The board of Farm Bureau Mutual Insurance Co. in West Des Moines, Iowa, has approved a plan to 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 Co. (MHC), and Farm Bureau Mutual will be reorganized as a stock property and casualty insurance company named Farm Bureau Property & Casualty Insurance Co.
Farm Bureau Mutual said it will also organize an intermediate holding company named Farm Bureau Multi-State Services, Inc., which will own all Farm Bureau Property & Casualty Insurance Co. 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 it has no definite plans to sell stock to outside investors, the company said it may pursue such a sale in the future as a part of its business plan.
The terms of existing policies will not be affected by the reorganization, and related membership interests and rights under policyholders’ contract of insurance will remain unchanged, according to the company.
“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 Co. “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.”
A meeting of Farm Bureau Mutual’s policyholders will be held on Oct. 30 on the plan of reorganization.
Farm Bureau companies underwrite 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 Co. was established in 1939 and has been rated A (Excellent) by A.M. Best for more than 65 years.
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