
    Presentation    (2)
    Notes Payable    December 31,2005


2004($ in thousands)OCEANS converted in September
    2005 (A)

$



$
189,212PRIDES notes with an initial
    maturity date of August 16, 2006 (B)


143,750



143,750Senior notes bearing interest at
    5.95% due August 2015 (C)


300,000



Senior notes bearing interest at
    6.95% due June 2005 (D)






125,000Revolving Credit Agreement (E)






Junior Subordinated debentures
    bearing interest at 8.85% (F)


50,755



50,755Other intercompany (eliminated in
    consolidation)


4,483



4,483$
498,988


$
513,200     (A)
    
    On March 6, 2002, the Company issued $185.0 million
    aggregate original principal amount of OCEANs. In September
    2005, holders of the $185.0 million aggregate original
    principal amount of OCEANs exercised their conversion rights
    which resulted in the Companys issuance of
    1.7 million shares of common stock and a cash payment of
    $203 million, including a $12.7 million prepayment
    premium. The prepayment premium and a write-off of
    $6.4 million of remaining unamortized debt issuance costs
    have been reported as early extinguishment of debt expense in
    the consolidated statement of income. In addition, the
    conversion resulted in the reclassification of an associated
    deferred tax liability of $10.7 million to additional
    paid-in capital on common stock.(B)
    
    On May 28, 2003, the Company issued $143.8 million of
    PRIDES which were registered on
    Form S-3
    filed with the Securities and Exchange Commission. The PRIDES
    initially consist of a $25 senior note and a contract requiring
    the holder to purchase the Companys common stock. The note
    has a minimum term of 4.75 years, which may be extended by
    the Company in certain circumstances. In addition, the Company
    entered into a remarketing agreement which requires the Company
    remarket the notes in 2006. Under the purchase contract, holders
    of each contract are required to purchase the Companys
    common stock on the settlement date of August 16, 2006
    based on a specified settlement rate, which will vary according
    to the applicable market value of the Companys common
    stock at the settlement date.(C)
    
    On August 5, 2005, the Company issued $300.0 million
    of senior notes under its shelf registration filed with the
    Securities and Exchange Commission. The senior notes bear
    interest at 5.95% per year payable semi-annually on
    February 15 and August 15 of each year commencing on
    February 15, 2006. The senior notes mature on S-8




---



##### Table of Contents



AMERUS
    GROUP CO.
  Condensed
    Financial Information of Registrant
  NOTES TO
    CONDENSED FINANCIAL STATEMENTS
 (Parent
    Company)  (Continued)
  August 15, 2015 and may be redeemed at the Companys
    option at any time, in whole or in part, subject to payment of a
    redemption premium.(D)
    
    The Company repaid the $125.0 million senior notes in June
    2005.(E)
    
    The revolving credit agreement provides for a maximum borrowing
    of $200 million with the balance maturing in December 2007.
    The interest rate is variable, however, the Company may elect to
    fix the rate for periods from 30 days to six months. The
    loan agreement contains various financial and operating
    covenants which, among other things, limit future indebtedness
    and restrict the amount of future dividend payments.(F)
    
    The Company has issued $50.8 million of junior subordinated
    debentures to a wholly-owned subsidiary trust in connection with
    capital securities issued by the trust. The debentures bear
    interest at the rate of 8.85% and mature February 1, 2027.
    The Company may prepay the securities at anytime after
    February 1, 2007.    ($ in thousands)2006

$
4,4832007


2008


143,7502009


2010


Thereafter


350,755$
498,988   (3)
    Equity
    Transactions     S-9




---



##### Table of Contents



AMERUS
    GROUP CO.
    SCHEDULE III
    SUPPLEMENTARY INSURANCE INFORMATION
    FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003
    ($ in thousands)  DAC,

















Benefits,deferred


Future policy





Other policy








claims,sales


benefits, losses





claims &





Net


losses &


Amortization


Otherinducements, &


claims & loss


Unearned


benefits


Premium


investment


settlement


of DAC &


operating


PremiumsSegment

VOBA


expenses (1)


premiums


payable (2)


revenue


income


expenses (3)


VOBA


expenses


writtenProtection Products12/31/2005

$
988,414


$
6,243,637






$
60,779


$
231,841


$
358,133


$
441,563


$
94,748


$
75,597



n/a12/31/2004

$
868,309


$
5,849,649


$



$
66,305


$
263,050


$
333,477


$
471,001


$
91,323


$
73,750



n/a12/31/2003

$
789,725


$
5,917,278


$



$
52,506


$
292,287


$
321,532


$
501,229


$
76,808


$
76,048



n/aAccumulation Products12/31/2005

$
1,385,016


$
14,916,058






$
4,202


$
3,028


$
748,887


$
503,706


$
96,833


$
52,350



n/a12/31/2004

$
892,030


$
13,727,230


$



$
3,776


$
2,602


$
697,363


$
497,699


$
113,540


$
51,462



n/a12/31/2003

$
749,987


$
12,614,576


$



$
5,868


$
4,114


$
672,141


$
547,798


$
102,856


$
34,497



n/aOther12/31/2005





$
89,871






$
1,156


$
2,100


$
2,483


$
9,106






$
29,615



n/a12/31/2004

$



$
88,249


$



$
384


$
2,014


$
6,607


$
1,088


$



$
29,852



n/a12/31/2003

$



$
89,794


$



$
506


$
787


$
8,241


$
3,200


$



$
41,660



n/aTotal12/31/2005

$
2,373,430


$
21,249,566


$



$
66,137


$
236,969


$
1,109,503


$
954,375


$
191,581


$
157,562



n/a12/31/2004

$
1,760,339


$
19,665,128


$



$
70,465


$
267,666


$
1,037,447


$
969,788


$
204,863


$
155,064



n/a12/31/2003

$
1,539,712


$
18,621,648


$



$
58,880


$
297,188


$
1,001,914


$
1,052,227


$
179,664


$
152,205



n/a     (1)
    
    Policy reserves, policyowner funds and dividends payable to
    policyowners(2)
    
    Policy and contract claims(3)
    
    Policyowner benefits, litigation following class certification,
    net and dividends to policyowners S-10




---



##### Table of Contents



AMERUS
    GROUP CO.SCHEDULE IVREINSURANCE
    FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND
    2003
  PercentageCeded to


Assumed





of AmountOther


From Other





AssumedGross Amount


Companies


Companies


Net Amount


to Net($ in thousands)Year Ended December 31,
    2005Life insurance in force

$
89,757,699


$
81,033,810


$
12,557,284


$
21,281,173



59.01
%Premiums and product chargesLife insurance

$
596,676


$
216,780


$
35,942


$
415,838



8.64
%Annuities


63,973



6,584







57,389




%Other


7,995



6,094



199



2,100



9.48
%Total premiums and product charges

$
668,644


$
229,458


$
36,141


$
475,327



7.60
%Year Ended December 31,
    2004Life insurance in force

$
84,353,582


$
77,375,294


$
13,287,744


$
20,266,032



65.57
%Premiums and product chargesLife insurance

$
596,449


$
205,758


$
39,944


$
430,635



9.28
%Annuities


63,864



8,293







55,571




%Other


8,006



6,236



244



2,014



12.12
%Total premiums and product charges

$
668,319


$
220,287


$
40,188


$
488,220



8.23
%Year Ended December 31,
    2003Life insurance in force

$
83,441,177


$
75,316,449


$
14,826,361


$
22,951,089



64.60
%Premiums and product chargesLife insurance

$
572,820


$
187,947


$
45,629


$
430,502



10.60
%Annuities


61,143



13,890







47,253




%Other


8,173



7,611



225



787



28.59
%Total premiums and product charges

$
642,136


$
209,448


$
45,854


$
478,542



9.58
%  S-11