UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark one)
[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2011
or
[ ]	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

(Exact name of registrant as specified in its charter)
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)
(515) 225-5400
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A common stock, without par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ] Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of June 30, 2011, the aggregate market value of the registrant's Class A and B Common Stock held by non-affiliates of the registrant was $434,918,995 based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date:
Title of each class	Outstanding at February 14, 2012
Class A Common Stock, without par value	29,512,058
Class B Common Stock, without par value	1,192,990
DOCUMENTS INCORPORATED BY REFERENCE
Document	Parts Into Which Incorporated
Proxy statement for annual shareholders meeting on May 16, 2012	Part III

FBL FINANCIAL GROUP, INC.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2011
TABLE OF CONTENTS
PART I.
	Cautionary Statement Regarding Forward Looking Information	1
Item 1.	Business	2
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	20
Item 3.	Legal Proceedings	20
Item 4.	[Removed and Reserved]	20
PART II.
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Consolidated Financial Data	24
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 8.	Consolidated Financial Statements and Supplementary Data	62
	Management's Report on Internal Control Over Financial Reporting	62
	Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	62
	Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements	63
	Consolidated Balance Sheets	64
	Consolidated Statements of Operations	66
	Consolidated Statements of Changes in Stockholders' Equity	67
	Consolidated Statements of Cash Flows	69
	Notes to Consolidated Financial Statements	71
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	117
Item 9A.	Controls and Procedures	117
Item 9B.	Other Information	118
PART III.
	The information required by Items 10 through 14 is incorporated by reference from our definitive proxy statement to be filed with the Commission pursuant to Regulation 14A within 120 days after December 31, 2011.
PART IV.
Item 15.	Exhibits and Financial Statement Schedules	118
	SIGNATURES	122
	Report of Independent Registered Public Accounting Firm on Schedules	123
	Schedule I - Summary of Investments - Other than Investments in Related Parties	124
	Schedule II - Condensed Financial Information of Registrant	125
	Schedule III - Supplementary Insurance Information	129
	Schedule IV - Reinsurance	131

Cautionary Statement Regarding Forward Looking Information

This Form 10-K 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. The risks and uncertainties that may affect the operations, performance, development and results of our business include but are not limited to the following.

• Difficult conditions in the financial markets and the economy may materially adversely affect our business and results of operations.

• Adverse financial market conditions may significantly affect our liquidity, access to capital and cost of capital.

• Our valuation of fixed maturity securities may include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may materially adversely affect our results of operations or financial condition.

• Our investment portfolio is subject to credit quality risks which may diminish the value of our invested assets and affect our profitability and reported book value per share.

• Changing interest rates, market volatility and general economic conditions affect the risks and the returns on both our products and our investment portfolio.

• We face competition from companies having greater financial resources, more advanced technology systems, broader arrays of products, higher ratings and stronger financial performance, which may impair our ability to retain existing customers, attract new customers and maintain our profitability and financial strength.

• As a holding company, we depend on our subsidiaries for funds to meet our obligations, but our life insurance subsidiary's ability to make distributions to us is limited by law, and could be affected by minimum risk-based capital requirements.

• A significant ratings downgrade may have a material adverse effect on our business.

• All segments of our business are highly regulated and these regulations or changes in them could affect our profitability.

• Inaccuracies in assumptions regarding future persistency, mortality and interest rates used in pricing our products and calculating reserve amounts and deferred acquisition costs could have a material adverse impact on our financial results.

• We may be required to accelerate the amortization of deferred acquisition costs, which could adversely affect our results of operations or financial condition.

• Our earnings are influenced by our claims experience, which is difficult to estimate. If our future claims experience does not match our pricing assumptions or past results, our earnings could be materially adversely affected.

• Our reinsurance program involves risks because we remain liable with respect to the liabilities ceded to reinsurers if the reinsurers fail to meet the obligations assumed by them.

• Our business is highly dependent on our relationships with Farm Bureau organizations and could be adversely affected if those relationships became impaired.

• Our relationship with Farm Bureau organizations could result in conflicts of interests.

• Changes in federal tax laws may affect sales of our products and profitability.

• Our ability to maintain competitive costs is dependent upon the level of new sales and persistency of existing business.

• If we are unable to attract and retain agents, sales of our products and services may be reduced.

• Attracting and retaining employees who are key to our business is critical to our growth and success.

• Success of our business depends in part on effective information technology systems and on continuing to develop and implement improvements.

• We face risks relating to litigation, including the costs of such litigation, management distraction and the potential for damage awards, which may adversely impact our business.

See Part 1A, Risk Factors, for additional information.

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PART I

ITEM 1. BUSINESS

General

FBL Financial Group, Inc. (we or the Company) sells individual life insurance and annuity products principally under the consumer brand name Farm Bureau Financial Services. This brand identity is represented by the distribution channel of our subsidiary Farm Bureau Life Insurance Company (Farm Bureau Life). As of December 31, 2011, this distribution channel consisted of 1,937 exclusive agents and agency managers. These agents and agency managers sell our products in the Midwestern and Western sections of the United States.

FBL Financial Group, Inc. was incorporated in Iowa in October 1993. Its life insurance subsidiary, Farm Bureau Life, began operations in 1945. Several other subsidiaries support various functional areas and affiliates by providing investment advisory and marketing and distribution services. In addition, we manage all aspects of two Farm Bureau affiliated property-casualty insurance companies (Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company) which operate predominately in eight states in the Midwest and West.

On December 30, 2011, we completed the sale of EquiTrust Life Insurance Company, in an all-cash transaction. As a result, the results of this business are reported as discontinued operations. See Note 2 to our consolidated financial statements included in Item 8 for a more detailed description of the sale. In addition, during 2011, we reorganized the portfolios of EquiTrust Series Fund, Inc. and EquiTrust Variable Insurance Series Fund into comparable mutual funds managed by Federated Investors, Inc.

FBL Financial Group, Inc. Business and Distribution Channel

FBL Financial Group, Inc.

COMPANY	Farm Bureau Life Insurance Company	Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company
RELATIONSHIP	Wholly-owned subsidiary	Managed by FBL Financial Group. Underwriting results do not impact FBL Financial Group's results
BRAND
DISTRIBUTION	1,937 exclusive Farm Bureau agents and agency managers	1,225 exclusive Farm Bureau agents and agency managers (included under the 1,937 Farm Bureau Life agents)
PRODUCTS	A comprehensive line of life insurance, annuity and investment products	A full line of personal and commercial property-casualty insurance products
TERRITORY	14 Midwestern and  Western states	Arizona, Iowa, Kansas, Minnesota, Nebraska, New Mexico, South Dakota and Utah, and other states for nonstandard auto insurance

Investor information, including electronic versions of periodic reports filed on Forms 10-K, 10-Q and 8-K, and proxy material, are available free of charge through the Financial Information section of our website at www.fblfinancial.com. These documents are posted to our website immediately after they are filed. Also available on our website are many corporate governance documents including a code of ethics for the Chief Executive Officer and senior financial officers, committee charters, corporate governance guidelines, director profiles and more. Product information may be found on our consumer website, www.fbfs.com.

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Business Strategy

Our core business strategies are defined by our target market, which is served by our life insurance subsidiary, Farm Bureau Life Insurance Company.

Our 1,937 Farm Bureau Life agents are multi-line agents who sell both property-casualty insurance products and life insurance and investment products under the Farm Bureau name. Having multi-line agents enhances our ability to develop a more comprehensive relationship with our customers and increases our ability to cross sell our life insurance and investment products to the pool of Farm Bureau property-casualty customers.

The Farm Bureau business and distribution channel is our foundation and we are defined by our service to this niche marketplace. We capitalize on the Farm Bureau brand to grow our business and build upon our agricultural and rural market leadership.

We focus on needs-based selling and have a broad portfolio of life insurance and annuity products so that we have attractive products available to satisfy the needs of our agents and customers. Sales within our Farm Bureau Life target marketplace are the result of perceived good value, excellent customer service and a trusted relationship with a Farm Bureau agent.

Because of their multi-line nature, our Farm Bureau Life agents focus on cross selling life insurance products to Farm Bureau members who already own a property-casualty policy issued by Farm Bureau affiliated property-casualty companies. For example, in the eight-state region where we manage the affiliated property-casualty insurance companies and related field force (Arizona, Iowa, Kansas, Minnesota, Nebraska, New Mexico, South Dakota and Utah), 23% of our property-casualty policyholders also own a Farm Bureau Life annuity or life product. We are considered among the best-in-industry in cross sales rates. This percentage is and has historically been higher than the industry average for multi-line exclusive agents, which is 12% according to the most recent research by Life Insurance and Market Research Association (LIMRA). We believe there is further opportunity for growth from cross-selling as 71% of the Farm Bureau members in the eight-state region have a Farm Bureau property-casualty insurance product, while only 20% of Farm Bureau members in the eight-state region have a life insurance product with us.

We provide our agents with sales materials, the necessary training and a high level of sales support. In addition, throughout our marketing territory, certain agents are life and investment specialists who work as a resource to help their fellow agents with cross selling techniques and client needs analysis.

Our sales model is designed so that our agents act like entrepreneurial business owners with a retail financial services business. Under this model our agents have sales and service associates who assist them and provide a variety of support for insurance sales and clients. While our agent count has not changed significantly over time, our production per agent has increased.

While we underwrite a vast majority of the products available for sale by the Farm Bureau agents, we broker products sold by other carriers when we do not have the expertise, ratings or scale to efficiently compete in the marketplace. Examples of brokered products include long-term care insurance, health insurance and last survivor life policies. In addition, in 2010, we discontinued underwriting variable products and began selling products manufactured by another carrier. We earn fees from the sale of brokered products, a portion of which is passed on to the agents as commissions for the underlying sales.

Farm Bureau Life's growth has been augmented by our long and successful history of being a consolidator among Farm Bureau affiliated insurance companies. This has allowed us to grow to an operation covering 14 states in the Midwest and West. While we believe further consolidation makes sense, this is a long-term strategy. By focusing on maintaining solid relationships with the leaders of these companies and the Farm Bureau organizations, we are prepared to react when opportunities arise.

Marketing and Distribution

Market Area

Sales through our distribution channel are currently conducted in 14 states which we characterize as follows: multi-line states (we own the Farm Bureau affiliated life company and manage the Farm Bureau affiliated property-casualty companies) - Arizona, Iowa, Kansas, Minnesota, Nebraska, New Mexico, South Dakota and Utah; and life only states (we own the Farm Bureau affiliated life company and non-owned/non-managed Farm Bureau affiliated property-casualty companies manage the exclusive multi-line agents) - Idaho, Montana, North Dakota, Oklahoma, Wisconsin and Wyoming.

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Our target market is Farm Bureau members and "Middle America" in our 14-state territory. We traditionally have been very strong in rural and small town markets and are growing our presence in small and mid-metro markets where we believe there are significant life and annuity opportunities. This target market represents a relatively financially conservative and stable customer base. The financial needs of our target market tend to focus on security, insurance needs and retirement savings.

Affiliation with Farm Bureau

Many of our customers are members of Farm Bureau organizations affiliated with the American Farm Bureau Federation (American Farm Bureau). The American Farm Bureau is the nation's largest grass roots farm and ranch organization and has a current membership of 6.3 million member families. In order to market insurance products in a given state using the "Farm Bureau" and "FB" designations, related trademarks and service marks, a company must have an agreement with the state's Farm Bureau organization. Generally, these marketing rights have only been granted to companies owned by or closely affiliated with Farm Bureau organizations. For each of the states in our Farm Bureau marketing territory, we have the right to use the "Farm Bureau" name and "FB" logo for marketing life insurance and investment products.

All of the state Farm Bureau organizations in our 14-state marketing area are associated with the American Farm Bureau. The primary goal of the American Farm Bureau is to be the unified national voice of agriculture, working through its grassroots organization to enhance and strengthen the lives of rural Americans and to build strong, prosperous agricultural communities. There are currently Farm Bureau organizations in all 50 states and Puerto Rico, each with their own distinctive mission and goals. Within each state, Farm Bureau is organized at the county level. Farm Bureau programs include policy development, government relations activities, leadership development and training, communications, market education classes, commodity conferences and young farmer activities. Member services provided by Farm Bureau vary by state but often include programs such as risk management, alternative energy development and guidance on enhancing profitability. Other benefits of membership include newspaper and magazine subscriptions, as well as savings in areas such as health care, entertainment and automobile rebates. In addition, members have access to theft and arson rewards, accidental death insurance, banking services, credit card programs, computerized farm accounting services, electronic information networks, feeder cattle procurement services, health care insurance, property-casualty insurance and financial services.

The American Farm Bureau may terminate our right to use the "Farm Bureau" and "FB" designations in our states (i) in the event of a material breach of the trademark license that we do not cure within 60 days, (ii) immediately in the event of termination by the American Farm Bureau of the state Farm Bureau's membership in the American Farm Bureau or (iii) in the event of a material breach of the state Farm Bureau organization's membership agreement with the American Farm Bureau, including by reason of the failure of the state Farm Bureau to cause us to adhere to the American Farm Bureau's policies.

We have royalty agreements with each state Farm Bureau organization in our Farm Bureau marketing territory giving us the right to use the Farm Bureau and FB designations in that particular state. Each state Farm Bureau organization in our Farm Bureau territory could terminate our right to use the Farm Bureau designations in that particular state without cause at the conclusion of the royalty agreements. The royalties paid to a particular state Farm Bureau organization are based on the sale of our products in the respective state. For 2011, royalty expense totaled approximately $2.0 million.

Our relationship with Farm Bureau provides a number of advantages. Farm Bureau organizations in our marketing territory tend to be well known and long established, have active memberships and provide a number of member benefits other than financial services. The strength of these organizations provides enhanced prestige and brand awareness for our products and increased access to Farm Bureau members, which results in a competitive advantage for us.

Our life insurance and investment products are available for sale to both members and non-members. Property-casualty products sold by the property-casualty insurance companies affiliated with Farm Bureau are available for sale to Farm Bureau members. Annual Farm Bureau memberships in our marketing territory average $60 and are available to individuals, families, partnerships or corporations.

We have service agreements with all of the Farm Bureau-affiliated property-casualty companies in our marketing area, pursuant to which the property-casualty companies provide certain services, which include recruiting and training the shared agency force that sells both property-casualty products for that company and life products for us. The service agreements have expiration dates through December 31, 2021. In 2011, we paid $9.7 million for the services provided under these agreements.

Our Advisory Committee, which consists of executives of the Farm Bureau property-casualty insurance companies in our marketing territory, assists us in our relationships with the property-casualty organizations and the Farm Bureau organization leaders in their respective states. The Advisory Committee meets on a regular basis to coordinate efforts and issues involving the agency force and other matters. The Advisory Committee is an important contributor to our success in marketing products

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through our Farm Bureau distribution system.

Royalty and property-casualty agreements vary in term and expiration date as shown below.

Royalty and Property-Casualty Service Agreements by State
State	Property-Casualty Service Agreement Expiration Date	Royalty Agreement Expiration Date	Percent of Farm Bureau Life 2011 First Year Premiums Collected
Iowa	December 31, 2015	December 31, 2033	26.4	%
Kansas	December 31, 2015	December 31, 2033	16.2
Wyoming	December 31, 2021	December 31, 2021	10.8
Oklahoma	December 31, 2014	December 31, 2014	9.7
Nebraska	December 31, 2015	December 31, 2033	6.4
Utah	December 31, 2015	December 31, 2033	5.4
Minnesota	December 31, 2015	December 31, 2033	4.6
Idaho	December 31, 2021	December 31, 2021	3.9
South Dakota	December 31, 2015	December 31, 2033	3.6
Montana	December 31, 2021	December 31, 2021	3.5
Arizona	December 31, 2015	December 31, 2033	3.0
New Mexico	December 31, 2015	December 31, 2033	2.6
Wisconsin	December 31, 2020	December 31, 2020	2.1
Colorado*	December 31, 2021	July 1, 2011	1.1
North Dakota	December 31, 2021	December 31, 2021	0.7
			100.0	%

* The royalty agreement with Colorado terminated on July 1, 2011. The existing block of Colorado business remains with Farm Bureau Life.

Agency Force

Our life insurance and annuity products are currently marketed throughout our 14-state marketing territory by an exclusive Farm Bureau agency force. We have a written contract with each member of our agency force. The contracts cover a number of topics including privacy, compensation payments and reserving our ownership of customer lists.

Sales activities of our agents focus on personal contact and on cross selling the multiple lines of products available through Farm Bureau affiliated companies. The Farm Bureau name recognition and access to Farm Bureau membership leads to additional customers, cross selling of additional insurance products and increased retention.

Our Farm Bureau Life agents are independent contractors and exclusive agents. In the multi-line states where we manage the Farm Bureau affiliated property-casualty companies, our agents are supervised by agency managers employed by the property-casualty companies which are under our direction. There are 1,225 agents and managers in our multi-line states, all of whom market a full range of our life insurance and annuity products. These agents and managers also market products for the property-casualty companies that we manage.

In our life only states, our life insurance and annuity products are marketed by agents and managers that we share with the property-casualty company affiliated with the Farm Bureau organization in that state. There are 712 agents and managers that market our life and annuity products on an exclusive basis and market the property-casualty products of that state's affiliated property-casualty companies. Agents, as well as agency managers, are independent contractors.

We are responsible for product and sales training for all lines of business in our multi-line states, and for training the agency force in life insurance products and sales methods in our life only states.

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We structure our agents' life products compensation system to encourage production and persistency. Agents receive commissions for new life insurance and annuity sales and service fees on premium payments in subsequent years. Production bonuses are paid based on the premium level of new life business written in the prior 12 months and the persistency of the business written by the agent. Persistency is a common measure used in life insurance, which measures the quality and the consistent payment of premiums, and is included in calculating the bonus to either increase or decrease (or even eliminate) the agent's production bonus. We are willing to pay added incentives for higher volumes of business only as long as the business is profitable. Production bonuses allow agents to increase their compensation significantly.

The focus of agency managers is to recruit, train, supervise and retain agents to achieve high production levels of profitable business. Managers receive overwrite commissions on each agent's life insurance commissions which vary according to that agent's productivity level and persistency of business. Agent development is encouraged through a bonus structure that rewards goal attainment and agent retention. New agent development is also encouraged through financing arrangements and the annualization of commissions paid when a life policy is sold.

We have a variety of incentives and recognition programs to focus agents on production of quality life insurance business. Some recognition programs and incentives are jointly conducted with the property-casualty companies. These programs provide significant incentives for the most productive agents. Approximately 15% of our agents and agency managers qualify for our annual incentive trip. Agent recruiting, training, financing and compensation programs are designed to develop a productive agent for the long term. The four-year agency force retention rate for 2011 in our 14 states was approximately 38%. We recently began a new agent acquisition strategy and new agent training, financing and business development programs, which are designed to increase agent loyalty and retention.

Segmentation of Our Business

We analyze operations by reviewing financial information regarding our primary products that are aggregated into the Annuity and Life Insurance product segments. In addition, our Corporate and Other segment includes various support operations, corporate capital and other product lines that are not currently underwritten by the Company.

See Note 15 to our consolidated financial statements included in Item 8 and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Segment Information" included in Item 7 for additional information regarding our financial results by operating segment. Included in the following discussion of our segments are details regarding premiums. We use premiums collected to measure the productivity of our exclusive agents. Premiums collected is not a measure used in financial statements prepared according to U.S. generally accepted accounting principles (GAAP). Note 15 also includes a discussion of the most comparable GAAP financial measures and, as applicable, a reconciliation to such GAAP measures.

Annuity Segment

We sell a variety of traditional annuity products through our exclusive agency force. The Annuity segment primarily consists of fixed rate annuities and supplementary contracts (some of which involve life contingencies). Traditional annuities provide for tax-deferred savings and supplementary contracts provide for the systematic repayment of funds that accumulate interest.

Premiums Collected - Annuity Segment
	Year ended December 31,
	2011		2010		2009
	(Dollars in thousands)
First year - individual	$	216,713	$	170,609	$	208,428
Renewal - individual	136,534		136,208		86,863
Group	15,909		9,819		10,389
Total Annuity	$	369,156	$	316,636	$	305,680

The amount of traditional annuity premiums collected is highly dependent upon the relationship between the current crediting rates on our products and the crediting rates available on competing products, including bank-offered certificates of deposit. We believe the increases in annuity premiums in 2011 and 2010 are due to lower short-term market interest rates making

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certificates of deposit and other short-term investments less attractive in relation to these traditional annuities. Average crediting rates on our individual deferred annuity contracts were 3.35% in 2011, 3.61% in 2010 and 3.90% in 2009, while the average three-month U.S. Treasury rate was 0.06% in 2011, 0.13% in 2010 and 0.14% in 2009. Premiums collected in our Farm Bureau market territory in 2011 are concentrated in the following states: Iowa (29%), Kansas (25%) and Wyoming (9%).

Fixed Rate Annuities

We offer annuities that are marketed to individuals in anticipation of retirement. We offer traditional annuities in the form of flexible premium deferred annuities (FPDA) that allow policyholders to make contributions over a number of periods. For traditional annuity products, policyholder account balances are credited interest at rates that we determine. Approximately 35% of our existing individual traditional annuity business, based on account balances, is held in qualified retirement plans. To further encourage persistency, a surrender charge against the policyholders' account balance is imposed for early termination of the annuity contract within a specified period after its effective date. The surrender charge rate varies by product, but typically starts at 10% and decreases 1% per year for the first ten years the contract is in force. The annuitant may elect to take the proceeds of the annuity either in a single payment or in a series of payments for life, for a fixed number of years, or a combination of these options.

In addition to FPDAs, we also market single premium deferred annuities (SPDA) and single premium immediate annuity (SPIA) products which feature a single premium paid when the contract is issued. Benefit payments and the surrender charge structure on SPDA contracts are similar to other fixed rate annuities. Benefit payments on SPIAs begin immediately after the issuance of the contract.

We invest the premiums we receive from fixed rate annuities and the investments reside in our general account. Acquisition costs are paid from the general account as they arise. The difference between the yield we earn on our investment portfolio and the interest we credit on our fixed rate annuities is known as the investment spread. The investment spread is a major driver of the profitability for all of our traditional annuity products.

Withdrawal Rates

Withdrawal rates (excluding death benefits) for our individual deferred annuities were 4.6% for 2011, 5.0% for 2010 and 4.3% for 2009. We believe the competitive environment, due to the low level of market interest rates discussed above, has favorably impacted the level of withdrawal rates in these periods.

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Interest Crediting Policy

We have a rate setting committee that meets monthly, or more frequently if required, to review and establish current period interest rates based upon existing and anticipated investment opportunities. This applies to new sales and to annuity products after an initial guaranteed period. We examine earnings on assets by portfolio. We then establish rates based on each product's required interest spread and competitive market conditions at the time. Most of our annuity contracts have guaranteed minimum crediting rates. These rates range from 1.00% to 5.50%, with a weighted average guaranteed crediting rate of 2.66% at December 31, 2011 and 2.78% at December 31, 2010. Interest rate guarantees on annuity contracts issued during 2011 ranged from 1.00% to 3.00%.

Interest Crediting Rates Compared to Guarantees - Annuity Segment
	Liabilities at
	December 31, 2011
	(Dollars in thousands)
Fixed rate annuities:
Greater than or equal to 100 basis points over guarantee	$	761,717
50 basis points to 99 basis points over guarantee	163,877
1 basis point to 49 basis points over guarantee	329,551
At guaranteed rate	1,094,743
Other annuities	12,172
Non-discretionary rate setting products	450,606
Total interest sensitive product liabilities	$	2,812,666

In Force - Annuity Segment
	December 31,
	2011		2010		2009
	(Dollars in thousands)
Number of contracts	53,894		53,428		53,116
Interest sensitive reserves	$	2,812,666	$	2,582,791	$	2,162,200
Other insurance reserves	378,319		370,114		368,141

Life Insurance Segment

We sell a variety of traditional and universal life insurance products through our exclusive agency force. The Life Insurance segment consists of whole life, term life and universal life policies. These policies provide benefits upon the death of the insured and may also allow the customer to build cash value on a tax-deferred basis.

8

Premiums Collected - Life Insurance Segment
	For the year ended December 31,
	2011			2010			2009
	(Dollars in thousands)
Universal life:
First year	$	14,888		$	8,753		$	8,523
Renewal	47,311			43,552			41,298
Total	62,199			52,305			49,821
Participating whole life:
First year	11,463			11,839			11,217
Renewal	96,242			95,591			94,741
Total	107,705			107,430			105,958
Term life and other:
First year	11,244			12,834			12,030
Renewal	68,623			61,183			54,360
Total	79,867			74,017			66,390
Total Life Insurance	249,771			233,752			222,169
Reinsurance ceded	(20,303		)	(20,307		)	(19,986		)
Total Life Insurance, net of reinsurance	$	229,468		$	213,445		$	202,183

The increases in life premiums collected in 2011 and 2010 reflect the attractiveness of enhanced universal life and term life product offerings and the strong farm economy in our rural marketplace. For our life insurance premiums collected in our market territory, premiums collected in 2011 are concentrated primarily in the following states: Iowa (25%), Kansas (16%) and Oklahoma (11%).

Traditional Life Insurance

We offer traditional participating whole life insurance products. Participating whole life insurance provides benefits for the life of the insured. It provides level premiums and a level death benefit and requires payments in excess of mortality charges in early years to offset increasing mortality costs in later years. Under the terms of these policies, policyholders have a right to participate in our surplus to the extent determined by the Board of Directors, generally through annual dividends. Participating business accounted for 34% of life receipts from policyholders during 2011 and represented 12% of life insurance in force at December 31, 2011.

We also market non-participating term insurance policies that provide life insurance protection for a specified period. Term insurance is mortality based and generally has no accumulation value. However, we also offer a return of premium rider, which returns a percentage of premiums after a set number of years. For a portion of our business, we may change the premium scales at any time but may not increase rates above guaranteed levels.

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Universal Life Insurance

Our universal life policies provide permanent life insurance protection with a flexible or fixed premium structure which allows the customer to pre-fund future insurance costs and accumulate savings on a tax-deferred basis. Premiums received, less policy assessments for administration expenses and mortality costs, are credited to the policyholder's account balance. Interest is credited to the cash value at rates that we periodically set.

Underwriting

We follow formal underwriting standards and procedures designed to properly assess and quantify life insurance risks before issuing policies to individuals. To implement these procedures, we employ an underwriting staff of 12 underwriters who have an average of 25 years of experience in the insurance industry. Our underwriters review each applicant's written application, which is prepared under the supervision of our agents, and any required medical records. We generally employ blood, oral fluid or urine testing (including HIV antibody testing) to provide additional information whenever the applicant is age 18 or older and the face amount is $100,000 or greater. Based on the results of these tests, we may adjust the mortality charge or decline coverage completely. We also have an automated process for handling term policies for ages 18 to 60 with face amounts of $25,000 to $75,000. We use our automated underwriting guidelines to evaluate the medical history provided by the applicant and information received from three service providers. Based on the evaluation against our automated underwriting guidelines, we may adjust the mortality charge or decline coverage. Generally, tobacco use by a life insurance applicant within the preceding one-year results in a substantially higher mortality charge. In accordance with industry practice, material misrepresentation on a policy application can result in the cancellation of the policy upon the return of any premiums paid.

Interest Crediting and Participating Dividend Policy

The interest crediting policy for our life insurance products is the same as for our traditional annuity products in the Annuity segment. See "Interest Crediting Policy" under the Annuity Segment discussion. We pay dividends, credit interest and determine other nonguaranteed elements on the individual insurance policies depending on the type of product. Some elements, such as dividends, are generally declared for a year at a time. Interest rates and other nonguaranteed elements are determined based on experience as it emerges and with regard to competitive factors. Average contractual credited rates on our universal life contracts were 4.17% in 2011, 4.26% in 2010 and 4.25% in 2009. Our universal life contracts have guaranteed minimum crediting rates that range from3.00% to 4.50%, with a weighted average guaranteed crediting rate of 3.93% at December 31, 2011 and December 31, 2010.

Interest Crediting Rates of Interest Sensitive Life Products Compared to Guarantees - Life Insurance Segment
	Liabilities at
	December 31, 2011
	(Dollars in thousands)
Discretionary rate setting products with minimum guarantees:
Greater than or equal to 100 basis points over guarantee	$	210,366
50 basis points to 99 basis points over guarantee	39,629
1 basis point to 49 basis points over guarantee	12,890
At guaranteed rate	373,460
Non-discretionary rate setting products	11,366
Total interest sensitive product liabilities	$	647,711

Policyholder dividends are currently being paid and will continue to be paid as declared on participating policies. Policyholder dividend scales are generally established annually and are based on the performance of assets supporting these policies, the mortality experience of the policies and expense levels. Other factors, such as changes in tax law, may be considered as well. Our participating business does not have minimum guaranteed dividend rates.

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In Force - Life Insurance Segment
	December 31,
	2011		2010		2009
	(Dollars in thousands, except face amounts in millions)
Number of policies - traditional life	352,274		349,009		342,791
Number of policies - universal life	58,115		56,835		55,729
Face amounts - traditional life	$	38,235	$	36,201	$	33,685
Face amounts - universal life	5,482		5,204		4,980
Traditional insurance reserves	1,549,886		1,489,858		1,436,195
Interest sensitive reserves	647,711		630,956		629,087

Corporate and Other Segment

The Corporate and Other segment includes (i) advisory services for the management of investments and other companies; (ii) marketing and distribution services for the sale of mutual funds and insurance products not issued by us; (iii) leasing services, primarily with affiliates; (iv) closed blocks of variable annuity, variable life and accident and health products; (v) interest expense and (vi) investments and related investment income not specifically allocated to our product segments.

We discontinued underwriting new sales of variable products during 2010 and terminated new sales with our variable alliance partners in 2010 and 2011. We continue to receive premiums from sales that occurred prior to this change. Variable premiums collected were $79.9 million in 2011, $104.0 million in 2010 and $103.4 million in 2009. During 2010, we began selling variable products underwritten by a large well-known insurance company with variable product expertise. We earn fees from the sale of brokered products, which are reported as other income. A portion of these revenues are passed on to the agents as commissions for the underlying sales. The decision to discontinue underwriting variable products was made because we lacked the scale necessary to generate acceptable returns and be competitive in this product line over time. The existing in force business remains on our books and we continue to administer this business.

Reinsurance

We reinsure a portion of our life insurance exposure with unaffiliated insurance companies under traditional indemnity reinsurance agreements. New sales of life products are reinsured above prescribed limits and do not require the reinsurer's prior approval within certain guidelines. We do not use financial or surplus relief reinsurance. We enter into indemnity reinsurance arrangements to assist in diversifying our risks and to limit our maximum loss on risks that exceed our policy retention limits. Our maximum retention limit on an insured life ranges up to $1.5 million depending on when the policy was issued.

Reinsurance contracts do not fully discharge our obligation to pay claims on the reinsured business. As the ceding insurer, we remain responsible for policy claims to the extent the reinsurer fails to pay claims. No reinsurer of business ceded by us has failed to pay any material policy claims (either individually or in the aggregate) with respect to our ceded business. We continually evaluate the financial strength of our reinsurers and monitor concentrations of credit risk. If for any reason reinsurance coverages would need to be replaced, we believe that replacement coverages from financially responsible reinsurers would be available.

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Primary Reinsurers as of December 31, 2011

Reinsurer	A.M. Best Rating	Amount of In Force Ceded		Reserve Credit
		(Dollars in millions)
Swiss Re Life & Health America Inc.	A+	$	3,855.3	$	11.9
RGA Reinsurance Company	A+	3,312.6		21.6
Generali USA Life Reassurance Company	A-	2,486.7		7.4
Employers Reassurance Corporation	A-	407.2		0.3
Scottish Re (1)	NR	357.2		3.5
All other (9 reinsurers)	A- to A++	612.5		22.4
Total		$	11,031.5	$	67.1

(1) New business with Scottish Re was terminated in early 2007, following difficulties at that company and related ratings downgrades. Scottish Re continues to meet its reinsurance obligation with us in a normal fashion.

In addition, we have an annual 100% quota share accidental death reinsurance agreement. Coverage includes all acts of terrorism including those of a nuclear, chemical or biological origin. Coverage is subject to an annual aggregate retention of $12.0 million. A maximum occurrence limit of $50.0 million applies to policies written on agents of the Company who are participating in Company-sponsored incentive trips. All other occurrence catastrophes are unlimited in amount.

Ratings and Competition

Financial strength ratings are an important factor in establishing the competitive position of insurance companies. Insurer financial strength ratings represent the opinions of rating agencies regarding the ability of an insurance company to meet its financial obligations to policyholders and contract holders. Credit ratings represent the opinions of rating agencies regarding an issuer's ability to repay its indebtedness. All of our ratings are subject to revision or withdrawal at any time by the rating agency, and therefore, no assurance can be given that these ratings will be maintained. Our insurer financial strength ratings and credit ratings as of the date of this filing are listed in the table below:

Insurer Financial Strength Ratings	Rating	Source	Outlook
Farm Bureau Life Insurance Company	A - (Excellent)	A.M. Best	Stable
Farm Bureau Life Insurance Company	A - (Strong)	Standard & Poor's	Stable
Credit Ratings
FBL Financial Group, Inc.	bbb-	A.M. Best	Stable
FBL Financial Group, Inc.	BBB-	Standard & Poor's	Stable

A.M. Best has 16 financial strength ratings assigned to insurance companies, which currently range from A++ (Superior) to S (Suspended). Standard & Poor's has eight financial strength ratings assigned to solvent insurance companies, ranging from "AAA" (Extremely Strong) to "CC" (Extremely Weak).

A.M. Best's long-term credit ratings range from aaa (exceptional) to d (in default). A + or - may be appended to ratings from aa to ccc to indicate relative position within a category. A rating of bbb- or above is considered investment grade. Standard & Poor's long-term credit ratings range from "AAA" (extremely strong) to "D" (payment default). A rating of "BBB" or above is considered investment grade. As of the date of this filing, both A.M. Best and Standard & Poor's have the life/health industry on a stable rating outlook.

We operate in a highly competitive industry. Insurers compete based primarily upon price, service level and the financial strength of the company. The operating results of companies in the insurance industry historically have been subject to significant fluctuations due to competition, economic conditions, interest rates, investment performance, maintenance of insurance ratings from rating agencies and other factors. We believe our ability to compete with other insurance companies is dependent upon, among other things, our ability to attract and retain agents to market our insurance products, our ability to develop competitive and profitable products and our ability to maintain good or better ratings from rating agencies. In

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connection with the development and sale of our products, we encounter significant competition from other insurance companies, and other financial institutions, such as banks and broker/dealers, many of which have financial resources substantially greater than ours.

Regulation

Our insurance subsidiary is subject to government regulation in each of the states in which it conducts business. This regulatory authority is vested in state agencies having broad administrative power dealing with all aspects of the insurance business, including rates, policy forms and capital adequacy, and is concerned primarily with the protection of policyholders rather than stockholders. Our variable insurance products, investment advisor, broker/dealer and certain licensed agents are also subject to regulation by the SEC, FINRA and state agencies.

Legislation has been introduced in Congress in the past which could result in the federal government assuming regulation of all or part of the insurance industry. In light of ongoing legislative developments, the National Association of Insurance Commissioners (NAIC) and state insurance regulators continue to reexamine existing laws and regulations, accounting policies and procedures, specifically focusing on insurance company investments and solvency issues, market conduct, risk-adjusted capital guidelines, enterprise risk management guidelines, interpretations of existing laws, the development of new laws, the implementation of non-statutory guidelines and the circumstances under which dividends may be paid. We do not believe the adoption of any of the current NAIC initiatives will have a material adverse impact on us; however, we cannot predict the form of any future proposals or regulation.

The insurance regulatory framework has been under examination, and certain state legislatures have considered or enacted laws that alter, and in many cases increase, state authority to regulate insurance companies and insurance holding company systems.

Although Dodd-Frank legislation has now passed its first anniversary, many key rules have yet to be formalized, some of which might have an impact on insurers. The Federal Insurance Office (FIO) has been established to collect information about the insurance industry and its mandate covers a wide variety of topics.

The Affordable Care Act was designed to provide universal health care to everyone in the United States. While our exclusive agents sell health insurance, those products are manufactured by unrelated third parties. While we anticipate there will be substantial changes ahead for companies who actually provide the coverage sold by our agents, we do not anticipate an immediate impact on our business as a result of the changes that have already gone into effect. The biggest changes to the Company as a result of the Affordable Care Act are those changes faced as an employer. We are carefully studying the impact of the new legislation but most of it has not yet gone into effect. We are studying how the changes will affect us as an employer and will take steps that are required, with an eye towards providing benefits commensurate with those of our competitors, and consistent with what we have provided our employees in the past.

Employees

At December 31, 2011, we had 1,570 employees. A majority of our employees, including the executive officers, also provide services to Farm Bureau Property & Casualty Insurance Company and other affiliates pursuant to management agreements. None of our employees are members of a collective bargaining unit.

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ITEM 1A. RISK FACTORS

Risk Factors

The performance of our company is subject to a variety of risks which you should review. Occurrence of these risks could materially affect our business, results of operations or financial condition, cause the trading price of our common stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward looking statements made by or on behalf of the Company.

Difficult conditions in the financial markets and the economy may materially adversely affect our business and results of operations.

Our results of operations are materially affected by conditions in the financial markets and the economy. The U.S. economy and financial markets continue to challenge the life insurance and annuity industries. However, recent economic data indicates growth. In the financial markets, strong liquidity, strong corporate profitability and modest economic growth continue to support fundamental credit quality. Corporate credit default rates declined during the past two years and conditions are expected to remain favorable into 2012.

Our business benefits from moderate to strong economic expansion. Conversely, a lackluster economic recovery characterized by higher unemployment, lower family income, lower consumer spending, muted corporate earnings growth and lower business investment could adversely impact the demand for our products in the future. We also may experience a higher incidence of claims, lapses or surrenders of policies. We cannot predict whether or when such actions may occur, or what impact such actions could have on our business, results of operations, cash flows or financial condition.

Adverse financial market conditions may significantly affect our liquidity, access to capital and cost of capital.

As described in "Item 7. Liquidity and Capital Resources" of this Form 10-K, our life insurance subsidiary has historically generated positive cash flow as measured by the degree to which cash inflows are adequate to meet benefit obligations to policyholders and normal operating expenses as they are incurred. At December 31, 2011, we believe the probability we would have to sell investments in an unrealized loss position to meet cash flow needs is remote. See "Item 7. Financial Condition" and Note 3 to our consolidated financial statements included in Item 8 for details regarding the unrealized gains and losses on our fixed maturity securities.

Capital requirements depend on factors including accumulated statutory earnings of our life insurance subsidiary, statutory capital and surplus of our life insurance subsidiary, the rate of sales growth of our products, aggregate reserve levels and the levels of credit risk and/or interest rate risk in our invested assets. In order to support these capital requirements, we may need to increase or maintain the statutory capital and surplus of our life insurance subsidiary through additional financings, which could include debt, equity or other transactions.

Adverse capital market conditions may affect the availability and cost of borrowed funds and could impact our ability to refinance existing borrowings, thereby ultimately impacting our profitability and ability to support or grow our businesses. Without sufficient capital, we could be forced to curtail certain of our operations, and our business could suffer. Actions we might take to access financing may in turn cause rating agencies to reevaluate our ratings.

We manage our capital level to be consistent with statutory and rating agency requirements. As of December 31, 2011, we estimate that we have sufficient capital in our life insurance subsidiary to meet our rating objectives. However, this capital may not be sufficient if significant future losses are incurred and access to additional capital is limited.

Our valuation of fixed maturity securities may include methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may materially adversely affect our results of operations or financial condition.

During periods of market disruption, it may be difficult to value certain securities if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the financial environment or market conditions.

Certain market sectors remain somewhat dislocated following periods of volatile and illiquid market conditions over the past several years, increasing the difficulty in valuing certain instruments, as trading has been less frequent and/or market data less

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observable. As a result, certain valuations require greater estimation and judgment as well as more complex valuation methods. These values may not ultimately be realizable in a market transaction, and such values may change rapidly as market conditions change and valuation assumptions are modified.

The decision on whether to record an other-than-temporary impairment is determined in part by our assessment of the financial condition and prospects of a particular issuer, projections of future cash flows and recoverability of the particular security as well as an evaluation of our intent to sell and whether it is more likely than not that we would be required to sell prior to recovery. Our conclusions regarding the recoverability of a particular security's market price may ultimately prove to be incorrect as facts and circumstances change.

Our investment portfolio is subject to credit quality risks which may diminish the value of our invested assets and affect our profitability and reported book value per share.

We are subject to the risk that the issuers of fixed maturity securities and other debt securities in our portfolio (other than U.S. agency securities), and borrowers on our commercial mortgages, will default on principal and interest payments, particularly in the event of a major downturn in economic activity. As of December 31, 2011, we held $5.6 billion of fixed income securities, $0.3 billion of which represented below-investment grade holdings. Of these below-investment grade holdings, 95.2% were acquired as investment grade holdings but, as of December 31, 2011, had been downgraded to below investment grade. An increase in defaults on our fixed maturity securities and commercial mortgage loan portfolios could harm our financial strength and reduce our profitability.

The concentration of our investment portfolios in any particular industry, group of related industries or geographic sector could have an adverse effect on our investment portfolios and, consequently, on our results of operations and financial position. As of December 31, 2011, we held $0.3 billion of fixed income securities in European countries, representing 5% of our investment portfolio. Our largest exposures are in the United Kingdom and the Netherlands, with 42% and 18% of the balance, respectively.

Changing interest rates, market volatility and general economic conditions affect the risks and the returns on both our products and our investment portfolio.

The market value of our investments and our investment performance, including yields and realization of gains or losses, may vary depending on economic and market conditions. Such conditions include the shape of the yield curve, level of interest rates and recognized equity and bond indices. Interest rate risk is our primary market risk exposure. Substantial and sustained increases and decreases in market interest rates can materially affect the profitability of our products, the market value of our investments and the reported value of stockholders' equity.

A key component of our financial results is the investment spread. A narrowing of investment spreads would adversely affect operating results. Although we have the right to adjust interest crediting rates on a substantial portion of our business in force, changes to crediting rates may not be sufficient to maintain targeted investment spreads in all economic and market environments. Our ability to lower crediting rates is subject to minimum crediting rates filed with and approved by state regulators. In addition, competition and other factors, including the potential for increases in surrenders and withdrawals, may limit our ability to adjust or maintain crediting rates at levels necessary to avoid the narrowing of spreads under certain market conditions.

See "Item 7. Market Risks of Financial Instruments" for further discussion of our interest rate risk exposure and information regarding our asset-liability management program to help mitigate our exposure to interest rate risk.

We face competition from companies having greater financial resources, more advanced technology systems, broader arrays of products, higher ratings and stronger financial performance, which may impair our ability to retain existing customers, attract new customers and maintain our profitability and financial strength.

See "Item 1. Business - Ratings and Competition" for information regarding risks relating to competition.

As a holding company, we depend on our subsidiaries for funds to meet our obligations, but our life insurance subsidiary's ability to make distributions to us is limited by law, and could be affected by minimum risk-based capital requirements.

As a holding company, we rely on dividends from subsidiaries to assist in meeting our obligations. The ability of our subsidiaries to pay dividends or to make other cash payments in the future may materially affect our ability to satisfy our parent

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company payment obligations, including debt service and dividends on our common stock.

The ability of our life insurance subsidiary, Farm Bureau Life, to pay dividends to the parent company is limited by law to earned profits (statutory unassigned surplus) as of the date the dividend is paid, as determined in accordance with accounting practices prescribed by insurance regulatory authorities of the State of Iowa. The annual dividend limitation is defined under the Iowa Insurance Holding Company Act as any dividend or distribution of cash or other property whose fair value, together with that of other dividends made within the preceding 12 months, exceeds the greater of (i) 10% of adjusted policyholders' surplus as of the preceding year-end, or (ii) the statutory net gain from operations of the insurer for the preceding calendar year. During 2012, the maximum amount legally available for distribution to FBL Financial Group, Inc., without further regulatory approval, is $87.8 million from Farm Bureau Life.

In addition, the Farm Bureau Life is subject to the risk-based capital (RBC) requirement of the NAIC set forth in the Risk-Based Capital for Insurers Model Act. The main purpose of the Model Act is to provide a tool for insurance regulators to evaluate the capital of insurers relative to the risks assumed by them and determine whether there is a need for possible corrective action. U.S. insurers and reinsurers are required to report the results of their RBC calculations as part of the statutory annual statements filed with state insurance regulatory authorities.

The Model Act provides for four different levels of regulatory actions based on annual statements, each of which may be triggered if an insurer's total adjusted capital, as defined in the Model Act, is less than a corresponding RBC.

• The company action level is triggered if an insurer's total adjusted capital is less than 200% of its authorized control level RBC, as defined in the Model Act. At the company action level, the insurer must submit a plan to the regulatory authority that discusses proposed corrective actions to improve its capital position.

• The regulatory action level is triggered if an insurer's total adjusted capital is less than 150% of its authorized control level RBC. At the regulatory action level, the regulatory authority will perform a special examination of the insurer and issue an order specifying corrective actions that must be followed.

• If an insurer's total adjusted capital is less than its authorized control level RBC, the regulatory authority is authorized (although not mandated) to take regulatory control of the insurer.

• The mandatory control level is triggered if an insurer's total adjusted capital is less than 70% of its authorized control level RBC, and at that level the regulatory authority must take regulatory control of the insurer. Regulatory control may lead to rehabilitation or liquidation of an insurer.

Our current capital levels are well above any action level. Failure to maintain adequate capital levels could lead to ratings downgrades and liquidity issues which could adversely affect our business and financial condition.

A significant ratings downgrade may have a material adverse effect on our business.

Ratings are an important factor in establishing the competitive position of insurance companies. If our ratings were lowered, our ability to market products to new customers could be harmed and existing policyholders might cancel their policies or withdraw the cash values of their policies. These events, in turn, could have a material adverse effect on our financial results and liquidity. Our ratings reflect the agency's opinions as to the financial strength, operating performance and ability to meet obligations to policyholders of our insurance company subsidiary. There is no assurance that a credit rating will remain in effect for any given period of time or that a rating will not be reduced, suspended or withdrawn entirely by the rating agency, if in the rating agency's judgment, circumstances so warrant. See "Item 1. Business - Ratings and Competition" for a summary of our current ratings.

All segments of our business are highly regulated and these regulations or changes in them could affect our profitability.

We are subject to regulation under applicable insurance statutes and regulations in the various states in which our life subsidiary operates. Insurance regulation is intended to provide safeguards for policyholders, insurance companies and their holding companies. Regulators oversee matters relating to sales practices, policy forms, claims practices, types and amounts of investments, reserve adequacy, insurer solvency, minimum amounts of capital and surplus, transactions with related parties, changes in control and payment of dividends. State insurance regulators continually reexamine existing laws and regulations, and may make changes in the future.

As noted above, our life subsidiary is subject to the NAIC's RBC requirements which are used by state insurance regulators as an early warning tool to identify deteriorating or weakly capitalized insurance companies for the purpose of initiating regulatory action.

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Although the federal government does not directly regulate the business of insurance, federal laws which include pension regulation, discrimination, financial services regulation, securities regulation and federal taxation, can significantly affect the insurance business. In addition, various forms of direct and indirect federal regulation of insurance have been proposed from time to time, including proposals for the establishment of an optional federal charter for insurance companies. Dodd-Frank established the Federal Insurance Office within the Department of Treasury to collect information about the insurance industry, recommend prudential standards and represent the U.S. in dealings with foreign insurance regulators. The regulatory framework at the state and federal level applicable to our insurance products is evolving and could affect the design of such products and our ability to sell certain products. Any changes in these laws and regulations could materially and adversely affect our business, financial condition or results of operations.

While the Affordable Care Act will have a substantial impact on the health care industry, we do not anticipate it directly affecting our insurance business. It is likely to have an impact on our captive agents who sell health insurance products and on our organization as an employer, but the impact has been minimal, to date. The extent of any impact of Dodd-Frank on our industry or on us as an employer will depend primarily on regulations that have not yet been adopted. Captive agents who are also registered representatives of our affiliated broker-dealer may be affected by proposed rules that would create an as-yet undefined fiduciary relationship between the registered representative and their customers. It is too early to tell what effect there will be until the rule making process has been completed.

Our investment management subsidiary is a federally registered investment adviser with the SEC. This entity manages funds for affiliated entities and non-affiliated organizations. In addition, the investment adviser manages our separate accounts, which are registered as investment companies under the Investment Company Act. Our registered separate accounts are themselves highly regulated under the Investment Company Act. In addition, our broker-dealer subsidiary is registered with the SEC and is subject to regulation under the Exchange Act and various state laws, and is a member of and subject to regulation by FINRA. Registered representatives sell variable products and mutual funds through our broker/dealer subsidiary and are regulated by the SEC and FINRA and are further subject to applicable state laws. We cannot predict the effect that any proposed or future legislation or rule making by the SEC, FINRA or the states will have on our financial condition or operational flexibility.

Our financial statements are prepared in accordance with U.S. generally accepted accounting principles. From time to time, we are required to adopt new or revised accounting standards. It is possible that future accounting standards we are required to adopt could change the current accounting treatment that we apply to our consolidated financial statements and that such changes could have a material adverse affect on our financial condition and results of operations. The impact of accounting pronouncements that have been issued but not yet implemented, including new guidance regarding accounting for deferred acquisition costs, is discussed in Note 1 to our consolidated financial statements included in Item 8.

Inaccuracies in assumptions regarding future persistency, mortality and interest rates used in pricing our products and calculating reserve amounts and deferred acquisition costs could have a material adverse impact on our financial results.

The process of pricing products and calculating reserve amounts and deferred acquisition costs for an insurance organization involves the use of a number of assumptions including those related to persistency (how long a contract stays with the company), mortality (the relative incidence of death in a given time) and interest rates (the rates expected to be paid or received on financial instruments, including insurance or investment contracts). Actual results could differ significantly from those assumed. Inaccuracies in one or more of these assumptions could have a material adverse impact on our results of operations.

We may be required to accelerate the amortization of deferred acquisition costs, which could adversely affect our results of operations or financial condition.

Deferred acquisition costs (DAC) represents the costs that vary with and are related primarily to the acquisition of new and renewal insurance and annuity contracts, and we amortize these costs over the expected lives of the contracts. We test the DAC recorded on our consolidated balance sheet to determine if these amounts are recoverable under current assumptions. In addition, we regularly review the estimates and assumptions underlying DAC for those products for which we amortize DAC in proportion to gross profits. Given changes in facts and circumstances, these tests and reviews could lead to reductions in DAC that could have an adverse effect on the results of our operations and our financial condition. Increases in actual or expected future withdrawals or surrenders and investment losses, which are more likely in a severe economic recession, would result in an acceleration of DAC amortization. In addition, significant or sustained equity and bond market declines could result in an acceleration of DAC amortization related to variable annuity and variable universal life contracts.

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Our earnings are influenced by our claims experience, which is difficult to estimate. If our future claims experience does not match our pricing assumptions or past results, our earnings could be materially adversely affected.

Our earnings are significantly influenced by the claims paid under our insurance contracts and will vary from period to period depending upon the amount of claims incurred. There is only limited predictability of claims experience within any given quarter or year. The liability that we have established for future insurance and annuity policy benefits is based on assumptions concerning a number of factors, including interest rates, expected claims, persistency and expenses. In the event our future experience does not match our pricing assumptions or our past results, our operating results could be materially adversely affected.

Our reinsurance program involves risks because we remain liable with respect to the liabilities ceded to reinsurers if the reinsurers fail to meet the obligations assumed by them.

We reinsure a portion of our life insurance exposure with unaffiliated insurance companies under traditional indemnity reinsurance agreements. New sales of life products are reinsured above prescribed limits and do not require the reinsurer's prior approval within certain guidelines. We enter into indemnity reinsurance arrangements to assist in diversifying our risks and to limit our maximum loss on risks that exceed our policy retention limits. Our maximum retention limit on an insured life ranges up to $1.5 million depending upon when the policy was issued.

Indemnity reinsurance does not fully discharge our obligation to pay claims on the reinsured business. As the ceding insurer, we remain responsible for policy claims to the extent the reinsurer fails to pay claims. Should any reinsurer fail to meet the obligations assumed under such reinsurance, we remain liable, and payment of these obligations could result in losses. To limit the possibility of such losses, we evaluate the financial condition of our reinsurers and monitor concentrations of credit risk.

Our business is highly dependent on our relationships with Farm Bureau organizations and could be adversely affected if those relationships became impaired.

Farm Bureau Life's business relies significantly upon the maintenance of our right to use the Farm Bureau and FB trade names and related trademarks and service marks which are controlled by the American Farm Bureau Federation and state Farm Bureau organizations. See discussion under "Item 1. Business - Marketing and Distribution - Affiliation with Farm Bureau" for information regarding these relationships and circumstances under which our access to the Farm Bureau membership base and use of the Farm Bureau and FB designations could be terminated. We believe our relationship with the Farm Bureaus provides a number of advantages. Farm Bureau organizations in our marketing territory tend to be well known and long established, have active memberships and provide a number of member benefits other than financial services. The strength of these organizations provides enhanced prestige and brand awareness for our products and increased access to Farm Bureau members. The loss of the right to use these designations in a key state or states could have a material adverse effect on operating results.

Our relationship with Farm Bureau organizations could result in conflicts of interests.

Our business and operations are interrelated to a degree with that of the American Farm Bureau Federation, its affiliates, and state Farm Bureaus. The overlap of the business, including service of certain common executive officers and directors of the Company and the state Farm Bureau organizations, may give rise to conflicts of interest among these parties. Conflicts could arise, for example, with respect to business dealings among the parties, the use of a common agency force, the sharing of employees, space and other services and facilities under intercompany agreements, and the allocation of business opportunities between them. Conflicts of interest could also arise between the Company and the various state Farm Bureau organizations in our life-only states, some of whose presidents serve as directors of the Company, and which control their state affiliated property-casualty insurance company, with respect to the use of the common agency force. We have adopted a conflict of interest policy which requires a director to disclose to the Board of Directors and any appropriate committee of the Board, the existence of any transaction or proposed transaction in which the Director has a direct or indirect interest, and the material facts relating thereto. In addition, a majority of our directors are independent and our Audit, Compensation and Governance committees all consist solely of independent directors.

Changes in federal tax laws may affect sales of our products and profitability.

The annuity and life insurance products that we market offer tax advantages to the policyholders, as compared to other savings instruments such as certificates of deposit and taxable bonds. Tax preferences include the deferral of income tax on the earnings during the accumulation period of the annuity or insurance policy as opposed to the current taxation of other savings instruments and the tax-free status of death benefit proceeds. In addition, life insurance companies receive a tax deduction for dividends received by separate accounts.

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Legislation eliminating this tax deferral and dividends received deduction could have a material adverse effect on our ability to sell life insurance and annuities. Congress has from time to time considered legislation which would reduce or eliminate the benefits to policyholders of the deferral of taxation on the growth of value within certain insurance products or might otherwise affect the taxation of insurance products and insurance companies relative to other investments. To the extent that the Internal Revenue Code of 1986, as amended, is revised to reduce the tax-deferred status of insurance products, to reduce the taxation of competing products, or to eliminate the dividends received deduction, our financial position and results of operations could be adversely affected.

Our ability to maintain competitive costs is dependent upon the level of new sales and persistency of existing business.

Maintaining competitive costs depends upon numerous factors, including the level of new sales, persistency of existing business and expense management. A decrease in sales or persistency without a corresponding reduction in expenses could affect our business and results of operations.

If we are unable to attract and retain agents, sales of our products and services may be reduced.

We compete to attract and retain exclusive agents for Farm Bureau Life. Intense competition exists for persons with demonstrated ability. We compete primarily on the basis of our reputation, products, compensation, support services, rating agency ratings and financial position. Sales and our results of operations and financial condition could be materially adversely affected if we are unsuccessful in attracting and retaining agents.

Attracting and retaining employees who are key to our business is critical to our growth and success.

The success of our business and the ability to reach goals is dependent, to a large extent, on our ability to attract and retain key employees. Competition is intense in the job market for certain positions, such as actuaries and other insurance professionals with demonstrated ability, particularly with our headquarters being located in central Iowa, a hub of insurance company home offices, where we compete with other insurance and financial institutions.

Our employees are not subject to employment contracts. Although none of our named executive officers have indicated that they intend to terminate their employment, there can be no certainty regarding the length of time they will remain with us. Our inability to retain our key employees, or attract and retain additional qualified employees, could materially adversely affect our sales, results of operations and financial condition.

Success of our business depends in part on effective information technology systems and on continuing to develop and implement improvements.

Our business is dependent upon the ability to keep up to date with effective, secure and advanced technology systems for interacting with employees, agents, policyholders, vendors, agents, third parties and investors. It is crucial to our business to reach a large number of people, provide sizable amounts of information, and secure and store information through our technology systems. If we do not maintain adequate systems to reflect technological advancements, we could experience adverse consequences, including inadequate information on which to base pricing, underwriting and reserving decisions, regulatory problems, litigation exposure or increases in administrative expenses. This could adversely affect our relationships and ability to do business with our clients and make it difficult to attract new customers.

Our information technology systems and software require an ongoing commitment of resources to maintain current standards. Our business strategy involves providing customers with easy-to-use products and systems to meet their needs. We are continuously enhancing and updating our systems to keep pace with changes in information processing technology, evolving industry and regulatory standards and customer demands. Our success is largely dependent on maintaining and enhancing the effectiveness of existing systems, as well as continuing to reuse, buy or build information systems that support our business processes in a cost-effective manner.

In the event of a disaster or catastrophic event, a computer system or information technology failure could occur and potentially disrupt our business, damage our reputation and adversely affect our profitability. Disruptions or breaches could occur as a result of natural disasters, man-made disasters, epidemic/pandemic, industrial accident, blackout, computer virus, criminal activity, technological changes or events, terrorism, or other unanticipated events beyond our control. While the company has obtained insurance and has implemented a variety of preventative security measures such as risk management, disaster recovery and business continuity plans, no predictions of specific scenarios can be made. Unanticipated problems with our business continuity systems and plans could have a material adverse impact on our ability to conduct business and on our

19

results of operations and financial position, particularly if those problems affect our computer-based processing, transmission, storage and retrieval systems and destroy valuable data.

We face risks relating to litigation, including the costs of such litigation, management distraction and the potential for damage awards, which may adversely impact our business.

We are occasionally involved in litigation, both as a defendant and as a plaintiff. In addition, state regulatory bodies, such as state insurance departments, the SEC, FINRA, the Department of Labor and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, the Employee Retirement Income Security Act of 1974 and laws governing the activities of broker-dealers. Companies in the life insurance and annuity business have faced litigation, including class action lawsuits, alleging improper product design, improper sales practices and similar claims. Moreover, we are subject to the risks of errors and misconduct by our appointed agents, such as fraud, non-compliance with policies and recommending transactions that are not suitable. While we are not a party to any lawsuit that we believe will have a material adverse effect on our business, financial condition or results of operations, there can be no assurance that such litigation, or any future litigation, will not have such an effect, whether financially, through distraction of our management or otherwise.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal operations are conducted from property leased from a subsidiary of the Iowa Farm Bureau Federation under a 10 year operating lease that expires in 2021, with automatic five-year extensions unless terminated by one of the parties at least six months prior to the expiration date. Currently, the property leased primarily consists of approximately 174,000 square feet of a 400,000 square foot office building in West Des Moines, Iowa. We consider the current facilities to be adequate for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

Information required for Item 3 is incorporated by reference from the discussion in Note 12 to our consolidated financial statements included in Item 8.

ITEM 4. [REMOVED AND RESERVED]

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stock Market and Dividend Information

The Class A common stock of FBL Financial Group, Inc. is traded on the New York Stock Exchange under the symbol FFG. The following table sets forth the cash dividends per common share and the high and low prices of FBL Financial Group Class A common stock as reported in the consolidated transaction reporting system for each quarter of 2011 and 2010.

Class A Common Stock Data (per share)	1st Qtr.		2nd Qtr.		3rd Qtr.		4th Qtr.
2011
High	$	31.92	$	32.30	$	33.32	$	36.93
Low	27.25		28.36		24.60		24.50
Dividends declared and paid	0.0625		0.0625		0.0625		0.1000
2010
High	$	25.21	$	28.17	$	26.92	$	29.50
Low	16.82		20.81		19.51		25.06
Dividends declared and paid	0.0625		0.0625		0.0625		0.0625

There is no established public trading market for our Class B common stock. As of January 26, 2012, there were approximately 5,800 holders of Class A common stock, including participants holding securities under the name of a broker (i.e., in "street name"), and 24 holders of Class B common stock.

Class B common stockholders receive dividends at the same rate as that declared on Class A common stock. We intend to declare regular quarterly cash dividends in the future, subject to the discretion of the Board of Directors, which depends in part upon general business conditions, legal restrictions and other factors the Board of Directors deems relevant. It is anticipated the quarterly dividend rate through the first quarter of 2012 will remain at $0.10 per common share.

For restrictions on dividends, see "Management's Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources" included in Item 7.

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Comparison of Five-Year Total Return

	Period Ending
	12/31/2006		12/31/2007		12/31/2008		12/31/2009		12/31/2010		12/31/2011
FBL Financial Group, Inc.	$	100.00	$	89.50	$	41.12	$	52.24	$	81.69	$	97.85
S&P 500 Index	100.00		105.49		66.46		84.05		96.71		98.76
S&P 500 Life & Health Insurance Index	100.00		111.00		57.37		66.30		83.04		65.84

Source: SNL Financial LC

The performance graph shows a comparison of the cumulative total return over the past five years of our Class A common stock, the S&P 500 Index and the S&P 500 Life and Health Insurance Index. The graph plots the changes in value of an initial $100 investment, assuming reinvestment of dividends.

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Issuer Purchases of Equity Securities

The following table sets forth issuer purchases of equity securities for the quarter ended December 31, 2011.

Period	(a) Total Number of Shares (or Units) Purchased (1)	(b) Average Price Paid per Share (or Unit) (1)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
October 1, 2011 through October 31, 2011	—	$	—	Not applicable	Not applicable
November 1, 2011 through November 30, 2011	131,378	31.36		131,378	$195,879,699
December 1, 2011 through December 31, 2011	281,597	33.73		281,597	$186,380,752
Total	412,975	$	32.98

(1) Activity in this table represents Class A common shares repurchased by Company in connection with the repurchase plan announced on October 7, 2011. The plan authorized us to make up to $200.0 million in repurchases of Class A common stock in the open market or through privately negotiated transactions, with the timing and terms of the purchases to be determined by management based on market conditions. Completion of the program is dependent on market conditions and other factors. There is no guarantee as to the exact timing of any repurchases or the number of shares, if any, that we will repurchase. The share repurchase program may be modified or terminated at any time without prior notice.

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

	As of or for the year ended December 31,
	2011			2010		2009			2008			2007
	(Dollars in thousands, except per share data)
Consolidated Statement of Income Data (1)
Interest sensitive product charges	$	97,103		$	93,881	$	88,757		$	88,138		$	85,432
Traditional life insurance premiums	168,519			162,056		154,154			145,851			140,981
Net investment income	343,310			324,540		303,486			287,273			295,028
Realized gains (losses) on investments	(8,296		)	11,576		(30,660		)	(68,662		)	8,296
Total revenues	618,337			606,342		533,209			477,772			556,276
Income from continuing operations	55,324			84,323		50,348			1,400			67,080
Income (loss) from discontinued operations	(24,042		)	36,252		19,344			(19,620		)	19,210
Net income (loss)	$	31,282		$	120,575	$	69,692		$	(18,220	)	$	86,290
Earnings (loss) per common share:
Income from continuing operations	$	1.80		$	2.77	$	1.67		$	0.04		$	2.25
Income (loss) from discontinued operations	(0.79		)	1.19		0.65			(0.66		)	0.65
Earnings (loss) per common share	$	1.01		$	3.96	$	2.32		$	(0.61	)	$	2.90
Earnings (loss) per common share - assuming dilution:
Income from continuing operations	$	1.77		$	2.74	$	1.67		$	0.04		$	2.21
Income (loss) from discontinued operations	(0.77		)	1.18		0.64			(0.66		)	0.63
Earnings (loss) per common share - assuming dilution	$	1.00		$	3.92	$	2.31		$	(0.61	)	$	2.84
Cash dividends	$	0.2875		$	0.2500	$	0.3125		$	0.5000		$	0.4800
Weighted average common shares outstanding - assuming dilution	31,215,023			30,718,616		30,201,476			29,893,909			30,321,617
Consolidated Balance Sheet Data (1)
Total investments	$	6,397,195		$	5,853,341	$	5,024,876		$	4,657,154		$	4,702,460
Assets held in separate accounts	603,903			675,586		630,094			516,438			760,864
Total assets	8,225,909			15,334,100		14,259,341			14,060,814			13,927,859
Long-term debt	146,968			271,168		371,084			371,005			316,930
Total liabilities	6,947,728			14,187,686		13,388,064			13,802,353			13,024,877
Total stockholders' equity (2)	1,278,181			1,146,414		871,277			258,461			902,982
Book value per common share (2)	41.60			36.95		28.49			8.46			29.98

Notes to Selected Consolidated Financial Data
(1	)	Certain amounts from 2007 through 2010 have been restated due to the sale of our subsidiary, EquiTrust Life Insurance Company, on December 30, 2011.
(2	)	Amounts are impacted by accumulated other comprehensive income (loss) totaling $149.6 million in 2011, $39.9 million in 2010, ($118.7) million in 2009, ($649.8) million in 2008 and ($36.3) million in 2007. These amounts are net of deferred income taxes and other adjustments for assumed changes in the amortization of deferred acquisition costs, unearned revenue reserve and value of insurance in force acquired.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

When reading the following Management's Discussion and Analysis of Financial Condition and Results of Operations, please refer to our consolidated financial statements and related notes included in Item 8, "Financial Statements and Supplementary Data," of this report. Unless noted otherwise, all references to FBL Financial Group, Inc. (we or the Company) include all of its direct and indirect subsidiaries, including its life insurance subsidiary Farm Bureau Life Insurance Company (Farm Bureau Life).

In this discussion and analysis, we explain our consolidated results of operations, financial condition and where appropriate, factors that management believes may affect future performance, including:

• factors which affect our business,

• our revenues and expenses in the periods presented,

• changes in revenues and expenses between periods,

• sources of earnings and changes in stockholders' equity,

• impact of these items on our overall financial condition and

• expected sources and uses of cash.

We have organized our discussion and analysis as follows:
•	First, we discuss our business and drivers of profitability.
•	We then describe the business environment in which we operate including factors that affect operating results.
•	We highlight significant events that are important to understanding our results of operations and financial condition.
•	We then review the results of operations beginning with an overview of the total Company results, followed by a more detailed review of those results by operating segment.
•	We review our financial condition by summarizing our investment portfolio, market risks, sources and uses of cash, capital resources and requirements and commitments.
•	Finally, we discuss critical accounting policies and recently issued accounting standards. The critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult or complex judgment.

Overview and Profitability

We sell individual life insurance and annuity products through an exclusive distribution channel. Our exclusive agency force consists of 1,937 Farm Bureau agents and managers operating in the Midwestern and Western sections of the United States. Several subsidiaries support various functional areas of Farm Bureau Life and other affiliates, by providing investment advisory, marketing and distribution, and leasing services. In addition, we manage two Farm Bureau affiliated property-casualty companies.

Our profitability is primarily a factor of:
•	The volume of our life insurance and annuity business in force, which is driven by the level of our sales and the persistency of the business written.
•	The amount of spread (excess of net investment income earned over interest credited) we earn on contract holders' general account balances.
•	Our ability to price our life insurance products to earn acceptable margins over the cost of providing benefits and the expenses of acquiring and administering the products. Competitive conditions, mortality experience, persistency, investment results and our ability to maintain expenses in accordance with pricing assumptions drive our margins on the life products. On many products, we have the ability to mitigate adverse experience through adjustments to credited interest rates, policyholder dividends or cost of insurance charges.
•	Our ability to manage our investment portfolio to maximize investment returns while providing adequate liquidity for obligations to policyholders and minimizing the risk of defaults or impairments of invested assets.

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• Our ability to manage the level of our operating expenses.

• Actual experience and changes in assumptions for expected surrender and withdrawal rates, mortality and spreads used in the amortization of deferred acquisition costs.

Our profitability is also impacted by changes in accounting guidance that impact the timing of profit recognition. During the first quarter of 2012 we will be adopting new guidance that will reduce the deferral of costs associated with the issuance of life insurance and annuity products which will increase the amount of such expenses recognized in the current year, and reduce the amount of amortization in future years. We currently estimate that the impact upon adoption will be to reduce stockholders' equity by approximately $75.8 million at December 31, 2011, $101.7 million at December 31, 2010 and $117.1 million at December 31, 2009. Net income from continuing operations is expected to be reduced by $3.1 million ($0.10 per basic and diluted common share) for 2011, $3.3 million ($0.11 per basic and diluted common share) for 2010 and $4.1 million ($0.14 per basic common share and $0.13 per diluted common share) for 2009. Net income (loss) from discontinued operations is expected to increase for 2011 due to a decrease in the loss recognized on the sale of EquiTrust Life by $12.6 million ($0.41 per basic common share and $0.40 per diluted common share). Net income from discontinued operations will decrease $1.7 million ($0.05 per basic and diluted common share) for 2010 and $1.0 million ($0.03 per basic and diluted common share) for 2009.

In addition to the impact from the adoption of the guidance above, the accounting standards setting bodies are currently working on a project evaluating the accounting for insurance contracts, which may significantly impact the timing of profit emergence for those products. It is uncertain what the outcome of that project will be or when it will be completed.

Impact of Recent Business Environment

Economic data, in general, surpassed expectations at year-end 2011, and initial Gross Domestic Product estimates indicate the United States economy expanded in the fourth quarter at its fastest pace for the year. Consumer activity suggests improving confidence, while measures of business sentiment and activity reflect a favorable environment. Housing statistics suggest the sector experienced modest improvement late in the year, which is normally a seasonally slow period. In addition, multiple labor market indicators suggest a developing upswing, which is encouraging as employment growth can provide a powerful reinforcement to economic growth.

Our business generally benefits from moderate to strong economic expansion. Conversely, a lackluster economic recovery characterized by higher unemployment, lower family income, lower consumer spending, muted corporate earnings growth and lower business investment, could adversely impact the demand for our products in the future. We also may experience a higher incidence of claims, lapses or surrenders of policies. We cannot predict whether or when such actions may occur, or what impact, if any, such actions could have on our business, results of operations, cash flows or financial condition.

Bond yields generally finished lower for the year, as declining U.S. Treasury yields offset widening credit spreads. The yield curve remained moderately steep at year-end with low short-term interest rates, making our annuity products competitive relative to bank-issued certificates of deposit. Strong liquidity and favorable corporate profitability continue to support fundamental credit quality. In the securitized markets, yields for asset-backed securities generally declined given continued strong investor demand amidst improving consumer fundamentals. Yields for residential mortgage-backed securities are moderately attractive, while yields on high quality commercial mortgage-backed securities declined during the year. Structured product yields, however, remain relatively attractive compared to corporate yields.

The fair value of our investment portfolio fluctuated during 2011 with the fluctuation in market yields. Additionally, certain sectors remain somewhat dislocated, making it difficult to value some securities. As a result, certain valuations require greater estimation and judgment, as well as valuation methods that are more complex. These values may not ultimately be realizable in a market transaction, and such values may change rapidly as market conditions change and valuation assumptions are modified. See Note 3 to our consolidated financial statements for details on the nature of our net unrealized gain position and Note 5 for discussion of our valuation methods.

Our products generally place strain on statutory capital when sold and add to capital in subsequent years. We maintain capital levels in accordance with certain statutory and rating agency requirements, and since early 2009 have continued to improve our capital levels. See the "Liquidity and Capital Resources" section below for additional details regarding our capital position.

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Results of Operations for the Three Years Ended December 31, 2011
	Year ended December 31,
	2011			2010			2009
	(Dollars in thousands, except per share data)
Revenues	$	618,337		$	606,342		$	533,209
Benefits and expenses	543,818			484,130			459,490
	74,519			122,212			73,719
Income taxes	(20,479		)	(41,348		)	(24,121		)
Equity income	1,284			3,459			750
Net income of continuing operations	55,324			84,323			50,348
Loss on sale of subsidiary	(68,507		)	—			—
Income from discontinued operations	44,465			36,252			19,344
Net Income	31,282			120,575			69,692
Net loss attributable to noncontrolling interest	(6		)	78			143
Net income attributable to FBL Financial Group, Inc.	$	31,276		$	120,653		$	69,835
Earnings per common share
Continuing operations	$	1.80		$	2.77		$	1.67
Discontinued operations	(0.79		)	1.19			0.65
Income available to common stockholders	$	1.01		$	3.96		$	2.32
Earnings per common share - assuming dilution
Continuing operations	$	1.77		$	2.74		$	1.67
Discontinued operations	(0.77		)	1.18			0.64
Income available to common stockholders	$	1.00		$	3.92		$	2.31
Other data
Premiums collected, net of reinsurance	$	678,893		$	634,523		$	611,669
Life insurance in force, end of year (in millions)	49,779			48,387			46,025
Life insurance lapse rates	6.8		%	6.3		%	6.8		%
Traditional annuity withdrawal rates	4.6		%	5.0		%	4.3		%

Premiums collected represents cash premiums received on life insurance policies and deposits on annuity and universal life-type products. Premiums collected is not a measure used in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). See Note 15 to our consolidated financial statements included in Item 8 for a discussion of the most comparable GAAP financial measures and, as applicable, a reconciliation to such GAAP measures. We use premiums collected to measure the productivity of our agents. See the "Segment Information" section that follows for additional discussion of our premiums collected.

The lapse and withdrawal rates changed in 2011 and 2010 due to normal fluctuations and remain within our expected levels.

Net Income Attributable to FBL Financial Group, Inc.

Net income attributable to FBL Financial Group, Inc. (FBL Net Income) was $31.3 million for 2011 compared to $120.7 million in 2010 and $69.8 million in 2009. As discussed in detail below, net income decreased in 2011 primarily due to the sale of our wholly-owned subsidiary, EquiTrust Life Insurance Company (EquiTrust Life), a related loss on debt redemption and increased mortality experience. These items were partially offset by improved results of the discontinued operations and increases in spreads earned and the volume of business in force on our continuing operations. Net income improved in 2010 primarily due to the impact of net realized gains/losses on investments, an improvement in the results of our discontinued

27

operations, and increases in spreads earned and the volume of business in force on our continuing operations.

The increase in volume of business in force is quantified in the detailed discussion that follows by summarizing the face amount of insurance in force for life products or account values of contracts in force for interest sensitive products. The face amount of life insurance in force represents the gross death benefit payable to policyholders and account value represents the value of the contract to the contract holder before application of surrender charges or reduction for any policy loans outstanding.The following discussion provides additional details on the items impacting FBL Net Income.

Sale of EquiTrust Life Insurance Company and Notes Redemptions

We sold our wholly-owned subsidiary EquiTrust Life for $465.3 million in an all cash transaction that closed on December 30, 2011. The sales price reflects adjustments to the initial closing price determined on the closing date and is potentially subject to further post closing adjustments based on a final statutory net worth reconciliation. The transaction resulted in an after-tax loss on the sale of $68.5 million, or $2.23 per basic and $2.19 per diluted common share. The loss consists of the sales price less the net book value of the entity and one-time transaction costs and termination benefits totaling $12.5 million, before tax.

The sale allows us to exit the annuity business sold through the independent distribution channel, which represents a majority of EquiTrust Life's operations, focus on our core Farm Bureau Life operations and undertake certain capital management initiatives. While EquiTrust Life was sold in its entirety, Farm Bureau Life is assuming a limited portion of the EquiTrust Life business related to variable universal life and variable annuity products distributed through various unaffiliated third parties, as well as a small amount of fixed life and annuity products. The business component sold (herein described as “the EquiTrust Life Business”) encompassed our former Traditional Annuity - Independent segment and a smaller portion of our remaining Life Insurance and Corporate and Other segments.

As a result of the sale, the operations of the component sold and the related loss on sale are reflected as discontinued operations for all periods presented, with financial information removed from the discussion that follows unless otherwise noted. Income generated from discontinued operations increased 22.7% in 2011 to $44.5 million and 87.4% in 2010 to $36.2 million. The increase in 2011 was primarily due to the impact of realized gains on investments and changes in assumptions used in the calculation of deferred acquisition costs (unlocking). The increase in 2010 was primarily due to an increase in spreads earned and the impact of unlocking.

In connection with the EquiTrust Life sale, we are undertaking certain capital management actions, including the redemption of $225.0 million of our long-term debt in accordance with the mandatory redemption provisions of the underlying notes. This includes $50.0 million Senior Notes with our affiliate, Farm Bureau Property & Casualty Insurance Company (Farm Bureau Property & Casualty), which was extinguished on December 30, 2011. The remaining $175.0 million of unaffiliated debt was extinguished on January 30, 2012, at the make-whole redemption price of $210.9 million. On December 30, 2011, we exercised the provisions of the trust indentures and deposited $211.6 million into two irrevocable defeasance trusts for the principal, accrued interest and estimated make-whole premium. The trust funds were not withdrawable by us, and the note holders were paid from assets in the trusts on January 30, 2012.

The make-whole redemption premium was based on U.S. Treasury yields and considered an embedded derivative. This derivative liability had a fair value of $33.1 million at December 31, 2011. This change in fair value is reported as loss on debt redemption in continuing operations. See the "Liquidity and Capital" section that follows and Note 8 to our consolidated financial statements for additional details on our debt and capital management initiatives.

Nonrecurring Gains from Refinements to Estimates

In 2011, refinements were made to the methods and assumptions used to calculate the amortization of value of insurance in force and deferred acquisition costs. Refinements were also made to the calculation of reserves for certain traditional life contracts in 2010 and for certain interest sensitive life insurance and annuity contracts in 2009. These refinements, along with associated adjustments to deferred acquisition costs and taxes, as applicable, resulted in an increase to after tax net income from continuing operations of $5.0 million ($0.16 per basic and diluted common share) in 2011, $3.0 million ($0.10 per basic and diluted common share) in 2010 and $7.2 million ($0.24 per basic and diluted common share) in 2009.

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Spreads Earned on our Universal Life and Individual Traditional Annuity Products
	Year ended December 31,
	2011		2010		2009
Weighted average yield on cash and invested assets	6.29	%	6.31	%	6.22	%
Weighted average interest crediting rate	3.55	%	3.78	%	4.01	%
Spread	2.74	%	2.53	%	2.21	%

The weighted average yield on cash and invested assets represents the yield on cash and investments backing the universal life and traditional annuity products net of investment expenses. The yield also includes losses relating to our interest rate swap program for certain individual traditional annuities. In 2009, the weighted average crediting rate and spread are computed excluding the impact of refining certain reserve estimates. See the "Segment Information" section that follows for further discussion of our spreads.

Impact of Unlocking
	Year ended December 31,
	2011			2010			2009
	(Dollars in thousands, except per share data)
Amortization of deferred acquisition costs	$	(2,467	)	$	1,689		$	3,084
Amortization of value of insurance in force acquired	408			4			756
Amortization of unearned revenues	(193		)	(220		)	211
Increase (decrease) to pre-tax income	$	(2,252	)	$	1,473		$	4,051
Impact per common share (basic and diluted)	$	(0.05	)	$	0.03		$	0.09

We periodically revise the key assumptions used in the calculation of the amortization of deferred acquisition costs, value of insurance in force acquired and unearned revenues for participating life insurance, variable and interest sensitive products, as applicable, through an "unlocking" process. Revisions are made based on historical results and our best estimate of future experience. The impact of unlocking is recorded in the current period as an increase or decrease to amortization of the respective balances. While the unlocking process can take place at any time, as needs dictate, the process typically takes place annually with different blocks of business unlocked each quarter. The impact in 2011, 2010 and 2009 was primarily due to updating the amortization models for assumptions relating to withdrawal rates, earned spreads, mortality and the current volume of business in force. See the "Segment Information" section that follows for additional discussion of our unlocking adjustments.

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Impact of Operating Adjustments on FBL Net Income
	Year ended December 31,
	2011			2010			2009
	(Dollars in thousands)
Realized gains (losses) on investments	$	(8,296	)	$	11,576		$	(30,660	)
Change in net unrealized gains/losses on derivatives	445			4,386			4,653
Change in amortization of:
Deferred acquisition costs	356			(3,273		)	(2,059		)
Value of insurance in force acquired	(46		)	(137		)	(13		)
Unearned revenue reserve	10			49			(66		)
Loss on debt redemption	(33,176		)	—			—
Income tax offset	14,249			(4,409		)	9,852
Net impact of operating income adjustments on continuing operations	(26,458		)	8,192			(18,293		)
Net impact of discontinued operations	(24,042		)	36,252			19,344
Net impact of operating income adjustments	$	(50,500	)	$	44,444		$	1,051

	Year ended December 31,
	2011			2010		2009
	(Dollars in thousands, except per share data)
Summary of adjustments noted above after offsets and income taxes:
Realized gains/losses on investments	$	(5,825	)	$	5,899	$	(20,025	)
Change in net unrealized gains/losses on derivatives	931			2,293		1,732
Loss on debt redemption	(21,564		)	—		—
Net impact of discontinued operations	(24,042		)	36,252		19,344
Net impact of operating income adjustments	$	(50,500	)	$	44,444	$	1,051
Net impact per common share - basic	$	(1.64	)	$	1.46	$	0.03
Net impact per common share - assuming dilution	$	(1.62	)	$	1.45	$	0.03

As noted in the "Segment Information" section that follows, we use both net income (loss) and operating income to measure our operating results. Operating income for the years covered by this report equals net income (loss), excluding the impact of realized gains and losses on investments, discontinued operations, debt redemption and the change in net unrealized gains and losses on derivatives. The rationale for excluding these items from operating income is explained in Note 15 to our consolidated financial statements.

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Changes in FBL Net Income
	Year ended December 31,
	2011 vs. 2010			2010 vs. 2009
	(Dollars in thousands)
Premiums and product charges	$	9,685		$	13,026
Net investment income	18,770			21,054
Realized gains/losses on investments	(19,872		)	42,236
Other income and other expenses	2,542			(2,719		)
Interest sensitive products benefits	(15,494		)	(13,917		)
Traditional life insurance policy benefits	(11,238		)	(7,765		)
Underwriting, acquisition and insurance expenses	56			(4,247		)
Interest expense	1,034			825
Loss on redemption of debt	(33,176		)	—
Income taxes	20,869			(17,227		)
Noncontrolling interest and equity income	(2,259		)	2,644
Loss on sale of subsidiary	(68,507		)	—
Income from discontinued operations	8,213			16,908
Total change in FBL Net Income	$	(89,377	)	$	50,818

A detailed discussion of changes in net income from continuing operations follows.

Premiums and Product Charges
	Year ended December 31,
	2011		2010		2009
	(Dollars in thousands)
Premiums and product charges:
Interest sensitive product charges	$	97,103	$	93,881	$	88,757
Traditional life insurance premiums	168,519		162,056		154,154
Total	$	265,622	$	255,937	$	242,911

Premiums and product charges increased 3.8% in 2011 to$265.6 millionand 5.4% in 2010 to $255.9 million primarily due to the impact of an increase in the volume of business in force. The increase in business in force in 2011 and 2010 was primarily attributable to sales by our Farm Bureau Life agency force exceeding the loss of in force amounts through deaths, lapses and surrenders. Our average aggregate traditional life insurance in force, net of reinsurance ceded, totaled$27,416.0 million for 2011, $25,871.0 million for 2010 and $23,992.2 million for 2009. The change in life insurance in force is not proportional to the change in premium income due to a higher concentration of term policies than whole life policies in our traditional life block of business. The premium for a term policy per $1,000 face amount is less than that for a whole life policy.

The increases in interest sensitive product charges were primarily due to cost of insurance charges on universal and variable universal life policies. Cost of insurance charges increased primarily due to growth and aging of the business in force. Our average universal and variable universal life insurance in force totaled$3,036.1 million for 2011, $2,810.4 million for 2010 and $2,601.0 million for 2009. Aging of the insureds also contributed to the increase in the cost of insurance charges. The average age of our universal and variable universal life policyholders was 47.9 years in 2011, 47.3 years in 2010 and 46.6 years in 2009.

Net Investment Income

Net investment income, which excludes investment income on separate account assets relating to variable products, increased 5.8% in 2011 to $343.3 millionand 6.9% in 2010 to $324.5 million. The increases are primarily due to an increase in average invested assets compared with the prior year, partially offset by lower investment yields. Average invested assets increased 7.8% to $5,887.5 million (based on securities at amortized cost) in 2011 and 8.5% to $5,460.5 million in 2010. The increases

31

are principally due to positive cash flows from operating and financing activities which included the issuance of funding agreements to the Federal Home Loan Bank (FHLB) totaling $228.5 million during 2010.

The annualized yield earned on average invested assets decreased to 6.03% in 2011 from 6.15% in 2010 and 6.24% in 2009. The decreases in yields earned are primarily due to lower investment yields on new acquisitions compared to our yields on investments maturing or being paid down. The average yields on fixed maturity securities purchased were 5.10% for 2011, 4.67% for 2010 and 6.40% for 2009. The average yields on fixed maturity securities maturing or being paid down were 5.92% for 2011, 5.76% for 2010 and 5.97% for 2009. For more discussion on fixed maturity acquisition yields see the "Financial Condition" section below. The decrease in 2011 was partially offset by an increase in fee income from bond calls, tender offers and mortgage loan prepayments. Investment fee income totaled $4.6 million in 2011, $0.8 million in 2010 and $1.0 million in 2009. Net investment income also includes $0.6 million in 2011, $0.4 million in 2010 and $0.8 million in 2009 representing the change of net discount accretion on mortgage and asset-backed securities.

Net investment income also includes derivative income resulting from income or loss from interest rate swaps, call options and embedded derivatives included in our modified coinsurance contracts. Derivative income or loss will fluctuate based on market conditions. See Note 4 to our consolidated financial statements for additional details on our derivatives.

See the "Financial Condition - Investments" section that follows for a description of how changes in prepayment speeds impact net investment income.

Realized Gains (Losses) on Investments
	Year ended December 31,
	2011			2010			2009
	(Dollars in thousands)
Realized gains (losses) on investments:
Realized gains on sales	$	5,818		$	21,918		$	14,178
Realized losses on sales	(463		)	(526		)	(6,430		)
Total other-than-temporary impairment charges	(20,206		)	(30,637		)	(61,068		)
Net realized investment losses	(14,851		)	(9,245		)	(53,320		)
Non-credit losses included in accumulated other comprehensive income (loss)	6,555			20,821			22,660
Total reported in statements of operations	$	(8,296	)	$	11,576		$	(30,660	)

The level of realized gains (losses) is subject to fluctuation from period to period depending on the prevailing interest rate and economic environment and the timing of the sale of investments. See "Financial Condition - Investments" and Note 3 to our consolidated financial statements for details regarding our unrealized gains and losses on available-for-sale securities at December 31, 2011 and 2010.

We monitor the financial condition and operations of the issuers of securities rated below investment grade and of the issuers of certain investment grade securities on which we have concerns regarding credit quality. If we determine that an unrealized loss is other than temporary, the security is written down to its fair value. A portion of the write down attributable to non-credit factors is recognized in accumulated other comprehensive income (loss). See additional details regarding the non-credit portion of the write downs and our methodology for evaluating investments for other-than-temporary impairment in Notes 1 and 3 to our consolidated financial statements.

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Investment Credit Impairment Losses Recognized in Net Income
	Year ended December 31,
	2011		2010		2009
	(Dollars in thousands)
Corporate securities:
Basic industrial	$	—	$	—	$	3,925
Communications	—		—		1,916
Consumer cyclical	—		—		4,000
Energy	1,850		—		—
Finance	439		1,376		6,086
Manufacturing	1,000		—		—
Residential mortgage-backed	1,259		—		293
Commercial mortgage-backed	—		54		—
Other asset-backed	3,814		7,243		8,644
Collateralized debt obligations	—		42		12,922
	8,362		8,715		37,786
Mortgage loans	—		816		473
Real estate and other assets	5,289		285		149
Total other-than-temporary impairment losses reported in net income	$	13,651	$	9,816	$	38,408

Fixed maturity other-than-temporary credit impairment losses for 2011 were incurred within several industry sectors. The energy sector loss related to an oil carrier with credit concerns, including a rating agency downgrade. The manufacturing sector and finance sector losses are related to companies restructuring their debt obligations due to financial difficulties. Losses were also incurred within our residential and other asset-backed securities, generally due to concerns over potential defaults and weakness in underlying collateral values. Furthermore, during 2011 we recognized an other-than-temporary impairment loss of $4.7 million on an equity method investment in an uncertain future financial condition due to current class action litigation.

Fixed maturity other-than-temporary credit impairment losses for 2010 were incurred within our other asset backed securities, generally due to concerns over potential defaults and weakness in underlying collateral values. Financial sector losses were caused by deferred interest coupons on hybrid financial instruments which likely will not be recovered. Fixed maturity other-than-temporary credit impairment losses for 2009 were incurred across several sectors as a result of the economic downturn which reduced the demand for consumer products, lowered collateral values and limited access to operating capital. Particularly impacted during 2009 were the finance sector, other asset-backed securities and our collateralized debt obligations, which incurred losses as collateral values declined and borrower defaults increased. See Note 3 to our consolidated financial statements for further discussion regarding our process for identifying other-than-temporary impairment losses.

Other Income and Other Expenses

Other income and other expensesinclude revenues and expenses, respectively, relating primarily to our non-insurance operations. Our non-insurance operations include management, advisory, marketing and distribution services and leasing activities. Fluctuations in these financial statement line items are primarily attributable to changes in the level of these services provided during the years. In 2011, other income includes $1.5 million in proceeds received from the merger of the EquiTrust Mutual Funds with funds sponsored by a third party. Merger-related expenses included in other expenses, totaled $1.2 million in 2011. Other income in 2011 also includes a $1.0 million cash settlement for our share of damages awarded upon settlement of litigation involving an agency matter.

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Interest Sensitive Product Benefits
	Year ended December 31,
	2011		2010		2009
	(Dollars in thousands)
Interest sensitive product benefits:
Interest credited	$	139,289	$	134,714	$	121,484
Interest sensitive death benefits	52,257		41,474		40,947
Other	536		400		240
Total	$	192,082	$	176,588	$	162,671

Interest sensitive product benefits increased 8.8% in 2011 to $192.1 million and 8.6% in 2010 to $176.6 million. The increase in 2011 is primarily due to an increase in death benefits and the volume of business in force, partially offset by reductions in interest crediting rates in 2011 and 2010. The increase in 2010 is primary due to refinements made to certain reserve estimates in 2009 and an increase in the volume of business in force, partially offset by reductions in interest crediting rates in 2010 and 2009.

The average account value of interest sensitive products in force increased in 2011 and 2010 primarily due to traditional deferred annuity sales and advances on our funding agreement with the FHLB. These average account values totaled $3,036.1 million in 2011, $2,810.4 million in 2010 and $2,601.0 million in 2009. The weighted average interest crediting rate and spread are computed excluding the impact of refining certain reserve estimates in 2009. The weighted average crediting rates were 3.55% for 2011, 3.78% for 2010 and 4.01% for 2009. See the "Segment Information" section that follows for additional details on these rates. As discussed above in "Results of Operations," during 2009 we refined the calculation of certain interest sensitive life reserves resulting in an $11.4 million decrease to interest credited.

Interest sensitive death benefits increased in 2011 primarily due to a higher number of universal life and variable universal life claims as well as an increase in the average amount per claim.

Traditional Life Insurance Policy Benefits
	Year ended December 31,
	2011		2010		2009
	(Dollars in thousands)
Traditional life insurance policy benefits:
Death benefits and surrenders	$	105,332	$	95,957	$	91,250
Increase in traditional life future policy benefits	43,627		41,223		36,909
Policyholder dividends	17,030		17,571		18,827
Total	$	165,989	$	154,751	$	146,986

Traditional life insurance policy benefits increased7.3% in 2011 to $166.0 million and 5.3% in 2010 to $154.8 million. The increases in 2011 and 2010 are primarily due to increased mortality experience and an increase in business in force. In addition, as discussed in "Results of Operations" above, we refined the calculation of traditional life reserve estimates resulting in a decrease to traditional life future policy benefits of $5.7 million in 2010.

Traditional life insurance death benefits, net of reserves released, increased 9.8% to $41.6 million in 2011 and 18.4% to $37.9 million in 2010. As discussed under "Premiums and Product Charges" above, the increase in business in force is primarily attributable to sales of traditional life products by our Farm Bureau Life agency force exceeding the loss of in force amounts through deaths, lapses and surrenders. The change in traditional life future policy benefits may not be proportional to the change in traditional premiums and benefits as reserves on term policies are generally less than reserves on whole life policies. Policyholder dividends continue to decrease due to reductions in our dividend crediting rates in response to the impact of declining market interest rates on our investment portfolio yield as discussed in the "Net Investment Income" section above. Traditional life insurance benefits can fluctuate from period to period primarily as a result of changes in mortality experience.

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Underwriting, Acquisition and Insurance Expenses

	Year ended December 31,
	2011			2010		2009
	(Dollars in thousands)
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	$	15,218		$	13,953	$	13,613
Amortization of deferred acquisition costs	49,947			46,343		40,123
Amortization of value of insurance in force acquired	(4,658		)	1,720		2,636
Other underwriting, acquisition and insurance expenses, net of deferrals	62,880			61,427		62,824
Total	$	123,387		$	123,443	$	119,196

Underwriting, acquisition and insurance expenses decreased less than 0.1% in 2011 to $123.4 million and increased 3.6% in 2010 to $123.4 million. Amortization of deferred acquisition costs increased in 2011 and 2010 primarily due to the impact of market performance on our variable products, an increase in the volume of business in force and the impact of unlocking. These increases were partially offset by the impact of mortality and operating income adjustments in 2011 and reduced amortization on our traditional annuity products in 2010. Amortization of value of insurance in force decreased in 2011 primarily due to the impact of refinements and assumptions made to our valuation models totaling $6.9 million. See the "Impact of Operating Adjustments on FBL Net Income" and "Impact of Unlocking" sections above for a discussion of these items. In addition, the "Segment Information" section that follows provides further detail on the other items impacting amortization.

Other underwriting, acquisition and insurance expenses increased 2.4% in 2011 to $62.9 million and decreased 2.2% in 2010 to $61.4 million. The increase in 2011 is primarily due to an increase in employee benefit expenses and a reduction in expense reimbursement on reinsured business. The decrease in 2010 is due to the implementation of cost-saving measures and $1.8 million in associated one-time charges incurred in 2009.

Interest Expense

Interest expense decreased 10.8% to $8.5 million in 2011 primarily due to refinancing our $100.0 million 9.25% Senior Notes payable to affiliates with $100.0 million 6.10% Senior Notes payable to the same affiliates in May 2011. Interest expense decreased 8.0% to $9.6 million in 2010 primarily due to the termination of our $60.0 million revolving line of credit agreement with Bank of America N.A. and Bankers Trust Company N.A. during the first quarter of 2009. Our average debt outstanding was $371.2 million in 2011 compared to $371.1 million in 2010 and $380.2 million in 2009.

Interest on debt required to be redeemed due to the sale of EquiTrust Life is reported in income from discontinued operations in our statements of operations and totaled $13.8 million in 2011 and $14.9 million in 2010 and 2009. See the "Liquidity and Capital Resources" section that follows for additional discussion on debt redemptions related to the EquiTrust Life sale.

Income Taxes

Income tax expense totaled $20.5 million in 2011, $41.3 million in 2010 and $24.1 million in 2009. Tax expense (benefit) on discontinued operations are netted with those line items. The effective tax rate on continuing operations was 27.5% for 2011, 33.8% for 2010 and 32.7% for 2009. The effective tax rates differ from the federal statutory rate of 35% primarily due to the impact of tax-exempt dividend income, tax-exempt interest and incentive stock options. The permanent differences between book and tax income had a greater impact on the effective rate in 2011 due to the lower amount of pre-tax income and an increase in the amount of the permanent differences between book and taxable income.

Equity Income, Net of Related Income Taxes

Equity income, net of related income taxes, totaled $1.3 million in 2011, $3.5 million in 2010 and $0.8 million in 2009. Equity income includes our proportionate share of gains and losses attributable to our ownership interest in partnerships, joint ventures and certain companies where we exhibit some control but have a minority ownership interest. Given the timing of availability of financial information from our equity investees, we will consistently use information that is as much as three months in arrears for certain of these entities. Several of these entities are investment companies whose operating results are derived primarily from unrealized and realized gains and losses generated by their investment portfolios. As is normal with these types

35

of entities, the level of these gains and losses is subject to fluctuation from period to period depending on the prevailing economic environment, changes in prices of bond and equity securities held by the investment partnerships, timing and success of initial public offerings and other exit strategies, and the timing of the sale of investments held by the partnerships and joint ventures.

Equity income decreased in 2011 due to increasing investments in entities that invest primarily in low income housing, which are expected to have operating losses that will be more than offset with an economic benefit provided through future tax credits. Equity income increased during 2010 due the impact of increased investments in limited partnerships and the sale of real estate by a limited partnership.

Segment Information

We analyze operations by reviewing financial information regarding our primary products that are aggregated into the Annuity (formerly known as "Traditional Annuity - Exclusive Distribution") and Life Insurance (formerly known as "Traditional and Universal Life Insurance") product segments. In addition, our Corporate and Other segment includes various support operations, corporate capital and other product lines that are not currently underwritten by the Company.

We analyze our segment results based on pre-tax operating income (loss). Accordingly, income taxes are not allocated to the segments. In addition, operating results are reported net of transactions between the segments. Operating income (loss) for the three years ended December 31, 2011 represents net income excluding, as applicable, the impact of:

• realized gains and losses on investments,

• changes in net unrealized gains and losses on derivatives,

• discontinued operations and

• loss on debt redemption associated with disposed operations.

The impact of realized gains and losses on investments and unrealized gains and losses on derivatives also includes adjustments for taxes and that portion of amortization of deferred acquisition costs, unearned revenue reserve and value of insurance in force acquired attributable to such gains or losses. Our rationale for using operating income (loss), in addition to net income, to measure our performance is summarized in Note 15 to our consolidated financial statements included in Item 8.

Reconciliation of Net Income to Pre-tax Operating Income
	Year ended December 31,
	2011			2010			2009
	(Dollars in thousands)
Net income attributable to FBL Financial Group, Inc.	$	31,276		$	120,653		$	69,835
Net impact of operating income adjustments (1)	50,500			(44,444		)	(1,051		)
Operating income	81,776			76,209			68,784
Income taxes on operating income	33,838			38,801			34,377
Pre-tax operating income	$	115,614		$	115,010		$	103,161
Pre-tax operating income (loss) by segment:
Annuity	$	60,728		$	52,286		$	34,633
Life Insurance	55,395			58,675			71,298
Corporate and Other	(509		)	4,049			(2,770		)
	$	115,614		$	115,010		$	103,161

(1) See "Net Income Attributable to FBL Financial Group, Inc." above for additional details on operating income adjustments.

A discussion of our operating results, by segment, follows:

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Annuity Segment
	Year ended December 31,
	2011			2010			2009
	(Dollars in thousands)
Pre-tax operating income
Operating revenues:
Interest sensitive product charges and other income	$	666		$	567		$	892
Net investment income	181,974			166,932			148,876
	182,640			167,499			149,768
Benefits and expenses	121,912			115,213			115,135
Pre-tax operating income	$	60,728		$	52,286		$	34,633
Other data
Annuity premiums collected	$	369,156		$	316,636		$	305,680
Policy liabilities and accruals, end of year	3,190,985			2,952,905			2,530,341
Individual annuity spread:
Weighted average yield on cash and invested assets	6.24		%	6.22		%	6.14		%
Weighted average interest crediting rate	3.36		%	3.62		%	3.92		%
Spread	2.88		%	2.60		%	2.22		%
Individual annuity withdrawal rate	4.6		%	5.0		%	4.3		%

Pre-tax operating income for the Annuity segment increased 16.1% in 2011 to $60.7 million and 51.0% in 2010 to $52.3 million. The increase in 2011 was primarily due to increases in spreads earned and the volume of business in force, partially offset by increases in the amortization of deferred acquisition costs and the value of insurance in force. The increase in 2010 was primarily due to increases in spreads earned and the volume of business in force and decreases in amortization of deferred acquisition costs and the value of insurance in force. The average aggregate account value for annuity contracts in force increased to $2,135.0 million in 2011, $1,940.0 million in 2010 and $1,744.2 million in 2009 due to sales from Farm Bureau Life and in 2010, advances on a funding agreement with the FHLB totaling $228.5 million.

Benefits and expenses increased in 2011 primarily due to increases in the volume of business in force and the amortization of deferred acquisition costs and the value of insurance in f