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Farm Bureau Mutual Insurance Company Announces Plan to Form Mutual Holding Company
WEST DES MOINES, Iowa (September 17, 2009) – Farm Bureau Mutual Insurance Company announced today that its Board of Directors has unanimously approved a plan of reorganization under which the company (Farm Bureau Mutual) will reorganize into a mutual holding company structure. The plan is subject to approvals by the Iowa Insurance Commissioner and the company’s policyholders.
With the required approvals, Farm Bureau Mutual will form a mutual insurance holding company to be named Farm Bureau Mutual Holding Company (MHC), and Farm Bureau Mutual will be reorganized as a stock property and casualty insurance company named Farm Bureau Property & Casualty Insurance Company. Farm Bureau Mutual will also organize an intermediate holding company named Farm Bureau Multi-State Services, Inc. All Farm Bureau Property & Casualty Insurance Company shares will be owned by Farm Bureau Multi-State Services, Inc. All Farm Bureau Multi-State Services, Inc. shares will be owned by MHC. While there are no definite plans to sell stock to outside investors, the company may pursue such a sale in the future as a part of its business plan.
The terms of existing policies will not be impacted by the reorganization, and related membership interests and rights under policyholders’ contract of insurance will remain unchanged.
“Historically, the earnings or profits from the business are cyclical in nature, which can make it difficult to plan future growth and expanded service to policyholders,” said Bruce Trost, Executive Vice President of Farm Bureau Mutual Insurance Company. “The strategic flexibility and access to capital the reorganization makes possible will help position the company for a level of growth that surpasses what it could achieve as a mutual company,” he added.
A special meeting of Farm Bureau Mutual’s policyholders will be held at 1:00 p.m. CST on Friday, October 30, 2009 in the company’s home office at 5400 University Avenue, West Des Moines, Iowa. Policyholders will be asked to approve the plan of reorganization, including the articles of incorporation and bylaws of the companies created as a result of the reorganization. Additional information about the meeting and the voting process is being mailed to current policyholders.
About Farm Bureau Financial Services
Through an exclusive, multi-state agent force, the companies affiliated with the Farm Bureau Financial Services brand underwrite, market and distribute a broad range of financial services products, including property-casualty insurance products and services, life insurance, investments and annuities to individuals and small businesses within a marketing territory that includes 15 states.
Farm Bureau Mutual Insurance Company was established in 1939 and has been rated A (Excellent) by A.M. Best for more than 65 years.
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