To Our Valued Distribution Partners:

On September 26, 2008, A.M. Best downgraded the financial strength ratings of EquiTrust Life Insurance Company to A- (Excellent) from A (Excellent). In addition, they downgraded the issuer credit rating of FBL Financial Group, Inc., the holding company, to bbb- from bbb. A.M. Best’s outlook for these ratings is negative. This ratings downgrade coincides with A.M. Best’s recent change in outlook for the entire life insurance industry to negative from stable.

We at FBL Financial Group are disappointed with A.M. Best’s decision regarding our ratings. We believe they have overreacted because (1) both of our companies currently have strong capital levels and (2) we had previously implemented business plans that deal with the concerns they’ve now raised. Because of the tumultuous financial markets, 2008 has been a challenging year for FBL and for all insurance companies. While the current environment is difficult, it is manageable and we are navigating through it logically and pragmatically.

According to our most recent pro forma BCAR (Best’s Capital Adequacy Ratio) calculations as of June 30, 2008, EquiTrust Life held capital at an A.M. Best rating level of A+. This capital level is several times the amount required by the insurance regulators in the states where we do business. We remain committed to maintaining the capital levels necessary for an A rating from A.M. Best and Standard & Poor’s.

A.M. Best expressed concern about the level of investment impairments we had in the first and second quarters of this year, which we acknowledge, and the high level of growth in our annuity reserves. They believe these items reduce our financial flexibility.

To address these issues, we have already implemented plans to manage EquiTrust Life’s sales volumes to levels that will allow it to be self-sustaining from a capital perspective. We are also in the process of working to raise additional debt capital in order to have excess capital and additional financial flexibility if needed. We view this as prudent given the existing environment where all companies with diversified investment portfolios could see possible future impairments. At June 30, 2008, our debt-to-total capitalization ratio was 17.7%, so we have adequate room to increase our leverage.

We have a successful track record of meeting needs and fulfilling promises throughout our 70-year history. We will continue to manage prudently for the benefit of our policyholders, employees, agents and shareholders.

Sincerely,

James W. Noyce
Chief Executive Officer