Exhibit (c)(9)
Milliman CLIENT Report
Actuarial Appraisal of
Farm Bureau Life Insurance Company and
Insurance Subsidiaries
as of September 30, 2020
Prepared for: Special Committee of the Board of Directors of FBL Financial Group, Inc.
December 31, 2020
Su Meng Lee, FSA, MAAA | James G. Stoltzfus, FSA, MAAA |
Luyao Li, FSA, MAAA | Ricardo Trachtman, FSA, MAAA |
Rahul Mohan, FSA, MAAA | Melinda A. Willson, FSA, MAAA |
Lucy Ouyang, FSA, MAAA | Laird D. Zacheis, FSA, MAAA |
John R. Roeger, FSA, MAAA |
December 31, 2020 | 71 South Wacker Drive 31st Floor Chicago, IL 60606 USA
Tel +1 312 726 0677 Fax +1 312 499 5700
milliman.com |
Mr. Paul Larson
Member of the Special Committee of the
Board of Directors of FBL Financial Group, Inc.
5400 University Avenue
West Des Moines, IA 50266
Dear Mr. Larson:
This report provides actuarial values and projections as of September 30, 2020 for Farm Bureau Life Insurance Company and insurance subsidiaries.
Section I outlines the scope and qualifications associated with the analysis. Actuarial values and yearly statutory profits are summarized in Section II. Sections III and IV and the Appendices summarize the methodology, models and actuarial assumptions underlying the developed values.
This report is a statement of actuarial opinion under guidelines promulgated by the American Academy of Actuaries. The undersigned professionals are members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the opinion contained herein.
The professionals responsible for developing the actuarial values in this report are available to answer any questions regarding the assumptions and procedures underlying the values. Please contact us if any questions are raised.
Sincerely,
/s/ Su Meng Lee | /s/ John R. Roeger | |
Su Meng Lee, F.S.A., M.A.A.A. | John R. Roeger, F.S.A., M.A.A.A. | |
Consulting Actuary | Consulting Actuary | |
/s/ James G. Stoltzfus | /s/ Ricardo Trachtman | |
James G. Stoltzfus, F.S.A., M.A.A.A. | Ricardo Trachtman, F.S.A., M.A.A.A. | |
Consulting Actuary | Consulting Actuary | |
/s/ Laird D. Zacheis | ||
Laird D. Zacheis, F.S.A., M.A.A.A. | ||
Consulting Actuary | ||
SML/JRR/JGS/RT/LDZ:sp |
MILLIMAN
Milliman client Report
Table of Contents | |
Section I – Introduction and Qualifications | 1 |
Rationale for STATUTORY Approach | 2 |
Relationship to Market Value | 3 |
Data Reliance | 3 |
Section II – Summary of Results | 5 |
Summary of Actuarial Appraisal Values | 5 |
Discount Rates | 9 |
NEW BUSINESS PRODUCTION | 9 |
General Expenses | 9 |
Federal Home Loan Bank Program | 10 |
Interest Maintenance Reserve (“IMR”) | 10 |
REtained assets and other deposit funds | 10 |
Statutory Surplus Levels, Cost of Required Capital, and Risk Based Capital | 10 |
Federal Income Taxes | 11 |
Sensitivity Analysis of Components of Value | 11 |
Section III – Development of Adjusted Statutory Book Value | 13 |
Section IV – Line of Business Overview | 14 |
Life Business | 14 |
Life and Annuity Summary of Models and Key Assumptions | 21 |
Appendix a – asset and Investment assumptions | A-1 |
Appendix B – Traditional Life models and assumptions | B-1 |
Appendix C – universal Life models and assumptions | C-1 |
Appendix d – annuity models and assumptions | D-1 |
Appendix E – DETAILED STATUTORY INCOME PROJECTIONS | e-1 |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 |
Milliman client Report
Section I – Introduction and Qualifications
Milliman, Inc. (“Milliman” or “our”) was retained by the Special Committee of the Board of Directors (“Special Committee”) of FBL Financial Group, Inc. (“FBLFG”) to perform certain actuarial analyses with respect to the life insurance and annuity business written by Farm Bureau Life Insurance Company (“FBL” or “Company”) and its insurance subsidiary, Greenfields Life Insurance Company (“Greenfields”). Specifically, our assignment has been to develop projected statutory earnings arising from the existing and new business of deferred annuities, payout annuities, term insurance, traditional life and interest sensitive life of FBL and to calculate present values of these future earnings using discount rates of 7%, 8%, 9% and 10%.
FBL is domiciled in Iowa and is a wholly owned subsidiary of FBLFG. The Company consists of multiple lines of business including Fixed Deferred Annuities (“FA”), Fixed Indexed Annuities (“FIA”), Variable Annuities (“VA”), Single Premium Immediate Annuities (“SPIA”), Structured Settlement Annuities (“SSA”), Term Insurance (“Term”), Whole Life Insurance (“WL”), Universal Life (“UL”), Indexed Universal Life (“IUL”) and Variable Universal Life (“VUL”). Business has historically been produced through FBLFG’s captive agency force where life and annuity products are generally sold as through the larger property and casualty relationships of FBLFG.
Greenfields is a small insurance company domiciled in Iowa and 100% of the liabilities are ceded to FBL.
Milliman is frequently engaged to prepare such analyses of life insurance companies. The approach followed in this situation is consistent with methodology we have generally employed in other engagements.
We have prepared this report with the understanding that it will be used by Special Committee and its advisors to analyze the potential value of FBL. The report is intended to provide certain actuarial information and analyses as of September 30, 2020 that would assist a qualified actuary, technically competent in the area of actuarial appraisals, to develop an estimate of (1) the adjusted statutory book value of FBL as of September 30, 2020; (2) the projected amounts and present values of future statutory profits from business in force as of September 30, 2020 and (3) the projected amounts and present values of future statutory profits from business sold after September 30, 2020.
In order to fully comprehend this report, any user of this report should be advised by an actuary with a substantial level of expertise in areas relevant to this analysis to appreciate the significance of the underlying assumptions and the impact of those assumptions on the illustrated results. This report must be read in its entirety to be understood. The models used in calculating the illustrated results were originally developed by FBL for its year-end cash flow testing and planning and have been modified by Milliman for purposes of this report.
This report is intended for the internal use of the Special Committee and their advisors and their affiliate’s advisors and may not be distributed to other parties without our consent. Notwithstanding the foregoing, the report may be included in any proxy statement, registration statement on Form S-4 or other joint proxy statement/prospectus relating to the transaction that is required to be filed with the Securities and Exchange Commission and is required to be distributed to its shareholders (“Disclosure Document”), with the form of such report to be included in any such Disclosure Document to be subject to the prior review and approval by Milliman (such approval to be made by Milliman in its reasonable discretion).
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 1 |
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Milliman does not intend to benefit and assumes no duty of liability to other parties who receive the report. Any distribution of this report must be in its entirety.
We have projected future profits computed according to statutory reporting criteria. The validity of these projections depends on how well future experience conforms to our assumptions. Our assumptions for future mortality, persistency, policyholder behavior, expenses, investment return and other actuarial factors are based on our evaluation of recent experience of FBL, industry experience and anticipated future trends. The approach employed to develop the projection assumptions is described below.
1. | Surrender and mortality assumptions are based on the experience of FBL and on general industry experience. |
2. | Expenses were projected as a combination of unit expense allowables and excess costs to reproduce the budget expenses of FBL. |
3. | Investment income reflects a runoff of the existing asset portfolio and a reinvestment strategy based on assumptions for asset yield, type, quality, and maturity provided by FBL. The projections are based on the November 6, 2020 forward curve. |
4. | Credited rates and indexed crediting parameters reflect FBL’s strategies for setting rates including target spreads and guarantees. |
5. | Separate account growth rates are based on long term expectations and underlying mix of policyholder funds. |
6. | New business production assumptions were provided by FBL and are summarized in Section II. |
Actual experience may differ from what is assumed in the projections. To the extent actual experience is different from the assumptions underlying this Report, so will actual results differ from the projected results shown here. Sensitivity of results to changes in assumptions is provided as part of Section II, Summary of Results.
Rationale for STATUTORY Approach
Our development of the projected amounts and actuarial values in this report reflect statutory reporting practices as applicable to the business of FBL. Two reasons why we believe it is appropriate to analyze a life company using this approach are:
1. | Statutory accounting determines the availability of earnings for dividends to life company shareholders. |
2. | Statutory surplus constitutes the funds available for investments in new business or other ventures requiring capital. |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 2 |
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Relationship to Market Value
An actuarial appraisal value does not necessarily represent the value of a company's stock or a block of business in the open market. Rather, it is derived from a projection of future earnings and therefore reflects the value of a company's or a block’s earnings potential under a specific set of assumptions. Assignment of a value to any business enterprise is also a matter of informed judgment. Purchase or sales price is determined by the parties involved, based on their respective evaluations of all relevant factors, including:
1. | the perspective of the buyer and the seller and the level of confidence regarding the assumptions underlying projected earnings, |
2. | the desired rate of return and the associated cost of capital, |
3. | economies of scale and scope associated with the potential transaction, and |
4. | significant tax or other consequences/benefits, unique to a proposed transaction, which can have an effect on value. |
Data Reliance
We have relied on information supplied by FBL as well as on published financial information. We performed no audits or independent verification of the information furnished to us. To the extent that there are any material errors in the information provided, the results of our analysis will be affected as well. The principal materials relied upon include:
1. | Information contained in the public and internal statutory and GAAP financial statements of FBL. |
2. | Inventory of insurance policies as of September 30, 2020 and for certain lines, September 30, 2019 as well. |
3. | Information regarding the MGALFA models as of September 30, 2020 used internally by FBL |
4. | Information prepared by FBL on recent surrender, mortality and premium persistency experience. |
5. | Information regarding FBL planned budget expenses and unit expense allowables. |
6. | Information on future business production for FBL. |
7. | Information on invested assets as of September 30, 2020 and guidance with respect to future reinvestment strategies. |
8. | Information regarding the mark-to-market as of September 30, 2020 on assets modeled to support surplus. |
9. | Information regarding the Federal Home Loan Bank (“FHLB”) program |
10. | Information on material reinsurance treaties and provisions. |
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11. | Information on statutory/tax reserve differences and other information with respect to income taxes. |
12. | Information on target credited rates, indexed option cost and spreads. |
13. | Information related to FBL reserving practices. |
14. | Information on NAIC required capital amounts and C3 Phase 1 testing. |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 4 |
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Section II – Summary of Results
Summary of Actuarial Appraisal Values
Tables I-A and I-B summarize the results of our analysis of the components of value as of September 30, 2020, consisting of the Adjusted Statutory Book Value, present value of future statutory profits from the business inforce and present value of future statutory profits from new business. The values are based upon fifty years of projected profits for the business. Amounts reflect cost of capital based on 350% NAIC RBC (Company Action Level). Results are presented reflecting the November 6, 2020 forward curve.
Tables II and III provide a summary of ten years of projected after-tax statutory profits. The ten-year projections reflect an assumption that earnings and capital in excess of required capital funding are distributed from FBL.
Summaries of assumptions are provided in Sections III and IV and in the Appendices. Detailed projections of annual statutory profits and present values of profit are provided in Appendix E.
Table I-A
FBL
Actuarial Appraisal Value
As of September 30, 2020
($ in millions)
DISCOUNT RATES | |||||||||||||||||
Item | 7% | 8% | 9% | 10% | |||||||||||||
1) | Adjusted Statutory Book Value | $ | 694.4 | $ | 694.4 | $ | 694.4 | $ | 694.4 | ||||||||
2) | Value of Business Inforce as of September 30, 2020 | ||||||||||||||||
Fixed Deferred Annuities | $ | 148.0 | $ | 141.1 | $ | 134.8 | $ | 128.9 | |||||||||
Fixed Indexed Annuities | 98.1 | 89.6 | 82.1 | 75.6 | |||||||||||||
Immediate Annuities | (1.8 | ) | (1.4 | ) | (1.2 | ) | (0.9 | ) | |||||||||
Variable Annuities | 41.9 | 38.9 | 36.3 | 34.0 | |||||||||||||
Traditional Life (WL) | 262.4 | 245.4 | 230.3 | 216.7 | |||||||||||||
Term | 192.9 | 180.5 | 170.2 | 161.3 | |||||||||||||
UL | 133.4 | 125.7 | 118.6 | 112.0 | |||||||||||||
VUL | 95.1 | 90.3 | 85.7 | 81.4 | |||||||||||||
Subtotal Pre-Tax Existing Business | $ | 969.9 | $ | 910.0 | $ | 856.7 | $ | 809.0 | |||||||||
Impact of Line-of-Business Federal Income Tax | (172.1 | ) | (165.3 | ) | (158.8 | ) | (152.5 | ) | |||||||||
Tax Benefits from Misc. Stat/Tax Diff | 13.0 | 12.4 | 11.9 | 11.4 | |||||||||||||
Cost of Capital at 350% RBC (i=2.65%) | (164.5 | ) | (183.0 | ) | (198.9 | ) | (212.5 | ) | |||||||||
Subtotal After-Tax Existing Business, After Cost of Capital | $ | 646.4 | $ | 574.1 | $ | 511.0 | $ | 455.4 | |||||||||
3) | Ten Years of New Business from September 30, 2020 | ||||||||||||||||
Fixed Deferred Annuities | $ | 8.9 | $ | 8.2 | $ | 7.6 | $ | 7.1 | |||||||||
Fixed Indexed Annuities | 88.2 | 76.4 | 66.4 | 58.1 | |||||||||||||
Traditional Life (WL) | 35.4 | 27.1 | 20.4 | 14.8 | |||||||||||||
Term | 147.8 | 125.6 | 107.3 | 92.2 | |||||||||||||
IUL | 107.9 | 86.7 | 69.4 | 55.0 | |||||||||||||
Unallocated Expense | (76.1 | ) | (74.1 | ) | (72.2 | ) | (70.4 | ) | |||||||||
Subtotal Pre-Tax New Business | $ | 312.0 | $ | 249.9 | $ | 198.9 | $ | 156.8 | |||||||||
Impact of Federal Income Taxes | (77.1 | ) | (66.8 | ) | (58.0 | ) | (50.3 | ) | |||||||||
Cost of Capital at 350% RBC (i=2.5%) | (92.2 | ) | (97.8 | ) | (101.4 | ) | (103.6 | ) | |||||||||
Subtotal After-Tax New Business, After Cost of Capital | $ | 142.7 | $ | 85.2 | $ | 39.5 | $ | 3.0 | |||||||||
4) | Total Actuarial Value (1) plus (2) plus (3) | $ | 1,483.5 | $ | 1,353.7 | $ | 1,244.9 | $ | 1,152.8 |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 5 |
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Table I-B
FBL
Actuarial Appraisal Value
As of September 30, 2020
($ in millions)
DISCOUNT RATES | |||||||||||||||||
Item | 7% | 8% | 9% | 10% | |||||||||||||
1) | Adjusted Statutory Book Value | $ | 694.4 | $ | 694.4 | $ | 694.4 | $ | 694.4 | ||||||||
2) | Value of Business Inforce as of September 30, 2020 | ||||||||||||||||
(After Tax, After Cost of Capital) | |||||||||||||||||
Fixed Deferred Annuities | $ | 81.0 | $ | 69.3 | $ | 58.9 | $ | 49.4 | |||||||||
Fixed Indexed Annuities | 64.7 | 55.4 | 47.4 | 40.4 | |||||||||||||
Immediate Annuities | (3.1 | ) | (3.4 | ) | (3.8 | ) | (4.0 | ) | |||||||||
Variable Annuities | 31.6 | 28.8 | 26.3 | 24.2 | |||||||||||||
Traditional Life (WL) | 183.4 | 164.9 | 149.0 | 135.0 | |||||||||||||
Term | 125.7 | 112.3 | 100.8 | 91.0 | |||||||||||||
UL | 80.1 | 69.0 | 59.4 | 51.0 | |||||||||||||
VUL | 70.0 | 65.3 | 61.0 | 57.1 | |||||||||||||
Tax Benefits from Misc. Stat/Tax Diff | 13.0 | 12.4 | 11.9 | 11.4 | |||||||||||||
Subtotal After-Tax Existing Business, After Cost of Capital | $ | 646.4 | $ | 574.1 | $ | 511.0 | $ | 455.4 | |||||||||
3) | Ten Years of New Business from September 30, 2020 | ||||||||||||||||
(After Tax, After Cost of Capital) | |||||||||||||||||
Fixed Deferred Annuities | $ | 3.9 | $ | 3.0 | $ | 2.3 | $ | 1.7 | |||||||||
Fixed Indexed Annuities | 36.8 | 25.1 | 15.5 | 7.7 | |||||||||||||
Traditional Life (WL) | 19.7 | 12.2 | 6.2 | 1.5 | |||||||||||||
Term | 74.1 | 54.0 | 38.1 | 25.3 | |||||||||||||
IUL | 68.4 | 49.5 | 34.4 | 22.3 | |||||||||||||
Unallocated Expense | (60.1 | ) | (58.5 | ) | (57.0 | ) | (55.6 | ) | |||||||||
Subtotal After-Tax New Business, After Cost of Capital | $ | 142.7 | $ | 85.2 | $ | 39.5 | $ | 3.0 | |||||||||
4) | Total Actuarial Value (1) plus (2) plus (3) | $ | 1,483.5 | $ | 1,353.7 | $ | 1,244.9 | $ | 1,152.8 |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 6 |
Milliman client Report
Table II
FBL
Line of Business Statutory Projection
($ in millions)
Year Ending September 30, | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Deferred Annuities | $ | 29.6 | $ | 25.5 | $ | 22.4 | $ | 19.1 | $ | 16.0 | $ | 15.1 | $ | 13.7 | $ | 11.6 | $ | 9.9 | $ | 8.7 | ||||||||||||||||||||||||
Fixed Indexed Annuities | 2.4 | 7.1 | 8.3 | 9.3 | 9.9 | 10.5 | 10.5 | 10.1 | 10.0 | 9.4 | ||||||||||||||||||||||||||||||||||
Immediate Annuities | (0.1 | ) | 1.1 | 0.6 | 0.2 | (0.3 | ) | (0.4 | ) | (0.5 | ) | (0.5 | ) | (0.5 | ) | (0.6 | ) | |||||||||||||||||||||||||||
Variable Annuities | 5.2 | 4.8 | 4.5 | 4.4 | 4.2 | 4.0 | 3.8 | 3.7 | 3.5 | 3.3 | ||||||||||||||||||||||||||||||||||
Traditional Life (WL) | 35.6 | 31.7 | 29.8 | 28.2 | 27.1 | 25.9 | 24.7 | 23.2 | 21.7 | 20.4 | ||||||||||||||||||||||||||||||||||
Term | 45.6 | 31.2 | 28.2 | 22.3 | 24.5 | 27.2 | 3.1 | (1.7 | ) | (14.2 | ) | (4.8 | ) | |||||||||||||||||||||||||||||||
UL | 19.4 | 19.1 | 16.5 | 13.6 | 9.5 | 8.0 | 8.3 | 8.5 | 13.0 | 15.1 | ||||||||||||||||||||||||||||||||||
VUL | 12.9 | 12.4 | 11.8 | 11.3 | 10.9 | 10.4 | 10.1 | 9.7 | 9.2 | 8.5 | ||||||||||||||||||||||||||||||||||
Total Pre-Tax Existing Business | $ | 150.6 | $ | 133.0 | $ | 122.2 | $ | 108.2 | $ | 101.9 | $ | 100.7 | $ | 73.7 | $ | 64.6 | $ | 52.5 | $ | 60.1 | ||||||||||||||||||||||||
Ten Years of New Business from 09/30/2020 | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Deferred Annuities | $ | 0.8 | $ | 0.8 | $ | 0.7 | $ | 0.7 | $ | 1.0 | $ | 1.0 | $ | 0.9 | $ | 1.0 | $ | 1.2 | $ | 1.2 | ||||||||||||||||||||||||
Fixed Indexed Annuities | (1.5 | ) | (0.6 | ) | 0.8 | 1.5 | 2.8 | 3.7 | 5.1 | 6.4 | 7.8 | 9.2 | ||||||||||||||||||||||||||||||||
Traditional Life (WL) | (7.7 | ) | (6.1 | ) | (5.1 | ) | (4.1 | ) | (3.2 | ) | (2.3 | ) | (1.3 | ) | (0.4 | ) | 0.6 | 1.6 | ||||||||||||||||||||||||||
Term | (11.9 | ) | (7.4 | ) | (2.4 | ) | 1.8 | 5.5 | 8.6 | 11.4 | 13.8 | 15.9 | 17.7 | |||||||||||||||||||||||||||||||
IUL | (17.2 | ) | (13.6 | ) | (10.5 | ) | (7.4 | ) | (4.4 | ) | (1.4 | ) | 1.7 | 5.0 | 8.3 | 11.7 | ||||||||||||||||||||||||||||
Total Pre-Tax New Business | $ | (37.4 | ) | $ | (27.0 | ) | $ | (16.5 | ) | $ | (7.5 | ) | $ | 1.8 | $ | 9.6 | $ | 17.8 | $ | 25.9 | $ | 33.8 | $ | 41.4 | ||||||||||||||||||||
Unallocated Expense | (19.1 | ) | (15.4 | ) | (14.0 | ) | (12.5 | ) | (10.7 | ) | (8.7 | ) | (6.6 | ) | (4.5 | ) | (2.1 | ) | 0.0 | |||||||||||||||||||||||||
Interest on Capital, Surplus, AVR, IMR | 18.4 | 10.8 | 11.0 | 11.2 | 11.5 | 11.8 | 12.2 | 12.5 | 12.9 | 13.4 | ||||||||||||||||||||||||||||||||||
Total Pre-Tax Earnings | $ | 112.5 | $ | 101.5 | $ | 102.7 | $ | 99.4 | $ | 104.4 | $ | 113.4 | $ | 97.1 | $ | 98.6 | $ | 97.1 | $ | 114.8 | ||||||||||||||||||||||||
Impact of Federal Income Tax (21.0%) | (24.1 | ) | (23.0 | ) | (23.3 | ) | (24.3 | ) | (27.3 | ) | (24.4 | ) | (23.9 | ) | (24.4 | ) | (23.4 | ) | (32.8 | ) | ||||||||||||||||||||||||
After-Tax Earnings | $ | 88.4 | $ | 78.5 | $ | 79.4 | $ | 75.2 | $ | 77.1 | $ | 89.0 | $ | 73.2 | $ | 74.2 | $ | 73.7 | $ | 82.0 | ||||||||||||||||||||||||
Distributed Earnings (Target RBC Ratio=350%) | 374.3 | 72.0 | 71.9 | 64.3 | 64.7 | 75.4 | 59.6 | 59.1 | 57.8 | 65.7 | ||||||||||||||||||||||||||||||||||
General Account Liabilities | $ | 7,912.3 | $ | 7,829.2 | $ | 7,750.8 | $ | 7,683.9 | $ | 7,687.2 | $ | 7,721.4 | $ | 7,767.7 | $ | 7,807.0 | $ | 7,876.1 | $ | 7,954.9 | $ | 8,032.8 | ||||||||||||||||||||||
Separate Account Liabilities | 685.4 | 682.8 | 678.6 | 673.1 | 666.5 | 658.9 | 650.6 | 641.5 | 631.6 | 621.0 | 610.0 | |||||||||||||||||||||||||||||||||
Interest Maintenance Reserve | 16.5 | 17.5 | 18.1 | 15.7 | 14.2 | 12.3 | 10.7 | 9.6 | 8.6 | 7.9 | 7.2 | |||||||||||||||||||||||||||||||||
Deferred Tax Asset | 63.8 | 45.4 | 46.1 | 47.0 | 48.2 | 49.5 | 51.0 | 52.5 | 54.2 | 56.0 | 57.8 | |||||||||||||||||||||||||||||||||
Capital, Surplus & AVR (excl. DTA) | 694.4 | 408.6 | 415.1 | 422.6 | 433.4 | 445.8 | 459.4 | 472.9 | 488.0 | 504.0 | 520.3 | |||||||||||||||||||||||||||||||||
NAIC RBC (Company Action Level) | 127.5 | 130.6 | 132.6 | 135.0 | 138.3 | 142.2 | 146.5 | 150.8 | 155.5 | 160.5 | 165.7 | |||||||||||||||||||||||||||||||||
RBC Ratio (Company Action Level) | 597.3 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % |
Note: 1) Interest on Capital, Surplus & AVR is based on a net earnings rate of 2.65%.
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 7 |
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Table III
FBL
Projected Statutory Operating Results
($ in millions)
Year Ending September 30, | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||||||||||||||||||||
Existing and New Business | ||||||||||||||||||||||||||||||||||||||||||||
Premium Income | $ | 611.9 | $ | 627.9 | $ | 646.2 | $ | 667.6 | $ | 689.6 | $ | 713.8 | $ | 740.5 | $ | 766.1 | $ | 793.5 | $ | 823.1 | ||||||||||||||||||||||||
Fees from Miscellaneous Revenue | 8.7 | 8.6 | 8.5 | 8.4 | 8.3 | 8.2 | 8.1 | 8.0 | 7.8 | 7.5 | ||||||||||||||||||||||||||||||||||
Investment Income | 359.0 | 338.9 | 330.4 | 325.4 | 322.4 | 323.2 | 324.0 | 325.6 | 327.7 | 330.6 | ||||||||||||||||||||||||||||||||||
Total Income | $ | 979.6 | $ | 975.5 | $ | 985.2 | $ | 1,001.4 | $ | 1,020.3 | $ | 1,045.2 | $ | 1,072.7 | $ | 1,099.7 | $ | 1,129.1 | $ | 1,161.2 | ||||||||||||||||||||||||
Death/Health/Annuity Benefits | $ | 287.0 | $ | 247.5 | $ | 288.3 | $ | 343.1 | $ | 266.4 | $ | 391.4 | $ | 405.3 | $ | 406.0 | $ | 413.8 | $ | 418.9 | ||||||||||||||||||||||||
Surrender Benefits | 522.0 | 561.1 | 512.7 | 403.1 | 458.3 | 331.6 | 362.5 | 352.5 | 359.7 | 363.2 | ||||||||||||||||||||||||||||||||||
Other Benefits | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||||||||||||||||
Dividends | 23.8 | 22.9 | 22.5 | 22.0 | 21.4 | 20.9 | 20.5 | 20.0 | 19.6 | 19.0 | ||||||||||||||||||||||||||||||||||
Net Transfers to Separate Account | (37.3 | ) | (38.9 | ) | (40.0 | ) | (41.0 | ) | (41.7 | ) | (42.2 | ) | (42.6 | ) | (43.1 | ) | (43.3 | ) | (43.5 | ) | ||||||||||||||||||||||||
Reserve Increase | (78.7 | ) | (73.6 | ) | (61.3 | ) | 9.3 | 40.4 | 52.9 | 46.3 | 76.0 | 86.0 | 85.8 | |||||||||||||||||||||||||||||||
Acquisition plus Maintenance Expense (o/t PrTax) (Incl Unalloc) | 86.8 | 89.2 | 91.2 | 93.3 | 95.4 | 97.6 | 99.9 | 102.2 | 104.5 | 107.0 | ||||||||||||||||||||||||||||||||||
Premium Tax | 5.7 | 6.0 | 6.2 | 6.5 | 6.8 | 7.1 | 7.5 | 7.8 | 8.2 | 8.6 | ||||||||||||||||||||||||||||||||||
Commission | 57.7 | 59.8 | 62.8 | 65.7 | 68.9 | 72.5 | 76.2 | 79.7 | 83.5 | 87.4 | ||||||||||||||||||||||||||||||||||
Total Benefits and Expenses | $ | 867.0 | $ | 874.0 | $ | 882.5 | $ | 902.0 | $ | 915.9 | $ | 931.8 | $ | 975.6 | $ | 1,001.1 | $ | 1,032.0 | $ | 1,046.4 | ||||||||||||||||||||||||
Total Pre-Tax Earnings | $ | 112.5 | $ | 101.5 | $ | 102.7 | $ | 99.4 | $ | 104.4 | $ | 113.4 | $ | 97.1 | $ | 98.6 | $ | 97.1 | $ | 114.8 | ||||||||||||||||||||||||
Impact of Federal Income Tax (21.0%) | (24.1 | ) | (23.0 | ) | (23.3 | ) | (24.3 | ) | (27.3 | ) | (24.4 | ) | (23.9 | ) | (24.4 | ) | (23.4 | ) | (32.8 | ) | ||||||||||||||||||||||||
After-Tax Earnings | $ | 88.4 | $ | 78.5 | $ | 79.4 | $ | 75.2 | $ | 77.1 | $ | 89.0 | $ | 73.2 | $ | 74.2 | $ | 73.7 | $ | 82.0 | ||||||||||||||||||||||||
Distributed Earnings (Target RBC Ratio=350%) | 0.0 | 374.3 | 72.0 | 71.9 | 64.3 | 64.7 | 75.4 | 59.6 | 59.1 | 57.8 | 65.7 | |||||||||||||||||||||||||||||||||
General Account Liabilities | $ | 7,912.3 | $ | 7,829.2 | $ | 7,750.8 | $ | 7,683.9 | $ | 7,687.2 | $ | 7,721.4 | $ | 7,767.7 | $ | 7,807.0 | $ | 7,876.1 | $ | 7,954.9 | $ | 8,032.8 | ||||||||||||||||||||||
Separate Account Liabilities | 685.4 | 682.8 | 678.6 | 673.1 | 666.5 | 658.9 | 650.6 | 641.5 | 631.6 | 621.0 | 610.0 | |||||||||||||||||||||||||||||||||
Interest Maintenance Reserve | 16.5 | 17.5 | 18.1 | 15.7 | 14.2 | 12.3 | 10.7 | 9.6 | 8.6 | 7.9 | 7.2 | |||||||||||||||||||||||||||||||||
Deferred Tax Asset | 63.8 | 45.4 | 46.1 | 47.0 | 48.2 | 49.5 | 51.0 | 52.5 | 54.2 | 56.0 | 57.8 | |||||||||||||||||||||||||||||||||
Capital, Surplus & AVR (excl. DTA) | 694.4 | 408.6 | 415.1 | 422.6 | 433.4 | 445.8 | 459.4 | 472.9 | 488.0 | 504.0 | 520.3 | |||||||||||||||||||||||||||||||||
NAIC RBC (Company Action Level) | 127.5 | 130.6 | 132.6 | 135.0 | 138.3 | 142.2 | 146.5 | 150.8 | 155.5 | 160.5 | 165.7 | |||||||||||||||||||||||||||||||||
RBC Ratio (Company Action Level) | 597.3 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % | 350.0 | % |
Note: 1) Interest on Capital, Surplus & AVR is based on a net earnings rate of 2.65%.
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 8 |
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Discount Rates
The actuarial appraisal values were developed using discount rates of 7%, 8%, 9% and 10%. Tables I-A and I-B illustrate the importance of the discount rate in the determination of the value of profits from the business.
NEW BUSINESS PRODUCTION
The following table summarizes the annualized premium production by product based on the ten year sales forecast provided by FBL. Note that all payout annuity production is assumed to be mapped to Fixed Indexed Annuities due to materiality.
Production Assumptions ($ in millions) | |||||||||||||||||||||||||
Year Ending September 30th | Fixed Deferred Annuities | Fixed Indexed Annuities | Traditional Life (WL) | Term | IUL | Total | |||||||||||||||||||
2021 | $ | 25.3 | $ | 152.4 | $ | 7.7 | $ | 13.3 | $ | 25.8 | $ | 224.5 | |||||||||||||
2022 | 25.3 | 158.8 | 8.2 | 14.8 | 26.3 | 233.4 | |||||||||||||||||||
2023 | 25.5 | 166.6 | 8.7 | 15.9 | 27.9 | 244.6 | |||||||||||||||||||
2024 | 25.8 | 174.6 | 9.3 | 17.0 | 29.6 | 256.2 | |||||||||||||||||||
2025 | 26.2 | 182.6 | 9.8 | 18.1 | 31.3 | 268.0 | |||||||||||||||||||
2026 | 26.6 | 190.7 | 10.4 | 19.2 | 33.4 | 280.2 | |||||||||||||||||||
2027 | 27.0 | 198.8 | 11.0 | 20.3 | 35.4 | 292.5 | |||||||||||||||||||
2028 | 27.5 | 205.4 | 11.7 | 21.4 | 37.6 | 303.6 | |||||||||||||||||||
2029 | 28.1 | 214.0 | 12.3 | 22.5 | 39.7 | 316.6 | |||||||||||||||||||
2030 | 28.8 | 221.9 | 12.9 | 23.6 | 41.7 | 329.0 |
General Expenses
Expenses were projected as a combination of unit expense allowables and excess costs to reproduce the budgeted expenses of FBL as illustrated in the table below. Unit expenses for acquisition were provided by FBL and reflect the expected full cost of new sales. Unit maintenance expenses are assumed to equal the fully allocated cost provided by FBL but reduced such that the projected total unit expenses converge to the Company’s budget by the end of ten years.
FBL – Fully Allocated Unit Expenses ($ in millions) | ||||||||||||||||||||||
Year Ending | UNIT EXPENSE ALLOWABLES | Unabsorbed | Total | |||||||||||||||||||
September 30th | Acquisition | Maintenance | Total | Expense | Expense | |||||||||||||||||
2021 | $ | 23.1 | $ | 44.6 | $ | 67.7 | $ | 19.1 | $ | 86.8 | ||||||||||||
2022 | 27.6 | 46.2 | 73.8 | 15.4 | 89.2 | |||||||||||||||||
2023 | 29.4 | 47.8 | 77.2 | 14.0 | 91.2 | |||||||||||||||||
2024 | 31.2 | 49.6 | 80.8 | 12.5 | 93.3 | |||||||||||||||||
2025 | 33.0 | 51.7 | 84.7 | 10.7 | 95.4 | |||||||||||||||||
2026 | 35.0 | 53.9 | 88.9 | 8.7 | 97.6 | |||||||||||||||||
2027 | 37.0 | 56.3 | 93.3 | 6.6 | 99.9 | |||||||||||||||||
2028 | 39.0 | 58.7 | 97.7 | 4.5 | 102.2 | |||||||||||||||||
2029 | 41.0 | 61.3 | 102.3 | 2.1 | 104.5 | |||||||||||||||||
2030 | 43.0 | 64.0 | 107.0 | 0.0 | 107.0 |
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Federal Home Loan Bank Program
As of September 30, 2020, the FHLB advances are $627 million run off over 4 years and are modeled together with the FA block for inforce business and across all annuity lines for future business. The average yield on the existing FHLB advances is 2.99% with an average borrowing cost of 1.85%. The model assumes new FHLB advances will continue at approximately $600 million for the first ten projection years, then run off as a constant percent of reserves in years 11+ for inforce business. For new business, FHLB is modeled as a constant percentage of reserves. The new FHLB advances are modeled separately and earn a net spread of 128 bps based on current market conditions. The derivation of the spread is summarized in the Appendix A.
Interest Maintenance Reserve (“IMR”)
FBL has $16.5 million of IMR balance as of September 30, 2020 which is allocated to the line of business projections and the balances are runoff according to the statement schedule. Projected capital gains and capital losses are capitalized into IMR with losses subject to the maximum allowed based on available positive IMR.
REtained assets and other deposit funds
FBL has $183.5 million of retained asset balance, called Living Traditions Account (“LTA”), and $1.9 million of premium deposit fund balance as of September 30, 2020. The balance is assumed to remain relatively level based on discussions with FBL. Since new business sales are only assumed for 10 years, we have assumed LTA balances are projected to remain level while new business is sold and then runoff assuming a 5% lapse rate per year for the rest of the projection period. Credited rates are assumed to be 75bps throughout consistent with the current credited rates on LTA.
Statutory Surplus Levels, Cost of Required Capital, and Risk Based Capital
The approach used to project yearly profits underlying the present values reflects an assumption that all future earnings are paid out as reported. Included in this calculation is a provision for the minimum level of statutory net worth required to continue favorable regulator and rating agency treatment. Tables II and III provide a projection of capital and surplus levels assuming all statutory earnings are paid out in excess of the funds required to maintain a 350% NAIC RBC Company Action Level (“CAL”) ratio.
The cost of retaining capital to support the ongoing insurance operations will depend on: a) the level of capital believed necessary for the risks inherent in the insurance operations of FBL and to achieve desired ratings from various rating agencies; and b) the differential between the rate of return realized on retained capital and a buyer’s desired rate of return for an acquisition. The cost of capital based on maintaining 350% CAL in FBL is provided for in Tables I-III. The detailed factors used to develop projected required capital are summarized in Appendix A.
The cost of capital calculation reflects an assumption that 10% of required capital is funded by an admitted deferred tax asset for FBL which is approximately the percentage of capital that FBL currently admits.
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Federal Income Taxes
The actuarial appraisal values summarized in Table I have been adjusted for the effect of Federal income taxes, assuming a 21% tax rate. In evaluating the potential effect of taxes on value, one should consider:
a) | Differences between tax and statutory reserves; |
b) | Impact of the DAC proxy tax; and |
c) | Other differences between tax and statutory amounts. |
For purposes of this analysis, we have projected taxes as 21% of statutory income, adjusted as described below.
§ | The actual statutory reserve exceeds the actual tax reserve, gross of net deferred premium, as of September 30, 2020 by approximately $247 million prior to subtracting the 807(d) amount which is required to run off over eight years, starting January 1, 2018 as required under the 2017 Tax Cuts and Jobs Act. The outstanding balance for 807(d) as of September 30, 2020 is $49 million and is scheduled to run down to the end of 2025. |
§ | In addition, there are 807(f) balances (i.e. prior year basis changes that are brought into taxable income over time) of $2.6 million as of September 30, 2020 and are scheduled to run off to zero by the end of 2027. The 807(f) amortization will increase taxable income during this period. |
§ | The impact of Deferred Acquisition Cost (“DAC”) proxy tax is based on the establishment of an asset for purposes of calculating taxable income equal to 9.20% of life and 2.09% of non-qualified annuity direct premiums and reinsurance net cashflow (including retained LTC). The resulting tax asset is assumed to be amortized over 15 years. Also included is the amortization of the existing DAC proxy tax balance of $167 million as of September 30, 2020. |
§ | Dividend received deduction (“DRD”) of 10 bps of VA and VUL separate account assets is assumed throughout based on FBL’s current tax deductions. |
Sensitivity Analysis of Components of Value
We have analyzed the sensitivity of actuarial appraisal values on the inforce business to changes in certain assumptions, as follows:
1) | Additional 25 bps investment income in all years, with no change to credited rates. |
2) | The mortality in this report takes a long term view and the assumptions do not reflect any increase to mortality due to COVID 19. As a sensitivity to reflect the potential impact to mortality due to COVID 19, the assumed mortality rate is increased by 10% for the first projection year. |
3) | 5% decrease in mortality for life products in all years. |
4) | 20% increase in lapse rates in all years (increase only during level period for level term business). |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 11 |
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5) | 20% decrease in lapse rates in all years (decrease only during level period for level term business). |
6) | 100% shock lapse at the end of the level period on level term business |
7) | 25% lower unit expense. No change to excess expense. |
8) | Cost of capital based on 300% RBC for FBL |
Results are summarized below.
FBL Inforce Business Sensitivity Analysis (after tax, after cost of capital, $ in millions) | |||||||||||||||||
DISCOUNT RATE | |||||||||||||||||
Sensitivity Test | 7% | 8% | 9% | 10% | |||||||||||||
Baseline | $ | 646.4 | $ | 574.1 | $ | 511.0 | $ | 455.4 | |||||||||
Impact of: | |||||||||||||||||
1) | Additional 25 bp investment income | $ | 144.3 | $ | 132.5 | $ | 122.5 | $ | 113.8 | ||||||||
2) | 10% increase in mortality first projection year | (8.0 | ) | (8.0 | ) | (7.9 | ) | (7.9 | ) | ||||||||
3) | 5% reduction in mortality | 51.1 | 46.5 | 42.6 | 39.3 | ||||||||||||
4) | 20% increase in lapse rate | (30.0 | ) | (23.3 | ) | (18.0 | ) | (13.8 | ) | ||||||||
5) | 20% decrease in lapse rate | 88.2 | 70.6 | 56.9 | 46.1 | ||||||||||||
6) | 100% shock lapse on level term | (56.0 | ) | (49.1 | ) | (43.4 | ) | (38.7 | ) | ||||||||
7) | 25% reduction in unit expense | 78.5 | 72.0 | 66.4 | 61.6 | ||||||||||||
8) | 300% RBC | 23.7 | 26.3 | 28.6 | 30.6 |
In addition, we have analyzed the impact of changes in the interest environment on the inforce business. Assumptions underlying the interest environment sensitivities are consistent with the baseline projections. Results are shown in the following table.
FBL Inforce Business Interest Rate Sensitivities Impact on Appraisal Values (after tax and after cost of capital, $ in millions) | ||||||||||||||||
DISCOUNT RATE | ||||||||||||||||
Scenario | 7% | 8% | 9% | 10% | ||||||||||||
Baseline Value – Forward Curve | $ | 646.4 | $ | 574.1 | $ | 511.0 | $ | 455.4 | ||||||||
Impact of: | ||||||||||||||||
Level Yield Curve | $ | (83.7 | ) | $ | (71.1 | ) | $ | (61.0 | ) | $ | (52.8 | ) | ||||
Rates increase .25% per year for 10 years, then level | 124.6 | 103.3 | 86.6 | 73.3 | ||||||||||||
Rates increase .5% per year for 5 years, then decrease .5% per year for 5 years, then level | 36.8 | 36.3 | 35.3 | 34.0 | ||||||||||||
Rates increase 1.5% immediately | 121.9 | 106.4 | 93.7 | 83.2 | ||||||||||||
Rates fall .25% per year for 10 years, then level | (111.3 | ) | (95.0 | ) | (82.0 | ) | (71.4 | ) | ||||||||
Rates fall .5% per year for 5 years, then rise .5% per year for 5 years, then level | (105.0 | ) | (90.1 | ) | (78.1 | ) | (68.2 | ) | ||||||||
Rates fall 1.5% immediately | (111.5 | ) | (95.3 | ) | (82.2 | ) | (71.6 | ) |
Under the interest rate scenarios, the yield curve is assumed to move as described above, without any adjustments for the forward yield curve. When rates fall, the maximum downward shift for any maturity period is one-half the November 6, 2020 five year Treasury rate.
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 12 |
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Section III – Development of Adjusted Statutory Book Value
A summary of the development of Adjusted Statutory Book Value for FBL as of September 30, 2020 is provided in the table below.
FBL Development of Adjusted Statutory Book Value As of September 30, 2020 ($ in millions) | ||||||||||||
Component Of Value | FBL | Greenfields | Total | |||||||||
Statutory Capital and Surplus | $ | 630.3 | $ | 8.8 | $ | 639.1 | ||||||
Consolidating Adjustment | (8.8 | ) | 0.0 | (8.8 | ) | |||||||
Asset Valuation Reserve | 62.8 | 0.0 | 62.8 | |||||||||
Removal of Deferred Tax Asset | (63.8 | ) | (0.0 | ) | (63.8 | ) | ||||||
Non Admitted Assets @50% | 20.3 | 0.1 | 20.4 | |||||||||
Mark-to-Market on Surplus Assets (after-tax)* | 44.7 | |||||||||||
Total ABV | $ | 694.4 |
* Mark-to-market as of September 30, 2020.
The items included in Adjusted Statutory Book Value are described below.
1) | Statutory capital & surplus and AVR reflect the reported amounts as of September 30, 2020. |
2) | The admitted portion of the deferred tax asset is deducted from Adjusted Book Value because the line of business projections reflect actual taxes. |
3) | Statutory non-admitted assets mostly consist of prepaid pension contributions and have been included at 50% of the statement value. |
4) | An adjustment is reflected in the Adjusted Book Value for the $44.7 million of the after-tax mark-to-market on assets as of September 30, 2020 backing capital and surplus. |
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Section IV – Line of Business Overview
Life Business
The following table provides a summary of the modeled FBL life inforce business by product line.
FBL Life business | ||||||||||||
Line of Business | Direct | Direct | Policy Count | |||||||||
Level Term | $ | 44,848.3 | $ | 405.1 | 164,778 | |||||||
Whole Life | 8,046.7 | 1,335.7 | 208,411 | |||||||||
Universal Life | 5,681.3 | 987.2 | 54,553 | |||||||||
Indexed Universal Life | 2,692.3 | 103.4 | 19,923 | |||||||||
Variable Universal Life | 3,979.2 | 169.7 | 34,136 |
Term Business
Choice Term Series
The Choice Term product series consists of 10, 15, 20, and 30-year level term insurance products, with an annual renewable term (“ART”) premium scale following the level term period (“LTP”). The products are based on a five class underwriting system, with two smoker classes and three non-smoker classes. Sales for these products began in 2004 and they are the primary Term life product series, comprising approximately 95% of total level term face amount currently in-force. The product series has various generations of premium rates which are utilized to reflect changes resulting from competitive market conditions since the products were first marketed. Approximately 96% of the block is within the LTP as of 9/30/2020. The products have generally no cash value; however, some of the policies have a return of premium (“ROP”) feature which returns the cumulative paid premium in the form of an endowment.
Other Term
Other term products include ART, 10, 15, 20, and 30-year level term insurance products. There are also products with a 10-year renewable LTP, customized level term periods, and increasing term life products. The products are based on a variety of underwriting systems, with two, three, four and five class underwriting systems being utilized. FBL began sales of the increasing term life product in 2018, which allows for scheduled increases of the initial face amount on the first five anniversaries, with premium increases as the face amount increases.
FBL cedes excess mortality risk using Yearly Renewable Term (“YRT”) reinsurance with retention limits. The retention limit has varied over time and is $1.0 million as of September 30, 2020 for issue ages less than 65 and $0.75 million for issue ages greater than 65 for all term products.
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Summaries of the Term distribution are provided as follows:
FBL TERM BUSINESS BY RISK CLASS |
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 |
($ IN MILLIONS) |
Block | Risk Class | Total | % of | |||||||
Term | Preferred Non-Smoker | $ | 6,027.4 | 13.4 | % | |||||
Preferred Smoker | 666.6 | 1.5 | ||||||||
Standard Non-Smoker | 26,129.7 | 58.3 | ||||||||
Standard Smoker | 2,377.3 | 5.3 | ||||||||
Super-Preferred Non-Smoker | 9,606.3 | 21.4 | ||||||||
Aggregate | 40.9 | 0.1 | ||||||||
Total Actual | $ | 44,848.3 | 100.0 | % |
FBL TERM BUSINESS BY ISSUE AGE |
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 |
($ IN MILLIONS) |
Block | Issue Age | Total | % of | |||||||
Term | 0-29 | $ | 12,242.3 | 27.3 | % | |||||
30-39 | 17,538.5 | 39.1 | ||||||||
40-49 | 9,684.0 | 21.6 | ||||||||
50-59 | 4,534.2 | 10.1 | ||||||||
60-69 | 804.2 | 1.8 | ||||||||
70+ | 45.0 | 0.1 | ||||||||
Total Actual | $ | 44,848.3 | 100.0 | % |
FBL TERM BUSINESS BY ISSUE YEAR |
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 |
($ IN MILLIONS) |
Block | Issue Year | Total Face Amount | % of Face Amount | |||||||||
Term | <=2005 | $ | 3,987.7 | 8.9 | % | |||||||
2006 | 1,155.2 | 2.6 | ||||||||||
2007 | 1,526.8 | 3.4 | ||||||||||
2008 | 1,776.5 | 4.0 | ||||||||||
2009 | 2,506.7 | 5.6 | ||||||||||
2010 | 2,162.5 | 4.8 | ||||||||||
2011 | 2,652.3 | 5.9 | ||||||||||
2012 | 2,775.2 | 6.2 | ||||||||||
2013 | 3,156.6 | 7.0 | ||||||||||
2014 | 3,170.7 | 7.1 | ||||||||||
2015 | 3,266.2 | 7.3 | ||||||||||
2016 | 3,126.5 | 7.0 | ||||||||||
2017 | 3,490.8 | 7.8 | ||||||||||
2018 | 3,664.0 | 8.2 | ||||||||||
2019 | 3,792.7 | 8.5 | ||||||||||
2020 | 2,637.8 | 5.9 | ||||||||||
Total Actual | $ | 44,848.3 | 100.0 | % |
FBL TERM BUSINESS |
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 |
($ IN MILLIONS) |
Block | Level Term Period | Total Face Amount | % of Face Amount | |||||||||
Term | ART | $ | 1,471.1 | 3.3 | % | |||||||
5-year Term | 0.3 | 0.0 | ||||||||||
10-year Term | 7,362.4 | 16.4 | ||||||||||
15-year Term | 3,615.0 | 8.1 | ||||||||||
20-year Term | 21,371.1 | 47.7 | ||||||||||
30-year Term | 10,706.3 | 23.9 | ||||||||||
Custom | 322.2 | 0.7 | ||||||||||
Total Actual | $ | 44,848.3 | 100.0 | % |
FBL TERM BUSINESS BY GENDER |
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 |
($ IN MILLIONS) |
Block | Gender | Total Face Amount | % of Face Amount | |||||||||
Term | F | $ | 16,795.5 | 37.4 | % | |||||||
M | 28,052.8 | 62.6 | ||||||||||
Total Actual | $ | 44,848.3 | 100.0 | % |
Whole Life Business
Whole life business consists primarily of dividend paying, participating life insurance policies which provide benefits for the life of the insured if premiums are paid. The business consists of traditional life insurance products, including WL plans, limited pay plans, endowments and paid-up plans. The products are available with a variety of premium payment options with single premium, 10 pay, 15 pay, paid up at 65 and lifetime pay being the most common. Participating policyholders have the option to purchase additional life insurance by applying their dividends to purchase paid-up additions, deposit dividends in a dividend accumulation account or receive dividends in cash. The dividends for the participating block are set by FBL and determined according to the overall performance of the participating life block. Policies issued prior to 2000 generally have a two class underwriting system or an aggregate non-smoker distinct class. Policies issues after 2000 generally follow a five class underwriting system with two smoker classes and three non-smoker classes. Current sales and new business modeled for WL business are in a non-participating plan which was introduced in 2019. Reinsurance on WL business is not modeled due to immateriality.
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Summaries of the WL distributions are as follows:
FBL WL Life Business |
Direct Amounts as of September 30, 2020 |
($ in millions) |
Block | Gender | Total | % of | |||||||
WL | F | $ | 3,293.3 | 40.9 | % | |||||
M | 4,753.5 | 59.1 | ||||||||
Total Actual | $ | 8,046.7 | 100.0 | % |
FBL WL Life Business |
Direct Amounts as of September 30, 2020 |
($ in millions) |
Block | Risk Class | Total | % of | |||||||
WL | Preferred Non-Smoker | $ | 885.1 | 11.0 | % | |||||
Preferred Smoker | 85.6 | 1.1 | ||||||||
Standard Non-Smoker | 5,164.7 | 64.2 | ||||||||
Standard Smoker | 810.3 | 10.1 | ||||||||
Super-Preferred Non-Smoker | 673.9 | 8.4 | ||||||||
Aggregate | 427.1 | 5.3 | ||||||||
Total Actual | $ | 8,046.7 | 100.0 | % |
FBL WL Life Business |
Direct Amounts as of September 30, 2020 |
($ in millions) |
Block | Issue Year | Total Face Amount | % of Face Amount | |||||||||
WL | <=2005 | $ | 3,193.4 | 39.7 | % | |||||||
2006 | 391.1 | 4.9 | ||||||||||
2007 | 384.8 | 4.8 | ||||||||||
2008 | 351.2 | 4.4 | ||||||||||
2009 | 336.9 | 4.2 | ||||||||||
2010 | 317.9 | 4.0 | ||||||||||
2011 | 381.7 | 4.7 | ||||||||||
2012 | 443.8 | 5.5 | ||||||||||
2013 | 380.6 | 4.7 | ||||||||||
2014 | 336.4 | 4.2 | ||||||||||
2015 | 330.2 | 4.1 | ||||||||||
2016 | 283.9 | 3.5 | ||||||||||
2017 | 239.5 | 3.0 | ||||||||||
2018 | 240.3 | 3.0 | ||||||||||
2019 | 266.7 | 3.3 | ||||||||||
2020 | 168.4 | 2.1 | ||||||||||
Total Actual | $ | 8,046.7 | 100.0 | % |
FBL WL Life Business |
Direct Amounts as of September 30, 2020 |
($ in millions) |
Block | Issue Age | Total | % of | |||||||
WL | 0-29 | $ | 3,898.9 | 48.5 | % | |||||
30-39 | 1,952.5 | 24.3 | ||||||||
40-49 | 1,190.6 | 14.8 | ||||||||
50-59 | 684.8 | 8.5 | ||||||||
60-69 | 263.4 | 3.3 | ||||||||
70+ | 56.4 | 0.7 | ||||||||
Total Actual | $ | 8,046.7 | 100.0 | % |
Universal Life Business
The UL business consists of fixed premium UL and flexible premium UL plans that offer permanent life insurance to policyholders. The block experienced increase in sales starting in 2008, with approximately 73% of the current face amount in-force being issued after 2008. The products include a combination of policy and premium loads, cost of insurance rates, and surrender charges. The guaranteed interest rate ranges between 2-4.50% for all products with majority of the block currently crediting the guaranteed rate.
FBL introduced flexible premium universal life with secondary guarantee products (“ULSG”) in 2008. ULSG products include specified premium and shadow fund designs. The specified premium provides a guarantee of no-lapse when the account value is zero given that the specified premium is paid. The shadow fund design provides a guarantee of no-lapse when the account value is zero given that the shadow fund is positive. The products include a combination of policy and premium loads, cost of insurance rates, and surrender charges. All ULSG products with lifetime guarantees have 19-year surrender charge periods.
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The UL policies issued after 2000 primarily follow a five class underwriting system and prior issues primarily follow a two class underwriting system.
Indexed Universal Life Business
FBL introduced flexible premium IUL products in 2015 with an indexed strategy that is based on the S&P500. The products include a fixed account and indexed account. The indexed account credits according to a 1-year Point-to-Point strategy and earns interest credits linked to the performance of S&P500. The indexed credit caps are based on the earned rate of the underlying asset portfolio and the option budget. The fixed account has a guaranteed rate of 1% and is credited the rate set by FBL. The products include a combination of policy and premium loads, cost of insurance rates, and surrender charges. The surrender charge period is 9-11 years.
Variable Universal Life Business
FBL introduced VUL business in the early 90s and discontinued sales in 2010. The products reflect a five class underwriting system with three nonsmoker classes and two smoker classes. Policyholders can choose to invest in both fixed and separate account funds. The products include a combination of policy and premium loads, mortality and expense risk charges, cost of insurance rates, and surrender charges. Surrender charge periods range from zero to six years.
FBL cedes excess mortality risk using Yearly Renewable Term (“YRT”) reinsurance with retention limits. As of September 30, 2020, the YRT reinsurance has retention limits of $1.0 million for issue ages less than 65 and $0.75 million for issue ages greater than 65 for all Interest Sensitive Life (“ISL”) business. Reinsurance on VUL is modeled due to immateriality.
Summaries of the UL and VUL distributions are as follows:
FBL UL and VUL Inforce Summary | ||||||||||||
Direct Amounts as of September 30, 2020 | ||||||||||||
($ in millions) | ||||||||||||
Block | Gender | Total Face Amount | % of Face Amount | |||||||||
UL & VUL | F | $ | 4,864.0 | 39.4 | % | |||||||
M | 7,488.8 | 60.6 | ||||||||||
Total Actual | $ | 12,352.8 | 100.0 | % |
FBL UL and VUL Inforce Summary Direct Amounts as of September 30, 2020 ($ in millions) | ||||||||||
Block | Risk Class | Total Face Amount | % of Face Amount | |||||||
UL & VUL | Preferred Non-Smoker | $ | 944.4 | 7.6 | % | |||||
Preferred Smoker | 101.5 | 0.8 | ||||||||
Standard Non-Smoker | 9,262.8 | 75.0 | ||||||||
Standard Smoker | 926.4 | 7.5 | ||||||||
Super-Preferred Non-Smoker | 1,117.8 | 9.0 | ||||||||
Total Actual | $ | 12,352.8 | 100.0 | % |
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Milliman client Report
FBL UL and VUL Inforce Summary | ||||||||||||
Direct Amounts as of September 30, 2020 | ||||||||||||
($ in millions) | ||||||||||||
Block | Issue Year | Total Face Amount | % of Face Amount | |||||||||
UL & VUL | <=2005 | $ | 5,499.7 | 44.5 | % | |||||||
2006 | 234.8 | 1.9 | ||||||||||
2007 | 227.4 | 1.8 | ||||||||||
2008 | 345.4 | 2.8 | ||||||||||
2009 | 343.8 | 2.8 | ||||||||||
2010 | 366.8 | 3.0 | ||||||||||
2011 | 419.5 | 3.4 | ||||||||||
2012 | 529.6 | 4.3 | ||||||||||
2013 | 478.7 | 3.9 | ||||||||||
2014 | 359.5 | 2.9 | ||||||||||
2015 | 348.5 | 2.8 | ||||||||||
2016 | 473.1 | 3.8 | ||||||||||
2017 | 637.1 | 5.2 | ||||||||||
2018 | 794.7 | 6.4 | ||||||||||
2019 | 811.7 | 6.6 | ||||||||||
2020 | 482.5 | 3.9 | ||||||||||
Total Actual | $ | 12,352.8 | 100.0 | % |
FBL UL and VUL Inforce Summary Direct Amounts as of September 30, 2020 ($ in millions) | ||||||||||
Block | Issue Age | Total Face Amount | % of Face Amount | |||||||
UL & VUL | 0-29 | $ | 3,921.9 | 31.7 | % | |||||
30-39 | 3,047.5 | 24.7 | ||||||||
40-49 | 2,439.1 | 19.7 | ||||||||
50-59 | 1,779.9 | 14.4 | ||||||||
60-69 | 922.8 | 7.5 | ||||||||
70+ | 241.7 | 2.0 | ||||||||
Total Actual | $ | 12,352.8 | 100.0 | % |
FBL UL and VUL Inforce Summary | ||||||||
Direct Amounts as of September 30, 2020 | ||||||||
($ in millions) | ||||||||
Product | Total Face Amount | % of Face Amount | ||||||
UL Non-SG | $ | 3,726.2 | 30.2 | % | ||||
UL Lifetime SG | 1,955.1 | 15.8 | ||||||
IUL | 2,692.3 | 21.8 | ||||||
VUL | 3,979.2 | 32.2 | ||||||
Total Actual | $ | 12,352.8 | 100.0 | % |
Annuity Business
The following table provides a summary of the annuity business inforce by product line.
FBL Annuity business inforce on modeled business as of September 30, 2020 ($ in millions) | ||||||||||||||||||||||
Block | Policy Count | Account Value | Cash Value (MVA) | MVA | Statutory Reserve | Tax Reserve | ||||||||||||||||
FA | 43,474 | $ | 3,239.4 | $ | 3,215.8 | $ | 3,218.5 | $ | 3,218.5 | |||||||||||||
FIA | 7,929 | 821.0 | 773.9 | 811.8 | 811.8 | |||||||||||||||||
VA | 9,316 | 566.5 | 566.5 | 566.5 | 566.5 | |||||||||||||||||
SPIA | 8,770 | 411.5 | 393.7 | |||||||||||||||||||
SSA | 769 | 42.4 | 39.3 | |||||||||||||||||||
FBL Total | 70,258 | $ | 4,626.9 | $ | 4,556.2 | $ | 5,050.7 | $ | 5,029.8 |
Fixed Annuity Business
The FA business consists of individual and group annuities.
Individual Annuities
This business is made up of single premium (SPDA) and flexible premium (FPDA) products. About 14% of the account value inforce is crediting interest on a new money basis, and the remainder is credited on a portfolio basis. Approximately 86% of the account value is currently being credited interest at the contract minimum rate.
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Surrender charge periods range from 4 years to 10 years, with approximately 77% of the account value beyond the surrender charge period. Many contracts offer penalty-free withdrawals of 10% per year.
The current-selling products are the Select IV MYGA SPDA (new money) and the Select IV Portfolio 6 and Portfolio 10 FPDAs.
Group Annuities
The group annuities include:
§ | Deposit administration funds, used by FBL to fund retirement benefits for employees who have not yet retired, and |
§ | Retirement accounts. |
Summaries for the FA distributions are as follows:
FBL FA Business by Issue Age | ||||||||
as of September 30, 2020 | ||||||||
($ in Millions) | ||||||||
% of Total | ||||||||
Account | Account | |||||||
Issue Age | Value | Value | ||||||
0-29 | $ | 86.6 | 3.7 | % | ||||
30-39 | 200.5 | 8.5 | ||||||
40-49 | 342.9 | 14.6 | ||||||
50-59 | 551.6 | 23.5 | ||||||
60-69 | 634.5 | 27.0 | ||||||
70+ | 533.6 | 22.7 | ||||||
Total | $ | 2,349.7 | 100.0 | % |
FBL FA Business by Gender | ||||||||
as of September 30, 2020 | ||||||||
($ in Millions) | ||||||||
% of Total | ||||||||
Account | Account | |||||||
Gender | Value | Value | ||||||
F | $ | 1,124.4 | 47.9 | % | ||||
M | 1,225.3 | 52.1 | % | |||||
Total | $ | 2,349.7 | 100.0 | % |
FBL FA Business by Issue Year | |||||||||
as of September 30, 2020 | |||||||||
($ in Millions) | |||||||||
% of Total | |||||||||
Account | Account | ||||||||
Issue Year | Value | Value | |||||||
1967-2000 | $ | 742.4 | 31.6 | % | |||||
2001 | 57.4 | 2.4 | |||||||
2002 | 151.6 | 6.5 | |||||||
2003 | 139.8 | 5.9 | |||||||
2004 | 146.0 | 6.2 | |||||||
2005 | 56.0 | 2.4 | |||||||
2006 | 44.6 | 1.9 | |||||||
2007 | 45.5 | 1.9 | |||||||
2008 | 88.5 | 3.8 | |||||||
2009 | 56.1 | 2.4 | |||||||
2010 | 63.4 | 2.7 | |||||||
2011 | 87.8 | 3.7 | |||||||
2012 | 87.5 | 3.7 | |||||||
2013 | 62.8 | 2.7 | |||||||
2014 | 61.3 | 2.6 | |||||||
2015 | 64.6 | 2.8 | |||||||
2016 | 77.2 | 3.3 | |||||||
2017 | 75.2 | 3.2 | |||||||
2018 | 115.2 | 4.9 | |||||||
2019 | 92.0 | 3.9 | |||||||
2020 | 34.7 | 1.5 | |||||||
Total | $ | 2,349.7 | 100.0 | % |
Fixed Indexed Annuity Business
FBL sells single premium and flexible premium versions of FIA. Interest crediting options include a fixed interest rate and two indexed crediting strategies – an annual point-to-point or a monthly averaging strategy, based on the S&P 500 and subject to a cap. The recently introduced Agility 6 is a single premium indexed annuity with a two-year point-to-point strategy.
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Milliman client Report
With the exception of the Agility 6 and flexible premium FIA contracts sold from 2005 to 2008, a guaranteed lifetime withdrawal benefit (GLWB) is automatically included in the contract at issue. The policyholder may choose to initiate (“activate”) the rider subject to account value and age minimums. Upon activation, the benefit base begins accumulating (roll up) on a simple interest basis for up to 20 years. For contracts issued prior to February 2020, the roll-up rate is 6 or 7%, depending on the product. Contracts issued after February have a 4% roll up. In addition, rider charges begin to be deducted from the account value at activation.
As of September 30, 2020, about 77% of the account value inforce was in contracts that had activated the rider.
Summaries for the FIA distributions are as follows:
FBL FIA Business by Issue Age | ||||||||
as of September 30, 2020 | ||||||||
($ in Millions) | ||||||||
% of Total | ||||||||
Account | Account | |||||||
Issue Age | Value | Value | ||||||
0-29 | $ | 0.9 | 0.1 | % | ||||
30-39 | 10.6 | 1.3 | ||||||
40-49 | 55.3 | 6.7 | ||||||
50-59 | 215.9 | 26.3 | ||||||
60-69 | 381.6 | 46.5 | ||||||
70+ | 156.6 | 19.1 | ||||||
Total | $ | 821.0 | 100.0 | % |
FBL FIA Business by Gender | ||||||||
as of September 30, 2020 | ||||||||
($ in Millions) | ||||||||
% of Total | ||||||||
Account | Account | |||||||
Gender | Value | Value | ||||||
F | $ | 376.1 | 45.8 | % | ||||
M | 444.9 | 54.2 | ||||||
Total | $ | 821.0 | 100.0 | % |
FBL FIA Business by Issue Year | |||||||||
as of September 30, 2020 | |||||||||
($ in Millions) | |||||||||
% of Total | |||||||||
Account | Account | ||||||||
Issue Year | Value | Value | |||||||
2005 | $ | 1.5 | 0.2 | % | |||||
2006 | 3.8 | 0.5 | |||||||
2007 | 1.4 | 0.2 | |||||||
2008 | 0.0 | 0.0 | |||||||
2012 | 1.9 | 0.2 | |||||||
2013 | 29.1 | 3.5 | |||||||
2014 | 75.7 | 9.2 | |||||||
2015 | 89.4 | 10.9 | |||||||
2016 | 128.5 | 15.6 | |||||||
2017 | 121.6 | 14.8 | |||||||
2018 | 164.1 | 20.0 | |||||||
2019 | 138.3 | 16.8 | |||||||
2020 | 65.8 | 8.0 | |||||||
Total | $ | 821.0 | 100.0 | % |
Variable Annuity Business
FBL stopped selling VA in 2010 and discontinued new sales with their variable alliance partners in 2011. The company continues to receive some new premiums on the existing block. All of the VA business is out of the surrender charge period.
The separate account options consist of five categories: large-cap, medium-cap, and small-cap equity funds as well as balanced and bond funds. There is also a general account option, which is currently crediting interest at the guaranteed minimum rate of 3.00%. As of September 30, 2020, approximately 39% of account value was in the general account, 30% in large-cap equity fund, 9% each in mid-cap, balanced, and bond funds, and 4% in small-cap funds.
All of the contracts have a return of premium death benefit. Some contracts also have a maximum anniversary value death benefit, an incremental death benefit that provides for an additional death benefit amount equal to a portion of the gain in the contract, and/or a guaranteed income benefit. In the earliest version of the product, some combination of these additional benefits were automatically included at no additional charge. Newer product versions offered these benefits for an additional charge.
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Under a coinsurance and modified coinsurance agreement, FBL assumes 100% of the variable annuity general account risk on a coinsurance basis and 100% of the variable annuity separate account risk on a modified coinsurance basis for a block of business from EquiTrust Life Insurance Company. The ceding company holds the separate account reserve under the modified coinsurance agreement. FBL also assumes a small block of variable annuities from Modern Woodmen of America and Country Investors Life Assurance Company via modified coinsurance agreement.
Summaries for the VA distributions are as follows:
FBL VA Business by Issue Age | ||||||||
as of September 30, 2020 | ||||||||
($ in Millions) | ||||||||
% of Total | ||||||||
Account | Account | |||||||
Issue Age | Value | Value | ||||||
0-29 | $ | 37.2 | 6.6 | % | ||||
30-39 | 122.5 | 21.7 | ||||||
40-49 | 176.9 | 31.4 | ||||||
50-59 | 147.1 | 26.1 | ||||||
60-69 | 63.1 | 11.2 | ||||||
70+ | 17.1 | 3.0 | ||||||
Total | $ | 564.0 | 100.0 | % |
FBL VA Business by Gender | ||||||||
as of September 30, 2020 | ||||||||
($ in Millions) | ||||||||
` | % of Total | |||||||
Account | Account | |||||||
Gender | Value | Value | ||||||
F | $ | 202.7 | 35.9 | % | ||||
M | 361.3 | 64.1 | ||||||
Total | $ | 564.0 | 100.0 | % |
FBL VA Business by Issue Year | |||||||||
as of September 30, 2020 | |||||||||
($ in Millions) | |||||||||
% of Total | |||||||||
Account | Account | ||||||||
Issue Year | Value | Value | |||||||
1994 | $ | 8.3 | 1.5 | % | |||||
1995 | 3.3 | 0.6 | |||||||
1996 | 25.9 | 4.6 | |||||||
1997 | 14.5 | 2.6 | |||||||
1998 | 21.6 | 3.8 | |||||||
1999 | 38.1 | 6.8 | |||||||
2000 | 53.3 | 9.5 | |||||||
2001 | 36.9 | 6.5 | |||||||
2002 | 60.8 | 10.8 | |||||||
2003 | 39.1 | 6.9 | |||||||
2004 | 36.8 | 6.5 | |||||||
2005 | 53.9 | 9.6 | |||||||
2006 | 45.1 | 8.0 | |||||||
2007 | 49.2 | 8.7 | |||||||
2008 | 29.8 | 5.3 | |||||||
2009 | 25.4 | 4.5 | |||||||
2010 | 21.6 | 3.8 | |||||||
2011 | 0.0 | 0.0 | |||||||
2012 | 0.1 | 0.0 | |||||||
2013 | 0.1 | 0.0 | |||||||
Total | $ | 564.0 | 100.0 | % |
SPIA/SSA/Supplementary Contracts
SPIA contracts include certain only or certain and life contingent single premium immediate annuities in which the annuitant receives a series of regular income payments in return of a single premium. SSA contracts are comprised of contracts with periodic and lump sum payments in the form of certain only annuities or certain and life annuities. Supplementary contracts (“SC”) are contracts resulting from annuitizations of deferred annuity policies and include certain only or certain and life contingent payouts.
Life and Annuity Summary of Models and Key Assumptions
The FBL business was modeled based on the seriatim inforce policies provided by FBL. The models were constructed to reflect the main characteristics of the inforce business. The key assumptions underlying the projections are outlined below. Detailed summaries of the models and assumptions are provided in the Appendices. Assumptions are based on company experience, our knowledge of industry experience and anticipated future trends as well as considerations of company internal assumptions.
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 21 |
Milliman client Report
1) | Mortality assumptions for life insurance business are based on the historical experience of the business and our expectations for industry trends. Future mortality improvement is reflected for twenty years. |
2) | Lapse assumptions are based on a review of the Company's internal study and industry trends. |
3) | The partial withdrawal assumption is based on the Company’s experience. |
4) | Assumptions for acquisition expenses are based on FBL’s current pricing cost. Assumptions for maintenance expenses are based on expected long term unit costs of FBL. |
5) | Investment income reflects a run-off of the existing asset portfolios and strategies for new investments provided by FBL and the November 6, 2020 forward curve. |
6) | Credited rates upon renewal are based on the recent rate setting activities as provided by FBL. |
7) | Third party reinsurance reflects treaty terms where material. |
Actuarial Appraisal of Farm Bureau Life Insurance Company and Insurance Subsidiaries As of September 30, 2020 | 22 |
Milliman client Report
Appendix A – Asset and Investment Assumptions
Asset Portfolio as of SEPTEMBER 30, 2020
A summary of the modeled invested assets is shown below. FHLB assets are summarized in the FHLB section below. The yields on tax-exempt municipal bonds are shown below are adjusted to tax equivalent yield based on an assumption that 30% of the income is taxable at 21% tax rate. In the model, tax-exempt municipal bonds are modeled with actual yield and 30% of the income is included in taxable investment income.
FBL – fixed deferred annuities
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 956.5 | $ | 989.2 | $ | 1,114.2 | 5.51 | % | 5.06 | % | 2.94 | % | ||||||||||||
Private Bond | 85.9 | 86.1 | 97.6 | 4.31 | 4.28 | 2.33 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 55.7 | 56.3 | 58.2 | 5.83 | 5.76 | 5.55 | ||||||||||||||||||
Passthrough | 2.5 | 2.5 | 2.9 | 5.32 | 5.12 | 1.00 | ||||||||||||||||||
CLO | 117.2 | 116.9 | 114.8 | 3.51 | 3.55 | 3.79 | ||||||||||||||||||
ABS | 156.1 | 150.1 | 154.8 | 2.87 | 4.01 | 3.08 | ||||||||||||||||||
CMBS | 363.9 | 340.6 | 390.7 | 3.16 | 3.93 | 2.18 | ||||||||||||||||||
CMO | 292.5 | 280.6 | 309.5 | 3.36 | 4.23 | 2.05 | ||||||||||||||||||
Tax Exempt Municipal | 206.7 | 205.9 | 221.8 | 4.83 | 4.89 | 3.12 | ||||||||||||||||||
Mortgage Loan | 505.4 | 505.7 | 546.6 | 4.62 | 4.59 | 3.03 | ||||||||||||||||||
TOTAL | $ | 2,742.5 | $ | 2,734.0 | $ | 3,010.9 | 4.48 | % | 4.60 | % | 2.85 | % |
FBL – Fixed Indexed ANNUITIES
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 343.5 | $ | 351.0 | $ | 408.8 | 4.65 | % | 4.44 | % | 3.06 | % | ||||||||||||
Private Bond | 25.5 | 25.7 | 28.9 | 3.95 | 3.86 | 2.67 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 1.0 | 1.0 | 0.9 | 3.65 | 3.68 | 4.11 | ||||||||||||||||||
Passthrough | 2.9 | 3.3 | 3.3 | 3.01 | 2.30 | 2.37 | ||||||||||||||||||
CLO | 25.6 | 25.6 | 25.2 | 4.07 | 4.10 | 4.31 | ||||||||||||||||||
ABS | 30.9 | 29.6 | 31.1 | 3.21 | 4.36 | 3.25 | ||||||||||||||||||
CMBS | 192.7 | 178.8 | 205.7 | 3.05 | 3.83 | 2.32 | ||||||||||||||||||
CMO | 44.5 | 42.1 | 46.4 | 2.94 | 4.12 | 1.35 | ||||||||||||||||||
Tax Exempt Municipal | 78.6 | 77.8 | 84.3 | 4.16 | 4.25 | 3.37 | ||||||||||||||||||
Mortgage Loan | 38.9 | 38.9 | 41.2 | 4.19 | 4.19 | 3.25 | ||||||||||||||||||
TOTAL | $ | 784.0 | $ | 773.9 | $ | 875.8 | 3.98 | % | 4.20 | % | 2.86 | % |
* $25.8 million of cash was included to support initial reserves.
Appendix A – Asset and Investment Assumptions | A-1 |
Milliman client Report
FBL – immediate ANNUITIES (incl. supp. contracts)
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 185.5 | $ | 189.7 | $ | 214.8 | 5.13 | % | 4.86 | % | 2.92 | % | ||||||||||||
Private Bond | 4.1 | 4.1 | 4.6 | 4.29 | 4.28 | 1.86 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 2.0 | 2.0 | 2.0 | 4.42 | 4.43 | 4.49 | ||||||||||||||||||
Passthrough | 0.1 | 0.1 | 0.1 | 5.19 | 5.07 | 1.39 | ||||||||||||||||||
CLO | 9.3 | 9.2 | 9.3 | 3.52 | 3.55 | 3.55 | ||||||||||||||||||
ABS | 29.2 | 28.6 | 30.1 | 3.52 | 4.47 | 3.21 | ||||||||||||||||||
CMBS | 46.2 | 42.3 | 49.3 | 2.97 | 3.89 | 2.20 | ||||||||||||||||||
CMO | 46.2 | 44.6 | 48.3 | 3.67 | 4.49 | 1.88 | ||||||||||||||||||
Tax Exempt Municipal | 44.8 | 44.6 | 49.1 | 5.18 | 5.22 | 3.44 | ||||||||||||||||||
Mortgage Loan | 13.0 | 13.2 | 14.1 | 5.94 | 5.42 | 2.70 | ||||||||||||||||||
TOTAL | $ | 380.2 | $ | 378.4 | $ | 421.6 | 4.55 | % | 4.70 | % | 2.80 | % |
* $0.8 million of cash was included to support initial reserves.
FBL –Variable Annuities
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 119.7 | $ | 123.7 | $ | 142.7 | 5.29 | % | 4.91 | % | 3.09 | % | ||||||||||||
Private Bond | 7.6 | 7.6 | 8.2 | 4.69 | 4.69 | 1.72 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 5.0 | 5.0 | 5.2 | 5.76 | 5.76 | 5.54 | ||||||||||||||||||
Passthrough | 0.1 | 0.1 | 0.1 | 5.62 | 3.97 | 0.71 | ||||||||||||||||||
CLO | 1.0 | 1.0 | 1.0 | 2.76 | 2.76 | 2.86 | ||||||||||||||||||
ABS | 4.2 | 4.3 | 4.5 | 4.44 | 4.33 | 3.14 | ||||||||||||||||||
CMBS | 28.2 | 25.8 | 30.0 | 3.03 | 3.90 | 2.22 | ||||||||||||||||||
CMO | 21.8 | 21.5 | 23.4 | 3.45 | 3.97 | 2.17 | ||||||||||||||||||
Tax Exempt Municipal | 18.2 | 18.1 | 19.4 | 4.59 | 4.65 | 3.67 | ||||||||||||||||||
Mortgage Loan | 2.9 | 2.9 | 3.1 | 4.87 | 4.87 | 3.18 | ||||||||||||||||||
TOTAL | $ | 208.7 | $ | 209.9 | $ | 237.5 | 4.68 | % | 4.65 | % | 2.95 | % |
* $5.2 million of cash was included to support initial reserves.
Appendix A – Asset and Investment Assumptions | A-2 |
Milliman client Report
FBL – traditional life (WL)
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 1,039.2 | $ | 1,053.5 | $ | 1,312.1 | 5.66 | % | 5.47 | % | 3.11 | % | ||||||||||||
Private Bond | 36.8 | 36.8 | 44.4 | 4.37 | 4.36 | 2.80 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 9.4 | 8.4 | 10.0 | 8.56 | 9.57 | 7.98 | ||||||||||||||||||
Passthrough | 1.7 | 1.6 | 1.7 | 5.27 | 5.65 | 4.16 | ||||||||||||||||||
CLO | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
ABS | 0.4 | 0.4 | 0.4 | 4.63 | 4.61 | 3.55 | ||||||||||||||||||
CMBS | 86.3 | 80.9 | 94.2 | 3.73 | 4.43 | 2.63 | ||||||||||||||||||
CMO | 20.5 | 20.4 | 22.6 | 5.10 | 5.21 | 3.39 | ||||||||||||||||||
Tax Exempt Municipal | 108.3 | 106.0 | 114.8 | 4.53 | 4.72 | 3.03 | ||||||||||||||||||
Mortgage Loan | 210.4 | 210.5 | 228.9 | 4.61 | 4.59 | 3.26 | ||||||||||||||||||
Alternative | $ | 41.3 | $ | 41.3 | $ | 41.3 | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||||||
TOTAL | $ | 1,554.4 | $ | 1,560.0 | $ | 1,870.5 | 5.37 | % | 5.31 | % | 3.23 | % |
FBL - Term
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 209.3 | $ | 216.2 | $ | 256.6 | 5.01 | % | 4.71 | % | 3.21 | % | ||||||||||||
Private Bond | 2.7 | 2.7 | 3.0 | 3.66 | 3.64 | 2.64 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 2.0 | 2.0 | 2.0 | 4.96 | 4.96 | 4.87 | ||||||||||||||||||
Passthrough | 0.3 | 0.3 | 0.3 | 5.08 | 5.40 | 4.46 | ||||||||||||||||||
CLO | 1.5 | 1.5 | 1.5 | 2.76 | 2.76 | 2.86 | ||||||||||||||||||
ABS | 4.9 | 5.0 | 5.5 | 4.67 | 5.21 | 3.35 | ||||||||||||||||||
CMBS | 49.5 | 46.0 | 53.8 | 3.22 | 3.93 | 2.51 | ||||||||||||||||||
CMO | 15.6 | 15.3 | 17.1 | 3.62 | 4.28 | 2.03 | ||||||||||||||||||
Tax Exempt Municipal | 60.7 | 60.3 | 65.1 | 4.59 | 4.65 | 3.26 | ||||||||||||||||||
Mortgage Loan | 11.7 | 11.7 | 12.7 | 4.41 | 4.41 | 3.05 | ||||||||||||||||||
TOTAL | $ | 358.2 | $ | 360.9 | $ | 417.5 | 4.59 | % | 4.57 | % | 3.08 | % |
Appendix A – Asset and Investment Assumptions | A-3 |
Milliman client Report
FBL – UL
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 693.1 | $ | 706.2 | $ | 856.1 | 5.30 | % | 5.12 | % | 3.31 | % | ||||||||||||
Private Bond | 28.5 | 28.3 | 32.6 | 4.34 | 4.43 | 2.94 | ||||||||||||||||||
Government | 1.0 | 1.0 | 1.0 | 8.04 | 5.70 | 0.22 | ||||||||||||||||||
Preferred Stock | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Passthrough | 1.4 | 1.4 | 1.5 | 5.25 | 5.71 | 4.94 | ||||||||||||||||||
CLO | 10.3 | 10.2 | 10.1 | 3.38 | 3.45 | 3.63 | ||||||||||||||||||
ABS | 12.4 | 12.2 | 12.4 | 4.07 | 4.69 | 4.08 | ||||||||||||||||||
CMBS | 68.6 | 64.1 | 74.8 | 3.47 | 4.15 | 2.63 | ||||||||||||||||||
CMO | 11.7 | 10.9 | 13.0 | 3.29 | 4.35 | 2.13 | ||||||||||||||||||
Tax Exempt Municipal | 90.4 | 89.0 | 96.2 | 4.51 | 4.67 | 3.26 | ||||||||||||||||||
Mortgage Loan | 183.6 | 183.6 | 198.8 | 4.58 | 4.58 | 3.15 | ||||||||||||||||||
Alternative | $ | 20.8 | $ | 20.8 | $ | 20.8 | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||||||
TOTAL | $ | 1,121.8 | $ | 1,127.8 | $ | 1,317.1 | 4.98 | % | 4.95 | % | 3.30 | % |
FBL – VUL
Summary of Modeled Assets
As of SEPTEMBER 30, 2020
($ in millions)
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 91.0 | $ | 92.4 | $ | 107.5 | 5.12 | % | 4.90 | % | 3.33 | % | ||||||||||||
Private Bond | 1.4 | 1.4 | 1.9 | 6.25 | 6.22 | 3.49 | ||||||||||||||||||
Government | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Preferred Stock | 1.0 | 1.0 | 0.9 | 3.65 | 3.65 | 4.11 | ||||||||||||||||||
Passthrough | 1.0 | 0.9 | 1.0 | 5.26 | 5.56 | 3.64 | ||||||||||||||||||
CLO | 4.5 | 4.5 | 4.3 | 3.17 | 3.17 | 3.67 | ||||||||||||||||||
ABS | 5.6 | 5.9 | 6.5 | 4.51 | 4.36 | 3.00 | ||||||||||||||||||
CMBS | 23.0 | 21.5 | 24.8 | 3.30 | 4.07 | 2.27 | ||||||||||||||||||
CMO | 13.0 | 12.8 | 13.5 | 3.46 | 3.40 | 1.38 | ||||||||||||||||||
Tax Exempt Municipal | 15.7 | 15.5 | 17.1 | 4.33 | 4.47 | 3.08 | ||||||||||||||||||
Mortgage Loan | 4.1 | 4.1 | 4.6 | 5.14 | 5.14 | 3.49 | ||||||||||||||||||
TOTAL | $ | 160.2 | $ | 160.1 | $ | 182.1 | 4.57 | % | 4.57 | % | 3.02 | % |
The model assumes adding in $41.3 million and $20.8 million of alternative assets supporting Perm and UL businesses would increase the yield by 7 bps and 6 bps, respectively. The extra yield is modeled through a reduction of investment expense.
Appendix A – Asset and Investment Assumptions | A-4 |
Milliman client Report
Assets Backing Surplus
The following table shows a summary of the assets assumed to back surplus.
FBL Summary of Asset Allocated to Surplus As of September 30, 2020 ($ in millions) | ||||||||||||
Book Value | Market Value | Mark-to-Market | ||||||||||
Non-Modeled Corporate Assets | $ | 264.8 | $ | 272.1 | $ | 7.3 | ||||||
Non-Modeled Other Assets | 154.5 | 173.2 | 18.7 | |||||||||
Modeled Assets Not Utilized | 230.4 | 260.7 | 30.3 | |||||||||
Total Asset Allocated to Surplus | $ | 649.7 | $ | 706.0 | $ | 56.3 | ||||||
After-Tax Mark-to-Market | $ | 44.5 |
Reinvestment Assumptions
The investment strategy assumes that positive cash flow would purchase fixed income securities according to the fixed proportion illustrated below. Spreads, shown in the following table, are consistent with corporate bond equivalent (semi-annual) yield. The spreads are based on market conditions as of November 6, 2020 and obtained from Bloomberg and other industry sources. FHLB reinvestments are summarized in the FHLB section below.
The strategies follow the current asset allocation for projection year 1-3 and switch to the long-term allocation starting in projection year 4. The yields on tax-exempt municipal bonds are shown below are adjusted to tax equivalent yield based on an assumption that 30% of the income is taxable at 21% tax rate. In the model, tax-exempt municipal bonds are modeled with actual yield and 30% of the income is included in taxable investment income
SHORT - VA, SCINLC | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY SUMMARY FOR YEAR 1-3 | ||||||||||||||||||||||||||||||||||||||||||
AS OF 11/06/2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
ABS | A3 | 7.00 | % | 3 | 2.93 | 0.21 | % | 1.65 | % | 1.86 | % | 1.88 | % | 0.11 | % | 0.11 | % | 1.66 | % | |||||||||||||||||||||||
ABS | A3 | 18.00 | 5 | 4.77 | 0.36 | 1.79 | 2.15 | 2.17 | 0.11 | 0.11 | 1.95 | |||||||||||||||||||||||||||||||
MBS | A3 | 0.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.17 | 0.11 | 0.19 | 2.88 | |||||||||||||||||||||||||||||||
Municipal | A3 | 0.00 | 30 | 19.42 | 1.60 | 1.64 | 3.24 | 3.26 | 0.11 | 0.01 | 3.14 | |||||||||||||||||||||||||||||||
NAIC1-30 yr Corp | A3 | 0.00 | 30 | 20.66 | 1.60 | 1.14 | 2.74 | 2.75 | 0.11 | 0.15 | 2.49 | |||||||||||||||||||||||||||||||
NAIC2-5 yr Corp | BAA3 | 0.00 | 5 | 4.87 | 0.36 | 0.85 | 1.21 | 1.21 | 0.11 | 0.24 | 0.86 | |||||||||||||||||||||||||||||||
NAIC2-10 yr Corp | BAA3 | 0.00 | 10 | 9.07 | 0.83 | 1.28 | 2.11 | 2.12 | 0.11 | 0.28 | 1.73 | |||||||||||||||||||||||||||||||
NAIC2-30 yr Corp | BAA3 | 0.00 | 30 | 19.77 | 1.60 | 1.49 | 3.09 | 3.11 | 0.11 | 0.33 | 2.67 | |||||||||||||||||||||||||||||||
NAIC3-5 yr Corp | BA3 | 25.00 | 5 | 4.67 | 0.36 | 2.78 | 3.14 | 3.17 | 0.11 | 1.50 | 1.56 | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 0.00 | 3 | 2.92 | 0.21 | 2.00 | 2.21 | 2.23 | 0.11 | 0.11 | 2.01 | |||||||||||||||||||||||||||||||
Emerging Market | BAA3 | 35.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.15 | 0.11 | 0.28 | 2.76 | |||||||||||||||||||||||||||||||
Commercial Mortgages | Baa2 | 15.00 | 10 | 8.72 | 0.83 | 2.16 | 2.99 | 3.03 | 0.23 | 0.18 | 2.62 | |||||||||||||||||||||||||||||||
Total | 100.00 | % | 7.36 | 6.57 | 0.58 | % | 2.26 | % | 2.85 | % | 2.87 | % | 0.13 | % | 0.53 | % | 2.22 | % |
Appendix A – Asset and Investment Assumptions | A-5 |
Milliman client Report
SHORT - VA, SCINLC | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY SUMMARY FOR YEAR 4+ | ||||||||||||||||||||||||||||||||||||||||||
AS OF 11/06/2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
ABS | A3 | 9.00 | % | 3 | 2.93 | 0.21 | % | 1.65 | % | 1.86 | % | 1.88 | % | 0.11 | % | 0.11 | % | 1.66 | % | |||||||||||||||||||||||
ABS | A3 | 25.00 | 5 | 4.77 | 0.36 | 1.79 | 2.15 | 2.17 | 0.11 | 0.11 | 1.95 | |||||||||||||||||||||||||||||||
MBS | A3 | 11.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.17 | 0.11 | 0.19 | 2.88 | |||||||||||||||||||||||||||||||
Municipal | A3 | 0.00 | 30 | 19.42 | 1.60 | 1.64 | 3.24 | 3.26 | 0.11 | 0.01 | 3.14 | |||||||||||||||||||||||||||||||
NAIC1-30 yr Corp | A3 | 0.00 | 30 | 20.66 | 1.60 | 1.14 | 2.74 | 2.75 | 0.11 | 0.15 | 2.49 | |||||||||||||||||||||||||||||||
NAIC2-5 yr Corp | BAA3 | 0.00 | 5 | 4.87 | 0.36 | 0.85 | 1.21 | 1.21 | 0.11 | 0.24 | 0.86 | |||||||||||||||||||||||||||||||
NAIC2-10 yr Corp | BAA3 | 0.00 | 10 | 9.07 | 0.83 | 1.28 | 2.11 | 2.12 | 0.11 | 0.28 | 1.73 | |||||||||||||||||||||||||||||||
NAIC2-30 yr Corp | BAA3 | 0.00 | 30 | 19.77 | 1.60 | 1.49 | 3.09 | 3.11 | 0.11 | 0.33 | 2.67 | |||||||||||||||||||||||||||||||
NAIC3-5 yr Corp | BA3 | 25.00 | 5 | 4.67 | 0.36 | 2.78 | 3.14 | 3.17 | 0.11 | 1.50 | 1.56 | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 0.00 | 3 | 2.92 | 0.21 | 2.00 | 2.21 | 2.23 | 0.11 | 0.11 | 2.01 | |||||||||||||||||||||||||||||||
Emerging Market | BAA3 | 15.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.15 | 0.11 | 0.28 | 2.76 | |||||||||||||||||||||||||||||||
Commercial Mortgages | Baa2 | 15.00 | 10 | 8.72 | 0.83 | 2.16 | 2.99 | 3.03 | 0.23 | 0.18 | 2.62 | |||||||||||||||||||||||||||||||
Total | 100.00 | % | 6.87 | 6.18 | 0.54 | % | 2.21 | % | 2.75 | % | 2.78 | % | 0.13 | % | 0.50 | % | 2.15 | % |
INTERMEDIATE - TRADANNUITY, SCILC | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY SUMMARY FOR YEAR 1-3 | ||||||||||||||||||||||||||||||||||||||||||
AS OF 11/06/2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
ABS | A3 | 2.00 | % | 3 | 2.93 | 0.21 | % | 1.65 | % | 1.86 | % | 1.88 | % | 0.11 | % | 0.11 | % | 1.66 | % | |||||||||||||||||||||||
ABS | A3 | 1.00 | 5 | 4.77 | 0.36 | 1.79 | 2.15 | 2.17 | 0.11 | 0.11 | 1.95 | |||||||||||||||||||||||||||||||
MBS | A3 | 8.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.17 | 0.11 | 0.19 | 2.88 | |||||||||||||||||||||||||||||||
Municipal | A3 | 9.00 | 30 | 19.42 | 1.60 | 1.64 | 3.24 | 3.26 | 0.11 | 0.01 | 3.14 | |||||||||||||||||||||||||||||||
NAIC1-30 yr Corp | A3 | 0.00 | 30 | 20.66 | 1.60 | 1.14 | 2.74 | 2.75 | 0.11 | 0.15 | 2.49 | |||||||||||||||||||||||||||||||
NAIC2-5 yr Corp | BAA3 | 0.00 | 5 | 4.87 | 0.36 | 0.85 | 1.21 | 1.21 | 0.11 | 0.24 | 0.86 | |||||||||||||||||||||||||||||||
NAIC2-10 yr Corp | BAA3 | 0.00 | 10 | 9.07 | 0.83 | 1.28 | 2.11 | 2.12 | 0.11 | 0.28 | 1.73 | |||||||||||||||||||||||||||||||
NAIC2-30 yr Corp | BAA3 | 35.00 | 30 | 19.77 | 1.60 | 1.49 | 3.09 | 3.11 | 0.11 | 0.33 | 2.67 | |||||||||||||||||||||||||||||||
NAIC3-5 yr Corp | BA3 | 0.00 | 5 | 4.67 | 0.36 | 2.78 | 3.14 | 3.17 | 0.11 | 1.50 | 1.56 | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 0.00 | 3 | 2.92 | 0.21 | 2.00 | 2.21 | 2.23 | 0.11 | 0.11 | 2.01 | |||||||||||||||||||||||||||||||
Emerging Market | BAA3 | 30.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.15 | 0.11 | 0.28 | 2.76 | |||||||||||||||||||||||||||||||
Commercial Mortgages | Baa2 | 15.00 | 10 | 8.72 | 0.83 | 2.16 | 2.99 | 3.03 | 0.23 | 0.18 | 2.62 | |||||||||||||||||||||||||||||||
Total | 100.00 | % | 18.61 | 13.37 | 1.15 | % | 1.92 | % | 3.07 | % | 3.10 | % | 0.13 | % | 0.25 | % | 2.72 | % |
INTERMEDIATE - TRADANNUITY, SCILC | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY SUMMARY FOR YEAR 4+ | ||||||||||||||||||||||||||||||||||||||||||
AS OF 11/06/2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
ABS | A3 | 0.00 | % | 3 | 2.93 | 0.21 | % | 1.65 | % | 1.86 | % | 1.88 | % | 0.11 | % | 0.11 | % | 1.66 | % | |||||||||||||||||||||||
ABS | A3 | 15.00 | 5 | 4.77 | 0.36 | 1.79 | 2.15 | 2.17 | 0.11 | 0.11 | 1.95 | |||||||||||||||||||||||||||||||
MBS | A3 | 27.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.17 | 0.11 | 0.19 | 2.88 | |||||||||||||||||||||||||||||||
Municipal | A3 | 15.00 | 30 | 19.42 | 1.60 | 1.64 | 3.24 | 3.26 | 0.11 | 0.01 | 3.14 | |||||||||||||||||||||||||||||||
NAIC1-30 yr Corp | A3 | 0.00 | 30 | 20.66 | 1.60 | 1.14 | 2.74 | 2.75 | 0.11 | 0.15 | 2.49 | |||||||||||||||||||||||||||||||
NAIC2-5 yr Corp | BAA3 | 0.00 | 5 | 4.87 | 0.36 | 0.85 | 1.21 | 1.21 | 0.11 | 0.24 | 0.86 | |||||||||||||||||||||||||||||||
NAIC2-10 yr Corp | BAA3 | 0.00 | 10 | 9.07 | 0.83 | 1.28 | 2.11 | 2.12 | 0.11 | 0.28 | 1.73 | |||||||||||||||||||||||||||||||
NAIC2-30 yr Corp | BAA3 | 25.00 | 30 | 19.77 | 1.60 | 1.49 | 3.09 | 3.11 | 0.11 | 0.33 | 2.67 | |||||||||||||||||||||||||||||||
NAIC3-5 yr Corp | BA3 | 0.00 | 5 | 4.67 | 0.36 | 2.78 | 3.14 | 3.17 | 0.11 | 1.50 | 1.56 | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 0.00 | 3 | 2.92 | 0.21 | 2.00 | 2.21 | 2.23 | 0.11 | 0.11 | 2.01 | |||||||||||||||||||||||||||||||
Emerging Market | BAA3 | 3.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.15 | 0.11 | 0.28 | 2.76 | |||||||||||||||||||||||||||||||
Commercial Mortgages | Baa2 | 15.00 | 10 | 8.72 | 0.83 | 2.16 | 2.99 | 3.03 | 0.23 | 0.18 | 2.62 | |||||||||||||||||||||||||||||||
Total | 100.00 | % | 17.25 | 12.48 | 1.07 | % | 1.90 | % | 2.97 | % | 3.00 | % | 0.13 | % | 0.19 | % | 2.68 | % |
Appendix A – Asset and Investment Assumptions | A-6 |
Milliman client Report
LONG - GROUPNONFHLB, PERM, TERM, UL, VUL | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY SUMMARY FOR YEAR 1-3 | ||||||||||||||||||||||||||||||||||||||||||
AS OF 11/06/2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
ABS | A3 | 0.00 | % | 3 | 2.93 | 0.21 | % | 1.65 | % | 1.86 | % | 1.88 | % | 0.11 | % | 0.11 | % | 1.66 | % | |||||||||||||||||||||||
ABS | A3 | 12.00 | 5 | 4.77 | 0.36 | 1.79 | 2.15 | 2.17 | 0.11 | 0.11 | 1.95 | |||||||||||||||||||||||||||||||
MBS | A3 | 0.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.17 | 0.11 | 0.19 | 2.88 | |||||||||||||||||||||||||||||||
Municipal | A3 | 25.00 | 30 | 19.42 | 1.60 | 1.64 | 3.24 | 3.26 | 0.11 | 0.01 | 3.14 | |||||||||||||||||||||||||||||||
NAIC1-30 yr Corp | A3 | 23.00 | 30 | 20.66 | 1.60 | 1.14 | 2.74 | 2.75 | 0.11 | 0.15 | 2.49 | |||||||||||||||||||||||||||||||
NAIC2-5 yr Corp | BAA3 | 0.00 | 5 | 4.87 | 0.36 | 0.85 | 1.21 | 1.21 | 0.11 | 0.24 | 0.86 | |||||||||||||||||||||||||||||||
NAIC2-10 yr Corp | BAA3 | 0.00 | 10 | 9.07 | 0.83 | 1.28 | 2.11 | 2.12 | 0.11 | 0.28 | 1.73 | |||||||||||||||||||||||||||||||
NAIC2-30 yr Corp | BAA3 | 20.00 | 30 | 19.77 | 1.60 | 1.49 | 3.09 | 3.11 | 0.11 | 0.33 | 2.67 | |||||||||||||||||||||||||||||||
NAIC3-5 yr Corp | BA3 | 0.00 | 5 | 4.67 | 0.36 | 2.78 | 3.14 | 3.17 | 0.11 | 1.50 | 1.56 | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 0.00 | 3 | 2.92 | 0.21 | 2.00 | 2.21 | 2.23 | 0.11 | 0.11 | 2.01 | |||||||||||||||||||||||||||||||
Emerging Market | BAA3 | 0.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.15 | 0.11 | 0.28 | 2.76 | |||||||||||||||||||||||||||||||
Commercial Mortgages | Baa2 | 20.00 | 10 | 8.72 | 0.83 | 2.16 | 2.99 | 3.03 | 0.23 | 0.18 | 2.62 | |||||||||||||||||||||||||||||||
Total | 100.00 | % | 23 | 15.87 | 1.30 | % | 1.61 | % | 2.91 | % | 2.94 | % | 0.13 | % | 0.15 | % | 2.65 | % |
LONG - GROUPNONFHLB, PERM, TERM, UL, VUL | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENT STRATEGY SUMMARY FOR YEAR 4+ | ||||||||||||||||||||||||||||||||||||||||||
AS OF 11/06/2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
ABS | A3 | 0.00 | % | 3 | 2.93 | 0.21 | % | 1.65 | % | 1.86 | % | 1.88 | % | 0.11 | % | 0.11 | % | 1.66 | % | |||||||||||||||||||||||
ABS | A3 | 0.00 | 5 | 4.77 | 0.36 | 1.79 | 2.15 | 2.17 | 0.11 | 0.11 | 1.95 | |||||||||||||||||||||||||||||||
MBS | A3 | 20.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.17 | 0.11 | 0.19 | 2.88 | |||||||||||||||||||||||||||||||
Municipal | A3 | 25.00 | 30 | 19.42 | 1.60 | 1.64 | 3.24 | 3.26 | 0.11 | 0.01 | 3.14 | |||||||||||||||||||||||||||||||
NAIC1-30 yr Corp | A3 | 15.00 | 30 | 20.66 | 1.60 | 1.14 | 2.74 | 2.75 | 0.11 | 0.15 | 2.49 | |||||||||||||||||||||||||||||||
NAIC2-5 yr Corp | BAA3 | 0.00 | 5 | 4.87 | 0.36 | 0.85 | 1.21 | 1.21 | 0.11 | 0.24 | 0.86 | |||||||||||||||||||||||||||||||
NAIC2-10 yr Corp | BAA3 | 0.00 | 10 | 9.07 | 0.83 | 1.28 | 2.11 | 2.12 | 0.11 | 0.28 | 1.73 | |||||||||||||||||||||||||||||||
NAIC2-30 yr Corp | BAA3 | 20.00 | 30 | 19.77 | 1.60 | 1.49 | 3.09 | 3.11 | 0.11 | 0.33 | 2.67 | |||||||||||||||||||||||||||||||
NAIC3-5 yr Corp | BA3 | 0.00 | 5 | 4.67 | 0.36 | 2.78 | 3.14 | 3.17 | 0.11 | 1.50 | 1.56 | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 0.00 | 3 | 2.92 | 0.21 | 2.00 | 2.21 | 2.23 | 0.11 | 0.11 | 2.01 | |||||||||||||||||||||||||||||||
Emerging Market | BAA3 | 0.00 | 10 | 8.66 | 0.83 | 2.30 | 3.13 | 3.15 | 0.11 | 0.28 | 2.76 | |||||||||||||||||||||||||||||||
Commercial Mortgages | Baa2 | 20.00 | 10 | 8.72 | 0.83 | 2.16 | 2.99 | 3.03 | 0.23 | 0.18 | 2.62 | |||||||||||||||||||||||||||||||
Total | 100.00 | % | 22 | 15.38 | 1.29 | % | 1.77 | % | 3.06 | % | 3.09 | % | 0.13 | % | 0.17 | % | 2.79 | % |
The reinvestment strategy is intended to be reflective of long-term expectations with respect to the overall maturity structure of general account assets, as well as an average of strategies seen across the industry. Future reinvestment rates reflect the forward curve illustrated later in this section. Assets are assumed to be purchased at par, i.e., coupon rates are equal to statutory yield.
Appendix A – Asset and Investment Assumptions | A-7 |
Milliman client Report
FHLB BLOCK
The FHLB existing asset summary and reinvestment strategies are summarized below.
FHLB Assets | ||||||||||||||||||||||||
Summary of Modeled Assets | ||||||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||
Coupon | Book | Market | ||||||||||||||||||||||
Par | Book | Market | Rate | Yield | Yield | |||||||||||||||||||
Asset Type | Value | Value | Value | (AnnEff) | (AnnEff) | (AnnEff) | ||||||||||||||||||
Public Bond | $ | 221.9 | $ | 222.4 | $ | 233.1 | 3.85 | % | 3.78 | % | 1.61 | % | ||||||||||||
Private Bond | 17.9 | 17.9 | 18.6 | 4.31 | 4.31 | 2.66 | ||||||||||||||||||
Government | 39.0 | 25.3 | 24.9 | 0.00 | 1.47 | 1.53 | ||||||||||||||||||
Preferred Stock | 2.8 | 2.8 | 2.2 | 5.06 | 5.03 | 6.45 | ||||||||||||||||||
Passthrough | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
CLO | 46.0 | 46.0 | 45.7 | 2.39 | 2.39 | 2.47 | ||||||||||||||||||
ABS | 201.4 | 201.2 | 204.2 | 2.94 | 3.13 | 1.95 | ||||||||||||||||||
CMBS | 48.1 | 48.1 | 51.2 | 3.67 | 3.65 | 1.46 | ||||||||||||||||||
CMO | 14.6 | 14.8 | 15.9 | 4.00 | 3.59 | 2.17 | ||||||||||||||||||
TaxExMuni | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
Mortgage Loan | - | - | - | 0.00 | 0.00 | 0.00 | ||||||||||||||||||
TOTAL | $ | 591.6 | $ | 578.5 | $ | 595.8 | 3.18 | % | 3.35 | % | 1.84 | % |
FHLB – eXISTING bUSINESS | ||||||||||||||||||||||||||||||||||||||||||
Investment Strategy Summary | ||||||||||||||||||||||||||||||||||||||||||
as of november 6, 2020 | ||||||||||||||||||||||||||||||||||||||||||
Gross | Gross | Net | ||||||||||||||||||||||||||||||||||||||||
Gross | Yield | Yield | Investment | Expected | Yield | |||||||||||||||||||||||||||||||||||||
Asset Class | Rating | Allocation | Maturity | Duration | Treasury | Spread | (BEY) | (AEY) | Expenses | Defaults | (AEY) | |||||||||||||||||||||||||||||||
FHLB-3yr ABS | A3 | 100 | % | 3 | 2.9 | 0.21 | % | 2.00 | % | 2.21 | % | 2.23 | % | 0.11 | % | 0.11 | % | 2.01 | % |
Assets backing FHLB advances are approximately $627 million in total. A portion of these assets could not be modeled and were allocated to adjusted book value. To account for the difference between modeled assets and existing FHLB advances, the shortfall was pulled from excess FA assets.
As of September 30, 2020, the FHLB advances are $627 million run off over 4 years and are modeled together with the FA block for inforce business and across all annuity lines for future business. The average yield on the existing FHLB advances is 2.99% with an average borrowing cost of 1.85%. The model assumes new FHLB advances will continue at approximately $600 million for the first ten projection years, then run off as a constant percent of reserves in years 11+ for inforce business. For new business, FHLB is modeled as a constant percentage of reserves. The new FHLB advances are modeled separately and earn a net spread of 128 bps based on current market conditions. Derivation of the 128 bps is shown in the table below.
Appendix A – Asset and Investment Assumptions | A-8 |
Milliman client Report
ADVANCES | INVESTED ASSETS | |||||||
Spread over 3-year Treasury | 0.50 | % | 2.00 | % | ||||
Default Cost | 0.11 | % | ||||||
Investment Expense | 0.11 | % | ||||||
Net Spread over 3-year Treasury | 0.50 | % | 1.78 | % | ||||
Net Spread of FHLB program | 1.28 | % |
To account for FHLB advances on new business, an additional 27 bps of investment income is added assuming a constant 21% of the total new business annuity reserves. The assumed NAIC RBC factors are increased by 21% to account for FHLB on new business as well.
Disinvestment Assumptions
Assets are liquidated on a pro-rata basis to meet cash flow needs. Capital gains and losses were amortized into income through the Interest Maintenance Reserve (“IMR”). The existing IMR balance of $16.5 million is included and assumed to amortize based on the September 30, 2020 schedule provided by the Company. The schedule is listed below.
FBL | ||||||||||||||||||||||||||||||||||||||||
IMR Amortization Schedule | ||||||||||||||||||||||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||||||||||||||||||||||
($ IN THOUSANDS) | ||||||||||||||||||||||||||||||||||||||||
Year | Group Annuity (incl FHLB) | FA | WL | SCILC | SCNILC | Term | UL | VA | VUL | Corp | ||||||||||||||||||||||||||||||
9/30/2020 | $ | 1,264.8 | $ | 6,986.8 | $ | 4,916.0 | $ | 220.2 | $ | 97.0 | $ | 165.1 | $ | 2,025.4 | $ | 690.8 | $ | 319.4 | $ | (185.6 | ) | |||||||||||||||||||
12/31/2020 | 1,201.6 | 6,501.0 | 4,747.3 | 201.2 | 91.8 | 146.2 | 1,920.8 | 655.0 | 296.4 | (191.0 | ) | |||||||||||||||||||||||||||||
2021 | 1,009.1 | 4,990.5 | 4,142.8 | 150.0 | 74.3 | 94.7 | 1,566.1 | 539.7 | 218.1 | (192.4 | ) | |||||||||||||||||||||||||||||
2022 | 856.0 | 3,806.0 | 3,602.7 | 114.5 | 60.1 | 58.5 | 1,265.1 | 450.8 | 152.0 | (174.7 | ) | |||||||||||||||||||||||||||||
2023 | 724.0 | 2,877.2 | 3,116.7 | 86.1 | 50.7 | 30.5 | 1,022.6 | 383.4 | 97.2 | (133.3 | ) | |||||||||||||||||||||||||||||
2024 | 610.4 | 2,141.3 | 2,681.9 | 62.3 | 44.7 | 5.1 | 829.9 | 327.3 | 54.6 | (87.8 | ) | |||||||||||||||||||||||||||||
2025 | 514.1 | 1,562.3 | 2,300.0 | 40.9 | 39.7 | (16.1 | ) | 673.5 | 278.1 | 21.4 | (57.6 | ) | ||||||||||||||||||||||||||||
2026 | 432.7 | 1,128.4 | 1,975.4 | 21.8 | 35.4 | (33.8 | ) | 555.4 | 234.5 | (4.0 | ) | (35.8 | ) | |||||||||||||||||||||||||||
2027 | 362.8 | 825.5 | 1,709.3 | 6.8 | 32.0 | (46.9 | ) | 471.7 | 196.5 | (20.7 | ) | (14.3 | ) | |||||||||||||||||||||||||||
2028 | 303.5 | 616.5 | 1,491.6 | (2.0 | ) | 28.6 | (55.2 | ) | 409.8 | 165.4 | (30.3 | ) | 6.4 | |||||||||||||||||||||||||||
2029 | 252.8 | 450.2 | 1,315.4 | (6.0 | ) | 24.9 | (59.9 | ) | 356.7 | 139.8 | (35.8 | ) | 24.9 | |||||||||||||||||||||||||||
2030 | 210.5 | 313.3 | 1,173.5 | (6.4 | ) | 20.7 | (61.7 | ) | 310.7 | 119.5 | (37.8 | ) | 40.2 | |||||||||||||||||||||||||||
2031 | 177.6 | 207.9 | 1,059.4 | (4.2 | ) | 16.4 | (60.4 | ) | 271.8 | 104.6 | (36.0 | ) | 49.9 | |||||||||||||||||||||||||||
2032 | 150.5 | 125.0 | 952.3 | (0.8 | ) | 11.8 | (57.8 | ) | 238.0 | 92.6 | (31.8 | ) | 51.5 | |||||||||||||||||||||||||||
2033 | 128.2 | 54.7 | 845.8 | 1.7 | 7.7 | (55.1 | ) | 205.7 | 82.1 | (27.4 | ) | 45.7 | ||||||||||||||||||||||||||||
2034 | 109.3 | (9.4 | ) | 732.4 | 2.4 | 4.4 | (52.7 | ) | 172.2 | 72.4 | (23.9 | ) | 35.4 | |||||||||||||||||||||||||||
2035 | 90.9 | (62.0 | ) | 614.2 | 2.1 | 2.0 | (50.8 | ) | 137.8 | 63.3 | (21.8 | ) | 24.6 | |||||||||||||||||||||||||||
2036 | 72.5 | (94.2 | ) | 492.9 | 1.8 | 0.5 | (48.6 | ) | 103.3 | 54.9 | (21.0 | ) | 16.0 | |||||||||||||||||||||||||||
2037 | 53.3 | (108.0 | ) | 374.6 | 1.5 | - | (45.6 | ) | 72.0 | 47.1 | (20.9 | ) | 9.5 | |||||||||||||||||||||||||||
2038 | 33.4 | (106.1 | ) | 267.7 | 1.2 | - | (41.0 | ) | 46.5 | 39.7 | (20.3 | ) | 5.7 | |||||||||||||||||||||||||||
2039 | 13.6 | (91.9 | ) | 179.4 | 0.8 | - | (35.3 | ) | 28.4 | 32.4 | (19.0 | ) | 5.2 | |||||||||||||||||||||||||||
2040 | (6.6 | ) | (72.6 | ) | 110.3 | 0.5 | - | (29.2 | ) | 16.6 | 25.0 | (16.6 | ) | 4.3 | ||||||||||||||||||||||||||
2041 | (25.6 | ) | (56.2 | ) | 60.6 | 0.3 | - | (23.2 | ) | 10.1 | 17.8 | (13.1 | ) | 1.8 | ||||||||||||||||||||||||||
2042 | (37.8 | ) | (42.7 | ) | 30.8 | 0.1 | - | (17.7 | ) | 6.9 | 11.2 | (9.1 | ) | 0.4 | ||||||||||||||||||||||||||
2043 | (39.8 | ) | (32.3 | ) | 13.6 | 0.0 | - | (13.1 | ) | 4.5 | 6.2 | (5.3 | ) | (0.0 | ) | |||||||||||||||||||||||||
2044 | (33.8 | ) | (23.2 | ) | 5.3 | - | - | (9.3 | ) | 2.7 | 2.7 | (2.6 | ) | (0.1 | ) | |||||||||||||||||||||||||
2045 | (24.0 | ) | (15.4 | ) | 2.0 | - | - | (6.2 | ) | 1.3 | 0.6 | (0.8 | ) | (0.1 | ) | |||||||||||||||||||||||||
2046 | (12.0 | ) | (9.3 | ) | 0.5 | - | - | (3.8 | ) | 0.6 | (0.1 | ) | (0.1 | ) | (0.1 | ) | ||||||||||||||||||||||||
2047 | (2.6 | ) | (4.9 | ) | 0.2 | - | - | (2.1 | ) | 0.2 | - | - | (0.1 | ) | ||||||||||||||||||||||||||
2048 | 0.3 | (1.9 | ) | 0.1 | - | - | (1.0 | ) | 0.1 | - | - | (0.0 | ) | |||||||||||||||||||||||||||
2049 | - | (0.5 | ) | - | - | - | (0.3 | ) | - | - | - | - | ||||||||||||||||||||||||||||
2050 | - | - | - | - | - | - | - | - | - | - |
Appendix A – Asset and Investment Assumptions | A-9 |
Milliman client Report
Prepayment Provisions
Corporate Bonds:
Initial call dates and premiums on existing bonds were extracted from Bloomberg Analytics. The call premium is assumed to linearly grade to zero at maturity. Investment grade bonds are assumed to be called when the market price of the bond exceeds the call price of the bond by 5% or more. Non-investment grade bonds are assumed to be called when the market price of the bond exceeds the call price by 10% or more.
Bonds Modeled on CMS:
CMOs and Passthroughs: BondEdge’s mortgage prepayment forecasts are stated in terms of percentage of the Public Security Association (“PSA”) standard prepayment model.
Prepayment forecasts for mortgage pools are generated by a proprietary prepayment model developed at CMS, and take into account the collateral type (e.g., thirty-year or fifteen-year maturity), the age and weighted average coupon on the collateral, and the current interest rate environment.
Prepayment forecasts for CMOs are based on CMS prepayment forecasts for the underlying mortgage collateral. CMO cashflow forecasts are then calculated on the assumption that no credit losses occur.
Asset-Backed Securities: BondEdge has a proprietary prepayment model for ABS assets. The model generates prepayment forecasts using one of a number of parameter sets, which determine the extent to which the collateral will exhibit interest rate-sensitive prepayments and prepayments due to relocations, defaults and curtailments. Each asset-backed security deal backed by these types of collateral is assigned to a particular parameter set, based upon the collateral details of the deal.
CMBS: BondEdge’s CMBS model assumes no prepayments can occur during a lockout period. If there is a make-whole penalty clause in the deal, cash flows will reflect the required prepayment penalty and/or yield maintenance on any principal prepayments, according to the prepayment speed (“CPR”) specified by the user. BondEdge does not make default projections for CMBS deals (defaults are assumed to be zero).
Commercial Mortgage Loans (“CMLs”): CMLs are assumed to have prepayment penalty provisions designed to eliminate economic incentives for prepayment. Therefore no prepayment of the Company’s CMLs are modeled.
Default Cost
Annual default costs are based on Moody’s Data, and reflect long term default costs covering the period from 1920 through 2019. These costs reflect both the probability and severity of default. The default assumptions reflect annualized rates derived from cumulative experience from issue at a particular rating so that they reflect the tendency of ratings for any particular bond to move down over time. 10-year default costs shown in the table below is used for both Corporate Bonds and CMLs. Default costs for new assets are shown in the strategy tables above.
Appendix A – Asset and Investment Assumptions | A-10 |
Milliman client Report
Default Cost | ||||
Rating | 10 year | |||
AAA | 0.01 | % | ||
Aa1 | 0.01 | % | ||
Aa2 | 0.04 | |||
Aa3 | 0.05 | |||
A1 | 0.09 | % | ||
A2 | 0.12 | |||
A3 | 0.13 | |||
Baa1 | 0.13 | % | ||
Baa2 | 0.18 | |||
Baa3 | 0.28 | |||
Ba1 | 0.55 | % | ||
Ba2 | 0.75 | |||
Ba3 | 1.54 | |||
B1 | 2.07 | % | ||
B2 | 2.41 | |||
B3 | 3.08 | |||
Caa - C | 3.84 | % |
Investment Expense
Investment expenses are assumed to be 23 basis points for mortgage loans and 11 basis points for all other assets, as provided by the Company. For alternatives, the return assumption is after investment expense and defaults. The cost to trade a bond due to the bid/ask spread is assumed to be 5 basis points.
Treasury Yield Curve (Corporate Bond Equivalent)
The projections are based on the Constant Maturity Treasury yield curve as of November 6, 2020. The yield curve as of September 30, 2020 is shown since this is the basis for determining market spreads on existing assets.
Constant Maturity Treasury Yield Curve | ||||||||
Maturity | September 30, 2020 | November 6, 2020 | ||||||
90-day | 0.10 | % | 0.10 | % | ||||
1 year | 0.12 | 0.12 | ||||||
2 year | 0.13 | 0.16 | ||||||
3 year | 0.16 | 0.21 | ||||||
5 year | 0.28 | 0.36 | ||||||
7 year | 0.47 | 0.59 | ||||||
10 year | 0.69 | 0.83 | ||||||
20 year | 1.23 | 1.37 | ||||||
30 year | 1.46 | 1.60 |
Appendix A – Asset and Investment Assumptions | A-11 |
Milliman client Report
Forward Curve
The base projections utilize the November 6, 2020 Treasury Forward curve, as shown below.
Treasury Forward Curve | ||||||||||||||||||||||||||
November 6, 2020 | ||||||||||||||||||||||||||
Projection | Maturity | |||||||||||||||||||||||||
Year | 2 | 5 | 7 | 10 | 20 | 30 | ||||||||||||||||||||
0 | 0.16 | % | 0.36 | % | 0.59 | % | 0.83 | % | 1.37 | % | 1.60 | % | ||||||||||||||
1 | 0.26 | 0.55 | 0.75 | 0.96 | 1.46 | 1.68 | ||||||||||||||||||||
2 | 0.41 | 0.77 | 0.92 | 1.10 | 1.56 | 1.76 | ||||||||||||||||||||
3 | 0.59 | 0.95 | 1.11 | 1.24 | 1.65 | 1.84 | ||||||||||||||||||||
4 | 0.86 | 1.14 | 1.24 | 1.37 | 1.74 | 1.92 | ||||||||||||||||||||
5 | 1.18 | 1.32 | 1.38 | 1.50 | 1.82 | 1.99 | ||||||||||||||||||||
6 | 1.28 | 1.40 | 1.47 | 1.60 | 1.88 | 2.04 | ||||||||||||||||||||
7 | 1.34 | 1.46 | 1.54 | 1.69 | 1.94 | 2.08 | ||||||||||||||||||||
8 | 1.51 | 1.55 | 1.64 | 1.80 | 2.00 | 2.13 | ||||||||||||||||||||
9 | 1.53 | 1.63 | 1.73 | 1.90 | 2.05 | 2.17 | ||||||||||||||||||||
10 | 1.52 | 1.70 | 1.82 | 2.00 | 2.10 | 2.21 | ||||||||||||||||||||
11 | 1.64 | 1.82 | 1.94 | 2.05 | 2.15 | 2.25 | ||||||||||||||||||||
12 | 1.76 | 1.94 | 2.07 | 2.10 | 2.20 | 2.28 | ||||||||||||||||||||
13 | 1.88 | 2.07 | 2.20 | 2.14 | 2.25 | 2.32 | ||||||||||||||||||||
14 | 2.01 | 2.20 | 2.22 | 2.18 | 2.28 | 2.34 | ||||||||||||||||||||
15 | 2.14 | 2.33 | 2.24 | 2.21 | 2.31 | 2.37 | ||||||||||||||||||||
16 | 2.27 | 2.31 | 2.24 | 2.23 | 2.34 | 2.38 | ||||||||||||||||||||
17 | 2.40 | 2.28 | 2.23 | 2.24 | 2.35 | 2.40 | ||||||||||||||||||||
18 | 2.54 | 2.23 | 2.21 | 2.24 | 2.36 | 2.40 | ||||||||||||||||||||
19 | 2.28 | 2.16 | 2.18 | 2.23 | 2.36 | 2.40 | ||||||||||||||||||||
20 | 1.98 | 2.07 | 2.13 | 2.22 | 2.35 | 2.39 | ||||||||||||||||||||
21 | 2.04 | 2.13 | 2.19 | 2.27 | 2.38 | 2.42 | ||||||||||||||||||||
22 | 2.10 | 2.19 | 2.25 | 2.33 | 2.41 | 2.44 | ||||||||||||||||||||
23 | 2.16 | 2.25 | 2.32 | 2.37 | 2.44 | 2.46 | ||||||||||||||||||||
24 | 2.22 | 2.32 | 2.37 | 2.41 | 2.46 | 2.47 | ||||||||||||||||||||
25 | 2.29 | 2.38 | 2.42 | 2.45 | 2.48 | 2.49 | ||||||||||||||||||||
26 | 2.35 | 2.44 | 2.46 | 2.47 | 2.49 | 2.50 | ||||||||||||||||||||
27 | 2.42 | 2.48 | 2.49 | 2.50 | 2.51 | 2.51 | ||||||||||||||||||||
28 | 2.48 | 2.50 | 2.51 | 2.51 | 2.52 | 2.52 | ||||||||||||||||||||
29 | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 | ||||||||||||||||||||
30 | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 |
Appendix A – Asset and Investment Assumptions | A-12 |
Milliman client Report
NAIC Risk Based Capital
The factors used to illustrate future risk based capital amounts were developed based on the Company’s September 30, 2020 internal RBC worksheets and guidance from the Company. The factors are summarized below.
Risk Based Capital Factors | ||||||||
(100% of NAIC Company Action Level) | ||||||||
Risk | Base | Factor | ||||||
C-1: | Asset Risk | Liabilities less (Policy Loans and Net Deferred Premiums) | 1.15 | % | ||||
C-2 | Insurance Risk: | Life | Net Amount at Risk | 0.083 | % | |||
Longevity Risk | Life contingent Payouts | 2021 and later liabilities | 1.35 | |||||
C-3a | Interest Rate Risk: | Life | Liabilities less Policy loans | 0.25 | % | |||
Deferred Annuity | Liabilities | 0.87 | ||||||
Payout/SC | Liabilities | 0.25 | ||||||
Structured Settlements | Liabilities | 0.50 | ||||||
FHLB and Other Ex.7 Deposits | Liabilities | 0.50 | ||||||
C-4 | Business Risk | Life | Direct Premium | 2.00 | % | |||
Annuity | Direct Premium | 2.00 | ||||||
Separate Account | Liabilities | 0.04 | % | |||||
Covariance Factor | 68.40 | % |
For Annuity new business only, C-1 and C-3 factors as summarized above are increased by 21% for modeling purposes to account for the additional assets and liabilities assumed for the FHLB program. The projected required capital amounts at 100% NAIC Company Action Level are equal to the sum of C-1, C-2 and C-3 above times the covariance factor, plus C-4.
The C-3 factors reflect the full benefit of FBL’s RBC C-3 Phase 1 testing at 50% of base factors.
Target capital is defined as 350% of NAIC Company Action Level Capital. Credit for the admitted deferred tax asset backing capital has been reflected at 10% of projected required capital for purposes of calculating the cost of capital.
The cost of capital calculation is based on the cost of retaining capital to support the liabilities assuming earnings on capital at the after-tax rate of 2.09% based on a 21% tax rate.
Appendix A – Asset and Investment Assumptions | A-13 |
Milliman client Report
Appendix B – Traditional Life Models and Assumptions
Term business
The following table summarizes the Term model inforce and Fixed Deposit Accounts (“FDA”) as of September 30, 2020, based on seriatim data provided by FBL.
FBL TERM BUSINESS | ||||||||||||||||||||||||||
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 | ||||||||||||||||||||||||||
($ IN MILLIONS) | ||||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||||
Model | Policy | Face | Annualized | Statutory | Total Tax | |||||||||||||||||||||
Block | Plan | Descriptions | Count | Amount | Premium | Reserves | Reserves* | |||||||||||||||||||
Term | 10YRT | 10-Year Term | 627 | $ | 114.0 | $ | 0.3 | $ | 0.5 | $ | 0.4 | |||||||||||||||
760 | Annual Renewable Term | 344 | 27.6 | 0.3 | 0.2 | 0.1 | ||||||||||||||||||||
ART0 | Annual Renewable Term | 115 | 6.8 | 0.2 | 0.1 | 0.1 | ||||||||||||||||||||
ARTFB | Annual Renewable Term | 1,275 | 64.4 | 1.1 | 0.8 | 0.4 | ||||||||||||||||||||
ARTII | Annual Renewable Term II | 205 | 15.4 | 0.2 | 0.2 | 0.1 | ||||||||||||||||||||
CHILD | Children Rider | 3 | 458.6 | 1.4 | 0.7 | 0.0 | ||||||||||||||||||||
CHTG04 | Choice Term 2004 Guaranteed Series | 18,044 | 4,542.8 | 10.1 | 90.9 | 93.0 | ||||||||||||||||||||
CHTG09 | Choice Term 2009 Guaranteed Series | 10,161 | 2,756.0 | 6.3 | 37.3 | 31.1 | ||||||||||||||||||||
CHTG14 | Choice Term 2014 Guaranteed Series | 8,604 | 2,744.1 | 5.8 | 21.8 | 16.6 | ||||||||||||||||||||
CHTG18 | Choice Term 2018 Guaranteed Series | 23,382 | 6,651.7 | 16.4 | 1.5 | 1.6 | ||||||||||||||||||||
CHTV01 | Choice Term 2001 Value Series | 10,214 | 1,842.7 | 5.0 | 10.3 | 5.5 | ||||||||||||||||||||
CHTV04 | Choice Term 2004 Value Series | 16,668 | 4,331.0 | 9.8 | 88.3 | 75.8 | ||||||||||||||||||||
CHTV09 | Choice Term 2009 Value Series | 3,247 | 907.8 | 2.3 | 4.5 | 2.9 | ||||||||||||||||||||
CHTV11 | Choice Term 2011 Value Series | 4,655 | 1,423.4 | 3.0 | 4.8 | 2.7 | ||||||||||||||||||||
CHTV14 | Choice Term 2014 Value Series | 31,272 | 11,192.3 | 22.4 | 14.9 | 7.0 | ||||||||||||||||||||
CT96 | Custom Term | 2,419 | 315.7 | 0.6 | 7.8 | 0.1 | ||||||||||||||||||||
CTG65 | Choice Term 2011 Guaranteed Series | 53 | 13.8 | 0.0 | 0.2 | 0.2 | ||||||||||||||||||||
CTV11R | Choice Term 2011 Value Series | 14,289 | 4,402.8 | 9.1 | 18.8 | 12.0 | ||||||||||||||||||||
CTV65 | Choice Term 2011 Value Series | 172 | 49.5 | 0.1 | 0.1 | 0.1 | ||||||||||||||||||||
INCR20 | Increasing Term | 183 | 43.9 | 0.1 | 0.0 | 0.0 | ||||||||||||||||||||
INT20I | Increasing Term | 0 | 6.2 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||
JVT14 | First Stem Children's Term | 868 | 12.5 | 0.0 | 0.1 | 1.2 | ||||||||||||||||||||
NEWTRM | New Term | 342 | 38.6 | 0.3 | 0.2 | 0.2 | ||||||||||||||||||||
ROP10 | Choice Term 2009 Series | 4,004 | 1,208.6 | 4.5 | 51.0 | 42.9 | ||||||||||||||||||||
ROP13 | Choice Term 2013 Series | 1,830 | 511.6 | 2.7 | 14.4 | 10.3 | ||||||||||||||||||||
ROP18 | ROP Term 2018 | 278 | 98.9 | 0.4 | 0.0 | 0.0 | ||||||||||||||||||||
RPU | Flex Life | 462 | 6.3 | 0.0 | 0.7 | 2.4 | ||||||||||||||||||||
SIMP11 | Simple Term 2011 Series | 1,827 | 97.6 | 0.4 | 0.7 | 0.5 | ||||||||||||||||||||
SIMP14 | Simple Term 2014 Series | 5,042 | 283.3 | 1.3 | 1.4 | 1.0 | ||||||||||||||||||||
SIMPL | Simple Term 2009 Series | 353 | 18.8 | 0.1 | 0.2 | 0.2 | ||||||||||||||||||||
T396 | 1996 Series Term | 2,119 | 240.1 | 1.5 | 1.5 | 2.8 | ||||||||||||||||||||
T65G14 | Choice Term 2014 Guaranteed Series | 198 | 59.6 | 0.1 | 0.6 | 0.5 | ||||||||||||||||||||
T65V14 | Choice Term 2014 Value Series | 789 | 290.8 | 0.4 | 0.2 | 0.1 | ||||||||||||||||||||
TM88 | 1988 Series Term | 732 | 71.2 | 0.5 | 1.0 | 0.5 | ||||||||||||||||||||
FDA | LVGTR | LTAs | 1 | n/a | $ | 0.0 | $ | 29.2 | $ | 29.2 | ||||||||||||||||
PRMDP | Premium Deposits | 1 | n/a | 0.0 | 0.1 | 0.1 | ||||||||||||||||||||
Total Actual | 164,778 | $ | 44,848.3 | $ | 106.9 | ** | $ | 405.1 | $ | 341.6 | ||||||||||||||||
Total Model | 164,775 | $ | 44,763.5 | $ | 124.9 | $ | 405.9 | $ | 341.6 | |||||||||||||||||
Actual/Model | 100 | % | 100 | % | 86 | % | 100 | % | 100 | % |
* Modeled amounts were used in lieu of missing actual tax reserves at the plan level.
** Actual premium excludes modal loads and substandard ratings.
Appendix B – Traditional Life Models and Assumptions | B-1 |
Milliman client Report
A similar summary by level term period is shown below:
FBL TERM BUSINESS | ||||||||||||||||||
DIRECT AMOUNTS AS OF SEPTEMBER 30, 2020 | ||||||||||||||||||
($ IN MILLIONS) | ||||||||||||||||||
Total | Total | |||||||||||||||||
Level | Policy | Face | Annualized | Statutory | ||||||||||||||
Block | Term Period | Count | Amount | Premium | Reserves | |||||||||||||
Term | ART | 8,087 | $ | 1,471.1 | $ | 5.9 | $ | 5.3 | ||||||||||
5-year Term | 5 | 0.3 | 0.0 | 0.0 | ||||||||||||||
10-year Term | 33,002 | 7,362.4 | 20.5 | 24.0 | ||||||||||||||
15-year Term | 13,479 | 3,615.0 | 11.5 | 28.9 | ||||||||||||||
20-year Term | 74,351 | 21,371.1 | 49.3 | 198.6 | ||||||||||||||
30-year Term | 33,135 | 10,706.3 | 19.1 | 110.7 | ||||||||||||||
Custom | 2,717 | 322.2 | 0.6 | 8.2 | ||||||||||||||
Total Actual | 164,776 | $ | 44,848.3 | $ | 106.9 | $ | 375.7 |
The business is modeled on seriatim basis by reflecting plan, underwriting class, gender, level term period, issue age and issue year as described in the following table:
FBL TERM BUSINESS | ||||||||||
BUSINESS MODELED AS OF SEPTEMBER 30, 2020 | ||||||||||
Model Plan | Gender | Risk Class* | Issue Age | Level Term Period | Model Issue Years | |||||
760 | M/F | A/PN/SM | Seriatim | ART | 1977-1996 | |||||
10YRT | M/F | N/PN/SM/SPN/PSM | Seriatim | 10-year term | 2000-2001 | |||||
ART0 | M/F | A/N/SM | Seriatim | ART | 1977-1984 | |||||
ARTFB | M/F | A/N/PN/SM | Seriatim | ART | 1938-1996 | |||||
ARTII | M/F | N/SM | Seriatim | ART | 1984-1994 | |||||
CHILD | M/F | A/N/PSM | Seriatim | ART, 5/10/15/20/30-year term, Custom | 1979-2020 | |||||
CHTG04 | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2004-2015 | |||||
CHTG09 | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2010-2014 | |||||
CHTG14 | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2014-2019 | |||||
CHTG18 | M/F | N/PN/SM/SPN/PSM | Seriatim | ART, 10/15/20/30-year term | 2018-2020 | |||||
CHTV01 | M/F | N/PN/SM/SPN/PSM | Seriatim | ART, 10/20/30-year term | 2000-2014 | |||||
CHTV04 | M/F | N/PN/SM/SPN/PSM | Seriatim | ART, 10/15/20/30-year term | 2004-2017 | |||||
CHTV09 | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2010-2013 | |||||
CHTV11 | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2013-2015 | |||||
CHTV14 | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2014-2019 | |||||
CT96 | M/F | A/N/SM/PSM | Seriatim | Custom | 1992-2001 | |||||
CTG65 | M/F | N/PN/SPN | Seriatim | ART | 2012-2014 | |||||
CTV11R | M/F | N/PN/SM/SPN/PSM | Seriatim | 10/15/20/30-year term | 2010-2013 | |||||
CTV65 | M/F | N/PN/SM/SPN/PSM | Seriatim | ART | 2012-2014 | |||||
INCR20 | M/F | N/PN/SM/SPN/PSM | Seriatim | 20-year term | 2018-2020 | |||||
INT20I | M/F | N/PN/SM/SPN/PSM | Seriatim | 20-year term | 2018-2019 | |||||
JVT14 | M/F | N | Seriatim | ART | 2014-2019 | |||||
NewTrm | M/F | N/PN/SM | Seriatim | ART, 5/10/15/20-year term | 1994-2014 | |||||
ROP10 | M/F | N/PN/SM/SPN/PSM | Seriatim | 20/30-year term | 2010-2014 | |||||
ROP13 | M/F | N/PN/SM/SPN/PSM | Seriatim | 20/30-year term | 2012-2019 | |||||
ROP18 | M/F | N/PN/SM/SPN/PSM | Seriatim | 20/30-year term | 2019-2020 | |||||
RPU | M/F | A/N/PN/SM/SPN/PSM | Seriatim | ART, 15/20/30-year term, Custom | 1990-2017 | |||||
SIMP11 | M/F | N/SM | Seriatim | 10/15/20-year term | 2011-2014 | |||||
SIMP14 | M/F | N/SM | Seriatim | 10/15/20-year term | 2013-2018 | |||||
SIMPL | M/F | N/SM | Seriatim | 10/15/20-year term | 2010-2011 | |||||
T396 | M/F | N/PN/SM/PSM | Seriatim | ART | 1996-2001 | |||||
T65G14 | M/F | N/PN/SM/SPN/PSM | Seriatim | ART | 2014-2018 | |||||
T65V14 | M/F | N/PN/SM/SPN/PSM | Seriatim | ART | 2014-2019 | |||||
TM88 | M/F | N/PN/SM | Seriatim | ART | 1988-1996 |
*Risk Class Types: | N: | Standard Non-Smoker | PN: | Preferred Non-Smoker | SPN: | Super-Preferred Non-Smoker |
SM: | Standard Smoker | PSM: | Preferred Smoker | A: | Aggregate | |
Appendix B – Traditional Life Models and Assumptions | B-2 |
Milliman client Report
WL business
The following table summarizes the WL model inforce as of September 30, 2020, based on seriatim data provided by FBL.
FBL WL Business | ||||||||||||||||||||||||||
Direct Amounts as of September 30, 2020 | ||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||||
Model | Policy | Face | Annualized | Statutory | Total Tax | |||||||||||||||||||||
Block | Plan | Descriptions | Count | Amount | Premium | Reserves | Reserves* | |||||||||||||||||||
Term Riders | CHILD | Children’s Term Rider | 0 | $ | 6.6 | $ | 0.0 | $ | 0.0 | $ | 0.0 | |||||||||||||||
CHTG04 | Choice Term Rider | 4,776 | 880.0 | 1.9 | 13.3 | 11.6 | ||||||||||||||||||||
CHTG09 | Choice Term Rider | 2,277 | 502.6 | 1.0 | 5.9 | 5.1 | ||||||||||||||||||||
CHTG14 | Choice Term Rider | 129 | 31.9 | 0.1 | 0.3 | 0.3 | ||||||||||||||||||||
CHTG18 | Choice Term Rider | 0 | 75.2 | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||
CHTV01 | Choice Term Rider | 2,653 | 442.5 | 0.9 | 1.7 | 0.7 | ||||||||||||||||||||
CHTV14 | Choice Term Rider | 1,372 | 387.5 | 0.6 | 2.4 | 0.0 | ||||||||||||||||||||
Participating | 085 | Endowment | 1,244 | $ | 2.7 | $ | 0.0 | $ | 2.2 | $ | 2.0 | |||||||||||||||
10P81 | 10 Pay | 3,830 | 97.4 | 0.0 | 42.1 | 39.2 | ||||||||||||||||||||
10P87 | 5/7/10 Pay | 1,155 | 19.5 | 0.0 | 6.2 | 6.1 | ||||||||||||||||||||
601 | Whole Life | 1,214 | 7.8 | 0.1 | 5.5 | 5.5 | ||||||||||||||||||||
603 | Whole Life | 841 | 14.5 | 0.2 | 7.5 | 7.7 | ||||||||||||||||||||
608 | Whole Life | 3,161 | 154.1 | 2.1 | 53.8 | 51.7 | ||||||||||||||||||||
611 | Whole Life | 150 | 1.8 | 0.0 | 1.3 | 1.3 | ||||||||||||||||||||
615 | Whole Life | 41 | 0.5 | 0.0 | 0.3 | 0.3 | ||||||||||||||||||||
617 | 8/10 Pay | 5,228 | 76.6 | 0.0 | 29.1 | 27.1 | ||||||||||||||||||||
621 | 20 Pay | 385 | 3.0 | 0.0 | 1.2 | 1.2 | ||||||||||||||||||||
635 | 12 Pay | 5,034 | 56.2 | 0.0 | 10.5 | 9.8 | ||||||||||||||||||||
636 | 12 Pay | 2,722 | 59.7 | 0.0 | 14.3 | 13.9 | ||||||||||||||||||||
665 | Paid-up at Age 65 | 820 | 6.7 | 0.0 | 3.2 | 3.2 | ||||||||||||||||||||
667 | Paid-up at Age 65 | 96 | 0.8 | 0.0 | 0.4 | 0.4 | ||||||||||||||||||||
695 | Single Premium | 108 | 8.8 | 0.0 | 5.1 | 5.2 | ||||||||||||||||||||
699J | Joint Whole Life | 75 | 1.1 | 0.0 | 0.8 | 0.8 | ||||||||||||||||||||
AC1315 | 15 Pay | 3,958 | 174.1 | 3.0 | 11.6 | 10.2 | ||||||||||||||||||||
AC1365 | Paid-Up at 65 | 780 | 59.7 | 1.2 | 3.3 | 2.8 | ||||||||||||||||||||
AC13LF | Paid Up at 100 | 785 | 45.6 | 1.4 | 3.4 | 2.9 | ||||||||||||||||||||
AC13SP | Single Premium | 334 | 22.5 | 0.0 | 9.5 | 9.0 | ||||||||||||||||||||
AL101 | 10 Pay | 22,427 | 735.1 | 5.4 | 124.4 | 123.7 | ||||||||||||||||||||
AL1315 | 15 Pay | 3,271 | 154.9 | 4.3 | 15.1 | 13.1 | ||||||||||||||||||||
AL1365 | Paid-Up at 65 | 3,760 | 251.1 | 4.1 | 14.2 | 12.3 | ||||||||||||||||||||
AL13LF | Paid-Up at 100 | 6,615 | 315.8 | 8.8 | 22.9 | 19.5 | ||||||||||||||||||||
AL13SP | Single Premium | 1,061 | 40.4 | 0.0 | 16.8 | 15.9 | ||||||||||||||||||||
AL601 | Paid-Up at 65 | 8,292 | 439.4 | 6.3 | 62.8 | 61.8 | ||||||||||||||||||||
ALF01 | Paid-Up at 100 | 14,130 | 597.2 | 12.0 | 101.0 | 100.1 | ||||||||||||||||||||
ALL10 | 10 Pay | 6,613 | 168.1 | 0.0 | 35.9 | 36.0 | ||||||||||||||||||||
ALL104 | 10 Pay | 6,350 | 190.1 | 4.8 | 13.0 | 11.2 | ||||||||||||||||||||
ALLIF | Paid-Up at 100 | 11,724 | 396.8 | 6.4 | 94.6 | 94.4 | ||||||||||||||||||||
ALS01 | Single Premium | 2,119 | 55.9 | 0.0 | 19.2 | 19.3 | ||||||||||||||||||||
COMP | Competitor Whole Life | 1,944 | 51.6 | 0.6 | 25.5 | 24.8 | ||||||||||||||||||||
EN52 | Endowment at 65 | 1,470 | 6.4 | 0.1 | 4.8 | 4.8 | ||||||||||||||||||||
END65 | Endowment at 65 | 286 | 2.2 | 0.0 | 1.5 | 1.4 | ||||||||||||||||||||
END95 | Master Farmer at 95 | 35 | 0.9 | 0.0 | 0.6 | 0.6 | ||||||||||||||||||||
EXWL | Express Issue Whole Life | 99 | 1.2 | 0.1 | 0.4 | 0.4 |
Appendix B – Traditional Life Models and Assumptions | B-3 |
Milliman client Report
FBL WL Business | ||||||||||||||||||||||||||
Direct Amounts as of September 30, 2020 | ||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||||
Model | Policy | Face | Annualized | Statutory | Total Tax | |||||||||||||||||||||
Block | Plan | Descriptions | Count | Amount | Premium | Reserves | Reserves* | |||||||||||||||||||
FIRST | First Life | 50 | $ | 0.9 | $ | 0.0 | $ | 0.3 | $ | 0.3 | ||||||||||||||||
JTWL | Joint Whole Life | 52 | 3.0 | 0.1 | 1.8 | 1.8 | ||||||||||||||||||||
LP20 | 20 Pay | 1,695 | 5.1 | 0.0 | 3.4 | 3.4 | ||||||||||||||||||||
LP65 | Paid-Up at 65 | 1,529 | 14.4 | 0.1 | 8.6 | 8.3 | ||||||||||||||||||||
LP85 | Paid-Up at 85 | 1,515 | 4.8 | 0.1 | 3.7 | 3.7 | ||||||||||||||||||||
LP95 | Paid-Up at 95 | 4,569 | 66.6 | 1.1 | 40.1 | 40.2 | ||||||||||||||||||||
LS92 | Joint Whole Life | 720 | 85.9 | 1.7 | 49.7 | 48.9 | ||||||||||||||||||||
P1596 | 15-Pay | 6,465 | 129.9 | 0.0 | 24.4 | 22.7 | ||||||||||||||||||||
RPU | Single Prem EIWL | 11,101 | 167.5 | 0.0 | 96.7 | 93.2 | ||||||||||||||||||||
SPL0 | Single Premium | 765 | 8.2 | 0.0 | 5.0 | 5.0 | ||||||||||||||||||||
SPLII | Single Premium | 2,172 | 34.0 | 0.0 | 17.2 | 16.1 | ||||||||||||||||||||
SURE | Surelife | 34 | 0.3 | 0.0 | 0.1 | 0.1 | ||||||||||||||||||||
WL45 | Ordinary Life | 3,733 | 8.9 | 0.1 | 7.5 | 7.4 | ||||||||||||||||||||
WL60 | Ordinary Life | 9,198 | 57.5 | 1.0 | 39.7 | 39.7 | ||||||||||||||||||||
WL64 | Ordinary Life | 1,363 | 8.8 | 0.1 | 5.8 | 5.8 | ||||||||||||||||||||
WL77 | Special Whole Life | 1,450 | 51.1 | 0.8 | 29.9 | 29.8 | ||||||||||||||||||||
WL84 | Special Whole Life | 6,635 | 133.1 | 1.4 | 43.4 | 43.4 | ||||||||||||||||||||
WL87 | Special Whole Life | 3,692 | 65.9 | 0.7 | 19.3 | 19.3 | ||||||||||||||||||||
WL90 | Special Whole Life | 3,835 | 89.7 | 0.8 | 17.2 | 16.9 | ||||||||||||||||||||
WL96 | Whole Life | 6,236 | 206.4 | 2.7 | 53.6 | 50.1 | ||||||||||||||||||||
WLCLS | Classic Whole Life | 909 | 59.4 | 0.7 | 17.8 | 17.8 | ||||||||||||||||||||
WLSPC | Special Whole Life | 1,594 | 29.8 | 0.5 | 11.5 | 11.4 | ||||||||||||||||||||
WL1815 | 15-Pay Whole Life 18 | 2,310 | 100.7 | 0.0 | 0.6 | 0.3 | ||||||||||||||||||||
WL1865 | Whole Life 18 Paid-Up at 65 | 1,009 | 60.4 | 0.0 | 0.1 | 0.0 | ||||||||||||||||||||
WL18LF | Whole Life 18 | 2,124 | 95.6 | 0.0 | 0.4 | 0.2 | ||||||||||||||||||||
WL18SP | Single Premium Whole Life 18 | 280 | 12.3 | 0.0 | 4.4 | 4.3 | ||||||||||||||||||||
FDA | INTER | Deferred Endowments | 10 | n/a | $ | 0.0 | $ | 0.5 | $ | 0.0 | ||||||||||||||||
PRMDP | Premium Deposits | 1 | n/a | 0.0 | 1.4 | 1.4 | ||||||||||||||||||||
LVGTR | LTAs | 1 | n/a | 0.0 | 43.7 | 43.7 | ||||||||||||||||||||
Total Actual | 208,411 | $ | 8,046.7 | $ | 77.4 | ** | $ | 1,335.7 | $ | 1,292.7 | ||||||||||||||||
Total Model | 208,394 | $ | 8,046.6 | $ | 89.2 | $ | 1,346.2 | $ | 1,293.2 | |||||||||||||||||
Actual/Model | 100 | % | 100 | % | 87 | % | 99 | % | 100 | % |
* Modeled amounts were used in lieu of missing actual tax reserves at the plan level.
** Actual premium excludes modal loads and substandard ratings.
Appendix B – Traditional Life Models and Assumptions | B-4 |
Milliman client Report
The business is modeled on seriatim basis by reflecting plan, underwriting class, gender, issue age and issue year as described in the following table:
FBL WL Business | ||||||||
Business Modeled as of September 30, 2020 | ||||||||
Model Plan | Gender | Risk Class* | Issue Age | Model Issue Years | ||||
CHILD | M/F | N | Seriatim | 2019-2020 | ||||
CHTG04 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2004-2013 | ||||
CHTG09 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2010-2014 | ||||
CHTG14 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2014-2014 | ||||
CHTG18 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2019-2020 | ||||
CHTV01 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2001-2008 | ||||
CHTV14 | M/F | N/PN/SM/SPN | Seriatim | 2014-2019 | ||||
085 | M/F | A | Seriatim | 1949-1981 | ||||
10P81 | M/F | N/SM | Seriatim | 1983-1987 | ||||
10P87 | M/F | N/PN/SM | Seriatim | 1984-1994 | ||||
601 | M/F | A | Seriatim | 1953-1978 | ||||
603 | M/F | A/PN | Seriatim | 1979-1996 | ||||
608 | M/F | PN/SM | Seriatim | 1988-1996 | ||||
611 | M/F | A | Seriatim | 1967-1978 | ||||
615 | M/F | A | Seriatim | 1979-1986 | ||||
617 | M/F | PN/SM | Seriatim | 1984-1994 | ||||
621 | M/F | A | Seriatim | 1979-1987 | ||||
635 | M/F | A | Seriatim | 1987-1993 | ||||
636 | M/F | PN/SM | Seriatim | 1992-1996 | ||||
665 | M/F | A | Seriatim | 1955-1984 | ||||
667 | M/F | A | Seriatim | 1979-1987 | ||||
695 | M/F | A/PN/SM | Seriatim | 1992-1996 | ||||
699J | M/F | A | Seriatim | 1968-1983 | ||||
AC1315 | M/F | A/N/PN/SM/SPN/PSM | Seriatim | 2012-2019 | ||||
AC1365 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2013-2019 | ||||
AC13LF | M/F | N/PN/SM/SPN/PSM | Seriatim | 2013-2019 | ||||
AC13SP | M/F | N/PN/SM/SPN | Seriatim | 2013-2019 | ||||
AL101 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2004-2013 | ||||
AL1315 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2013-2019 | ||||
AL1365 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2012-2019 | ||||
AL13LF | M/F | N/PN/SM/SPN/PSM | Seriatim | 2012-2019 | ||||
AL13SP | M/F | N/PN/SM/SPN/PSM | Seriatim | 2014-2019 | ||||
AL601 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2004-2013 | ||||
ALF01 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2004-2013 | ||||
ALL10 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2001-2011 | ||||
ALL104 | M/F | A/N/PN/SM/SPN/PSM | Seriatim | 2014-2019 | ||||
ALLIF | M/F | N/PN/SM/SPN/PSM | Seriatim | 1995-2012 | ||||
ALS01 | M/F | N/PN/SM/SPN | Seriatim | 2003-2013 | ||||
COMP | M/F | A/N/SM | Seriatim | 1974-1987 | ||||
EN52 | M/F | A/PN/SM | Seriatim | 1955-1997 | ||||
END65 | M/F | A/N/SM | Seriatim | 1955-1984 | ||||
END95 | M/F | A | Seriatim | 1966-1980 | ||||
EXWL | M/F | SM | Seriatim | 2002-2006 | ||||
FIRST | M/F | N/SM | Seriatim | 1995-1998 | ||||
JTWL | M/F | A/N/SM | Seriatim | 1981-1988 | ||||
LP20 | M | A/PN/SM | Seriatim | 1949-1984 | ||||
LP65 | M/F | A/N/PN/SM | Seriatim | 1951-1984 | ||||
LP85 | M/F | A/PN/SM | Seriatim | 1951-1983 | ||||
LP95 | M/F | A/PN/SM | Seriatim | 1966-2007 | ||||
LS92 | M/F | A/N/SM | Seriatim | 1969-2006 | ||||
P1596 | M/F | N/SM | Seriatim | 1996-2001 | ||||
RPU | M/F | A/N/PN/SM/SPN/PSM | Seriatim | 1945-2019 | ||||
SPL0 | M/F | A/N/SM | Seriatim | 1965-1984 | ||||
SPLII | M/F | N/SM | Seriatim | 1984-1988 | ||||
SURE | M/F | SM | Seriatim | 1996-2002 |
Appendix B – Traditional Life Models and Assumptions | B-5 |
Milliman client Report
FBL WL Business | ||||||||
Business Modeled as of September 30, 2020 | ||||||||
Model Plan | Gender | Risk Class* | Issue Age | Model Issue Years | ||||
WL45 | M/F | A/PN | Seriatim | 1945-1974 | ||||
WL60 | M/F | A/PN/SM | Seriatim | 1955-1984 | ||||
WL64 | M/F | A | Seriatim | 1949-1981 | ||||
WL77 | M/F | A/N/PN/SM | Seriatim | 1959-1985 | ||||
WL84 | M/F | A/N/PN/SM | Seriatim | 1981-2009 | ||||
WL87 | M/F | A/N/PN/SM | Seriatim | 1986-2013 | ||||
WL90 | M/F | N/SM | Seriatim | 1990-1998 | ||||
WL96 | M/F | N/SM/PSM | Seriatim | 1995-2002 | ||||
WLCLS | M/F | N/SM | Seriatim | 1988-1995 | ||||
WLSPC | M/F | N/SM | Seriatim | 1987-1994 | ||||
WL1815 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2019-2020 | ||||
WL1865 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2019-2020 | ||||
WL18LF | M/F | N/PN/SM/SPN/PSM | Seriatim | 2019-2020 | ||||
WL18SP | M/F | N/PN/SM/SPN | Seriatim | 2019-2020 |
*Risk Class Types: | N: | Standard Non-Smoker | A: | Aggregate | ||||
SM: | Standard Smoker | PN: | Preferred Non-Smoker | |||||
SPN: | Super-Preferred Non-Smoker | PSM: | Preferred Smoker |
NEW BUSINESS PRODUCTION
The following table summarizes the annualized premium production for Term and WL based on the ten year sales forecast provided by FBL.
Production Assumptions ($ in millions) | ||||||||
Year Ending September 30th | Term | WL | ||||||
2021 | $ | 13.3 | $ | 7.7 | ||||
2022 | 14.8 | 8.2 | ||||||
2023 | 15.9 | 8.7 | ||||||
2024 | 17.0 | 9.3 | ||||||
2025 | 18.1 | 9.8 | ||||||
2026 | 19.2 | 10.4 | ||||||
2027 | 20.3 | 11.0 | ||||||
2028 | 21.4 | 11.7 | ||||||
2029 | 22.5 | 12.3 | ||||||
2030 | 23.6 | 12.9 |
Mortality
Base Table: | 2015 VBT ALB - 25 Year Select and Ultimate table, sex and smoker distinct Unisex assumption is 60% male – 40% female blend |
Mortality factors were developed based on experience studies of FBL for the period 2010 through 2019 but with overall adjustments based on the more recent experience 2015 through 2019. Adjustments for old age grading were applied based on both the experience of FBL and trends that we have observed in the industry.
Appendix B – Traditional Life Models and Assumptions | B-6 |
Milliman client Report
Mortality Factors
FACTORS BY BAND | ||||||||
Band | Term Factor | WL Factor | ||||||
$0 - $99,999.99 | 117.5 | % | 117.5 | % | ||||
$100,000 - $249,999.99 | 117.5 | 117.5 | ||||||
$250,000 - $499,999.99 | 107.5 | 107.5 | ||||||
$500,000+ | 107.5 | 107.5 |
FACTORS BY DURATION AND ISSUE YEAR | ||||||||
Duration | Issued Post 1999 | Issued Pre 2000 | ||||||
1-2 | 130.0 | % | 100.0 | % | ||||
3 | 122.5 | 100.0 | ||||||
4 | 115.0 | 100.0 | ||||||
5 | 107.5 | 100.0 | ||||||
6-10 | 100.0 | 100.0 | ||||||
11+ | 95.0 | 100.0 |
FACTORS BY DURATION AND LINE OF BUSINESS | ||||||||
Duration | WL | Term | ||||||
1-20 | 105 | % | 90 | % | ||||
21-25 | 103 | 90 | ||||||
26-30 | 101 | 90 | ||||||
31+ | 100 | 90 |
FACTORS BY UNDERWRITING CLASS | |||||||
INITIAL FACTOR | |||||||
Underwriting Class | Post 1999 | Pre 2000 | Ultimate Factor | ||||
Super Preferred Non-Tobacco | 59% | 59% | 90 | % | |||
Preferred Non-Tobacco | 78 | 78 | 90 | ||||
Non-Tobacco | 112 | 95 | 100 | ||||
Preferred Tobacco | 80 | 80 | 90 | ||||
Tobacco | 100 | 100 | 100 | ||||
Non-Tobacco Substandard | 80 x Table Rating | 80 x Table Rating | 100 | ||||
Tobacco Substandard | 80 x Table Rating | 80 x Table Rating | 100 | ||||
Unismoke (U) | 90 | 90 | 100 |
Beginning in later of Attained Age 80 or the 10th policy year, geometric grade the product of all multiples (excluding future mortality improvement and mortality anti-selection) to the ultimate factor of the 2015 VBT ALB table by Attained Age 100.
Appendix B – Traditional Life Models and Assumptions | B-7 |
Milliman client Report
Mortality Improvement
Mortality improvement is assumed for 20 years where the cumulative improvement factor is calculated with the specific attained age factor at any point in the future. For example: male, attained age 95, twenty years in the future, the factor is (1-.003) ^ 20. The improvement factors are as follows:
ATTAINED AGE | MALE | FEMALE | ||||||
0-24 | 1.00 | % | 1.00 | % | ||||
25-34 | 1.50 | 1.00 | ||||||
35-44 | 1.00 | 0.50 | ||||||
45-54 | 1.00 | 0.50 | ||||||
55-64 | 1.50 | 1.00 | ||||||
65-74 | 1.50 | 1.00 | ||||||
75-84 | 1.50 | 1.00 | ||||||
85-89 | 1.00 | 0.75 | ||||||
90-94 | 0.67 | 0.50 | ||||||
95-99 | 0.30 | 0.25 | ||||||
100+ | 0.20 | 0.20 |
Past mortality improvement of 3.25 years is assumed from the midpoint of the mortality study to the projection start date as of September 30, 2020, assuming the annual improvement rates specified in the table above.
Mortality Anti-Selection for Level Premium Term Business
Anti-selection factors associated with high lapse rates were calculated using a Dukes-MacDonald approach. The model assumes that a percentage of assumed lapses in excess of 10% have fully select mortality. The percentage depends on the premium increase ratio, the ratio between the first ART premium and the level term premium, as shown in the following table.
Dukes-MacDonald Effectiveness | ||||||||||||
EFFECTIVE PERCENTAGE | ||||||||||||
Premium Increase | 10 YT | 15 YT | 20+ YT | |||||||||
1 < X ≤ 2 | 70 | % | 67.5 | % | 65 | % | ||||||
2 < X ≤ 3 | 80 | 75 | 70 | |||||||||
3 < X ≤ 6 | 85 | 80 | 75 | |||||||||
6 < X ≤ 12 | 90 | 85 | 80 | |||||||||
X > 12 | 95 | 90 | 85 |
LAPSES
Term
Lapse rates are based on the recent experience of the Company based on a study period from 2010 to 2019 as well as our knowledge of similar products within the industry.
Appendix B – Traditional Life Models and Assumptions | B-8 |
Choice Term
Milliman client Report
The lapse assumptions for Choice Term business are summarized in the tables below.
10-Year Level Term
ISSUE AGE | ||||||||||||||||||||||||||||||||||||
NONSMOKER | SMOKER | |||||||||||||||||||||||||||||||||||
Bands | Duration | <30 | 30-39 | 40-49 | 50+ | <30 | 30-39 | 40-49 | 50+ | |||||||||||||||||||||||||||
1 | 6.75 | % | 6.50 | % | 6.50 | % | 6.00 | % | 12.00 | % | 10.00 | % | 10.00 | % | 10.00 | % | ||||||||||||||||||||
2 | 7.00 | 6.50 | 6.00 | 6.00 | 11.00 | 8.50 | 8.50 | 8.50 | ||||||||||||||||||||||||||||
3 | 7.50 | 6.00 | 6.00 | 6.00 | 9.00 | 8.00 | 8.00 | 8.00 | ||||||||||||||||||||||||||||
>=250,000 (3,4,5) | 4 | 6.50 | 4.50 | 5.00 | 5.00 | 9.00 | 7.00 | 7.00 | 7.00 | |||||||||||||||||||||||||||
5 | 6.00 | 4.50 | 4.50 | 4.50 | 8.00 | 6.75 | 6.00 | 6.00 | ||||||||||||||||||||||||||||
6 | 5.50 | 4.00 | 4.00 | 4.00 | 7.00 | 6.00 | 6.00 | 6.00 | ||||||||||||||||||||||||||||
7 - End of Level Period | 4.00 | 4.00 | 4.00 | 4.00 | 6.00 | 6.00 | 6.00 | 6.00 | ||||||||||||||||||||||||||||
1 | 9.50 | % | 9.50 | % | 8.00 | % | 5.50 | % | 17.00 | % | 16.00 | % | 12.00 | % | 11.00 | % | ||||||||||||||||||||
2 | 9.00 | 7.00 | 6.00 | 4.75 | 12.00 | 11.00 | 10.00 | 7.00 | ||||||||||||||||||||||||||||
3 | 8.50 | 6.50 | 5.75 | 4.00 | 10.00 | 10.00 | 9.00 | 6.50 | ||||||||||||||||||||||||||||
<250,000 (1,2) | 4 | 7.00 | 5.50 | 4.50 | 4.00 | 9.00 | 8.00 | 8.00 | 6.00 | |||||||||||||||||||||||||||
5 | 6.50 | 5.00 | 3.50 | 3.00 | 8.00 | 7.00 | 7.00 | 5.50 | ||||||||||||||||||||||||||||
6 | 5.50 | 4.00 | 3.50 | 3.50 | 7.00 | 6.00 | 6.00 | 5.50 | ||||||||||||||||||||||||||||
7 - End of Level Period | 5.00 | 4.00 | 4.00 | 4.00 | 6.00 | 5.50 | 5.50 | 5.50 |
Other Level Terms
ISSUE AGE | ||||||||||||||||||||||||||||||||||||
NONSMOKER | SMOKER | |||||||||||||||||||||||||||||||||||
Bands | Duration | <30 | 30-39 | 40-49 | 50+ | <30 | 30-39 | 40-49 | 50+ | |||||||||||||||||||||||||||
1 | 5.00 | % | 5.00 | % | 5.00 | % | 4.50 | % | 8.50 | % | 9.50 | % | 10.00 | % | 10.00 | % | ||||||||||||||||||||
2 | 5.00 | 4.75 | 4.50 | 4.00 | 8.25 | 8.50 | 8.00 | 8.00 | ||||||||||||||||||||||||||||
3 | 4.75 | 4.50 | 3.75 | 3.75 | 8.00 | 8.00 | 8.00 | 7.00 | ||||||||||||||||||||||||||||
4 | 4.25 | 4.00 | 3.50 | 3.00 | 7.50 | 7.00 | 6.00 | 7.00 | ||||||||||||||||||||||||||||
>=250,000 (3,4,5) | 5 | 4.00 | 3.75 | 3.50 | 3.00 | 6.00 | 5.50 | 5.50 | 6.00 | |||||||||||||||||||||||||||
6 | 3.00 | 3.00 | 3.00 | 2.75 | 5.00 | 5.25 | 5.25 | 5.00 | ||||||||||||||||||||||||||||
7 | 2.75 | 2.75 | 2.75 | 2.75 | 4.75 | 5.00 | 5.00 | 4.75 | ||||||||||||||||||||||||||||
8 | 2.75 | 2.50 | 2.50 | 2.50 | 4.50 | 4.75 | 4.75 | 4.50 | ||||||||||||||||||||||||||||
9 | 2.50 | 2.25 | 2.25 | 2.25 | 4.00 | 4.50 | 4.50 | 4.00 | ||||||||||||||||||||||||||||
10 - End of Level Period | 2.00 | 2.00 | 2.00 | 2.00 | 3.00 | 3.00 | 3.00 | 3.00 | ||||||||||||||||||||||||||||
1 | 7.50 | % | 7.00 | % | 7.00 | % | 5.00 | % | 13.00 | % | 12.00 | % | 11.00 | % | 9.50 | % | ||||||||||||||||||||
2 | 7.50 | 6.00 | 6.00 | 4.50 | 10.00 | 10.00 | 10.00 | 7.50 | ||||||||||||||||||||||||||||
3 | 6.00 | 5.50 | 4.75 | 3.75 | 8.00 | 7.50 | 8.00 | 6.00 | ||||||||||||||||||||||||||||
4 | 5.50 | 5.00 | 3.75 | 3.00 | 7.75 | 7.00 | 7.75 | 5.75 | ||||||||||||||||||||||||||||
<250,000 (1,2) | 5 | 5.00 | 4.50 | 3.50 | 2.75 | 6.00 | 6.00 | 6.50 | 4.00 | |||||||||||||||||||||||||||
6 | 4.00 | 3.50 | 3.25 | 2.75 | 6.00 | 5.00 | 5.50 | 3.50 | ||||||||||||||||||||||||||||
7 | 3.50 | 3.00 | 2.75 | 2.75 | 5.00 | 3.50 | 3.50 | 3.50 | ||||||||||||||||||||||||||||
8 | 3.00 | 2.75 | 2.50 | 2.50 | 4.00 | 3.25 | 3.25 | 3.25 | ||||||||||||||||||||||||||||
9 | 2.50 | 2.50 | 2.00 | 2.00 | 3.00 | 3.25 | 3.00 | 3.00 | ||||||||||||||||||||||||||||
10 - End of Level Period | 2.00 | 2.00 | 2.00 | 2.00 | 3.00 | 3.00 | 3.00 | 3.00 |
For one-year Choice Term business, a constant 20% lapse is assumed.
Appendix B – Traditional Life Models and Assumptions | B-9 |
Choice Term ROP
Milliman client Report
The lapse assumptions for Choice Term ROP business are summarized in the tables below. The modeled plans include ROP10, ROP13, and ROP18.
DURATION | ROP13/18 | ROP10 | ||||||
1 | 4.50 | % | 4.50 | % | ||||
2 | 4.25 | 4.25 | ||||||
3 | 4.00 | 4.00 | ||||||
4 | 3.00 | 3.00 | ||||||
5 | 3.00 | 3.00 | ||||||
6 | 2.75 | 2.75 | ||||||
7 | 2.50 | 2.50 | ||||||
8 | 2.00 | 2.00 | ||||||
Year 9 to 6 years before end of Level Period | 2.00 | 2.00 | ||||||
5-year period before end of Level | 0.50 | 0.50 | ||||||
Last year of Level | 100.00 | 60.00 | ||||||
1st year post Level | 30.00 | |||||||
Ultimate | 20.00 |
Other Term
The lapse assumptions for the other Term plans are summarized below.
Product Type | LTP | Post LTP | ||||||
Simple Term | 7.00 | % | 100.00 | % | ||||
10 YRT | 7.00 | 30% shock lapse at the end of 10 year, and the following year 20% | ||||||
Other Term | 3.75 | 3.75 | % | |||||
New Term (1, 5) | 3.00 | 15 | % | |||||
New Term (10, 15, 20) | 3.00 | 60% shock lapse for the last year of LTP, and 30% in the first year post LTP, 15% thereafter | ||||||
ART | N/A | 7.00 | % |
Simple Term: SIMP11, SIMP14, and SIMPL
10 YRT: 10YRT
Other Term: 760, CT96, JVT14, PRU, and T396
New Term: NEWTERM
ART: ART0, ARTFB, ARTII, TM88
Appendix B – Traditional Life Models and Assumptions | B-10 |
Milliman client Report
Level Term Shock Lapse
For level premium term business, the shock lapse assumption was based upon industry experience and depends on the increase in premium immediately following the level term period. The shock lapse was assumed to increase as the relative magnitude of premium increase becomes larger.
Shock Lapse Assumptions Lapse Rate Beyond Level Premium Period (N) Premium Increase (First ART Premium as a Multiple of Level, Term Premium)(x) | ||||||||||||||||||||||||||||
ATTAINED AGE AT (N) 0-49 | ||||||||||||||||||||||||||||
Duration | 1<X≤2 | 2<X≤3 | 3<X≤4 | 4<X≤5 | 5<X≤6 | 6<X≤7 | 7<X≤8 | |||||||||||||||||||||
N | 22 | % | 33 | % | 45 | % | 56 | % | 70 | % | 74 | % | 78 | % | ||||||||||||||
N+1 | 18 | 26 | 33 | 41 | 49 | 55 | 57 | |||||||||||||||||||||
N+2 | 10 | 12 | 15 | 18 | 22 | 25 | 27 | |||||||||||||||||||||
N+3 | 10 | 10 | 11 | 13 | 15 | 16 | 18 | |||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | |||||||||||||||||||||
8<X≤9 | 9<X≤10 | 10<X≤12 | 12<X≤14 | 14<X≤16 | 16<X≤20 | X>20 | ||||||||||||||||||||||
N | 79 | % | 81 | % | 83 | % | 84 | % | 84 | % | 87 | % | 100 | % | ||||||||||||||
N+1 | 59 | 64 | 66 | 67 | 70 | 75 | ||||||||||||||||||||||
N+2 | 27 | 33 | 33 | 33 | 40 | 45 | ||||||||||||||||||||||
N+3 | 18 | 19 | 19 | 19 | 19 | 19 | ||||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | ||||||||||||||||||||||
Attained Age at (N) 50-59 | ||||||||||||||||||||||||||||
Duration | 1<X≤2 | 2<X≤3 | 3<X≤4 | 4<X≤5 | 5<X≤6 | 6<X≤7 | 7<X≤8 | |||||||||||||||||||||
N | 29 | % | 44 | % | 54 | % | 67 | % | 77 | % | 82 | % | 83 | % | ||||||||||||||
N+1 | 23 | 34 | 39 | 49 | 54 | 60 | 61 | |||||||||||||||||||||
N+2 | 14 | 16 | 18 | 21 | 25 | 27 | 28 | |||||||||||||||||||||
N+3 | 11 | 12 | 13 | 16 | 17 | 18 | 19 | |||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | |||||||||||||||||||||
8<X≤9 | 9<X≤10 | 10<X≤12 | 12<X≤14 | 14<X≤16 | 16<X≤20 | X>20 | ||||||||||||||||||||||
N | 84 | % | 85 | % | 87 | % | 88 | % | 88 | % | 91 | % | 100 | % | ||||||||||||||
N+1 | 63 | 67 | 69 | 70 | 73 | 78 | ||||||||||||||||||||||
N+2 | 29 | 34 | 34 | 35 | 42 | 47 | ||||||||||||||||||||||
N+3 | 19 | 20 | 20 | 20 | 20 | 20 | ||||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | ||||||||||||||||||||||
Attained Age at (N) 60-69 | ||||||||||||||||||||||||||||
Duration | 1<X≤2 | 2<X≤3 | 3<X≤4 | 4<X≤5 | 5<X≤6 | 6<X≤7 | 7<X≤8 | |||||||||||||||||||||
N | 40 | % | 60 | % | 62 | % | 77 | % | 81 | % | 87 | % | 87 | % | ||||||||||||||
N+1 | 32 | 46 | 45 | 56 | 57 | 64 | 64 | |||||||||||||||||||||
N+2 | 19 | 22 | 20 | 24 | 26 | 29 | 30 | |||||||||||||||||||||
N+3 | 16 | 17 | 15 | 18 | 18 | 19 | 20 | |||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | |||||||||||||||||||||
8<X≤9 | 9<X≤10 | 10<X≤12 | 12<X≤14 | 14<X≤16 | 16<X≤20 | X>20 | ||||||||||||||||||||||
N | 88 | % | 90 | % | 92 | % | 93 | % | 93 | % | 96 | % | 100 | % | ||||||||||||||
N+1 | 66 | 71 | 73 | 74 | 77 | 83 | ||||||||||||||||||||||
N+2 | 30 | 36 | 36 | 37 | 44 | 50 | ||||||||||||||||||||||
N+3 | 20 | 21 | 21 | 21 | 21 | 21 | ||||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | ||||||||||||||||||||||
Attained Age at (N) 70+ | ||||||||||||||||||||||||||||
Duration | 1<X≤2 | 2<X≤3 | 3<X≤4 | 4<X≤5 | 5<X≤6 | 6<X≤7 | 7<X≤8 | |||||||||||||||||||||
N | 48 | % | 73 | % | 64 | % | 80 | % | 82 | % | 88 | % | 88 | % | ||||||||||||||
N+1 | 38 | 56 | 47 | 59 | 58 | 65 | 65 | |||||||||||||||||||||
N+2 | 23 | 26 | 21 | 25 | 26 | 29 | 30 | |||||||||||||||||||||
N+3 | 19 | 21 | 16 | 19 | 18 | 19 | 20 | |||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 | 10 | |||||||||||||||||||||
8<X≤9 | 9<X≤10 | 10<X≤12 | 12<X≤14 | 14<X≤16 | 16<X≤20 | X>20 | ||||||||||||||||||||||
N | 89 | % | 91 | % | 93 | % | 94 | % | 94 | % | 97 | % | 100 | % | ||||||||||||||
N+1 | 67 | 72 | 74 | 75 | 78 | 84 | ||||||||||||||||||||||
N+2 | 31 | 37 | 37 | 37 | 44 | 50 | ||||||||||||||||||||||
N+3 | 20 | 21 | 21 | 21 | 21 | 21 | ||||||||||||||||||||||
N+4 | 10 | 10 | 10 | 10 | 10 | 10 |
Appendix B – Traditional Life Models and Assumptions | B-11 |
Milliman client Report
The assumed shock lapse rate at the end of 30th policy year is 100% for 30 year Level Term products.
The excess of the N+1 shock lapse over 15% was skewed towards the beginning of the N+1 policy year based on the following schedule:
N+1 Policy | Excess Shock Lapse Distribution Non-Graded ART Schedule | |||
Month | Non-Annual Mode | Annual Mode | ||
1 | 50% | 20% | ||
2 | 20 | 15 | ||
3 | 20 | 10 | ||
4 | 10 | 10 | ||
5 | 0 | 4 | ||
6 | 0 | 4 | ||
7 | 0 | 4 | ||
8 | 0 | 4 | ||
9 | 0 | 4 | ||
10 | 0 | 0 | ||
11 | 0 | 0 | ||
12 | 0 | 25 |
Policies that are in the grace period just after the level term period were set back to be in the last month of the level term period so that the appropriate shock lapse assumption is applied.
WL
Lapse rates are based on the recent experience of the Company based on a study period from 2010 to 2019 as well as our knowledge of similar products within the industry.
WL Base Policies
The lapse assumptions for WL business are summarized in the tables below.
ISSUE AGE | ||||||||||||||||||||||||||||||||
Duration | 0 - 9 | 10 - 19 | 20 - 29 | 30 - 39 | 40 - 49 | 50 - 59 | 60 - 69 | 70+ | ||||||||||||||||||||||||
1 | 8.50 | % | 14.00 | % | 16.00 | % | 16.00 | % | 13.00 | % | 10.00 | % | 9.00 | % | 7.00 | % | ||||||||||||||||
2 | 6.50 | 10.00 | 14.00 | 14.00 | 13.00 | 10.00 | 7.00 | 6.00 | ||||||||||||||||||||||||
3 | 4.00 | 7.00 | 10.00 | 10.00 | 9.00 | 7.00 | 6.00 | 4.00 | ||||||||||||||||||||||||
4 | 3.75 | 5.00 | 7.00 | 8.00 | 8.00 | 6.50 | 5.50 | 4.00 | ||||||||||||||||||||||||
5-8 | 3.00 | 4.00 | 5.00 | 6.00 | 6.00 | 5.00 | 4.00 | 4.00 | ||||||||||||||||||||||||
9-12 | 2.50 | 4.00 | 4.50 | 5.00 | 5.00 | 4.50 | 4.00 | 4.00 | ||||||||||||||||||||||||
13-16 | 2.25 | 4.00 | 3.75 | 3.25 | 3.25 | 3.50 | 4.00 | 4.00 | ||||||||||||||||||||||||
17+ | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 |
Paid-up whole life policies reflect a 1.5% lapse rate per year once paid up.
Single premium whole life policies reflect a 1% lapse rate per year.
Appendix B – Traditional Life Models and Assumptions | B-12 |
Milliman client Report
Term Riders
The Term riders follow the same lapse assumptions as Term policies.
Expenses And commissions
Term
Acquisition expenses are as follows:
Per Policy Acquisition Expense | ||||||||||||||||
Issue Age | Band 2 $100,000 - $249,999 | Band 3 $250,000 - $499,999 | Band 4 $500,000 - $999,999 | Band 5 $1,000,000+ | ||||||||||||
18-35 | $ | 293.1 | $ | 293.1 | $ | 335.1 | $ | 335.1 | ||||||||
36-50 | 293.1 | 293.1 | 442.1 | 442.1 | ||||||||||||
51-64 | 293.1 | 293.1 | 430.1 | 430.1 | ||||||||||||
65-69 | 386.1 | 386.1 | 439.1 | 439.1 | ||||||||||||
70+ | 386.1 | 386.1 | 386.1 | 386.1 |
Percent of Premium Acquisition: 32.0%
Maintenance expenses and premium tax are as follows:
Maintenance Expense | ||||
Per Policy (fully allocated) | $ | 67.00 | ||
Premium Tax | 1.51 | % | ||
Inflation | 2.50 | % |
The fully allocated maintenance expenses are reduced by 20% such that the projected expenses are at scale according to FBL’s budget after 10 years. The difference between the budget and total unit expenses are captured as unallocated in the appraisal results in Tables I-A and 1-B.
Commissions are as follows:
COMMISSIONS | 1ST YEAR | RENEWAL YEAR | ||||||
JVT14 | 15.45 | % | 0.00 | % | ||||
CHTG18 | 73.10 | 4.70 | ||||||
All other plans | 57.94 | 4.87 |
Appendix B – Traditional Life Models and Assumptions | B-13 |
Milliman client Report
WL
Acquisition expenses are as follows:
Per Policy Acquisition Expense – Single Premium | ||||||||||||
Issue Age | Band 1 $10,000 - $24,000 | Band 2 $25,000 - $99,999 | Band 3 $100,000+ | |||||||||
0-15 | $ | 81.11 | $ | 81.11 | $ | 81.11 | ||||||
18-35 | 194.11 | 194.11 | 293.11 | |||||||||
36-50 | 194.11 | 194.11 | 293.11 | |||||||||
51-64 | 194.11 | 194.11 | 293.11 | |||||||||
65-69 | 386.11 | 386.11 | 386.11 | |||||||||
70+ | 386.11 | 386.11 | 386.11 |
Per Policy Acquisition Expense – Other Premium Periods | ||||||||||||||||||||
Issue Age | Band 1 $10,000 - $24,999 | Band 2 $25,000 – $49,999 | Band 3 $50,000 - $99,999 | Band 4 $100,000 - $249,999 | Band 5 $250,000+ | |||||||||||||||
0-15 | $ | 81.11 | $ | 81.11 | $ | 81.11 | $ | 81.11 | $ | 151.11 | ||||||||||
18-35 | 194.11 | 194.11 | 194.11 | 293.11 | 293.11 | |||||||||||||||
36-50 | 194.11 | 194.11 | 194.11 | 293.11 | 293.11 | |||||||||||||||
51-64 | 194.11 | 194.11 | 194.11 | 293.11 | 293.11 | |||||||||||||||
65-69 | 386.11 | 386.11 | 386.11 | 386.11 | 386.11 | |||||||||||||||
70+ | 386.11 | 386.11 | 386.11 | 386.11 | 386.11 |
EXPENSE | SINGLE PREMIUM | ALL OTHER | ||||||
Percent of Premium Acquisition | 1.28 | % | 32.00 | % |
Maintenance expenses and premium tax are as follows:
Maintenance Expense | ||||
Per Policy (Fully Allocated) | $ | 78.00 | ||
Premium Tax | 1.51 | % | ||
Inflation | 2.50 | % |
The fully allocated maintenance expenses are reduced by 20% such that the projected expenses are at scale according to FBL’s budget after 10 years. The difference between the budget and total unit expenses are captured as unallocated in the appraisal results in Tables I-A and 1-B.
Commissions are as follows:
COMMISSIONS (% OF PREM) | 1ST YEAR | RENEWAL YEAR | ||||||
10P81, 611, 615, 617, 699J, SPLII, SURE, Term Riders | 57.94 | % | 4.87 | % | ||||
695, AC13SP, AL13SP, ALS01, SPL0, WLSPC | 15.45 | % | 0.00 | % | ||||
WL18SP | 11.04 | % | 0.00 | % | ||||
WL18LF, WL1815, WL1865 | 115.08 | % | 4.73 | % | ||||
All other plans | 96.57 | % | 4.87 | % |
Appendix B – Traditional Life Models and Assumptions | B-14 |
Milliman client Report
Statutory Reserves
Statutory reserves were calculated consistent with FBL’s reserving methodology. For level term products, the statutory reserve methodology prescribed under Regulation XXX is used for 2000 and later issues. X-factors were provided by FBL. The Regulation XXX reserves are generally on the way down from its reserve peak and the reserves not currently financed through an insurance captive by FBL.
Reinsurance
FBL cedes mortality risks via YRT in excess of retention limits. The retention limits are $1 million for issue ages under 65 and $0.75 million for issue ages over 65. Reinsurance on WL business is not modeled due to immateriality.
Reinsurance Summary for Term | ||||||||
($ in millions) | ||||||||
Reinsurer | Ceded Face | Ceded Reserve* | ||||||
A | $ | 5,342.0 | $ | 33.3 | ||||
B | 3,599.5 | 30.6 | ||||||
C | 1,284.0 | 12.7 | ||||||
D | 604.9 | 0.8 | ||||||
E | 203.1 | 4.4 | ||||||
Other | 450.9 | 1.6 | ||||||
Total | $ | 11,484.4 | $ | 83.4 |
*Modeled amounts were used in lieu of missing actuals |
TAX ReSERVES
Federal Income Tax: | 21% |
DAC Proxy Tax: | 9.2% of future direct premium net of third party reinsurance cash flows amortized over fifteen years. |
Tax Reserves: | Tax reserves are 92.81% of the statutory reserves floored at the cash value. |
CASH VALUES
Cash Values were modeled for WL business. There are some term policies with ROP features which returns the cumulative paid premium as an endowment which are also modeled.
NON-MODELED
Reserves related to non-deduction of premium, accidental death benefits, disability waiver of premium benefits and other riders were not modeled.
Appendix B – Traditional Life Models and Assumptions | B-15 |
Milliman client Report
Appendix C – Universal Life Models and Assumptions
UL business
The following table summarizes the UL model inforce as of September 30, 2020, based on seriatim data provided by FBL.
FBL Universal Life Inforce Summary
As of September 30, 2020
($ in millions)
Segment | Plan | Description | Policy Count | Inforce Amount | Account Value | Cash Value | Statutory Reserve | Tax Reserve* | ||||||||||||||||||||
FlexPremUL | EXTEND | Extend Endowment (set with UL02) | 36 | $ | 3.5 | $ | 2.1 | $ | 2.1 | $ | 2.1 | $ | 2.1 | |||||||||||||||
LSUL1 | LSUL | 190 | 76.3 | 15.4 | 15.4 | 15.7 | 15.4 | |||||||||||||||||||||
LSUL6 | LSUL06 | 181 | 99.6 | 15.4 | 15.0 | 15.5 | 15.5 | |||||||||||||||||||||
U132 | Westflex | 787 | 65.9 | 17.3 | 17.3 | 17.4 | 17.3 | |||||||||||||||||||||
U136 | UL 100 | 468 | 34.8 | 7.8 | 7.8 | 7.8 | 7.8 | |||||||||||||||||||||
U151 | SPWL(WFB) | 78 | 6.7 | 5.1 | 5.1 | 5.1 | 5.1 | |||||||||||||||||||||
U901 | ValueLife | 2,674 | 196.2 | 47.1 | 47.0 | 47.1 | 47.1 | |||||||||||||||||||||
U921 | ValueLifePlus | 502 | 50.0 | 19.2 | 19.2 | 19.4 | 19.2 | |||||||||||||||||||||
UL02 | UL02 | 1048 | 103.4 | 14.9 | 14.9 | 14.9 | 14.9 | |||||||||||||||||||||
UL05 | UL05 | 4097 | 393.9 | 37.9 | 37.4 | 39.0 | 38.5 | |||||||||||||||||||||
UL10 | UL10 | 6618 | 1,088.7 | 163.4 | 143.0 | 153.2 | 150.6 | |||||||||||||||||||||
UL15 | Foundations UL | 600 | 70.8 | 3.5 | 2.1 | 2.5 | 2.5 | |||||||||||||||||||||
UL84 | OldUL | 9,961 | 950.0 | 127.8 | 127.5 | 128.8 | 127.8 | |||||||||||||||||||||
UL96 | OldUL | 2464 | 182.6 | 28.7 | 28.6 | 28.9 | 28.7 | |||||||||||||||||||||
ULSG08 | ULSG 2008 | 9,340 | 1,159.8 | 49.0 | 32.1 | 243.7 | 233.6 | |||||||||||||||||||||
ULSG12 | ULSG 2012 | 4,177 | 438.0 | 25.2 | 13.5 | 48.6 | 45.1 | |||||||||||||||||||||
ULSG17 | ULSG 2017 | 2966 | 357.2 | 3.8 | 1.1 | 1.6 | 2.2 | |||||||||||||||||||||
FixedPremUL | CURLF | CRLF | 5,985 | $ | 274.8 | $ | 139.8 | $ | 139.8 | $ | 139.8 | $ | 139.8 | |||||||||||||||
DISCV | Discover | 1,331 | 80.8 | 19.4 | 19.4 | 26.3 | 24.0 | |||||||||||||||||||||
LFPLS | LifePlus | 46 | 2.3 | 0.7 | 0.7 | 0.8 | 0.7 | |||||||||||||||||||||
SINGL | SPWL(KFB) | 640 | 21.4 | 9.2 | 9.2 | 11.4 | 10.7 | |||||||||||||||||||||
TRADUL | Traditional UL | 364 | 24.6 | 14.6 | 14.6 | 17.5 | 14.6 | |||||||||||||||||||||
IUL | IUL15 | Foundations Indexed Universal Life | 16727 | $ | 2,288.2 | $ | 131.9 | $ | 89.1 | $ | 97.1 | $ | 94.5 | |||||||||||||||
IUL19 | Foundations Indexed Universal Life 2019 | 3196 | 404.1 | 9.3 | 6.2 | 6.2 | 0.0 | |||||||||||||||||||||
FDA | LVGTR | LTAs | 1 | n/a | $ | 43.51 | $ | 43.51 | $ | 43.51 | $ | 43.51 | ||||||||||||||||
PRMDP | Premium Deposits | 1 | n/a | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Total Actual | 74,478 | $ | 8,373.7 | $ | 952.0 | $ | 851.8 | $ | 1,134.2 | $ | 1,101.4 | |||||||||||||||||
Total Model | 74,477 | $ | 8,483.5 | $ | 942.7 | $ | 845.8 | $ | 1,149.8 | $ | 1,101.4 | |||||||||||||||||
Actual/Model | 100 | % | 99 | % | 101 | % | 101 | % | 99 | % | 100 | % |
* Modeled amounts were used in lieu of missing actual tax reserve.
Appendix C – Universal Life Models and Assumptions | C-1 |
Milliman client Report
The business is modeled on a seriatim basis by reflecting plan, underwriting class, gender, issue age and issue year as described in the following table:
FBL UL Business | ||||||||
Business Modeled as of September 30, 2020 | ||||||||
Model Plan | Gender | Risk Class* | Issue Age | Model | ||||
EXTEND | M/F | N/PN/SM | Seriatim | 2011-2020 | ||||
LSUL1 | M/F | N | Seriatim | 1996-2007 | ||||
LSUL6 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2006-2013 | ||||
U132 | M/F | N/SM | Seriatim | 1982-2020 | ||||
U136 | M/F | N/SM | Seriatim | 1987-1996 | ||||
U151 | M/F | N/SM | Seriatim | 1987-1988 | ||||
U901 | M/F | N/SM | Seriatim | 1984-2020 | ||||
U921 | M/F | N/SM | Seriatim | 1984-2012 | ||||
UL02 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2002-2008 | ||||
UL05 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2005-2011 | ||||
UL10 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2010-2016 | ||||
UL15 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2015-2019 | ||||
UL84 | M/F | N/PN/SM/SPN | Seriatim | 1983-2015 | ||||
UL96 | M/F | N/PN/SM/SPN/PSM | Seriatim | 1996-2020 | ||||
ULSG08 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2008-2013 | ||||
ULSG12 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2012-2018 | ||||
ULSG17 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2017-2020 | ||||
CURLF | M/F | N/SM | Seriatim | 1985-1996 | ||||
DISCV | M/F | N/SM | Seriatim | 1985-1994 | ||||
LFPLS | M/F | N/SM | Seriatim | 1995-1997 | ||||
SINGL | M/F | N/SM | Seriatim | 1986-1994 | ||||
TRADUL | M/F | N/SM | Seriatim | 2011-2015 | ||||
IUL15 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2015-2019 | ||||
IUL19 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2019-2020 |
*Risk Class Types: | N: | Standard Non-Smoker | PN: | Preferred Non-Smoker | |
SM: | Standard Smoker | PSM: | Preferred Smoker | ||
SPN: | Super-Preferred Non-Smoker | ||||
A: | Aggregate |
Appendix C – Universal Life Models and Assumptions | C-2 |
Milliman client Report
VUL business
The following table summarizes the VUL model inforce as of September 30, 2020, based on seriatim data provided by FBL.
FBL VUL Inforce Summary | ||||||||||||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||
Plan | Description | Policy | Inforce | General Account Value | Separate Account Value | Cash Value | Statutory Reserve | Tax Reserve* | ||||||||||||||||||||||
VU84 | VUL 1996 | 6,829 | $ | 786.7 | $ | 39.3 | $ | 45.1 | $ | 84.4 | $ | 39.7 | $ | 84.4 | ||||||||||||||||
VU96 | VUL 1996 | 21,637 | 2,324.5 | 85.0 | 217.0 | 302.0 | 86.2 | 302.0 | ||||||||||||||||||||||
VUL02 | VUL02 | 2,525 | 350.7 | 11.7 | 31.7 | 43.4 | 11.7 | 43.4 | ||||||||||||||||||||||
VUL05 | VUL05 | 2,342 | 356.3 | 6.0 | 31.6 | 37.6 | 6.0 | 37.6 | ||||||||||||||||||||||
VUL08 | VUL08 | 803 | 160.9 | 1.6 | 12.4 | 14.1 | 1.6 | 14.1 | ||||||||||||||||||||||
LVGTR | LTAs | 1 | n/a | $ | 24.5 | $ | 0.0 | $ | 24.5 | $ | 24.5 | $ | 24.5 | |||||||||||||||||
Total Actual | 34,137 | $ | 3,979.2 | $ | 168.2 | $ | 337.9 | $ | 506.0 | $ | 169.7 | $ | 506.0 | |||||||||||||||||
Total Model | 34,136 | $ | 4,118.9 | $ | 169.5 | $ | 336.5 | $ | 506.0 | $ | 168.9 | $ | 506.0 | |||||||||||||||||
Actual/Model | 100 | % | 97 | % | 99 | % | 100 | % | 100 | % | 100 | % | 100 | % |
* Modeled amounts were used in lieu of missing actuals.
The business is modeled on a seriatim basis by reflecting plan, underwriting class, gender, issue age and issue year as described in the following table:
FBL VUL Business | ||||||||
Business Modeled as of September 30, 2020 | ||||||||
Model Plan | Gender | Risk Class* | Issue Age | Model | ||||
VU84 | M/F | N/PN/SM/SPN/PSM | Seriatim | 1990-1997 | ||||
VU96 | M/F | N/PN/SM/SPN/PSM | Seriatim | 1995-2020 | ||||
VUL02 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2002-2006 | ||||
VUL05 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2005-2008 | ||||
VUL08 | M/F | N/PN/SM/SPN/PSM | Seriatim | 2008-2010 |
*Risk Class Types: | N: | Standard Non-Smoker | PN: | Preferred Non-Smoker | |
SM: | Standard Smoker | PSM: | Preferred Smoker | ||
SPN: | Super-Preferred Non-Smoker | ||||
A: | Unknown |
Appendix C – Universal Life Models and Assumptions | C-3 |
Milliman client Report
NEW BUSINESS PRODUCTION
The following table summarizes the annualized premium production for UL based on the ten year sales forecast provided by FBL.
Production Assumptions ($ in millions) | ||||||
Year Ending September 30th | IUL | |||||
2021 | $ | 25.8 | ||||
2022 | 26.3 | |||||
2023 | 27.9 | |||||
2024 | 29.6 | |||||
2025 | 31.3 | |||||
2026 | 33.4 | |||||
2027 | 35.4 | |||||
2028 | 37.6 | |||||
2029 | 39.7 | |||||
2030 | 41.7 |
Mortality
Base Table: | 2015 VBT ALB - 25 Year Select and Ultimate table, sex and smoker distinct Unisex assumption is 60% male – 40% female blend |
Mortality factors were developed based on experience studies of FBL for the period 2010 through 2019 but with overall adjustments based on the more recent experience 2015 through 2019. Adjustments for old age grading were applied based on both the experience of FBL and trends that we have observed in the industry.
Mortality Factors
FACTORS BY DURATION AND ISSUE YEAR | |||||||||
Duration | Issued Post 1999 | Issued Pre 2000 | |||||||
1-2 | 130.0 | % | 100.0 | % | |||||
3 | 122.5 | 100.0 | |||||||
4 | 115.0 | 100.0 | |||||||
5 | 107.5 | 100.0 | |||||||
6-10 | 100.0 | 100.0 | |||||||
11+ | 95.0 | 100.0 |
FACTORS BY BAND | ||||
Band | Factor | |||
$0 - $99,999.99 | 117.5 | % | ||
$100,000 - $249,999.99 | 117.5 | |||
$250,000 - $499,999.99 | 107.5 | |||
$500,000+ | 107.5 |
Appendix C – Universal Life Models and Assumptions | C-4 |
Milliman client Report
FACTORS BY DURATION AND LINE OF BUSINESS | ||||||||
Duration | UL/ULSG | VUL | ||||||
1-20 | 115 | % | 95 | % | ||||
21-25 | 110 | 95 | ||||||
26-30 | 105 | 95 | ||||||
31+ | 105 | 95 |
FACTORS BY UNDERWRITING CLASS | ||||||||||||
INITIAL FACTOR | ||||||||||||
Underwriting Class | Post 1999 | Pre 2000 | Ultimate Factor | |||||||||
Super Preferred Non-Tobacco | 59 | % | 59 | % | 90 | % | ||||||
Preferred Non-Tobacco | 78 | 78 | 90 | |||||||||
Non-Tobacco | 112 | 95 | 100 | |||||||||
Preferred Tobacco | 80 | 80 | 90 | |||||||||
Tobacco | 100 | 100 | 100 | |||||||||
Non-Tobacco Substandard | 80 x Table Rating | 80 x Table Rating | 100 | |||||||||
Tobacco Substandard | 80 x Table Rating | 80 x Table Rating | 100 | |||||||||
Unismoke (U) | 90 | 90 | 100 |
Beginning in later of Attained Age 80 or the 10th policy year, geometric grade the product of all multiples (excluding future mortality improvement and mortality anti-selection) to the ultimate factor of the 2015 VBT ALB table by Attained Age 100.
Mortality Improvement
Mortality improvement is assumed for 20 years where the cumulative improvement factor is calculated with the specific attained age factor at any point in the future. For example: male, attained age 95, twenty years in the future, the factor is (1-.003) ^ 20. The improvement factors are as follows:
ATTAINED AGE | MALE | FEMALE | ||||||
0-24 | 1.00 | % | 1.00 | % | ||||
25-34 | 1.50 | 1.00 | ||||||
35-44 | 1.00 | 0.50 | ||||||
45-54 | 1.00 | 0.50 | ||||||
55-64 | 1.50 | 1.00 | ||||||
65-74 | 1.50 | 1.00 | ||||||
75-84 | 1.50 | 1.00 | ||||||
85-89 | 1.00 | 0.75 | ||||||
90-94 | 0.67 | 0.50 | ||||||
95-99 | 0.30 | 0.25 | ||||||
100+ | 0.20 | 0.20 |
Past mortality improvement of 3.25 years is assumed from the midpoint of the mortality study to the projection start date as of September 30, 2020, assuming the annual improvement rates specified in the table above.
Appendix C – Universal Life Models and Assumptions | C-5 |
Milliman client Report
Mortality Anti-selection
Mortality anti-selection of 150% grading off to 100% over 10 years is applied to policies which fund the minimum premium required to keep the policy in-force.
LapseS and premiumS
Lapses
UL
Lapse rates are based on the recent experience of the Company based on a study period from 2010 to 2019 as well as our knowledge of similar products within the industry.
Flexible Premium UL
The lapse assumptions for flexible premium UL business without secondary guarantees are summarized in the table below.
Issue Age | |||||||||||||||||||||||||
Duration | 0 - 29 | 30 - 39 | 40 - 49 | 50 - 59 | 60 - 69 | 70+ | |||||||||||||||||||
1-5 | 3.00 | % | 4.00 | % | 3.50 | % | 3.00 | % | 2.25 | % | 1.65 | % | |||||||||||||
6-10 | 2.75 | 3.75 | 3.75 | 3.50 | 2.25 | 2.00 | |||||||||||||||||||
11-15 | 2.75 | 3.50 | 3.50 | 3.00 | 2.50 | 2.00 | |||||||||||||||||||
16+ | 2.50 | 2.50 | 3.00 | 3.00 | 2.50 | 2.00 |
For flexible premium UL using the cash value accumulation test, the following lapse assumptions are assumed. This applies to plan UL10 with secondary plan code 212M1 and 21211.
§ | Non-Smoker: 2.88% |
§ | Smoker: 3.75% |
ULSG
For ULSG business, the following Lapse assumptions are assumed.
Duration | NS | S | |||||||
1-5 | 1.50 | % | 1.75 | % | |||||
6-10 | 1.50 | 1.75 | |||||||
11-15 | 1.35 | 1.50 | |||||||
16+ | 1.25 | 1.35 |
Appendix C – Universal Life Models and Assumptions | C-6 |
Milliman client Report
ULSG Dynamic Lapse
The base lapse rates as summarized in the above tables are adjusted for ULSG products while the secondary guarantee is in effect and the account value drops to zero or the secondary guarantee becomes paid up as follows:
ULSG Lapse Adjustment | ||||
Attained Age >=80, AV > $0 Premium Paying, AV <= $0 Paid Up, AV > $0 | ½Base lapse rate | |||
Paid Up, AV <= $0 | 0 | % |
Fixed Premium UL
For fixed premium UL business, the following lapse assumptions are assumed.
§ | Current Life, LFPLS, DISCV, Single UL: 2.50% |
§ | Traditions UL: 2.80% |
IUL
For index UL business, the following lapse assumptions are assumed.
Product | NS | S | |||||||
GPV | 5.75 | % | 7.50 | % | |||||
CVAT | 2.88 | 3.75 |
Premium
The projected premium assumption for the UL business was based on the Company’s experience. Target premium, last 12 months of collected premium, policy fees and modal loading were provided by the Company.
Flexible Premium UL
For UL products without secondary guarantees projected premiums are 100% of the last 12 months of collected premiums for each policy, except for UL84.
Appendix C – Universal Life Models and Assumptions | C-7 |
Milliman client Report
For UL84, projected premiums are the target premium adjusted by the following multiples based on attained age.
Attained Age | % Target | |||||
25 | 75 | % | ||||
35 | 75 | |||||
45 | 75 | |||||
55 | 80 | |||||
65 | 90 | |||||
75 | 100 | |||||
85 | 125 | |||||
95 | 150 |
In addition, for UL84, when the account value is depleted, catch-up premium is assumed to keep the policies in-force. When catch-up premium commences, the lapse rates are increased by the rates summarized in the table below.
MINIMUM FUNDING LAPSE RATES | ||||||||||||
Attained | YEARS SINCE COMMENCEMENT OF MINIMUM FUNDING | |||||||||||
Age | 0 | 1 | 2+ | |||||||||
0-49 | 4.50 | % | 1.50 | % | 0.75 | % | ||||||
50-59 | 6.00 | 2.00 | 1.00 | |||||||||
60-69 | 7.00 | 2.50 | 1.00 | |||||||||
70-79 | 7.50 | 2.50 | 1.00 | |||||||||
80+ | 8.00 | 2.50 | 1.00 |
ULSG
For ULSG policies in duration 1 at the valuation date, projected premiums are the higher of the last 12 months of collected premiums and the target premium for each policy. Otherwise, projected premiums are 100% of the last 12 months of collected premiums for each policy. Premiums are assumed to be level throughout until the no-lapse guarantee is paid up. Further, policies are not assumed to fund the premium under an annual renewal schedule in the event that the no lapse guarantee and the fund values are exhausted. Based on an analysis of the premium required to keep the policy in force (very high on average) we assumed all policy would lapse in this event.
Fixed Premium UL
For fixed premium UL, projected premiums are 100% of the last 12 months of collected premiums for each policy.
IUL
For IUL policies in duration 1 at the valuation date, projected premiums are 200% of the target premium in the first projected year, and 100% of the target premium thereafter. Otherwise, projected premiums are the last 12 months of collected premiums for each policy, adjusted by 2% premium suspension and floored at the target premium.
Appendix C – Universal Life Models and Assumptions | C-8 |
Milliman client Report
VUL
Lapse rates are based on the recent experience of the Company with study period from 2010 to 2019 as well as our knowledge of similar products within the industry.
The lapse assumptions for VUL business are summarized in the table below.
Issue Age | ||||||||||||||||||||||||
Duration | 0 - 29 | 30 - 39 | 40 - 49 | 50 - 59 | 60 - 69 | 70+ | ||||||||||||||||||
1-5 | 4.50 | % | 6.50 | % | 5.50 | % | 4.75 | % | 5.00 | % | 1.50 | % | ||||||||||||
6-10 | 4.00 | 5.50 | 5.50 | 4.50 | 5.25 | 1.75 | ||||||||||||||||||
11-15 | 3.50 | 3.75 | 3.75 | 3.50 | 4.00 | 2.50 | ||||||||||||||||||
16+ | 3.00 | 3.00 | 3.25 | 4.00 | 3.50 | 3.50 |
Premium
The projected premium assumption for the VUL business was based on the Company’s experience. Target premium, last 12 months of collected premium, policy fees and modal loading were provided by the Company.
For VUL, projected premiums are 85% of the last 12 months of collected premiums for each policy.
Credited Rates
Model credited rate is set to the projected net investment earned rate less target spread, subject to minimum guarantees. USLG08, ULSG12 and ULSG17 are assumed to credit the guaranteed rate throughout the projection as per FBL’s current credited rate policy.
Appendix C – Universal Life Models and Assumptions | C-9 |
Milliman client Report
UL
FBL - Summary of Credited Rates | ||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||
($ in millions) | ||||||||||||||||||||
Plan | Account Value | Weighted Average Credited Rate | Guaranteed Rate | Target Spread | ||||||||||||||||
FlexPremUL | EXTEND | $ | 2.1 | 4.00 | % | 4.00 | % | 2.00 | % | |||||||||||
LSUL1 | 15.4 | 4.50 | 4.50 | 2.00 | ||||||||||||||||
LSUL6 | 15.4 | 4.00 | 4.00 | 1.25 | ||||||||||||||||
U132 | 17.3 | 4.00 | 4.00 | 2.40 | ||||||||||||||||
U136 | 7.8 | 4.00 | 4.00 | 2.60 | ||||||||||||||||
U151 | 5.1 | 3.65 | 3.25 | 2.50 | ||||||||||||||||
U901 | 47.1 | 4.00 | 4.00 | 2.50 | ||||||||||||||||
U921 | 19.2 | 4.25 | 4.25 | 2.00 | ||||||||||||||||
UL02 | 14.9 | 4.00 | 4.00 | 2.00 | ||||||||||||||||
UL05 | 37.9 | 4.00 | 4.00 | 1.25 | ||||||||||||||||
UL10 | 163.4 | 3.00 | 3.00 | 0.95 | ||||||||||||||||
UL15 | 3.5 | 3.00 | 2.00 | 0.40 | ||||||||||||||||
UL84 | 127.8 | 4.50 | 4.50 | 2.00 | ||||||||||||||||
UL96 | 28.7 | 4.50 | 4.50 | 2.00 | ||||||||||||||||
ULSG08 | 49.0 | 3.00 | 3.00 | n/a | ||||||||||||||||
ULSG12 | 25.2 | 3.00 | 3.00 | n/a | ||||||||||||||||
ULSG17 | 3.8 | 2.00 | 2.00 | n/a | ||||||||||||||||
FixedPremUL | CURLF | $ | 139.8 | 3.00 | % | 3.00 | % | 1.95 | % | |||||||||||
DISCV | 19.4 | 3.00 | 3.00 | 2.00 | ||||||||||||||||
LFPLS | 0.7 | 3.00 | 3.00 | 2.00 | ||||||||||||||||
SINGL | 9.2 | 3.00 | 3.00 | 2.00 | ||||||||||||||||
TRADUL | 14.6 | 3.00 | 3.00 | 0.50 | ||||||||||||||||
IUL | IUL15 | $ | 131.9 | 3.50 | % | 1.00 | % | 0.00 | % | |||||||||||
IUL19 | 9.3 | 3.50 | 1.00 | 0.00 | ||||||||||||||||
Total | $ | 908.4 | 3.54 | % | 3.15 | % | 1.41 | % |
VUL
FBL - Summary of GA Credited Rates | ||||||||||||||||||||
As of September 30, 2020 | ||||||||||||||||||||
($ in millions) | ||||||||||||||||||||
Plan | General Account Value | Weighted Average Credited Rate | Guaranteed Rate | Target Spread | ||||||||||||||||
VUL | VU84 | $ | 39.3 | 4.50 | % | 4.50 | % | 2.77 | % | |||||||||||
VU96 | 85.0 | 4.44 | 4.44 | 2.62 | ||||||||||||||||
VUL02 | 11.7 | 4.00 | 4.00 | 2.77 | ||||||||||||||||
VUL05 | 6.0 | 4.00 | 4.00 | 2.77 | ||||||||||||||||
VUL08 | 1.6 | 4.00 | 4.00 | 2.67 | ||||||||||||||||
Total | $ | 143.6 | 4.36 | % | 4.36 | % | 2.67 | % |
Appendix C – Universal Life Models and Assumptions | C-10 |
Milliman client Report
VUL Fund Allocations
The following table summarizes the fund mix for the inforce VUL as of September 2020. The assumed SA returns are 8% for equity funds, 6.40% for balanced funds and 4% for bond funds.
VUL Inforce – BREAKDOWN by FUND | ||||||||||||||||
Fund | Fixed | Equity | Balanced | Bond | ||||||||||||
Allocation | 33.2 | % | 41.1 | % | 18.8 | % | 6.9 | % |
The M&E Fees are as follows:
PLAN | M&E FEES TO VARIABLE ACCOUNTS | |
VUL08 | 0.90% | |
All other plans | 1.2% (y<10), 0.3% after |
Expenses
UL
The acquisition expenses are as follows:
Acquisition Expense | ||||
Percent of Premium Acquisition up to Threshold | 56.00 | % | ||
Percent of Premium Acquisition in Excess of Threshold | 2.30 | % | ||
Per Policy | $ | 51.00 | ||
Per Unit | 1.38 |
The maintenance expenses and premium tax are as follows:
Maintenance Expenses | ||||||||||||
Segment | Per Policy (Fully Allocated) | Premium Tax | Inflation Rate | |||||||||
All UL | $ | 130 | 1.51 | % | 2.5 | % |
The fully allocated maintenance expenses are reduced by 20% such that the projected expenses are at scale according to FBL’s budget after 10 years. The difference between the budget and total unit expenses are captured as unallocated in the appraisal results in Tables I-A and 1-B
Appendix C – Universal Life Models and Assumptions | C-11 |
Milliman client Report
VUL
The maintenance expenses are as follows:
Maintenance Expenses | ||||||||||||
Segment | Per Policy | Premium Tax | Inflation Rate | |||||||||
All VUL | $ | 52 | 1.51 | % | 2.5 | % |
Appendix C – Universal Life Models and Assumptions | C-12 |
Milliman client Report
The fully allocated maintenance expenses are reduced by 20% such that the projected expenses are at scale according to FBL’s budget after 10 years. The difference between the budget and total unit expenses are captured as unallocated in the appraisal results in Tables I-A and 1-B.
Product Features
The major product features are summarized in the following table.
Segment | Plan | Description | EMO | Ins Period | Surrender Charge Period | Loads % of Excess | Loads % of Target | Load per Policy | Load Per Unit | NLG Benefit Period (yrs) | ||||||||||||||||||||||
FlexPremUL | EXTEND | Extend Endowment (set with UL02) | No | A121 | No SC | 0 | % | 0 | % | $ | 36 | No | 0 | |||||||||||||||||||
LSUL1 | LSUL | No | A95 | No SC | 7 | % | 7 | % | $ | 72 | No | 0 | ||||||||||||||||||||
LSUL6 | LSUL06 | No | A121 | No SC | 7 | % | 7 | % | $ | 72 | No | 0 | ||||||||||||||||||||
U132 | Westflex | No | A95 | No SC | 7.5 | % | 7.5 | % | $ | 0 | No | 0 | ||||||||||||||||||||
U136 | UL 100 | No | A100 | 15 years | 4 | % | 4 | % | $ | 72 | No | 0 | ||||||||||||||||||||
U151 | SPWL(WFB) | No | A95 | 8 years | 0 | % | 0 | % | 0 | No | 0 | |||||||||||||||||||||
U901 | ValueLife | No | A95 | No SC | 7 | % | 7 | % | 36 | No | 0 | |||||||||||||||||||||
U921 | ValueLifePlus | No | A95 | No SC | 7 | % | 7 | % | 36 | No | 0 | |||||||||||||||||||||
UL02 | UL02 | No | A115 | 6 years | 2 | % | 7 | % | $120 (yr 1), $60 after | Yes | 0 | |||||||||||||||||||||
UL05 | UL05 | No | A121 | 10 years | 0 | % | 7 | % | $72 (yr 1), $36 (yr 2-10), $0 after | Yes | Max(10, years to Attained Age 65) | |||||||||||||||||||||
UL10 | UL10 | No | A121 | 10 to 15 years | 0% for pre-Aug 2013 issues, 3% otherwise | 5 | % | $72 (yr 1), $36 (yr 2-15), $0 after | Yes | 10-15 | ||||||||||||||||||||||
UL15 | Foundations UL | No | A121 | 9 years | 6 | % | 6 | % | $ | 95 | Yes | 10 | ||||||||||||||||||||
UL84 | OldUL | No | A95 | No SC | 7 | % | 7 | % | $ | 36 | No | 0 | ||||||||||||||||||||
UL96 | OldUL | No | A95 | No SC | 7 | % | 7 | % | $ | 36 | No | 0 | ||||||||||||||||||||
ULSG08 | ULSG 2008 | No | A121 | 19 years | 15 | % | 15 | % | $ | 144 | Yes | A120 | ||||||||||||||||||||
ULSG12 | ULSG 2012 | No | A121 | 19 years | 15 | % | 15 | % | $ | 144 | Yes | A120 | ||||||||||||||||||||
ULSG17 | ULSG 2017 | No | A121 | 19 years | 15% (yr 1), 0% after | 15 | % | $ | 144 | Yes | A121 | |||||||||||||||||||||
FixedPremUL | CURLF | CRLF | No | A95 | No SC | 2 | % | 2 | % | $ | 0 | Yes | 0 | |||||||||||||||||||
DISCV | Discover | No | A100 | No SC | 11.5 | % | 11.5 | % | $ | 30 | No | 0 | ||||||||||||||||||||
LFPLS | LifePlus | No | A100 | 10 years | 11.5 | % | 11.5 | % | $ | 30 | No | 0 | ||||||||||||||||||||
SINGL | SPWL(KFB) | No | A100 | No SC | 11.5 | % | 11.5 | % | 30 | No | 0 | |||||||||||||||||||||
TRADUL | Traditional UL | No | A121 | No SC | 9% (yr 1), 0% after | 9% (yr 1), 0% after | $ | 0 | No | 0 | ||||||||||||||||||||||
IUL | IUL15 | Foundations Indexed Universal Life | No | A121 | 9 years | 6 | % | 6 | % | $96 (yr 1), $36 after | Yes | 10 | ||||||||||||||||||||
IUL19 | Foundations Indexed Universal Life 2019 | No | A121 | 11 years | 6 | % | 6 | % | $96 (yr 1), $36 after | Yes | 11 |
Segment | Plan | Description | EMO | Ins Period | Surrender Charge Period | Loads % of Excess | Loads % of Target | Load per Policy | Load Per Unit | NLG Benefit Period (yrs) | ||||||||||||||||||||||
VUL | VU84 | VUL 1996 | No | A95 | No SC | 7 | % | 7 | % | $ | 36 | Yes | 0 | |||||||||||||||||||
VU96 | VUL 1996 | No | A95 | No SC for FBL, 6 years for AMP | 7 | % | 7 | % | FBL: $36 (iss yr 1988-2020), $0 otherwise AMP: $60 (iss yr 1988-2004), $84 (iss yr 2005-2020), $0 otherwise | Yes | 0 | |||||||||||||||||||||
VUL02 | VUL02 | No | A95 | 6 years | 7 | % | 7 | % | $ | 84 | Yes | 0 | ||||||||||||||||||||
VUL05 | VUL05 | No | A95 | 6 years | 7.0 | % | 7.0 | % | $ | 84 | Yes | 0 | ||||||||||||||||||||
VUL08 | VUL08 | No | A95 | 6 years | 0 | % | 0 | % | FBL: $180 (yr 1-10), $0 after AMP: $60 | Yes | 0 |
Appendix C – Universal Life Models and Assumptions | C-13 |
Milliman client Report
Commissions
UL
Plan | Commission% Up to Target Premium | ||
All Non-TradUL Plans | Issue age 70 and under: Issue age 71-75: Issue age 76+: | 96.57% (yr 1), 4.87% after 77.26% (yr 1), 4.87% after 57.94% (yr 1), 4.87% after | |
TradUL | Issue age 80 and under: Issue age 81-85:Issue age 86+: | 15.45% (yr 1), 0% after |
Plan | Commission% Premium Excess of Target | ||
All Non-TradUL Plans | 7.73% (yr 1), 4.87% after | ||
TradUL | Issue age 80 and under: Issue age 81-85: Issue age 86+: | 15.45% (yr 1), 0% after 9.66% (yr 1), 0% after 5.79% (yr 1), 0% after |
VUL
Commission% | ||
Up to Target Premium | 86.42% (yr 1), 5% after | |
Excess of Target | 86.42% (yr 1), 5% after |
Appendix C – Universal Life Models and Assumptions | C-14 |
Milliman client Report
Policy Loans
FBL – Summary of policy loans
As of September 30, 2020
($ in millions)
Policy | Credited | Earned | ||||||||||||
Plan | Loan | Rate | Rate | |||||||||||
FlexPremUL | EXTEND | $ | 0.0 | 4.50 | % | 7.99 | % | |||||||
LSUL1 | 0.1 | 4.50 | 7.99 | |||||||||||
LSUL6 | 0.1 | 4.50 | 7.99 | |||||||||||
U132 | 0.5 | 3.16 | 4.84 | |||||||||||
U136 | 0.4 | 3.16 | 4.84 | |||||||||||
U151 | 0.9 | 3.16 | 4.84 | |||||||||||
U901 | 1.1 | 4.00 | 8.00 | |||||||||||
U921 | 0.2 | 4.25 | 8.00 | |||||||||||
UL02 | 0.6 | 4.00 | 4.50 | |||||||||||
UL05 | 1.4 | 4.00 | 4.50 | |||||||||||
UL10 | 2.6 | 3.00 | 4.50 | |||||||||||
UL15 | 0.0 | 4.00 | 4.25 | |||||||||||
UL84 | 2.0 | 4.50 | 7.99 | |||||||||||
UL96 | 0.8 | 4.50 | 7.99 | |||||||||||
ULSG08 | 0.3 | 3.00 | 6.00 | |||||||||||
ULSG12 | 0.1 | 3.00 | 6.00 | |||||||||||
ULSG17 | 0.0 | 2.00 | 7.40 | |||||||||||
FixedPremUL | CURLF | $ | 0.3 | 3.16 | % | 4.84 | % | |||||||
DISCV | 0.1 | 3.00 | 4.45 | |||||||||||
LFPLS | 0.0 | 3.00 | 4.45 | |||||||||||
SINGL | 0.0 | 3.00 | 4.45 | |||||||||||
TRADUL | 0.0 | 3.00 | 4.50 | |||||||||||
IUL | IUL15 | $ | 0.0 | 0.00 | % | 0.00 | % | |||||||
IUL19 | 0.0 | 0.00 | 0.00 | |||||||||||
Total | $ | 11.4 | 3.72 | % | 5.90 | % |
FBL - Summary of Policy Loans
As of September 30, 2020
($ in millions)
Policy | Credited | Earned | ||||||||||||
Plan | Loan | Rate | Rate | |||||||||||
VUL | VU84 | $ | 1.6 | 4.50 | % | 8.00 | % | |||||||
VU96 | 8.9 | 4.37 | 7.09 | |||||||||||
VUL02 | 2.6 | 4.00 | 4.49 | |||||||||||
VUL05 | 1.7 | 4.00 | 4.49 | |||||||||||
VUL08 | 0.8 | 4.00 | 4.49 | |||||||||||
Total | $ | 15.6 | 4.26 | % | 6.33 | % |
Statutory Reserves
Statutory reserves were calculated consistent with FBL’s reserving methodology.
Appendix C – Universal Life Models and Assumptions | C-15 |
Milliman client Report
Reinsurance
FBL cedes mortality risks via YRT in excess of retention limits. The retention limits are $1 million for issue ages under 65 and $0.75 million for issue ages over 65. Reinsurance on VUL business is not modeled due to immateriality.
Reinsurance Summary for UL
($ in millions)
Reinsurer | Ceded Face | Ceded Reserve* | ||||||
A | $ | 339.9 | $ | 1.6 | ||||
B | 328.6 | 0.8 | ||||||
C | 97.8 | 0.4 | ||||||
D | 40.8 | 0.1 | ||||||
E | 29.1 | 0.0 | ||||||
Other | 97.1 | 0.2 | ||||||
Total | $ | 933.3 | $ | 3.1 |
*Modeled amounts were used in lieu of missing actuals
TAX ReSERVES
Federal Income Tax: | 21% |
DAC Proxy Tax: | 9.2% of future direct premium net of third party reinsurance cash flows amortized over fifteen years. |
Tax Reserves: | Tax reserves are equal to 92.81% of the statutory reserve floored at the cash value. |
NON-MODELED
Reserves related to non-deduction of premium, accidental death benefits, disability waiver of premium benefits and other riders were not modeled.
Appendix C – Universal Life Models and Assumptions | C-16 |
Milliman client Report
Appendix D – Annuity Models and Assumptions
Deferred Annuities
The following table summarizes the modeled deferred annuity inforce as of September 30, 2020, based on seriatim data provided by the Company. Note that production for payout annuities are mapped into FIA due to materiality.
Deferred Annuity Inforce as of September 30, 2020 ($ in millions) | ||||||||||||||||||||||||||||||
Model Plan | Description | Count | Account Value | Cash Value | GLWB | GMDB | GMIB | Stat Reserve | ||||||||||||||||||||||
FIA | ||||||||||||||||||||||||||||||
AGLTY6 | Agility6 Single Premium FIA | 13 | $ | 0.6 | $ | 0.6 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.6 | ||||||||||||||||
FIDX17 | AccumuLock Flexible Premium FIA | 4,096 | 411.9 | 381.8 | 325.2 | 0.0 | 0.0 | 397.6 | ||||||||||||||||||||||
FINDX | Asset Guardian Flexible Premium FIA | 126 | 6.7 | 6.7 | 0.0 | 0.0 | 0.0 | 6.7 | ||||||||||||||||||||||
IDX12 | Income Guard Single Premium FIA | 3,694 | 401.8 | 384.8 | 393.6 | 0.0 | 0.0 | 407.0 | ||||||||||||||||||||||
Total FIA | 7,929 | $ | 821.0 | $ | 773.9 | $ | 718.9 | $ | 0.0 | $ | 0.0 | $ | 811.8 | |||||||||||||||||
Individual FA | ||||||||||||||||||||||||||||||
INTBR | Interest Builder FPDA | 200 | $ | 6.3 | $ | 6.3 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 6.3 | ||||||||||||||||
KAN06 | Kansas Annuities | 3,157 | 283.6 | 283.6 | 0.0 | 0.0 | 0.0 | 283.6 | ||||||||||||||||||||||
MV4 | Select IV MYGA 4 SPDA | 3,019 | 320.5 | 307.4 | 0.0 | 0.0 | 0.0 | 309.9 | ||||||||||||||||||||||
NEWM8 | New Money 8 | 47 | 3.1 | 3.1 | 0.0 | 0.0 | 0.0 | 3.1 | ||||||||||||||||||||||
OldAnn | Old Annuities | 15,502 | 729.5 | 729.5 | 0.0 | 0.0 | 0.0 | 729.5 | ||||||||||||||||||||||
POR10 | Select IV Portfolio 10 FPDA | 12,555 | 663.5 | 654.9 | 0.0 | 0.0 | 0.0 | 655.0 | ||||||||||||||||||||||
PORT0 | Portfolio FPDA | 57 | 17.9 | 17.9 | 0.0 | 0.0 | 0.0 | 17.9 | ||||||||||||||||||||||
PORT6 | Select IV Portfolio 6 FPDA | 6,685 | 325.2 | 323.4 | 0.0 | 0.0 | 0.0 | 323.4 | ||||||||||||||||||||||
DA01N | Miscellaneous Deferred Annuities | 16 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | ||||||||||||||||||||||
LVGTR, DIVACC | LTA Allocated to Annuities | 2 | 33.4 | 33.4 | 0.0 | 0.0 | 0.0 | 33.4 | ||||||||||||||||||||||
SYSW | Systematic Withdrawals | 23 | 1.2 | 1.2 | 0.0 | 0.0 | 0.0 | 1.2 | ||||||||||||||||||||||
FIX, FLOAT | FHLB Advances | 214 | 626.5 | 626.5 | 0.0 | 0.0 | 0.0 | 626.5 | ||||||||||||||||||||||
Total Individual FA | 41,477 | $ | 3,010.9 | $ | 2,987.4 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 2,990.0 | |||||||||||||||||
VA | ||||||||||||||||||||||||||||||
VA94N, VA94Y | FBL VA94 | 3,400 | $ | 223.2 | $ | 223.2 | $ | 0.0 | $ | 257.9 | $ | 0.0 | $ | 223.2 | ||||||||||||||||
VA02N, VA02Y | FBL VA02 | 4,020 | 234.1 | 234.1 | 0.0 | 239.9 | 0.0 | 234.1 | ||||||||||||||||||||||
VA08N, VA08Y | FBL VA08 | 801 | 55.3 | 55.3 | 0.0 | 56.8 | 12.3 | 55.3 | ||||||||||||||||||||||
VA94N, VA94Y | ET-I VA | 1,050 | 49.7 | 49.7 | 0.0 | 58.1 | 0.0 | 49.7 | ||||||||||||||||||||||
VA02Y | ET-I VA | 15 | 0.3 | 0.3 | 0.0 | 0.3 | 0.0 | 0.3 | ||||||||||||||||||||||
VA08N, VA08Y | ET-I (2008) VA | 29 | 1.5 | 1.5 | 0.0 | 1.5 | 0.5 | 1.5 | ||||||||||||||||||||||
LVGTR | LTVA | 1 | 2.5 | 2.5 | 0.0 | 0.0 | 0.0 | 2.5 | ||||||||||||||||||||||
Total VA | 9,316 | $ | 566.5 | $ | 566.5 | $ | 0.0 | $ | 614.5 | $ | 12.8 | $ | 566.5 | |||||||||||||||||
Group FA | ||||||||||||||||||||||||||||||
DAF | Deposit administration funds | 984 | $ | 191.9 | $ | 191.9 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 191.9 | ||||||||||||||||
INTER | RPS Deferred Vested | 113 | 7.6 | 7.6 | 0.0 | 0.0 | 0.0 | 7.6 | ||||||||||||||||||||||
401K, 401K1, DFVES | Group PEN | 900 | 28.9 | 28.9 | 0.0 | 0.0 | 0.0 | 28.9 | ||||||||||||||||||||||
Total Group FA | 1,997 | $ | 228.5 | $ | 228.5 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 228.5 | |||||||||||||||||
Total Deferred Annuities | 60,719 | $ | 4,627.0 | $ | 4,556.3 | $ | 718.9 | $ | 614.5 | $ | 12.8 | $ | 4,596.8 | |||||||||||||||||
Modeled | 60,500 | 4,628.1 | $ | 4,557.8 | $ | 4,594.4 | ||||||||||||||||||||||||
Actual / Modeled | 100.4 | % | 100.0 | % | 100.0 | % | 100.1 | % |
Appendix D – Annuity Models and Assumptions | D-1 |
Milliman client Report
New Business Production
The following table summarizes the annual premium production for deferred annuities based on the ten-year sales forecast provided by FBL.
PRODUCTION ASSUMPTIONS ($ IN MILLIONS) | ||||
Year Ending September 30th | FA | FIA | ||
2021 | $25.3 | $152.4 | ||
2022 | 25.3 | 158.8 | ||
2023 | 25.5 | 166.6 | ||
2024 | 25.8 | 174.6 | ||
2025 | 26.2 | 182.6 | ||
2026 | 26.6 | 190.7 | ||
2027 | 27.0 | 198.8 | ||
2028 | 27.5 | 205.4 | ||
2029 | 28.1 | 214.0 | ||
2030 | 28.8 | 221.9 |
Model Assumptions
Lapse Rates
Lapse rates are based on experience studies, pricing assumptions and typical industry assumptions and trends we have observed in the industry.
FIA
1. | FIA without GLWB: The Agility6 is a single premium indexed annuity with 6-year surrender charge period sold as an accumulation annuity, with no GLWB rider. |
LAPSE RATES –FIA WITHOUT GLWB | ||||||||||||||||||||||||||||||||||||||||||||||||
DURATION | ||||||||||||||||||||||||||||||||||||||||||||||||
Plan | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12+ | ||||||||||||||||||||||||||||||||||||
Agility6 | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 10.0 | % | 10.0 | % | 10.0 | % | 10.0 | % | 10.0 | % |
A shock lapse rate of 80% is assumed at the end of the surrender charge period.
The Flexible Premium FIA, sold from 2005 to 2008, does not have a GLWB. All of these contracts are out of surrender charge period. The assumed lapse rate is 3.70%.
2. | FIA sold with GLWB: the Income Guard and AccumuLock products are sold with a GLWB rider, where the policyholder may choose to activate the rider (start accumulation) based on a minimum account value and attained age. These plans have a 9-year surrender charge period. |
Appendix D – Annuity Models and Assumptions | D-2 |
Milliman client Report
LAPSE RATES – INCOME GUARD, ACCUMULOCK FIA BY GLWB STATUS | ||||||||||||||||||||||||||||||||||||||||||||||||
DURATION | ||||||||||||||||||||||||||||||||||||||||||||||||
GLWB Status | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12+ | ||||||||||||||||||||||||||||||||||||
GLWB not activated | 2.50 | % | 2.75 | % | 3.00 | % | 3.25 | % | 3.50 | % | 3.75 | % | 4.00 | % | 4.25 | % | 4.50 | % | 4.75 | % | 5.00 | % | 10.00 | % | ||||||||||||||||||||||||
GLWB, accumulation phase | 1.25 | 1.38 | 1.50 | 1.63 | 1.75 | 1.88 | 2.00 | 2.13 | 2.25 | 2.38 | 2.50 | 5.00 | ||||||||||||||||||||||||||||||||||||
GLWB, payout phase | 1.25 | 1.38 | 1.50 | 1.63 | 1.75 | 1.88 | 2.00 | 2.00 | 2.00 | 1.00 | 1.00 | 1.00 |
For contracts that have not activated the GLWB, there is a 20% shock lapse that applies at the beginning of year 10. If the GLWB has been activated, but has not yet started the payout phase, the shock lapse rate is 15%; for contracts with GLWB in payout phase, no shock lapse is assumed.
The lapse rate is set to 0% once the AV is zero, after GLWB payouts begin.
FA
The assumption is consistent with the Company’s current best estimate lapse assumptions for the FA and reflect recent experience.
The MYGA4 has a 4-year guaranteed interest rate period; at the end of four years, the policyholder may renew into a new 4-year guarantee period (with surrender charges that also re-start), or renew to an ultimate bucket with no surrender charges and no rate guarantee period. The plan is modeled assuming that at the end of the guarantee period, remaining contracts renew for a new 4-year period.
The lapse rates are shown in the table below.
LAPSE RATES – MYGA4 FIXED DEFERRED ANNUITY, 4-YEAR GUARANTEE PERIOD | ||
Duration | Lapse Rate | |
1 | 1.00% | |
2 | 2.00 | |
3 | 2.00 | |
4 | 50.00 |
For FA products other than MYGA4, the lapse rates are higher in the first 3 years of the projection, reflecting recent experience, and then revert to a lower level that is more in line with long-term expected levels. Lapse rates also differ by guaranteed rate (under 3.00% versus 3.00% and above) and the point in the surrender charge period.
The following assumptions apply to the business with guarantees under 3.00%. Business with guarantees at 3.00% or higher are out of the surrender charge period and a 2.00% lapse rate is assumed in all years.
LAPSE RATES – FA, GUARANTEED INTEREST < 3.00% | ||||||||||||||
LAPSE RATE | ||||||||||||||
Plan | Projection Year | Within SC Period | Shock Lapse | Ultimate | ||||||||||
Portfolio 6 | 1-3 | 2.00 | % | 20.00 | % | 6.00 | % | |||||||
4+ | 1.50 | 15.00 | 4.50 | |||||||||||
Portfolio 10, Other | 1-3 | 2.00 | % | 15.00 | % | 6.00 | % | |||||||
4+ | 1.50 | 11.25 | 4.50 |
Appendix D – Annuity Models and Assumptions | D-3 |
Milliman client Report
VA
Lapse assumptions for VA vary by the length of the surrender charge period, however, the Company is no longer selling these products and nearly all of the contracts are beyond the surrender charge period.
LAPSE RATES – VA | |||||||||||||||||||||||||||||||||||||||
Surrender | DURATION | ||||||||||||||||||||||||||||||||||||||
Charge Period | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12+ | |||||||||||||||||||||||||||
6 Years | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 4.00 | % | 15.00 | % | 4.50 | % | 4.50 | % | 4.50 | % | 4.50 | % | 4.50 | % | |||||||||||||||
7 Years | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 15.00 | 4.50 | 4.50 | 4.50 | 4.50 | |||||||||||||||||||||||||||
8 Years | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 15.00 | 4.50 | 4.50 | 4.50 |
The LVGTR plan is assumed to have 0% lapse rate in projection years 1 through 10, and 5% per year thereafter.
Group Deferred Annuities
We used the Company’s lapse assumptions for the group deferred annuities, which are connected with retirement savings or pension plans. The assumptions are summarized in the following table.
LAPSE RATES – GROUP DEFERRED ANNUITIES | |||||||
Plan | Description | Lapse Rate | |||||
401K | Group deferred annuity, where withdrawals are retirement distributions or transfers between 401k options | 32% per year | |||||
DFVES | 0% | ||||||
DAF | Group deferred annuities, FBL employees | 11% per year | |||||
FIX | FHLB | 0% | |||||
FLOAT | FHLB | 0% | |||||
INTER | Deferred annuity funded by a defined benefit pension plan, with payouts starting at age 65 | Attained Age 0-63, 0%; 64-69, 98%, 70, 100% |
Interest-Sensitive Dynamic Lapse Adjustments
We used our standard interest-sensitive dynamic lapse adjustment. The interest-sensitive dynamic lapse adjustment is an additive adjustment to the base lapse rate for FA. The excess lapse adjustment is capped at an annual rate of 60% and floored at 0%.
Appendix D – Annuity Models and Assumptions | D-4 |
Milliman client Report
The dynamic lapse adjustment is given by:
Excess (annual) Lapse % = min[ 0.6, 0.01 * max(0, 2.25 * (min {A, B})^2) ]
Where
A = max(MR – CR – SC/4, 0)
B = max(MR – CR – 0.50, 0)
MR = competitor rate * 100, where competitor rate for MYGA4 is the 5-year Treasury rate and for the flexible premium plans, the 7-year Treasury plus 100 bp
CR = credited rate * 100
SC = (1 – CV/AV) * 100
ITM Dynamic Lapse Adjustments
FIA contracts with GLWB are subject to a dynamic lapse adjustment that reflects the degree to which the GLWB benefit base is in the money. We used the Company’s formula. The ITM dynamic lapse adjustment is multiplicative (multiplied by the base lapse rate plus any shock lapse) and is floored at 10%, if triggered.
Max(0.1, 1 – 1.25 x (GLWBITM% - 1.1))
Where
GLWBITM% = Benefit Base / Account Value
Partial Withdrawals
The partial withdrawal rate assumption varies by product type, as described below. For all products, except the group deferred annuities, 50% of partial withdrawals are assumed to be penalty-free, if within the surrender charge period. The assumptions do not vary by tax-qualified status. Rates are based on the Company’s experience.
FIA
For contracts with no (or non-activated) GLWB, 3.25% in all years
For contracts with activated GLWB, 0%
FA
MYGA4 – 1.00%
All Other – As with full surrenders, the partial withdrawal assumptions differ by the projection year, the guaranteed interest rate, and whether the policy is within or out of the surrender charge period.
Appendix D – Annuity Models and Assumptions | D-5 |
Milliman client Report
All business with guaranteed rate of 3.00% of higher is out of the surrender charge period. The partial withdrawal is assumed to be 3.50% in projection years 1-3 and 3.25% thereafter (level without a shock lapse) for such contracts.
For business with guaranteed rate less than 3.00%, the assumptions are shown in the following table:
PARTIAL WITHDRAWALS FOR FA, GUARANTEED INTEREST < 3.00% | ||||||||||||
Projection Year | Within SC Period | Shock Lapse | Ultimate | |||||||||
1-3 | 3.50 | % | 9.75 | % | 3.50 | % | ||||||
4+ | 3.25 | % | 9.50 | % | 3.25 | % |
VA: 2.25%
Group Deferred Annuities: the only partial withdrawals assumed are for the FIX and FLOAT plans, where it is assumed that interest is withdrawn.
GLWB Utilization Rates
For contracts with GLWB in payout phase as of the valuation date, the full utilization of the maximum benefit withdrawal amount is assumed to apply immediately. Contracts that have not begun taking withdrawal benefits are segmented into deferral periods, depending on issue age and the GLWB roll-up percent, as summarized below. Each such contract was randomly assigned to a deferral period using a Monte Carlo approach.
Table of GLWB Utilization by Deferral Period 6% or 7% ROLL-UP | ||||||||||||||||||||
DEFERRAL PERIOD | ||||||||||||||||||||
Issue Age | 1 | 6 | 11 | 21 | Never | |||||||||||||||
0 to 54 | 0.00 | % | 0.00 | % | 10.00 | % | 85.00 | % | 5.00 | % | ||||||||||
55 to 64 | 2.63 | 10.53 | 43.42 | 33.42 | 10.00 | |||||||||||||||
65 to 74 | 6.41 | 35.26 | 41.67 | 8.66 | 8.00 | |||||||||||||||
75 to 84 | 18.04 | 51.55 | 20.62 | 2.79 | 7.00 | |||||||||||||||
85+ | 23.75 | 68.75 | 5.00 | 0.00 | 2.50 |
Table of GLWB Utilization by Deferral Period 4% ROLL-UP | ||||||||||||||||||||
DEFERRAL PERIOD | ||||||||||||||||||||
Issue Age | 1 | 6 | 11 | 21 | Never | |||||||||||||||
0 to 54 | 0.00 | % | 0.00 | % | 10.00 | % | 80.00 | % | 10.00 | % | ||||||||||
55 to 64 | 1.52 | 12.12 | 43.94 | 32.42 | 10.00 | |||||||||||||||
65 to 74 | 3.82 | 36.26 | 40.08 | 11.84 | 8.00 | |||||||||||||||
75 to 84 | 13.59 | 58.42 | 20.38 | 0.61 | 7.00 | |||||||||||||||
85+ | 17.50 | 75.00 | 2.50 | 0.00 | 5.00 |
As modeled, the withdrawals start at the beginning of the deferral year. For example, a deferral period of 6 years means that the rider was in accumulation phase for 5 full years before withdrawals commenced.
Appendix D – Annuity Models and Assumptions | D-6 |
Milliman client Report
Crediting Strategy
FIA
There are two indexed fund options for the flexible premium FIAs: an annual point-to-point and a monthly averaging based on the S&P 500 and subject to a cap. The Agility6, which is a single premium annuity, offers a 2-year point-to-point strategy. As of September 2020, about 50% of the account value was in the monthly averaging strategy, 37% in the point-to-point, and 14% in the fixed account.
For modeling purposes, all indexed funds are credited interest based on an option budget approach, where the option budget is based on the net investment earnings rate less the target spread. The credited interest is 120% of the option budget to reflect an equity kicker.
Indexed Annuity Fund Balances | ||||||||||||||||||||
Plan | Fund | AV ($millions) | Guar Int/Min Cap | Curr Int/Cap | Target Spread | |||||||||||||||
AGLTY6 | 2YPTP | $ | 0.6 | 1.00 | % | ? | 2.90 | % | ||||||||||||
FIDX17 | FIXED | 39.3 | 1.00 | 1.49 | 1.80 | |||||||||||||||
FIDX17 | FIXED | 2.5 | 1.50 | 1.50 | 1.80 | |||||||||||||||
FIDX17 | 1YPTP | 171.1 | 1.00 | 3.81 | 1.73 | |||||||||||||||
FIDX17 | MAVG | 199.0 | 1.00 | 4.54 | 1.73 | |||||||||||||||
FINDX | MAVG | 6.7 | 6.00 | 6.00 | 1.73 | |||||||||||||||
IDX12 | FIXED | 73.0 | 1.00 | 1.90 | 1.90 | |||||||||||||||
IDX12 | 1YPTP | 129.1 | 1.00 | 3.72 | 1.73 | |||||||||||||||
IDX12 | MAVG | 199.6 | 1.00 | 4.44 | 1.73 | |||||||||||||||
Total | $ | 821.0 | 1.04 | % | 3.85 | % | 1.75 | % |
FA
The credited interest rate is at the guarantee for about 86% of the FA block, based on the account value inforce as of September 30, 2020. Of the current-selling plans, the MYGA4 is a new money product, while the Portfolio 6 and Portfolio 10 has a portfolio crediting strategy. The table below summarizes the crediting rates and target spreads.
FA– Current and Guaranteed Interest Rates | ||||||||||||||||||||||||
Plan | AV ($millions) | AV at Guar ($millions) | Guar Int | Avg Curr Int | Target Spread | Strategy | ||||||||||||||||||
MV4 | $ | 288.4 | $ | 0.0 | 1.00 | % | 2.09 | % | 1.28 | % | N | |||||||||||||
MV4 | 32.1 | 0.0 | 1.50 | 2.21 | 1.28 | N | ||||||||||||||||||
PORT6 | 171.3 | 171.3 | 1.00 | 1.00 | 2.11 | P | ||||||||||||||||||
PORT6 | 2.2 | 2.2 | 1.50 | 1.50 | 2.11 | P | ||||||||||||||||||
PORT6 | 5.3 | 5.3 | 2.00 | 2.00 | 2.11 | P | ||||||||||||||||||
PORT6 | 12.2 | 12.2 | 2.10 | 2.10 | 2.11 | P | ||||||||||||||||||
PORT6 | 7.2 | 7.2 | 2.65 | 2.65 | 2.11 | P | ||||||||||||||||||
PORT6 | 127.0 | 127.0 | 3.00 | 3.00 | 2.11 | P | ||||||||||||||||||
POR10 | 316.0 | 316.0 | 1.00 | 1.00 | 1.76 | P | ||||||||||||||||||
POR10 | 5.5 | 5.5 | 1.50 | 1.50 | 1.76 | P | ||||||||||||||||||
POR10 | 0.0 | 0.0 | 1.60 | 1.60 | 1.76 | P | ||||||||||||||||||
POR10 | 14.9 | 14.9 | 2.00 | 2.00 | 1.76 | P | ||||||||||||||||||
POR10 | 35.6 | 35.6 | 2.10 | 2.10 | 1.76 | P | ||||||||||||||||||
POR10 | 0.0 | 0.0 | 2.25 | 2.25 | 1.76 | P | ||||||||||||||||||
POR10 | 30.4 | 30.4 | 2.65 | 2.65 | 1.76 | P |
Appendix D – Annuity Models and Assumptions | D-7 |
Milliman client Report
FA- CURRENT AND GUARANTEED INTEREST RATES | ||||||||||||||||||||||||
Plan | AV ($millions) | AV at Guar ($millions) | Guar Int | Avg Curr Int | Target Spread | Strategy | ||||||||||||||||||
POR10 | 260.9 | 260.9 | 3.00 | 3.00 | 1.76 | P | ||||||||||||||||||
NEWM8 | 1.0 | 1.0 | 1.00 | 1.00 | 0.14 | N | ||||||||||||||||||
NEWM8 | 0.9 | 0.9 | 1.50 | 1.50 | 0.14 | N | ||||||||||||||||||
NEWM8 | 1.2 | 1.2 | 2.00 | 2.00 | 0.14 | N | ||||||||||||||||||
PORT0 | 9.6 | 9.6 | 1.00 | 1.00 | 1.66 | P | ||||||||||||||||||
PORT0 | 0.3 | 0.3 | 1.50 | 1.50 | 1.66 | P | ||||||||||||||||||
PORT0 | 0.3 | 0.3 | 2.00 | 2.00 | 1.66 | P | ||||||||||||||||||
PORT0 | 0.0 | 0.0 | 2.10 | 2.10 | 1.66 | P | ||||||||||||||||||
PORT0 | 0.1 | 0.1 | 2.65 | 2.65 | 1.66 | P | ||||||||||||||||||
PORT0 | 7.7 | 7.7 | 3.00 | 3.00 | 1.66 | P | ||||||||||||||||||
INTBR | 3.7 | 0.0 | 1.00 | 1.95 | 1.75 | P | ||||||||||||||||||
INTBR | 0.7 | 0.0 | 1.50 | 2.13 | 1.75 | P | ||||||||||||||||||
INTBR | 1.9 | 0.0 | 2.00 | 2.47 | 1.75 | P | ||||||||||||||||||
INTBR | 0.0 | 0.0 | 3.00 | 3.00 | 1.75 | P | ||||||||||||||||||
KAN06 | 283.6 | 283.6 | 4.00 | 4.01 | 2.20 | P | ||||||||||||||||||
OLDANN | 14.9 | 14.9 | 1.00 | 1.00 | 2.21 | P | ||||||||||||||||||
OLDANN | 2.6 | 2.6 | 1.50 | 1.50 | 2.21 | P | ||||||||||||||||||
OLDANN | 40.6 | 40.6 | 2.00 | 2.00 | 2.21 | P | ||||||||||||||||||
OLDANN | 0.4 | 0.4 | 2.50 | 2.50 | 2.21 | P | ||||||||||||||||||
OLDANN | 483.3 | 483.3 | 3.00 | 3.01 | 2.21 | P | ||||||||||||||||||
OLDANN | 0.5 | 0.5 | 3.50 | 3.50 | 2.21 | P | ||||||||||||||||||
OLDANN | 78.8 | 78.8 | 4.00 | 4.00 | 2.21 | P | ||||||||||||||||||
OLDANN | 81.7 | 81.7 | 4.50 | 4.50 | 2.21 | P | ||||||||||||||||||
OLDANN | 1.3 | 1.3 | 5.00 | 5.00 | 2.21 | P | ||||||||||||||||||
OLDANN | 25.1 | 25.1 | 5.50 | 5.50 | 2.21 | P | ||||||||||||||||||
DA01N | 0.1 | 0.1 | 3.00 | 3.00 | 2.20 | P | ||||||||||||||||||
Total | $ | 2,349.7 | $ | 2,022.9 | 2.47 | % | 2.62 | % | 1.93 | % |
VA Fund Allocations
The following table summarizes the fund mix for the inforce VA as of September 2020. The interest credited on the fixed account is at the guaranteed minimum rate of 3.00%.
VA Inforce – BREAKDOWN by FUND | ||||||||||||||||||||||||
Fund | Fixed | Large Cap | Mid Cap | Small Cap | Balanced | Bond | ||||||||||||||||||
Allocation | 39 | % | 30 | % | 9 | % | 4 | % | 9 | % | 9 | % |
Mortality
The mortality assumption for all of the deferred annuity business, except the group deferred annuities, is 80% of the 2012 IAM Basic table, with G2 improvement scale. The assumption is based on the overall experience for the deferred annuity business.
For the VA, in particular, the stand-alone experience did not indicate higher mortality than for all deferred annuities, despite the fact that over 90% of the VA have some form of GMDB in excess of return of premium. Therefore, we believe it is reasonable to use the common assumption for the entire block.
Appendix D – Annuity Models and Assumptions | D-8 |
Milliman client Report
For the group deferred annuities, no mortality is assumed.
Renewal Premiums
The following table shows the assumed renewal premiums for the deferred annuities, expressed as a percentage of account value:
DEFERRED ANNUITY RENEWAL PREMIUMS | |
Plan | Renewal Premium, as Percent of Account Value |
KAN06 | 2.00% |
OLDANN | 0%, if guaranteed interest < 3% 2.00%, if guaranteed interest >= 3% |
POR10 | 2.00% |
PORT6 | 2.00% |
FIDX17 | 4.00% 0% for contracts that have GLWB in payout phase |
VA | 1.00% for Company AMP 4.00% for Company FBL |
Tax Qualified
Thirty-three percent (33%) of the FIA and FA new business is assumed to be tax-qualified.
Commissions
Percent of premium commissions are shown in the table below.
COMMISSION RATES - % of PREMIUM | ||||||||||||||||||||||||||||||||||||||
LOB | Plan | Issue Age | DURATION | |||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ | ||||||||||||||||||||||||||||
FIA | AGILITY6 | 0-80 | 3.27 | % | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | ||||||||||||||||||||||||
81+ | 2.30 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |||||||||||||||||||||||||||
AccumuLock | 0-80 | 4.89 | 4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | 4.59 | % | 2.29 | % | 2.29 | % | ||||||||||||||||
81+ | 3.91 | 3.61 | 3.61 | 3.61 | 3.61 | 3.61 | 3.61 | 3.61 | 3.61 | 1.81 | 1.81 | |||||||||||||||||||||||||||
FA | MYGA4 | 0-80 | 2.30 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |||||||||||||||||||||||||
81+ | 1.65 | NA | NA | NA | NA | NA | NA | NA | NA | NA | NA | |||||||||||||||||||||||||||
Portfolio 6 | 0-80 | 3.59 | 3.29 | 3.29 | 3.29 | 3.29 | 3.29 | 1.65 | 1.65 | 1.65 | 1.65 | 1.65 | ||||||||||||||||||||||||||
81+ | 2.30 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 1.00 | 1.00 | 1.00 | 1.00 | 1.00 | |||||||||||||||||||||||||||
Portfolio 10 | 0-80 | 3.59 | 3.29 | 3.29 | 3.29 | 3.29 | 3.29 | 3.29 | 3.29 | 3.29 | 3.29 | 1.65 | ||||||||||||||||||||||||||
81+ | 2.30 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 2.00 | 1.00 |
For MYGA 4 contracts that renew into a new 4-year interest guarantee period, there is a commission based on the account value at renewal. The renewal commission rates are 1.15% for attained ages up to 80 and 0.825% for attained ages 81 and older.
The VA have a percent of premium commission of 2.50% for FBL and 5.00% for AMP.
There are no trail commissions.
Appendix D – Annuity Models and Assumptions | D-9 |
Milliman client Report
Expenses
DEFERRED ANNUITY EXPENSE ASSUMPTIONS | ||||||||||||||||
FIA | Individual FA | VA | Group | |||||||||||||
Acquisition Expense | ||||||||||||||||
Per policy | $ | 46 | $ | 46 | None | None | ||||||||||
% of Premium | 2.30 | % | 2.30 | % | None | None | ||||||||||
Maintenance Expense (fully allocated) | ||||||||||||||||
Per Policy | $ | 63.55 | $ | 63.55 | $ | 138 | $ | 63.55 | ||||||||
Inflation | 2.50 | % | 2.50 | % | 2.50 | % | 2.50 | % | ||||||||
% of Account Value | 0.0292%, deducted monthly | 0.0292%, deducted monthly | None | None |
The fully allocated maintenance expenses are reduced by 20% such that the projected expenses are at scale according to FBL’s budget after 10 years. The difference between the budget and total unit expenses are captured as unallocated in the appraisal results in Tables I-A and 1-B
Product Specifications
Surrender Charges
The table below shows the plans that have contracts inforce currently within the surrender charge period.
Surrender Charges | ||||||||||||||||||||||||||||||||||||||||
LOB | Plan | Issue Age | DURATION | |||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11+ | ||||||||||||||||||||||||||||||
FIA | AGILITY6 | All | 9 | % | 8 | % | 7 | % | 6 | % | 4 | % | 2 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||||||||||
AccumuLock | All | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 | 0 | 0 | ||||||||||||||||||||||||||||
FA | MYGA4 | All | 8 | 6 | 4 | 2 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
Portfolio 6 | All | 7 | 6 | 5 | 4 | 3 | 2 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Portfolio 10 | 0-59 | 10 | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 | 0 | ||||||||||||||||||||||||||||
60+ | 9 | 8.1 | 7.2 | 6.3 | 5.4 | 4.5 | 3.6 | 2.7 | 1.8 | 0.9 | 0 |
The VAs are out of the surrender charge period.
Minimum Guaranteed Surrender Value (“MGSV”)
The cash value is floored at 87.5% of premiums paid, less partial withdrawals, accumulated at minimum nonforfeiture interest rate.
GMxB Riders
GLWB
With the exception of the Agility6, contracts automatically include a Guaranteed Lifetime Withdrawal Benefit. The rider can be activated by the policyholder at any time, subject to minimum account value and attained age limits. At activation, the benefit base begins a simple interest roll-up for a maximum of 20 years.
Appendix D – Annuity Models and Assumptions | D-10 |
Milliman client Report
The following table summarizes the features of the GLWB riders.
PRODUCT NAME | INCOME GUARD | ACCUMULOCK | ||||||||||||||||||||||
Rider Name | InfiLife | Simple 7 | Simple 7 | Simple 6 | Simple Multiplier | |||||||||||||||||||
Dates Issued | 2012 Thru Feb 2016 | Feb-16 | 9/11/2017 | Mid 2018 | 3/11/2020 | 10/9/2020 | ||||||||||||||||||
Base Annuity Premium Mode | Single | Single | Flexible | Flexible | Flexible | Flexible | ||||||||||||||||||
Base Annuity Minimum Premium | $ | 25,000 | $ | 25,000 | $ | 5,000 | $ | 5,000 | $ | 5,000 | $ | 5,000 | ||||||||||||
GLWB Minimum AV to activate rider | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||
Rider Rollup Rate | 7 | % | 7 | % | 7 | % | 6 | % | 4 | % | 4 | % | ||||||||||||
Interest Type | Simple | Simple | Simple | Simple | Simple | Simple | ||||||||||||||||||
Rollup Period | 20 years | 20 years | 20 years | 20 years | 20 years | 20 years | ||||||||||||||||||
Rider Charge | 0.90 | % | 0.95 | % | 0.95 | % | 0.95 | % | 0.95 | % | 0.95 | % | ||||||||||||
Rider Charge Timing | BOY | BOY | EOY | EOY | EOY | EOY | ||||||||||||||||||
Rider Minimum Activation Age | 40 | 40 | 40 | 40 | 40 | 40 | ||||||||||||||||||
Rider Activation Waiting Period | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | ||||||||||||||||||
Chronic Illness Benefit | No | Yes | Yes | Yes | Yes | Yes | ||||||||||||||||||
Chronic Illness Benefit Minimum Age | N/A | 50 | 50 | 50 | 50 | 50 | ||||||||||||||||||
Chronic Illness Benefit Waiting Period | N/A | 2 years | 2 years | 2 years | 2 years | 2 years | ||||||||||||||||||
Payout Factors | Base | Base | Base | Base | Base | Reduce Single Life Factors 50bps |
GLWB Maximum Benefit Payout Factors
GLWB Maximum Benefit Payout Factors | ||||||||||||||||||||
Utilization Age | 40-49 | 50-54 | 55-59 | 60-64 | 65-69 | 70-74 | 75-79 | 80-84 | 85-89 | 90+ | ||||||||||
Payout Factor | 3.0% | 3.5% | 4.0% | 4.5% | 5.0% | 5.5% | 6.0% | 6.5% | 7.0% | 7.5% |
For contracts issued in September 2020 or later, the payout factors are reduced by 50 bp.
The current exposure of the GLWB on the FIAs is summarized below.
FIA Inforce Breakdown by GLWB Status
as of September 2020
$ MILLIONS | ||||||||||||||||||||
Issue Dates | Roll Up Rate | Payout Factors | Rider Status | Contracts | AV | GLWB | ||||||||||||||
9/2012-11/2019 | 7.00 | % | Base | No Activated | 751 | $ | 78.4 | $ | 0.0 | |||||||||||
Activated | 2,601 | 281.4 | 340.2 | |||||||||||||||||
Taking WDs | 342 | 42.0 | 53.4 | |||||||||||||||||
9/2017-2/2020 | 6.00 | % | Base | No Activated | 1,468 | 85.1 | 0.0 | |||||||||||||
Activated | 2,089 | 269.4 | 284.8 | |||||||||||||||||
Taking WDs | 75 | 11.0 | 12.3 | |||||||||||||||||
3/2020-9/2020 | 4.00 | % | Base | No Activated | 216 | 15.1 | 0.0 | |||||||||||||
Activated | 194 | 24.7 | 24.3 | |||||||||||||||||
Taking WDs | 0 | 0.0 | 0.0 | |||||||||||||||||
9/2020 | 4.00 | % | Reduced 50 | No Activated | 27 | 2.6 | 0.0 | |||||||||||||
Activated | 27 | 3.9 | 3.9 | |||||||||||||||||
Taking WDs | 0 | 0.0 | 0.0 | |||||||||||||||||
Total | 7,790 | $ | 813.7 | $ | 718.9 |
Appendix D – Annuity Models and Assumptions | D-11 |
Milliman client Report
GMDB
A return of premium (ROP) death benefit is automatically included in all VA contracts. There is also a Performance Enhanced Death Benefit (PEDB), which is a maximum anniversary value benefit, and an Incremental Death Benefit (IDB), which provides for additional death benefit equal to 40% of the gain in the contract, capped at 50% of premium. These benefits are automatically included in some of plans, at no additional charge, and as optional benefits for other plans.
The rider charges and availability are summarized in the table below.
GMDB Rider Availability
AUTOMATIC RIDERS | OPTIONAL RIDERS | |||||||||||||||||
Plan | Issue Dates | ROP | PEDB | IDB | PEDB | PEDB rider charge | IDB | IDB rider charge | ||||||||||
FBL VA08 | 6/1/2008 | 12/31/2010 | Y | N | N | Y | 60 bp (0-65), 120 bp (66+) | Y | 36 bp (0-65), 72 bp (66+) | |||||||||
FBL VA06 | 5/1/2006 | 5/31/2008 | Y | Y | N | N | 30 bp | Y | NA | |||||||||
FBL VA02 | 9/1/2002 | 4/30/2006 | Y | Y | N | N | 30 bp | Y | NA | |||||||||
FBL VA94 | 1/1/1994 | 8/31/2002 | Y | N | Y | N | NA | N | NA | |||||||||
ET-I (2008) | 6/1/2008 | 12/31/2011 | Y | N | N | Y | 30 bp (0-65), 60 bp (66+) | Y | 18 bp (0-65), 36 bp (66+) | |||||||||
ET-I (1998) | 5/1/1998 | 5/31/2008 | Y | Y | Y | N | NA | N | NA | |||||||||
ET-II (2006) | 5/1/2006 | 5/31/2008 | Y | Y | Y | N | NA | N | NA | |||||||||
ET-II (1998) | 5/1/1998 | 4/30/2006 | Y | Y | Y | N | NA | N | NA |
The current exposure of the GMDB on the VA block is summarized below.
VA Inforce breakdown by GMDB RIDER
as of September 2020
$MILLIONS | ||||||||||||||||||||||||
Rider | Contracts | AV | ROP | PEDB | IDB | Total GMDB | ||||||||||||||||||
ROP only | 605 | $ | 44.1 | $ | 25.5 | $ | 0.0 | $ | 0.0 | $ | 44.1 | |||||||||||||
ROP + PEDB | 3,783 | 216.7 | 112.7 | 218.7 | 0.0 | 218.7 | ||||||||||||||||||
ROP + IDB | 3,432 | 222.9 | 107.9 | 0.0 | 35.3 | 258.3 | ||||||||||||||||||
ROP+PEDB+IDB | 1,495 | 80.2 | 38.6 | 81.1 | 12.3 | 93.4 | ||||||||||||||||||
Total | 9,315 | $ | 564.0 | $ | 284.8 | $ | 299.8 | $ | 47.6 | $ | 614.5 |
Modeling of GMDB Rider Cost
In order to capture the volatility costs of the GLWB rider, we performed a stochastic analysis and determined a cost estimate in basis points of account value.
The cost of the GLDB cannot be fully captured on a deterministic scenario as currently modeled. We would expect actual benefits being paid to be larger than the deterministic growth scenario due to potentially different paths of equity growth. In order to assess this excess volatility charge, the model was run using 1,000 real world scenarios and the average excess death benefits paid above the account value along with the excess GMDB charges were captured. The 1,000 scenarios were generated with the American Academy of Actuaries interest rate generator version 7.1.202005. The excess benefits minus excess rider charges were discounted at the deterministic scenario net investment earnings rate and expressed in basis points of the deterministic account value. The following table shows the results.
Appendix D – Annuity Models and Assumptions | D-12 |
Milliman client Report
AVERAGE STOCHASTIC | GMDB COST | GMDB CHG | NET GMDB COST | AVIF | NET COST IN BPS OF AV | |||||||||||||||
VAFBL | 11,409,057 | -2,022,832 | 9,386,225 | 5,708,526,428 | 16.44 | |||||||||||||||
VAAMP | 2,662,951 | -20,270 | 2,642,681 | 636,452,831 | 41.52 | |||||||||||||||
Total | 14,072,007 | -2,043,101 | 12,028,906 | 6,344,979,258 | 18.96 | |||||||||||||||
Deterministic | ||||||||||||||||||||
VAFBL | 6,474,999 | -1,824,432 | 4,650,567 | 4,963,946,469 | 9.37 | |||||||||||||||
VAAMP | 1,147,733 | -17,337 | 1,130,397 | 549,571,108 | 20.57 | |||||||||||||||
Total | 7,622,732 | -1,841,769 | 5,780,964 | 5,513,517,577 | 10.49 | |||||||||||||||
Additional GMDB Benefits | ||||||||||||||||||||
VAFBL | 4,934,058 | -198,400 | 4,735,658 | 4,963,946,469 | 9.54 | |||||||||||||||
VAAMP | 1,515,217 | -2,933 | 1,512,285 | 549,571,108 | 27.52 | |||||||||||||||
Total | 6,449,275 | -201,333 | 6,247,942 | 5,513,517,577 | 11.33 |
The additional benefits as a percent of account value presented in the previous table were added to the main projection to capture the volatility cost of the GMDB rider.
GMIB
A guaranteed minimum income benefit was offered for VA contracts, which provides that if the contract is annuitized after the 8th policy anniversary, the income is guaranteed to be no less than the income base applied to a guaranteed payment option. The income base is equal to the premiums, less partial withdrawals, accumulated at 5% through age 85.
The rider is not modeled, as there are fewer than 170 contracts that had the rider as of September 2020. The total account value was $13.3 million with total income base of $12.8 million.
Statutory Reserves
For the FIAs with GLWB we used CARVM GL33/35 methodology.
TAX ReSERVES
Federal Income Tax: | 21% |
DAC Proxy Tax: | 2.09% of future direct non-qualified premium amortized over fifteen years. |
Tax Reserves: | Tax reserves are 92.81% of life contingent statutory reserves floored at the cash value. |
Appendix D – Annuity Models and Assumptions | D-13 |
Milliman client Report
Appendix E – Detailed Statutory Income Projections
EXISTING BUSINESS AS OF SEPTEMBER 30, 2020 | PAGE | ||
• | Fixed Deferred Annuities | E-2 | |
• | Fixed Indexed Annuities | E-4 | |
• | Immediate Annuities | E-6 | |
• | Variable Annuities | E-8 | |
• | Traditional Life (WL) | E-10 | |
• | Term | E-12 | |
• | UL | E-14 | |
• | VUL | E-16 | |
• | Total Existing Business | E-18 | |
FUTURE BUSINESS - 10 YEARS OF NEW BUSINESS | |||
• | Fixed Deferred Annuities | E-20 | |
• | Fixed Indexed Annuities | E-22 | |
• | Traditional Life (WL) | E-24 | |
• | Term | E-26 | |
• | IUL | E-28 | |
• | Total Future Business | E-30 |
Appendix E - Detailed Statutory Income Projections | E-1 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:23 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Fixed Deferred Annuities | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 37,318 | 34,300 | 31,410 | 28,736 | 26,373 | 24,164 | 22,089 | 20,166 | 18,386 | 16,736 | 15,203 | 13,788 | 12,480 | 11,274 | 10,161 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 128,767 | 113,738 | 99,270 | 88,977 | 78,795 | 71,899 | 65,265 | 59,042 | 53,573 | 48,703 | 44,546 | 40,596 | 37,070 | 33,780 | 30,776 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 1,845 | 1,695 | 1,629 | 1,369 | 1,190 | 975 | 783 | 633 | 513 | 427 | 380 | 343 | 325 | 314 | 297 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 2,709 | 2,439 | 2,088 | 1,877 | 1,626 | 1,432 | 1,310 | 1,147 | 1,051 | 947 | 885 | 810 | 751 | 669 | 605 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 4,426 | 4,002 | 3,452 | 3,000 | 2,507 | 2,079 | 1,875 | 1,664 | 1,545 | 1,427 | 1,409 | 1,325 | 1,257 | 1,167 | 1,090 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 160,796 | 143,293 | 126,770 | 114,204 | 102,225 | 93,528 | 84,952 | 77,030 | 69,875 | 63,492 | 57,836 | 52,592 | 47,867 | 43,531 | 39,539 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 353,702 | 383,745 | 326,564 | 209,276 | 251,724 | 1 | 112,032 | 93,537 | 82,665 | 78,380 | 73,432 | 63,907 | 57,556 | 52,985 | 49,003 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 44,739 | (5,637 | ) | 29,170 | 78,393 | (133 | ) | 122,028 | 115,648 | 106,047 | 98,985 | 93,807 | 88,390 | 81,723 | 76,242 | 71,593 | 66,959 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 8,494 | 7,853 | 7,195 | 6,610 | 6,142 | 5,718 | 5,296 | 4,907 | 4,562 | 4,240 | 3,923 | 3,628 | 3,359 | 3,106 | 2,865 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 736 | 779 | 773 | 482 | 369 | 377 | 369 | 251 | 204 | 201 | 192 | 142 | 120 | 113 | 105 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | (275,689 | ) | (268,196 | ) | (259,289 | ) | (199,486 | ) | (171,878 | ) | (168,722 | ) | (162,085 | ) | (139,323 | ) | (126,404 | ) | (121,787 | ) | (116,012 | ) | (103,653 | ) | (95,445 | ) | (89,682 | ) | (84,293 | ) | |||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 131,982 | 118,544 | 104,412 | 95,276 | 86,225 | 78,397 | 71,261 | 65,418 | 60,011 | 54,841 | 49,924 | 45,747 | 41,831 | 38,116 | 34,639 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 28,814 | 24,749 | 22,357 | 18,928 | 16,000 | 15,131 | 13,691 | 11,612 | 9,864 | 8,651 | 7,911 | 6,845 | 6,036 | 5,416 | 4,900 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 3,750 | 3,554 | 142 | 602 | 197 | 39 | 22 | 39 | 0 | 20 | 2 | 0 | (89 | ) | (97 | ) | (37 | ) | |||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 2,962 | 2,808 | 112 | 476 | 155 | 31 | 17 | 31 | 0 | 16 | 1 | 0 | (70 | ) | (77 | ) | (29 | ) | |||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 29,601 | 25,495 | 22,387 | 19,055 | 16,041 | 15,139 | 13,696 | 11,620 | 9,864 | 8,655 | 7,912 | 6,845 | 6,017 | 5,395 | 4,892 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 4,942 | 4,496 | 3,817 | 3,567 | 2,966 | 2,848 | 2,544 | 2,125 | 1,739 | 1,444 | 1,244 | 996 | 793 | 663 | 573 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 24,659 | 20,999 | 18,570 | 15,488 | 13,075 | 12,291 | 11,152 | 9,495 | 8,125 | 7,211 | 6,667 | 5,849 | 5,224 | 4,732 | 4,319 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 3,218,490 | 2,942,801 | 2,674,606 | 2,415,317 | 2,215,831 | 2,043,953 | 1,875,231 | 1,713,146 | 1,573,823 | 1,447,419 | 1,325,632 | 1,209,620 | 1,105,966 | 1,010,521 | 920,839 | 836,546 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 3,218,490 | 2,942,801 | 2,674,606 | 2,415,317 | 2,215,831 | 2,043,953 | 1,875,231 | 1,713,146 | 1,573,823 | 1,447,419 | 1,325,632 | 1,209,620 | 1,105,966 | 1,010,521 | 920,839 | 836,546 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 3,214,824 | 2,940,954 | 2,672,995 | 2,413,412 | 2,213,490 | 2,041,257 | 1,872,262 | 1,709,981 | 1,570,531 | 1,444,065 | 1,322,275 | 1,206,317 | 1,102,768 | 1,007,473 | 917,983 | 833,920 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 8,066 | 9,183 | 10,297 | 8,780 | 7,887 | 6,853 | 5,908 | 5,142 | 4,540 | 4,027 | 3,616 | 3,237 | 2,894 | 2,498 | 2,108 | 1,782 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 43,260 | 39,845 | 36,641 | 33,578 | 31,005 | 28,763 | 26,637 | 24,619 | 22,810 | 21,143 | 19,515 | 18,039 | 16,683 | 15,420 | 14,236 | 13,122 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 3,214,820 | 2,868,529 | 2,484,380 | 2,150,658 | 1,932,397 | 1,668,152 | 1,533,869 | 1,404,779 | 1,293,312 | 1,191,787 | 1,093,713 | 1,000,067 | 916,012 | 838,286 | 765,141 | 696,180 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 3,239,414 | 2,885,671 | 2,496,730 | 2,160,513 | 1,939,617 | 1,673,107 | 1,537,479 | 1,407,834 | 1,295,641 | 1,193,445 | 1,094,982 | 1,001,188 | 916,876 | 838,905 | 765,618 | 696,595 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 3,239,414 | 2,885,671 | 2,496,730 | 2,160,513 | 1,939,617 | 1,673,107 | 1,537,479 | 1,407,834 | 1,295,641 | 1,193,445 | 1,094,982 | 1,001,188 | 916,876 | 838,905 | 765,618 | 696,595 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 23,045 | 41,387 | 56,546 | 68,361 | 77,683 | 85,873 | 92,818 | 98,344 | 102,763 | 106,429 | 109,597 | 112,194 | 114,362 | 116,197 | 117,763 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 22,832 | 40,836 | 55,577 | 66,961 | 75,860 | 83,605 | 90,112 | 95,241 | 99,306 | 102,646 | 105,505 | 107,828 | 109,749 | 111,360 | 112,722 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 22,623 | 40,297 | 54,637 | 65,609 | 74,106 | 81,435 | 87,535 | 92,300 | 96,041 | 99,087 | 101,671 | 103,751 | 105,455 | 106,871 | 108,057 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 27,664 | 49,933 | 68,207 | 82,744 | 94,181 | 104,269 | 112,798 | 119,561 | 124,926 | 129,326 | 133,085 | 136,124 | 138,621 | 140,714 | 142,487 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 27,408 | 49,266 | 67,038 | 81,043 | 91,961 | 101,501 | 109,493 | 115,770 | 120,705 | 124,714 | 128,107 | 130,825 | 133,038 | 134,875 | 136,417 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 27,157 | 48,615 | 65,902 | 79,401 | 89,827 | 98,854 | 106,346 | 112,178 | 116,719 | 120,375 | 123,441 | 125,875 | 127,838 | 129,452 | 130,795 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 3,214,824 | 2,941,708 | 2,674,390 | 2,415,342 | 2,215,857 | 2,043,973 | 1,875,245 | 1,713,157 | 1,573,830 | 1,447,422 | 1,325,632 | 1,209,620 | 1,105,966 | 1,010,521 | 920,839 | 836,546 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 137,176 | 124,550 | 113,337 | 102,409 | 93,988 | 86,718 | 79,584 | 72,728 | 66,828 | 61,470 | 56,315 | 51,394 | 46,993 | 42,935 | 39,120 | 35,536 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 15,497 | 13,820 | 13,301 | 10,565 | 9,238 | 8,949 | 8,522 | 7,423 | 6,757 | 6,442 | 6,100 | 5,477 | 5,041 | 4,714 | 4,403 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 29,601 | 25,495 | 22,387 | 19,055 | 16,041 | 15,139 | 13,696 | 11,620 | 9,864 | 8,655 | 7,912 | 6,845 | 6,017 | 5,395 | 4,892 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (4,942 | ) | (4,496 | ) | (3,817 | ) | (3,567 | ) | (2,966 | ) | (2,848 | ) | (2,544 | ) | (2,125 | ) | (1,739 | ) | (1,444 | ) | (1,244 | ) | (996 | ) | (793 | ) | (663 | ) | (573 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 40,156 | 34,820 | 31,871 | 26,053 | 22,313 | 21,240 | 19,674 | 16,917 | 14,882 | 13,653 | 12,767 | 11,326 | 10,266 | 9,447 | 8,722 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 147,997 | 141,086 | 134,759 | 128,948 | 123,597 | 118,657 | 128,756 | 122,772 | 117,286 | 112,242 | 107,592 | 103,295 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (24,514 | ) | (23,564 | ) | (22,662 | ) | (21,811 | ) | (21,007 | ) | (20,250 | ) | (21,288 | ) | (20,506 | ) | (19,760 | ) | (19,049 | ) | (18,376 | ) | (17,737 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (42,521 | ) | (48,182 | ) | (53,204 | ) | (57,688 | ) | (61,714 | ) | (65,348 | ) | (38,767 | ) | (43,934 | ) | (48,519 | ) | (52,611 | ) | (56,285 | ) | (59,600 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 80,962 | 69,341 | 58,892 | 49,449 | 40,877 | 33,060 | 68,701 | 58,332 | 49,008 | 40,582 | 32,932 | 25,958 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-2 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection (cont.) | 03:23 PM | ||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Fixed Deferred Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 9,137 | 8,197 | 7,335 | 6,548 | 5,829 | 5,175 | 4,581 | 4,042 | 3,554 | 3,115 | 2,719 | 2,365 | 2,049 | 1,769 | 1,524 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 27,996 | 25,421 | 22,715 | 20,355 | 18,201 | 16,240 | 14,414 | 12,767 | 11,285 | 9,857 | 8,560 | 7,419 | 6,475 | 5,623 | 5,149 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 258 | 221 | 183 | 137 | 119 | 92 | 92 | 71 | (287 | ) | (130 | ) | (240 | ) | (383 | ) | (345 | ) | (372 | ) | (6 | ) | |||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 536 | 485 | 435 | 394 | 352 | 303 | 272 | 238 | 220 | 186 | 178 | 152 | 136 | 119 | 96 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 1,002 | 929 | 857 | 798 | 734 | 653 | 601 | 537 | 500 | 436 | 410 | 362 | 324 | 286 | 251 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 35,853 | 32,424 | 28,941 | 25,847 | 23,062 | 20,550 | 18,213 | 16,105 | 13,833 | 12,221 | 10,452 | 8,887 | 7,718 | 6,616 | 6,319 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 43,188 | 38,923 | 35,454 | 32,709 | 28,929 | 25,682 | 23,195 | 20,887 | 18,880 | 16,661 | 14,974 | 13,403 | 11,884 | 10,503 | 9,255 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 62,044 | 57,727 | 53,823 | 49,993 | 46,160 | 42,626 | 39,338 | 36,162 | 33,067 | 30,158 | 27,410 | 24,789 | 22,310 | 19,998 | 17,858 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 2,639 | 2,430 | 2,234 | 2,050 | 1,877 | 1,718 | 1,569 | 1,429 | 1,300 | 1,180 | 1,069 | 966 | 871 | 784 | 705 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 84 | 72 | 66 | 60 | 49 | 43 | 38 | 34 | 29 | 25 | 22 | 19 | 16 | 14 | 12 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (76,433 | ) | (70,524 | ) | (65,707 | ) | (61,510 | ) | (56,037 | ) | (51,224 | ) | (47,272 | ) | (43,442 | ) | (39,861 | ) | (36,105 | ) | (32,938 | ) | (29,882 | ) | (26,889 | ) | (24,100 | ) | (21,511 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 31,521 | 28,627 | 25,870 | 23,301 | 20,979 | 18,845 | 16,868 | 15,070 | 13,415 | 11,919 | 10,536 | 9,295 | 8,191 | 7,199 | 6,319 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 4,331 | 3,797 | 3,071 | 2,546 | 2,084 | 1,705 | 1,346 | 1,035 | 418 | 302 | (85 | ) | (408 | ) | (473 | ) | (583 | ) | 0 | ||||||||||||||||||||||||||
CAPITAL GAINS | (47 | ) | 0 | 0 | 0 | (97 | ) | (27 | ) | (332 | ) | (225 | ) | (409 | ) | (165 | ) | (304 | ) | (485 | ) | (437 | ) | (470 | ) | (7 | ) | ||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | (37 | ) | 0 | 0 | 0 | (76 | ) | (21 | ) | (262 | ) | (178 | ) | (323 | ) | (130 | ) | (240 | ) | (383 | ) | (345 | ) | (372 | ) | (6 | ) | ||||||||||||||||||
BOOK PROFIT | 4,321 | 3,797 | 3,071 | 2,546 | 2,063 | 1,700 | 1,276 | 988 | 332 | 267 | (149 | ) | (510 | ) | (564 | ) | (682 | ) | (1 | ) | |||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 463 | 355 | 218 | 122 | 17 | (33 | ) | (167 | ) | (183 | ) | (261 | ) | (244 | ) | (323 | ) | (386 | ) | (375 | ) | (379 | ) | (212 | ) | ||||||||||||||||||||
PROFITS RELEASED | 3,858 | 3,442 | 2,853 | 2,424 | 2,047 | 1,733 | 1,443 | 1,171 | 593 | 512 | 175 | (125 | ) | (189 | ) | (303 | ) | 211 | |||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 760,113 | 689,589 | 623,881 | 562,371 | 506,334 | 455,110 | 407,839 | 364,397 | 324,536 | 288,432 | 255,493 | 225,612 | 198,723 | 174,623 | 153,112 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 760,113 | 689,589 | 623,881 | 562,371 | 506,334 | 455,110 | 407,839 | 364,397 | 324,536 | 288,432 | 255,493 | 225,612 | 198,723 | 174,623 | 153,112 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 757,726 | 687,423 | 621,919 | 560,597 | 504,733 | 453,668 | 406,543 | 363,235 | 323,498 | 287,505 | 254,669 | 224,881 | 198,076 | 174,052 | 152,610 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 1,486 | 1,266 | 1,083 | 946 | 752 | 639 | 285 | 36 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 12,089 | 11,127 | 10,229 | 9,388 | 8,609 | 7,886 | 7,212 | 6,585 | 6,002 | 5,461 | 4,959 | 4,492 | 4,063 | 3,670 | 3,311 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 633,459 | 575,429 | 521,281 | 470,403 | 423,953 | 381,445 | 342,160 | 306,005 | 272,717 | 242,553 | 214,992 | 189,957 | 167,406 | 147,183 | 129,133 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 633,776 | 575,654 | 521,453 | 470,550 | 424,064 | 381,522 | 342,218 | 306,054 | 272,753 | 242,578 | 215,010 | 189,972 | 167,417 | 147,191 | 129,138 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 633,776 | 575,654 | 521,453 | 470,550 | 424,064 | 381,522 | 342,218 | 306,054 | 272,753 | 242,578 | 215,010 | 189,972 | 167,417 | 147,191 | 129,138 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 119,070 | 120,159 | 121,003 | 121,674 | 122,203 | 122,621 | 122,947 | 123,194 | 123,311 | 123,405 | 123,435 | 123,415 | 123,387 | 123,344 | 123,372 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 113,848 | 114,779 | 115,493 | 116,054 | 116,493 | 116,838 | 117,103 | 117,302 | 117,396 | 117,471 | 117,494 | 117,479 | 117,457 | 117,424 | 117,445 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 109,029 | 109,824 | 110,429 | 110,900 | 111,266 | 111,549 | 111,766 | 111,927 | 112,002 | 112,061 | 112,080 | 112,068 | 112,051 | 112,026 | 112,042 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 143,951 | 145,153 | 146,061 | 146,765 | 147,298 | 147,709 | 147,997 | 148,205 | 148,271 | 148,320 | 148,294 | 148,212 | 148,127 | 148,031 | 148,031 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 137,678 | 138,704 | 139,473 | 140,063 | 140,506 | 140,843 | 141,078 | 141,246 | 141,299 | 141,338 | 141,317 | 141,254 | 141,188 | 141,115 | 141,115 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 131,884 | 132,761 | 133,412 | 133,907 | 134,275 | 134,554 | 134,745 | 134,881 | 134,923 | 134,954 | 134,939 | 134,889 | 134,838 | 134,782 | 134,782 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 760,113 | 689,589 | 623,882 | 562,371 | 506,334 | 455,110 | 407,839 | 364,397 | 324,536 | 288,432 | 255,493 | 225,612 | 198,723 | 174,623 | 153,112 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 32,281 | 29,279 | 26,482 | 23,868 | 21,482 | 19,301 | 17,282 | 15,429 | 13,734 | 12,199 | 10,798 | 9,528 | 8,385 | 7,361 | 6,447 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 3,998 | 3,678 | 3,410 | 3,169 | 2,885 | 2,631 | 2,423 | 2,215 | 2,017 | 1,823 | 1,656 | 1,497 | 1,342 | 1,200 | 1,068 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 4,321 | 3,797 | 3,071 | 2,546 | 2,063 | 1,700 | 1,276 | 988 | 332 | 267 | (149 | ) | (510 | ) | (564 | ) | (682 | ) | (1 | ) | |||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (463 | ) | (355 | ) | (218 | ) | (122 | ) | (17 | ) | 33 | 167 | 183 | 261 | 244 | 323 | 386 | 375 | 379 | 212 | |||||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 7,857 | 7,120 | 6,263 | 5,592 | 4,932 | 4,364 | 3,866 | 3,386 | 2,610 | 2,335 | 1,831 | 1,372 | 1,153 | 896 | 1,279 | ||||||||||||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-3 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:23 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Fixed Indexed Annuities | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 15,631 | 15,126 | 14,534 | 13,065 | 11,806 | 10,775 | 10,334 | 9,347 | 7,380 | 5,789 | 4,763 | 4,410 | 4,087 | 3,791 | 3,517 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 34,564 | 33,630 | 34,371 | 34,008 | 33,016 | 31,930 | 30,434 | 28,998 | 27,206 | 25,647 | 24,096 | 23,090 | 21,775 | 20,518 | 19,262 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2 | 2 | 3 | 3 | 5 | 5 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 571 | 616 | 615 | 604 | 586 | 568 | 535 | 512 | 489 | 444 | 440 | 407 | 384 | 359 | 332 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 858 | 973 | 992 | 987 | 950 | 909 | 858 | 838 | 813 | 740 | 735 | 686 | 662 | 634 | 597 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 48,766 | 47,168 | 47,298 | 45,481 | 43,287 | 41,229 | 39,375 | 36,995 | 33,284 | 30,254 | 27,686 | 26,410 | 24,819 | 23,319 | 21,856 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 25,350 | 27,565 | 34,257 | 36,483 | 41,483 | 41,978 | 52,415 | 49,506 | 49,570 | 38,732 | 37,586 | 35,476 | 32,990 | 31,685 | 31,310 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 11,395 | 11,669 | 11,837 | 11,920 | 11,969 | 12,029 | 11,974 | 11,733 | 11,334 | 10,933 | 10,603 | 10,220 | 9,802 | 9,364 | 8,904 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 2,687 | 2,655 | 2,600 | 2,524 | 2,432 | 2,324 | 2,192 | 2,046 | 1,895 | 1,762 | 1,640 | 1,518 | 1,401 | 1,290 | 1,181 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 711 | 688 | 662 | 596 | 539 | 487 | 371 | 272 | 168 | 132 | 109 | 101 | 93 | 87 | 80 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 6,238 | (2,537 | ) | (10,365 | ) | (15,335 | ) | (23,047 | ) | (26,070 | ) | (38,050 | ) | (36,643 | ) | (39,682 | ) | (30,726 | ) | (31,320 | ) | (30,426 | ) | (29,465 | ) | (29,475 | ) | (30,493 | ) | ||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 46,380 | 40,041 | 38,991 | 36,187 | 33,375 | 30,748 | 28,902 | 26,915 | 23,285 | 20,834 | 18,618 | 16,887 | 14,821 | 12,950 | 10,983 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 2,385 | 7,127 | 8,307 | 9,294 | 9,911 | 10,480 | 10,473 | 10,080 | 9,999 | 9,420 | 9,068 | 9,522 | 9,997 | 10,369 | 10,873 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 42 | 0 | 0 | 0 | (1 | ) | 0 | 0 | |||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 33 | 0 | 0 | 0 | (1 | ) | 0 | 0 | |||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 2,385 | 7,127 | 8,307 | 9,294 | 9,911 | 10,480 | 10,473 | 10,080 | 10,008 | 9,420 | 9,068 | 9,522 | 9,997 | 10,369 | 10,873 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 1,122 | 1,236 | 1,605 | 1,836 | 1,955 | 1,983 | 1,803 | 1,758 | 1,753 | 1,667 | 1,500 | 1,498 | 1,530 | 1,561 | 1,588 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 1,263 | 5,891 | 6,702 | 7,458 | 7,956 | 8,497 | 8,670 | 8,322 | 8,255 | 7,753 | 7,568 | 8,024 | 8,467 | 8,808 | 9,285 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 811,814 | 818,053 | 815,516 | 805,151 | 789,816 | 766,769 | 740,699 | 702,648 | 666,006 | 626,324 | 595,598 | 564,278 | 533,852 | 504,387 | 474,911 | 444,419 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 811,814 | 818,053 | 815,516 | 805,151 | 789,816 | 766,769 | 740,699 | 702,648 | 666,006 | 626,324 | 595,598 | 564,278 | 533,852 | 504,387 | 474,911 | 444,419 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 785,741 | 787,107 | 783,808 | 772,120 | 755,360 | 731,068 | 704,253 | 666,431 | 630,056 | 590,868 | 560,491 | 529,938 | 500,693 | 472,711 | 444,969 | 416,634 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 33 | 31 | 29 | 27 | 23 | 18 | 13 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 7,929 | 7,667 | 7,390 | 7,070 | 6,744 | 6,398 | 6,064 | 5,636 | 5,262 | 4,906 | 4,646 | 4,388 | 4,137 | 3,898 | 3,669 | 3,449 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 775,244 | 774,618 | 769,100 | 754,734 | 735,201 | 707,787 | 676,873 | 633,222 | 589,163 | 541,229 | 500,973 | 460,234 | 421,026 | 383,889 | 348,091 | 313,146 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 821,010 | 813,052 | 800,085 | 778,473 | 752,386 | 719,200 | 683,599 | 636,253 | 590,089 | 541,229 | 500,973 | 460,234 | 421,025 | 383,885 | 348,074 | 313,116 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 821,010 | 813,052 | 800,085 | 778,473 | 752,386 | 719,200 | 683,599 | 636,253 | 590,089 | 541,229 | 500,973 | 460,234 | 421,025 | 383,885 | 348,074 | 313,116 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 1,180 | 6,325 | 11,796 | 17,485 | 23,158 | 28,820 | 34,219 | 39,063 | 43,553 | 47,494 | 51,090 | 54,653 | 58,166 | 61,582 | 64,947 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 1,169 | 6,220 | 11,540 | 17,021 | 22,436 | 27,791 | 32,850 | 37,346 | 41,475 | 45,066 | 48,312 | 51,499 | 54,612 | 57,611 | 60,538 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 1,158 | 6,117 | 11,292 | 16,575 | 21,746 | 26,812 | 31,555 | 35,732 | 39,532 | 42,807 | 45,740 | 48,593 | 51,355 | 53,991 | 56,540 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 2,229 | 8,454 | 15,234 | 22,325 | 29,391 | 36,375 | 42,897 | 48,764 | 54,207 | 58,996 | 63,304 | 67,532 | 71,680 | 75,702 | 79,643 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 2,208 | 8,318 | 14,912 | 21,744 | 28,489 | 35,094 | 41,205 | 46,651 | 51,657 | 56,020 | 59,909 | 63,691 | 67,367 | 70,897 | 74,324 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 2,188 | 8,187 | 14,601 | 21,185 | 27,627 | 33,876 | 39,605 | 44,664 | 49,271 | 53,250 | 56,765 | 60,150 | 63,411 | 66,514 | 69,499 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 785,741 | 787,423 | 784,408 | 772,970 | 756,412 | 732,277 | 705,581 | 667,855 | 631,543 | 592,363 | 561,952 | 531,337 | 502,016 | 473,946 | 446,103 | 417,657 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 42,956 | 36,589 | 36,447 | 35,958 | 35,198 | 34,116 | 32,916 | 31,232 | 29,575 | 27,725 | 26,288 | 24,860 | 23,513 | 22,210 | 20,909 | 19,564 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 7,266 | 908 | 1,251 | 1,513 | 1,819 | 1,914 | 2,373 | 2,311 | 2,469 | 2,018 | 1,978 | 1,867 | 1,795 | 1,767 | 1,782 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 2,385 | 7,127 | 8,307 | 9,294 | 9,911 | 10,480 | 10,473 | 10,080 | 10,008 | 9,420 | 9,068 | 9,522 | 9,997 | 10,369 | 10,873 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (1,122 | ) | (1,236 | ) | (1,605 | ) | (1,836 | ) | (1,955 | ) | (1,983 | ) | (1,803 | ) | (1,758 | ) | (1,753 | ) | (1,667 | ) | (1,500 | ) | (1,498 | ) | (1,530 | ) | (1,561 | ) | (1,588 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 8,529 | 6,799 | 7,953 | 8,970 | 9,775 | 10,411 | 11,043 | 10,632 | 10,724 | 9,771 | 9,547 | 9,891 | 10,262 | 10,575 | 11,067 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 98,067 | 89,559 | 82,144 | 75,645 | 69,917 | 64,846 | 102,546 | 94,339 | 87,152 | 80,824 | 75,223 | 70,242 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (16,737 | ) | (15,492 | ) | (14,387 | ) | (13,404 | ) | (12,524 | ) | (11,735 | ) | (16,787 | ) | (15,608 | ) | (14,560 | ) | (13,622 | ) | (12,780 | ) | (12,021 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (16,616 | ) | (18,620 | ) | (20,347 | ) | (21,846 | ) | (23,156 | ) | (24,309 | ) | (15,672 | ) | (17,572 | ) | (19,211 | ) | (20,634 | ) | (21,878 | ) | (22,971 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 64,713 | 55,448 | 47,410 | 40,395 | 34,237 | 28,802 | 70,088 | 61,158 | 53,381 | 46,568 | 40,566 | 35,250 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-4 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection (cont.) | 03:23 PM | ||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Fixed Indexed Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 3,265 | 3,032 | 2,768 | 1,718 | 1,196 | 782 | 696 | 618 | 547 | 482 | 423 | 370 | 321 | 277 | 238 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 17,964 | 16,645 | 15,338 | 13,988 | 12,585 | 11,215 | 10,059 | 8,976 | 7,998 | 7,063 | 6,129 | 5,344 | 4,645 | 3,974 | 3,478 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 5 | (30 | ) | (33 | ) | (60 | ) | 0 | (37 | ) | (65 | ) | (94 | ) | (117 | ) | 0 | (57 | ) | (78 | ) | (13 | ) | 0 | 0 | ||||||||||||||||||||
LESS INVESTMENT EXPENSE | 309 | 289 | 262 | 242 | 217 | 198 | 178 | 158 | 146 | 115 | 113 | 101 | 88 | 75 | 70 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 562 | 527 | 490 | 465 | 431 | 405 | 373 | 343 | 321 | 263 | 252 | 235 | 212 | 190 | 185 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 20,363 | 18,831 | 17,320 | 14,940 | 13,133 | 11,358 | 10,140 | 8,999 | 7,962 | 7,168 | 6,130 | 5,299 | 4,652 | 3,986 | 3,460 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 31,080 | 31,425 | 31,744 | 31,798 | 31,078 | 29,158 | 26,976 | 24,885 | 22,887 | 20,978 | 19,142 | 17,376 | 15,688 | 14,092 | 12,596 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 8,431 | 7,952 | 7,453 | 6,895 | 6,286 | 5,651 | 5,069 | 4,561 | 4,137 | 3,771 | 3,402 | 3,021 | 2,663 | 2,370 | 2,143 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 1,075 | 973 | 874 | 777 | 682 | 593 | 513 | 445 | 388 | 339 | 297 | 259 | 225 | 195 | 171 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 75 | 69 | 63 | 39 | 27 | 18 | 16 | 14 | 13 | 11 | 10 | 8 | 7 | 6 | 5 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (30,197 | ) | (31,157 | ) | (31,358 | ) | (30,749 | ) | (30,009 | ) | (28,150 | ) | (26,145 | ) | (24,312 | ) | (22,573 | ) | (20,920 | ) | (19,332 | ) | (17,778 | ) | (16,234 | ) | (14,748 | ) | (13,317 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 10,465 | 9,262 | 8,776 | 8,761 | 8,065 | 7,269 | 6,429 | 5,593 | 4,852 | 4,179 | 3,518 | 2,886 | 2,350 | 1,916 | 1,599 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 9,898 | 9,569 | 8,544 | 6,179 | 5,068 | 4,089 | 3,711 | 3,406 | 3,110 | 2,988 | 2,611 | 2,413 | 2,303 | 2,070 | 1,861 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | (48 | ) | (42 | ) | (76 | ) | 0 | (46 | ) | (82 | ) | (118 | ) | (148 | ) | 0 | (72 | ) | (99 | ) | (16 | ) | 0 | 0 | ||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | (38 | ) | (33 | ) | (60 | ) | 0 | (37 | ) | (65 | ) | (94 | ) | (117 | ) | 0 | (57 | ) | (78 | ) | (13 | ) | 0 | 0 | ||||||||||||||||||||
BOOK PROFIT | 9,898 | 9,559 | 8,535 | 6,163 | 5,068 | 4,079 | 3,694 | 3,381 | 3,079 | 2,988 | 2,596 | 2,392 | 2,300 | 2,070 | 1,861 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 1,412 | 1,287 | 1,117 | 684 | 485 | 344 | 299 | 275 | 246 | 261 | 191 | 178 | 191 | 167 | 135 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 8,487 | 8,271 | 7,418 | 5,479 | 4,583 | 3,735 | 3,395 | 3,107 | 2,833 | 2,728 | 2,405 | 2,214 | 2,109 | 1,903 | 1,725 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 414,222 | 383,065 | 351,707 | 320,958 | 290,949 | 262,798 | 236,653 | 212,342 | 189,769 | 168,849 | 149,517 | 131,739 | 115,505 | 100,757 | 87,440 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 414,222 | 383,065 | 351,707 | 320,958 | 290,949 | 262,798 | 236,653 | 212,342 | 189,769 | 168,849 | 149,517 | 131,739 | 115,505 | 100,757 | 87,440 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 388,503 | 359,700 | 330,576 | 301,828 | 273,746 | 247,245 | 222,648 | 199,781 | 178,565 | 158,903 | 140,732 | 124,027 | 108,765 | 94,894 | 82,360 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 9 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 3,237 | 3,033 | 2,837 | 2,649 | 2,469 | 2,294 | 2,125 | 1,961 | 1,803 | 1,652 | 1,506 | 1,366 | 1,233 | 1,107 | 989 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 279,587 | 247,154 | 215,748 | 184,712 | 154,941 | 127,891 | 104,853 | 85,990 | 70,902 | 58,451 | 47,717 | 38,324 | 30,451 | 24,367 | 19,858 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 279,545 | 247,097 | 215,681 | 184,626 | 154,843 | 127,774 | 104,719 | 85,847 | 70,747 | 58,296 | 47,572 | 38,192 | 30,324 | 24,244 | 19,744 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 279,545 | 247,097 | 215,681 | 184,626 | 154,843 | 127,774 | 104,719 | 85,847 | 70,747 | 58,296 | 47,572 | 38,192 | 30,324 | 24,244 | 19,744 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 67,822 | 70,440 | 72,635 | 74,150 | 75,334 | 76,236 | 77,003 | 77,658 | 78,217 | 78,719 | 79,133 | 79,490 | 79,807 | 80,074 | 80,301 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 63,015 | 65,250 | 67,107 | 68,376 | 69,360 | 70,102 | 70,726 | 71,255 | 71,702 | 72,100 | 72,425 | 72,703 | 72,947 | 73,151 | 73,323 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 58,677 | 60,588 | 62,161 | 63,227 | 64,044 | 64,656 | 65,166 | 65,594 | 65,952 | 66,268 | 66,524 | 66,740 | 66,929 | 67,085 | 67,215 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 82,995 | 86,022 | 88,547 | 90,251 | 91,560 | 92,546 | 93,379 | 94,093 | 94,700 | 95,250 | 95,697 | 96,082 | 96,428 | 96,719 | 96,964 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 77,214 | 79,797 | 81,933 | 83,361 | 84,448 | 85,259 | 85,938 | 86,514 | 87,000 | 87,436 | 87,787 | 88,086 | 88,353 | 88,575 | 88,760 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 71,992 | 74,201 | 76,010 | 77,209 | 78,113 | 78,781 | 79,336 | 79,801 | 80,191 | 80,537 | 80,813 | 81,047 | 81,253 | 81,423 | 81,563 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 389,415 | 360,514 | 331,303 | 302,462 | 274,291 | 247,708 | 223,040 | 200,113 | 178,846 | 159,141 | 140,932 | 124,194 | 108,903 | 95,008 | 82,454 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 18,234 | 16,863 | 15,482 | 14,077 | 12,738 | 11,487 | 10,344 | 9,281 | 8,294 | 7,379 | 6,534 | 5,757 | 5,047 | 4,403 | 3,821 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 1,740 | 1,753 | 1,734 | 1,729 | 1,634 | 1,518 | 1,384 | 1,280 | 1,181 | 1,088 | 1,000 | 914 | 830 | 750 | 674 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 9,898 | 9,559 | 8,535 | 6,163 | 5,068 | 4,079 | 3,694 | 3,381 | 3,079 | 2,988 | 2,596 | 2,392 | 2,300 | 2,070 | 1,861 | ||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (1,412 | ) | (1,287 | ) | (1,117 | ) | (684 | ) | (485 | ) | (344 | ) | (299 | ) | (275 | ) | (246 | ) | (261 | ) | (191 | ) | (178 | ) | (191 | ) | (167 | ) | (135 | ) | |||||||||||||||
Profit After-Tax, After Cost of Capital | 10,226 | 10,024 | 9,152 | 7,208 | 6,217 | 5,253 | 4,779 | 4,386 | 4,014 | 3,816 | 3,404 | 3,128 | 2,939 | 2,654 | 2,400 | ||||||||||||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-5 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:23 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Immediate Annuities | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 19,222 | 17,003 | 14,846 | 12,909 | 11,229 | 9,915 | 8,813 | 7,821 | 6,969 | 6,161 | 5,581 | 4,973 | 4,411 | 3,918 | 3,464 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 76 | 147 | 198 | 214 | 203 | 174 | 141 | 148 | 149 | 140 | 137 | 143 | 159 | 142 | 145 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 330 | 295 | 254 | 225 | 191 | 171 | 160 | 141 | 129 | 109 | 107 | 96 | 84 | 75 | 66 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 645 | 576 | 494 | 474 | 400 | 360 | 319 | 272 | 250 | 213 | 225 | 194 | 177 | 159 | 137 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 18,324 | 16,279 | 14,296 | 12,424 | 10,840 | 9,557 | 8,475 | 7,556 | 6,739 | 5,978 | 5,385 | 4,826 | 4,309 | 3,826 | 3,406 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 24,930 | 21,741 | 18,735 | 16,474 | 14,185 | 12,134 | 10,536 | 9,253 | 8,364 | 7,581 | 7,068 | 6,247 | 5,441 | 4,817 | 4,148 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 43,124 | 40,249 | 37,199 | 31,431 | 28,132 | 23,844 | 21,606 | 20,075 | 16,938 | 15,725 | 13,675 | 12,862 | 11,696 | 10,343 | 9,405 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 471 | 451 | 419 | 386 | 350 | 316 | 285 | 260 | 238 | 217 | 196 | 177 | 159 | 141 | 124 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | (49,811 | ) | (47,106 | ) | (42,602 | ) | (35,960 | ) | (31,574 | ) | (26,297 | ) | (23,406 | ) | (21,475 | ) | (18,243 | ) | (16,973 | ) | (15,071 | ) | (14,036 | ) | (12,624 | ) | (11,154 | ) | (10,006 | ) | |||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 18,714 | 15,334 | 13,752 | 12,330 | 11,095 | 9,996 | 9,020 | 8,113 | 7,297 | 6,550 | 5,868 | 5,249 | 4,672 | 4,148 | 3,671 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | (390 | ) | 944 | 544 | 94 | (254 | ) | (439 | ) | (546 | ) | (556 | ) | (558 | ) | (571 | ) | (483 | ) | (423 | ) | (363 | ) | (322 | ) | (266 | ) | ||||||||||||||||||||
CAPITAL GAINS | 0 | 1,485 | 884 | 328 | 290 | 8 | 0 | 314 | 150 | 199 | 0 | 72 | 120 | (1 | ) | 19 | (3 | ) | ||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 1,173 | 698 | 259 | 229 | 7 | 0 | 248 | 118 | 157 | 0 | 57 | 95 | (1 | ) | 15 | (3 | ) | ||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | (78 | ) | 1,130 | 613 | 155 | (252 | ) | (439 | ) | (480 | ) | (525 | ) | (517 | ) | (571 | ) | (468 | ) | (398 | ) | (363 | ) | (318 | ) | (266 | ) | ||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | (151 | ) | (5 | ) | (146 | ) | (112 | ) | (231 | ) | (253 | ) | (198 | ) | (234 | ) | (222 | ) | (264 | ) | (228 | ) | (205 | ) | (217 | ) | (198 | ) | (186 | ) | |||||||||||||||||
PROFITS RELEASED | 0 | 73 | 1,135 | 759 | 266 | (21 | ) | (185 | ) | (281 | ) | (291 | ) | (295 | ) | (307 | ) | (240 | ) | (192 | ) | (146 | ) | (120 | ) | (80 | ) | |||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 453,907 | 404,096 | 356,989 | 314,387 | 278,427 | 246,853 | 220,556 | 197,150 | 175,675 | 157,432 | 140,459 | 125,388 | 111,352 | 98,728 | 87,574 | 77,568 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 453,907 | 404,096 | 356,989 | 314,387 | 278,427 | 246,853 | 220,556 | 197,150 | 175,675 | 157,432 | 140,459 | 125,388 | 111,352 | 98,728 | 87,574 | 77,568 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 446,621 | 397,078 | 350,262 | 307,968 | 272,316 | 241,062 | 215,097 | 192,028 | 170,894 | 153,001 | 136,375 | 121,640 | 107,929 | 95,614 | 84,749 | 75,014 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 317 | 1,414 | 1,966 | 2,027 | 2,042 | 1,846 | 1,672 | 1,779 | 1,749 | 1,757 | 1,618 | 1,538 | 1,490 | 1,330 | 1,203 | 1,055 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 9,537 | 9,026 | 8,341 | 7,481 | 6,675 | 5,914 | 5,164 | 4,585 | 4,093 | 3,649 | 3,239 | 2,848 | 2,504 | 2,200 | 1,887 | 1,610 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 163,171 | 144,140 | 126,085 | 110,601 | 96,993 | 85,329 | 75,419 | 66,846 | 59,323 | 52,481 | 46,229 | 40,314 | 35,062 | 30,479 | 26,395 | 22,874 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 163,171 | 144,140 | 126,085 | 110,601 | 96,993 | 85,329 | 75,419 | 66,846 | 59,323 | 52,481 | 46,229 | 40,314 | 35,062 | 30,479 | 26,395 | 22,874 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 163,171 | 144,140 | 126,085 | 110,601 | 96,993 | 85,329 | 75,419 | 66,846 | 59,323 | 52,481 | 46,229 | 40,314 | 35,062 | 30,479 | 26,395 | 22,874 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 68 | 1,060 | 1,680 | 1,883 | 1,868 | 1,744 | 1,569 | 1,400 | 1,239 | 1,083 | 969 | 884 | 823 | 776 | 747 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 68 | 1,041 | 1,644 | 1,839 | 1,825 | 1,708 | 1,544 | 1,387 | 1,239 | 1,097 | 994 | 918 | 864 | 823 | 798 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 67 | 1,022 | 1,609 | 1,798 | 1,784 | 1,673 | 1,519 | 1,373 | 1,237 | 1,108 | 1,015 | 946 | 899 | 863 | 841 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | (73 | ) | 914 | 1,414 | 1,532 | 1,352 | 1,060 | 761 | 456 | 175 | (115 | ) | (338 | ) | (514 | ) | (665 | ) | (789 | ) | (885 | ) | ||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | (73 | ) | 896 | 1,383 | 1,497 | 1,325 | 1,049 | 769 | 485 | 227 | (38 | ) | (239 | ) | (397 | ) | (530 | ) | (639 | ) | (722 | ) | ||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | (72 | ) | 879 | 1,353 | 1,462 | 1,298 | 1,037 | 774 | 511 | 273 | 32 | (150 | ) | (291 | ) | (410 | ) | (505 | ) | (578 | ) | |||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 446,621 | 397,078 | 350,262 | 307,968 | 272,316 | 241,062 | 215,097 | 192,028 | 170,894 | 153,001 | 136,375 | 121,640 | 107,929 | 95,614 | 84,749 | 75,014 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 12,373 | 11,089 | 9,859 | 8,725 | 7,767 | 6,910 | 6,195 | 5,559 | 4,968 | 4,469 | 3,997 | 3,580 | 3,191 | 2,836 | 2,523 | 2,241 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 1,543 | 1,463 | 1,340 | 1,141 | 1,019 | 860 | 765 | 707 | 604 | 565 | 501 | 465 | 421 | 372 | 336 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (78 | ) | 1,130 | 613 | 155 | (252 | ) | (439 | ) | (480 | ) | (525 | ) | (517 | ) | (571 | ) | (468 | ) | (398 | ) | (363 | ) | (318 | ) | (266 | ) | |||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | 151 | 5 | 146 | 112 | 231 | 253 | 198 | 234 | 222 | 264 | 228 | 205 | 217 | 198 | 186 | |||||||||||||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 1,616 | 2,598 | 2,099 | 1,408 | 998 | 675 | 484 | 416 | 309 | 258 | 261 | 273 | 275 | 252 | 255 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | (1,795 | ) | (1,447 | ) | (1,158 | ) | (917 | ) | (713 | ) | (541 | ) | (1,843 | ) | (1,484 | ) | (1,184 | ) | (930 | ) | (714 | ) | (528 | ) | ||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | 2,119 | 1,914 | 1,739 | 1,588 | 1,457 | 1,343 | 2,116 | 1,916 | 1,744 | 1,595 | 1,466 | 1,353 | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (3,433 | ) | (3,907 | ) | (4,333 | ) | (4,718 | ) | (5,067 | ) | (5,386 | ) | (3,066 | ) | (3,489 | ) | (3,868 | ) | (4,211 | ) | (4,523 | ) | (4,807 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | (3,109 | ) | (3,440 | ) | (3,753 | ) | (4,047 | ) | (4,324 | ) | (4,584 | ) | (2,793 | ) | (3,058 | ) | (3,309 | ) | (3,546 | ) | (3,770 | ) | (3,982 | ) |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-6 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection (cont.) | 03:23 PM | ||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Immediate Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 3,096 | 2,763 | 2,417 | 2,123 | 1,868 | 1,646 | 1,476 | 1,326 | 1,224 | 1,117 | 1,027 | 951 | 888 | 825 | 764 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 123 | 129 | 110 | 64 | 54 | 41 | 19 | 39 | 17 | 23 | 6 | 2 | 13 | (1 | ) | 16 | |||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 58 | 51 | 44 | 42 | 36 | 32 | 31 | 25 | 26 | 24 | 21 | 21 | 19 | 18 | 16 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 111 | 102 | 94 | 90 | 82 | 81 | 79 | 68 | 77 | 72 | 65 | 67 | 63 | 56 | 51 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 3,049 | 2,739 | 2,389 | 2,056 | 1,803 | 1,574 | 1,386 | 1,272 | 1,138 | 1,045 | 946 | 865 | 819 | 750 | 712 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 3,457 | 2,964 | 2,527 | 2,187 | 1,888 | 1,590 | 1,240 | 1,009 | 884 | 795 | 709 | 632 | 583 | 500 | 469 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 7,777 | 7,725 | 6,610 | 6,198 | 5,013 | 4,180 | 4,157 | 3,332 | 3,285 | 2,712 | 2,517 | 2,405 | 1,873 | 2,626 | 1,529 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 108 | 95 | 83 | 72 | 61 | 52 | 45 | 39 | 34 | 30 | 27 | 23 | 21 | 18 | 16 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (8,079 | ) | (7,886 | ) | (6,648 | ) | (6,170 | ) | (4,928 | ) | (3,989 | ) | (3,780 | ) | (2,870 | ) | (2,814 | ) | (2,258 | ) | (2,063 | ) | (1,958 | ) | (1,443 | ) | (2,170 | ) | (1,118 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 3,263 | 2,898 | 2,572 | 2,286 | 2,034 | 1,834 | 1,662 | 1,509 | 1,389 | 1,279 | 1,190 | 1,102 | 1,033 | 973 | 896 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | (214 | ) | (159 | ) | (183 | ) | (231 | ) | (230 | ) | (260 | ) | (276 | ) | (237 | ) | (251 | ) | (234 | ) | (243 | ) | (237 | ) | (215 | ) | (224 | ) | (185 | ) | |||||||||||||||
CAPITAL GAINS | (2 | ) | (6 | ) | (5 | ) | (21 | ) | (5 | ) | (6 | ) | (35 | ) | (1 | ) | (25 | ) | (10 | ) | (28 | ) | (32 | ) | (13 | ) | (31 | ) | (11 | ) | |||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | (2 | ) | (5 | ) | (4 | ) | (16 | ) | (4 | ) | (5 | ) | (28 | ) | (1 | ) | (20 | ) | (8 | ) | (22 | ) | (26 | ) | (10 | ) | (25 | ) | (9 | ) | |||||||||||||||
BOOK PROFIT | (214 | ) | (161 | ) | (184 | ) | (235 | ) | (231 | ) | (261 | ) | (283 | ) | (237 | ) | (256 | ) | (236 | ) | (249 | ) | (244 | ) | (217 | ) | (230 | ) | (187 | ) | |||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (167 | ) | (153 | ) | (148 | ) | (147 | ) | (135 | ) | (134 | ) | (135 | ) | (117 | ) | (117 | ) | (106 | ) | (100 | ) | (94 | ) | (84 | ) | (85 | ) | (74 | ) | |||||||||||||||
PROFITS RELEASED | (47 | ) | (7 | ) | (36 | ) | (88 | ) | (96 | ) | (127 | ) | (148 | ) | (120 | ) | (140 | ) | (130 | ) | (149 | ) | (150 | ) | (133 | ) | (145 | ) | (113 | ) | |||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 69,489 | 61,603 | 54,955 | 48,785 | 43,857 | 39,868 | 36,087 | 33,217 | 30,403 | 28,145 | 26,083 | 24,125 | 22,681 | 20,511 | 19,393 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 69,489 | 61,603 | 54,955 | 48,785 | 43,857 | 39,868 | 36,087 | 33,217 | 30,403 | 28,145 | 26,083 | 24,125 | 22,681 | 20,511 | 19,393 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 67,184 | 59,530 | 53,091 | 47,114 | 42,358 | 38,522 | 34,875 | 32,120 | 29,406 | 27,233 | 25,242 | 23,344 | 21,950 | 19,824 | 18,746 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 930 | 796 | 682 | 601 | 544 | 498 | 451 | 411 | 374 | 342 | 314 | 286 | 263 | 239 | 215 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 1,372 | 1,171 | 991 | 835 | 692 | 584 | 490 | 414 | 354 | 303 | 262 | 227 | 195 | 170 | 148 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 19,955 | 17,455 | 15,329 | 13,488 | 11,899 | 10,569 | 9,557 | 8,752 | 8,051 | 7,422 | 6,863 | 6,368 | 5,910 | 5,524 | 5,161 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 19,955 | 17,455 | 15,329 | 13,488 | 11,899 | 10,569 | 9,557 | 8,752 | 8,051 | 7,422 | 6,863 | 6,368 | 5,910 | 5,524 | 5,161 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 19,955 | 17,455 | 15,329 | 13,488 | 11,899 | 10,569 | 9,557 | 8,752 | 8,051 | 7,422 | 6,863 | 6,368 | 5,910 | 5,524 | 5,161 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 731 | 729 | 718 | 694 | 669 | 639 | 605 | 580 | 552 | 528 | 502 | 478 | 458 | 438 | 423 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 784 | 782 | 773 | 753 | 732 | 707 | 679 | 659 | 637 | 618 | 598 | 579 | 564 | 548 | 537 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 829 | 827 | 819 | 802 | 785 | 764 | 742 | 726 | 708 | 693 | 677 | 662 | 650 | 638 | 630 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | (958 | ) | (1,008 | ) | (1,063 | ) | (1,128 | ) | (1,188 | ) | (1,251 | ) | (1,315 | ) | (1,365 | ) | (1,415 | ) | (1,459 | ) | (1,502 | ) | (1,541 | ) | (1,574 | ) | (1,606 | ) | (1,631 | ) | |||||||||||||||
PV AT 8.00% BOOK PROFITS | (785 | ) | (828 | ) | (874 | ) | (929 | ) | (978 | ) | (1,030 | ) | (1,082 | ) | (1,123 | ) | (1,163 | ) | (1,198 | ) | (1,231 | ) | (1,262 | ) | (1,287 | ) | (1,312 | ) | (1,330 | ) | |||||||||||||||
PV AT 9.00% BOOK PROFITS | (632 | ) | (669 | ) | (708 | ) | (754 | ) | (795 | ) | (838 | ) | (880 | ) | (913 | ) | (945 | ) | (973 | ) | (999 | ) | (1,023 | ) | (1,042 | ) | (1,061 | ) | (1,075 | ) | |||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 67,184 | 59,530 | 53,091 | 47,114 | 42,358 | 38,522 | 34,875 | 32,120 | 29,406 | 27,233 | 25,242 | 23,344 | 21,950 | 19,824 | 18,746 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 2,013 | 1,788 | 1,598 | 1,421 | 1,280 | 1,166 | 1,057 | 973 | 891 | 825 | 765 | 708 | 666 | 602 | 569 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 275 | 267 | 227 | 210 | 171 | 141 | 134 | 105 | 103 | 84 | 77 | 73 | 57 | 78 | 45 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (214 | ) | (161 | ) | (184 | ) | (235 | ) | (231 | ) | (261 | ) | (283 | ) | (237 | ) | (256 | ) | (236 | ) | (249 | ) | (244 | ) | (217 | ) | (230 | ) | (187 | ) | |||||||||||||||
IMPACT OF FEDERAL INCOME TAX | 167 | 153 | 148 | 147 | 135 | 134 | 135 | 117 | 117 | 106 | 100 | 94 | 84 | 85 | 74 | ||||||||||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 227 | 260 | 191 | 122 | 74 | 14 | (14 | ) | (15 | ) | (37 | ) | (46 | ) | (72 | ) | (77 | ) | (77 | ) | (67 | ) | (68 | ) | |||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-7 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:23 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Variable Annuities | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 15,744 | 14,604 | 13,530 | 12,523 | 11,571 | 10,678 | 9,840 | 9,045 | 8,311 | 7,614 | 6,975 | 6,378 | 5,817 | 5,296 | 4,818 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 9,377 | 8,801 | 8,379 | 7,951 | 7,599 | 7,234 | 6,838 | 6,505 | 6,153 | 5,747 | 5,447 | 5,152 | 4,873 | 4,530 | 4,225 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 4,961 | 4,864 | 4,762 | 4,652 | 4,537 | 4,416 | 4,290 | 4,161 | 4,027 | 3,888 | 3,750 | 3,609 | 3,467 | 3,323 | 3,179 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 122 | 96 | 73 | 60 | 60 | 58 | 52 | 46 | 40 | 33 | 29 | 27 | 25 | 23 | 25 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 146 | 143 | 145 | 139 | 132 | 125 | 115 | 112 | 109 | 102 | 97 | 87 | 83 | 77 | 72 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 358 | 358 | 371 | 333 | 322 | 310 | 281 | 263 | 259 | 254 | 247 | 219 | 214 | 204 | 191 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 29,701 | 27,863 | 26,229 | 24,713 | 23,313 | 21,950 | 20,625 | 19,381 | 18,164 | 16,924 | 15,857 | 14,859 | 13,886 | 12,892 | 11,984 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 38,083 | 37,489 | 36,431 | 35,163 | 34,145 | 32,875 | 31,701 | 30,795 | 29,322 | 28,529 | 26,968 | 25,828 | 24,725 | 23,426 | 22,052 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | (22,892 | ) | (23,322 | ) | (23,594 | ) | (23,642 | ) | (23,827 | ) | (23,763 | ) | (23,683 | ) | (23,599 | ) | (23,466 | ) | (23,312 | ) | (22,816 | ) | (22,574 | ) | (22,203 | ) | (21,778 | ) | (21,354 | ) | |||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 15,718 | 15,866 | 16,068 | 16,256 | 16,417 | 16,478 | 16,503 | 16,425 | 16,363 | 16,155 | 16,038 | 15,905 | 15,718 | 15,493 | 15,322 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 992 | 948 | 906 | 865 | 825 | 786 | 748 | 711 | 675 | 640 | 607 | 574 | 542 | 511 | 481 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 488 | 455 | 424 | 395 | 367 | 341 | 316 | 292 | 271 | 250 | 230 | 212 | 195 | 179 | 164 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | (7,932 | ) | (8,394 | ) | (8,543 | ) | (8,636 | ) | (8,771 | ) | (8,755 | ) | (8,764 | ) | (8,915 | ) | (8,498 | ) | (8,606 | ) | (8,316 | ) | (8,133 | ) | (8,025 | ) | (7,696 | ) | (7,288 | ) | |||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 24,455 | 23,042 | 21,692 | 20,401 | 19,157 | 17,962 | 16,821 | 15,709 | 14,667 | 13,655 | 12,712 | 11,812 | 10,952 | 10,136 | 9,377 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 5,245 | 4,821 | 4,537 | 4,312 | 4,156 | 3,988 | 3,803 | 3,672 | 3,496 | 3,269 | 3,145 | 3,047 | 2,934 | 2,756 | 2,608 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 4 | 18 | 180 | 75 | 0 | 7 | 6 | 3 | 24 | 4 | 2 | 4 | 21 | 13 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 3 | 14 | 143 | 59 | 0 | 5 | 5 | 2 | 19 | 3 | 2 | 3 | 16 | 10 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 5,245 | 4,822 | 4,541 | 4,350 | 4,171 | 3,988 | 3,804 | 3,673 | 3,497 | 3,274 | 3,146 | 3,048 | 2,935 | 2,760 | 2,610 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 979 | 898 | 846 | 844 | 784 | 730 | 696 | 666 | 633 | 590 | 558 | 535 | 510 | 475 | 442 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 4,267 | 3,924 | 3,695 | 3,506 | 3,387 | 3,258 | 3,109 | 3,007 | 2,864 | 2,684 | 2,588 | 2,513 | 2,425 | 2,286 | 2,168 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 216,505 | 208,573 | 200,179 | 191,636 | 183,000 | 174,229 | 165,474 | 156,710 | 147,795 | 139,297 | 130,691 | 122,375 | 114,243 | 106,218 | 98,522 | 91,234 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 216,505 | 208,573 | 200,179 | 191,636 | 183,000 | 174,229 | 165,474 | 156,710 | 147,795 | 139,297 | 130,691 | 122,375 | 114,243 | 106,218 | 98,522 | 91,234 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 347,510 | 341,418 | 334,634 | 327,293 | 319,588 | 311,363 | 302,840 | 294,017 | 284,878 | 275,458 | 265,751 | 256,101 | 246,238 | 236,284 | 226,283 | 216,228 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 217,774 | 209,471 | 200,749 | 191,919 | 183,037 | 174,056 | 165,125 | 156,218 | 147,190 | 138,608 | 129,944 | 121,596 | 113,455 | 105,442 | 97,780 | 90,544 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 691 | 569 | 476 | 417 | 500 | 499 | 442 | 395 | 354 | 317 | 303 | 278 | 252 | 230 | 223 | 209 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 9,311 | 8,693 | 8,108 | 7,555 | 7,036 | 6,542 | 6,078 | 5,639 | 5,226 | 4,839 | 4,474 | 4,132 | 3,810 | 3,508 | 3,225 | 2,961 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 567,631 | 553,501 | 538,209 | 522,210 | 505,753 | 488,638 | 471,240 | 453,533 | 435,358 | 417,320 | 398,886 | 380,803 | 362,691 | 344,596 | 326,786 | 309,332 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 220,121 | 212,082 | 203,576 | 194,917 | 186,165 | 177,275 | 168,401 | 159,516 | 150,480 | 141,862 | 133,135 | 124,702 | 116,452 | 108,312 | 100,503 | 93,103 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 567,631 | 553,501 | 538,209 | 522,210 | 505,753 | 488,638 | 471,240 | 453,533 | 435,358 | 417,320 | 398,886 | 380,803 | 362,691 | 344,596 | 326,786 | 309,332 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 3,988 | 7,415 | 10,430 | 13,105 | 15,520 | 17,691 | 19,627 | 21,377 | 22,935 | 24,299 | 25,528 | 26,644 | 27,650 | 28,537 | 29,323 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 3,951 | 7,315 | 10,247 | 12,824 | 15,130 | 17,183 | 18,997 | 20,621 | 22,054 | 23,297 | 24,407 | 25,405 | 26,296 | 27,074 | 27,758 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 3,914 | 7,217 | 10,070 | 12,553 | 14,755 | 16,697 | 18,398 | 19,907 | 21,226 | 22,359 | 23,362 | 24,256 | 25,046 | 25,730 | 26,326 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 4,902 | 9,114 | 12,821 | 16,139 | 19,113 | 21,771 | 24,140 | 26,278 | 28,180 | 29,844 | 31,339 | 32,692 | 33,910 | 34,980 | 35,927 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 4,857 | 8,991 | 12,595 | 15,793 | 18,632 | 21,145 | 23,365 | 25,350 | 27,099 | 28,615 | 29,965 | 31,175 | 32,254 | 33,194 | 34,017 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 4,812 | 8,871 | 12,377 | 15,459 | 18,170 | 20,548 | 22,629 | 24,473 | 26,083 | 27,466 | 28,685 | 29,768 | 30,726 | 31,552 | 32,268 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 217,774 | 209,789 | 201,340 | 192,742 | 184,051 | 175,225 | 166,416 | 157,598 | 148,629 | 140,079 | 131,421 | 123,056 | 114,876 | 106,805 | 99,064 | 91,734 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 6,921 | 6,712 | 6,419 | 6,127 | 5,839 | 5,549 | 5,261 | 4,976 | 4,689 | 4,417 | 4,144 | 3,882 | 3,627 | 3,376 | 3,137 | 2,910 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 354 | 433 | 427 | 416 | 413 | 404 | 395 | 391 | 371 | 365 | 349 | 337 | 326 | 310 | 293 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 5,245 | 4,822 | 4,541 | 4,350 | 4,171 | 3,988 | 3,804 | 3,673 | 3,497 | 3,274 | 3,146 | 3,048 | 2,935 | 2,760 | 2,610 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (979 | ) | (898 | ) | (846 | ) | (844 | ) | (784 | ) | (730 | ) | (696 | ) | (666 | ) | (633 | ) | (590 | ) | (558 | ) | (535 | ) | (510 | ) | (475 | ) | (442 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 4,621 | 4,357 | 4,121 | 3,922 | 3,799 | 3,662 | 3,504 | 3,398 | 3,234 | 3,049 | 2,936 | 2,849 | 2,751 | 2,596 | 2,461 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 41,860 | 38,873 | 36,261 | 33,960 | 31,921 | 30,104 | 39,545 | 36,738 | 34,279 | 32,111 | 30,187 | 28,471 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (7,590 | ) | (7,065 | ) | (6,605 | ) | (6,199 | ) | (5,838 | ) | (5,515 | ) | (7,143 | ) | (6,652 | ) | (6,221 | ) | (5,840 | ) | (5,501 | ) | (5,198 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (2,710 | ) | (3,043 | ) | (3,333 | ) | (3,587 | ) | (3,809 | ) | (4,007 | ) | (2,560 | ) | (2,878 | ) | (3,155 | ) | (3,398 | ) | (3,612 | ) | (3,802 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 31,560 | 28,764 | 26,322 | 24,175 | 22,274 | 20,582 | 29,843 | 27,208 | 24,903 | 22,873 | 21,074 | 19,471 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-8 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection (cont.) | 03:23 PM | ||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Variable Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 4,369 | 3,953 | 3,569 | 3,213 | 2,886 | 2,586 | 2,310 | 2,057 | 1,827 | 1,617 | 1,426 | 1,256 | 1,101 | 962 | 839 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 3,880 | 3,605 | 3,346 | 3,066 | 2,787 | 2,535 | 2,281 | 2,032 | 1,792 | 1,561 | 1,418 | 1,276 | 1,159 | 1,049 | 918 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 3,033 | 2,888 | 2,743 | 2,599 | 2,456 | 2,316 | 2,178 | 2,042 | 1,909 | 1,779 | 1,654 | 1,532 | 1,415 | 1,303 | 1,196 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 23 | 24 | 24 | 28 | 31 | 36 | 39 | 34 | 3 | 0 | 0 | (0 | ) | (0 | ) | (11 | ) | (0 | ) | ||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 64 | 60 | 57 | 52 | 46 | 43 | 38 | 31 | 28 | 21 | 24 | 23 | 22 | 20 | 17 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 173 | 163 | 141 | 131 | 122 | 114 | 101 | 81 | 71 | 63 | 98 | 101 | 103 | 101 | 87 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 11,068 | 10,247 | 9,485 | 8,724 | 7,992 | 7,317 | 6,669 | 6,052 | 5,432 | 4,873 | 4,376 | 3,939 | 3,550 | 3,182 | 2,847 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 21,079 | 19,836 | 18,673 | 17,578 | 16,445 | 15,276 | 14,306 | 13,333 | 12,319 | 11,530 | 10,601 | 9,736 | 9,014 | 8,283 | 7,602 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | (20,984 | ) | (20,455 | ) | (19,829 | ) | (19,359 | ) | (18,748 | ) | (18,060 | ) | (17,428 | ) | (16,765 | ) | (16,057 | ) | (15,408 | ) | (14,667 | ) | (13,922 | ) | (13,167 | ) | (12,459 | ) | (11,695 | ) | |||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 15,107 | 14,850 | 14,574 | 14,239 | 13,898 | 13,542 | 13,134 | 12,667 | 12,165 | 11,628 | 11,062 | 10,487 | 9,887 | 9,278 | 8,669 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 453 | 425 | 398 | 372 | 347 | 323 | 300 | 278 | 257 | 237 | 219 | 201 | 184 | 168 | 153 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 150 | 137 | 125 | 113 | 103 | 93 | 84 | 75 | 68 | 61 | 54 | 48 | 43 | 38 | 34 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (7,151 | ) | (6,825 | ) | (6,624 | ) | (6,242 | ) | (5,916 | ) | (5,581 | ) | (5,311 | ) | (4,958 | ) | (4,563 | ) | (4,279 | ) | (3,889 | ) | (3,528 | ) | (3,273 | ) | (2,926 | ) | (2,660 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 8,653 | 7,967 | 7,316 | 6,701 | 6,128 | 5,593 | 5,085 | 4,630 | 4,190 | 3,769 | 3,379 | 3,022 | 2,688 | 2,382 | 2,103 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 2,415 | 2,280 | 2,169 | 2,023 | 1,864 | 1,724 | 1,584 | 1,422 | 1,242 | 1,104 | 997 | 917 | 862 | 799 | 744 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 13 | 11 | 15 | 7 | (0 | ) | (0 | ) | (0 | ) | 0 | 0 | (1 | ) | (1 | ) | (14 | ) | (0 | ) | |||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 10 | 9 | 12 | 5 | (0 | ) | (0 | ) | (0 | ) | 0 | 0 | (0 | ) | (0 | ) | (11 | ) | (0 | ) | |||||||||||||||||||||||
BOOK PROFIT | 2,415 | 2,280 | 2,172 | 2,025 | 1,867 | 1,726 | 1,584 | 1,422 | 1,242 | 1,104 | 997 | 917 | 862 | 797 | 744 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 403 | 379 | 363 | 338 | 310 | 283 | 256 | 226 | 197 | 171 | 153 | 141 | 144 | 144 | 135 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 2,012 | 1,901 | 1,809 | 1,687 | 1,557 | 1,443 | 1,328 | 1,196 | 1,045 | 933 | 844 | 776 | 717 | 652 | 609 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 84,083 | 77,258 | 70,634 | 64,392 | 58,476 | 52,896 | 47,584 | 42,626 | 38,063 | 33,784 | 29,894 | 26,366 | 23,093 | 20,167 | 17,506 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 84,083 | 77,258 | 70,634 | 64,392 | 58,476 | 52,896 | 47,584 | 42,626 | 38,063 | 33,784 | 29,894 | 26,366 | 23,093 | 20,167 | 17,506 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 206,058 | 195,927 | 185,932 | 175,914 | 166,018 | 156,324 | 146,781 | 137,428 | 128,316 | 119,397 | 110,773 | 102,461 | 94,486 | 86,816 | 79,525 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 83,452 | 76,681 | 70,105 | 63,909 | 58,035 | 52,493 | 47,216 | 42,290 | 37,757 | 33,504 | 29,640 | 26,136 | 22,884 | 19,977 | 17,335 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 185 | 161 | 147 | 128 | 108 | 77 | 37 | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 2,712 | 2,480 | 2,264 | 2,063 | 1,875 | 1,702 | 1,541 | 1,392 | 1,254 | 1,127 | 1,012 | 906 | 808 | 720 | 640 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 291,901 | 274,838 | 258,114 | 241,754 | 225,843 | 210,474 | 195,528 | 181,128 | 167,370 | 154,090 | 141,501 | 129,588 | 118,272 | 107,611 | 97,600 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 85,843 | 78,911 | 72,182 | 65,839 | 59,825 | 54,150 | 48,747 | 43,700 | 39,053 | 34,693 | 30,728 | 27,127 | 23,786 | 20,795 | 18,075 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 291,901 | 274,838 | 258,114 | 241,754 | 225,843 | 210,474 | 195,528 | 181,128 | 167,370 | 154,090 | 141,501 | 129,588 | 118,272 | 107,611 | 97,600 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 30,004 | 30,606 | 31,141 | 31,608 | 32,010 | 32,359 | 32,658 | 32,911 | 33,117 | 33,289 | 33,434 | 33,559 | 33,667 | 33,758 | 33,838 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 28,345 | 28,859 | 29,311 | 29,702 | 30,036 | 30,323 | 30,567 | 30,771 | 30,936 | 31,072 | 31,186 | 31,283 | 31,367 | 31,437 | 31,497 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 26,832 | 27,272 | 27,655 | 27,983 | 28,261 | 28,497 | 28,697 | 28,862 | 28,994 | 29,102 | 29,192 | 29,267 | 29,332 | 29,385 | 29,431 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 36,744 | 37,466 | 38,109 | 38,669 | 39,151 | 39,568 | 39,926 | 40,226 | 40,470 | 40,674 | 40,846 | 40,993 | 41,123 | 41,235 | 41,332 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 34,721 | 35,338 | 35,881 | 36,350 | 36,751 | 37,094 | 37,385 | 37,627 | 37,823 | 37,984 | 38,119 | 38,234 | 38,334 | 38,419 | 38,493 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 32,876 | 33,403 | 33,864 | 34,258 | 34,591 | 34,873 | 35,111 | 35,307 | 35,464 | 35,592 | 35,698 | 35,788 | 35,865 | 35,930 | 35,986 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 84,542 | 77,678 | 71,016 | 64,739 | 58,790 | 53,178 | 47,836 | 42,850 | 38,262 | 33,959 | 30,049 | 26,501 | 23,210 | 20,268 | 17,593 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 2,688 | 2,476 | 2,271 | 2,078 | 1,895 | 1,722 | 1,557 | 1,402 | 1,260 | 1,127 | 1,005 | 894 | 790 | 697 | 612 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 283 | 268 | 256 | 241 | 227 | 213 | 201 | 187 | 171 | 160 | 146 | 132 | 122 | 110 | 100 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 2,415 | 2,280 | 2,172 | 2,025 | 1,867 | 1,726 | 1,584 | 1,422 | 1,242 | 1,104 | 997 | 917 | 862 | 797 | 744 | ||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (403 | ) | (379 | ) | (363 | ) | (338 | ) | (310 | ) | (283 | ) | (256 | ) | (226 | ) | (197 | ) | (171 | ) | (153 | ) | (141 | ) | (144 | ) | (144 | ) | (135 | ) | |||||||||||||||
Profit After-Tax, After Cost of Capital | 2,295 | 2,169 | 2,065 | 1,928 | 1,784 | 1,656 | 1,529 | 1,383 | 1,216 | 1,093 | 989 | 908 | 840 | 762 | 709 | ||||||||||||||||||||||||||||||
Present Values | �� | ||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-9 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:23 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Traditional Life (WL) | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 85,928 | 78,958 | 73,265 | 69,085 | 64,603 | 60,269 | 56,489 | 52,001 | 47,245 | 43,842 | 40,779 | 38,021 | 35,355 | 32,720 | 30,043 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 82,957 | 81,013 | 79,602 | 78,363 | 77,675 | 76,809 | 75,911 | 74,803 | 73,607 | 72,503 | 71,677 | 70,709 | 69,569 | 68,324 | 66,848 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 635 | 565 | 502 | 448 | 395 | 339 | 281 | 230 | 187 | 150 | 121 | 109 | 107 | 112 | 117 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 194 | 240 | 279 | 334 | 355 | 367 | 386 | 421 | 444 | 464 | 468 | 450 | 452 | 435 | 447 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 2,209 | 2,211 | 2,238 | 2,256 | 2,257 | 2,240 | 2,179 | 2,132 | 2,128 | 2,138 | 2,130 | 2,102 | 2,085 | 2,063 | 2,050 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 167,117 | 158,085 | 150,852 | 145,306 | 140,061 | 134,810 | 130,115 | 124,480 | 118,467 | 113,894 | 109,979 | 106,286 | 102,494 | 98,658 | 94,512 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 34,029 | 34,126 | 33,749 | 33,725 | 33,441 | 33,529 | 33,159 | 32,492 | 32,125 | 31,439 | 33,066 | 32,712 | 32,147 | 31,347 | 30,853 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 44,866 | 44,774 | 44,464 | 44,183 | 43,891 | 43,642 | 43,355 | 43,105 | 42,896 | 42,683 | 42,557 | 42,393 | 42,166 | 41,999 | 41,838 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 13,945 | 13,607 | 13,294 | 13,022 | 12,761 | 12,509 | 12,270 | 12,035 | 11,801 | 11,589 | 11,393 | 11,198 | 11,006 | 10,817 | 10,631 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 3,963 | 3,635 | 3,369 | 3,176 | 2,971 | 2,771 | 2,598 | 2,389 | 2,165 | 2,010 | 1,870 | 1,744 | 1,622 | 1,500 | 1,376 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 23,654 | 22,765 | 22,365 | 21,847 | 21,269 | 20,804 | 20,397 | 19,879 | 19,453 | 18,881 | 18,534 | 18,042 | 17,711 | 17,289 | 16,985 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | (1,231 | ) | (144 | ) | 86 | 47 | (123 | ) | (134 | ) | (88 | ) | (201 | ) | (246 | ) | (30 | ) | (135 | ) | 5 | (36 | ) | (1 | ) | (58 | ) | ||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 12,306 | 7,596 | 3,750 | 1,065 | (1,286 | ) | (4,223 | ) | (6,258 | ) | (8,449 | ) | (11,390 | ) | (13,121 | ) | (17,254 | ) | (19,087 | ) | (20,643 | ) | (22,031 | ) | (23,975 | ) | |||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 131,532 | 126,361 | 121,077 | 117,064 | 112,924 | 108,898 | 105,433 | 101,250 | 96,804 | 93,451 | 90,031 | 87,006 | 83,973 | 80,920 | 77,650 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 35,585 | 31,724 | 29,775 | 28,241 | 27,137 | 25,912 | 24,681 | 23,230 | 21,663 | 20,442 | 19,948 | 19,280 | 18,521 | 17,738 | 16,862 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 16 | 11 | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 12 | 8 | 3 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 35,588 | 31,726 | 29,776 | 28,241 | 27,137 | 25,912 | 24,681 | 23,230 | 21,663 | 20,442 | 19,948 | 19,280 | 18,521 | 17,738 | 16,862 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 8,519 | 7,444 | 6,849 | 6,386 | 5,935 | 5,463 | 5,022 | 4,495 | 3,945 | 3,502 | 3,245 | 2,968 | 2,658 | 2,359 | 2,007 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 27,069 | 24,283 | 22,927 | 21,855 | 21,202 | 20,449 | 19,659 | 18,735 | 17,718 | 16,940 | 16,702 | 16,313 | 15,863 | 15,379 | 14,855 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 1,653,000 | 1,665,305 | 1,672,902 | 1,676,652 | 1,677,717 | 1,676,431 | 1,672,207 | 1,665,950 | 1,657,501 | 1,646,111 | 1,632,990 | 1,615,736 | 1,596,648 | 1,576,005 | 1,553,975 | 1,529,999 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 1,631,080 | 1,644,113 | 1,653,383 | 1,658,492 | 1,660,768 | 1,660,567 | 1,657,378 | 1,652,054 | 1,644,724 | 1,634,429 | 1,622,131 | 1,605,640 | 1,587,327 | 1,567,442 | 1,546,160 | 1,522,919 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 1,587,294 | 1,592,013 | 1,594,211 | 1,593,382 | 1,590,770 | 1,586,670 | 1,580,541 | 1,573,065 | 1,564,399 | 1,553,655 | 1,541,595 | 1,525,970 | 1,509,060 | 1,491,105 | 1,472,255 | 1,451,966 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 4,916 | 4,294 | 3,738 | 3,238 | 2,791 | 2,395 | 2,057 | 1,776 | 1,546 | 1,359 | 1,209 | 1,088 | 979 | 872 | 761 | 644 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 197,187 | 189,026 | 181,515 | 174,546 | 167,938 | 161,670 | 155,669 | 149,925 | 144,448 | 139,206 | 134,169 | 129,304 | 124,614 | 120,092 | 115,720 | 111,508 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 8,092,270 | 7,699,653 | 7,310,249 | 6,931,783 | 6,579,418 | 6,257,669 | 5,947,700 | 5,654,064 | 5,381,937 | 5,132,559 | 4,902,678 | 4,679,280 | 4,454,888 | 4,239,059 | 4,036,127 | 3,844,038 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 1,235,928 | 1,251,899 | 1,265,343 | 1,276,237 | 1,284,975 | 1,291,576 | 1,295,483 | 1,297,315 | 1,297,104 | 1,294,104 | 1,289,181 | 1,280,379 | 1,269,761 | 1,257,603 | 1,244,062 | 1,228,720 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 45,679 | 45,898 | 46,108 | 46,310 | 46,501 | 46,682 | 46,855 | 47,018 | 47,175 | 47,319 | 47,447 | 45,469 | 43,360 | 41,335 | 39,387 | 37,514 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 45,679 | 45,898 | 46,108 | 46,310 | 46,501 | 46,682 | 46,855 | 47,018 | 47,175 | 47,319 | 47,447 | 45,469 | 43,360 | 41,335 | 39,387 | 37,514 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 137,000 | 138,915 | 140,962 | 142,606 | 143,937 | 145,030 | 145,788 | 146,371 | 146,762 | 146,887 | 146,701 | 146,205 | 145,397 | 144,371 | 143,155 | 141,742 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 25,817 | 23,859 | 22,041 | 20,768 | 19,603 | 18,396 | 17,227 | 16,205 | 14,885 | 13,544 | 12,691 | 11,793 | 11,024 | 10,229 | 9,479 | 8,687 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 21,920 | 21,193 | 19,519 | 18,160 | 16,949 | 15,864 | 14,829 | 13,896 | 12,777 | 11,682 | 10,860 | 10,096 | 9,322 | 8,563 | 7,814 | 7,081 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 25,298 | 46,508 | 65,223 | 81,896 | 97,013 | 110,639 | 122,882 | 133,786 | 143,423 | 152,035 | 159,970 | 167,213 | 173,796 | 179,760 | 185,144 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 25,064 | 45,882 | 64,083 | 80,147 | 94,577 | 107,463 | 118,934 | 129,056 | 137,919 | 145,766 | 152,929 | 159,407 | 165,240 | 170,476 | 175,159 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 24,834 | 45,272 | 62,976 | 78,459 | 92,239 | 104,432 | 115,186 | 124,589 | 132,746 | 139,902 | 146,375 | 152,175 | 157,349 | 161,951 | 166,029 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 33,260 | 60,971 | 85,277 | 106,822 | 126,171 | 143,437 | 158,807 | 172,328 | 184,111 | 194,503 | 203,980 | 212,541 | 220,226 | 227,105 | 233,217 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 32,952 | 60,152 | 83,790 | 104,548 | 123,017 | 139,346 | 153,747 | 166,298 | 177,135 | 186,604 | 195,159 | 202,815 | 209,626 | 215,665 | 220,980 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 32,650 | 59,353 | 82,346 | 102,353 | 119,990 | 135,440 | 148,942 | 160,600 | 170,575 | 179,210 | 186,940 | 193,795 | 199,836 | 205,144 | 209,774 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 6,910 | 6,451 | 6,052 | 5,687 | 5,332 | 5,013 | 4,720 | 4,445 | 4,167 | 3,851 | 3,605 | 3,384 | 3,184 | 2,986 | 2,813 | 2,647 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 1,587,294 | 1,599,830 | 1,608,672 | 1,613,437 | 1,615,581 | 1,615,412 | 1,612,420 | 1,607,355 | 1,600,376 | 1,590,570 | 1,578,804 | 1,562,931 | 1,545,261 | 1,526,072 | 1,505,528 | 1,483,107 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 59,167 | 58,964 | 58,186 | 57,391 | 56,664 | 55,895 | 55,073 | 54,252 | 53,376 | 52,467 | 51,601 | 50,647 | 49,660 | 48,655 | 47,630 | 46,569 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 1,442 | 2,012 | 2,014 | 1,928 | 1,955 | 1,993 | 1,973 | 2,012 | 2,027 | 1,965 | 2,034 | 2,047 | 2,045 | 2,044 | 2,058 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 35,588 | 31,726 | 29,776 | 28,241 | 27,137 | 25,912 | 24,681 | 23,230 | 21,663 | 20,442 | 19,948 | 19,280 | 18,521 | 17,738 | 16,862 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (8,519 | ) | (7,444 | ) | (6,849 | ) | (6,386 | ) | (5,935 | ) | (5,463 | ) | (5,022 | ) | (4,495 | ) | (3,945 | ) | (3,502 | ) | (3,245 | ) | (2,968 | ) | (2,658 | ) | (2,359 | ) | (2,007 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 28,511 | 26,295 | 24,941 | 23,784 | 23,157 | 22,441 | 21,633 | 20,747 | 19,745 | 18,905 | 18,736 | 18,360 | 17,908 | 17,423 | 16,913 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 262,373 | 245,399 | 230,259 | 216,706 | 204,528 | 193,545 | 245,151 | 229,443 | 215,394 | 202,788 | 191,437 | 181,182 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (46,149 | ) | (44,639 | ) | (43,060 | ) | (41,472 | ) | (39,912 | ) | (38,403 | ) | (40,860 | ) | (39,691 | ) | (38,416 | ) | (37,099 | ) | (35,783 | ) | (34,492 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (32,860 | ) | (35,827 | ) | (38,236 | ) | (40,223 | ) | (41,886 | ) | (43,295 | ) | (32,257 | ) | (35,198 | ) | (37,591 | ) | (39,568 | ) | (41,224 | ) | (42,629 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 183,364 | 164,933 | 148,963 | 135,011 | 122,729 | 111,846 | 172,034 | 154,553 | 139,387 | 126,121 | 114,430 | 104,060 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-10 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection (cont.) | 03:23 PM | ||||||||||||||||||||||||||||||||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Traditional Life (WL) | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 28,181 | 26,526 | 24,753 | 23,119 | 21,454 | 19,790 | 18,338 | 16,950 | 15,683 | 14,749 | 13,642 | 12,630 | 11,658 | 10,680 | 9,640 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 65,564 | 63,840 | 61,599 | 59,465 | 57,304 | 55,223 | 53,533 | 51,922 | 50,168 | 48,290 | 46,565 | 45,015 | 43,477 | 41,926 | 40,696 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 121 | 119 | 110 | 93 | 74 | 55 | 35 | 20 | 11 | 5 | 2 | 1 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 449 | 446 | 479 | 512 | 512 | 586 | 588 | 612 | 637 | 675 | 730 | 729 | 710 | 698 | 711 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 2,017 | 1,973 | 1,966 | 1,967 | 1,919 | 1,959 | 1,913 | 1,882 | 1,821 | 1,717 | 1,721 | 1,667 | 1,618 | 1,573 | 1,536 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 91,400 | 88,066 | 84,018 | 80,199 | 76,400 | 72,523 | 69,405 | 66,398 | 63,404 | 60,651 | 57,759 | 55,249 | 52,808 | 50,334 | 48,088 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 30,218 | 29,632 | 28,955 | 28,263 | 27,727 | 26,923 | 26,411 | 25,779 | 25,000 | 24,279 | 23,438 | 22,698 | 21,958 | 21,232 | 20,502 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 41,603 | 41,351 | 41,134 | 40,922 | 40,675 | 40,839 | 40,948 | 40,980 | 40,869 | 40,704 | 40,463 | 40,141 | 39,693 | 39,136 | 38,508 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 10,457 | 10,290 | 10,124 | 9,964 | 9,806 | 9,650 | 9,495 | 9,340 | 9,188 | 9,039 | 8,893 | 8,748 | 8,606 | 8,467 | 8,330 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 1,291 | 1,216 | 1,135 | 1,061 | 983 | 906 | 840 | 775 | 717 | 676 | 626 | 579 | 534 | 489 | 439 | ||||||||||||||||||||||||||||||
DIVIDENDS | 16,644 | 16,290 | 15,903 | 15,539 | 15,154 | 14,927 | 14,658 | 14,357 | 14,063 | 13,719 | 13,363 | 13,018 | 12,572 | 12,165 | 11,720 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | (14 | ) | (17 | ) | (64 | ) | (100 | ) | (99 | ) | (119 | ) | (99 | ) | (95 | ) | (32 | ) | 144 | (43 | ) | (3 | ) | (2 | ) | (77 | ) | (100 | ) | ||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (24,983 | ) | (25,912 | ) | (26,812 | ) | (27,575 | ) | (28,388 | ) | (29,424 | ) | (30,546 | ) | (31,357 | ) | (31,876 | ) | (32,388 | ) | (32,688 | ) | (32,997 | ) | (33,020 | ) | (32,934 | ) | (32,673 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 75,216 | 72,851 | 70,377 | 68,074 | 65,859 | 63,702 | 61,707 | 59,780 | 57,929 | 56,172 | 54,052 | 52,184 | 50,340 | 48,477 | 46,725 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 16,184 | 15,214 | 13,641 | 12,124 | 10,541 | 8,821 | 7,698 | 6,618 | 5,474 | 4,479 | 3,707 | 3,065 | 2,468 | 1,857 | 1,363 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
BOOK PROFIT | 16,184 | 15,214 | 13,641 | 12,124 | 10,541 | 8,821 | 7,698 | 6,618 | 5,474 | 4,479 | 3,707 | 3,065 | 2,468 | 1,857 | 1,363 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 1,802 | 1,593 | 1,212 | 863 | 538 | 111 | (108 | ) | (358 | ) | (612 | ) | (876 | ) | (1,099 | ) | (1,236 | ) | (1,362 | ) | (1,500 | ) | (1,636 | ) | |||||||||||||||||||||
PROFITS RELEASED | 14,383 | 13,621 | 12,428 | 11,261 | 10,003 | 8,710 | 7,806 | 6,976 | 6,086 | 5,354 | 4,806 | 4,301 | 3,830 | 3,357 | 2,998 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 1,505,017 | 1,479,105 | 1,452,293 | 1,424,718 | 1,396,330 | 1,366,906 | 1,336,360 | 1,305,003 | 1,273,127 | 1,240,739 | 1,208,051 | 1,175,053 | 1,142,033 | 1,109,099 | 1,076,426 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 1,498,453 | 1,472,992 | 1,446,624 | 1,419,446 | 1,391,415 | 1,362,358 | 1,332,144 | 1,301,094 | 1,269,533 | 1,237,484 | 1,205,111 | 1,172,409 | 1,139,662 | 1,106,975 | 1,074,519 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 1,430,574 | 1,408,033 | 1,384,458 | 1,359,915 | 1,334,384 | 1,307,746 | 1,279,834 | 1,250,990 | 1,221,503 | 1,191,434 | 1,160,956 | 1,130,081 | 1,099,087 | 1,068,091 | 1,037,277 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 523 | 404 | 294 | 201 | 128 | 73 | 38 | 18 | 7 | 3 | 1 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 107,447 | 103,521 | 99,731 | 96,071 | 92,535 | 89,094 | 85,754 | 82,516 | 79,391 | 76,367 | 73,453 | 70,637 | 67,929 | 65,321 | 62,817 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 3,662,876 | 3,490,377 | 3,327,324 | 3,174,339 | 3,034,411 | 2,902,792 | 2,775,779 | 2,652,584 | 2,531,910 | 2,415,394 | 2,305,111 | 2,201,113 | 2,100,676 | 2,005,435 | 1,916,372 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 1,212,173 | 1,194,606 | 1,176,136 | 1,156,807 | 1,136,532 | 1,115,334 | 1,093,011 | 1,069,787 | 1,045,956 | 1,021,523 | 996,711 | 971,526 | 946,126 | 920,647 | 895,201 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 35,713 | 33,978 | 32,306 | 30,691 | 29,130 | 27,613 | 26,139 | 24,705 | 23,309 | 21,950 | 20,627 | 19,336 | 18,075 | 16,842 | 15,635 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 35,713 | 33,978 | 32,306 | 30,691 | 29,130 | 27,613 | 26,139 | 24,705 | 23,309 | 21,950 | 20,627 | 19,336 | 18,075 | 16,842 | 15,635 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 140,054 | 138,205 | 136,150 | 133,922 | 131,547 | 128,953 | 126,185 | 123,258 | 120,161 | 116,908 | 113,570 | 110,157 | 106,626 | 103,118 | 99,580 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 8,156 | 7,689 | 7,181 | 6,684 | 6,229 | 5,743 | 5,312 | 4,910 | 4,564 | 4,368 | 4,010 | 3,711 | 3,436 | 3,112 | 2,795 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 6,564 | 6,113 | 5,669 | 5,272 | 4,916 | 4,548 | 4,216 | 3,909 | 3,594 | 3,255 | 2,939 | 2,644 | 2,371 | 2,124 | 1,907 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 190,016 | 194,328 | 198,005 | 201,119 | 203,704 | 205,808 | 207,569 | 209,041 | 210,241 | 211,227 | 212,055 | 212,747 | 213,323 | 213,795 | 214,189 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 179,357 | 183,039 | 186,149 | 188,758 | 190,904 | 192,635 | 194,070 | 195,258 | 196,218 | 197,000 | 197,650 | 198,188 | 198,632 | 198,992 | 199,290 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 169,652 | 172,799 | 175,434 | 177,624 | 179,409 | 180,835 | 182,007 | 182,968 | 183,738 | 184,359 | 184,870 | 185,290 | 185,633 | 185,908 | 186,134 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 238,699 | 243,516 | 247,551 | 250,904 | 253,628 | 255,758 | 257,496 | 258,892 | 259,971 | 260,796 | 261,434 | 261,928 | 262,299 | 262,560 | 262,739 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 225,704 | 229,816 | 233,230 | 236,039 | 238,301 | 240,053 | 241,469 | 242,596 | 243,459 | 244,113 | 244,614 | 244,998 | 245,284 | 245,483 | 245,619 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 213,850 | 217,366 | 220,257 | 222,615 | 224,496 | 225,940 | 227,096 | 228,008 | 228,700 | 229,219 | 229,614 | 229,913 | 230,134 | 230,287 | 230,389 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 2,494 | 2,332 | 2,192 | 2,047 | 1,923 | 1,798 | 1,694 | 1,591 | 1,502 | 1,416 | 1,336 | 1,254 | 1,179 | 1,105 | 1,036 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 1,459,472 | 1,434,879 | 1,409,407 | 1,383,110 | 1,355,946 | 1,327,785 | 1,298,457 | 1,268,296 | 1,237,580 | 1,206,373 | 1,174,847 | 1,142,989 | 1,111,074 | 1,079,215 | 1,047,574 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 45,547 | 44,536 | 43,504 | 42,484 | 41,457 | 40,424 | 39,375 | 38,319 | 37,259 | 36,218 | 35,167 | 34,127 | 33,096 | 32,075 | 31,065 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 1,996 | 1,965 | 1,964 | 1,931 | 1,916 | 1,902 | 1,894 | 1,881 | 1,862 | 1,822 | 1,809 | 1,776 | 1,746 | 1,715 | 1,681 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 16,184 | 15,214 | 13,641 | 12,124 | 10,541 | 8,821 | 7,698 | 6,618 | 5,474 | 4,479 | 3,707 | 3,065 | 2,468 | 1,857 | 1,363 | ||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (1,802 | ) | (1,593 | ) | (1,212 | ) | (863 | ) | (538 | ) | (111 | ) | 108 | 358 | 612 | 876 | 1,099 | 1,236 | 1,362 | 1,500 | 1,636 | ||||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 16,379 | 15,587 | 14,392 | 13,192 | 11,919 | 10,612 | 9,700 | 8,857 | 7,948 | 7,176 | 6,615 | 6,076 | 5,576 | 5,071 | 4,679 | ||||||||||||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-11 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||
Line of Business Projection | 03:23 PM |
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Term | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 98,264 | 92,656 | 87,303 | 82,346 | 77,074 | 72,476 | 67,790 | 63,152 | 58,263 | 53,626 | 50,785 | 48,007 | 45,849 | 43,286 | 40,224 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 12,325 | 12,153 | 12,132 | 11,997 | 12,019 | 12,186 | 11,668 | 11,490 | 11,088 | 10,534 | 10,501 | 9,619 | 8,672 | 8,178 | 7,372 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 58 | 40 | 30 | 26 | 11 | 0 | 0 | 0 | 0 | 61 | 12 | 30 | 39 | 39 | 38 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 195 | 202 | 213 | 220 | 223 | 224 | 224 | 223 | 221 | 216 | 207 | 187 | 162 | 149 | 133 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 297 | 314 | 335 | 356 | 363 | 368 | 369 | 361 | 358 | 354 | 340 | 313 | 281 | 262 | 239 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 110,155 | 104,334 | 98,917 | 93,793 | 88,519 | 84,071 | 78,865 | 74,059 | 68,772 | 63,651 | 60,751 | 57,157 | 54,117 | 51,092 | 47,263 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 1,728 | 4,728 | 4,918 | 6,029 | 3,670 | 2,065 | 10,515 | 11,278 | 16,642 | 11,434 | 2,776 | 2,743 | 2,571 | 2,357 | 2,209 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 41,405 | 47,814 | 48,607 | 51,022 | 46,675 | 43,818 | 56,307 | 57,181 | 63,189 | 61,888 | 54,411 | 52,170 | 47,684 | 37,259 | 37,764 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 10,358 | 9,898 | 9,463 | 9,034 | 8,620 | 8,243 | 7,872 | 7,477 | 7,033 | 6,539 | 6,108 | 5,702 | 5,293 | 4,862 | 4,429 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 5,920 | 5,659 | 5,401 | 5,163 | 4,919 | 4,684 | 4,468 | 4,246 | 4,026 | 3,793 | 3,543 | 3,325 | 3,124 | 2,892 | 2,664 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 142 | 138 | 134 | 129 | 123 | 118 | 112 | 106 | 100 | 94 | 89 | 83 | 78 | 72 | 68 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | (3,019 | ) | (86 | ) | (129 | ) | (567 | ) | (709 | ) | (576 | ) | (415 | ) | (320 | ) | (993 | ) | (304 | ) | 1,026 | 999 | 1,420 | 1,174 | 1,043 | ||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 7,976 | 4,972 | 2,296 | 714 | 697 | (1,472 | ) | (3,131 | ) | (4,249 | ) | (6,993 | ) | (15,010 | ) | (24,905 | ) | (25,669 | ) | (21,892 | ) | (19,838 | ) | (17,573 | ) | ||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 64,511 | 73,123 | 70,689 | 71,524 | 63,996 | 56,881 | 75,729 | 75,718 | 83,005 | 68,433 | 43,048 | 39,353 | 38,278 | 28,779 | 30,604 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 45,645 | 31,210 | 28,229 | 22,269 | 24,523 | 27,190 | 3,136 | (1,659 | ) | (14,233 | ) | (4,783 | ) | 17,704 | 17,804 | 15,839 | 22,313 | 16,658 | |||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 148 | 160 | 72 | 3 | (31 | ) | (33 | ) | ||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 117 | 126 | 57 | 3 | (24 | ) | (26 | ) | ||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 45,645 | 31,210 | 28,229 | 22,269 | 24,523 | 27,190 | 3,136 | (1,659 | ) | (14,233 | ) | (4,751 | ) | 17,737 | 17,819 | 15,839 | 22,307 | 16,651 | |||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 8,263 | 6,749 | 5,621 | 4,576 | 6,380 | 2,902 | 795 | (242 | ) | (3,211 | ) | 5,019 | 3,788 | 3,298 | 2,883 | 2,420 | 1,481 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 37,381 | 24,462 | 22,607 | 17,693 | 18,143 | 24,288 | 2,341 | (1,417 | ) | (11,022 | ) | (9,771 | ) | 13,949 | 14,521 | 12,956 | 19,887 | 15,171 | |||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 322,873 | 330,849 | 335,821 | 338,116 | 338,831 | 339,528 | 338,056 | 334,925 | 330,676 | 323,683 | 308,673 | 283,768 | 258,099 | 236,207 | 216,369 | 198,796 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 268,340 | 275,614 | 282,674 | 286,809 | 288,830 | 290,707 | 290,388 | 288,594 | 285,795 | 279,543 | 266,067 | 243,922 | 220,888 | 201,996 | 184,998 | 170,056 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 264,599 | 276,911 | 281,863 | 286,357 | 288,005 | 283,160 | 295,359 | 292,056 | 287,897 | 281,893 | 239,024 | 215,924 | 194,314 | 176,830 | 169,906 | 163,893 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 165 | 108 | 68 | 37 | 11 | 0 | 0 | 0 | 0 | 0 | 56 | 170 | 197 | 161 | 97 | 33 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 164,775 | 154,063 | 143,609 | 134,146 | 124,783 | 116,269 | 108,640 | 101,071 | 93,346 | 85,113 | 76,796 | 70,218 | 63,731 | 57,407 | 51,022 | 45,121 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 33,308,469 | 31,477,845 | 29,766,816 | 28,198,057 | 26,623,197 | 25,082,038 | 23,674,401 | 22,210,491 | 20,749,407 | 19,204,610 | 17,635,861 | 16,401,564 | 15,191,501 | 14,000,250 | 12,700,596 | 11,370,989 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 91,197 | 105,045 | 113,259 | 121,228 | 127,333 | 138,323 | 153,116 | 154,737 | 153,802 | 141,706 | 123,156 | 115,564 | 106,950 | 108,209 | 109,840 | 112,960 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 29,346 | 29,476 | 29,673 | 29,888 | 30,111 | 30,336 | 30,563 | 30,793 | 31,023 | 31,256 | 31,491 | 30,282 | 28,984 | 27,741 | 26,552 | 25,414 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 29,346 | 29,476 | 29,673 | 29,888 | 30,111 | 30,336 | 30,563 | 30,793 | 31,023 | 31,256 | 31,491 | 30,282 | 28,984 | 27,741 | 26,552 | 25,414 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 47,328 | 45,012 | 42,837 | 40,868 | 38,995 | 37,106 | 35,378 | 33,625 | 31,856 | 30,122 | 28,283 | 26,549 | 24,912 | 23,333 | 21,667 | 20,079 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 54,533 | 55,235 | 53,147 | 51,307 | 50,001 | 48,821 | 47,668 | 46,331 | 44,882 | 44,140 | 42,606 | 39,846 | 37,210 | 34,211 | 31,372 | 28,740 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 34,936 | 56,302 | 74,756 | 88,254 | 101,189 | 117,373 | 118,831 | 118,007 | 112,011 | 107,044 | 113,671 | 120,119 | 125,495 | 133,208 | 138,706 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 34,612 | 55,584 | 73,530 | 86,535 | 98,883 | 114,189 | 115,555 | 114,789 | 109,275 | 104,750 | 110,732 | 116,499 | 121,263 | 128,033 | 132,816 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 34,295 | 54,884 | 72,340 | 84,875 | 96,666 | 111,148 | 112,429 | 111,718 | 106,643 | 102,516 | 107,922 | 113,084 | 117,310 | 123,261 | 127,426 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 42,658 | 69,919 | 92,962 | 109,950 | 127,435 | 145,553 | 147,506 | 146,540 | 138,799 | 136,383 | 144,810 | 152,722 | 159,295 | 167,946 | 173,981 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 42,263 | 69,021 | 91,430 | 107,798 | 124,488 | 141,623 | 143,453 | 142,556 | 135,436 | 133,235 | 140,843 | 147,919 | 153,743 | 161,337 | 166,587 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 41,876 | 68,145 | 89,942 | 105,718 | 121,657 | 137,869 | 139,585 | 138,752 | 132,199 | 130,192 | 137,066 | 143,401 | 148,567 | 155,242 | 159,814 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 264,599 | 287,143 | 301,116 | 313,465 | 321,879 | 322,721 | 339,601 | 340,019 | 338,649 | 334,489 | 292,561 | 269,659 | 247,495 | 228,780 | 219,926 | 211,255 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 74,989 | 71,924 | 68,709 | 65,681 | 62,603 | 59,574 | 56,749 | 53,783 | 50,788 | 47,547 | 44,035 | 40,893 | 37,783 | 34,838 | 31,726 | 28,623 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 4,635 | 4,721 | 4,467 | 4,453 | 4,340 | 4,072 | 4,155 | 4,121 | 4,304 | 4,508 | 4,064 | 3,966 | 3,736 | 3,842 | 3,767 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 45,645 | 31,210 | 28,229 | 22,269 | 24,523 | 27,190 | 3,136 | (1,659 | ) | (14,233 | ) | (4,751 | ) | 17,737 | 17,819 | 15,839 | 22,307 | 16,651 | ||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (8,263 | ) | (6,749 | ) | (5,621 | ) | (4,576 | ) | (6,380 | ) | (2,902 | ) | (795 | ) | 242 | 3,211 | (5,019 | ) | (3,788 | ) | (3,298 | ) | (2,883 | ) | (2,420 | ) | (1,481 | ) | ||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 42,016 | 29,183 | 27,074 | 22,146 | 22,483 | 28,360 | 6,496 | 2,704 | (6,718 | ) | (5,263 | ) | 18,013 | 18,486 | 16,692 | 23,729 | 18,937 | |||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 192,886 | 180,539 | 170,152 | 161,279 | 153,595 | 146,855 | 160,744 | 149,338 | 139,821 | 131,763 | 124,846 | 118,834 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (38,987 | ) | (36,487 | ) | (34,377 | ) | (32,570 | ) | (31,000 | ) | (29,621 | ) | (33,453 | ) | (31,142 | ) | (29,208 | ) | (27,564 | ) | (26,147 | ) | (24,912 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (28,188 | ) | (31,798 | ) | (34,955 | ) | (37,733 | ) | (40,190 | ) | (42,375 | ) | (26,482 | ) | (29,912 | ) | (32,922 | ) | (35,578 | ) | (37,932 | ) | (40,031 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 125,711 | 112,255 | 100,819 | 90,976 | 82,404 | 74,860 | 100,809 | 88,283 | 77,691 | 68,622 | 60,766 | 53,891 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-12 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||
Line of Business Projection (cont.) | 03:23 PM |
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 36,840 | 33,279 | 29,974 | 27,146 | 24,258 | 22,630 | 21,874 | 21,227 | 20,441 | 19,424 | 18,012 | 16,936 | 16,261 | 15,223 | 14,572 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 6,796 | 5,650 | 5,019 | 4,473 | 4,010 | 3,877 | 3,254 | 2,673 | 2,325 | 1,925 | 1,623 | 1,350 | 1,147 | 952 | 883 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | (1 | ) | (49 | ) | (20 | ) | (33 | ) | (37 | ) | (62 | ) | (96 | ) | (71 | ) | (33 | ) | 0 | (33 | ) | (70 | ) | (25 | ) | (42 | ) | (0 | ) | ||||||||||||||||
LESS INVESTMENT EXPENSE | 121 | 110 | 98 | 90 | 80 | 68 | 60 | 48 | 38 | 29 | 30 | 26 | 21 | 19 | 15 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 217 | 200 | 183 | 171 | 157 | 137 | 119 | 97 | 80 | 59 | 56 | 49 | 41 | 37 | 30 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 43,297 | 38,571 | 34,691 | 31,324 | 27,993 | 26,239 | 24,853 | 23,684 | 22,615 | 21,261 | 19,516 | 18,142 | 17,321 | 16,077 | 15,410 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 2,991 | 14,562 | 15,684 | 19,034 | 11,105 | 1,301 | 1,178 | 1,100 | 1,024 | 959 | 904 | 862 | 1,419 | 3,551 | 737 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 33,861 | 43,077 | 41,016 | 39,100 | 32,501 | 28,082 | 25,859 | 22,072 | 17,629 | 16,256 | 14,244 | 12,799 | 11,031 | 8,398 | 6,094 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 4,059 | 3,688 | 3,276 | 2,848 | 2,388 | 2,110 | 1,939 | 1,771 | 1,607 | 1,430 | 1,265 | 1,110 | 948 | 776 | 613 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 2,459 | 2,260 | 2,064 | 1,907 | 1,727 | 1,563 | 1,469 | 1,381 | 1,301 | 1,231 | 1,147 | 1,073 | 1,017 | 944 | 891 | ||||||||||||||||||||||||||||||
DIVIDENDS | 63 | 58 | 54 | 49 | 45 | 41 | 37 | 33 | 30 | 27 | 24 | 21 | 18 | 15 | 12 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 1,397 | 1,868 | 2,064 | (591 | ) | (342 | ) | (198 | ) | (43 | ) | 340 | 677 | 1,069 | 1,011 | 1,306 | 1,421 | 10 | (5 | ) | |||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (17,519 | ) | (17,433 | ) | (14,732 | ) | (12,689 | ) | (16,143 | ) | (17,477 | ) | (15,472 | ) | (12,776 | ) | (10,526 | ) | (8,641 | ) | (8,565 | ) | (8,087 | ) | (6,188 | ) | (5,823 | ) | (2,345 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 27,310 | 48,079 | 49,425 | 49,660 | 31,280 | 15,421 | 14,966 | 13,922 | 11,741 | 12,329 | 10,029 | 9,084 | 9,665 | 7,872 | 5,998 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 15,987 | (9,508 | ) | (14,735 | ) | (18,336 | ) | (3,287 | ) | 10,818 | 9,886 | 9,763 | 10,873 | 8,931 | 9,487 | 9,058 | 7,656 | 8,205 | 9,413 | ||||||||||||||||||||||||||
CAPITAL GAINS | (44 | ) | (62 | ) | (26 | ) | (42 | ) | (47 | ) | (78 | ) | (122 | ) | (90 | ) | (42 | ) | 0 | (42 | ) | (89 | ) | (31 | ) | (54 | ) | (0 | ) | ||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | (35 | ) | (49 | ) | (20 | ) | (33 | ) | (37 | ) | (62 | ) | (96 | ) | (71 | ) | (33 | ) | 0 | (33 | ) | (70 | ) | (25 | ) | (42 | ) | (0 | ) | ||||||||||||||||
BOOK PROFIT | 15,978 | (9,521 | ) | (14,740 | ) | (18,344 | ) | (3,297 | ) | 10,801 | 9,861 | 9,744 | 10,864 | 8,931 | 9,478 | 9,039 | 7,650 | 8,194 | 9,413 | ||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 63 | (1,544 | ) | (2,035 | ) | (2,625 | ) | 1,483 | 1,806 | 1,779 | 2,006 | 1,870 | 1,696 | 1,746 | 1,704 | 1,607 | 1,639 | 1,813 | |||||||||||||||||||||||||||
PROFITS RELEASED | 15,915 | (7,977 | ) | (12,705 | ) | (15,720 | ) | (4,779 | ) | 8,995 | 8,082 | 7,737 | 8,994 | 7,235 | 7,732 | 7,335 | 6,043 | 6,555 | 7,600 | ||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 181,278 | 163,844 | 149,112 | 136,424 | 120,280 | 102,803 | 87,331 | 74,555 | 64,029 | 55,388 | 46,823 | 38,737 | 32,548 | 26,726 | 24,381 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 155,374 | 141,388 | 130,287 | 118,308 | 103,130 | 86,401 | 71,600 | 59,805 | 50,587 | 43,564 | 36,672 | 30,488 | 26,217 | 20,965 | 18,999 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 164,278 | 147,587 | 130,944 | 112,654 | 86,712 | 71,821 | 58,097 | 46,229 | 38,740 | 32,356 | 26,389 | 20,909 | 16,446 | 11,411 | 10,078 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 40,348 | 35,162 | 30,025 | 24,638 | 19,696 | 17,600 | 15,663 | 13,768 | 11,925 | 10,036 | 8,488 | 6,925 | 5,437 | 3,857 | 2,545 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 10,147,887 | 8,801,339 | 7,487,232 | 6,109,007 | 4,824,845 | 4,407,924 | 4,017,362 | 3,635,055 | 3,219,684 | 2,739,505 | 2,252,850 | 1,764,142 | 1,301,040 | 864,422 | 493,486 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 116,636 | 106,950 | 94,980 | 79,027 | 60,197 | 50,217 | 40,132 | 35,661 | 31,503 | 27,924 | 24,579 | 21,695 | 18,875 | 15,130 | 14,455 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 24,324 | 23,281 | 22,283 | 21,328 | 20,413 | 19,538 | 18,700 | 17,898 | 17,131 | 16,397 | 15,694 | 15,021 | 14,377 | 13,760 | 13,170 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 24,324 | 23,281 | 22,283 | 21,328 | 20,413 | 19,538 | 18,700 | 17,898 | 17,131 | 16,397 | 15,694 | 15,021 | 14,377 | 13,760 | 13,170 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 18,639 | 17,060 | 15,493 | 14,193 | 12,885 | 11,939 | 11,224 | 10,583 | 9,952 | 9,402 | 8,741 | 8,145 | 7,648 | 7,087 | 6,704 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 25,904 | 22,457 | 18,825 | 18,116 | 17,150 | 16,402 | 15,731 | 14,750 | 13,442 | 11,824 | 10,151 | 8,249 | 6,331 | 5,760 | 5,382 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 144,097 | 141,572 | 137,813 | 133,466 | 132,231 | 134,404 | 136,228 | 137,860 | 139,633 | 140,966 | 142,298 | 143,478 | 144,387 | 145,309 | 146,307 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 137,461 | 135,305 | 132,126 | 128,483 | 127,458 | 129,245 | 130,732 | 132,049 | 133,468 | 134,524 | 135,570 | 136,488 | 137,188 | 137,892 | 138,647 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 131,435 | 129,592 | 126,898 | 123,841 | 122,988 | 124,461 | 125,674 | 126,740 | 127,877 | 128,716 | 129,539 | 130,255 | 130,796 | 131,335 | 131,907 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 179,393 | 176,379 | 172,018 | 166,946 | 166,094 | 168,703 | 170,928 | 172,984 | 175,126 | 176,771 | 178,403 | 179,858 | 181,008 | 182,160 | 183,397 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 171,250 | 168,677 | 164,989 | 160,738 | 160,031 | 162,176 | 163,990 | 165,650 | 167,363 | 168,667 | 169,949 | 171,080 | 171,967 | 172,846 | 173,782 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 163,838 | 161,638 | 158,514 | 154,946 | 154,358 | 156,126 | 157,607 | 158,949 | 160,322 | 161,358 | 162,367 | 163,249 | 163,934 | 164,607 | 165,316 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 208,640 | 189,006 | 169,465 | 148,324 | 119,593 | 102,066 | 85,939 | 71,900 | 62,444 | 54,261 | 46,630 | 39,631 | 33,810 | 27,544 | 25,104 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 25,765 | 22,688 | 19,749 | 16,727 | 13,761 | 12,375 | 11,144 | 10,009 | 8,894 | 7,737 | 6,553 | 5,399 | 4,365 | 3,339 | 2,550 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 3,458 | 3,616 | 3,413 | 3,436 | 3,317 | 1,674 | 1,490 | 1,368 | 1,324 | 1,344 | 1,345 | 1,291 | 1,147 | 1,117 | 860 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 15,978 | (9,521 | ) | (14,740 | ) | (18,344 | ) | (3,297 | ) | 10,801 | 9,861 | 9,744 | 10,864 | 8,931 | 9,478 | 9,039 | 7,650 | 8,194 | 9,413 | ||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (63 | ) | 1,544 | 2,035 | 2,625 | (1,483 | ) | (1,806 | ) | (1,779 | ) | (2,006 | ) | (1,870 | ) | (1,696 | ) | (1,746 | ) | (1,704 | ) | (1,607 | ) | (1,639 | ) | (1,813 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 19,373 | (4,361 | ) | (9,292 | ) | (12,284 | ) | (1,462 | ) | 10,669 | 9,572 | 9,105 | 10,318 | 8,579 | 9,078 | 8,627 | 7,190 | 7,672 | 8,460 | ||||||||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-13 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||
Line of Business Projection | 03:23 PM |
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
UL | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 117,302 | 107,702 | 101,569 | 96,391 | 91,323 | 86,188 | 81,287 | 76,715 | 72,375 | 68,011 | 63,782 | 59,877 | 56,033 | 52,416 | 48,893 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 54,691 | 56,194 | 57,622 | 58,310 | 59,349 | 60,336 | 61,185 | 61,747 | 62,171 | 62,232 | 62,281 | 62,055 | 61,509 | 60,863 | 60,016 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 373 | 318 | 257 | 205 | 165 | 128 | 92 | 67 | 55 | 48 | 41 | 35 | 33 | 33 | 34 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 305 | 386 | 442 | 508 | 550 | 600 | 647 | 675 | 710 | 733 | 749 | 746 | 749 | 731 | 724 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 1,666 | 1,776 | 1,857 | 1,948 | 2,001 | 2,029 | 2,061 | 2,094 | 2,138 | 2,160 | 2,164 | 2,157 | 2,158 | 2,144 | 2,128 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 170,396 | 162,052 | 157,149 | 152,450 | 148,286 | 144,024 | 139,856 | 135,761 | 131,754 | 127,398 | 123,191 | 119,065 | 114,667 | 110,437 | 106,091 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 24,308 | 25,847 | 26,312 | 27,391 | 28,488 | 29,607 | 30,286 | 30,061 | 31,084 | 30,939 | 32,910 | 32,724 | 32,013 | 31,685 | 32,008 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 55,110 | 56,575 | 57,906 | 59,117 | 60,410 | 61,700 | 62,935 | 64,212 | 65,426 | 66,556 | 67,626 | 68,486 | 69,450 | 70,425 | 71,075 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 9,386 | 9,115 | 8,899 | 8,690 | 8,492 | 8,292 | 8,094 | 7,897 | 7,703 | 7,508 | 7,313 | 7,116 | 6,922 | 6,730 | 6,537 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 7,182 | 5,537 | 5,284 | 5,035 | 4,804 | 4,581 | 4,361 | 4,144 | 3,938 | 3,742 | 3,556 | 3,379 | 3,200 | 3,026 | 2,852 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 55,026 | 45,856 | 42,233 | 38,632 | 36,637 | 31,893 | 25,840 | 20,904 | 10,593 | 3,582 | (1,074 | ) | (7,310 | ) | (10,889 | ) | (14,711 | ) | (19,277 | ) | |||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 151,012 | 142,929 | 140,635 | 138,865 | 138,830 | 136,072 | 131,516 | 127,219 | 118,744 | 112,327 | 110,331 | 104,395 | 100,695 | 97,154 | 93,195 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 19,384 | 19,123 | 16,514 | 13,585 | 9,456 | 7,952 | 8,340 | 8,542 | 13,011 | 15,071 | 12,859 | 14,671 | 13,973 | 13,283 | 12,897 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 3 | 5 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 2 | 4 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 19,385 | 19,124 | 16,514 | 13,585 | 9,456 | 7,952 | 8,340 | 8,542 | 13,011 | 15,071 | 12,859 | 14,671 | 13,973 | 13,283 | 12,897 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 6,049 | 5,410 | 4,515 | 3,620 | 2,544 | 1,994 | 1,785 | 1,590 | 2,272 | 2,478 | 1,851 | 1,984 | 1,603 | 1,249 | 945 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 13,335 | 13,714 | 11,998 | 9,965 | 6,912 | 5,958 | 6,555 | 6,952 | 10,738 | 12,593 | 11,008 | 12,687 | 12,369 | 12,034 | 11,952 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 1,144,998 | 1,200,024 | 1,245,880 | 1,288,113 | 1,326,745 | 1,363,381 | 1,395,274 | 1,421,114 | 1,442,018 | 1,452,611 | 1,456,193 | 1,455,119 | 1,447,809 | 1,436,919 | 1,422,208 | 1,402,931 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 1,144,998 | 1,200,024 | 1,245,880 | 1,288,113 | 1,326,745 | 1,363,381 | 1,395,274 | 1,421,114 | 1,442,018 | 1,452,611 | 1,456,193 | 1,455,119 | 1,447,809 | 1,436,919 | 1,422,208 | 1,402,931 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 1,098,487 | 1,141,372 | 1,177,675 | 1,212,171 | 1,244,519 | 1,275,660 | 1,302,964 | 1,325,263 | 1,343,485 | 1,352,290 | 1,354,892 | 1,353,389 | 1,346,537 | 1,336,967 | 1,324,401 | 1,308,075 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 2,025 | 1,655 | 1,340 | 1,083 | 878 | 713 | 585 | 493 | 425 | 370 | 322 | 281 | 246 | 214 | 181 | 146 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 74,477 | 71,231 | 68,292 | 65,457 | 62,730 | 60,105 | 57,562 | 55,098 | 52,700 | 50,367 | 48,118 | 45,911 | 43,776 | 41,708 | 39,710 | 37,773 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 7,593,796 | 7,287,150 | 7,008,722 | 6,745,146 | 6,494,849 | 6,249,379 | 6,009,252 | 5,778,958 | 5,557,617 | 5,341,433 | 5,133,779 | 4,925,916 | 4,723,993 | 4,527,481 | 4,336,535 | 4,150,583 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 845,751 | 872,822 | 898,901 | 922,927 | 943,117 | 961,602 | 976,080 | 985,784 | 991,623 | 988,852 | 980,327 | 968,851 | 952,778 | 935,027 | 915,551 | 894,032 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 942,717 | 969,855 | 987,948 | 1,001,406 | 1,010,425 | 1,014,954 | 1,015,417 | 1,012,441 | 1,007,136 | 998,444 | 987,274 | 971,767 | 954,438 | 935,699 | 915,494 | 893,377 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 942,717 | 969,855 | 987,948 | 1,001,406 | 1,010,425 | 1,014,954 | 1,015,417 | 1,012,441 | 1,007,136 | 998,444 | 987,274 | 971,767 | 954,438 | 935,699 | 915,494 | 893,377 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 32,946 | 32,522 | 31,955 | 31,464 | 30,773 | 30,152 | 29,444 | 28,714 | 27,944 | 27,136 | 26,269 | 25,312 | 24,360 | 23,423 | 22,448 | 21,444 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 12,463 | 24,441 | 34,235 | 41,838 | 46,766 | 50,736 | 54,818 | 58,864 | 64,705 | 71,107 | 76,337 | 81,970 | 87,103 | 91,770 | 96,102 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 12,348 | 24,105 | 33,630 | 40,954 | 45,659 | 49,413 | 53,238 | 56,994 | 62,366 | 68,199 | 72,920 | 77,958 | 82,506 | 86,603 | 90,371 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 12,234 | 23,777 | 33,042 | 40,101 | 44,594 | 48,147 | 51,732 | 55,221 | 60,166 | 65,485 | 69,751 | 74,262 | 78,296 | 81,897 | 85,179 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 18,117 | 34,820 | 48,300 | 58,664 | 65,406 | 70,705 | 75,899 | 80,870 | 87,947 | 95,608 | 101,718 | 108,232 | 114,030 | 119,181 | 123,855 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 17,949 | 34,344 | 47,453 | 57,439 | 63,874 | 68,885 | 73,752 | 78,367 | 84,875 | 91,856 | 97,371 | 103,197 | 108,335 | 112,857 | 116,923 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 17,784 | 33,880 | 46,632 | 56,256 | 62,402 | 67,143 | 71,705 | 75,992 | 81,983 | 88,349 | 93,332 | 98,548 | 103,106 | 107,081 | 110,621 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 1,098,487 | 1,152,048 | 1,197,462 | 1,239,870 | 1,279,031 | 1,315,944 | 1,348,009 | 1,374,105 | 1,395,215 | 1,406,046 | 1,409,836 | 1,408,724 | 1,401,506 | 1,390,841 | 1,376,491 | 1,357,733 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 52,745 | 53,761 | 53,995 | 54,370 | 54,699 | 55,012 | 55,204 | 55,257 | 55,202 | 54,881 | 54,381 | 53,762 | 52,981 | 52,125 | 51,184 | 50,129 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 88 | 892 | 755 | 810 | 832 | 959 | 1,103 | 1,212 | 1,476 | 1,649 | 1,757 | 1,907 | 1,965 | 2,033 | 2,126 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 19,385 | 19,124 | 16,514 | 13,585 | 9,456 | 7,952 | 8,340 | 8,542 | 13,011 | 15,071 | 12,859 | 14,671 | 13,973 | 13,283 | 12,897 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (6,049 | ) | (5,410 | ) | (4,515 | ) | (3,620 | ) | (2,544 | ) | (1,994 | ) | (1,785 | ) | (1,590 | ) | (2,272 | ) | (2,478 | ) | (1,851 | ) | (1,984 | ) | (1,603 | ) | (1,249 | ) | (945 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 13,423 | 14,606 | 12,753 | 10,775 | 7,745 | 6,917 | 7,658 | 8,164 | 12,215 | 14,242 | 12,765 | 14,594 | 14,335 | 14,067 | 14,078 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 133,426 | 125,718 | 118,575 | 111,993 | 105,949 | 100,407 | 123,382 | 116,390 | 109,862 | 103,808 | 98,218 | 93,071 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (20,783 | ) | (21,303 | ) | (21,467 | ) | (21,389 | ) | (21,149 | ) | (20,802 | ) | (16,189 | ) | (16,957 | ) | (17,349 | ) | (17,479 | ) | (17,426 | ) | (17,249 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (32,525 | ) | (35,421 | ) | (37,740 | ) | (39,622 | ) | (41,167 | ) | (42,449 | ) | (32,214 | ) | (35,139 | ) | (37,494 | ) | (39,414 | ) | (40,997 | ) | (42,318 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 80,118 | 68,994 | 59,368 | 50,982 | 43,633 | 37,156 | 74,978 | 64,294 | 55,019 | 46,915 | 39,795 | 33,504 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-14 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||
Line of Business Projection (cont.) | 03:23 PM | |||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
UL | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 45,519 | 42,312 | 39,228 | 36,321 | 33,531 | 30,909 | 28,304 | 26,132 | 23,818 | 21,677 | 19,594 | 17,710 | 16,141 | 14,385 | 12,681 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 59,026 | 57,889 | 56,537 | 55,216 | 53,462 | 51,397 | 49,561 | 48,019 | 46,023 | 43,906 | 41,827 | 40,011 | 38,306 | 36,552 | 34,856 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 34 | 32 | 27 | 20 | 13 | 8 | 4 | 3 | 2 | 1 | 1 | (134 | ) | (158 | ) | 0 | (127 | ) | |||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 725 | 709 | 705 | 689 | 666 | 684 | 701 | 691 | 705 | 710 | 751 | 735 | 707 | 685 | 681 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 2,113 | 2,083 | 2,064 | 2,032 | 1,973 | 1,945 | 1,935 | 1,887 | 1,785 | 1,634 | 1,617 | 1,568 | 1,503 | 1,446 | 1,402 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 101,741 | 97,442 | 93,024 | 88,837 | 84,366 | 79,685 | 75,233 | 71,576 | 67,352 | 63,241 | 59,053 | 55,284 | 52,079 | 48,806 | 45,328 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 31,021 | 29,942 | 29,355 | 28,944 | 28,433 | 27,690 | 27,229 | 26,762 | 25,713 | 24,701 | 24,349 | 23,451 | 22,399 | 21,770 | 20,624 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 71,411 | 71,685 | 71,856 | 71,840 | 71,676 | 72,099 | 72,370 | 72,283 | 71,902 | 71,358 | 70,615 | 69,584 | 68,177 | 66,577 | 64,883 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 6,343 | 6,151 | 5,960 | 5,772 | 5,585 | 5,399 | 5,211 | 5,023 | 4,837 | 4,655 | 4,472 | 4,289 | 4,111 | 3,936 | 3,764 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 2,703 | 2,546 | 2,397 | 2,256 | 2,105 | 1,982 | 1,841 | 1,732 | 1,608 | 1,506 | 1,396 | 1,291 | 1,190 | 1,097 | 1,009 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (21,822 | ) | (23,911 | ) | (25,690 | ) | (27,443 | ) | (29,252 | ) | (31,382 | ) | (34,060 | ) | (36,111 | ) | (37,167 | ) | (38,189 | ) | (39,771 | ) | (40,840 | ) | (40,589 | ) | (41,358 | ) | (40,931 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 89,658 | 86,414 | 83,879 | 81,367 | 78,547 | 75,788 | 72,590 | 69,689 | 66,894 | 64,030 | 61,062 | 57,775 | 55,289 | 52,022 | 49,349 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 12,084 | 11,028 | 9,145 | 7,470 | 5,820 | 3,896 | 2,643 | 1,887 | 459 | (789 | ) | (2,009 | ) | (2,491 | ) | (3,210 | ) | (3,216 | ) | (4,021 | ) | ||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (171 | ) | (200 | ) | 0 | (160 | ) | |||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (135 | ) | (158 | ) | 0 | (127 | ) | |||||||||||||||||||||||||||
BOOK PROFIT | 12,084 | 11,028 | 9,145 | 7,470 | 5,820 | 3,896 | 2,643 | 1,887 | 459 | (789 | ) | (2,009 | ) | (2,527 | ) | (3,252 | ) | (3,216 | ) | (4,055 | ) | ||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 634 | 384 | (42 | ) | (413 | ) | (772 | ) | (1,235 | ) | (1,547 | ) | (1,713 | ) | (2,033 | ) | (2,313 | ) | (2,638 | ) | (2,743 | ) | (2,862 | ) | (2,826 | ) | (2,992 | ) | |||||||||||||||||
PROFITS RELEASED | 11,449 | 10,644 | 9,187 | 7,883 | 6,592 | 5,131 | 4,190 | 3,600 | 2,492 | 1,524 | 629 | 216 | (390 | ) | (390 | ) | (1,062 | ) | |||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 1,381,109 | 1,357,198 | 1,331,509 | 1,304,065 | 1,274,813 | 1,243,431 | 1,209,370 | 1,173,259 | 1,136,092 | 1,097,903 | 1,058,132 | 1,017,292 | 976,703 | 935,345 | 894,415 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 1,381,109 | 1,357,198 | 1,331,509 | 1,304,065 | 1,274,813 | 1,243,431 | 1,209,370 | 1,173,259 | 1,136,092 | 1,097,903 | 1,058,132 | 1,017,292 | 976,703 | 935,345 | 894,415 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 1,289,591 | 1,268,999 | 1,246,596 | 1,222,438 | 1,196,461 | 1,168,356 | 1,137,582 | 1,104,742 | 1,070,793 | 1,035,751 | 999,106 | 961,397 | 923,856 | 885,498 | 847,474 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 112 | 80 | 53 | 33 | 20 | 12 | 8 | 5 | 3 | 2 | 1 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 35,869 | 34,039 | 32,282 | 30,586 | 28,969 | 27,390 | 25,857 | 24,391 | 22,988 | 21,644 | 20,340 | 19,080 | 17,905 | 16,770 | 15,683 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 3,965,626 | 3,788,256 | 3,616,241 | 3,448,147 | 3,289,491 | 3,134,674 | 2,979,210 | 2,826,672 | 2,680,859 | 2,538,867 | 2,401,676 | 2,267,376 | 2,137,766 | 2,014,286 | 1,894,434 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 872,221 | 850,519 | 828,542 | 806,362 | 784,142 | 761,582 | 738,105 | 714,126 | 690,108 | 666,029 | 641,251 | 616,615 | 592,442 | 568,163 | 544,393 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 871,152 | 849,190 | 827,032 | 804,789 | 782,543 | 759,987 | 736,519 | 712,569 | 688,623 | 664,584 | 639,842 | 615,292 | 591,172 | 566,948 | 543,254 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 871,152 | 849,190 | 827,032 | 804,789 | 782,543 | 759,987 | 736,519 | 712,569 | 688,623 | 664,584 | 639,842 | 615,292 | 591,172 | 566,948 | 543,254 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 20,360 | 19,287 | 18,301 | 17,270 | 16,239 | 15,251 | 14,212 | 13,203 | 12,290 | 11,318 | 10,407 | 9,537 | 8,669 | 7,834 | 7,070 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 99,980 | 103,349 | 106,068 | 108,247 | 109,951 | 111,190 | 112,136 | 112,895 | 113,387 | 113,667 | 113,776 | 113,811 | 113,752 | 113,697 | 113,557 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 93,713 | 96,590 | 98,889 | 100,715 | 102,130 | 103,149 | 103,920 | 104,533 | 104,926 | 105,148 | 105,234 | 105,261 | 105,215 | 105,173 | 105,068 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 88,062 | 90,522 | 92,469 | 94,002 | 95,179 | 96,019 | 96,648 | 97,144 | 97,459 | 97,636 | 97,703 | 97,724 | 97,689 | 97,657 | 97,577 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 127,949 | 131,440 | 134,145 | 136,211 | 137,715 | 138,656 | 139,252 | 139,651 | 139,741 | 139,596 | 139,250 | 138,843 | 138,354 | 137,902 | 137,369 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 120,450 | 123,430 | 125,719 | 127,450 | 128,698 | 129,472 | 129,959 | 130,280 | 130,352 | 130,237 | 129,966 | 129,649 | 129,272 | 128,927 | 128,524 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 113,665 | 116,213 | 118,152 | 119,605 | 120,643 | 121,281 | 121,678 | 121,938 | 121,996 | 121,904 | 121,691 | 121,444 | 121,153 | 120,889 | 120,583 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 1,336,566 | 1,313,410 | 1,288,546 | 1,262,029 | 1,233,787 | 1,203,507 | 1,170,637 | 1,135,802 | 1,099,940 | 1,063,074 | 1,024,682 | 985,292 | 946,161 | 906,290 | 866,820 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 49,014 | 47,868 | 46,686 | 45,473 | 44,225 | 42,930 | 41,563 | 40,146 | 38,714 | 37,266 | 35,786 | 34,282 | 32,802 | 31,317 | 29,853 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 2,164 | 2,173 | 2,184 | 2,191 | 2,199 | 2,221 | 2,266 | 2,286 | 2,273 | 2,258 | 2,261 | 2,253 | 2,198 | 2,171 | 2,119 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 12,084 | 11,028 | 9,145 | 7,470 | 5,820 | 3,896 | 2,643 | 1,887 | 459 | (789 | ) | (2,009 | ) | (2,527 | ) | (3,252 | ) | (3,216 | ) | (4,055 | ) | ||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (634 | ) | (384 | ) | 42 | 413 | 772 | 1,235 | 1,547 | 1,713 | 2,033 | 2,313 | 2,638 | 2,743 | 2,862 | 2,826 | 2,992 | ||||||||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 13,613 | 12,817 | 11,371 | 10,073 | 8,791 | 7,352 | 6,457 | 5,887 | 4,765 | 3,782 | 2,889 | 2,469 | 1,808 | 1,781 | 1,057 | ||||||||||||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-15 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||
Line of Business Projection | 03:23 PM |
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
VUL | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 28,351 | 26,634 | 25,077 | 23,580 | 22,194 | 20,958 | 19,710 | 18,585 | 17,530 | 16,515 | 15,526 | 14,594 | 13,692 | 12,827 | 12,031 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 7,660 | 7,616 | 7,310 | 7,124 | 6,975 | 6,806 | 6,623 | 6,401 | 6,328 | 6,165 | 6,009 | 5,804 | 5,603 | 5,387 | 5,193 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 3,751 | 3,748 | 3,772 | 3,789 | 3,799 | 3,804 | 3,804 | 3,799 | 3,789 | 3,616 | 3,594 | 3,567 | 3,540 | 3,510 | 3,478 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 82 | 69 | 58 | 46 | 36 | 27 | 2 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 104 | 98 | 99 | 99 | 95 | 95 | 94 | 90 | 94 | 89 | 91 | 87 | 83 | 80 | 80 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 207 | 193 | 190 | 189 | 185 | 184 | 179 | 165 | 164 | 161 | 165 | 161 | 158 | 157 | 157 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 39,532 | 37,776 | 35,928 | 34,250 | 32,724 | 31,317 | 29,866 | 28,530 | 27,389 | 26,046 | 24,873 | 23,718 | 22,595 | 21,487 | 20,464 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 15,120 | 15,395 | 14,909 | 14,870 | 14,675 | 14,553 | 14,219 | 14,172 | 13,898 | 13,908 | 15,176 | 14,771 | 14,294 | 14,322 | 14,202 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | (14,419 | ) | (15,580 | ) | (16,402 | ) | (17,325 | ) | (17,923 | ) | (18,479 | ) | (18,958 | ) | (19,489 | ) | (19,821 | ) | (20,211 | ) | (20,811 | ) | (20,845 | ) | (20,885 | ) | (21,244 | ) | (21,353 | ) | |||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 26,694 | 26,338 | 26,083 | 25,726 | 25,502 | 25,309 | 24,843 | 24,548 | 24,446 | 24,389 | 24,250 | 24,094 | 23,996 | 23,834 | 23,750 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 1,815 | 1,761 | 1,710 | 1,660 | 1,611 | 1,564 | 1,516 | 1,470 | 1,425 | 1,381 | 1,338 | 1,294 | 1,250 | 1,207 | 1,165 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 1,431 | 1,332 | 1,254 | 1,179 | 1,110 | 1,048 | 985 | 929 | 877 | 826 | 776 | 730 | 685 | 641 | 602 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | (3,981 | ) | (3,882 | ) | (3,458 | ) | (3,158 | ) | (3,168 | ) | (3,118 | ) | (2,795 | ) | (2,782 | ) | (2,649 | ) | (2,781 | ) | (4,171 | ) | (4,087 | ) | (3,920 | ) | (3,867 | ) | (3,879 | ) | |||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 26,661 | 25,364 | 24,095 | 22,953 | 21,807 | 20,877 | 19,810 | 18,849 | 18,176 | 17,511 | 16,557 | 15,957 | 15,421 | 14,894 | 14,486 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 12,871 | 12,411 | 11,832 | 11,297 | 10,916 | 10,439 | 10,056 | 9,681 | 9,214 | 8,535 | 8,316 | 7,761 | 7,173 | 6,593 | 5,978 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 12,871 | 12,411 | 11,832 | 11,297 | 10,916 | 10,439 | 10,056 | 9,681 | 9,214 | 8,535 | 8,316 | 7,761 | 7,173 | 6,593 | 5,978 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 3,082 | 2,916 | 2,709 | 2,563 | 2,428 | 2,273 | 2,143 | 2,026 | 1,886 | 1,702 | 1,602 | 1,449 | 1,289 | 1,130 | 966 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 9,789 | 9,495 | 9,124 | 8,733 | 8,489 | 8,166 | 7,913 | 7,655 | 7,328 | 6,832 | 6,714 | 6,312 | 5,885 | 5,463 | 5,011 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 167,147 | 163,166 | 159,284 | 155,826 | 152,668 | 149,500 | 146,382 | 143,587 | 140,805 | 138,156 | 135,375 | 131,203 | 127,116 | 123,197 | 119,330 | 115,451 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 167,147 | 163,166 | 159,284 | 155,826 | 152,668 | 149,500 | 146,382 | 143,587 | 140,805 | 138,156 | 135,375 | 131,203 | 127,116 | 123,197 | 119,330 | 115,451 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 337,851 | 341,428 | 343,940 | 345,820 | 346,931 | 347,559 | 347,716 | 347,451 | 346,683 | 345,586 | 344,249 | 342,281 | 340,216 | 338,047 | 335,434 | 332,612 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 166,457 | 159,879 | 153,750 | 148,490 | 143,720 | 139,217 | 135,012 | 131,369 | 127,961 | 124,891 | 121,886 | 117,731 | 113,834 | 110,273 | 106,923 | 103,707 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 319 | 238 | 169 | 111 | 65 | 30 | 2 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 34,136 | 32,653 | 31,191 | 29,821 | 28,473 | 27,171 | 25,909 | 24,686 | 23,503 | 22,357 | 21,269 | 20,222 | 19,182 | 18,171 | 17,214 | 16,307 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 4,143,428 | 3,963,404 | 3,791,021 | 3,629,129 | 3,465,701 | 3,311,596 | 3,159,933 | 3,011,278 | 2,869,692 | 2,731,988 | 2,601,340 | 2,473,089 | 2,347,414 | 2,224,071 | 2,106,127 | 1,997,535 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 506,013 | 505,385 | 503,803 | 502,153 | 499,929 | 497,220 | 494,089 | 490,855 | 487,134 | 483,216 | 478,925 | 472,838 | 466,733 | 460,692 | 454,256 | 447,596 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 168,162 | 163,957 | 159,863 | 156,332 | 152,997 | 149,660 | 146,372 | 143,404 | 140,451 | 137,629 | 134,676 | 130,557 | 126,517 | 122,644 | 118,821 | 114,984 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 506,013 | 505,385 | 503,803 | 502,152 | 499,928 | 497,219 | 494,088 | 490,855 | 487,134 | 483,215 | 478,924 | 472,838 | 466,733 | 460,691 | 454,255 | 447,596 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 15,604 | 15,160 | 14,663 | 14,151 | 13,645 | 13,132 | 12,623 | 12,148 | 11,674 | 11,231 | 10,789 | 10,360 | 9,937 | 9,518 | 9,112 | 8,707 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 9,149 | 17,443 | 24,890 | 31,553 | 37,605 | 43,046 | 47,974 | 52,430 | 56,415 | 59,889 | 63,078 | 65,881 | 68,323 | 70,441 | 72,258 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 9,064 | 17,205 | 24,448 | 30,867 | 36,644 | 41,790 | 46,407 | 50,543 | 54,209 | 57,373 | 60,253 | 62,759 | 64,923 | 66,783 | 68,363 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 8,981 | 16,973 | 24,018 | 30,205 | 35,722 | 40,591 | 44,920 | 48,762 | 52,136 | 55,022 | 57,624 | 59,868 | 61,787 | 63,422 | 64,798 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 12,029 | 22,870 | 32,528 | 41,147 | 48,930 | 55,886 | 62,149 | 67,783 | 72,795 | 77,134 | 81,084 | 84,530 | 87,507 | 90,064 | 92,230 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 11,918 | 22,558 | 31,951 | 40,255 | 47,684 | 54,263 | 60,131 | 65,361 | 69,970 | 73,924 | 77,490 | 80,572 | 83,210 | 85,454 | 87,339 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 11,808 | 22,255 | 31,392 | 39,394 | 46,489 | 52,714 | 58,215 | 63,074 | 67,316 | 70,921 | 74,144 | 76,903 | 79,243 | 81,216 | 82,857 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 166,457 | 162,400 | 158,466 | 155,099 | 151,935 | 148,770 | 145,657 | 142,866 | 140,090 | 137,444 | 134,665 | 130,547 | 126,509 | 122,636 | 118,814 | 114,977 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 12,222 | 11,804 | 11,403 | 11,032 | 10,666 | 10,316 | 9,972 | 9,640 | 9,321 | 9,012 | 8,710 | 8,372 | 8,041 | 7,718 | 7,406 | 7,109 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | 674 | 648 | 609 | 597 | 573 | 561 | 540 | 521 | 505 | 490 | 520 | 506 | 491 | 474 | 452 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 12,871 | 12,411 | 11,832 | 11,297 | 10,916 | 10,439 | 10,056 | 9,681 | 9,214 | 8,535 | 8,316 | 7,761 | 7,173 | 6,593 | 5,978 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (3,082 | ) | (2,916 | ) | (2,709 | ) | (2,563 | ) | (2,428 | ) | (2,273 | ) | (2,143 | ) | (2,026 | ) | (1,886 | ) | (1,702 | ) | (1,602 | ) | (1,449 | ) | (1,289 | ) | (1,130 | ) | (966 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 10,463 | 10,144 | 9,733 | 9,330 | 9,062 | 8,727 | 8,453 | 8,176 | 7,833 | 7,322 | 7,234 | 6,818 | 6,376 | 5,937 | 5,463 | |||||||||||||||||||||||||||||||||
Present Values | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 95,107 | 90,257 | 85,680 | 81,391 | 77,394 | 73,678 | 88,893 | 84,607 | 80,520 | 76,659 | 73,036 | 69,648 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (19,466 | ) | (18,703 | ) | (17,941 | ) | (17,197 | ) | (16,480 | ) | (15,797 | ) | (17,746 | ) | (17,117 | ) | (16,474 | ) | (15,834 | ) | (15,211 | ) | (14,611 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (5,622 | ) | (6,211 | ) | (6,706 | ) | (7,128 | ) | (7,490 | ) | (7,806 | ) | (5,416 | ) | (5,986 | ) | (6,466 | ) | (6,874 | ) | (7,226 | ) | (7,531 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 70,020 | 65,344 | 61,033 | 57,067 | 53,423 | 50,075 | 65,731 | 61,504 | 57,580 | 53,951 | 50,599 | 47,506 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-16 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||
Line of Business Projection (cont.) | 03:23 PM | |||||||||||||||
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
VUL | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 11,270 | 10,547 | 9,856 | 9,208 | 8,589 | 8,004 | 7,449 | 6,917 | 6,424 | 5,961 | 5,520 | 5,102 | 4,711 | 4,338 | 3,979 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 5,017 | 4,799 | 4,593 | 4,410 | 4,218 | 4,017 | 3,811 | 3,631 | 3,444 | 3,251 | 3,066 | 2,912 | 2,760 | 2,636 | 2,539 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 3,444 | 3,407 | 3,368 | 3,325 | 3,281 | 3,237 | 3,191 | 3,144 | 3,092 | 3,038 | 2,981 | 2,922 | 2,853 | 2,785 | 2,718 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (18 | ) | 0 | (26 | ) | ||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 76 | 73 | 74 | 70 | 67 | 62 | 59 | 61 | 56 | 54 | 57 | 57 | 54 | 52 | 51 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 151 | 146 | 149 | 144 | 141 | 134 | 127 | 126 | 118 | 108 | 109 | 109 | 105 | 101 | 101 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 19,503 | 18,535 | 17,594 | 16,729 | 15,880 | 15,062 | 14,265 | 13,505 | 12,785 | 12,089 | 11,402 | 10,771 | 10,147 | 9,605 | 9,058 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 13,621 | 13,648 | 13,674 | 13,356 | 13,384 | 12,831 | 12,378 | 12,143 | 12,401 | 12,080 | 11,772 | 11,779 | 12,441 | 11,635 | 11,523 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | (21,211 | ) | (21,550 | ) | (21,766 | ) | (21,644 | ) | (21,734 | ) | (21,611 | ) | (21,516 | ) | (21,528 | ) | (21,884 | ) | (21,747 | ) | (21,731 | ) | (21,848 | ) | (22,437 | ) | (21,746 | ) | (21,588 | ) | |||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 23,675 | 23,637 | 23,640 | 23,564 | 23,487 | 23,669 | 23,942 | 24,144 | 24,350 | 24,512 | 24,550 | 24,542 | 24,355 | 24,082 | 23,811 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 1,126 | 1,087 | 1,048 | 1,011 | 975 | 939 | 905 | 870 | 837 | 804 | 772 | 740 | 710 | 681 | 652 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 563 | 527 | 493 | 460 | 429 | 400 | 372 | 346 | 321 | 298 | 276 | 255 | 236 | 217 | 199 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (3,683 | ) | (3,666 | ) | (3,646 | ) | (3,492 | ) | (3,556 | ) | (3,379 | ) | (3,278 | ) | (3,191 | ) | (3,265 | ) | (3,237 | ) | (3,066 | ) | (3,088 | ) | (3,128 | ) | (2,975 | ) | (2,934 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 14,091 | 13,682 | 13,443 | 13,256 | 12,985 | 12,849 | 12,803 | 12,784 | 12,760 | 12,710 | 12,573 | 12,379 | 12,176 | 11,894 | 11,663 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 5,412 | 4,853 | 4,151 | 3,474 | 2,895 | 2,213 | 1,462 | 720 | 25 | (621 | ) | (1,171 | ) | (1,609 | ) | (2,029 | ) | (2,289 | ) | (2,605 | ) | ||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (23 | ) | 0 | (33 | ) | ||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (18 | ) | 0 | (26 | ) | ||||||||||||||||||||||||||||
BOOK PROFIT | 5,412 | 4,853 | 4,151 | 3,474 | 2,895 | 2,213 | 1,462 | 720 | 25 | (621 | ) | (1,171 | ) | (1,609 | ) | (2,034 | ) | (2,289 | ) | (2,612 | ) | ||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 837 | 724 | 578 | 444 | 332 | 199 | 51 | (99 | ) | (239 | ) | (373 | ) | (493 | ) | (583 | ) | (669 | ) | (714 | ) | (779 | ) | ||||||||||||||||||||||
PROFITS RELEASED | 4,575 | 4,129 | 3,574 | 3,029 | 2,563 | 2,014 | 1,411 | 819 | 264 | (249 | ) | (678 | ) | (1,025 | ) | (1,365 | ) | (1,575 | ) | (1,833 | ) | ||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 111,767 | 108,101 | 104,455 | 100,963 | 97,407 | 94,027 | 90,750 | 87,559 | 84,294 | 81,057 | 77,992 | 74,903 | 71,775 | 68,801 | 65,867 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 111,767 | 108,101 | 104,455 | 100,963 | 97,407 | 94,027 | 90,750 | 87,559 | 84,294 | 81,057 | 77,992 | 74,903 | 71,775 | 68,801 | 65,867 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 329,821 | 326,563 | 322,945 | 319,283 | 315,355 | 311,367 | 307,284 | 302,987 | 298,103 | 293,111 | 287,874 | 282,240 | 275,686 | 269,486 | 263,121 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 100,736 | 97,745 | 94,740 | 91,856 | 88,877 | 86,046 | 83,288 | 80,591 | 77,793 | 74,997 | 72,350 | 69,657 | 66,902 | 64,281 | 61,681 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 15,457 | 14,623 | 13,842 | 13,082 | 12,371 | 11,671 | 11,022 | 10,400 | 9,789 | 9,217 | 8,668 | 8,141 | 7,656 | 7,185 | 6,732 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 1,897,069 | 1,797,190 | 1,701,167 | 1,611,696 | 1,525,845 | 1,442,468 | 1,364,624 | 1,289,168 | 1,216,978 | 1,148,977 | 1,083,327 | 1,019,868 | 960,246 | 903,436 | 847,386 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 441,158 | 434,267 | 427,035 | 419,911 | 412,455 | 405,115 | 397,779 | 390,314 | 382,187 | 373,977 | 365,693 | 356,988 | 347,322 | 338,162 | 328,877 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 111,337 | 107,704 | 104,090 | 100,628 | 97,100 | 93,747 | 90,495 | 87,327 | 84,084 | 80,866 | 77,819 | 74,748 | 71,636 | 68,676 | 65,756 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 441,158 | 434,267 | 427,035 | 419,911 | 412,455 | 405,115 | 397,779 | 390,314 | 382,187 | 373,977 | 365,693 | 356,988 | 347,322 | 338,162 | 328,877 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 8,324 | 7,953 | 7,595 | 7,249 | 6,906 | 6,567 | 6,256 | 5,963 | 5,639 | 5,207 | 4,981 | 4,763 | 4,557 | 4,364 | 4,198 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 73,807 | 75,114 | 76,172 | 77,009 | 77,672 | 78,158 | 78,477 | 78,649 | 78,702 | 78,656 | 78,539 | 78,374 | 78,169 | 77,947 | 77,706 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 69,698 | 70,814 | 71,708 | 72,410 | 72,960 | 73,360 | 73,620 | 73,759 | 73,801 | 73,765 | 73,673 | 73,545 | 73,387 | 73,217 | 73,035 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 65,950 | 66,904 | 67,662 | 68,251 | 68,708 | 69,038 | 69,250 | 69,363 | 69,396 | 69,367 | 69,295 | 69,195 | 69,073 | 68,943 | 68,805 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 94,064 | 95,600 | 96,828 | 97,789 | 98,537 | 99,071 | 99,401 | 99,553 | 99,558 | 99,444 | 99,242 | 98,983 | 98,677 | 98,356 | 98,012 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 88,918 | 90,230 | 91,269 | 92,074 | 92,695 | 93,135 | 93,404 | 93,526 | 93,530 | 93,440 | 93,281 | 93,080 | 92,844 | 92,598 | 92,339 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 84,220 | 85,342 | 86,222 | 86,897 | 87,414 | 87,776 | 87,996 | 88,095 | 88,098 | 88,026 | 87,902 | 87,744 | 87,562 | 87,374 | 87,177 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 111,330 | 107,699 | 104,085 | 100,624 | 97,096 | 93,744 | 90,492 | 87,325 | 84,081 | 80,864 | 77,818 | 74,747 | 71,635 | 68,675 | 65,756 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 6,832 | 6,556 | 6,286 | 6,031 | 5,781 | 5,540 | 5,311 | 5,087 | 4,868 | 4,659 | 4,454 | 4,250 | 4,051 | 3,861 | 3,672 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 426 | 420 | 407 | 386 | 377 | 362 | 345 | 335 | 326 | 310 | 303 | 297 | 288 | 275 | 269 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 5,412 | 4,853 | 4,151 | 3,474 | 2,895 | 2,213 | 1,462 | 720 | 25 | (621 | ) | (1,171 | ) | (1,609 | ) | (2,034 | ) | (2,289 | ) | (2,612 | ) | ||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (837 | ) | (724 | ) | (578 | ) | (444 | ) | (332 | ) | (199 | ) | (51 | ) | 99 | 239 | 373 | 493 | 583 | 669 | 714 | 779 | |||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 5,001 | 4,549 | 3,981 | 3,415 | 2,939 | 2,376 | 1,756 | 1,153 | 590 | 62 | (374 | ) | (729 | ) | (1,077 | ) | (1,300 | ) | (1,564 | ) | |||||||||||||||||||||||||
Present Values | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | �� | ||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-17 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||
Line of Business Projection | 03:23 PM |
Existing Business at 09/30/2020 (000’s) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Total Existing Business | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 398,539 | 369,980 | 346,689 | 325,724 | 304,944 | 285,509 | 267,539 | 249,012 | 229,490 | 212,133 | 197,813 | 185,077 | 173,314 | 161,609 | 149,687 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 349,565 | 330,149 | 313,533 | 299,639 | 286,657 | 277,116 | 266,736 | 256,808 | 247,096 | 237,691 | 230,138 | 221,998 | 213,481 | 205,498 | 197,156 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 8,711 | 8,612 | 8,534 | 8,441 | 8,336 | 8,220 | 8,095 | 7,959 | 7,816 | 7,504 | 7,344 | 7,176 | 7,007 | 6,833 | 6,657 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 3,189 | 2,929 | 2,748 | 2,366 | 2,060 | 1,701 | 1,352 | 1,124 | 943 | 861 | 722 | 690 | 689 | 667 | 661 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 4,553 | 4,418 | 4,135 | 4,007 | 3,758 | 3,581 | 3,471 | 3,322 | 3,247 | 3,105 | 3,043 | 2,870 | 2,749 | 2,576 | 2,458 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 10,665 | 10,403 | 9,930 | 9,543 | 8,985 | 8,478 | 8,122 | 7,790 | 7,654 | 7,447 | 7,415 | 7,157 | 6,990 | 6,790 | 6,589 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 744,787 | 696,848 | 657,438 | 622,621 | 589,254 | 560,486 | 532,129 | 503,792 | 474,444 | 447,638 | 425,559 | 404,914 | 384,753 | 365,242 | 345,114 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 517,250 | 550,635 | 495,875 | 379,410 | 421,812 | 285,738 | 294,863 | 271,093 | 263,669 | 240,941 | 228,983 | 214,408 | 201,737 | 192,625 | 185,786 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | (37,311 | ) | (38,902 | ) | (39,996 | ) | (40,967 | ) | (41,749 | ) | (42,242 | ) | (42,641 | ) | (43,088 | ) | (43,287 | ) | (43,523 | ) | (43,627 | ) | (43,419 | ) | (43,088 | ) | (43,021 | ) | (42,708 | ) | |||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 283,050 | 237,650 | 271,333 | 318,048 | 232,863 | 348,848 | 353,170 | 343,326 | 339,577 | 332,138 | 317,551 | 307,852 | 296,754 | 280,311 | 275,017 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 48,148 | 46,288 | 44,487 | 42,792 | 41,234 | 39,751 | 38,275 | 36,804 | 35,332 | 33,876 | 32,518 | 31,207 | 29,932 | 28,663 | 27,414 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 20,430 | 18,086 | 17,167 | 16,026 | 15,079 | 14,290 | 13,469 | 12,523 | 11,648 | 10,953 | 10,277 | 9,633 | 9,038 | 8,439 | 7,843 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 23,797 | 22,904 | 22,499 | 21,976 | 21,392 | 20,922 | 20,509 | 19,986 | 19,554 | 18,975 | 18,622 | 18,125 | 17,789 | 17,361 | 17,053 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | (4,250 | ) | (230 | ) | (43 | ) | (520 | ) | (832 | ) | (710 | ) | (503 | ) | (522 | ) | (1,239 | ) | (334 | ) | 891 | 1,004 | 1,383 | 1,174 | 985 | ||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | (255,866 | ) | (271,691 | ) | (275,978 | ) | (222,164 | ) | (202,390 | ) | (206,765 | ) | (218,649 | ) | (200,931 | ) | (203,266 | ) | (205,422 | ) | (218,124 | ) | (212,403 | ) | (202,902 | ) | (198,453 | ) | (196,784 | ) | |||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 595,248 | 564,739 | 535,343 | 514,601 | 487,409 | 459,832 | 458,493 | 439,190 | 421,989 | 387,603 | 347,091 | 326,406 | 310,643 | 287,097 | 274,605 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 149,539 | 132,109 | 122,095 | 108,020 | 101,846 | 100,654 | 73,636 | 64,602 | 52,455 | 60,034 | 78,468 | 78,508 | 74,110 | 78,145 | 70,509 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 5,253 | 4,457 | 492 | 1,073 | 280 | 39 | 343 | 194 | 244 | 192 | 238 | 194 | (85 | ) | (89 | ) | (60 | ) | |||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 4,150 | 3,521 | 388 | 848 | 221 | 31 | 271 | 154 | 193 | 152 | 188 | 153 | (67 | ) | (70 | ) | (47 | ) | |||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 150,642 | 133,045 | 122,199 | 108,245 | 101,904 | 100,662 | 73,708 | 64,643 | 52,506 | 60,075 | 78,518 | 78,548 | 74,092 | 78,127 | 70,496 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 32,806 | 29,142 | 25,817 | 23,281 | 22,761 | 17,941 | 14,591 | 12,185 | 8,797 | 16,138 | 13,560 | 12,523 | 11,048 | 9,658 | 7,816 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 117,836 | 103,903 | 96,382 | 84,964 | 79,143 | 82,722 | 59,117 | 52,457 | 43,710 | 43,936 | 64,957 | 66,026 | 63,044 | 68,469 | 62,680 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 7,988,734 | 7,732,868 | 7,461,177 | 7,185,199 | 6,963,035 | 6,760,645 | 6,553,879 | 6,335,230 | 6,134,299 | 5,931,033 | 5,725,611 | 5,507,487 | 5,295,084 | 5,092,182 | 4,893,729 | 4,696,944 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 7,912,282 | 7,656,440 | 7,388,511 | 7,115,732 | 6,896,085 | 6,695,960 | 6,491,382 | 6,275,004 | 6,076,640 | 5,875,210 | 5,672,145 | 5,457,545 | 5,248,552 | 5,049,407 | 4,854,543 | 4,661,124 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 685,361 | 682,847 | 678,574 | 673,113 | 666,519 | 658,922 | 650,556 | 641,468 | 631,561 | 621,043 | 610,000 | 598,382 | 586,454 | 574,331 | 561,718 | 548,840 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 7,781,797 | 7,504,785 | 7,215,314 | 6,925,818 | 6,691,216 | 6,472,151 | 6,270,612 | 6,046,409 | 5,842,413 | 5,639,271 | 5,406,481 | 5,192,505 | 4,988,589 | 4,796,416 | 4,618,965 | 4,443,754 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 16,500 | 17,460 | 18,053 | 15,694 | 14,175 | 12,336 | 10,666 | 9,585 | 8,615 | 7,864 | 7,155 | 6,621 | 6,085 | 5,328 | 4,591 | 3,883 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 540,612 | 512,204 | 485,087 | 459,654 | 435,384 | 412,832 | 391,723 | 371,259 | 351,388 | 331,580 | 312,226 | 295,062 | 278,437 | 262,404 | 246,683 | 231,851 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 53,137,964 | 50,428,051 | 47,876,807 | 45,504,115 | 43,163,165 | 40,900,682 | 38,791,287 | 36,654,791 | 34,558,652 | 32,410,590 | 30,273,658 | 28,479,848 | 26,717,796 | 24,990,862 | 23,179,385 | 21,363,145 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 7,399,756 | 7,075,939 | 6,699,081 | 6,360,747 | 6,125,698 | 5,838,627 | 5,676,168 | 5,487,072 | 5,306,820 | 5,110,695 | 4,911,391 | 4,719,050 | 4,531,013 | 4,358,779 | 4,190,122 | 4,024,840 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 5,629,621 | 5,264,132 | 4,850,067 | 4,478,440 | 4,215,194 | 3,896,544 | 3,704,105 | 3,504,105 | 3,321,319 | 3,143,665 | 2,976,207 | 2,804,513 | 2,642,716 | 2,488,999 | 2,340,844 | 2,196,978 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 6,314,982 | 5,946,979 | 5,528,640 | 5,151,553 | 4,881,714 | 4,555,466 | 4,354,661 | 4,145,573 | 3,952,880 | 3,764,708 | 3,586,207 | 3,402,895 | 3,229,170 | 3,063,330 | 2,902,562 | 2,745,818 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 185,549 | 186,597 | 187,580 | 188,220 | 188,355 | 188,314 | 187,856 | 187,233 | 186,381 | 185,254 | 183,759 | 181,878 | 179,694 | 177,312 | 174,716 | 171,893 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 73,145 | 68,871 | 64,878 | 61,636 | 58,598 | 55,502 | 52,604 | 49,831 | 46,741 | 43,666 | 40,975 | 38,342 | 35,936 | 33,562 | 31,146 | 28,766 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 76,453 | 76,428 | 72,666 | 69,467 | 66,950 | 64,685 | 62,497 | 60,226 | 57,659 | 55,823 | 53,466 | 49,942 | 46,532 | 42,775 | 39,186 | 35,821 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 110,127 | 200,880 | 279,556 | 344,375 | 400,803 | 455,924 | 492,739 | 523,270 | 547,045 | 569,380 | 600,241 | 629,557 | 655,718 | 682,271 | 704,990 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 109,107 | 198,187 | 274,698 | 337,149 | 391,013 | 443,142 | 477,636 | 505,977 | 527,843 | 548,194 | 576,053 | 602,273 | 625,454 | 648,765 | 668,524 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 108,106 | 195,559 | 269,983 | 330,174 | 381,612 | 430,936 | 463,276 | 489,602 | 509,727 | 528,287 | 553,460 | 576,934 | 597,498 | 617,987 | 635,195 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 140,787 | 256,993 | 356,744 | 439,323 | 511,980 | 579,056 | 624,957 | 662,580 | 691,140 | 721,679 | 758,982 | 793,859 | 824,604 | 854,903 | 880,454 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 139,483 | 253,548 | 350,553 | 430,116 | 499,471 | 562,905 | 605,913 | 640,838 | 667,104 | 694,930 | 728,605 | 759,798 | 787,041 | 813,640 | 835,864 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 138,204 | 250,185 | 344,545 | 421,228 | 487,459 | 547,481 | 587,802 | 620,244 | 644,419 | 669,795 | 700,223 | 728,150 | 752,317 | 775,697 | 795,050 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 6,910 | 6,451 | 6,052 | 5,687 | 5,332 | 5,013 | 4,720 | 4,445 | 4,167 | 3,851 | 3,605 | 3,384 | 3,184 | 2,986 | 2,813 | 2,647 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 7,781,797 | 7,537,417 | 7,276,116 | 7,010,892 | 6,797,061 | 6,595,385 | 6,408,025 | 6,194,983 | 5,999,225 | 5,801,415 | 5,571,247 | 5,357,514 | 5,151,557 | 4,955,214 | 4,771,515 | 4,588,023 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 398,548 | 375,393 | 358,354 | 341,693 | 327,424 | 314,090 | 300,954 | 287,428 | 274,749 | 261,987 | 249,470 | 237,390 | 225,789 | 214,695 | 203,634 | 192,681 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change | 0 | 31,498 | 24,898 | 24,163 | 21,423 | 20,188 | 19,711 | 19,826 | 18,697 | 18,514 | 18,002 | 17,302 | 16,572 | 15,821 | 15,555 | 15,216 | ||||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 150,642 | 133,045 | 122,199 | 108,245 | 101,904 | 100,662 | 73,708 | 64,643 | 52,506 | 60,075 | 78,518 | 78,548 | 74,092 | 78,127 | 70,496 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (32,806 | ) | (29,142 | ) | (25,817 | ) | (23,281 | ) | (22,761 | ) | (17,941 | ) | (14,591 | ) | (12,185 | ) | (8,797 | ) | (16,138 | ) | (13,560 | ) | (12,523 | ) | (11,048 | ) | (9,658 | ) | (7,816 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 149,334 | 128,800 | 120,545 | 106,387 | 99,332 | 102,433 | 78,944 | 71,154 | 62,223 | 61,938 | 82,260 | 82,598 | 78,865 | 84,024 | 77,896 | |||||||||||||||||||||||||||||||||
PV’s -- Total Existing Business | LOB Sum | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | PV Y2+ | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | ||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 969,922 | 909,985 | 856,671 | 809,006 | 766,188 | 727,551 | 887,175 | 832,141 | 783,129 | 739,265 | 699,826 | 664,215 | ||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (172,108 | ) | (165,338 | ) | (158,761 | ) | (152,453 | ) | (146,454 | ) | (140,780 | ) | (151,349 | ) | (145,759 | ) | (140,243 | ) | (134,892 | ) | (129,758 | ) | (124,867 | ) | ||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (164,475 | ) | (183,008 | ) | (198,855 | ) | (212,544 | ) | (224,481 | ) | (234,974 | ) | (156,434 | ) | (174,109 | ) | (189,226 | ) | (202,288 | ) | (213,677 | ) | (223,689 | ) | ||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 633,339 | 561,638 | 499,056 | 444,009 | 395,253 | 351,797 | 579,391 | 512,273 | 453,660 | 402,085 | 356,392 | 315,659 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-18 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||
Line of Business Projection (cont.) | 03:23 PM |
Existing Business at 09/30/2020 (000’s) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Total Existing Business | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 138,581 | 127,846 | 117,484 | 107,273 | 97,743 | 89,876 | 83,552 | 77,943 | 72,294 | 67,025 | 61,337 | 56,369 | 52,241 | 47,634 | 43,473 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 189,338 | 180,612 | 171,564 | 163,097 | 154,434 | 146,150 | 138,388 | 131,347 | 124,259 | 116,971 | 110,215 | 104,278 | 98,857 | 93,536 | 89,281 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 6,477 | 6,295 | 6,111 | 5,924 | 5,738 | 5,553 | 5,369 | 5,186 | 5,001 | 4,817 | 4,635 | 4,454 | 4,268 | 4,088 | 3,914 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 563 | 447 | 400 | 248 | 254 | 133 | 28 | 2 | (404 | ) | (100 | ) | (322 | ) | (663 | ) | (546 | ) | (426 | ) | (143 | ) | |||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 2,339 | 2,222 | 2,154 | 2,090 | 1,977 | 1,977 | 1,926 | 1,864 | 1,856 | 1,814 | 1,904 | 1,844 | 1,758 | 1,685 | 1,658 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 6,346 | 6,123 | 5,943 | 5,798 | 5,560 | 5,427 | 5,246 | 5,021 | 4,774 | 4,351 | 4,327 | 4,158 | 3,968 | 3,791 | 3,644 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 326,274 | 306,855 | 287,462 | 268,655 | 250,631 | 234,308 | 220,164 | 207,592 | 194,520 | 182,548 | 169,634 | 158,435 | 149,093 | 139,355 | 131,222 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 176,656 | 180,932 | 176,065 | 173,869 | 158,988 | 140,451 | 132,913 | 125,899 | 119,109 | 111,983 | 105,888 | 99,936 | 95,386 | 91,564 | 83,308 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | (42,195 | ) | (42,005 | ) | (41,595 | ) | (41,002 | ) | (40,482 | ) | (39,672 | ) | (38,944 | ) | (38,293 | ) | (37,941 | ) | (37,155 | ) | (36,398 | ) | (35,770 | ) | (35,605 | ) | (34,205 | ) | (33,282 | ) | |||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 263,909 | 268,004 | 260,106 | 252,751 | 239,696 | 230,688 | 224,816 | 216,200 | 207,403 | 201,098 | 194,263 | 187,768 | 179,989 | 172,466 | 163,495 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 26,259 | 25,137 | 23,998 | 22,864 | 21,721 | 20,784 | 19,976 | 19,195 | 18,448 | 17,714 | 17,014 | 16,336 | 15,674 | 15,026 | 14,404 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 7,325 | 6,828 | 6,343 | 5,896 | 5,424 | 5,004 | 4,660 | 4,357 | 4,056 | 3,807 | 3,531 | 3,274 | 3,043 | 2,806 | 2,588 | ||||||||||||||||||||||||||||||
DIVIDENDS | 16,707 | 16,348 | 15,957 | 15,589 | 15,199 | 14,968 | 14,695 | 14,390 | 14,094 | 13,746 | 13,387 | 13,039 | 12,589 | 12,180 | 11,733 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 1,382 | 1,851 | 2,000 | (691 | ) | (441 | ) | (316 | ) | (142 | ) | 245 | 645 | 1,213 | 967 | 1,303 | 1,419 | (67 | ) | (105 | ) | ||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (189,867 | ) | (187,314 | ) | (181,217 | ) | (175,870 | ) | (174,230 | ) | (170,607 | ) | (165,865 | ) | (159,016 | ) | (152,644 | ) | (146,018 | ) | (142,312 | ) | (138,158 | ) | (130,765 | ) | (127,032 | ) | (117,489 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 260,177 | 269,781 | 261,657 | 253,407 | 225,876 | 201,300 | 192,109 | 182,978 | 173,170 | 166,388 | 156,340 | 147,728 | 141,731 | 132,736 | 124,652 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 66,098 | 37,074 | 25,805 | 15,248 | 24,755 | 33,008 | 28,055 | 24,614 | 21,350 | 16,160 | 13,294 | 10,707 | 7,363 | 6,619 | 6,570 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | (93 | ) | (116 | ) | (60 | ) | (128 | ) | (134 | ) | (151 | ) | (572 | ) | (434 | ) | (624 | ) | (175 | ) | (447 | ) | (876 | ) | (721 | ) | (569 | ) | (212 | ) | |||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | (74 | ) | (92 | ) | (48 | ) | (101 | ) | (106 | ) | (119 | ) | (452 | ) | (343 | ) | (493 | ) | (138 | ) | (353 | ) | (692 | ) | (570 | ) | (450 | ) | (167 | ) | |||||||||||||||
BOOK PROFIT | 66,078 | 37,050 | 25,792 | 15,221 | 24,727 | 32,976 | 27,935 | 24,522 | 21,219 | 16,123 | 13,200 | 10,523 | 7,211 | 6,499 | 6,526 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 5,447 | 3,026 | 1,264 | (734 | ) | 2,257 | 1,341 | 428 | 37 | (949 | ) | (1,784 | ) | (2,563 | ) | (3,020 | ) | (3,411 | ) | (3,554 | ) | (3,610 | ) | ||||||||||||||||||||||
PROFITS RELEASED | 60,631 | 34,024 | 24,528 | 15,955 | 22,470 | 31,635 | 27,507 | 24,486 | 22,168 | 17,907 | 15,763 | 13,542 | 10,622 | 10,054 | 10,136 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 4,507,078 | 4,319,763 | 4,138,546 | 3,962,676 | 3,788,446 | 3,617,839 | 3,451,974 | 3,292,958 | 3,140,315 | 2,994,297 | 2,851,985 | 2,713,827 | 2,583,062 | 2,456,029 | 2,338,540 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 4,474,610 | 4,291,194 | 4,114,052 | 3,939,288 | 3,766,381 | 3,596,889 | 3,432,027 | 3,274,299 | 3,123,278 | 2,979,219 | 2,838,895 | 2,702,934 | 2,574,359 | 2,448,144 | 2,331,251 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 535,879 | 522,490 | 508,877 | 495,198 | 481,373 | 467,691 | 454,065 | 440,414 | 426,419 | 412,508 | 398,647 | 384,701 | 370,171 | 356,302 | 342,645 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 4,282,044 | 4,105,698 | 3,932,430 | 3,760,311 | 3,585,306 | 3,425,896 | 3,270,083 | 3,119,979 | 2,978,053 | 2,841,684 | 2,709,085 | 2,580,431 | 2,457,966 | 2,338,029 | 2,227,561 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 3,246 | 2,707 | 2,259 | 1,910 | 1,550 | 1,298 | 819 | 473 | 385 | 347 | 315 | 286 | 263 | 239 | 215 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 218,531 | 205,156 | 192,201 | 179,312 | 167,216 | 158,221 | 149,664 | 141,427 | 133,506 | 125,807 | 118,688 | 111,774 | 105,226 | 98,800 | 92,865 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 19,673,458 | 17,877,162 | 16,131,964 | 14,343,189 | 12,674,592 | 11,887,857 | 11,136,975 | 10,403,479 | 9,649,431 | 8,842,743 | 8,042,963 | 7,252,499 | 6,499,728 | 5,787,579 | 5,151,679 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 3,867,089 | 3,701,218 | 3,537,163 | 3,372,464 | 3,209,962 | 3,062,625 | 2,921,125 | 2,791,763 | 2,668,794 | 2,551,969 | 2,439,306 | 2,331,060 | 2,226,804 | 2,126,788 | 2,034,676 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 2,061,645 | 1,933,270 | 1,810,354 | 1,691,939 | 1,579,817 | 1,474,900 | 1,377,094 | 1,286,853 | 1,203,751 | 1,126,786 | 1,054,155 | 986,056 | 922,698 | 863,981 | 809,934 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 2,597,524 | 2,455,760 | 2,319,231 | 2,187,136 | 2,061,190 | 1,942,592 | 1,831,160 | 1,727,267 | 1,630,170 | 1,539,294 | 1,452,801 | 1,370,757 | 1,292,869 | 1,220,283 | 1,152,579 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 168,738 | 165,445 | 162,046 | 158,441 | 154,692 | 150,772 | 146,652 | 142,424 | 138,090 | 133,432 | 128,958 | 124,458 | 119,851 | 115,315 | 110,848 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 26,796 | 24,749 | 22,674 | 20,877 | 19,114 | 17,682 | 16,537 | 15,494 | 14,516 | 13,771 | 12,750 | 11,856 | 11,084 | 10,200 | 9,499 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 32,468 | 28,570 | 24,495 | 23,388 | 22,066 | 20,950 | 19,947 | 18,660 | 17,036 | 15,078 | 13,091 | 10,893 | 8,702 | 7,885 | 7,289 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 725,527 | 736,299 | 743,555 | 747,967 | 753,774 | 761,414 | 767,623 | 772,788 | 777,158 | 780,458 | 783,172 | 785,351 | 786,949 | 788,362 | 789,694 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 686,222 | 695,418 | 701,556 | 705,253 | 710,074 | 716,358 | 721,418 | 725,588 | 729,084 | 731,699 | 733,830 | 735,525 | 736,756 | 737,835 | 738,843 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 650,466 | 658,328 | 663,528 | 666,631 | 670,640 | 675,819 | 679,950 | 683,323 | 686,126 | 688,202 | 689,879 | 691,201 | 692,152 | 692,978 | 693,742 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 902,837 | 914,566 | 922,197 | 926,406 | 932,796 | 940,760 | 947,065 | 952,238 | 956,422 | 959,392 | 961,665 | 963,359 | 964,443 | 965,357 | 966,214 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 855,151 | 865,165 | 871,619 | 875,146 | 880,451 | 887,002 | 892,141 | 896,317 | 899,663 | 902,018 | 903,802 | 905,120 | 905,955 | 906,653 | 907,302 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 811,694 | 820,255 | 825,722 | 828,683 | 833,095 | 838,493 | 842,688 | 846,067 | 848,749 | 850,619 | 852,024 | 853,051 | 853,696 | 854,230 | 854,722 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 2,494 | 2,332 | 2,192 | 2,047 | 1,923 | 1,798 | 1,694 | 1,591 | 1,502 | 1,416 | 1,336 | 1,254 | 1,179 | 1,105 | 1,036 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 4,417,263 | 4,232,305 | 4,050,795 | 3,870,773 | 3,688,195 | 3,521,620 | 3,359,115 | 3,202,804 | 3,055,096 | 2,913,337 | 2,775,694 | 2,642,310 | 2,515,467 | 2,391,447 | 2,277,158 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 182,375 | 172,052 | 162,058 | 152,159 | 142,620 | 134,944 | 127,632 | 120,646 | 113,915 | 107,410 | 101,062 | 94,946 | 89,202 | 83,655 | 78,590 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change | 14,340 | 14,140 | 13,596 | 13,292 | 12,725 | 10,661 | 10,138 | 9,657 | 9,257 | 8,889 | 8,597 | 8,232 | 7,731 | 7,415 | 6,816 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 66,078 | 37,050 | �� | 25,792 | 15,221 | 24,727 | 32,976 | 27,935 | 24,522 | 21,219 | 16,123 | 13,200 | 10,523 | 7,211 | 6,499 | 6,526 | |||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (5,447 | ) | (3,026 | ) | (1,264 | ) | 734 | (2,257 | ) | (1,341 | ) | (428 | ) | (37 | ) | 949 | 1,784 | 2,563 | 3,020 | 3,411 | 3,554 | 3,610 | |||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 74,971 | 48,165 | 38,124 | 29,247 | 35,195 | 42,296 | 37,645 | 34,143 | 31,425 | 26,796 | 24,360 | 21,775 | 18,353 | 17,469 | 16,951 | ||||||||||||||||||||||||||||||
PV’s -- Total Existing Business | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-19 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||
Line of Business Projection | 03:24 PM | |||||||||||
Baseline Production |
Future Business - 10 Years of New Business (000) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Fixed Deferred Annuities | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 25,305 | 25,282 | 25,499 | 25,847 | 26,193 | 26,571 | 27,015 | 27,530 | 28,124 | 28,799 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 820 | 1,603 | 2,359 | 3,096 | 3,642 | 4,157 | 4,647 | 5,113 | 5,499 | 5,873 | 5,274 | 4,676 | 4,059 | 3,441 | 3,061 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 26,125 | 26,885 | 27,858 | 28,943 | 29,835 | 30,728 | 31,662 | 32,643 | 33,623 | 34,672 | 5,274 | 4,676 | 4,059 | 3,441 | 3,061 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 805 | 1,734 | 2,632 | 3,241 | 8,999 | 9,708 | 11,125 | 11,865 | 14,552 | 15,246 | 15,553 | 15,293 | 15,772 | 15,867 | 8,988 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 786 | 1,601 | 2,384 | 3,147 | 3,638 | 4,124 | 4,606 | 5,081 | 5,450 | 5,828 | 5,236 | 4,586 | 3,909 | 3,248 | 2,939 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 621 | 620 | 625 | 633 | 641 | 650 | 661 | 673 | 686 | 702 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 106 | 212 | 314 | 414 | 495 | 574 | 649 | 721 | 785 | 847 | 789 | 724 | 657 | 590 | 546 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 720 | 715 | 720 | 727 | 734 | 742 | 752 | 763 | 776 | 790 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 22,238 | 21,233 | 20,464 | 20,089 | 14,357 | 13,955 | 12,922 | 12,534 | 10,199 | 10,023 | (16,596 | ) | (16,396 | ) | (16,935 | ) | (17,037 | ) | (9,890 | ) | |||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 25,277 | 26,114 | 27,139 | 28,250 | 28,865 | 29,754 | 30,715 | 31,636 | 32,447 | 33,436 | 4,981 | 4,206 | 3,403 | 2,668 | 2,584 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | 849 | 771 | 719 | 693 | 970 | 974 | 948 | 1,007 | 1,176 | 1,236 | 292 | 470 | 656 | 774 | 477 | ||||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | 849 | 771 | 719 | 693 | 970 | 974 | 948 | 1,007 | 1,176 | 1,236 | 292 | 470 | 656 | 774 | 477 | ||||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 246 | 225 | 210 | 201 | 255 | 252 | 243 | 252 | 283 | 293 | 12 | 50 | 89 | 113 | 51 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | 603 | 546 | 509 | 492 | 715 | 722 | 705 | 756 | 892 | 943 | 280 | 420 | 568 | 660 | 426 | ||||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 0 | 22,238 | 43,471 | 63,935 | 84,024 | 98,381 | 112,336 | 125,258 | 137,792 | 147,991 | 158,014 | 141,417 | 125,021 | 108,085 | 91,048 | 81,159 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 0 | 22,238 | 43,471 | 63,935 | 84,024 | 98,381 | 112,336 | 125,258 | 137,792 | 147,991 | 158,014 | 141,417 | 125,021 | 108,085 | 91,048 | 81,159 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 0 | 21,916 | 42,850 | 63,034 | 82,860 | 96,973 | 110,703 | 123,417 | 135,759 | 145,784 | 155,648 | 139,286 | 123,123 | 106,421 | 89,618 | 79,962 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 0 | 823 | 1,596 | 2,338 | 3,059 | 3,715 | 4,350 | 4,942 | 5,508 | 6,036 | 6,545 | 6,157 | 5,771 | 5,381 | 4,985 | 4,646 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 0 | 22,238 | 43,471 | 63,935 | 84,024 | 98,381 | 112,336 | 125,258 | 137,792 | 147,991 | 158,014 | 141,417 | 125,021 | 108,085 | 91,048 | 81,159 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 24,019 | 46,619 | 68,095 | 88,888 | 104,014 | 118,551 | 131,847 | 144,648 | 155,152 | 165,423 | 146,952 | 129,111 | 111,173 | 93,497 | 82,838 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 24,019 | 46,619 | 68,095 | 88,888 | 104,014 | 118,551 | 131,847 | 144,648 | 155,152 | 165,423 | 146,952 | 129,111 | 111,173 | 93,497 | 82,838 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | 563 | 1,040 | 1,456 | 1,831 | 2,341 | 2,822 | 3,261 | 3,701 | 4,186 | 4,666 | 4,799 | 4,985 | 5,221 | 5,477 | 5,631 | ||||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | 558 | 1,026 | 1,430 | 1,792 | 2,278 | 2,734 | 3,145 | 3,553 | 4,000 | 4,436 | 4,557 | 4,723 | 4,932 | 5,157 | 5,291 | ||||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | 553 | 1,012 | 1,405 | 1,754 | 2,219 | 2,650 | 3,035 | 3,414 | 3,825 | 4,224 | 4,332 | 4,481 | 4,667 | 4,864 | 4,981 | ||||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | 793 | 1,466 | 2,053 | 2,581 | 3,273 | 3,922 | 4,512 | 5,099 | 5,738 | 6,366 | 6,505 | 6,714 | 6,986 | 7,286 | 7,459 | |||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | 786 | 1,446 | 2,017 | 2,526 | 3,186 | 3,800 | 4,353 | 4,897 | 5,486 | 6,058 | 6,183 | 6,370 | 6,611 | 6,875 | 7,025 | |||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | 779 | 1,427 | 1,982 | 2,473 | 3,103 | 3,684 | 4,203 | 4,708 | 5,249 | 5,771 | 5,885 | 6,052 | 6,266 | 6,497 | 6,628 | |||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 0 | 22,238 | 43,471 | 63,935 | 84,024 | 98,381 | 112,336 | 125,258 | 137,792 | 147,991 | 158,014 | 141,417 | 125,021 | 108,085 | 91,048 | 81,159 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 0 | 2,765 | 3,882 | 4,973 | 6,053 | 6,831 | 7,590 | 8,298 | 8,991 | 9,565 | 10,136 | 7,447 | 6,584 | 5,692 | 4,795 | 4,274 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | (2,765 | ) | (1,059 | ) | (1,010 | ) | (976 | ) | (651 | ) | (616 | ) | (550 | ) | (519 | ) | (386 | ) | (370 | ) | 2,901 | 1,019 | 1,030 | 1,016 | 621 | ||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 849 | 771 | 719 | 693 | 970 | 974 | 948 | 1,007 | 1,176 | 1,236 | 292 | 470 | 656 | 774 | 477 | |||||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (246 | ) | (225 | ) | (210 | ) | (201 | ) | (255 | ) | (252 | ) | (243 | ) | (252 | ) | (283 | ) | (293 | ) | (12 | ) | (50 | ) | (89 | ) | (113 | ) | (51 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | (2,163 | ) | (513 | ) | (501 | ) | (483 | ) | 64 | 107 | 155 | 237 | 506 | 573 | 3,181 | 1,440 | 1,597 | 1,677 | 1,047 | |||||||||||||||||||||||||||||
PV’s -- Fixed Deferred Annuities | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | ||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 8,860 | 8,184 | 7,591 | 7,066 | 6,601 | 6,185 | ||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (2,051 | ) | (1,918 | ) | (1,799 | ) | (1,693 | ) | (1,598 | ) | (1,512 | ) | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (2,957 | ) | (3,254 | ) | (3,490 | ) | (3,676 | ) | (3,821 | ) | (3,931 | ) | ||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 3,852 | 3,012 | 2,301 | 1,697 | 1,182 | 742 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-20 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||
Line of Business Projection | 03:24 PM | ||||||||||
Baseline Production |
Future Business - 10 Years of New Business (000) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Fixed Deferred Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 2,704 | 2,356 | 2,026 | 1,797 | 1,584 | 1,384 | 1,203 | 1,068 | 946 | 831 | 726 | 642 | 566 | 496 | 432 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 2,704 | 2,356 | 2,026 | 1,797 | 1,584 | 1,384 | 1,203 | 1,068 | 946 | 831 | 726 | 642 | 566 | 496 | 432 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 8,828 | 8,167 | 7,943 | 5,065 | 4,843 | 4,234 | 3,946 | 2,711 | 2,489 | 2,296 | 2,086 | 1,560 | 1,405 | 1,272 | 1,147 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 2,636 | 2,316 | 2,004 | 1,839 | 1,674 | 1,504 | 1,340 | 1,242 | 1,146 | 1,050 | 956 | 889 | 823 | 757 | 692 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 502 | 458 | 417 | 385 | 354 | 324 | 297 | 275 | 254 | 234 | 216 | 199 | 184 | 169 | 155 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (9,803 | ) | (9,228 | ) | (8,983 | ) | (5,988 | ) | (5,774 | ) | (5,154 | ) | (4,813 | ) | (3,500 | ) | (3,246 | ) | (3,018 | ) | (2,767 | ) | (2,196 | ) | (2,008 | ) | (1,841 | ) | (1,680 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 2,163 | 1,714 | 1,381 | 1,302 | 1,097 | 909 | 770 | 729 | 644 | 564 | 490 | 453 | 403 | 357 | 314 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 541 | 642 | 645 | 495 | 487 | 475 | 433 | 339 | 301 | 268 | 236 | 189 | 162 | 139 | 117 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
BOOK PROFIT | 541 | 642 | 645 | 495 | 487 | 475 | 433 | 339 | 301 | 268 | 236 | 189 | 162 | 139 | 117 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 67 | 93 | 98 | 71 | 74 | 77 | 73 | 58 | 55 | 54 | 50 | 40 | 34 | 29 | 25 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 474 | 549 | 547 | 424 | 413 | 399 | 360 | 281 | 246 | 214 | 186 | 149 | 128 | 110 | 93 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 71,356 | 62,128 | 53,145 | 47,157 | 41,384 | 36,230 | 31,417 | 27,917 | 24,671 | 21,653 | 18,886 | 16,690 | 14,682 | 12,841 | 11,162 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 71,356 | 62,128 | 53,145 | 47,157 | 41,384 | 36,230 | 31,417 | 27,917 | 24,671 | 21,653 | 18,886 | 16,690 | 14,682 | 12,841 | 11,162 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 70,382 | 61,354 | 52,549 | 46,717 | 41,076 | 36,032 | 31,304 | 27,866 | 24,658 | 21,653 | 18,886 | 16,690 | 14,682 | 12,841 | 11,162 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 4,302 | 3,979 | 3,663 | 3,374 | 3,088 | 2,839 | 2,607 | 2,395 | 2,198 | 2,013 | 1,842 | 1,685 | 1,537 | 1,399 | 1,270 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 71,356 | 62,128 | 53,145 | 47,157 | 41,384 | 36,230 | 31,417 | 27,917 | 24,671 | 21,653 | 18,886 | 16,690 | 14,682 | 12,841 | 11,162 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 72,476 | 62,938 | 53,785 | 47,576 | 41,661 | 36,445 | 31,606 | 28,050 | 24,764 | 21,724 | 18,948 | 16,733 | 14,712 | 12,863 | 11,181 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 72,476 | 62,938 | 53,785 | 47,576 | 41,661 | 36,445 | 31,606 | 28,050 | 24,764 | 21,724 | 18,948 | 16,733 | 14,712 | 12,863 | 11,181 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 5,792 | 5,966 | 6,128 | 6,245 | 6,352 | 6,448 | 6,529 | 6,588 | 6,637 | 6,676 | 6,709 | 6,733 | 6,752 | 6,767 | 6,779 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 5,430 | 5,578 | 5,715 | 5,813 | 5,902 | 5,981 | 6,047 | 6,095 | 6,134 | 6,165 | 6,190 | 6,209 | 6,224 | 6,236 | 6,245 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 5,101 | 5,228 | 5,344 | 5,426 | 5,500 | 5,565 | 5,619 | 5,658 | 5,689 | 5,714 | 5,733 | 5,748 | 5,760 | 5,769 | 5,775 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7,642 | 7,846 | 8,037 | 8,174 | 8,299 | 8,414 | 8,512 | 8,584 | 8,643 | 8,692 | 8,733 | 8,763 | 8,788 | 8,807 | 8,823 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 7,183 | 7,357 | 7,518 | 7,633 | 7,737 | 7,832 | 7,911 | 7,969 | 8,017 | 8,056 | 8,088 | 8,111 | 8,130 | 8,145 | 8,157 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 6,765 | 6,913 | 7,050 | 7,146 | 7,233 | 7,311 | 7,376 | 7,423 | 7,461 | 7,492 | 7,517 | 7,535 | 7,550 | 7,561 | 7,570 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 71,356 | 62,128 | 53,145 | 47,157 | 41,384 | 36,230 | 31,417 | 27,917 | 24,671 | 21,653 | 18,886 | 16,690 | 14,682 | 12,841 | 11,162 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 3,758 | 3,272 | 2,799 | 2,483 | 2,179 | 1,908 | 1,654 | 1,470 | 1,299 | 1,140 | 995 | 879 | 773 | 676 | 588 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 606 | 565 | 542 | 374 | 356 | 317 | 293 | 219 | 202 | 186 | 170 | 136 | 124 | 113 | 103 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 541 | 642 | 645 | 495 | 487 | 475 | 433 | 339 | 301 | 268 | 236 | 189 | 162 | 139 | 117 | ||||||||||||||||||||||||||||||
IMPACT OF FEDERAL INCOME TAX | (67 | ) | (93 | ) | (98 | ) | (71 | ) | (74 | ) | (77 | ) | (73 | ) | (58 | ) | (55 | ) | (54 | ) | (50 | ) | (40 | ) | (34 | ) | (29 | ) | (25 | ) | |||||||||||||||
Profit After-Tax, After Cost of Capital | 1,080 | 1,114 | 1,089 | 798 | 769 | 716 | 654 | 500 | 448 | 400 | 356 | 286 | 252 | 223 | 195 | ||||||||||||||||||||||||||||||
PV’s -- Fixed Deferred Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-21 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | ||||||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Fixed Indexed Annuities | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 152,411 | 158,769 | 166,620 | 174,577 | 182,585 | 190,669 | 198,777 | 205,438 | 214,040 | 221,947 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 1,650 | 7,119 | 13,160 | 18,990 | 25,399 | 31,579 | 38,179 | 44,431 | 50,615 | 56,409 | 59,943 | 57,463 | 53,905 | 50,977 | 46,979 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 154,062 | 165,888 | 179,780 | 193,567 | 207,984 | 222,249 | 236,956 | 249,868 | 264,655 | 278,356 | 59,943 | 57,463 | 53,905 | 50,977 | 46,979 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 3,964 | 8,480 | 13,283 | 18,371 | 23,733 | 30,281 | 47,966 | 57,757 | 66,109 | 87,583 | 90,460 | 94,268 | 97,476 | 100,024 | 101,941 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 1,827 | 3,854 | 5,988 | 8,216 | 10,535 | 12,920 | 15,304 | 17,775 | 20,386 | 22,901 | 22,651 | 22,202 | 21,682 | 21,110 | 20,481 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 3,595 | 3,745 | 3,931 | 4,118 | 4,307 | 4,498 | 4,689 | 4,846 | 5,049 | 5,236 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 481 | 1,008 | 1,551 | 2,107 | 2,678 | 3,259 | 3,814 | 4,360 | 4,909 | 5,413 | 5,187 | 4,893 | 4,580 | 4,252 | 3,908 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 7,212 | 7,463 | 7,823 | 8,192 | 8,565 | 8,943 | 9,326 | 9,640 | 10,052 | 10,435 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 138,506 | 141,936 | 146,448 | 151,029 | 155,368 | 158,668 | 150,780 | 149,044 | 150,326 | 137,629 | (72,076 | ) | (78,415 | ) | (83,881 | ) | (89,088 | ) | (93,468 | ) | |||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 155,586 | 166,487 | 179,023 | 192,033 | 205,186 | 218,570 | 231,880 | 243,423 | 256,831 | 269,197 | 46,222 | 42,949 | 39,858 | 36,298 | 32,862 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | (1,524 | ) | (598 | ) | 757 | 1,533 | 2,798 | 3,679 | 5,076 | 6,446 | 7,824 | 9,159 | 13,721 | 14,515 | 14,047 | 14,679 | 14,117 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | (1,524 | ) | (598 | ) | 757 | 1,533 | 2,798 | 3,679 | 5,076 | 6,446 | 7,824 | 9,159 | 13,721 | 14,515 | 14,047 | 14,679 | 14,117 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | 1,014 | 1,187 | 1,386 | 1,591 | 1,800 | 2,011 | 2,213 | 2,458 | 2,737 | 2,935 | 1,897 | 2,093 | 2,236 | 2,334 | 2,392 | ||||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | (2,538 | ) | (1,786 | ) | (629 | ) | (58 | ) | 998 | 1,668 | 2,863 | 3,987 | 5,086 | 6,224 | 11,825 | 12,422 | 11,811 | 12,345 | 11,725 | ||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 0 | 138,506 | 280,441 | 426,889 | 577,918 | 733,286 | 891,954 | 1,042,735 | 1,191,779 | 1,342,105 | 1,479,734 | 1,407,658 | 1,329,243 | 1,245,362 | 1,156,274 | 1,062,806 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 0 | 138,506 | 280,441 | 426,889 | 577,918 | 733,286 | 891,954 | 1,042,735 | 1,191,779 | 1,342,105 | 1,479,734 | 1,407,658 | 1,329,243 | 1,245,362 | 1,156,274 | 1,062,806 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 0 | 132,151 | 267,835 | 408,439 | 553,425 | 703,017 | 855,789 | 1,001,109 | 1,144,893 | 1,290,008 | 1,422,822 | 1,355,436 | 1,281,571 | 1,201,091 | 1,115,565 | 1,024,823 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 0 | 1,894 | 3,821 | 5,773 | 7,759 | 9,777 | 11,810 | 13,719 | 15,579 | 17,444 | 19,120 | 17,933 | 16,690 | 15,435 | 14,155 | 12,860 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 0 | 134,047 | 271,607 | 414,057 | 560,843 | 712,184 | 866,647 | 1,013,594 | 1,158,915 | 1,305,496 | 1,439,689 | 1,370,728 | 1,295,217 | 1,212,953 | 1,125,288 | 1,031,857 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 145,940 | 294,300 | 446,588 | 602,218 | 761,297 | 922,351 | 1,074,710 | 1,224,400 | 1,374,548 | 1,511,492 | 1,427,372 | 1,338,496 | 1,244,608 | 1,147,104 | 1,045,771 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 145,940 | 294,300 | 446,588 | 602,218 | 761,297 | 922,351 | 1,074,710 | 1,224,400 | 1,374,548 | 1,511,492 | 1,427,372 | 1,338,496 | 1,244,608 | 1,147,104 | 1,045,771 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | (2,372 | ) | (3,932 | ) | (4,446 | ) | (4,490 | ) | (3,779 | ) | (2,667 | ) | (884 | ) | 1,437 | 4,203 | 7,367 | 12,985 | 18,501 | 23,402 | 28,190 | 32,439 | |||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | (2,350 | ) | (3,881 | ) | (4,381 | ) | (4,423 | ) | (3,744 | ) | (2,693 | ) | (1,023 | ) | 1,132 | 3,676 | 6,559 | 11,631 | 16,564 | 20,907 | 25,109 | 28,806 | |||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | (2,329 | ) | (3,832 | ) | (4,318 | ) | (4,359 | ) | (3,710 | ) | (2,716 | ) | (1,149 | ) | 852 | 3,194 | 5,823 | 10,405 | 14,822 | 18,674 | 22,369 | 25,587 | |||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | (1,424 | ) | (1,947 | ) | (1,329 | ) | (160 | ) | 1,835 | 4,287 | 7,448 | 11,199 | 15,455 | 20,111 | 26,629 | 33,074 | 38,903 | 44,596 | 49,713 | |||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | (1,411 | ) | (1,924 | ) | (1,323 | ) | (197 | ) | 1,708 | 4,026 | 6,988 | 10,470 | 14,384 | 18,626 | 24,511 | 30,275 | 35,440 | 40,438 | 44,888 | |||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | (1,398 | ) | (1,902 | ) | (1,317 | ) | (231 | ) | 1,587 | 3,781 | 6,557 | 9,792 | 13,394 | 17,263 | 22,581 | 27,741 | 32,323 | 36,716 | 40,591 | |||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 0 | 134,091 | 271,662 | 414,113 | 560,902 | 712,246 | 866,712 | 1,013,662 | 1,158,985 | 1,305,569 | 1,439,765 | 1,370,742 | 1,295,239 | 1,213,120 | 1,125,958 | 1,033,578 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 0 | 16,896 | 24,771 | 32,978 | 41,433 | 50,120 | 58,985 | 67,436 | 75,705 | 84,163 | 91,909 | 74,131 | 70,002 | 65,584 | 60,893 | 55,970 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | (16,896 | ) | (7,522 | ) | (7,688 | ) | (7,764 | ) | (7,819 | ) | (7,816 | ) | (7,216 | ) | (6,857 | ) | (6,874 | ) | (5,984 | ) | 19,702 | 5,681 | 5,883 | 6,065 | 6,197 | ||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (1,524 | ) | (598 | ) | 757 | 1,533 | 2,798 | 3,679 | 5,076 | 6,446 | 7,824 | 9,159 | 13,721 | 14,515 | 14,047 | 14,679 | 14,117 | |||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (1,014 | ) | (1,187 | ) | (1,386 | ) | (1,591 | ) | (1,800 | ) | (2,011 | ) | (2,213 | ) | (2,458 | ) | (2,737 | ) | (2,935 | ) | (1,897 | ) | (2,093 | ) | (2,236 | ) | (2,334 | ) | (2,392 | ) | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | (19,434 | ) | (9,307 | ) | (8,318 | ) | (7,822 | ) | (6,821 | ) | (6,148 | ) | (4,353 | ) | (2,870 | ) | (1,787 | ) | 240 | 31,527 | 18,104 | 17,694 | 18,410 | 17,922 | ||||||||||||||||||||||||
PV’s -- Fixed Indexed Annuities | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | ||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 88,223 | 76,374 | 66,448 | 58,082 | 50,986 | 44,936 | ||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (23,924 | ) | (21,536 | ) | (19,495 | ) | (17,738 | ) | (16,215 | ) | (14,889 | ) | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (27,466 | ) | (29,749 | ) | (31,432 | ) | (32,645 | ) | (33,486 | ) | (34,033 | ) | ||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 36,833 | 25,089 | 15,521 | 7,699 | 1,285 | (3,986 | ) |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-22 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | ||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | |||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Fixed Indexed Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 43,668 | 39,589 | 36,314 | 33,013 | 30,345 | 27,332 | 24,934 | 22,639 | 20,501 | 18,502 | 16,631 | 14,899 | 13,298 | 11,814 | 10,433 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 43,668 | 39,589 | 36,314 | 33,013 | 30,345 | 27,332 | 24,934 | 22,639 | 20,501 | 18,502 | 16,631 | 14,899 | 13,298 | 11,814 | 10,433 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 101,888 | 82,161 | 80,972 | 79,505 | 58,449 | 56,237 | 51,812 | 47,607 | 43,794 | 40,340 | 37,213 | 34,387 | 31,835 | 29,540 | 27,482 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 19,833 | 19,298 | 18,609 | 17,738 | 17,024 | 16,319 | 15,509 | 14,630 | 13,688 | 12,706 | 11,697 | 10,680 | 9,671 | 8,679 | 7,711 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 3,556 | 3,260 | 2,967 | 2,672 | 2,445 | 2,226 | 2,014 | 1,816 | 1,630 | 1,457 | 1,296 | 1,146 | 1,009 | 882 | 767 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (96,313 | ) | (79,314 | ) | (80,110 | ) | (80,308 | ) | (60,573 | ) | (58,528 | ) | (54,320 | ) | (50,403 | ) | (46,927 | ) | (43,888 | ) | (40,662 | ) | (37,691 | ) | (35,032 | ) | (32,658 | ) | (30,528 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 28,964 | 25,404 | 22,437 | 19,607 | 17,345 | 16,254 | 15,015 | 13,649 | 12,185 | 10,614 | 9,544 | 8,523 | 7,482 | 6,443 | 5,432 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 14,705 | 14,185 | 13,877 | 13,406 | 12,999 | 11,078 | 9,919 | 8,990 | 8,316 | 7,888 | 7,087 | 6,376 | 5,815 | 5,372 | 5,000 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
BOOK PROFIT | 14,705 | 14,185 | 13,877 | 13,406 | 12,999 | 11,078 | 9,919 | 8,990 | 8,316 | 7,888 | 7,087 | 6,376 | 5,815 | 5,372 | 5,000 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 2,445 | 2,522 | 2,494 | 2,444 | 2,504 | 2,114 | 1,835 | 1,574 | 1,387 | 1,261 | 1,148 | 1,029 | 923 | 824 | 740 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 12,260 | 11,663 | 11,383 | 10,963 | 10,495 | 8,964 | 8,084 | 7,416 | 6,929 | 6,626 | 5,939 | 5,348 | 4,892 | 4,547 | 4,260 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 966,493 | 887,178 | 807,069 | 726,760 | 666,187 | 607,659 | 553,339 | 502,935 | 456,008 | 412,120 | 371,458 | 333,767 | 298,735 | 266,077 | 235,549 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 966,493 | 887,178 | 807,069 | 726,760 | 666,187 | 607,659 | 553,339 | 502,935 | 456,008 | 412,120 | 371,458 | 333,767 | 298,735 | 266,077 | 235,549 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 931,574 | 854,436 | 776,328 | 697,790 | 638,290 | 580,771 | 527,631 | 478,722 | 433,505 | 391,500 | 352,458 | 316,245 | 282,633 | 251,421 | 222,370 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 11,581 | 10,556 | 9,564 | 8,583 | 7,877 | 7,178 | 6,554 | 5,978 | 5,446 | 4,953 | 4,496 | 4,074 | 3,681 | 3,317 | 3,004 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 935,328 | 854,349 | 771,802 | 688,206 | 623,007 | 559,166 | 499,104 | 442,855 | 390,363 | 341,573 | 296,488 | 255,097 | 217,280 | 183,036 | 152,151 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 943,271 | 858,242 | 773,072 | 688,206 | 623,007 | 559,166 | 499,104 | 442,855 | 390,363 | 341,552 | 296,449 | 255,040 | 217,207 | 182,947 | 152,046 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 943,271 | 858,242 | 773,072 | 688,206 | 623,007 | 559,166 | 499,104 | 442,855 | 390,363 | 341,552 | 296,449 | 255,040 | 217,207 | 182,947 | 152,046 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 36,592 | 40,284 | 43,652 | 46,684 | 49,396 | 51,561 | 53,385 | 54,950 | 56,316 | 57,536 | 58,559 | 59,420 | 60,156 | 60,795 | 61,354 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 32,384 | 35,536 | 38,385 | 40,925 | 43,177 | 44,958 | 46,445 | 47,708 | 48,800 | 49,768 | 50,571 | 51,240 | 51,807 | 52,295 | 52,719 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 28,675 | 31,370 | 33,783 | 35,916 | 37,788 | 39,256 | 40,470 | 41,492 | 42,367 | 43,136 | 43,768 | 44,290 | 44,728 | 45,101 | 45,422 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 54,694 | 59,184 | 63,290 | 66,997 | 70,356 | 73,032 | 75,271 | 77,167 | 78,806 | 80,260 | 81,480 | 82,506 | 83,381 | 84,136 | 84,793 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 49,180 | 53,014 | 56,487 | 59,593 | 62,382 | 64,583 | 66,407 | 67,939 | 69,250 | 70,402 | 71,360 | 72,158 | 72,832 | 73,409 | 73,906 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 44,295 | 47,573 | 50,515 | 53,122 | 55,441 | 57,255 | 58,745 | 59,983 | 61,035 | 61,949 | 62,703 | 63,326 | 63,846 | 64,288 | 64,665 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 938,757 | 860,185 | 780,786 | 701,105 | 640,621 | 582,281 | 528,490 | 479,108 | 433,602 | 391,500 | 352,458 | 316,245 | 282,633 | 251,421 | 222,370 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 50,898 | 46,721 | 42,502 | 38,273 | 35,083 | 32,001 | 29,140 | 26,486 | 24,015 | 21,703 | 19,562 | 17,577 | 15,732 | 14,012 | 12,405 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 6,244 | 5,242 | 5,197 | 5,119 | 3,991 | 3,817 | 3,531 | 3,264 | 3,026 | 2,814 | 2,596 | 2,394 | 2,213 | 2,049 | 1,901 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 14,705 | 14,185 | 13,877 | 13,406 | 12,999 | 11,078 | 9,919 | 8,990 | 8,316 | 7,888 | 7,087 | 6,376 | 5,815 | 5,372 | 5,000 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (2,445 | ) | (2,522 | ) | (2,494 | ) | (2,444 | ) | (2,504 | ) | (2,114 | ) | (1,835 | ) | (1,574 | ) | (1,387 | ) | (1,261 | ) | (1,148 | ) | (1,029 | ) | (923 | ) | (824 | ) | (740 | ) | |||||||||||||||
Profit After-Tax, After Cost of Capital | 18,504 | 16,906 | 16,580 | 16,082 | 14,486 | 12,781 | 11,615 | 10,680 | 9,955 | 9,440 | 8,535 | 7,742 | 7,105 | 6,596 | 6,161 | ||||||||||||||||||||||||||||||
PV’s -- Fixed Indexed Annuities | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-23 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | ||||||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Traditional Life (WL) | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 7,522 | 14,020 | 20,366 | 26,726 | 33,169 | 39,781 | 46,556 | 53,481 | 60,554 | 67,759 | 62,072 | 58,513 | 55,557 | 52,933 | 50,537 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | (132 | ) | (35 | ) | 165 | 478 | 905 | 1,450 | 2,117 | 2,905 | 3,818 | 4,857 | 6,254 | 7,381 | 8,470 | 9,509 | 10,503 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | (8 | ) | (35 | ) | (90 | ) | (171 | ) | (279 | ) | (414 | ) | (575 | ) | (762 | ) | (976 | ) | (1,216 | ) | (1,470 | ) | (1,718 | ) | (1,949 | ) | (2,164 | ) | ||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 2 | 7 | 18 | 34 | 55 | 82 | 114 | 152 | 195 | 243 | 294 | 344 | 390 | 433 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 7,390 | 13,991 | 20,558 | 27,276 | 34,212 | 41,456 | 49,004 | 56,847 | 64,982 | 73,396 | 69,299 | 67,070 | 65,401 | 64,000 | 62,771 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 2 | 37 | 154 | 434 | 846 | 1,357 | 2,018 | 2,830 | 3,756 | 4,771 | 5,851 | 6,901 | 7,867 | 8,580 | 9,171 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 171 | 575 | 1,114 | 1,762 | 2,479 | 3,248 | 4,091 | 5,039 | 6,104 | 7,293 | 8,252 | 8,891 | 9,422 | 9,907 | 10,419 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 2,981 | 4,160 | 4,416 | 4,681 | 4,961 | 5,265 | 5,582 | 5,902 | 6,223 | 6,542 | 1,644 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 325 | 926 | 1,524 | 2,132 | 2,758 | 3,411 | 4,092 | 4,802 | 5,540 | 6,307 | 6,530 | 6,309 | 6,142 | 6,005 | 5,888 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 7,791 | 8,597 | 9,386 | 10,197 | 11,044 | 11,946 | 12,872 | 13,808 | 14,755 | 15,701 | 3,027 | 2,845 | 2,697 | 2,567 | 2,451 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 2,412 | 781 | 771 | 781 | 802 | 833 | 858 | 878 | 900 | 912 | (3,250 | ) | (309 | ) | (259 | ) | (228 | ) | (215 | ) | |||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 1,388 | 5,022 | 8,259 | 11,391 | 14,502 | 17,669 | 20,819 | 23,943 | 27,087 | 30,259 | 31,045 | 28,061 | 25,968 | 24,272 | 22,733 | ||||||||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 15,071 | 20,098 | 25,626 | 31,377 | 37,393 | 43,728 | 50,332 | 57,202 | 64,363 | 71,785 | 53,100 | 52,699 | 51,836 | 51,104 | 50,446 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | (7,681 | ) | (6,107 | ) | (5,068 | ) | (4,101 | ) | (3,181 | ) | (2,273 | ) | (1,328 | ) | (355 | ) | 618 | 1,611 | 16,199 | 14,370 | 13,565 | 12,895 | 12,325 | ||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | (7,681 | ) | (6,107 | ) | (5,068 | ) | (4,101 | ) | (3,181 | ) | (2,273 | ) | (1,328 | ) | (355 | ) | 618 | 1,611 | 16,199 | 14,370 | 13,565 | 12,895 | 12,325 | ||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | (1,515 | ) | (1,036 | ) | (667 | ) | (329 | ) | (14 | ) | 289 | 588 | 883 | 1,166 | 1,443 | 4,358 | 3,703 | 3,250 | 2,844 | 2,468 | |||||||||||||||||||||||||||
PROFITS RELEASED | 0 | (6,166 | ) | (5,071 | ) | (4,401 | ) | (3,771 | ) | (3,166 | ) | (2,561 | ) | (1,916 | ) | (1,238 | ) | (548 | ) | 169 | 11,840 | 10,667 | 10,315 | 10,051 | 9,857 | |||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 0 | 1,388 | 6,410 | 14,669 | 26,060 | 40,562 | 58,231 | 79,050 | 102,994 | 130,080 | 160,339 | 191,384 | 219,444 | 245,412 | 269,684 | 292,417 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 0 | 848 | 3,817 | 10,075 | 19,475 | 31,972 | 47,600 | 66,332 | 88,144 | 113,055 | 141,098 | 170,810 | 200,133 | 227,162 | 252,372 | 275,963 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 0 | 381 | 2,169 | 6,509 | 13,308 | 22,558 | 34,317 | 48,588 | 65,374 | 84,724 | 106,696 | 130,829 | 155,634 | 179,265 | 202,109 | 224,328 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 0 | 6,992 | 13,713 | 20,334 | 27,003 | 33,806 | 40,813 | 48,028 | 55,436 | 63,043 | 70,844 | 66,599 | 63,265 | 60,497 | 58,059 | 55,838 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 568,111 | 1,125,374 | 1,679,093 | 2,237,982 | 2,808,123 | 3,395,171 | 4,000,764 | 4,624,567 | 5,266,846 | 5,923,041 | 5,593,872 | 5,318,120 | 5,081,757 | 4,871,421 | 4,674,926 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 0 | 561 | 1,950 | 5,220 | 11,427 | 20,731 | 33,172 | 48,733 | 67,394 | 89,171 | 114,104 | 141,279 | 170,357 | 199,603 | 227,343 | 253,433 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 2,952 | 5,785 | 8,558 | 11,330 | 14,137 | 17,012 | 19,956 | 22,966 | 26,041 | 29,169 | 27,252 | 25,681 | 24,361 | 23,195 | 22,123 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 540 | 2,593 | 4,594 | 6,584 | 8,589 | 10,631 | 12,718 | 14,850 | 17,025 | 19,241 | 20,573 | 19,312 | 18,250 | 17,312 | 16,455 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | (5,763 | ) | (10,192 | ) | (13,784 | ) | (16,661 | ) | (18,919 | ) | (20,626 | ) | (21,819 | ) | (22,540 | ) | (22,838 | ) | (22,752 | ) | (17,127 | ) | (12,390 | ) | (8,110 | ) | (4,212 | ) | (639 | ) | |||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | (5,709 | ) | (10,057 | ) | (13,550 | ) | (16,322 | ) | (18,477 | ) | (20,091 | ) | (21,210 | ) | (21,879 | ) | (22,153 | ) | (22,075 | ) | (16,996 | ) | (12,760 | ) | (8,967 | ) | (5,545 | ) | (2,438 | ) | |||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | (5,657 | ) | (9,925 | ) | (13,323 | ) | (15,995 | ) | (18,053 | ) | (19,580 | ) | (20,628 | ) | (21,250 | ) | (21,502 | ) | (21,431 | ) | (16,842 | ) | (13,050 | ) | (9,685 | ) | (6,677 | ) | (3,971 | ) | |||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | (7,178 | ) | (12,513 | ) | (16,649 | ) | (19,778 | ) | (22,045 | ) | (23,560 | ) | (24,387 | ) | (24,593 | ) | (24,257 | ) | (23,438 | ) | (15,742 | ) | (9,361 | ) | (3,733 | ) | 1,268 | 5,736 | ||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | (7,112 | ) | (12,348 | ) | (16,371 | ) | (19,385 | ) | (21,549 | ) | (22,982 | ) | (23,756 | ) | (23,948 | ) | (23,639 | ) | (22,893 | ) | (15,945 | ) | (10,239 | ) | (5,251 | ) | (860 | ) | 3,025 | |||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | (7,047 | ) | (12,187 | ) | (16,100 | ) | (19,005 | ) | (21,072 | ) | (22,427 | ) | (23,154 | ) | (23,332 | ) | (23,047 | ) | (22,367 | ) | (16,089 | ) | (10,980 | ) | (6,555 | ) | (2,697 | ) | 687 | |||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 0 | 787 | 3,543 | 9,351 | 18,075 | 29,674 | 44,177 | 61,563 | 81,806 | 104,927 | 130,953 | 158,686 | 186,353 | 212,191 | 236,646 | 259,923 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 0 | 1,517 | 3,018 | 4,596 | 6,274 | 8,065 | 9,986 | 12,038 | 14,221 | 16,533 | 18,969 | 18,872 | 18,980 | 19,132 | 19,301 | 19,463 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | (1,517 | ) | (1,469 | ) | (1,515 | ) | (1,581 | ) | (1,660 | ) | (1,752 | ) | (1,844 | ) | (1,930 | ) | (2,015 | ) | (2,089 | ) | 494 | 287 | 245 | 232 | 242 | ||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (7,681 | ) | (6,107 | ) | (5,068 | ) | (4,101 | ) | (3,181 | ) | (2,273 | ) | (1,328 | ) | (355 | ) | 618 | 1,611 | 16,199 | 14,370 | 13,565 | 12,895 | 12,325 | |||||||||||||||||||||||||
FEDERAL INCOME TAX | 1,515 | 1,036 | 667 | 329 | 14 | (289 | ) | (588 | ) | (883 | ) | (1,166 | ) | (1,443 | ) | (4,358 | ) | (3,703 | ) | (3,250 | ) | (2,844 | ) | (2,468 | ) | |||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | (7,683 | ) | (6,541 | ) | (5,916 | ) | (5,353 | ) | (4,826 | ) | (4,313 | ) | (3,760 | ) | (3,168 | ) | (2,563 | ) | (1,920 | ) | 12,334 | 10,954 | 10,560 | 10,283 | 10,099 | |||||||||||||||||||||||
PV’s -- Traditional Life (WL) | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | ||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 35,406 | 27,127 | 20,378 | 14,843 | 10,281 | 6,504 | ||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (7,487 | ) | (6,528 | ) | (5,650 | ) | (4,854 | ) | (4,137 | ) | (3,495 | ) | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (8,193 | ) | (8,423 | ) | (8,492 | ) | (8,454 | ) | (8,346 | ) | (8,191 | ) | ||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 19,726 | 12,176 | 6,236 | 1,535 | (2,202 | ) | (5,182 | ) |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-24 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | ||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | |||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Traditional Life (WL) | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 46,891 | 43,254 | 39,711 | 36,231 | 32,785 | 29,375 | 25,980 | 22,557 | 19,096 | 15,634 | 14,588 | 13,716 | 12,864 | 12,065 | 11,336 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 11,440 | 12,283 | 13,041 | 13,715 | 14,305 | 14,810 | 15,221 | 15,533 | 15,737 | 15,829 | 15,832 | 15,807 | 15,747 | 15,655 | 15,533 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1 | ) | (3 | ) | (7 | ) | (12 | ) | ||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | (2,366 | ) | (2,550 | ) | (2,715 | ) | (2,864 | ) | (2,996 | ) | (3,111 | ) | (3,210 | ) | (3,290 | ) | (3,351 | ) | (3,391 | ) | (3,410 | ) | (3,419 | ) | (3,421 | ) | (3,416 | ) | (3,404 | ) | |||||||||||||||
LESS INCOME LOST ON DEFAULTS | 474 | 511 | 543 | 572 | 598 | 619 | 638 | 652 | 662 | 669 | 671 | 671 | 670 | 668 | 664 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 60,223 | 57,577 | 54,924 | 52,238 | 49,487 | 46,677 | 43,773 | 40,728 | 37,521 | 34,185 | 33,159 | 32,269 | 31,359 | 30,461 | 29,597 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 9,628 | 9,786 | 9,732 | 9,566 | 9,333 | 9,072 | 8,857 | 8,630 | 8,446 | 8,177 | 7,949 | 7,897 | 7,881 | 7,842 | 7,784 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 10,944 | 11,482 | 12,004 | 12,490 | 12,920 | 13,328 | 13,725 | 14,081 | 14,384 | 14,643 | 14,934 | 15,195 | 15,398 | 15,549 | 15,659 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 5,765 | 5,641 | 5,524 | 5,416 | 5,313 | 5,213 | 5,115 | 5,018 | 4,921 | 4,824 | 4,754 | 4,700 | 4,646 | 4,591 | 4,536 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 2,278 | 2,104 | 1,935 | 1,768 | 1,604 | 1,441 | 1,279 | 1,117 | 953 | 788 | 734 | 690 | 649 | 610 | 574 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | (296 | ) | (310 | ) | (310 | ) | (312 | ) | (313 | ) | (317 | ) | (313 | ) | (321 | ) | (329 | ) | (323 | ) | (164 | ) | (126 | ) | (117 | ) | (108 | ) | (91 | ) | |||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 20,180 | 17,910 | 15,844 | 13,846 | 11,857 | 9,835 | 7,675 | 5,424 | 3,010 | 613 | 78 | (643 | ) | (1,400 | ) | (2,115 | ) | (2,772 | ) | ||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 48,498 | 46,614 | 44,729 | 42,775 | 40,713 | 38,573 | 36,338 | 33,949 | 31,386 | 28,721 | 28,284 | 27,713 | 27,056 | 26,369 | 25,690 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 11,724 | 10,963 | 10,195 | 9,463 | 8,774 | 8,104 | 7,435 | 6,779 | 6,135 | 5,464 | 4,874 | 4,556 | 4,303 | 4,092 | 3,907 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1 | ) | (4 | ) | (9 | ) | (15 | ) | ||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1 | ) | (3 | ) | (7 | ) | (12 | ) | ||||||||||||||||||||||||||
BOOK PROFIT | 11,724 | 10,963 | 10,195 | 9,463 | 8,774 | 8,104 | 7,435 | 6,779 | 6,135 | 5,464 | 4,874 | 4,556 | 4,302 | 4,090 | 3,904 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 2,085 | 1,683 | 1,298 | 939 | 601 | 329 | 135 | (39 | ) | (196 | ) | (334 | ) | (426 | ) | (452 | ) | (465 | ) | (469 | ) | (464 | ) | ||||||||||||||||||||||
PROFITS RELEASED | 9,639 | 9,280 | 8,897 | 8,524 | 8,173 | 7,775 | 7,300 | 6,819 | 6,331 | 5,798 | 5,300 | 5,008 | 4,767 | 4,559 | 4,367 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 312,597 | 330,507 | 346,351 | 360,198 | 372,055 | 381,891 | 389,565 | 394,989 | 397,999 | 398,613 | 398,690 | 398,047 | 396,648 | 394,533 | 391,761 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 297,420 | 316,584 | 333,646 | 348,683 | 361,712 | 372,698 | 381,517 | 388,087 | 392,248 | 394,011 | 394,408 | 394,052 | 392,928 | 391,072 | 388,539 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 245,411 | 265,137 | 283,621 | 300,862 | 316,830 | 331,210 | 343,517 | 353,607 | 361,269 | 366,419 | 369,971 | 372,512 | 374,036 | 374,594 | 374,232 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 53,768 | 51,855 | 50,102 | 48,486 | 46,980 | 45,573 | 44,242 | 42,988 | 41,783 | 40,628 | 39,521 | 38,439 | 37,376 | 36,338 | 35,325 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 4,483,135 | 4,299,603 | 4,124,665 | 3,956,937 | 3,790,228 | 3,620,073 | 3,450,129 | 3,280,561 | 3,110,565 | 2,947,882 | 2,798,659 | 2,651,865 | 2,505,000 | 2,357,858 | 2,220,113 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 277,313 | 298,750 | 317,920 | 334,910 | 349,750 | 362,408 | 372,749 | 380,690 | 386,079 | 388,896 | 390,224 | 390,745 | 390,444 | 389,362 | 387,541 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 20,550 | 18,986 | 17,457 | 15,955 | 14,471 | 13,003 | 11,545 | 10,079 | 8,599 | 7,126 | 6,642 | 6,229 | 5,837 | 5,469 | 5,139 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 15,177 | 13,923 | 12,705 | 11,515 | 10,344 | 9,193 | 8,048 | 6,902 | 5,751 | 4,602 | 4,282 | 3,995 | 3,720 | 3,460 | 3,221 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 2,626 | 5,564 | 8,196 | 10,553 | 12,665 | 14,543 | 16,191 | 17,629 | 18,877 | 19,945 | 20,858 | 21,664 | 22,381 | 23,022 | 23,595 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 376 | 2,884 | 5,110 | 7,085 | 8,839 | 10,383 | 11,726 | 12,888 | 13,886 | 14,733 | 15,449 | 16,076 | 16,628 | 17,118 | 17,552 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | (1,543 | ) | 601 | 2,487 | 4,145 | 5,603 | 6,876 | 7,972 | 8,912 | 9,712 | 10,384 | 10,948 | 11,437 | 11,864 | 12,239 | 12,568 | |||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 9,707 | 13,178 | 16,194 | 18,811 | 21,078 | 23,035 | 24,714 | 26,144 | 27,353 | 28,360 | 29,199 | 29,932 | 30,579 | 31,154 | 31,667 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 6,447 | 9,410 | 11,961 | 14,154 | 16,037 | 17,647 | 19,014 | 20,169 | 21,136 | 21,934 | 22,593 | 23,163 | 23,662 | 24,101 | 24,489 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 3,640 | 6,173 | 8,335 | 10,175 | 11,741 | 13,067 | 14,184 | 15,118 | 15,894 | 16,527 | 17,046 | 17,490 | 17,876 | 18,212 | 18,506 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 281,482 | 301,111 | 318,992 | 335,194 | 349,750 | 362,408 | 372,749 | 380,690 | 386,079 | 388,896 | 390,224 | 390,745 | 390,444 | 389,362 | 387,541 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 19,493 | 19,472 | 19,414 | 19,315 | 19,163 | 18,950 | 18,676 | 18,337 | 17,927 | 17,462 | 17,139 | 16,810 | 16,460 | 16,092 | 15,727 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 378 | 428 | 466 | 505 | 556 | 615 | 670 | 730 | 794 | 841 | 689 | 688 | 702 | 712 | 702 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 11,724 | 10,963 | 10,195 | 9,463 | 8,774 | 8,104 | 7,435 | 6,779 | 6,135 | 5,464 | 4,874 | 4,556 | 4,302 | 4,090 | 3,904 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (2,085 | ) | (1,683 | ) | (1,298 | ) | (939 | ) | (601 | ) | (329 | ) | (135 | ) | 39 | 196 | 334 | 426 | 452 | 465 | 469 | 464 | |||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | 10,018 | 9,709 | 9,363 | 9,030 | 8,729 | 8,390 | 7,970 | 7,548 | 7,125 | 6,639 | 5,989 | 5,696 | 5,468 | 5,271 | 5,070 | ||||||||||||||||||||||||||||||
PV’s -- Traditional Life (WL) | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-25 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | ||||||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Term | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 13,078 | 26,286 | 39,672 | 53,300 | 67,218 | 81,438 | 95,965 | 110,775 | 125,843 | 141,174 | 132,174 | 124,371 | 117,066 | 110,181 | 103,594 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | (191 | ) | (80 | ) | 109 | 364 | 707 | 1,150 | 1,722 | 2,428 | 3,273 | 4,257 | 5,735 | 6,742 | 7,739 | 8,728 | 9,655 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | (2 | ) | (7 | ) | (17 | ) | (34 | ) | (58 | ) | (93 | ) | (137 | ) | (193 | ) | (259 | ) | (335 | ) | (416 | ) | (501 | ) | (584 | ) | (662 | ) | ||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 1 | 4 | 9 | 19 | 33 | 53 | 79 | 110 | 148 | 192 | 239 | 288 | 335 | 380 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 12,887 | 26,207 | 39,784 | 53,671 | 67,939 | 82,613 | 97,727 | 113,261 | 129,198 | 145,541 | 138,052 | 131,290 | 125,018 | 119,157 | 113,530 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 60 | 73 | 79 | 84 | 90 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 840 | 2,883 | 5,655 | 8,978 | 12,677 | 16,671 | 21,056 | 25,988 | 31,538 | 37,787 | 42,849 | 45,551 | 47,590 | 49,384 | 51,338 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 7,124 | 9,700 | 10,488 | 11,224 | 11,960 | 12,695 | 13,431 | 14,167 | 14,903 | 15,639 | 3,158 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 655 | 1,976 | 3,365 | 4,809 | 6,314 | 7,884 | 9,525 | 11,237 | 13,023 | 14,885 | 15,525 | 14,968 | 14,455 | 13,980 | 13,531 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 9,720 | 11,390 | 12,813 | 14,252 | 15,710 | 17,189 | 18,689 | 20,211 | 21,754 | 23,319 | 6,883 | 6,561 | 6,262 | 5,985 | 5,725 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 5,676 | 5,970 | 6,112 | 6,275 | 6,456 | 6,648 | 6,848 | 7,048 | 7,247 | 7,464 | (3,216 | ) | (2,962 | ) | (2,742 | ) | (2,550 | ) | (2,395 | ) | |||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 742 | 1,719 | 3,780 | 6,380 | 9,288 | 12,927 | 16,797 | 20,788 | 24,812 | 28,769 | 30,280 | 31,756 | 30,929 | 28,906 | 26,172 | ||||||||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 24,758 | 33,639 | 42,212 | 51,918 | 62,405 | 74,014 | 86,346 | 99,439 | 113,278 | 127,862 | 95,539 | 95,947 | 96,573 | 95,789 | 94,460 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | (11,871 | ) | (7,432 | ) | (2,428 | ) | 1,754 | 5,534 | 8,599 | 11,382 | 13,822 | 15,920 | 17,679 | 42,513 | 35,343 | 28,445 | 23,368 | 19,070 | |||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | (11,871 | ) | (7,432 | ) | (2,428 | ) | 1,754 | 5,534 | 8,599 | 11,382 | 13,822 | 15,920 | 17,679 | 42,513 | 35,343 | 28,445 | 23,368 | 19,070 | |||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | (2,341 | ) | (1,156 | ) | 153 | 1,284 | 2,321 | 3,202 | 4,010 | 4,731 | 5,362 | 5,900 | 10,966 | 9,115 | 7,300 | 5,866 | 4,601 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | (9,530 | ) | (6,275 | ) | (2,581 | ) | 469 | 3,214 | 5,397 | 7,371 | 9,091 | 10,559 | 11,778 | 31,547 | 26,228 | 21,145 | 17,502 | 14,469 | |||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 0 | 742 | 2,462 | 6,242 | 12,622 | 21,909 | 34,836 | 51,633 | 72,421 | 97,233 | 126,001 | 156,281 | 188,037 | 218,966 | 247,873 | 274,044 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 0 | 742 | 2,462 | 6,242 | 12,622 | 21,909 | 34,836 | 51,633 | 72,421 | 97,233 | 126,001 | 156,281 | 188,037 | 218,966 | 247,873 | 274,044 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 0 | 18 | (192 | ) | 415 | 2,396 | 6,090 | 12,235 | 21,102 | 32,862 | 47,606 | 65,335 | 85,094 | 107,766 | 131,129 | 153,995 | 175,627 | |||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 0 | 20,021 | 40,936 | 62,241 | 84,032 | 106,392 | 129,376 | 153,035 | 177,379 | 202,411 | 228,201 | 214,969 | 202,917 | 191,868 | 181,593 | 171,890 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 4,679,469 | 9,614,128 | 14,671,889 | 19,866,916 | 25,213,416 | 30,721,958 | 36,405,557 | 42,266,280 | 48,304,839 | 54,532,958 | 51,791,135 | 49,284,393 | 46,991,521 | 44,872,668 | 42,888,665 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 0 | 827 | 1,697 | 2,590 | 3,505 | 4,448 | 5,418 | 6,418 | 7,446 | 8,503 | 9,588 | 9,148 | 8,724 | 8,329 | 7,960 | 7,611 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 5,676 | 11,645 | 17,757 | 24,032 | 30,487 | 37,135 | 43,983 | 51,031 | 58,278 | 65,742 | 62,526 | 59,564 | 56,822 | 54,273 | 51,878 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | (8,907 | ) | (14,388 | ) | (16,495 | ) | (16,137 | ) | (13,846 | ) | (10,250 | ) | (5,659 | ) | (368 | ) | 5,375 | 11,363 | 26,350 | 37,996 | 46,770 | 53,558 | 58,802 | ||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | (8,824 | ) | (14,205 | ) | (16,254 | ) | (15,909 | ) | (13,722 | ) | (10,321 | ) | (6,020 | ) | (1,108 | ) | 4,174 | 9,630 | 23,160 | 33,575 | 41,350 | 47,309 | 51,870 | ||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | (8,743 | ) | (14,025 | ) | (16,018 | ) | (15,686 | ) | (13,597 | ) | (10,380 | ) | (6,347 | ) | (1,785 | ) | 3,077 | 8,052 | 20,278 | 29,603 | 36,500 | 41,737 | 45,709 | ||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | (11,095 | ) | (17,586 | ) | (19,568 | ) | (18,230 | ) | (14,284 | ) | (8,554 | ) | (1,466 | ) | 6,578 | 15,238 | 24,225 | 44,422 | 60,115 | 71,919 | 80,981 | 87,893 | ||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | (10,992 | ) | (17,363 | ) | (19,291 | ) | (18,002 | ) | (14,235 | ) | (8,817 | ) | (2,175 | ) | 5,292 | 13,256 | 21,445 | 39,678 | 53,713 | 64,172 | 72,128 | 78,140 | ||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | (10,891 | ) | (17,146 | ) | (19,021 | ) | (17,779 | ) | (14,182 | ) | (9,055 | ) | (2,828 | ) | 4,108 | 11,439 | 18,906 | 35,381 | 47,947 | 57,225 | 64,218 | 69,453 | ||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 0 | 689 | 2,285 | 5,793 | 11,714 | 20,334 | 32,331 | 47,920 | 67,214 | 90,242 | 116,942 | 145,044 | 174,517 | 203,223 | 230,051 | 254,341 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 0 | 9,213 | 18,946 | 28,979 | 39,354 | 50,109 | 61,285 | 72,913 | 84,999 | 97,547 | 110,576 | 106,076 | 102,072 | 98,456 | 95,122 | 91,974 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | (9,213 | ) | (9,540 | ) | (9,636 | ) | (9,768 | ) | (9,931 | ) | (10,127 | ) | (10,345 | ) | (10,560 | ) | (10,768 | ) | (10,987 | ) | 6,815 | 6,225 | 5,752 | 5,395 | 5,140 | ||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (11,871 | ) | (7,432 | ) | (2,428 | ) | 1,754 | 5,534 | 8,599 | 11,382 | 13,822 | 15,920 | 17,679 | 42,513 | 35,343 | 28,445 | 23,368 | 19,070 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 2,341 | 1,156 | (153 | ) | (1,284 | ) | (2,321 | ) | (3,202 | ) | (4,010 | ) | (4,731 | ) | (5,362 | ) | (5,900 | ) | (10,966 | ) | (9,115 | ) | (7,300 | ) | (5,866 | ) | (4,601 | ) | ||||||||||||||||||||
Profit After-Tax, After Cost of Capital | (18,744 | ) | (15,816 | ) | (12,217 | ) | (9,299 | ) | (6,718 | ) | (4,730 | ) | (2,974 | ) | (1,469 | ) | (209 | ) | 791 | 38,362 | 32,453 | 26,897 | 22,897 | 19,609 | ||||||||||||||||||||||||
PV’s -- Term | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | ||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 147,753 | 125,570 | 107,339 | 92,191 | 79,484 | 68,731 | ||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (37,351 | ) | (32,867 | ) | (29,061 | ) | (25,801 | ) | (22,984 | ) | (20,533 | ) | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (36,348 | ) | (38,684 | ) | (40,189 | ) | (41,069 | ) | (41,477 | ) | (41,531 | ) | ||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 74,053 | 54,020 | 38,088 | 25,321 | 15,022 | 6,667 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-26 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | ||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | |||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Term | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 97,301 | 91,033 | 84,903 | 78,928 | 72,980 | 67,379 | 62,014 | 56,770 | 51,649 | 46,623 | 41,541 | 36,834 | 32,281 | 27,839 | 23,633 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 10,494 | 11,151 | 11,598 | 11,811 | 11,818 | 11,691 | 11,412 | 11,020 | 10,534 | 9,973 | 9,333 | 8,694 | 8,074 | 7,494 | 6,932 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | (13 | ) | (32 | ) | (68 | ) | (82 | ) | (88 | ) | (151 | ) | (164 | ) | (181 | ) | (207 | ) | (243 | ) | (270 | ) | (295 | ) | (302 | ) | (330 | ) | (351 | ) | |||||||||||||||
LESS INVESTMENT EXPENSE | (733 | ) | (790 | ) | (833 | ) | (859 | ) | (871 | ) | (873 | ) | (861 | ) | (840 | ) | (813 | ) | (779 | ) | (739 | ) | (698 | ) | (655 | ) | (614 | ) | (570 | ) | |||||||||||||||
LESS INCOME LOST ON DEFAULTS | 421 | 453 | 477 | 491 | 496 | 495 | 486 | 471 | 453 | 431 | 405 | 380 | 354 | 330 | 305 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 108,094 | 102,489 | 96,790 | 91,026 | 85,085 | 79,297 | 73,637 | 67,978 | 62,335 | 56,701 | 50,938 | 45,550 | 40,354 | 35,287 | 30,479 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 143 | 159 | 169 | 179 | 189 | 178 | 192 | 205 | 218 | 230 | 154 | 154 | 162 | 170 | 179 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 53,485 | 55,253 | 56,840 | 58,199 | 59,272 | 59,703 | 58,765 | 57,148 | 54,908 | 52,006 | 48,703 | 45,742 | 42,217 | 38,098 | 33,308 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 13,069 | 12,575 | 12,072 | 11,561 | 11,035 | 10,484 | 9,914 | 9,309 | 8,671 | 7,998 | 7,343 | 6,722 | 6,075 | 5,401 | 4,697 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 5,479 | 5,215 | 4,954 | 4,696 | 4,441 | 4,165 | 3,894 | 3,618 | 3,339 | 3,054 | 2,769 | 2,527 | 2,290 | 2,052 | 1,813 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | (2,489 | ) | (2,460 | ) | (2,427 | ) | (2,395 | ) | (2,391 | ) | (2,499 | ) | (2,541 | ) | (2,571 | ) | (2,608 | ) | (2,654 | ) | (2,304 | ) | (2,266 | ) | (2,247 | ) | (2,254 | ) | (2,285 | ) | |||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 20,956 | 15,165 | 8,706 | 3,191 | (775 | ) | (5,802 | ) | (9,077 | ) | (11,762 | ) | (14,041 | ) | (16,126 | ) | (16,219 | ) | (16,224 | ) | (15,680 | ) | (15,927 | ) | (17,378 | ) | |||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 90,642 | 85,908 | 80,314 | 75,431 | 71,771 | 66,230 | 61,146 | 55,946 | 50,486 | 44,509 | 40,447 | 36,655 | 32,816 | 27,540 | 20,334 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 17,452 | 16,581 | 16,475 | 15,595 | 13,314 | 13,067 | 12,491 | 12,032 | 11,850 | 12,192 | 10,492 | 8,895 | 7,539 | 7,747 | 10,145 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | (16 | ) | (41 | ) | (86 | ) | (103 | ) | (111 | ) | (191 | ) | (207 | ) | (229 | ) | (262 | ) | (308 | ) | (341 | ) | (373 | ) | (382 | ) | (418 | ) | (444 | ) | |||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | (13 | ) | (32 | ) | (68 | ) | (82 | ) | (88 | ) | (151 | ) | (164 | ) | (181 | ) | (207 | ) | (243 | ) | (270 | ) | (295 | ) | (302 | ) | (330 | ) | (351 | ) | |||||||||||||||
BOOK PROFIT | 17,448 | 16,572 | 16,457 | 15,573 | 13,291 | 13,027 | 12,447 | 11,984 | 11,794 | 12,128 | 10,420 | 8,817 | 7,459 | 7,659 | 10,052 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 3,885 | 3,339 | 2,977 | 2,503 | 1,792 | 1,524 | 1,250 | 1,040 | 926 | 957 | 607 | 303 | 60 | 132 | 649 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 13,564 | 13,233 | 13,480 | 13,070 | 11,499 | 11,502 | 11,198 | 10,944 | 10,868 | 11,171 | 9,813 | 8,514 | 7,399 | 7,528 | 9,403 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 295,000 | 310,165 | 318,871 | 322,063 | 321,287 | 315,486 | 306,408 | 294,646 | 280,605 | 264,479 | 248,261 | 232,036 | 216,356 | 200,429 | 183,050 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 295,000 | 310,165 | 318,871 | 322,063 | 321,287 | 315,486 | 306,408 | 294,646 | 280,605 | 264,479 | 248,261 | 232,036 | 216,356 | 200,429 | 183,050 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 193,617 | 207,352 | 216,085 | 220,562 | 222,101 | 219,572 | 214,485 | 207,265 | 198,159 | 187,219 | 176,234 | 165,189 | 154,597 | 143,732 | 131,471 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 161,905 | 152,098 | 142,437 | 132,872 | 123,269 | 114,775 | 106,152 | 97,418 | 88,544 | 79,515 | 71,610 | 63,621 | 55,533 | 47,340 | 38,998 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 40,825,981 | 38,806,696 | 36,823,203 | 34,865,079 | 32,910,140 | 30,767,748 | 28,543,508 | 26,264,120 | 23,929,134 | 21,536,492 | 19,421,774 | 17,269,530 | 15,077,782 | 12,845,395 | 10,560,993 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 7,239 | 6,847 | 6,453 | 6,061 | 5,671 | 5,237 | 4,803 | 4,366 | 3,923 | 3,473 | 3,092 | 2,758 | 2,433 | 2,110 | 1,786 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 49,389 | 46,929 | 44,502 | 42,107 | 39,716 | 37,217 | 34,676 | 32,105 | 29,497 | 26,843 | 24,538 | 22,273 | 20,025 | 17,772 | 15,487 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 63,397 | 67,586 | 71,574 | 75,188 | 78,160 | 80,938 | 83,465 | 85,774 | 87,916 | 89,975 | 91,664 | 93,035 | 94,147 | 95,206 | 96,441 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 55,829 | 59,406 | 62,779 | 65,808 | 68,275 | 70,560 | 72,619 | 74,483 | 76,197 | 77,828 | 79,155 | 80,221 | 81,079 | 81,887 | 82,821 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 49,126 | 52,183 | 55,041 | 57,583 | 59,635 | 61,518 | 63,200 | 64,707 | 66,081 | 67,377 | 68,421 | 69,252 | 69,914 | 70,533 | 71,241 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 93,803 | 99,050 | 103,919 | 108,225 | 111,659 | 114,805 | 117,615 | 120,143 | 122,468 | 124,703 | 126,497 | 127,916 | 129,038 | 130,114 | 131,435 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 83,233 | 87,712 | 91,830 | 95,439 | 98,290 | 100,878 | 103,167 | 105,209 | 107,069 | 108,839 | 110,248 | 111,352 | 112,216 | 113,039 | 114,037 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 73,848 | 77,677 | 81,166 | 84,195 | 86,566 | 88,699 | 90,568 | 92,219 | 93,710 | 95,117 | 96,225 | 97,086 | 97,754 | 98,383 | 99,141 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 273,790 | 287,865 | 295,945 | 298,906 | 298,187 | 292,802 | 284,377 | 273,461 | 260,429 | 245,463 | 230,411 | 215,353 | 200,800 | 186,018 | 169,889 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 88,530 | 84,992 | 81,338 | 77,578 | 73,712 | 69,345 | 64,739 | 59,952 | 54,996 | 49,871 | 45,278 | 40,644 | 35,958 | 31,191 | 26,286 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 5,370 | 5,391 | 5,433 | 5,463 | 5,490 | 5,910 | 6,058 | 6,142 | 6,211 | 6,276 | 5,637 | 5,582 | 5,537 | 5,520 | 5,558 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 17,448 | 16,572 | 16,457 | 15,573 | 13,291 | 13,027 | 12,447 | 11,984 | 11,794 | 12,128 | 10,420 | 8,817 | 7,459 | 7,659 | 10,052 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (3,885 | ) | (3,339 | ) | (2,977 | ) | (2,503 | ) | (1,792 | ) | (1,524 | ) | (1,250 | ) | (1,040 | ) | (926 | ) | (957 | ) | (607 | ) | (303 | ) | (60 | ) | (132 | ) | (649 | ) | |||||||||||||||
Profit After-Tax, After Cost of Capital | 18,933 | 18,624 | 18,913 | 18,533 | 16,988 | 17,413 | 17,256 | 17,086 | 17,079 | 17,447 | 15,450 | 14,096 | 12,936 | 13,047 | 14,960 | ||||||||||||||||||||||||||||||
PV’s -- Term | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-27 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | ||||||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
IUL | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 15,026 | 33,600 | 47,401 | 61,406 | 75,462 | 89,848 | 104,682 | 119,904 | 135,466 | 151,322 | 141,890 | 126,015 | 118,690 | 111,996 | 105,963 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | (212 | ) | 300 | 1,216 | 2,450 | 3,993 | 5,840 | 8,012 | 10,508 | 13,323 | 16,451 | 20,246 | 23,130 | 25,595 | 27,808 | 29,793 | |||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | (30 | ) | (94 | ) | (179 | ) | (284 | ) | (410 | ) | (555 | ) | (720 | ) | (905 | ) | (1,110 | ) | (1,334 | ) | (1,527 | ) | (1,683 | ) | (1,821 | ) | (1,943 | ) | ||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 17 | 54 | 102 | 162 | 234 | 317 | 413 | 520 | 638 | 768 | 879 | 967 | 1,045 | 1,113 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 14,814 | 33,913 | 48,657 | 63,933 | 79,576 | 95,864 | 112,932 | 130,720 | 149,175 | 168,245 | 162,702 | 149,794 | 145,001 | 140,580 | 136,587 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 21 | 207 | 742 | 1,644 | 2,922 | 4,564 | 6,563 | 8,912 | 11,604 | 14,633 | 17,955 | 21,405 | 24,680 | 27,596 | 30,143 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 280 | 952 | 1,861 | 2,962 | 4,198 | 5,547 | 7,054 | 8,780 | 10,749 | 12,978 | 14,947 | 16,427 | 17,710 | 18,896 | 20,105 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 8,764 | 9,408 | 9,953 | 10,546 | 11,178 | 11,896 | 12,645 | 13,400 | 14,152 | 14,896 | 736 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 637 | 1,738 | 2,783 | 3,863 | 4,979 | 6,140 | 7,352 | 8,615 | 9,926 | 11,285 | 11,606 | 11,153 | 10,835 | 10,531 | 10,242 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 11,830 | 13,511 | 14,877 | 16,315 | 17,803 | 19,419 | 21,094 | 22,798 | 24,514 | 26,236 | 7,854 | 6,224 | 5,871 | 5,548 | 5,258 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 10,440 | 21,703 | 28,928 | 36,011 | 42,847 | 49,649 | 56,477 | 63,266 | 69,962 | 76,527 | 65,995 | 58,669 | 52,686 | 47,539 | 42,984 | ||||||||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 31,971 | 47,521 | 59,144 | 71,340 | 83,926 | 97,215 | 111,184 | 125,770 | 140,909 | 156,556 | 119,094 | 113,878 | 111,781 | 110,109 | 108,731 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | (17,157 | ) | (13,608 | ) | (10,487 | ) | (7,408 | ) | (4,350 | ) | (1,351 | ) | 1,747 | 4,950 | 8,266 | 11,689 | 43,608 | 35,916 | 33,220 | 30,471 | 27,856 | ||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | (17,157 | ) | (13,608 | ) | (10,487 | ) | (7,408 | ) | (4,350 | ) | (1,351 | ) | 1,747 | 4,950 | 8,266 | 11,689 | 43,608 | 35,916 | 33,220 | 30,471 | 27,856 | ||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | (3,164 | ) | (1,934 | ) | (983 | ) | (67 | ) | 813 | 1,658 | 2,503 | 3,275 | 3,756 | 4,256 | 10,139 | 7,655 | 6,514 | 5,395 | 4,335 | ||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | (13,992 | ) | (11,674 | ) | (9,504 | ) | (7,340 | ) | (5,163 | ) | (3,010 | ) | (756 | ) | 1,676 | 4,510 | 7,433 | 33,469 | 28,261 | 26,706 | 25,077 | 23,520 | |||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 0 | 10,440 | 32,143 | 61,071 | 97,083 | 139,930 | 189,579 | 246,055 | 309,321 | 379,283 | 455,811 | 521,805 | 580,475 | 633,161 | 680,699 | 723,683 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 0 | 10,440 | 32,143 | 61,071 | 97,083 | 139,930 | 189,579 | 246,055 | 309,321 | 379,283 | 455,811 | 521,805 | 580,475 | 633,161 | 680,699 | 723,683 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 0 | 8,350 | 25,590 | 48,506 | 77,034 | 111,026 | 150,505 | 195,546 | 246,503 | 304,723 | 370,041 | 428,165 | 482,577 | 533,286 | 580,994 | 626,159 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 0 | 7,805 | 15,412 | 23,138 | 31,007 | 39,043 | 47,318 | 55,842 | 64,610 | 73,608 | 82,816 | 78,954 | 75,276 | 71,776 | 68,442 | 65,268 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 867,012 | 1,716,072 | 2,580,789 | 3,463,535 | 4,367,155 | 5,299,224 | 6,261,032 | 7,251,826 | 8,269,891 | 9,313,177 | 8,906,126 | 8,514,317 | 8,139,328 | 7,780,430 | 7,436,941 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 0 | 1,081 | 9,038 | 24,495 | 48,176 | 79,934 | 119,618 | 167,165 | 222,510 | 285,564 | 356,209 | 432,488 | 509,219 | 579,421 | 642,103 | 697,592 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 11,619 | 35,762 | 67,942 | 108,000 | 155,659 | 210,881 | 273,696 | 344,062 | 421,876 | 506,994 | 579,513 | 637,260 | 687,955 | 732,303 | 770,960 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 11,619 | 35,762 | 67,942 | 108,000 | 155,659 | 210,881 | 273,696 | 344,062 | 421,876 | 506,994 | 579,513 | 637,260 | 687,955 | 732,303 | 770,960 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | (13,077 | ) | (23,273 | ) | (31,031 | ) | (36,631 | ) | (40,312 | ) | (42,318 | ) | (42,789 | ) | (41,813 | ) | (39,360 | ) | (35,582 | ) | (19,680 | ) | (7,132 | ) | 3,949 | 13,675 | 22,199 | ||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | (12,956 | ) | (22,964 | ) | (30,509 | ) | (35,904 | ) | (39,418 | ) | (41,315 | ) | (41,756 | ) | (40,850 | ) | (38,594 | ) | (35,151 | ) | (20,797 | ) | (9,574 | ) | 245 | 8,783 | 16,198 | ||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | (12,837 | ) | (22,663 | ) | (30,001 | ) | (35,201 | ) | (38,557 | ) | (40,352 | ) | (40,765 | ) | (39,924 | ) | (37,848 | ) | (34,708 | ) | (21,737 | ) | (11,690 | ) | (2,979 | ) | 4,525 | 10,982 | |||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | (16,034 | ) | (27,920 | ) | (36,480 | ) | (42,132 | ) | (45,233 | ) | (46,134 | ) | (45,046 | ) | (42,164 | ) | (37,668 | ) | (31,726 | ) | (11,008 | ) | 4,939 | 18,724 | 30,541 | 40,637 | ||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | (15,886 | ) | (27,552 | ) | (35,877 | ) | (41,322 | ) | (44,283 | ) | (45,134 | ) | (44,115 | ) | (41,440 | ) | (37,305 | ) | (31,891 | ) | (13,188 | ) | 1,075 | 13,290 | 23,664 | 32,445 | ||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | (15,740 | ) | (27,193 | ) | (35,291 | ) | (40,539 | ) | (43,367 | ) | (44,172 | ) | (43,216 | ) | (40,732 | ) | (36,926 | ) | (31,988 | ) | (15,089 | ) | (2,319 | ) | 8,516 | 17,635 | 25,282 | |||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 0 | 9,689 | 29,832 | 56,680 | 90,103 | 129,869 | 175,948 | 228,364 | 287,416 | 354,388 | 429,046 | 494,747 | 554,455 | 609,032 | 659,280 | 705,758 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 0 | 2,794 | 6,104 | 9,349 | 12,840 | 16,566 | 20,557 | 24,825 | 29,363 | 34,162 | 39,212 | 39,777 | 39,746 | 40,114 | 40,404 | 40,633 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | (2,794 | ) | (3,252 | ) | (3,116 | ) | (3,295 | ) | (3,457 | ) | (3,645 | ) | (3,837 | ) | (4,018 | ) | (4,184 | ) | (4,335 | ) | 256 | 863 | 464 | 550 | 616 | ||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (17,157 | ) | (13,608 | ) | (10,487 | ) | (7,408 | ) | (4,350 | ) | (1,351 | ) | 1,747 | 4,950 | 8,266 | 11,689 | 43,608 | 35,916 | 33,220 | 30,471 | 27,856 | |||||||||||||||||||||||||||
FEDERAL INCOME TAX | 3,164 | 1,934 | 983 | 67 | (813 | ) | (1,658 | ) | (2,503 | ) | (3,275 | ) | (3,756 | ) | (4,256 | ) | (10,139 | ) | (7,655 | ) | (6,514 | ) | (5,395 | ) | (4,335 | ) | ||||||||||||||||||||||
Profit After-Tax, After Cost of Capital | (16,786 | ) | (14,926 | ) | (12,620 | ) | (10,636 | ) | (8,621 | ) | (6,655 | ) | (4,593 | ) | (2,342 | ) | 326 | 3,099 | 33,725 | 29,124 | 27,170 | 25,627 | 24,136 | |||||||||||||||||||||||||
PV’s -- IUL | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | ||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 107,910 | 86,735 | 69,374 | 55,033 | 43,108 | 33,136 | ||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (22,284 | ) | (19,553 | ) | (17,134 | ) | (14,992 | ) | (13,095 | ) | (11,415 | ) | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (17,254 | ) | (17,709 | ) | (17,825 | ) | (17,716 | ) | (17,461 | ) | (17,110 | ) | ||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 68,372 | 49,472 | 34,415 | 22,325 | 12,553 | 4,611 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-28 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | ||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | |||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
IUL | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 100,305 | 94,861 | 89,633 | 84,617 | 79,815 | 75,217 | 70,830 | 66,643 | 62,641 | 58,802 | 55,140 | 51,656 | 48,332 | 45,160 | 42,129 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 31,562 | 33,096 | 34,403 | 35,500 | 36,399 | 37,101 | 37,614 | 38,023 | 38,301 | 38,459 | 38,509 | 38,457 | 38,317 | 38,103 | 37,827 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2 | ) | (10 | ) | (25 | ) | (43 | ) | (64 | ) | |||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | (2,052 | ) | (2,149 | ) | (2,234 | ) | (2,308 | ) | (2,372 | ) | (2,426 | ) | (2,470 | ) | (2,505 | ) | (2,532 | ) | (2,553 | ) | (2,567 | ) | (2,576 | ) | (2,578 | ) | (2,576 | ) | (2,569 | ) | |||||||||||||||
LESS INCOME LOST ON DEFAULTS | 1,173 | 1,224 | 1,266 | 1,301 | 1,329 | 1,350 | 1,366 | 1,379 | 1,387 | 1,392 | 1,394 | 1,393 | 1,388 | 1,382 | 1,373 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 132,746 | 128,882 | 125,004 | 121,124 | 117,257 | 113,394 | 109,547 | 105,793 | 102,087 | 98,422 | 94,820 | 91,287 | 87,815 | 84,414 | 81,088 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 32,348 | 34,233 | 35,819 | 37,128 | 38,179 | 38,998 | 39,476 | 39,591 | 39,594 | 39,497 | 39,307 | 39,035 | 38,692 | 38,286 | 37,826 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 21,382 | 22,667 | 23,874 | 24,957 | 25,904 | 26,795 | 27,692 | 28,578 | 29,428 | 30,225 | 30,962 | 31,627 | 32,248 | 32,824 | 33,338 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 9,964 | 9,693 | 9,429 | 9,173 | 8,923 | 8,681 | 8,445 | 8,216 | 7,993 | 7,775 | 7,562 | 7,355 | 7,153 | 6,956 | 6,764 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 4,985 | 4,724 | 4,473 | 4,232 | 4,001 | 3,781 | 3,571 | 3,371 | 3,180 | 2,998 | 2,824 | 2,659 | 2,502 | 2,353 | 2,210 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 38,795 | 34,892 | 31,244 | 27,867 | 24,750 | 21,000 | 8,999 | 6,442 | 4,064 | 1,873 | (140 | ) | (1,969 | ) | (3,627 | ) | (5,122 | ) | (6,441 | ) | |||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 107,474 | 106,208 | 104,838 | 103,356 | 101,758 | 99,255 | 88,182 | 86,197 | 84,259 | 82,367 | 80,515 | 78,708 | 76,968 | 75,297 | 73,696 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 25,273 | 22,674 | 20,165 | 17,768 | 15,499 | 14,139 | 21,365 | 19,595 | 17,828 | 16,055 | 14,306 | 12,579 | 10,847 | 9,117 | 7,392 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (3 | ) | (13 | ) | (31 | ) | (55 | ) | (81 | ) | |||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2 | ) | (10 | ) | (25 | ) | (43 | ) | (64 | ) | |||||||||||||||||||||||||
BOOK PROFIT | 25,273 | 22,674 | 20,165 | 17,768 | 15,499 | 14,139 | 21,365 | 19,595 | 17,828 | 16,055 | 14,305 | 12,576 | 10,840 | 9,106 | 7,375 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 3,317 | 2,340 | 1,547 | 1,311 | 1,112 | 838 | 2,252 | 1,814 | 1,410 | 1,039 | 690 | 342 | (9 | ) | (358 | ) | (703 | ) | |||||||||||||||||||||||||||
PROFITS RELEASED | 21,956 | 20,334 | 18,618 | 16,458 | 14,387 | 13,301 | 19,113 | 17,782 | 16,418 | 15,016 | 13,615 | 12,234 | 10,849 | 9,464 | 8,077 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 762,478 | 797,370 | 828,614 | 856,480 | 881,231 | 902,231 | 911,230 | 917,671 | 921,735 | 923,609 | 923,468 | 921,499 | 917,872 | 912,750 | 906,309 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 762,478 | 797,370 | 828,614 | 856,480 | 881,231 | 902,231 | 911,230 | 917,671 | 921,735 | 923,609 | 923,468 | 921,499 | 917,872 | 912,750 | 906,309 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 669,005 | 709,632 | 747,542 | 780,488 | 808,704 | 832,848 | 845,249 | 855,213 | 862,782 | 868,009 | 871,011 | 872,013 | 871,221 | 868,807 | 864,955 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 62,240 | 59,353 | 56,596 | 53,965 | 51,456 | 49,061 | 46,776 | 44,592 | 42,505 | 40,509 | 38,602 | 36,781 | 35,041 | 33,379 | 31,785 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 7,107,738 | 6,792,046 | 6,489,363 | 6,199,006 | 5,920,683 | 5,653,946 | 5,398,592 | 5,153,777 | 4,919,001 | 4,693,603 | 4,477,618 | 4,270,718 | 4,072,372 | 3,882,137 | 3,699,425 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 746,319 | 788,681 | 825,037 | 855,765 | 881,231 | 902,231 | 911,230 | 917,671 | 921,735 | 923,609 | 923,468 | 921,499 | 917,872 | 912,750 | 906,309 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 804,322 | 832,661 | 856,262 | 875,440 | 890,512 | 902,230 | 911,229 | 917,671 | 921,734 | 923,608 | 923,468 | 921,499 | 917,872 | 912,749 | 906,308 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 804,322 | 832,661 | 856,262 | 875,440 | 890,512 | 902,230 | 911,229 | 917,671 | 921,734 | 923,608 | 923,468 | 921,499 | 917,872 | 912,749 | 906,308 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 29,637 | 36,074 | 41,582 | 46,133 | 49,851 | 53,063 | 57,377 | 61,128 | 64,365 | 67,131 | 69,476 | 71,445 | 73,076 | 74,407 | 75,468 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 22,606 | 28,102 | 32,761 | 36,575 | 39,661 | 42,304 | 45,819 | 48,848 | 51,437 | 53,629 | 55,470 | 57,002 | 58,259 | 59,275 | 60,077 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 16,512 | 21,211 | 25,158 | 28,359 | 30,926 | 33,103 | 35,974 | 38,424 | 40,499 | 42,240 | 43,689 | 44,883 | 45,854 | 46,632 | 47,241 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 49,198 | 56,376 | 62,342 | 67,255 | 71,261 | 74,675 | 79,498 | 83,631 | 87,146 | 90,104 | 92,567 | 94,591 | 96,222 | 97,502 | 98,470 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 39,822 | 45,950 | 50,996 | 55,113 | 58,439 | 61,248 | 65,177 | 68,515 | 71,326 | 73,671 | 75,605 | 77,179 | 78,436 | 79,413 | 80,146 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 31,647 | 36,887 | 41,162 | 44,617 | 47,383 | 49,697 | 52,906 | 55,606 | 57,860 | 59,721 | 61,243 | 62,471 | 63,442 | 64,190 | 64,745 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 748,806 | 788,681 | 825,037 | 855,765 | 881,231 | 902,231 | 911,230 | 917,671 | 921,735 | 923,609 | 923,468 | 921,499 | 917,872 | 912,750 | 906,309 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 40,794 | 40,881 | 40,901 | 40,861 | 40,768 | 40,602 | 40,129 | 39,615 | 39,064 | 38,478 | 37,864 | 37,225 | 36,564 | 35,885 | 35,191 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 690 | 767 | 835 | 896 | 949 | 1,019 | 1,323 | 1,354 | 1,381 | 1,404 | 1,420 | 1,432 | 1,440 | 1,444 | 1,445 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 25,273 | 22,674 | 20,165 | 17,768 | 15,499 | 14,139 | 21,365 | 19,595 | 17,828 | 16,055 | 14,305 | 12,576 | 10,840 | 9,106 | 7,375 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (3,317 | ) | (2,340 | ) | (1,547 | ) | (1,311 | ) | (1,112 | ) | (838 | ) | (2,252 | ) | (1,814 | ) | (1,410 | ) | (1,039 | ) | (690 | ) | (342 | ) | 9 | 358 | 703 | ||||||||||||||||||
Profit After-Tax, After Cost of Capital | 22,646 | 21,101 | 19,454 | 17,354 | 15,335 | 14,321 | 20,436 | 19,135 | 17,798 | 16,419 | 15,035 | 13,666 | 12,289 | 10,908 | 9,522 | ||||||||||||||||||||||||||||||
PV’s -- IUL | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-29 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | |||||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | |||||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | ||||||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | ||||||||||||||||||||||||||||||||
Total Future Business | ||||||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 0 | 213,342 | 257,956 | 299,558 | 341,856 | 384,626 | 428,307 | 472,995 | 517,128 | 564,026 | 611,001 | 336,136 | 308,898 | 291,313 | 275,110 | 260,094 | ||||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 0 | 1,936 | 8,908 | 17,009 | 25,378 | 34,646 | 44,177 | 54,677 | 65,385 | 76,528 | 87,846 | 97,452 | 99,393 | 99,768 | 100,463 | 99,991 | ||||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS INVESTMENT EXPENSE | 0 | 0 | (40 | ) | (135 | ) | (285 | ) | (489 | ) | (747 | ) | (1,062 | ) | (1,433 | ) | (1,860 | ) | (2,345 | ) | (2,885 | ) | (3,413 | ) | (3,902 | ) | (4,353 | ) | (4,769 | ) | ||||||||||||||||||
LESS INCOME LOST ON DEFAULTS | 0 | 0 | 20 | 64 | 129 | 215 | 322 | 452 | 605 | 782 | 981 | 1,203 | 1,411 | 1,599 | 1,770 | 1,926 | ||||||||||||||||||||||||||||||||
TOTAL INCOME | 0 | 215,278 | 266,884 | 316,638 | 367,390 | 419,546 | 472,909 | 528,281 | 583,340 | 641,633 | 700,211 | 435,270 | 410,292 | 393,384 | 378,155 | 362,927 | ||||||||||||||||||||||||||||||||
NET SURRENDERS | 0 | 4,792 | 10,458 | 16,811 | 23,689 | 36,499 | 45,910 | 67,672 | 81,364 | 96,020 | 122,234 | 129,880 | 137,941 | 145,874 | 152,151 | 150,332 | ||||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 0 | 3,905 | 9,865 | 17,002 | 25,065 | 33,527 | 42,511 | 52,111 | 62,663 | 74,227 | 86,786 | 93,935 | 97,656 | 100,313 | 102,545 | 105,282 | ||||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 23,086 | 27,634 | 29,412 | 31,202 | 33,047 | 35,005 | 37,008 | 38,988 | 41,015 | 43,016 | 5,538 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 0 | 2,205 | 5,861 | 9,537 | 13,325 | 17,224 | 21,268 | 25,432 | 29,734 | 34,183 | 38,737 | 39,638 | 38,047 | 36,669 | 35,358 | 34,115 | ||||||||||||||||||||||||||||||||
NET COMMISSIONS | 0 | 37,273 | 41,677 | 45,619 | 49,682 | 53,857 | 58,239 | 62,733 | 67,219 | 71,851 | 76,480 | 17,764 | 15,630 | 14,829 | 14,099 | 13,434 | ||||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
INCREASE IN LOADING | 0 | 8,088 | 6,750 | 6,883 | 7,056 | 7,258 | 7,481 | 7,706 | 7,926 | 8,147 | 8,376 | (6,466 | ) | (3,270 | ) | (3,001 | ) | (2,778 | ) | (2,609 | ) | |||||||||||||||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | 0 | 173,314 | 191,613 | 207,879 | 224,900 | 236,362 | 252,868 | 257,795 | 269,575 | 282,385 | 283,207 | 38,647 | 23,675 | 8,766 | (5,407 | ) | (11,470 | ) | ||||||||||||||||||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 0 | 252,662 | 293,859 | 333,144 | 374,919 | 417,774 | 463,282 | 510,457 | 557,470 | 607,829 | 658,837 | 318,936 | 309,679 | 303,451 | 295,968 | 289,083 | ||||||||||||||||||||||||||||||||
STATUTORY GAIN | 0 | (37,384 | ) | (26,975 | ) | (16,507 | ) | (7,529 | ) | 1,772 | 9,627 | 17,824 | 25,870 | 33,804 | 41,374 | 116,334 | 100,613 | 89,933 | 82,187 | 73,844 | ||||||||||||||||||||||||||||
CAPITAL GAINS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
BOOK PROFIT | 0 | (37,384 | ) | (26,975 | ) | (16,507 | ) | (7,529 | ) | 1,772 | 9,627 | 17,824 | 25,870 | 33,804 | 41,374 | 116,334 | 100,613 | 89,933 | 82,187 | 73,844 | ||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 0 | (5,760 | ) | (2,714 | ) | 99 | 2,679 | 5,175 | 7,412 | 9,557 | 11,599 | 13,305 | 14,826 | 27,372 | 22,615 | 19,388 | 16,552 | 13,847 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 0 | (31,625 | ) | (24,260 | ) | (16,606 | ) | (10,208 | ) | (3,403 | ) | 2,216 | 8,267 | 14,272 | 20,499 | 26,548 | 88,962 | 77,998 | 70,544 | 65,635 | 59,997 | |||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 0 | 173,314 | 364,927 | 572,806 | 797,707 | 1,034,069 | 1,286,936 | 1,544,731 | 1,814,306 | 2,096,691 | 2,379,898 | 2,418,545 | 2,442,220 | 2,450,987 | 2,445,579 | 2,434,109 | ||||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 0 | 172,774 | 362,335 | 568,212 | 791,122 | 1,025,479 | 1,276,305 | 1,532,013 | 1,799,456 | 2,079,667 | 2,360,657 | 2,397,972 | 2,422,909 | 2,432,737 | 2,428,267 | 2,417,655 | ||||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 0 | 162,817 | 338,252 | 526,904 | 729,023 | 939,665 | 1,163,549 | 1,389,762 | 1,625,391 | 1,872,845 | 2,120,543 | 2,138,810 | 2,150,672 | 2,151,192 | 2,142,281 | 2,130,900 | ||||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 0 | 37,536 | 75,478 | 113,824 | 152,860 | 192,733 | 233,667 | 275,566 | 318,512 | 362,541 | 407,525 | 384,612 | 363,919 | 344,956 | 327,235 | 310,503 | ||||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 0 | 6,114,592 | 12,455,574 | 18,931,772 | 25,568,433 | 32,388,694 | 39,416,353 | 46,667,353 | 54,142,673 | 61,841,576 | 69,769,177 | 66,291,134 | 63,116,831 | 60,212,606 | 57,524,518 | 55,000,533 | ||||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 0 | 158,754 | 327,764 | 510,296 | 707,976 | 915,679 | 1,137,192 | 1,361,168 | 1,594,058 | 1,836,725 | 2,077,604 | 2,095,060 | 2,108,538 | 2,108,391 | 2,093,743 | 2,071,652 | ||||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 0 | 181,577 | 376,681 | 582,625 | 799,107 | 1,020,970 | 1,251,784 | 1,480,253 | 1,713,109 | 1,951,577 | 2,183,909 | 2,153,838 | 2,104,867 | 2,043,736 | 1,972,903 | 1,899,569 | ||||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 0 | 181,577 | 376,681 | 582,625 | 799,107 | 1,020,970 | 1,251,784 | 1,480,253 | 1,713,109 | 1,951,577 | 2,183,909 | 2,153,838 | 2,104,867 | 2,043,736 | 1,972,903 | 1,899,569 | ||||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 0 | 8,628 | 17,431 | 26,315 | 35,361 | 44,624 | 54,147 | 63,940 | 73,997 | 84,319 | 94,911 | 89,778 | 85,246 | 81,184 | 77,468 | 74,001 | ||||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 0 | 540 | 2,593 | 4,594 | 6,584 | 8,589 | 10,631 | 12,718 | 14,850 | 17,025 | 19,241 | 20,573 | 19,312 | 18,250 | 17,312 | 16,455 | ||||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 0 | (29,556 | ) | (50,746 | ) | (64,301 | ) | (72,088 | ) | (74,515 | ) | (73,038 | ) | (67,890 | ) | (59,584 | ) | (48,434 | ) | (34,938 | ) | 7,327 | 41,959 | 71,233 | 96,687 | 118,433 | ||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 0 | (29,282 | ) | (50,081 | ) | (63,263 | ) | (70,767 | ) | (73,083 | ) | (71,686 | ) | (66,863 | ) | (59,152 | ) | (48,897 | ) | (36,601 | ) | 1,553 | 32,528 | 58,467 | 80,813 | 99,727 | ||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 0 | (29,013 | ) | (49,433 | ) | (62,255 | ) | (69,487 | ) | (71,699 | ) | (70,378 | ) | (65,855 | ) | (58,693 | ) | (49,254 | ) | (38,040 | ) | (3,565 | ) | 24,166 | 47,176 | 66,817 | 83,289 | |||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 7.0 | % | (34,938 | ) | (58,499 | ) | (71,974 | ) | (77,717 | ) | (76,454 | ) | (70,039 | ) | (58,939 | ) | (43,882 | ) | (25,495 | ) | (4,463 | ) | 50,807 | 95,480 | 132,799 | 164,673 | 191,438 | |||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 8.0 | % | (34,615 | ) | (57,741 | ) | (70,845 | ) | (76,379 | ) | (75,173 | ) | (69,106 | ) | (58,706 | ) | (44,729 | ) | (27,818 | ) | (8,654 | ) | 41,239 | 81,194 | 114,262 | 142,244 | 165,523 | |||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 9.0 | % | (34,297 | ) | (57,001 | ) | (69,748 | ) | (75,081 | ) | (73,930 | ) | (68,189 | ) | (58,439 | ) | (45,455 | ) | (29,891 | ) | (12,414 | ) | 32,669 | 68,441 | 97,775 | 122,369 | 142,642 | |||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 0 | 167,495 | 350,793 | 549,873 | 764,818 | 990,504 | 1,231,505 | 1,476,767 | 1,733,213 | 2,003,116 | 2,274,720 | 2,310,637 | 2,335,585 | 2,345,651 | 2,342,983 | 2,334,758 | ||||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 0 | 33,185 | 56,722 | 80,875 | 105,954 | 131,691 | 158,403 | 185,511 | 213,279 | 241,971 | 270,802 | 246,303 | 237,383 | 228,978 | 220,515 | 212,315 | ||||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 0 | (33,185 | ) | (22,842 | ) | (22,966 | ) | (23,385 | ) | (23,519 | ) | (23,955 | ) | (23,792 | ) | (23,884 | ) | (24,227 | ) | (23,765 | ) | 30,168 | 14,076 | 13,374 | 13,258 | 12,816 | ||||||||||||||||||||||
PRE-TAX BOOK PROFIT | (37,384 | ) | (26,975 | ) | (16,507 | ) | (7,529 | ) | 1,772 | 9,627 | 17,824 | 25,870 | 33,804 | 41,374 | 116,334 | 100,613 | 89,933 | 82,187 | 73,844 | |||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 5,760 | 2,714 | (99 | ) | (2,679 | ) | (5,175 | ) | (7,412 | ) | (9,557 | ) | (11,599 | ) | (13,305 | ) | (14,826 | ) | (27,372 | ) | (22,615 | ) | (19,388 | ) | (16,552 | ) | (13,847 | ) | ||||||||||||||||||||
Profit After-Tax, After Cost of Capital | (64,810 | ) | (47,102 | ) | (39,571 | ) | (33,594 | ) | (26,922 | ) | (21,740 | ) | (15,525 | ) | (9,613 | ) | (3,728 | ) | 2,783 | 119,130 | 92,074 | 83,919 | 78,893 | 72,813 | ||||||||||||||||||||||||
PV’s -- Total Future Business | LOB Sum | 7.00 | % | 8.00 | % | 9.00 | % | 10.00 | % | 11.00 | % | 12.00 | % | |||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | 388,152 | 323,990 | 271,131 | 227,216 | 190,460 | 159,492 | ||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | (93,098 | ) | (82,402 | ) | (73,139 | ) | (65,077 | ) | (58,029 | ) | (51,843 | ) | ||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | (92,219 | ) | (97,819 | ) | (101,429 | ) | (103,561 | ) | (104,590 | ) | (104,796 | ) | ||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital | 202,836 | 143,769 | 96,563 | 58,578 | 27,840 | 2,852 |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-30 |
Farm Bureau Life (Rev 12/11) - Base Case Unit Expense | 12/11/20 | ||||||||||||||||||||||||||||||||||||||||||||
Line of Business Projection | 03:24 PM | ||||||||||||||||||||||||||||||||||||||||||||
Baseline Production | |||||||||||||||||||||||||||||||||||||||||||||
Future Business - 10 Years of New Business (000) | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | 2047 | 2048 | 2049 | 2050 | ||||||||||||||||||||||||||||||
Total Future Business | |||||||||||||||||||||||||||||||||||||||||||||
PREMIUM | 244,496 | 229,148 | 214,247 | 199,777 | 185,580 | 171,971 | 158,823 | 145,971 | 133,385 | 121,059 | 111,269 | 102,206 | 93,478 | 85,064 | 77,098 | ||||||||||||||||||||||||||||||
GROSS INVESTMENT INCOME | 99,869 | 98,476 | 97,383 | 95,836 | 94,451 | 92,318 | 90,385 | 88,284 | 86,018 | 83,595 | 81,031 | 78,499 | 76,002 | 73,562 | 71,156 | ||||||||||||||||||||||||||||||
MISCELLANEOUS FEES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AMORTIZATION OF IMR | (13 | ) | (32 | ) | (68 | ) | (82 | ) | (88 | ) | (151 | ) | (164 | ) | (181 | ) | (207 | ) | (243 | ) | (272 | ) | (306 | ) | (330 | ) | (380 | ) | (427 | ) | |||||||||||||||
LESS INVESTMENT EXPENSE | (5,151 | ) | (5,489 | ) | (5,782 | ) | (6,031 | ) | (6,238 | ) | (6,410 | ) | (6,540 | ) | (6,635 | ) | (6,696 | ) | (6,723 | ) | (6,717 | ) | (6,692 | ) | (6,655 | ) | (6,605 | ) | (6,543 | ) | |||||||||||||||
LESS INCOME LOST ON DEFAULTS | 2,067 | 2,188 | 2,287 | 2,364 | 2,422 | 2,464 | 2,489 | 2,502 | 2,502 | 2,492 | 2,470 | 2,444 | 2,413 | 2,380 | 2,342 | ||||||||||||||||||||||||||||||
TOTAL INCOME | 347,436 | 330,893 | 315,057 | 299,198 | 283,758 | 268,083 | 253,095 | 238,207 | 223,390 | 208,642 | 196,274 | 184,647 | 173,391 | 162,472 | 152,028 | ||||||||||||||||||||||||||||||
NET SURRENDERS | 152,834 | 134,506 | 134,635 | 131,443 | 110,993 | 108,720 | 104,282 | 98,744 | 94,542 | 90,540 | 86,709 | 83,033 | 79,974 | 77,109 | 74,417 | ||||||||||||||||||||||||||||||
NET TRANSFERS TO SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
DEATH/GMDB/ANNUITY BENEFITS | 108,280 | 111,016 | 113,330 | 115,224 | 116,795 | 117,650 | 117,031 | 115,679 | 113,554 | 110,629 | 107,252 | 104,134 | 100,356 | 95,906 | 90,708 | ||||||||||||||||||||||||||||||
OTHER BENEFITS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
COST OF FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
AQUISITION EXPENSE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
MAINTENANCE EXPENSE | 32,856 | 31,627 | 30,410 | 29,207 | 28,070 | 26,927 | 25,785 | 24,634 | 23,469 | 22,289 | 21,170 | 20,122 | 19,066 | 17,999 | 16,919 | ||||||||||||||||||||||||||||||
NET COMMISSIONS | 12,742 | 12,043 | 11,361 | 10,696 | 10,046 | 9,387 | 8,744 | 8,106 | 7,472 | 6,840 | 6,327 | 5,877 | 5,441 | 5,015 | 4,597 | ||||||||||||||||||||||||||||||
DIVIDENDS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
INCREASE IN LOADING | (2,785 | ) | (2,770 | ) | (2,737 | ) | (2,707 | ) | (2,704 | ) | (2,816 | ) | (2,854 | ) | (2,891 | ) | (2,937 | ) | (2,978 | ) | (2,469 | ) | (2,392 | ) | (2,364 | ) | (2,362 | ) | (2,376 | ) | |||||||||||||||
INCREASE IN RESERVES AND DIVIDEND LIAB | (26,185 | ) | (20,575 | ) | (33,298 | ) | (41,392 | ) | (30,515 | ) | (38,648 | ) | (51,537 | ) | (53,800 | ) | (57,140 | ) | (60,544 | ) | (59,710 | ) | (58,723 | ) | (57,748 | ) | (57,663 | ) | (58,799 | ) | |||||||||||||||
INCR IN RESERVE FINANCING LIABILITY | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL DISBURSEMENTS | 277,741 | 265,848 | 253,700 | 242,470 | 232,685 | 221,220 | 201,452 | 190,470 | 178,960 | 166,775 | 159,280 | 152,052 | 144,725 | 136,005 | 125,466 | ||||||||||||||||||||||||||||||
STATUTORY GAIN | 69,695 | 65,046 | 61,357 | 56,728 | 51,073 | 46,863 | 51,643 | 47,736 | 44,430 | 41,867 | 36,994 | 32,595 | 28,666 | 26,467 | 26,561 | ||||||||||||||||||||||||||||||
CAPITAL GAINS | (16 | ) | (41 | ) | (86 | ) | (103 | ) | (111 | ) | (191 | ) | (207 | ) | (229 | ) | (262 | ) | (308 | ) | (344 | ) | (387 | ) | (418 | ) | (481 | ) | (540 | ) | |||||||||||||||
GAIN ON CALLS AND ROLLOVER | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS DEFAULT LOSSES | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
LESS IMR CAPITALIZATION | (13 | ) | (32 | ) | (68 | ) | (82 | ) | (88 | ) | (151 | ) | (164 | ) | (181 | ) | (207 | ) | (243 | ) | (272 | ) | (306 | ) | (330 | ) | (380 | ) | (427 | ) | |||||||||||||||
BOOK PROFIT | 69,691 | 65,037 | 61,339 | 56,706 | 51,050 | 46,823 | 51,600 | 47,688 | 44,375 | 41,802 | 36,922 | 32,514 | 28,578 | 26,366 | 26,448 | ||||||||||||||||||||||||||||||
INCREASE IN SURPLUS | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | 11,798 | 9,977 | 8,414 | 7,268 | 6,084 | 4,882 | 5,545 | 4,447 | 3,583 | 2,977 | 2,069 | 1,261 | 543 | 159 | 248 | ||||||||||||||||||||||||||||||
PROFITS RELEASED | 57,893 | 55,060 | 52,926 | 49,438 | 44,966 | 41,941 | 46,055 | 43,241 | 40,792 | 38,826 | 34,853 | 31,253 | 28,036 | 26,207 | 26,200 | ||||||||||||||||||||||||||||||
STATUTORY RESERVE AND DIVIDEND LIAB (GA) | 2,407,924 | 2,387,349 | 2,354,051 | 2,312,658 | 2,282,144 | 2,243,495 | 2,191,958 | 2,138,158 | 2,081,018 | 2,020,473 | 1,960,763 | 1,902,041 | 1,844,293 | 1,786,630 | 1,727,831 | ||||||||||||||||||||||||||||||
RESERVE FINANCING | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- GENERAL ACCOUNT | 2,392,747 | 2,373,426 | 2,341,346 | 2,301,144 | 2,271,800 | 2,234,303 | 2,183,910 | 2,131,256 | 2,075,267 | 2,015,872 | 1,956,481 | 1,898,046 | 1,840,573 | 1,783,170 | 1,724,609 | ||||||||||||||||||||||||||||||
TOTAL LIABILITY -- SEPARATE ACCOUNT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
TOTAL TAX RESERVE (GA) | 2,109,989 | 2,097,912 | 2,076,124 | 2,046,420 | 2,027,001 | 2,000,432 | 1,962,186 | 1,922,673 | 1,880,373 | 1,834,799 | 1,788,560 | 1,742,649 | 1,697,169 | 1,651,395 | 1,604,190 | ||||||||||||||||||||||||||||||
INTEREST MAINTENANCE RESERVE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
POLICIES IN FORCE (UNSCALED) | 293,797 | 277,841 | 262,363 | 247,280 | 232,669 | 219,426 | 206,332 | 193,372 | 180,476 | 167,618 | 156,072 | 144,600 | 133,168 | 121,773 | 110,381 | ||||||||||||||||||||||||||||||
INSURANCE IN FORCE | 52,416,853 | 49,898,344 | 47,437,231 | 45,021,023 | 42,621,052 | 40,041,766 | 37,392,230 | 34,698,457 | 31,958,701 | 29,177,977 | 26,698,050 | 24,192,113 | 21,655,154 | 19,085,390 | 16,480,531 | ||||||||||||||||||||||||||||||
CASH VALUE IN FORCE | 2,037,554 | 2,010,756 | 1,974,358 | 1,932,100 | 1,901,042 | 1,865,272 | 1,819,303 | 1,773,499 | 1,726,771 | 1,679,204 | 1,632,159 | 1,586,790 | 1,542,712 | 1,500,100 | 1,458,948 | ||||||||||||||||||||||||||||||
GA ACCOUNT VALUE IN FORCE | 1,820,069 | 1,753,842 | 1,683,119 | 1,611,223 | 1,555,180 | 1,497,841 | 1,441,940 | 1,388,576 | 1,336,862 | 1,286,884 | 1,238,865 | 1,193,272 | 1,149,790 | 1,108,559 | 1,069,535 | ||||||||||||||||||||||||||||||
TOTAL ACCOUNT VALUE IN FORCE | 1,820,069 | 1,753,842 | 1,683,119 | 1,611,223 | 1,555,180 | 1,497,841 | 1,441,940 | 1,388,576 | 1,336,862 | 1,286,884 | 1,238,865 | 1,193,272 | 1,149,790 | 1,108,559 | 1,069,535 | ||||||||||||||||||||||||||||||
POLICY LOANS IN FORCE | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
GROSS DEFERRED PREMIUMS | 69,939 | 65,915 | 61,959 | 58,062 | 54,187 | 50,220 | 46,221 | 42,184 | 38,096 | 33,969 | 31,181 | 28,502 | 25,862 | 23,241 | 20,626 | ||||||||||||||||||||||||||||||
NET DEFERRED PREMIUMS | 15,177 | 13,923 | 12,705 | 11,515 | 10,344 | 9,193 | 8,048 | 6,902 | 5,751 | 4,602 | 4,282 | 3,995 | 3,720 | 3,460 | 3,221 | ||||||||||||||||||||||||||||||
PV AT 7.00% PROFITS RELEASED | 138,043 | 155,474 | 171,133 | 184,803 | 196,423 | 206,552 | 216,947 | 226,069 | 234,111 | 241,264 | 247,266 | 252,296 | 256,512 | 260,196 | 263,638 | ||||||||||||||||||||||||||||||
PV AT 8.00% PROFITS RELEASED | 116,625 | 131,506 | 144,751 | 156,206 | 165,853 | 174,185 | 182,657 | 190,021 | 196,454 | 202,123 | 206,836 | 210,748 | 213,998 | 216,810 | 219,414 | ||||||||||||||||||||||||||||||
PV AT 9.00% PROFITS RELEASED | 97,871 | 110,594 | 121,813 | 131,429 | 139,452 | 146,318 | 153,234 | 159,192 | 164,348 | 168,851 | 172,559 | 175,609 | 178,120 | 180,273 | 182,248 | ||||||||||||||||||||||||||||||
PV AT 7.00% BOOK PROFITS | 215,044 | 235,634 | 253,782 | 269,461 | 282,654 | 293,962 | 305,609 | 315,669 | 324,417 | 332,119 | 338,477 | 343,709 | 348,007 | 351,713 | 355,188 | ||||||||||||||||||||||||||||||
PV AT 8.00% BOOK PROFITS | 185,865 | 203,442 | 218,793 | 231,932 | 242,885 | 252,187 | 261,678 | 269,800 | 276,798 | 282,902 | 287,893 | 291,964 | 295,276 | 298,106 | 300,735 | ||||||||||||||||||||||||||||||
PV AT 9.00% BOOK PROFITS | 160,195 | 175,224 | 188,227 | 199,256 | 208,365 | 216,030 | 223,779 | 230,350 | 235,959 | 240,806 | 244,735 | 247,908 | 250,467 | 252,633 | 254,627 | ||||||||||||||||||||||||||||||
Unearned Premium Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Claim Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Economic Reserve | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Dividend Liability | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Tax Reserve before unamort DAC (GA) | 2,314,191 | 2,299,970 | 2,273,905 | 2,238,128 | 2,211,172 | 2,175,952 | 2,128,263 | 2,078,847 | 2,026,517 | 1,971,121 | 1,915,447 | 1,860,533 | 1,806,432 | 1,752,393 | 1,697,270 | ||||||||||||||||||||||||||||||
Capital Based on 350% RBC | 203,472 | 195,338 | 186,955 | 178,511 | 170,906 | 162,805 | 154,338 | 145,861 | 137,301 | 128,655 | 120,837 | 113,134 | 105,487 | 97,857 | 90,197 | ||||||||||||||||||||||||||||||
Capital: After-Tax int less change (i=2.65%) | 13,288 | 12,394 | 12,473 | 12,358 | 11,342 | 11,678 | 11,876 | 11,709 | 11,613 | 11,521 | 10,511 | 10,233 | 10,016 | 9,838 | 9,709 | ||||||||||||||||||||||||||||||
PRE-TAX BOOK PROFIT | 69,691 | 65,037 | 61,339 | 56,706 | 51,050 | 46,823 | 51,600 | 47,688 | 44,375 | 41,802 | 36,922 | 32,514 | 28,578 | 26,366 | 26,448 | ||||||||||||||||||||||||||||||
FEDERAL INCOME TAX | (11,798 | ) | (9,977 | ) | (8,414 | ) | (7,268 | ) | (6,084 | ) | (4,882 | ) | (5,545 | ) | (4,447 | ) | (3,583 | ) | (2,977 | ) | (2,069 | ) | (1,261 | ) | (543 | ) | (159 | ) | (248 | ) | |||||||||||||||
Profit After-Tax, After Cost of Capital | 71,181 | 67,454 | 65,398 | 61,796 | 56,308 | 53,620 | 57,930 | 54,950 | 52,405 | 50,346 | 45,364 | 41,486 | 38,051 | 36,045 | 35,909 | ||||||||||||||||||||||||||||||
PV’s -- Total Future Business | |||||||||||||||||||||||||||||||||||||||||||||
PV PRE-TAX BOOK PROFIT | |||||||||||||||||||||||||||||||||||||||||||||
PV IMPACT OF FEDERAL INCOME TAX | |||||||||||||||||||||||||||||||||||||||||||||
PV Capital: After-Tax int less change (i=2.65%) less Init Cap | |||||||||||||||||||||||||||||||||||||||||||||
PV After-Tax, After Cost of Capital |
Appendix E - Detailed Statutory Income Projections | MILLIMAN | E-31 |
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