To recapture a block of annuities and life insurance policies

FBL Financial Group has announced an agreement with EMC National Life (EMCNL), in which EMCNL intends to recapture a block of annuities and life insurance policies with reserves totaling $250m.

The effective date for this transaction is October 1, 2009 with a planned closing by October 30, 2009.

As a result of this recapture transaction, FBL Financial Group subsidiary EquiTrust Life Insurance expects to record an after-tax gain of $9m on a generally accepted accounting principles basis and an after-tax gain of $20m on a statutory basis. The forgone after-tax GAAP earnings from this block of business, after reinvestment of proceeds, are approximately $0.7m per quarter.

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

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