##### 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 ended June 30, 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 August 3, 2009Class A Common Stock, without par value
    
    29,269,247Class 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 JUNE 30, 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
    
    
    26Item 3.            Quantitative and Qualitative Disclosures About Market Risk
    
    
    58Item 4.            Controls and Procedures
    
    
    58PART II.       OTHER INFORMATIONItem 4.            Submission of Matters to a Vote of Security Holders
    
    
    59Item 6.            Exhibits
    
    
    59SIGNATURES
    
    
    60EX-3.II.AEX-10.4.AEX-10.29(A)EX-10.30EX-31.1EX-31.2EX-32
  1




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##### Table of Contents



FBL FINANCIAL GROUP, INC.
 
 CONSOLIDATED BALANCE SHEETS (Unaudited)
 (Dollars in thousands)
 June 30,
    
    
    December 31,2009
    
    
    2008AssetsInvestments:Fixed
maturities  available for sale, at market
(amortized cost: 2009 - $10,334,654; 2008 - $10,505,084)
    
    $
    9,256,407
    
    
    $
    8,965,443Equity
securities  available for sale, at market (cost: 2009 - $62,369; 2008 - $51,958)
    
    
    53,440
    
    
    
    44,863Mortgage loans on real estate
    
    
    1,336,165
    
    
    
    1,381,854Derivative instruments
    
    
    36,621
    
    
    
    12,933Investment real estate
    
    
    2,559
    
    
    
    2,559Policy loans
    
    
    185,393
    
    
    
    182,421Other long-term investments
    
    
    1,679
    
    
    
    1,527Short-term investments
    
    
    535,343
    
    
    
    262,459Total investments
    
    
    11,407,607
    
    
    
    10,854,059Cash and cash equivalents
    
    
    5,988
    
    
    
    37,710Securities and indebtedness of related parties
    
    
    19,028
    
    
    
    18,921Accrued investment income
    
    
    132,414
    
    
    
    136,893Amounts receivable from affiliates
    
    
    7,426
    
    
    
    15,791Reinsurance recoverable
    
    
    113,601
    
    
    
    107,854Deferred policy acquisition costs
    
    
    1,320,993
    
    
    
    1,365,609Deferred sales inducements
    
    
    440,874
    
    
    
    420,147Value of insurance in force acquired
    
    
    51,373
    
    
    
    63,121Property and equipment, less allowances for depreciation of
$62,765 in 2009 and $63,730 in 2008
    
    
    19,682
    
    
    
    23,074Current income taxes recoverable
    
    
    13,478
    
    
    
    14,389Deferred income tax benefit
    
    
    121,486
    
    
    
    305,080Goodwill
    
    
    11,170
    
    
    
    11,170Collateral held for securities lending and other transactions
    
    
    
    
    
    
    67,953Other assets
    
    
    91,782
    
    
    
    41,623Assets held in separate accounts
    
    
    595,047
    
    
    
    577,420Total assets
    
    $
    14,351,949
    
    
    $
    14,060,814
 2




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##### Table of Contents



FBL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
 June 30,
    
    
    December 31,2009
    
    
    2008Liabilities and stockholders equityLiabilities:Policy liabilities and accruals:Future policy benefits:Interest sensitive and index products
    
    $
    10,373,461
    
    
    $
    10,531,967Traditional life insurance and accident and health products
    
    
    1,350,597
    
    
    
    1,328,506Unearned revenue reserve
    
    
    32,343
    
    
    
    34,663Other policy claims and benefits
    
    
    29,199
    
    
    
    38,25611,785,600
    
    
    
    11,933,392Other policyholders funds:Supplementary contracts without life contingencies
    
    
    512,998
    
    
    
    504,885Advance premiums and other deposits
    
    
    178,961
    
    
    
    167,473Accrued dividends
    
    
    9,595
    
    
    
    10,241701,554
    
    
    
    682,599Amounts payable to affiliates
    
    
    1,671
    
    
    
    247Short-term debt
    
    
    
    
    
    
    59,446Long-term debt payable to affiliates
    
    
    100,000
    
    
    
    100,000Long-term debt
    
    
    271,044
    
    
    
    271,005Collateral payable for securities lending and other transactions
    
    
    33
    
    
    
    69,656Other liabilities
    
    
    303,101
    
    
    
    108,588Liabilities related to separate accounts
    
    
    595,047
    
    
    
    577,420Total liabilities
    
    
    13,758,050
    
    
    
    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 29,273,391
shares in 2009 and 28,975,889 shares in 2008
    
    
    106,413
    
    
    
    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
    
    
    (349,526
    )
    
    
    (649,758
    )Retained earnings
    
    
    826,403
    
    
    
    793,511Total FBL Financial Group, Inc. stockholders equity
    
    
    593,812
    
    
    
    258,365Noncontrolling interest
    
    
    87
    
    
    
    96Total stockholders equity
    
    
    593,899
    
    
    
    258,461Total liabilities and stockholders equity
    
    $
    14,351,949
    
    
    $
    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 June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Interest sensitive and index product charges
    
    $
    52,991
    
    
    $
    31,785
    
    
    $
    94,131
    
    
    $
    60,906Traditional life insurance premiums
    
    
    40,954
    
    
    
    38,769
    
    
    
    78,908
    
    
    
    74,902Net investment income
    
    
    182,772
    
    
    
    172,173
    
    
    
    366,841
    
    
    
    340,667Derivative income (loss)
    
    
    17,000
    
    
    
    (31,685
    )
    
    
    (7,601
    )
    
    
    (130,581
    )Net realized capital gains on sales of investments
    
    
    33,528
    
    
    
    4,007
    
    
    
    35,479
    
    
    
    4,007Total other-than-temporary impairment losses
    
    
    (48,724
    )
    
    
    (78,028
    )
    
    
    (79,851
    )
    
    
    (107,375
    )Non-credit portion in other comprehensive loss
    
    
    21,317
    
    
    
    
    
    
    
    30,823
    
    
    
    Net impairment loss recognized in earnings
    
    
    (27,407
    )
    
    
    (78,028
    )
    
    
    (49,028
    )
    
    
    (107,375
    )Other income
    
    
    4,661
    
    
    
    6,955
    
    
    
    9,247
    
    
    
    12,820Total revenues
    
    
    304,499
    
    
    
    143,976
    
    
    
    527,977
    
    
    
    255,346Benefits and expenses:Interest sensitive and index product benefits
    
    
    109,402
    
    
    
    104,477
    
    
    
    223,838
    
    
    
    209,238Change in value of index product embedded
derivatives
    
    
    51,350
    
    
    
    (30,321
    )
    
    
    42,681
    
    
    
    (133,491
    )Traditional life insurance benefits
    
    
    24,453
    
    
    
    22,602
    
    
    
    46,557
    
    
    
    49,854Increase in traditional life future policy benefits
    
    
    10,110
    
    
    
    11,037
    
    
    
    19,828
    
    
    
    22,427Distributions to participating policyholders
    
    
    5,057
    
    
    
    5,023
    
    
    
    9,978
    
    
    
    10,293Underwriting, acquisition and insurance expenses
    
    
    56,203
    
    
    
    46,992
    
    
    
    128,166
    
    
    
    93,683Interest expense
    
    
    6,116
    
    
    
    4,448
    
    
    
    13,048
    
    
    
    8,899Other expenses
    
    
    5,550
    
    
    
    6,137
    
    
    
    10,480
    
    
    
    12,092Total benefits and expenses
    
    
    268,241
    
    
    
    170,395
    
    
    
    494,576
    
    
    
    272,99536,258
    
    
    
    (26,419
    )
    
    
    33,401
    
    
    
    (17,649
    )Income taxes
    
    
    (11,982
    )
    
    
    9,996
    
    
    
    (10,726
    )
    
    
    7,538Equity income (loss), net of related income taxes
    
    
    88
    
    
    
    (159
    )
    
    
    161
    
    
    
    (42
    )Net income (loss)
    
    
    24,364
    
    
    
    (16,582
    )
    
    
    22,836
    
    
    
    (10,153
    )Net loss attributable to noncontrolling interest
    
    
    54
    
    
    
    7
    
    
    
    92
    
    
    
    16Net income (loss) attributable to FBL Financial Group,
Inc.
    
    $
    24,418
    
    
    $
    (16,575
    )
    
    $
    22,928
    
    
    $
    (10,137
    )Earnings (loss) per common share
    
    $
    0.81
    
    
    $
    (0.56
    )
    
    $
    0.76
    
    
    $
    (0.34
    )Earnings (loss) per common share  assuming dilution
    
    $
    0.81
    
    
    $
    (0.56
    )
    
    $
    0.76
    
    
    $
    (0.34
    )Cash dividends per common share
    
    $
    0.0625
    
    
    $
    0.1250
    
    
    $
    0.1875
    
    
    $
    0.2500
  4




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##### Table of Contents



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 loss
 six months ended June
30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,137
    )
    
    
    (16
    )
    
    
    (10,153
    )Change in net unrealized
investment gains/losses
    
    
    
    
    
    
    
    
    
    
    (150,434
    )
    
    
    
    
    
    
    
    
    
    
    (150,434
    )Change in underfunded status of
other postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    14Total comprehensive loss (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (160,573
    )Adjustment resulting from capital
transactions of equity investee
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Stock-based compensation, including
the issuance of 144,199 common shares
under compensation plans
    
    
    
    
    
    
    4,569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,569Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )
    
    
    
    
    
    
    (75
    )Dividends on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,453
    )
    
    
    
    
    
    
    (7,453
    )Receipts related to noncontrolling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55
    
    
    
    55Balance at June 30, 2008
    
    $
    3,000
    
    
    $
    113,320
    
    
    $
    (186,765
    )
    
    $
    809,055
    
    
    $
    130
    
    
    $
    738,740Balance 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 income
 six months ended June
30, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,928
    
    
    
    (92
    )
    
    
    22,836Change in net unrealized
investment gains/losses
    
    
    
    
    
    
    
    
    
    
    331,851
    
    
    
    
    
    
    
    
    
    
    
    331,851Non-credit impairment losses
    
    
    
    
    
    
    
    
    
    
    (15,989
    )
    
    
    
    
    
    
    
    
    
    
    (15,989
    )Change in underfunded status of
other postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Total comprehensive income (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    338,709Stock-based compensation, including
the issuance of 297,502 common shares
under compensation plans
    
    
    
    
    
    
    2,323
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,323Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75
    )
    
    
    
    
    
    
    (75
    )Dividends on common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,602
    )
    
    
    
    
    
    
    (5,602
    )Receipts related to noncontrolling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83
    
    
    
    83Balance at June 30, 2009
    
    $
    3,000
    
    
    $
    113,935
    
    
    $
    (349,526
    )
    
    $
    826,403
    
    
    $
    87
    
    
    $
    593,899
 
 (a)
    
    All activity for the periods shown relates to Class A Common Stock.(b)
    
    Detail of comprehensive income (loss) for the quarter and six-month period is shown below: Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Total comprehensive income (loss)
    
    $
    323,307
    
    
    $
    (65,351
    )
    
    $
    338,709
    
    
    $
    (160,573
    )Comprehensive income (loss)
attributable to FBL Financial
Group, Inc.
    
    
    323,361
    
    
    
    (65,344
    )
    
    
    338,801
    
    
    
    (160,557
    )
  5




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FBL FINANCIAL GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 (Dollars in thousands)
 Six months ended June 30,2009
    
    
    2008Operating activitiesNet income (loss)
    
    $
    22,836
    
    
    $
    (10,153
    )Adjustments 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
    
    
    163,757
    
    
    
    160,550Change in fair value of embedded derivatives
    
    
    42,681
    
    
    
    (133,491
    )Charges for mortality and administration
    
    
    (92,236
    )
    
    
    (56,925
    )Deferral of unearned revenues
    
    
    963
    
    
    
    777Amortization of unearned revenue reserve
    
    
    (793
    )
    
    
    (715
    )Provision for depreciation and amortization of property and equipment
    
    
    3,350
    
    
    
    7,876Provision for accretion and amortization of investments
    
    
    (3,419
    )
    
    
    (3,429
    )Realized losses on investments
    
    
    13,549
    
    
    
    103,368Change in fair value of derivatives
    
    
    2,104
    
    
    
    106,786Increase in traditional life and accident and health benefit accruals
    
    
    22,091
    
    
    
    23,070Policy acquisition costs deferred
    
    
    (64,028
    )
    
    
    (86,098
    )Amortization of deferred policy acquisition costs
    
    
    81,253
    
    
    
    47,185Amortization of deferred sales inducements
    
    
    34,682
    
    
    
    25,716Amortization of value of insurance in force
    
    
    1,393
    
    
    
    1,067Change in accrued investment income
    
    
    4,479
    
    
    
    (9,749
    )Change in amounts receivable from/payable to affiliates
    
    
    9,789
    
    
    
    (54
    )Change in reinsurance recoverable
    
    
    (5,747
    )
    
    
    14,525Change in current income taxes
    
    
    911
    
    
    
    (4,520
    )Provision for deferred income taxes
    
    
    12,881
    
    
    
    (6,584
    )Other
    
    
    (22,576
    )
    
    
    (6,974
    )Net cash provided by operating activities
    
    
    227,920
    
    
    
    172,228Investing activitiesSale, maturity or repayment of investments:Fixed maturities  available for sale
    
    
    1,041,040
    
    
    
    380,419Equity securities  available for sale
    
    
    88
    
    
    
    15,473Mortgage loans on real estate
    
    
    45,281
    
    
    
    32,897Derivative instruments
    
    
    10,538
    
    
    
    23,293Policy loans
    
    
    20,198
    
    
    
    19,769Other long-term investments
    
    
    14
    
    
    
    1,117,159
    
    
    
    471,851Acquisition of investments:Fixed maturities  available for sale
    
    
    (686,219
    )
    
    
    (1,078,701
    )Equity securities  available for sale
    
    
    (10,414
    )
    
    
    (224
    )Mortgage loans on real estate
    
    
    (475
    )
    
    
    (74,115
    )Derivative instruments
    
    
    (35,642
    )
    
    
    (116,084
    )Policy loans
    
    
    (23,170
    )
    
    
    (20,909
    )Short-term investments  net
    
    
    (272,884
    )
    
    
    (15,521
    )(1,028,804
    )
    
    
    (1,305,554
    )
 6




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##### Table of Contents



FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)
 Six months ended June 30,2009
    
    
    2008Investing activities  continuedProceeds from disposal, repayments of advances and
other distributions of capital from equity investees
    
    $
    25
    
    
    $
    129Purchases of property and equipment
    
    
    (2,589
    )
    
    
    (8,356
    )Disposal of property and equipment
    
    
    2,631
    
    
    
    1,220Net cash provided by (used in) investing activities
    
    
    88,422
    
    
    
    (840,710
    )Financing activitiesReceipts from interest sensitive and index products
credited to policyholder account balances
    
    
    936,869
    
    
    
    1,170,146Return of policyholder account balances on interest
sensitive and index products
    
    
    (1,220,008
    )
    
    
    (506,535
    )Repayment of short-term debt
    
    
    (60,000
    )
    
    
    Receipts related to noncontrolling interests  net
    
    
    83
    
    
    
    55Excess tax deductions on stock-based compensation
    
    
    15
    
    
    
    262Issuance of common stock
    
    
    654
    
    
    
    3,307Dividends paid
    
    
    (5,677
    )
    
    
    (7,528
    )Net cash provided by (used in) financing activities
    
    
    (348,064
    )
    
    
    659,707Decrease in cash and cash equivalents
    
    
    (31,722
    )
    
    
    (8,775
    )Cash and cash equivalents at beginning of period
    
    
    37,710
    
    
    
    84,015Cash and cash equivalents at end of period
    
    $
    5,988
    
    
    $
    75,240Supplemental disclosures of cash flow informationCash paid (received) during the period for:Interest
    
    $
    13,084
    
    
    $
    8,895Income taxes
    
    
    (2,995
    )
    
    
    3,286Non-cash operating activity:Deferral of sales inducements
    
    
    24,153
    
    
    
    33,388
  7




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##### Table of Contents



FBL
FINANCIAL GROUP, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 2009
 1. Significant Accounting Policies
 Basis of Presentation
   Accounting Changes
    8




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
        9




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
  Reclassifications
  2. Investment Operations
 Fixed Maturities and Equity Securities
 Available-For-Sale Fixed Maturity and Equity Securities by Investment Category
 June 30, 2009Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(Dollars in thousands)Bonds:Corporate securities
    
    $
    5,624,448
    
    
    $
    74,213
    
    
    $
    (582,145
    )
    
    $
    5,116,516Residential mortgage-backed securities
    
    
    2,042,512
    
    
    
    17,790
    
    
    
    (210,921
    )
    
    
    1,849,381Commercial mortgage-backed securities
    
    
    743,499
    
    
    
    15,463
    
    
    
    (144,905
    )
    
    
    614,057Other asset-backed securities
    
    
    212,368
    
    
    
    244
    
    
    
    (94,098
    )
    
    
    118,514Collateralized debt obligations
    
    
    40,501
    
    
    
    
    
    
    
    (32,137
    )
    
    
    8,364United States Government and agencies
    
    
    170,682
    
    
    
    9,383
    
    
    
    (4,231
    )
    
    
    175,834State, municipal and other governments
    
    
    1,495,644
    
    
    
    10,098
    
    
    
    (136,164
    )
    
    
    1,369,578Redeemable preferred stocks
    
    
    5,000
    
    
    
    
    
    
    
    (837
    )
    
    
    4,163Total fixed maturities
    
    $
    10,334,654
    
    
    $
    127,191
    
    
    $
    (1,205,438
    )
    
    $
    9,256,407Equity securities:Non-redeemable preferred stocks
    
    $
    40,649
    
    
    $
    3,256
    
    
    $
    (11,749
    )
    
    $
    32,156Common stocks
    
    
    21,720
    
    
    
    2
    
    
    
    (438
    )
    
    
    21,284Total equity securities
    
    $
    62,369
    
    
    $
    3,258
    
    
    $
    (12,187
    )
    
    $
    53,440
  10




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Available-For-Sale Fixed Maturity Securities by Maturity Date
 June 30, 2009Amortized
    
    
    EstimatedCost
    
    
    Fair Value(Dollars in thousands)Due in one year or less
    
    $
    123,032
    
    
    $
    122,760Due after one year through five years
    
    
    1,178,336
    
    
    
    1,110,112Due after five years through ten years
    
    
    2,818,564
    
    
    
    2,617,205Due after ten years
    
    
    3,211,343
    
    
    
    2,820,2157,331,275
    
    
    
    6,670,292Residential mortgage-backed securities
    
    
    2,042,512
    
    
    
    1,849,381Commercial mortgage-backed securities
    
    
    743,499
    
    
    
    614,057Other asset-backed securities
    
    
    212,368
    
    
    
    118,514Redeemable preferred stocks
    
    
    5,000
    
    
    
    4,163$
    10,334,654
    
    
    $
    9,256,407
  Net Unrealized Losses on Fixed Maturity and Equity Securities
 June 30, 2009(Dollars inthousands)Unrealized depreciation on:Fixed maturities  available for sale
    
    $
    (1,078,247
    )Equity securities  available for sale
    
    
    (8,929
    )Interest rate swaps
    
    
    (460
    )(1,087,636
    )Adjustments for assumed changes in amortization pattern of:Deferred policy acquisition costs
    
    
    373,654Deferred sales inducements
    
    
    166,019Value of insurance in force acquired
    
    
    15,009Unearned revenue reserve
    
    
    (4,484
    )Provision for deferred income taxes
    
    
    188,108(349,330
    )Proportionate share of net unrealized investment gains of
equity investees
    
    
    4Net unrealized investment losses
    
    $
    (349,326
    )
  11




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
  
    
    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;
 
    
    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
 June 30, 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
    
    $
    847,672
    
    
    $
    (82,666
    )
    
    $
    2,505,700
    
    
    $
    (499,479
    )
    
    $
    3,353,372
    
    
    $
    (582,145
    )Residential mortgage-backed
securities
    
    
    307,976
    
    
    
    (4,678
    )
    
    
    1,056,496
    
    
    
    (206,243
    )
    
    
    1,364,472
    
    
    
    (210,921
    )Commercial mortgage-backed
securities
    
    
    78,114
    
    
    
    (7,466
    )
    
    
    195,716
    
    
    
    (137,439
    )
    
    
    273,830
    
    
    
    (144,905
    )Other asset-backed securities
    
    
    22,417
    
    
    
    (20,444
    )
    
    
    89,880
    
    
    
    (73,654
    )
    
    
    112,297
    
    
    
    (94,098
    )Collateralized debt
obligations
    
    
    
    
    
    
    
    
    
    
    7,873
    
    
    
    (32,137
    )
    
    
    7,873
    
    
    
    (32,137
    )Unites States governments &
agencies
    
    
    21,612
    
    
    
    (4,231
    )
    
    
    
    
    
    
    
    
    
    
    21,612
    
    
    
    (4,231
    )State, municipal and
other governments
    
    
    298,481
    
    
    
    (16,713
    )
    
    
    711,997
    
    
    
    (119,451
    )
    
    
    1,010,478
    
    
    
    (136,164
    )Redeemable preferred stocks
    
    
    4,163
    
    
    
    (837
    )
    
    
    
    
    
    
    
    
    
    
    4,163
    
    
    
    (837
    )Total fixed maturities
    
    $
    1,580,435
    
    
    $
    (137,035
    )
    
    $
    4,567,662
    
    
    $
    (1,068,403
    )
    
    $
    6,148,097
    
    
    $
    (1,205,438
    )
  Corporate securities
  12




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
   Residential mortgage-backed securities:
 Commercial mortgage-backed securities:
 Other asset-backed securities:
 Collateralized debt obligations:
 13




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 United States Government and agencies:
 State, municipal and other governments:
     14




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
  Credit Loss Component of Other-Than-Temporary Impairments on Fixed Maturity Securities
 Three months ended
    
    
    Six months endedJune 30, 2009
    
    
    June 30, 2009(Dollars in thousands)Balance at beginning of period
    
    $
    (127,145
    )
    
    $
    (106,421
    )Increases for which an impairment was not
previously recognized
    
    
    (23,286
    )
    
    
    (40,472
    )Increases to previously impaired investments
    
    
    (4,121
    )
    
    
    (7,691
    )Reductions due to investments sold
    
    
    32,840
    
    
    
    32,872Balance at June 30, 2009
    
    $
    (121,712
    )
    
    $
    (121,712
    )
 Sales, Maturities and Principal Repayments on Fixed Maturity Securities
 Three months ended June 30, 2009Gross
    
    
    GrossAmortized
    
    
    Realized
    
    
    RealizedCost
    
    
    Gains
    
    
    Losses
    
    
    Proceeds(Dollars in thousands)Scheduled principal repayments and
calls  available for sale
    
    $
    159,535
    
    
    $
    
    
    
    $
    
    
    
    $
    159,535Sales  available for sale
    
    
    618,560
    
    
    
    34,480
    
    
    
    (3,106
    )
    
    
    649,934Total
    
    $
    778,095
    
    
    $
    34,480
    
    
    $
    (3,106
    )
    
    $
    809,469
 Six months ended June 30, 2009Gross
    
    
    GrossAmortized
    
    
    Realized
    
    
    RealizedCost
    
    
    Gains
    
    
    Losses
    
    
    Proceeds(Dollars in thousands)Scheduled principal repayments and
calls  available for sale
    
    $
    255,962
    
    
    $
    
    
    
    $
    
    
    
    $
    255,962Sales  available for sale
    
    
    751,784
    
    
    
    36,548
    
    
    
    (3,254
    )
    
    
    785,078Total
    
    $
    1,007,746
    
    
    $
    36,548
    
    
    $
    (3,254
    )
    
    $
    1,041,040
  Mortgage Loans on Real Estate
   15




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
  3. Derivative Instruments
   Summary of Swaps
 Notional
    
    
    Receive
    
    
    Pay
    
    
    Carrying and Fair ValueMaturity Date
    
    Amount
    
    
    Rate
    
    
    Rate
    
    
    June 30, 2009
    
    
    December 31, 2008(Dollars in thousands)1/1/2010
    
    $
    50,000
    
    
    1 month LIBOR*
    
    
    4.858
    %
    
    $
    (1,102
    )
    
    $
    (1,860
    )10/7/2010
    
    
    46,000
    
    
    3 month LIBOR*
    
    
    4.760
    
    
    
    (2,103
    )
    
    
    (2,692
    )6/1/2011
    
    
    50,000
    
    
    1 month LIBOR*
    
    
    5.519
    
    
    
    (3,949
    )
    
    
    (4,905
    )$
    (7,154
    )
    
    $
    (9,457
    )
 
 *
    
    London Interbank Offered Rate   16




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
     4. Fair Values
    17




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Fixed maturity securities:
 Equity securities:
 Mortgage loans on real estate:
 Derivative instruments:
 Policy loans
 Other long-term investments, cash and short-term investments:
 Reinsurance recoverable:
 Collateral payable for securities lending and other transactions:
 Assets held in separate accounts:
 Future policy benefits and other policyholders funds:
 Long-term debt:
 Other liabilities:
 Liabilities related to separate accounts:
 18




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Fair Values and Carrying Values
 June 30, 2009Carrying Value
    
    

Fair Value(Dollars in thousands)AssetsFixed maturities  available for sale
    
    $
    9,256,407
    
    
    $
    9,256,407Equity securities  available for sale
    
    
    53,440
    
    
    
    53,440Mortgage loans on real estate
    
    
    1,336,165
    
    
    
    1,263,275Derivative instruments
    
    
    36,621
    
    
    
    36,621Policy loans
    
    
    185,393
    
    
    
    233,496Other long-term investments
    
    
    1,679
    
    
    
    1,679Cash and short-term investments
    
    
    541,331
    
    
    
    541,331Reinsurance recoverable
    
    
    10,711
    
    
    
    10,711Assets held in separate accounts
    
    
    595,047
    
    
    
    595,047LiabilitiesFuture policy benefits
    
    $
    9,475,614
    
    
    $
    7,866,173Other policyholders funds
    
    
    690,641
    
    
    
    691,974Long-term debt
    
    
    371,044
    
    
    
    232,175Collateral payable for securities lending and other transactions
    
    
    33
    
    
    
    33Other liabilities
    
    
    137
    
    
    
    137Liabilities related to separate accounts
    
    
    595,047
    
    
    
    575,632
      19




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
   Valuation of our Financial Instruments by Fair Value Hierarchy Levels
 June 30, 2009Quoted prices inactive markets
    
    
    Significant other
    
    
    Significantfor  identical
    
    
    observable
    
    
    unobservableassets (Level 1)
    
    
    inputs (Level 2)
    
    
    inputs (Level 3)
    
    
    Total(Dollars in thousands)AssetsCorporate securities
    
    $
    
    
    
    $
    4,940,261
    
    
    $
    176,255
    
    
    $
    5,116,516Residential mortgage-backed securities
    
    
    
    
    
    
    1,836,827
    
    
    
    12,554
    
    
    
    1,849,381Commercial mortgage-backed securities
    
    
    
    
    
    
    582,713
    
    
    
    31,344
    
    
    
    614,057Other asset-backed securities
    
    
    
    
    
    
    102,114
    
    
    
    16,400
    
    
    
    118,514Collateralized debt obligations
    
    
    
    
    
    
    
    
    
    
    8,364
    
    
    
    8,364United States Government and agencies
    
    
    
    
    
    
    175,834
    
    
    
    
    
    
    
    175,834State, municipal and other governments
    
    
    
    
    
    
    1,258,809
    
    
    
    110,769
    
    
    
    1,369,578Redeemable preferred stocks
    
    
    
    
    
    
    
    
    
    
    4,163
    
    
    
    4,163Non-redeemable preferred stocks
    
    
    
    
    
    
    32,156
    
    
    
    
    
    
    
    32,156Common stocks
    
    
    2,252
    
    
    
    19,032
    
    
    
    
    
    
    
    21,284Derivative instruments
    
    
    
    
    
    
    36,621
    
    
    
    
    
    
    
    36,621Other long-term investments
    
    
    
    
    
    
    
    
    
    
    1,679
    
    
    
    1,679Cash and short-term investments
    
    
    541,331
    
    
    
    
    
    
    
    
    
    
    
    541,331Reinsurance recoverable
    
    
    
    
    
    
    10,711
    
    
    
    
    
    
    
    10,711Assets held in separate accounts
    
    
    595,047
    
    
    
    
    
    
    
    
    
    
    
    595,047LiabilitiesFuture
policy benefits  index
annuity embedded derivatives
    
    $
    
    
    
    $
    
    
    
    $
    430,889
    
    
    $
    430,889Other liabilities
    
    
    
    
    
    
    137
    
    
    
    
    
    
    
    137Collateral payable for
securities lending and other
transactions
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    33
  20




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Level 3 Fixed Maturity Investments by Valuation Source
 June 30, 2009Third-party
    
    
    Pricedvendors
    
    
    internally
    
    
    Total(Dollars in thousands)AssetsCorporate securities
    
    $
    141,426
    
    
    $
    34,829
    
    
    $
    176,255Residential mortgage-backed securities
    
    
    12,554
    
    
    
    
    
    
    
    12,554Commercial mortgage-backed securities
    
    
    25,984
    
    
    
    5,360
    
    
    
    31,344Other asset-backed securities
    
    
    16,400
    
    
    
    
    
    
    
    16,400Collateralized debt obligations
    
    
    8,364
    
    
    
    
    
    
    
    8,364State, municipal and other governments
    
    
    110,769
    
    
    
    
    
    
    
    110,769Redeemable preferred stocks
    
    
    
    
    
    
    4,163
    
    
    
    4,163Total
    
    $
    315,497
    
    
    $
    44,352
    
    
    $
    359,849Percent of total
    
    
    87.7
    %
    
    
    12.3
    %
    
    
    100.0
    %
 Level 3 Financial Instruments Changes in Fair Value
 June 30, 2009Realizedand
    
    
    Transfers in
    
    
    Included inBalance,
    
    
    Purchases
    
    
    unrealized
    
    
    and/or (out)
    
    
    earnings
    
    
    Balance,December 31,
    
    
    (disposals),
    
    
    gains
    
    
    of
    
    
    (amort-
    
    
    June 30,2008
    
    
    net
    
    
    (losses), net
    
    
    Level 3(1)
    
    
    ization)
    
    
    2009(Dollars in thousands)AssetsCorporate securities
    
    $
    644,162
    
    
    $
    (1,594
    )
    
    $
    (1,165
    )
    
    $
    (465,445
    )
    
    $
    297
    
    
    $
    176,255Residential mortgage-backed securities
    
    
    70,003
    
    
    
    12,554
    
    
    
    
    
    
    
    (70,003
    )
    
    
    
    
    
    
    12,554Commercial mortgage-backed securities
    
    
    24,122
    
    
    
    312
    
    
    
    7,013
    
    
    
    
    
    
    
    (103
    )
    
    
    31,344Other asset-backed securities
    
    
    17,201
    
    
    
    (555
    )
    
    
    (2,438
    )
    
    
    2,231
    
    
    
    (39
    )
    
    
    16,400Collateralized debt obligations
    
    
    7,414
    
    
    
    
    
    
    
    951
    
    
    
    
    
    
    
    (1
    )
    
    
    8,364State, municipal and other governments
    
    
    140,189
    
    
    
    (120
    )
    
    
    (9,292
    )
    
    
    (19,999
    )
    
    
    (9
    )
    
    
    110,769Redeemable preferred stocks
    
    
    4,526
    
    
    
    
    
    
    
    (363
    )
    
    
    
    
    
    
    
    
    
    
    4,163Other long-term investments
    
    
    1,527
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152
    
    
    
    1,679Total
    
    $
    909,144
    
    
    $
    10,597
    
    
    $
    (5,294
    )
    
    $
    (553,216
    )
    
    $
    297
    
    
    $
    361,528
  
 (1)
    
    Included in the transfers in and/or out line above is $559.9 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 $6.7 million that were
transferred into Level 3 that did not have enough observable data to include in Level 2 in
2009. 21




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Six months endedJune 30, 2009(Dollars inthousands)Future Policy Benefits  Index Product Embedded DerivativesBalance, December 31, 2008
    
    $
    523,515Premiums less benefits, net
    
    
    (9,951
    )Impact of unrealized gains (losses), net
    
    
    (82,675
    )Balance, June 30, 2009
    
    $
    430,889Change in unrealized gains/losses on embedded derivatives
held at June 30, 2009 (2)
    
    $
    (82,675
    )
 (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. 5. Credit Agreement
  6. Defined Benefit Plan
  Components of Net Periodic Pension Cost for all Employers in the Multiemployer Plans
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Service cost
    
    $
    1,861
    
    
    $
    1,659
    
    
    $
    3,721
    
    
    $
    3,318Interest cost
    
    
    3,890
    
    
    
    3,709
    
    
    
    7,780
    
    
    
    7,418Expected return on assets
    
    
    (2,997
    )
    
    
    (3,495
    )
    
    
    (5,994
    )
    
    
    (6,990
    )Amortization of prior service cost
    
    
    185
    
    
    
    196
    
    
    
    370
    
    
    
    392Amortization of actuarial loss
    
    
    2,216
    
    
    
    945
    
    
    
    4,432
    
    
    
    1,890Settlement expense
    
    
    1,400
    
    
    
    
    
    
    
    1,496
    
    
    
    Net periodic
pension cost  all employers
    
    $
    6,555
    
    
    $
    3,014
    
    
    $
    11,805
    
    
    $
    6,028
 7. Commitments and Contingencies
  22




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FBL Financial Group, Inc.
    
    June 30, 2009
     23




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 8. Earnings (Loss) per Share
 Computation of Earnings (Loss) per Common Share
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per share data)Numerator:Net income (loss) attributable to
FBL Financial Group, Inc.
    
    $
    24,418
    
    
    $
    (16,575
    )
    
    $
    22,928
    
    
    $
    (10,137
    )Dividends on Series B preferred stock
    
    
    (37
    )
    
    
    (37
    )
    
    
    (75
    )
    
    
    (75
    )Numerator for earnings (loss)
per common share  income (loss)
available to common stockholders
    
    $
    24,381
    
    
    $
    (16,612
    )
    
    $
    22,853
    
    
    $
    (10,212
    )Denominator:Weighted average shares
    
    
    29,860,950
    
    
    
    29,815,392
    
    
    
    29,855,779
    
    
    
    29,802,226Deferred common stock units relating
to deferred compensation plans
    
    
    146,228
    
    
    
    76,686
    
    
    
    126,691
    
    
    
    73,446Denominator for earnings (loss)
per common share 
weighted-average shares
    
    
    30,007,178
    
    
    
    29,892,078
    
    
    
    29,982,470
    
    
    
    29,875,672Effect of dilutive securities 
stock-based compensation
    
    
    18,281
    
    
    
    
    
    
    
    72,150
    
    
    
    Denominator for diluted earnings
(loss) per common share 
adjusted weighted-average shares
    
    
    30,025,459
    
    
    
    29,892,078
    
    
    
    30,054,620
    
    
    
    29,875,672Earnings (loss) per common share
    
    $
    0.81
    
    
    $
    (0.56
    )
    
    $
    0.76
    
    
    $
    (0.34
    )Earnings
(loss) per common share 
assuming dilution
    
    $
    0.81
    
    
    $
    (0.56
    )
    
    $
    0.76
    
    
    $
    (0.34
    )
 9. Segment Information
    24




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
  Financial Information Concerning our Operating Segments
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Operating revenues:Traditional Annuity  Exclusive
Distribution
    
    $
    37,520
    
    
    $
    35,003
    
    
    $
    74,180
    
    
    $
    70,699Traditional Annuity  Independent
Distribution
    
    
    102,167
    
    
    
    81,053
    
    
    
    193,300
    
    
    
    159,336Traditional and Universal Life Insurance
    
    
    89,054
    
    
    
    86,218
    
    
    
    175,186
    
    
    
    169,580Variable
    
    
    16,346
    
    
    
    16,561
    
    
    
    32,491
    
    
    
    32,496Corporate and Other
    
    
    5,426
    
    
    
    8,800
    
    
    
    11,024
    
    
    
    17,297250,513
    
    
    
    227,635
    
    
    
    486,181
    
    
    
    449,408Realized gains (losses) on investments (A)
    
    
    5,981
    
    
    
    (74,129
    )
    
    
    (13,699
    )
    
    
    (103,561
    )Change in net unrealized gains/losses on
derivatives (A)
    
    
    48,005
    
    
    
    (9,530
    )
    
    
    55,495
    
    
    
    (90,501
    )Consolidated revenues
    
    $
    304,499
    
    
    $
    143,976
    
    
    $
    527,977
    
    
    $
    255,346Pre-tax operating income (loss):Traditional Annuity  Exclusive
Distribution
    
    $
    8,174
    
    
    $
    7,614
    
    
    $
    15,000
    
    
    $
    14,856Traditional Annuity  Independent
Distribution
    
    
    12,114
    
    
    
    8,894
    
    
    
    11,987
    
    
    
    16,690Traditional and Universal Life Insurance
    
    
    18,885
    
    
    
    15,665
    
    
    
    34,328
    
    
    
    23,828Variable
    
    
    5,758
    
    
    
    1,680
    
    
    
    1,933
    
    
    
    2,848Corporate and Other
    
    
    (6,349
    )
    
    
    (2,504
    )
    
    
    (12,977
    )
    
    
    (4,638
    )38,582
    
    
    
    31,349
    
    
    
    50,271
    
    
    
    53,584Income taxes on operating income
    
    
    (12,777
    )
    
    
    (10,221
    )
    
    
    (16,598
    )
    
    
    (17,388
    )Realized gains/losses on investments (A)
    
    
    (62
    )
    
    
    (42,642
    )
    
    
    (11,102
    )
    
    
    (54,807
    )Change in net unrealized gains/losses on
derivatives (A)
    
    
    (1,325
    )
    
    
    4,939
    
    
    
    357
    
    
    
    8,474Consolidated net income (loss)
    
    $
    24,418
    
    
    $
    (16,575
    )
    
    $
    22,928
    
    
    $
    (10,137
    )
 
 (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.  25




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 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
    26




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FBL Financial Group, Inc.
    
    June 30, 2009
    Results of Operations for the Three and Six Months Ended June 30, 2009 and 2008
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands, except per share data)Revenues
    
    $
    304,499
    
    
    $
    143,976
    
    
    $
    527,977
    
    
    $
    255,346Benefits and expenses
    
    
    268,241
    
    
    
    170,395
    
    
    
    494,576
    
    
    
    272,99536,258
    
    
    
    (26,419
    )
    
    
    33,401
    
    
    
    (17,649
    )Income taxes
    
    
    (11,982
    )
    
    
    9,996
    
    
    
    (10,726
    )
    
    
    7,538Equity income (loss)
    
    
    88
    
    
    
    (159
    )
    
    
    161
    
    
    
    (42
    )Net income (loss)
    
    
    24,364
    
    
    
    (16,582
    )
    
    
    22,836
    
    
    
    (10,153
    )Net loss attributable to
noncontrolling interest
    
    
    54
    
    
    
    7
    
    
    
    92
    
    
    
    16Net income (loss) attributable
to FBL Financial Group, Inc.
    
    $
    24,418
    
    
    $
    (16,575
    )
    
    $
    22,928
    
    
    $
    (10,137
    )Earnings (loss) per common share
    
    $
    0.81
    
    
    $
    (0.56
    )
    
    $
    0.76
    
    
    $
    (0.34
    )Earnings (loss) per common
share  assuming dilution
    
    $
    0.81
    
    
    $
    (0.56
    )
    
    $
    0.76
    
    
    $
    (0.34
    )
 27




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Other dataDirect premiums collected, net of
reinsurance ceded:Traditional Annuity  Exclusive
Distribution
    
    $
    73,401
    
    
    $
    64,425
    
    
    $
    169,769
    
    
    $
    109,773Traditional Annuity  Independent
Distribution
    
    
    199,281
    
    
    
    538,207
    
    
    
    523,980
    
    
    
    864,893Traditional and Universal Life Insurance
    
    
    51,584
    
    
    
    49,081
    
    
    
    101,444
    
    
    
    96,340Variable Annuity and Variable Universal
Life (1)
    
    
    23,789
    
    
    
    38,873
    
    
    
    49,969
    
    
    
    80,794Reinsurance assumed and other
    
    
    3,116
    
    
    
    3,712
    
    
    
    6,052
    
    
    
    7,392Total
    
    $
    351,171
    
    
    $
    694,298
    
    
    $
    851,214
    
    
    $
    1,159,192Direct life insurance in force, end of
quarter (in millions)
    
    
    
    
    
    
    
    
    
    $
    44,652
    
    
    $
    42,048Life insurance lapse rates
    
    
    
    
    
    
    
    
    
    
    7.0
    %
    
    
    6.4
    %Withdrawal rates  individual traditional
annuity:Exclusive Distribution
    
    
    
    
    
    
    
    
    
    
    4.4
    %
    
    
    3.4
    %Independent Distribution
    
    
    
    
    
    
    
    
    
    
    22.0
    %
    
    
    6.3
    %
 
 (1)
    
    Amounts are net of portion ceded to and include amounts assumed from alliance
partners.   Net Income (Loss) Attributable to FBL Financial Group, Inc.
  28




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FBL Financial Group, Inc.
    
    June 30, 2009
  Spreads Earned on our Universal Life and Individual Annuity Products
 Six months ended June 30,2009
    
    
    2008Weighted average yield on cash and invested assets
    
    
    6.21
    %
    
    
    6.02
    %Weighted average interest crediting rate/index cost
    
    
    4.07
    
    
    
    3.85Spread
    
    
    2.14
    %
    
    
    2.17
    %
  Impact of Unlocking
  29




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 Impact of Operating Adjustments on FBL Net Income (Loss)
  Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Realized gains (losses) on investments
    
    $
    6,121
    
    
    $
    (74,021
    )
    
    $
    (13,549
    )
    
    $
    (103,368
    )Change in net unrealized gains/losses on derivatives
    
    
    (3,345
    )
    
    
    20,791
    
    
    
    12,814
    
    
    
    42,990Change in amortization of:Deferred policy acquisition costs
    
    
    (4,116
    )
    
    
    (1,358
    )
    
    
    (10,966
    )
    
    
    (1,944
    )Deferred sales inducements
    
    
    (652
    )
    
    
    (3,711
    )
    
    
    (4,683
    )
    
    
    (9,324
    )Value of insurance in force acquired
    
    
    (2
    )
    
    
    401
    
    
    
    3
    
    
    
    557Unearned revenue reserve
    
    
    (140
    )
    
    
    (108
    )
    
    
    (150
    )
    
    
    (193
    )Income tax offset
    
    
    747
    
    
    
    20,303
    
    
    
    5,786
    
    
    
    24,949Net impact of operating income adjustments
    
    $
    (1,387
    )
    
    $
    (37,703
    )
    
    $
    (10,745
    )
    
    $
    (46,333
    )
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Summary of adjustments noted above after
offsets and income taxes:Realized gains/losses on investments
    
    $
    (62
    )
    
    $
    (42,642
    )
    
    $
    (11,102
    )
    
    $
    (54,807
    )Change in net unrealized gains/losses on
derivatives
    
    
    (1,325
    )
    
    
    4,939
    
    
    
    357
    
    
    
    8,474Net impact of operating income adjustments
    
    $
    (1,387
    )
    
    $
    (37,703
    )
    
    $
    (10,745
    )
    
    $
    (46,333
    )Net impact per common share  basic
    
    $
    (0.05
    )
    
    $
    (1.26
    )
    
    $
    (0.36
    )
    
    $
    (1.55
    )Net impact per common share  assuming dilution
    
    $
    (0.05
    )
    
    $
    (1.26
    )
    
    $
    (0.36
    )
    
    $
    (1.55
    )
 Changes in FBL Net Income (Loss)
 Period endedJune 30, 2009 vs. June 30, 2008Three months
    
    
    Six months(Dollars in thousands)Premiums and product charges
    
    $
    23,391
    
    
    $
    37,231Net investment income
    
    
    10,599
    
    
    
    26,174Derivative income (loss)
    
    
    48,685
    
    
    
    122,980Realized gains (losses) on investments
    
    
    80,142
    
    
    
    89,819Other income and other expenses
    
    
    (1,707
    )
    
    
    (1,961
    )Interest sensitive and index products benefits and change in value
of index product embedded derivative
    
    
    (86,596
    )
    
    
    (190,772
    )Traditional life insurance policy benefits
    
    
    (958
    )
    
    
    6,211Underwriting, acquisition and insurance expenses
    
    
    (9,211
    )
    
    
    (34,483
    )Interest expense
    
    
    (1,668
    )
    
    
    (4,149
    )Income taxes
    
    
    (21,978
    )
    
    
    (18,264
    )Noncontrolling interest and equity income
    
    
    294
    
    
    
    279Total change in FBL Net Income (Loss)
    
    $
    40,993
    
    
    $
    33,065
  30




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FBL Financial Group, Inc.
    
    June 30, 2009
 Premiums and Product Charges
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Premiums and product charges:Interest sensitive and index product charges
    
    $
    52,991
    
    
    $
    31,785
    
    
    $
    94,131
    
    
    $
    60,906Traditional life insurance premiums
    
    
    40,954
    
    
    
    38,769
    
    
    
    78,908
    
    
    
    74,902Total
    
    $
    93,945
    
    
    $
    70,554
    
    
    $
    173,039
    
    
    $
    135,808
   Surrender Charges on EquiTrust Life Direct Fixed Annuity Contracts
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Surrender charges:Gross surrender charges
    
    $
    64,034
    
    
    $
    7,183
    
    
    $
    128,642
    
    
    $
    11,839Market value adjustments
    
    
    (36,872
    )
    
    
    (1,601
    )
    
    
    (86,643
    )
    
    
    (2,863
    )Net surrender charges
    
    $
    27,162
    
    
    $
    5,582
    
    
    $
    41,999
    
    
    $
    8,976
   Net Investment Income
  31




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
  Derivative Income (Loss)
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Derivative income (loss):Components of derivative income
(loss) from call options:Gains received at expiration
    
    $
    260
    
    
    $
    11,625
    
    
    $
    487
    
    
    $
    26,642Change in the difference
between fair value and
remaining option cost at
beginning and end of period
    
    
    46,384
    
    
    
    (14,279
    )
    
    
    55,188
    
    
    
    (91,830
    )Cost of money for call options
    
    
    (29,583
    )
    
    
    (33,020
    )
    
    
    (60,325
    )
    
    
    (65,248
    )17,061
    
    
    
    (35,674
    )
    
    
    (4,650
    )
    
    
    (130,436
    )Other
    
    
    (61
    )
    
    
    3,989
    
    
    
    (2,951
    )
    
    
    (145
    )Total
    
    $
    17,000
    
    
    $
    (31,685
    )
    
    $
    (7,601
    )
    
    $
    (130,581
    )
 ®
  32




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FBL Financial Group, Inc.
    
    June 30, 2009
 Realized Gains (Losses) on Investments
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Realized gains (losses) on investments:Realized gains on sales
    
    $
    36,634
    
    
    $
    4,128
    
    
    $
    38,733
    
    
    $
    4,128Realized losses on sales
    
    
    (3,106
    )
    
    
    (121
    )
    
    
    (3,254
    )
    
    
    (121
    )Total other-than-temporary impairment losses
    
    
    (48,724
    )
    
    
    (78,028
    )
    
    
    (79,851
    )
    
    
    (107,375
    )Net realized losses investment
    
    
    (15,196
    )
    
    
    (74,021
    )
    
    
    (44,372
    )
    
    
    (103,368
    )Non-credit losses included in accumulated other
comprehensive loss
    
    
    21,317
    
    
    
    
    
    
    
    30,823
    
    
    
    Total reported in statements of operations
    
    $
    6,121
    
    
    $
    (74,021
    )
    
    $
    (13,549
    )
    
    $
    (103,368
    )
   Investment Impairments Recognized in FBL Net Income (Loss) Individually Exceeding $0.5 Million
 General Description
    
    Impairment Loss
    
    Circumstance(Dollars inthousands)Six months ended June 30, 2009:Collateralized debt obligation
    
    $
    11,509
    
    
    Defaults of the underlying collateral supporting this issue
increased resulting in possible future losses. (A)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
    
    $
    5,671
    
    
    Debt restructuring and declines in ratings and revenues which
could result in a future covenant violation reduced estimates
on potential recovery. (A)Apparel and other textile
company
    
    $
    4,000
    
    
    The probability of future losses increased due to declining
economic conditions and increased concerns about the companys
ability to continue as a going concern. (A)
 33




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##### Table of Contents



FBL Financial Group, Inc.
    
    June 30, 2009
 General Description
    
    Impairment Loss
    
    Circumstance(Dollars inthousands)Commercial finance company
    
    $
    3,996
    
    
    Rating declines occurred due to the impact of declining
economic conditions on earnings, liquidity and the companys
ability to continue as a going concern. (A)Other asset-backed securities
    
    $
    3,786
    
    
    Defaults in underlying collateral supporting these issues
increased. (A)Collateralized bond obligation
    
    $
    2,133
    
    
    Rating declines occurred and defaults of the underlying
collateral supporting this issue increased. (A)Collateralized bond obligation
    
    $
    1,353
    
    
    Rating declines occurred and defaults of the underlying
collateral supporting this issue increased. (A)Other asset-backed securities
    
    $
    1,338
    
    
    Rating declines occurred on the monoline insurer supporting
these issues. Financial recoveries are fully dependent on the
insurer. (A)Reinsurance carrier
    
    $
    586
    
    
    Rating declines occurred and near term solvency became a
concern. (A)Six months ended June 30, 2008:Other asset-backed securities
    
    $
    67,349
    
    
    Losses on 13
securities increased
due to increasing
delinquencies by
homeowners. In
addition, underlying
insurance that was
expected to absorb
losses was deemed to
be less valuable due
to the monoline
insurer being
downgraded during
the quarter.
Collateral is second
lien home equity
loans with minimal
recoveries expected.
(A)Collateralized debt obligation
    
    $
    9,800
    
    
    Ratings declined and
the value of
collateral
supporting this
issue decreased,
which triggered an
event whereby we did
not receive interest
on our investment.
(A)Commercial mortgage-backed 
security
    
    $
    9,639
    
    
    Ratings declined and
the probability of
future losses
increased due to
declining economic
conditions and a
reduction in the
debt available to
absorb losses prior
to our ownership
class. (A)Other asset-backed security
    
    $
    9,114
    
    
    Ratings declined and
losses from the
underlying home
equity loans to
Alt-A borrowers
increased. (A)Reinsurance carrier
    
    $
    7,129
    
    
    Ratings declined 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
    
    
    Ratings declined 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 June
30, 2009 for other material investments in this industry. 34




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Other Income and Other Expenses
  Interest Sensitive and Index Product Benefits and Change in Value of Index Product Embedded
Derivatives
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Interest sensitive and index product benefits:Interest credited
    
    $
    81,555
    
    
    $
    68,569
    
    
    $
    160,715
    
    
    $
    135,248Index credits
    
    
    1,867
    
    
    
    10,774
    
    
    
    3,212
    
    
    
    25,382Amortization of deferred sales inducements
    
    
    15,234
    
    
    
    12,991
    
    
    
    34,570
    
    
    
    25,657Interest sensitive death benefits
    
    
    10,746
    
    
    
    12,143
    
    
    
    25,341
    
    
    
    22,951109,402
    
    
    
    104,477
    
    
    
    223,838
    
    
    
    209,238Change in value of index product embedded derivatives
    
    
    51,350
    
    
    
    (30,321
    )
    
    
    42,681
    
    
    
    (133,491
    )Total
    
    $
    160,752
    
    
    $
    74,156
    
    
    $
    266,519
    
    
    $
    75,747
      35




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Traditional Life Insurance Policy Benefits
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Traditional life insurance policy benefits:Traditional life insurance benefits
    
    $
    24,453
    
    
    $
    22,602
    
    
    $
    46,557
    
    
    $
    49,854Increase in traditional life future policy
benefits
    
    
    10,110
    
    
    
    11,037
    
    
    
    19,828
    
    
    
    22,427Distributions to participating policyholders
    
    
    5,057
    
    
    
    5,023
    
    
    
    9,978
    
    
    
    10,293Total
    
    $
    39,620
    
    
    $
    38,662
    
    
    $
    76,363
    
    
    $
    82,574
  Underwriting, Acquisition and Insurance Expenses
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Underwriting, acquisition and insurance expenses:Commission expense, net of deferrals
    
    $
    3,620
    
    
    $
    3,349
    
    
    $
    7,193
    
    
    $
    6,749Amortization of deferred policy acquisition
costs
    
    
    33,813
    
    
    
    24,163
    
    
    
    81,253
    
    
    
    47,185Amortization of value of insurance in force
acquired
    
    
    652
    
    
    
    167
    
    
    
    1,393
    
    
    
    1,067Other underwriting, acquisition and
insurance expenses, net of deferrals
    
    
    18,118
    
    
    
    19,313
    
    
    
    38,327
    
    
    
    38,682Total
    
    $
    56,203
    
    
    $
    46,992
    
    
    $
    128,166
    
    
    $
    93,683
   Interest Expense
  36




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Income Taxes
  Equity Income (Loss), Net of Related Income Taxes
  Segment Information
    37




---



##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Reconciliation of Net Income (Loss) to Pre-tax Operating Income
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Net income (loss) attributable to FBL Financial
Group, Inc.
    
    $
    24,418
    
    
    $
    (16,575
    )
    
    $
    22,928
    
    
    $
    (10,137
    )Net impact of operating income adjustments (1)
    
    
    1,387
    
    
    
    37,703
    
    
    
    10,745
    
    
    
    46,333Income taxes on operating income
    
    
    12,777
    
    
    
    10,221
    
    
    
    16,598
    
    
    
    17,388Pre-tax operating income
    
    $
    38,582
    
    
    $
    31,349
    
    
    $
    50,271
    
    
    $
    53,584Pre-tax operating income (loss) by segment:Traditional Annuity  Exclusive Distribution
    
    $
    8,174
    
    
    $
    7,614
    
    
    $
    15,000
    
    
    $
    14,856Traditional Annuity  Independent
Distribution
    
    
    12,114
    
    
    
    8,894
    
    
    
    11,987
    
    
    
    16,690Traditional and Universal Life Insurance
    
    
    18,885
    
    
    
    15,665
    
    
    
    34,328
    
    
    
    23,828Variable
    
    
    5,758
    
    
    
    1,680
    
    
    
    1,933
    
    
    
    2,848Corporate and Other
    
    
    (6,349
    )
    
    
    (2,504
    )
    
    
    (12,977
    )
    
    
    (4,638
    )$
    38,582
    
    
    $
    31,349
    
    
    $
    50,271
    
    
    $
    53,584
 
 (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 June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive and index product charges and other
    
    $
    246
    
    
    $
    315
    
    
    $
    494
    
    
    $
    606Net investment income
    
    
    38,543
    
    
    
    35,670
    
    
    
    76,212
    
    
    
    71,208Derivative loss
    
    
    (1,269
    )
    
    
    (982
    )
    
    
    (2,526
    )
    
    
    (1,115
    )37,520
    
    
    
    35,003
    
    
    
    74,180
    
    
    
    70,699Benefits and expenses
    
    
    29,346
    
    
    
    27,389
    
    
    
    59,180
    
    
    
    55,843Pre-tax operating income
    
    $
    8,174
    
    
    $
    7,614
    
    
    $
    15,000
    
    
    $
    14,856Other dataAnnuity premiums collected, direct
    
    $
    73,401
    
    
    $
    64,425
    
    
    $
    169,769
    
    
    $
    109,773Policy liabilities and accruals, end of period
    
    
    
    
    
    
    
    
    
    
    2,453,291
    
    
    
    2,276,645Individual deferred annuity spread:Weighted average yield on cash and invested assets
    
    
    
    
    
    
    
    
    
    
    6.06
    %
    
    
    6.09
    %Weighted average interest crediting rate/index costs
    
    
    
    
    
    
    
    
    
    
    3.99
    %
    
    
    4.13
    %Spread
    
    
    
    
    
    
    
    
    
    
    2.07
    %
    
    
    1.96
    %Individual traditional annuity withdrawal rate
    
    
    
    
    
    
    
    
    
    
    4.4
    %
    
    
    3.4
    %
  38




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
   Traditional Annuity  Independent Distribution Segment
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive and index product charges
    
    $
    28,965
    
    
    $
    7,621
    
    
    $
    45,857
    
    
    $
    12,930Net investment income
    
    
    102,447
    
    
    
    94,605
    
    
    
    207,152
    
    
    
    185,371Derivative loss
    
    
    (29,245
    )
    
    
    (21,173
    )
    
    
    (59,709
    )
    
    
    (38,965
    )102,167
    
    
    
    81,053
    
    
    
    193,300
    
    
    
    159,336Benefits and expenses
    
    
    90,053
    
    
    
    72,159
    
    
    
    181,313
    
    
    
    142,646Pre-tax operating income
    
    $
    12,114
    
    
    $
    8,894
    
    
    $
    11,987
    
    
    $
    16,690Other dataAnnuity premiums collected, independent channelFixed rate annuities
    
    $
    99,782
    
    
    $
    378,209
    
    
    $
    313,114
    
    
    $
    499,137Index annuities
    
    
    99,499
    
    
    
    159,998
    
    
    
    210,866
    
    
    
    365,756Annuity premiums collected, assumed
    
    
    513
    
    
    
    892
    
    
    
    871
    
    
    
    1,774Policy liabilities and accruals, end of period
    
    
    
    
    
    
    
    
    
    
    7,517,080
    
    
    
    7,394,001Individual deferred annuity spread:Weighted average yield on cash and invested
assets
    
    
    
    
    
    
    
    
    
    
    6.20
    %
    
    
    5.91
    %Weighted average interest crediting
rate/index cost
    
    
    
    
    
    
    
    
    
    
    4.06
    %
    
    
    3.73
    %Spread
    
    
    
    
    
    
    
    
    
    
    2.14
    %
    
    
    2.18
    %Individual traditional annuity withdrawal rate
    
    
    
    
    
    
    
    
    
    
    22.0
    %
    
    
    6.3
    %
  39




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
      Traditional and Universal Life Insurance Segment
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive product charges
    
    $
    12,484
    
    
    $
    11,781
    
    
    $
    24,610
    
    
    $
    23,202Traditional life insurance premiums and
other income
    
    
    40,941
    
    
    
    38,755
    
    
    
    78,956
    
    
    
    74,909Net investment income
    
    
    35,629
    
    
    
    35,682
    
    
    
    71,620
    
    
    
    71,46989,054
    
    
    
    86,218
    
    
    
    175,186
    
    
    
    169,580Benefits and expenses
    
    
    70,169
    
    
    
    70,553
    
    
    
    140,858
    
    
    
    145,752Pre-tax operating income
    
    $
    18,885
    
    
    $
    15,665
    
    
    $
    34,328
    
    
    $
    23,828Other dataLife premiums collected, net of reinsurance
    
    $
    54,149
    
    
    $
    51,871
    
    
    $
    106,516
    
    
    $
    101,865Policy liabilities and accruals, end of period
    
    
    
    
    
    
    
    
    
    
    2,248,568
    
    
    
    2,199,899Direct life insurance in force, end of period
(in millions)
    
    
    
    
    
    
    
    
    
    
    37,137
    
    
    
    34,252Interest sensitive life insurance spread:Weighted average yield on cash and
invested assets
    
    
    
    
    
    
    
    
    
    
    6.70
    %
    
    
    6.65
    %Weighted average interest crediting rate
    
    
    
    
    
    
    
    
    
    
    4.37
    %
    
    
    4.44
    %Spread
    
    
    
    
    
    
    
    
    
    
    2.33
    %
    
    
    2.21
    %
 40




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
    Variable Segment
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Pre-tax operating incomeOperating revenues:Interest sensitive product charges
    
    $
    11,472
    
    
    $
    12,290
    
    
    $
    23,400
    
    
    $
    24,501Net investment income
    
    
    4,085
    
    
    
    3,638
    
    
    
    7,976
    
    
    
    6,979Other income
    
    
    789
    
    
    
    633
    
    
    
    1,115
    
    
    
    1,01616,346
    
    
    
    16,561
    
    
    
    32,491
    
    
    
    32,496Benefits and expenses
    
    
    10,588
    
    
    
    14,881
    
    
    
    30,558
    
    
    
    29,648Pre-tax operating income
    
    $
    5,758
    
    
    $
    1,680
    
    
    $
    1,933
    
    
    $
    2,848Other dataVariable premiums collected, net of reinsurance
    
    $
    23,789
    
    
    $
    38,873
    
    
    $
    49,969
    
    
    $
    80,794Policy liabilities and accruals, end of period
    
    
    
    
    
    
    
    
    
    
    260,140
    
    
    
    237,571Separate account assets, end of period
    
    
    
    
    
    
    
    
    
    
    595,047
    
    
    
    794,846Direct life insurance in force, end of period
(in millions)
    
    
    
    
    
    
    
    
    
    
    7,515
    
    
    
    7,797
    41




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Corporate and Other Segment
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in thousands)Pre-tax operating loss:Operating revenues:Net investment income
    
    $
    2,068
    
    
    $
    2,578
    
    
    $
    3,881
    
    
    $
    5,640Derivative loss
    
    
    (491
    )
    
    
    
    
    
    
    (861
    )
    
    
    Other income
    
    
    3,849
    
    
    
    6,222
    
    
    
    8,004
    
    
    
    11,6575,426
    
    
    
    8,800
    
    
    
    11,024
    
    
    
    17,297Interest expense
    
    
    6,116
    
    
    
    4,448
    
    
    
    13,048
    
    
    
    8,899Benefits and other expenses
    
    
    5,849
    
    
    
    6,618
    
    
    
    11,292
    
    
    
    12,987(6,539
    )
    
    
    (2,266
    )
    
    
    (13,316
    )
    
    
    (4,589
    )Minority interest
    
    
    54
    
    
    
    7
    
    
    
    92
    
    
    
    16Equity income (loss), before tax
    
    
    136
    
    
    
    (245
    )
    
    
    247
    
    
    
    (65
    )Pre-tax operating loss
    
    $
    (6,349
    )
    
    $
    (2,504
    )
    
    $
    (12,977
    )
    
    $
    (4,638
    )
  Financial Condition
 Investments
   42




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Investment Portfolio Summary
 June 30, 2009
    
    
    December 31, 2008Carrying Value
    
    
    Percent
    
    
    Carrying Value
    
    
    Percent(Dollars in thousands)Fixed maturities  available for sale:Public
    
    $
    7,613,523
    
    
    
    66.7
    %
    
    $
    7,406,964
    
    
    
    68.3
    %144A private placement
    
    
    1,221,514
    
    
    
    10.7
    
    
    
    1,164,417
    
    
    
    10.7Private placement
    
    
    421,370
    
    
    
    3.7
    
    
    
    394,062
    
    
    
    3.6Total fixed
maturities  available
for sale
    
    
    9,256,407
    
    
    
    81.1
    
    
    
    8,965,443
    
    
    
    82.6Equity securities
    
    
    53,440
    
    
    
    0.5
    
    
    
    44,863
    
    
    
    0.4Mortgage loans on real estate
    
    
    1,336,165
    
    
    
    11.7
    
    
    
    1,381,854
    
    
    
    12.8Derivative instruments
    
    
    36,621
    
    
    
    0.3
    
    
    
    12,933
    
    
    
    0.1Investment real estate
    
    
    2,559
    
    
    
    
    
    
    
    2,559
    
    
    
    Policy loans
    
    
    185,393
    
    
    
    1.7
    
    
    
    182,421
    
    
    
    1.7Other long-term investments
    
    
    1,679
    
    
    
    
    
    
    
    1,527
    
    
    
    Short-term investments
    
    
    535,343
    
    
    
    4.7
    
    
    
    262,459
    
    
    
    2.4Total investments
    
    $
    11,407,607
    
    
    
    100.0
    %
    
    $
    10,854,059
    
    
    
    100.0
    %
  Credit Quality by NAIC Designation and Standard & Poors (S&P) Rating Equivalents
 June 30, 2009
    
    
    December 31, 2008NAICDesignation
    
    Equivalent S&P Ratings (1)
    
    
    Carrying Value
    
    
    Percent
    
    
    Carrying Value
    
    
    Percent(Dollars in thousands)1
    
    AAA, AA, A
    
    $
    5,184,534
    
    
    
    56.0
    %
    
    $
    5,382,110
    
    
    
    60.0
    %2
    
    BBB
    
    
    3,466,660
    
    
    
    37.5
    
    
    
    3,243,034
    
    
    
    36.2Total investment grade
    
    
    8,651,194
    
    
    
    93.5
    
    
    
    8,625,144
    
    
    
    96.23
    
    BB
    
    
    443,514
    
    
    
    4.8
    
    
    
    244,814
    
    
    
    2.74
    
    B
    
    
    105,261
    
    
    
    1.1
    
    

40,565
    
    
    
    0.55
    
    CCC, CC, C
    
    
    34,366
    
    
    
    0.4
    
    
    
    43,064
    
    
    
    0.56
    
    In or near default
    
    
    22,072
    
    
    
    0.2
    
    
    
    11,856
    
    
    
    0.1Total below investment grade
    
    
    605,213
    
    
    
    6.5
    
    
    
    340,299
    
    
    
    3.8Total fixed maturities  available for sale
    
    $
    9,256,407
    
    
    
    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.  43




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Gross Unrealized Gains and Gross Unrealized Losses by Internal Industry Classification
 June 30, 2009Carrying 
Value of
    
    
    
    
    
    
    Carrying 
Value ofSecurities
    
    
    
    
    
    
    SecuritiesTotal
    
    
    with Gross
    
    
    Gross
    
    
    with Gross
    
    
    GrossCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    Gains
    
    
    Losses
    
    
    Losses(Dollars in thousands)Corporate securities:Financial services
    
    $
    1,362,446
    
    
    $
    178,505
    
    
    $
    4,157
    
    
    $
    1,183,941
    
    
    $
    (377,451
    )Manufacturing
    
    
    1,226,648
    
    
    
    505,737
    
    
    
    19,536
    
    
    
    720,911
    
    
    
    (100,217
    )Mining
    
    
    524,551
    
    
    
    210,463
    
    
    
    10,671
    
    
    
    314,088
    
    
    
    (25,701
    )Retail trade
    
    
    102,548
    
    
    
    42,486
    
    
    
    1,246
    
    
    
    60,062
    
    
    
    (13,089
    )Services
    
    
    196,248
    
    
    
    93,923
    
    
    
    3,137
    
    
    
    102,325
    
    
    
    (10,461
    )Transportation
    
    
    180,665
    
    
    
    48,738
    
    
    
    2,248
    
    
    
    131,927
    
    
    
    (16,188
    )Utilities
    
    
    1,357,492
    
    
    
    640,058
    
    
    
    30,401
    
    
    
    717,434
    
    
    
    (61,668
    )Other
    
    
    178,445
    
    
    
    43,725
    
    
    
    2,817
    
    
    
    134,720
    
    
    
    (10,344
    )Total corporate securities
    
    
    5,129,043
    
    
    
    1,763,635
    
    
    
    74,213
    
    
    
    3,365,408
    
    
    
    (615,119
    )Mortgage and asset-backed securities
    
    
    2,581,952
    
    
    
    831,353
    
    
    
    33,497
    
    
    
    1,750,599
    
    
    
    (449,924
    )United States Government and agencies
    
    
    175,834
    
    
    
    154,222
    
    
    
    9,383
    
    
    
    21,612
    
    
    
    (4,231
    )State, municipal and other governments
    
    
    1,369,578
    
    
    
    359,100
    
    
    
    10,098
    
    
    
    1,010,478
    
    
    
    (136,164
    )Total
    
    $
    9,256,407
    
    
    $
    3,108,310
    
    
    $
    127,191
    
    
    $
    6,148,097
    
    
    $
    (1,205,438
    )
 December 31, 2008Carrying 
Value of
    
    
    
    
    
    
    Carrying 
Value ofSecurities
    
    
    
    
    
    
    SecuritiesTotal
    
    
    with Gross
    
    
    Gross
    
    
    with Gross
    
    
    GrossCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    Unrealized
    
    
    UnrealizedValue
    
    
    Gains
    
    
    Gains
    
    
    Losses
    
    
    Losses(Dollars in thousands)Corporate securities:Financial services
    
    $
    1,246,895
    
    
    $
    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
    )
 44




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##### Table of Contents



Credit Quality of Available-for-Sale Fixed Maturity Securities with Unrealized Losses
 June 30, 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
    
    $
    3,111,922
    
    
    
    50.6
    %
    
    $
    (512,206
    )
    
    
    42.5
    %2
    
    BBB
    
    
    2,472,970
    
    
    
    40.2
    
    
    
    (352,217
    )
    
    
    29.2Total investment grade
    
    
    5,584,892
    
    
    
    90.8
    
    
    
    (864,423
    )
    
    
    71.73
    
    BB
    
    
    403,841
    
    
    
    6.6
    
    
    
    (134,595
    )
    
    
    11.24
    
    B
    
    
    103,745
    
    
    
    1.7
    
    
    
    (103,518
    )
    
    
    8.65
    
    CCC, CC, C
    
    
    34,366
    
    
    
    0.6
    
    
    
    (52,905
    )
    
    
    4.46
    
    In or near default
    
    
    21,253
    
    
    
    0.3
    
    
    
    (49,997
    )
    
    
    4.1Total below investment grade
    
    
    563,205
    
    
    
    9.2
    
    
    
    (341,015
    )
    
    
    28.3Total
    
    $
    6,148,097
    
    
    
    100.0
    %
    
    $
    (1,205,438
    )
    
    
    100.0
    %
 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
 June 30, 2009Amortized 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
    
    
    51
    
    
    $
    46,971
    
    
    $
    456,276
    
    
    $
    (23,013
    )
    
    $
    (11,234
    )Greater than three months to six months
    
    
    40
    
    
    
    24,013
    
    
    
    183,550
    
    
    
    (11,872
    )
    
    
    (9,361
    )Greater than six months to nine months
    
    
    94
    
    
    
    17,888
    
    
    
    425,381
    
    
    
    (6,616
    )
    
    
    (31,106
    )Greater than nine months to twelve
months
    
    
    96
    
    
    
    36,756
    
    
    
    526,635
    
    
    
    (13,722
    )
    
    
    (30,111
    )Greater than twelve months
    
    
    616
    
    
    
    1,418,464
    
    
    
    4,217,601
    
    
    
    (619,282
    )
    
    
    (449,121
    )Total
    
    
    
    
    
    $
    1,544,092
    
    
    $
    5,809,443
    
    
    $
    (674,505
    )
    
    $
    (530,933
    )
 45




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 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
    )
 Available-For-Sale Fixed Maturity Securities with Unrealized Losses by Maturity Date
 June 30, 2009
    
    
    December 31, 2008Carrying Value
    
    
    
    
    
    
    Carrying Valueof Securities with
    
    
    Gross
    
    
    of Securities with
    
    
    GrossGross Unrealized
    
    
    Unrealized
    
    
    Gross Unrealized
    
    
    UnrealizedLosses
    
    
    Losses
    
    
    Losses
    
    
    Losses(Dollars in thousands)Due in one year or less
    
    $
    20,239
    
    
    $
    (1,069
    )
    
    $
    43,483
    
    
    $
    (4,985
    )Due after one year through five years
    
    
    580,184
    
    
    
    (85,164
    )
    
    
    791,636
    
    
    
    (143,559
    )Due after five years through ten years
    
    
    1,688,898
    
    
    
    (242,572
    )
    
    
    2,037,451
    
    
    
    (514,869
    )Due after ten years
    
    
    2,104,014
    
    
    
    (425,872
    )
    
    
    2,260,568
    
    
    
    (506,966
    )4,393,335
    
    
    
    (754,677
    )
    
    
    5,133,138
    
    
    
    (1,170,379
    )Mortgage and asset-backed securities
    
    
    1,750,599
    
    
    
    (449,924
    )
    
    
    1,594,576
    
    
    
    (478,994
    )Redeemable preferred stock
    
    
    4,163
    
    
    
    (837
    )
    
    
    4,526
    
    
    
    (474
    )Total
    
    $
    6,148,097
    
    
    $
    (1,205,438
    )
    
    $
    6,732,240
    
    
    $
    (1,649,847
    )
  
    
    decreased market liquidity and credit quality concerns of assets held by banking
institutions,
    
    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 from weaker operating results in the manufacturing sector, and
    
    increased credit spreads and defaults in collateralized debt obligations.
  Mortgage and Asset-Backed Securities
  46




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
   Mortgage and Asset-Backed Securities by Type
 June 30, 2009Percent of FixedAmortized Cost
    
    
    Par Value
    
    
    Carrying Value
    
    
    Maturities(Dollars in thousands)Residential mortgage-backed securities:Sequential
    
    $
    1,241,414
    
    
    $
    1,260,547
    
    
    $
    1,100,156
    
    
    
    11.9
    %Pass-through
    
    
    306,338
    
    
    
    297,882
    
    
    
    307,680
    
    
    
    3.3Planned and targeted amortization class
    
    
    455,011
    
    
    
    457,811
    
    
    
    409,187
    
    
    
    4.4Other
    
    
    39,749
    
    
    
    39,832
    
    
    
    32,358
    
    
    
    0.4Total residential mortgage-backed securities
    
    
    2,042,512
    
    
    
    2,056,072
    
    
    
    1,849,381
    
    
    
    20.0Commercial mortgage-backed securities
    
    
    743,499
    
    
    
    762,060
    
    
    
    614,057
    
    
    
    6.6Other asset-backed securities
    
    
    212,368
    
    
    
    262,363
    
    
    
    118,514
    
    
    
    1.3Total mortgage and asset-backed securities
    
    $
    2,998,379
    
    
    $
    3,080,495
    
    
    $
    2,581,952
    
    
    
    27.9
    %
 December 31, 2008Percent of FixedAmortized Cost
    
    
    Par Value
    
    
    Carrying 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
    %
  47




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
    Mortgage and Asset-Backed Securities by Collateral Type
 June 30, 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
    
    $
    682,172
    
    
    $
    696,500
    
    
    
    7.6
    %
    
    $
    557,311
    
    
    $
    579,489
    
    
    
    6.5
    %Prime
    
    
    985,782
    
    
    
    863,253
    
    
    
    9.3
    
    
    
    1,068,716
    
    
    
    913,772
    
    
    
    10.2Alt-A
    
    
    537,057
    
    
    
    374,121
    
    
    
    4.0
    
    
    
    524,264
    
    
    
    397,556
    
    
    
    4.5Subprime
    
    
    30,126
    
    
    
    18,977
    
    
    
    0.2
    
    
    
    30,133
    
    
    
    20,311
    
    
    
    0.2Commercial mortgage
    
    
    743,499
    
    
    
    614,057
    
    
    
    6.6
    
    
    
    799,546
    
    
    
    640,236
    
    
    
    7.1Non-mortgage
    
    
    19,743
    
    
    
    15,044
    
    
    
    0.2
    
    
    
    22,220
    
    
    
    18,405
    
    
    
    0.2Total
    
    $
    2,998,379
    
    
    $
    2,581,952
    
    
    
    27.9
    %
    
    $
    3,002,190
    
    
    $
    2,569,769
    
    
    
    28.7
    %
  Residential Mortgage-Backed Securities by Collateral Type and Origination Year
 June 30, 2009Government & Prime
    
    
    Alt-A
    
    
    TotalAmortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    CarryingCost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost
    
    
    Value(Dollars in thousands)2009
    
    $
    200,609
    
    
    $
    199,438
    
    
    $
    
    
    
    $
    
    
    
    $
    200,609
    
    
    $
    199,4382008
    
    
    124,281
    
    
    
    128,058
    
    
    
    
    
    
    
    
    
    
    
    124,281
    
    
    
    128,0582007
    
    
    72,091
    
    
    
    64,145
    
    
    
    60,028
    
    
    
    29,795
    
    
    
    132,119
    
    
    
    93,9402006
    
    
    86,189
    
    
    
    67,688
    
    
    
    22,437
    
    
    
    9,771
    
    
    
    108,626
    
    
    
    77,4592005
    
    
    48,465
    
    
    
    47,690
    
    
    
    
    
    
    
    
    
    
    
    48,465
    
    
    
    47,6902004 and prior
    
    
    1,113,590
    
    
    
    1,044,478
    
    
    
    314,822
    
    
    
    258,318
    
    
    
    1,428,412
    
    
    
    1,302,796Total
    
    $
    1,645,225
    
    
    $
    1,551,497
    
    
    $
    397,287
    
    
    $
    297,884
    
    
    $
    2,042,512
    
    
    $
    1,849,381
 48




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 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. Residential Mortgage-Backed Securities by Rating
 June 30, 2009
    
    
    December 31, 2008Carrying Value
    
    
    Percent of 
Total
    
    
    Carrying Value
    
    
    Percent of 
Total(Dollars in thousands)AAA
    
    $
    1,673,549
    
    
    
    90.5
    %
    
    $
    1,721,046
    
    
    
    96.2
    %AA
    
    
    60,874
    
    
    
    3.3
    
    
    
    3,462
    
    
    
    0.2A
    
    
    46,404
    
    
    
    2.5
    
    
    
    24,121
    
    
    
    1.3BBB
    
    
    3,045
    
    
    
    0.2
    
    
    
    7,281
    
    
    
    0.4BB
    
    
    15,560
    
    
    
    0.8
    
    
    
    17,326
    
    
    
    1.0B
    
    
    30,217
    
    
    
    1.6
    
    
    
    16,453
    
    
    
    0.9CCC
    
    
    19,732
    
    
    
    1.1
    
    
    
    
    
    
    
    Total
    
    $
    1,849,381
    
    
    
    100.0
    %
    
    $
    1,789,689
    
    
    
    100.0
    %
 Commercial Mortgage-Backed Securities by Origination Year
 June 30, 2009
    
    
    December 31, 2008Amortized Cost
    
    
    Carrying Value
    
    
    Amortized Cost
    
    
    Carrying Value(Dollars in thousands)2008
    
    $
    192,185
    
    
    $
    194,370
    
    
    $
    197,725
    
    
    $
    196,9082007
    
    
    181,037
    
    
    
    114,505
    
    
    
    194,169
    
    
    
    114,8162006
    
    
    144,060
    
    
    
    98,899
    
    
    
    170,452
    
    
    
    117,6062005
    
    
    56,499
    
    
    
    43,888
    
    
    
    56,220
    
    
    
    41,8772004 and prior
    
    
    169,718
    
    
    
    162,395
    
    
    
    180,980
    
    
    
    169,029Total
    
    $
    743,499
    
    
    $
    614,057
    
    
    $
    799,546
    
    
    $
    640,236
 49




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Commercial Mortgage-Backed Securities by Rating
 June 30, 2009
    
    
    December 31, 2008Carrying Value
    
    
    Percent of Total
    
    
    Carrying Value
    
    
    Percent of Total(Dollars in thousands)GNMA
    
    $
    339,058
    
    
    
    55.2
    %
    
    $
    386,634
    
    
    
    60.4
    %FNMA
    
    
    15,613
    
    
    
    2.5
    
    
    
    15,611
    
    
    
    2.4AAA
Generic AAA
    
    
    60,591
    
    
    
    9.9
    
    
    
    1,174
    
    
    
    0.2Super Senior AAA
    
    
    102,175
    
    
    
    16.6
    
    
    
    103,951
    
    
    
    16.2Mezzanine AAA
    
    
    18,616
    
    
    
    3.0
    
    
    
    62,823
    
    
    
    9.8Junior AAA
    
    
    42,327
    
    
    
    6.9
    
    
    
    41,662
    
    
    
    6.5Total AAA
    
    
    223,709
    
    
    
    36.4
    
    
    
    209,610
    
    
    
    32.7AA
    
    
    15,131
    
    
    
    2.5
    
    
    
    14,682
    
    
    
    2.3A
    
    
    12,710
    
    
    
    2.1
    
    
    
    3,870
    
    
    
    0.6BBB
    
    
    
    
    
    
    
    
    
    
    9,349
    
    
    
    1.5B
    
    
    7,476
    
    
    
    1.2
    
    
    
    
    
    
    
    CCC
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    0.1CC
    
    
    360
    
    
    
    0.1
    
    
    
    
    
    
    
    Total
    
    $
    614,057
    
    
    
    100.0
    %
    
    $
    640,236
    
    
    
    100.0
    %
   Other Asset-Backed Securities by Collateral Type and Origination Year
 June 30, 2009Government & Prime
    
    
    Alt-A
    
    
    Subprime
    
    
    Non-Mortgage
    
    
    TotalAmortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    CarryingCost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost
    
    
    Value
    
    
    Cost
    
    
    Value(Dollars in thousands)2007
    
    $
    9,985
    
    
    $
    1,688
    
    
    $
    18,996
    
    
    $
    7,627
    
    
    $
    
    
    
    $
    
    
    
    $
    7,078
    
    
    $
    5,383
    
    
    $
    36,059
    
    
    $
    14,6982006
    
    
    9,737
    
    
    
    3,519
    
    
    
    82,770
    
    
    
    40,858
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92,507
    
    
    
    44,3772005
    
    
    
    
    
    
    
    
    
    
    26,428
    
    
    
    21,119
    
    
    
    30,126
    
    
    
    18,977
    
    
    
    
    
    
    
    
    
    
    
    56,554
    
    
    
    40,0962004 and prior
    
    
    3,007
    
    
    
    3,049
    
    
    
    11,576
    
    
    
    6,633
    
    
    
    
    
    
    
    
    
    
    
    12,665
    
    
    
    9,661
    
    
    
    27,248
    
    
    
    19,343Total
    
    $
    22,729
    
    
    $
    8,256
    
    
    $
    139,770
    
    
    $
    76,237
    
    
    $
    30,126
    
    
    $
    18,977
    
    
    $
    19,743
    
    
    $
    15,044
    
    
    $
    212,368
    
    
    $
    118,514
 December 31, 2008Government & Prime
    
    
    Alt-A
    
    
    Subprime
    
    
    Non-Mortgage
    
    
    TotalAmortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    Carrying
    
    
    Amortized
    
    
    CarryingCost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost (1)
    
    
    Value
    
    
    Cost
    
    
    Value
    
    
    Cost
    
    
    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
 50




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 
 (1)
    
    Insurance on 2006 Alt-A issues is provided by Financial Guaranty Insurance Co. (47% in 2009
and 38% in 2008) and AMBAC Assurance Corporation (28% in 2009 and 34% in 2008). Insurance on
2007 Alt-A issues is provided by AMBAC Assurance Corporation (53% in 2009 and 57% in 2008),
MBIA Insurance Corporation (26% in 2009 and 29% in 2008) and Financial Guaranty Insurance Co.
(21% 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
 June 30, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)AAA
    
    $
    44,822
    
    
    
    37.8
    %
    
    $
    59,900
    
    
    
    42.8
    %AA
    
    
    919
    
    
    
    0.8
    
    
    
    18,852
    
    
    
    13.5A
    
    
    12,129
    
    
    
    10.2
    
    
    
    3,015
    
    
    
    2.2BBB
    
    
    11,390
    
    
    
    9.6
    
    
    
    36,337
    
    
    
    26.0BB
    
    
    35,524
    
    
    
    30.0
    
    
    
    11,666
    
    
    
    8.3B
    
    
    5,597
    
    
    
    4.7
    
    
    
    2,615
    
    
    
    1.9CCC
    
    
    2,665
    
    
    
    2.2
    
    
    
    4,894
    
    
    
    3.5CC
    
    
    2,800
    
    
    
    2.4
    
    
    
    2,565
    
    
    
    1.8C
    
    
    2,668
    
    
    
    2.3
    
    
    
    
    
    
    
    Total
    
    $
    118,514
    
    
    
    100.0
    %
    
    $
    139,844
    
    
    
    100.0
    %
   51




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Residential Mortgage-Backed Securities and Other Asset-Backed Securities by Insurance
 June 30, 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
    
    BBB
    
    $
    
    
    
    $
    16,167
    
    
    $
    16,167
    
    
    $
    
    
    
    $
    18,380
    
    
    $
    18,380Assured Guaranty Ltd
    
    AAA
    
    
    7,971
    
    
    
    
    
    
    
    7,971
    
    
    
    11,608
    
    
    
    
    
    
    
    11,608Financial Guaranty
Insurance Co.
    
    CC
    
    
    
    
    
    
    21,657
    
    
    
    21,657
    
    
    
    
    
    
    
    27,239
    
    
    
    27,239MBIA Insurance
Corporation
    
    BBB
    
    
    14,939
    
    
    
    9,648
    
    
    
    24,587
    
    
    
    15,762
    
    
    
    10,558
    
    
    
    26,320Total with insurance
    
    
    
    
    
    
    22,910
    
    
    
    47,472
    
    
    
    70,382
    
    
    
    27,370
    
    
    
    56,177
    
    
    
    83,547Uninsured:GNMA
    
    
    
    
    
    
    364,818
    
    
    
    
    
    
    
    364,818
    
    
    
    187,682
    
    
    
    
    
    
    
    187,682FHLMC
    
    
    
    
    
    
    234,279
    
    
    
    2,983
    
    
    
    237,262
    
    
    
    257,810
    
    
    
    3,226
    
    
    
    261,036FNMA
    
    
    
    
    
    
    94,333
    
    
    
    66
    
    
    
    94,399
    
    
    
    130,613
    
    
    
    135
    
    
    
    130,748Other
    
    
    
    
    
    
    1,133,041
    
    
    
    67,993
    
    
    
    1,201,034
    
    
    
    1,186,215
    
    
    
    80,306
    
    
    
    1,266,521Total
    
    
    
    
    
    $
    1,849,381
    
    
    $
    118,514
    
    
    $
    1,967,895
    
    
    $
    1,789,690
    
    
    $
    139,844
    
    
    $
    1,929,534
 
 (1)
    
    Rating in effect as of June 30, 2009. Collateralized Debt Obligations
 State, Municipal and Other Government Securities
 52




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 State, Municipal and Other Government Holdings by Insurance and Rating
 June 30, 2009Insured Bonds
    
    
    Total BondsBy Underlying
    
    
    By Underlying
    
    
    Insured Bonds byUninsured Bonds
    
    
    Issue Rating
    
    
    Issue Rating
    
    
    Insurer RatingCarrying
    
    
    % of
    
    
    Carrying
    
    
    % of
    
    
    Carrying
    
    
    % of
    
    
    Carrying
    
    
    % ofRating
    
    Value
    
    
    Total
    
    
    Value
    
    
    Total
    
    
    Value
    
    
    Total
    
    
    Value
    
    
    Total(Dollars in thousands)AAA (1)
    
    $
    166,173
    
    
    
    43.2
    %
    
    $
    13,830
    
    
    
    1.4
    %
    
    $
    180,003
    
    
    
    13.1
    %
    
    $
    173,192
    
    
    
    17.6
    %AA
    
    
    175,442
    
    
    
    45.6
    
    
    
    330,146
    
    
    
    33.5
    
    
    
    505,588
    
    
    
    36.9
    
    
    
    338,858
    
    
    
    34.4A
    
    
    21,722
    
    
    
    5.6
    
    
    
    368,085
    
    
    
    37.5
    
    
    
    389,807
    
    
    
    28.5
    
    
    
    330,212
    
    
    
    33.5BBB
    
    
    21,679
    
    
    
    5.6
    
    
    
    45,447
    
    
    
    4.6
    
    
    
    67,126
    
    
    
    4.9
    
    
    
    138,655
    
    
    
    14.1B
    
    
    
    
    
    
    
    
    
    
    6,247
    
    
    
    0.6
    
    
    
    6,247
    
    
    
    0.5
    
    
    
    
    
    
    
    NR (2)
    
    
    
    
    
    
    
    
    
    
    220,807
    
    
    
    22.4
    
    
    
    220,807
    
    
    
    16.1
    
    
    
    3,645
    
    
    
    0.4$
    385,016
    
    
    
    100.0
    %
    
    $
    984,562
    
    
    
    100.0
    %
    
    $
    1,369,578
    
    
    
    100.0
    %
    
    $
    984,562
    
    
    
    100.0
    %
 December 31, 2008Insured Bonds
    
    
    Total Bonds byBy Underlying
    
    
    By Underlying
    
    
    Insured Bonds byUninsured Bonds
    
    
    Issue Rating
    
    
    Issue Rating
    
    
    Insurer RatingRating
    
    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
    %
    
    $
    4,850
    
    
    
    0.5
    %
    
    $
    171,679
    
    
    
    13.1
    %
    
    $
    198,432
    
    
    
    20.5
    %AA
    
    
    119,324
    
    
    
    34.8
    
    
    
    319,786
    
    
    
    33.0
    
    
    
    439,110
    
    
    
    33.5
    
    
    
    454,193
    
    
    
    46.9A
    
    
    29,505
    
    
    
    8.6
    
    
    
    361,165
    
    
    
    37.4
    
    
    
    390,670
    
    
    
    29.8
    
    
    
    310,695
    
    
    
    32.1BBB
    
    
    27,039
    
    
    
    7.9
    
    
    
    42,630
    
    
    
    4.4
    
    
    
    69,669
    
    
    
    5.3
    
    
    
    4,609
    
    
    
    0.5NR (2)
    
    
    
    
    
    
    
    
    
    
    239,498
    
    
    
    24.7
    
    
    
    239,498
    
    
    
    18.3
    
    
    
    
    
    
    
    $
    342,697
    
    
    
    100.0
    %
    
    $
    967,929
    
    
    
    100.0
    %
    
    $
    1,310,626
    
    
    
    100.0
    %
    
    $
    967,929
    
    
    
    100.0
    %
 
 (1)
    
    AAA uninsured bonds includes $49.4 million in 2009 and $57.7 million in 2008 of bonds with
GNMA and/or FNMA collateral.(2)
    
    No formal public rating issued. Approximately 59% 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 28% in 2009 and 29% in 2008 are revenue obligation bonds, and
approximately 13% in 2009 and 2008 are general obligation bonds. Insurance on these bonds is
provided by AMBAC Assurance Corporation (62% in 2009 and 61% in 2008), Financial Security
Assurance, Inc. (17% in 2009 and 16% in 2008), National Insurance Corporation (formerly MBIA
Insurance Corporation) (15% in 2009 and 17% in 2008), and Financial Guaranty Insurance Co.
(Reinsured by National Insurance Corporation) (6% in 2009 and 5% in 2008). Equity Securities
  53




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Mortgage Loans
  Mortgage Loans by Collateral Type
 June 30, 2009
    
    
    December 31, 2008Percent of
    
    
    
    
    
    
    Percent ofCollateral Type
    
    Carrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)Retail
    
    $
    459,654
    
    
    
    34.4
    %
    
    $
    467,942
    
    
    
    33.8
    %Office
    
    
    437,401
    
    
    
    32.7
    
    
    
    466,068
    
    
    
    33.7Industrial
    
    
    406,854
    
    
    
    30.5
    
    
    
    418,050
    
    
    
    30.3Other
    
    
    32,256
    
    
    
    2.4
    
    
    
    29,794
    
    
    
    2.2Total
    
    $
    1,336,165
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
 Mortgage Loans by Geographic Location within the United States
 June 30, 2009
    
    
    December 31, 2008Region of the United States
    
    Carrying Value
    
    
    Percent of 
Total
    
    
    Carrying Value
    
    
    Percent of 
Total(Dollars in thousands)South Atlantic
    
    $
    336,681
    
    
    
    25.2
    %
    
    $
    341,728
    
    
    
    24.8
    %East North Central
    
    
    264,372
    
    
    
    19.8
    
    
    
    269,876
    
    
    
    19.5Pacific
    
    
    250,528
    
    
    
    18.7
    
    
    
    261,581
    
    
    
    18.9West North Central
    
    
    169,077
    
    
    
    12.7
    
    
    
    172,283
    
    
    
    12.5Mountain
    
    
    123,384
    
    
    
    9.2
    
    
    
    132,649
    
    
    
    9.6West South Central
    
    
    67,090
    
    
    
    5.0
    
    
    
    69,582
    
    
    
    5.0Other
    
    
    125,033
    
    
    
    9.4
    
    
    
    134,155
    
    
    
    9.7Total
    
    $
    1,336,165
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
 Mortgage Loans by Loan-to-Value Ratio (1)
 June 30, 2009
    
    
    December 31, 2008Gross
    
    
    Percent of
    
    
    Gross
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)0% - 50%
    
    $
    335,791
    
    
    
    25.1
    %
    
    $
    330,144
    
    
    
    23.9
    %50% - 60%
    
    
    287,957
    
    
    
    21.6
    
    
    
    269,816
    
    
    
    19.660% - 70%
    
    
    452,323
    
    
    
    33.8
    
    
    
    474,436
    
    
    
    34.370% - 80%
    
    
    217,967
    
    
    
    16.3
    
    
    
    267,159
    
    
    
    19.380% - 90%
    
    
    36,812
    
    
    
    2.8
    
    
    
    34,904
    
    
    
    2.590% - 100%
    
    
    5,315
    
    
    
    0.4
    
    
    
    5,395
    
    
    
    0.4Total
    
    $
    1,336,165
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
 
 (1)
    
    Loan-to-Value Ratio at origination 54




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Mortgage Loans by Year of Origination
 June 30, 2009
    
    
    December 31, 2008Gross
    
    
    Percent of
    
    
    Gross
    
    
    Percent ofCarrying Value
    
    
    Total
    
    
    Carrying Value
    
    
    Total(Dollars in thousands)2008
    
    $
    203,878
    
    
    
    15.3
    %
    
    $
    205,925
    
    
    
    14.9
    %2007
    
    
    288,168
    
    
    
    21.6
    
    
    
    291,261
    
    
    
    21.12006
    
    
    190,620
    
    
    
    14.3
    
    
    
    197,153
    
    
    
    14.22005
    
    
    134,151
    
    
    
    10.0
    
    
    
    136,753
    
    
    
    9.92004 and prior
    
    
    519,348
    
    
    
    38.8
    
    
    
    550,762
    
    
    
    39.9Total
    
    $
    1,336,165
    
    
    
    100.0
    %
    
    $
    1,381,854
    
    
    
    100.0
    %
  Derivative Instruments
  Asset-Liability Management
  Collateral Related to Securities Lending and Other Transactions
  55




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
 Other Assets
  Liabilities
  Stockholders Equity
   Liquidity and Capital Resources
 Cash Flows
  Sources and Uses of Capital Resources
  56




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
       57




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
     Contractual Obligations
  Recently Adopted Accounting Changes
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
  58




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 2009
  
 PART II. OTHER INFORMATION
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   For
    
    WithheldJerry L. Chicoine
    
    
    34,929,885
    
    
    
    1,890,458Tim H. Gill
    
    
    32,737,402
    
    
    
    4,082,941Robert H. Hanson
    
    
    34,856,613
    
    
    
    1,963,730Paul E. Larson
    
    
    31,761,532
    
    
    
    5,058,811Edward W. Mehrer
    
    
    35,652,261
    
    
    
    1,168,082John E. Walker
    
    
    32,875,005
    
    
    
    3,945,338
 (ii)
    
    Election of the following Class B directors to the Companys Board of
Directors:
 For
    
    WithheldSteve L. Baccus
    
    
    1,170,590
    
    
    
    22,300Craig D. Hill
    
    
    1,170,590
    
    
    
    22,300Craig A. Lang
    
    
    1,170,590
    
    
    
    22,300Keith R. Olsen
    
    
    1,170,590
    
    
    
    22,300Kevin G. Rogers
    
    
    1,170,590
    
    
    
    22,300
 (iii)
    
    Approval of the appointment of Ernst & Young LLP as independent auditors
for the Company for the year 2009: Shareholders cast 36,891,902 votes for and
982,532 votes against the appointment of Ernst & Young LLP. There were 48,799
abstentions and no broker non-votes.
 
 ITEM 6. EXHIBITS
  3(ii)(a)
    
    Second Restated and Amended Bylaws, as amended through February 18, 200910.4(a)
    
    Forbearance letter agreement between FBL Financial Group, Inc. and Iowa
Farm Bureau Federation10.29(a)
    
    Bonus Metrics Schedule dated June 29, 2009 for 2009 Restricted Stock
Agreement between James E. Hohmann and FBL Financial Group dated April
29, 2009* (Confidential treatment has been requested for portions of
this exhibit and confidential portions have been filed with the
Securities and Exchange Commission.)10.30
    
    Termination Agreement and Release of All Claims, by and between James W.
Noyce and FBL Financial Group, Inc., effective June 10, 2009*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
 
 *
    
    exhibit relates to a compensatory plan for management or directors 59




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##### Table of Contents



FBL
Financial Group, Inc.
    
    June 30, 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) 60