FBL Financial Group Inc. in West Des Moines, Iowa, said Friday that its coinsurance agreement with American Equity Investment Life Insurance Co. is suspended.
Beginning Aug. 1, it said, FBL would no longer assume new business from American Equity. During the coinsurance agreement -- from Aug. 1, 2001, through June 30, 2004 -- FBL assumed $2.1 billion of premiums from American Equity.
Under the agreement, FBL assumed certain fixed and index annuity business written by American Equity. The premiums already assumed by FBL will be treated as a closed block of business and are expected to continue generating profits and adding to FBL’s earnings per share in the future.
“The coinsurance agreement has been beneficial for both companies,” FBL chief executive officer Bill Oddy said in a press release. “FBL has been able to increase its asset base and its earnings from the business we assumed, while American Equity has been able to continue to grow at times when they were otherwise capital constrained.”
“The suspension of the coinsurance agreement is timely for both companies,” he said, “as we at FBL experience growth by broadening our distribution through our subsidiary EquiTrust Life Insurance Co. and for American Equity because of its enhanced capital position following its IPO.”
FBL Financial Group is a holding company whose primary operating subsidiaries are EquiTrust and Farm Bureau Life Insurance Co. In addition, FBL manages, for a fee, all aspects of three Farm Bureau-affiliated property/casualty insurance companies.
