FBL Financial (FFG) 10-Q 2007 Q3 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedSeptember 30, 2007

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission File Number:1-11917

FBL Financial Group, Inc.

(Exact name of registrant as specified in its charter)

Iowa	42-1411715
(State of incorporation)	(I.R.S. Employer Identification No.)
5400 University Avenue, West Des Moines, Iowa	50266-5997
(Address of principal executive offices)	(Zip Code)

(515) 225-5400

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

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

Large accelerated filer o     Accelerated filer þ     Non-accelerated filer o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of each class	Outstanding at October 24, 2007
Class A Common Stock, without par value	28,811,188
Class B Common Stock, without par value	1,192,990

FBL FINANCIAL GROUP, INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION
			Cautionary Statement Regarding Forward Looking Information		2
	Item 1.		Financial Statements (Unaudited)
				Consolidated Balance Sheets	3
				Consolidated Statements of Income	5
				Consolidated Statements of Changes in Stockholders’ Equity	6
				Consolidated Statements of Cash Flows	7
				Notes to Consolidated Financial Statements	9
	Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
	Item 3.		Quantitative and Qualitative Disclosures About Market Risk		41
	Item 4.		Controls and Procedures		41
PART II.		OTHER INFORMATION
	Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		41
	Item 6.		Exhibits		42
SIGNATURES					45
Summary of Named Executive Officer Compensation
Certification Pursuant to Section 302
Certification Pursuant to Section 302
Certification Pursuant to Section 906

1

Cautionary Statement Regarding Forward Looking Information

This Form 10-Q includes statements relating to anticipated financial performance, business prospects, new products, and similar matters. These statements and others, which include words such as “expect”, “anticipate”, “believe”, “intend”, and other similar expressions, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. A variety of factors could cause our actual results and experiences to differ materially from the anticipated results or other expectations expressed in our forward-looking statements. The risks and uncertainties that may affect the operations, performance, development and results of our business include but are not limited to the following:

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

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

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

• As a holding company, we depend on our subsidiaries for funds to meet our obligations, but our subsidiaries’ ability to make distributions to us is limited by law, and could be affected by risk based capital computations.

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

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

• Inaccuracies in assumptions regarding future persistency, mortality and interest rates used in calculating reserve, deferred policy acquisition expense and deferred sales inducement amounts and pricing our products could have a material impact on our net income.

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

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

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

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

• We assumed a significant amount of closed block business through coinsurance agreements and have only a limited ability to manage this business.

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

• We may experience volatility in net income due to accounting standards for derivatives.

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

See Part 1A, Risk Factors, of our annual report on Form 10-K for additional information.

2

ITEM 1. FINANCIAL STATEMENTS

FBL FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

	September 30,		December 31,
	2007		2006
Assets
Investments:
Fixed maturities – available for sale, at market (amortized cost: 2007 - $9,292,580; 2006 - $8,354,564)	$	9,161,133	$	8,375,796
Fixed maturities – trading, at market (cost: 2006 - $15,000)		—		14,927
Equity securities – available for sale, at market (cost: 2007 - $23,735; 2006 - $35,604)		29,127		50,278
Mortgage loans on real estate		1,163,707		979,883
Derivative instruments		153,571		127,478
Investment real estate, less allowances for depreciation of $0 in 2007 and $2,452 in 2006		2,559		8,711
Policy loans		179,600		179,899
Other long-term investments		1,300		1,300
Short-term investments		64,024		44,354
Total investments		10,755,021		9,782,626
Cash and cash equivalents		170,117		112,292
Securities and indebtedness of related parties		19,514		17,839
Accrued investment income		120,328		103,027
Amounts receivable from affiliates		7,283		17,608
Reinsurance recoverable		138,741		146,789
Deferred policy acquisition costs		944,163		827,720
Deferred sales inducements		295,478		226,647
Value of insurance in force acquired		42,792		42,841
Property and equipment, less allowances for depreciation of $75,160 in 2007 and $73,433 in 2006		47,808		46,030
Goodwill		11,170		11,170
Other assets		41,520		55,046
Assets held in separate accounts		865,557		764,377
Total assets	$	13,459,492	$	12,154,012

3

FBL FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS (Continued)

(Dollars in thousands)

	September 30,			December 31,
	2007			2006
Liabilities and stockholders’ equity
Liabilities:
Policy liabilities and accruals:
Future policy benefits:
Interest sensitive and index products	$	9,124,438		$	8,163,318
Traditional life insurance and accident and health products		1,273,127			1,244,712
Unearned revenue reserve		28,558			28,436
Other policy claims and benefits		31,049			38,133
		10,457,172			9,474,599
Other policyholders’ funds:
Supplementary contracts without life contingencies		425,349			391,113
Advance premiums and other deposits		156,451			159,965
Accrued dividends		10,672			11,766
		592,472			562,844
Amounts payable to affiliates		2,834			7,319
Long-term debt		316,912			218,399
Current income taxes		6,648			8,740
Deferred income taxes		32,715			62,380
Other liabilities		287,721			174,496
Liabilities related to separate accounts		865,557			764,377
Total liabilities		12,562,031			11,273,154
Minority interest in subsidiaries		143			138
Stockholders’ equity:
Preferred stock, without par value, at liquidation value – authorized 10,000,000 shares, issued and outstanding 5,000,000 Series B shares		3,000			3,000
Class A common stock, without par value – authorized 88,500,000 shares, issued and outstanding 28,793,167 shares in 2007 and 28,468,662 shares in 2006		98,237			86,462
Class B common stock, without par value – authorized 1,500,000 shares, issued and outstanding 1,192,990 shares		7,523			7,519
Accumulated other comprehensive income (loss)		(30,658	)		28,195
Retained earnings		819,216			755,544
Total stockholders’ equity		897,318			880,720
Total liabilities and stockholders’ equity	$	13,459,492		$	12,154,012

See accompanying notes.

4

FBL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
Revenues:
Interest sensitive and index product charges	$	29,129		$	26,935		$	84,045		$	78,744
Traditional life insurance premiums		34,751			33,355			108,263			103,516
Net investment income		157,016			137,378			461,560			388,730
Derivative income		6,327			29,042			47,276			23,443
Realized/unrealized gains (losses) on investments		3,932			(256	)		6,544			11,570
Other income		6,513			5,985			20,055			17,699
Total revenues		237,668			232,439			727,743			623,702
Benefits and expenses:
Interest sensitive and index product benefits		132,194			125,348			343,827			266,728
Traditional life insurance benefits		21,595			24,235			69,676			69,365
Increase in traditional life future policy benefits		8,840			5,991			28,069			25,296
Distributions to participating policyholders		4,866			5,493			16,114			16,938
Underwriting, acquisition and insurance expenses		36,198			32,749			129,842			121,691
Interest expense		4,437			2,954			12,236			8,793
Other expenses		5,675			5,173			17,371			16,236
Total benefits and expenses		213,805			201,943			617,135			525,047
		23,863			30,496			110,608			98,655
Income taxes		(7,904	)		(9,807	)		(37,251	)		(32,872	)
Minority interest in loss (earnings) of subsidiaries		2			1			(3	)		(125	)
Equity income, net of related income taxes		538			16			1,102			484
Net income		16,499			20,706			74,456			66,142
Dividends on Series B preferred stock		(37	)		(37	)		(112	)		(112	)
Net income applicable to common stock	$	16,462		$	20,669		$	74,344		$	66,030
Earnings per common share	$	0.55		$	0.70		$	2.50		$	2.25
Earnings per common share – assuming dilution	$	0.54		$	0.69		$	2.46		$	2.21
Cash dividends per common share	$	0.120		$	0.115		$	0.360		$	0.345

See accompanying notes.

5

FBL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)

(Dollars in thousands)

							Accumulated
	Series B		Class A		Class B		Other						Total
	Preferred		Common		Common		Comprehensive			Retained			Stockholders’
	Stock		Stock		Stock		Income (Loss)			Earnings			Equity
Balance at January 1, 2006	$	3,000	$	72,260	$	7,524	$	82,301		$	679,146		$	844,231
Comprehensive income:
Net income for nine months ended September 30, 2006		—		—		—		—			66,142			66,142
Change in net unrealized investment gains/losses		—		—		—		(50,535	)		—			(50,535	)
Total comprehensive income														15,607
Stock based compensation, including the issuance of 482,137 common shares under compensation plans		—		11,682		—		—			—			11,682
Dividends on preferred stock		—		—		—		—			(112	)		(112	)
Dividends on common stock		—		—		—		—			(10,158	)		(10,158	)
Balance at September 30, 2006	$	3,000	$	83,942	$	7,524	$	31,766		$	735,018		$	861,250
Balance at January 1, 2007	$	3,000	$	86,462	$	7,519	$	28,195		$	755,544		$	880,720
Comprehensive income:
Net income for nine months ended September 30, 2007		—		—		—		—			74,456			74,456
Change in net unrealized investment gains/losses		—		—		—		(58,863	)		—			(58,863	)
Change in underfunded status of other postretirement benefit plans		—		—		—		10			—			10
Total comprehensive income														15,603
Adjustment resulting from capital transactions of equity investee		—		36		4		—			—			40
Stock based compensation, including the issuance of 324,505 common shares under compensation plans		—		11,739		—		—			—			11,739
Dividends on preferred stock		—		—		—		—			(112	)		(112	)
Dividends on common stock		—		—		—		—			(10,672	)		(10,672	)
Balance at September 30, 2007	$	3,000	$	98,237	$	7,523	$	(30,658	)	$	819,216		$	897,318

Comprehensive income totaled $26.7 million in the third quarter of 2007 and $150.6 million in the third quarter of 2006.

See accompanying notes.

6

FBL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

	Nine months ended September 30,
	2007			2006
Operating activities
Net income	$	74,456		$	66,142
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments related to interest sensitive and index products:
Interest credited/index credits to account balances, excluding deferred sales inducements		292,294			197,723
Change in fair value of embedded derivatives		6,427			25,946
Charges for mortality and administration		(76,910	)		(72,634	)
Deferral of unearned revenues		1,060			798
Amortization of unearned revenue reserve		(1,724	)		(1,462	)
Provision for depreciation and amortization of property and equipment		10,222			10,639
Provision for accretion and amortization of investments		(8,013	)		(4,355	)
Realized/unrealized gains on investments		(6,544	)		(11,570	)
Change in fair value of derivatives		(32,615	)		(19,091	)
Increase in traditional life and accident and health benefit accruals		28,415			29,660
Policy acquisition costs deferred		(124,991	)		(140,021	)
Amortization of deferred policy acquisition costs		61,037			49,523
Amortization of deferred sales inducements		15,682			13,357
Amortization of value of insurance in force		3,008			2,090
Net sale of fixed maturities – trading		15,000			—
Change in accrued investment income		(17,301	)		(22,463	)
Change in amounts receivable from/payable to affiliates		5,840			(906	)
Change in reinsurance recoverable		8,048			(21,116	)
Change in current income taxes		(2,092	)		(384	)
Provision for deferred income taxes		2,004			11,249
Other		27,769			(52,406	)
Net cash provided by operating activities		281,072			60,719
Investing activities
Sale, maturity or repayment of investments:
Fixed maturities – available for sale		414,328			308,212
Equity securities – available for sale		17,864			32,725
Mortgage loans on real estate		45,223			59,706
Derivative instruments		94,536			49,682
Investment real estate		9,741			522
Policy loans		30,084			27,901
Short-term investments – net		—			153,274
		611,776			632,022
Acquisition of investments:
Fixed maturities – available for sale		(1,274,429	)		(1,573,429	)
Equity securities – available for sale		(143	)		(256	)
Mortgage loans on real estate		(229,011	)		(137,397	)
Derivative instruments		(71,624	)		(52,497	)
Investment real estate		(536	)		—
Policy loans		(29,785	)		(30,943	)
Short-term investments – net		(19,670	)		—
		(1,625,198	)		(1,794,522	)

7

FBL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Dollars in thousands)

	Nine months ended September 30,
	2007			2006
Investing activities – continued
Proceeds from disposal, repayments of advances and other distributions of capital from equity investees	$	58		$	640
Investments in and advances to equity investees		(850	)		(1,200	)
Purchases of property and equipment		(14,904	)		(14,585	)
Disposal of property and equipment		2,904			3,440
Net cash used in investing activities		(1,026,214	)		(1,174,205	)
Financing activities
Receipts from interest sensitive and index products credited to policyholder account balances		1,397,704			1,666,761
Return of policyholder account balances on interest sensitive and index products		(688,691	)		(552,341	)
Proceeds from long-term debt		98,460			—
Distributions related to minority interests – net		2			(153	)
Excess tax deductions on stock-based compensation		1,254			1,340
Issuance of common stock		5,022			10,342
Dividends paid		(10,784	)		(10,270	)
Net cash provided by financing activities		802,967			1,115,679
Increase in cash and cash equivalents		57,825			2,193
Cash and cash equivalents at beginning of period		112,292			5,120
Cash and cash equivalents at end of period	$	170,117		$	7,313
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	12,159		$	7,684
Income taxes		36,680			19,428
Non-cash operating activity:
Deferral of sales inducements		64,151			65,763

See accompanying notes.

8

FBL FINANCIAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
September 30, 2007

1. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of FBL Financial Group, Inc. (we or the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Our financial statements include all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of our financial position and results of operations. Operating results for the three- and nine-month periods ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. We encourage you to refer to our consolidated financial statements and notes for the year ended December 31, 2006 included in our annual report on Form 10-K for a complete description of our material accounting policies. Also included in the Form 10-K is a description of areas of judgments and estimates and other information necessary to understand our financial position and results of operations.

Accounting Changes

Effective April 1, 2007, we adopted Statement of Financial Accounting Standards (Statement) 133 Implementation Issue No. G26, “Cash Flow Hedges: Hedging Interest Cash Flows on Variable-Rate Assets and Liabilities That Are Not Based on a Benchmark Interest Rate,” (DIG G26) which clarifies the accounting for a cash flow hedge of a variable-rate asset or liability, specifically addressing when an entity is permitted to hedge benchmark interest rate risk. DIG G26 indicates that the risk being hedged in a cash flow hedge of a variable-rate financial asset or liability cannot be designated as interest rate risk unless the cash flows of the hedged transaction are explicitly based on that same benchmark interest rate. In addition, DIG G26 clarifies that the only permitted benchmarks are the risk-free rate and rates based on the LIBOR swap curve. Hedging relationships that no longer qualify for cash flow hedge accounting based on this guidance must be undesignated prospectively. Changes in fair value of derivatives not subsequently re-designated to a new qualifying hedging relationship are recorded in earnings. Gains or losses previously included in accumulated other comprehensive income (loss) remain in accumulated other comprehensive income (loss) and are amortized to net income over the remaining term of the swaps as the hedged anticipated cash flows occur. If it becomes probable that the anticipated cash flows will not occur, the deferred gains or losses will be reclassified into earnings immediately. As a result of adopting DIG G26, we undesignated the hedging relationship for the interest rate swaps related to our flexible premium deferred annuity contracts as they are not explicitly based on one of the two permitted benchmarks. Net unrealized gains on these swaps included in accumulated other comprehensive income (loss) totaled $2.8 million at March 31, 2007 and are being amortized into income over the life of the individual swaps. Derivative income includes the change in fair value of these derivatives after March 31, 2007, which totaled $(4.4) million for the third quarter of 2007 and $(2.8) million for the nine-month period. Amortization of the net unrealized gain totaled $0.7 million for the third quarter of 2007 and $1.5 million for the nine-month period. This guidance does not impact the interest rate swap on our line of credit, as both the derivative instrument and hedged item are based on the three-month LIBOR rate.

Effective January 1, 2007, we adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” Interpretation No. 48 creates a single model to address uncertainty in tax positions and clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Under the Interpretation, a tax position can be recognized in the financial statements if it is more likely than not that the position will be sustained upon examination by taxing authorities who have full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Interpretation No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The impact of adopting Interpretation No. 48 was not material to our consolidated financial statements; therefore the cumulative effective of change in this accounting principle, totaling $0.3 million, is reflected as an increase to income tax

9

FBL Financial Group, Inc. September 30, 2007

expense in our 2007 consolidated income statement. We recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses. We are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2001.

Effective January 1, 2007, we adopted Statement of Position (SOP) 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts” issued by the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants. The SOP provides guidance on the accounting for internal replacements of one insurance contract for another insurance contract. Under the SOP, an internal replacement that is determined to result in a replacement contract that is substantially changed from the replaced contract is accounted for as an extinguishment of the replaced contract. As an extinguishment, the unamortized deferred policy acquisition costs, deferred sales inducements, value of insurance in force acquired and unearned revenue reserve from the replaced contract are written off at the time of the extinguishment. An internal replacement that is determined to result in a replacement contract that is substantially unchanged from the replaced contract is accounted for as a continuation of the replaced contract. The impact of adopting SOP 05-1 was not material to our consolidated financial statements for the nine months ended September 30, 2007 (estimated to be less than $0.1 million) as our previous accounting policy for internal replacements substantially conformed to current interpretations of the guidance in the SOP.

In April 2007, the FASB issued Staff Position FIN 39-1 (FSP FIN 39-1), which amends certain aspects of FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts – an interpretation of APB Opinion No. 10 and FASB Statement No. 105.” This FSP allows a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. The guidance in this FSP is effective for fiscal years beginning after November 15, 2007, with early application permitted. We intend to adopt FSP FIN 39-1 beginning in 2008. This FSP will have no impact on our consolidated statements of income. At September 30, 2007, the cash collateral payable to counterparties totaled $92.9 million and the cash collateral receivable from counterparties totaled $2.3 million. These amounts are included in the other liabilities and other assets lines on our consolidated balance sheet at September 30, 2007, but will be netted against the fair value of the call options and swaps included in the derivative instruments line on our consolidated balance sheet upon adoption of FSP FIN 39-1.

In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which permits certain financial assets and liabilities to be measured at fair value, with changes in fair value reported in earnings. This election is allowed on an instrument-by-instrument basis and requires additional reporting disclosures. This Statement is effective for fiscal years beginning after November 15, 2007. Early adoption is allowed provided the provisions of Statement No. 157 are also adopted. We are currently evaluating the requirements of this Statement and have not yet concluded if the fair value option will be adopted.

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value and expands the required disclosures about fair value measurements. This Statement is effective for fiscal years beginning after November 15, 2007. The impact of adoption is not expected to be material to our consolidated financial statements.

In September 2006, the FASB issued Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R).” While certain aspects of this Statement were adopted effective December 31, 2006, as described in our 2006 Form 10-K, the Statement also requires measurement of a plan’s assets and benefit obligations as of the end of the employer’s fiscal year, beginning with fiscal years ending after December 15, 2008. The impact of adopting this aspect of the Statement is not expected to be material to our consolidated financial statements.

Reclassifications

Certain amounts in the 2006 consolidated financial statements have been reclassified to conform to the 2007 financial statement presentation.

10

FBL Financial Group, Inc. September 30, 2007

2. Credit Arrangements

On March 12, 2007, we issued $100.0 million of 5.875% Senior Notes (Senior Notes) due March 15, 2017. Interest on the Senior Notes is payable semi-annually on March 15 and September 15 each year. The Senior Notes are redeemable in whole or in part at any time at our option at a “make-whole” redemption price equal to the greater of 100% of their principal amount or the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes, discounted to the redemption date on a semiannual basis at the treasury rate plus 20 basis points. We received net proceeds of approximately $98.5 million from the issuance of the Senior Notes after underwriting fees, offering expenses and original issue discount.

The Senior Notes offering would have caused us to violate the covenants of our revolving line of credit agreement with LaSalle Bank National Association and Bankers Trust Company, N.A. Therefore, on March 12, 2007, the line of credit agreement was amended to allow for the Senior Notes offering without violating the financial covenants of that agreement.

3. Defined Benefit Plans

We participate with several affiliates and an unaffiliated organization in various multiemployer defined benefit plans. Our share of net periodic pension cost for the plans recorded in our consolidated income statements for the third quarter totaled $1.5 million for 2007 and $1.6 million for 2006, and for the nine months ended September 30 totaled $4.4 million for 2007 and $4.8 million for 2006. Components of net periodic pension cost for all employers in the multiemployer plans are as follows:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands)
Service cost	$	2,341		$	2,396		$	7,023		$	7,188
Interest cost		3,476			3,428			10,427			10,284
Expected return on assets		(3,087	)		(2,746	)		(9,261	)		(8,238	)
Amortization of prior service cost		194			201			581			603
Amortization of actuarial loss		1,120			1,398			3,359			4,194
Net periodic pension cost – all employers	$	4,044		$	4,677		$	12,129		$	14,031

4. Commitments and Contingencies

In the normal course of business, we may be involved in litigation where amounts are alleged that are substantially in excess of contractual policy benefits or certain other agreements. At September 30, 2007, management is not aware of any claims for which a material loss is reasonably possible.

We seek to limit our exposure to loss on any single insured or event and to recover a portion of benefits paid by ceding a portion of our exposure to other insurance enterprises or reinsurers. Reinsurance contracts do not relieve us of our obligations to policyholders. To the extent that reinsuring companies are later unable to meet obligations under reinsurance agreements, our insurance subsidiaries would be liable for these obligations, and payment of these obligations could result in losses. To limit the possibility of such losses, we evaluate the financial condition of our reinsurers and monitor concentrations of credit risk. No allowance for uncollectible amounts has been established against our asset for reinsurance recoverable since none of our receivables are deemed to be uncollectible.

We participate in a reinsurance pool with various unaffiliated life insurance companies to mitigate the impact of a catastrophic event on our financial position and results of operations. Members of the pool share in the eligible catastrophic losses based on their size and contribution to the pool. Under the pool arrangement, we will be able to cede approximately 60% of catastrophic losses after other reinsurance and a deductible of $0.8 million. Pool losses are capped at $11.7 million per event and the maximum loss we could incur as a result of losses assumed from other pool members is $4.2 million per event.

11

FBL Financial Group, Inc. September 30, 2007

We self-insure our employee health and dental claims. However, claims in excess of self-insurance levels are fully insured. We fund insurance claims through a self-insurance trust. Deposits to the trust are made at an amount equal to our best estimate of claims incurred during the period. Accordingly, no accruals are recorded on our financial statements for unpaid claims and claims incurred but not reported. Adjustments, if any, resulting in changes in the estimate of claims incurred will be reflected in operations in the periods in which such adjustments are known.

In the second quarter of 2006, we incurred a pre-tax charge of $4.9 million relating to the settlement of a lawsuit with a husband and wife who had applied for life insurance policies. The settlement ended litigation regarding the process we followed in denying insurance coverage for medical reasons. Insurance claims have been filed under our professional liability and general liability insurance policies for reimbursement of the settlement amount, but coverage has been denied, and we have made a claim against an insurance broker for breach of contractual duties. We have filed lawsuits against the insurer and the insurance broker to recover those damages. While we have received an adverse ruling in the case against the insurer at the district court level, the adverse ruling has been appealed and we continue to believe both claims are valid. Recoveries from third parties are required to be accounted for as gain contingencies and not recorded in our financial statements until the lawsuits are resolved. Accordingly, any recoveries will be recorded in net income in the period the recovery is received.

5. Earnings Per Share

The following table sets forth the computation of earnings per common share and earnings per common share – assuming dilution.

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands, except per share data)
Numerator:
Net income	$	16,499		$	20,706		$	74,456		$	66,142
Dividends on Series B preferred stock		(37	)		(37	)		(112	)		(112	)
Numerator for earnings per common share – income available to common stockholders	$	16,462		$	20,669		$	74,344		$	66,030
Denominator:
Weighted average shares		29,669,542			29,385,046			29,620,962			29,303,253
Deferred common stock units relating to deferred compensation plans		61,987			48,530			59,622			45,220
Denominator for earnings per common share – weighted-average shares		29,731,529			29,433,576			29,680,584			29,348,473
Effect of dilutive securities – stock-based compensation		550,763			452,974			601,190			487,887
Denominator for diluted earnings per common share – adjusted weighted-average shares		30,282,292			29,886,550			30,281,774			29,836,360
Earnings per common share	$	0.55		$	0.70		$	2.50		$	2.25
Earnings per common share – assuming dilution	$	0.54		$	0.69		$	2.46		$	2.21

12

FBL Financial Group, Inc. September 30, 2007

6. Segment Information

We analyze operations by reviewing financial information regarding products that are aggregated into four product segments. The product segments are: (1) Traditional Annuity – Exclusive Distribution (“Exclusive Annuity”), (2) Traditional Annuity – Independent Distribution (“Independent Annuity”), (3) Traditional and Universal Life Insurance and (4) Variable. We also have various support operations and corporate capital that are aggregated into a Corporate and Other segment.

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

• realized and unrealized gains and losses on investments,

• changes in net unrealized gains and losses on derivatives,

• the cumulative effect of changes in accounting principles,

• a nonrecurring lawsuit settlement and

• discontinued operations.

We use operating income, in addition to net income, to measure our performance since realized and unrealized gains and losses on investments and the change in net unrealized gains and losses on derivatives can fluctuate greatly from quarter to quarter. Also, the cumulative effect of changes in accounting principles, discontinued operations and the lawsuit settlement in 2006 are nonrecurring items. These fluctuations make it difficult to analyze core operating trends. In addition, for derivatives not designated as hedges, there is a mismatch between the valuation of the asset and liability when deriving net income. Specifically, call options relating to our index business are one or two-year assets while the embedded derivative in the index contracts represents the rights of the contract holder to receive index credits over the entire period the index annuities are expected to be in force. For our other embedded derivatives in the product segments and interest rate swaps backing our annuity liabilities, the derivatives are marked to market, but the associated insurance liabilities are not marked to market. A view of our operating performance without the impact of these mismatches and nonrecurring items enhances the analysis of our results. We use operating income for goal setting, determining company-wide bonuses and evaluating performance on a basis comparable to that used by many in the investment community.

13

FBL Financial Group, Inc. September 30, 2007

Financial information concerning our operating segments is as follows:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
				(Dollars in thousands)
Operating revenues:
Traditional Annuity – Exclusive Distribution	$	36,996		$	37,510		$	112,385		$	109,563
Traditional Annuity – Independent Distribution		110,671			60,300			276,220			163,050
Traditional and Universal Life Insurance		82,373			79,970			251,468			243,368
Variable		15,327			14,725			47,450			43,919
Corporate and Other		10,299			7,459			27,789			22,397
		255,666			199,964			715,312			582,297
Realized/unrealized gains (losses) on investments (A)		3,932			(258	)		6,544			11,569
Change in net unrealized gains/losses on derivatives (A)		(21,930	)		32,733			5,887			29,836
Consolidated revenues	$	237,668		$	232,439		$	727,743		$	623,702
Pre-tax operating income (loss):
Traditional Annuity – Exclusive Distribution	$	6,665		$	10,331		$	24,240		$	26,961
Traditional Annuity – Independent Distribution		10,779			8,453			30,413			21,396
Traditional and Universal Life Insurance		15,114			16,790			42,725			43,413
Variable		4,381			(995	)		10,412			2,275
Corporate and Other		(51	)		(1,109	)		(1,660	)		(3,420	)
		36,888			33,470			106,130			90,625
Income taxes on operating income		(12,462	)		(10,848	)		(35,406	)		(30,106	)
Realized/unrealized gains (losses) on investments, net (A)		2,392			(52	)		4,710			7,729
Change in net unrealized gains/losses on derivatives (A)		(10,319	)		(1,864	)		(695	)		1,066
Cumulative effect of change in accounting principle		—			—			(283	)		—
Lawsuit settlement (A)		—			—			—			(3,172	)
Consolidated net income	$	16,499		$	20,706		$	74,456		$	66,142

(A) Amounts are net of adjustments, as applicable, to amortization of unearned revenue reserves, deferred policy acquisition costs, deferred sales inducements, value of insurance in force acquired and income taxes attributable to these items.

Our investment in equity method investees, the related equity income and interest expense are attributable to the Corporate and Other segment. Expenditures for long-lived assets were not significant during the periods presented above. Goodwill at September 30, 2007 and December 31, 2006 is allocated among the segments as follows: Exclusive Annuity ($3.9 million), Traditional and Universal Life Insurance ($6.1 million) and Variable ($1.2 million).

14

FBL Financial Group, Inc. September 30, 2007

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section includes a summary of FBL Financial Group, Inc.’s consolidated results of operations, financial condition and where appropriate, factors that management believes may affect future performance. Unless noted otherwise, all references to FBL Financial Group, Inc. (we or the Company) include all of its direct and indirect subsidiaries, including its primary life insurance subsidiaries, Farm Bureau Life Insurance Company (Farm Bureau Life) and EquiTrust Life Insurance Company (EquiTrust Life) (collectively, the Life Companies). Please read this discussion in conjunction with the accompanying consolidated financial statements and related notes. In addition, we encourage you to refer to our 2006 Form 10-K for a complete description of our significant accounting policies and estimates. Familiarity with this information is important in understanding our financial position and results of operations.

Results of Operations for the Three and Nine Months Ended September 30, 2007 Compared to Three and Nine Months Ended September 30, 2006

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands, except per share data)
Revenues	$	237,668		$	232,439		$	727,743		$	623,702
Benefits and expenses		213,805			201,943			617,135			525,047
		23,863			30,496			110,608			98,655
Income taxes		(7,904	)		(9,807	)		(37,251	)		(32,872	)
Minority interest and equity income		540			17			1,099			359
Net income		16,499			20,706			74,456			66,142
Less dividends on Series B preferred stock		(37	)		(37	)		(112	)		(112	)
Net income applicable to common stock	$	16,462		$	20,669		$	74,344		$	66,030
Earnings per common share	$	0.55		$	0.70		$	2.50		$	2.25
Earnings per common share – assuming dilution	$	0.54		$	0.69		$	2.46		$	2.21
Other data
Direct premiums collected, net of reinsurance ceded:
Traditional Annuity – Exclusive Distribution	$	27,848		$	28,106		$	99,927		$	107,418
Traditional Annuity – Independent Distribution		489,120			635,048			1,064,532			1,353,964
Traditional and Universal Life Insurance		45,015			41,928			138,942			131,501
Variable Annuity and Variable Universal Life (1)		41,109			32,818			133,599			117,835
Reinsurance assumed and other		3,598			3,826			11,641			12,967
Total	$	606,690		$	741,726		$	1,448,641		$	1,723,685
Direct life insurance in force, end of quarter (in millions)							$	40,307		$	37,817
Life insurance lapse rates								6.0	%		6.7	%
Withdrawal rates – individual traditional annuity:
Exclusive Distribution								5.6	%		5.4	%
Independent Distribution								5.2	%		5.0	%

(1) Amounts are net of portion ceded to and include amounts assumed from alliance partners.

15

FBL Financial Group, Inc. September 30, 2007

Premiums collected is not a measure used in financial statements prepared according to U.S. generally accepted accounting principles (GAAP). There is no comparable GAAP financial measure. We use premiums collected to measure the productivity of our exclusive and independent agents. Direct Traditional Annuity – Independent Distribution premiums collected decreased for the 2007 periods as expected, reflecting the unusually high level of fixed rate annuity sales in 2006 as well as actions we took in 2007 to further increase the profitability of the products sold by our EquiTrust Life independent distribution channel.

Net income applicable to common stockdecreased 20.4% in the third quarter of 2007 to $16.5 million due primarily to the impact of changes in unrealized gains and losses on derivatives and a reserve adjustment for an embedded derivative in 2006. These items for the quarter were partially offset by the impact of an increase in the volume of business in force, an increase in realized gains on investments and a decrease in death benefits. Net income applicable to common stock increased 12.6% in the nine months ended September 30, 2007 to $74.3 million due primarily to the impact of an increase in the volume of business in force and a $4.9 million lawsuit settlement recorded in 2006. These items for the nine-month period were partially offset by a decrease in realized gains on investments and the embedded derivative reserve adjustment in 2006. The increase in volume of business in force is quantified in the detailed discussion that follows by summarizing the face amount of insurance in force for life products or account values of contracts in force for interest sensitive products. The face amount of life insurance in force represents the gross death benefit payable to policyholders and account value represents the value of the contract to the contract holder before application of surrender charges or reduction for any policy loans outstanding.

During the third quarter of 2006, we reduced our reserves for the embedded derivative in our coinsured index annuities $7.1 million. This adjustment, which is the correction of an overstatement that started in 2001, increased third quarter 2006 net income $2.6 million ($0.09 per basic and diluted common share) after offsets for taxes and the amortization of deferred policy acquisition costs and deferred sales inducements. The impact to the financial statement line items affected by this overstatement is not material. This adjustment does not impact our segment results as the segment results are based on operating income which, as explained in the section entitled “Segment Information,” excludes the impact of changes in the valuation of derivatives. This adjustment is also not material to any prior period financial statements.

The spreads earned on our universal life and individual traditional annuity products are as follows:

	Nine months ended September 30,
	2007			2006
Weighted average yield on cash and invested assets		6.01	%		6.01	%
Weighted average interest crediting rate/index cost		3.64			3.51
Spread		2.37	%		2.50	%

The weighted average yield on cash and invested assets represents the yield on cash and investments backing the universal life and individual traditional annuity products net of investment expenses. With respect to our index annuities, index costs represent the expenses we incur to fund the annual index credits through the purchase of options and minimum guaranteed interest credited on the index business. The weighted average crediting rate/index cost and spread are computed excluding the impact of the amortization of deferred sales inducements. See the “Segment Information” section that follows for a discussion of our spreads.

Premiums and product chargesare as follows:

	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006
			(Dollars in thousands)
Premiums and product charges:
Interest sensitive and index product charges	$	29,129	$	26,935	$	84,045	$	78,744
Traditional life insurance premiums		34,751		33,355		108,263		103,516
Total	$	63,880	$	60,290	$	192,308	$	182,260

16

FBL Financial Group, Inc. September 30, 2007

Premiums and product charges increased 6.0% in the third quarter of 2007 to $63.9 million and 5.5% in the nine months ended September 30, 2007 to $192.3 million. The increases in interest sensitive and index product charges are principally driven by surrender charges on annuity and universal life products, cost of insurance charges on variable universal life and universal life products and mortality and expense fees on variable products.

Surrender charges totaled $16.3 million in the nine-month period ended September 30, 2007 compared to $13.9 million in the 2006 period. Surrender charges increased primarily due to an increase in surrenders relating to growth in the volume and aging of business in force. The average aggregate account value for annuity and universal life insurance in force, which increased due to premiums collected as summarized in the “Other data” table above, totaled $8,205.7 million for the nine-month period in 2007 and $6,647.8 million for the 2006 period. We believe aging of the business in force is driving a portion of the increase in surrender charges relating to our annuity business as the surrender charge rate decreases with the passage of time (at a rate generally equal to 1.0% per year). This makes a surrender later in the contract period more economical for the contract holder, which results in higher lapse rates as the business ages. We started assuming business under a coinsurance agreement with American Equity Investment Life Insurance Company in 2001 and started selling annuities directly through EquiTrust Life independent agents in the fourth quarter of 2003. Surrender charges on this coinsurance and direct business included in the above amounts totaled $14.1 million for the nine months ended September 30, 2007 and $11.8 million for the 2006 period.

Cost of insurance charges totaled $48.8 million in the nine months ended September 30, 2007 and $47.7 million in the 2006 period. Cost of insurance charges increased primarily due to aging of the business in force as the cost of insurance charge rate per each $1,000 in force increases with the age of the insured. The average age of our universal life and variable universal life policyholders was 45.4 years at September 30, 2007 and 45.0 years at September 30, 2006.

Mortality and expense fees totaled $7.3 million in the nine-month period ended September 30, 2007 and $5.9 million in the 2006 period. Mortality and expense fees increased due to an increase in the separate account balances on which fees are based. The average separate account balance increased to $813.3 million for the nine-month period in 2007 from $680.9 million for the nine-month period in 2006 due to the impact of new sales and favorable investment results. Transfers of premiums to the separate accounts totaled $103.0 million for the nine months ended September 30, 2007 and $93.6 million for the 2006 period. Net investment income and net realized and unrealized gains on separate account assets totaled $75.2 million in the nine-month period of 2007 and $39.8 million in the 2006 period.

Traditional premiums increased due to an increase in the volume of business in force, partially offset by an increase in reinsurance ceded. The increase in the business in force is primarily attributable to sales of traditional life products by our Farm Bureau Life agency force exceeding the loss of in force amounts through deaths, lapses and surrenders. Our average aggregate traditional life insurance in force, net of reinsurance ceded, totaled $19,773.3 million for the nine-month period in 2007 and $18,037.4 million for the nine-month period in 2006. The change in life insurance in force is not proportional to the change in premium income due to a shift in the composition of our traditional life block of business from whole life policies to term policies. The premium for a term policy per $1,000 face amount is less than that for a whole life policy.

Net investment income,which excludes investment income on separate account assets relating to variable products, increased 14.3% in the third quarter of 2007 to $157.0 million and 18.7% in the nine months ended September 30, 2007 to $461.6 million, primarily due to an increase in average invested assets. Average invested assets in the nine-month period of 2007 increased 18.9% to $10,229.2 million (based on securities at amortized cost) from $8,603.4 million in the 2006 period, principally due to net premium inflows from the Life Companies and proceeds from issuance of Senior Notes in March 2007. The annualized yield earned on average invested assets decreased to 6.06% in the nine months ended September 30, 2007 from 6.07% in the respective 2006 period. Fee income from bond calls, tender offers and mortgage loan prepayments totaled $7.6 million in the nine months ended September 30, 2007 compared to $4.9 million in the respective 2006 period. Net investment income also includes ($1.3) million for the nine-month period in 2007 and less than $0.1 million in 2006, representing the acceleration (reversal) of net discount accretion on mortgage and asset-backed securities resulting from changing prepayment speed

17

FBL Financial Group, Inc. September 30, 2007

assumptions as of the end of each respective period. See the “Financial Condition – Investments” section that follows for a description of how changes in prepayment speeds impact net investment income.

Derivative incomeis as follows:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands)
Derivative income:
Components of derivative income from call options:
Gains received at expiration	$	55,010		$	15,544		$	117,043		$	44,699
Change in the difference between fair value and remaining option cost at beginning and end of period		(18,092	)		32,748			7,007			30,324
Cost of money for call options		(28,156	)		(19,401	)		(77,602	)		(51,436	)
		8,762			28,891			46,448			23,587
Other		(2,435	)		151			828			(144	)
Total	$	6,327		$	29,042		$	47,276		$	23,443

The increase in gains received at expiration is attributable to growth in the volume of index annuities in force and appreciation in the market indices on which our options are based. The average aggregate account value of index annuities in force, which has increased due to new sales, totaled $4,003.8 million for the nine months ended September 30, 2007 compared to $3,078.2 million for the respective 2006 period. The changes in the difference between the fair value of the call options and the remaining option costs are caused primarily by the change in the S&P 500 Index^® (upon which the majority of our options are based). The range of index appreciation for S&P 500 Index options for the periods ended September 30 is as follows:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
Annual point-to-point strategy		5.9%-22.7	%		1.1%-12.2	%		5.9%-22.7	%		1.1%-15.0	%
Monthly point-to-point strategy		5.6%-15.9	%		0.0%-8.0	%		4.4%-15.9	%		0.0%-10.1	%
Monthly average strategy – one-year options		7.5%-12.9	%		1.5%-5.6	%		1.2%-12.9	%		0.9%-9.1	%
Monthly average strategy – two-year options		8.1%-12.9	%		—			8.1%-12.9	%		—
Daily average strategy		6.8%-11.1	%		1.0%-5.1	%		2.1%-11.1	%		0.7%-8.7	%

The change in fair value is also reduced by participation rates and caps, as applicable, on the underlying options. Furthermore, the change in fair value is impacted by options based on other underlying indices and the timing of option settlements. The cost of money for call options increased primarily due to the impact of growth in the volume of index annuities in force. Other derivative income (loss) is comprised of changes in the value of the conversion feature embedded in convertible fixed maturity securities and the embedded derivative included in our modified coinsurance contracts. In addition, beginning in the second quarter of 2007, other derivative income (loss) includes cash flows and the change in fair value of the interest rate swaps relating to our flexible premium deferred annuity contracts due to the adoption of Statement 133 Implementation Issue No. G26, “Cash Flow Hedges: Hedging Interest Cash Flows on Variable Rate Assets and Liabilities That Are Not Based on a Benchmark Interest Rate.” See “Accounting Changes” for additional details on this Issue. Derivative income will fluctuate based on market conditions.

Realized/unrealized gains (losses) on investmentsare as follows:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands)
Realized/unrealized gains (losses) on investments:
Realized gains on sales	$	4,343		$	264		$	9,358		$	14,491
Realized losses on sales		(5	)		(603	)		(45	)		(614	)
Realized losses due to impairments		(406	)		—			(2,842	)		(2,340	)
Unrealized gains on trading securities		—			83			73			33
Total	$	3,932		$	(256	)	$	6,544		$	11,570

18

FBL Financial Group, Inc. September 30, 2007

The level of realized/unrealized gains (losses) is subject to fluctuation from period to period depending on the prevailing interest rate and economic environment and the timing of the sale of investments. See “Financial Condition – Investments” for details regarding our unrealized gains and losses on available-for-sale securities at September 30, 2007 and December 31, 2006. Gains on sales in the nine-month period include $5.6 million in 2007 and $13.5 million in 2006 related to sales of a portion of our investment in American Equity Investment Life Holding Company (AEL) common stock.

We monitor the financial condition and operations of the issuers of securities rated below investment grade and of the issuers of certain investment grade securities on which we have concerns regarding credit quality. In determining whether or not an unrealized loss is other than temporary, we review factors such as:

• historical operating trends;

• business prospects;

• status of the industry in which the company operates;

• analyst ratings on the issuer and sector;

• quality of management;

• size of the unrealized loss;

• length of time the security has been in an unrealized loss position; and

• our intent and ability to hold the security.

If we determine that an unrealized loss is other than temporary, the security is written down to its fair value with the difference between amortized cost and fair value recognized as a realized loss. Details regarding investment impairments individually exceeding $0.5 million, for the nine months ended September 30, 2007 and 2006, including the circumstances requiring the write downs, are summarized in the following table:

General Description	Impairment Loss		Circumstance
	(Dollars in
	thousands)
Nine months ended September 30, 2007:
Major printing and publishing company	$	1,624	During the second quarter, the company announced that it would take the company private in a series of transactions tendering outstanding shares. In addition, rating declines and other adverse details regarding the financial status of the company became available. (A)
United States military base housing revenue bond	$	812	During the second quarter, the United States closed one military base leading to a restructuring and tender offer for the bonds. (A)
Nine months ended September 30, 2006:
Major United States credit company	$	986	Valuation of this security is tied to the strength of its parent. During the first quarter, continued rating declines and other adverse details regarding the financial status of the parent company became available. (A)
Major United States automaker	$	648	During the first quarter, continued rating declines and other adverse details regarding the financial status of the company became available. In addition, the company faces labor strikes and restated its financial statements during the quarter. (A)
Major United States automaker	$	643	During the first quarter, continued rating declines and other adverse details regarding the financial status of the company became available. (A)

(A) Negative trends in this segment of the industry were considered in our analysis, which is done on an issue-by-issue basis. We concluded that there is no impact on other material investments in addition to amounts already written down.

19

FBL Financial Group, Inc. September 30, 2007

Other income and other expensesinclude revenues and expenses, respectively, relating primarily to our non-insurance operations. Our non-insurance operations include management, advisory, marketing and distribution services and leasing activities. Fluctuations in these financial statement line items are generally attributable to fluctuations in the level of these services provided during the periods.

Interest sensitive and index product benefitsare as follows:

	Three months ended September 30,					Nine months ended September 30,
	2007			2006		2007		2006
	(Dollars in thousands)
Interest sensitive and index product benefits:
Interest credited	$	60,737		$	53,051	$	177,139	$	149,069
Index credits		53,482			15,848		114,826		46,342
Change in value of embedded derivative		10,195			43,453		6,427		25,946
Amortization of deferred sales inducements		(667	)		525		15,533		13,300
Interest sensitive death benefits		8,447			12,471		29,902		32,071
Total	$	132,194		$	125,348	$	343,827	$	266,728

Interest sensitive and index product benefits increased 5.5% in the third quarter of 2007 to $132.2 million, and increased 28.9% in the nine months ended September 30, 2007 to $343.8 million. These increases are primarily due to the impact of an increase in the volume of annuity business in force, partially offset by a decrease in the change in value of embedded derivative and interest sensitive death benefits. Interest sensitive and index product benefits tend to fluctuate from period to period primarily as a result of changes in mortality experience and the impact of changes in the equity markets on index credits and the value of the embedded derivatives in our index annuities.

The average aggregate account value of annuity contracts in force, which increased due to additional premiums collected as summarized in the “Other data” table above, totaled $7,314.6 million for the nine-month period in 2007 and $5,756.5 million for the 2006 period. These account values include values relating to index contracts totaling $4,003.8 million for 2007 and $3,078.2 million for 2006.

The weighted average interest crediting rate/index cost for universal life and individual traditional annuity products, excluding the impact of the amortization of deferred sales inducements, was 3.64% for the nine-month period of 2007 and 3.51% for the respective 2006 period.

The change in the amount of index credits is impacted by growth in the volume of index annuities in force and the amount of appreciation/depreciation in the underlying equity market indices on which our options are based as discussed above under “Derivative income.” The change in the value of the embedded derivative is impacted by the change in expected index credits on the next policy anniversary dates, which is related to the change in the fair value of the options acquired to fund these index credits as discussed above under “Derivative income.” The value of the embedded derivative is also impacted by the timing of the posting of index credits and changes in reserve discount rates and assumptions used in estimating future call option costs. In addition, the change in the value of the embedded derivative was reduced $7.1 million in the third quarter of 2006 as described in the “Net income applicable to common stock” section above.

The decrease in amortization of deferred sales inducements for the third quarter is primarily due to the impact of changes in unrealized gains and losses on derivatives. The increase in amortization of deferred sales inducements for the nine-month period is primarily due to additional capitalization of costs incurred with new sales and profitability in the underlying business. Deferred sales inducements on interest sensitive and index products totaled $293.6 million at

20

FBL Financial Group, Inc. September 30, 2007

September 30, 2007 and $204.3 million at September 30, 2006. The change in unrealized gains and losses on derivatives decreased amortization by $6.4 million in the third quarter of 2007 and $3.9 million in the 2006 period. Changes in assumptions (unlocking) used to calculate amortization of deferred sales inducements decreased amortization $1.1 million for the nine-month period of 2007 and $0.1 million for the 2006 period. The impact of unlocking in 2007 is primarily due to decreasing lapse assumptions in the models for our direct index annuity business.

Traditional life insurance benefitsare as follows:

	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006
	(Dollars in thousands)
Traditional life insurance policy benefits:
Traditional life insurance benefits	$	21,595	$	24,235	$	69,676	$	69,365
Increase in traditional life future policy benefits		8,840		5,991		28,069		25,296
Distributions to participating policyholders		4,866		5,493		16,114		16,938
Total	$	35,301	$	35,719	$	113,859	$	111,599

Traditional life insurance policy benefits decreased 1.2% in the third quarter of 2007 to $35.3 million and increased 2.0% in the nine months ended September 30, 2007 to $113.9 million. The decrease in the third quarter of 2007 is primarily due to a decrease in death benefits, partially offset by the impact of growth in the volume of business in force. The increase in the nine-month period of 2007 is attributable to the impact of growth in the volume of business in force, partially offset by a decrease in death benefits. Death benefits decreased 9.3% to $12.9 million for the quarter and 7.2% to $38.5 million for the nine-month period primarily due to a decrease in the average size of death claims on term life insurance policies. Surrender benefits decreased 11.6% to $7.9 million in the third quarter of 2007, but increased 12.5% to $27.7 million for the nine-month period. Distributions to participating policyholders decreased due to reductions in our dividend crediting rates. The change in traditional life future policy benefits may not be proportional to the change in traditional premiums and benefits as reserves on term policies are generally less than reserves on whole life policies. Traditional life insurance benefits can fluctuate from period to period primarily as a result of changes in mortality experience.

Underwriting, acquisition and insurance expensesare as follows:

	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007		2006
	(Dollars in thousands)
Underwriting, acquisition and insurance expenses:
Commission expense, net of deferrals	$	3,455	$	3,248	$	10,507	$	10,240
Amortization of deferred policy acquisition costs		12,456		10,353		61,037		49,523
Amortization of value of insurance in force acquired		1,008		996		3,008		2,090
Other underwriting, acquisition and insurance expenses, net of deferrals		19,279		18,152		55,290		59,838
Total	$	36,198	$	32,749	$	129,842	$	121,691

Underwriting, acquisition and insurance expenses increased 10.5% for the third quarter of 2007 to $36.2 million and 6.7% for the nine months ended September 30, 2007 to $129.8 million. Amortization of deferred policy acquisition costs increased for the 2007 periods primarily due an increase in the profitability and volume of business in force resulting from new sales from our EquiTrust Life distribution channel. In addition, for the third quarter, the impact of changes in assumptions (unlocking) increased amortization $1.9 million in 2007 and decreased amortization $1.6 million in 2006. The change in unrealized gains and losses on derivatives decreased amortization by $9.8 million in the third quarter of 2007 and $4.0 million in the 2006 period.

Amortization of value of insurance in force acquired increased $0.9 million for the nine months ended September 30, 2007 primarily due to increased profitability on the underlying business. Underwriting, acquisition and insurance expenses increased 6.2% for the third quarter of 2007 due primarily to an increase in salary expense and a

21

FBL Financial Group, Inc. September 30, 2007

$0.5 million impairment of a fixed asset. Underwriting, acquisition and insurance expenses decreased 7.6% for the nine-month period primarily due to a $4.9 million lawsuit settlement in the second quarter of 2006. See Note 4 of our notes to the consolidated financial statements for further details regarding this settlement and a related unrecorded gain contingency.

Interest expenseincreased 50.2% to $4.4 million in the third quarter of 2007 and 39.2% to $12.2 million for the nine months ended September 30, 2007, due to an increase in our long-term debt. The average debt outstanding increased to $289.7 million for the nine months ended September 30, 2007, compared to $218.4 million for the 2006 period due to the issuance of Senior Notes in March 2007.

Income taxesdecreased 19.4% in the third quarter of 2007 to $7.9 million and increased 13.3% for the nine months ended September 30, 2007 to $37.3 million. The effective tax rate was 33.1% for the third quarter of 2007 and 32.2% for the 2006 period. The effective tax rate was 33.7% for the nine months ended September 30, 2007 and 33.3% for the nine months ended September 30, 2006. The effective tax rates were lower than the federal statutory rate of 35% primarily due to tax-exempt interest and tax-exempt dividend income. In addition, tax accruals totaling $0.5 million were reversed in the third quarter of 2006 as we determined they were no longer necessary based on events and analysis performed during that period.

Equity income net of related income taxestotaled $0.5 million for the third quarter of 2007 and less than $0.1 million in the 2006 period. For the nine-month periods, equity income net of related income taxes totaled $1.1 million in 2007 and $0.5 million in 2006. Equity income includes our proportionate share of gains and losses attributable to our ownership interest in partnerships, joint ventures and certain companies where we exhibit some control but have a minority ownership interest. Given the timing of availability of financial information from our equity investees, we will consistently use information that is as much as three months in arrears for certain of these entities. Several of these entities are investment companies whose operating results are derived primarily from unrealized and realized gains and losses generated by their investment portfolios. As is normal with these types of entities, the level of these gains and losses is subject to fluctuation from period to period depending on the prevailing economic environment, changes in prices of equity securities held by the investment partnerships, timing and success of initial public offerings and other exit strategies, and the timing of the sale of investments held by the partnerships and joint ventures.

Segment Information

We analyze operations by reviewing financial information regarding products that are aggregated into four product segments. The product segments are: (1) Traditional Annuity – Exclusive Distribution (“Exclusive Annuity”), (2) Traditional Annuity – Independent Distribution (“Independent Annuity”), (3) Traditional and Universal Life Insurance and (4) Variable. We also have various support operations and corporate capital that are aggregated into a Corporate and Other segment.

We analyze our segment results based on pre-tax operating income (loss). Accordingly, income taxes are not allocated to the segments. In addition, operating results are generally reported net of any transactions between the segments. Operating income (loss) represents net income excluding, as applicable, the after tax impact of:

• realized and unrealized gains and losses on investments,

• changes in net unrealized gains and losses on derivatives,

• the cumulative effect of changes in accounting principles,

• a nonrecurring lawsuit settlement and

• discontinued operations.

The impact of realized and unrealized gains and losses on investments and unrealized gains and losses on derivatives also includes adjustments and that portion of amortization of deferred policy acquisition costs, deferred sales inducements, unearned revenue reserve and value of insurance in force acquired attributable to such gains or losses. Our rationale for using operating income, in addition to net income, to measure our performance is summarized in Note 6, “Segment Information,” to the consolidated financial statements.

22

FBL Financial Group, Inc. September 30, 2007

A reconciliation of net income to pre-tax operating income and a summary of pre-tax operating income (loss) by segment follow:

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands)
Net income	$	16,499		$	20,706		$	74,456		$	66,142
Realized/unrealized losses (gains) on investments		(3,932	)		256			(6,544	)		(11,570	)
Change in net unrealized gains/losses on derivatives		32,125			10,719			528			(3,891	)
Change in amortization of:
Deferred policy acquisition costs		(9,572	)		(4,046	)		(191	)		1,079
Deferred sales inducements		(6,429	)		(3,992	)		26			915
Value of insurance in force acquired		3			9			(5	)		(64	)
Unearned revenue reserve		—			2			10			1
Cumulative effect of change in accounting principle		—			—			283			—
Lawsuit settlement		—			—			—			4,880
Income tax offset		(4,268	)		(1,032	)		2,161			3,027
		(7,927	)		1,916			(3,732	)		(5,623	)
Income taxes on operating income		12,462			10,848			35,406			30,106
Pre-tax operating income	$	36,888		$	33,470		$	106,130		$	90,625
Pre-tax operating income (loss) by segment:
Traditional Annuity – Exclusive Distribution	$	6,665		$	10,331		$	24,240		$	26,961
Traditional Annuity – Independent Distribution		10,779			8,453			30,413			21,396
Traditional and Universal Life Insurance		15,114			16,790			42,725			43,413
Variable		4,381			(995	)		10,412			2,275
Corporate and Other		(51	)		(1,109	)		(1,660	)		(3,420	)
	$	36,888		$	33,470		$	106,130		$	90,625

23

FBL Financial Group, Inc. September 30, 2007

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

Traditional Annuity – Exclusive Distribution Segment

	Three months ended September 30,					Nine months ended September 30,
	2007		2006			2007			2006
	(Dollars in thousands)
Pre-tax operating income
Operating revenues:
Interest sensitive and index product charges	$	276	$	254		$	852		$	855
Net investment income		35,664		37,328			109,406			108,876
Derivative income (loss)		1,056		(72	)		2,127			(168	)
		36,996		37,510			112,385			109,563
Benefits and expenses		30,331		27,179			88,145			82,602
Pre-tax operating income	$	6,665	$	10,331		$	24,240		$	26,961
Other data
Annuity premiums collected, direct	$	27,848	$	28,106		$	99,927		$	107,418
Policy liabilities and accruals, end of period							2,219,365			2,221,000
Individual deferred annuity spread:
Weighted average yield on cash and invested assets							6.25	%		6.26	%
Weighted average interest crediting rate/index costs							4.08	%		3.99	%
Spread							2.17	%		2.27	%
Individual traditional annuity withdrawal rate							5.6	%		5.4	%

Pre-tax operating income for the Exclusive Annuity segment decreased 35.5% in the third quarter of 2007 to $6.7 million and 10.1% in the nine months ended September 30, 2007 to $24.2 million primarily due to the impact of changing assumptions (unlocking) used in the amortization of deferred policy acquisition costs. Unlocking increased amortization $1.2 million in the 2007 periods and decreased amortization $1.7 million in the 2006 periods. Investment fee income relating to bond calls, tender offers and mortgage loan prepayments and the change in net discount accretion on mortgage and asset-backed securities decreased to $0.5 million in the third quarter of 2007 from $1.5 million in the third quarter of 2006. For the nine month periods, this fee income and change in discount accretion totaled $3.0 million in 2007 and $1.5 million in 2006.

Premiums collected decreased 0.9% in the third quarter of 2007 to $27.8 million and 7.0% in the nine-month period ended September 30, 2007 to $99.9 million. The amount of traditional annuity premiums collected is highly dependent upon the relationship between the current crediting rates on our products and the crediting rates available on competing products, including bank-offered certificates of deposit. We believe the decrease in annuity premiums in 2007 is due to a rise in short-term market interest rates during 2007 and 2006, making certificates of deposit and other short-term investments more attractive in relation to these traditional annuities.

The decrease in the weighted average yield on cash and invested assets is primarily due to the items impacting net investment income discussed above. In 2006 we increased the crediting rate on our primary flexible premium deferred annuity product ten basis points in response to increased income generated from interest rate swaps we utilize to hedge a portion of our annuity portfolio. Income from these swaps totaled $3.1 million in the nine months ended September 30, 2007 compared to $2.7 million in the comparable 2006 period. Income from these swaps is netted against interest credited through March 31, 2007, but included in derivative income (loss) starting in the second quarter of 2007. See “Accounting Changes” for additional details regarding this change.

24

FBL Financial Group, Inc. September 30, 2007

Traditional Annuity – Independent Distribution Segment

	Three months ended September 30,					Nine months ended September 30,
	2007		2006			2007			2006
	(Dollars in thousands)
Pre-tax operating income
Operating revenues:
Interest sensitive and index product charges	$	5,133	$	4,440		$	14,067		$	11,797
Net investment income		78,337		59,479			222,901			157,478
Derivative income (loss)		27,201		(3,619	)		39,252			(6,225	)
		110,671		60,300			276,220			163,050
Benefits and expenses		99,892		51,847			245,807			141,654
Pre-tax operating income	$	10,779	$	8,453		$	30,413		$	21,396
Other data
Annuity premiums collected, independent channel Fixed rate annuities	$	275,866	$	375,415		$	407,083		$	606,478
Index annuities		213,254		259,633			657,449			747,486
Annuity premiums collected, assumed		663		736			2,729			3,555
Policy liabilities and accruals, end of period							6,380,691			4,894,317
Individual deferred annuity spread:
Weighted average yield on cash and invested assets							5.81	%		5.74	%
Weighted average interest crediting rate/index cost							3.44	%		3.17	%
Spread							2.37	%		2.57	%
Individual traditional annuity withdrawal rate							5.2	%		5.0	%

Pre-tax operating income for the Independent Annuity segment increased 27.5% in the third quarter of 2007 to $10.8 million and increased 42.1% to $30.4 million in the nine months ended September 30, 2007. These increases are primarily due to growth in the volume of business in force. Revenues, benefits, expenses and the volume of business in force increased primarily due to the growth of our EquiTrust Life distribution channel. The number of appointed independent agents and distributors increased to 23,515 at September 30, 2007, from 17,402 at September 30, 2006, which includes individual agents totaling 18,902 at September 30, 2007 and 14,319 at September 30, 2006. The average aggregate account value for annuity contracts in force in the Independent Annuity segment for the nine-month period totaled $6,231.7 million for 2007 and $4,189.7 million for 2006.

The increases in interest sensitive and index product charges in the 2007 periods are due to an increase in surrender charges. Surrender charges increased due to increases in surrenders relating to growth in the volume and aging of business in force. The increases in net investment income are attributable to growth in invested assets, primarily due to net premium inflows, and the impact of an increase in our investment yield. The increase in derivative income (loss) is due to increases in proceeds from call option settlements, partially offset by increases in the cost of money for options as discussed under “Derivative income (loss)” above. Call option settlements in 2007 increased $39.5 million for the third quarter and $71.5 million for the nine-month period due to appreciation in the underlying indices and growth in the volume of business in force. The cost of money for call options increased $8.7 million in the third quarter of 2007 and $26.1 million for the nine-month period, primarily due primarily to an increase in the business in force.

Benefits and expenses for the 2007 periods increased due to growth in the volume of business in force. The timing of policy anniversary dates and the amount of appreciation in the underlying indices also contributed to increases in index credits totaling $37.6 million in the third quarter of 2007 and $68.2 million in the nine months ended September 30, 2007. In addition, the impact of unlocking adjustments decreased amortization of deferred policy

25

FBL Financial Group, Inc. September 30, 2007

acquisition costs and deferred sales inducements $1.9 million for the nine-months in 2007 and less than $0.1 million for the 2006 period. The impact of unlocking in 2007 is primarily due to decreasing lapse assumptions in the models for our direct index annuity business.

Premiums collected from the independent channel decreased for the 2007 periods primarily due to a more favorable market environment during 2006 for the sale of our multi-year guaranteed annuity product. In addition, during 2007 we took actions to further increase the profitability of our products. The weighted average yield on cash and invested assets increased primarily due to an increase in market investment rates and the acquisition of investments at yields greater than the existing portfolio yield. The weighted average crediting rate increased for the 2007 period due to increasing crediting rates and option costs. The decrease in spread is due primarily to a shift in business to our multi-year guaranteed annuity which has a lower spread target than other products in our portfolio.

Traditional and Universal Life Insurance Segment

	Three months ended September 30,				Nine months ended September 30,
	2007		2006		2007			2006
	(Dollars in thousands)
Pre-tax operating income
Operating revenues:
Interest sensitive product charges	$	12,296	$	11,318	$	34,723		$	33,766
Traditional life insurance premiums and other income		34,751		33,355		108,263			103,516
Net investment income		35,326		35,297		108,482			106,086
		82,373		79,970		251,468			243,368
Benefits and expenses		67,259		63,180		208,743			199,955
Pre-tax operating income	$	15,114	$	16,790	$	42,725		$	43,413
Other data
Life premiums collected, net of reinsurance	$	47,926	$	44,986	$	147,732		$	140,779
Policy liabilities and accruals, end of period						2,152,642			2,122,280
Direct life insurance in force, end of period (in millions)						32,528			30,200
Interest sensitive life insurance spread:
Weighted average yield on cash and invested assets						6.68	%		6.65	%
Weighted average interest crediting rate						4.37	%		4.48	%
Spread						2.31	%		2.17	%

Pre-tax operating income for the Traditional and Universal Life Insurance segment decreased 10.0% in the third quarter of 2007 to $15.1 million and decreased 1.6% in the nine-month period of 2007 to $42.7 million. The decreases for the 2007 periods are primarily due to the impact of changing assumptions used in the amortization of deferred policy acquisition costs. Unlocking increased amortization $1.6 million in the third quarter of 2007 and decreased amortization $1.1 million in the 2006 period. The impact of unlocking was partially offset by a decrease in death benefits. Death benefits decreased 11.4% to $18.7 million for the third quarter of 2007 and 4.0% to $59.6 million for the nine months ended September 30, 2007.

The increase in net investment income for the nine-month period is primarily due to an increase in invested assets, primarily due to net premium inflows, and additional fee income from bond calls, tender offers, mortgage loan prepayments and the acceleration (reversal) of net discount accretion on mortgage and asset-backed securities which totaled $2.5 million for the nine months ended September 30, 2007, compared to $1.8 million in the 2006 period.

Premiums collected increased 6.5% to $47.9 million for the third quarter and 4.9% to $147.7 million for the nine months ended September 30, 2007 primarily due to increases in new sales.

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FBL Financial Group, Inc. September 30, 2007

The changes in the weighted average yield on cash and invested assets are attributable to the items affecting net investment income noted above. The decrease in weighted average interest crediting rate is primarily due to a decrease in credited rates on assumed business.

Variable Segment

	Three months ended September 30,					Nine months ended September 30,
	2007		2006			2007		2006
	(Dollars in thousands)
Pre-tax operating income (loss)
Operating revenues:
Interest sensitive product charges	$	11,424	$	10,925		$	34,413	$	32,327
Net investment income		3,330		3,507			10,306		10,751
Other income		573		293			2,731		841
		15,327		14,725			47,450		43,919
Benefits and expenses		10,946		15,720			37,038		41,644
Pre-tax operating income	$	4,381	$	(995	)	$	10,412	$	2,275
Other data
Variable premiums collected, net of reinsurance	$	41,109	$	32,818		$	133,599	$	117,835
Policy liabilities and accruals, end of period							228,520		237,578
Separate account assets, end of period							865,557		715,376
Direct life insurance in force, end of period (in millions)							7,779		7,617

Pre-tax operating income (loss) for the Variable segment totaled $4.4 million in the third quarter of 2007 and ($1.0) million for the 2006 period. For the nine months ended September 30, pre-tax operating income totaled $10.4 million for 2007 and $2.3 million for 2006. These increases are primarily due to an increase in the volume of business in force, lower death benefits and a decrease in amortization of deferred policy acquisition costs. Interest sensitive product charges increased due to mortality and expense fee income and cost of insurance charges. For the nine-month period of 2007, mortality and expense fee income increased 23.6% to $7.3 million due to an increase in separate account assets. Cost of insurance charges increased 5.4% to $21.0 million for the nine-month period primarily due to the impact of the aging of business in force. In addition, other income for the nine-month period increased $1.0 million due to the recognition of contingent administrative fee income from alliance partners in the first quarter of 2007. This is not expected to be a recurring source of income.

Death benefits decreased 54.5% to $2.3 million in the third quarter of 2007 and 20.7% to $8.0 million for the nine months ended September 30, 2007, primarily due to a decrease in the average size of death claims paid in excess of related account values on variable universal life policies. Amortization of deferred policy acquisition costs decreased $2.3 million for the nine months of 2007 compared to the 2006 period due primarily to the impact of changing assumptions (unlocking) used in the amortization of deferred policy acquisition costs. Unlocking resulted in a $1.2 million decrease to amortization for the nine months of 2007 compared to a $1.8 million increase in 2006.

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FBL Financial Group, Inc. September 30, 2007

Corporate and Other Segment

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
	(Dollars in thousands)
Pre-tax operating loss:
Operating revenues:
Net investment income	$	4,359		$	1,767		$	10,465		$	5,539
Other income		5,940			5,692			17,324			16,858
		10,299			7,459			27,789			22,397
Interest expense		4,437			2,954			12,236			8,793
Benefits and other expenses		6,743			5,640			18,906			17,644
		(881	)		(1,135	)		(3,353	)		(4,040	)
Minority interest		2			1			(3	)		(125	)
Equity income, before tax		828			25			1,696			745
Pre-tax operating loss	$	(51	)	$	(1,109	)	$	(1,660	)	$	(3,420	)

Pre-tax operating loss decreased 95.4% to $0.1 million for the third quarter of 2007 and decreased 51.5% to $1.7 million for the nine-month period. Net investment income increased due to an increase in invested assets, primarily from the proceeds of our Senior Notes offering as discussed in the “Net investment income” section above. In addition, the yield earned on average invested assets for the nine-month period increased to 4.22% at September 30, 2007 compared to 3.84% at September 30, 2006. Interest expense increased in the 2007 periods due an increase in our average debt outstanding resulting from the Senior Notes offering. The changes in other income and expense are primarily due to operating results of our non-insurance operations.

Accounting Changes

Effective April 1, 2007, we adopted Statement of Financial Accounting Standards (Statement) 133 Implementation Issue No. G26, “Cash Flow Hedges: Hedging Interest Cash Flows on Variable-Rate Assets and Liabilities That Are Not Based on a Benchmark Interest Rate,” (DIG G26) which clarifies the accounting for a cash flow hedge of a variable-rate asset or liability, specifically addressing when an entity is permitted to hedge benchmark interest rate risk. DIG G26 indicates that the risk being hedged in a cash flow hedge of a variable-rate financial asset or liability cannot be designated as interest rate risk unless the cash flows of the hedged transaction are explicitly based on that same benchmark interest rate. In addition, DIG G26 clarifies that the only permitted benchmarks are the risk-free rate and rates based on the LIBOR swap curve. Hedging relationships that no longer qualify for cash flow hedge accounting based on this guidance must be undesignated prospectively. Changes in fair value of derivatives not subsequently re-designated to a new qualifying hedging relationship are recorded in earnings. Gains or losses previously included in accumulated other comprehensive income (loss) remain in accumulated other comprehensive income (loss) and are amortized to net income over the remaining term of the swaps as the hedged anticipated cash flows occur. If it becomes probable that the anticipated cash flows will not occur, the deferred gains or losses will be reclassified into earnings immediately. As a result of adopting DIG G26, we undesignated the hedging relationship for the interest rate swaps related to our flexible premium deferred annuity contracts as they are not explicitly based on one of the two permitted benchmarks. Net unrealized gains on these swaps included in accumulated other comprehensive income (loss) totaled $2.8 million at March 31, 2007 and are being amortized into income over the life of the individual swaps. Derivative income includes the change in fair value of these derivatives after March 31, 2007, which totaled $(4.4) million for the third quarter of 2007 and $(2.8) million for the nine-month period. Amortization of the net unrealized gain totaled $0.7 million for the third quarter of 2007 and $1.5 million for the nine-month period. This guidance does not impact the interest rate swap on our line of credit, as both the derivative instrument and hedged item are based on the three-month LIBOR rate.

Effective January 1, 2007, we adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” Interpretation No. 48 creates a single model to address uncertainty in tax positions and clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Under the Interpretation, a tax position can be recognized in the financial statements if it is more likely than not that the position will be sustained upon examination by taxing authorities who have full knowledge of all relevant information. A tax position that

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FBL Financial Group, Inc. September 30, 2007

meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Interpretation No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The impact of adopting Interpretation No. 48 was not material to our consolidated financial statements; therefore the cumulative effective of change in this accounting principle, totaling $0.3 million, is reflected as an increase to income tax expense in our 2007 consolidated income statement. We recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in other expenses. We are no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2001.

Effective January 1, 2007, we adopted Statement of Position (SOP) 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts” issued by the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants. The SOP provides guidance on the accounting for internal replacements of one insurance contract for another insurance contract. Under the SOP, an internal replacement that is determined to result in a replacement contract that is substantially changed from the replaced contract is accounted for as an extinguishment of the replaced contract. As an extinguishment, the unamortized deferred policy acquisition costs, deferred sales inducements, value of insurance in force acquired and unearned revenue reserve from the replaced contract are written off at the time of the extinguishment. An internal replacement that is determined to result in a replacement contract that is substantially unchanged from the replaced contract is accounted for as a continuation of the replaced contract. The impact of adopting SOP 05-1 was not material to our consolidated financial statements for the nine months ended September 30, 2007 (estimated to be less than $0.1 million) as our previous accounting policy for internal replacements substantially conformed to current interpretations of the guidance in the SOP.

In April 2007, the FASB issued Staff Position FIN 39-1 (FSP FIN 39-1), which amends certain aspects of FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts – an interpretation of APB Opinion No. 10 and FASB Statement No. 105.” This FSP allows a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. The guidance in this FSP is effective for fiscal years beginning after November 15, 2007, with early application permitted. We intend to adopt FSP FIN 39-1 beginning in 2008. This FSP will have no impact on our consolidated statements of income. At September 30, 2007, the cash collateral payable to counterparties totaled $92.9 million and the cash collateral receivable from counterparties totaled $2.3 million. These amounts are included in the other liabilities and other assets lines on our consolidated balance sheet at September 30, 2007, but will be netted against the fair value of the call options and swaps included in the derivative instruments line on our consolidated balance sheet upon adoption of FSP FIN 39-1.

In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which permits certain financial assets and liabilities to be measured at fair value, with changes in fair value reported in earnings. This election is allowed on an instrument-by-instrument basis and requires additional reporting disclosures. This Statement is effective for fiscal years beginning after November 15, 2007. Early adoption is allowed provided the provisions of Statement No. 157 are also adopted. We are currently evaluating the requirements of this Statement and have not yet concluded if the fair value option will be adopted.

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value and expands the required disclosures about fair value measurements. This Statement is effective for fiscal years beginning after November 15, 2007. The impact of adoption is not expected to be material to our consolidated financial statements.

In September 2006, the FASB issued Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R).” While certain aspects of this Statement were adopted effective December 31, 2006, as described in our 2006 Form 10-K, the Statement also requires measurement of a plan’s assets and benefit obligations as of the end of the employer’s fiscal year, beginning with fiscal years ending after December 15, 2008. The impact of adopting this aspect of the Statement is not expected to be material to our consolidated financial statements.

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FBL Financial Group, Inc. September 30, 2007

Financial Condition

Investments

Our total investment portfolio increased 9.9% to $10,755.0 million at September 30, 2007 compared to $9,782.6 million at December 31, 2006. This increase is primarily the result of net cash received from interest sensitive and index products and proceeds from our Senior Notes offering, partially offset by a decrease in net unrealized appreciation on fixed maturity securities classified as available for sale. Net unrealized appreciation of fixed maturity securities decreased $152.7 million during the nine months of 2007 to a net unrealized loss of $131.4 million at September 30, 2007, due principally to the impact of a general widening of credit spreads, partially offset by a decrease in risk free interest rates.

Internal investment professionals manage our investment portfolio. The investment strategy is designed to achieve superior risk-adjusted returns consistent with the investment philosophy of maintaining a largely investment grade portfolio and providing adequate liquidity for obligations to policyholders and other requirements. We continually review the returns on invested assets and change the mix of invested assets as deemed prudent under the current market environment to help maximize current income.

Our investment portfolio is summarized in the table below:

	September 30, 2007					December 31, 2006
	Carrying Value		Percent			Carrying Value		Percent
	(Dollars in thousands)
Fixed maturities – available for sale:
Public	$	7,537,173		70.1	%	$	6,859,169		70.1	%
144A private placement		1,303,455		12.1			1,215,215		12.4
Private placement		320,505		3.0			301,412		3.1
Total fixed maturities – available for sale		9,161,133		85.2			8,375,796		85.6
Fixed maturities – trading		—		—			14,927		0.2
Equity securities		29,127		0.3			50,278		0.5
Mortgage loans on real estate		1,163,707		10.8			979,883		10.0
Derivative instruments		153,571		1.4			127,478		1.3
Investment real estate		2,559		—			8,711		0.1
Policy loans		179,600		1.7			179,899		1.8
Other long-term investments		1,300		—			1,300		—
Short-term investments		64,024		0.6			44,354		0.5
Total investments	$	10,755,021		100.0	%	$	9,782,626		100.0	%

As of September 30, 2007, 95.9% (based on carrying value) of the available-for-sale fixed maturity securities were investment grade debt securities, defined as being in the highest two National Association of Insurance Commissioners (NAIC) designations. Non-investment grade debt securities generally provide higher yields and involve greater risks than investment grade debt securities because their issuers typically are more highly leveraged and more vulnerable to adverse economic conditions than investment grade issuers. In addition, the trading market for these securities is usually more limited than for investment grade debt securities. We regularly review the percentage of our portfolio that is invested in non-investment grade debt securities (NAIC designations 3 through 6). As of September 30, 2007, the investment in non-investment grade debt was 4.1% of available-for-sale fixed maturity securities. At that time, no single non-investment grade holding exceeded 0.2% of total investments.

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FBL Financial Group, Inc. September 30, 2007

The following table sets forth the credit quality, by NAIC designation and Standard & Poor’s (S&P) rating equivalents, of available-for-sale fixed maturity securities.

NAIC		September 30, 2007					December 31, 2006
Designation	Equivalent S&P Ratings (1)	Carrying Value		Percent			Carrying Value		Percent
		(Dollars in thousands)
1	AAA, AA, A	$	5,808,905		63.4	%	$	5,352,040		63.9	%
2	BBB		2,980,269		32.5			2,668,572		31.9
	Total investment grade		8,789,174		95.9			8,020,612		95.8
3	BB		281,063		3.1			264,071		3.2
4	B		78,466		0.9			78,345		0.9
5	CCC, CC, C		11,705		0.1			11,932		0.1
6	In or near default		725		—			836		—
	Total below investment grade		371,959		4.1			355,184		4.2
	Total fixed maturities – available for sale	$	9,161,133		100.0	%	$	8,375,796		100.0	%

(1) The Securities Valuation Office of the NAIC generally rates private placement securities. Comparisons between NAIC designations and S&P ratings are published by the NAIC. S&P has not rated some of the fixed maturity securities in our portfolio.

A summary of the gross unrealized gains and gross unrealized losses on our available-for-sale fixed maturity securities, by internal industry classification, as of September 30, 2007 and December 31, 2006 is as follows:

	September 30, 2007
			Carrying				Carrying
			Value of				Value of
			Securities				Securities
	Total		with Gross		Gross		with Gross		Gross
	Carrying		Unrealized		Unrealized		Unrealized		Unrealized
	Value		Gains		Gains		Losses		Losses
	(Dollars in thousands)
Corporate securities:
Financial services	$	1,892,053	$	635,896	$	22,451	$	1,256,157	$	(64,703	)
Manufacturing		983,176		394,257		15,845		588,919		(30,851	)
Mining		421,368		178,206		6,369		243,162		(10,655	)
Retail trade		111,465		61,515		4,173		49,950		(2,316	)
Services		152,810		57,755		2,995		95,055		(3,920	)
Transportation		178,438		89,218		4,953		89,220		(4,418	)
Private utilities and related sectors		471,512		242,823		13,777		228,689		(8,674	)
Other		87,531		36,585		801		50,946		(1,940	)
Total corporate securities		4,298,353		1,696,255		71,364		2,602,098		(127,477	)
Mortgage and asset-backed securities		2,567,217		815,519		12,656		1,751,698		(62,948	)
United States Government and agencies		588,740		154,700		4,307		434,040		(8,150	)
State, municipal and other governments		1,118,239		441,080		10,736		677,159		(23,348	)
Public utilities		588,584		265,799		6,997		322,785		(15,584	)
Total	$	9,161,133	$	3,373,353	$	106,060	$	5,787,780	$	(237,507	)

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FBL Financial Group, Inc. September 30, 2007

	December 31, 2006
			Carrying				Carrying
			Value of				Value of
			Securities				Securities
	Total		with Gross		Gross		with Gross		Gross
	Carrying		Unrealized		Unrealized		Unrealized		Unrealized
	Value		Gains		Gains		Losses		Losses
	(Dollars in thousands)
Corporate securities:
Financial services	$	1,708,538	$	920,465	$	41,021	$	788,073	$	(18,774	)
Manufacturing		941,985		474,324		21,544		467,661		(21,829	)
Mining		403,234		207,522		8,280		195,712		(7,357	)
Retail trade		107,442		55,528		3,640		51,914		(1,776	)
Services		145,073		85,009		3,163		60,064		(2,770	)
Transportation		181,233		131,136		7,399		50,097		(1,173	)
Private utilities and related sectors		440,361		275,912		15,611		164,449		(4,911	)
Other		82,617		40,818		1,620		41,799		(827	)
Total corporate securities		4,010,483		2,190,714		102,278		1,819,769		(59,417	)
Mortgage and asset-backed securities		2,344,986		924,029		14,324		1,420,957		(27,601	)
United States Government and agencies		603,246		96,013		3,702		507,233		(13,436	)
State, municipal and other governments		929,378		428,158		14,855		501,220		(13,950	)
Public utilities		487,703		230,629		8,473		257,074		(7,996	)
Total	$	8,375,796	$	3,869,543	$	143,632	$	4,506,253	$	(122,400	)

The following tables set forth the composition by credit quality of the available-for-sale fixed maturity securities with gross unrealized losses.

		September 30, 2007
		Carrying Value of
		Securities with					Gross
NAIC		Gross Unrealized		Percent of			Unrealized			Percent of
Designation	Equivalent S&P Ratings	Losses		Total			Losses			Total
		(Dollars in thousands)
1	AAA, AA, A	$	3,790,005		65.5	%	$	(139,875	)		58.9	%
2	BBB		1,835,575		31.7			(81,468	)		34.3
	Total investment grade		5,625,580		97.2			(221,343	)		93.2
3	BB		127,238		2.2			(10,267	)		4.3
4	B		29,466		0.5			(4,964	)		2.1
5	CCC, CC, C		5,496		0.1			(933	)		0.4
6	In or near default		—		—			—			—
	Total below investment grade		162,200		2.8			(16,164	)		6.8
	Total	$	5,787,780		100.0	%	$	(237,507	)		100.0	%

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FBL Financial Group, Inc. September 30, 2007

		December 31, 2006
		Carrying Value of
		Securities with					Gross
NAIC		Gross Unrealized		Percent of			Unrealized			Percent of
Designation	Equivalent S&P Ratings	Losses		Total			Losses			Total
		(Dollars in thousands)
1	AAA, AA, A	$	3,030,985		67.3	%	$	(71,362	)		58.3	%
2	BBB		1,344,332		29.8			(40,978	)		33.5
	Total investment grade		4,375,317		97.1			(112,340	)		91.8
3	BB		99,430		2.2			(7,335	)		6.0
4	B		25,667		0.6			(2,143	)		1.7
5	CCC, CC, C		5,839		0.1			(582	)		0.5
6	In or near default		—		—			—			—
	Total below investment grade		130,936		2.9			(10,060	)		8.2
	Total	$	4,506,253		100.0	%	$	(122,400	)		100.0	%

     The following tables set forth the number of issuers, amortized cost, unrealized losses and market value of available-for-sale fixed maturity securities in an unrealized loss position listed by the length of time the securities have been in an unrealized loss position.

	September 30, 2007
	Number of		Amortized		Gross Unrealized			Estimated
	Issuers		Cost		Losses			Market Value
	(Dollars in thousands)
Three months or less		57	$	396,469	$	(6,765	)	$	389,704
Greater than three months to six months		240		1,470,718		(33,735	)		1,436,983
Greater than six months to nine months		74		436,138		(18,014	)		418,124
Greater than nine months to twelve months		52		270,797		(8,993	)		261,804
Greater than twelve months		398		3,451,165		(170,000	)		3,281,165
Total			$	6,025,287	$	(237,507	)	$	5,787,780

	December 31, 2006
	Number of		Amortized		Gross Unrealized			Estimated
	Issuers		Cost		Losses			Market Value
			(Dollars in thousands)
Three months or less		105	$	564,118	$	(5,078	)	$	559,040
Greater than three months to six months		18		80,862		(528	)		80,334
Greater than six months to nine months		13		63,674		(456	)		63,218
Greater than nine months to twelve months		179		1,013,254		(17,449	)		995,805
Greater than twelve months		304		2,906,745		(98,889	)		2,807,856
Total			$	4,628,653	$	(122,400	)	$	4,506,253

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FBL Financial Group, Inc. September 30, 2007

The scheduled maturity dates for available-for-sale fixed maturity securities in an unrealized loss position are as follows:

	September 30, 2007					December 31, 2006
	Carrying Value					Carrying Value
	of Securities with		Gross			of Securities with		Gross
	Gross Unrealized		Unrealized			Gross Unrealized		Unrealized
	Losses		Losses			Losses		Losses
	(Dollars in thousands)
Due in one year or less	$	5,713	$	(7	)	$	12,512	$	(31	)
Due after one year through five years		332,327		(6,303	)		282,055		(4,868	)
Due after five years through ten years		1,539,863		(59,647	)		1,123,357		(32,487	)
Due after ten years		2,146,406		(108,375	)		1,652,648		(57,091	)
		4,024,309		(174,332	)		3,070,572		(94,477	)
Mortgage and asset-backed securities		1,751,698		(62,948	)		1,420,957		(27,601	)
Redeemable preferred stock		11,773		(227	)		14,724		(322	)
Total	$	5,787,780	$	(237,507	)	$	4,506,253	$	(122,400	)

Included in the above table are 1,026 securities from 636 issuers at September 30, 2007 and 780 securities from 513 issuers at December 31, 2006. The following summarizes the details describing the more significant unrealized losses by investment category as of September 30, 2007.

Corporate securities:The unrealized losses on corporate securities totaled $127.5 million, or 53.7% of our total unrealized losses. The largest losses were in the financial services sector ($1,256.2 million carrying value and $64.7 million unrealized loss) and in the manufacturing sector ($588.9 million carrying value and $30.9 million unrealized loss). The largest unrealized losses in the manufacturing sector were in the paper and allied products sector ($101.5 million carrying value and $8.9 million unrealized loss) and the printing and publishing sector ($48.2 million carrying value and $4.1 million unrealized loss). The unrealized losses in the paper and allied products sector and the printing and publishing sector are due to a rise in market interest rates and spread widening that is the result of weaker operating results. The unrealized losses in the financial services sector and the remaining corporate sectors were caused primarily by a rise in market interest rates. Because we have the ability and intent to hold these investments until a recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2007.

Mortgage and asset-backed securities:The unrealized losses on mortgage and asset-backed securities totaled $62.9 million, or 26.5% of our total unrealized losses, and were caused primarily by increases in market interest rates. We purchased most of these investments at a discount to their face amount and the contractual cash flows of these investments are based on mortgages and other assets backing the securities. Because the decline in market value is attributable to changes in market interest rates and not credit quality, and because we have the ability and intent to hold these investments until a recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2007.

United States Government and agencies:The unrealized losses on U.S. Governments and agencies totaled $8.2 million, or 3.4% of our total unrealized losses, and were caused by increases in market interest rates from the original purchase date. We purchased most of these investments at a discount to their face amount and the contractual cash flows of these investments are based on direct guarantees from the U.S. Government and by agencies of the U.S. Government. Because the decline in market value is attributable to changes in market interest rates and not credit quality, and because we have the ability and intent to hold these investments until a recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2007.

State municipal and other governments:The unrealized losses on state, municipal and other governments totaled $23.3 million, or 9.8% of our total unrealized losses, and were caused by increases in market interest rates. We purchased most of these investments at a discount to their face amount and the contractual cash flows of these investments are based on the taxing authority of a municipality or the revenues of a municipal project. Because the decline in market value is attributable to changes in market interest rates and not credit quality, and because we have

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FBL Financial Group, Inc. September 30, 2007

the ability and intent to hold these investments until a recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2007.

Public utilities:The unrealized losses on public utilities totaled $15.6 million, or 6.6% of our total unrealized losses, and were caused primarily by an increase in market interest rates. Because the decline in market value is attributable to changes in market interest rates and not credit quality, and because we have the ability and intent to hold these investments until recovery of fair value, which may be maturity, we do not consider these investments to be other-than-temporarily impaired at September 30, 2007.

Excluding mortgage and asset-backed securities, no securities from the same issuer had an aggregate unrealized loss in excess of $5.5 million at September 30, 2007. The $5.5 million unrealized loss is from one security with sub-prime collateral exposure that has been impacted by the loss of market liquidity and spread widening. This security is rated investment grade at September 30, 2007. We believe the decline in market values in this sector is temporary, and we have the ability and intent to hold this security until recovery of fair value. With respect to mortgage and asset-backed securities not backed by the United States Government, no securities from the same issuer had an aggregate unrealized loss in excess of $6.3 million at September 30, 2007. The $6.3 million unrealized loss from one issuer relates to eight different securities that are backed by different pools of residential mortgage loans. All eight securities are rated investment grade and the largest unrealized loss on any one security totaled $2.0 million at September 30, 2007.

Excluding mortgage and asset-backed securities, no securities from the same issuer had an aggregate unrealized loss in excess of $1.2 million at December 31, 2006. With respect to mortgage and asset-backed securities not backed by the United States Government, no securities from the same issuer had an aggregate unrealized loss in excess of $4.5 million at December 31, 2006. The $4.5 million unrealized loss from one issuer relates to five different securities that are backed by different pools of residential mortgage loans. All five securities are rated investment grade and the largest unrealized loss on any one security totaled $2.3 million at December 31, 2006.

The carrying value and estimated market value of our portfolio of available-for-sale fixed maturity securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2007				December 31, 2006
			Estimated				Estimated
	Amortized Cost		Market Value		Amortized Cost		Market Value
	(Dollars in thousands)
Due in one year or less	$	83,635	$	84,824	$	71,066	$	71,927
Due after one year through five years		812,814		824,031		628,258		634,720
Due after five years through ten years		2,299,563		2,259,304		2,074,127		2,074,513
Due after ten years		3,433,920		3,378,833		3,140,461		3,162,001
		6,629,932		6,546,992		5,913,912		5,943,161
Mortgage and asset-backed securities		2,617,509		2,567,217		2,358,263		2,344,986
Redeemable preferred stocks		45,139		46,924		82,389		87,649
Total	$	9,292,580	$	9,161,133	$	8,354,564	$	8,375,796

Mortgage and other asset-backed securities comprised 28.0% at September 30, 2007 and December 31, 2006 of our total available-for-sale fixed maturity securities. These securities are purchased when we believe these types of investments provide superior risk-adjusted returns compared to returns of more conventional investments such as corporate bonds and mortgage loans. These securities are diversified as to collateral types, cash flow characteristics and maturity.

The repayment pattern on mortgage and other asset-backed securities is more variable than that of more traditional fixed maturity securities because the repayment terms are tied to underlying debt obligations that are subject to prepayments. The prepayment speeds (e.g., the rate of individuals refinancing their home mortgages) can vary based

35

FBL Financial Group, Inc. September 30, 2007

on a number of economic factors that cannot be predicted with certainty. These factors include the prevailing interest rate environment and general status of the economy.

At each balance sheet date, we review and update our expectation of future prepayment speeds and the book value of the mortgage and other asset-backed securities purchased at a premium or discount is reset, if needed, to result in a constant effective yield over the life of the security. This effective yield is computed using historical principal payments and expected future principal payment patterns. Any adjustments to book value to derive the constant effective yield, which may include the reversal of premium or discount amounts previously amortized or accrued, are recorded in the current period as a component of net investment income. Accordingly, deviations in actual prepayment speeds from that originally expected or changes in expected prepayment speeds can cause a change in the yield earned on mortgage and asset-backed securities purchased at a premium or discount and may result in adjustments that have a material positive or negative impact on quarterly reported results. Increases in prepayment speeds, which typically occur in a decreasing interest rate environment, generally increase the rate at which discount is accrued and premium is amortized into income. Decreases in prepayment speeds, which typically occur in an increasing interest rate environment, generally slow down the rate these amounts are recorded into income.

The mortgage-backed portfolio includes pass-through and collateralized mortgage obligation (CMO) securities. With a pass-through security, we receive a pro rata share of principal payments as payments are made on the underlying mortgage loans. CMOs consist of pools of mortgages divided into sections or “tranches” which provide sequential retirement of the bonds. We invest in sequential tranches which provide cash flow stability in that principal payments do not occur until the previous tranches are paid off. In addition, to provide call protection and more stable average lives, we invest in CMOs such as planned amortization class (PAC) and targeted amortization class (TAC) securities. CMOs of these types provide more predictable cash flows within a range of prepayment speeds by shifting the prepayment risks to support tranches. We generally do not purchase certain types of CMOs that we believe would subject the investment portfolio to greater than average risk. These include, but are not limited to, principal only, floater, inverse floater, PAC II and support tranches.

The following tables set forth the amortized cost, par value and carrying value of our mortgage and asset-backed securities summarized by type of security.

	September 30, 2007
	Amortized Cost		Par Value		Carrying Value		Percent of Fixed Maturities
	(Dollars in thousands)
Residential mortgage-backed securities:
Sequential	$	1,254,354	$	1,280,672	$	1,233,346		13.5	%
Pass-through		174,413		174,418		172,122		1.9
Planned and targeted amortization class		328,447		332,018		323,390		3.5
Other		101,047		102,042		96,139		1.0
Total residential mortgage-backed securities		1,858,261		1,889,150		1,824,997		19.9
Commercial mortgage-backed securities		468,483		468,542		460,903		5.0
Other asset-backed securities		290,765		291,636		281,317		3.1
Total mortgage and asset-backed securities	$	2,617,509	$	2,649,328	$	2,567,217		28.0	%

	December 31, 2006
							Percent of Fixed
	Amortized Cost		Par Value		Carrying Value		Maturities
	(Dollars in thousands)
Residential mortgage-backed securities:
Sequential	$	1,179,339	$	1,203,495	$	1,172,544		14.0	%
Pass-through		115,281		114,933		114,337		1.3
Planned and targeted amortization class		304,861		308,391		301,209		3.6
Other		101,904		102,900		99,154		1.2
Total residential mortgage-backed securities		1,701,385		1,729,719		1,687,244		20.1
Commercial mortgage-backed securities		400,946		399,438		402,271		4.8
Other asset-backed securities		255,932		256,453		255,471		3.1
Total mortgage and asset-backed securities	$	2,358,263	$	2,385,610	$	2,344,986		28.0	%

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FBL Financial Group, Inc. September 30, 2007

The commercial and other asset-backed securities are primarily sequential securities. Commercial mortgage-backed securities typically have cash flows that are less sensitive to interest rate changes than residential securities of similar types due principally to prepayment restrictions on many of the underlying commercial mortgage loans. The asset-backed securities, whose collateral is primarily home-equity loans, generally exhibit more stable cash flows relative to mortgage-backed issues.

The mortgage and asset-backed portfolios include securities with exposure to the Alt-A and sub-prime equity loan sectors. All securities with this exposure are “AAA” rated, senior tranches of fixed rate home equity collateral. These securities are backed by loans to borrowers with credit scores below those of A-grade borrowers. Alt-A securities generally include borrowers with credit scores ranging from 725 to 641, and sub-prime securities include borrowers with credit scores of 640 or less. Our exposure to the Alt-A and sub-prime mortgage and asset-backed sectors is summarized below. We do not participate in the adjustable rate mortgage sector.

	September 30, 2007
					Percent of			Average			Percent
			Estimated		Fixed			Loan-to-Value			Originated
	Amortized Cost		Market Value		Maturities			Ratio *			Prior to 2006
	(Dollars in thousands)
Alt-A exposure:
Mortgage-backed securities	$	581,934	$	572,086		6.2	%		69.4	%		85.2	%
Asset-backed securities		204,374		196,669		2.1			99.2			19.0
Total Alt-A exposure	$	786,308	$	768,755		8.3	%		77.0	%		68.3
Sub-prime asset-backed securities	$	30,149	$	28,825		0.3	%		76.5			100.0

	December 31, 2006
					Percent of			Average			Percent
			Estimated		Fixed			Loan-to-Value			Originated
	Amortized Cost		Market Value		Maturities			Ratio *			Prior to 2006
	(Dollars in thousands)
Alt-A exposure:
Mortgage-backed securities	$	544,578	$	542,334		6.5	%		69.0	%		95.0	%
Asset-backed securities		183,239		183,580		2.2			99.7			21.2
Total Alt-A exposure	$	727,817	$	725,914		8.7	%		76.7			76.3
Sub-prime asset-backed securities	$	30,159	$	29,395		0.4	%		76.5			100.0

* Represents average loan-to-value ratio at issue.

Fixed maturity securities held for trading included U.S. Treasury securities totaling $14.9 million at December 31, 2006. These securities, which matured during 2007, had an unrealized loss of $0.1 million at December 31, 2006.

Equity securities totaled $29.1 million at September 30, 2007 and $50.3 million at December 31, 2006. Gross unrealized gains totaled $5.5 million and gross unrealized losses totaled $0.1 million at September 30, 2007. At December 31, 2006, gross unrealized gains totaled $14.9 million and gross unrealized losses totaled $0.2 million on these securities. Included in equity securities is our investment in AEL which totaled $17.8 million at September 30, 2007 and $39.4 million at December 31, 2006.

Mortgage loans totaled $1,163.7 million at September 30, 2007 and $979.9 million at December 31, 2006. These mortgage loans are diversified as to property type, location and loan size, and are collateralized by the related properties. There were no mortgages more than 60 days delinquent at September 30, 2007. At December 31, 2006, mortgages more than 60 days delinquent accounted for less than 0.1% of the carrying value of the mortgage portfolio.

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FBL Financial Group, Inc. September 30, 2007

Our mortgage lending policies establish limits on the amount that can be loaned to one borrower and require diversification by geographic location and collateral type. Information regarding the collateral type and related geographic location within the United States follows:

	September 30, 2007					December 31, 2006
	Mortgage Loan		Percent of			Mortgage Loan		Percent of
Collateral Type	Carrying Value		Total			Carrying Value		Total
	(Dollars in thousands)
Retail	$	390,615		33.6	%	$	344,749		35.2	%
Office		387,987		33.3			342,164		34.9
Industrial		354,158		30.4			266,902		27.2
Other		30,947		2.7			26,068		2.7
Total	$	1,163,707		100.0	%	$	979,883		100.0	%

	September 30, 2007					December 31, 2006
	Mortgage Loan		Percent of			Mortgage Loan		Percent of
Region of the United States	Carrying Value		Total			Carrying Value		Total
	(Dollars in thousands)
South Atlantic	$	261,057		22.4	%	$	200,309		20.4	%
East North Central		231,408		19.9			203,543		20.8
Pacific		226,465		19.5			165,614		16.9
West North Central		150,051		12.9			154,441		15.8
Mountain		117,079		10.1			92,954		9.5
West South Central		71,278		6.1			75,442		7.7
Other		106,369		9.1			87,580		8.9
Total	$	1,163,707		100.0	%	$	979,883		100.0	%

Our asset-liability management program includes (i) designing and developing products that encourage persistency and help ensure targeted spreads are earned and, as a result, create a stable liability structure, and (ii) structuring the investment portfolio with duration and cash flow characteristics consistent with the duration and cash flow characteristics of our insurance liabilities. The weighted average life of the fixed maturity and mortgage loan portfolio based on market values and excluding convertible bonds, was approximately 9.8 years at September 30, 2007 and 9.6 years at December 31, 2006. Based on calculations utilizing our fixed income analytical system, including our mortgage-backed prepayment assumptions, the effective duration of our fixed maturity and mortgage loan portfolios was 6.3 at September 30, 2007 and 6.1 at December 31, 2006.

Other Assets

Deferred policy acquisition costs increased 14.1% to $944.2 million and deferred sales inducements increased 30.4% to $295.5 million at September 30, 2007 due primarily to capitalization of costs incurred with new sales. In addition, deferred policy acquisition costs increased $52.4 million and deferred sales inducements increased $20.4 million due to the impact of the change in unrealized appreciation/depreciation on fixed maturity securities and interest rate swaps. Assets held in separate accounts increased 13.2% to $865.6 million at September 30, 2007 due primarily to positive investment returns and the transfer of net premiums to the separate accounts.

Liabilities

Policy liabilities and accruals and other policyholders’ funds increased 10.1% to $11,049.6 million at September 30, 2007 primarily due to increases in the volume of business in force. Long-term debt increased 45.1% to $316.9 million due to the issuance of $100.0 million of Senior Notes as described in Note 2, “Credit Arrangements,” to the consolidated financial statements. Other liabilities increased 64.9% to $287.7 million primarily due to an increase in payables for securities purchases.

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FBL Financial Group, Inc. September 30, 2007

Stockholders’ Equity

Stockholders’ equity increased 1.9%, to $897.3 million at September 30, 2007, compared to $880.7 million at December 31, 2006. This increase is primarily attributable to net income partially offset by the change in net unrealized investment gains/losses and dividends paid.

At September 30, 2007, common stockholders’ equity was $894.3 million, or $29.82 per share, compared to $877.7 million or $29.59 per share at December 31, 2006. Included in stockholders’ equity per common share is ($1.03) at September 30, 2007 and $0.95 at December 31, 2006 attributable to accumulated other comprehensive income (loss).

Liquidity and Capital Resources

FBL Financial Group, Inc.

Parent company cash inflows from operations consist primarily of (i) dividends from subsidiaries, if declared and paid, (ii) fees that it charges the various subsidiaries and affiliates for management of their operations, (iii) expense reimbursements from subsidiaries and affiliates, (iv) proceeds from the exercise of employee stock options, (v) proceeds from borrowings and (vi) tax settlements between the parent company and its subsidiaries. Cash outflows are principally for salaries, taxes and other expenses related to providing these management services, capital contributions to subsidiaries, dividends on outstanding stock and interest on our parent company debt.

On March 12, 2007, we issued $100.0 million of 5.875% Senior Notes (Senior Notes) due March 15, 2017. Interest on the Senior Notes is payable semi-annually on March 15 and September 15 each year. The Senior Notes are redeemable in whole or in part at any time at our option at a “make-whole” redemption price equal to the greater of 100% of their principal amount or the sum of the present values of the remaining scheduled payments of principal and interest on the Senior Notes, discounted to the redemption date on a semiannual basis at the treasury rate plus 20 basis points. We received net proceeds of approximately $98.5 million from the issuance of the Senior Notes after underwriting fees, offering expenses and an original issue discount. We intend to use the net proceeds to fund the continued growth of EquiTrust Life.

We paid cash dividends on our common and preferred stock during the nine-month period totaling $10.7 million in 2007 and $10.3 million in 2006. Interest payments on our debt totaled $11.0 million for the nine months ended September 30, 2007 and $7.7 million for the 2006 period. It is anticipated quarterly cash dividend requirements for the remainder of 2007 will be $0.12 per common and $0.0075 per Series B redeemable preferred share or approximately $3.6 million. In addition, interest payments on our debt are estimated to be $4.1 million for the remainder of 2007.

The ability of the Life Companies to pay dividends to FBL Financial Group, Inc. is limited by law to earned profits (statutory unassigned surplus) as of the date the dividend is paid, as determined in accordance with accounting practices prescribed by insurance regulatory authorities of the State of Iowa. In addition, under the Iowa Insurance Holding Company Act, the Life Companies may not pay an “extraordinary” dividend without prior notice to and approval by the Iowa Insurance Commissioner. An “extraordinary” dividend is defined under the Iowa Insurance Holding Company Act as any dividend or distribution of cash or other property whose fair market value, together with that of other dividends or distributions made within the preceding 12 months, exceeds the greater of (i) 10% of policyholders’ surplus (total statutory capital stock and statutory surplus) as of December 31 of the preceding year, or (ii) the statutory net gain from operations of the insurer for the 12-month period ending December 31 of the preceding year. During 2007, the maximum amount legally available for distribution to FBL Financial Group, Inc. without further regulatory approval, from Farm Bureau Life is $38.3 million and from EquiTrust Life is $32.8 million. However, distributions from Farm Bureau Life are not available without prior approval until December 2007 due to the timing and amount of dividend payments made during 2006.

FBL Financial Group, Inc. expects to rely on available cash resources to make dividend payments to its stockholders and interest payments on its debt for the remainder of 2007. During the nine-month period in 2007, Farm Bureau Life obtained regulatory approval and paid dividends totaling $7.5 million. It is anticipated that Farm Bureau Life will pay dividends totaling $2.5 million in the fourth quarter of 2007.

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FBL Financial Group, Inc. September 30, 2007

We may from time to time review potential acquisition opportunities. It is anticipated that funding for any such acquisition would be provided from available cash resources, debt or equity financing. As of September 30, 2007, we had no material commitments for capital expenditures. The parent company had available cash and investments totaling $106.5 million at September 30, 2007.

Insurance Operations

The Life Companies’ cash inflows consist primarily of premium income, deposits to policyholder account balances, income from investments, sales, maturities and calls of investments, repayments of investment principal and proceeds from call option exercises. In addition, EquiTrust Life receives capital contributions from FBL Financial Group to help fund its growth. The Life Companies’ cash outflows are primarily related to withdrawals of policyholder account balances, investment purchases, payment of policy acquisition costs, policyholder benefits, income taxes, dividends and current operating expenses. Life insurance companies generally produce a positive cash flow which may be measured by the degree to which cash inflows are adequate to meet benefit obligations to policyholders and normal operating expenses as they are incurred. The remaining cash flow is generally used to increase the asset base to provide funds to meet the need for future policy benefit payments and for writing new business. The Life Companies’ liquidity positions continued to be favorable in the third quarter of 2007, with cash inflows at levels sufficient to provide the funds necessary to meet their obligations.

For the life insurance operations, cash outflow requirements for operations are typically met from normal premium and deposit cash inflows. This has been the case for all reported periods as the Life Companies’ continuing operations and financing activities relating to interest sensitive and index products provided funds totaling $972.6 million in the nine months ended September 30, 2007 and $1,208.6 million in the 2006 period. Positive cash flow from operations is generally used to increase the insurance companies’ fixed maturity securities and other investment portfolios. In developing their investment strategy, the Life Companies establish a level of cash and securities which, combined with expected net cash inflows from operations, maturities of fixed maturity investments and principal payments on mortgage and asset-backed securities and mortgage loans, are believed adequate to meet anticipated short-term and long-term benefit and expense payment obligations.

We anticipate that funds to meet our short-term and long-term capital expenditures, cash dividends to stockholders and operating cash needs will come from existing capital and internally generated funds. We believe that the current level of cash, available-for-sale and short-term securities, combined with expected net cash inflows from operations, maturities of fixed maturity investments, principal payments on mortgage and asset-backed securities and mortgage loans and premiums and deposits on our insurance products, are adequate to meet our anticipated cash obligations for the foreseeable future. Our investment portfolio at September 30, 2007, included $64.0 million of short-term investments, $170.1 million of cash and $1,176.2 million in carrying value of U.S. Government and U.S. Government agency backed securities that could be readily converted to cash at or near carrying value.

Contractual Obligations

In the normal course of business, we enter into insurance contracts, financing transactions, lease agreements or other commitments which are necessary or beneficial to our operations. These commitments may obligate us to certain cash flows during future periods. As of December 31, 2006, we had contractual obligations totaling $19,926.8 million with payments due as follows: less than one year – $928.2 million, one-to-three years – $1,845.9 million, four-to-five years – $1,959.2 million and after five years – $15,193.5 million. On March 12, 2007, we completed our $100.0 million Senior Notes offering which is due March 15, 2017. There have been no other material changes to our total contractual obligations since December 31, 2006.

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FBL Financial Group, Inc. September 30, 2007

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the market risks of our financial instruments since December 31, 2006.

ITEM 4. CONTROLS AND PROCEDURES

At the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our internal control over financial reporting changes from time-to-time as we modify and enhance our systems and processes to meet our dynamic needs. Changes are also made as we strive to be more efficient in how we conduct our business. Any significant changes in controls are evaluated prior to implementation to help ensure the continued effectiveness of our internal controls and internal control environment. While changes have taken place in our internal controls during the quarter ended September 30, 2007, there have been no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) The following table sets forth issuer purchases of equity securities for the quarter ended September 30, 2007.

					(c) Total		(d) Maximum
					Number of		Number (or
					Shares (or		Approximate
					Units)		Dollar Value)
					Purchased as		of Shares (or
					Part of		Units) that
	(a) Total		(b) Average		Publicly		May Yet Be
	Number of		Price Paid		Announced		Purchased
	Shares (or Units)		per Share (or		Plans or		Under the
Period	Purchased (1)		Unit) (1)		Programs		Plans or Programs
July 1, 2007 through July 31, 2007		—	$	—		Not applicable		Not applicable
August 1, 2007 through August 31, 2007		—		—		Not applicable		Not applicable
September 1, 2007 through September 30, 2007		601		40.36		Not applicable		Not applicable
Total		601	$	40.36

(1) Our Amended and Restated 1996 and 2006 Class A Common Stock Compensation Plans (the Plans) provides for the grant of incentive stock options, nonqualified stock options, bonus stock, restricted stock and stock appreciation rights to directors, officers and employees. Under the Plans, the purchase price for any shares purchased pursuant to the exercise of an option shall be paid in full upon such exercise in cash, by check or by transferring shares of Class A common stock to the Company. Activity in this table represents Class A common shares returned to the Company in connection with the exercise of employee stock options.

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FBL Financial Group, Inc. September 30, 2007

ITEM 6. EXHIBITS

(a) Exhibits:

3(i)(a)	Restated Articles of Incorporation, filed with Iowa Secretary of State March 19, 1996 (G)
3(i)(b)	Articles of Amendment, Designation of Series A Preferred Stock, filed with Iowa Secretary of State April 30, 1996 (G)
3(i)(c)	Articles of Amendment, Designation of Series B Preferred Stock, filed with Iowa Secretary of State May 30, 1997 (G)
3(i)(d)	Articles of Correction, filed with Iowa Secretary of State October 27, 2000 (G)
3(i)(f)	Articles of Amendment, filed with Iowa Secretary of State May 15, 2003 (G)
3(i)(g)	Articles of Amendment, filed with Iowa Secretary of State May 14, 2004 (G)
3(ii)(a)	Second Restated Bylaws, adopted May 14, 2004 (G)
3(ii)(b)	Amendment to Article VI of Second Restated Bylaws, adopted May 16, 2007 (Q)
4.1	Form of Class A Common Stock Certificate of the Registrant (A)
4.2	Restated Stockholders’ Agreement Regarding Management and Transfer of Shares of Class B Common Stock of FBL Financial Group, Inc. dated as of March 31, 2004 (G)
4.3	Certificate of Trust; Declaration of Trust of FBL Financial Group Capital Trust dated May 30, 1997, including in Annex I thereto the form of Trust Preferred Security and the form of Trust Common Security; Subordinated Deferrable Interest Note Agreement dated May 30, 1997 between FBL Financial Group, Inc. and FBL Financial Group Capital Trust, including therein the form of Subordinated Deferrable Interest Note; Preferred Securities Guarantee Agreement of FBL Financial Group, Inc., dated May 30, 1997 (B)
4.4(a)	Master Transaction Agreement between Federal Home Loan Bank of Des Moines and Farm Bureau Life Insurance Company dated May 1, 2006 (N)
4.4(b)	Advance Agreement between Federal Home Loan Bank of Des Moines and Farm Bureau Life Insurance Company dated September 12, 2006 (N)
4.5	Amended and Restated Credit Agreement and related Schedules and Exhibits dated as of October 7, 2005 between FBL Financial Group, Inc. and LaSalle Bank National Association, along with Amendment No. 1 dated as of January 20, 2006 and Amendment No. 2 dated as of March 12, 2007. These documents are not filed pursuant to the exception of Regulation S-K, Item 601(b)(4)(iii)(A); FBL Financial Group, Inc. agrees to furnish these documents to the Commission upon request.
4.6	Indenture, dated as of April 12, 2004, between FBL Financial Group, Inc. and Deutsche Bank Trust Company Americas as Trustee (F)
4.7	Form of 5.85% Senior Note Due 2014 (F)
4.8	Revolving Demand Note, dated as of September 20, 2004, between Farm Bureau Life Insurance Company and Farm Bureau Mutual Insurance Company (H)
4.9	Revolving Demand Note, dated as of September 20, 2004, between EquiTrust Life Insurance Company and Farm Bureau Mutual Insurance Company (H)
4.10	Indenture, dated as of March 12, 2007, between FBL Financial Group, Inc. and LaSalle Bank National Association as Trustee (P)
4.11	Form of 5.875% Senior Note Due 2017 (P)
10.1	Form of 2006 Class A Common Stock Compensation Plan adopted May 17, 2006 (M) *
10.1(a)	Form of Stock Option Agreement, pursuant to the FBL Financial Group, Inc. 2006 Class A Common Stock Compensation Plan (M) *
10.2	Trademark License from the American Farm Bureau Federation to Farm Bureau Life Insurance Company dated May 20, 1987 (A)
10.3	Membership Agreement between American Farm Bureau Federation to the Iowa Farm Bureau Federation dated February 13, 1987 (A)
10.4	Form of Royalty Agreement with Farm Bureau organizations (J)
10.5	Executive Salary and Bonus Deferred Compensation Plan, effective June 1, 2005 (K) *
10.6	2006 Revised Rules for Payment of Meeting Fees, Retainers and Expenses to the Board of Directors (L) *
10.7	Form of Services Agreement between FBL Financial Group, Inc. and Farm Bureau Management Corporation, dated as of January 1, 1996 (A)

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FBL Financial Group, Inc. September 30, 2007

10.8	Management Services Agreement between FBL Financial Group, Inc. and Farm Bureau Mutual effective as of January 1, 2003 (E)
10.10	Management Performance Plan (2007) sponsored by FBL Financial Group, Inc. (O)*
10.14	Lease Agreement dated as of March 31, 1998 between IFBF Property Management, Inc., FBL Financial Group, Inc. and Farm Bureau Mutual Insurance Company (C)
10.15	Building Management Services Agreement dated as of March 31, 1998 between IFBF Property Management, Inc. and FBL Financial Group, Inc. (C)
10.16	Coinsurance Agreement between EquiTrust Life Insurance Company and American Equity Investment Life Insurance Company, dated December 29, 2003 (E)
10.17	First Amendment to the Coinsurance Agreement by and between EquiTrust Life Insurance Company and American Equity Investment Life Insurance Company, effective August 1, 2004 (H)
10.18	Form of Change In Control Agreement Form B, dated as of April 22, 2002 between the Company and each of James W. Noyce, Stephen M. Morain, John M. Paule and JoAnn Rumelhart, and dated as of November 24, 2004 between the Company and Bruce A. Trost, and January 1, 2007 between the Company and James P. Brannen (D) *
10.19	Form of Change In Control Agreement Form B, dated as of April 22, 2002 between the Company and each of Douglas W. Gumm, Donald J. Seibel and Lou Ann Sandburg, dated as of November 24, 2004 between the Company and David T. Sebastian, and dated as of August 16, 2007 between the Company and Richard J. Kypta (D) *
10.21	Form of Restricted Stock Agreement, dated as of January 17, 2005 between the Company and each of James W. Noyce, Stephen M. Morain, John M. Paule, JoAnn Rumelhart, Bruce A. Trost, James P. Brannen, Douglas W. Gumm, Lou Ann Sandburg and David T. Sebastian (J) *
10.22	Form of Restricted Stock Agreement, dated as of January 16, 2006 between the Company and each of James W. Noyce, Stephen M. Morain, John M. Paule, JoAnn Rumelhart, Bruce A. Trost, James P. Brannen, Douglas W. Gumm, Lou Ann Sandburg and David T. Sebastian (L) *
10.23	Form of Early Retirement Agreement, dated June 1, 1993 executed by the Company and each of Stephen M. Morain, James W. Noyce and JoAnn Rumelhart (L) *
10.24	Summary of Named Executive Officer Compensation *
10.25	Form of Restricted Stock Agreement, dated as of February 20, 2007 between the Company and each of James W. Noyce, Stephen M. Morain, John M. Paule, JoAnn Rumelhart, Bruce A. Trost, James P. Brannen, Douglas W. Gumm, Lou Ann Sandburg, David T. Sebastian and Donald J. Seibel (O) *
31.1	Certification Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* exhibit relates to a compensatory plan for management or directors

Incorporated by reference to:

(A)	Form S-1 filed on July 11, 1996, File No. 333-04332
(B)	Form 8-K filed on June 6, 1997, File No. 001-11917
(C)	Form 10-Q for the period ended March 31, 1998, File No. 001-11917
(D)	Form 10-Q for the period ended June 30, 2002, File No. 001-11917
(E)	Form 10-K for the period ended December 31, 2003, File No. 001-11917
(F)	Form S-4 filed on May 5, 2004, File No. 333-115197
(G)	Form 10-Q for the period ended June 30, 2004, File No. 001-11917
(H)	Form 10-Q for the period ended September 30, 2004, File No. 001-11917

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FBL Financial Group, Inc. September 30, 2007

(I)	Form 10-K for the period ended December 31, 2004, File No. 001-11917
(J)	Form 10-Q for the period ended March 31, 2005, File No. 001-11917
(K)	Form 10-Q for the period ended June 30, 2005, File No. 001-11917
(L)	Form 10-K for the period ended December 31, 2005, File No. 001-11917
(M)	Form 10-Q for the period ended June 30, 2006, File No. 001-11917
(N)	Form 10-Q for the period ended September 30, 2006, File No. 001-11917
(O)	Form 10-K for the period ended December 31, 2006, File No. 001-11917
(P)	Form S-4 filed on April 6, 2007, File No. 333-141949
(Q)	Form 8-K filed on May 16, 2007, File No. 001-11917

44

FBL Financial Group, Inc. September 30, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 30, 2007
	FBL FINANCIAL GROUP, INC.
	By	/s/ James W. Noyce
		James W. Noyce
		Chief Executive Officer (Principal Executive Officer)
	By	/s/ James P. Brannen
		James P. Brannen
		Chief Financial Officer (Principal Financial and Accounting Officer)

45