Committments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Legal Proceedings

In the normal course of business, we may be involved in litigation in which damages are alleged that are substantially in excess of contractual policy benefits or certain other agreements. We are not aware of any claims threatened or pending against FBL Financial Group, Inc. or any of its subsidiaries for which a material loss is reasonably possible.

Lease Commitments

As discussed in Note 1 to our consolidated financial statements, we adopted new accounting guidance for leases during 2019. Upon adoption, we elected to follow the following practical expedients as allowed under the new guidance:

• We did not reassess whether any expired or existing contracts are or contain leases.

• We did not reassess the lease classification (operating vs. finance) for any expired or existing leases.

• We did not reassess initial direct costs for any existing leases.

We consider leases with original terms of one year or less to be short-term. We have elected not to carry short-term leases on our consolidated balance sheet. We have no agreements with lease and non-lease components. None of our leases are considered finance leases.

On the date of adoption, January 1, 2019, we held four long-term leases; and at December 31, 2019, we held eight long-term leases, all of which relate to real estate. The net present value of future cash flows for these leases is reported within our consolidated balance sheet in other assets and other liabilities. The carrying value of these leases total $14.0 million at December 31, 2019 and $7.2 million on the date of adoption. The most significant lease is for our home office facilities, which is owned by a subsidiary of the IFBF. The carrying value of this lease increased from $6.1 million on January 1, 2019 to $12.6 million on December 31, 2019 because we have reasonable assurance of exercising the five-year renewal of the lease term due to substantial leasehold improvements underway on this property. All of our leases are based on fixed terms which expire from 2021 through 2026 but allow renewal. Two of our leases, not including the home office property, contain provisions that allow the lease cost to increase based on a stated step-up schedule or changes in the consumer price index. Our estimated incremental borrowing rate of 4.5% was used in determining the net present value of the future lease commitments.

Lease expense and the related cash flows totaled $5.4 million in 2019. For our home office building, lease expense totaled $4.3 million in 2018 and $4.1 million in 2017. These amounts are net of $0.2 million in 2018 and 2017 in amortization of a deferred gain on the exchange of our home office properties for common stock in 1998. Upon adoption of the new leasing standard, the remaining unamortized deferred gain totaling $0.5 million at December 31, 2018 was eliminated.

Future remaining minimum lease payments for the long-term leases discussed above, as of December 31, 2019, are as follows:

Lease commitments by year
	December 31, 2019
	(Dollars in thousands)
2020	$	2,700
2021	2,702
2022	2,525
2023	2,337
2024	2,278
Thereafter	4,400
Total minimum lease payments	16,942
Less: Interest	(2,899		)
Present value of lease liabilities	$	14,043

Commitments for Partnership Investments and Private Corporate Bond Investments

At December 31, 2019, we have unfunded investment commitments to limited partnerships and limited liability companies of $56.6 million and privately placed corporate securities commitments of $11.0 million.

Other

We self-insure our employee health and dental claims. However, claims in excess of our self-insurance limits are fully insured. We previously funded insurance claims through a self-insurance trust, which was dissolved as of December 31, 2019. Expenses equal to our best estimate of claims will continue to be reflected in operations and an allowance for incurred but not reported claims is now included in liabilities.

From time to time, assessments are levied on our insurance subsidiaries by life and health guaranty associations in most states in which the subsidiaries are licensed. These assessments, which are accrued for, are to cover losses of policyholders of insolvent or rehabilitated companies. In some states, these assessments can be partially recovered through a reduction in future premium taxes. Expenses for guaranty fund assessments, net of related premium tax offsets, totaled less than $0.1 million in 2019, 2018 and 2017.