Managment and Other Agreements

12 Months Ended

Dec. 31, 2019

Management and Other Agreements [Abstract]

Management and other agreements [Text Block]

Management and Other Agreements

We have management agreements under which we provide general business, administrative and management services to Farm Bureau Property & Casualty Insurance Company and other affiliates. Fee income for these services totaled $2.0 million in 2019, 2018 and 2017. In addition, as discussed in Note 1, we provide investment advisory services and lease property and equipment under agreements with Farm Bureau Property & Casualty, other affiliates and non-affiliates.

We share certain office facilities and services with the IFBF and its affiliated companies. These expenses are allocated based on cost and time studies that are updated annually and consist primarily of rent, salaries and related expenses, travel and other operating costs. In addition, Farm Bureau Management Corporation, a wholly-owned subsidiary of the IFBF, provides certain services to us under a separate arrangement. Related expenses, net of reimbursements for certain services we provide, totaled $1.6 million in 2019, $1.5 million in 2018 and $1.3 million in 2017.

We also have an expense allocation agreement with Farm Bureau Property & Casualty Insurance Company for the use of property and equipment. Expense relating to this agreement totaled $0.3 million in 2019, 2018 and 2017.

We have service agreements with the Farm Bureau-affiliated property-casualty companies operating within our marketing territory, including Farm Bureau Property & Casualty Insurance Company and another affiliate. Under the service agreements,

the property-casualty companies are responsible for development and management of our agency force for a fee. We incurred expenses totaling $8.0 million in 2019, $9.2 million in 2018 and $9.1 million in 2017 relating to these arrangements.

We are licensed by the IFBF to use the “Farm Bureau” and “FB” designations in Iowa. In connection with this license, we incurred royalty expense totaling $0.6 million in 2019, 2018 and 2017. The royalty agreement with the IFBF provides IFBF an option to terminate the agreement if our quarterly common stock dividend is less than $0.10 per share. We have similar royalty arrangements with other state Farm Bureau organizations in our market territory. Total royalty expense to Farm Bureau organizations other than the IFBF totaled $1.7 million in 2019 and $1.8 million in 2018 and 2017. The loss of the right to use these designations in a state with a high premium concentration could have a material adverse effect on operating results.

Premium Concentration by State
	Year ended December 31,
	2019		2018		2017
Life and annuity collected premiums:
Iowa	26.3	%	25.5	%	25.9	%
Kansas	16.4		19.2		18.1
Oklahoma	7.6		7.9		8.2