Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Steven Schwartz - Raymond James.
Steven Schwartz - Raymond James
I got a few; I guess I will start with just on the capital numbers that you gave. Iowa has changed a couple of rules. They are now including deferred tax assets, I guess to some extent, as well as they changed the rule with regards to how you value the derivatives for the indexed annuities. Jim, do you have a sense about how much that added? Did you include any of that in there?
Jim Brannen
Yes, it’s in there. I’d say on the deferred tax side, three subsidiaries about a little north of $20 million and on the index annuity change, I guess around 61 and I guess I want to talk a little bit about that. I mean, folks are distinguishing that Iowa companies are getting the deferred tax benefit and I really think that it possibly is just an advanced benefit in the sense that NAIC is going to probably take that issue up again in ?09 here again and likely other companies will get it as well.
So, on the indexed annuity change, that was really a method that was fixing a method that was very detrimental and non-economic for the companies that wrote indexed annuities in terms of the statutory accounting rules. So, that was really restoring quite a bit of non-economic losses that were already booked throughout the year in 2008, as the equity markets declined and the value of the options declined on our books.
Although, while the options decline on the books, we’re also not going to provide indexed credits from those options either so, really that was a bit of a restoration and an equity issue to get the accounting right for these indexed annuities on a statutory basis.
Steven Schwartz - Raymond James
Yes, I agree with the indexed annuity part that the old way they did it made no sense whatsoever. The $20 million for each on the deferred tax asset, would you know how many basis points of RBC that would be for each company?
Don Seibel
I have it right here. For Farm Bureau Life, that was 21 points and for EquiTrust Life that was 16.
Steven Schwartz - Raymond James
Then if I could, the $7 million of savings that you noted, would any of that wind up or would any of that I guess, have round up in DAC and therefore not really go to the bottom line?
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