Adjustment. If the bailout rate equals the Index Rate Cap for your Risk Control Account, you will not be eligible to transfer your Risk Control Account Value under the Bailout Provision. For example, if the bailout rate for the Secure Account is set at 1.00% and the Index Rate Cap for the Secure Account is set at 1.00%, you would not be eligible to transfer under the Bailout Provision. If you intend to withdraw Risk Control Account Value transferred from a Risk Control Account under the Bailout Provision, the Risk Control Account Value would first be transferred to the Variable Subaccounts according to your instructions and then withdrawn from the Variable Subaccounts without the application of a Market Value Adjustment. The amount withdrawn from the Variable Subaccounts may be subject to a Surrender Charge. Partial withdrawals and surrender of the Contract by an Owner before age 59½ may also be subject to a ten percent tax. See “Federal Income Tax Matters” on page 59. We must receive your Authorized Request under the Bailout Provision in Good Order during the 30-day period following the Risk Control Account Anniversary. At any time the Index Rate Cap for your Risk Control Account is less than the bailout rate specified on your Contract Data Page, we may, at our discretion, restrict transfers into that Risk Control Account.

DEATH BENEFIT

Death of the Owner

If the Owner dies during the Accumulation Period (if there are joint Owners, the Death Benefit will become payable after the first joint Owner dies), a Death Benefit will become payable to the Beneficiary. We will pay the Death Benefit after we receive the following at our Administrative Office in a form and manner satisfactory to us:

	•		Proof of Death of the Owner while the Contract is in force;
	•		our claim form from each Beneficiary, properly completed; and
	•		any other documents we require.

No Surrender Charges or Market Value Adjustments will apply to the Death Benefit.

Death of Annuitant While the Owner is Living

If an Owner is a natural person and the Annuitant dies during the Accumulation Period, the following will occur: (i) if there is a surviving Joint Annuitant, the surviving Joint Annuitant will become the Annuitant; and (ii) if there is no Joint Annuitant, the Owner will become the Annuitant (Primary Owner if Joint Owner). If, however, the Owner is not a natural person and the Annuitant dies during the Accumulation Period, the following will occur: (i) if there is a surviving Joint Annuitant, the surviving Joint Annuitant will become the

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Annuitant; and (ii) if there is no Joint Annuitant, the Beneficiary must elect to receive the Death Benefit proceeds. If you have any questions concerning the criteria you should use when choosing Annuitants under the Contract, consult your financial professional.

Death Benefit Payment Options

The following rules apply to the payment of the Death Benefit under a Non-Qualified Contract:

	•		Spouses – If the sole Beneficiary is the surviving Spouse of the deceased Owner, then he or she may choose to continue the Contract and become the new Owner (except under certain Qualified Contracts). At the death of the surviving Spouse, this provision may not be used again, even if that surviving Spouse remarries. In that case, the rules for non-Spouses will apply. A surviving Spouse may also elect to receive the Death Benefit proceeds in a lump sum, apply the proceeds to an Income Payout Option, or receive the Death Benefit proceeds within five years of the date of the Owner’s death.
	•		Non-Spouses – If the Beneficiary is not the surviving Spouse of the deceased Owner, then this Contract cannot be continued. Instead, upon the death of any Owner, the Beneficiary must choose one of the following:

	•		Receive the Death Benefit (if the Beneficiary is a natural person) pursuant to one of the Income Payout Options. Payments under an Income Payout Option must begin within one year of the Owner’s death and must not extend beyond a period certain equal to the Beneficiary’s life expectancy;
	•		Receive the Death Benefit in one lump sum following our receipt of Proof of Death; or
	•		Receive the Death Benefit in one lump sum, deferred for up to five years from the date of the Owner’s death.

Upon receipt of Proof of Death, the Beneficiary must instruct us how to treat the proceeds subject to the distribution rules discussed above. Other minimum distribution rules apply to Qualified Contracts.

Death of Owner or Annuitant After the Payout Date

If an Annuitant dies during the Payout Period, remaining income payments or Death Benefit proceeds, if any, will be distributed as provided by the Income Payout Option in effect. The Income Payout Option in effect will determine whether additional income payments or a Death Benefit apply.

If an Owner dies during the Payout Period, any remaining income payments will be distributed at least as rapidly as provided by the Income Payout Option in effect.

Interest on Death Benefit Proceeds

Interest will be paid on lump sum Death Benefit proceeds if required by state law. Interest, if any, will be calculated at the rate and for the time period required by state law.

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Abandoned Property Requirements

Every state has unclaimed property laws which generally declare annuity contracts to be abandoned after a period of inactivity of three to five years from the date the Death Benefit is due and payable. For example, if the payment of a Death Benefit has been triggered, but, if after a thorough search, we are still unable to locate the Beneficiary, or the Beneficiary does not come forward to claim the Death Benefit in a timely manner, the Death Benefit will be paid to the abandoned property division or unclaimed property office of the state in which the Beneficiary or you last resided, as shown on our books and records, or to our state of domicile. The “escheatment” is revocable, however, and the state is obligated to pay the Death Benefit (without interest) if your Beneficiary steps forward to claim it with the proper documentation. To prevent such escheatment, it is important that you update your Beneficiary designations, including addresses, if and as they change. To make such changes, please contact us by writing to us or calling us at our Administrative Office.

INCOME PAYMENTS – THE PAYOUT PERIOD

Payout Date

When you purchase the Contract, we will set the Payout Date as the Contract Anniversary following the Annuitant’s 95^th birthday. If there are Joint Annuitants, we will set the Payout Date based on the age of the oldest Joint Annuitant. Please refer to the Data Page of your Contract for details.

You may change the Payout Date by sending an Authorized Request in Good Order to our Administrative Office provided: (i) the request is made while an Owner is living; (ii) the request is received at our Administrative Office at least 30 days before the anticipated Payout Date; (iii) the requested Payout Date is at least two years after the Contract Issue Date; and (iv) the requested Payout Date is no later than the anticipated Payout Date as shown on your Contract Data Page. Any such change is subject to any maximum maturity age restrictions that may be imposed by law.

Payout Period

The Payout Period is the period of time that begins on the Payout Date and continues until we make the last payment as provided by the Income Payout Option chosen. On the first day of the Payout Period, the Contract Value will be applied to the Income Payout Option you selected. A Surrender Charge (in the case of Series B Contracts only) and Market Value Adjustment will not apply to proceeds applied to an Income Payout Option. You cannot change the Annuitant or Owner on or after the Payout Date for any reason.

Terms of Income Payments

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The Owner may name the person to receive income payments. If no person is named, payments will be made to the Owner.

We will make the first income payment on the Payout Date. We may require proof of age and gender (if the Income Payout Option Rates is based on gender) of the Annuitant/Joint Annuitants before making the first income payment. To receive income payments, the Annuitant/Joint Annuitant must be living on the Payout Date and on the date that each subsequent payment is due as required by the terms of the Income Payout Option. We may require proof from time to time that this condition has been met.

INCOME PAYOUT OPTIONS

Election of an Income Payout Option

You and/or the Beneficiary may elect to receive one of the Income Payout Options described under “Options” below. The Income Payout Option and distribution, however, must satisfy the applicable distribution requirements of Section 72(s) or 401(a)(9) of the Internal Revenue Code, as applicable.

The election of an Income Payout Option must be made by Authorized Request. The election is irrevocable after the payments commence. The Payee may not assign or transfer any future payments under any option.

The amount applied under each option must be at least $2,500, or the amount required to provide an initial monthly income payment of $20.

We will make income payments monthly, quarterly, semiannually, or annually for the Installment Option. Life Income and Joint Survivor options allow monthly income payments. We will also furnish the amount of such payments on request. Payments that are less than $20 will only be made annually.

	•		Life Income Option with a 10-Year Guaranteed Period Certain (as described below) for Contracts with one Annuitant; and
	•		Joint and Survivor Life Income Option with a 10-Year Guaranteed Period Certain (as described below) for Contracts with two Annuitants.

You may change your Income Payout Option any time before payments begin on the Payout Date.

Options

Option 1 – Installment Option . We will pay monthly income payments for a chosen number of years, not less than 10, nor more than 30. If the Annuitant dies before income payments have been made for the chosen number of years: (a) income payments will be continued for the remainder of the period to the Payee; or (b) the present value of the remaining income payments, computed at the interest rate used to create the Option 1 rates, will be paid to the Payee or to the Owner, if there is no surviving Payee. For purposes of the present value calculation, guaranteed rates will be used.

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Option 2 – Life Income Option – Guaranteed Period Certain. We will pay monthly income payments for as long as the Annuitant lives. If the Annuitant dies before all the income payments have been made for the guaranteed period certain: (a) income payments will be continued for the remainder of the guaranteed period to the Payee; or (b) the present value of the remaining income payments, computed at the interest rate used to create the Option 2 rates, will be paid to the Payee or to the Owner, if there is no surviving Payee. For purposes of the present value calculation, guaranteed rates will be used. The guaranteed period certain choices are 0 (life income only), 5, 10, 15, or 20 years.

Option 3 – Joint and Survivor Life Income Option – Guaranteed Period Certain. We will pay monthly income payments for as long as either of the Annuitants lives. If at the death of the second surviving Annuitant, income payments have been made for less than 10 years: (a) income payments will be continued for the remainder of the guaranteed period certain to the Payee; or (b) the present value of the remaining income payments, computed at the interest rate used to create the Option 3 rates, will be paid to the Payee or to the Owner, if there is no surviving Payee. For purposes of the present value calculation, guaranteed rates will be used.

The Income Payout Options described above may not be offered in all states. Further, we may offer other Income Payout Options. More than one option may be elected. If your Contract is a Qualified Contract, not all options may satisfy required minimum distribution rules. Consult a tax advisor. Option 2 and Option 3 pay monthly income payments. We do allow partial annuitization.

FEDERAL INCOME TAX MATTERS

The following discussion is general in nature and is not intended as tax advice. Each person concerned should consult a competent tax adviser. No attempt is made to consider any applicable state or other income tax laws, any state and local estate or inheritance tax, or other tax consequences of ownership or receipt of distributions under a Contract.

When you invest in an annuity contract, you usually do not pay taxes on your investment gains until you withdraw the money —generally for retirement purposes. If you invest in an annuity as part of an individual retirement plan, pension plan or employer-sponsored retirement program, your contract is called a Qualified Contract. If your annuity is independent of any formal retirement or pension plan, it is termed a Non-Qualified Contract. The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan. See “Non-Natural Person” below for a discussion of Non-Qualified Contracts owned by persons such as corporations and trusts that are not natural persons.

Tax Status of the Contracts

Tax law imposes several requirements that annuities must satisfy in order to receive the tax treatment normally accorded to annuity contracts.

Required Distributions. In order to be treated as an annuity contract for Federal income tax purposes, Section 72(s) of the Internal Revenue Code requires any Non-Qualified Contract to contain certain provisions specifying how your interest in the Contract will be distributed in the event of the death of an Owner of the Contract. Specifically, Section 72(s) requires that (i) if any Owner dies on or after the annuity starting date, but prior to the time the entire interest in the Contract has been distributed, the entire interest in the Contract will be distributed at least as rapidly as under the method of distribution being used as of the date of such Owner’s death; and (ii) if any Owner dies prior to the annuity starting date, the entire interest in the Contract will be distributed within five years after the date of such Owner’s death unless distributions are made over life or life expectancy, beginning within one year of the death of the Owner.

The Non-Qualified Contracts contain provisions that are intended to comply with these Internal Revenue Code requirements, although no regulations interpreting these requirements have yet been issued. We intend to review such provisions and modify them if necessary to assure that they comply with the

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applicable requirements when such requirements are clarified by regulation or otherwise.

Other rules may apply to Qualified Contracts.

Taxation of Non-Qualified Contracts

Non-Natural Person. If a non-natural person (e.g., a corporation or a trust) owns a Non-Qualified Contract, the taxpayer generally must include in income any increase in the excess of the account value over the investment in the Contract (generally, the Purchase Payments or other consideration paid for the Contract) during the taxable year. There are some exceptions to this rule and a prospective Owner that is not a natural person should discuss these with a tax adviser.

The following discussion generally applies to Contracts owned by natural persons.

Withdrawals. When a withdrawal from a Non-Qualified Contract occurs, the amount received will be treated as ordinary income subject to tax up to an amount equal to the excess (if any) of the Contract Value, without adjustment for any applicable Surrender Charge, immediately before the distribution over the Owner’s investment in the Contract (generally, the Purchase Payments or other consideration paid for the Contract, reduced by any amount previously distributed from the Contract that was not subject to tax) at that time. The Contract Value immediately before a withdrawal may have to be increased by any positive Market Value Adjustment that results from a withdrawal. There is, however, no definitive guidance on the proper tax treatment of Market Value Adjustments and you may want to discuss the potential tax consequences of a Market Value Adjustment with your tax adviser. In the case of a surrender under a Non-Qualified Contract, the amount received generally will be taxable only to the extent it exceeds the Owner’s investment in the Contract.

In the case of a withdrawal under a Qualified Contract, a ratable portion of the amount received is taxable, generally based on the ratio of the “investment in the contract” to the individual’s total account balance or accrued benefit under the retirement plan. The “investment in the contract” generally equals the amount of any non-deductible Purchase Payment paid by or on behalf of any individual. In many cases, the “investment in the contract” under a Qualified Contract can be zero.

Penalty Tax on Certain Withdrawals.  In the case of a distribution from a Non-Qualified Contract and Qualified Contract, there may be an imposed federal tax penalty equal to ten percent of the amount treated as income. In general, however, there is no penalty on distributions if they are:

•		made on or after the taxpayer reaches age 59½;
•		made on or after the death of an Owner;
•		attributable to the taxpayer’s becoming disabled; or
•		made as part of a series of substantially equal periodic payments for the life (or life expectancy) of the taxpayer.

Income Payments. Although tax consequences may vary depending on the payout option elected under an annuity contract, a portion of each income payment is generally not taxed and the remainder is taxed as ordinary income. The non-taxable portion of an income payment is generally determined in a manner that is designed to allow you to recover your investment in the Contract ratably on a tax-free basis over the expected stream of income payments, as determined when income payments start. Once your investment in the Contract has been fully recovered, however, the full amount of each income payment is subject to tax as ordinary income.

Partial Annuitization. Under a new tax provision enacted in 2010, if part of an annuity contract’s value is applied to an annuity option that provides payments for one or more lives or for a period of at least ten

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years, those payments may be taxed as annuity payments instead of withdrawals. The payment options under the Contract are intended to qualify for this “partial annuitization” treatment.

Taxation of Death Benefit Proceeds. Amounts may be distributed from a Contract because of your death or the death of the Annuitant. Generally, such amounts are includible in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as surrender of the Contract, or (ii) if distributed under a payout option, they are taxed in the same way as income payments.

Withholding.  Annuity distributions are generally subject to withholding for the recipient’s federal income tax liability. Recipients can generally elect, however, not to have tax withheld from distributions.

Multiple Contracts. All Non-Qualified deferred annuity contracts that are issued by us (or our affiliates) to the same Owner during any calendar year are treated as one annuity contract for purposes of determining the amount includible in such Owner’s income when a taxable distribution occurs.

Further Information. We believe that the Contracts will qualify as annuity contracts for Federal income tax purposes and the above discussion is based on that assumption.

Taxation of Qualified Contracts

The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan. Your rights under a Qualified Contract may be subject to the terms of the retirement plan itself, regardless of the terms of the Qualified Contract. Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions with respect to the Contract comply with the law.

Individual Retirement Annuities (IRAs), as defined in Section 408 of the Internal Revenue Code, permit individuals to make annual contributions of up to the lesser of a specified dollar amount for the year or the amount of compensation includible in the individual’s gross income for the year. The contributions may be deductible in whole or in part, depending on the individual’s income. Distributions from certain retirement plans may be “rolled over” into an IRA on a tax-deferred basis without regard to these limits. Amounts in the IRA (other than nondeductible contributions) are taxed when distributed from the IRA. A 10% penalty tax generally applies to distributions made before age 59½, unless an exception applies. Distributions that are rolled over to an IRA within 60 days are not immediately taxable, however only one such rollover is permitted each year. Beginning in 2015, an individual can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs that are owned. The limit will apply by aggregating all of an individual’s IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. This limit does not apply to direct trustee-to-trustee transfers or conversation to Roth IRAs.

Roth IRAs, as described in Internal Revenue Code Section 408A, permit certain eligible individuals to contribute to make non-deductible contributions to a Roth IRA in cash or as a rollover or transfer from another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA is generally subject to tax and other special rules apply. The Owner may wish to consult a tax adviser before combining any converted amounts with any other Roth IRA contributions, including any other conversion amounts from other tax years. Distributions from a Roth IRA generally are not taxed, except that, once aggregate distributions exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply to distributions made (i) before age 59½ (subject to certain exceptions), or (ii) during the five taxable years starting with the year in which the first contribution is made to any Roth IRA. A 10% penalty tax may apply to amounts attributable to a conversion from an IRA if they are distributed during the five taxable years beginning with the year in which the conversion was made. Distributions that are rolled over to an IRA within 60 days are not immediately taxable, however only one such rollover is permitted each year. Beginning in 2015, an individual can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs that are owned. The limit will apply by

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aggregating all of an individual’s IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. This limit does not apply to direct trustee-to-trustee transfers or conversions to Roth IRAs.

Other Tax Issues. Qualified Contracts have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan, adoption agreement, or consult a tax adviser for more information about these distribution rules.

Distributions from Qualified Contracts generally are subject to withholding for the Owner’s federal income tax liability. The withholding rate varies according to the type of distribution and the Owner’s tax status. The Owner will be provided the opportunity to elect not have tax withheld from distributions.

“Eligible rollover distributions” from Section 401(a), 403(b), and governmental 457 plans are subject to a mandatory federal income tax withholding of 20%. For this purpose, an eligible rollover distribution is any distribution to an employee (or employee’s spouse or former spouse as Beneficiary or alternate Payee) from such a plan, except certain distributions such as distributions required by the Internal Revenue Code, distributions in a specified annuity form, or hardship distributions. The 20% withholding does not apply, however, to nontaxable distributions or if the employee chooses a “direct rollover” from the plan to a tax-qualified plan, IRA or tax sheltered annuity or to a governmental 457 plan that agrees to separately account for rollover contributions.

Federal Estate Taxes, Gift and Generation-Skipping Transfer Taxes

While no attempt is being made to discuss in detail the Federal estate tax implications of the Contract, a purchaser should keep in mind that the value of an annuity contract owned by a decedent and payable to a Beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the contingent Owner or the actuarial value of the payments to be received by the Beneficiary. Consult an estate planning adviser for more information.

The potential application of these taxes underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios.

Medicare Tax

Distributions from non-qualified annuity policies will be considered “investment income” for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g., earnings) to individuals whose income exceeds certain threshold amounts. Please consult a tax advisor for more information.

Same-Sex Spouses

The Contract provides that upon your death, a surviving spouse may have certain continuation rights that he or she may elect to exercise for the Contract’s Death Benefit and any joint-life coverage under an optional living benefit. All Contract provisions relating to spousal continuation are available only to a person who meets the definition of “spouse” under federal law. The U.S. Supreme Court has held marriages must be recognized for federal law purposes regardless of whether they are same or different sex. Consult a tax adviser for more information on this subject.

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Annuity Purchases By Nonresident Aliens and Foreign Corporations

The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, such purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Additional withholding may occur with respect to entity purchasers (including foreign corporations, partnerships and trusts) that are not U.S. residents. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S., state, and foreign taxation with respect to an annuity contract purchase.

Possible Tax Law Changes

Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation or otherwise. Consult a tax adviser with respect to legislative developments and their effect on the Contract.

We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of the Contract and do not intend the above discussion as tax advice.

Important Information about the Indices

The Contract is not sponsored, endorsed, sold or promoted by Bank of America/Merrill Lynch (“BofA Merrill Lynch”). BofA Merrill Lynch has not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Contract, nor makes any representation or warranty, express or implied, to the Owners of the Contract or any member of the public regarding the Contract or the advisability of investing in the Contract, particularly the ability of the Bank of America/Merrill Lynch Index to track performance of any market or strategy. BofA Merrill Lynch’s only relationship to the Company is the licensing of certain trademarks and trade names and indices or components thereof. The Bank of America/Merrill Lynch Index is determined, composed and calculated by BofA Merrill Lynch without regard to the Company or the Contract or its Owners. BofA Merrill Lynch has no obligation to take the needs of the Company or the Owners of the Contract into consideration in determining, composing or calculating the Bank of America/Merrill Lynch Index. BofA Merrill Lynch is not responsible for and has not participated in the determination of the timing of, prices of, or quantities of the Contract to be issued or in the determination or calculation of the equation by which the Contract is to be priced, sold, purchased, or redeemed. BofA Merrill Lynch has no obligation or liability in connection with the administration, marketing, or trading of the Contract.

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The Contract is not sponsored, endorsed, sold or promoted by Standard & Poor’s, a division of the McGraw-Hill companies, Inc. (“S&P”). S&P makes no representation or warranty, express or implied, to the owners of the Contract or any member of the public regarding the advisability of investing in securities generally or in the Contract particularly or the ability of the S&P 500 Index to track general stock market performance. S&P’s only relationship to the Company is the licensing of certain trademarks and trade names of S&P and of the S&P 500 Index which is determined, composed and calculated by S&P without regard to the Company or the Contract. S&P has no obligation to take the needs of the Company or the Owners of the Contract into consideration in determining, composing or calculating the S&P 500 Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Contract or the timing of the issuance or sale of the Contract or in determination or calculation of the equation by which the Contract is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Contract.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY, OWNERS OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

The S&P 500 Index is a stock market index based on the market capitalizations of 500 leading companies publicly traded in the U.S. stock market, as determined by Standard & Poors. The S&P 500 Index can go up or down based on the stock prices of the 500 companies that comprise the Index. The S&P 500 Index does not include dividends paid on the stocks comprising the Index and therefore does not reflect the full investment performance of the underlying stocks.

The S&P 500 Index is a trademark of Standard & Poors or its affiliates and has been licensed for use by the Company.

MSCI EAFE Index. The Contract is not sponsored, endorsed, sold or promoted by Morgan Stanley Capital International Inc. (“MSCI”). MSCI makes no representation or warranty, express or implied, to the owners of the Contract or any member of the public regarding the advisability of investing in securities generally or in the Contract particularly or the ability of the MSCI EAFE Index to track general stock market performance. MSCI’s only relationship to the Company is in the licensing of certain trademarks and trade names of MSCI and of the MSCI EAFE Index which is determined, composed and calculated by MSCI without regard to the Company or the Contract. MSCI has no obligation to take the needs of the Company or the Owners of the Contract into consideration in determining, composing or calculating the MSCI EAFE Index. MSCI is not responsible for and has not participated in the determination of the prices and amount of the Contract or the timing of the issuance or sale of the Contract or in determination or calculation of the equation by which the Contract is to be converted into cash. MSCI has no obligation or liability in connection with the administration, marketing or trading of the Contract.

MSCI DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE MSCI EAFE INDEX OR ANY DATA INCLUDED THEREIN AND MSCI SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. MSCI MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE COMPANY, OWNERS OF THE PRODUCT,

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OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE MSCI INDEX OR ANY DATA INCLUDED THEREIN. MSCI MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE MSCI EAFE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL MSCI HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

The MSCI EAFE Index is an equity index which captures large and mid cap representation across developed markets countries around the world, excluding the U.S. and Canada. With 912 constituents, the MSCI EAFE Index covers approximately 85% of the free float-adjusted market capitalization in each country.

The MSCI EAFE Index is a trademark of MSCI or its affiliates and has been licensed for use by the Company.

OTHER INFORMATION

Distribution of the Contract

We offer the Contract on a continuous basis. We have entered into a distribution agreement with our affiliate, CUNA Brokerage Services, Inc., for the distribution of the Contract. MEMBERS Life Insurance Company and CUNA Brokerage Services, Inc. are both wholly-owned subsidiaries of CUNA Mutual Investment Corporation. The principal business address of CUNA Brokerage Services, Inc. is 2000 Heritage Way, Waverly, IA 50677. Contracts are sold by licensed insurance agents (the “Selling Agents”) in those states where the Contract may be lawfully sold. Such Selling Agents will be registered representatives of CUNA Brokerage Services, Inc. or other affiliated and unaffiliated broker-dealer firms (the “Selling Broker-Dealers”) registered under the Securities Exchange Act of 1934, as amended (the “1934 Act”), who are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and who have entered into the Company’s selling agreements with us and the principal underwriter, CUNA Brokerage Services, Inc.

We pay CUNA Brokerage Services, Inc. and/or our affiliates pay the Selling Broker-Dealers compensation for the promotion and sale of the Contract. The Selling Agents who solicit sales of the Contract typically receive a portion of the compensation paid by the Company to CUNA Brokerage Services, Inc. and the Selling Broker-Dealers in the form of commissions or other compensation, depending on the agreement between the Selling Broker-Dealer and the Selling Agent. The Selling Agents are also licensed as insurance agents by applicable state insurance authorities and appointed as agents of the Company. Selling Agents who are registered representatives of CUNA Brokerage Services, Inc. or our affiliates are also eligible for various cash benefits, such as bonuses, insurance benefits and financing arrangements, and non-cash items that we may jointly provide with CUNA Brokerage Services, Inc. or our affiliates. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items. Sales of the Contracts may help registered representatives of CUNA Brokerage Services, Inc. qualify for such benefits.

We also pay compensation to wholesaling broker-dealers or other firms or intermediaries, including payments to affiliates of ours, in return for wholesaling services such as providing marketing and sales support, product training and administrative services to the Selling Agents of the Selling Broker-Dealers. These allowances may be based on a percentage of each Purchase Payment.

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In addition to the compensation described above, we may make additional cash payments, in certain circumstances referred to as “override” compensation or reimbursements to Selling Broker-Dealers in recognition of their marketing and distribution, transaction processing and/or administrative services support. These payments are not offered to all Selling Broker-Dealers, and the terms of any particular agreement governing the payments may vary among Selling Broker-Dealers depending on, among other things, the level and type of marketing and distribution support provided. Marketing and distribution support services may include, among other services, placement of the Company’s products on the Selling Broker-Dealers’ preferred or recommended list, increased access to the Selling Broker-Dealers’ registered representatives for purposes of promoting sales of our products, assistance in training and education of the Selling Agents, and opportunities for us to participate in sales conferences and educational seminars. The payments or reimbursements may be calculated as a percentage of the particular Selling Broker-Dealer’s actual or expected aggregate sales of our annuity contracts (including the Contract) and/or may be a fixed dollar amount. Broker-dealers receiving these additional payments may pass on some or all of the payments to the Selling Agent.

You should ask your Selling Agent for further information about what commissions or other compensation he or she, or the Selling Broker-Dealer for which he or she works, may receive in connection with your purchase of a Contract.

Commissions and other incentives or payments described above are not charged directly to you. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Contract.

Cyber Security

Our business is highly dependent upon the effective operation of our computer systems and those of our business partners, so that our business is potentially susceptible to operational and information security risks resulting from a cyber-attack. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, denial of service on websites and other operational disruption and unauthorized release of confidential customer information. Cyber-attacks affecting us, CUNA Brokerage Services, Inc., and intermediaries may adversely affect us and your Contract Value. For instance, cyber-attacks may interfere with our processing of Contract transactions, cause the release and possible destruction of confidential Owner or business information, impede order processing, subject us and/or CUNA Brokerage Services, Inc. and intermediaries to regulatory fines and financial losses and/or cause reputational damage. There can be no assurance that we or CUNA Brokerage Services, Inc. will avoid losses affecting your Contract due to cyber-attacks or information security breaches in the future.

Authority to Change

Only the President or Secretary of the Company may change or waive any of the terms of your Contract. Any change must be in writing and signed by the President or Secretary of the Company. You will be notified of any such change, as required by law.

Incontestability

We consider all statements in your application (in the absence of fraud) to be representations and not warranties. We will not contest your Contract.

Misstatement of Age or Gender

If an Annuitant’s date of birth is misstated, we will adjust the income payments under the Contract to be equal to the payout amount the Contract Value would have purchased based on the Annuitant’s correct date of birth. If an Annuitant’s gender has been misstated, and the Life Income Rate Type is based on gender, we will adjust the income payments under the Contract to be equal to the payout amount the Contract Value would have purchased based on the Annuitant’s correct gender. We will add any

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underpayments to the next payment. We will subtract any overpayment from future payments. We will not credit or charge any interest to any underpayment or overpayment.

Conformity with Applicable Laws

The provisions of the Contract conform to the minimum requirements of the state in which the Contract is delivered (i.e., the “state of issue”). The laws of the state of issue control any conflicting laws of any other state in which the Owner may live on or after the Contract Issue Date. If any provision of your Contract is determined not to provide the minimum benefits required by the state in which the Contract is issued, such provision will be deemed to be amended to conform or comply with such laws or regulations. Further, the Company will amend the Contract to comply with any changes in law governing the Contract or the taxation of benefits under the Contract.

Reports to Owners

At least annually, we will mail a report to you at your last known address of record, a report that will state the beginning and end dates for the current report period; your Contract Value at the beginning and end of the current report period; the amounts that have been credited and debited to your Contract Value during the current report period, identified by the type of activity the amount represents; the Surrender Value at the end of the current report period; and any other information required by any applicable law or regulation.

You also will receive confirmations of each financial transaction, such as transfers, withdrawals, and surrenders.

Change of Address

Inquiries

You may make inquiries regarding your Contract by writing to us or calling us at our Administrative Office.

CORPORATE HISTORY OF THE COMPANY

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In addition, in August 2013, the Company began issuing an Index-Linked Annuity Contract under the name “MEMBERS^® Zone Annuity”. This annuity contract accounts for all the new sales of the Company. The Contract described in this Prospectus is first being offered as of the date of this Prospectus. When it becomes available the Company will have two annuity contract forms for sale. The Company also serves existing blocks of individual and group life policies.

•

CMFG Life provides significant services required in the conduct of the Company’s operations. We have entered into a Cost Sharing, Procurement, Disbursement, Billing and Collection Agreement for the administration of our business pursuant to which CMFG Life performs certain administrative functions related to agent licensing, payment of commissions, actuarial services, annuity policy issuance and service, accounting and financial compliance, market conduct, general and informational services and marketing as well as share certain resources and personnel with us; and pursuant to which CMFG Life provides us with certain procurement, disbursement, billing and collection services.

You may write us at 2000 Heritage Way, Waverly, Iowa 50677-9202, or call us at 1-800-798-5500.

Financial Information

Our financial statements have been prepared in accordance with U.S. GAAP.

Investments

Our investment portfolio consists primarily of fixed income securities.

Reinsurance

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Policy Liabilities and Accruals

The applicable accounting standards and state insurance laws under which we operate require that we record policy liabilities to meet the future obligations associated with all of our outstanding policies.

POTENTIAL RISK FACTORS THAT MAY AFFECT OUR BUSINESS AND OUR FUTURE RESULTS

Although economic conditions both domestically and globally have continued to improve since the financial crisis in 2008, we remain vulnerable to market uncertainty and continued financial instability of national, state and local governments. Continued difficult conditions in the global capital markets and economy could deteriorate in the near future and affect our financial position and our level of earnings from our operations.

Markets in the United States and elsewhere experienced extreme volatility and disruption since the second half of 2007, due in part to the financial stresses affecting the liquidity of the banking system and the financial markets. This volatility and disruption reached unprecedented levels in late 2008 and early 2009. The United States entered a severe recession and recovery was slow with long-term high unemployment rates and lower average household income levels. One of the strategies used by the U.S. government to stimulate the economy has been to keep interest rates low and increase the supply of United States dollars. While these strategies have appeared to have had positive effects, any future economic downturn or market disruption could negatively impact our ability to invest our funds.

•		our investment portfolio could incur other-than-temporary impairments;
•		due to potential downgrades in our investment portfolio, we could be required to raise additional capital to sustain our current business in force and new sales of our annuity products, which may be difficult in a distressed market. If capital would be available, it may be at terms that are not favorable to us; or
•		our liquidity could be negatively affected and we could be forced to further limit our operations and our business could suffer, as we need liquidity to pay our policyholder benefits and operating expenses.

The principal sources of our liquidity are monthly settlements under the coinsurance agreements with CMFG Life, annuity deposits, investment income, proceeds from the sale, maturity and call of investments and capital contributions from CMFG Life.

Governmental initiatives intended to improve global and local economies that have been adopted may not be effective and, in any event, may be accompanied by other initiatives, including new capital requirements or other regulations that could materially affect our results of operations, financial condition and liquidity in ways that we cannot predict.

We are subject to extensive laws and regulations that are administered and enforced by a number of different regulatory authorities including state insurance regulators, the National Association of Insurance Commissioners (“NAIC”) and the SEC. Some of these authorities are or may in the future consider enhanced or new regulatory requirements intended to prevent future crises or otherwise assure the stability of institutions under their supervision. These authorities may also seek to exercise their supervisory or enforcement authority in new or more robust ways. All of these possibilities, if they occurred, could affect the way we conduct our business and manage our capital, and may require us to satisfy increased capital requirements, any of which in turn could materially affect our results of operations, financial condition and liquidity.

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We face potential competition from companies that have greater financial resources, broader arrays of products, higher ratings and stronger financial performance, which may impair our ability to attract new customers and maintain our profitability and financial strength. It may also impair our ability to retain customers which could increase surrenders and impact profitability and financial strength.

We operate in a highly competitive industry. Many of our competitors are substantially larger and enjoy substantially greater financial resources, claims-paying ability and financial strength, broader and more diversified product lines and more widespread distribution relationships. Our annuity products compete with fixed indexed, traditional fixed rate and variable annuities (and combinations thereof) sold by other insurance companies and also with mutual fund products, traditional bank investments and other investment and retirement funding alternatives offered by asset managers, banks and broker-dealers. Our annuity products also compete with products of other insurance companies, financial intermediaries and other institutions based on a number of factors, including crediting rates, policy terms and conditions, services provided to distribution channels and policyholders, ratings, reputation and distribution compensation.

Our ability to compete will depend in part on the performance of our products. We will not be able to accumulate and retain assets under management for our products if our products underperform the market or the competition, since such underperformance likely would result in asset withdrawals and reduced sales.

We compete for distribution sources for our products. We believe that our success in competing for distributors will depend on factors such as our financial strength, the services we provide to, and the relationships we develop with these distributors and offering competitive commission structures. Our distributors will generally be free to sell products from whichever providers they wish, which makes it important for us to continually offer distributors products and services they find attractive. If our products or services fall short of distributors’ needs, we may not be able to establish and maintain satisfactory relationships with distributors of our annuity products. Our ability to compete will also depend in part on our ability to develop innovative new products and bring them to market more quickly than our competitors. In order for us to compete in the future, we will need to continue to bring innovative products to market in a timely fashion. Otherwise, our revenues and profitability could suffer.

The loss of key employees could disrupt our operations.

Our success depends in part on the continued service of key executives within our Company and our ability to attract and retain additional executives and employees. The loss of key employees or our inability to recruit and retain additional qualified personnel could cause disruption in our business and prevent us from fully implementing our business strategies, which could materially and adversely affect our business, growth and profitability.

Changes in state and federal regulation may affect our profitability.

We are subject to regulation under applicable insurance statutes, including insurance holding company statutes, in the various states in which we transact business. Insurance regulation is intended to provide safeguards for policyholders rather than to protect shareholders of insurance companies or their holding companies. As increased scrutiny has been placed upon the insurance regulatory framework, a number of state legislatures have considered or enacted legislative proposals that alter, and in many cases increase, state authority to regulate insurance companies and holding company systems.

Regulators oversee matters relating to trade practices, policy forms, claims practices, guaranty funds, types and amounts of investments, reserve adequacy, insurer solvency, minimum amounts of capital and surplus, transactions with related parties, changes in control and payment of dividends.

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State insurance regulators and the NAIC continually reexamine existing laws and regulations and may impose changes in the future.

We are subject to the NAIC’s risk-based capital requirements which are intended to be used by insurance regulators as an early warning tool to identify deteriorating or weakly capitalized insurance companies for the purpose of initiating regulatory action. We also may be required, under solvency or guaranty laws of most states in which we do business, to pay assessments up to certain prescribed limits to fund policyholder losses or liabilities for insolvent insurance companies.

Although the federal government does not directly regulate the insurance business, federal legislation and administrative policies in several areas, including pension regulation, age and sex discrimination, financial services regulation, securities regulation and federal taxation, can significantly affect the insurance business. In addition, legislation has been enacted which could result in the federal government assuming some role in the regulation of the insurance industry.

Other regulatory requirements may indirectly impact us. For example, non-U.S. counterparties of the Company may also be subject non-U.S. regulation of their derivatives transactions with the Company. In addition, counterparties regulated by the Prudential Regulators are subject to liquidity, leverage and capital requirements that impact their derivatives transactions with the Company. Collectively, these new requirements have increased the direct and indirect costs of our derivatives activities and may further increase them in the future.

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The Dodd-Frank Act established a new federal council of financial regulators, the Financial Stability Oversight Council (“Council”), which is charged with identifying risks to the financial stability of the U.S. financial markets, promoting market discipline, and responding to emerging threats to the stability of the U.S. financial markets. The Council is empowered to make recommendations to primary financial regulatory agencies regarding the application of new or heightened standards and safeguards for financial activities or practices, and certain participation in such activities, that threaten the stability of the U.S. financial markets. In addition, the Council is authorized to determine whether an insurance company is systematically significant and to recommend that it should be subject to enhanced prudential standards and to supervision by the Board of Governors of the Federal Reserve System. In April 2012, the Council approved its final rule for designating non-bank financial companies as systemically important financial institutions (“SIFI”). Under the final rule, the Company’s assets, liabilities and operations do not currently satisfy the financial thresholds that serve as the first step of the three-stage process to designate a non-bank financial company as a SIFI. Despite not being a SIFI, the Company could potentially be subject to the orderly liquidation authority of the Federal Deposit Insurance Corporation (“FDIC”), in accordance with Title II of the Dodd-Frank Act. Title II of the Dodd-Frank Act provides that the FDIC, under certain circumstances, may be appointed receiver of a “covered financial company,” which could include an insurance company, for purposes of liquidating such company. This would apply to insurance companies in a limited context, where the relevant state insurance regulator has failed to act within 60 days after a determination has been made to subject the insurance company to the FDIC’s orderly liquidation authority, and resolution by the FDIC would be in accordance with state insurance law.

Changes in federal income taxation laws may affect sales of our products and profitability.

The annuity products that we market generally provide the policyholder with certain federal income tax advantages. For example, federal income taxation on any increases in non-qualified annuity contract values (i.e., the “inside build-up”) is deferred until it is received by the policyholder. With other savings and investments, such as certificates of deposit and taxable bonds, the increase in value is generally taxed each year as it is earned.

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From time to time, various tax law changes have been proposed that could have an adverse effect on our business, including the elimination of all or a portion of the income tax advantages for annuities. If legislation were enacted to eliminate the tax deferral for annuities, such a change may have an adverse effect on our ability to sell non-qualified annuities. Non-qualified annuities are annuities that are not sold to a qualified retirement plan.

Distributions from non-qualified annuity policies have been considered “investment income” for purposes of the Medicare tax on investment income contained in the Health Care and Education Reconciliation Act of 2010. As a result, in certain circumstances, a 3.8% tax (“Medicare Tax”) may be applied to some or all of the taxable portion of distributions from non-qualified annuities to individuals whose income exceeds certain threshold amounts. This new tax may have an adverse effect on our ability to sell non-qualified annuities to individuals whose income exceeds these threshold amounts and could accelerate withdrawals due to this additional tax. The constitutionality of the Health Care and Education Reconciliation Act of 2010 is currently the subject of multiple litigation actions initiated by various state attorneys general, and the Act is also the subject of several proposals in the U.S. Congress for amendment and/or repeal. The outcome of such litigation and legislative action as it relates to the 3.8% Medicare Tax is unknown at this time.

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.

We may become involved in litigation, both as a defendant and as a plaintiff, relating to claims arising out of our operations in the normal course of business. In addition, state regulatory bodies, such as state insurance departments, the SEC, FINRA, the Department of Labor, and other regulatory bodies regularly make inquiries and conduct examinations or investigations of companies in the annuity business concerning compliance with, among other things, insurance laws, securities laws, the Employee Retirement Income Security Act of 1974, as amended, and laws governing the activities of broker-dealers. Companies in the annuity business have faced litigation, including class action lawsuits, alleging improper product design, improper sales practices and similar claims. There can be no assurance that any future litigation will not have a material adverse effect on our business, financial condition or results of operations through distraction of our management or otherwise.

SELECTED FINANCIAL DATA

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		For the year ended December 31,
Results of Operations Data:		2015				2014				2013				2012				2011
		(Dollars in thousands)
Revenues
Life and health premiums		$	(1,175	)		$	127			$	139			$	(20,459	)		$	3,409
Contract charges			18				24				46				460				501
Net investment income			366				278				176				1,928				2,175
Net realized gains on investments			117				-				-				4,319				119
Other income			5,336				-				293				-				-
Total revenues			4,662				429				654				(13,752	)			6,204
Benefits and expenses:
Life and health insurance claims
and benefits			(1,204	)			112				179				(20,028	)			2,268
Interest credited to policyholder
account balances			4				8				9				158				164
Operating and other expenses			1,633				137				86				1,087				1,040
Total benefits and expenses			433				257				274				(18,783	)			3,472
Income before income taxes			4,229				172				380				5,031				2,732
Income tax expense			1,449				11				249				1,679				921
Net income		$	2,780			$	161			$	131			$	3,352			$	1,811
		December 31,
Balance Sheet Data:		2015				2014				2013				2012				2011
		(Dollars in thousands)
Assets:
Total investments		$	12,351			$	13,313			$	6,681			$	8,691			$	53,678
Cash and cash equivalents			17,093				5,602				11,105				4,926				3,853
Reinsurance recoverable			24,628				25,199				25,525				26,391				-
Assets on deposits			947,595				349,937				89,313				-				-
Total assets			1,007,811				399,381				138,582				47,405				64,248
Liabilities and stockholder’s equity:
Claim and policy benefit reserves			21,537				22,368				23,196				24,112				23,974
Policyholder account balances			951,068				353,549				93,047				3,797				3,885
Total liabilities			986,263				380,166				119,481				28,281				28,212
Total stockholder’s equity			21,548				19,215				19,101				19,124				36,036

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Information

All statements, trend analyses and other information contained in this Prospectus and elsewhere (such as in press releases, presentations by us, our immediate parent CMIC, or CMFG Life, our management or oral statements) relative to markets for our products and trends in our operations or financial results, as well as other statements including words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, “intend”, and other similar expressions, constitute forward-looking statements. We caution that these statements may vary from actual results and the differences between these statements and actual results can be material. Accordingly, we cannot assure you that actual results will not differ materially from those expressed or implied by the forward-looking statements. Factors that could contribute to these differences include, among other things:

•		general economic conditions and other factors, including prevailing interest rate levels and stock and credit market performance which may affect (among other things) our ability to sell our products, our ability to access capital resources and the costs associated therewith, the fair value of our investments, which could result in other than temporary impairments, and certain liabilities, and the lapse rate and profitability of policies;
•		customer response to new products and marketing initiatives;
•		changes in the Federal income tax laws and regulations which may affect the relative income tax advantages of our products;
•		increasing competition in the sale of annuities;
•		regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) bank and credit union sales and underwriting of insurance products and regulation of the sale, underwriting and pricing of products; and
•		the risk factors or uncertainties disclosed in this Prospectus.

For a detailed discussion of these and other factors that might affect our performance see the section entitled “Potential Risk Factors That May Affect Our Business and Our Future Results.”

Overview

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•		Managed Agents: employees of CMFG Life who sell insurance and investment products to members of credit unions that have contracted with the Company and its affiliates to provide these services;
•		Dual Employee Agents: employees of credit unions who sell insurance and investment products to members of credit unions that have contracted with the Company and its affiliates to provide these services. These agents are registered representatives of the Company’s affiliated broker dealer, CUNA Brokerage Services, Inc.; and
•		Independent Agents: agents who also represent other insurance companies and, along with or through an unaffiliated broker-dealer, contract with the Company to offer its individual life insurance and annuity products that are made available for distribution through this channel.

CMFG Life provides significant services required in the conduct of the Company’s operations. CMFG Life allocates expenses to us on the basis of estimated time spent by employees of CMFG Life on Company matters and the use of operational resources. Management believes the allocations of expenses are

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reasonable and that the results of the Company’s operations may have materially differed in a negative manner from the results reflected in the accompanying financial statements if the Company did not have this relationship.

Critical Accounting Policies

The increasing complexity of the business environment and applicable authoritative accounting guidance requires us to closely monitor our accounting policies. The following summary of our critical accounting policies is intended to enhance your ability to assess our financial condition and results of operations and the potential volatility due to changes in estimates.

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and in some cases the difference could be material. Investment valuations, embedded derivatives, claim and policyholder benefit reserves and deferred tax asset valuation reserves are most affected by the use of estimates and assumptions.

Investment Valuation. Investments in debt securities are classified as available for sale and are carried at fair value. Unrealized gains and losses on investments in debt securities, net of federal income taxes, are included in accumulated other comprehensive income as a separate component of stockholder’s equity.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value of assets and liabilities into three broad levels. The Company has categorized its financial instruments, based on the degree of subjectivity inherent in the valuation technique, as follows:

•		Level 1:  Inputs are directly observable and represent quoted prices for identical assets or liabilities in active markets the Company has the ability to access at the measurement date.
•		Level 2:  All significant inputs are observable, either directly or indirectly, other than quoted prices included in Level 1, for the asset or liability. This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
•		Level 3:  One or more significant inputs are unobservable and reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

For purposes of determining the fair value of the Company’s investments, observable inputs are those inputs used by market participants in valuing financial instruments, which are developed based on market data obtained from independent sources. In the absence of sufficient observable inputs, unobservable inputs, reflecting the Company’s estimates of the assumptions market participants would use in valuing investments, are developed based on the best information available in the circumstances. The Company uses prices and inputs that are current as of the measurement date. In some instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

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The hierarchy requires the use of market observable information when available for assessing fair value. The availability of observable inputs varies by investment. In situations where the fair value is based on inputs that are unobservable in the market or on inputs from inactive markets, the determination of fair value requires more judgment and is subject to the risk of variability. The degree of judgment exercised by the Company in determining fair value is typically greatest for investments categorized in Level 3.

Assets, at Fair Value		Level 1				Level 2				Level 3				Total
Cash equivalents		$	16,080			$	-			$	-			$	16,080
Debt securities:
U.S. government and agencies			-				9,813				-				9,813
Mortgage-backed securities:
Residential mortgage-backed			-				2,538				-				2,538
Total debt securities			-				12,351				-				12,351
Derivatives embedded in assets on deposits			-				-				122,043				122,043
Total assets		$	16,080			$	12,351			$	122,043			$	150,474
Liabilities, at Fair Value		Level 1				Level 2				Level 3				Total
Derivatives embedded in annuity contracts		$	-			$	-			$	122,043			$	122,043
Total liabilities		$	-			$	-			$	122,043			$	122,043
Our assets which are measured at fair value on a recurring basis as of December 31, 2014 are presented below based on the fair value hierarchy levels.
Assets, at Fair Value		Level 1				Level 2				Level 3				Total
Cash equivalents		$	3,681			$	-			$	-			$	3,681
Debt securities:
U.S. government and agencies			-				9,987				-				9,987
Mortgage-backed securities:
Residential mortgage-backed			-				3,207				-				3,207
Total debt securities			-				13,194				-				13,194
Derivatives embedded in assets on deposits			-				-				45,503				45,503
Total assets		$	3,681			$	13,194			$	45,503			$	62,378

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Liabilities, at Fair Value		Level 1				Level 2				Level 3				Total
Derivatives embedded in annuity contracts		$	-			$	-			$	45,503			$	45,503
Total liabilities		$	-			$	-			$	45,503			$	45,503

Other-Than-Temporary Investment Impairments. Investment securities are reviewed for other than temporary impairment (“OTTI”) on an ongoing basis. The Company creates a watchlist of securities based largely on the fair value of an investment security relative to its cost basis. When the fair value drops below the Company’s cost, the Company monitors the security for OTTI. The determination of OTTI requires significant judgment on the part of the Company and depends on several factors, including:

•		the existence of any plans to sell the investment security;
•		the extent to which fair value is less than book value;
•		the underlying reason for the decline in fair value (credit concerns, interest rates, etc.);
•		the financial condition and near term prospects of the issuer/borrower, including the ability to meet contractual obligations, relevant industry trends and conditions;
•		the Company’s intent and ability to retain the investment for a period of time sufficient to allow for an anticipated recovery in fair value;
•		the Company’s ability to recover all amounts due according to the contractual terms of the agreements; and
•		the Company’s collateral position in the case of bankruptcy or restructuring.

A debt security is considered other-than-temporarily impaired when the fair value is less than the amortized cost basis and its value is not expected to recover through the Company’s holding period of the security. If a credit loss exists, but the Company does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, it is required to bifurcate the impairment into the loss that is attributable to credit and non-credit related risk. The credit portion of the OTTI is the difference between the present value of the expected future cash flows and amortized cost. Only the estimated credit loss amount is recognized in earnings, with the remainder of the loss amount recognized in other comprehensive income. If the Company intends to sell, at the time this determination is made, the Company records a realized loss equal to the difference between the amortized cost and fair value. The fair value of the other-than-temporarily impaired security becomes its new cost basis. In determining whether an unrealized loss is expected to be other than temporary, the Company considers, among other factors, any plans to sell the security, the severity of impairment, financial position of the issuer, recent events affecting the issuer’s business and industry sector, credit ratings, and the ability of the Company to hold the investment until the fair value has recovered at least its original cost basis.

For securitized debt securities, the Company considers factors including commercial and residential property changes in value that vary by property type and location and average cumulative collateral loss rates that vary by vintage year. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer and/or underlying collateral.

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For certain securitized financial assets with contractual cash flows, the Company is required to periodically update its best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is less than its cost or amortized cost and there has been a decrease in the present value of the estimated cash flows since the last revised estimate, considering both timing and amount, an OTTI charge is recognized. The Company also considers its intent to retain a temporarily impaired security until recovery. Estimating future cash flows involves judgment and includes both quantitative and qualitative factors. Such determinations incorporate various information and assessments regarding the future performance of the underlying collateral. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral.

Derivative Financial Instruments. The Company issues deferred annuity contracts that contain embedded derivatives. Derivatives embedded within non-derivative host contracts are separated from the host instrument when the embedded derivative is not clearly and closely related to the host instrument. Such embedded derivatives are recorded at fair value, and they are reported as part of assets on deposit and policyholder account balances in the balance sheets, with the change in the value being recorded in net realized investment gains.

Changes in the fair value of the embedded derivative in assets on deposit offset changes in the fair value of the embedded derivative in policyholder account balances; both of these changes are included in net realized investment gains. Accretion of the interest on assets on deposit offsets accretion of the interest on the host contract; both of these activities are included in interest credited on policyholder account balances.

Reinsurance. Reinsurance premiums, claims and benefits, commission expense reimbursements, and reserves related to reinsured business ceded are accounted for on a basis consistent with the accounting for the underlying direct policies that have been ceded and the terms of the reinsurance contracts. Premiums and insurance claims and benefits in the statements of operations and comprehensive income (loss) are reported net of the amounts ceded to other companies under such reinsurance contracts. Ceded insurance reserves and ceded benefits paid are included in reinsurance recoverables along with certain ceded policyholder account balances which include mortality risk. A prepaid reinsurance asset is also recorded for the portion of unearned premiums related to ceded policies.

The Company entered into a second agreement with CMFG Life, as described above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview,” to cede 100% of its new business, which includes investment type contracts such as the Contract. Accordingly, the agreement is accounted for using the deposit method of accounting.

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Assets on Deposit. Assets on deposit represent the amount of policyholder account balances related to deferred annuity contracts, an investment type contract, that are ceded to CMFG Life. These investment type contracts are accounted for on a basis consistent with the accounting for the underlying contracts. Since the related product is an investment type contract, the Company accounts for the reinsurance of these contracts using the deposit method of accounting consistent with the terms of the reinsurance agreement with CMFG Life. The related contract charges and interest credited to policyholder account balances in the statements of operations and comprehensive income (loss) are reported net of the amounts ceded under the agreement. See Note 7 of the Notes to the Financial Statements appearing elsewhere in this Prospectus for a further discussion of the ceding agreement.

When actual experience indicates that existing contract liabilities, together with the present value of future gross premiums, will not be sufficient to recover the present value of future benefits or recover unamortized deferred acquisition costs, a premium deficiency will be recognized by either a reduction in unamortized acquisition costs or an increase in liability of future benefits.

The Company entered into three agreements with CMFG Life, as described above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview.” These agreements do not relieve the Company of its obligations to its policyholders under contracts covered by these agreements. However, they do transfer nearly all of the Company’s underwriting profits and losses to CMFG Life and require CMFG Life to indemnify the Company for nearly all of its liabilities.

Policyholder Account Balances. The Company recognizes a liability at the stated account value for policyholder deposits that are not subject to significant policyholder mortality or longevity risk and for universal life-type policies. The account value equals the sum of the original deposit and accumulated interest, less any withdrawals and expense charges. The average credited rate of interest applied to the account values was 4.5% in 2015, 2014 and 2013. The minimum guaranteed rate of interest that must be credited to such account values for the life of those contracts is 4.5%.

The single premium deferred annuities, which are included in policyholder account balances, have two risk control accounts, referred to as the Secure and Growth Accounts; the Secure Account has an annual credited interest rate floor and ceiling of 0% and 4%, respectively, and the Growth Account has an annual credited interest rate floor and ceiling of -10% and 14%, respectively. The Secure and Growth Accounts both have credited interest rate caps that vary with issuance. Interest is credited at the end of each Contract Year during the selected index term based on the allocation between risk control accounts and the performance of an external index during that Contract Year. Performance of both the Secure Account and Growth Account is calculated based, in part, on the performance of the S&P 500 Index. At the end of the initial index term only the Secure Account will be available as an option to the policyholder.

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Income Taxes. The Company recognizes taxes payable or refundable and deferred taxes for the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured by applying the enacted tax rates to the difference between the financial statement and tax basis of assets and liabilities. The Company records current tax benefits and deferred tax assets utilizing a benefits-for-loss approach. Under this approach, current benefits are realized and deferred tax assets are considered realizable by the Company when realized or realizable by the consolidated group of which the Company is a member even if the benefits would not be realized on a stand-alone basis. The Company records a valuation allowance for deferred tax assets if it determines it is more likely than not that the asset will not be realized by the consolidated group. Deferred income tax assets can be realized through future earnings, including, but not limited to the generation of future income, reversal of existing temporary differences and available tax planning strategies.

The Company is subject to tax-related audits. These audits may result in additional tax assets or liabilities. In establishing tax liabilities, the Company determines whether a tax position is more likely than not to be sustained under examination by the appropriate taxing authority. Tax positions that do not meet the more likely than not standard are not recognized. Tax positions that meet this standard are recognized in the financial statements.

Executive Summary

The Company provides life and health insurance throughout the United States servicing its existing blocks of individual and group life policies, and began marketing the Index-Linked Annuity Contract in 2013 and the Contract offered by this Prospectus as of the date hereof. The Company is managed as two reportable business segments, (1) life and health, and (2) annuities. See Note 10 of the Notes to the Financial Statements appearing elsewhere in this Prospectus for information related to the two business segments.

The Company began distributing the Index-Linked Annuity Contract, an individual or joint owned, single premium deferred annuity contract, in 2013 which became the Company’s second reportable business segment. The Company began distributing the Contract as of the date of this Prospectus. The Company’s annuities segment, which includes the Index-Linked Annuity Contract and the Contract, is ceded 100% to CMFG Life under the 2013 ceding agreement and accordingly does not impact the results of operations.

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Total benefits and expenses were $433, $257 and $274 for the years ended December 31, 2015, 2014 and 2013, respectively. The increase in life and health benefits and expenses in 2015 compared to 2014 is primarily due to increased legal expenses related to the settlement received on structured security investments that had previously been sold, partially offset by the 2015 amendment to the 2012 reinsurance agreement. The primary decrease in life and health benefits in 2014 is due to fewer claims incurred by the Company in 2014. Life and health benefits totaled ($1,204), $112 and $179 for the years ended December 31, 2015, 2014 and 2013, respectively. The Company ceded $1,244 of life and health benefits in 2015, leading to the decrease in benefits in 2015 from 2014. The Company’s primary expense is the payment of claims related to life insurance policies. Operating expenses totaled $1,633, $137 and $86 for the years ended December 31, 2015, 2014 and 2013, respectively. CMFG Life provides significant services required in the conduct of the Company’s operations. Operating expenses incurred by the Company that are specifically identifiable are borne by the Company; other operating expenses are allocated from CMFG Life on the basis of estimated time and usage studies. Operating expenses are primarily related to and include employee costs such as wages and benefits, and credit union reimbursements whereby the Company reimburses credit unions for certain administrative expenses they incur in the production of new and renewal business sold for the Company and other operating expenses such as rent, insurance and utilities. The increase in operating expenses in 2015 relates to increased legal fees related to the litigation settlement received on structured security investments that had previously been sold.

Income tax expense is recorded at 35% offset by prior year tax expense or benefits primarily related to interest on accrued refunds, resulting in an effective tax rate of 34.3%, 6.4% and 65.5% for the years ended December 31, 2015, 2014 and 2013, respectively.

Financial Condition

Our investment strategy is based upon a strategic asset allocation framework that considers the need to manage our General Account investment portfolio on a risk-adjusted spread basis for the underwriting of contract liabilities and to maximize return on retained capital. Our investment in bonds consists of publicly traded corporate bonds, mortgage-backed securities, and U.S. Treasury securities. While the investments are categorized as available for sale, we generally hold our bond portfolio to maturity.

Insurance statutes regulate the type of investments that we are permitted to purchase and limit the amount of funds that may be used for any one type of investment. In light of these statutes and

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regulations and our business and investment strategy, we generally seek to invest in United States government and government-sponsored agency securities and debt securities rated investment grade by established nationally recognized rating organizations or in securities of comparable investment quality, if not rated.

		December 31,
			2015				%				2014		%
Debt Securities		$	12,351				100.0	%		$	13,194		99.1	%
Policy loans			-				-				104		0.8
Receivable for securities sold			-				-				15		0.1
Total investments		$	12,351				100.0	%		$	13,313		100.0	%

The table below presents our total debt securities by type at December 31, 2015 and December 31, 2014.

		December 31,
			2015				%				2014		%
U.S. government and agencies		$	9,813				79.5	%		$	9,987		75.6	%
Mortgage-backed securities:
Residential mortgage-backed			2,538				20.5				3,207		24.4
Total debt securities		$	12,351				100.0	%		$	13,194		100.0	%

The amortized cost and estimated fair value of debt securities by contractual maturity are shown below at December 31, 2015. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

		Amortized Cost				Estimated Fair Value
Due in one year or less		$	1,261			$	1,280
Due after one year through five years			315				322
Due after ten years			8,757				8,211
Mortgage-backed securities:
Residential mortgage-backed			2,365				2,538
Total debt securities		$	12,698			$	12,351

We have classified our debt securities as available for sale. Available for sale securities are reported at fair value and unrealized gains and losses, if any, on these securities (net of income taxes) are included as a separate component of stockholder’s equity, thereby exposing stockholder’s equity to volatility for changes in the reported fair value of securities classified as available for sale.

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Liquidity and Capital Resources

As consideration for the reinsurance provided under these agreements, as of October 1, 2015 we transfer all of our revenues to CMFG Life. Specifically, CMFG Life receives 100% of all premiums and other amounts received on account of our existing business and new business. CMFG Life pays us a monthly expense allowance to reimburse the Company for expenses and costs incurred on account of its insurance business.

While the reinsurance transactions have a minimal impact on our stockholder’s equity, they substantially diminish our net liabilities and greatly decrease the amount of capital and liquidity needed within the Company.

Operating activities provided $10,987, $1,327 and $4,286 in net cash flow for the years ended December 31, 2015, 2014, and 2013, respectively. The Company’s primary use of funds includes the payment of benefits and related operating expenses. The increase in cash flow in 2015 from 2014 was primarily due to the Company’s new annuity product and the receipt of cash for income taxes from the Company’s parent company. The decrease in cash flow in 2014 from 2013 was primarily due to the receipt of tax receivables in 2013 and the non-renewal of business on the Company’s older insurance policies. The Company’s sources of funds include renewal premiums and investment income.

Investing activities provided $331 and $1,655 of net cash flow for the years ended December 31, 2015 and 2013, respectively, and used $6,779 for the year ended December 31, 2014 The Company’s main investing activities include the purchase and sale of debt securities. The Company sold $8,987 and purchased $8,760 of debt securities in 2015, contributing to the net increase of cash from investing activities. The Company purchased $7,535 of debt securities in 2014, contributing to the net use of cash from investing activities. The increase in the cash provided in 2013 was driven by the Company receiving proceeds on the sale of debt securities and not making any purchases of investments in 2013.

Going forward, liquidity requirements will be met primarily through monthly settlements under the coinsurance agreements with CMFG Life. We anticipate receiving adequate cash flow from these settlements and our investment income to meet our obligations. However, a primary liquidity concern going forward will be the risk of an extraordinary level of early policyholder withdrawals. We include provisions within our policies, such as Surrender Charges, that help limit and discourage early withdrawals.

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We believe that cash flows generated from sources above will be sufficient to satisfy the near term liquidity requirements of our operations, including reasonable foreseeable contingencies. However, we cannot predict future experience regarding benefits and surrenders since benefit and surrender levels are influenced by such factors as the interest rate environment, our claims paying ability and our financial credit ratings.

Most funds we receive going forward, funds which we will receive as annuity deposits, will be invested in high quality investments, those identified by the Company as investment grade, to fund our future commitments. We believe that the settlement we receive under the reinsurance agreements with CMFG Life, the diversity of our investment portfolio and a concentration of investments in high quality securities should provide sufficient liquidity to meet foreseeable cash requirements. Although there is no present need or intent to dispose of our investments, we could readily liquidate portions of our investments, if such a need arose. Sales of available for sale securities in an unrealized loss position are subject to other-than-temporary impairment considerations including our intent to sell.

Statutory Financial Data and Dividend Restrictions

We are subject to statutory regulations as to maintenance of equity and the payment of dividends. Generally, ordinary dividends from an insurance subsidiary to its parent company must meet notice requirements promulgated by the regulator of the subsidiary’s state of domicile (“Insurance Department”). Extraordinary dividends, as defined by state statutes, must be approved by the Insurance Department. Based on Iowa statutory regulations, the Company could pay dividends of $2,111 during 2016, without prior approval of the Iowa Insurance Department.

Risk-based capital requirements promulgated by the NAIC require U.S. insurers to maintain minimum capitalization levels that are determined based on formulas incorporating credit risk, insurance risk, interest rate risk, and general business risk. At December 31, 2015 and 2014, the Company’s adjusted capital exceeded the minimum capitalization requirements.

Contractual Obligations

For detailed discussion of the management services agreement, the investment advisory agreement and the coinsurance agreements, see “Management – Transactions with Related Persons, Promoters and Certain Control Persons.”

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Going forward, we may enter into financing transactions, lease agreements, or other commitments in the normal course of our business.

		Estimated Future Claim and Benefit Payments
Due in one year or less		$	49,319
Due after one year through three years			126,547
Due after three years through five years			280,564
Due after five years			660,945
Total estimated payments		$	1,117,375

Quantitative and Qualitative Disclosures about Market Risk

Given our limited operations in writing new business to date, we are not currently subject to any material market risk exposures. However, in future periods, we expect to have exposure to market risk through both our insurance operations and investment activities, although a significant portion of this risk will be reinsured by CMFG Life pursuant to the coinsurance agreements discussed above. In addition, many of the measures described herein to offset these market risks will be taken by CMFG Life as it will hold nearly all of the assets related to our insurance business as a result of the Coinsurance Agreements.

Interest rate risk will be our primary market risk exposure. Substantial and sustained increases and decreases in market interest rates will affect the profitability of our annuity products and the fair value of our investments. Most of the interest rate risk is absorbed by CMFG Life under the coinsurance agreements. The profitability of most of our annuity products will depend on the spreads between interest yield on investments and rates credited on the annuity products. We will have the ability to adjust crediting rates (caps, participation rates or asset fee rates for indexed annuities) on substantially all of our annuity products at least annually (subject to minimum guaranteed values). In addition, substantially all of our annuity products will have surrender and withdrawal penalty provisions designed to encourage persistency and to help ensure targeted spreads are earned. However, competitive factors, including the impact of the level of surrenders and withdrawals, may limit our ability to adjust or maintain crediting rates at levels necessary to avoid narrowing of spreads under certain market conditions.

A major component of our interest rate risk management program is structuring the General Account investment portfolio with cash flow characteristics consistent with the cash flow characteristics of our annuity products. We use computer models to simulate cash flows expected from our existing business under various interest rate scenarios. These simulations enable us to measure the potential gain or loss in fair value of our interest rate-sensitive financial instruments, to evaluate the adequacy of expected cash flows from our assets to meet the expected cash requirements of our annuity products and to determine if it is necessary to lengthen or shorten the average life and duration of our investment portfolio. The “duration” of a security is the time weighted present value of the security’s expected cash flows and is used to measure a security’s sensitivity to changes in interest rates. When the durations of assets and liabilities are similar, exposure to interest rate risk is minimized because a change in value of assets should be largely offset by a change in the value of liabilities. As of December 31, 2015, the Company’s fixed debt investment portfolio consisted of U.S. government and agency securities and residential mortgage-backed securities with fair values of $9,813 and $2,538, respectively, and has an average duration of 16.4 years.

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We also utilize a hedging process in which we purchase options out of the money to the extent of any anticipated annual index credits under the indexed annuities. On the anniversary dates of the indexed annuities, we will purchase new one-year call options to fund the next annual index credits. The risk associated with these prospective purchases is the uncertainty of the cost, which will determine whether we are able to earn our spread on our index business. We will manage this risk through the terms of our annuities, which will permit us to change caps, participation rates and asset fees, subject to contractual features. By modifying caps, participation rates or asset fees, we can limit option costs to budgeted amounts, except in cases where the contractual features would prevent further modifications.

MANAGEMENT

Directors and Executive Officers

Our directors and executive officers are as follows:

	Name			Age			Position
	M. Jeffrey Bosco			51			President and Director
	Steven R. Suleski			62			Secretary and Director
	Brian J. Borakove			37			Treasurer
	Michael F. Anderson			48			Director
	Michael T. Defnet			55			Director
	Jason A. Pisarik			43			Director

All executive officers and directors are elected annually.

Steven R. Suleski has been a director of the Company since December 15, 2015 and has served as our Secretary and Senior Vice President since February 1, 2012. He has served as Associate General Counsel at CMFG Life, from May 1999 to January 2014. He serves as Chief Governance & Compliance Officer effective January 2014 to present. Before joining the Company, Mr. Suleski spent 12 years at Foley & Lardner, LLP, in Madison, Wisconsin, where he was a partner specializing in securities law, mergers and acquisitions and general corporate law.

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Michael T. Defnet has been a director of the Company since December 15, 2015 and Senior Vice President of Sales & Marketing for CMFG Life. Mr. Defnet previously served as Senior Vice President of Sales Distribution Support and various positions in CMFG Life’s Sales Department for 25 years. He brings more than 25 years of progressive experience in sales and marketing leadership, sales operations and sales strategy.

Transactions with Related Persons, Promoters and Certain Control Persons

Policy Regarding Related Person Transactions. It is our policy to enter into or ratify related person transactions only when our Board of Directors determines that the transaction either is in, or is not inconsistent with, our best interests, including but not limited to situations where we may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily available from alternative sources or when we provide products or services to related persons on an arm’s length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to employees generally.

Therefore, we have adopted the following written procedures for the review, approval or ratification of related person transactions. For purposes of the related person transaction policy, a related person transaction is a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which (i) we were, are or will be a participant, (ii) the amount of the transaction, arrangement or relationship exceeds $120,000, and (iii) in which a related person had, has or will have a direct or indirect material interest in the transaction.

A related person means:

•		any person who is, or at any time since the beginning of our last fiscal year was, a member of our Board of Directors or an executive officer or a nominee to become a member of our Board of Directors;
•		any person who is known to be the beneficial owner of more than 5% of any class of our voting securities;
•		any immediate family member of any of the foregoing persons; or
•		any firm, corporation, or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.

Any proposed transaction with a related person shall be consummated or amended only if the following steps are taken:

•

Counsel (either inside or outside) will assess whether the proposed transaction is a related person transaction for purposes of this policy.

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•		If counsel determines that the proposed transaction is a related person transaction, the proposed transaction shall be submitted to the Board of Directors for consideration at the next meeting or, in those instances in which counsel, in consultation with the President or the Treasurer, determines that it is not practicable or desirable for us to wait until the next committee meeting, to the President of the Company (who has been delegated authority to act between meetings).
•		The Board of Directors shall consider all of the relevant facts and circumstances available, including (if applicable) but not limited to: (i) the benefits to the Company; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director, or an entity in which a director is a partner, shareholder, or executive officer; (iii) the availability of other suppliers or customers for comparable products or services; (iv) the terms of the transaction; and (v) the terms available to unrelated third parties or to employees generally.
•		The Board of Directors shall approve only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its shareholders, as the Board of Directors determines in good faith. The Board of Directors shall convey the decision to counsel, who shall convey the decision to the appropriate persons within the Company.

At the Board of Director’s first meeting of each fiscal year, it shall review any previously approved related person transactions that remain ongoing and have a remaining term of more than six months or remaining amounts payable to or receivable from the Company of more than $120,000. Based on all relevant facts and circumstances, taking into consideration the Company’s contractual obligations, the Board of Directors shall determine if it is in the best interests of the Company and its shareholders to continue, modify, or terminate the related person transaction.

No member of the Board of Directors shall participate in any review, consideration, or approval of any related person transaction with respect to which such member or any of his or her immediate family members is the related person.

Certain Relationships and Related Person Transactions. Except for the agreements noted below, there have been no transactions between the Company and any related person since January 1, 2011, nor are any such related person transactions currently being contemplated for which disclosure would be required.

As consideration for the reinsurance provided under these agreements, as of October 1, 2015, we transfer nearly all of our revenues to CMFG Life. Specifically, CMFG Life receives 100% of all premiums and other amounts received on account of our existing business and new business. As additional consideration, we transferred assets equal to 95% of our reserves as of October 31, 2012 to CMFG Life. CMFG Life pays us a monthly expense allowance to reimburse the Company for expenses and costs incurred on account of its insurance business. For the years ended December 31, 2015, 2014 and 2013, we ceded $3,559, $2,486 and $2,672, respectively. See Note 7 to the Financial Statements appearing elsewhere in this Prospectus.

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Committees of the Board of Directors

Our Board of Directors of the Company has not established any committees. The Board relies upon the committees of the CUNA Mutual Holding Company to oversee actions over the subsidiary companies. For example the CUNA Mutual Holding Company Audit Committee will assist with oversight of the company’s external auditors, performance of internal audit functions and legal and regulatory compliance requirements.

Compensation Committee Interlocks and Insider Participation

In order to help you understand our compensation-related costs, we have set forth below a discussion of CMFG Life’s compensation policies and programs as such policies and programs relate to our named executive officers.

Compensation Discussion and Analysis. These compensation policies and programs are designed to attract and retain highly qualified and motivated executive officers and employees and encourage and reward achievement of annual and long-term goals.

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Federal income tax law limits deductibility of compensation in excess of $1 million paid to certain named executive officers unless this compensation qualifies as “performance-based compensation.” It is the intent of CMFG Life to qualify its executives’ compensation for deductibility under applicable tax laws, while recognizing that there may be situations in which compensation for executive officers may not be tax deductible.

Named Executive Officers. The primary elements of compensation for our named executive officers, who are officers of and compensated by CMFG Life, include base pay and incentive compensation.

In August 2013, the Company began issuing a single premium deferred index annuity contract under the name “MEMBERS ^® Zone Annuity”. This annuity contract accounts for all the new sales of the Company. The Contract described in this Prospectus is first being offered as of the date of this Prospectus. When it becomes available the Company will have two annuity contract forms for sale. The Company also serves existing blocks of individual and group life policies. The amount of compensation allocated to the Company for Mr. Trunzo in 2015, 2014 and 2013 was $72,412, $43,000 and $5,800, respectively. The amount of compensation allocated to the Company for Mr. Borakove for 2015, 2014 and 2013 was $4,398, $2,600 and $1,300, respectively. The amount of compensation allocated to the Company for Mr. Bosco in 2015 was $4,884. This represents an allocation of gross wages and Corporate Success Sharing Plan (“CSSP)” payment.

Incentive Compensation. Under the CSSP for 2016, an incentive compensation pool is created if CM Holding and its subsidiaries consolidated financial statement has positive pre-tax net income on a GAAP basis. If this objective is met, the Board determines the amount of the pool that may be paid to leadership and staff based on CMFG Life performance, using the following guidelines and weighting factors: adjusted pre-tax operating gain, 60%; controllable expenses, 20%; and weighted revenue, 20%. Depending upon the level of CMFG Life’s success as determined by the Board, compensation is paid out of this pool as a percentage of the base salary according to the level of individual performance. Our management and the Board believe that this CSSP design creates the proper focus, flexibility and alignment for maximizing short-term and long-term policyholder value creation to benefit the policyholders who own CUNA Mutual Holding Company, the ultimate parent of both CMFG Life and the Company.

The costs of the CSSP and other incentive programs and benefits that have been allocated to the Company for the President for 2016 is $58,376. These allocations increased as management has been required to devote more time to the operations of the Company.

The costs of the CSSP and other incentive programs and benefits that have been allocated to the Company for the Treasurer for 2016 is $1,595. These allocations increased as management has been required to devote more time to the operations of the Company.

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At the time the performance goals for the different incentive plans were approved by the Board, it was believed that the performance targets reflected an appropriate degree of stretch but that they were attainable based on successful execution of the Company’s business plan and the realization of macro-economic and market conditions reasonably aligned with the Company’s near term expectations.

Change in Control, Separation and Retirement Arrangements. CMFG Life has a written employment contract with Mr. Trunzo. None of the other named executive officers have employment contracts or separation agreements with CMFG Life. No costs associated with this employment contract have previously been allocated to the Company.

Other Compensation Including Other Non-Qualified Deferred Compensation Arrangements. CMFG Life has a qualified 401(k) plan for all eligible employees. CMFG Life matches 100% of employee contributions to the plan up to 5% of the employee’s total compensation, subject to the limitations specified in the Internal Revenue Code. CMFG Life also maintains a Supplemental 401(k) Plan in which some of the named executive officers participate that provides additional benefits and a company match.

In addition to the 401(k) plan, all employees of CMFG Life participate in a qualified Defined Benefit Pension Plan. There is a non-qualified plan for some of the named executives that provides benefits that would otherwise be paid into the qualified Defined Benefit Pension Plan but for Internal Revenue Code limitations. CMFG Life offers a package of insurance benefits to all employees including health, dental, long-term disability and life insurance. Several of the named executive officers receive perquisites including personal liability insurance, use of Company owned aircraft, travel to Company conventions for themselves and their spouse, tax benefits and tax preparation fees.

Compensation Summary. The following table sets forth the allocated compensation based upon the estimated percentage of time the following officers devote to the affairs of the Company for the 2013, 2014 and 2015 fiscal years:

Name and principal position	Year*	Salary ($)	Bonus ($)	Total*** ($)
(a)	(b)	(c)	(d)	(j)
Robert N. Trunzo, President and Director*	2013 2014 2015	$2,800 $8,000 $14,036	$3,000 $35,000 $58,376	$5,800 $43,000 $72,412
M. Jeffrey Bosco, President **	2015	$2,718	$2,166	$4,884
Brian J. Borakove, Treasurer***	2013 2014 2015	$1,000 $1,600 $2,802	$300 $1,000 $1,595	$1,300 $2,600 $4,397

	*	Mr. Trunzo resigned as President and Director of the Company effective December 1, 2015.
	**	Mr. Bosco was appointed President effective December 1, 2015.
	***	Includes compensation paid by CMFG Life that was allocated to the Company for service rendered by Messrs. Bosco and Borakove.

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Director Compensation

Legal Proceedings

Like other insurance companies, we routinely are involved in litigation and other proceedings, including class actions, reinsurance claims and regulatory proceedings arising in the ordinary course of our business. In recent years, the life insurance and annuity industry, including us and our affiliated companies, has been subject to an increase in litigation pursued on behalf of both individual and purported classes of insurance and annuity purchasers, questioning the conduct of insurance companies and their agents in the marketing of their products. In addition, state and federal regulatory bodies, such as state insurance departments and attorneys general, periodically make inquiries and conduct examinations concerning compliance by us and others with applicable insurance and other laws.

* * *

We do not file reports under the 1934 Act in reliance on Rule 12h-7 under the 1934 Act, which provides an exemption from the reporting requirements of Sections 13 and 15 of the 1934 Act.

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FINANCIAL STATEMENTS

MEMBERS Life Insurance Company

Financial Statements as of December 31, 2015 and 2014
and for the Three Years in the Period Ended December 31, 2015
and Report of Independent Registered Public Accounting Firm

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Index to

Financial Statements of

MEMBERS Life Insurance Company

Report of Independent Registered Public Accounting Firm	1
Balance Sheets as of December 31, 2015 and 2014	2
Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2015, 2014 and 2013	3
Statements of Stockholder’s Equity for the Years Ended December 31, 2015, 2014 and 2013	4
Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	5
Notes to Financial Statements
Note 1—Nature of Business	6
Note 2—Summary of Significant Accounting Policies	6
Note 3—Investments, Debt Securities	11
Note 3—Investments, Net Investment Income	12
Note 3—Investments, Net Realized Investment Gains	13
Note 3—Investments, Other-Than-Temporary Investment Impairments	13
Note 3—Investments, Net Unrealized Investment Gains	14
Note 3—Investments, Embedded Derivatives	14
Note 3—Investments, Assets Designated /Securities on Deposit	15
Note 4—Fair Value	15
Note 5—Income Tax	22
Note 6—Related Party Transactions	25
Note 7—Reinsurance	26
Note 8—Statutory Financial Data and Dividend Restrictions	28
Note 9—Accumulated Other Comprehensive Income (Loss)	29
Note 10—Business Segment Information	30
Note 11—Commitments and Contingencies	33
Note 12—Subsequent Events	33

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of
MEMBERS Life Insurance Company
Madison, Wisconsin

We have audited the accompanying balance sheets of MEMBERS Life Insurance Company (the “Company”) as of December 31, 2015 and 2014, and the related statements of operations and comprehensive income (loss), stockholder’s equity, and cash flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of MEMBERS Life Insurance Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, results of the Company may not be indicative of those of a stand-alone entity, as the Company is a member of a controlled group of affiliated companies.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois
March 8, 2016

MEMBERS Life Insurance Company

Balance Sheets

December 31, 2015 and 2014

($ in 000s)

Assets		2015				2014
Investments
Debt securities, available for sale, at fair value
(amortized cost 2015 - $12,698; 2014 - $12,854)		$	12,351			$	13,194
Policy loans			-				104
Receivable for securities sold			-				15
Total investments			12,351				13,313
Cash and cash equivalents			17,093				5,602
Accrued investment income			134				80
Reinsurance recoverable from affiliate			24,628				25,199
Assets on deposit			947,595				349,937
Premiums receivable, net			26				28
Net deferred tax asset			682				440
Receivable from affiliate			4,518				2,765
Other assets and receivables			268				220
Federal income taxes recoverable from affiliate			516				1,797
Total assets		$	1,007,811			$	399,381
Liabilities and Stockholder’s Equity
Liabilities
Claim and policy benefit reserves - life and health		$	21,537			$	22,368
Policyholder account balances			951,068				353,549
Unearned premiums			1				3
Payables to affiliates			2,480				1,292
Accounts payable and other liabilities			11,177				2,954
Total liabilities			986,263				380,166
Commitments and contingencies (Note 11)
Stockholder’s equity
Common stock, $5 par value, authorized 1,000 shares;
issued and outstanding 1,000 shares			5,000				5,000
Additional paid in capital			10,500				10,500
Accumulated other comprehensive income (loss),
net of tax expense (benefit) (2015 - ($122); 2014 - $118)			(225	)			222
Retained earnings			6,273				3,493
Total stockholder’s equity			21,548				19,215
Total liabilities and stockholder’s equity		$	1,007,811			$	399,381

See accompanying notes to financial statements.	2

MEMBERS Life Insurance Company

Statements of Operations and Comprehensive Income (Loss)

Years Ended December 31, 2015, 2014 and 2013

($ in 000s)

			2015				2014				2013
Revenues
Life and health premiums, net			$	(1,175	)		$	127			$	139
Contract charges, net				18				24				46
Net investment income				366				278				176
Net realized investment gains				117				-				-
Other income				5,336				-				293
Total revenues				4,662				429				654
Benefits and expenses
Life and health insurance claims and benefits, net				(1,204	)			112				179
Interest credited to policyholder account balances, net				4				8				9
Operating and other expenses (Note 6)				1,633				137				86
Total benefits and expenses				433				257				274
Income before income taxes				4,229				172				380
Income tax expense				1,449				11				249
Net income				2,780				161				131
Change in unrealized gains (losses), net of tax expense
(benefit) (2015 - ($235); 2014 - ($25); 2013 - ($105))				(437	)			(47	)			(154	)
Reclassification adjustment for (gains)
included in net income, net of tax (benefit) - (2015 - ($5))				(10	)			-				-
Other comprehensive loss				(447	)			(47	)			(154	)
Total comprehensive income (loss)			$	2,333			$	114			$	(23	)

See accompanying notes to financial statements.	3

MEMBERS Life Insurance Company

Statements of Stockholder’s Equity

Years Ended December 31, 2015, 2014 and 2013

($ in 000s)

										Accumulated
						Additional				other								Total
		Common				paid in				comprehensive				Retained				stockholder’s
		stock				capital				income (loss)				earnings				equity
Balance, January 1, 2013		$	5,000			$	10,500			$	423			$	3,201			$	19,124
Net income			-				-				-				131				131
Other comprehensive (loss)			-				-				(154	)			-				(154	)
Balance, December 31, 2013			5,000				10,500				269				3,332				19,101
Net income			-				-				-				161				161
Other comprehensive (loss)			-				-				(47	)			-				(47	)
Balance, December 31, 2014			5,000				10,500				222				3,493				19,215
Net income			-				-				-				2,780				2,780
Other comprehensive (loss)			-				-				(447	)			-				(447	)
Balance, December 31, 2015		$	5,000			$	10,500			$	(225	)		$	6,273			$	21,548

See accompanying notes to financial statements.	4

MEMBERS Life Insurance Company

Statements of Cash Flows

Years Ended December 31, 2015, 2014 and 2013

($ in 000s)

		2015				2014				2013
Cash flows from operating activities:
Net income		$	2,780			$	161			$	131
Adjustments to reconcile net income
to net cash provided by operating activities:
Policyholder charges on investment type contracts			(18	)			(24	)			(46	)
Net realized investment gains			(117	)			-				-
Interest credited to policyholder account balances			4				8				9
Deferred income taxes			(2	)			197				675
Amortization of bond premium and discount			61				75				86
Amortization and write off of deferred charges			26				26				21
Changes in other assets and liabilities
Accrued investment income			(54	)			(16	)			9
Reinsurance recoverable			273				326				611
Premiums receivable			2				4				2
Other assets			(1,828	)			356				(1,079	)
Federal income taxes recoverable from affiliate			1,281				87				1,892
Insurance reserves			(831	)			(828	)			(916	)
Unearned premiums			(2	)			-				(1	)
Other liabilities			9,412				955				2,892
Net cash provided by operating activities			10,987				1,327				4,286
Cash flows from investing activities:
Purchases of debt securities			(8,760	)			(7,535	)			-
Proceeds on sale or maturity of debt securities			8,987				750				1,665
Net amounts received on policy loans			104				6				-
Net cash provided by (used in) investing activities			331				(6,779	)			1,665
Cash flows from financing activities:
Policyholder account deposits			596,817				252,273				89,726
Policyholder account withdrawals			(12,250	)			(3,581	)			(930	)
Assets on deposit - deposits			(596,492	)			(252,273	)			(89,382	)
Assets on deposit - withdrawals			12,098				3,531				813
Change in bank overdrafts			-				(1	)			1
Net cash provided by (used in) financing activities			173				(51	)			228
Change in cash and cash equivalents			11,491				(5,503	)			6,179
Cash and cash equivalents at beginning of year			5,602				11,105				4,926
Cash and cash equivalents at end of year		$	17,093			$	5,602			$	11,105
Supplemental disclosure of cash information:
Cash received (paid) during the year for income taxes		$	(170	)		$	273			$	2,318

See accompanying notes to financial statements.	5

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 1:   Nature of Business

MEMBERS Life Insurance Company (“MLIC” or the “Company”) is a life and health insurance stock company organized under the laws of Iowa and a wholly-owned subsidiary of CUNA Mutual Investment Corporation (“CMIC”). CMIC is organized under the laws of Wisconsin and is a wholly-owned subsidiary of CMFG Life Insurance Company (“CMFG Life”), an Iowa life insurance company. CMFG Life and its affiliated companies primarily sell insurance and other products to credit unions and their members. The Company’s ultimate parent is CUNA Mutual Holding Company (“CMHC”), a mutual insurance holding company organized under the laws of Iowa. In 2013, MLIC began selling single premium deferred annuity contracts to credit union members through face-to-face and direct response distribution channels. Prior to 2013, MLIC did not actively market new business; it primarily serviced existing blocks of individual and group life policies. See Note 7, Reinsurance, for information on the Company’s reinsurance and ceding agreements.

MLIC is authorized to sell life, health and annuity policies in all states in the U.S. and the District of Columbia, except New York. The following table identifies states with premiums greater than 5% of total direct premium and states with deposits on annuity contracts greater than 5% of total deposits:

---

														Deposits on
		Direct Life and Health Premium												Annuity Contracts
		2015				2014				2013				2015				2014				2013
Michigan			63	%			63	%			64	%			8	%			12	%			11	%
Texas			23				22				22				7				8				*
California			5				5				5				8				*				*
Indiana			*				*				*				6				6				6
Iowa			*				*				*				5				8				17
Wisconsin			*				*				*				5				7				7
Pennsylvania			*				*				*				5				6				5
Florida			*				*				*				5				5				*
Washington			*				*				*				5				*				*
Rhode Island			*				*				*				*				8				6
Utah			*				*				*				*				*				5

No other state represents more than 5% of the Company’s premiums or deposits for any year in the three years ended December 31, 2015.

CMFG Life provides significant services required in the conduct of the Company’s operations. Management believes allocations of expenses are reasonable, but the results of the Company’s operations may have materially differed from the results reflected in the accompanying financial statements if the Company did not have this relationship.

Note 2: Summary of Significant Accounting Policies

Basis of Presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

6

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and in some cases the difference could be material. Investment valuations, embedded derivatives, deferred tax asset valuation reserves, and claim and policyholder benefit reserves are most affected by the use of estimates and assumptions.

Segment Reporting

The Company is currently managed as two reportable business segments, (1) life and health and (2) annuities. See Note 7, Reinsurance, for information on the Company’s reinsurance and ceding agreements, which impact the financial statement presentation of these segments.

Investments

Debt securities: Investments in debt securities are classified as available for sale and are carried at fair value. A debt security is considered other-than-temporarily impaired when the fair value is less than the amortized cost basis and its value is not expected to recover through the Company’s anticipated holding period of the security. If a credit loss exists, but the Company does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, it is required to bifurcate the impairment into the loss that is attributable to credit and non-credit related components. The credit portion of the other-than-temporary impairment (“OTTI”) is the difference between the present value of the expected future cash flows and amortized cost. Only the estimated credit loss amount is recognized in net realized investment gains, with the remainder of the loss amount recognized in other comprehensive loss. If the Company intends to sell or it is more likely than not that the Company will be required to sell before anticipated recovery in value, the Company records a realized loss equal to the difference between the amortized cost and fair value. The fair value of the other-than-temporarily impaired security becomes its new cost basis. In determining whether an unrealized loss is expected to be other than temporary, the Company considers, among other factors, any plans to sell the security, the severity of impairment, financial position of the issuer, recent events affecting the issuer’s business and industry sector, credit ratings, and the intent and ability of the Company to hold the investment until the fair value has recovered at least its cost basis.

Unrealized gains and losses on investments in debt securities, net of deferred federal income taxes, are included in accumulated other comprehensive income as a separate component of stockholder’s equity.

Policy loans: Policy loans are reported at their unpaid principal balance. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal or interest on the loan is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Policy loans allocated to CMFG Life as payment related to the 2012 reinsurance agreement and the 2015 amendment (See Note 7) are $1,882 and $1,975 at December 31, 2015 and 2014, respectively. As a result of the amendment, all policy loans are allocated to CMFG Life as of December 31, 2015.

Net investment income: Interest income related to mortgage-backed and other structured securities is recognized on an accrual basis using a constant effective yield method, based on anticipated prepayments and the estimated economic life of the securities. When estimates of prepayments change, the effective yield is recalculated to reflect actual payments to date and anticipated future payments and such adjustments are reflected in net investment income. Prepayment assumptions for loan-backed bonds and structured securities are based on industry averages or internal estimates. Interest income related to non-structured securities is recognized on an accrual basis using a constant effective yield method. Discounts and premiums on debt securities are amortized over the estimated lives of the respective securities on an effective yield basis.

7

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Net realized gains and losses: Realized gains and losses on the sale of investments are determined on a specific identification basis and are recorded on the trade date.

Derivative Financial Instruments

The Company issues single premium deferred annuity contracts that contain embedded derivatives. Derivatives embedded within non-derivative host contracts are separated from the host instrument when the embedded derivative is not clearly and closely related to the host instrument. Such embedded derivatives are recorded at fair value, and they are reported as part of assets on deposit and policyholder account balances in the balance sheets, with the change in the value being recorded in net realized investment gains. See Note 3, Investments-Embedded Derivatives for additional information.

Changes in the fair value of the embedded derivative in assets on deposit offset changes in the fair value of the embedded derivative in policyholder account balances; both of these changes are included in net realized investment gains. Accretion of the interest on assets on deposit offsets accretion of the interest on the host contract; both of these amounts are included in interest credited on policyholder account balances.

Cash and Cash Equivalents

Cash and cash equivalents include unrestricted deposits in financial institutions with maturities of 90 days or less. The Company recognizes a liability in accounts payable and other liabilities for the amount of checks issued in excess of its current cash balance. The change in this overdraft amount is recognized as a financing activity in the Company’s statement of cash flows.

Recognition of Insurance Revenue and Related Benefits

Term-life and whole-life insurance premiums are recognized as premium income when due. Policy benefits for these products are recognized in relation to the premiums so as to result in the recognition of profits over the expected lives of the policies and contracts.

Amounts collected on policies not subject to significant mortality or longevity risk, such as the Company’s single premium deferred annuity contracts, are considered investment contracts and are recorded as increases in policyholder account balances. Revenues from investment contracts principally consist of net investment income and contract charges such as expense and surrender charges. Expenses for investment contracts consist of interest credited to contracts, benefits incurred in excess of related policyholder account balances and policy maintenance costs. Because the Company has entered into an agreement with CMFG Life to cede 100% of this business, these revenues and expenses are ceded and do not impact the statement of operations and comprehensive income (loss). See Note 7, Reinsurance for additional information on this agreement.

Other Income / Operating and Other Expenses

Other income in 2015 and 2013 relates to legal settlements received on structured security investments that had previously been sold. Operating and other expenses in 2015 include legal expenses related to the settlement received.

Deferred Policy Acquisition Costs

The costs of acquiring insurance business that are directly related to the successful acquisition of new and renewal business are deferred to the extent that such costs are expected to be recoverable from future profits. Such costs principally include commissions and sales costs, direct response advertising costs, premium taxes, and certain policy issuance and underwriting costs. Costs deferred on term-life and whole-life insurance products, deferred policy acquisition costs (“DAC”), are amortized in proportion to the ratio of the annual premium to the total anticipated premiums generated. Due to the age of the existing block of policies, all DAC has been fully amortized as of December 31, 2015 and 2014 and there was no amortization expense in 2015, 2014 or 2013.

8

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Acquisition costs on the Company’s single premium deferred annuity contracts are reimbursed through a ceding commission by CMFG Life, which assumes all deferrable costs as part of its agreement to assume 100% of this business from the Company. See Note 7, Reinsurance for additional information on this agreement.

Insurance Reserves

Life and health claim and policy benefit reserves consist principally of future policy benefit reserves and reserves for estimates of future payments on incurred claims reported but not yet paid and unreported incurred claims. Estimates for future payments on incurred claims are developed using actuarial principles and assumptions based on past experience adjusted for current trends. Any change in the probable ultimate liabilities is reflected in net income in the period in which the change is determined.

When actual experience indicates that existing contract liabilities, together with the present value of future gross premiums will not be sufficient to recover the present value of future benefits or recover unamortized deferred acquisition costs, a premium deficiency will be recognized by either a reduction in unamortized acquisition costs or an increase in the liability for future benefits. There was no premium deficiency in 2015, 2014 or 2013.

Policyholder Account Balances

The Company recognizes a liability at the stated account value for policyholder deposits that are not subject to significant policyholder mortality or longevity risk and for universal life-type policies. The account value equals the sum of the original deposit and accumulated interest, less any withdrawals and expense charges. The average credited rate was 4.5% in 2015, 2014 and 2013. The future minimum guaranteed interest rate during the life of the contracts is 4.5%.

The single premium deferred annuities, which are included in policyholder account balances, have two risk control accounts, referred to as the Secure and Growth Accounts; the Secure Account has a yearly credited interest rate floor of 0% and the yearly Growth Account floor is -10%. The Secure and Growth Accounts both have credited interest rate caps that vary with issuance. Interest is credited at the end of each contract year during the selected index term based on the allocation between risk control accounts and the performance of an external index during that contract year. Both the Growth Account and Secure Account are based on the S&P 500 Index. At the end of the initial index term, only the Secure Account will be available as an option to the policyholder. The average annualized credited rate was 1.65%, 1.10% and .72% in 2015, 2014 and 2013, respectively.

Accounts Payable and Other Liabilities

The Company issues annuity contracts on the 10^th and 25^th of each month. The Company recognizes a liability on contracts for which it has received cash, but has not issued a contract.

Reinsurance

Reinsurance premiums, claims and benefits, commission expense reimbursements, and reserves related to reinsured business ceded are accounted for on a basis consistent with the accounting for the underlying direct policies that have been ceded and the terms of the reinsurance contracts. Premiums and insurance claims and benefits in the statements of operations and comprehensive income (loss) are reported net of the amounts ceded to other companies under such reinsurance contracts. Ceded insurance reserves and ceded benefits paid are included in reinsurance recoverables along with certain ceded policyholder account balances, which include mortality risk. A prepaid reinsurance asset is also recorded for the portion of unearned premiums related to ceded policies.

9

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Assets on Deposit

Assets on deposit represent the amount of policyholder account balances related to the single premium deferred annuity contracts (investment-type contracts) that are ceded to CMFG Life. These investment-type contracts are accounted for on a basis consistent with the accounting for the underlying contracts. Since the related product is an investment-type contract, the Company accounts for the reinsurance of these contracts using the deposit method of accounting consistent with the terms of the ceding agreement. The related contract charges and interest credited to policyholder account balances in the statements of operations and comprehensive income (loss) are reported net of the amounts ceded under the agreement. See Note 7 for a further discussion of the ceding agreement.

Income Taxes

The Company recognizes taxes payable or refundable and deferred taxes for the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured by applying the enacted tax rates to the difference between the financial statement and tax basis of assets and liabilities. The Company records current tax benefits and deferred tax assets utilizing a benefits-for-loss approach. Under this approach, current benefits are realized and deferred tax assets are considered realizable by the Company when realized or realizable by the consolidated group of which the Company is a member even if the benefits would not be realized on a stand-alone basis. The Company records a valuation allowance for deferred tax assets if it determines it is more likely than not that the asset will not be realized by the consolidated group. Deferred income tax assets can be realized through future earnings, including, but not limited to, the generation of future income, reversal of existing temporary differences and available tax planning strategies.

The Company is subject to tax-related audits. These audits may result in additional tax assets or liabilities. In establishing tax liabilities, the Company determines whether a tax position is more likely than not to be sustained under examination by the appropriate taxing authority. Tax positions that do not meet the more likely than not standard are not recognized. Tax positions that meet this standard are recognized in the financial statements within net deferred tax assets or liabilities or federal income taxes recoverable or payable.

Accounting Standards Updates Pending Adoption

In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition standard, Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The new standard will supersede nearly all existing revenue recognition guidance by establishing a five step, principles-based process; however, it will not impact the accounting for insurance contracts, leases, financial instruments, and guarantees. For those contracts that are impacted by the new guidance, ASU 2014-09 will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB approved the deferral of ASU 2014-09 for one year and it is effective for annual and interim reporting periods beginning in 2018 for public business entities and 2019 for others. Early adoption in 2017 will be permitted. The Company is currently evaluating the impact of ASU 2014-09 on its financial statements.

In January 2016, the FASB issued Accounting Standard Update (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities (“ASU 2016-01”), effective in 2018. The new standard will require equity investments to be measured at fair value with changes in fair value recognized in net income. Other provisions in ASU 2016-01 do not appear to be materially applicable to the Company. The Company is currently evaluating the potential impact of ASU 2016-01 on its financial statements.

10

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 3: Investments

Debt Securities

The amortized cost, gross unrealized gains and losses, and estimated fair values, as reported on the balance sheet, of debt securities at December 31, 2015 are as follows:

		Amortized			Gross Unrealized							Estimated
		Cost			Gains			Losses				Fair Value
U.S. government and agencies		$	10,333		$	26		$	(546	)		$	9,813
Mortgage-backed securities:
Residential mortgage-backed			2,365			173			-				2,538
Total debt securities		$	12,698		$	199		$	(546	)		$	12,351

The amortized cost, gross unrealized gains and losses, and estimated fair values, as reported on the balance sheet, of debt securities at December 31, 2014 are as follows:

		Amortized			Gross Unrealized							Estimated
		Cost			Gains			Losses				Fair Value
U.S. government and agencies		$	9,888		$	103		$	(4	)		$	9,987
Mortgage-backed securities:
Residential mortgage-backed			2,966			241			-				3,207
Total debt securities		$	12,854		$	344		$	(4	)		$	13,194

No investments were non-income producing in 2015 or 2014.

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The amortized cost and estimated fair values of investments in debt securities at December 31, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Because of the potential for prepayment on mortgage-backed securities, such securities have not been displayed in the table below by contractual maturity.

		Amortized			Estimated
		Cost			Fair Value
Due in one year or less		$	1,261		$	1,280
Due after one year through five years			315			322
Due after ten years			8,757			8,211
Mortgage-backed securities:
Residential mortgage-backed			2,365			2,538
Total debt securities		$	12,698		$	12,351

Net Investment Income

Sources of investment income for the years ended December 31 are summarized as follows:

		2015				2014				2013
Gross investment income:
Debt securities		$	389			$	304			$	275
Policy loans			5				8				8
Other investments			-				-				6
Total gross investment income			394				312				289
Investment expenses			(28	)			(34	)			(113	)
Net investment income		$	366			$	278			$	176

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Net Realized Investment Gains

Net realized investment gains for the years ended December 31 are summarized as follows:

		2015			2014			2013
Debt securities
Gross gains on sales		$	117		$	-		$	-
Net realized investment gains		$	117		$	-		$	-

Proceeds from the sale of debt securities was $8,389 in 2015, there were no sales or transfers of debt securities in 2014 or 2013 that resulted in a realized investment gain or loss.

Other-Than-Temporary Investment Impairments

Investment securities are reviewed for OTTI on an ongoing basis. The Company creates a watchlist of securities based largely on the fair value of an investment security relative to its cost basis. When the fair value drops below the Company’s cost, the Company monitors the security for OTTI. The determination of OTTI requires significant judgment on the part of the Company and depends on several factors, including, but not limited to:

	•		The existence of any plans to sell the investment security.
	•		The extent to which fair value is less than book value.
	•		The underlying reason for the decline in fair value (credit concerns, interest rates, etc.).
	•		The financial condition and near term prospects of the issuer/borrower, including the ability to meet contractual obligations, relevant industry trends and conditions.
	•		The Company’s intent and ability to retain the investment for a period of time sufficient to allow for an anticipated recovery in fair value.
	•		The Company’s ability to recover all amounts due according to the contractual terms of the agreements.
	•		The Company’s collateral position in the case of bankruptcy or restructuring.

A debt security is considered other-than-temporarily impaired when the fair value is less than the amortized cost basis and its value is not expected to recover through the Company’s anticipated holding period of the security. If a credit loss exists, but the Company does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, it is required to bifurcate the impairment into the loss that is attributable to credit and non-credit related risk. The credit portion of the OTTI is the difference between the present value of the expected future cash flows and amortized cost. Only the estimated credit loss amount is recognized in earnings, with the remainder of the loss amount recognized in other comprehensive loss. If the Company intends to sell, at the time this determination is made, the Company records a realized loss equal to the difference between the amortized cost and fair value. The fair value of the other-than-temporarily impaired security becomes its new cost basis. In determining whether an unrealized loss is expected to be other than temporary, the Company considers, among other factors, any plans to sell the security, the severity of impairment, financial position of the issuer, recent events affecting the issuer’s business and industry sector, credit ratings, and the ability of the Company to hold the investment until the fair value has recovered at least its cost basis.

For securitized debt securities, the Company considers factors including, commercial and residential property changes in value that vary by property type and location and average cumulative collateral loss rates that vary by vintage year. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

expected recoveries. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer and/or underlying collateral.

For certain securitized financial assets with contractual cash flows, the Company is required to periodically update its best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is less than its cost or amortized cost and there has been a decrease in the present value of the estimated cash flows since the last revised estimate, considering both timing and amount, an OTTI charge is recognized. The Company also considers its intent to retain a temporarily impaired security until recovery. Estimating future cash flows involves judgment and includes both quantitative and qualitative factors. Such determinations incorporate various information and assessments regarding the future performance of the underlying collateral. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral.

Management has completed a review for other-than-temporarily impaired securities at December 31, 2015, 2014 and 2013 and recorded no OTTI. As a result of the subjective nature of these estimates, however, provisions may subsequently be determined to be necessary as new facts emerge and a greater understanding of economic trends develops. Consistent with the Company’s practices, OTTI will be recorded as appropriate and as determined by the Company’s regular monitoring procedures of additional facts.

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses) included in accumulated other comprehensive income (loss) at December 31 were as follows:

		2015				2014				2013
Debt securities		$	(347	)		$	340			$	412
Deferred income taxes			122				(118	)			(143	)
Net unrealized investment gains (losses)		$	(225	)		$	222			$	269

At December 31, 2015, the Company owned one debt security with a fair value of $8,210 in an unrealized loss position of $546 for less than twelve months. At December 31, 2014 the Company owned one debt security with a fair value of $7,526 in an unrealized loss position of $4 for less than twelve months. The Company did not have any gross unrealized losses at December 31, 2013.

Embedded Derivatives

The Company issues single premium deferred annuity contracts that contain embedded derivatives. Such embedded derivatives are separated from their host contracts and recorded at fair value. The fair value of the embedded derivatives, which are reported as part of assets on deposit and policyholder account balances in the balance sheets, were an asset of $122,043 and a liability of $122,043, respectively, as of December 31, 2015 and an asset of $45,503 and a liability of $45,503, respectively, as of December 31, 2014. The increase in fair value related to embedded derivatives from the date of deposit was $3,591, $9,581 and $592 for the years ended December 31, 2015, 2014 and 2013, respectively. Because the Company has entered into an agreement with CMFG Life to cede 100% of this business, this expense is ceded and does not impact the statement of operations and comprehensive income (loss).

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Assets Designated/Securities on Deposit

Iowa law requires that assets equal to a life insurer’s “legal reserve” must be designated for the Iowa Department of Commerce, Insurance Division. The legal reserve is equal to the net present value of all outstanding policies and contracts involving life contingencies. At December 31, 2015 and 2014, debt securities, policy loans and cash with a carrying value of $10,618 and $11,512, respectively, were accordingly designated for Iowa. Other regulatory jurisdictions require cash and securities to be deposited for the benefit of policyholders. Pursuant to these requirements, securities with a fair value of $1,732 and $1,854 were on deposit with other regulatory jurisdictions as of December 31, 2015 and 2014, respectively.

Note 4: Fair Value

The Company uses fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, such as insurance policy liabilities (other than investment-type contracts), are excluded from the fair value disclosure requirements.

Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value of assets and liabilities into three broad levels. The Company has categorized its financial instruments, based on the degree of subjectivity inherent in the valuation technique, as follows:

	•		Level 1: Inputs are directly observable and represent quoted prices for identical assets or liabilities in active markets the Company has the ability to access at the measurement date.
	•		Level 2: All significant inputs are observable, either directly or indirectly, other than quoted prices included in Level 1, for the asset or liability. This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
	•		Level 3: One or more significant inputs are unobservable and reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

For purposes of determining the fair value of the Company’s assets and liabilities, observable inputs are those inputs used by market participants in valuing financial instruments, which are developed based on market data obtained from independent sources. In the absence of sufficient observable inputs, unobservable inputs, reflecting the Company’s estimates of the assumptions market participants would use in valuing financial assets and liabilities, are developed based on the best information available in the circumstances. The Company uses prices and inputs that are current as of the measurement date. In some instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The hierarchy requires the use of market observable information when available for assessing fair value. The availability of observable inputs varies by investment. In situations where the fair value is based on inputs that are unobservable in the market or on inputs from inactive markets, the determination of fair value requires more judgment and is subject to the risk of variability. The degree of judgment exercised by the Company in determining fair value is typically greatest for investments categorized in Level 3. Transfers in and out of level

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

categorizations are reported as having occurred at the end of the quarter in which the transfer occurred. Therefore, for all transfers into Level 3, all realized gains and losses and all changes in unrealized gains and losses in the fourth quarter are not reflected in the Level 3 rollforward table.

Valuation Process

The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance on the overall reasonableness and consistent application of valuation methodologies and inputs and compliance with accounting standards through the execution of various processes and controls designed to provide assurance that the Company’s assets and liabilities are appropriately valued.

The Company has policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of prices against market activity or indicators of reasonableness, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. The valuation policies and guidelines are reviewed and updated as appropriate.

For fair values received from third parties or internally estimated, the Company’s processes are designed to provide assurance that the valuation methodologies and inputs are appropriate and consistently applied, the assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are appropriately recorded. The Company performs procedures to understand and assess the methodologies, process and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. When using internal valuation models, these models are developed by the Company’s investment group using established methodologies. The models including key assumptions are reviewed with various investment sector professionals, accounting, operations, compliance and risk management. In addition, when fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

Transfers Between Levels

There were no transfers between levels during the year ended December 31, 2015. There were two U.S. government and agency securities totaling $2,556 transferred from Level 1 to Level 2 during the year ended December 31, 2014. The transfer occurred due to a change in the availability of the observable inputs. There were no other transfers in 2014.

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Fair Value Measurement – Recurring Basis

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015.

Assets, at Fair Value		Level 1			Level 2			Level 3			Total
Cash equivalents1		$	16,080		$	-		$	-		$	16,080
Debt securities:
U.S. government and agencies			-			9,813			-			9,813
Mortgage-backed securities:
Residential mortgage-backed			-			2,538			-			2,538
Total debt securities			-			12,351			-			12,351
Derivatives embedded in assets on deposit			-			-			122,043			122,043
Total assets		$	16,080		$	12,351		$	122,043		$	150,474
Liabilities, at Fair Value		Level 1			Level 2			Level 3			Total
Derivatives embedded in annuity contracts		$	-		$	-		$	122,043		$	122,043
Total liabilities		$	-		$	-		$	122,043		$	122,043

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2014.

Assets, at Fair Value		Level 1			Level 2			Level 3			Total
Cash equivalents 1		$	3,681		$	-		$	-		$	3,681
Debt securities:
U.S. government and agencies			-			9,987			-			9,987
Mortgage-backed securities:
Residential mortgage-backed			-			3,207			-			3,207
Total debt securities			-			13,194			-			13,194
Derivatives embedded in assets on deposit			-			-			45,503			45,503
Total assets		$	3,681		$	13,194		$	45,503		$	62,378
Liabilities, at Fair Value		Level 1			Level 2			Level 3			Total
Derivatives embedded in annuity contracts		$	-		$	-		$	45,503		$	45,503
Total liabilities		$	-		$	-		$	45,503		$	45,503

The Company had no assets or liabilities that required a fair value adjustment on a non-recurring basis as of December 31, 2015 or 2014.

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Changes in Fair Value Measurement

The following table sets forth the values of assets and liabilities classified as Level 3 within the fair value hierarchy at December 31, 2015.

					Total Realized/Unrealized
					Gain (Loss) Included in:
		Balance January 1, 2015			Purchases			Maturities				Earnings1			Balance December 31, 2015
Derivatives embedded
in assets on deposit		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
Total assets		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
Derivatives embedded
in annuity contracts		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
Total liabilities		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
1 Included in net income is realized gains and losses associated with embedded derivatives.

The following table sets forth the values of assets and liabilities classified as Level 3 within the fair value hierarchy at December 31, 2014.

					Total Realized/Unrealized
					Gain (Loss) Included in:
		Balance January 1, 2014			Purchases			Maturities				Earnings1			Balance December 31, 2014
Derivatives embedded
in assets on deposit		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
Total assets		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
Derivatives embedded
in annuity contracts		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
Total liabilities		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
1 Included in net income is realized gains and losses associated with embedded derivatives.

Determination of Fair Values

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The use of quoted prices and matrix pricing or similar techniques are examples of market approaches, while the use of discounted cash flow methodologies is an example of the income approach.

A summary of valuation techniques for classes of financial assets and liabilities by fair value hierarchy level are as follows:

19

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Level 1 Measurements

Cash equivalents: Consists of money market funds; valuation is based on the closing price as of the balance sheet date.

Level 2 Measurements

U.S. government and agencies: Certain U.S. Treasury securities and debentures issued by agencies of the U.S. government are valued based on observable inputs such as the U.S. Treasury yield curve, market indicated spreads and quoted prices for identical assets in markets that are not active and/or similar assets in markets that are active.

Residential mortgage-backed securities: Valuation is principally based on observable inputs including quoted prices for similar assets in markets that are active and observable market data.

For the majority of assets classified as Level 2 investments, the Company values the assets using third-party pricing sources, which generally rely on quoted prices for similar assets in markets that are active and observable market data.

Level 3 Measurements

Derivatives embedded in assets on deposit and annuity contracts: The Company offers single premium deferred annuity contracts with certain caps and floors which represent a minimum and maximum amount that could be credited to a contract during that contract year based on the performance of an external index. These embedded derivatives are measured at fair value separately from the host deposit asset and annuity contract.

In estimating the fair value of the embedded derivative, the Company attributes a present value to the embedded derivative equal to the discounted sum of the excess cash flows of the index related fund value over the minimum fund value. The current year portion of the embedded derivative is adjusted for known market conditions. The discount factor at which the embedded derivative is valued contains an adjustment for the Company’s own credit and risk margins for unobservable non-capital market inputs. The Company’s own credit adjustment is determined taking into account its A.M. Best rating as well as its claims paying ability.

These derivatives may be more costly than expected in volatile or declining equity markets. Changes in market conditions include, but are not limited to, changes in interest rates, equity indices, default rates and market volatility. Changes in fair value may be impacted by changes in the Company’s own credit standing. Lastly, changes in actuarial assumptions regarding policyholder behavior (such as full or partial withdrawals varying from expectations) and risk margins related to non-capital market inputs may result in significant fluctuations in the fair value of the derivatives. See Embedded Derivatives within Note 3, Investments for the impact to net income.

20

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table presents information about significant unobservable inputs used in Level 3 embedded derivative assets and liabilities measured at fair value developed by internal models as of December 31, 2015 and 2014:

Predominant		Significant		Range of Values - Unobservable Input
Valuation Method		Unobservable Input		2015		2014
Derivatives embedded in single premium deferred annuities and related assets on deposit
Discounted cash flow		Lapse rates		2% to 4% with an excess lapse rate at the end of the index period of 95%.		2% to 4% with an excess lapse rate at the end of the index period of 95%.
		Company’s own credit and risk margin		82 - 137 basis points added on to discount rate		60 - 90 basis points added on to discount rate

Fair Value Measurements for Financial Instruments Not Reported at Fair Value

Accounting standards require disclosure of fair value information about certain on- and off-balance sheet financial instruments which are not recorded at fair value on a recurring basis for which it is practicable to estimate that value.

The following methods and assumptions were used by the Company in estimating the fair value disclosures for significant financial instruments:

Level 1 Measurements

Cash: The carrying amount for this instrument approximates its fair value due to its short term nature and is based on observable inputs.

Level 2 Measurements

Assets on deposit and Investment-type contracts: Assets on deposit and investment-type contracts include single premium deferred annuity contracts, excluding the related embedded derivative. In most cases, the fair values are determined by discounting expected liability cash flows and required profit margins using the year-end swap curve plus a spread equivalent to a cost of funds for insurance companies based on observable inputs.

21

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Not Practicable to Estimate Fair Value

Policy loans: The Company believes it is not practicable to determine the fair value of its policy loans since there is no stated maturity and policy loans are often repaid by reductions to policy benefits.

The carrying amounts and estimated fair values of the Company’s financial instruments which are not measured at fair value on a recurring basis at December 31 are as follows:

						2015									2014
		Carrying			Estimated						Carrying			Estimated
		Amount			Fair Value			Level			Amount			Fair Value			Level
Financial instruments
recorded as assets:
Cash		$	1,013		$	1,013		1			$	1,921		$	1,921		1
Policy loans			-			n/a		n/a				104			n/a		n/a
Assets on deposit			825,552			699,721		2				304,434			294,710		2
Financial instruments
recorded as liabilities:
Investment-type contracts			825,552			699,721		2				304,434			294,710		2

Note 5: Income Tax

The Company is included in the consolidated federal income tax return filed by CMHC, the Company’s ultimate parent. The Company has entered into a tax sharing agreement with CMHC and its subsidiaries. The agreement provides for the allocation of tax expense based on each subsidiary’s contribution to the consolidated federal income tax liability. Pursuant to the agreement, subsidiaries that have incurred losses are reimbursed regardless of the utilization of the loss in the current year. Federal income taxes recoverable from affiliate reported on the balance sheet are due from CMFG Life.

Income Tax Expense

Income tax expense for the years ended December 31 is as follows:

		2015				2014				2013
Current tax expense (benefit)		$	1,451			$	(186	)		$	(426	)
Deferred tax expense (benefit)			(2	)			197				675
Total income tax expense		$	1,449			$	11			$	249

22

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Reconciliation to U.S. Tax Rate

Income tax expense differs from the amount computed by applying the U.S. federal corporate income tax rate of 35% to income before income taxes due to the items listed in the following reconciliation:

			2015							2014							2013
		Amount				Rate			Amount				Rate			Amount			Rate
Tax expense computed at
federal corporate tax rate		$	1,480			35.0	%		$	60			35.0	%		$	133		35.0	%
Income tax expense (benefit)
related to prior years			(31	)		(0.7	)			(41	)		(23.9	)			116		30.5
Other			-			-				(8	)		(4.7	)			-
Total income tax expense		$	1,449			34.3	%		$	11			6.4	%		$	249		65.5	%

Deferred Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2015 and 2014 are as follows:

		2015			2014
Deferred tax assets
Policy liabilities and reserves		$	36		$	81
Unrealized investment losses			122			-
Investments			168			276
Accrued expenses			94			26
Deferred policy acquisition costs			309			230
Other			1			3
Gross deferred tax assets			730			616
Deferred tax liabilities
Unrealized investment gains			-			118
Deferred reinsurance expense			47			56
Other			1			2
Gross deferred tax liabilities			48			176
Net deferred tax asset		$	682		$	440

23

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Valuation Allowance

The Company considered the need for a valuation allowance with respect to its gross deferred tax assets as of December 31, 2015 and 2014, and based on that evaluation, the Company has determined it is more likely than not all deferred tax assets as of December 31, 2015 and 2014 will be realized. Therefore, a valuation allowance was not established.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

		2015			2014
Balance at January 1		$	1		$	7
Reductions for prior years’ tax positions			-			(6	)
Balance at December 31		$	1		$	1

There were no unrecognized tax benefits as of December 31, 2015 and 2014 that, if recognized, would affect the effective tax rate in future periods. Management does not anticipate a material change to the Company’s uncertain tax positions during 2016.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense in the statements of comprehensive income (loss). The Company did not recognize any additions or reductions in interest and penalties for the year ended December 31, 2015 or 2014. During the year ended December 31, 2013 the Company recognized additions of $1 in interest and penalties. The Company had accrued $7 and $7 for the payment of interest and penalties at December 31, 2015 and 2014, respectively.

The Company is included in a consolidated U.S. federal income tax return filed by CMHC. The Company is also included in income tax returns filed in various states. For the major jurisdictions where it operates, the Company is generally no longer subject to income tax examinations by tax authorities for years ended before 2008.

Other Tax Items

As of December 31, 2015 and 2014, the Company did not have any capital loss, operating loss or credit carryforwards.

24

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 6: Related Party Transactions

In the normal course of business, there are various transactions between the Company and other related entities. In certain circumstances, expenses such as those related to sales and marketing, administrative, operations, other support and infrastructure costs are shared between the companies. Expenses incurred that are specifically identifiable with a particular company are borne by that company; other expenses are allocated among the companies on the basis of time and usage studies. Amounts due from transactions with affiliates are generally settled monthly. The Company reimbursed CMFG Life $8,447, $5,641 and $2,492 for these expenses in 2015, 2014 and 2013, respectively; which are included in operating and other expenses.

Amounts receivable/payable from/to affiliates are shown in the following table:

		2015			2014
Receivable from:
CMFG Life		$	4,518		$	2,765
Total		$	4,518		$	2,765
Payable to:
CUNA Brokerage Services, Inc.		$	2,478		$	1,290
MEMBERS Capital Advisors, Inc.			2			2
Total		$	2,480		$	1,292

Amounts receivable from CMFG Life at December 31, 2015 and 2014 are primarily for a policyholder’s purchase of an annuity when a CMFG Life policyholder has surrendered their policy for the purchase of a single premium deferred annuity and for the cession of death claims related to the Company’s single premium deferred annuity.

The Company hires MEMBERS Capital Advisors, Inc. (“MCA”) for investment advisory services. MCA, which is 100% owned by CMIC, manages substantially all of the Company’s invested assets in accordance with policies, directives and guidelines established by the Company. The Company recorded MCA investment management fees totaling $28, $34 and $113 for the years ended December 31, 2015, 2014 and 2013, respectively, which are included as a reduction to net investment income.

The Company utilizes CUNA Brokerage Services, Inc. (“CBSI”), which is 100% owned by CMIC, to distribute its single premium deferred annuity and recorded commission expense for this service of $23,072, $10,853 and $4,256 in 2015, 2014 and 2013, respectively, which is included in operating and other expenses. This expense is entirely offset by commission income the Company receives from CMFG Life as part of the 2013 reinsurance agreement.

See Note 7 regarding reinsurance and other agreements entered into by the Company and CMFG Life.

25

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 7: Reinsurance

The Company entered into a reinsurance agreement with its affiliate, CMFG Life, on a coinsurance and modified coinsurance basis. The agreement was effective November 1, 2015 to cede 100% of the business related to a new product currently in development, which includes any related development expenses. The Company receives a commission equal to 100% of its actual expenses incurred for this business, which was $1,027 for the year ended December 31, 2015.

The Company entered into an agreement with its affiliate, CMFG Life, effective January 1, 2013 to cede 100% of its investment-type contracts for its single premium deferred annuity, which are accounted for using the deposit method of accounting. The Company had $947,595 and $349,937 of assets on deposit for these contracts as of December 31, 2015 and 2014, respectively. The Company had related liabilities of $947,595 and $349,937, respectively which are included in policyholder account balances in the balance sheets. The Company receives a commission equal to 100% of its actual expenses incurred for this business, which was $34,236, $14,861 and $6,425 for the year ended December 31, 2015, 2014 and 2013, respectively.

On October 31, 2012, the Company ceded 95% of its insurance policies in force pursuant to a reinsurance agreement with CMFG Life and the Company was reimbursed for 95% of expenses incurred in the provision of policyholder and benefit payment services, and insurance taxes and charges on a go forward basis under this contract. On September 30, 2015, the Company amended its reinsurance agreement with CMFG Life and now cedes 100% of its insurance policies in force to CMFG Life and is reimbursed 100% for expenses incurred in the provision of policyholder and benefit payments services, and insurance taxes and charges going forward. As a result of the amendment to this agreement the Company ceded $1,297 of earned premiums and $1,244 of benefits as of September 30, 2015.

MLIC did not have any other reinsurance agreements at December 31, 2015 or 2014 and the entire reinsurance recoverable balance of $24,628 and $25,199, respectively, was due from CMFG Life. The recoverable balances are not collateralized and the Company retains the risk of loss in the event CMFG Life is unable to meet its obligations assumed under the reinsurance agreements. CMFG Life is rated A (excellent) by A.M. Best Company and MLIC believes the risk of non-collection is remote.

26

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The effects of reinsurance on contract charges, interest credited to policyholder accounts, premiums and on claims, benefits, and losses incurred for the years ended December 31 are as follows:

		2015				2014				2013
Face amount of policies in force		$	110,827			$	123,223			$	147,371
Premiums:
Direct - written		$	2,384			$	2,613			$	2,811
Direct - change in unearned			-				-				-
Direct - earned			2,384				2,613				2,811
Ceded to affiliate - written			(3,559	)			(2,482	)			(2,671	)
Ceded to affiliate - change in unearned			-				(4	)			(1	)
Ceded to affiliate - earned			(3,559	)			(2,486	)			(2,672	)
Premiums - written, net			(1,175	)			131				140
Premiums - change in unearned, net			-				(4	)			(1	)
Premiums, net		$	(1,175	)		$	127			$	139
Contract charges:
Direct		$	742			$	472			$	461
Ceded to affiliate			(724	)			(448	)			(415	)
Contract charges, net		$	18			$	24			$	46
Claims, benefits and losses incurred:
Direct		$	1,784			$	1,883			$	2,953
Ceded to affiliate			(2,988	)			(1,771	)			(2,774	)
Claims, benefits and losses, net		$	(1,204	)		$	112			$	179
Interest credited to policyholder account balances:
Direct		$	9,833			$	2,457			$	320
Ceded to affiliate			(9,829	)			(2,449	)			(311	)
Interest credited to policyholder account balances, net		$	4			$	8			$	9

27

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 8: Statutory Financial Data and Dividend Restrictions

The Company is a life and health insurer and is domiciled in Iowa. The Company files statutory-basis financial statements with insurance regulatory authorities. The Company did not use any permitted practices in 2015, 2014 or 2013. Certain statutory basis financial information for MLIC is presented in the table below as of and for the years ended December 31.

		Statutory Basis						Statutory Basis
		Capital and Surplus						Net Income (Loss)
		2015			2014			2015			2014				2013
MLIC		$	21,111		$	18,366		$	1,112		$	(1,792	)		$	(1,562	)

The Company is subject to statutory regulations as to maintenance of equity and the payment of dividends. Generally, ordinary dividends from an insurance subsidiary to its parent company must meet notice requirements promulgated by the regulator of the subsidiary’s state of domicile (“Insurance Department”). Extraordinary dividends, as defined by state statutes, must be approved by the Insurance Department. Based on Iowa statutory regulations, the Company could pay dividends up to $2,111 during 2016, without prior approval of the Insurance Department.

Risk-based capital (“RBC”) requirements promulgated by the National Association of Insurance Commissioners require U.S. insurers to maintain minimum capitalization levels that are determined based on formulas incorporating credit risk, insurance risk, interest rate risk, and general business risk. The adequacy of the Company’s actual capital is evaluated by a comparison to the RBC results, as determined by the formula. At December 31, 2015 and 2014, the Company’s adjusted capital exceeded the minimum requirements.

28

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 9:   Accumulated Other Comprehensive Income (Loss)

The components of accumulated comprehensive income (loss), net of tax, are as follows:

						Accumulated
		Unrealized				Other
		Investment				Comprehensive
		Gains (Loss)				Income (Loss)
Balance, January 1, 2013		$	423			$	423
Change in unrealized holding gains (losses),
net of tax - ($105)			(154	)			(154	)
Balance, December 31, 2013			269				269
Change in unrealized holding gains (losses),
net of tax - ($25)			(47	)			(47	)
Balance, December 31, 2014			222				222
Change in unrealized holding gains (losses),
net of tax - ($240)			(447	)			(447	)
Balance, December 31, 2015		$	(225	)		$	(225	)

Reclassification Adjustments

Accumulated other comprehensive income (losses) includes amounts related to unrealized investment gains (losses) which were reclassified to net income. Reclassifications from accumulated other comprehensive income (losses) for the years ended December 31 are included in the following table:

		2015				2014				2013
Reclassifications from accumulated other comprehensive income (losses)
Unrealized gains on available-for-sale
securities included in net realized investment losses		$	15			$	-			$	-
Total reclassifications from accumulated
other comprehensive income (losses)			15				-				-
Tax expense			5				-				-
Net reclassification from accumulated
other comprehensive income (losses)		$	10			$	-			$	-

29

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 10:   Business Segment Information

The following table sets forth financial information regarding the Company’s two reportable business segments for the year ended December 31, 2015.

		Life and
Year ended or as of December 31, 2015		Health				Annuities				Total
Revenues
Life and health premiums, net		$	(1,175	)		$	-			$	(1,175	)
Contract charges			18				-				18
Net investment income			366				-				366
Net realized investment gains			117				-				117
Other income			5,336				-				5,336
Total revenues			4,662				-				4,662
Benefits and expenses
Life and health insurance claims and benefits, net			(1,204	)			-				(1,204	)
Interest credited to policyholder account balances			4				-				4
Operating and other expenses			1,633				-				1,633
Total benefits and expenses			433				-				433
Income before income taxes			4,229				-				4,229
Income tax expense			1,449				-				1,449
Net income			2,780				-				2,780
Change in unrealized (losses), net of tax (benefit)			(447	)			-				(447	)
Other comprehensive (loss)			(447	)			-				(447	)
Total comprehensive income		$	2,333			$	-			$	2,333
Reinsurance recoverable from affiliate		$	24,628			$	-			$	24,628
Assets on deposit			-				947,595				947,595
Claim and policy benefit reserves - life and health			21,077				460				21,537
Policyholder account balances			3,473				947,595				951,068

30

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table sets forth financial information regarding the Company’s two reportable business segments for the year ended December 31, 2014.

		Life and
Year ended or as of December 31, 2014		Health				Annuities				Total
Revenues
Life and health premiums, net		$	127							$	127
Contract charges			24				-				24
Net investment income			278				-				278
Net realized investment gains			-				-				-
Other income			-				-				-
Total revenues			429				-				429
Benefits and expenses
Life and health insurance claims and benefits, net			112				-				112
Interest credited to policyholder account balances			8				-				8
Operating and other expenses			137				-				137
Total benefits and expenses			257				-				257
Income before income taxes			172				-				172
Income tax expense			11				-				11
Net income			161				-				161
Change in unrealized (losses), net of tax (benefit)			(47	)			-				(47	)
Other comprehensive (loss)			(47	)			-				(47	)
Total comprehensive (loss)		$	114			$	-			$	114
Reinsurance recoverable from affiliate		$	25,199			$	-			$	25,199
Assets on deposit			-				349,937				349,937
Claim and policy benefit reserves - life and health			22,035				333				22,368
Policyholder account balances			3,612				349,937				353,549

31

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table sets forth financial information regarding the Company’s two reportable business segments for the year ended December 31, 2013.

		Life and
Year ended or as of December 31, 2013		Health				Annuities				Total
Revenues
Life and health premiums, net		$	139			$	-			$	139
Contract charges			46				-				46
Net investment income			176				-				176
Net realized investment gains			-				-				-
Other income			293				-				293
Total revenues			654				-				654
Benefits and expenses
Life and health insurance claims and benefits, net			179				-				179
Interest credited to policyholder account balances			9				-				9
Operating and other expenses			86				-				86
Total benefits and expenses			274				-				274
Income before income taxes			380				-				380
Income tax expense			249				-				249
Net income			131				-				131
Change in unrealized (losses), net of tax (benefit)			(154	)			-				(154	)
Other comprehensive (loss)			(154	)			-				(154	)
Total comprehensive (loss)		$	(23	)		$	-			$	(23	)
Reinsurance recoverable from affiliate		$	25,525			$	-			$	25,525
Assets on deposit			-				89,313				89,313
Claim and policy benefit reserves - life and health			23,196				-				23,196
Policyholder account balances			3,734				89,313				93,047

32

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 11:   Commitments and Contingencies

Insurance Guaranty Funds

The Company is liable for guaranty fund assessments related to certain unaffiliated insurance companies that have become insolvent during 2015 and prior years. The Company includes a provision for all known assessments that will be levied as well as an estimate of amounts that it believes will be assessed in the future relating to past insolvencies. The Company has established a liability of $270 and $75 at December 31, 2015 and 2014, respectively, for guaranty fund assessments. The Company also estimates the amount recoverable from future premium tax payments related to these assessments and has not established an asset as of December 31, 2015 and 2014 since it does not believe any amount will be recoverable. Recoveries of assessments from premium taxes are generally made over a five-year period.

Legal Matters

Like other members of the insurance industry, the Company is occasionally a party to a number of lawsuits and other types of proceedings, some of which may involve claims for substantial or indeterminate amounts. These actions are based on a variety of issues and involve a range of the Company’s practices. The Company has established procedures and policies to facilitate compliance with laws and regulations and to support financial reporting.

In connection with regulatory examinations and proceedings, government authorities may seek various forms of relief, including penalties, restitution and changes in business practices. The Company may not be advised of the nature and extent of relief sought until the final stages of the examination or proceeding. In the opinion of management, the ultimate liability, if any, resulting from all such pending actions will not materially affect the financial statements of the Company.

Note 12:   Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued. During this period, there were no significant subsequent events that required adjustment to or disclosure in the accompanying financial statements.

33

STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS

TABLE OF CONTENTS
MEMBERS LIFE INSURANCE COMPANY		S-1
ADDITIONAL CONTRACT PROVISIONS		S-1
PRINCIPAL UNDERWRITER		S-1
INCOME PAYMENTS		S-2
OTHER INFORMATION		S-4
CUSTODIAN		S-4
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		S-4
FINANCIAL STATEMENTS		S-4

You may obtain a copy of the SAI free of charge by writing to our Administrative Office at 2000 Heritage Way, Waverly, Iowa 50677, or by calling 1-800-798-5500.

96

APPENDIX A: EXAMPLES OF PARTIAL WITHDRAWALS AND FULL SURRENDER WITH APPLICATION OF SURRENDER CHARGE AND MARKET VALUE ADJUSTMENT

Example 1: Partial Withdrawal with a Negative Market Value Adjustment (MVA)

Assume the following information as it relates to the Contract:
	•		The Contract was issued on 06/05/2015 with an initial deposit of $100,000.00.
	•		The Series B Contract is purchased; therefore, the Contract Fee is 1.50%.
	•		Money is allocated to the Variable Subaccounts and S&P 500 Risk Control Accounts.
	•		There have been no additional Purchase Payments.
	•		A gross withdrawal of $20,000.00 is taken on 12/10/2016. No other withdrawals have been previously taken.
Assume the following information as it relates to the Variable Subaccounts:
	•		As of the withdrawal date, there are 1,012.09 Variable Subaccount Accumulation Units with an Accumulation Unit Value of $10.560000.
Assume the following information as it relates to the Risk Control Accounts:
	•		The Risk Control Account Start Date is 06/10/2015.
	•		The S&P 500 Secure Risk Control Account has a 0.00% Index Rate Floor and a 7.00% Index Rate Cap.
	•		The S&P 500 Growth Risk Control Account has a -10.00% Index Rate Floor and a 17.00% Index Rate Cap.
	•		As of the withdrawal date, there are 5,940.59 S&P 500 Secure Risk Control Account Accumulation Credits.
	•		As of the withdrawal date, there are 3,902.44 S&P 500 Growth Risk Control Account Accumulation Credits.
	•		The Accumulation Credit Factor (P) at the start of the Risk Control Account Year immediately preceding the withdrawal for the S&P 500 Secure Risk Control Account is $10.1.
	•		The Accumulation Credit Factor (P) at the start of the Risk Control Account Year immediately preceding the withdrawal for the S&P 500 Growth Risk Control Account is $10.25.
	•		The S&P 500 Index value at the start of the Risk Control Account Year immediately preceding the withdrawal is 1000.00.
	•		The S&P 500 Index value at the time of the withdrawal is 1200.00.
	•		On the Risk Control Account Start Date, the 5-year Constant Maturity Treasury Rate (I) was 2.50% and the Bank of America/Merrill Lynch Index (K) was 1.00%.
	•		At the time of the withdrawal the Constant Maturity Treasury Rate for the remaining Index period (J) is 2.90% and the Bank of America/Merrill Lynch Index (L) is 1.10%.
	•		At the time of the withdrawal there are 3.50137 years remaining in the Risk Control Account Period (N).

A-1

We take the following steps to determine the net partial withdrawal amount (excluding taxes) payable to the Owner:

First, we calculate the Contract Value at the time of the withdrawal.

		(1)			(2)			(3)
		Units /			Unit Value /			Contract Value
		Accumulation			Accumulation			at time of
Account		Credits			Credit Factor			Withdrawal
Variable Subaccounts		1,012.09			$10.56			$10,687.67
S&P 500 Secure Risk Control Account		5,940.59			$10.731042			$63,748.72
S&P 500 Growth Risk Control Account		3,902.44			$11.915414			$46,499.19
Total								$120,935.58

The return of the Index is equal to the Closing Index Value divided by the Initial Index Value. The return of the S&P 500 Index is calculated to be 1.2 (1,200.00 / 1,000.00 - 1). This is greater than the (1 + Index Rate Cap) and above (1 + the Index Rate Floor) for both the S&P 500 Secure and Growth accounts. Therefore, the Index Rate of Return is set to (1 + the Index Rate Cap) which equals 1.07 for the S&P 500 Secure Risk Control Account and 1.17 for the S&P 500 Growth Risk Control Account.

The Risk Control Account Daily Contract Fee is calculated as 1.50% divided by the number of days in the Risk Control Account Year multiplied by the Accumulation Credit Factor at the start of the Risk Control Account Year (1.50% / 365 x 10.1 for the S&P 500 Secure Risk Control Account and 1.50% / 365 x 10.25 for the S&P 500 Growth Risk Control Account).

The Accumulation Credit Factor is then calculated as (a) the Accumulation Credit Factor at the start of the Risk Control Account Year multiplied by (b) the Index Rate of Return less (c) the Risk Control Account Daily Contract Fee multiplied by the number of days that have passed since the last Risk Control Account Anniversary (i.e. a x b – c).

For the S&P 500 Secure Risk Control Account, this results in an Accumulation Credit Factor at the time of the withdrawal of $10.1 x 1.07 – ((1.50% / 365 x 10.1) x 183) which equals $10.731042. The current S&P 500 Secure Risk Control Account Contract Value is then calculated as 5,940.59 x $10.731042 which equals $63,748.72.

A-2

Next, we calculate the gross withdrawal from each account.

Account	(4) Gross Withdrawal
Variable Subaccounts  S&P 500 Secure Risk Control Account  S&P 500 Growth Risk Control Account	$10,687.67 $5,384.67 $3,927.66
Total	$20,000.00

Next, we calculate the net withdrawal from each account.

		(5)			(6)			(7)			(8)			(9)
								Withdrawal
		Withdrawal						Subject to
		Subject to						Surrender			Surrender			Net
Account		MVA			MVA			Charge			Charge			Withdrawal
Variable Subaccounts		$0.00			$0.00			$687.67			$61.89			$10,625.78
S&P 500 Secure Risk Control Account		$5,384.67			($84.80)			$5,384.67			$484.62			$4,815.25
S&P 500 Growth Risk Control Account		$3,927.66			($56.53)			$3,927.66			$353.49			$3,517.64
Total		$9,312.33			($141.33)			$10,000.00			$900.00			$18,958.67

A-3

Withdrawals are first taken from the Variable Subaccounts, and because $10,000.00 is free of Surrender Charge, the Surrender Charge only applies to the remaining $687.67. There is no Surrender Charge free withdrawal amount remaining, so a Surrender Charge applies to the entire withdrawal from the Risk Control Accounts.

A-4

Next, we calculate the Accumulation Units, Accumulation Credits, and Contract Value remaining after the withdrawal.

		(10)			(11)
		Units /			Contract
		Accumulation Credits			Value after
Account		After Withdrawal			Withdrawal
Variable Subaccounts		0.00			$0.00
S&P 500 Secure Risk Control Account		5,438.81			$58,364.10
S&P 500 Growth Risk Control Account		3,572.81			$42,571.51
Total					$100,935.61

A-5

Example 2: Partial Withdrawal with a Positive MVA
Assume the following information as it relates to the Contract:
	•		The Contract was issued on 06/05/2015 with an initial deposit of $100,000.00.
	•		The Series B contract is purchased; therefore, the Contract Fee is 1.50%.
	•		Money is allocated to the Variable Subaccounts and S&P 500 Risk Control Accounts.
	•		There have been no additional Purchase Payments.
	•		A gross withdrawal of $20,000.00 is taken on 12/10/2016. No other withdrawals have been previously taken.
Assume the following information as it relates to the Variable Subaccounts:
	•		As of the withdrawal date, there are 1,012.09 Variable Subaccount Accumulation Units with an Accumulation Unit Value of $10.560000.
Assume the following information as it relates to the Risk Control Accounts:
	•		The Risk Control Account Start Date is 06/10/2015.
	•		The S&P 500 Secure Risk Control Account has a 0.00% Index Rate Floor and a 7.00% Index Rate Cap.
	•		The S&P 500 Growth Risk Control Account has a -10.00% Index Rate Floor and a 17.00% Index Rate Cap.
	•		As of the withdrawal date, there are 5,940.59 S&P 500 Secure Risk Control Account Accumulation Credits.
	•		As of the withdrawal date, there are 3,902.44 S&P 500 Growth Risk Control Account Accumulation Credits.
	•		The Accumulation Credit Factor (P) at the start of the Risk Control Account Year immediately preceding the withdrawal for the S&P 500 Secure Risk Control Account is $10.1.
	•		The Accumulation Credit Factor (P) at the start of the Risk Control Account Year immediately preceding the withdrawal for the S&P 500 Growth Risk Control Account is $10.25.
	•		The S&P 500 Index value at the start of the Risk Control Account Year immediately preceding the withdrawal is 1000.00.
	•		The S&P 500 Index value at the time of the withdrawal is 1200.00.
	•		On the Risk Control Account Start Date, the 5-year Constant Maturity Treasury Rate (I) was 2.50% and the Bank of America/Merrill Lynch Index (K) was 1.00%.
	•		At the time of the withdrawal the Constant Maturity Treasury Rate for the remaining Index period (J) is 2.10% and the Bank of America/Merrill Lynch Index (L) is 0.90%.
	•		At the time of the withdrawal there are 3.50137 years remaining in the Risk Control Account Period (N).

A-6

We take the following steps to determine the net partial withdrawal amount (excluding taxes) payable to the Owner:

First, we calculate the Contract Value at the time of the withdrawal.

		(1)			(2)			(3)
		Units /			Unit Value /			Contract Value
		Accumulation			Accumulation			at time of
Account		Credits			Credit Factor			Withdrawal
Variable Subaccounts		1,012.09			$10.56			$10,687.67
S&P 500 Secure Risk Control Account		5,940.59			$10.731042			$63,748.19
S&P 500 Growth Risk Control Account		3,902.44			$11.915414			$46,499.19
Total								$120,935.58

The return of the Index is equal to the Closing Index Value divided by the Initial Index Value.

The return of the S&P 500 Index is calculated to be 1.2 (1,200.00 / 1,000.00). This is greater than (1 + the Index Rate Cap) and above (1+ the Index Rate Floor) for both the S&P 500 Secure and Growth accounts. Therefore, the Index Rate of Return is set to (1 + the Index Rate Cap) which equals 1.07 for the S&P 500 Secure Risk Control Accounts and 1.17 for the S&P 500 Growth Risk Control Account.

The Risk Control Account Daily Contract Fee is calculated as 1.50% divided by the number of days in the Risk Control Account Year, multiplied by the Accumulation Credit Factor at the start of the Risk Control Account Year (1.50% / 365 x 10.1 for the S&P 500 Secure Risk Control Account and 1.50% / 365 x 10.25 for the S&P 500 Growth Risk Control Account).

The Accumulation Credit Factor is then calculated as (a) the Accumulation Credit Factor at the start of the Risk Control Account Year multiplied by (b) the Index Rate of Return less (c) the Risk Control Account Daily Contract Fee multiplied by the number of days that have passed since the last Risk Control Account Anniversary (i.e. a x b – c).

For the S&P 500 Secure Risk Control Account, this results in an Accumulation Credit Factor at the time of the withdrawal of $10.1 x 1.07 – ((1.50% x 365 x 10.1) x 183) which equals $10.731042. The current S&P 500 Secure Risk Control Account Contract Value is then calculated as 5,940.59 x $10.731042 which equals $63,748.72.

A-7

Next, we calculate the gross withdrawal from each account.

	(4)
	Gross
Account	Withdrawal
Variable Subaccounts	$10,687.67
S&P 500 Secure Risk Control Account	$5,384.67
S&P 500 Growth Risk Control Account	$3,927.66
Total	$20,000.00

Next, we calculate the net withdrawal from each account.

		(5)			(6)			(7)			(8)			(9)
								Withdrawal
		Withdrawal						Subject to
		Subject to						Surrender			Surrender			Net
Account		MVA			MVA			Charge			Charge			Withdrawal
Variable Subaccounts		$0.00			$0.00			$687.67			$61.89			$10,625.78
S&P 500 Secure Risk Control Account		$5,384.67			$86.67			$5,384.67			$484.62			$4,986.72
S&P 500 Growth Risk Control Account		$3,927.66			$57.78			$3,927.66			$353.49			$3,631.95
Total		$9,312.33			$144.45			$10,000.00			$900.00			$19,244.45

A-8

Withdrawals are first taken from the Variable Subaccounts, and because $10,000.00 is free of Surrender Charge, the Surrender Charge only applies to the remaining $687.67. There is no Surrender Charge free withdrawal amount remaining, so a Surrender Charge applies to the entire withdrawal from the Risk Control Accounts.

A-9

Next, we calculate the Accumulation Units, Accumulation Credits, and Contract Value remaining after the withdrawal.

		(10)			(11)
		Units /			Contract
		Accumulation Credits			Value after
Account		After Withdrawal			Withdrawal
Variable Subaccounts		0.00			$0.00
S&P 500 Secure Risk Control Account		5,438.81			$58,364.10
S&P 500 Growth Risk Control Account		3,572.82			$42,571.51
Total					$100,935.61

A-10

Example 3: Full Surrender of Contract with a Negative MVA
Assume the following information as it relates to the Contract:
	•		The Contract was issued on 06/05/2015 with an initial deposit of $100,000.00.
	•		The Series B Contract is purchase; therefore, the Contract Fee is 1.50%.
	•		Money is allocated to the Variable Subaccounts and S&P 500 Risk Control Accounts.
	•		There have been no additional Purchase Payments.
	•		A full surrender is taken on 12/10/2016. No other withdrawals have been previously taken.
Assume the following information as it relates to the Variable Subaccounts:
	•		As of the withdrawal date, there are 1,012.09 Variable Subaccount Accumulation Units with an Accumulation Unit Value of $10.56.
Assume the following information as it relates to the Risk Control Accounts:
	•		The Risk Control Account Start Date is 06/10/2015.
	•		The S&P 500 Secure Risk Control Account has a 0.00% Index Rate Floor and a 7.00% Index Rate Cap.
	•		The S&P 500 Growth Risk Control Account has a -10.00% Index Rate Floor and a 17.00% Index Rate Cap.
	•		As of the withdrawal date, there are 5,940.59 S&P 500 Secure Risk Control Account Accumulation Credits.
	•		As of the withdrawal date, there are 3,902.44 S&P 500 Growth Risk Control Account Accumulation Credits.
	•		The Accumulation Credit Factor (P) at the start of the Risk Control Account Year immediately preceding the withdrawal for the S&P 500 Secure Risk Control Account is $10.1.
	•		The Accumulation Credit Factor (P) at the start of the Risk Control Account Year immediately preceding the withdrawal for the S&P 500 Growth Risk Control Account is $10.25.
	•		The S&P 500 Index value at the start of the Risk Control Account Year immediately preceding the withdrawal is 1000.00.
	•		The S&P 500 Index value at the time of the withdrawal is 1200.00.
	•		On the Risk Control Account Start Date, the 5-year Constant Maturity Treasury Rate (I) was 2.50% and the Bank of America/Merrill Lynch Index (K) was 1.00%.
	•		At the time of the withdrawal the Constant Maturity Treasury Rate for the remaining Index period (J) is 2.90% and the Bank of America/Merrill Lynch Index (L) is 1.10%.
	•		At the time of the withdrawal there are 3.50137 years remaining in the Risk Control Account Period (N).

A-11

We take the following steps to determine the Surrender Value (excluding taxes) payable to the Owner:

First, we calculate the Contract Value at the time of the withdrawal.

		(1)			(2)			(3)
		Units /			Unit Value /			Contract Value
		Accumulation			Accumulation			at time of
Account		Credits			Credit Factor			Withdrawal
Variable Subaccounts		1,012.09			$10.56			$10,687.67
S&P 500 Secure Risk Control Account		5,940.59			$10.731042			$63,748.72
S&P 500 Growth Risk Control Account		3,902.44			$11.915414			$46,499.19
Total								$120,935.58

The return of the Index is equal to the Closing Index Value divided by the Initial Index Value. The return of the S&P 500 Index is calculated to be 1.2 (1,200.00 / 1,000.00). This is greater than (1 + the Index Rate Cap) and above (1 + the Index Rate Floor) for both the S&P 500 Secure and Growth accounts. Therefore, the Index Rate of Return is set to (1 + the Index Rate Cap), which equals 1.07 for the S&P 500 Secure Risk Control Account and 1.17% for the S&P 500 Growth Risk Control Account.

The Risk Control Account Daily Contract Fee is calculated as 1.50% divided by the number of days in the Risk Control Account Year multiplied by the Accumulation Credit Factor at the start of the Risk Control Account Year (1.50% / 365 x 10.1 for the S&P 500 Secure Risk Control Account and 1.50% / 365 x 10.25 for the S&P 500 Growth Risk Control Account).

The Accumulation Credit Factor is then calculated as (a) the Accumulation Credit Factor at the start of the Risk Control Account Year multiplied by (b) the Index Rate of Return less (c) the Risk Control Account Daily Contract Fee multiplied by the number of days that have passed since the last Risk Control Account Anniversary (i.e. a x b – c).

For the S&P 500 Secure Risk Control Account, this results in an Accumulation Credit Factor at the time of the withdrawal of $10.1 x 1.07 – ((1.50% x 365 x 1.1) x 183) which equals $10.731042. The current S&P 500 Secure Risk Control Account Contract Value is then calculated as 5,940.59 x $10. 731042 which equals $63,748.72.

A-12

Next, we calculate the gross withdrawal from each account.

		(4)
		Gross
Account		Withdrawal
Variable Subaccounts		$10,687.67
S&P 500 Secure Risk Control Account		$63,748.72
S&P 500 Growth Risk Control Account		$46,499.19
Total		$120,935.58

Next, we calculate the net withdrawal from each account.

		(5)			(6)			(7)			(8)			(9)
		Withdrawal						Withdrawal Subject
		Subject to						to Surrender			Surrender			Net
Account		MVA			MVA			Charge			Charge			Withdrawal
Variable Subaccounts		$0.00			$0.00			$687.67			$61.89			$10,625.78
S&P 500 Secure Risk Control Account		$63,748.72			($1,003.95)			$51,643.13			$4,647.88			$58,096.89
S&P 500 Growth Risk Control Account		$46,499.19			($669.30)			$37,669.20			$3,390.23			$42,439.66
Total		$110,247.91			($1,673.25)			$90,000.00			$8,100.00			$111,162.33

A-13

Withdrawals are first taken from the Variable Subaccounts, and because $10,000.00 is free of Surrender Charge, the Surrender Charge only applies to the remaining $687.67. There is no Surrender Charge free withdrawal amount remaining, so a Surrender Charge applies to the Pro Rata withdrawal of the remaining Purchase payments subject to a Surrender Charge from the Risk Control Accounts. The remaining purchase Payments subject to a Surrender Charge is equal to the withdrawal subject to a Surrender Charge less the withdrawal from the Variable Subaccount subject to a surrender Charge, calculated as $90,000 - $687.67 which equals $89,312.33.

The Pro Rata withdrawal from the S&P 500 Growth Risk Control Account that is subject to a Surrender Charge is equal to the withdrawal from the S&P 500 Growth Risk Control Account divided by the total withdrawal from the S&P 500 Risk Control Account multiplied by the remaining Purchase Payments subject to a Surrender Charge. This is calculated as $46,499.19 / $110,247.91 x $89,312.33 = $37,669.20.

A-14

Next, we calculate the Accumulation Units, Accumulation Credits, and Contract Value remaining after the withdrawal.

		(10)			(11)
		Units /			Contract
		Accumulation Credits			Value after
Account		After Withdrawal			Withdrawal
Variable Subaccounts		0.00			$0.00
S&P 500 Secure Risk Control Account		0.00			$0.00
S&P 500 Growth Risk Control Account		0.00			$0.00
Total					$0.00

A-15

MEMBERS Life Insurance Company
2000 Heritage Way
Waverly, IA 50677
1-800-798-5500

Dealer Prospectus Delivery Obligations

All dealers that effect transactions in these securities are required to deliver a Prospectus.

MEMBERS Life Insurance Company

Financial Statements as of December 31, 2015 and 2014
and for the Three Years in the Period Ended December 31, 2015
and Report of Independent Registered Public Accounting Firm

Index to

Financial Statements of

MEMBERS Life Insurance Company

Report of Independent Registered Public Accounting Firm	1
Balance Sheets as of December 31, 2015 and 2014	2
Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2015, 2014 and 2013	3
Statements of Stockholder’s Equity for the Years Ended December 31, 2015, 2014 and 2013	4
Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	5
Notes to Financial Statements
Note 1—Nature of Business	6
Note 2—Summary of Significant Accounting Policies	6
Note 3—Investments, Debt Securities	11
Note 3—Investments, Net Investment Income	12
Note 3—Investments, Net Realized Investment Gains	13
Note 3—Investments, Other-Than-Temporary Investment Impairments	13
Note 3—Investments, Net Unrealized Investment Gains	14
Note 3—Investments, Embedded Derivatives	14
Note 3—Investments, Assets Designated /Securities on Deposit	15
Note 4—Fair Value	15
Note 5—Income Tax	22
Note 6—Related Party Transactions	25
Note 7—Reinsurance	26
Note 8—Statutory Financial Data and Dividend Restrictions	28
Note 9—Accumulated Other Comprehensive Income (Loss)	29
Note 10—Business Segment Information	30
Note 11—Commitments and Contingencies	33
Note 12—Subsequent Events	33

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of
MEMBERS Life Insurance Company
Madison, Wisconsin

We have audited the accompanying balance sheets of MEMBERS Life Insurance Company (the “Company”) as of December 31, 2015 and 2014, and the related statements of operations and comprehensive income (loss), stockholder’s equity, and cash flows for each of the three years in the period ended December 31, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of MEMBERS Life Insurance Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, results of the Company may not be indicative of those of a stand-alone entity, as the Company is a member of a controlled group of affiliated companies.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois
March 8, 2016

MEMBERS Life Insurance Company

Balance Sheets

December 31, 2015 and 2014

($ in 000s)

Assets		2015				2014
Investments
Debt securities, available for sale, at fair value
(amortized cost 2015 - $12,698; 2014 - $12,854)		$	12,351			$	13,194
Policy loans			-				104
Receivable for securities sold			-				15
Total investments			12,351				13,313
Cash and cash equivalents			17,093				5,602
Accrued investment income			134				80
Reinsurance recoverable from affiliate			24,628				25,199
Assets on deposit			947,595				349,937
Premiums receivable, net			26				28
Net deferred tax asset			682				440
Receivable from affiliate			4,518				2,765
Other assets and receivables			268				220
Federal income taxes recoverable from affiliate			516				1,797
Total assets		$	1,007,811			$	399,381
Liabilities and Stockholder’s Equity
Liabilities
Claim and policy benefit reserves - life and health		$	21,537			$	22,368
Policyholder account balances			951,068				353,549
Unearned premiums			1				3
Payables to affiliates			2,480				1,292
Accounts payable and other liabilities			11,177				2,954
Total liabilities			986,263				380,166
Commitments and contingencies (Note 11)
Stockholder’s equity
Common stock, $5 par value, authorized 1,000 shares;
issued and outstanding 1,000 shares			5,000				5,000
Additional paid in capital			10,500				10,500
Accumulated other comprehensive income (loss),
net of tax expense (benefit) (2015 - ($122); 2014 - $118)			(225	)			222
Retained earnings			6,273				3,493
Total stockholder’s equity			21,548				19,215
Total liabilities and stockholder’s equity		$	1,007,811			$	399,381

See accompanying notes to financial statements.	2

MEMBERS Life Insurance Company

Statements of Operations and Comprehensive Income (Loss)

Years Ended December 31, 2015, 2014 and 2013

($ in 000s)

			2015				2014				2013
Revenues
Life and health premiums, net			$	(1,175	)		$	127			$	139
Contract charges, net				18				24				46
Net investment income				366				278				176
Net realized investment gains				117				-				-
Other income				5,336				-				293
Total revenues				4,662				429				654
Benefits and expenses
Life and health insurance claims and benefits, net				(1,204	)			112				179
Interest credited to policyholder account balances, net				4				8				9
Operating and other expenses (Note 6)				1,633				137				86
Total benefits and expenses				433				257				274
Income before income taxes				4,229				172				380
Income tax expense				1,449				11				249
Net income				2,780				161				131
Change in unrealized gains (losses), net of tax expense
(benefit) (2015 - ($235); 2014 - ($25); 2013 - ($105))				(437	)			(47	)			(154	)
Reclassification adjustment for (gains)
included in net income, net of tax (benefit) - (2015 - ($5))				(10	)			-				-
Other comprehensive loss				(447	)			(47	)			(154	)
Total comprehensive income (loss)			$	2,333			$	114			$	(23	)

See accompanying notes to financial statements.	3

MEMBERS Life Insurance Company

Statements of Stockholder’s Equity

Years Ended December 31, 2015, 2014 and 2013

($ in 000s)

										Accumulated
						Additional				other								Total
		Common				paid in				comprehensive				Retained				stockholder’s
		stock				capital				income (loss)				earnings				equity
Balance, January 1, 2013		$	5,000			$	10,500			$	423			$	3,201			$	19,124
Net income			-				-				-				131				131
Other comprehensive (loss)			-				-				(154	)			-				(154	)
Balance, December 31, 2013			5,000				10,500				269				3,332				19,101
Net income			-				-				-				161				161
Other comprehensive (loss)			-				-				(47	)			-				(47	)
Balance, December 31, 2014			5,000				10,500				222				3,493				19,215
Net income			-				-				-				2,780				2,780
Other comprehensive (loss)			-				-				(447	)			-				(447	)
Balance, December 31, 2015		$	5,000			$	10,500			$	(225	)		$	6,273			$	21,548

See accompanying notes to financial statements.	4

MEMBERS Life Insurance Company

Statements of Cash Flows

Years Ended December 31, 2015, 2014 and 2013

($ in 000s)

		2015				2014				2013
Cash flows from operating activities:
Net income		$	2,780			$	161			$	131
Adjustments to reconcile net income
to net cash provided by operating activities:
Policyholder charges on investment type contracts			(18	)			(24	)			(46	)
Net realized investment gains			(117	)			-				-
Interest credited to policyholder account balances			4				8				9
Deferred income taxes			(2	)			197				675
Amortization of bond premium and discount			61				75				86
Amortization and write off of deferred charges			26				26				21
Changes in other assets and liabilities
Accrued investment income			(54	)			(16	)			9
Reinsurance recoverable			273				326				611
Premiums receivable			2				4				2
Other assets			(1,828	)			356				(1,079	)
Federal income taxes recoverable from affiliate			1,281				87				1,892
Insurance reserves			(831	)			(828	)			(916	)
Unearned premiums			(2	)			-				(1	)
Other liabilities			9,412				955				2,892
Net cash provided by operating activities			10,987				1,327				4,286
Cash flows from investing activities:
Purchases of debt securities			(8,760	)			(7,535	)			-
Proceeds on sale or maturity of debt securities			8,987				750				1,665
Net amounts received on policy loans			104				6				-
Net cash provided by (used in) investing activities			331				(6,779	)			1,665
Cash flows from financing activities:
Policyholder account deposits			596,817				252,273				89,726
Policyholder account withdrawals			(12,250	)			(3,581	)			(930	)
Assets on deposit - deposits			(596,492	)			(252,273	)			(89,382	)
Assets on deposit - withdrawals			12,098				3,531				813
Change in bank overdrafts			-				(1	)			1
Net cash provided by (used in) financing activities			173				(51	)			228
Change in cash and cash equivalents			11,491				(5,503	)			6,179
Cash and cash equivalents at beginning of year			5,602				11,105				4,926
Cash and cash equivalents at end of year		$	17,093			$	5,602			$	11,105
Supplemental disclosure of cash information:
Cash received (paid) during the year for income taxes		$	(170	)		$	273			$	2,318

See accompanying notes to financial statements.	5

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 1:   Nature of Business

MEMBERS Life Insurance Company (“MLIC” or the “Company”) is a life and health insurance stock company organized under the laws of Iowa and a wholly-owned subsidiary of CUNA Mutual Investment Corporation (“CMIC”). CMIC is organized under the laws of Wisconsin and is a wholly-owned subsidiary of CMFG Life Insurance Company (“CMFG Life”), an Iowa life insurance company. CMFG Life and its affiliated companies primarily sell insurance and other products to credit unions and their members. The Company’s ultimate parent is CUNA Mutual Holding Company (“CMHC”), a mutual insurance holding company organized under the laws of Iowa. In 2013, MLIC began selling single premium deferred annuity contracts to credit union members through face-to-face and direct response distribution channels. Prior to 2013, MLIC did not actively market new business; it primarily serviced existing blocks of individual and group life policies. See Note 7, Reinsurance, for information on the Company’s reinsurance and ceding agreements.

MLIC is authorized to sell life, health and annuity policies in all states in the U.S. and the District of Columbia, except New York. The following table identifies states with premiums greater than 5% of total direct premium and states with deposits on annuity contracts greater than 5% of total deposits:

---

														Deposits on
		Direct Life and Health Premium												Annuity Contracts
		2015				2014				2013				2015				2014				2013
Michigan			63	%			63	%			64	%			8	%			12	%			11	%
Texas			23				22				22				7				8				*
California			5				5				5				8				*				*
Indiana			*				*				*				6				6				6
Iowa			*				*				*				5				8				17
Wisconsin			*				*				*				5				7				7
Pennsylvania			*				*				*				5				6				5
Florida			*				*				*				5				5				*
Washington			*				*				*				5				*				*
Rhode Island			*				*				*				*				8				6
Utah			*				*				*				*				*				5

No other state represents more than 5% of the Company’s premiums or deposits for any year in the three years ended December 31, 2015.

CMFG Life provides significant services required in the conduct of the Company’s operations. Management believes allocations of expenses are reasonable, but the results of the Company’s operations may have materially differed from the results reflected in the accompanying financial statements if the Company did not have this relationship.

Note 2: Summary of Significant Accounting Policies

Basis of Presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

6

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and in some cases the difference could be material. Investment valuations, embedded derivatives, deferred tax asset valuation reserves, and claim and policyholder benefit reserves are most affected by the use of estimates and assumptions.

Segment Reporting

The Company is currently managed as two reportable business segments, (1) life and health and (2) annuities. See Note 7, Reinsurance, for information on the Company’s reinsurance and ceding agreements, which impact the financial statement presentation of these segments.

Investments

Debt securities: Investments in debt securities are classified as available for sale and are carried at fair value. A debt security is considered other-than-temporarily impaired when the fair value is less than the amortized cost basis and its value is not expected to recover through the Company’s anticipated holding period of the security. If a credit loss exists, but the Company does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, it is required to bifurcate the impairment into the loss that is attributable to credit and non-credit related components. The credit portion of the other-than-temporary impairment (“OTTI”) is the difference between the present value of the expected future cash flows and amortized cost. Only the estimated credit loss amount is recognized in net realized investment gains, with the remainder of the loss amount recognized in other comprehensive loss. If the Company intends to sell or it is more likely than not that the Company will be required to sell before anticipated recovery in value, the Company records a realized loss equal to the difference between the amortized cost and fair value. The fair value of the other-than-temporarily impaired security becomes its new cost basis. In determining whether an unrealized loss is expected to be other than temporary, the Company considers, among other factors, any plans to sell the security, the severity of impairment, financial position of the issuer, recent events affecting the issuer’s business and industry sector, credit ratings, and the intent and ability of the Company to hold the investment until the fair value has recovered at least its cost basis.

Unrealized gains and losses on investments in debt securities, net of deferred federal income taxes, are included in accumulated other comprehensive income as a separate component of stockholder’s equity.

Policy loans: Policy loans are reported at their unpaid principal balance. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal or interest on the loan is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Policy loans allocated to CMFG Life as payment related to the 2012 reinsurance agreement and the 2015 amendment (See Note 7) are $1,882 and $1,975 at December 31, 2015 and 2014, respectively. As a result of the amendment, all policy loans are allocated to CMFG Life as of December 31, 2015.

Net investment income: Interest income related to mortgage-backed and other structured securities is recognized on an accrual basis using a constant effective yield method, based on anticipated prepayments and the estimated economic life of the securities. When estimates of prepayments change, the effective yield is recalculated to reflect actual payments to date and anticipated future payments and such adjustments are reflected in net investment income. Prepayment assumptions for loan-backed bonds and structured securities are based on industry averages or internal estimates. Interest income related to non-structured securities is recognized on an accrual basis using a constant effective yield method. Discounts and premiums on debt securities are amortized over the estimated lives of the respective securities on an effective yield basis.

7

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Net realized gains and losses: Realized gains and losses on the sale of investments are determined on a specific identification basis and are recorded on the trade date.

Derivative Financial Instruments

The Company issues single premium deferred annuity contracts that contain embedded derivatives. Derivatives embedded within non-derivative host contracts are separated from the host instrument when the embedded derivative is not clearly and closely related to the host instrument. Such embedded derivatives are recorded at fair value, and they are reported as part of assets on deposit and policyholder account balances in the balance sheets, with the change in the value being recorded in net realized investment gains. See Note 3, Investments-Embedded Derivatives for additional information.

Changes in the fair value of the embedded derivative in assets on deposit offset changes in the fair value of the embedded derivative in policyholder account balances; both of these changes are included in net realized investment gains. Accretion of the interest on assets on deposit offsets accretion of the interest on the host contract; both of these amounts are included in interest credited on policyholder account balances.

Cash and Cash Equivalents

Cash and cash equivalents include unrestricted deposits in financial institutions with maturities of 90 days or less. The Company recognizes a liability in accounts payable and other liabilities for the amount of checks issued in excess of its current cash balance. The change in this overdraft amount is recognized as a financing activity in the Company’s statement of cash flows.

Recognition of Insurance Revenue and Related Benefits

Term-life and whole-life insurance premiums are recognized as premium income when due. Policy benefits for these products are recognized in relation to the premiums so as to result in the recognition of profits over the expected lives of the policies and contracts.

Amounts collected on policies not subject to significant mortality or longevity risk, such as the Company’s single premium deferred annuity contracts, are considered investment contracts and are recorded as increases in policyholder account balances. Revenues from investment contracts principally consist of net investment income and contract charges such as expense and surrender charges. Expenses for investment contracts consist of interest credited to contracts, benefits incurred in excess of related policyholder account balances and policy maintenance costs. Because the Company has entered into an agreement with CMFG Life to cede 100% of this business, these revenues and expenses are ceded and do not impact the statement of operations and comprehensive income (loss). See Note 7, Reinsurance for additional information on this agreement.

Other Income / Operating and Other Expenses

Other income in 2015 and 2013 relates to legal settlements received on structured security investments that had previously been sold. Operating and other expenses in 2015 include legal expenses related to the settlement received.

Deferred Policy Acquisition Costs

The costs of acquiring insurance business that are directly related to the successful acquisition of new and renewal business are deferred to the extent that such costs are expected to be recoverable from future profits. Such costs principally include commissions and sales costs, direct response advertising costs, premium taxes, and certain policy issuance and underwriting costs. Costs deferred on term-life and whole-life insurance products, deferred policy acquisition costs (“DAC”), are amortized in proportion to the ratio of the annual premium to the total anticipated premiums generated. Due to the age of the existing block of policies, all DAC has been fully amortized as of December 31, 2015 and 2014 and there was no amortization expense in 2015, 2014 or 2013.

8

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Acquisition costs on the Company’s single premium deferred annuity contracts are reimbursed through a ceding commission by CMFG Life, which assumes all deferrable costs as part of its agreement to assume 100% of this business from the Company. See Note 7, Reinsurance for additional information on this agreement.

Insurance Reserves

Life and health claim and policy benefit reserves consist principally of future policy benefit reserves and reserves for estimates of future payments on incurred claims reported but not yet paid and unreported incurred claims. Estimates for future payments on incurred claims are developed using actuarial principles and assumptions based on past experience adjusted for current trends. Any change in the probable ultimate liabilities is reflected in net income in the period in which the change is determined.

When actual experience indicates that existing contract liabilities, together with the present value of future gross premiums will not be sufficient to recover the present value of future benefits or recover unamortized deferred acquisition costs, a premium deficiency will be recognized by either a reduction in unamortized acquisition costs or an increase in the liability for future benefits. There was no premium deficiency in 2015, 2014 or 2013.

Policyholder Account Balances

The Company recognizes a liability at the stated account value for policyholder deposits that are not subject to significant policyholder mortality or longevity risk and for universal life-type policies. The account value equals the sum of the original deposit and accumulated interest, less any withdrawals and expense charges. The average credited rate was 4.5% in 2015, 2014 and 2013. The future minimum guaranteed interest rate during the life of the contracts is 4.5%.

The single premium deferred annuities, which are included in policyholder account balances, have two risk control accounts, referred to as the Secure and Growth Accounts; the Secure Account has a yearly credited interest rate floor of 0% and the yearly Growth Account floor is -10%. The Secure and Growth Accounts both have credited interest rate caps that vary with issuance. Interest is credited at the end of each contract year during the selected index term based on the allocation between risk control accounts and the performance of an external index during that contract year. Both the Growth Account and Secure Account are based on the S&P 500 Index. At the end of the initial index term, only the Secure Account will be available as an option to the policyholder. The average annualized credited rate was 1.65%, 1.10% and .72% in 2015, 2014 and 2013, respectively.

Accounts Payable and Other Liabilities

The Company issues annuity contracts on the 10^th and 25^th of each month. The Company recognizes a liability on contracts for which it has received cash, but has not issued a contract.

Reinsurance

Reinsurance premiums, claims and benefits, commission expense reimbursements, and reserves related to reinsured business ceded are accounted for on a basis consistent with the accounting for the underlying direct policies that have been ceded and the terms of the reinsurance contracts. Premiums and insurance claims and benefits in the statements of operations and comprehensive income (loss) are reported net of the amounts ceded to other companies under such reinsurance contracts. Ceded insurance reserves and ceded benefits paid are included in reinsurance recoverables along with certain ceded policyholder account balances, which include mortality risk. A prepaid reinsurance asset is also recorded for the portion of unearned premiums related to ceded policies.

9

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Assets on Deposit

Assets on deposit represent the amount of policyholder account balances related to the single premium deferred annuity contracts (investment-type contracts) that are ceded to CMFG Life. These investment-type contracts are accounted for on a basis consistent with the accounting for the underlying contracts. Since the related product is an investment-type contract, the Company accounts for the reinsurance of these contracts using the deposit method of accounting consistent with the terms of the ceding agreement. The related contract charges and interest credited to policyholder account balances in the statements of operations and comprehensive income (loss) are reported net of the amounts ceded under the agreement. See Note 7 for a further discussion of the ceding agreement.

Income Taxes

The Company recognizes taxes payable or refundable and deferred taxes for the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured by applying the enacted tax rates to the difference between the financial statement and tax basis of assets and liabilities. The Company records current tax benefits and deferred tax assets utilizing a benefits-for-loss approach. Under this approach, current benefits are realized and deferred tax assets are considered realizable by the Company when realized or realizable by the consolidated group of which the Company is a member even if the benefits would not be realized on a stand-alone basis. The Company records a valuation allowance for deferred tax assets if it determines it is more likely than not that the asset will not be realized by the consolidated group. Deferred income tax assets can be realized through future earnings, including, but not limited to, the generation of future income, reversal of existing temporary differences and available tax planning strategies.

The Company is subject to tax-related audits. These audits may result in additional tax assets or liabilities. In establishing tax liabilities, the Company determines whether a tax position is more likely than not to be sustained under examination by the appropriate taxing authority. Tax positions that do not meet the more likely than not standard are not recognized. Tax positions that meet this standard are recognized in the financial statements within net deferred tax assets or liabilities or federal income taxes recoverable or payable.

Accounting Standards Updates Pending Adoption

In May 2014, the Financial Accounting Standards Board (“FASB”) issued a comprehensive new revenue recognition standard, Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The new standard will supersede nearly all existing revenue recognition guidance by establishing a five step, principles-based process; however, it will not impact the accounting for insurance contracts, leases, financial instruments, and guarantees. For those contracts that are impacted by the new guidance, ASU 2014-09 will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In July 2015, the FASB approved the deferral of ASU 2014-09 for one year and it is effective for annual and interim reporting periods beginning in 2018 for public business entities and 2019 for others. Early adoption in 2017 will be permitted. The Company is currently evaluating the impact of ASU 2014-09 on its financial statements.

In January 2016, the FASB issued Accounting Standard Update (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities (“ASU 2016-01”), effective in 2018. The new standard will require equity investments to be measured at fair value with changes in fair value recognized in net income. Other provisions in ASU 2016-01 do not appear to be materially applicable to the Company. The Company is currently evaluating the potential impact of ASU 2016-01 on its financial statements.

10

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 3: Investments

Debt Securities

The amortized cost, gross unrealized gains and losses, and estimated fair values, as reported on the balance sheet, of debt securities at December 31, 2015 are as follows:

		Amortized			Gross Unrealized							Estimated
		Cost			Gains			Losses				Fair Value
U.S. government and agencies		$	10,333		$	26		$	(546	)		$	9,813
Mortgage-backed securities:
Residential mortgage-backed			2,365			173			-				2,538
Total debt securities		$	12,698		$	199		$	(546	)		$	12,351

The amortized cost, gross unrealized gains and losses, and estimated fair values, as reported on the balance sheet, of debt securities at December 31, 2014 are as follows:

		Amortized			Gross Unrealized							Estimated
		Cost			Gains			Losses				Fair Value
U.S. government and agencies		$	9,888		$	103		$	(4	)		$	9,987
Mortgage-backed securities:
Residential mortgage-backed			2,966			241			-				3,207
Total debt securities		$	12,854		$	344		$	(4	)		$	13,194

No investments were non-income producing in 2015 or 2014.

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The amortized cost and estimated fair values of investments in debt securities at December 31, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Because of the potential for prepayment on mortgage-backed securities, such securities have not been displayed in the table below by contractual maturity.

		Amortized			Estimated
		Cost			Fair Value
Due in one year or less		$	1,261		$	1,280
Due after one year through five years			315			322
Due after ten years			8,757			8,211
Mortgage-backed securities:
Residential mortgage-backed			2,365			2,538
Total debt securities		$	12,698		$	12,351

Net Investment Income

Sources of investment income for the years ended December 31 are summarized as follows:

		2015				2014				2013
Gross investment income:
Debt securities		$	389			$	304			$	275
Policy loans			5				8				8
Other investments			-				-				6
Total gross investment income			394				312				289
Investment expenses			(28	)			(34	)			(113	)
Net investment income		$	366			$	278			$	176

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Net Realized Investment Gains

Net realized investment gains for the years ended December 31 are summarized as follows:

		2015			2014			2013
Debt securities
Gross gains on sales		$	117		$	-		$	-
Net realized investment gains		$	117		$	-		$	-

Proceeds from the sale of debt securities was $8,389 in 2015, there were no sales or transfers of debt securities in 2014 or 2013 that resulted in a realized investment gain or loss.

Other-Than-Temporary Investment Impairments

Investment securities are reviewed for OTTI on an ongoing basis. The Company creates a watchlist of securities based largely on the fair value of an investment security relative to its cost basis. When the fair value drops below the Company’s cost, the Company monitors the security for OTTI. The determination of OTTI requires significant judgment on the part of the Company and depends on several factors, including, but not limited to:

	•		The existence of any plans to sell the investment security.
	•		The extent to which fair value is less than book value.
	•		The underlying reason for the decline in fair value (credit concerns, interest rates, etc.).
	•		The financial condition and near term prospects of the issuer/borrower, including the ability to meet contractual obligations, relevant industry trends and conditions.
	•		The Company’s intent and ability to retain the investment for a period of time sufficient to allow for an anticipated recovery in fair value.
	•		The Company’s ability to recover all amounts due according to the contractual terms of the agreements.
	•		The Company’s collateral position in the case of bankruptcy or restructuring.

A debt security is considered other-than-temporarily impaired when the fair value is less than the amortized cost basis and its value is not expected to recover through the Company’s anticipated holding period of the security. If a credit loss exists, but the Company does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, it is required to bifurcate the impairment into the loss that is attributable to credit and non-credit related risk. The credit portion of the OTTI is the difference between the present value of the expected future cash flows and amortized cost. Only the estimated credit loss amount is recognized in earnings, with the remainder of the loss amount recognized in other comprehensive loss. If the Company intends to sell, at the time this determination is made, the Company records a realized loss equal to the difference between the amortized cost and fair value. The fair value of the other-than-temporarily impaired security becomes its new cost basis. In determining whether an unrealized loss is expected to be other than temporary, the Company considers, among other factors, any plans to sell the security, the severity of impairment, financial position of the issuer, recent events affecting the issuer’s business and industry sector, credit ratings, and the ability of the Company to hold the investment until the fair value has recovered at least its cost basis.

For securitized debt securities, the Company considers factors including, commercial and residential property changes in value that vary by property type and location and average cumulative collateral loss rates that vary by vintage year. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

expected recoveries. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer and/or underlying collateral.

For certain securitized financial assets with contractual cash flows, the Company is required to periodically update its best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is less than its cost or amortized cost and there has been a decrease in the present value of the estimated cash flows since the last revised estimate, considering both timing and amount, an OTTI charge is recognized. The Company also considers its intent to retain a temporarily impaired security until recovery. Estimating future cash flows involves judgment and includes both quantitative and qualitative factors. Such determinations incorporate various information and assessments regarding the future performance of the underlying collateral. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral.

Management has completed a review for other-than-temporarily impaired securities at December 31, 2015, 2014 and 2013 and recorded no OTTI. As a result of the subjective nature of these estimates, however, provisions may subsequently be determined to be necessary as new facts emerge and a greater understanding of economic trends develops. Consistent with the Company’s practices, OTTI will be recorded as appropriate and as determined by the Company’s regular monitoring procedures of additional facts.

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses) included in accumulated other comprehensive income (loss) at December 31 were as follows:

		2015				2014				2013
Debt securities		$	(347	)		$	340			$	412
Deferred income taxes			122				(118	)			(143	)
Net unrealized investment gains (losses)		$	(225	)		$	222			$	269

At December 31, 2015, the Company owned one debt security with a fair value of $8,210 in an unrealized loss position of $546 for less than twelve months. At December 31, 2014 the Company owned one debt security with a fair value of $7,526 in an unrealized loss position of $4 for less than twelve months. The Company did not have any gross unrealized losses at December 31, 2013.

Embedded Derivatives

The Company issues single premium deferred annuity contracts that contain embedded derivatives. Such embedded derivatives are separated from their host contracts and recorded at fair value. The fair value of the embedded derivatives, which are reported as part of assets on deposit and policyholder account balances in the balance sheets, were an asset of $122,043 and a liability of $122,043, respectively, as of December 31, 2015 and an asset of $45,503 and a liability of $45,503, respectively, as of December 31, 2014. The increase in fair value related to embedded derivatives from the date of deposit was $3,591, $9,581 and $592 for the years ended December 31, 2015, 2014 and 2013, respectively. Because the Company has entered into an agreement with CMFG Life to cede 100% of this business, this expense is ceded and does not impact the statement of operations and comprehensive income (loss).

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Assets Designated/Securities on Deposit

Iowa law requires that assets equal to a life insurer’s “legal reserve” must be designated for the Iowa Department of Commerce, Insurance Division. The legal reserve is equal to the net present value of all outstanding policies and contracts involving life contingencies. At December 31, 2015 and 2014, debt securities, policy loans and cash with a carrying value of $10,618 and $11,512, respectively, were accordingly designated for Iowa. Other regulatory jurisdictions require cash and securities to be deposited for the benefit of policyholders. Pursuant to these requirements, securities with a fair value of $1,732 and $1,854 were on deposit with other regulatory jurisdictions as of December 31, 2015 and 2014, respectively.

Note 4: Fair Value

The Company uses fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, such as insurance policy liabilities (other than investment-type contracts), are excluded from the fair value disclosure requirements.

Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value of assets and liabilities into three broad levels. The Company has categorized its financial instruments, based on the degree of subjectivity inherent in the valuation technique, as follows:

	•		Level 1: Inputs are directly observable and represent quoted prices for identical assets or liabilities in active markets the Company has the ability to access at the measurement date.
	•		Level 2: All significant inputs are observable, either directly or indirectly, other than quoted prices included in Level 1, for the asset or liability. This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
	•		Level 3: One or more significant inputs are unobservable and reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

For purposes of determining the fair value of the Company’s assets and liabilities, observable inputs are those inputs used by market participants in valuing financial instruments, which are developed based on market data obtained from independent sources. In the absence of sufficient observable inputs, unobservable inputs, reflecting the Company’s estimates of the assumptions market participants would use in valuing financial assets and liabilities, are developed based on the best information available in the circumstances. The Company uses prices and inputs that are current as of the measurement date. In some instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The hierarchy requires the use of market observable information when available for assessing fair value. The availability of observable inputs varies by investment. In situations where the fair value is based on inputs that are unobservable in the market or on inputs from inactive markets, the determination of fair value requires more judgment and is subject to the risk of variability. The degree of judgment exercised by the Company in determining fair value is typically greatest for investments categorized in Level 3. Transfers in and out of level

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

categorizations are reported as having occurred at the end of the quarter in which the transfer occurred. Therefore, for all transfers into Level 3, all realized gains and losses and all changes in unrealized gains and losses in the fourth quarter are not reflected in the Level 3 rollforward table.

Valuation Process

The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance on the overall reasonableness and consistent application of valuation methodologies and inputs and compliance with accounting standards through the execution of various processes and controls designed to provide assurance that the Company’s assets and liabilities are appropriately valued.

The Company has policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of prices against market activity or indicators of reasonableness, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. The valuation policies and guidelines are reviewed and updated as appropriate.

For fair values received from third parties or internally estimated, the Company’s processes are designed to provide assurance that the valuation methodologies and inputs are appropriate and consistently applied, the assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are appropriately recorded. The Company performs procedures to understand and assess the methodologies, process and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third party valuation sources for selected securities. When using internal valuation models, these models are developed by the Company’s investment group using established methodologies. The models including key assumptions are reviewed with various investment sector professionals, accounting, operations, compliance and risk management. In addition, when fair value determinations are expected to be more variable, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

Transfers Between Levels

There were no transfers between levels during the year ended December 31, 2015. There were two U.S. government and agency securities totaling $2,556 transferred from Level 1 to Level 2 during the year ended December 31, 2014. The transfer occurred due to a change in the availability of the observable inputs. There were no other transfers in 2014.

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Fair Value Measurement – Recurring Basis

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015.

Assets, at Fair Value		Level 1			Level 2			Level 3			Total
Cash equivalents1		$	16,080		$	-		$	-		$	16,080
Debt securities:
U.S. government and agencies			-			9,813			-			9,813
Mortgage-backed securities:
Residential mortgage-backed			-			2,538			-			2,538
Total debt securities			-			12,351			-			12,351
Derivatives embedded in assets on deposit			-			-			122,043			122,043
Total assets		$	16,080		$	12,351		$	122,043		$	150,474
Liabilities, at Fair Value		Level 1			Level 2			Level 3			Total
Derivatives embedded in annuity contracts		$	-		$	-		$	122,043		$	122,043
Total liabilities		$	-		$	-		$	122,043		$	122,043

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2014.

Assets, at Fair Value		Level 1			Level 2			Level 3			Total
Cash equivalents 1		$	3,681		$	-		$	-		$	3,681
Debt securities:
U.S. government and agencies			-			9,987			-			9,987
Mortgage-backed securities:
Residential mortgage-backed			-			3,207			-			3,207
Total debt securities			-			13,194			-			13,194
Derivatives embedded in assets on deposit			-			-			45,503			45,503
Total assets		$	3,681		$	13,194		$	45,503		$	62,378
Liabilities, at Fair Value		Level 1			Level 2			Level 3			Total
Derivatives embedded in annuity contracts		$	-		$	-		$	45,503		$	45,503
Total liabilities		$	-		$	-		$	45,503		$	45,503

The Company had no assets or liabilities that required a fair value adjustment on a non-recurring basis as of December 31, 2015 or 2014.

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Changes in Fair Value Measurement

The following table sets forth the values of assets and liabilities classified as Level 3 within the fair value hierarchy at December 31, 2015.

					Total Realized/Unrealized
					Gain (Loss) Included in:
		Balance January 1, 2015			Purchases			Maturities				Earnings1			Balance December 31, 2015
Derivatives embedded
in assets on deposit		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
Total assets		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
Derivatives embedded
in annuity contracts		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
Total liabilities		$	45,503		$	73,631		$	(682	)		$	3,591		$	122,043
1 Included in net income is realized gains and losses associated with embedded derivatives.

The following table sets forth the values of assets and liabilities classified as Level 3 within the fair value hierarchy at December 31, 2014.

					Total Realized/Unrealized
					Gain (Loss) Included in:
		Balance January 1, 2014			Purchases			Maturities				Earnings1			Balance December 31, 2014
Derivatives embedded
in assets on deposit		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
Total assets		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
Derivatives embedded
in annuity contracts		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
Total liabilities		$	8,652		$	27,522		$	(252	)		$	9,581		$	45,503
1 Included in net income is realized gains and losses associated with embedded derivatives.

Determination of Fair Values

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The use of quoted prices and matrix pricing or similar techniques are examples of market approaches, while the use of discounted cash flow methodologies is an example of the income approach.

A summary of valuation techniques for classes of financial assets and liabilities by fair value hierarchy level are as follows:

19

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Level 1 Measurements

Cash equivalents: Consists of money market funds; valuation is based on the closing price as of the balance sheet date.

Level 2 Measurements

U.S. government and agencies: Certain U.S. Treasury securities and debentures issued by agencies of the U.S. government are valued based on observable inputs such as the U.S. Treasury yield curve, market indicated spreads and quoted prices for identical assets in markets that are not active and/or similar assets in markets that are active.

Residential mortgage-backed securities: Valuation is principally based on observable inputs including quoted prices for similar assets in markets that are active and observable market data.

For the majority of assets classified as Level 2 investments, the Company values the assets using third-party pricing sources, which generally rely on quoted prices for similar assets in markets that are active and observable market data.

Level 3 Measurements

Derivatives embedded in assets on deposit and annuity contracts: The Company offers single premium deferred annuity contracts with certain caps and floors which represent a minimum and maximum amount that could be credited to a contract during that contract year based on the performance of an external index. These embedded derivatives are measured at fair value separately from the host deposit asset and annuity contract.

In estimating the fair value of the embedded derivative, the Company attributes a present value to the embedded derivative equal to the discounted sum of the excess cash flows of the index related fund value over the minimum fund value. The current year portion of the embedded derivative is adjusted for known market conditions. The discount factor at which the embedded derivative is valued contains an adjustment for the Company’s own credit and risk margins for unobservable non-capital market inputs. The Company’s own credit adjustment is determined taking into account its A.M. Best rating as well as its claims paying ability.

These derivatives may be more costly than expected in volatile or declining equity markets. Changes in market conditions include, but are not limited to, changes in interest rates, equity indices, default rates and market volatility. Changes in fair value may be impacted by changes in the Company’s own credit standing. Lastly, changes in actuarial assumptions regarding policyholder behavior (such as full or partial withdrawals varying from expectations) and risk margins related to non-capital market inputs may result in significant fluctuations in the fair value of the derivatives. See Embedded Derivatives within Note 3, Investments for the impact to net income.

20

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table presents information about significant unobservable inputs used in Level 3 embedded derivative assets and liabilities measured at fair value developed by internal models as of December 31, 2015 and 2014:

Predominant		Significant		Range of Values - Unobservable Input
Valuation Method		Unobservable Input		2015		2014
Derivatives embedded in single premium deferred annuities and related assets on deposit
Discounted cash flow		Lapse rates		2% to 4% with an excess lapse rate at the end of the index period of 95%.		2% to 4% with an excess lapse rate at the end of the index period of 95%.
		Company’s own credit and risk margin		82 - 137 basis points added on to discount rate		60 - 90 basis points added on to discount rate

Fair Value Measurements for Financial Instruments Not Reported at Fair Value

Accounting standards require disclosure of fair value information about certain on- and off-balance sheet financial instruments which are not recorded at fair value on a recurring basis for which it is practicable to estimate that value.

The following methods and assumptions were used by the Company in estimating the fair value disclosures for significant financial instruments:

Level 1 Measurements

Cash: The carrying amount for this instrument approximates its fair value due to its short term nature and is based on observable inputs.

Level 2 Measurements

Assets on deposit and Investment-type contracts: Assets on deposit and investment-type contracts include single premium deferred annuity contracts, excluding the related embedded derivative. In most cases, the fair values are determined by discounting expected liability cash flows and required profit margins using the year-end swap curve plus a spread equivalent to a cost of funds for insurance companies based on observable inputs.

21

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Not Practicable to Estimate Fair Value

Policy loans: The Company believes it is not practicable to determine the fair value of its policy loans since there is no stated maturity and policy loans are often repaid by reductions to policy benefits.

The carrying amounts and estimated fair values of the Company’s financial instruments which are not measured at fair value on a recurring basis at December 31 are as follows:

						2015									2014
		Carrying			Estimated						Carrying			Estimated
		Amount			Fair Value			Level			Amount			Fair Value			Level
Financial instruments
recorded as assets:
Cash		$	1,013		$	1,013		1			$	1,921		$	1,921		1
Policy loans			-			n/a		n/a				104			n/a		n/a
Assets on deposit			825,552			699,721		2				304,434			294,710		2
Financial instruments
recorded as liabilities:
Investment-type contracts			825,552			699,721		2				304,434			294,710		2

Note 5: Income Tax

The Company is included in the consolidated federal income tax return filed by CMHC, the Company’s ultimate parent. The Company has entered into a tax sharing agreement with CMHC and its subsidiaries. The agreement provides for the allocation of tax expense based on each subsidiary’s contribution to the consolidated federal income tax liability. Pursuant to the agreement, subsidiaries that have incurred losses are reimbursed regardless of the utilization of the loss in the current year. Federal income taxes recoverable from affiliate reported on the balance sheet are due from CMFG Life.

Income Tax Expense

Income tax expense for the years ended December 31 is as follows:

		2015				2014				2013
Current tax expense (benefit)		$	1,451			$	(186	)		$	(426	)
Deferred tax expense (benefit)			(2	)			197				675
Total income tax expense		$	1,449			$	11			$	249

22

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Reconciliation to U.S. Tax Rate

Income tax expense differs from the amount computed by applying the U.S. federal corporate income tax rate of 35% to income before income taxes due to the items listed in the following reconciliation:

			2015							2014							2013
		Amount				Rate			Amount				Rate			Amount			Rate
Tax expense computed at
federal corporate tax rate		$	1,480			35.0	%		$	60			35.0	%		$	133		35.0	%
Income tax expense (benefit)
related to prior years			(31	)		(0.7	)			(41	)		(23.9	)			116		30.5
Other			-			-				(8	)		(4.7	)			-
Total income tax expense		$	1,449			34.3	%		$	11			6.4	%		$	249		65.5	%

Deferred Income Taxes

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2015 and 2014 are as follows:

		2015			2014
Deferred tax assets
Policy liabilities and reserves		$	36		$	81
Unrealized investment losses			122			-
Investments			168			276
Accrued expenses			94			26
Deferred policy acquisition costs			309			230
Other			1			3
Gross deferred tax assets			730			616
Deferred tax liabilities
Unrealized investment gains			-			118
Deferred reinsurance expense			47			56
Other			1			2
Gross deferred tax liabilities			48			176
Net deferred tax asset		$	682		$	440

23

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Valuation Allowance

The Company considered the need for a valuation allowance with respect to its gross deferred tax assets as of December 31, 2015 and 2014, and based on that evaluation, the Company has determined it is more likely than not all deferred tax assets as of December 31, 2015 and 2014 will be realized. Therefore, a valuation allowance was not established.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

		2015			2014
Balance at January 1		$	1		$	7
Reductions for prior years’ tax positions			-			(6	)
Balance at December 31		$	1		$	1

There were no unrecognized tax benefits as of December 31, 2015 and 2014 that, if recognized, would affect the effective tax rate in future periods. Management does not anticipate a material change to the Company’s uncertain tax positions during 2016.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense in the statements of comprehensive income (loss). The Company did not recognize any additions or reductions in interest and penalties for the year ended December 31, 2015 or 2014. During the year ended December 31, 2013 the Company recognized additions of $1 in interest and penalties. The Company had accrued $7 and $7 for the payment of interest and penalties at December 31, 2015 and 2014, respectively.

The Company is included in a consolidated U.S. federal income tax return filed by CMHC. The Company is also included in income tax returns filed in various states. For the major jurisdictions where it operates, the Company is generally no longer subject to income tax examinations by tax authorities for years ended before 2008.

Other Tax Items

As of December 31, 2015 and 2014, the Company did not have any capital loss, operating loss or credit carryforwards.

24

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 6: Related Party Transactions

In the normal course of business, there are various transactions between the Company and other related entities. In certain circumstances, expenses such as those related to sales and marketing, administrative, operations, other support and infrastructure costs are shared between the companies. Expenses incurred that are specifically identifiable with a particular company are borne by that company; other expenses are allocated among the companies on the basis of time and usage studies. Amounts due from transactions with affiliates are generally settled monthly. The Company reimbursed CMFG Life $8,447, $5,641 and $2,492 for these expenses in 2015, 2014 and 2013, respectively; which are included in operating and other expenses.

Amounts receivable/payable from/to affiliates are shown in the following table:

		2015			2014
Receivable from:
CMFG Life		$	4,518		$	2,765
Total		$	4,518		$	2,765
Payable to:
CUNA Brokerage Services, Inc.		$	2,478		$	1,290
MEMBERS Capital Advisors, Inc.			2			2
Total		$	2,480		$	1,292

Amounts receivable from CMFG Life at December 31, 2015 and 2014 are primarily for a policyholder’s purchase of an annuity when a CMFG Life policyholder has surrendered their policy for the purchase of a single premium deferred annuity and for the cession of death claims related to the Company’s single premium deferred annuity.

The Company hires MEMBERS Capital Advisors, Inc. (“MCA”) for investment advisory services. MCA, which is 100% owned by CMIC, manages substantially all of the Company’s invested assets in accordance with policies, directives and guidelines established by the Company. The Company recorded MCA investment management fees totaling $28, $34 and $113 for the years ended December 31, 2015, 2014 and 2013, respectively, which are included as a reduction to net investment income.

The Company utilizes CUNA Brokerage Services, Inc. (“CBSI”), which is 100% owned by CMIC, to distribute its single premium deferred annuity and recorded commission expense for this service of $23,072, $10,853 and $4,256 in 2015, 2014 and 2013, respectively, which is included in operating and other expenses. This expense is entirely offset by commission income the Company receives from CMFG Life as part of the 2013 reinsurance agreement.

See Note 7 regarding reinsurance and other agreements entered into by the Company and CMFG Life.

25

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 7: Reinsurance

The Company entered into a reinsurance agreement with its affiliate, CMFG Life, on a coinsurance and modified coinsurance basis. The agreement was effective November 1, 2015 to cede 100% of the business related to a new product currently in development, which includes any related development expenses. The Company receives a commission equal to 100% of its actual expenses incurred for this business, which was $1,027 for the year ended December 31, 2015.

The Company entered into an agreement with its affiliate, CMFG Life, effective January 1, 2013 to cede 100% of its investment-type contracts for its single premium deferred annuity, which are accounted for using the deposit method of accounting. The Company had $947,595 and $349,937 of assets on deposit for these contracts as of December 31, 2015 and 2014, respectively. The Company had related liabilities of $947,595 and $349,937, respectively which are included in policyholder account balances in the balance sheets. The Company receives a commission equal to 100% of its actual expenses incurred for this business, which was $34,236, $14,861 and $6,425 for the year ended December 31, 2015, 2014 and 2013, respectively.

On October 31, 2012, the Company ceded 95% of its insurance policies in force pursuant to a reinsurance agreement with CMFG Life and the Company was reimbursed for 95% of expenses incurred in the provision of policyholder and benefit payment services, and insurance taxes and charges on a go forward basis under this contract. On September 30, 2015, the Company amended its reinsurance agreement with CMFG Life and now cedes 100% of its insurance policies in force to CMFG Life and is reimbursed 100% for expenses incurred in the provision of policyholder and benefit payments services, and insurance taxes and charges going forward. As a result of the amendment to this agreement the Company ceded $1,297 of earned premiums and $1,244 of benefits as of September 30, 2015.

MLIC did not have any other reinsurance agreements at December 31, 2015 or 2014 and the entire reinsurance recoverable balance of $24,628 and $25,199, respectively, was due from CMFG Life. The recoverable balances are not collateralized and the Company retains the risk of loss in the event CMFG Life is unable to meet its obligations assumed under the reinsurance agreements. CMFG Life is rated A (excellent) by A.M. Best Company and MLIC believes the risk of non-collection is remote.

26

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The effects of reinsurance on contract charges, interest credited to policyholder accounts, premiums and on claims, benefits, and losses incurred for the years ended December 31 are as follows:

		2015				2014				2013
Face amount of policies in force		$	110,827			$	123,223			$	147,371
Premiums:
Direct - written		$	2,384			$	2,613			$	2,811
Direct - change in unearned			-				-				-
Direct - earned			2,384				2,613				2,811
Ceded to affiliate - written			(3,559	)			(2,482	)			(2,671	)
Ceded to affiliate - change in unearned			-				(4	)			(1	)
Ceded to affiliate - earned			(3,559	)			(2,486	)			(2,672	)
Premiums - written, net			(1,175	)			131				140
Premiums - change in unearned, net			-				(4	)			(1	)
Premiums, net		$	(1,175	)		$	127			$	139
Contract charges:
Direct		$	742			$	472			$	461
Ceded to affiliate			(724	)			(448	)			(415	)
Contract charges, net		$	18			$	24			$	46
Claims, benefits and losses incurred:
Direct		$	1,784			$	1,883			$	2,953
Ceded to affiliate			(2,988	)			(1,771	)			(2,774	)
Claims, benefits and losses, net		$	(1,204	)		$	112			$	179
Interest credited to policyholder account balances:
Direct		$	9,833			$	2,457			$	320
Ceded to affiliate			(9,829	)			(2,449	)			(311	)
Interest credited to policyholder account balances, net		$	4			$	8			$	9

27

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 8: Statutory Financial Data and Dividend Restrictions

The Company is a life and health insurer and is domiciled in Iowa. The Company files statutory-basis financial statements with insurance regulatory authorities. The Company did not use any permitted practices in 2015, 2014 or 2013. Certain statutory basis financial information for MLIC is presented in the table below as of and for the years ended December 31.

		Statutory Basis						Statutory Basis
		Capital and Surplus						Net Income (Loss)
		2015			2014			2015			2014				2013
MLIC		$	21,111		$	18,366		$	1,112		$	(1,792	)		$	(1,562	)

The Company is subject to statutory regulations as to maintenance of equity and the payment of dividends. Generally, ordinary dividends from an insurance subsidiary to its parent company must meet notice requirements promulgated by the regulator of the subsidiary’s state of domicile (“Insurance Department”). Extraordinary dividends, as defined by state statutes, must be approved by the Insurance Department. Based on Iowa statutory regulations, the Company could pay dividends up to $2,111 during 2016, without prior approval of the Insurance Department.

Risk-based capital (“RBC”) requirements promulgated by the National Association of Insurance Commissioners require U.S. insurers to maintain minimum capitalization levels that are determined based on formulas incorporating credit risk, insurance risk, interest rate risk, and general business risk. The adequacy of the Company’s actual capital is evaluated by a comparison to the RBC results, as determined by the formula. At December 31, 2015 and 2014, the Company’s adjusted capital exceeded the minimum requirements.

28

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 9:   Accumulated Other Comprehensive Income (Loss)

The components of accumulated comprehensive income (loss), net of tax, are as follows:

						Accumulated
		Unrealized				Other
		Investment				Comprehensive
		Gains (Loss)				Income (Loss)
Balance, January 1, 2013		$	423			$	423
Change in unrealized holding gains (losses),
net of tax - ($105)			(154	)			(154	)
Balance, December 31, 2013			269				269
Change in unrealized holding gains (losses),
net of tax - ($25)			(47	)			(47	)
Balance, December 31, 2014			222				222
Change in unrealized holding gains (losses),
net of tax - ($240)			(447	)			(447	)
Balance, December 31, 2015		$	(225	)		$	(225	)

Reclassification Adjustments

Accumulated other comprehensive income (losses) includes amounts related to unrealized investment gains (losses) which were reclassified to net income. Reclassifications from accumulated other comprehensive income (losses) for the years ended December 31 are included in the following table:

		2015				2014				2013
Reclassifications from accumulated other comprehensive income (losses)
Unrealized gains on available-for-sale
securities included in net realized investment losses		$	15			$	-			$	-
Total reclassifications from accumulated
other comprehensive income (losses)			15				-				-
Tax expense			5				-				-
Net reclassification from accumulated
other comprehensive income (losses)		$	10			$	-			$	-

29

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 10:   Business Segment Information

The following table sets forth financial information regarding the Company’s two reportable business segments for the year ended December 31, 2015.

		Life and
Year ended or as of December 31, 2015		Health				Annuities				Total
Revenues
Life and health premiums, net		$	(1,175	)		$	-			$	(1,175	)
Contract charges			18				-				18
Net investment income			366				-				366
Net realized investment gains			117				-				117
Other income			5,336				-				5,336
Total revenues			4,662				-				4,662
Benefits and expenses
Life and health insurance claims and benefits, net			(1,204	)			-				(1,204	)
Interest credited to policyholder account balances			4				-				4
Operating and other expenses			1,633				-				1,633
Total benefits and expenses			433				-				433
Income before income taxes			4,229				-				4,229
Income tax expense			1,449				-				1,449
Net income			2,780				-				2,780
Change in unrealized (losses), net of tax (benefit)			(447	)			-				(447	)
Other comprehensive (loss)			(447	)			-				(447	)
Total comprehensive income		$	2,333			$	-			$	2,333
Reinsurance recoverable from affiliate		$	24,628			$	-			$	24,628
Assets on deposit			-				947,595				947,595
Claim and policy benefit reserves - life and health			21,077				460				21,537
Policyholder account balances			3,473				947,595				951,068

30

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table sets forth financial information regarding the Company’s two reportable business segments for the year ended December 31, 2014.

		Life and
Year ended or as of December 31, 2014		Health				Annuities				Total
Revenues
Life and health premiums, net		$	127							$	127
Contract charges			24				-				24
Net investment income			278				-				278
Net realized investment gains			-				-				-
Other income			-				-				-
Total revenues			429				-				429
Benefits and expenses
Life and health insurance claims and benefits, net			112				-				112
Interest credited to policyholder account balances			8				-				8
Operating and other expenses			137				-				137
Total benefits and expenses			257				-				257
Income before income taxes			172				-				172
Income tax expense			11				-				11
Net income			161				-				161
Change in unrealized (losses), net of tax (benefit)			(47	)			-				(47	)
Other comprehensive (loss)			(47	)			-				(47	)
Total comprehensive (loss)		$	114			$	-			$	114
Reinsurance recoverable from affiliate		$	25,199			$	-			$	25,199
Assets on deposit			-				349,937				349,937
Claim and policy benefit reserves - life and health			22,035				333				22,368
Policyholder account balances			3,612				349,937				353,549

31

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

The following table sets forth financial information regarding the Company’s two reportable business segments for the year ended December 31, 2013.

		Life and
Year ended or as of December 31, 2013		Health				Annuities				Total
Revenues
Life and health premiums, net		$	139			$	-			$	139
Contract charges			46				-				46
Net investment income			176				-				176
Net realized investment gains			-				-				-
Other income			293				-				293
Total revenues			654				-				654
Benefits and expenses
Life and health insurance claims and benefits, net			179				-				179
Interest credited to policyholder account balances			9				-				9
Operating and other expenses			86				-				86
Total benefits and expenses			274				-				274
Income before income taxes			380				-				380
Income tax expense			249				-				249
Net income			131				-				131
Change in unrealized (losses), net of tax (benefit)			(154	)			-				(154	)
Other comprehensive (loss)			(154	)			-				(154	)
Total comprehensive (loss)		$	(23	)		$	-			$	(23	)
Reinsurance recoverable from affiliate		$	25,525			$	-			$	25,525
Assets on deposit			-				89,313				89,313
Claim and policy benefit reserves - life and health			23,196				-				23,196
Policyholder account balances			3,734				89,313				93,047

32

MEMBERS Life Insurance Company

Notes to Financial Statements

($ in 000s)

Note 11:   Commitments and Contingencies

Insurance Guaranty Funds

The Company is liable for guaranty fund assessments related to certain unaffiliated insurance companies that have become insolvent during 2015 and prior years. The Company includes a provision for all known assessments that will be levied as well as an estimate of amounts that it believes will be assessed in the future relating to past insolvencies. The Company has established a liability of $270 and $75 at December 31, 2015 and 2014, respectively, for guaranty fund assessments. The Company also estimates the amount recoverable from future premium tax payments related to these assessments and has not established an asset as of December 31, 2015 and 2014 since it does not believe any amount will be recoverable. Recoveries of assessments from premium taxes are generally made over a five-year period.

Legal Matters

Like other members of the insurance industry, the Company is occasionally a party to a number of lawsuits and other types of proceedings, some of which may involve claims for substantial or indeterminate amounts. These actions are based on a variety of issues and involve a range of the Company’s practices. The Company has established procedures and policies to facilitate compliance with laws and regulations and to support financial reporting.

In connection with regulatory examinations and proceedings, government authorities may seek various forms of relief, including penalties, restitution and changes in business practices. The Company may not be advised of the nature and extent of relief sought until the final stages of the examination or proceeding. In the opinion of management, the ultimate liability, if any, resulting from all such pending actions will not materially affect the financial statements of the Company.

Note 12:   Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued. During this period, there were no significant subsequent events that required adjustment to or disclosure in the accompanying financial statements.

33

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.*

The expenses for the issuance and distribution of the securities offered by this Registration Statement, other than any underwriting discounts and commissions, are as follows:

Securities and Exchange Commission Registration Fees		$	290,500
Printing and engraving		$	70,000
Accounting fees and expenses		$	53,202
Legal fees and expenses		$	200,000
Miscellaneous		$	7,000
TOTAL EXPENSES		$	620,702

* Estimated.

Item 14.  Indemnification of Directors and Officers.

Section 490.202 of the Iowa Business Corporation Act (the “IBCA”), provides that a corporation’s articles of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for any action taken, or failure to take action, as a director, except liability for (1) the amount of a financial benefit received by a director to which the director is not entitled, (2) an intentional infliction of harm on MEMBERS Life Insurance Company (the “Registrant,” “we,” “our,” or “us”) or the shareholders, (3) a violation of Section 490.833 of the IBCA or (4) an intentional violation of criminal law.

Further, Section 490.851 of the IBCA provides that a corporation may indemnify its directors who may be party to a proceeding against liability incurred in the proceeding by reason of such person serving in the capacity of director, if such person has acted in good faith and in a manner reasonably believed by the individual to be in the best interests of the corporation, if the director was acting in an official capacity, and in all other cases that the individual’s conduct was at least not opposed to the best interests of the corporation, and in any criminal proceeding if such person had no reasonable cause to believe the individual’s conduct was unlawful or the director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation. The indemnity provisions under Section 490.851 do not apply (i) in the case of actions brought by or in the right of the corporation except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct set forth above or (ii) in connection with any proceedings with respect to conduct for which the director was adjudged liable on the basis that the director received a financial benefit to which the director was not entitled, whether or not involving action in the director’s official capacity.

In addition, Section 490.852 of the IBCA provides mandatory indemnification of reasonable expenses incurred by a director who is wholly successful in defending any action in which the director was a party because the director is or was a director of the corporation. A director who is a party to a proceeding because the person is a director may also apply for court-ordered indemnification and advance of expenses under Section 490.854 of the IBCA.

Section 490.853 of the IBCA provides that a corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding because such person is a director if the director delivers the following to the corporation: (1) a written affirmation that the director has met the standard of conduct described above or that the proceeding involved conduct for which liability has been eliminated under the corporation’s articles of incorporation and (2) the director’s written undertaking to repay any funds advanced if the director is not entitled to mandatory indemnification under Section 490.852 of the IBCA and it is ultimately determined that the director has not met the standard of conduct described above.

II-1

Under Section 490.856 of the IBCA, a corporation may indemnify and advance expenses to an officer of the corporation who is a party to a proceeding because such person is an officer, to the same extent as a director. In addition, if the person is an officer but not a director, further indemnification may be provided by the corporation’s articles of incorporation or bylaws, a resolution of the board of directors or by contract, except liability for (1) a proceeding by or in the right of the corporation other than for reasonable expenses incurred in connection with the proceeding and (2) conduct that constitutes receipt by the officer of a financial benefit to which the officer is not entitled, an intentional infliction of harm on the corporation or the shareholders or an intentional violation of criminal law. Such indemnification is also available to an officer who is also a director if the basis on which the officer is made a party to a proceeding is an act taken or a failure to take action solely as an officer.

Our Amended and Restated Articles of Incorporation provide that our directors will not be liable to us or our shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for (1) the amount of a financial benefit received by a director to which the director is not entitled, (2) an intentional infliction of harm on the Registrant or the shareholders, (3) a violation of Section 490.833 of the IBCA or (4) an intentional violation of criminal law.

Our Amended and Restated Articles of Incorporation also provide that we indemnify each of our directors or officers for any action taken, or any failure to take any action, as a director or officer except liability for (1) the amount of a financial benefit received by a director to which the director is not entitled, (2) an intentional infliction of harm on the Registrant or the shareholders, (3) a violation of Section 490.833 of the IBCA or (4) an intentional violation of criminal law. Additionally, the Registrant is required to exercise all of its permissive powers as often as necessary to indemnify and advance expenses to its directors and officers to the fullest extent permitted by law.

Our Bylaws also provide indemnification to our directors on the same terms as the indemnification provided in our Amended and Restated Articles of Incorporation. Our Bylaws also provide for advances of expenses to our directors and officers. The indemnification provisions of our Bylaws are not exclusive of any other right which any person seeking indemnification may have or acquire under any statute, our Amended and Restated of Incorporation or any agreement, vote of stockholders or disinterested directors or otherwise.

Section 490.857 of the IBCA provides that a corporation may purchase and maintain insurance on behalf of a person who is a director or officer of a corporation, or who, while a director or officer of a corporation, serves at the corporation’s request as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan or other entity, against liability asserted against or incurred by that person in that capacity or arising from that person’s status as a director or officer, whether or not the corporation would have the power to indemnify or advance expenses to that person against the same liability under the IBCA. As permitted by and in accordance with Section 490.857 of the IBCA, we maintain insurance coverage for our officers and directors as well as insurance coverage to reimburse us for potential costs for indemnification of directors and officers.

Item 15. Recent Sales of Unregistered Securities

None.

Item 16. Exhibits.

Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
1(i)	Amended and Restated Distribution Agreement dated as of January 7, 2016 between MEMBERS Life Insurance Company (“MLIC”) and CUNA Brokerage Services, Inc. (“CBSI”)	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
1(ii)	Form of Selling and Services Agreement	Incorporated herein by reference to the initial filing of the Registrant on Form S-1, filed April 6, 2016 (File No. 333-207222)
3(i)	Articles of Incorporation of MLIC	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form S-1, filed February 6, 2013 (File No. 333-186477)
3(ii)	Bylaws of MLIC	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form S-1, filed February 6, 2013 (File No. 333-186477)

II-2

Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
3(iii)	Amended and Restated Bylaws of MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
4(i)	Form of MEMBERS® Horizons Flexible Premium Deferred Variable Annuity Contract (Form No. 2015-VA-B)	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
4(ii)	Form of MEMBERS® Horizons Flexible Premium Deferred Variable Annuity Contract (Form No. 2015-VA-C)	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
4(iii)	Form of MEMBERS® Horizons Flexible Premium Deferred Variable Annuity Data Page (Form No. 2015-VADP-B)	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
4(iv)	Form of MEMBERS® Horizons Flexible Premium Deferred Variable Annuity Data Page (Form No. 2015-VADP-C)	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
4(v)(a)	Form of Individual Retirement Annuity Endorsement	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
4(v)(b)	Form of Roth Individual Retirement Annuity Endorsement	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
4(vi)	Form of MEMBERS® Horizons Flexible Premium Deferred Variable Annuity Application	Incorporated herein by reference to the initial filing of the MLIC Registration Statement on Form N-4, filed October 5, 2015 (File Nos.333-207276)
5	Legal Opinion		X
10(i)(a)	Coinsurance Agreement dated as of October 31, 2012	Incorporated herein by reference to the filing of Pre-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed June 12, 2013 (File No. 333-186477)
10(i)(b)	Coinsurance Agreement dated as of January 1, 2013	Incorporated herein by reference to the filing of Pre-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed June 12, 2013 (File No. 333-186477)
10(i)(c)	First Amendment to Coinsurance Agreement dated as of January 1, 2014	Incorporated herein by reference to the filing of Post-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed April 4, 2014 (File No. 333-186477)
10(i)(d)	MEMBERS Horizon Coinsurance and Modified Coinsurance Agreement dated November 1, 2015 between MLIC and CMFG Life	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)

II-3

Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
10(ii)(a)	Cost Sharing Agreement	Incorporated herein by reference to the filing of Pre-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed June 12, 2013 (File No. 333-186477)
10(ii)(b)	Expense Sharing Agreement dated as of December 31, 2013	Incorporated herein by reference to the filing of Post-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed April 4, 2014 (File No. 333-186477)
10(ii)(c)	Amended and Restated Expense Sharing Agreement dated as of January 1, 2015	Incorporated herein by reference to the filing of the MLIC Registration Statement on Form S-1, filed March 25, 2015 (File No. 333-202984)
10(iii)(a)	Investment Advisory Agreement	Incorporated herein by reference to the filing of Pre-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed June 12, 2013 (File No. 333-186477)
10(iii)(b)	Amendment to Investment Advisory Agreement dated January 15, 2014	Incorporated herein by reference to the filing of Post-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed April 4, 2014 (File No. 333-186477)
10(iii)(c)	Amended and Restated Investment Advisory Agreement dated January 1, 2015	Incorporated herein by reference to the filing of the MLIC Registration Statement on Form S-1, filed March 25, 2015 (File No. 333-202984)
10(iv)(a)	Procurement and Disbursement and Billing and Collection Services Agreement	Incorporated herein by reference to the filing of Pre-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed June 12, 2013 (File No. 333-186477)
10(iv)(b)	Amendment to Procurement and Disbursement and Billing and Collection Services Agreement	Incorporated herein by reference to the filing of Post-Effective Amendment No. 1 to the MLIC Registration Statement on Form S-1, filed April 4, 2014 (File No. 333-186477)
10(iv)(c)	CUNA Mutual Group Cost Sharing, Procurement, Disbursement, Billing and Collection Agreement dated as of January 1, 2015	Incorporated herein by reference to the filing of the MLIC Registration Statement on Form S-1, filed March 25, 2015 (File No. 333-202984)
10(v)(a)	Fund Participation and Service Agreement between American Funds Insurance Series and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(a)i	Business Agreement between American Funds Distributors, Inc., CBSI and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(a)ii	American Funds Rule 22c-2 Agreement between American Funds Service Company and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)

II-4

Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
10(v)(b)	Fund Participation Agreement between BlackRock Variable Series Funds, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(b)i	Administrative Services Agreement between BlackRock Advisors, LLC and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(b)ii	Form of Distribution Sub-Agreement between BlackRock Variable Series Funds, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(c)	Fund Participation Agreement between Columbia Funds Variable Insurance Trust I, Columbia Management Investment Advisors, LLC, Columbia Management Investment Distributors, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(c)i	Fund Participation Agreement between Columbia Funds Variable Insurance Trust II, Columbia Management Investment Advisors, LLC, Columbia Management Investment Distributors, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(c)ii	Fund Participation Agreement between Columbia Funds Variable Insurance Trust, Columbia Management Investment Advisors, LLC, Columbia Management Investment Distributors, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(c)iii	Revenue Sharing Agreement between Columbia Management Investment Distributors, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(d)	Participation Agreement between DFA Investment Dimensions Group Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(e)	Fund Participation Agreement between The Dreyfus Variable Investment Fund and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(f)	Fund Participation Agreement between The Dreyfus Corporation and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(f)i	Administrative Services Agreement between The Dreyfus Corporation and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)

II-5

Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
10(v)(f)ii	Distribution Letter Agreement between MBSC Securities Corporation (The Dreyfus Corporation) and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(g)	Participation Agreement between Franklin Templeton Variable Insurance Products Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(g)i	Administrative Services Agreement between Franklin Templeton Variable Insurance Products Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(g)ii	Shareholder Information Agreement between Franklin Templeton Variable Insurance Products Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(h)	Participation Agreement between Goldman Sachs Variable Insurance Trust, Goldman Sachs & Co. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(h)i	Amendment #1 to Participation Agreement between Goldman Sachs Variable Insurance Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(h)ii	Service Class Services Agreement between Goldman Sachs Variable Insurance Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(h)iii	Administrative Services Agreement between Goldman Sachs Asset Management, L.P. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(h)iv	Shareholder Information Agreement between Goldman Sachs & Co and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(i)	Participation Agreement between AIM Variable Insurance Funds(Invesco Variable Insurance Funds), Invesco Distributors, Inc., CBSI and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(i)i	Distribution Services Agreement between AIM Variable Insurance Funds(Invesco Variable Insurance Funds) and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)

II-6

Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
10(v)(j)	Fund Participation Agreement between Lazard Retirement Series, Inc., Lazard Asset Management Securities LLC and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(j)i	Servicing Agreement between Lazard Retirement Series, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(k)	Participation Agreement between MFS Variable Insurance Trust, MFS Variable Insurance Trust II, MFS Variable Insurance Trust III, MFS Fund Distributors, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(k)i	Fund/Serv and Networking Supplement to Participation Agreement between MFS Variable Insurance Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(k)ii	Fee Letter Agreement between MFS Variable Insurance Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(l)	Participation Agreement between Morgan Stanley and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(l)i	Servicing Agreement between Morgan Stanley and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(l)ii	Letter Agreement between Morgan Stanley and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(l)iv	Administrative Service Agreement between Morgan Stanley and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(m)	Participation Agreement between Oppenheimer Variable Account Funds and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(m)i	Shareholder Information Agreement between OppenheimerFunds Distributor, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)

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Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
10(v)(n)	Participation Agreement between PIMCO Variable Insurance Trust, PIMCO Equity Series, VIT, PIMCO Investments LLC and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(o)	Fund Participation Agreement between Northern Lights Variable Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(o)i	Fund/Serv Agreement between Northern Lights Distributors, LLC and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(o)ii	Distribution and Shareholder Services Agreement between Northern Lights Variable Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(p)	Participation Agreement between T Rowe Price Equity Series, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(p)i	Rule 22c-2 Agreement between T Rowe Price Equity Series, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(p)ii	12b-1 Agreement between T. Rowe Price Investment Services, Inc. and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(q)	Participation Agreement between Vanguard Variable Insurance Fund, The Vanguard Group, Inc., Vanguard Marketing Corporation and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(q)i	Defined Contribution Clearance & Settlement Agreement between The Vanguard Group and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed April 6, 2016 (File No. 333-207276)
10(v)(r)	Participation Agreement between Putnam Variable Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)

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Exhibit Item Number	Description	Incorporated by Reference to	Filed Herewith
10(v)(r)i	Rule 22c-2 Agreement between Putnam Variable Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(r)ii	Marketing and Administrative Services Agreement between Putnam Variable Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
10(v)(r)iii	Letter Agreement between Putnam Variable Trust and MLIC	Incorporated herein by reference to the initial filing of the Registrant on Form N-4, filed January 29, 2016 (File No. 333-207276)
23(i)	Consent of Legal Counsel	See Exhibit 5	X
23(ii)	Consent of Independent Registered Public Accounting Firm		X
24	Powers of Attorney	Incorporated herein by reference to the initial filing of the Registrant on Form S-1, filed April 6, 2016 (File No. 333-207222)
101	Interactive Date Files		X

Item 17. Undertakings.

(A) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(i)		To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
	(ii)		To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;
	(iii)		To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a Registration Statement relating to an offering, other than Registration Statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a Registration Statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to

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such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.

(5) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

	(i)		Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
	(ii)		Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;
	(iii)		The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
	(iv)		Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(B) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in that Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, MEMBERS Life Insurance Company has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Madison, and State of Wisconsin as of this 19 day of April, 2016.

	MEMBERS Life Insurance Company
	By:	/s/M. Jeffrey Bosco
		M. Jeffrey Bosco, President

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and as of the dates indicated:

Name			Title		Date
/s/ M. Jeffrey Bosco*			President and Director		April 19, 2016
M. Jeffrey Bosco			(Principal Executive
			Officer)
/s/ Brian J. Borakove*			Treasurer (Principal		April 19, 2016
Brian J. Borakove			Financial & Accounting
			Officer)
/s/ Michael F. Anderson*			Director		April 19, 2016
Michael F. Anderson
/s/ Michael T. Defnet*			Director		April 19, 2016
Michael T. Defnet
/s/ Jason A. Pisarik*			Director		April 19, 2016
Jason A. Pisarik
/s/ Steven R. Suleski*			Director		April 19, 2016
Steven R. Suleski
*By:/s/Ross D. Hansen
Ross D. Hansen

*

Signed pursuant to Power of Attorney dated January 29, 2016 filed electronically with pre-effective amendment number 1 (File No. 333-207222) filed with the Commission on April 6, 2016.

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