##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period endedMarch 31, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _________ to _________
 Commission File Number: 1-11917
 FBL Financial Group, Inc.
  Iowa
    
    42-1411715(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 5400 University Avenue, West Des Moines, Iowa
    
    50266-5997(Address of principal executive offices)
    
    (Zip Code)
 
  
 þ o
 o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o
 o þ
  Title of each class
    

Outstanding at May 6, 2009Class A Common Stock, without par value
    
    29,218,427Class B Common Stock, without par value
    
    1,192,990




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##### 



FBL FINANCIAL GROUP, INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
TABLE OF CONTENTS
 PART I.       FINANCIAL INFORMATIONItem 1.            Financial Statements (Unaudited)Consolidated Balance Sheets
    
    
    2Consolidated Statements of Operations
    
    
    4Consolidated Statements of Changes in Stockholders Equity
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Item 2.            Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3.            Quantitative and Qualitative Disclosures About Market Risk
    
    
    54Item 4.            Controls and Procedures
    
    
    54PART II.       OTHER INFORMATIONItem 6.            Exhibits
    
    
    55SIGNATURES
    
    
    56EX-3.II.CEX-10.11EX-10.26EX-10.27EX-10.28EX-10.29EX-31.1EX-31.2EX-32
  1




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##### Table of Contents



FBL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
 March 31,
    
    
    December 31,2009
    
    
    2008AssetsInvestments:Fixed maturities  available for sale, at market
(amortized cost: 2009 - $10,453,306; 2008 - $10,505,084)
    
    $
    8,881,526
    
    
    $
    8,965,443Equity securities  available for sale, at market (cost:2009 - $61,260; 2008 - $51,958)
    
    
    44,953
    
    
    
    44,863Mortgage loans on real estate
    
    
    1,362,146
    
    
    
    1,381,854Derivative instruments
    
    
    15,755
    
    
    
    12,933Investment real estate
    
    
    2,559
    
    
    
    2,559Policy loans
    
    
    183,423
    
    
    
    182,421Other long-term investments
    
    
    1,581
    
    
    
    1,527Short-term investments
    
    
    383,183
    
    
    
    262,459Total investments
    
    
    10,875,126
    
    
    
    10,854,059Cash and cash equivalents
    
    
    11,444
    
    
    
    37,710Securities and indebtedness of related parties
    
    
    18,971
    
    
    
    18,921Accrued investment income
    
    
    143,801
    
    
    
    136,893Amounts receivable from affiliates
    
    
    8,936
    
    
    
    15,791Reinsurance recoverable
    
    
    107,460
    
    
    
    107,854Deferred policy acquisition costs
    
    
    1,375,292
    
    
    
    1,365,609Deferred sales inducements
    
    
    431,934
    
    
    
    420,147Value of insurance in force acquired
    
    
    61,912
    
    
    
    63,121Property and equipment, less allowances for depreciation of
$63,184 in 2009 and $63,730 in 2008
    
    
    20,835
    
    
    
    23,074Current income taxes recoverable
    
    
    24,569
    
    
    
    14,389Deferred income tax benefit
    
    
    285,377
    
    
    
    305,080Goodwill
    
    
    11,170
    
    
    
    11,170Collateral held for securities lending and other transactions
    
    
    38,223
    
    
    
    67,953Other assets
    
    
    34,987
    
    
    
    41,623Assets held in separate accounts
    
    
    522,591
    
    
    
    577,420Total assets
    
    $
    13,972,628
    
    
    $
    14,060,814
 2




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##### Table of Contents



FBL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
 March 31,
    
    
    December 31,2009
    
    
    2008Liabilities and stockholders equityLiabilities:Policy liabilities and accruals:Future policy benefits:Interest sensitive and index products
    
    $
    10,520,377
    
    
    $
    10,531,967Traditional life insurance and accident and health products
    
    
    1,338,662
    
    
    
    1,328,506Unearned revenue reserve
    
    
    34,813
    
    
    
    34,663Other policy claims and benefits
    
    
    29,894
    
    
    
    38,25611,923,746
    
    
    
    11,933,392Other policyholders funds:Supplementary contracts without life contingencies
    
    
    510,762
    
    
    
    504,885Advance premiums and other deposits
    
    
    174,158
    
    
    
    167,473Accrued dividends
    
    
    10,407
    
    
    
    10,241695,327
    
    
    
    682,599Amounts payable to affiliates
    
    
    830
    
    
    
    247Short-term debt
    
    
    
    
    
    
    59,446Long-term debt payable to affiliates
    
    
    100,000
    
    
    
    100,000Long-term debt
    
    
    271,025
    
    
    
    271,005Collateral payable for securities lending and other transactions
    
    
    39,925
    
    
    
    69,656Other liabilities
    
    
    147,582
    
    
    
    108,588Liabilities related to separate accounts
    
    
    522,591
    
    
    
    577,420Total liabilities
    
    
    13,701,026
    
    
    
    13,802,353Stockholdersequity:FBL Financial Group, Inc. stockholders equity:Preferred stock, without par value, at liquidation value 
authorized 10,000,000 shares, issued and outstanding 5,000,000
Series B shares
    
    
    3,000
    
    
    
    3,000Class A common stock, without par value  authorized
88,500,000 shares, issued and outstanding 29,172,275 shares in
2009 and 28,975,889 shares in 2008
    
    
    105,558
    
    
    
    104,090Class B common stock, without par value  authorized 1,500,000
shares, issued and outstanding 1,192,990 shares
    
    
    7,522
    
    
    
    7,522Accumulated other comprehensive loss
    
    
    (648,469
    )
    
    
    (649,758
    )Retained earnings
    
    
    803,892
    
    
    
    793,511Total FBL Financial Group, Inc. stockholders equity
    
    
    271,503
    
    
    
    258,365Noncontrolling interest
    
    
    99
    
    
    
    96Total stockholders equity
    
    
    271,602
    
    
    
    258,461Total liabilities and stockholders equity
    
    $
    13,972,628
    
    
    $
    14,060,814
  3




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##### Table of Contents



FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share data)
 Three months ended March 31,2009
    
    
    2008Revenues:Interest sensitive and index product charges
    
    $
    41,140
    
    
    $
    29,121Traditional life insurance premiums
    
    
    37,954
    
    
    
    36,133Net investment income
    
    
    184,069
    
    
    
    168,494Derivative loss
    
    
    (24,601
    )
    
    
    (98,896
    )Realized investment gains
    
    
    1,951
    
    
    
    Other-than-temporary impairment losses (2009
includes total impairment losses of $31,127, less
$9,506 recognized in other comprehensive loss)
    
    
    (21,621
    )
    
    
    (29,347
    )Other income
    
    
    4,586
    
    
    
    5,865Total revenues
    
    
    223,478
    
    
    
    111,370Benefits and expenses:Interest sensitive and index product benefits
    
    
    114,436
    
    
    
    104,761Change in value of index product embedded derivatives
    
    
    (8,669
    )
    
    
    (103,170
    )Traditional life insurance benefits
    
    
    22,104
    
    
    
    27,252Increase in traditional life future policy benefits
    
    
    9,718
    
    
    
    11,390Distributions to participating policyholders
    
    
    4,921
    
    
    
    5,270Underwriting, acquisition and insurance expenses
    
    
    71,963
    
    
    
    46,691Interest expense
    
    
    6,932
    
    
    
    4,451Other expenses
    
    
    4,930
    
    
    
    5,955Total benefits and expenses
    
    
    226,335
    
    
    
    102,600(2,857
    )
    
    
    8,770Income taxes
    
    
    1,256
    
    
    
    (2,458
    )Equity income, net of related income taxes
    
    
    73
    
    
    
    117Net income (loss)
    
    
    (1,528
    )
    
    
    6,429Net loss attributable to noncontrolling interest
    
    
    38
    
    
    
    9Net income (loss) attributable to FBL Financial Group, Inc
    
    $
    (1,490
    )
    
    $
    6,438Earnings (loss) per common share
    
    $
    (0.05
    )
    
    $
    0.21Earnings
(loss) per common share  assuming dilution
    
    $
    (0.05
    )
    
    $
    0.21Cash dividends per common share
    
    $
    0.1250
    
    
    $
    0.1250
  4




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FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (Unaudited)
(Dollars in thousands)
 FBL Financial Group, Inc. Stockholders EquityClass A and
    
    
    AccumulatedSeries B
    
    
    Class B
    
    
    Other
    
    
    
    
    
    
    Non-
    
    
    TotalPreferred
    
    
    Common
    
    
    Comprehensive
    
    
    Retained
    
    
    controlling
    
    
    StockholdersStock
    
    
    Stock (a)
    
    
    Loss
    
    
    Earnings
    
    
    Interest
    
    
    EquityBalance at January 1, 2008
    
    $
    3,000
    
    
    $
    108,746
    
    
    $
    (36,345
    )
    
    $
    827,490
    
    
    $
    91
    
    
    $
    902,982Change in measurement date of
benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (770
    )
    
    
    
    
    
    
    (770
    )Comprehensive loss:Net income  three months
ended March 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,438
    
    
    
    (9
    )
    
    
    6,429Change in net unrealized
investment gains/losses
    
    
    
    
    
    
    
    
    
    
    (101,665
    )
    
    
    
    
    
    
    
    
    
    
    (101,665
    )Change in underfunded status
of other postretirement
benefit plans
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    14Total comprehensive loss (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (95,222
    )Adjustment resulting from
capital transactions of equity
investee
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Stock-based compensation,
including the issuance of
142,330 common shares under
compensation plans
    
    
    
    
    
    
    3,238
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,238Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38
    )
    
    
    
    
    
    
    (38
    )Dividends on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,726
    )
    
    
    
    
    
    
    (3,726
    )Receipts related to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    47Balance at March 31, 2008
    
    $
    3,000
    
    
    $
    111,978
    
    
    $
    (137,996
    )
    
    $
    829,394
    
    
    
    129
    
    
    
    806,505Balance at January 1, 2009
    
    $
    3,000
    
    
    $
    111,612
    
    
    $
    (649,758
    )
    
    $
    793,511
    
    
    $
    96
    
    
    $
    258,461Reclassification of non-credit
impairment losses from prior
periods
    
    
    
    
    
    
    
    
    
    
    (15,641
    )
    
    
    15,641
    
    
    
    
    
    
    
    Comprehensive income:Net loss  three months
ended March 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,490
    )
    
    
    (38
    )
    
    
    (1,528
    )Change in net unrealized
investment gains/losses
    
    
    
    
    
    
    
    
    
    
    22,105
    
    
    
    
    
    
    
    
    
    
    
    22,105Non-credit impairment losses.
    
    
    
    
    
    
    
    
    
    
    (5,185
    )
    
    
    
    
    
    
    
    
    
    
    (5,185
    )Change in underfunded status
of other postretirement
benefit plans
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    10Total comprehensive income (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,402Stock-based compensation,
including the issuance of
196,386 common shares under
compensation plans
    
    
    
    
    
    
    1,468
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,468Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38
    )
    
    
    
    
    
    
    (38
    )Dividends on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,732
    )
    
    
    
    
    
    
    (3,732
    )Receipts related to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    41Balance at March 31, 2009
    
    $
    3,000
    
    
    $
    113,080
    
    
    $
    (648,469
    )
    
    $
    803,892
    
    
    $
    99
    
    
    $
    271,602
 
 (a)
    
    All activity for the periods shown relates to Class A Common Stock.(b)
    
    Comprehensive income (loss) attributable to FBL Financial Group, Inc. aggregated
$15,440 and ($95,213) for the three months ended March 31, 2009 and 2008, respectively.  5




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FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
 Three months ended March 31,2009
    
    
    2008Operating activitiesNet income (loss)
    
    $
    (1,528
    )
    
    $
    6,429Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Adjustments related to interest sensitive and index products:Interest credited/index credits to account balances, excluding
deferred sales inducements
    
    
    80,589
    
    
    
    81,162Change in fair value of embedded derivatives
    
    
    (8,669
    )
    
    
    (103,170
    )Charges for mortality and administration
    
    
    (40,014
    )
    
    
    (27,216
    )Deferral of unearned revenues
    
    
    464
    
    
    
    440Amortization of unearned revenue reserve
    
    
    (684
    )
    
    
    (399
    )Provision for depreciation and amortization of property and equipment
    
    
    1,740
    
    
    
    3,783Provision for accretion and amortization of investments
    
    
    (1,994
    )
    
    
    (2,285
    )Realized losses on investments
    
    
    19,670
    
    
    
    29,347Change in fair value of derivatives
    
    
    18,029
    
    
    
    82,779Increase in traditional life and accident and health benefit accruals
    
    
    10,156
    
    
    
    13,129Policy acquisition costs deferred
    
    
    (36,756
    )
    
    
    (40,192
    )Amortization of deferred policy acquisition costs
    
    
    47,440
    
    
    
    23,022Amortization of deferred sales inducements
    
    
    19,387
    
    
    
    12,683Amortization of value of insurance in force
    
    
    741
    
    
    
    899Change in accrued investment income
    
    
    (6,908
    )
    
    
    (12,826
    )Change in amounts receivable from/payable to affiliates
    
    
    7,438
    
    
    
    6,087Change in reinsurance recoverable
    
    
    394
    
    
    
    11,810Change in current income taxes
    
    
    (10,180
    )
    
    
    (7,993
    )Provision for deferred income taxes
    
    
    10,340
    
    
    
    10,416Other
    
    
    7,609
    
    
    
    (6,508
    )Net cash provided by operating activities
    
    
    117,264
    
    
    
    81,397Investing activitiesSale, maturity or repayment of investments:Fixed maturities  available for sale
    
    
    231,571
    
    
    
    203,042Mortgage loans on real estate
    
    
    19,309
    
    
    
    19,306Other long  term investments
    
    
    14
    
    
    
    Derivative instruments
    
    
    841
    
    
    
    12,778Policy loans
    
    
    9,732
    
    
    
    10,077261,467
    
    
    
    245,203Acquisition of investments:Fixed maturities  available for sale
    
    
    (154,866
    )
    
    
    (360,492
    )Mortgage loans on real estate
    
    
    (475
    )
    
    
    (26,784
    )Derivative instruments
    
    
    (21,683
    )
    
    
    (84,509
    )Equity securities
    
    
    (9,302
    )
    
    
    Policy loans
    
    
    (10,734
    )
    
    
    (9,727
    )Short-term investments  net
    
    
    (120,724
    )
    
    
    (27,090
    )(317,784
    )
    
    
    (508,602
    )
 6




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FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)
 Three months ended March 31,2009
    
    
    2008Investing activities  continuedProceeds from disposal, repayments of advances and
other distributions of capital from equity
investees
    
    $
    7
    
    
    $
    Purchases of property and equipment
    
    
    (357
    )
    
    
    (5,129
    )Disposal of property and equipment
    
    
    856
    
    
    
    726Net cash used in investing activities
    
    
    (55,811
    )
    
    
    (267,802
    )Financing activitiesReceipts from interest sensitive and index
products credited to policyholder account balances
    
    
    584,562
    
    
    
    454,592Return of policyholder account balances on
interest sensitive and index products
    
    
    (608,988
    )
    
    
    (249,270
    )Repayment of short-term debt
    
    
    (60,000
    )
    
    
    Receipts related to noncontrolling interests  net
    
    
    41
    
    
    
    46Excess tax deductions on stock-based compensation
    
    
    
    
    
    
    262Issuance of common stock
    
    
    436
    
    
    
    1,928Dividends paid
    
    
    (3,770
    )
    
    
    (3,764
    )Net cash provided by (used in) financing activities
    
    
    (87,719
    )
    
    
    203,794Increase (decrease) in cash and cash equivalents
    
    
    (26,266
    )
    
    
    17,389Cash and cash equivalents at beginning of period
    
    
    37,710
    
    
    
    84,015Cash and cash equivalents at end of period
    
    $
    11,444
    
    
    $
    101,404Supplemental disclosures of cash flow informationCash paid (received) during the period for:Interest
    
    $
    7,365
    
    
    $
    4,852Income taxes
    
    
    (1,377
    )
    
    
    (165
    )Non-cash operating activity:Deferral of sales inducements
    
    
    13,654
    
    
    
    18,390
  7




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 
 FBL FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 2009
 1. Significant Accounting Policies
 Basis of Presentation
  Accounting Changes
     8




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FBL Financial Group, Inc.
    
    March 31, 2009
   Reclassifications
  2. Investment Operations
 Fixed Maturities and Equity Securities
 Available-For-Sale Fixed Maturity and Equity Securities by Investment Category
 March 31, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(Dollars in thousands)Bonds:Corporate securities
    
    $
    5,729,713
    
    
    $
    37,643
    
    
    $
    (1,012,488
    )
    
    $
    4,754,868Residential mortgage-backed securities
    
    
    1,959,565
    
    
    
    33,663
    
    
    
    (202,960
    )
    
    
    1,790,268Commercial mortgage-backed securities
    
    
    807,520
    
    
    
    23,784
    
    
    
    (176,293
    )
    
    
    655,011Other asset-backed securities
    
    
    218,833
    
    
    
    324
    
    
    
    (97,532
    )
    
    
    121,625Collateralized debt obligations
    
    
    52,011
    
    
    
    
    
    
    
    (46,574
    )
    
    
    5,437United States Government and agencies
    
    
    254,957
    
    
    
    12,405
    
    
    
    
    
    
    
    267,362State, municipal and other governments
    
    
    1,425,707
    
    
    
    5,572
    
    
    
    (148,412
    )
    
    
    1,282,867Redeemable preferred stocks
    
    
    5,000
    
    
    
    
    
    
    
    (912
    )
    
    
    4,088Total fixed maturities
    
    $
    10,453,306
    
    
    $
    113,391
    
    
    $
    (1,685,171
    )
    
    $
    8,881,526Equity securities:Non-redeemable preferred stocks
    
    $
    40,649
    
    
    $
    3,759
    
    
    $
    (19,324
    )
    
    $
    25,084Common stocks
    
    
    20,611
    
    
    
    1
    
    
    
    (743
    )
    
    
    19,869Total equity securities
    
    $
    61,260
    
    
    $
    3,760
    
    
    $
    (20,067
    )
    
    $
    44,953
  9




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Available-For-Sale Fixed Maturity Securities by Maturity Date
 March 31, 2009Amortized
    
    
    EstimatedCost
    
    
    Fair Value(Dollars in thousands)Due in one year or less
    
    $
    127,175
    
    
    $
    121,882Due after one year through five years
    
    
    1,222,651
    
    
    
    1,095,800Due after five years through ten years
    
    
    2,912,294
    
    
    
    2,452,348Due after ten years
    
    
    3,200,268
    
    
    
    2,640,5047,462,388
    
    
    
    6,310,534Residential mortgage-backed securities
    
    
    1,959,565
    
    
    
    1,790,268Commercial mortgage-backed securities
    
    
    807,520
    
    
    
    655,011Other asset-backed securities
    
    
    218,833
    
    
    
    121,625Redeemable preferred stocks
    
    
    5,000
    
    
    
    4,088$
    10,453,306
    
    
    $
    8,881,526
  Net Unrealized Losses on Fixed Maturity and Equity Securities
 March 31, 2009(Dollars inthousands)Unrealized depreciation on:Fixed maturities  available for sale
    
    $
    (1,571,780
    )Equity securities  available for sale
    
    
    (16,307
    )Interest rate swaps
    
    
    (509
    )(1,588,596
    )Adjustments for assumed changes in amortization pattern of:Deferred policy acquisition costs
    
    
    421,412Deferred sales inducements
    
    
    152,283Value of insurance in force acquired
    
    
    24,896Unearned revenue reserve
    
    
    (7,343
    )Provision for deferred income taxes
    
    
    349,077(648,271
    )Proportionate share of net unrealized investment gains of
equity investees
    
    
    3Net unrealized investment losses
    
    $
    (648,268
    )
   
    
    historical operating trends;
    
    business prospects;
    
    status of the industry in which the company operates;
    
    analyst ratings on the issuer and sector;
    
    quality of management;
    
    size of the unrealized loss;
    
    level of current market interest rates compared to market interest rates when the
security was purchased;
 10




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 
    
    length of time the security has been in an unrealized loss position; and
    
    our intent and ability to hold the security.
 Fixed Maturity Securities with Unrealized Losses by Length of Time Unrealized
 March 31, 2009Less than one year
    
    
    One year or more
    
    
    TotalDescription of
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    Unrealized
    
    
    Estimated
    
    
    UnrealizedSecurities
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses(Dollars in Thousands)Corporate securities
    
    $
    2,010,972
    
    
    $
    (271,266
    )
    
    $
    1,814,988
    
    
    $
    (741,222
    )
    
    $
    3,825,960
    
    
    $
    (1,012,488
    )Residential
mortgage-backed
securities
    
    
    38,192
    
    
    
    (1,274
    )
    
    
    1,110,441
    
    
    
    (201,686
    )
    
    
    1,148,633
    
    
    
    (202,960
    )Commercial
mortgage-backed
securities
    
    
    125,071
    
    
    
    (17,891
    )
    
    
    143,586
    
    
    
    (158,402
    )
    
    
    268,657
    
    
    
    (176,293
    )Other asset-backed
securities
    
    
    15,050
    
    
    
    (17,631
    )
    
    
    101,030
    
    
    
    (79,901
    )
    
    
    116,080
    
    
    
    (97,532
    )Collateralized debt
obligations
    
    
    
    
    
    
    
    
    
    
    5,437
    
    
    
    (46,574
    )
    
    
    5,437
    
    
    
    (46,574
    )State, municipal and
other governments
    
    
    601,060
    
    
    
    (43,441
    )
    
    
    525,336
    
    
    
    (104,971
    )
    
    
    1,126,396
    
    
    
    (148,412
    )Redeemable preferred
stocks
    
    
    4,088
    
    
    
    (912
    )
    
    
    
    
    
    
    
    
    
    
    4,088
    
    
    
    (912
    )Total fixed maturities
    
    $
    2,794,433
    
    
    $
    (352,415
    )
    
    $
    3,700,818
    
    
    $
    (1,332,756
    )
    
    $
    6,495,251
    
    
    $
    (1,685,171
    )
  Corporate securities
   Residential mortgage-backed securities:
 11




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Commercial mortgage-backed securities:
 Other asset-backed securities:
 Collateralized debt obligations:
 State, municipal and other governments:
  12




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
      13




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Credit Loss Component of Other-Than-Temporary Impairments on Fixed Maturity Securities
 Three months endedMarch 31, 2009(Dollars in thousands)Balance at January 1, 2009
    
    $
    (106,421
    )Increases for which an impairment was not
previously recognized
    
    
    (17,186
    )Increases to previously impaired investments
    
    
    (3,570
    )Reductions due to sold investments
    
    
    32Balance at March 31, 2009
    
    $
    (127,145
    )
 Sales, Maturities and Principal Repayments on Fixed Maturity Securities
 Three months ended March 31, 2009Gross
    
    
    GrossAmortized
    
    
    Realized
    
    
    RealizedCost
    
    
    Gains
    
    
    Losses
    
    
    Proceeds(Dollars in thousands)Scheduled principal repayments and
calls  available for sale
    
    $
    96,427
    
    
    $
    
    
    
    $
    
    
    
    $
    96,427Sales  available for sale
    
    
    133,224
    
    
    
    2,068
    
    
    
    (148
    )
    
    
    135,144Total
    
    $
    229,651
    
    
    $
    2,068
    
    
    $
    (148
    )
    
    $
    231,571
 Mortgage Loans on Real Estate
   3. Derivative Instruments
   14




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Summary of Swaps
 Notional
    
    
    Receive
    
    
    Pay
    
    
    Carrying and Fair ValueMaturity Date
    
    Amount
    
    
    Rate
    
    
    Rate
    
    
    March 31, 2009
    
    
    December 31, 2008(dollars in thousands)1/1/2010
    
    
    50,000
    
    
    1 month LIBOR*
    
    
    4.858
    %
    
    $
    (1,248
    )
    
    $
    (1,860
    )10/7/2010
    
    
    46,000
    
    
    3 month LIBOR*
    
    
    4.760
    
    
    
    (2,426
    )
    
    
    (2,692
    )6/1/2011
    
    
    50,000
    
    
    1 month LIBOR*
    
    
    5.519
    
    
    
    (4,955
    )
    
    
    (4,905
    )$
    (8,629
    )
    
    $
    (9,457
    )
 
 *
    
    London Interbank Offered Rate      15




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 4. Fair Values of Financial Instruments
    Fixed maturity securities:
 Equity securities:
 Derivative instruments:
 Other long-term investments, cash and short-term investments:
 Reinsurance recoverable:
 Collateral held and payable for securities lending and other transactions:
 16




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Assets held in separate accounts:
 Future policy benefits  index annuity embedded derivatives:
 Other liabilities:
       17




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Valuation of our Financial Instruments by Fair Value Hierarchy Levels
 March 31, 2009Quoted prices inactive markets
    
    
    Significant other
    
    
    Significantfor identical
    
    
    observable
    
    
    unobservableassets (Level 1)
    
    
    inputs (Level 2)
    
    
    inputs (Level 3)
    
    
    Total(Dollars in thousands)AssetsCorporate securities
    
    $
    
    
    
    $
    4,579,715
    
    
    $
    175,153
    
    
    $
    4,754,868Residential mortgage-backed securities
    
    
    
    
    
    
    1,701,976
    
    
    
    88,292
    
    
    
    1,790,268Commercial mortgage-backed securities
    
    
    
    
    
    
    635,716
    
    
    
    19,295
    
    
    
    655,011Asset-backed securities
    
    
    
    
    
    
    105,399
    
    
    
    16,226
    
    
    
    121,625Collateralized debt obligations
    
    
    
    
    
    
    
    
    
    
    5,437
    
    
    
    5,437United States Government and agencies
    
    
    
    
    
    
    267,362
    
    
    
    
    
    
    
    267,362State, municipal and other governments
    
    
    
    
    
    
    1,167,023
    
    
    
    115,844
    
    
    
    1,282,867Redeemable preferred stocks
    
    
    
    
    
    
    
    
    
    
    4,088
    
    
    
    4,088Non-redeemable preferred stocks
    
    
    
    
    
    
    25,084
    
    
    
    
    
    
    
    25,084Common stocks
    
    
    1,950
    
    
    
    17,919
    
    
    
    
    
    
    
    19,869Derivative instruments
    
    
    
    
    
    
    15,755
    
    
    
    
    
    
    
    15,755Other long-term investments
    
    
    
    
    
    
    
    
    
    
    1,581
    
    
    
    1,581Cash and short-term investments
    
    
    394,627
    
    
    
    
    
    
    
    
    
    
    
    394,627Reinsurance recoverable
    
    
    
    
    
    
    4,498
    
    
    
    
    
    
    
    4,498Collateral held for securities
lending and other transactions
    
    
    
    
    
    
    38,223
    
    
    
    
    
    
    
    38,223Assets held in separate accounts
    
    
    522,591
    
    
    
    
    
    
    
    
    
    
    
    522,591LiabilitiesFuture policy benefits 
index annuity embedded
derivatives
    
    $
    
    
    
    $
    
    
    
    $
    447,223
    
    
    $
    447,223Other liabilities
    
    
    
    
    
    
    180
    
    
    
    
    
    
    
    180Collateral payable for
securities lending and other
transactions
    
    
    
    
    
    
    39,925
    
    
    
    
    
    
    
    39,925
  18




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Level 3 Fixed Maturity Investments by Valuation Source
 March 31, 2009Third-party
    
    
    Pricedvendors
    
    
    internally
    
    
    Total(Dollars in thousands)AssetsCorporate securities (including
redeemable preferred stocks)
    
    $
    153,583
    
    
    $
    25,658
    
    
    $
    179,241Residential mortgage-backed securities
    
    
    
    
    
    
    88,292
    
    
    
    88,292Commercial mortgage-backed securities
    
    
    13,766
    
    
    
    5,529
    
    
    
    19,295Other asset-backed securities
    
    
    16,226
    
    
    
    
    
    
    
    16,226Collateralized debt obligations
    
    
    5,437
    
    
    
    
    
    
    
    5,437State, municipals and other
    
    
    115,844
    
    
    
    
    
    
    
    115,844Total
    
    $
    304,856
    
    
    $
    119,479
    
    
    $
    424,335Percent of total
    
    
    71.8
    %
    
    
    28.2
    %
    
    
    100.0
    %
 Level 3 Financial Instruments Changes in Fair Value
 March 31, 2009Residential
    
    
    Commercial
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    Othermortgage-
    
    
    mortgage-
    
    
    asset-
    
    
    Collateralized
    
    
    States,
    
    
    long-termCorporate
    
    
    backed
    
    
    backed
    
    
    backed
    
    
    debt
    
    
    municipals
    
    
    invest-securities
    
    
    securities
    
    
    securities
    
    
    securities
    
    
    obligations
    
    
    & other
    
    
    ments(Dollars in thousands)AssetsBalance, December 31, 2008
    
    $
    648,688
    
    
    $
    70,003
    
    
    $
    24,122
    
    
    $
    17,201
    
    
    $
    7,414
    
    
    $
    140,189
    
    
    $
    1,527Purchases (disposals), net
    
    
    (10,811
    )
    
    
    
    
    
    
    (301
    )
    
    
    (637
    )
    
    
    
    
    
    
    (54
    )
    
    
    Realized and unrealized
gains (losses), net
    
    
    (3,474
    )
    
    
    9,049
    
    
    
    1,067
    
    
    
    (2,572
    )
    
    
    (1,976
    )
    
    
    (4,287
    )
    
    
    Transfers in and/or (out) of
Level 3 (1)
    
    
    (455,128
    )
    
    
    9,224
    
    
    
    (5,590
    )
    
    
    2,231
    
    
    
    
    
    
    
    (19,999
    )
    
    
    Included in earnings
(amortization)
    
    
    (34
    )
    
    
    16
    
    
    
    (3
    )
    
    
    3
    
    
    
    (1
    )
    
    
    (5
    )
    
    
    54Balance, March 31, 2009
    
    $
    179,241
    
    
    $
    88,292
    
    
    $
    19,295
    
    
    $
    16,226
    
    
    $
    5,437
    
    
    $
    115,844
    
    
    $
    1,581
  
 (1)
    
    Included in the transfers in and/or out line above is $535.3 million of securities
that were priced using a broker only quote at December 31, 2008 and were transferred to a
pricing service that uses observable market data in the prices and $66.1 million that were
transferred into Level 3 that did not have enough observable data to include in Level 2
this quarter. Three months endedMarch 31, 2009(Dollars inthousands)Future Policy Benefits  Index Product Embedded DerivativesBalance, December 31, 2008
    
    $
    523,515Premiums less benefits, net
    
    
    (20,558
    )Impact of unrealized gains (losses), net
    
    
    (55,734
    )Balance, March 31, 2009
    
    $
    447,223Change in unrealized gains/losses on embedded
derivatives held at March 31 (2)
    
    $
    (55,734
    )
 (2)
    
    Excludes host accretion and the timing of posting index credits, which are included
with the change in value of index product embedded derivatives in the consolidated
statements of operations. 19




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 5. Credit Agreement
  6. Defined Benefit Plan
  Components of Net Periodic Pension Cost for all Employers in the Multiemployer Plans
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Service cost
    
    $
    1,860
    
    
    $
    1,659Interest cost
    
    
    3,890
    
    
    
    3,709Expected return on assets
    
    
    (2,997
    )
    
    
    (3,495
    )Amortization of prior service cost
    
    
    185
    
    
    
    196Amortization of actuarial loss
    
    
    2,216
    
    
    
    945Settlement expense
    
    
    96
    
    
    
    Net periodic pension cost  all employers
    
    $
    5,250
    
    
    $
    3,014
 7. Commitments and Contingencies
    20




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
    8. Earnings per Share
 Computation of Earnings per Common Share
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands, except per share data)Numerator:Net income (loss) attributable to FBL Financial Group, Inc.
    
    $
    (1,490
    )
    
    $
    6,438Dividends on Series B preferred stock
    
    
    (38
    )
    
    
    (38
    )Numerator for earnings per common share - income
available to common stockholders
    
    $
    (1,528
    )
    
    $
    6,400Denominator:Weighted average shares
    
    
    29,850,768
    
    
    
    29,789,122Deferred common stock units relating to deferred
compensation plans
    
    
    107,035
    
    
    
    70,468Denominator for earnings per common share 
weighted-average shares
    
    
    29,957,803
    
    
    
    29,859,590Effect of dilutive securities  stock-based compensation
    
    
    
    
    
    
    348,273Denominator for diluted earnings per common share 
adjusted weighted-average shares
    
    
    29,957,803
    
    
    
    30,207,863Earnings per common share
    
    $
    (0.05
    )
    
    $
    0.21Earnings per common share  assuming dilution
    
    $
    (0.05
    )
    
    $
    0.21
 9. Segment Information
  21




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
   Financial Information Concerning our Operating Segments
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Operating revenues:Traditional Annuity  Exclusive Distribution
    
    $
    36,660
    
    
    $
    35,696Traditional Annuity  Independent Distribution
    
    
    91,133
    
    
    
    78,282Traditional and Universal Life Insurance
    
    
    86,132
    
    
    
    83,362Variable
    
    
    16,145
    
    
    
    15,935Corporate and Other
    
    
    5,598
    
    
    
    8,497235,668
    
    
    
    221,772Realized losses on investments (A)
    
    
    (19,680
    )
    
    
    (29,432
    )Change in net unrealized gains/losses on derivatives (A)
    
    
    7,490
    
    
    
    (80,970
    )Consolidated revenues
    
    $
    223,478
    
    
    $
    111,370Pre-tax operating income (loss):Traditional Annuity  Exclusive Distribution
    
    $
    6,826
    
    
    $
    7,242Traditional Annuity  Independent Distribution
    
    
    (127
    )
    
    
    7,795Traditional and Universal Life Insurance
    
    
    15,443
    
    
    
    8,164Variable
    
    
    (3,825
    )
    
    
    1,168Corporate and Other
    
    
    (6,628
    )
    
    
    (2,134
    )11,689
    
    
    
    22,235Income taxes on operating income
    
    
    (3,821
    )
    
    
    (7,167
    )Realized losses on investments (A)
    
    
    (11,040
    )
    
    
    (12,165
    )Change in net unrealized gains/losses on derivatives (A)
    
    
    1,682
    
    
    
    3,535Consolidated net income (loss) attributable to FBL Financial Group, Inc.
    
    $
    (1,490
    )
    
    $
    6,438
 
 (A)
    
    Amounts are net of adjustments, as applicable, to amortization of unearned revenue reserves,
deferred policy acquisition costs, deferred sales inducements, value of insurance in force
acquired and income taxes attributable to these items.  22




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009


ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 This section includes a summary of FBL Financial Group, Inc.s consolidated results of operations,
financial condition and where appropriate, factors that management believes may affect future
performance. Unless noted otherwise, all references to FBL Financial Group, Inc. (we or the
Company) include all of its direct and indirect subsidiaries, including its primary life insurance
subsidiaries, Farm Bureau Life Insurance Company (Farm Bureau Life) and EquiTrust Life Insurance
Company (EquiTrust Life) (collectively, the Life Companies). Please read this discussion in
conjunction with the accompanying consolidated financial statements and related notes. In
addition, we encourage you to refer to our 2008 Form 10-K for a complete description of our
significant accounting policies and estimates. Familiarity with this information is important in
understanding our financial position and results of operations.
 This Form 10-Q includes statements relating to anticipated financial performance, business
prospects, new products, and similar matters. These statements and others, which include words
such as expect, anticipate, believe, intend and other similar expressions, constitute
forward-looking statements under the Private Securities Litigation Reform Act of 1995. A
variety of factors could cause our actual results and experiences to differ materially from the
anticipated results or other expectations expressed in our forward-looking statements. See Part
1A, Risk Factors, of our 2008 Annual Report on Form 10-K for additional information on the risks
and uncertainties that may affect the operations, performance, development and results of our
business.
 Impact of Recent Business Environment
     23




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
   Results of Operations for the Three Months Ended March 31, 2009 and 2008
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands,except per share data)Revenues
    
    $
    223,478
    
    
    $
    111,370Benefits and expenses
    
    
    226,335
    
    
    
    102,600(2,857
    )
    
    
    8,770Income taxes
    
    
    1,256
    
    
    
    (2,458
    )Equity income
    
    
    73
    
    
    
    117Net income (loss)
    
    
    (1,528
    )
    
    
    6,429Net loss attributable to noncontrolling interest
    
    
    38
    
    
    
    9Net income (loss) attributable to FBL Financial Group, Inc.
    
    $
    (1,490
    )
    
    $
    6,438Earnings per common share
    
    $
    (0.05
    )
    
    $
    0.21Earnings per common share  assuming dilution
    
    $
    (0.05
    )
    
    $
    0.21
 24




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands,except per share data)Other dataDirect premiums collected, net of reinsurance ceded:Traditional Annuity  Exclusive Distribution
    
    $
    96,368
    
    
    $
    45,348Traditional Annuity  Independent Distribution
    
    
    324,699
    
    
    
    326,686Traditional and Universal Life Insurance
    
    
    49,860
    
    
    
    47,259Variable Annuity and Variable Universal Life (1)
    
    
    26,180
    
    
    
    41,921Reinsurance assumed and other
    
    
    2,936
    
    
    
    3,680Total
    
    $
    500,043
    
    
    $
    464,894Direct life insurance in force, end of quarter (in millions)
    
    $
    43,993
    
    
    $
    41,576Life insurance lapse rates
    
    
    7.1
    %
    
    
    6.3
    %Withdrawal rates  individual traditional annuity:Exclusive Distribution
    
    
    4.9
    %
    
    
    3.6
    %Independent Distribution
    
    
    20.8
    %
    
    
    5.9
    %
 
 (1)
    
    Amounts are net of portion ceded to and include amounts assumed from alliance partners.   Net Income (Loss) Attributable to FBL Financial Group, Inc.
  25




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FBL Financial Group, Inc.
    
    March 31, 2009
 Spreads Earned on our Universal Life and Individual Annuity Products
 Three months ended March 31,2009
    
    
    2008Weighted average yield on cash and invested assets
    
    
    6.15
    %
    
    
    6.10
    %Weighted average interest crediting rate/index cost
    
    
    3.98
    
    
    
    3.92Spread
    
    
    2.17
    %
    
    
    2.18
    %
  Impact of Operating Adjustments on FBL Net Income (Loss)
  Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Realized losses on investments
    
    $
    (19,670
    )
    
    $
    (29,347
    )Change in net unrealized gains/losses on derivatives
    
    
    16,159
    
    
    
    22,199Change in amortization of:Deferred policy acquisition costs
    
    
    (6,850
    )
    
    
    (586
    )Deferred sales inducements
    
    
    (4,031
    )
    
    
    (5,613
    )Value of insurance in force acquired
    
    
    5
    
    
    
    156Unearned revenue reserve
    
    
    (10
    )
    
    
    (85
    )Income tax offset
    
    
    5,039
    
    
    
    4,646Net impact of operating income adjustments
    
    $
    (9,358
    )
    
    $
    (8,630
    )Summary of adjustments noted above after offsets and income taxes:Realized losses on investments
    
    $
    (11,040
    )
    
    $
    (12,165
    )Change in net unrealized gains/losses on derivatives
    
    
    1,682
    
    
    
    3,535Net impact of operating income adjustments
    
    $
    (9,358
    )
    
    $
    (8,630
    )Net impact per common share  basic
    
    $
    (0.31
    )
    
    $
    (0.29
    )Net impact per common share  assuming dilution
    
    $
    (0.31
    )
    
    $
    (0.29
    )
 26




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Changes in FBL Net Income (Loss)
  Three months endedMarch 31,2009 vs. 2008(Dollars in thousands)Premiums and product charges
    
    $
    13,840Net investment income
    
    
    15,575Derivative loss
    
    
    74,295Realized losses on investments
    
    
    9,677Other income and other expenses
    
    
    (254
    )Interest sensitive and index products benefits and change in value
of index product embedded derivative
    
    
    (104,176
    )Traditional life insurance policy benefits
    
    
    7,169Underwriting, acquisition and insurance expenses
    
    
    (25,272
    )Interest expense
    
    
    (2,481
    )Income taxes
    
    
    3,714Noncontrolling interest and equity income
    
    
    (15
    )Total change in FBL Net Income (Loss)
    
    $
    (7,928
    )
 Premiums and Product Charges
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Premiums and product charges:Interest sensitive and index product charges
    
    $
    41,140
    
    
    $
    29,121Traditional life insurance premiums
    
    
    37,954
    
    
    
    36,133Total
    
    $
    79,094
    
    
    $
    65,254
   Surrender Charges on EquiTrust Life Direct Fixed Annuity Contracts
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Surrender charges:Gross surrender charges
    
    $
    64,609
    
    
    $
    4,656Market value adjustments
    
    
    (49,771
    )
    
    
    (1,263
    )Net surrender charges
    
    $
    14,838
    
    
    $
    3,393
  27




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Net Investment Income
   Derivative Loss
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Derivative loss:Components of derivative loss from call options:Gains received at expiration
    
    $
    227
    
    
    $
    15,017Change in the difference between fair
value and remaining option cost at
beginning and end of period
    
    
    8,804
    
    
    
    (77,551
    )Cost of money for call options
    
    
    (30,742
    )
    
    
    (32,228
    )(21,711
    )
    
    
    (94,762
    )Other
    
    
    (2,890
    )
    
    
    (4,134
    )Total
    
    $
    (24,601
    )
    
    $
    (98,896
    )
 ®
  28




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FBL Financial Group, Inc.
    
    March 31, 2009
 Realized Losses on Investments
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Realized gains (losses) on investments:Gains on sales
    
    $
    2,099
    
    
    $
    Losses on sales
    
    
    (148
    )
    
    
    Credit losses on other-than-temporary impairments
    
    
    (21,621
    )
    
    
    (29,347
    )Total reported in statements of operations
    
    
    (19,670
    )
    
    
    (29,347
    )Non-credit losses included in AOCL
    
    
    (9,506
    )
    
    
    Total
    
    $
    (29,176
    )
    
    $
    (29,347
    )
   29




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FBL Financial Group, Inc.
    
    March 31, 2009
 Investment Impairments Recognized in FBL Net Loss Individually Exceeding $0.5 Million
 General Description
    
    Impairment Loss
    
    Circumstance(Dollars inthousands)Three months ended March 31, 2009:Major paper manufacturing company
    
    $
    6,630
    
    
    Issuer filed for bankruptcy
after unsuccessful attempts
to obtain financial
assistance. This reduced
estimates on potential
recovery. (A)Real estate investment trust
    
    $
    6,299
    
    
    Issuer filed for bankruptcy
after unsuccessful attempts
to obtain financial
assistance. This reduced
estimates on potential
recovery. (A)Major printing & publishing company
    
    $
    4,764
    
    
    Rating declines occurred
due to expected revenue
declines which could result
in a future covenant
violation. (A)Asset backed security
    
    $
    1,095
    
    
    Rating declines occurred on
the monoline insurer
supporting this issue.
Financial recoveries are
fully dependent on the
insurer. (A)Collateralized bond obligation
    
    $
    636
    
    
    Rating declines occurred
and defaults of the
underlying collateral
supporting this issue
increased. (A)Reinsurance carrier
    
    $
    586
    
    
    Rating declines occurred
and near term solvency
became a concern. (A)Asset backed security
    
    $
    550
    
    
    Rating declines occurred,
delinquencies increased and
credit support from the
lower tranches stopped
increasing. (A)Three months ended March 31, 2008:Other asset-backed security
    
    $
    9,114
    
    
    Ratings declined and
losses from the
underlying home equity
loans to Alt-A borrowers
increased. (A)Collateralized debt obligation
    
    $
    9,100
    
    
    The value of collateral
supporting this issue
declined, which triggered
an event whereby we did
not receive interest on
our investment. Rating
declines also occurred
during the quarter. (A)Reinsurance carrier
    
    $
    6,789
    
    
    Rating declines occurred
and the fair value
decreased significantly
due to subprime and Alt-A
exposure and the parents
potential reorganization,
which reduced estimates
on potential recovery.
(A)Major printing & publishing company
    
    $
    2,341
    
    
    Issuer filed for
bankruptcy after
unsuccessful attempts to
obtain financial
assistance. This reduced
estimates on potential
recovery. (A)Major printing & publishing company
    
    $
    1,603
    
    
    Rating declines and other
adverse details regarding
the financial status of
the company became
available. (A)
 
 (A)
    
    Negative trends in this segment of the industry were considered in our analysis, which is
done on an issue-by-issue basis. No additional write-downs were deemed necessary as of March
31, 2009 for other material investments in this industry. 30




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FBL Financial Group, Inc.
    
    March 31, 2009
 Other Income and Other Expenses
  Interest Sensitive and Index Product Benefits and Change in Value of Index Product Embedded
Derivatives
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Interest sensitive and index product benefits:Interest credited
    
    $
    79,160
    
    
    $
    66,679Index credits
    
    
    1,345
    
    
    
    14,608Amortization of deferred sales inducements
    
    
    19,336
    
    
    
    12,666Interest sensitive death benefits
    
    
    14,595
    
    
    
    10,808114,436
    
    
    
    104,761Change in value of index product embedded derivatives
    
    
    (8,669
    )
    
    
    (103,170
    )Total
    
    $
    105,767
    
    
    $
    1,591
      31




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Traditional Life Insurance Policy Benefits
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Traditional life insurance policy benefits:Traditional life insurance benefits
    
    $
    22,104
    
    
    $
    27,252Increase in traditional life future policy benefits
    
    
    9,718
    
    
    
    11,390Distributions to participating policyholders
    
    
    4,921
    
    
    
    5,270Total
    
    $
    36,743
    
    
    $
    43,912
  Underwriting, Acquisition and Insurance Expenses
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Underwriting, acquisition and insurance expenses:Commission expense, net of deferrals
    
    $
    3,573
    
    
    $
    3,401Amortization of deferred policy acquisition costs
    
    
    47,440
    
    
    
    23,022Amortization of value of insurance in force acquired
    
    
    741
    
    
    
    899Other underwriting, acquisition and insurance
expenses, net of deferrals
    
    
    20,209
    
    
    
    19,369Total
    
    $
    71,963
    
    
    $
    46,691
   Interest Expense
  32




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FBL Financial Group, Inc.
    
    March 31, 2009
 Income Taxes
  Equity Income, Net of Related Income Taxes
  Segment Information
    33




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FBL Financial Group, Inc.
    
    March 31, 2009
 Reconciliation of Net Income (Loss) to Pre-tax Operating Income
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Net income (loss) attributable to FBL Financial Group, Inc.
    
    $
    (1,490
    )
    
    $
    6,438Net impact of operating income adjustments (1)
    
    
    9,358
    
    
    
    8,630Income taxes on operating income
    
    
    3,821
    
    
    
    7,167Pre-tax operating income
    
    $
    11,689
    
    
    $
    22,235Pre-tax operating income (loss) by segment:Traditional Annuity  Exclusive Distribution
    
    $
    6,826
    
    
    $
    7,242Traditional Annuity  Independent Distribution
    
    
    (127
    )
    
    
    7,795Traditional and Universal Life Insurance
    
    
    15,443
    
    
    
    8,164Variable
    
    
    (3,825
    )
    
    
    1,168Corporate and Other
    
    
    (6,628
    )
    
    
    (2,134
    )$
    11,689
    
    
    $
    22,235
 
 (1)
    
    See Net Income (Loss) Attributable to FBL Financial Group, Inc. above for additional details
on our operating income adjustments.  Traditional
Annuity  Exclusive Distribution Segment
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive and index product charges and other
    
    $
    248
    
    
    $
    291Net investment income
    
    
    37,669
    
    
    
    35,538Derivative loss
    
    
    (1,257
    )
    
    
    (133
    )36,660
    
    
    
    35,696Benefits and expenses
    
    
    29,834
    
    
    
    28,454Pre-tax operating income
    
    $
    6,826
    
    
    $
    7,242Other dataAnnuity premiums collected, direct
    
    $
    96,368
    
    
    $
    45,348Policy liabilities and accruals, end of period
    
    
    2,408,797
    
    
    
    2,237,420Individual deferred annuity spread:Weighted average yield on cash and invested assets
    
    
    6.11
    %
    
    
    6.19
    %Weighted average interest crediting rate/index cost
    
    
    3.98
    
    
    
    4.20Spread
    
    
    2.13
    %
    
    
    1.99
    %Individual traditional annuity withdrawal rate
    
    
    4.9
    %
    
    
    3.6
    %
  34




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FBL Financial Group, Inc.
    
    March 31, 2009
   Traditional Annuity  Independent Distribution Segment
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive and index product charges
    
    $
    16,892
    
    
    $
    5,309Net investment income
    
    
    104,705
    
    
    
    90,766Derivative loss
    
    
    (30,464
    )
    
    
    (17,793
    )91,133
    
    
    
    78,282Benefits and expenses
    
    
    91,260
    
    
    
    70,487Pre-tax operating income
    
    $
    (127
    )
    
    $
    7,795Other dataAnnuity premiums collected, independent channelFixed rate annuities
    
    $
    213,332
    
    
    $
    120,928Index annuities
    
    
    111,367
    
    
    
    205,758Total annuity premiums collected, independent channel
    
    
    324,699
    
    
    
    326,686Annuity premiums collected, assumed
    
    
    358
    
    
    
    882Policy liabilities and accruals, end of period
    
    
    7,638,876
    
    
    
    6,980,529Individual deferred annuity spread:Weighted average yield on cash and invested assets
    
    
    6.10
    %
    
    
    6.01
    %Weighted average interest crediting rate/index cost
    
    
    3.93
    
    
    
    3.80Spread
    
    
    2.17
    %
    
    
    2.21
    %Individual traditional annuity withdrawal rate
    
    
    20.8
    %
    
    
    5.9
    %
   35




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FBL Financial Group, Inc.
    
    March 31, 2009
     36




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Traditional and Universal Life Insurance Segment
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive product charges
    
    $
    12,126
    
    
    $
    11,421Traditional life insurance premiums and other income
    
    
    37,954
    
    
    
    36,133Net investment income
    
    
    35,991
    
    
    
    35,787Other income
    
    
    61
    
    
    
    2186,132
    
    
    
    83,362Benefits and expenses
    
    
    70,689
    
    
    
    75,198Pre-tax operating income
    
    $
    15,443
    
    
    $
    8,164Other dataLife premiums collected, net of reinsurance
    
    $
    52,367
    
    
    $
    49,994Policy liabilities and accruals, end of period
    
    
    2,237,867
    
    
    
    2,184,452Direct life insurance in force, end of period (in millions)
    
    
    36,378
    
    
    
    33,772Interest sensitive life insurance spread:Weighted average yield on cash and invested assets
    
    
    6.65
    %
    
    
    6.55
    %Weighted average interest crediting rate
    
    
    4.39
    
    
    
    4.41Spread
    
    
    2.26
    %
    
    
    2.14
    %
    37




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Variable Segment
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Pre-tax operating income (loss)Operating revenues:Interest sensitive product charges
    
    $
    11,928
    
    
    $
    12,211Net investment income
    
    
    3,891
    
    
    
    3,341Other income
    
    
    326
    
    
    
    38316,145
    
    
    
    15,935Benefits and expenses
    
    
    19,970
    
    
    
    14,767Pre-tax operating income (loss)
    
    $
    (3,825
    )
    
    $
    1,168Other dataVariable premiums collected, net of reinsurance
    
    $
    26,180
    
    
    $
    41,921Policy liabilities and accruals, end of period
    
    
    262,758
    
    
    
    233,561Separate account assets, end of period
    
    
    522,591
    
    
    
    802,225Direct life insurance in force, end of period (in millions)
    
    
    7,614
    
    
    
    7,804
    Corporate and Other Segment
 Three months ended March 31,2009
    
    
    2008(Dollars in thousands)Pre-tax operating lossOperating revenues:Net investment income
    
    $
    1,813
    
    
    $
    3,062Derivative loss
    
    
    (370
    )
    
    
    Other income
    
    
    4,155
    
    
    
    5,4355,598
    
    
    
    8,497Interest expense
    
    
    6,932
    
    
    
    4,451Benefits and other expenses
    
    
    5,443
    
    
    
    6,369(6,777
    )
    
    
    (2,323
    )Noncontrolling interest
    
    
    38
    
    
    
    9Equity income, before tax
    
    
    111
    
    
    
    180Pre-tax operating loss
    
    $
    (6,628
    )
    
    $
    (2,134
    )
  38




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Financial Condition
 Investments
   Investment Portfolio Summary
 March 31, 2009
    
    
    December 31, 2008Carrying Value
    
    
    Percent
    
    

Carrying Value
    
    
    Percent(Dollars in thousands)Fixed maturities  available for sale:Public
    
    $
    7,357,009
    
    
    
    67.7
    %
    
    $
    7,406,964
    
    
    
    68.3
    %144A private placement
    
    
    1,131,776
    
    
    
    10.4
    
    
    
    1,164,417
    
    
    
    10.7Private placement
    
    
    392,741
    
    
    
    3.6
    
    
    
    394,062
    
    
    
    3.6Total fixed maturities  available
for sale
    
    
    8,881,526
    
    
    
    81.7
    
    
    
    8,965,443
    
    
    
    82.6Equity securities
    
    
    44,953
    
    
    
    0.4
    
    
    
    44,863
    
    
    
    0.4Mortgage loans on real estate
    
    
    1,362,146
    
    
    
    12.6
    
    
    
    1,381,854
    
    
    
    12.8Derivative instruments
    
    
    15,755
    
    
    
    0.1
    
    
    
    12,933
    
    
    
    0.1Investment real estate
    
    
    2,559
    
    
    
    
    
    
    
    2,559
    
    
    
    Policy loans
    
    
    183,423
    
    
    
    1.7
    
    
    
    182,421
    
    
    
    1.7Other long-term investments
    
    
    1,581
    
    
    
    
    
    
    
    1,527
    
    
    
    Short-term investments
    
    
    383,183
    
    
    
    3.5
    
    
    
    262,459
    
    
    
    2.4Total investments
    
    $
    10,875,126
    
    
    
    100.0
    %
    
    $
    10,854,059
    
    
    
    100.0
    %
  39




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Credit Quality by NAIC Designation and Standard & Poors (S&P) Rating Equivalents
 March 31, 2009
    
    
    December 31, 2008NAICDesignation
    
    Equivalent S&P Ratings (1)
    

Carrying Value
    
    
    Percent
    
    

Carrying Value
    
    
    Percent(Dollars in thousands)1
    
    AAA, AA, A
    
    $
    5,225,104
    
    
    
    58.8
    %
    
    $
    5,382,110
    
    
    
    60.0
    %2
    
    BBB
    
    
    3,201,705
    
    
    
    36.1
    
    
    
    3,243,034
    
    
    
    36.2Total investment grade
    
    
    8,426,809
    
    
    
    94.9
    
    
    
    8,625,144
    
    
    
    96.23
    
    BB
    
    
    301,786
    
    
    
    3.4
    
    
    
    244,814
    
    
    
    2.74
    
    B
    
    
    109,322
    
    
    
    1.2
    
    
    
    40,565
    
    
    
    0.55
    
    CCC, CC, C
    
    
    19,950
    
    
    
    0.2
    
    
    
    43,064
    
    
    
    0.56
    
    In or near default
    
    
    23,659
    
    
    
    0.3
    
    
    
    11,856
    
    
    
    0.1Total below investment grade
    
    
    454,717
    
    
    
    5.1
    
    
    
    340,299
    
    
    
    3.8Total fixed maturities  available for sale
    
    $
    8,881,526
    
    
    
    100.0
    %
    
    $
    8,965,443
    
    
    
    100.0
    %
 
 (1)
    
    The Securities Valuation Office of the NAIC generally rates private placement
securities. Comparisons between NAIC designations and S&P ratings are published by the
NAIC. S&P has not rated some of the fixed maturity securities in our portfolio. Gross Unrealized Gains and Gross Unrealized Losses by Internal Industry Classification
 March 31, 2009Carrying
    
    
    
    
    
    
    CarryingValue of
    
    
    
    
    
    
    Value ofSecurities
    
    
    
    
    
    
    SecuritiesTotal
    
    
    with Gross
    
    
    Gross
    
    
    with Gross
    
    
    GrossCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    Gains
    
    
    Losses
    
    
    Losses(Dollars in thousands)Corporate securities:Financial services
    
    $
    1,173,730
    
    
    $
    66,972
    
    
    $
    3,196
    
    
    $
    1,106,758
    
    
    $
    (599,818
    )Manufacturing
    
    
    1,204,731
    
    
    
    387,324
    
    
    
    12,373
    
    
    
    817,407
    
    
    
    (181,596
    )Mining
    
    
    506,440
    
    
    
    65,679
    
    
    
    1,732
    
    
    
    440,761
    
    
    
    (70,819
    )Retail trade
    
    
    96,277
    
    
    
    27,052
    
    
    
    465
    
    
    
    69,225
    
    
    
    (19,928
    )Services
    
    
    181,521
    
    
    
    33,632
    
    
    
    1,824
    
    
    
    147,889
    
    
    
    (26,428
    )Transportation
    
    
    170,589
    
    
    
    43,312
    
    
    
    4,471
    
    
    
    127,277
    
    
    
    (22,366
    )Utilities
    
    
    1,270,018
    
    
    
    267,065
    
    
    
    11,149
    
    
    
    1,002,953
    
    
    
    (120,234
    )Other
    
    
    161,087
    
    
    
    37,872
    
    
    
    2,433
    
    
    
    123,215
    
    
    
    (18,785
    )Total corporate securities
    
    
    4,764,393
    
    
    
    928,908
    
    
    
    37,643
    
    
    
    3,835,485
    
    
    
    (1,059,974
    )Mortgage and asset-backed securities
    
    
    2,566,904
    
    
    
    1,033,534
    
    
    
    57,771
    
    
    
    1,533,370
    
    
    
    (476,785
    )United States Government and agencies
    
    
    267,362
    
    
    
    267,362
    
    
    
    12,405
    
    
    
    
    
    
    
    State, municipal and other governments
    
    
    1,282,867
    
    
    
    156,471
    
    
    
    5,572
    
    
    
    1,126,396
    
    
    
    (148,412
    )Total
    
    $
    8,881,526
    
    
    $
    2,386,275
    
    
    $
    113,391
    
    
    $
    6,495,251
    
    
    $
    (1,685,171
    )
 40




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 December 31, 2008Carrying
    
    
    
    
    
    
    CarryingValue of
    
    
    
    
    
    
    Value ofSecurities
    
    
    
    
    
    
    Securities withTotal
    
    
    with Gross
    
    
    Gross
    
    
    Gross
    
    
    GrossCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    Gains
    
    
    Losses
    
    
    Losses(Dollars in thousands)Corporate securities:Financial services
    
    $
    1,246,895
    
    
    $
    114,067
    
    
    $
    4,806
    
    
    $
    1,132,828
    
    
    $
    (547,594
    )Manufacturing
    
    
    1,211,102
    
    
    
    289,093
    
    
    
    11,187
    
    
    
    922,009
    
    
    
    (183,439
    )Mining
    
    
    469,935
    
    
    
    24,521
    
    
    
    1,770
    
    
    
    445,414
    
    
    
    (73,562
    )Retail trade
    
    
    104,379
    
    
    
    24,170
    
    
    
    569
    
    
    
    80,209
    
    
    
    (16,819
    )Services
    
    
    184,528
    
    
    
    42,850
    
    
    
    1,164
    
    
    
    141,678
    
    
    
    (28,796
    )Transportation
    
    
    177,844
    
    
    
    52,034
    
    
    
    6,849
    
    
    
    125,810
    
    
    
    (20,253
    )Utilities
    
    
    1,279,641
    
    
    
    299,537
    
    
    
    16,623
    
    
    
    980,104
    
    
    
    (135,654
    )Other
    
    
    159,831
    
    
    
    52,252
    
    
    
    3,209
    
    
    
    107,579
    
    
    
    (21,275
    )Total corporate securities
    
    
    4,834,155
    
    
    
    898,524
    
    
    
    46,177
    
    
    
    3,935,631
    
    
    
    (1,027,392
    )Mortgage and asset-backed securities
    
    
    2,569,769
    
    
    
    975,193
    
    
    
    46,573
    
    
    
    1,594,576
    
    
    
    (478,994
    )United States Government and agencies
    
    
    250,893
    
    
    
    217,379
    
    
    
    12,891
    
    
    
    33,514
    
    
    
    (4,031
    )State, municipal and other governments
    
    
    1,310,626
    
    
    
    142,107
    
    
    
    4,565
    
    
    
    1,168,519
    
    
    
    (139,430
    )Total
    
    $
    8,965,443
    
    
    $
    2,233,203
    
    
    $
    110,206
    
    
    $
    6,732,240
    
    
    $
    (1,649,847
    )
 Credit Quality of Available-for-Sale Fixed Maturity Securities with Unrealized Losses
 March 31, 2009Carrying Valueof Securities with
    
    
    
    
    
    
    GrossNAIC
    
    
    
    Gross Unrealized
    
    
    Percent of
    
    
    Unrealized
    
    
    Percent ofDesignation
    
    Equivalent S&P Ratings
    
    Losses
    
    
    Total
    
    
    Losses
    
    
    Total(Dollars in thousands)1
    
    AAA, AA, A
    
    $
    3,303,926
    
    
    
    50.9
    %
    
    $
    (683,021
    )
    
    
    40.5
    %2
    
    BBB
    
    
    2,778,251
    
    
    
    42.8
    
    
    
    (671,884
    )
    
    
    39.9Total investment grade
    
    
    6,082,177
    
    
    
    93.7
    
    
    
    (1,354,905
    )
    
    
    80.43
    
    BB
    
    
    268,052
    
    
    
    4.1
    
    
    
    (109,755
    )
    
    
    6.54
    
    B
    
    
    103,881
    
    
    
    1.6
    
    
    
    (128,109
    )
    
    
    7.65
    
    CCC, CC, C
    
    
    19,949
    
    
    
    0.3
    
    
    
    (27,068
    )
    
    
    1.66
    
    In or near default
    
    
    21,192
    
    
    
    0.3
    
    
    
    (65,334
    )
    
    
    3.9Total below investment grade
    
    
    413,074
    
    
    
    6.3
    
    
    
    (330,266
    )
    
    
    19.6Total
    
    $
    6,495,251
    
    
    
    100.0
    %
    
    $
    (1,685,171
    )
    
    
    100.0
    %
 41




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 December 31, 2008Carrying Valueof Securities with
    
    
    
    
    
    
    GrossNAIC
    
    
    
    Gross Unrealized
    
    
    Percent of
    
    
    Unrealized
    
    
    Percent ofDesignation
    
    Equivalent S&P Ratings
    
    Losses
    
    
    Total
    
    
    Losses
    
    
    Total(Dollars in thousands)1
    
    AAA, AA, A
    
    $
    3,545,103
    
    
    
    52.7
    %
    
    $
    (740,675
    )
    
    
    44.9
    %2
    
    BBB
    
    
    2,890,656
    
    
    
    42.9
    
    
    
    (738,512
    )
    
    
    44.8Total investment grade
    
    
    6,435,759
    
    
    
    95.6
    
    
    
    (1,479,187
    )
    
    
    89.73
    
    BB
    
    
    212,438
    
    
    
    3.1
    
    
    
    (70,545
    )
    
    
    4.34
    
    B
    
    
    37,399
    
    
    
    0.6
    
    
    
    (45,228
    )
    
    
    2.75
    
    CCC, CC, C
    
    
    40,308
    
    
    
    0.6
    
    
    
    (47,615
    )
    
    
    2.96
    
    In or near default
    
    
    6,336
    
    
    
    0.1
    
    
    
    (7,272
    )
    
    
    0.4Total below investment grade
    
    
    296,481
    
    
    
    4.4
    
    
    
    (170,660
    )
    
    
    10.3Total
    
    $
    6,732,240
    
    
    
    100.0
    %
    
    $
    (1,649,847
    )
    
    
    100.0
    %
 Available-For-Sale Fixed Maturity Securities with Unrealized Losses by Length of Time
 March 31, 2009Amortized Cost
    
    
    Gross Unrealized LossesMarket Value
    
    
    Market Value is
    
    
    Market Value
    
    
    Market Value isNumber of
    
    
    is Less than
    
    
    75% or Greater
    
    
    is Less than
    
    
    75% or GreaterIssuers
    
    
    75% of Cost
    
    
    than Cost
    
    
    75% of Cost
    
    
    than CostThree months or less
    
    
    71
    
    
    $
    29,862
    
    
    $
    336,171
    
    
    $
    (12,625
    )
    
    $
    (25,901
    )Greater than three months to six months
    
    
    137
    
    
    
    39,823
    
    
    
    608,734
    
    
    
    (15,066
    )
    
    
    (47,324
    )Greater than six months to nine months.
    
    
    155
    
    
    
    55,024
    
    
    
    844,273
    
    
    
    (17,946
    )
    
    
    (72,836
    )Greater than nine months to twelve
months
    
    
    240
    
    
    
    192,425
    
    
    
    1,040,536
    
    
    
    (61,577
    )
    
    
    (99,140
    )Greater than twelve months
    
    
    518
    
    
    
    2,030,508
    
    
    
    3,003,066
    
    
    
    (945,554
    )
    
    
    (387,202
    )Total
    
    
    
    
    
    $
    2,347,642
    
    
    $
    5,832,780
    
    
    $
    (1,052,768
    )
    
    $
    (632,403
    )
 December 31, 2008Amortized Cost
    
    
    Gross Unrealized LossesMarket Value
    
    
    Market Value is
    
    
    Market Value
    
    
    Market Value isNumber
    
    
    is Less than
    
    
    75% or Greater
    
    
    is Less than
    
    
    75% or Greaterof Issuers
    
    
    75% of Cost
    
    
    than Cost
    
    
    75% of Cost
    
    
    than CostThree months or less
    
    
    170
    
    
    $
    31,774
    
    
    $
    784,689
    
    
    $
    (12,658
    )
    
    $
    (51,824
    )Greater than three months to six months
    
    
    193
    
    
    
    75,356
    
    
    
    1,024,158
    
    
    
    (28,791
    )
    
    
    (82,320
    )Greater than six months to nine months
    
    
    262
    
    
    
    182,184
    
    
    
    1,140,978
    
    
    
    (56,719
    )
    
    
    (111,013
    )Greater than nine months to twelve
months
    
    
    143
    
    
    
    288,140
    
    
    
    780,947
    
    
    
    (103,539
    )
    
    
    (97,928
    )Greater than twelve months
    
    
    455
    
    
    
    1,733,949
    
    
    
    2,339,912
    
    
    
    (785,180
    )
    
    
    (319,875
    )Total
    
    
    
    
    
    $
    2,311,403
    
    
    $
    6,070,684
    
    
    $
    (986,887
    )
    
    $
    (662,960
    )
 42




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Available-For-Sale Fixed Maturity Securities with Unrealized Losses by Maturity Date
 March 31, 2009
    
    
    December 31, 2008Carrying Value of
    
    
    
    
    
    
    Carrying Value ofSecurities with
    
    
    Gross
    
    
    Securities with
    
    
    GrossGross Unrealized
    
    
    Unrealized
    
    
    Gross Unrealized
    
    
    UnrealizedLosses
    
    
    Losses
    
    
    Losses
    
    
    Losses(Dollars in thousands)Due in one year or less
    
    $
    28,111
    
    
    $
    (6,083
    )
    
    $
    43,483
    
    
    $
    (4,985
    )Due after one year through five years
    
    
    725,000
    
    
    
    (138,502
    )
    
    
    791,636
    
    
    
    (143,559
    )Due after five years through ten years
    
    
    2,000,092
    
    
    
    (482,198
    )
    
    
    2,037,451
    
    
    
    (514,869
    )Due after ten years
    
    
    2,204,590
    
    
    
    (580,691
    )
    
    
    2,260,568
    
    
    
    (506,966
    )4,957,793
    
    
    
    (1,207,474
    )
    
    
    5,133,138
    
    
    
    (1,170,379
    )Mortgage and asset-backed securities
    
    
    1,533,370
    
    
    
    (476,785
    )
    
    
    1,594,576
    
    
    
    (478,994
    )Redeemable preferred stock
    
    
    4,088
    
    
    
    (912
    )
    
    
    4,526
    
    
    
    (474
    )Total
    
    $
    6,495,251
    
    
    $
    (1,685,171
    )
    
    $
    6,732,240
    
    
    $
    (1,649,847
    )
  
    
    increased credit spreads on commercial real estate investment trust bonds, due to the
underlying real estate exposure and market concerns about the ability to access capital
markets,
    
    increased credit spreads and defaults in collateralized debt obligations,
    
    a decrease in market liquidity and credit quality concerns of assets held by banking
institutions and
    
    increased credit spreads from weaker operating results in the manufacturing sector.
  Mortgage and Asset-Backed Securities
    43




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Mortgage and Asset-Backed Securities by Type
 March 31, 2009Carrying
    
    
    Percent of FixedAmortized Cost
    
    
    Par Value
    
    
    Value
    
    
    Maturities(Dollars in thousands)Residential mortgage-backed securities:Sequential
    
    $
    1,211,633
    
    
    $
    1,237,379
    
    
    $
    1,077,966
    
    
    
    12.1
    %Pass-through
    
    
    208,285
    
    
    
    208,679
    
    
    
    216,902
    
    
    
    2.4Planned and targeted amortization class
    
    
    499,657
    
    
    
    505,375
    
    
    
    463,132
    
    
    
    5.2Other
    
    
    39,990
    
    
    
    40,072
    
    
    
    32,268
    
    
    
    0.4Total residential mortgage-backed securities
    
    
    1,959,565
    
    
    
    1,991,505
    
    
    
    1,790,268
    
    
    
    20.1Commercial mortgage-backed securities
    
    
    807,520
    
    
    
    827,065
    
    
    
    655,011
    
    
    
    7.4Other asset-backed securities
    
    
    218,833
    
    
    
    263,951
    
    
    
    121,625
    
    
    
    1.4Total mortgage and asset-backed securities
    
    $
    2,985,918
    
    
    $
    3,082,521
    
    
    $
    2,566,904
    
    
    
    28.9
    %
 December 31, 2008Carrying
    
    
    Percent of FixedAmortized Cost
    
    
    Par Value
    
    
    Value
    
    
    Maturities(Dollars in thousands)Residential mortgage-backed securities:Sequential
    
    $
    1,237,035
    
    
    $
    1,264,691
    
    
    $
    1,068,869
    
    
    
    11.9
    %Pass-through
    
    
    219,447
    
    
    
    219,855
    
    
    
    225,513
    
    
    
    2.5Planned and targeted amortization class
    
    
    508,133
    
    
    
    513,373
    
    
    
    464,296
    
    
    
    5.2Other
    
    
    40,086
    
    
    
    40,184
    
    
    
    31,011
    
    
    
    0.4Total residential mortgage-backed securities
    
    
    2,004,701
    
    
    
    2,038,103
    
    
    
    1,789,689
    
    
    
    20.0Commercial mortgage-backed securities
    
    
    799,546
    
    
    
    819,030
    
    
    
    640,236
    
    
    
    7.1Other asset-backed securities
    
    
    197,943
    
    
    
    265,435
    
    
    
    139,844
    
    
    
    1.6Total mortgage and asset-backed securities
    
    $
    3,002,190
    
    
    $
    3,122,568
    
    
    $
    2,569,769
    
    
    
    28.7
    %
    44




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Mortgage and Asset-Backed Securities by Collateral Type
 March 31, 2009
    
    
    December 31, 2008Percent
    
    
    
    
    
    
    
    
    
    
    PercentAmortized
    
    
    Carrying
    
    
    of Fixed
    
    
    Amortized
    
    
    Carrying
    
    
    of FixedCost
    
    
    Value
    
    
    Maturities
    
    
    Cost
    
    
    Value
    
    
    Maturities(Dollars in thousands)
    
    
    (Dollars in thousands)Government agency
    
    $
    544,588
    
    
    $
    577,895
    
    
    
    6.5
    %
    
    $
    557,311
    
    
    $
    579,489
    
    
    
    6.5
    %Prime
    
    
    1,038,351
    
    
    
    908,382
    
    
    
    10.2
    
    
    
    1,068,716
    
    
    
    913,772
    
    
    
    10.2Alt-A
    
    
    544,394
    
    
    
    389,453
    
    
    
    4.4
    
    
    
    524,264
    
    
    
    397,556
    
    
    
    4.5Subprime
    
    
    30,130
    
    
    
    20,865
    
    
    
    0.2
    
    
    
    30,133
    
    
    
    20,311
    
    
    
    0.2Commercial mortgage
    
    
    807,520
    
    
    
    655,011
    
    
    
    7.4
    
    
    
    799,546
    
    
    
    640,236
    
    
    
    7.1Non-mortgage
    
    
    20,935
    
    
    
    15,298
    
    
    
    0.2
    
    
    
    22,220
    
    
    
    18,405
    
    
    
    0.2Total
    
    $
    2,985,918
    
    
    $
    2,566,904
    
    
    
    28.9
    %
    
    $
    3,002,190
    
    
    $
    2,569,769
    
    
    
    28.7
    %
  Residential Mortgage-Backed Securities by Collateral Type and Origination Year
 March 31, 2009Government & Prime
    
    
    Alt-A
    
    
    TotalAmortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    CarryingCost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost
    
    
    Value(Dollars in thousands)2008
    
    $
    62,191
    
    
    $
    67,812
    
    
    $
    
    
    
    $
    
    
    
    $
    62,191
    
    
    $
    67,8122007
    
    
    115,796
    
    
    
    113,655
    
    
    
    59,714
    
    
    
    34,486
    
    
    
    175,510
    
    
    
    148,1412006
    
    
    114,787
    
    
    
    101,713
    
    
    
    22,437
    
    
    
    13,782
    
    
    
    137,224
    
    
    
    115,4952005
    
    
    27,734
    
    
    
    27,871
    
    
    
    
    
    
    
    
    
    
    
    27,734
    
    
    
    27,8712004 and prior
    
    
    1,239,551
    
    
    
    1,167,310
    
    
    
    317,355
    
    
    
    263,639
    
    
    
    1,556,906
    
    
    
    1,430,949Total
    
    $
    1,560,059
    
    
    $
    1,478,361
    
    
    $
    399,506
    
    
    $
    311,907
    
    
    $
    1,959,565
    
    
    $
    1,790,268
 December 31, 2008Government & Prime
    
    
    Alt-A
    
    
    TotalAmortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    CarryingCost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost
    
    
    Value(Dollars in thousands)2008
    
    $
    63,195
    
    
    $
    67,391
    
    
    $
    
    
    
    $
    
    
    
    $
    63,195
    
    
    $
    67,3912007
    
    
    120,089
    
    
    
    117,851
    
    
    
    60,265
    
    
    
    32,723
    
    
    
    180,354
    
    
    
    150,5742006
    
    
    117,671
    
    
    
    106,016
    
    
    
    22,436
    
    
    
    11,099
    
    
    
    140,107
    
    
    
    117,1152005
    
    
    28,517
    
    
    
    27,581
    
    
    
    
    
    
    
    
    
    
    
    28,517
    
    
    
    27,5812004 and prior
    
    
    1,273,488
    
    
    
    1,162,275
    
    
    
    319,040
    
    
    
    264,753
    
    
    
    1,592,528
    
    
    
    1,427,028Total
    
    $
    1,602,960
    
    
    $
    1,481,114
    
    
    $
    401,741
    
    
    $
    308,575
    
    
    $
    2,004,701
    
    
    $
    1,789,689
 
 (1)
    
    Insurance on 2006 Alt-A issues is provided by MBIA Insurance Corporation (78% in 2009 and
2008). Insurance on 2007 Alt-A issues is provided by Assured Guaranty Ltd. (33% in 2009 and
32% in 2008) and MBIA Insurance Corporation (25% in 2009 and 2008). There is no insurance
coverage on Government & Prime investments or Alt-A investments with collateral originating
prior to 2006. 45




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Residential Mortgage-Backed Securities by Rating
 March 31, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)AAA
    
    $
    1,679,076
    
    
    
    93.8
    %
    
    $
    1,721,046
    
    
    
    96.2
    %AA
    
    
    41,935
    
    
    
    2.3
    
    
    
    3,462
    
    
    
    0.2A
    
    
    21,096
    
    
    
    1.2
    
    
    
    24,121
    
    
    
    1.3BBB
    
    
    6,285
    
    
    
    0.3
    
    
    
    7,281
    
    
    
    0.4BB
    
    
    3,204
    
    
    
    0.2
    
    
    
    17,326
    
    
    
    1.0B
    
    
    22,599
    
    
    
    1.3
    
    
    
    16,453
    
    
    
    0.9CCC
    
    
    16,073
    
    
    
    0.9
    
    
    
    
    
    
    
    Total
    
    $
    1,790,268
    
    
    
    100.0
    %
    
    $
    1,789,689
    
    
    
    100.0
    %
 Commercial Mortgage-Backed Securities by Origination Year
 March 31, 2009
    
    
    December 31, 2008Amortized Cost
    
    
    Carrying Value
    
    
    Amortized Cost
    
    
    Carrying Value(Dollars in thousands)2008
    
    $
    197,863
    
    
    $
    200,234
    
    
    $
    197,725
    
    
    $
    196,9082007
    
    
    194,184
    
    
    
    115,061
    
    
    
    194,169
    
    
    
    114,8162006
    
    
    170,463
    
    
    
    117,439
    
    
    
    170,452
    
    
    
    117,6062005
    
    
    56,614
    
    
    
    41,436
    
    
    
    56,220
    
    
    
    41,8772004 and prior
    
    
    188,396
    
    
    
    180,841
    
    
    
    180,980
    
    
    
    169,029Total
    
    $
    807,520
    
    
    $
    655,011
    
    
    $
    799,546
    
    
    $
    640,236
 Commercial Mortgage-Backed Securities by Rating
 March 31, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)GNMA
    
    $
    391,451
    
    
    
    59.8
    %
    
    $
    386,634
    
    
    
    60.4
    %FNMA
    
    
    15,763
    
    
    
    2.4
    
    
    
    15,611
    
    
    
    2.4AAAGeneric AAA
    
    
    15,353
    
    
    
    2.3
    
    
    
    1,174
    
    
    
    0.2Super Senior AAA
    
    
    102,376
    
    
    
    15.6
    
    
    
    103,951
    
    
    
    16.2Mezzanine AAA
    
    
    61,209
    
    
    
    9.3
    
    
    
    62,823
    
    
    
    9.8Junior AAA
    
    
    29,377
    
    
    
    4.5
    
    
    
    41,662
    
    
    
    6.5Total AAA
    
    
    208,315
    
    
    
    31.7
    
    
    
    209,610
    
    
    
    32.7AA
    
    
    21,473
    
    
    
    3.3
    
    
    
    14,682
    
    
    
    2.3A
    
    
    9,914
    
    
    
    1.5
    
    
    
    3,870
    
    
    
    0.6BBB
    
    
    
    
    
    
    
    
    
    
    9,349
    
    
    
    1.5B
    
    
    7,735
    
    
    
    1.2
    
    
    
    
    
    
    
    CCC
    
    
    360
    
    
    
    0.1
    
    
    
    480
    
    
    
    0.1Total
    
    $
    655,011
    
    
    
    100.0
    %
    
    $
    640,236
    
    
    
    100.0
    %
  46




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Other Asset-Backed Securities by Collateral Type and Origination Year
 March 31, 2009Government & Prime
    
    Alt-A
    
    Subprime
    
    Non-Mortgage
    
    TotalAmortized Cost (1)
    
    Carrying Value
    
    Amortized Cost (1)
    
    Carrying Value
    
    Amortized Cost (1)
    
    Carrying Value
    
    Amortized Cost
    
    Carrying Value
    
    Amortized Cost
    
    Carrying Value(Dollars in thousands)2007
    
    $
    9,987
    
    
    $
    1,310
    
    
    $
    20,050
    
    
    $
    6,159
    
    
    $
    
    
    
    $
    
    
    
    $
    7,084
    
    
    $
    3,730
    
    
    $
    37,121
    
    
    $
    11,1992006
    
    
    9,731
    
    
    
    3,367
    
    
    
    86,592
    
    
    
    42,665
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,323
    
    
    
    46,0322005
    
    
    
    
    
    
    
    
    
    
    26,651
    
    
    
    22,036
    
    
    
    30,130
    
    
    
    20,865
    
    
    
    
    
    
    
    
    
    
    
    56,781
    
    
    
    42,9012004 and prior
    
    
    3,162
    
    
    
    3,239
    
    
    
    11,595
    
    
    
    6,686
    
    
    
    
    
    
    
    
    
    
    
    13,851
    
    
    
    11,568
    
    
    
    28,608
    
    
    
    21,493Total
    
    $
    22,880
    
    
    $
    7,916
    
    
    $
    144,888
    
    
    $
    77,546
    
    
    $
    30,130
    
    
    $
    20,865
    
    
    $
    20,935
    
    
    $
    15,298
    
    
    $
    218,833
    
    
    $
    121,625
 December 31, 2008Government & Prime
    
    Alt-A
    
    Subprime
    
    Non-Mortgage
    
    TotalAmortized Cost (1)
    
    Carrying Value
    
    Amortized Cost (1)
    
    Carrying Value
    
    Amortized Cost (1)
    
    Carrying Value
    
    Amortized Cost
    
    Carrying Value
    
    Amortized Cost
    
    Carrying Value(Dollars in thousands)2007
    
    $
    9,989
    
    
    $
    2,820
    
    
    $
    17,442
    
    
    $
    9,140
    
    
    $
    
    
    
    $
    
    
    
    $
    7,091
    
    
    $
    4,465
    
    
    $
    34,522
    
    
    $
    16,4252006
    
    
    9,726
    
    
    
    5,966
    
    
    
    66,826
    
    
    
    45,740
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,552
    
    
    
    51,7062005
    
    
    
    
    
    
    
    
    
    
    26,653
    
    
    
    25,068
    
    
    
    30,133
    
    
    
    20,311
    
    
    
    
    
    
    
    
    
    
    
    56,786
    
    
    
    45,3792004 and prior
    
    
    3,352
    
    
    
    3,361
    
    
    
    11,602
    
    
    
    9,033
    
    
    
    
    
    
    
    
    
    
    
    15,129
    
    
    
    13,940
    
    
    
    30,083
    
    
    
    26,334Total
    
    $
    23,067
    
    
    $
    12,147
    
    
    $
    122,523
    
    
    $
    88,981
    
    
    $
    30,133
    
    
    $
    20,311
    
    
    $
    22,220
    
    
    $
    18,405
    
    
    $
    197,943
    
    
    $
    139,844
 
 (1)
    
    Insurance on 2006 Alt-A issues is provided by Financial Guaranty Insurance Co. (49% in 2009
and 38% in 2008) and AMBAC Assurance Corporation (27% in 2009 and 34% in 2008). Insurance on
2007 Alt-A issues is provided by AMBAC Assurance Corporation (50% in 2009 and 57% in 2008),
MBIA Insurance Corporation (25% in 2009 and 29% in 2008) and Financial Guaranty Insurance Co.
(25% in 2009 and 14% in 2008). The 2006 and 2007 Government & Prime issues are 100% insured
by AMBAC Assurance Corporation (2006 issues) and MBIA Insurance Corporation (2007 issues).
There is no insurance coverage on other asset-backed securities with non-mortgage collateral
or collateral originating prior to 2006. Other Asset-Backed Securities by Rating
 March 31, 2009
    
    
    December 31, 2008Carrying Value
    
    
    Percent of Total
    
    
    Carrying Value
    
    
    Percent of Total(Dollars in thousands)AAA
    
    $
    49,110
    
    
    
    40.4
    %
    
    $
    59,900
    
    
    
    42.8
    %AA
    
    
    12,992
    
    
    
    10.7
    
    
    
    18,852
    
    
    
    13.5A
    
    
    9,056
    
    
    
    7.4
    
    
    
    3,015
    
    
    
    2.2BBB
    
    
    25,567
    
    
    
    21.0
    
    
    
    36,337
    
    
    
    26.0BB
    
    
    8,907
    
    
    
    7.3
    
    
    
    11,666
    
    
    
    8.3B
    
    
    8,122
    
    
    
    6.7
    
    
    
    2,615
    
    
    
    1.9CCC
    
    
    1,586
    
    
    
    1.3
    
    
    
    4,894
    
    
    
    3.5CC
    
    
    2,673
    
    
    
    2.2
    
    
    
    2,565
    
    
    
    1.8C
    
    
    3,612
    
    
    
    3.0
    
    
    
    
    
    
    
    Total
    
    $
    121,625
    
    
    
    100.0
    %
    
    $
    139,844
    
    
    
    100.0
    %
  47




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
   Residential Mortgage-Backed Securities and Other Asset-Backed Securities by Insurance
 March 31, 2009
    
    
    December 31, 2008Insurers
    
    
    Residential
    
    
    Other
    
    
    Total
    
    
    Residential
    
    
    Other
    
    
    TotalS&P
    
    

    Mortgage-
    
    
    Asset-
    
    
    Carrying
    
    
    Mortgage-
    
    
    Asset-
    
    
    CarryingRating (1)
    
    
    Backed
    
    
    Backed
    
    
    Value
    
    
    Backed
    
    
    Backed
    
    
    Value(Dollars in thousands)Insured:AMBAC Assurance
Corporation
    
    A
    
    $
    
    
    
    $
    14,782
    
    
    $
    14,782
    
    
    $
    
    
    
    $
    18,380
    
    
    $
    18,380Assured Guaranty
Ltd.
    
    AAA
    
    
    9,596
    
    
    
    
    
    
    
    9,596
    
    
    
    11,608
    
    
    
    
    
    
    
    11,608Financial Guaranty
Insurance Co.
    
    CCC
    
    
    
    
    
    
    21,427
    
    
    
    21,427
    
    
    
    
    
    
    
    27,239
    
    
    
    27,239MBIA Insurance
Corporation
    
    BBB+
    
    
    19,180
    
    
    
    7,304
    
    
    
    26,484
    
    
    
    15,762
    
    
    
    10,558
    
    
    
    26,320Total with insurance
    
    
    
    
    
    
    28,776
    
    
    
    43,513
    
    
    
    72,289
    
    
    
    27,370
    
    
    
    56,177
    
    
    
    83,547Uninsured:GNMA
    
    
    
    
    
    
    187,369
    
    
    
    
    
    
    
    187,369
    
    
    
    187,682
    
    
    
    
    
    
    
    187,682FHLMC
    
    
    
    
    
    
    256,229
    
    
    
    3,146
    
    
    
    259,375
    
    
    
    257,810
    
    
    
    3,226
    
    
    
    261,036FNMA
    
    
    
    
    
    
    131,038
    
    
    
    93
    
    
    
    131,131
    
    
    
    130,613
    
    
    
    135
    
    
    
    130,748Other
    
    
    
    
    
    
    1,186,856
    
    
    
    74,873
    
    
    
    1,261,729
    
    
    
    1,186,215
    
    
    
    80,306
    
    
    
    1,266,521Total
    
    
    
    
    
    $
    1,790,268
    
    
    $
    121,625
    
    
    $
    1,911,893
    
    
    $
    1,789,690
    
    
    $
    139,844
    
    
    $
    1,929,534
 
 (1)
    
    Rating in effect as of March 31, 2009. Collateralized Debt Obligations
 State, Municipal and Other Government Securities
 48




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 State, Municipal and Other Government Holdings by Insurance and Rating
 March 31, 2009Insured Bonds
    
    
    
    
    
    
    
    
    
    Total BondsInsured Bonds by
    
    By Underlying
    
    Total Bonds by
    
    By UnderlyingUninsured Bonds
    
    Insurer Rating
    
    Issue Rating
    
    Insurer Rating
    
    Issue RatingRating
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total(Dollars in thousands)AAA (1)
    
    $
    149,626
    
    
    
    46.5
    %
    
    $
    192,695
    
    
    
    20.0
    %
    
    $
    
    
    
    
    
    %
    
    $
    342,321
    
    
    
    26.6
    %
    
    $
    149,626
    
    
    
    11.8
    %AA
    
    
    129,328
    
    
    
    40.2
    
    
    
    448,612
    
    
    
    46.7
    
    
    
    321,669
    
    
    
    34.0
    
    
    
    577,940
    
    
    
    45.1
    
    
    
    450,997
    
    
    
    35.5A
    
    
    15,285
    
    
    
    4.8
    
    
    
    315,668
    
    
    
    32.8
    
    
    
    359,025
    
    
    
    36.4
    
    
    
    330,953
    
    
    
    25.8
    
    
    
    360,310
    
    
    
    28.4BBB
    
    
    27,207
    
    
    
    8.5
    
    
    
    4,446
    
    
    
    0.5
    
    
    
    42,057
    
    
    
    4.4
    
    
    
    31,653
    
    
    
    2.5
    
    
    
    69,264
    
    
    
    5.5B
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,372
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    7,372
    
    
    
    0.6NR (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    231,298
    
    
    
    24.4
    
    
    
    
    
    
    
    
    
    
    
    231,298
    
    
    
    18.2$
    321,446
    
    
    
    100.0
    %
    
    $
    961,421
    
    
    
    100.0
    %
    
    $
    961,421
    
    
    
    100.0
    %
    
    $
    1,282,867
    
    
    
    100.0
    %
    
    $
    1,268,867
    
    
    
    100.0
    %
 December 31, 2008Insured Bonds
    
    
    
    
    
    
    
    
    
    Total Bonds byInsured Bonds by
    
    By Underlying
    
    Total Bonds by
    
    By UnderlyingUninsured Bonds
    
    Insurer Rating
    
    Issue Rating
    
    Insurer Rating
    
    Issue RatingRating
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total
    
    Carrying Value
    
    % of Total(Dollars in thousands)AAA (1)
    
    $
    166,829
    
    
    
    48.7
    %
    
    $
    198,432
    
    
    
    20.5
    %
    
    $
    4,850
    
    
    
    0.5
    %
    
    $
    365,261
    
    
    
    27.9
    %
    
    $
    171,679
    
    
    
    13.1
    %AA
    
    
    119,324
    
    
    
    34.8
    
    
    
    454,193
    
    
    
    46.9
    
    
    
    319,786
    
    
    
    33.0
    
    
    
    573,517
    
    
    
    43.7
    
    
    
    439,110
    
    
    
    33.5A
    
    
    29,505
    
    
    
    8.6
    
    
    
    310,695
    
    
    
    32.1
    
    
    
    361,165
    
    
    
    37.4
    
    
    
    340,200
    
    
    
    26.0
    
    
    
    390,670
    
    
    
    29.8BBB
    
    
    27,039
    
    
    
    7.9
    
    
    
    4,609
    
    
    
    0.5
    
    
    
    42,630
    
    
    
    4.4
    
    
    
    31,648
    
    
    
    2.4
    
    
    
    69,669
    
    
    
    5.3NR (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    239,498
    
    
    
    24.7
    
    
    
    
    
    
    
    
    
    
    
    239,498
    
    
    
    18.3$
    342,697
    
    
    
    100.0
    %
    
    $
    967,929
    
    
    
    100.0
    %
    
    $
    967,929
    
    
    
    100.0
    %
    
    $
    1,310,626
    
    
    
    100.0
    %
    
    $
    1,310,626
    
    
    
    100.0
    %
 
 (1)
    
    AAA uninsured bonds includes $51.5 million in 2009 and $57.7 million in 2008 of bonds with
GNMA and/or FNMA collateral.(2)
    
    No formal public rating issued. Approximately 62% in 2009 and 58% in 2008 of the non-rated
securities relate to military housing bonds, which we believe have a BBB or above shadow
rating; approximately 26% in 2009 and 29% in 2008 are revenue obligation bonds; and
approximately 12% in 2009 and 13% in 2008 are general obligation bonds. Insurance on these
bonds is provided by AMBAC Assurance Corporation (61% in 2009 and 2008), Financial Security
Assurance, Inc. (16% in 2009 and 2008), National Insurance Corporation (formerly MBIA
Insurance Corporation) (18% in 2009 and 17% in 2008), and Financial Guaranty Insurance Co.
(Reinsured by National Insurance Corporation) (5% in 2009 and 2008). Equity Securities
  Mortgage Loans
  49




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Mortgage Loans by Collateral Type
 March 31, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofCollateral Type
    
    Carrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)Retail
    
    $
    463,740
    
    
    
    34.0
    %
    
    $
    467,942
    
    
    
    33.8
    %Office
    
    
    452,492
    
    
    
    33.2
    
    
    
    466,068
    
    
    
    33.7Industrial
    
    
    413,442
    
    
    
    30.4
    
    
    
    418,050
    
    
    
    30.3Other
    
    
    32,472
    
    
    
    2.4
    
    
    
    29,794
    
    
    
    2.2Total
    
    $
    1,362,146
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
 Mortgage Loans by Geographic Location within the United States
 March 31, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofRegion of the United States
    
    Carrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)South Atlantic
    
    $
    339,173
    
    
    
    25.0
    %
    
    $
    341,728
    
    
    
    24.8
    %East North Central
    
    
    266,989
    
    
    
    19.6
    
    
    
    269,876
    
    
    
    19.5Pacific
    
    
    252,562
    
    
    
    18.5
    
    
    
    261,581
    
    
    
    18.9West North Central
    
    
    170,625
    
    
    
    12.5
    
    
    
    172,283
    
    
    
    12.5Mountain
    
    
    131,282
    
    
    
    9.6
    
    
    
    132,649
    
    
    
    9.6West South Central
    
    
    68,325
    
    
    
    5.0
    
    
    
    69,582
    
    
    
    5.0Other
    
    
    133,190
    
    
    
    9.8
    
    
    
    134,155
    
    
    
    9.7Total
    
    $
    1,362,146
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
 Mortgage Loans by Loan-to-Value Ratio (1)
 March 31, 2009
    
    
    December 31, 2008Gross
    
    
    Percent of
    
    
    Gross
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)0% - 50%
    
    $
    334,645
    
    
    
    24.6
    %
    
    $
    330,144
    
    
    
    23.9
    %50% -60%
    
    
    262,676
    
    
    
    19.3
    
    
    
    269,816
    
    
    
    19.660% - 70%
    
    
    477,250
    
    
    
    35.0
    
    
    
    474,436
    
    
    
    34.370% - 80%
    
    
    247,087
    
    
    
    18.1
    
    
    
    267,159
    
    
    
    19.380% - 90%
    
    
    35,133
    
    
    
    2.6
    
    
    
    34,904
    
    
    
    2.590% - 100%
    
    
    5,355
    
    
    
    0.4
    
    
    
    5,395
    
    
    
    0.4Total
    
    $
    1,362,146
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
 
 (1)
    
    Loan-to-Value Ratio at origination 50




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 Mortgage Loans by Year of Origination
 March 31, 2009
    
    
    December 31, 2008Gross
    
    
    Percent of
    
    
    Gross
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)2008
    
    $
    204,918
    
    
    
    15.0
    %
    
    $
    205,925
    
    
    
    14.9
    %2007
    
    
    289,684
    
    
    
    21.3
    
    
    
    291,261
    
    
    
    21.12006
    
    
    195,881
    
    
    
    14.4
    
    
    
    197,153
    
    
    
    14.22005
    
    
    135,466
    
    
    
    9.9
    
    
    
    136,753
    
    
    
    9.92004 and prior
    
    
    536,197
    
    
    
    39.4
    
    
    
    550,762
    
    
    
    39.9Total
    
    $
    1,362,146
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
  Asset-Liability Management
  Derivative Instruments
  Collateral Related to Securities Lending and Other Transactions
  Other Assets
  51




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
  Liabilities
  Stockholders Equity
   Liquidity and Capital Resources
 Cash Flows
  Sources and Uses of Capital Resources
   52




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
        53




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
   Contractual Obligations
  Recently Adopted Accounting Changes
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
   54




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 
 PART II. OTHER INFORMATION
 
 ITEM 6. EXHIBITS
  3(ii)(c)
    
    Amendment to the Second Restated Bylaws, adopted March 19, 200910.11
    
    Management Performance Plan (2009) sponsored by FBL Financial Group, Inc. *10.26
    
    Form of Restricted Stock Agreement, dated as of February 19, 2008 between
the Company and each of James W. Noyce, Richard J. Kypta, John M. Paule,
Bruce A. Trost, James P. Brannen, Douglas W. Gumm, David T. Sebastian and
Donald J. Seibel *10.27
    
    Form of Restricted Stock Agreement, dated as of February 17, 2009 between
the Company and each of James W. Noyce, Richard J. Kypta, John M. Paule,
Bruce A. Trost, James P. Brannen, Douglas W. Gumm, David T. Sebastian and
Donald J. Seibel *10.28
    
    Employment Contract dated as  of
April 29, 2009  between the Company and James E. Hohmann, CEO *10.29
    
    Restricted Stock Agreement dated as
of April 29, 2009 between the Company and James E. Hohmann, CEO *31.1
    
    Certification Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
  55




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##### Table of Contents



FBL Financial Group, Inc.
    
    March 31, 2009
 
 SIGNATURES
   FBL FINANCIAL GROUP, INC.By
    /s/ James E. HohmannJames E. HohmannChief Executive Officer (Principal Executive
Officer)By
    /s/ James P. BrannenJames P. BrannenChief Financial Officer (Principal Financial and Accounting Officer) 56