EX-99.O 8 dex99o.htm REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Report of Independent Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON SCHEDULES

 

The Board of Directors and Stockholder

Farm Bureau Life Insurance Company

 

We have audited the consolidated balance sheets of Farm Bureau Life Insurance Company as of December 31, 2005 and 2004, and the related consolidated statements of income, changes in stockholder’s equity and cash flows for each of the three years in the period ended December 31, 2005, and have issued our report thereon dated February 3, 2006 (included elsewhere in this Registration Statement). Our audits also included the financial statement schedules listed in Item 26 of this Registration Statement. These schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

 

In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in Note 1 to the consolidated financial statements, in 2004 the Company changed its method of accounting for guaranteed minimum death benefits and incremental death benefits on its variable annuities.

 

/s/ Ernst & Young LLP

 

Des Moines, Iowa

February 3, 2006

Schedule I - Summary of Investments - Other

Than Investments in Related Parties

FARM BUREAU LIFE INSURANCE COMPANY

 

December 31, 2005

 

Column A

    Column B
    Column C
    Column D
  

Type of Investment

    Cost (1)
    Value
   

Amount at which shown

in the balance sheet

  
     (Dollars in thousands)  
Fixed maturity securities, available for sale:                       

Bonds:

                       

Corporate securities

    $ 1,749,075    $ 1,817,645    $ 1,817,645  

Mortgage and asset-backed securities

      1,215,983      1,221,321      1,221,321  

United States Government and agencies

      365,893      367,275      367,275  

State, municipal and other governments

      243,436      250,349      250,349  

Public utilities

      145,307      149,393      149,393  

Redeemable preferred stock

      71,618      78,168      78,168  
    
  
  

Total

      3,791,312    $ 3,884,151      3,884,151  
           
        
Equity securities, available for sale:                       

Common stocks:

                       

Banks, trusts, and insurance companies

      52,136    $ 80,063      80,063  

Industrial, miscellaneous, and all other

      1,207      1,012      1,012  
    
  
  

Total

      53,343    $ 81,075      81,075  
           
        
Mortgage loans on real estate      537,098             537,122  
Derivative instruments      77    $ 5,961      5,961  
Investment real estate:                       

Acquired for debt

      1,273             573 (2)

Investment

      8,928             8,928  
Policy loans      156,037             156,037  
Other long-term investments      1,300             1,300  
Short-term investments      52,665             52,665  
    
         
Total investments    $ 4,602,033           $ 4,727,812  
    
         

 

(1) On the basis of cost adjusted for repayments and amortization of premiums and accrual of discounts for fixed maturities and short-term investments; original cost for equity securities, derivative instruments and other long-term investments; unpaid principal balance for mortgage loans on real estate and policy loans, and original cost less accumulated depreciation for investment real estate.

 

(2) Amount not equal to cost (Column B) because of allowance for possible losses deducted from cost to determine reported amount.

 

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Schedule III - Supplementary Insurance Information

FARM BUREAU LIFE INSURANCE COMPANY

 

Column A

    Column B
     Column C
    Column D
     Column E
    

Deferred

policy

acquisition

costs

    

Future policy

benefits, losses,

claims and loss

expenses

   

Unearned

revenues

    

Other

policyholder

funds

     (Dollars in thousands)
December 31, 2005:                              

Traditional Annuity-Exclusive Distribution

    $ 72,005     $ 1,821,410    $ —       $ 391,030

Traditional and Universal Life Insurance

      185,164       1,717,875      10,950       149,205

Variable

      125,755       202,232      16,918       9,314

Corporate and Other

      —         69,365      —         —  

Impact of unrealized gains/losses

      (10,238 )     —        (374 )     —  
    
 
  
 

Total

    $ 372,686     $ 3,810,882    $ 27,494     $ 549,549
    
 
  
 
December 31, 2004:                              

Traditional Annuity-Exclusive Distribution

    $ 66,638     $ 1,750,821    $ —       $ 368,817

Traditional and Universal Life Insurance

      170,630       1,671,208      10,963       169,180

Variable

      117,533       197,194      17,249       —  

Corporate and Other

      —         66,424      —         —  

Impact of unrealized gains/losses

      (17,918 )     —        (660 )     —  
    
 
  
 

Total

    $ 336,883     $ 3,685,647    $ 27,552     $ 537,997
    
 
  
 
December 31, 2003:                              

Traditional Annuity-Exclusive Distribution

    $ 54,663     $ 1,582,979    $ —       $ 351,754

Traditional Annuity-Independent Distribution

      —         —        —         —  

Traditional and Universal Life Insurance

      160,958       1,629,796      11,512       158,203

Variable

      114,513       191,177      17,646       —  

Corporate and Other

      —         65,620      —         —  

Impact of unrealized gains/losses

      (15,513 )     —        (847 )     —  
    
 
  
 

Total

    $ 314,621     $ 3,469,572    $ 28,311     $ 509,957
    
 
  
 

 

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Schedule III - Supplementary Insurance Information (Continued)

FARM BUREAU LIFE INSURANCE COMPANY

 

Column A

    Column F
     Column G
    Column H
     Column I
     Column J
  
    

Premium

revenue

    

Net investment

income (1)

   

Benefits,

claims, losses

and settlement

expenses (2)

    

Amortization

of deferred

policy

acquisition

costs (2)

    

Other

operating

expenses (3)

  
     (Dollars in thousands)  
December 31, 2005:                                        

Traditional Annuity-Exclusive Distribution

    $ 824     $ 145,672    $ 93,428     $ 9,122     $ 10,841  

Traditional and Universal Life Insurance

      164,326       125,699      166,335       10,244       42,947  

Variable

      37,590       13,896      20,264       4,316       23,130  

Corporate and Other

      385       7,588      236       —         2,698  

Change in net unrealized gains/losses on derivatives

      —         —        (12 )     —         —    

Impact of realized gains/losses

      (7 )     —        —         214       (6 )
    
 
  
 
 

Total

    $ 203,118     $ 292,855    $ 280,251     $ 23,896     $ 79,610  
    
 
  
 
 
December 31, 2004:                                        

Traditional Annuity-Exclusive Distribution

    $ 754     $ 134,014    $ 92,023     $ 4,998     $ 11,950  

Traditional and Universal Life Insurance

      161,039       122,014      158,272       12,925       43,899  

Variable

      35,325       12,848      17,859       7,116       22,114  

Corporate and Other

      480       1,324      405       —         5,989  

Change in net unrealized gains/losses on derivatives

      —         —        —         9       —    

Impact of realized gains/losses

      (45 )     —        —         307       177  
    
 
  
 
 

Total

    $ 197,553     $ 270,200    $ 268,559     $ 25,355     $ 84,129  
    
 
  
 
 
December 31, 2003:                                        

Traditional Annuity-Exclusive Distribution

    $ 486     $ 131,683    $ 89,304     $ 5,408     $ 12,881  

Traditional Annuity-Independent Distribution

      5,582       103,594      70,892       19,634       2,366  

Traditional and Universal Life Insurance

      172,075       141,034      175,401       13,455       43,155  

Variable

      34,986       13,483      18,602       6,115       23,729  

Corporate and Other

      566       3,454      246       —         6,198  

Change in net unrealized gains/losses on derivatives

      —         —        14,746       268       —    

Impact of realized gains/losses

      5       —        (124 )     (88 )     122  
    
 
  
 
 

Total

    $ 213,700     $ 393,248    $ 369,067     $ 44,792     $ 88,451  
    
 
  
 
 

 

(1) Net investment income is allocated to the segments based upon the investments held by the respective segment. Beginning in 2005, we changed the allocation of capital among our segments to be consistent with a change in how we manage capital at the segment level. Accordingly, operating revenues and pre-tax operating income (loss) by segment for 2005 are impacted by the income on the investments transferred. See Note 13 to the consolidated financial statements for more information.

 

(2) Beginning in 2005, operating income includes an adjustment to eliminate the impact of changes in net unrealized gains and losses on derivatives. The amounts for 2004 and 2003 have been modified to conform to the 2005 presentation. See Note 13 to the consolidated financial statements for more information.

 

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(3) Beginning in 2005, we changed the method in which indirect expenses (those expenses for which we do not have a reliable basis such as time studies for allocating the costs) are allocated among the segments from a pro rata method based on allocated capital to a pro rata method based on direct expenses. See Note 13 to the consolidated financial statements for more information.

 

Schedule IV - Reinsurance

FARM BUREAU LIFE INSURANCE COMPANY

 

Column A

    Column B
    Column C
    Column D
    Column E
    Column F
  
     Gross amount
   

Ceded to other

companies

   

Assumed from

other

companies

    Net amount
   

Percent of

amount

assumed to net

  
     (Dollars in thousands)  
Year ended December 31, 2005:                                   

Life insurance in force, at end of year

    $ 35,350,826    $ 6,858,604    $ 129,319    $ 28,621,541    0.5 %
    
  
  
  
  

Insurance premiums and other considerations:

                                   

Interest sensitive product charges

    $ 73,176    $ 544    $ —      $ 72,632    —   %

Traditional life insurance premiums

      145,940      15,964      125      130,101    0.1  

Accident and health premiums

      13,245      12,860      —        385    —    
    
  
  
  
  
     $ 232,361    $ 29,368    $ 125    $ 203,118    0.1 %
    
  
  
  
  
Year ended December 31, 2004:                                   

Life insurance in force, at end of year

    $ 33,362,694    $ 6,224,766    $ 118,978    $ 27,256,906    0.4 %
    
  
  
  
  

Insurance premiums and other considerations:

                                   

Interest sensitive product charges

    $ 70,437    $ 488    $ —      $ 69,949    —   %

Traditional life insurance premiums

      141,586      14,670      208      127,124    0.2  

Accident and health premiums

      14,078      13,598      —        480    —    
    
  
  
  
  
     $ 226,101    $ 28,756    $ 208    $ 197,553    0.1 %
    
  
  
  
  
Year ended December 31, 2003:                                   

Life insurance in force, at end of year

    $ 31,915,306    $ 5,809,583    $ 89,970    $ 26,195,693    0.3 %
    
  
  
  
  

Insurance premiums and other considerations:

                                   

Interest sensitive and index product charges

    $ 69,558    $ 1,743    $ 16,129    $ 83,944    19.2 %

Traditional life insurance premiums

      138,678      11,455      1,967      129,190    1.5  

Accident and health premiums

      15,141      14,575      —        566    —    
    
  
  
  
  
     $ 223,377    $ 27,773    $ 18,096    $ 213,700    8.5 %
    
  
  
  
  

 

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