AMERUS LIFE HOLDINGS INC, S-1/A, 1996-12-12

AMERUS LIFE HOLDINGS INC
S-1/A, 1996-12-12
LIFE INSURANCE

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 12, 1996

REGISTRATION NO. 333-12239
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------

AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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AMERUS LIFE HOLDINGS, INC.
(Exact name of registrant as specified in its Articles of Incorporation)

<TABLE>
<S> <C> <C>
IOWA 6719 42-1459712
(State or other (Primary Standard (IRS Employer
jurisdiction of Industrial Classification Identification
incorporation or Code Number) No.)
organization)
</TABLE>

418 SIXTH AVENUE
DES MOINES, IOWA 50306-2499
(515) 280-1331
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

JAMES A. SMALLENBERGER
SENIOR VICE PRESIDENT AND SECRETARY
AMERUS LIFE HOLDINGS, INC.
418 SIXTH AVENUE
DES MOINES, IOWA 50309-2407
(515) 280-1331

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------

Copies to:

<TABLE>
<S> <C>
RICHARD G. CLEMENS, ESQ. WILLIAM D. TORCHIANA, ESQ.
SIDLEY & AUSTIN SULLIVAN & CROMWELL
ONE FIRST NATIONAL PLAZA 125 BROAD STREET
CHICAGO, ILLINOIS 60603 NEW YORK, NEW YORK 10004
(312) 853-7642 (212) 558-4000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
--------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two separate prospectuses. The first
prospectus relates to a subscription offering by the Company of five million
shares of the Company's Class A Common Stock to certain eligible policyowners of
the Company's principal life insurance subsidiary (the "Subscription Offering").
The second prospectus relates to a public offering of the shares of Class A
Common Stock which remain unsold at the expiration of the subscription period in
the Subscription Offering (the "Public Offering" and, together with the
Subscription Offering, the "Offerings"). The prospectus for the Public Offering
will be identical to the prospectus for the Subscription Offering except for (i)
the alternate pages which appear in this Registration Statement immediately
following the complete prospectus for the Subscription Offering, and (ii) the
absence of the sections entitled "Plan of Distribution" and "The Public
Offering" from the Public Offering prospectus.

<PAGE>
5,000,000 SHARES
AMERUS LIFE HOLDINGS, INC.
CLASS A COMMON STOCK
(NO PAR VALUE)
--------------

Of the 5,000,000 shares of Class A Common Stock of AmerUs Life Holdings,
Inc., an Iowa corporation, offered hereby (the "Shares"), 2,500,000 Shares are
being offered by the Company and 2,500,000 Shares are being offered by the
Company's parent corporation, AmerUs Group Co., an Iowa corporation ("AmerUs
Group" or the "Selling Shareholder"). See "Ownership of Common Stock." The
Shares are being offered on a non-underwritten basis to eligible policyowners as
of June 30, 1996 (the "Subscription Policyowners") pursuant to nontransferable
subscription rights (the "Subscription Offering"). See "Ownership of Common
Stock." The Company will not receive any of the proceeds from the sale of Shares
being offered by the Selling Shareholder. The Company and the Selling
Shareholder intend to offer all or a portion of the Shares not subscribed for in
the Subscription Offering to the public in a subsequent underwritten public
offering, the closing of which would occur contemporaneously with the closing of
the Subscription Offering (the "Public Offering," and together with the
Subscription Offering, the "Offerings"). See "The Subscription Offering" and
"The Public Offering."

The Company has two classes of authorized common stock, no par value (the
"Common Stock"), consisting of (i) the Class A Common Stock, which has one vote
per share, and (ii) the Class B Common Stock, the holder of which shall at all
times have a majority of the voting power of the Common Stock. Under Iowa law,
the Class B Common Stock must be held, directly or indirectly, by American
Mutual Holding Company, an Iowa mutual insurance holding company ("AMHC"), and
is automatically convertible into Class A Common Stock in the event of the
demutualization of AMHC. Following the Offerings, AMHC will own, directly or
indirectly, 71% of the Company's Class A Common Stock (assuming no exercise of
the underwriters' over-allotment option in the Public Offering) and 100% of the
Class B Common Stock, which together will represent approximately 77% of the
voting power of the Common Stock and approximately 77% of the economic value of
the Company. See "Risk Factors--Control by AMHC; Anti-Takeover Effects of Iowa
Law and the Company's Articles of Incorporation and Bylaws" and "Description of
the Capital Stock."

The issuance of Shares in the Subscription Offering is contingent upon the
sale by the Company and the Selling Shareholder of Shares in the Offerings in an
aggregate amount of $50 million. Subscribers for Shares in the Subscription
Offering may subscribe for a minimum of 100 Shares and a maximum of 5,000
Shares. There can be no assurance that subscribers for the Shares in the
Subscription Offering will in fact be able to purchase such Shares, because the
Company may in its sole discretion determine to cancel or rescind the
Subscription Offering at any time prior to the closing of the Subscription
Offering. See "The Subscription Offering."

Upon consummation of the Offerings, the Company expects, subject to market
conditions, to sell trust preferred securities to the public in an aggregate
amount of up to $75 million pursuant to a separate prospectus (the "Preferred
Offering"). See "The Preferred Offering."

Prior to the Offerings, there has been no public market for the Class A
Common Stock of the Company. The price of the Shares in the Subscription
Offering (the "Subscription Price") will be $19.00 per Share. The Subscription
Price was set by the Company and the Selling Shareholder after consultation with
their financial advisors. If the Subscription Price is greater than the price
per share to the public in the Public Offering (the "Public Offering Price") or
the Revised Subscription Price (as defined herein) the Company and the Selling
Shareholder will issue refunds to subscribing policyowners in the form of a
check equal to the amount of such difference multiplied by the number of Shares
subscribed for by each such policyowner. See "The Subscription Offering." If the
Public Offering Price or the Revised Subscription Price is more than the
Subscription Price, subscribers will not be required to pay any additional
amounts for the Shares subscribed for, nor will there be any adjustment in the
number of Shares issued to them. See "The Subscription Offering."

The Class A Common Stock has been approved for quotation, subject to
official notice of issuance, on the Nasdaq National Market under the symbol
"AMRS".

THE SUBSCRIPTION OFFERING EXPIRES AT 4:00 P.M., NEW YORK TIME, ON WEDNESDAY,
JANUARY 8, 1997 (THE "SUBSCRIPTION EXPIRATION DATE"). SUBSCRIPTION ORDER FORMS
AND PAYMENT IN FULL FOR THE SHARES BEING SUBSCRIBED FOR MUST BE RECEIVED BY
CHASEMELLON SHAREHOLDER SERVICES, L.L.C. (THE "SUBSCRIPTION SERVICES AGENT") NOT
LATER THAN 4:00 P.M., NEW YORK TIME, ON THE SUBSCRIPTION EXPIRATION DATE.
SUBSCRIPTIONS FOR SHARES ARE IRREVOCABLE BY THE SUBSCRIBER.

Subscription funds will be held in an account with the Subscription Services
Agent pending consummation of the Subscription Offering or the refund of such
funds to subscribers. Please read this Prospectus for additional information on
subscription procedures and on other aspects of this Subscription Offering.

SEE "RISK FACTORS" BEGINNING ON PAGE 14 FOR A DISCUSSION OF CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK.

--------------

<TABLE>
<CAPTION>
SUBSCRIPTION PROCEEDS TO THE PROCEEDS TO THE
PRICE(1) COMPANY(2) SELLING SHAREHOLDER(3)
------------- ---------------- ----------------------
<S> <C> <C> <C>
Per Share...................................................... $ 19.00 $ 19.00 $ 19.00
Total................................................Minimum(4) $ 0 $ 0 $ 0
Maximum(5) $95,000,000 $ 47,500,000 $ 47,500,000
</TABLE>

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(1) If the Public Offering Price or the Revised Subscription Price (as defined
herein) is less than the Subscription Price, the Company and the Selling
Shareholder will issue refunds to subscribing policyowners in the form of a
check equal to the amount of such difference multiplied by the number of
Shares subscribed for by each such policyowner. See "The Subscription
Offering."

(2) Before deducting expenses of the Subscription Offering payable by the
Company, estimated to be $1,037,500, and assuming the effective Subscription
Price is $19.00 per share. If the Public Offering Price or the Revised
Subscription Price is below $19.00, then the gross proceeds to the Company
would be reduced by $2,500,000 for each $1.00 of such difference.

(3) Before deducting expenses of the Subscription Offering payable by the
Selling Shareholder, estimated to be $1,037,500, and assuming the effective
Subscription Price is $19.00 per share. If the Public Offering Price or the
Revised Subscription Price is below $19.00, then the gross proceeds to the
Selling Shareholder would be reduced by $2,500,000 for each $1.00 of such
difference.

(4) Assumes no Shares are sold in the Subscription Offering.
(5) Assumes all Shares are sold in the Subscription Offering.
------------------

The date of this Prospectus is December 12, 1996.

<PAGE>
AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-1 (including all amendments
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Class A Common Stock offered
hereby. As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information contained in the Registration Statement.
For further information with respect to the Company and the Class A Common Stock
offered hereby, reference is hereby made to the Registration Statement and to
the exhibits and schedules filed therewith. Statements contained in this
Prospectus regarding the contents of any agreement or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is made to the copy of such agreement filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. The Registration Statement, including the exhibits and
schedules thereto, may be inspected at the public reference facilities
maintained by the Commission at Room 204, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, DC 20549; Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661; and Seven World Trade Center, New York, New York 10048; and
copies of all or any part thereof may be obtained from such office upon payment
of the prescribed fees. The Commission maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants who file electronically with the Commission.

As a result of the Offerings, the Company will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). So long as the Company is subject to the periodic
reporting requirements of the Exchange Act, it will continue to furnish the
reports and other information required thereby to the Commission. The Company
intends to furnish holders of the Class A Common Stock with annual reports
containing, among other information, audited consolidated financial statements
certified by an independent public accounting firm and quarterly reports
containing unaudited condensed consolidated financial information for the first
three quarters of each fiscal year. The Company also intends to furnish such
other reports as it may determine or as may be required by law.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE IOWA
COMMISSIONER OF INSURANCE NOR HAS THE IOWA COMMISSIONER OF INSURANCE RULED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
--------------

THIS PROSPECTUS RELATES SOLELY TO THE SUBSCRIPTION OFFERING AND DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, COMMON STOCK
IN THE ANTICIPATED PUBLIC OFFERING. COMMON STOCK, IF ANY, TO BE OFFERED IN THE
ANTICIPATED PUBLIC OFFERING WILL BE OFFERED ONLY BY MEANS OF A SEPARATE
PROSPECTUS.
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IN CONNECTION WITH THE PUBLIC OFFERING THAT MAY FOLLOW THIS SUBSCRIPTION
OFFERING, THE UNDERWRITERS FOR SUCH PUBLIC OFFERING MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE OVER-
THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

2
<PAGE>
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THE PLAN OF REORGANIZATION OF AMERICAN MUTUAL LIFE INSURANCE COMPANY AND
IOWA LAW REQUIRE AMHC AT ALL TIMES TO OWN DIRECTLY, OR INDIRECTLY THROUGH ONE OR
MORE INTERMEDIATE HOLDING COMPANY SUBSIDIARIES, SHARES OF CAPITAL STOCK WHICH
CARRY THE RIGHT TO CAST A MAJORITY OF THE VOTES ENTITLED TO BE CAST BY ALL OF
THE OUTSTANDING SHARES OF THE CAPITAL STOCK AT A SHAREHOLDERS' MEETING OF THE
COMPANY. ANY ATTEMPT TO EFFECT ANY TRANSACTION PURSUANT TO WHICH AMHC WOULD NO
LONGER HAVE SUCH VOTING MAJORITY WOULD BE NULL AND VOID AND INEFFECTUAL TO
TRANSFER SUCH VOTING RIGHTS.
--------------

THE IOWA INSURANCE HOLDING COMPANY SYSTEMS STATUTE APPLICABLE TO THE COMPANY
PROVIDES THAT NO PERSON MAY SEEK TO ACQUIRE CONTROL OF THE COMPANY, AND THUS
INDIRECT CONTROL OF AMERUS LIFE, WITHOUT THE PRIOR APPROVAL OF THE IOWA
COMMISSIONER OF INSURANCE. GENERALLY, ANY PERSON WHO DIRECTLY OR INDIRECTLY
OWNS, CONTROLS, HOLDS WITH POWER TO VOTE OR HOLDS PROXIES REPRESENTING 10% OR
MORE OF THE COMPANY'S VOTING SECURITIES (CONSISTING OF THE COMBINED OUTSTANDING
SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK) WOULD BE PRESUMED TO
HAVE ACQUIRED SUCH CONTROL, UNLESS SUCH PRESUMPTION IS REBUTTED BY A SHOWING
THAT SUCH CONTROL DOES NOT EXIST IN FACT.
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FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR THE ADEQUACY OF THE PROSPECTUS.
--------------

3
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DETAILED INFORMATION, CONSOLIDATED FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. CERTAIN INSURANCE TERMS AND
OTHER CAPITALIZED TERMS USED IN THIS PROSPECTUS ARE DEFINED IN THE "GLOSSARY OF
CERTAIN INSURANCE AND OTHER DEFINED TERMS" HEREIN AND ARE PRINTED IN BOLD THE
FIRST TIME THEY APPEAR IN TEXT BELOW. FOR PURPOSES OF THIS PROSPECTUS, THE TERM
"COMPANY" REFERS TO AMERUS LIFE HOLDINGS, INC. AND ITS SUBSIDIARIES,
COLLECTIVELY, UNLESS THE CONTEXT OTHERWISE REQUIRES. THE TERM "AMERUS LIFE"
REFERS AT ALL TIMES TO AMERUS LIFE INSURANCE COMPANY AND ITS SUBSIDIARIES. THE
TERM "AMERICAN MUTUAL LIFE" REFERS TO AMERICAN MUTUAL LIFE INSURANCE COMPANY
PRIOR TO ITS CONVERSION INTO A STOCK LIFE COMPANY AND NAME CHANGE TO AMERUS LIFE
INSURANCE COMPANY ON JUNE 30, 1996, EXCLUDING AMERUS PROPERTIES, INC. ("API"),
AMERUS BANK, AND IOWA REALTY CO., INC., AND EACH OF THEIR RESPECTIVE
SUBSIDIARIES (THE "NON-LIFE INSURANCE SUBSIDIARIES"). THE TERM "PLAN" REFERS TO
THE PLAN OF REORGANIZATION OF AMERICAN MUTUAL LIFE DATED OCTOBER 27, 1995, THE
EFFECTIVE DATE OF WHICH WAS JUNE 30, 1996.

THE INFORMATION CONTAINED IN THIS PROSPECTUS GIVES EFFECT TO (I) THE
REORGANIZATION (AS DEFINED HEREIN) OF AMERICAN MUTUAL LIFE AND (II) THE
DISTRIBUTION BY AMERUS LIFE OF ITS NON-LIFE INSURANCE SUBSIDIARIES (THE
"DISTRIBUTION") TO AMERUS GROUP CO. ("AMERUS GROUP" OR THE "SELLING
SHAREHOLDER"), THE COMPANY'S IMMEDIATE PARENT CORPORATION, AS IF BOTH HAD BEEN
COMPLETED AT THE BEGINNING OF THE PERIODS IDENTIFIED HEREIN AND ASSUMES THAT,
DURING THE PERIODS PRESENTED, THE COMPANY OWNED AND OPERATED THE ASSETS IT WILL
OWN AS A RESULT OF SUCH REORGANIZATION AND DISTRIBUTION. THE INFORMATION
CONTAINED HEREIN, UNLESS OTHERWISE INDICATED, DOES NOT GIVE EFFECT TO A CAPITAL
CONTRIBUTION ( THE "CAPITAL CONTRIBUTION") BY AMERUS LIFE TO OR FOR THE BENEFIT
OF CERTAIN OF THE NON-LIFE INSURANCE SUBSIDIARIES OF CASH AND OTHER PROPERTY
HAVING AN APPROXIMATE NET CARRYING VALUE OF $79 MILLION. UNLESS OTHERWISE
SPECIFIED, THE INFORMATION CONTAINED HEREIN ASSUMES NO EXERCISE OF THE
UNDERWRITERS' OVER-ALLOTMENT OPTION IN THE PUBLIC OFFERING.

ALL FINANCIAL INFORMATION IN THIS PROSPECTUS IS PRESENTED IN ACCORDANCE WITH
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR LIFE INSURANCE
COMPANIES ("GAAP") UNLESS OTHERWISE SPECIFIED. STATUTORY DATA INCLUDED HEREIN
HAVE BEEN DERIVED FROM THE ANNUAL AND QUARTERLY STATEMENTS OF AMERICAN MUTUAL
LIFE AS FILED WITH INSURANCE REGULATORY AUTHORITIES AND PREPARED IN ACCORDANCE
WITH STATUTORY ACCOUNTING PRACTICES.

THE COMPANY

The Company is engaged in the business of marketing, UNDERWRITING and
distributing a broad range of individual life insurance and ANNUITY products to
individuals and businesses in 45 states and the District of Columbia. The
Company's primary product offerings consist of WHOLE LIFE, UNIVERSAL LIFE and
TERM LIFE INSURANCE policies and FIXED ANNUITIES. In addition, on April 1, 1996
the Company acquired a 34% interest in a variable life insurance and annuity
company through a joint venture arrangement (the "Ameritas Joint Venture") with
Ameritas Life Insurance Corp. ("Ameritas"). The Company's distribution systems
now market fixed annuities issued by Ameritas Variable Life Insurance Company
("AVLIC") and have begun to sell AVLIC's variable life insurance and VARIABLE
ANNUITY products. Based on published comparisons and rankings of life insurance
and annuity products, the Company believes that its products have a long history
of being competitive within the industry.

The Company's subsidiary, AmerUs Life, was originally incorporated in 1896
as a mutual insurance company under the name Central Life Assurance Society of
the United States. Its name was changed to American Mutual Life Insurance
Company in 1994 following the merger of American Mutual Life Insurance Company
("Old AML") into Central Life Assurance Company ("Central Life"). On June 30,
1996, American Mutual Life was converted into a stock life insurance company
pursuant to the Plan and its name was changed to AmerUs Life. As of September
30, 1996, AmerUs Life had approximately 418,000 life insurance POLICIES and
annuity contracts outstanding and individual life insurance IN FORCE, net of
REINSURANCE, of approximately $26.1 billion. As of September 30, 1996, the
Company had total assets of $4.3 billion and total shareholders' equity of $433
million (prior to the Offerings, after giving effect to the Capital
Contribution).

4
<PAGE>

The Company's target markets are individuals in the middle and upper income
brackets and small businesses. Its geographic focus is national in scope (except
for Connecticut, Maine, New Hampshire, New York and Vermont, in which the
Company is not licensed to do business), and it primarily serves suburban and
rural areas. The Company distributes its products primarily through a
combination of CAREER GENERAL AGENCY and PERSONAL PRODUCING GENERAL AGENCY
("PPGA") distribution systems, as well as a network of independent brokers. The
career general agency system consists of a network of 33 career general
agencies, with approximately 550 CAREER GENERAL AGENTS. The PPGA system is
comprised of approximately 425 PPGAS, with approximately 950 agents. Career
agents and agents in the PPGA system do not contract exclusively with the
Company. Variable life insurance products and the fixed and variable annuities
offered by the Ameritas Joint Venture are marketed through the Company's
distribution systems and the distribution systems of Ameritas and AVLIC, which
consist of approximately 250 agents and 450 independent broker-dealers (with
approximately 7,500 registered representatives), respectively.

AmerUs Life's claims-paying ability is rated "AA-" (Very high) by DUFF &
PHELPS and "A" (Good) by STANDARD & POOR'S. AmerUs Life is rated "A" (Excellent)
by A.M. BEST and "A2" (Good) by MOODY'S. See "Risk Factors--Importance of
Ratings" and "Glossary of Certain Insurance and Other Defined Terms" under the
captions Duff & Phelps, Standard & Poor's, A.M. Best and Moody's.

BUSINESS STRATEGY

The Company's business strategy to achieve earnings growth and increase
shareholder value is focused on managing certain operating fundamentals that
historically have compared favorably to the industry. The Company intends to
utilize these operating strengths to differentiate its products by maintaining
its position and reputation as a low-cost producer that provides high-value
products to its life insurance and annuity customers, while also providing
superior service to both agents and customers. The Company believes it is well
positioned to compete effectively based upon a number of strengths including its
strong operating performance, customer-driven product offerings, productive and
diversified distribution systems, sophisticated asset/liability management
capabilities and a customer service orientation. In addition, the Company
intends to continue to seek new business opportunities through mergers,
acquisitions and strategic alliances.

The Company believes that its operating performance is significantly
impacted by four basic elements: (i) MORTALITY, (ii) PERSISTENCY, (iii)
operating expenses, and (iv) investment yield. The Company believes that its
results for each of these basic elements for the last several years have been
strong. In addition to realizing efficiencies from reduced personnel and data
processing costs from the merger of Old AML into Central Life in 1994, the
Company has benefited from its efficient use of technology, its advanced
customer service systems, its variable-cost based distribution system, and its
sophisticated asset/liability management system.

The Company has other strengths which enable it to compete effectively in
the industry. Based on published comparisons and rankings of life insurance and
annuity products, the Company believes that its products have a long history of
being competitive within the industry. See "Business--Products." The Company
also has a productive and diversified distribution system, with a non-exclusive
distribution network comprised of a career general agency system, a PPGA system,
distribution channels available to it through the Ameritas Joint Venture and a
sales network of certain of the Company's AFFILIATES. In response to competition
among insurance companies for agents with demonstrated ability, the Company
provides agents in both its career general agency and the PPGA systems with
financial incentives based on their volume of sales of the Company's products.
See "Risk Factors--Competitive Environment" for additional discussion of
competitive factors in the insurance industry.

Management believes that mergers, acquisitions and strategic alliances will
be necessary to more fully utilize the Company's distribution and administrative
capacity and to obtain improved economies of scale and a lower cost structure.
The Company's access to the capital markets provides it with the financial
flexibility to selectively pursue acquisitions. The Company has historically
sought mergers,

5
<PAGE>
acquisitions and strategic alliances with the goal of improving its position in
existing market segments or entering desirable new market segments. Based on the
Company's success in identifying and effectively implementing mergers,
acquisitions and strategic alliances, management intends to actively and
selectively participate in such transactions in the future as a means to further
enhance shareholder value. Notable recent activities include the combination by
merger of Old AML into Central Life in 1994, and the Ameritas Joint Venture
which was completed in April 1996.

CONTROLLING SHAREHOLDER

Following the Offerings, AMHC will continue to be the indirect controlling
shareholder of the Company through its ownership of AmerUs Group. After the
Offerings, AmerUs Group will own all five million of the outstanding shares of
Class B Common Stock and 12 million of the outstanding shares of Class A Common
Stock, representing approximately 77% of the combined voting power of the Class
A Common Stock and Class B Common Stock. AMHC acquired its ownership interest in
the Company as a result of the Reorganization, pursuant to which American Mutual
Life formed AMHC as a mutual insurance holding company and American Mutual Life
was converted into a stock life insurance company as a wholly owned subsidiary
of AMHC. See "The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries."

6
<PAGE>
ORGANIZATIONAL STRUCTURE

The following chart illustrates the general organization of AMHC and its
subsidiaries, including the Company, after the Offerings:

[GRAPH]

* Assuming no exercise of the underwriters' over-allotment option in the
Public Offering.

** The Non-Life Insurance Subsidiaries consist of API, AmerUs Bank, and Iowa
Realty Co., Inc., and each of their respective subsidiaries.

*** AmerUs Life participates in the Ameritas Joint Venture through its ownership
interest in AMAL Corporation, a Nebraska corporation ("AMAL"). See
"Business--Ameritas Joint Venture."

7
<PAGE>
THE REORGANIZATION AND DISTRIBUTION OF THE NON-LIFE INSURANCE SUBSIDIARIES

On October 27, 1995, the Board of Directors of American Mutual Life adopted
the Plan, which authorized American Mutual Life to reorganize into a mutual
insurance holding company structure (the "Reorganization"). The Iowa
Commissioner of Insurance (the "Iowa Commissioner") held a public hearing on the
Reorganization on November 21, 1995. The Plan was approved by American Mutual
Life's policyowners on November 28, 1995, and the Iowa Commissioner approved the
Plan on December 13, 1995. The Reorganization became effective on June 30, 1996
(the "Effective Date"). American Mutual Life was the first company to obtain
approval under the Iowa mutual insurance holding company statute to form a
mutual insurance holding company.

Pursuant to the Reorganization, American Mutual Life formed AMHC as a mutual
insurance holding company and American Mutual Life was converted into a stock
life insurance company and its name was changed to AmerUs Life Insurance
Company. As part of the Reorganization, the policyowners' contract rights in
their insurance policies and annuities remained with AmerUs Life and the
policyowners automatically became MEMBERS of AMHC, and thereby became entitled
to vote for directors of AMHC. Purchasers of insurance policies and annuities
from AmerUs Life after the Reorganization automatically become members of AMHC
(subject to certain exceptions and conditions set forth in the Plan). AMHC may,
among other things, elect all of the directors of the Company and approve
matters submitted for shareholder approval. Conflicts of interest between the
Company and AMHC may arise. See "Risk Factors--Relationship with AMHC; Potential
Conflicts of Interest" and "Certain Transactions and Relationships."

Prior to the Distribution, AmerUs Life made the Capital Contribution to or
for the benefit of certain of the Non-Life Insurance Subsidiaries. The net
assets contributed in the Capital Contribution had an aggregate carrying value
of approximately $79 million as of the date of contribution. Following the
Capital Contribution, a series of transactions was undertaken by the Company and
its affiliates. AmerUs Life effected the Distribution, pursuant to which it
distributed the Non-Life Insurance Subsidiaries to AmerUs Group. Immediately
after the Distribution, AmerUs Group contributed all of its shares of common
stock in AmerUs Life to the Company. Under this structure, the Company is an
intermediate holding company, with AmerUs Group as its direct parent company and
AmerUs Life as its wholly-owned subsidiary. Under Iowa law, AMHC is required to
retain direct or indirect ownership and control of shares representing a
majority of the vote of the outstanding capital stock of the Company.
Immediately following the Distribution, the Company entered into a bank credit
facility pursuant to which it borrowed $100 million in term debt and $75 million
under a revolving line of credit (the "Bank Credit Facility"). The Company used
the proceeds from such borrowings to make a $125 million capital contribution to
AmerUs Life and to purchase a $50 million surplus note from AmerUs Life. The
Company will use certain proceeds of the Offerings and the Preferred Offering
(as defined below) to repay such borrowings.

The Distribution effectively separated AMHC's non-life insurance businesses
from the life insurance businesses owned by the Company, such that the companies
engaged in non-life insurance businesses are no longer subsidiaries of the
Company. See "The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries."

8
<PAGE>
THE SUBSCRIPTION OFFERING

The Shares are being offered by the Company and the Selling Shareholder in
the Subscription Offering in accordance with the priority subscription rights
provided under the Plan to eligible policyowners of AmerUs Life as of June 30,
1996 ("Subscription Policyowners"). Subscription Policyowners may purchase
between 100 and 5,000 whole Shares in the Subscription Offering at a per share
price of $19.00 (the "Subscription Price"), subject to adjustment if (i) the
Public Offering Price or the Revised Subscription Price (as defined below) is
less than the Subscription Price or (ii) if the Subscription Offering is
oversubscribed. While it is currently the intention of the Company and the
Selling Shareholder to offer all or a portion of the Shares not subscribed for
in the Subscription Offering to the public in the Public Offering and to close
the Subscription Offering contemporaneously with the closing of the Public
Offering, the Company and the Selling Shareholder may close the Subscription
Offering without commencing or closing the Public Offering in the event the
Company and the Selling Shareholder receive, in the aggregate, $50 million or
more in gross proceeds in the Subscription Offering. In the event that the
Company and the Selling Shareholder determine that the closing of the
Subscription Offering shall occur without undertaking the Public Offering and
provided that the Company and the Selling Shareholder elect to proceed with the
Subscription Offering, then the Company and the Selling Shareholder will
determine, after consultation with their financial advisors and a review of
market conditions, the recent prices of stocks of comparable companies which are
publicly traded and other factors customarily considered in determining an
initial offering price, the price per share at which the Company estimates the
Common Stock would trade in the public market on the closing of the Subscription
Offering (the "Revised Subscription Price"). If the Public Offering Price or the
Revised Subscription Price is more than the Subscription Price, subscribers will
not be required to pay any additional amounts for the Shares subscribed for, nor
will there be any adjustment in the number of Shares issued to them. See "The
Subscription Offering--Subscription Price and Payment for Shares."

<TABLE>
<S> <C>
Class A Common Stock Offered by the
Company Pursuant to the Subscrip-
tion Offering...................... 2,500,000 Shares. (If fewer than 5,000,000 Shares are
subscribed for in the Subscription Offering the
Company and the Selling Shareholder will each sell
one-half of the total Shares subscribed for.)
Class A Common Stock Offered by the
Selling Shareholder pursuant to the
Subscription Offering.............. 2,500,000 Shares. (If fewer than 5,000,000 Shares are
subscribed for in the Subscription Offering the
Company and the Selling Shareholder will each sell
one-half of the total Shares subscribed for.)
Class A Common Stock to be Out-
standing Immediately After the
Offerings.......................... 17,000,000 Shares. (Assumes that all Shares offered
pursuant to the Subscription Offering are sold in the
Subscription Offering and/or the Public Offering and
that the underwriters for the Public Offering do not
exercise their over-allotment option.)
Class B Common Stock to be Out-
standing Immediately After the
Offerings.......................... 5,000,000 shares
Nasdaq Symbol....................... AMRS
Voting Rights....................... The Class A Common Stock has one vote per share. The
voting rights of the Class B Common Stock provide the
holder of the Class B Common Stock with a majority of
the voting power of the Class A Common Stock and the
Class B
</TABLE>

9
<PAGE>

<TABLE>
<S> <C>
Common Stock combined. Both classes generally vote
together as a single class on all matters, except
that the holders of Class A Common Stock and the
holders of Class B Common Stock will vote separately
as a class with respect to certain matters for which
class voting is required under Iowa law. See
"Description of the Capital Stock."
Use of Proceeds..................... The amount of proceeds from the Offerings, if any,
will vary according to, among other things, the total
number of Shares subscribed for by Subscription
Policyowners. Assuming that the Public Offering Price
(or the Revised Subscription Price if the Public
Offering is not consummated) is equal to $15.50 per
Share, the net proceeds to the Company from the
Offerings are expected to be approximately $35
million after deducting the Company's share of the
estimated expenses of the Offerings. All such
estimated net proceeds will be used by the Company to
repay debt outstanding under the Bank Credit
Facility. The Company will not receive any proceeds
from the sale of Class A Common Stock by the Selling
Shareholder. See "Use of Proceeds," "The Subscription
Offering" and "The Public Offering."
Dividend Policy..................... Subject to the Company's financial results,
applicable regulatory constraints and declaration by
the Board of Directors of the Company, the Company
currently intends to pay a quarterly dividend of
$0.10 per share of Common Stock commencing with the
quarter ending on March 31, 1997. However, there can
be no assurance that the Company will declare and pay
any dividends. See "Risk Factors--Holding Company
Structure; Limitation on Dividends" and "Dividend
Policy."
Subscription Price.................. $19.00 per share. If the Public Offering Price or the
Revised Subscription Price is less than the
Subscription Price, the Company will issue refunds to
subscribing policyowners in the form of a check equal
to the amount of such difference multiplied by the
number of Shares subscribed for by each such
policyowner. If the Subscription Price is less than
the Public Offering Price or the Revised Subscription
Price, subscribers will not be required to pay any
additional amounts for the Shares subscribed for. See
"The Subscription Offering."
Subscription Minimum and Maximum.... The minimum number of Shares a Subscription
Policyowner is entitled to subscribe for is 100. The
maximum number of Shares a Subscription Policyowner
is entitled to subscribe for is 5,000. In the event
that Subscription Policyowners in the aggregate
subscribe for more than five million Shares (the
amount of Shares being offered hereby), Subscription
Policyowners will be permitted to purchase, to the
extent possible, 100 shares and thereafter will
receive a pro-rated number of Shares in the same
proportion that the subscription of each bears to the
total subscriptions received by the Company in the
Subscription Offering. The Company will
</TABLE>

10
<PAGE>

<TABLE>
<S> <C>
issue refunds to each Subscription Policyowner for
Shares subscribed for but not received. See "The
Subscription Offering."
Subscription Procedures............. Together with this Prospectus, the Company is
delivering to each Subscription Policyowner a
subscription order form pursuant to which such
Subscription Policyowner shall have the right to
subscribe for Shares.
To exercise the right to subscribe for Shares, a
Subscription Policyowner must complete and sign the
subscription order form and such form must be
received, together with payment in full for the
Shares subscribed for, by the Subscription Services
Agent not later than 4:00 p.m., New York time, on the
Subscription Expiration Date. Payment for the Shares
shall be made by check or money order in United
States dollars. SUBSCRIPTIONS FOR SHARES ARE
IRREVOCABLE BY THE SUBSCRIBER.
Subscription order forms received by the Subscription
Services Agent may not be modified, amended or
rescinded without the consent of the Company. See
"The Subscription Offering."
Subscription Expiration Date........ The Subscription Offering expires at 4:00 p.m., New
York time, on Wednesday, January 8, 1997. Properly
executed subscription order forms must be received,
together with payment in full for the Shares
subscribed for, by the Subscription Services Agent by
such time on such date. See "The Subscription
Offering."
Cancellation of Subscription The Company may in its sole discretion at any time
Offering........................... prior to the closing of the Subscription Offering
determine to cancel or rescind the Subscription
Offering. See "The Subscription Offering."
Subscription Funds.................. Subscription funds will be held in an account with
the Subscription Services Agent pending consummation
of the Subscription Offering or the refund of such
funds to subscribers. If the Company cancels the
Subscription Offering, payments made by subscribers
will be promptly refunded with interest at a rate of
3.5% simple interest per annum (the "Subscription
Interest Rate"). If the period from the Subscription
Expiration Date to the closing of the Subscription
Offering exceeds 60 days, interest will be paid to
each subscriber on all subscription amounts at the
Subscription Interest Rate from such sixtieth day
until the closing of the Subscription Offering.
Except as described above, interest will not be paid
on subscription funds. See "The Subscription
Offering."
Subscription Agent.................. The Chicago Corporation
Subscription Services Agent......... ChaseMellon Shareholder Services, L.L.C.
</TABLE>

11
<PAGE>
THE PUBLIC OFFERING

If the Shares offered hereby are not fully subscribed for in the
Subscription Offering, the Company and the Selling Shareholder intend to sell
all or a portion of such Shares in an underwritten offering (the "Public
Offering"). See "The Public Offering."

THE PREFERRED OFFERING

Upon consummation of the Offerings, the Company expects, subject to market
conditions, to sell through AmerUs Capital I (the "Trust"), a statutory business
trust formed under the laws of the State of Delaware and a wholly-owned
subsidiary of the Company, trust preferred securities to the public in an
aggregate amount of approximately $75 million pursuant to a separate prospectus
(the "Preferred Offering"). The Trust would invest the net proceeds of the
Preferred Offering, which are expected to be $72.4 million after giving effect
to the underwriting discount and estimated offering expenses, in deferrable
interest subordinated debentures (the "Junior Subordinated Debt Securities") of
the Company. It is expected that the Company would use the proceeds received in
the Preferred Offering to repay amounts outstanding under the Bank Credit
Facility. See "The Preferred Offering" and "Management's Discussion and Analysis
of Results of Operation and Financial Condition--Liquidity and Capital
Resources."

The consummation of the Offerings is not conditioned upon completion of the
Preferred Offering, and there can be no assurance that the Preferred Offering
will be completed. See "The Preferred Offering."

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The summary consolidated financial data below for the nine months ended
September 30, 1996 and each of the three years ending December 31, 1995 are
derived from the Consolidated Financial Statements of the Company, which
financial statements have been audited by KPMG Peat Marwick LLP, independent
auditors. The summary consolidated financial data provided below for the nine
months ended September 30, 1995 and for each of the two years ending December
31, 1992 are derived from the unaudited consolidated financial statements of the
Company. In the opinion of management, the unaudited financial data for the two
years ended December 31, 1992 presents fairly the consolidated financial
statements for such periods in conformity with generally accepted accounting
principles.

The foregoing give effect to the Reorganization and the Distribution as if
both had been completed prior to the periods presented, but do not give effect
to the Capital Contribution. In the opinion of management, the financial
information presented for all interim periods reflects all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of such data. Results for the nine-month periods ended September
30, 1996 and 1995 are not necessarily indicative of results that may be expected
for any other interim period or the year as a whole. This data should be read in
conjunction with (i) "Management's Discussion and Analysis of Results of
Operations and Financial Condition," (ii) the audited Consolidated Financial
Statements of the Company as of September 30, 1996 and December 31, 1995 and
1994, and for the nine months ended September 30, 1996 and each of the years in
the three-year period ended December 31, 1995, which financial statements have
been audited by KPMG Peat Marwick LLP, independent auditors, together with the
related notes and the report thereon, (iii) the unaudited consolidated financial
statements of the Company as of September 30, 1995 and for the nine months ended
September 30, 1995 and (iv) other financial data included elsewhere in this
Prospectus.

12
<PAGE>

<TABLE>
<CAPTION>
AS OF OR FOR THE
NINE MONTHS ENDED AS OF OR FOR THE YEAR ENDED DECEMBER 31,(A)
SEPTEMBER 30,
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA:
Revenues:
Insurance premiums.............................. $ 133.7 $ 183.9 $ 244.1 $ 237.9 $ 226.4 $ 192.9 $ 186.9
Product charges................................. 39.1 42.5 57.3 56.3 57.4 57.2 50.8
Net investment income........................... 189.3 210.5 285.2 275.7 269.9 273.1 268.6
Realized gains (losses) on investments.......... 62.5 41.6 51.4 (19.9) 15.5 10.1 15.7
Other income.................................... 2.3 2.3 5.4 2.4 2.4 0.9 3.6
Contribution from the Closed Block.............. 2.7 -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Total revenues.................................... 429.6 480.8 643.4 552.4 571.6 534.2 525.6
Benefits and expenses:
Total policyowner benefits...................... 222.9 279.7 374.6 369.9 364.3 334.8 327.8
Total expenses.................................. 78.8 80.9 108.9 111.4 106.0 100.0 87.6
Dividends to policyowners....................... 26.3 36.3 49.4 45.0 45.5 42.1 40.9
--------- --------- --------- --------- --------- --------- ---------
Total benefits and expenses....................... 328.0 396.9 532.9 526.3 515.8 476.9 456.3
--------- --------- --------- --------- --------- --------- ---------

Income before income taxes........................ 101.6 83.9 110.5 26.1 55.8 57.3 69.3
Income tax expense................................ 38.7 29.9 41.2 19.4 21.4 18.6 24.5
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of a change in
accounting principles............................ 62.9 54.0 69.3 6.7 34.4 38.7 44.8
Cumulative effect of a change in accounting
principles, net of tax........................... 0.0 0.0 0.0 0.0 (3.2) 0.0 0.0
--------- --------- --------- --------- --------- --------- ---------
Net income........................................ $ 62.9 $ 54.0 $ 69.3 $ 6.7 $ 31.2 $ 38.7 $ 44.8
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Earnings per share (C)............................ $ 2.86 -- $ 3.15 -- -- -- --

CONSOLIDATED BALANCE SHEET DATA:
Total invested assets............................. $ 2,810.2 $ 3,839.7 $ 3,965.0 $ 3,491.7 $ 3,639.3 $ 3,274.8 $ 3,155.8
Total assets...................................... 4,291.8 4,248.8 4,371.9 4,036.9 4,030.7 3,707.6 3,572.5
Total liabilities................................. 3,779.4 3,760.5 3,832.0 3,618.6 3,524.8 3,286.4 3,195.6
Total shareholder's equity (B)(D)................. 512.4 488.3 539.9 418.3 505.9 421.2 376.9

OTHER OPERATING DATA:
Cash flows from operating activities.............. $ 85.3 $ 128.4 $ 202.0 $ 172.4 $ 173.6 $ 101.5 $ 155.7
Cash flows from investing activities.............. 5.8 (95.0) (148.3) (134.9) (192.1) (99.6) (175.2)
Cash flows from financing activities.............. (95.8) (56.5) (72.5) (24.8) 14.5 9.2 19.1

Individual life insurance in force, net of
reinsurance...................................... $ 26,082 $ 25,865 $ 25,984 $ 25,282 $ 24,698 $ 23,947 $ 23,181
Number of employees............................... 407 406 406 457 489 505 526

STATUTORY DATA:
Statutory premiums and deposits:
Individual life................................. $ 236.0 $ 233.0 $ 307.1 $ 296.4 $ 286.3 $ 270.2 $ 261.7
Annuities (E)................................... 73.4 145.6 197.1 187.8 90.4 65.2 108.5
</TABLE>

- ------------------

(A) The merger of Old AML into Central Life, which was consummated in 1994, has
been accounted for as a pooling of interests transaction.

(B) The Capital Contribution would have the effect of reducing total
shareholder's equity as of September 30, 1996 and the year ended December
31, 1995 by $79 million.

(C) Retroactively reflects the pro forma effect of the issuance of 17.0 million
shares of Class A Common Stock and 5.0 millon shares of Class B Common Stock
at the beginning of the respective periods and gives retroactive effect to
the Capital Contribution.

(D) Amounts reported prior to September 30, 1996 reflect policyowners' equity.
From December 31, 1993, results reflect the impact of SFAS 115, "Accounting
for Certain Investments in Debt and Equity Securities." See Note 2 to
Consolidated Financial Statements.

(E) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See
"Business--Ameritas Joint Venture."

13
<PAGE>
RISK FACTORS

POTENTIAL INVESTORS SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" AND OTHER
INFORMATION IN THIS PROSPECTUS PRIOR TO MAKING AN INVESTMENT DECISION REGARDING
THE CLASS A COMMON STOCK.

HOLDING COMPANY STRUCTURE; LIMITATIONS ON DIVIDENDS

The Company is an insurance holding company whose assets consist primarily
of all of the outstanding shares of common stock of AmerUs Life. The Company's
ongoing ability to pay dividends to its shareholders and meet its other
obligations, including operating expenses and any debt, is primarily dependent
upon the receipt of sufficient funds from AmerUs Life in the form of dividends,
interest payments or loans. The payment of dividends by AmerUs Life to the
Company is regulated under Iowa law. Under Iowa law, AmerUs Life may pay
dividends only from the earned surplus arising from its business and must
receive the prior approval of the Iowa Commissioner to pay a dividend if such
dividend would exceed certain statutory limitations. The current statutory
limitation is the greater of (i) 10% of AmerUs Life's capital and statutory
surplus as of the preceding year end or (ii) the net gain from operations for
the previous calendar year. Iowa law gives the Iowa Commissioner broad
discretion to disapprove requests for dividends in excess of these limits. Based
on this limitation and 1995 statutory results, and absent the Distribution,
AmerUs Life would have been able to pay approximately $40 million in dividends
to the Company in 1996 without obtaining the Iowa Commissioner's approval.
However, as a result of the Distribution, AmerUs Life will not be able to pay
any additional dividends in the 12-month period following the Distribution
without the prior approval of the Iowa Commissioner. AmerUs Life has the ability
to loan funds to the Company subject to certain regulatory restrictions. At
September 30, 1996, AmerUs Life could loan up to $120 million without prior
regulatory approval. AmerUs Life's inability to pay dividends or advance loans
to the Company in the future in an amount sufficient for the Company to pay
dividends to its shareholders and meet its other obligations could have a
material adverse effect on the Company and the market value of the Class A
Common Stock. See "Dividend Policy," "Supervision and Regulation" and
"Description of the Capital Stock--Common Stock."

Under the Bank Credit Facility, the Company is prohibited from paying
dividends on its Common Stock in excess of an amount equal to 4% of the
Company's consolidated net worth as of the last day of the preceeding fiscal
year, and has also pledged to the lenders thereunder approximately 49.9% of the
common stock of AmerUs Life owned by the Company and a $50 million 9% surplus
note payable to the Company by AmerUs Life. See "Certain Transactions and
Relationships--Security Arrangements for Bank Credit Facility."

In connection with the Preferred Offering, the Company will agree not to
declare or pay any dividends on the Company's capital stock (including the Class
A Common Stock) during any period of time in which dividends on the preferred
securities issued in connection with the Preferred Offering are suspended,
except for stock dividends paid by the Company where the dividend stock is the
same stock as that on which the dividend is being paid. Dividends on the
Company's capital stock cannot be paid until all accrued dividends on the
preferred securities have been paid. See "The Preferred Offering."

CONTROL BY AMHC; ANTI-TAKEOVER EFFECTS OF IOWA LAW AND THE COMPANY'S ARTICLES OF
INCORPORATION AND BYLAWS

AMHC indirectly owns 100% of the Class B Common Stock of the Company and,
following completion of the Offerings, will indirectly hold approximately 77% of
the combined voting power of the Class A Common Stock and Class B Common Stock
(assuming that the underwriters in the Public Offering do not exercise their
over-allotment option). Moreover, under Iowa law, AMHC is required to own,
directly or indirectly through one or more intermediate holding companies,
shares of capital stock of the Company which carry the right to cast a majority
of the votes entitled to be cast by all of the outstanding shares of the capital
stock at a shareholders' meeting of the Company. Consequently, AMHC may, without
the approval of the other shareholders of the Company, prevent a potential
takeover or merger proposal (even if advantageous to the other shareholders). In
addition, AMHC may, without the approval of the other shareholders of the
Company, elect all of the directors of the Company, approve matters submitted
for shareholder approval and effect a possible transaction to go private. In the
event that AMHC adopts a plan of conversion to stock company form and
demutualizes pursuant to Iowa law, each share of Class B

14
<PAGE>
Common Stock would automatically be converted to become a share of Class A
Common Stock. See "Description of the Capital Stock--Common Stock" and
"Supervision and Regulation--Regulation of the Company and AMHC."

In addition to the requirement under Iowa law that AMHC directly or
indirectly own shares of capital stock of the Company giving it a majority of
the votes entitled to be cast by all of the outstanding shares of capital stock,
certain provisions included in the Company's Articles of Incorporation and its
Bylaws (the "Bylaws") may also have anti-takeover effects and may delay, defer
or prevent a takeover attempt that a shareholder might consider in his or her
best interests. These provisions include provisions relating to the Class B
Common Stock, so-called "blank check" preferred stock and a classified board of
directors. Such provisions may adversely affect the prevailing market price of
the Class A Common Stock. See "Certain Provisions of the Articles of
Incorporation and Bylaws of the Company" for a description of these provisions.

RELATIONSHIP WITH AMHC; POTENTIAL CONFLICTS OF INTEREST

AMHC is a mutual insurance holding company which is operated for the benefit
of its members. The members of AMHC are policyowners of AmerUs Life. AMHC
(through certain of its wholly-owned subsidiaries) has entered or will enter
into agreements with the Company and/or AmerUs Life whereby the Company and/or
AmerUs Life will provide to such subsidiaries certain management, data
processing, legal and other services, or whereby such subsidiaries will provide
services to the Company and/or AmerUs Life. Although management believes the
terms of such agreements are fair and reasonable, none of these contracts were
the result of arms' length negotiations between independent parties. These
agreements may be modified in the future and additional agreements or
transactions may be entered into between AMHC or subsidiaries of AMHC and the
Company and its subsidiaries. See "Certain Transactions and Relationships."

As a result of these arrangements, there may be a number of potential
conflicts of interest between the Company and AMHC. In an effort to address such
potential conflicts, and consistent with proposed regulations recently
promulgated by the Iowa Commissioner, at least three of the Company's outside
directors will not be directors of AMHC or any of AMHC's subsidiaries. Following
the completion of the Offerings, it is the Company's intent that at least two of
the Company's outside directors will have had no previous affiliation with the
Company. Outside directors of the Company will review any intercompany
transactions involving potential conflicting interests. However, there can be no
assurance that decisions made by AMHC will not adversely affect the Company. See
"Certain Transactions and Relationships" and "Management--Board of Directors of
the Company."

COMPETITIVE ENVIRONMENT

The Company competes with a large number of other insurers and non-insurance
financial service companies, such as banks, broker-dealers and mutual funds,
many of whom have greater financial resources, offer alternative products and,
with respect to other insurers, have higher claims-paying ability and financial
strength ratings than the Company. Competition exists for individual consumers
and agents and other distributors of life insurance and annuity products.
National banks, with their pre-existing customer bases for financial services
products, may pose increasing competition in the future to insurers who sell
life insurance and annuity products, including the Company. Recent United States
Supreme Court decisions, as well as rules adopted by the Office of the
Comptroller of the Currency, have significantly expanded the authority of
national banks to engage in the insurance business, including the sale of life
insurance products and annuities.

In addition, several proposals to repeal or modify the Glass-Steagall Act of
1933, as amended, and the Bank Holding Company Act of 1956, as amended, have
been made by members of Congress and the Clinton administration. Currently, the
Bank Holding Company Act restricts banks from being affiliated with insurance
companies. Certain of the proposals would repeal or modify these restrictions
and permit banks to become affiliated with insurance companies. None of these
proposals has yet been enacted, and it is not possible to predict whether any of
these proposals will be enacted or, if enacted, their potential effect on the
Company.

15
<PAGE>
The Company must attract and retain productive agents to sell its life
insurance and annuity products. Strong competition exists among insurance
companies for agents with demonstrated ability. Competition among insurance
companies for such agents is based on, among other things, the services provided
to, and relationships developed with, these agents in addition to compensation
and product structure.

IMPORTANCE OF RATINGS

Ratings with respect to claims-paying ability and financial strength have
become an increasingly important factor in establishing the competitive position
of insurance companies. Each of the rating agencies reviews its ratings
periodically and there can be no assurance that current ratings will be
maintained in the future. Claims-paying and financial strength ratings are based
upon factors relevant to policyowners and are not directed toward protection of
shareholders. AmerUs Life's claims-paying ability is currently rated "AA-" (Very
high) by Duff & Phelps and "A" (Good) by Standard & Poor's. AmerUs Life is rated
"A" (Excellent) by A.M. Best and "A2" (Good) by Moody's. A downgrade in such
ratings could significantly affect sales of life insurance and annuity products
and could have a material adverse effect on the results of operations of the
Company. See "Management's Discussion and Analysis of Results of Operations and
Financial Condition."

INTEREST RATE FLUCTUATIONS; RISK OF IMPACT OF FORCED LIQUIDATION OF INVESTMENT
PORTFOLIO

Severe interest rate fluctuations could adversely affect AmerUs Life's
ability to pay policyowner benefits with operating and investment cash flows,
cash on hand and other cash sources. In the unanticipated event that such
sources would prove inadequate, management believes the Company could meet
shortfalls with funds available to the Company as a result of its membership in
the Federal Home Loan Bank of Des Moines, as well as other borrowing sources.
See "Management's Discussion and Analysis of Results of Operations and Financial
Condition--Liquidity and Capital Resources."

Interest rate fluctuations may also have an impact on policyowner behavior.
To the extent that the Company does not maintain competitive interest rates with
those credited in the marketplace, increased policyowner lapses may be
experienced. While such lapses would generate surrender charges during the
current period, they would reduce the Company's future income.

The Company's actual cash flows from investments may differ from those
anticipated at the time of investment. Some of the Company's corporate bonds
have call features which could cause the Company to reinvest these proceeds at
lower interest rates if such bonds were called prior to their stated maturities.
As of September 30, 1996, approximately $319 million, or 16.0% of the bond
portfolio (excluding mortgage and other asset-backed securities), was subject to
call. The Company's collateralized mortgage obligations ("CMOs") and other
asset-backed securities are purchased based on assumptions regarding rates of
prepayments. To the extent that actual prepayments are earlier or later than
anticipated at the time of purchase, the Company may not receive cash flows when
expected or needed. These prepayment rates are influenced by interest rates
available for new mortgages as well as general economic conditions.

FUTURE POLICY BENEFITS EXPOSURE

The liability established by the Company for future life insurance and
annuity policy benefits is based upon assumptions concerning a number of
factors, including interest rates, mortality, persistency and expenses. Actual
experience will likely differ from assumed experience. Should the Company's
provision for future policy benefits prove inadequate, future earnings will be
adversely affected.

REGULATORY AND RELATED RISKS

AmerUs Life is subject to regulation by state regulators under the insurance
laws of states in which it conducts business. The Company, AmerUs Life and AMHC
are also subject to regulation by the Insurance Division of the Iowa Department
of Commerce. The purpose of such regulation is primarily to provide safeguards
for policyowners rather than to protect the interests of shareholders. The
insurance laws of the various states establish regulatory agencies with broad
administrative powers including, among others, the authority to grant or revoke
operating licenses and to regulate sales practices,

16
<PAGE>
investments, deposits of securities, the form and content of financial
statements and insurance policies, accounting practices and the maintenance of
specified RESERVES and capital. See "Supervision and Regulation."

The insurance regulatory framework has been subject to increasing scrutiny
by the National Association of Insurance Commissioners ("NAIC"), state
legislatures, regulators and Congress. The NAIC and state regulators have from
time to time re-examined laws and regulations, with an emphasis on insurance
company investment and solvency issues. State legislatures have considered or
enacted legislative proposals that alter, and in many cases increase, state
regulation of insurance companies. In recent years, various legislative
proposals have been introduced in Congress that called for the federal
government to assume some role in the regulation of the insurance industry. To
date, none of the Congressional proposals had been enacted and it cannot be
predicted what form any such future proposals might take or what effect, if any,
such proposals might have on AmerUs Life if enacted into law.

Insurance regulators have also given greater emphasis in recent years to the
investigation of allegations of improper sales practices by insurance agents,
including churning and misleading sales presentations. The NAIC has adopted a
model law and regulation which would standardize the form and content of any
illustrations provided to prospective purchasers of individual life insurance
products. The model law has been enacted, to be effective January 1, 1997, in at
least two states, and is currently under consideration in a number of other
states. Management expects that similar legislation will eventually be enacted
in additional states in which AmerUs Life sells individual life insurance
products. There can be no assurance as to whether this reform will have a
material adverse impact on sales of such products by the industry as a whole or
by AmerUs Life.

State guaranty associations assess insurance companies to pay contractual
benefits owed by impaired, insolvent or failed insurance companies. AmerUs Life
was assessed, net of amounts estimated to be recoverable from future state
PREMIUM taxes, approximately $0.4 million during the nine months ended September
30, 1996 and $0.4 million, $1.2 million and $3.3 million for the years ended
December 31, 1995, 1994, and 1993, respectively. AmerUs Life cannot predict the
amount of any future assessments. See "Supervision and Regulation."

In addition, the Iowa Commissioner has proposed rules that would regulate
the issuance of stock by the Company in the Offerings and in subsequent
offerings. See "Supervision and Regulation--Regulation of the Company and AMHC."

RISKS OF CLASS ACTION LITIGATION

In recent years, life insurance companies, including AmerUs Life, have been
named defendants in class action lawsuits relating to life insurance pricing and
sales practices. Although AmerUs Life has denied all allegations against it and
has vigorously defended against such litigation, there can be no assurance that
this or future litigation will not have a material adverse effect on the life
insurance industry generally or on the Company. AmerUs Life is currently in the
process of negotiating a potential class settlement with respect to certain of
such actions, and has taken a charge to income for the first nine months of 1996
in connection therewith. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition--Nine Months Ended September 30, 1996
Compared to Nine Months Ended September 30, 1995" and "Business--Legal
Proceedings."

POTENTIAL ADVERSE TAX LEGISLATION

Congress has from time to time considered possible legislation that would
reduce or eliminate the benefits to policyowners of the deferral of taxation on
the accretion of value within certain annuities and life insurance products or
otherwise affect the taxation of annuities and life insurance products and
insurance companies. Other possible legislation, including a simplified "flat
tax" income tax structure with an exemption from taxation for investment income,
could also adversely affect purchases of annuities and life insurance products
if such legislation were to be enacted. There can be no assurance as to what, if
any, future legislation might be enacted or, if enacted, whether any such
legislation would contain provisions with possible adverse effects on the
Company's life insurance and annuity products.

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RISKS RELATING TO THE CLOSED BLOCK

Under the Plan, AmerUs Life established and will operate a CLOSED BLOCK for
the benefit of the CLOSED BLOCK BUSINESS. The Closed Block is based on a concept
included in demutualization plans of other mutual life insurance companies and
is designed to give reasonable assurance to policyowners included therein that,
after the Reorganization, assets will be available to maintain DIVIDEND SCALES
and interest credits in effect prior to the Reorganization if the experience
underlying such scales and credits continues. In accordance with the Plan,
certain of AmerUs Life's invested assets, as well as cash and short-term
investments, were allocated by AmerUs Life to the Closed Block as of June 30,
1996. Non-investment grade bonds, mortgage loans, preferred stock, real estate
and certain other invested assets were not included in this allocation to the
Closed Block. The amount of assets allocated to the Closed Block is expected to
produce cash flows which, together with future revenues from the Closed Block
Business, are expected to be sufficient to support the Closed Block Business,
including provisions for payment of claims, taxes and certain other expenses and
for the continuation of policyowner dividend scales and interest credits in
effect prior to the Reorganization, if the experience underlying such dividend
scales continues. The assets, including the revenue therefrom, allocated to the
Closed Block Business will accrue solely to the benefit of owners of the
policies included in the Closed Block Business until such time as the Closed
Block is no longer in effect; accordingly, such assets and the revenue therefrom
will not be available for the benefit of AmerUs Life or the Company.

To the extent that over time cash flows from the assets allocated to the
Closed Block and other experience relating to the Closed Block are, in the
aggregate, more or less favorable than assumed in establishing the Closed Block,
total dividends paid to Closed Block policyowners in the future would be greater
than or less than the total dividends that would have been paid to these
policyowners if the dividend scales in effect prior to the Reorganization had
been continued. Any excess of cumulative favorable deviations for Closed Block
policies over unfavorable deviations will be available for distribution over
time to Closed Block policyowners and will not be available to AmerUs Life or
the Company. Unless the Iowa Commissioner consents to an earlier termination,
the Closed Block will continue to be in effect until the date on which none of
the policies in the Closed Block remains in force.

The Company will continue to pay guaranteed benefits under all policies,
including the policies included in the Closed Block in accordance with their
terms. If the assets allocated to the Closed Block, the investment cash flows
from those assets and the revenues from the policies included in the Closed
Block including investment income thereon prove to be insufficient to pay the
benefits guaranteed under the policies included in the Closed Block, the Company
will be required to make such payments from its general funds. The Company bears
the costs of operating and managing the Closed Block and, accordingly, such
costs were not funded as part of the assets allocated to the Closed Block. Any
increase in such costs in the future would be borne by the Company. See "The
Reorganization and Distribution of the Non-life Insurance
Subsidiaries--Establishment and Operation of the Closed Block."

EFFECT OF PARTIAL SUBSCRIPTION FOR SHARES; CANCELLATION OR RESCISSION OF THE
SUBSCRIPTION OFFERING

A partial subscription and the failure to effect the Public Offering might
have an adverse effect on the market for the Class A Common Stock, the ability
of the purchasers of Shares in the Subscription Offering to resell such Shares,
and the ability of the Company to raise additional capital in the equity markets
in the future. In addition, the Company may cancel or rescind the Subscription
Offering in its sole discretion at any time prior to the closing of the
Offerings; accordingly there can be no assurance that Subscription Policyowners
who subscribe for Shares will be able to purchase such Shares. See "The
Subscription Offering."

CLASS A COMMON STOCK ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Class A Common Stock (including shares of
Class B Common Stock converted into Class A Common Stock), or the perception
that such sales could occur, could have an adverse effect on the price of the
Class A Common Stock. The Company believes that none of the shares of Class A
Common Stock or Class B Common Stock which are held by AmerUs Group will be
eligible for sale under Rule 144 promulgated under the Act for two years.
Thereafter, such shares will be subject to the volume and timing requirements of
Rule 144. However, the Company and AmerUs Group

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are parties to an agreement which provides AmerUs Group with certain
registration rights with respect to such shares. See "Certain Transactions and
Relationships--Intercompany Agreement" and "Shares Eligible for Future Sale."

NO PRIOR MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF COMMON STOCK PRICE

Prior to the Offerings there has been no public market for shares of either
class of the Company's Common Stock. Application has been made for quotation of
the Class A Common Stock on the Nasdaq National Market. There can be no
assurance, however, that an active trading market for the Class A Common Stock
will develop, or, if developed, will continue. The Subscription Price has been
established by the Company and the Selling Shareholder after consultation with
their financial advisors and based upon a review of the recent prices of stocks
of comparable publicly-traded companies. See "The Subscription Offering." The
Public Offering Price for the Class A Common Stock will be determined by
negotiations between the Company, the Selling Shareholder and the
representatives of the underwriters for the Public Offering. Among the factors
to be considered in determining the Public Offering Price of the Class A Common
Stock, in addition to prevailing market conditions, will be the Company's
historical performance, estimates of the business potential and earnings
prospects of the Company, an assessment of the Company's management and the
consideration of these factors in relation to market valuations of companies in
related businesses. The price at which the Class A Common Stock is sold in the
Offerings may not be indicative of the market price of the Class A Common Stock
after completion of the Offerings. In addition, factors such as variations in
the Company's financial results or other developments affecting the Company
could cause the market price of the Class A Common Stock to fluctuate
significantly after the Offerings.

THE COMPANY

AmerUs Life Holdings, Inc. is an Iowa business corporation which was formed
in August of 1996 primarily for the purpose of owning all of the stock of AmerUs
Life following the Reorganization. See "The Reorganization and Distribution of
the Non-Life Insurance Subsidiaries." AmerUs Life, the Company's principal asset
and wholly-owned subsidiary, is an Iowa stock life insurance company.

AmerUs Life was originally incorporated in 1896 as a mutual insurance
company under the name Central Life Assurance Society of the United States. In
1994, Old AML merged into Central Life and the resulting entity changed its name
to American Mutual Life. On June 30, 1996, pursuant to the Plan, American Mutual
Life formed AMHC as a mutual insurance holding company and American Mutual Life
was converted into a stock life insurance company and its name was changed to
AmerUs Life Insurance Company.

The Company offers a broad line of individual life insurance and annuity
products through a nationwide distribution system. It presently conducts
business in 45 states and the District of Columbia. As of September 30, 1996,
the Company had approximately 418,000 life insurance policies and annuity
contracts outstanding and individual life insurance in force, net of
reinsurance, of approximately $26.1 billion. As of September 30, 1996, the
Company had total assets of $4.3 billion and total shareholders' equity of $433
million (prior to the Offerings, after giving effect to the Capital
Contribution).

The Company's executive offices are located at 418 Sixth Avenue, Des Moines,
Iowa 50309-2407, and its telephone number is (515) 280-1331.

THE REORGANIZATION AND DISTRIBUTION OF THE
NON-LIFE INSURANCE SUBSIDIARIES

DESCRIPTION OF THE REORGANIZATION

On October 27, 1995, the Board of Directors of American Mutual Life adopted
the Plan, which authorized American Mutual Life to effect the Reorganization.
Pursuant to the Reorganization, American Mutual Life formed AMHC as a mutual
insurance holding company and American Mutual Life was converted into a stock
life insurance company and its name was changed to AmerUs Life Insurance
Company. The Iowa Commissioner held a public hearing on the Reorganization on
November 21, 1995.

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The Plan was approved by American Mutual Life's policyowners on November 28,
1995. The Iowa Commissioner approved the Plan on December 13, 1995, and the Plan
became effective on June 30, 1996 (the "Effective Date").

As part of the Reorganization, all of the shares of capital stock of AmerUs
Life were issued to AMHC. Subsequent to the Reorganization, on August 1, 1996,
AMHC contributed all of its shares of capital stock of AmerUs Life to AmerUs
Group. The Company was formed on August 1, 1996, as of which date all of its
shares of capital stock were issued to AmerUs Group. Immediately after the
Distribution, AmerUs Group contributed all of its shares of common stock in
AmerUs Life to the Company. Under this structure, the Company is an intermediate
holding company, with AmerUs Group as its direct parent company and AmerUs Life
as its wholly-owned subsidiary. Under Iowa law, AMHC is required to retain
direct or indirect ownership and control of shares representing a majority of
the vote of the outstanding capital stock of the Company.

Immediately following the Reorganization, the policyowners' contract rights
in their life insurance policies and annuities remained with AmerUs Life and the
policyowners automatically became members of AMHC, and thereby became entitled
to vote for directors of AMHC and on certain other matters as set forth in
AMHC's articles of incorporation. Purchasers of life insurance policies and
annuities from AmerUs Life after the Reorganization automatically become members
of AMHC (subject to certain exceptions and conditions set forth in the Plan).

American Mutual Life was the first company to obtain approval under the Iowa
mutual holding company statute to form a mutual insurance holding company. The
Company understands that at least six other states, including California,
Minnesota, Missouri, Pennsylvania, Rhode Island and Vermont, and the District of
Columbia, have recently adopted laws authorizing the formation of mutual
insurance holding companies.

DISTRIBUTION OF THE NON-LIFE INSURANCE SUBSIDIARIES AND RELATED TRANSACTIONS

Prior to the Distribution, AmerUs Life made the Capital Contribution to or
for the benefit of certain of the Non-Life Insurance Subsidiaries. The net
assets contributed in the Capital Contribution had an aggregate carrying value
of approximately $79 million as of the date of contribution. Following the
Capital Contribution, a series of transactions were undertaken by the Company
and its affiliates. AmerUs Life effected the Distribution, pursuant to which it
distributed the Non-Life Insurance Subsidiaries to AmerUs Group. Immediately
following the Distribution, the Company borrowed $100 million in term debt and
$75 million under a revolving line of credit pursuant to the Bank Credit
Facility. The Company used the proceeds from such borrowings to make a $125
million capital contribution to AmerUs Life and to purchase a $50 million
surplus note from AmerUs Life. The Consolidated Financial Statements and other
financial information presented herein give effect to the Reorganization and the
Distribution as if both had been completed prior to the periods presented
(including giving effect to the establishment of the Closed Block from June 30,
1996 forward), but do not give effect to the Capital Contribution.

BACKGROUND AND REASONS FOR THE REORGANIZATION AND DISTRIBUTION

Recognizing the capital-raising difficulties faced by mutual insurers and
the present competitive state of the insurance industry, the Iowa legislature in
1995 amended Iowa's insurance law to permit mutual insurance companies
incorporated in Iowa to reorganize into a mutual insurance holding company
structure.

As a mutual life insurance company, American Mutual Life had no ability to
issue shares of capital stock and consequently had no access to market sources
of equity capital and limited ability to increase its surplus and fund future
growth while maintaining the financial strength necessary to assure policyowners
that their obligations will be met. The Reorganization will position the Company
to obtain access to equity capital through the Offerings and will enable the
Company to effect future equity offerings as necessary and appropriate to
satisfy its capital requirements.

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The Reorganization is also intended to facilitate potential mergers,
acquisitions and strategic alliances by creating a more flexible corporate
structure. Among other things, the Reorganization will facilitate the issuance
of stock by the Company to consummate acquisitions.

The Iowa legislation would permit AMHC subsequently to demutualize, a
process which would cause AMHC to convert from mutual to stock form and become
publicly owned by shareholders. Pursuant to the Company's Articles of
Incorporation, upon a demutualization all of the Company's shares of outstanding
Class B Common Stock will automatically convert into shares of Class A Common
Stock. See "Description of the Capital Stock." AMHC has no present plans to
demutualize.

The Capital Contribution and the Distribution were important preliminary
transactions that were necessary to complete the Offerings and the Preferred
Offering successfully.

REGULATION OF AMHC AFTER THE REORGANIZATION

AMHC, as a mutual insurance holding company incorporated in Iowa, is subject
to regulation at a level substantially equal to that of an Iowa domestic
insurance company. The Iowa Commissioner retains jurisdiction at all times over
a mutual insurance holding company and any intermediate insurance holding
company to assure that policyowners' interests are protected. See "Supervision
and Regulation."

Under Iowa law, shares of capital stock of AmerUs Life which carry the right
to cast a majority of the votes entitled to be cast by all of the outstanding
shares of the capital stock (which are required at all times to be owned,
directly or indirectly, by AMHC) may not be conveyed, transferred, assigned,
pledged, subjected to a security interest or lien, encumbered, or otherwise
hypothecated or alienated by AMHC or any intermediate holding company, including
the Company. Any conveyance, transfer, assignment, pledge, security interest,
lien, encumbrance, hypothecation or alienation by AMHC or any intermediate
holding company, in or on such shares of AmerUs Life having a voting majority
shall be deemed void in inverse chronological order from the date of such
transaction to the extent necessary to give AMHC unencumbered direct or indirect
ownership of such shares having a voting majority.

ESTABLISHMENT AND OPERATION OF THE CLOSED BLOCK

In connection with the Reorganization, the Closed Block was established.
Insurance policies which had a dividend scale in effect as of June 30, 1996 were
included in the Closed Block. The Closed Block was designed to provide
reasonable assurance to policyowners included therein that, after the
Reorganization, assets will be available to maintain the dividend scales and
interest credits in effect prior to the Reorganization if the experience
underlying such scales and credits continues. The establishment of the Closed
Block did not alter, diminish, reduce or in any other way adversely affect these
policyowners' contractual rights.

The Closed Block was established on June 30, 1996. Pursuant to the Plan,
assets were allocated to the Closed Block at June 30, 1996 in an amount which
the Company expects to produce cash flows which, together with anticipated
revenues from the Closed Block Business, are expected to be sufficient to
support the Closed Block Business, including provision for payment of claims,
taxes and certain other expenses and for the continuation of dividend scales and
interest credits in effect prior to the Reorganization if the experience
underlying such scales and credits continues or for appropriate adjustments in
such scales and credits if the experience changes. The assets, including the
revenue therefrom, allocated to the Closed Block will accrue solely to the
benefit of policyowners included in the Closed Block Business until such time as
the Closed Block is no longer in effect. To the extent that over time cash flows
from the assets allocated to the Closed Block and other experience relating to
the Closed Block are, in the aggregate, more or less favorable than assumed in
establishing the Closed Block, total dividends and interest credits paid to
Closed Block policyowners in the future may be greater than or less than the
total dividends and interest credits that would have been paid to these
policyowners if the dividend scales and interest credits in effect prior to the
Reorganization had been continued. Dividends and interest credits on policies
included in the Closed Block, as in the past, will be declared at the discretion
of AmerUs Life's Board of Directors and may vary from time to time (reflecting
changes in investment, mortality, persistency and other experience factors).
AmerUs Life will not be required to support the

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<PAGE>
payment of dividends and interest credits on Closed Block policies from its
general funds above certain guaranteed levels, although it could choose to
provide such support if it were deemed to be in the best interests of AmerUs
Life's shareholders.

AmerUs Life will continue to pay guaranteed benefits under all policies,
including the policies included in the Closed Block, in accordance with their
terms. If the assets allocated to the Closed Block, the investment cash flows
from those assets and the revenues from the policies included in the Closed
Block including investment income thereon prove to be insufficient to pay the
benefits guaranteed under the policies included in the Closed Block, AmerUs Life
will be required to make such payments from its general funds. AmerUs Life bears
the costs of operating and managing the Closed Block and, accordingly, such
costs were not funded as part of the assets allocated to the Closed Block. Any
increase in such costs in the future would be borne by AmerUs Life. Since the
Closed Block has been funded to provide for payment of guaranteed benefits as
well as future dividends, it should not be necessary to use other general funds
to pay guaranteed benefits unless the Closed Block Business experiences
substantial adverse deviations in investment, mortality, persistency or other
experience factors. While AmerUs Life will use its best efforts to support the
policies included in the Closed Block with the assets allocated to the Closed
Block, these assets will be subject to the same liabilities (with the same
priority in liquidation) as assets outside the Closed Block.

The Closed Block Business will consist of the policies within the classes
specified in the Plan, but only to the extent such policies were in force on
June 30, 1996. A policy may be within a class for which there is a dividend
scale currently in effect, even if it does not receive a current dividend, and,
therefore, the policy would be included in the Closed Block.

Premiums received and policy benefits paid by AmerUs Life on the policies
included in the Closed Block and investment cash flows from the assets allocated
to the Closed Block and from the investment of net cash flow will be added to or
withdrawn from the Closed Block as provided in the Plan. The Closed Block will
be allocated its share of state, local and federal taxes paid on the Closed
Block Business in accordance with tax sharing procedures set forth in the Plan.
However, commissions and other expenses (including investment management
expenses) of operating and administering the Closed Block will not be charged to
the Closed Block except to the limited extent provided in the Plan. If expenses
of operating and administering the Closed Block were to increase after June 30,
1996, such increases would be paid by AmerUs Life. Future estimated cash
outflows were considered in determining the amount of assets allocated to the
Closed Block.

Dividends and interest credits on the Closed Block policies will be set
periodically by AmerUs Life's Board of Directors in accordance with applicable
law and with the objective that all of the assets will be distributed to owners
of Closed Block policies. Such dividends and interest credits will also be
allocated among the policies included in the Closed Block so as to reflect the
underlying experience of the Closed Block and the degree to which the various
classes of Closed Block policies contributed to such experience. An income
statement, balance sheet and schedule of investments for the Closed Block will
be prepared and submitted to the Iowa Commissioner and AmerUs Life's Board of
Directors annually. AmerUs Life will retain an independent consulting actuary to
review the operation of the Closed Block and dividend and interest credit
determinations and to report his or her findings to the Iowa Commissioner and
AmerUs Life's Board of Directors at least every three years, with the first
review to be made as of December 31, 1998.

The Closed Block will continue in effect until either (i) the last policy in
the Closed Block is no longer in force or (ii) the Closed Block is dissolved.
The Plan provides that the Closed Block may not be dissolved without the
approval of the Iowa Commissioner, which approval could only be obtained if
dissolution were demonstrated not to be adverse to the interests of the
policyowners whose policies make up the Closed Block. If the Closed Block is
dissolved, the assets associated with the Closed Block will become part of
AmerUs Life's general funds. If the Closed Block is not dissolved, the expected
life of the Closed Block is in excess of 75 years.

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<PAGE>
CLOSED BLOCK ASSETS AND LIABILITIES

In accordance with the Plan, certain of AmerUs Life's invested assets, as
well as cash and short-term investments, were allocated to the Closed Block at
June 30, 1996. Non-investment grade bonds, commercial mortgage loans, common and
preferred stock and real estate owned were not included in this allocation to
the Closed Block.

The bonds allocated to the Closed Block include assets of similar asset type
and maturity that were part of the investment segment for AmerUs Life's
TRADITIONAL LIFE INSURANCE policies. In addition, AmerUs Life included in the
Closed Block cash and short-term investments in order to meet the short-term
liquidity requirements of the Closed Block. For GAAP purposes, Closed Block
assets include deferred ACQUISITION COSTS relating to policies in the Closed
Block.

The composition of assets in the Closed Block will change over time as a
result of new investments, prepayments, calls, maturities and sales. New
investments for the Closed Block acquired with Closed Block cash flows shall be
allocated to the Closed Block upon acquisition and shall consist only of
investments permitted by the investment policy for the Closed Block. In the
event of liquidation, the assets allocated to the Closed Block will be subject
to the same liabilities (with the same priority) as assets outside the Closed
Block.

The Company retained Tillinghast, a Towers Perrin Company ("Tillinghast"),
an actuarial consulting firm, to advise it in connection with actuarial matters
involved in the establishment and operation of the Closed Block. The opinion of
Tillinghast, dated October 26, 1995, states (in reliance upon the matters and
subject to the limitations described in such opinion) that the establishment and
operation of the Closed Block as contemplated by the Plan make adequate
provision for allocating to the Closed Block assets which will be reasonably
sufficient to enable the Closed Block to provide for the guaranteed benefits,
taxes and certain other expenses associated with Closed Block policies, and to
provide for the continuation of the current dividend scales and interest credits
in effect prior to the Reorganization if the experience underlying those scales
and credits continues. The Closed Block was funded on a preliminary basis at
June 30, 1996. At September 30, 1996, the Closed Block had assets of $1,237.1
million and liabilities of $1,501.3 million. Final funding adjustments of the
Closed Block will be made, if necessary, prior to the completion of the
Offerings.

The excess of Closed Block Liabilities over Closed Block Assets represents
the expected future after-tax contributions (before certain other expense
charges, which were not funded in the Closed Block) from the Closed Block which
may be recognized in income over the period the policies in the Closed Block
remain in force.

If the actual contribution from the Closed Block in any given period equals
or exceeds the expected contribution for such period as determined at the
establishment of the Closed Block, only the expected contribution would be
recognized in income from continuing operations for that period. Any excess of
the actual contribution over the expected contribution would also be recognized
in income from continuing operations to the extent that the aggregate expected
contribution for all prior periods exceeded the aggregate actual contribution.
Any remaining excess of actual contribution over expected contributions would be
accrued in the Closed Block as a liability for future policyowners' dividends.
This accrual for future dividends effectively limits the actual Closed Block
contribution recognized in income from continuing operations to the Closed Block
contribution expected to emerge from operation of the Closed Block as determined
as of the date of establishment of the Closed Block.

If the actual contribution from the Closed Block in any given period is less
than the expected contribution for that period, because changes in dividends
scales are inadequate to offset the negative performance in relation to the
expected performance, the contribution inuring to shareholders of AmerUs Life
will be reduced. If a liability for policyowners' dividends had been previously
established in the Closed Block because the actual contribution to the relevant
date had exceeded the expected contribution to such date, such liability would
be reduced (but not below zero) in any periods in which the actual contribution
for that period is less than the expected contribution for such period.

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THE SUBSCRIPTION OFFERING

Pursuant to the Plan, five million Shares are being offered in the
Subscription Offering to Subscription Policyowners as of June 30, 1996 (the
effective date of the Reorganization). If the number of Shares subscribed for in
the Subscription Offering exceeds five million, the Company and the Selling
Shareholder will (i) pro-rate Shares among subscribers so as to permit each
subscriber to purchase, to the extent possible, 100 shares and thereafter pro
rata in the same proportion that the subscription of each bears to the total
subscriptions received by the Company and the Selling Shareholder in the
Subscription Offering and (ii) issue a refund to Subscription Policyowners in
the form of a check for each Share subscribed for but not received. No
policyowner will have a preemptive right to purchase any shares of Class A
Common Stock not subscribed for in the Subscription Offering which are issued in
connection with the Public Offering. The Company and the Selling Shareholder
intend to close the Subscription Offering contemporaneously with the closing of
the Public Offering. If the Public Offering is not completed, the Subscription
Offering will close as soon as practicable after Wednesday, January 8, 1997 (the
"Subscription Expiration Date"), but in no event more than 90 days after the
Subscription Expiration Date, unless cancelled by the Company. See
"--Cancellation of the Subscription Offering."

The issuance of Shares in the Subscription Offering is contingent upon the
sale by the Company and the Selling Shareholder of Shares in the Offerings in an
aggregate amount of at least $50 million.

The Company will not be required to offer Shares in the Subscription
Offering to any Subscription Policyowner who resides in a foreign country. The
Subscription Offering expires at 4:00 P.M., New York time, on the Subscription
Expiration Date.

SUBSCRIPTION PRICE AND PAYMENT FOR SHARES

The Subscription Price is $19.00 per share. Each Subscription Policyowner
shall have the right to subscribe in the Subscription Offering for a minimum of
100 Shares and a maximum of 5,000 Shares. The Subscription Price was set by the
Company and the Selling Shareholder after consultation with their financial
advisors. If the Public Offering Price is less than the Subscription Price, then
the Company and the Selling Shareholder will issue refunds to subscribing
policyowners in the form of a check equal to the amount of such difference
multiplied by the number of Shares subscribed for by each such policyowner. Such
refunds will be mailed to subscribers within 60 days after the closing of the
Public Offering. If the Public Offering Price is more than the Subscription
Price, the Subscription Policyowners who purchase Shares in the Subscription
Offering will not be required to pay any additional amounts for the Shares nor
will there be any adjustment in the number of Shares issued to them. As a
result, the Public Offering Price may be greater than the effective price per
Share of Class A Common Stock issued in the Subscription Offering. The Public
Offering Price will be determined by negotiations between the representatives of
the underwriters for the Public Offering, the Company and the Selling
Shareholder.

While it is currently the intention of the Company and the Selling
Shareholder to offer all or a portion of the Shares not subscribed for in the
Subscription Offering to the public in the Public Offering, the Company and the
Selling Shareholder may close the Subscription Offering without commencing or
closing the Public Offering in the event the Company and the Selling Shareholder
receive, in the aggregate, $50 million or more in gross proceeds in the
Subscription Offering. In the event that the Company and the Selling Shareholder
determine that the closing of the Subscription Offering shall occur prior to the
closing of the Public Offering and provided that the Company and the Selling
Shareholder elect to proceed with the Subscription Offering, then a bona fide
estimation will be made by the Company and the Selling Shareholder after
consultation with their financial advisors and a review of market conditions,
the recent prices of stocks of comparable companies which are publicly traded
and other factors customarily considered in determining an initial public
offering price, of the price per share at which the Class A Common Stock would
trade in the public market on the closing of the Subscription Offering (the
"Revised Subscription Price"). If the Revised Subscription Price is less than
the Subscription Price, then the Company and the Selling Shareholder will issue
refunds to subscribing policyowners in the form of a check equal to the amount
of such difference multiplied by the number of Shares subscribed for by each
such policyowner. Such refunds will be mailed to subscribers within 60 days
after

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the closing of the Subscription Offering. If the Revised Subscription Price is
more than the Subscription Price, the Subscription Policyowners who purchase
Shares in the Subscription Offering will not be required to pay any additional
amounts for such Shares nor will there be any adjustment in the number of Shares
issued to them.

There has not been any public market for the Class A Common Stock. Some of
the major factors that may influence the determination of the Public Offering
Price or the Revised Subscription Price are, in addition to prevailing market
conditions, the historical performance of the Company, estimates of the business
potential and earning prospects of the Company, an assessment of the Company's
management, and the consideration of the above factors in relation to market
valuations of other insurance companies.

ChaseMellon Shareholder Services, L.L.C. has been appointed Subscription
Services Agent in connection with the Subscription Offering. The subscription
order form and required payment for Shares subscribed for in the Subscription
Offering may be sent to the Subscription Services Agent as follows:

<TABLE>
<CAPTION>
BY HAND OR OVERNIGHT DELIVERY: BY REGULAR MAIL:
<S> <C>
ChaseMellon Shareholder Services AmerUs Life Holdings, Inc.
120 Broadway, 13th Floor c/o ChaseMellon Shareholder Services
New York, NY 10271 P.O. Box 876
Midtown Station
New York, NY 10138-0878
</TABLE>

EXERCISE OF SUBSCRIPTION RIGHTS

Each Subscription Policyowner shall have the right to subscribe in the
Subscription Offering for a minimum of 100 Shares and a maximum of 5,000 Shares.
Subscriptions may only be for whole shares. In order for Subscription
Policyowners to exercise subscription rights to receive Shares, the subscription
order form must be received by the Subscription Services Agent by 4:00 P.M., New
York time, on the Subscription Expiration Date. Any person electing to purchase
Shares must submit the required payment for such Shares at that time. If a
subscription order form is not received by the Subscription Services Agent by
such time, or is executed incorrectly or is received without full payment, the
associated subscription right will expire (subject to the Company's
discretionary right to waive any defect or permit correction). Once an executed
subscription order form is received by the Subscription Services Agent, it may
not be modified, amended or rescinded without the consent of the Company. The
Company has the right to waive or permit correction of incomplete or improperly
executed forms, but does not represent that it will do so, and any Subscription
Policyowner not submitting such a form shall have been deemed to have waived and
released its right to subscribe for Shares.

Payment for Shares by Subscription Policyowners shall be made by check or
money order in United States dollars. If the period from the Subscription
Expiration Date to the closing of the Subscription Offering exceeds 60 days,
interest will be paid to each subscriber on all subscription amounts at the
Subscription Interest Rate from such sixtieth day until the closing of the
Subscription Offering.

Participation in the Subscription Offering by Subscription Policyowners who
are associated with a broker or dealer is only permissible in accordance with,
and subject to the limitations of, Rule 2110 of the Conduct Rules of the
National Association of Securities Dealers, Inc. ("NASD") and the "Free-Riding
and Withholding Interpretation" promulgated thereunder. In general, "associated
with a broker/dealer" includes (i) every officer, director, general partner,
employee or agent of a broker/dealer that is a member of the NASD (a "member"),
(ii) every sole proprietor, partner, officer, director, or branch manager of any
member, or any natural person occupying a similar status or performing similar
functions, or any natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by such member,
whether or not any such person is registered or exempt from registration with
the NASD and (iii) any immediate family member of any such person; and
"immediate family" includes parents, mother-in-law or father-in-law, husband or
wife, brother or sister, brother-in-law or sister-in-law, son-in-law or
daughter-in-law, and children and any other person who is supported, directly or
indirectly, to a material extent by any person referred to in clause (i) or
(ii).

25
<PAGE>
DELIVERY OF SHARE CERTIFICATES AND REFUNDS

Under the Plan, on the closing date of the Subscription Offering or as soon
thereafter as reasonably practicable (but no more than 10 business days after
the closing date), the Company and the Selling Shareholder will issue or deliver
Shares sold pursuant to the Subscription Offering and issue refunds, as
applicable, for (i) the excess of the Subscription Price over the Public
Offering Price or Revised Subscription Price, if any, or (ii) Shares subscribed
for but not purchased as a result of the Subscription Offering being
oversubscribed. There may be a substantial delay between the Subscription
Expiration Date and the delivery of share certificates and refunds after the
closing of the Subscription Offering. Any certificates or refunds returned as
undeliverable will be held by the Company until claimed by the persons legally
entitled thereto or otherwise disposed of in accordance with applicable law.
Until certificates are delivered to Subscription Policyowners, such Subscription
Policyowners may not be able to sell their shares of Class A Common Stock.

RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS

Under the Plan, Subscription Policyowners may not transfer or assign their
right to subscribe for Shares in the Subscription Offering. Persons found to be
transferring rights to subscribe for Shares in the Subscription Offering will
automatically forfeit such rights.

CANCELLATION OF THE SUBSCRIPTION OFFERING

The Company may, in its sole discretion, at any time prior to the closing of
the Subscription Offering, elect to cancel or rescind the Subscription Offering.
In such event, subscriptions for Class A Common Stock will not be executed and
all payments submitted by Subscription Policyowners in accordance with the
Subscription Offering will be refunded, together with interest thereon computed
at the Subscription Interest Rate from the date of receipt of such payments
until the date of mailing of the refunds.

SUBSCRIPTION AGENT

The Chicago Corporation, a registered broker-dealer, has been engaged by the
Company to assist it in effecting the Subscription Offering by serving as
Subscription Agent. The Subscription Agent will forward copies of this
Prospectus and subscription materials to Subscription Policyowners upon request.
In addition, the Subscription Agent will be available to answer certain
questions from potential subscribers during the Subscription Period.

It is anticipated that The Chicago Corporation will be one of the
underwriters in the Public Offering. John A. Wing is a Director of the Company
and Chairman of The Chicago Corporation. See "The Public Offering" and "Plan of
Distribution."

SUBSCRIPTION SERVICES AGENT

Following receipt of subscription order forms from prospective subscribers,
the Subscription Services Agent will, among other things, verify that (i) the
submitted checks and money orders are honored, (ii) the subscription order form
has been fully and properly completed and signed, (iii) the subscriber has not
previously submitted a subscription, and (iv) the subscriber is an eligible
policyowner.

All subscriptions which the Subscription Services Agent is not able to so
verify will be rejected and returned to the prospective subscriber after
consultation with the Company.

In addition, the Subscription Services Agent will receive and hold all funds
submitted by Subscription Policyowners, and will disburse funds in the event a
refund or other return of funds is required.

THE PUBLIC OFFERING

The Company and the Selling Shareholder intend to offer all or a portion of
the shares not subscribed for in the Subscription Offering to the public in the
Public Offering. The Public Offering may, at the discretion of the Board of
Directors of the Company, close simultaneously with or at any time after the
closing of the Subscription Offering.

26
<PAGE>
It is anticipated that Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette
Securities Corporation, Salomon Brothers Inc and The Chicago Corporation will
act as the representatives of the underwriters in the Public Offering. An
underwriting agreement between the Company, the Selling Shareholder and the
underwriters with respect to the Public Offering will not be executed until
after the Subscription Expiration Date. See "The Subscription Offering."

In the event that there is a Public Offering, the underwriters will receive
underwriting compensation for the shares sold in the Public Offering in an
amount to be determined by the Company, the Selling Shareholder and the
representatives of the underwriters. The Company and the Selling Shareholder
will also agree to indemnify the underwriters against certain liabilities and
expenses, including liabilities under the federal securities laws.

THE PREFERRED OFFERING

The Company has formed AmerUs Capital I (the "Trust"), a statutory business
trust organized under Delaware law, which is a wholly owned subsidiary of the
Company. The Trust, together with the Company, filed a registration statement on
October 8, 1996 under the Securities Act relating to the offering of
approximately $75 million of trust preferred securities of the Trust (the
"Preferred Securities") representing undivided beneficial interests in the
assets of such Trust. Substantially all of the assets of the Trust will be
invested in junior subordinated deferrable interest debentures (the "Junior
Subordinated Debt Securities") of the Company. The Junior Subordinated Debt
Securities will be direct, unsecured obligations of the Company that will rank
junior and subordinate in right of payment to senior indebtedness of the
Company. The Junior Subordinated Debt Securities will bear interest, payable
quarterly in arrears, subject to certain circumstances described below. In
addition, the Company will execute various instruments and agreements in
connection with the Preferred Offering, including the Junior Subordinated Debt
Securities, a guarantee and other agreements, which, taken together, provide a
full irrevocable and unconditional guarantee by the Company of payments of
distributions and other amounts due with respect to the Preferred Securities.

The net proceeds of the Preferred Offering to the Company are currently
expected to be $72.4 million after giving effect to the underwriting discount
and estimated offering expenses. It is expected that the Company will use such
proceeds to repay a portion of the revolving debt outstanding under the Bank
Credit Facility. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition--Liquidity and Capital Resources."

Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions thereon, payable quarterly in arrears. The distribution rate
and the distribution payment date and other payment dates of the Preferred
Securities will correspond to the interest rate and interest payment dates and
other payment dates on the Junior Subordinated Debt Securities.

The Company will have the right from time to time to defer payments of
interest on the Junior Subordinated Debt Securities by extending the interest
payment period on the Junior Subordinated Debt Securities at any time for up to
20 consecutive quarters (each, an "Extension Period"), PROVIDED, that no
Extension Period may extend beyond the maturity of the Junior Subordinated Debt
Securities. If interest payments are so deferred, distributions on the Preferred
Securities will also be deferred. During such Extension Period, interest on the
Junior Subordinated Debt Securities and distributions on the Preferred
Securities will continue to accrue with interest thereon (to the extent
permitted by applicable law) compounded quarterly. The Company will agree, among
other things, not to declare or pay any dividends on the Company's capital stock
(including the Class A Common Stock) during any Extension Period, except stock
dividends paid by the Company where the dividend stock is the same stock as that
on which the dividend is being paid.

The Junior Subordinated Debt Securities will be redeemable by the Company,
in whole or in part, from time to time, on or after dates specified in the
Preferred Offering or at any time, in whole or in part, in certain circumstances
upon the occurrence of certain tax events or investment company events. If the
Company redeems Junior Subordinated Debt Securities, the Trust must redeem
Preferred Securities

27
<PAGE>
having an aggregate liquidation amount equal to the aggregate principal amount
of the Junior Subordinated Debt Securities so redeemed plus accrued and unpaid
distributions thereon to the date fixed for redemption. In addition, upon the
occurrence of certain events arising from a change in law or a change in legal
interpretation regarding tax or investment company matters, unless the Junior
Subordinated Debt Securities are redeemed under limited circumstances, the Trust
will be dissolved, with the result that the Junior Subordinated Debt Securities
will be distributed to the holders of the Preferred Securities of the Trust, on
a PRO RATA basis, in lieu of any cash distribution.

In the event of the involuntary or voluntary dissolution, winding up or
termination of the Trust, the holders of Preferred Securities will be entitled
to receive for each such Preferred Security, a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debt Securities are distributed to the holders of the Preferred
Securities.

It is anticipated that Goldman, Sachs & Co. will be one of the
representatives of the underwriters for the Preferred Offering. The consummation
of the Offerings is not conditioned upon completion of the Preferred Offering,
and there can be no assurance that the Preferred Offering will be consummated.

USE OF PROCEEDS

The proceeds to the Company from the Offerings, if any, may vary according
to: (i) the total number of Shares subscribed for by Subscription Policyowners
in the Subscription Offering and the Subscription Price (or Revised Subscription
Price); and (ii) the total number of shares sold in the Public Offering and the
Public Offering Price, if the Company completes the Public Offering.

Assuming that the Public Offering Price (or the Revised Subscription Price
if the Public Offering is not consummated) is equal to $15.50 per Share, the net
proceeds to the Company from the Offerings are expected to be approximately $35
million after deducting the Company's share of the estimated expenses of the
Offerings. All such estimated proceeds will be used by the Company to repay a
portion of the term debt under the Bank Credit Facility. The term debt will be
due over the next five years and will bear interest at a variable rate, which
rate was approximately 6.3% as of the date of this Prospectus. The term debt to
be repaid was incurred in December, 1996 and the proceeds of such debt were
advanced to AmerUs Life in the form of a capital contribution to replace capital
which was distributed by AmerUs Life pursuant to the Distribution. The Company
will not receive any proceeds from the sale of Class A Common Stock by the
Selling Shareholder.

The Company currently estimates the net proceeds it would receive from the
Preferred Offering, if completed, to be $72.4 million after giving effect to the
underwriting discount and estimated offering expenses of the Company. It is
expected that the Company would use such proceeds to repay a portion of the
revolving debt under the Bank Credit Facility. The revolving line of credit
matures in November 2001 and will bear interest at a variable rate, which rate
was approximately 6.3% as of the date of this Prospectus. See "The Preferred
Offering" and "Management's Discussion and Analysis of Results of Operation and
Financial Condition--Liquidity and Capital Resources."

MARKET FOR COMMON STOCK

Prior to the Offerings, there has been no public market for shares of either
class of the Company's Common Stock. The Class A Common Stock has been approved
for quotation, subject to official notice of issuance, on the Nasdaq National
Market under the symbol "AMRS". There can be no assurance, however, that an
active market for the Class A Common Stock will develop or, if developed, will
continue. See "Risk Factors--No Prior Market for Common Stock; Possible
Volatility of Common Stock Price."

28
<PAGE>
DIVIDEND POLICY

The Company's Board of Directors currently intends to pay a quarterly
dividend of $0.10 per share of Common Stock, commencing with the quarter ending
on March 31, 1997. The declaration and payment of dividends in the future is
subject to the discretion of the Company's Board of Directors and will be
dependent upon the Company's financial condition, results of operations, cash
requirements, future prospects, regulatory restrictions on the payment of
dividends by AmerUs Life and other factors deemed relevant by the Company's
Board of Directors. There is no requirement or assurance that the Company will
declare and pay any dividends. For a discussion of the Company's cash sources
and needs, see "Management's Discussion and Analysis of Results of Operations
and Financial Condition-- Liquidity and Capital Resources--The Company."

The Company is an insurance holding company whose principal asset will
consist of all of the outstanding shares of the common stock of AmerUs Life. The
Company's ongoing ability to pay dividends to its shareholders and meet its
other obligations, including operating expenses and any debt service, primarily
depends upon the receipt of sufficient funds from AmerUs Life in the form of
dividends, interest payments or loans. In connection with the Distribution, the
Company has agreed with the Iowa Commissioner not to cause AmerUs Life to pay
any additional shareholder dividends in 1996. In addition, as a result of the
Distribution, AmerUs Life will not be able to pay dividends to the Company in
the 12 month period following the Distribution without the prior approval of the
Iowa Commissioner. It is the Company's intention to seek regulatory approval to
pay dividends from Amerus Life during this 12-month period. However, AmerUs Life
has the ability to loan funds to the Company subject to certain regulatory
restrictions. At September 30, 1996, AmerUs Life could advance up to $120
million to the Company without prior approval by the Iowa Commissioner. See
"Risk Factors--Holding Company Structure; Limitations on Dividends,"
"Supervision and Regulation" and "Description of the Capital Stock--Common
Stock."

Under the Bank Credit Facility, the Company is prohibited from paying
dividends on its Common Stock in excess of an amount equal to 4% of the
Company's consolidated net worth as of the last day of the preceding fiscal
year, and has also pledged to the lenders thereunder approximately 49.9% of the
common stock of AmerUs Life owned by the Company and a $50 million 9% surplus
note payable to the Company by AmerUs Life.

In connection with the Preferred Offering, the Company will agree not to
declare or pay any dividends on the Company's capital stock (including the Class
A Common Stock) during any Extension Period, except for stock dividends paid by
the Company where the dividend stock is the same stock as that on which the
dividend is being paid. Dividends on the Company's capital stock cannot be paid
until all accrued dividends on the Preferred Securities have been paid. See "The
Preferred Offering."

29
<PAGE>
CAPITALIZATION

The following table sets forth the unaudited consolidated capitalization of
the Company at September 30, 1996 on an actual basis and on a pro forma basis as
adjusted to reflect (i) the Capital Contribution, (ii) the sale of 2.5 million
shares of Class A Common Stock in the Offerings at a per share price of $15.50,
as if such sales had occurred as of September 30, 1996 (after deducting the
underwriting discount and estimated offering expenses payable by the Company),
(iii) the issuance of the Junior Subordinated Debt Securities in connection with
the Preferred Offering and (iv) the establishment of the Bank Credit Facility,
as if such Capital Contribution, sale, issuance and establishment had occurred
as of September 30, 1996. See "Use of Proceeds," "The Subscription Offering,"
"The Public Offering" and "The Preferred Offering." This table should be read in
conjunction with the Consolidated Financial Statements, including the related
notes and report thereon and the Unaudited Pro Forma Condensed Consolidated
Financial Statements of the Company appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1996
--------------------------------------------------------------------------------------------------
PRO FORMA FOR
PRO FORMA THE CAPITAL
ADJUSTMENTS FOR PRO FORMA FOR CONTRIBUTIONS,
THE CAPITAL THE CAPITAL PRO FORMA AS ADJUSTED FOR PRO FORMA
CONTRIBUTION, AND CONTRIBUTION ADJUSTMENTS FOR THE OFFERINGS ADJUSTMENTS FOR
THE BANK CREDIT AND THE BANK THE AND THE BANK THE PREFERRED
HISTORICAL FACILITY(A) CREDIT FACILITY OFFERINGS(B) CREDIT FACILITY OFFERING(C)
----------- ----------------- --------------- --------------- --------------- ---------------
(IN MILLIONS)

<S> <C> <C> <C> <C> <C> <C>
Long Term Debt................ $ 45.1 $ 166.2 $ 211.3 $ (35.0) $ 176.3 $ (72.4)
----------- ------- ------- ------ ------- ------
Company-obligated
mandatorily-redeemable
Preferred Securities(C)...... -- -- -- -- -- 75.0
------
Equity:(D)
Preferred Stock, no par
value, 25,000,000 shares
authorized; no shares
issued and outstanding..... -- -- -- -- -- --
Class A Common Stock, no par
value, 75,000,000 shares
authorized; 14,500,000
shares issued and
outstanding historical and
17,000,000 shares
pro forma.................. 14.5 -- 14.5 2.5 17.0 --
Class B Common Stock, no par
value, 50,000,000 shares
authorized; 5,000,000
shares issued and
outstanding................ 5.0 -- 5.0 -- 5.0 --
Additional paid-in
capital.................... -- -- -- 32.5 32.5 --
Retained earnings........... 470.2 (79.0) 391.2 -- 391.2 (1.7)
Unrealized appreciation of
invested assets, net....... 22.7 -- 22.7 -- 22.7 --
----------- ------- ------- ------ ------- ------
Total equity.............. 512.4 (79.0) 433.4 35.0 468.4 (1.7)
----------- ------- ------- ------ ------- ------
Total capitalization.......... $ 557.5 $ 87.2 $ 644.7 -- $ 644.7 $ .9
----------- ------- ------- ------ ------- ------
----------- ------- ------- ------ ------- ------

PRO FORMA FOR
THE CAPITAL
CONTRIBUTIONS,
AS ADJUSTED FOR
THE OFFERINGS,
THE BANK CREDIT
FACILITY AND
THE PREFERRED
OFFERING
---------------

<S> <C>
Long Term Debt................ $ 103.9
-------
Company-obligated
mandatorily-redeemable
Preferred Securities(C)...... 75.0
-------
Equity:(D)
Preferred Stock, no par
value, 25,000,000 shares
authorized; no shares
issued and outstanding..... --
Class A Common Stock, no par
value, 75,000,000 shares
authorized; 14,500,000
shares issued and
outstanding historical and
17,000,000 shares
pro forma.................. 17.0
Class B Common Stock, no par
value, 50,000,000 shares
authorized; 5,000,000
shares issued and
outstanding................ 5.0
Additional paid-in
capital.................... 32.5
Retained earnings........... 389.5
Unrealized appreciation of
invested assets, net....... 22.7
-------
Total equity.............. 466.7
-------
Total capitalization.......... $ 645.6
-------
-------
</TABLE>

- ------------------
(A) Represents AmerUs Life's Capital Contribution to or for the benefit of the
Non-Life Insurance Subsidiaries of certain net assets having an aggregate
net carrying value of approximately $79 million. Also represents the
establishment of the Bank Credit Facility, consisting of $100 million in
term debt and a $75 million revolving credit facility.

(B) Represents the issuance of Class A Common Stock (net of related issuance
costs).

(C) Represents the issuance of the Preferred Securities by the Trust (net of
related issuance costs). One hundred percent of the assets of the Trust will
consist of approximately $75 million in principal amount of the Junior
Subordinated Debt Securities of the Company. The financial statements of the
Trust will be reflected in the Company's consolidated financial statements
with the Preferred Securities shown as Company-obligated
mandatorily-redeemable Preferred Securities of the Trust.

(D) Retroactively restated to give effect to the issuance of Class A Common
Stock and Class B Common Stock to AmerUs Group.

30
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table sets forth certain financial and operating data of the
Company. The selected consolidated financial data below for the nine months
ended September 30, 1996 and each of the three years ending December 31, 1995
are derived from the Consolidated Financial Statements of the Company, which
financial statements have been audited by KPMG Peat Marwick LLP, independent
auditors. The selected consolidated financial data provided below for the nine
months ending September 30, 1995 and for each of the two years ending December
31, 1992 are derived from the unaudited consolidated financial statements of the
Company. In the opinion of management, the unaudited financial data for the two
years ended December 31, 1992 presents fairly the consolidated financial
statements for such periods in conformity with generally accepted accounting
principles.

The foregoing give effect to the Reorganization and the Distribution as if
both had been completed prior to the periods presented, but do not give effect
to the Capital Contribution. In the opinion of management, the financial
information presented for all interim periods reflects all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of such data. Results for the nine-month periods ending September
30, 1996 and 1995 are not necessarily indicative of results that may be expected
for any other interim period or the year as a whole. This data should be read in
conjunction with (i) "Management's Discussion and Analysis of Results of
Operations and Financial Condition," (ii) the audited Consolidated Financial
Statements of the Company as of September 30, 1996 and December 31, 1995 and
1994, and for the nine months ended September 30, 1996 and each of the years in
the three-year period ended December 31, 1995, which financial statements have
been audited by KPMG Peat Marwick LLP, independent auditors, together with the
related notes and the report thereon, (iii) the unaudited consolidated financial
statements of the Company as of September 30, 1995 and for the nine months ended
September 30, 1995, and (iv) other financial data included elsewhere in this
Prospectus.

31
<PAGE>

- ------------------

(A) The merger of Old AML into Central Life, which was consummated in 1994, has
been accounted for as a pooling of interests transaction.

(B) The Capital Contribution would have the effect of reducing total
shareholder's equity as of September 30, 1996 and the year ended December
31, 1995 by $79 million.

(E) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See
"Business--Ameritas Joint Venture."

32
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed Consolidated Financial
Statements give effect to (i) the establishment of the Closed Block, (ii) the
Capital Contribution, (iii) the sale of 2.5 million shares of Class A Common
Stock in the Offerings at an estimated per share price of $15.50 (after
deducting the underwriting discount and estimated offering expenses payable by
the Company and assuming no exercise of the underwriters' over-allotment
option), (iv) the Preferred Offering, and (v) the establishment of the Bank
Credit Facility, as if the establishment of the Closed Block, the Capital
Contribution, the Offerings, the Preferred Offering and the Bank Credit Facility
had occurred as of September 30, 1996, for the purposes of the unaudited pro
forma condensed consolidated balance sheet and as of the beginning of the
respective periods for the purposes of the consolidated pro forma condensed
consolidated statements of income for the nine months ended September 30, 1996
and the year ended December 31, 1995.

The unaudited pro forma information reflects estimated net proceeds from the
Offerings of $35 million and estimated net proceeds from the Preferred Offering
of $72.4 million (in each case after deducting the underwriting discount and
estimated offering expenses payable by the Company). The $35 million estimated
net proceeds from the Offerings will be used by the Company to retire debt under
the Bank Credit Facility. The estimated net proceeds from the Preferred Offering
will be used to repay debt under the Bank Credit Facility. At the time of the
Distribution, $100 million will be borrowed by the Company as term debt and $75
million under the revolving loan component of the Bank Credit Facility. The
Company intends to use the proceeds from such borrowings to make a $125 million
capital contribution to AmerUs Life and to purchase a $50 million surplus note
issued by AmerUs Life. See "Use of Proceeds," "The Subscription Offering" and
"The Preferred Offering."

The Unaudited Pro Forma Condensed Consolidated Financial Statements are
based on available information and on assumptions management believes are
reasonable and that reflect the effects of the transactions described above.
Such Unaudited Pro Forma Condensed Consolidated Financial Statements are
provided for informational purposes only and should not be construed to be
indicative of the Company's consolidated financial position or results of
operations had these transactions been consummated on the dates assumed and do
not in any way represent a projection or forecast of the Company's consolidated
financial position or results of operations for any future date or period. The
Unaudited Pro Forma Condensed Consolidated Financial Statements should be read
in conjunction with the notes thereto, the audited Consolidated Financial
Statements of the Company, together with the related notes and report thereon,
the unaudited consolidated statements of the Company included elsewhere in this
Prospectus and with the information set forth under "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and "Business."

33
<PAGE>
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
------------------------------------------------------------------------------
PRO FORMA PRO FORMA
OFFERINGS AND ASSUMING ASSUMING NO
REORGANIZATION PREFERRED PREFERRED PREFERRED
HISTORICAL (A) RELATED ADJUSTMENTS OFFERING (E) OFFERING (F) OFFERING (G)
------------- -------------------- ------------- ----------- -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
ASSETS:
Invested assets
Fixed maturities..................... $ 2,297.6 $ 171.5 (B)(D $ 2,469.1 $ 2,469.1
Equity securities.................... 74.6 (0.7)(B) 73.9 73.9
Short-term investments............... 12.0 12.0 12.0
Mortgage loans....................... 260.2 (9.7)(B) 250.5 250.5
Real estate.......................... 40.0 (29.6)(B) 10.4 10.4
Policy loans......................... 64.0 64.0 64.0
Other investments.................... 61.8 61.8 61.8
------------- ------- ------ ----------- -------------
Total investments.................... 2,810.2 131.5 0.0 2,941.7 2,941.7
Accrued investment income.............. 42.1 42.1 42.1
Deferred policy acquisition costs...... 123.5 123.5 123.5
Property and equipment, net............ 13.3 (8.7)(B) 4.6 4.6
Deferred income taxes.................. 4.4 4.4 4.4
Other assets........................... 61.1 61.1 61.1
Closed Block........................... 1,237.2 1,237.2 1,237.2
------------- ------- ------ ----------- -------------
Total assets....................... $ 4,291.8 $ 122.8 $ 0.0 $ 4,414.6 $ 4,414.6
------------- ------- ------ ----------- -------------
------------- ------- ------ ----------- -------------
LIABILITIES:
Policyowner reserves and policyowner
funds................................. $ 2,113.2 $ 2,113.2 $ 2,113.2
Other liabilities...................... 119.8 35.5(B) (0.9) 154.4 155.3
Long-term debt......................... 45.1 131.3 (B)(C)(D (72.4) 104.0 176.4
Closed Block liabilities............... 1,501.3 1,501.3 1,501.3
------------- ------- ------ ----------- -------------
Total liabilities.................. 3,779.4 166.8 (73.3) 3,872.9 3,946.2
Company-obligated mandatorily
redeemable preferred securities....... -- 75.0 75.0 0.0
SHAREHOLDERS' EQUITY:
Preferred stock, no par value,
20,000,000 shares authorized, no
shares issued and outstanding......... --
Common stock, Class A, no par value,
75,000,000 shares authorized;
14,500,000 shares issued and
outstanding historical; 17,000,000
shares pro forma...................... 14.5 2.5(C) 17.0 17.0
Common stock, Class B, no par value,
50,000,000 shares authorized;
5,000,000 shares issued and
outstanding........................... 5.0 5.0 5.0
Additional paid in capital............. 32.5(C) 32.5 32.5
Retained earnings...................... 470.2 (79.0)(B) (1.7) 389.5 391.2
Unrealized appreciation of available
for sale securities................... 22.7 22.7 22.7
------------- ------- ------ ----------- -------------
Total shareholders' equity......... 512.4 (44.0) (1.7) 466.7 468.4
------------- ------- ------ ----------- -------------
Total liabilities and shareholders'
equity............................ $ 4,291.8 $ 122.8 $ 0.0 $ 4,414.6 $ 4,414.6
------------- ------- ------ ----------- -------------
------------- ------- ------ ----------- -------------
</TABLE>

(The Accompanying Notes are an integral part of this Unaudited
Pro Forma Condensed Consolidated Balance Sheet)

34
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
------------------------------------------------------------------------------
PRO FORMA PRO FORMA
OFFERINGS AND ASSUMING ASSUMING NO
REORGANIZATION PREFERRED PREFERRED PREFERRED
HISTORICAL (A) RELATED ADJUSTMENTS OFFERING (E) OFFERING (F) OFFERING (G)
------------- --------------------- ------------ ----------- -------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Insurance premiums................. $ 133.7 $ (95.8)(H) $ 37.9 $ 37.9
Product charges.................... 39.1 (9.1)(H) 30.0 30.0
Net investment income.............. 189.3 (50.6)(B)(H) 138.7 138.7
Realized gains on investments...... 62.5 1.4(H) 63.9 63.9
Other.............................. 2.3 1.5(I) 3.8 3.8
Contribution from the Closed
Block............................. 2.7 (2.6)(H) 0.1 0.1
------------- ------- ------------ ----------- -------------
Total revenues..................... 429.6 (155.2) 0.0 274.4 274.4
------------- ------- ------------ ----------- -------------
BENEFITS AND EXPENSES:
Total policyowner benefits......... 222.9 (110.7)(H) 112.2 112.2
Total expenses..................... 78.8 (13.4)(H)(K)(M)(N) 4.2(L) 69.6 65.4
Dividends to policyowners.......... 26.3 (26.3)(H)
------------- ------- ------------ ----------- -------------
Total benefits and expenses........ 328.0 (150.4) 4.2 181.8 177.6
------------- ------- ------------ ----------- -------------
Income before income taxes........... 101.6 (4.8) (4.2) 92.6 96.8
Income tax expense................... 38.7 (6.2)(J)(O) (1.5)(O) 31.0 32.5
------------- ------- ------------ ----------- -------------
Net income........................... $ 62.9 $ 1.4 $ (2.7) $ 61.6 $ 64.3
------------- ------- ------------ ----------- -------------
------------- ------- ------------ ----------- -------------
Net income per share................. $ 2.86 $ 2.80 $ 2.92
Shares used in the calculation of net
income per share.................... 22.0 22.0 22.0
</TABLE>

(The Accompanying Notes are an integral part of this
Unaudited Pro Forma Condensed Consolidated Statement of Income)

35
<PAGE>
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
------------------------------------------------------------------------------
PRO FORMA PRO FORMA
OFFERINGS AND ASSUMING ASSUMING NO
REORGANIZATION PREFERRED PREFERRED PREFERRED
HISTORICAL (A) RELATED ADJUSTMENTS OFFERING (E) OFFERING (F) OFFERING (G)
------------- --------------------- ------------ ----------- -------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
REVENUES:
Insurance premiums................. $ 244.1 $ (182.2)(H) $ 61.9 $ 61.9
Product charges.................... 57.3 (16.9)(H) 40.4 40.4
Net investment income.............. 285.2 (99.5)(B)(H) 185.7 185.7
Realized gains on investments...... 51.4 (0.9)(H) 50.5 50.5
Other.............................. 5.4 2.0(I) 7.4 7.4
Contribution from the Closed
Block............................. 7.6(H) 7.6 7.6
------------- ------- ------------ ----------- -------------
Total revenues..................... 643.4 (289.9) 0.0 353.5 353.5
------------- ------- ------------ ----------- -------------
BENEFITS AND EXPENSES:
Total policyowner benefits......... 374.6 (200.3)(H) 174.3 174.3
Total expenses..................... 108.9 (34.0)(H)(K)(M)(N) 4.8(L) 79.7 74.9
Dividends to policyowners.......... 49.4 (49.4)(H)
------------- ------- ------------ ----------- -------------
Total benefits and expenses........ 532.9 (283.7) 4.8 254.0 249.2
------------- ------- ------------ ----------- -------------
Income before income taxes........... 110.5 (6.2) (4.8) 99.5 104.3
Income tax expense................... 41.2 (2.2)(O) (1.7)(O) 37.3 39.0
------------- ------- ------------ ----------- -------------
Net income........................... $ 69.3 $ (4.0) $ (3.1) $ 62.2 $ 65.3
------------- ------- ------------ ----------- -------------
------------- ------- ------------ ----------- -------------
Net income per share................. $ 3.15 $ 2.83 $ 2.97
Shares used in the calculation of net
income per share.................... 22.0 22.0 22.0
</TABLE>

(The Accompanying Notes are an integral part of this
Unaudited Pro Forma Condensed Consolidated Statement of Income)

36
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(A) As a result of the Distribution which caused its Non-Life Insurance
Subsidiaries to be distributed to AmerUs Group. Accordingly, the Consolidated
Financial Statements include only the accounts and operations, after
eliminations, of the Company and its wholly-owned life insurance subsidiaries,
principally, AmerUs Life and American Vanguard Life Insurance Company.

(B) The Capital Contribution consisted of a contribution of net assets as
follows:

<TABLE>
<CAPTION>
BOOK VALUE
SEPTEMBER 30, 1996
---------------------
(IN MILLIONS)
<S> <C>
Fixed maturity securities............................................... $ 3.5
Equity securities....................................................... 0.7
Mortgage loans.......................................................... 9.7
Real estate............................................................. 29.6
Property and equipment, net............................................. 8.7
Cash.................................................................... 35.5
Long-term debt assumed.................................................. (8.7)
-----
$ 79.0
-----
-----
</TABLE>

Net investment income has been increased by $0.1 million and $0.2 million
for the nine months ended September 30, 1996 and the year ended December 31,
1995, respectively, which represents the actual net investment loss of the
assets distributed for such periods.

(C) Represents estimated net proceeds to the Company of $35 million from
the issuance of 2,500,000 shares of Class A Common Stock and the use of the
proceeds to retire long-term debt, assuming all shares are sold in the Public
Offering at a price of $15.50 per share.

(D) Represents $175 million of proceeds from the Bank Credit Facility and
the investment of such proceeds in fixed maturity securities. No adjustment has
been included to reflect the investment earnings that would have resulted from
the investment of the proceeds. If such proceeds would have been invested at the
average rate of return on the Company's investment portfolio for each respective
period, $10.3 million and $13.7 million would have been earned in the nine
months ended September 30, 1996 and the year ended December 31, 1995.

(E) Represents estimated net proceeds of $72.4 million from the Preferred
Offering and the use of such proceeds to repay long-term debt. See "The
Preferred Offering."

(F) Giving effect to the establishment of the Closed Block, management fee
income, the Capital Contribution, the Offerings, the Bank Credit Facility, and
the Preferred Offering.

(G) Giving effect to the establishment of the Closed Block, management fee
income, the Capital Contribution, the Offerings and the Bank Credit Facility,
but not the Preferred Offering.

(H) The unaudited pro forma condensed consolidated statements of income
reflect an allocation of revenues and expenses to the Closed Block based on
certain estimates and assumptions that management believes are reasonable. The
contribution from the Closed Block reflected in the unaudited pro forma
condensed consolidated statements of income is not necessarily indicative of the
Closed Block's contribution had the Closed Block been established as of January
1, 1995 or of the expected contribution for any future period.

The Closed Block, which was established on June 30, 1996, will include only
those revenues, benefits, expenses and dividends considered in funding the
Closed Block. See "The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries--Establishment and Operation of the Closed Block." The pre-tax
contribution from the Closed Block is reported as a single line item of total
revenues from continuing operations. Many expenses related to the Closed Block
operations are charged to operations

37
<PAGE>
outside the Closed Block, accordingly, the contribution from the Closed Block
does not represent the actual profitability of the Closed Block operations.
Operating costs and expenses outside of the Closed Block are, therefore,
disproportionate to the business outside the Closed Block. Income tax expense
applicable to the Closed Block, which will be funded in the Closed Block, is
reflected as a component of income tax expense.

The excess of Closed Block liabilities over Closed Block assets as of
September 30, 1996 represents the total estimated future contribution from the
Closed Block expected to emerge from operations in the Closed Block after income
taxes. If the actual contribution from the Closed Block in any given period
equals or exceeds the expected contribution for such period as determined at the
establishment of the Closed Block, the expected contribution would be recognized
in income from continuing operations for that period. Any excess of the actual
contribution over the expected contribution would also be recognized in income
from continuing operations to the extent that the aggregate expected
contribution for all prior periods exceeded the aggregate actual contribution.
Any remaining excess of actual contribution over expected contributions would be
accrued in the Closed Block as a liability for future policyowners' dividends.
This accrual for the future dividends effectively limits the actual Closed Block
contribution recognized in income from continuing operations to the Closed Block
contribution expected to emerge from operation of the Closed Block as determined
as of the date of establishment of the Closed Block.

The following is a summary of Closed Block pro forma income statement
adjustments for the respective periods:

<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1996 DECEMBER 31, 1995
-------------------- -------------------
(IN MILLIONS)
<S> <C> <C>
CLOSED BLOCK REVENUES
Insurance premiums..................................................... $ 95.8 $ 182.2
Product charges........................................................ 9.1 16.9
Net investment income.................................................. 50.7 99.7
Realized gains (losses) on investments................................. (1.4) 0.9
------- -------
$ 154.2 $ 299.7
CLOSED BLOCK EXPENSES
Total policyowner benefits............................................. 110.7 200.3
Total Expenses......................................................... 19.8 42.4
Dividends to policyowners.............................................. 26.3 49.4
------- -------
$ 156.8 $ 292.1
------- -------
------- -------
Contributions from the Closed Block.................................... $ (2.6) $ 7.6
------- -------
------- -------
</TABLE>

If over the period the policies and contracts in the Closed Block remain in
force the actual contribution from the Closed Block is less than the expected
contribution from the Closed Block, only such actual contribution would be
recognized in income from continuing operations. If the actual contribution from
the Closed Block in any given period is less than the expected contribution for
that period and changes in dividend scales are inadequate to offset the negative
performance in relation to the expected performance, the contribution inuring to
shareholders of the Company will be reduced. If a liability for policyowners'
dividends had been previously established in the Closed Block because the actual
contribution to the relevant date had exceeded the expected contribution to such
date, such liability would be reduced (but not below zero) in any periods in
which the actual contribution for that period is less than the expected
contribution for such period. See "The Reorganization and Distribution of the
Non-Life Insurance Subsidiaries" and "Management's Discussion of Results of
Operations and Financial Conditions."

38
<PAGE>
(I) Represents fixed fee for management services and assistance to be
received under an Intercompany Agreement between AmerUs Group and the Company as
compensation for services rendered by Company employees. See "Certain
Transactions and Relationships--Intercompany Agreement--Management Services."

(J) Represents the elimination of $4.5 million of the mutual company equity
add-on tax for the six months ended June 30, 1996, which is applicable only to
mutual life insurance companies. This adjustment can vary significantly from
year to year, based on rates published by the IRS. The Company believes that
this tax will not be applicable to the Company after the Reorganization due to
AmerUs Life's conversion into a stock corporation.

(K) Total expenses have been reduced by $0.9 million and $1.1 million for
the nine months ended September 30, 1996 and the year ended December 31, 1995,
respectively, as a result of the assignment of a certain employment contract to
AmerUs Group.

(L) Represents dividends of $5.1 million and $6.8 million for the nine
months ended September 30, 1996 and the year ended December 31, 1995,
respectively, on the shares issued in conjunction with the Preferred Offering
which are assumed to be payable at 9% per annum and the offering expenses of
$2.6 million which are classified as interest expense, net of the reduction in
interest expense resulting from the retirement of long-term debt from the
proceeds from the Preferred Offering of $3.5 million and $4.6 million for the
nine months ended September 30, 1996 and the year ended December 31, 1995,
respectively.

(M) Represents interest expense under the Bank Credit Facility based upon a
rate of 6.25% per annum, and amortization of debt expense. The resulting
adjustment was $8.9 million and $11.7 million for the nine months ended
September 30, 1996 and the year ended December 31, 1995, respectively.

(N) Represents the reduction in interest expense under the Bank Credit
Facility resulting from the application of the proceeds from the Offerings to
retire long-term debt. The adjustment was $1.6 million and $2.2 million for the
nine months ended September 30, 1996 and the year ended December 31, 1995,
respectively.

(O) Represents the income tax effect on the net pro forma adjustments.

39
<PAGE>
ORGANIZATIONAL STRUCTURE

The following chart illustrates the general organization of AMHC and its
subsidiaries, including the Company, after the Offerings:

[GRAPH]

* Assuming no exercise of the underwriters' over-allotment option in the
Public Offering.

** The Non-Life Insurance Subsidiaries consist of API, AmerUs Bank, and Iowa
Realty Co., Inc., and each of their respective subsidiaries.

*** AmerUs Life participates in the Ameritas Joint Venture through its ownership
interest in AMAL Corporation, a Nebraska corporation ("AMAL"). See
"Business--Ameritas Joint Venture."

40
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION

THE FOLLOWING ANALYSIS OF THE CONSOLIDATED RESULTS OF OPERATIONS AND
FINANCIAL CONDITION OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA AND CONSOLIDATED FINANCIAL
STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS PROSPECTUS.

BACKGROUND

THE REORGANIZATION, THE CAPITAL CONTRIBUTION AND THE DISTRIBUTION

The Company is an insurance holding company formed on August 1, 1996, in
connection with the Reorganization of American Mutual Life on June 30, 1996. As
part of the Reorganization, all of the shares of capital stock of AmerUs Life
were issued to AMHC. Subsequent to the Reorganization, on August 1, 1996, AMHC
contributed all of its shares of capital stock of AmerUs Life to AmerUs Group.
On August 1, 1996, all of the shares of the Company's capital stock were issued
to AmerUs Group. See "The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries."

Prior to the Distribution, AmerUs Life made the Capital Contribution to or
for the benefit of the Non-Life Insurance Subsidiaries. The Capital Contribution
consisted of cash and other property having a net carrying value of
approximately $79 million. Following the Capital Contribution, a series of
transactions were undertaken by the Company and its affiliates. AmerUs Life
effected the Distribution pursuant to which it distributed the Non-Life
Insurance Subsidiaries to AmerUs Group. Immediately after the Distribution,
AmerUs Group contributed all of its shares of common stock in AmerUs Life to the
Company. Under this structure, the Company is an intermediate holding company,
with AmerUs Group as its direct parent company and AmerUs Life as its
wholly-owned subsidiary. Under Iowa law, AMHC is required to retain direct or
indirect ownership and control of shares representing a majority of the vote of
the outstanding capital stock of the Company. Immediately following the
Distribution, the Company entered into the Bank Credit Facility, pursuant to
which it borrowed $100 million in term debt and $75 million through a revolving
line of credit. The Company used the proceeds from such borrowings to make a
$125 million capital contribution to AmerUs Life and to purchase a $50 million
surplus note from AmerUs Life. The Company will use the proceeds of the
Offerings and the Preferred Offering to repay such borrowings.

The Distribution effectively separated AMHC's non-life insurance businesses
from the life insurance businesses owned by the Company, such that the companies
engaged in non-life insurance businesses will no longer be subsidiaries of the
Company. See "The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries."

ACCOUNTING TREATMENT

The Selected Consolidated Financial and Operating Data, the Consolidated
Financial Statements and other financial data of the Company presented herein
give effect to the Reorganization and the Distribution as if both had been
completed prior to the periods presented (including giving effect to the
establishment of the Closed Block as of June 30, 1996), but do not give effect
to the Capital Contribution.

AMERITAS JOINT VENTURE

Under the Ameritas Joint Venture, the Company will no longer offer DEFERRED
FIXED ANNUITIES for sale to new customers except through the Ameritas Joint
Venture, although the Company will continue to issue renewal and replacement
annuity contracts with respect to annuity contracts issued by it prior to the
formation of the Ameritas Joint Venture. Consequently, future sales of fixed
annuities by the Company will be substantially reduced, which will have an
effect on future investment income and product charges of the Company.
Management believes that any reductions in net income resulting from the
curtailment of direct annuity sales by the Company will be more than offset by
management fees and by the Company's increased equity interest in the net income
of the Ameritas Joint Venture.

41
<PAGE>
OVERVIEW

The Company is engaged in the business of underwriting, marketing and
distributing a broad range of individual life insurance and annuity products to
individuals and businesses in 45 states and the District of Columbia. The
Company's primary product offerings consist of whole life, universal life and
term life insurance policies and fixed annuities. Since April 1, 1996 the
Company has been a party to the Ameritas Joint Venture with Ameritas Life
Insurance Corp., through which it now markets fixed annuities and has begun to
sell variable annuities and variable life insurance products. See
"Business--Products" and "Business--Ameritas Joint Venture."

In accordance with GAAP, universal life insurance premiums and annuity
deposits received are reflected as increases in liabilities for policyowner
account balances and not as revenues. Revenues reported for universal life and
annuity products consist of policy charges for the cost of insurance,
administration charges and surrender charges assessed against policyowner
account balances. Surrender benefits paid relating to universal life insurance
policies and annuity products are reflected as decreases in liabilities for
policyowner account balances and not as expenses. Amounts for interest credited
to universal life and annuity policyowner account balances and benefit claims in
excess of policyowner account balances are reported as expenses in the financial
statements. The Company receives investment income earned from the funds
deposited into account balances by universal life and annuity policyowners, the
majority of which is passed through to such policyowners in the form of interest
credited.

Premium revenues reported for traditional life insurance products are
recognized as revenues when due. Future policy benefits and policy acquisition
costs are recognized as expenses over the life of the policy by means of a
provision for future policy benefits and amortization of deferred policy
acquisition costs.

The costs related to acquiring new business, including certain costs of
issuing policies and certain other variable selling expenses (principally
commissions), defined as deferred policy acquisition costs, are capitalized and
amortized as an expense in proportion to expected profits or margins from such
policies. This amortization is adjusted when current or estimated future gross
profits or margins on the underlying policies vary from previous estimates. For
example, the amortization of deferred policy acquisition costs is accelerated
when policy terminations are higher than originally estimated or when
investments supporting the policies are sold at a gain prior to their
anticipated maturity. Death and other policyowner benefits reflect exposure to
mortality risk and fluctuate from period to period based on the level of claims
incurred within insurance retention limits. The profitability of the Company is
primarily affected by expense levels, interest spread results (i.e., the excess
of investment earnings over the interest credited to policyowners) and
fluctuations in mortality, persistency and other policyowner benefits. The
Company has the ability to mitigate adverse experience through adjustments to
credited interest rates, policyowner dividends or cost of insurance charges.

ADJUSTED OPERATING INCOME

The following table reflects net income adjusted to eliminate certain items
(net of applicable income taxes) which management believes are not necessarily
indicative of overall operating trends, including net realized gains or losses
on investments. Different items are likely to occur in each period presented

42
<PAGE>

and others may have different opinions as to which items may warrant adjustment.
The adjusted operating income shown below does not constitute net income
computed in accordance with generally accepted accounting principles.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net income........................................ $ 62,944 $ 54,008 $ 69,348 $ 6,667 $ 31,209 $ 38,753 $ 44,847
Net realized (gains) losses on investments (A).... (40,006) (25,912) (32,244) 11,223 (10,187) (6,646) (8,547)
Equity add-on tax (B)............................. 4,480 9,585
Reorganization costs (C).......................... 726 115 1,426
Adoption of SFAS 106 (D).......................... 3,214
--------- --------- --------- --------- --------- --------- ---------
Adjusted operating income......................... $ 28,144 $ 28,211 $ 38,530 $ 27,475 $ 24,236 $ 32,107 $ 36,300
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Adjusted operating income per share............... $ 1.28 $ -- $ 1.75 -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>

- ------------------

(A) Represents realized gains or losses on investments less that portion of the
amortization of deferred policy acquisition costs adjusted for income taxes
on such amounts. Realized gains may vary widely between periods. Such
amounts are determined by management's timing of individual transactions and
do not necessarily correspond to the underlying operating trends.

(B) Represents the mutual life insurance company EQUITY ADD-ON TAX, which is
applicable only to mutual life insurance companies and which the Company
believes will not be applicable to the Company after June 30, 1996 due to
AmerUs Life's conversion into a stock company.

(C) Represents costs directly related to the Reorganization consisting primarily
of printing, postage, legal and consulting costs. All of the 1995 costs were
incurred in the second half of 1995. These costs were not of a continuing
nature and were not expected to have any effect on future operations.

(D) As of January 1, 1993, the Company adopted SFAS 106, pursuant to which the
cost of certain post-retirement benefits must be recognized on an accrual
basis as employees perform services to earn such benefits. The Company's
transition obligation as of January 1, 1993 amounted to approximately $3.2
million, net of income tax benefits, and was recorded as a cumulative effect
adjustment to net income.

THE CLOSED BLOCK

In connection with the Reorganization, the Closed Block was established.
Insurance policies which had a dividend scale in effect as of June 30, 1996 were
included in the Closed Block. The Closed Block is designed to provide reasonable
assurance to owners of insurance policies included therein that, after the
Reorganization, assets will be available to maintain the dividend scales and
interest credits in effect for 1995 if the experience underlying such scales and
credits continues. See "Risk Factors--The Closed Block" and "The Reorganization
and Distribution of the Non-Life Insurance Subsidiaries--Establishment and
Operation of the Closed Block."

The contribution to the operating income of the Company from the Closed
Block is reported as a single line item in the income statement. Accordingly,
premiums, product charges, investment income, realized gains (losses) on
investments, policyowner benefits and dividends attributable to the Closed
Block, less certain minor expenses including amortization of deferred policy
acquisition costs, are shown as a net number under the caption the "Contribution
from the Closed Block." This results in material reductions in the respective
line items in the income statement while having no effect on net income. Also,
all assets allocated to the Closed Block are grouped together and shown as a
separate item entitled "Closed Block Assets." Likewise, all liabilities
attributable to the Closed Block are combined and disclosed as the "Closed Block
Liabilities." See "Unaudited Pro Forma Condensed Consolidated Financial
Statements."

43
<PAGE>
COMBINED RESULTS OF OPERATIONS

Since the operating results from the Closed Block for the three months ended
September 30, 1996 are reported on one line of the income statement,
"Contribution from the Closed Block," the individual income statement components
for the first nine months of 1996 are not fully comparable with those for the
first nine months of 1995, prior to the establishment of the Closed Block.
Management believes that the presentation of the results of operations for the
nine months ended September 30, 1996 on a combined basis as if the Closed Block
had not been formed facilitates comparability with the results of operations for
the nine months ended September 30, 1995. Accordingly, the combined presentation
set forth below includes certain revenues and expenses associated with the
policies included in the Closed Block. Such presentation does not, however,
affect the Company's reported net income.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1996
-----------------------------------
CLOSED
AS REPORTED BLOCK COMBINED
----------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues:
Insurance premiums........................................................ $ 133,704 $ 48,747 $ 182,451
Product charges........................................................... 39,135 4,657 43,792
Net investment income..................................................... 189,293 26,826 216,119
Realized gains (losses) on investments.................................... 62,555 70 62,625
Other income.............................................................. 2,280 0 2,280
Contribution from the Closed Block........................................ 2,659 (2,659) 0
----------- --------- -----------
Total revenues............................................................ 429,626 77,641 507,267
Benefits and expenses:
Policyowner benefits...................................................... 222,929 51,028 273,957
Underwriting, acquisition and insurance expenses.......................... 46,892 1,038 47,930
Amortization of deferred policy acquisition costs......................... 31,865 11,244 43,109
Dividends to policyowners................................................. 26,343 14,331 40,674
----------- --------- -----------
328,029 77,641 405,670
Income before income taxes.................................................. 101,597 0 101,597
Income tax expenses......................................................... 38,653 0 38,653
----------- --------- -----------
Net income.................................................................. $ 62,944 $ 0 $ 62,944
----------- --------- -----------
----------- --------- -----------
</TABLE>

<PAGE>
RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1995

A summary of the Company's combined revenues, including revenues associated
with the Closed Block, follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Insurance premiums
Traditional life insurance premiums......................................... $ 169,435 $ 163,857
Immediate annuity and supplementary contract premiums....................... 11,366 14,594
Other premiums.............................................................. 1,650 5,413
----------- -----------

Total insurance premiums.................................................. 182,451 183,864

Universal life product charges.............................................. 43,138 42,144
Annuity product charges..................................................... 654 417
----------- -----------

Total product charges..................................................... 43,792 42,561

Net investment income....................................................... 216,119 210,491
Realized gains (losses) on investments...................................... 62,625 41,564
Other revenues.............................................................. 2,280 2,285
----------- -----------

Total revenues............................................................ $ 507,267 $ 480,765
----------- -----------
----------- -----------
</TABLE>

Insurance premiums decreased $1.4 million to $182.5 million in the nine
months ended September 30, 1996 compared to $183.9 million in the nine months
ended September 30, 1995. Traditional life insurance premiums increased $5.6
million due to continued growth in renewal premiums. Immediate annuity deposits
and SUPPLEMENTARY CONTRACT premiums were $3.2 million lower in the nine months
ended September 30, 1996 compared to the nine months ended September 30, 1995
due to decreased immediate annuity sales. Other premiums were $3.8 million lower
in the nine months ended September 30, 1996 than in the nine months ended
September 30, 1995 primarily due to the Company's exit from several group life
and long-term disability reinsurance pools in the second half of 1995 and the
sale of the Company's remaining group life operation in the third quarter of
1996, as part of management's continuing review of insurance products'
profitability.

Universal life product charges were $1.0 million higher in the nine months
ended September 30, 1996 compared to the same period in 1995 primarily due to
increased COST OF INSURANCE charges as a result of the normal aging of that
block of business.

Net investment income increased by $5.6 million, or 2.7%, to $216.1 million
in the nine months ended September 30, 1996 as compared to $210.5 million in the
nine months ended September 30, 1995. The increase was attributable to an
increase in average invested assets. Average invested assets increased by $234.6
million to $3,900.3 million, including Closed Block investments, during the nine
months ended September 30, 1996. The effective yield on average invested assets
was 7.85% in the nine months ended September 30, 1996, compared to 7.87% in the
same period of 1995. The decrease in effective yield is due to lower bond yields
in the first nine months of 1996 compared to the same period in 1995.

Realized gains on investments were $62.6 million in the nine months ended
September 30, 1996, compared to gains of $41.6 million in the nine months ended
September 30, 1995. The increase of $21.0

45
<PAGE>
million resulted primarily from increased sales of common stock, reflecting the
Company's decision to reduce its exposure to equity securities. Proceeds from
these sales were invested primarily in fixed maturity securities.

A summary of the Company's combined policyowner benefits, including policyowner
benefits associated with the Closed Block, follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1995
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Traditional life insurance
Death benefits.................................................... $ 25,656 $ 24,356
Change in liability for future policy benefits and other policy
benefits......................................................... 117,849 112,935
----------- -----------

Total traditional life insurance benefits....................... 143,505 137,291

Universal life insurance
Death benefits in excess of cash value............................ 13,324 12,668
Interest credited to policyowner account balances................. 35,457 33,366
Other policy benefits............................................. 3,883 4,493
----------- -----------

Total universal life insurance benefits......................... 52,664 50,527

Annuities
Interest credited to deferred annuity account balances............ 52,142 59,123
Other annuity benefits............................................ 23,988 27,195
----------- -----------

Total annuity benefits.......................................... 76,130 86,318

Miscellaneous benefits.............................................. 1,658 5,546
----------- -----------

Total policyowner benefits...................................... $ 273,957 $ 279,682
----------- -----------
----------- -----------
</TABLE>

Total policyowner benefits decreased $5.7 million to $274.0 million in the
nine months ended September 30, 1996 as compared to the nine months ended
September 30, 1995. Traditional life benefits increased $6.2 million primarily
due to the growth in the amount of such business in force. Universal life
benefits increased by $2.1 million primarily due to increased interest credited
to policyowner account balances. While the weighted average crediting rate for
the Company's universal life liabilities decreased 16 basis points from 6.47% in
the nine months ended September 30, 1995 to 6.31% in the nine months ended
September 30, 1996, the Company's average liabilities increased $40.8 million
from the first nine months of 1995 to the first nine months of 1996, resulting
in the increased credited amounts in the 1996 period.

Annuity benefits decreased $10.2 million in the nine month period ended
September 30, 1996 to $76.1 million compared to $86.3 million in the nine months
ended September 30, 1995. Such benefits decreased due to reduced interest
credited to policyowner account balances and decreased other annuity benefits.
The weighted average crediting rate for the Company's individual deferred
annuity liabilities decreased 88 basis points to 5.39% in the nine months ended
September 30, 1996 compared to 6.27% in the nine months ended September 30,
1995. The Company's average deferred annuity

46
<PAGE>
liabilities decreased $60.6 million from the first nine months of 1995 compared
to the same period in 1996, also contributing to the decrease in interest
credited amounts in the 1996 period. The decrease in other annuity benefits was
the result of reduced immediate annuity sales in 1996.

The decrease in miscellaneous benefits of $3.9 million to $1.6 million in
the nine months ended September 30, 1996 compared to $5.5 million in the nine
months ended September 30, 1995 was primarily the result of the Company's exit
from several group life and long-term disability reinsurance pools in the second
half of 1995 and the sale of the Company's remaining group life operation in the
third quarter of 1996.

A summary of the Company's combined expenses, including expenses associated
with the Closed Block, follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1996 1995
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Commission expense, net of deferrals............................................. $ 6,843 $ 7,600
Other underwriting, acquisition and insurance expenses, net of deferrals......... 41,087 32,239
Amortization of deferred policy acquisition costs................................ 43,109 41,096
--------- ---------
Total expenses............................................................... $ 91,039 $ 80,935
--------- ---------
--------- ---------
</TABLE>

Commission expense, net of deferrals, decreased $0.8 million to $6.8 million
in the first nine months of 1996 compared to $7.6 million in the same period of
1995, primarily due to a decrease in gross commission expense as a result of
lower sales levels and the conversion of new annuity sales to the Ameritas Joint
Venture in May 1996. Other underwriting, acquisition and insurance expenses, net
of deferrals, increased by $8.9 million, or 27.4%, to $41.1 million in the nine
months ended September 30, 1996. The increase in expenses during the 1996 period
was primarily due to increased costs related to the Reorganization of $0.9
million, the Ameritas Joint Venture of $0.8 million, settlements and associated
legal fees of $5.5 million, and higher premium taxes of $0.7 million due to a
one-time adjustment to the amortization of the guaranty association asset.
Settlements and legal fees included the establishment of a $5.0 million reserve
in connection with certain pending class action litigation. See "Business--Legal
Proceedings."

The amortization of deferred policy acquisition costs increased by $2.0
million to $43.1 million in the nine months ended September 30, 1996 compared to
$41.1 million in the nine months ended September 30, 1995. Since deferred policy
acquisition costs are generally amortized in proportion to gross margins, the
increase in amortization in the 1996 period is primarily due to higher gross
margins resulting partially from higher realized capital gains in the first nine
months of 1996 compared to the same period in 1995.

Dividends to policyowners increased by $4.4 million, or 12.1%, to $40.7
million in the first nine months of 1996 compared to $36.3 million in the first
nine months of 1995. The growth in dividends was primarily the result of the
growth and aging of the in-force policies. Traditional life reserves grew 7.9%
from September 30, 1995 to $1.18 billion at September 30, 1996. The weighted
average dividend rate credited to these policies was 7.16% for the nine months
ended September 30, 1996 compared to 7.14% for the same period in 1995.

Income before income taxes increased by $17.7 million in 1996, or 21.1%, to
$101.6 million in the nine months ended September 30, 1996 compared to $83.9
million in the nine months ended September 30, 1995. The increase resulted
primarily from the increase of $21.0 million in realized gains on investments.

47
<PAGE>

Income tax expense increased by $8.8 million in the nine months ended
September 30, 1996 to $38.7 million compared to $29.9 million in the nine months
ended September 30, 1995. The increased income taxes for the nine month period
ended September 30, 1996 were the result of the higher pre-tax income due
primarily to the increased realized gains on investments and a $4.5 million
provision for the equity add-on tax in the first half of 1996 partially offset
by $1.7 million of tax credits. The effective income tax rate for the first nine
months of 1996 was 38.1% compared to 35.6% for the first nine months of 1995.

Net income increased by $8.9 million in the nine months ended September 30,
1996 to $62.9 million from $54.0 million in the nine months ended September 30,
1995. The increased net income resulted from higher pre-tax income due primarily
to the increased realized gains on investments.

1995 COMPARED TO 1994

A summary of the Company's revenues follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Insurance premiums
Traditional life insurance premiums......................................... $ 219,732 $ 209,447
Immediate annuity and supplementary contract premiums....................... 17,659 16,680
Other premiums.............................................................. 6,696 11,785
----------- -----------

Total insurance premiums.................................................. 244,087 237,912
Universal life product charges.............................................. 56,763 55,815
Annuity product charges..................................................... 607 547
----------- -----------

Total product charges..................................................... 57,370 56,362
Net investment income....................................................... 285,244 275,691
Realized gains (losses) on investments...................................... 51,387 (19,930)
Other revenues.............................................................. 5,390 2,391
----------- -----------

Total revenues............................................................ $ 643,478 $ 552,426
----------- -----------
----------- -----------
</TABLE>

Insurance premiums increased $6.2 million to $244.1 million in 1995 compared
to $237.9 million in 1994. Traditional life insurance premiums increased $10.3
million as a result of continued growth in renewal premiums. Immediate annuity
deposits and supplementary contract premiums were $1.0 million greater in 1995
than 1994 due to increased immediate annuity sales. Other premiums were $5.1
million lower in 1995 than in 1994 primarily due to the Company's exit from
several group life and long-term disability reinsurance pools in 1995, as part
of management's continuing review of insurance products' profitability.

Universal life product charges were $0.9 million higher in 1995 compared to
1994 primarily due to increased cost of insurance charges as a result of the
normal aging of that block of business.

Net investment income increased by $9.5 million, or 3.5%, to $285.2 million
in 1995 as compared to $275.7 million in 1994. The increase was attributable to
an increase in average invested assets partially offset by a decline in the
effective yield on average invested assets. Average invested assets increased by
$162.9 million to $3,728.4 million during 1995. The effective yield on average
invested assets decreased from 7.90% in 1994 to 7.84% in 1995 reflecting a
reduction in interest income on both bonds and commercial mortgages as a result
of lower market interest rates on new investments.

48
<PAGE>
Realized gains on investments were $51.4 million in 1995 compared to
realized losses of $19.9 million in 1994. The increase of $71.3 million in 1995
resulted primarily from the combination of increased gains of $32.5 million over
1994 amounts from the sale of common stock and a gain of $9.4 million in 1995
compared to a loss of $25.5 million in 1994 from sales of fixed maturity
securities. Of the losses incurred in 1994, $21.1 million were incurred in
connection with sales of fixed maturity securities which resulted from a planned
investment strategy that maximized the after-tax proceeds from the sale of
selected fixed maturity securities. The sales of common stock in 1995 were a
direct result of the Company's decision to reduce the level of equity securities
as a percentage of its investment portfolio on a long-term basis.

Other revenues increased in 1995 by $3.0 million from 1994 levels, primarily
due to a gain of $3.1 million which resulted from the curtailment of the
Company's defined benefit pension plans, effective December 31, 1995. See Note 7
to the Consolidated Financial Statements.

A summary of the Company's policyowner benefits follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Traditional life insurance
Death benefits.............................................................. $ 32,196 $ 30,044
Change in liability for future policy benefits and other policy benefits.... 152,742 149,283
----------- -----------

Total traditional life insurance benefits................................. 184,938 179,327

Universal life insurance
Death benefits in excess of cash value...................................... 17,098 15,165
Interest credited to policyowner account balances........................... 45,240 42,095
Other policy benefits....................................................... 5,214 7,237
----------- -----------

Total universal life insurance benefits................................... 67,552 64,497

Annuities
Interest credited to deferred annuity account balances...................... 78,120 77,980
Other annuity benefits...................................................... 35,582 34,918
----------- -----------

Total annuity benefits.................................................... 113,702 112,898

Miscellaneous benefits........................................................ 8,428 13,174
----------- -----------

Total policyowner benefits................................................ $ 374,620 $ 369,896
----------- -----------
----------- -----------
</TABLE>

Total policyowner benefits increased $4.7 million from 1994 to $374.6
million in 1995. Traditional life benefits increased $5.6 million due primarily
to increased mortality costs and increased liabilities for future policy
benefits, in each case associated with the growth in the amount of such business
in force. Universal life benefits increased $3.1 million primarily due to
increased interest credited to policyowner account balances. The weighted
average crediting rate for the Company's universal life liabilities increased 23
basis points from 6.44% in 1994 to 6.67% in 1995, and the Company's average
liabilities increased $41.9 million, or 5.8%, from 1994 to 1995, resulting in
the increased credited amounts in 1995.

Annuity benefits increased $0.8 million in 1995 to $113.7 million compared
to $112.9 million in 1994. Such benefits increased due to increased interest
credited to policyowner account balances and

49
<PAGE>
increased other annuity benefits. While the weighted average crediting rate for
the Company's individual deferred annuity liabilities decreased 25 basis points
to 6.16% in 1995 compared to 6.41% in 1994, the Company's average liabilities
increased $32.1 million, or 2.5%, from 1994 to 1995, resulting in the increased
interest credited amounts in 1995. The increased other annuity benefits were the
result of continued growth in the immediate annuity and supplementary contract
business in force.

The decrease in miscellaneous benefits of $4.8 million to $8.4 million in
1995 compared to $13.2 million in 1994 was primarily the result of the Company's
exit from several group life and long-term disability reinsurance pools in 1995.

A summary of the Company's expenses follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1995 1994
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Commission expense, net of deferrals.......................................... $ 10,448 $ 9,451
Other underwriting, acquisition and insurance expenses, net of deferrals...... 48,207 59,153
Amortization of deferred policy acquisition costs............................. 50,239 42,756
----------- -----------
Total expenses............................................................ $ 108,894 $ 111,360
----------- -----------
----------- -----------
</TABLE>

Commission expense, net of deferrals, increased $1.0 million, or 10.5%, in
1995 to $10.4 million, primarily as a result of the integration of the product
lines of Central Life and Old AML and an increase in gross commissions of $3.0
million as a result of increased annuity sales in 1995. Other underwriting,
acquisition and insurance expenses, net of deferrals, decreased in 1995 by $10.9
million, or 18.5%, to $48.2 million. 1995 was the first year of the consolidated
operations of Central Life and Old AML. As a result of the combination,
approximately $7.8 million of cost reductions were realized in 1995 from 1994
combined levels, excluding the merger-related expenses described below. These
reductions in 1995 were partially offset by increased legal and settlement costs
of $1.1 million, higher incentive compensation of $1.0 million and $2.2 million
of expenses related to the investigation and review of alternative capital
structures, including implementing the Reorganization. Included in 1994 expenses
were approximately $10.0 million of expenses related to the merger of the two
companies compared to $2.2 million of merger-related costs in 1995.

The amortization of deferred policy acquisition costs increased by $7.4
million to $50.2 million in 1995 compared to $42.8 million in 1994. The increase
in amortization in 1995 was primarily due to higher realized gains and gross
profits in 1995 than in 1994.

Dividends to policyowners increased by $4.4 million, or 9.8%, to $49.4
million in 1995 compared to $45.0 million in 1994. The growth in dividends was
primarily the result of the growth and aging of the in-force policies.
Traditional life reserves grew 8.4% from 1994 to $1.12 billion in 1995. The
weighted average dividend rate credited to these policies was 7.14% for 1995 and
1994.

Income before income taxes increased by $84.5 million, or 323%, to $110.6
million in 1995 compared to $26.1 million in 1994. The increase resulted
primarily from the $9.5 million increase in net investment income, net realized
gains on investments of $51.4 million in 1995 as compared to net realized losses
on investments of $19.9 million in 1994, and reduced expenses, partially offset
by higher dividends to policyowners.

Income tax expense increased by $21.7 million to $41.2 million in 1995 as
compared to $19.5 million in 1994. The increased 1995 income taxes were the
result of the higher pre-tax income discussed above. The effective income tax
rate for 1995 was 37.3% and for 1994 was 74.5%. In 1994, American Mutual Life
was subject to the equity add-on tax which resulted in an additional $9.6
million of current income tax expense.

50
<PAGE>

Net income increased by $62.6 million in 1995 to $69.3 million from $6.7
million in 1994. This increase resulted from the increases in pre-tax income
discussed above.

1994 COMPARED TO 1993

A summary of the Company's revenues follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Insurance premiums
Traditional life insurance premiums......................................... $ 209,447 $ 198,079
Immediate annuity and supplementary contract premiums....................... 16,680 16,737
Other premiums.............................................................. 11,785 11,544
----------- -----------

Total insurance premiums.................................................. 237,912 226,360

Universal life product charges.............................................. 55,815 56,928
Annuity product charges..................................................... 547 545
----------- -----------

Total product charges..................................................... 56,362 57,473

Net investment income....................................................... 275,691 269,854
Realized gains (losses) on investments...................................... (19,930) 15,460
Other revenues.............................................................. 2,391 2,498
----------- -----------

Total revenues............................................................ $ 552,426 $ 571,645
----------- -----------
----------- -----------
</TABLE>

Insurance premiums increased $11.5 million to $237.9 million in 1994
compared to $226.4 million in 1993. Traditional life insurance premiums
increased $11.4 million primarily as a result of continued growth in renewal
premiums.

Universal life product charges were $1.1 million lower in 1994 than in 1993
primarily due to a decrease in cost of insurance charges by the Company in its
universal life product line in 1994.

Net investment income increased by $5.8 million, or 2.2%, to $275.7 million
in 1994 as compared to $269.9 million in 1993. The increase was attributable to
an increase in average invested assets partially offset by a decline in the
effective yield on average invested assets. Average invested assets increased by
$108.5 million to $3,565.5 million during 1994. The effective yield on average
invested assets decreased from 8.08% in 1993 to 7.90% in 1994, primarily
reflecting lower reinvestment rates in late 1993 and throughout 1994.

Realized losses on investments were $19.9 million in 1994 compared to gains
of $15.5 million in 1993. The realized losses in 1994 resulted in part from a
planned investment strategy to increase after-tax investment yields in future
periods by disposing of selected fixed maturity securities that generated losses
of $21.1 million in 1994.

51
<PAGE>
A summary of the Company's policyowner benefits follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Traditional life insurance
Death benefits.............................................................. $ 30,044 $ 28,516
Change in liability for future policy benefits and other policy benefits.... 149,283 143,659
----------- -----------

Total traditional life insurance benefits................................. 179,327 172,175

Universal life insurance
Death benefits in excess of cash value...................................... 15,165 13,270
Interest credited to policyowner account balances........................... 42,095 40,060
Other policy benefits....................................................... 7,237 7,007
----------- -----------

Total universal life insurance benefits................................... 64,497 60,337

Annuities
Interest credited to deferred annuity account balances...................... 77,980 82,314
Other annuity benefits...................................................... 34,918 38,001
----------- -----------

Total annuity benefits.................................................... 112,898 120,315

Miscellaneous benefits........................................................ 13,174 11,446
----------- -----------

Total policyowner benefits................................................ $ 369,896 $ 364,273
----------- -----------
----------- -----------
</TABLE>

Total policyowner benefits increased by $5.6 million from 1993 to $369.9
million in 1994. Traditional life benefits increased $7.2 million primarily due
to increased mortality costs and increased liabilities for future policy
benefits, in each case associated with the growth in the amount of such business
in force. Universal life benefits increased $4.2 million due to increased
mortality costs and increased interest credited to policyowner account balances
resulting from the growth in the amount of such business in force. While the
weighted average crediting rate for the Company's universal life liabilities
decreased 15 basis points from 6.59% in 1993 to 6.44% in 1994, the Company's
average liabilities increased $43.8 million, or 6.5%, from 1993 to 1994,
resulting in the increased credited amounts in 1994.

Annuity benefits decreased $7.4 million in 1994 to $112.9 million compared
to $120.3 million in 1993. Such benefits decreased due to reduced interest
credited to policyowner account balances and decreased other annuity benefits.
While the Company's average annuity liabilities increased $88.2 million or 7.4%
for these products from 1993 to 1994, this was more than offset by the reduction
in the weighted average crediting rate on these products of 54 basis points from
6.95% in 1993 to 6.41% in 1994, resulting in the decreased interest credited
amounts in 1994. The decrease in other annuity benefits was the result of a
change in valuation basis on structured settlement contracts which increased
reserves in 1993, partially offset by the growth of immediate annuity and
supplementary contract business in force in 1994.

The increase in miscellaneous benefits of $1.7 million was primarily due to
a reduction of reserves in the Company's group accident and health business in
1993.

52
<PAGE>
A summary of the Company's expenses follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1994 1993
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Commission expense, net of deferrals.......................................... $ 9,451 $ 9,239
Other underwriting, acquisition and insurance expenses, net of deferrals...... 59,153 49,398
Amortization of deferred policy acquisition costs............................. 42,756 47,441
----------- -----------
Total expenses............................................................ $ 111,360 $ 106,078
----------- -----------
----------- -----------
</TABLE>

Commission expense, net of deferrals, increased $0.2 million to $9.4 million
in 1994 as compared to $9.2 million in 1993. Other underwriting, acquisition and
insurance expenses, net of deferrals, increased in 1994 by $9.8 million, or
19.7%, to $59.2 million, primarily due to approximately $10.0 million of merger-
related expenses incurred in 1994 in connection with the merger of Central Life
and Old AML.

The amortization of deferred policy acquisition costs decreased by $4.6
million in 1994 to $42.8 million compared to $47.4 million in 1993. The change
in amortization was primarily the result of the combination of decreased
amortization due to realized losses in 1994 and higher amortization in 1993 due
to changes in assumptions as to future profitability resulting from an expected
decrease in cost of insurance charges in the universal life product line, net of
an expected improvement in mortality experience.

Dividends to policyowners decreased by $0.5 million, or 1.1% to $45.0
million in 1994 compared to $45.5 million in 1993. The decrease in dividends was
primarily the result of a dividend scale reduction in 1994. The weighted average
dividend rate credited to these policies was 7.14% in 1994 compared to 7.34% in
1993. Traditional life reserves grew 9.3% from 1993 to $1.03 billion in 1994.

Income before income taxes and before the cumulative effect of a change in
accounting principles decreased by $29.7 million, or 53.1%, to $26.1 million in
1994 compared to $55.8 million in 1993. The decrease resulted primarily from net
realized losses on investments of $19.9 million in 1994 as compared to $15.5
million in net realized gains on investments in 1993 and an increase of $9.8
million in underwriting, acquisition and insurance expenses, net of deferrals,
partially offset by higher net investment income, lower amortization of deferred
policy acquisition costs and lower crediting rates on all product lines.

Income tax expense decreased by $1.9 million from 1993 to 1994. The
decreased 1994 income taxes were the result of the lower pre-tax income
discussed above, partially offset by the equity add-on tax in 1994. The
effective income tax rate for 1994, adjusted for the equity add-on tax, was
identical to the 1993 rate of 38%. In 1994, American Mutual Life was subject to
the equity add-on tax which resulted in an additional $9.6 million of current
income tax expense. The 1993 equity add-on tax was zero.

As of January 1, 1993, the Company adopted SFAS 106, pursuant to which the
cost of certain post-retirement benefits must be recognized on an accrual basis
as employees perform services to earn such benefits. The Company's transition
obligation as of January 1, 1993 amounted to approximately $3.2 million, net of
income tax benefits, and was recorded as a cumulative effect adjustment to net
income.

Net income decreased by $24.5 million in 1994 to $6.7 million compared to
$31.2 million in 1993. The primary reasons for the decrease were investment
losses, merger-related costs and the equity add-on tax in 1994.

LIQUIDITY AND CAPITAL RESOURCES

THE COMPANY

The Company's cash flow from operations will consist of dividends from
subsidiaries, if declared and paid, interest income on loans and advances to its
subsidiaries (including a surplus note issued to

53
<PAGE>
the Company by AmerUs Life), investment income on assets held by the Company and
fees which the Company will charge AmerUs Group, AmerUs Life and certain other
of its affiliates for management services, offset by the expenses incurred for
debt service, salaries and other expenses.

The Company intends to rely primarily on dividends and interest income from
AmerUs Life to make any dividend payments to its shareholders. The payment of
dividends by AmerUs Life to the Company is regulated under Iowa law. Under Iowa
law, AmerUs Life may pay dividends only from the earned surplus arising from its
business and must receive the prior approval of the Iowa Commissioner to pay a
dividend, if such dividend would exceed certain statutory limitations. The
current statutory limitation is the greater of (i) 10% of AmerUs Life's capital
and surplus as of the preceding year end or (ii) the net gain from operations
for the previous calendar year. Iowa law gives the Iowa Commissioner broad
discretion to disapprove requests for dividends in excess of these limits.
During 1996, the maximum amount that would have been legally available for
distribution to the Company, absent the Distribution, without further regulatory
approval would have been approximately $40 million. However, as a result of the
Distribution, AmerUs Life will not be able to pay dividends to the Company in
the 12-month period following the Distribution without the prior consent of the
Iowa Commissioner. See "Supervision and Regulation." It is the Company's
intention to seek regulatory approval to pay dividends from AmerUs Life during
this 12-month period. However, at September 30, 1996, the Company, also has the
ability to borrow up to approximately $120 million from AmerUs Life without
prior regulatory approval. The Company would utilize this borrowing capacity, if
necessary, to meet its liquidity needs including the payment of dividends to its
shareholders. Any such borrowings from AmerUs Life would be repaid from future
available dividends from AmerUs Life. Management believes that the Company's
access to capital through borrowings from AmerUs Life, public equity and debt
markets and the Bank Credit Facility provide the Company with sufficient
liquidity and capital resources during the 12-month period following the
Distribution, irrespective of whether regulatory approval for the payment of
dividends by AmerUs Life is obtained.

In December, 1996, the Company established the Bank Credit Facility, which
is comprised of $100 million in term debt and $75 million under a revolving line
of credit. Immediately after establishing the Bank Credit Facility the Company
borrowed $100 million under the term debt component of the facility and $75
million under the revolving line of credit. The Company contributed $125 million
of the borrowings under the Bank Credit Facility to AmerUs Life and used $50
million to purchase a 9% surplus note, due December 1, 2006, from AmerUs Life.
Proceeds of the Offerings and the Preferred Offering will be used to repay
borrowings outstanding under the Bank Credit Facility. Following such repayment,
the Company would have significant borrowing capacity under its revolving line
of credit.

In connection with the Bank Credit Facility, the Company pledged
approximately 49.9% of the common stock of AmerUs Life owned by the Company and
a $50 million 9% surplus note payable to the Company by AmerUs Life. See
"Certain Transactions and Relationships--Security Arrangements For Bank Credit
Facility."

The Company may from time to time review potential acquisition
opportunities. The Company anticipates that funding for any such acquisition may
be provided from available cash resources or from debt or equity financing. As
of September 30, 1996 the Company had no material commitments for capital
expenditures. In the future the Company anticipates that its liquidity and
capital needs will be met through interest and dividends from AmerUs Life,
accessing the public equity and debt markets depending upon market conditions,
or alternatively from bank financing.

AMERUS LIFE

AmerUs Life's cash inflows consist primarily of premium income, deposits to
policyowner account balances, income from investments, sales, maturities and
calls of investments and repayments of investment principal. Cash outflows are
primarily related to withdrawals of policyowner account balances, investment
purchases, payment of policy acquisition costs, payment of policyowner benefits,
income taxes and current operating expenses. Life insurance companies generally
produce a positive cash flow from operations, as measured by the amount by which
cash inflows are adequate to meet

54
<PAGE>
benefit obligations to policyowners and normal operating expenses as they are
incurred. The remaining cash flow is generally used to increase the asset base
to provide funds to meet the need for future policy benefit payments and for
writing new business.

Management anticipates that funds to meet its short-term and long-term
capital expenditures, cash dividends to shareholders and operating cash needs
will come from existing capital and internally generated funds. Management
believes that the current level of cash and available-for-sale and short-term
securities, combined with expected net cash inflows from operations, maturities
of fixed maturity investments, principal payments on mortgage-backed securities
and its insurance products, will be adequate to meet AmerUs Life's anticipated
short-term cash obligations.

AmerUs Life generated cash flows from operating activities of $85.3 million,
$202.0 million, $172.4 million and $173.6 million, for the nine months ended
September 30, 1996 and for the years ended December 31, 1995, 1994 and 1993,
respectively. Excess operating cash flows were primarily used to increase AmerUs
Life's fixed maturity investment portfolio consistent with the long-term
investment objective of the Company to reduce the level of equity investments
and mortgages as a percentage of its investment portfolio.

In November 1994, the Company securitized and sold a pool of commercial
mortgage loans with an approximate aggregate principal balance of $158 million.
The Company converted the loans to cash and reinvested the proceeds in fixed
maturity investments which afforded the Company more liquidity and higher
overall credit quality, and reduced its exposure to mortgages in accordance with
its long-term investment objectives.

Matching the investment portfolio maturities to the cash flow demands of the
type of insurance being provided is an important consideration for each type of
life insurance product and annuity. AmerUs Life continuously monitors benefits
and surrenders to provide projections of future cash requirements. As part of
this monitoring process, AmerUs Life performs cash flow testing of its assets
and liabilities under various scenarios to evaluate the adequacy of reserves. In
developing its investment strategy, AmerUs Life establishes a level of cash and
securities which, combined with expected net cash inflows from operations,
maturities of fixed maturity investments and principal payments on mortgage-
backed securities, are believed adequate to meet anticipated short-term and
long-term benefit and expense payment obligations. There can be no assurance
that future experience regarding benefits and surrenders will be similar to
historic experience since withdrawal and surrender levels are influenced by such
factors as the interest rate environment and AmerUs Life's claims-paying and
financial strength ratings. See "Risk Factors--Future Policy Benefits Exposure"
and "--Interest Rate Fluctuations; Risk of Impact on Forced Liquidation of
Investment Portfolio."

AmerUs Life takes into account asset-liability management considerations.
Contract terms for AmerUs Life's INTEREST-SENSITIVE PRODUCTS include SURRENDER
AND WITHDRAWAL provisions which mitigate the risk of losses due to early
withdrawals. These provisions generally do one or more of the following: limit
the amount of penalty-free withdrawals, limit the circumstances under which
withdrawals are permitted, or assess a surrender charge or market value
adjustment relating to the underlying assets. The following table summarizes
statutory liabilities for interest-sensitive life products and annuities by
their contractual withdrawal provisions at December 31, 1995 (dollars in
millions):

<TABLE>
<S> <C> <C>
Not subject to discretionary withdrawal..................... $ 231
Subject to discretionary withdrawal with adjustments:
Specified surrender charges (A)........................... 867
Market value adjustments.................................. 413
---------
Subtotal................................................ 1,280
Subject to discretionary withdrawal without adjustments..... 716
---------
Total................................................... $ 2,227
---------
---------
</TABLE>

55
<PAGE>
- --------------
(A) Includes $255 million of statutory liabilities with a contractual surrender
charge of less than five percent of the account balance.

Through its membership in the Federal Home Loan Bank of Des Moines, AmerUs
Life is eligible to borrow on a line of credit available to provide it
additional liquidity. The line of credit, the amount of which is re-set
annually, is based on the amount of capital stock of the Federal Home Loan Bank
of Des Moines owned by AmerUs Life, which supported a borrowing capacity of $70
million as of December 31, 1995. Interest is payable at a current rate at the
time of any advance. As of September 30, 1996, AmerUs Life had a $25 million
open secured line of credit against which $24.7 million had been borrowed.

AmerUs Life may also obtain liquidity through sales of investments or
borrowings collateralized by its investment portfolio. AmerUs Life's investment
portfolio as of September 30, 1996 had a carrying value of $3.8 billion,
including Closed Block investments. As of September 30, 1996, fixed maturity
securities were $3.1 billion, or 81.9%, of invested assets, with public and
private fixed maturity securities constituting $2.8 billion, or 88.1%, and
$373.8 million, or 11.9%, of total fixed maturity securities, respectively. See
"Business--Investment Portfolio."

The statutory surplus of AmerUs Life will be impacted by the Distribution,
the Capital Contribution and the Company's simultaneous capital contribution to
AmerUs Life and purchase of a surplus note issued by AmerUs Life. At September
30, 1996, the pro forma statutory surplus of AmerUs Life was approximately $259
million after giving effect to the above transactions compared to the actual
statutory surplus of $289 at September 30, 1996. The Company believes that this
level of statutory capital is more than adequate as the Company's risk-based
capital is significantly in excess of required levels. See "Supervision and
Regulation--Regulation of AmerUs Life." In contrast, the pro forma GAAP
shareholders' equity of AmerUs Life at September 30, 1996 was approximately $433
million. The major difference between statutory and GAAP accounting relates to
the accounting for policy acquisition costs. For statutory purposes, these costs
are expensed when incurred, while for GAAP these costs are capitalized and
amortized in the future to better match revenues and expenses. At September 30,
1996, deferred policy acquisition costs were $320 million which accounted for
approximately $208 million of the after-tax difference between statutory and
GAAP equity.

In the future, in addition to cash flows from operations and AmerUs Life's
borrowing capacity, AmerUs Life would anticipate obtaining its required capital
from the Company as the Company will have access to the public markets.

EFFECTS OF INFLATION AND INTEREST RATE CHANGES

The Company does not believe that inflation has had a material effect on its
consolidated results of operations.

Interest rate changes may have temporary effects on the sale and
profitability of the annuities and life insurance products offered by the
Company. For example, if interest rates rise, competing investments (such as
annuities or life insurance products offered by the Company's competitors,
certificates of deposit, mutual funds, and similar instruments) may become more
attractive to potential purchasers of the Company's products until the Company
increases the interest rate credited to owners of its annuities and life
insurance products. In contrast, as interest rates fall, the Company attempts to
adjust its credited rates to compensate for the corresponding decline in
reinvestment rates. The Company monitors interest rates and sells annuities and
life insurance policies that permit flexible responses to interest rate changes
as part of the Company's management of interest spreads. However, the
profitability of the Company's products is not based solely upon interest rate
spreads but also on persistency, mortality and expenses.

The Company manages its investment portfolio in part to reduce its exposure
to interest rate fluctuations. In general, the market value of the Company's
fixed maturity portfolio increases or decreases in an inverse relationship with
fluctuations in interest rates, and the Company's net investment income
increases or decreases in a direct relationship with interest rate changes.

56
<PAGE>
Although all of its assets support all of its liabilities, the Company has
developed an asset/liability management approach with separate investment
portfolios for major product lines such as traditional life, universal life and
annuities. Investment policies and strategies have been established based on the
specific characteristics of each product line. The portfolio investment policies
and strategies establish asset duration, quality and other guidelines. The
Company utilizes analytical systems to establish an optimal asset mix for each
line of business. The Company seeks to manage the asset/liability mismatch and
the associated interest rate risk through active management of the investment
portfolio. Financial, actuarial, investment, product development and product
marketing professionals work together throughout the product development,
introduction and management phases to jointly develop and implement product
features, initial and renewal crediting strategies, and investment strategies
based on extensive modeling of a variety of factors under a number of interest
rate scenarios.

In force reserves and the assets allocated to each segment are modeled on a
regular basis to analyze projected cash flows under a variety of economic
scenarios. The result of this modeling is used to modify asset allocation,
investment portfolio duration and CONVEXITY and renewal crediting strategies.
The Company does invest in collateralized mortgage obligations as part of its
basic portfolio strategy, but uses other types of derivatives only as a hedge
against the effects of interest rate fluctuations or to synthetically alter the
investment characteristics of specific assets. For a further discussion and
disclosure of the nature and extent of the Company's use of derivatives, see
Note 13 to the Consolidated Financial Statements.

FEDERAL INCOME TAX MATTERS

For periods prior to the Offerings, the Company and its subsidiaries filed
as part of a consolidated United States federal income tax return with AMHC and
its subsidiaries. For periods after the Offerings, the Company and its
subsidiaries will not file as part of a consolidated United States federal
income tax return with AMHC. Further, the Company and its subsidiary AmerUs Life
will not be eligible to file a consolidated United States federal income tax
return for five years.

EMERGING ACCOUNTING MATTERS

SFAS NO. 125

In June 1996, the FASB issued Statement No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No.
125 provides consistent accounting standards for securitizations and other
transfers of financial assets, determines when financial assets (liabilities)
should be considered sold (settled) and removed from the balance sheet, and
determines when related revenues and expenses should be recognized. FASB
Statement No. 125 is effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after December 31, 1996. This
statement will be applicable to the Company, however, management believes that
it will have no material effect on the Company's consolidated financial
statements.

STATUTORY ACCOUNTING CODIFICATION

The NAIC currently is in the process of codifying statutory accounting
practices, the result of which is expected to constitute the only source of
"prescribed" statutory accounting practices. Accordingly, that project, which is
not expected to be completed before the end of 1997, will likely change certain
statutory accounting practices. The codification may result in changes to the
permitted or prescribed accounting practices that the Company's insurance
subsidiaries use to prepare their statutory-basis financial statements.

57
<PAGE>
BUSINESS

GENERAL

The Company is engaged in the business of marketing, underwriting and
distributing a broad range of individual life insurance and annuity products to
individuals and businesses in 45 states and the District of Columbia. The
Company's primary product offerings consist of whole life, universal life and
term life insurance policies and fixed annuities. In addition, on April 1, 1996
the Company acquired a 34% interest in a variable life insurance and annuity
company through a joint venture arrangement (the "Ameritas Joint Venture") with
Ameritas Life Insurance Corp. ("Ameritas"). The Company's distribution systems
now market fixed annuities issued by AVLIC and have begun to sell AVLIC's
variable life insurance and variable annuity products. Based on published
comparisions and rankings of life insurance and annuity products, the Company
believes that its products have a history of being competitive within the
industry.

The Company's subsidiary, AmerUs Life, was originally incorporated in 1896
as a mutual insurance company under the name Central Life Assurance Society of
the United States. Its name was changed to American Mutual Life Insurance
Company in 1994 following the merger of Old AML into Central Life. On June 30,
1996, American Mutual Life was converted into a stock life insurance company
pursuant to the Plan and its name was changed to AmerUs Life. As of September
30, 1996, AmerUs Life had approximately 418,000 life insurance policies and
annuity contracts outstanding and individual life insurance in force, net of
reinsurance, of approximately $26.1 billion. As of September 30, 1996, the
Company had total assets of $4.3 billion and total shareholders' equity of $433
million (prior to the Offerings, after giving effect to the Capital
Contribution).

The Company's target markets are individuals in the middle and upper income
brackets and small businesses. Its geographic focus is national in scope (except
for Connecticut, Maine, New Hampshire, New York and Vermont, in which the
Company is not licensed to do business), and it primarily serves suburban and
rural areas. The Company distributes its products primarily through a
combination of career general agency and personal producing general agency
("PPGA") distribution systems, as well as a network of independent brokers. The
career general agency system consists of a network of 33 career general
agencies, with approximately 550 career agents. The PPGA system is comprised of
approximately 425 PPGAs, with approximately 950 agents. Variable life insurance
products and the fixed and variable annuities offered by the Ameritas Joint
Venture are marketed through the Company's distribution systems and the
distribution systems of Ameritas and AVLIC, which consist of approximately 250
agents and 450 independent broker-dealers (with approximately 7,500 registered
representatives), respectively.

The pricing of the Company's products is generally determined by reference
to actuarial calculations and statistical assumptions principally relating to
mortality, persistency, investment yield assumptions, estimates of expenses and
management's judgment as to market and competitive conditions. The premiums and
deposits received, together with assumed investment earnings, are designed to
cover policy benefits, expenses and policyowner dividends plus return a profit
to the Company. These profits arise from the margin between mortality charges
and insurance benefits paid, the margin between actual investment results and
the investment income credited to policies (either directly or through dividends
to policyowners) and the margin between expense charges and actual expenses. The
level of profits also depends on persistency because business acquisition costs,
particularly agent commissions, are recovered over the life of the policy.
Dividends and interest credited on policies (including policies included in the
Closed Block) may vary from time to time reflecting changes in investment,
mortality, persistency, expenses and other factors. Interest rate fluctuations
have an effect on investment income and may have an impact on policyowner
behavior. Increased lapses in policies may be experienced if the Company does
not maintain interest rates and dividend scales that are competitive with other
products in the marketplace.

58
<PAGE>
AmerUs Life's claims-paying ability is rated "AA-" (Very high) by Duff &
Phelps and "A" (Good) by Standard & Poor's. AmerUs Life is rated "A" (Excellent)
by A.M. Best and "A2" (Good) by Moody's. See "Risk Factors--Importance of
Ratings."

BUSINESS STRATEGY

The Company's business strategy to achieve earnings growth and increase
shareholder value is focused on managing certain operating fundamentals where
the Company's results have historically compared favorably to the industry. The
Company intends to utilize these operating strengths to differentiate its
products by maintaining its position and reputation as a low-cost producer that
provides high-value products to its life insurance and annuity customers, while
also providing superior service to both agents and customers. The Company
believes it is well positioned to compete effectively based upon a number of
strengths including its strong operating performance, customer-driven product
offerings, productive and diversified distribution systems, sophisticated
asset/liability management capabilities and a customer service orientation. In
addition, the Company intends to continue to seek new business opportunities
through mergers, acquisitions and strategic alliances.

FACTORS AFFECTING OPERATING PERFORMANCE

The Company believes that its operating performance is significantly
impacted by four basic elements: (i) mortality, (ii) persistency, (iii)
operating expenses, and (iv) investment yield. The Company believes that its
results for each of these four basic elements for the last several years have
been strong.

The Company believes its conservative risk selection practices, its
disciplined field underwriting and its focus on maintaining a suburban and rural
customer base have resulted in the Company realizing favorable mortality
experience for the last several years. See "--Insurance Underwriting." The
Company fully underwrites each application and has no group underwriting or
guaranteed issue business.

The Company has consistently achieved favorable persistency on its life
insurance products (i.e., lower lapse rates). See "--Products." This has
resulted in a high level of renewal premiums and, as a result, a larger revenue
base over which to amortize acquisition costs. This high persistency has been
achieved by providing incentives to agents by, among other things, grading
production bonuses by actual persistency, paying persistency bonuses, awarding
recognition for both career agency and career agent persistency achievements,
and monitoring agency persistency on a monthly basis. Also, the Company believes
that its favorable career agent retention rate has contributed to the high
persistency rates it has achieved.

The Company has aggressively managed its cost structure, reducing general
insurance expenses by $7.8 million, or 16.6%, in 1995 compared to 1994
(excluding certain non-recurring expenses). This reduction reflects, among other
things, efficiencies realized from reduced personnel and data processing costs
as a result of the merger of Old AML into Central Life at the beginning of 1995.
Additional cost reductions are expected to be realized as product lines of the
two companies are further integrated and the technology applications of Central
Life are applied to all of the Old AML business. Other factors contributing to
the Company's lower cost structure include: (i) a flat organizational structure
which allows the Company to be responsive to changing business conditions; (ii)
the location of the Company in a geographic area which provides lower cost
operations than found in many other areas of the country; (iii) a well-trained,
experienced workforce; and (iv) efficient use of technology.

The Company's distribution systems are compensated almost entirely on a
variable-cost basis, which provides flexibility in managing distribution costs
and has allowed the Company to maintain acquisition costs which management
believes are satisfactory. The Company also focuses on reducing acquisition
costs. For example, the Company reduced life insurance acquisition costs in its
career general agency system by approximately 9% from 1992 through 1995.

The Company has maintained competitive portfolio yields, while at the same
time substantially reducing exposure to higher risk assets such as mortgages and
real estate over the last several years. As of September 30, 1996, mortgages
were 6.8% of invested assets and real estate acquired in foreclosure was 0.5% At
the same time, overall credit quality of invested assets has been substantially
improved.

59
<PAGE>
These results have been achieved in part by a more systematic and sophisticated
investment strategy, recruitment and development of experienced investment
professionals, enhanced systems technology and reduced investment expenses.
Attractive risk-adjusted yields on its investments have enabled the Company to
offer competitive pricing on its products and to attract and retain business,
while maintaining the Company's profitability.

COMPETITIVE PRODUCT OFFERINGS WHICH MEET DEMANDS OF CUSTOMERS

The Company's business strategy emphasizes the development of products which
meet the demands of its customers. Based on published comparisons and rankings
of life insurance and annuity products, the Company believes that its products
have a long history of being very competitive within the industry. The Company's
participating whole life insurance products have consistently ranked among the
top ten based on 10 and 20 year interest adjusted surrender cost indices, and
its universal life insurance products have consistently ranked among the top
quartile based on 5 and 10 year cash values. The Company's fixed annuity
products are also highly competitive in the industry, having ranked among the
top ten in surveys measuring account and cash values of single premium deferred
annuity products. See "--Products."

The Company continuously monitors the marketplace to identify and develop
new products and improve existing products. For example, in 1989, the Company
introduced a life insurance product which combined permanent whole life
insurance, increasing paid-up additions and decreasing term life insurance.
These flexible life insurance products can be tailored to meet the life
insurance needs of the customer at a premium level which is attractive to the
customer. These products were substantially enhanced with additional features in
1994, and generated over 20% of total new annualized life premiums in 1995.

Recent product development activity has been done on an integrated basis,
using a team approach involving the Company's distribution, investment and
asset/liability management units. In 1993, the Company used this approach, which
takes into account acceptable risk levels, to develop a new series of deferred
annuities with more attractive features and pricing. These new products were
substantially responsible for an increase in annuity sales from $57.2 million in
1992 to $191.5 million in 1995. In 1996, the Company's distribution systems
began offering, through the Ameritas Joint Venture, variable life insurance and
variable annuities issued by AVLIC. These products enable the policyowner to
share in the investment experience of a SEPARATE ACCOUNT. These additional
products expand the product portfolio available to producers in the career
general agency and PPGA systems and provide the Company with immediate access to
one of the fastest-growing business segments within the life insurance and
annuity business.

The Company also continuously reviews its product lines to eliminate low
volume products and augment its existing products to increase sales of such
products. In addition, the Company regularly reviews the pricing of its
products. Where the Company has decided not to manufacture a line of products it
has made arrangements in selected cases to sell products of other companies.
This practice provides producers with a broader line of competitive products
while enabling the Company to focus on its core lines of business.

PRODUCTIVE AND DIVERSIFIED DISTRIBUTION SYSTEMS

One of the Company's strategies for growth is to make its distribution
systems more productive and diversified. Prior to the merger of Old AML into
Central Life, the Company's distribution system consisted primarily of its
career general agency system. With the merger, the Company added the PPGA
distribution system of Old AML. The Company successfully rationalized the
overlapping career general agency distribution system and the PPGA distribution
system, leaving existing agencies and agents in place in their existing systems
and dividing the country along geographic lines for new recruiting of career
general agencies and PPGAs. The Ameritas Joint Venture provides access to a
network of approximately 450 independent broker/dealers (with approximately
7,500 registered representatives) and the Ameritas agency distribution systems.
Agents in the Company's distribution systems may sell competitors' products.
However, agents in both the career general agency and the PPGA system are given
financial incentives based on the volume of their sales of the Company's
products.

60
<PAGE>
The Company has recently added two additional regional vice presidents to
strengthen its distribution systems management and increase recruiting of new
general agents and agents. The Company believes it will be able to recruit both
inexperienced and experienced producers by providing a broad range of
competitive products, including the newly added variable life insurance and
variable annuity products, and by offering strong marketing and administrative
support services and competitive compensation. The Company's variable cost-based
compensation systems, which include bonus opportunities based on production and
persistency, are designed to attract and reward producers who sell increasing
amounts of persisting business.

SOPHISTICATED ASSET/LIABILITY MANAGEMENT

The Company has developed a sophisticated approach to asset/liability
management. The investment unit and the asset/liability management unit work
together closely to identify investments which provide maximum returns
consistent with acceptable risk levels and liability durations. The asset
portfolio is segmented by liability type, with tailored investment strategies
for specific product lines. The Company has the ability to continuously model
the actual results of its investment portfolio against expected results in order
to identify changing market conditions early and, where appropriate, exit
existing investments and shift to new investments which better meet the
Company's investment objectives.

CUSTOMER SERVICE ORIENTATION

As part of a strategy to provide better service to agents and customers, the
Company continues to invest in advanced customer service systems and technology
to support these functions. In addition to improving the level of service, these
investments have also reduced administration costs. The Company developed and
installed an imaging system in its new business processing unit in 1991 and is
currently developing and installing a second generation imaging system in both
the new business and in force business units. During the past five years,
numerous enhancements have been added to the original imaging system to
facilitate more efficient and accurate processing of new business. The new
imaging system will incorporate all of these and additional enhancements
developed from the experience gained in using the original system. The immediate
on-line availability to any service representative of policy-related
correspondence and documents enables the Company to provide fast, comprehensive
service to inquiries by policyowners and agents. Along with easy access to data,
work flow and other management tools provided by the system have resulted in
improved productivity.

MERGERS, ACQUISITIONS AND STRATEGIC ALLIANCES

Consistent with increased merger and acquisition activity in the life
insurance industry, management believes that mergers, acquisitions and strategic
alliances will be necessary to more fully utilize the Company's distribution and
administrative capacity and to obtain improved economies of scale and a lower
cost structure.

The mutual holding company structure provides the Company with access to the
capital markets, thereby enhancing the Company's ability to pursue acquisitions.
Based on the Company's success in identifying and effectively implementing
mergers, acquisitions and strategic alliances, management intends to actively
and selectively participate in such transactions in the future as a means to
further enhance shareholder value.

The Company has historically pursued mergers, acquisitions and strategic
alliances with the goals of improving its position in existing market segments
or entering desirable new market segments. Notable recent activities include the
combination by merger of Old AML into Central Life in 1994, and the Ameritas
Joint Venture which was completed in April, 1996. As part of the merger of Old
AML into Central Life in December, 1994, management was able to: (i)
substantially integrate the administrative operations of the two companies
within a four-month period in late 1994 and achieve a $7.8 million, or 16.6%,
expense reduction (excluding certain non-recurring expenses) in 1995 with
minimal disruption to policyowners and agents and without a reduction in the
quality or quantity of services offered; (ii) successfully rationalize the
different distribution systems existing after the merger with no loss of
production; and

61
<PAGE>
(iii) consolidate the product lines of Old AML and Central Life into one
integrated line of products by selecting the best products from each portfolio
and making them available through both the career general agency and PPGA
systems.

The Ameritas Joint Venture is an important part of the Company's overall
strategic plan to continue to identify profitable insurance products and to
achieve growth. The strategic alliance with Ameritas benefited the Company by
providing it with immediate access to a line of existing variable life insurance
and variable annuity products and a share in an already-established business,
thereby avoiding the time and cost associated with developing a new product
line.

AMERITAS JOINT VENTURE

The Company's partner in the Ameritas Joint Venture is Ameritas Life
Insurance Corp., a Nebraska mutual life insurance company which has been in
existence for more than 100 years. Ameritas is licensed to conduct business in
all states except New York and the District of Columbia, and had approximately
250 agents as of December 31, 1995. On a statutory basis, Ameritas had $1.8
billion in assets, $7.8 billion of insurance in force and $248.0 million in
policyowners' surplus as of September 30, 1996. Ameritas currently is rated "AA"
(Excellent) by Standard & Poor's and "A+" (Superior) by A.M. Best.

The Company participates in the Ameritas Joint Venture through AmerUs Life's
34% ownership interest in AMAL Corporation, a Nebraska corporation ("AMAL").
AMAL's operations are conducted through AVLIC and Ameritas Investment Corp., a
registered broker-dealer ("AIC"), its two wholly-owned subsidiaries, which have
been in business since 1983. AVLIC is licensed to conduct business in 46 states
and the District of Columbia and currently markets its products and those of AIC
through approximately 450 independent broker-dealers (with approximately 7,500
registered representatives) and the Ameritas distribution system. AIC is a
registered broker/dealer which is licensed to do business in 49 states. As of
September 30, 1996, AMAL had total consolidated assets of $1,025.6 million and
total consolidated shareholders' equity of $54.2 million on a GAAP basis. AVLIC
had $2.9 billion of insurance in force and $40.2 million in surplus as of
September 30, 1996, on a statutory basis.

AmerUs Life contributed $20.4 million in cash and substantially all of its
new fixed annuity production, as well as other consideration, for its interest
in AMAL. Under the terms of the Joint Venture Agreement, AmerUs Life has an
option to purchase an additional 5% to 15% of AMAL (the "Option") if certain
premium growth targets are met. The Option is exercisable in three portions,
each of which would permit AmerUs Life to acquire the number of newly-authorized
shares that would increase its equity ownership by 5%. Each portion of the
Option is exercisable at specified exercise prices set forth in the Joint
Venture Agreement.

Management of the Ameritas Joint Venture is shared between AmerUs Life and
Ameritas. Each has equal membership on the board of directors of AMAL, AVLIC and
AIC.

The Joint Venture Agreement provides that certain conditions may trigger
buy-sell provisions of the Joint Venture Agreement in the event of certain
disputes between the parties. For example, if at any time during the
continuation of the Ameritas Joint Venture a dispute arises between the parties,
the Joint Venture Agreement sets forth a mechanism for the resolution of the
dispute by informal means, including mediation. In certain specified
circumstances, in the event a major dispute remains unresolved, certain buy-sell
provisions of the Joint Venture Agreement can be triggered. Further, each party
may make and/ or enter into acquisitions, divestitures, mergers, consolidations,
reorganizations or other transactions affecting its corporate structure.
However, if any such transaction involves or constitutes a "change of control"
with respect to Ameritas or AmerUs Life, then the other party shall have the
right to trigger the buy-sell provisions of the Joint Venture Agreement. A
"change of control" is deemed to have occurred if a majority of the board of
directors of an entity or an ultimate parent shall consist of individuals who
were not directors of such entity prior to such transaction or who were not
nominated for board membership by such directors.

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<PAGE>
The Company and Ameritas each have guaranteed the obligations of AVLIC. The
guarantee of each party is joint and several, and will remain in effect until
certain financial conditions are met.

PRODUCTS

The Company offers a diverse line of individual life insurance products
which are tailored to its markets and distributed primarily through its career
general agency and PPGA distribution systems. In addition, the Company is a
party to the Ameritas Joint Venture, which offers fixed and variable annuity and
variable life insurance products. As a result of superior operating
fundamentals, including mortality, persistency, operating expenses and
investment yield, the Company has had a long history of providing high-value,
low-cost products to its customers, while operating profitably. Moreover, the
Company continuously reviews and updates its product portfolio in order to
continue offering a broad range of products at competitive performance levels.

INDIVIDUAL LIFE INSURANCE AND FIXED ANNUITY PRODUCTS

The Company offers a broad line of individual traditional life and universal
life insurance products. Traditional life insurance has accounted for
approximately 60% to 75% of the Company's total individual life insurance
premiums for the last five years and universal life insurance has accounted for
approximately 25% to 40% of its total individual life insurance premiums for the
same time period. In addition, the Company has historically offered a broad line
of fixed annuity products.

The following table sets forth information regarding the Company's sales
activity by product:

SALES ACTIVITY BY PRODUCT

- ------------------
(A) Direct FIRST YEAR ANNUALIZED PREMIUMS.

(B) Direct first year and single collected premiums.

(C) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

TRADITIONAL LIFE INSURANCE PRODUCTS. The Company's traditional life
insurance products have a long history of being highly competitive within the
industry. The Company is the only participant in the industry to have had its
participating whole life insurance products ranked among the top ten in annual
surveys prepared by A.M. Best for each of the years 1976 through 1995. (Source:
Best's Review, Rankings of 10- and 20-year Interest Adjusted Surrender Cost
Index, 1976-1995). Management believes that such surveys provide a gauge for
measuring product performance based upon operating fundamentals, including
mortality, persistency, operating expenses and investment yield, and that the
consistent high rankings of the Company's traditional life insurance products in
such surveys reflect the Company's status within the industry as a provider of
high-value products to its customers.

The Company's traditional life insurance products include participating
whole life and term life insurance products. PARTICIPATING WHOLE LIFE INSURANCE
is designed to provide benefits for the life of the insured. This product
generally provides for level premiums and a level death benefit and requires
payments in excess of the mortality cost in earlier years to offset increasing
mortality costs in later years.

63
<PAGE>
The Company also offers a SECOND TO DIE WHOLE LIFE INSURANCE product which
insures two lives and provides benefits upon the death of the second insured.
The Company targets its second to die products primarily to potential customers
seeking to achieve estate planning goals.

The Company also offers a portfolio of term life insurance policies that
provide life insurance protection for a specific time period (which generally
can be renewed at an increased premium). Such policies are mortality-based and
offer no cash accumulation feature.

Since 1989, the Company has offered a flexible life insurance product, which
is a combination of permanent participating whole life insurance, increasing
paid-up additions and decreasing term insurance coverage. In 1994, the Company
began offering an enhanced version of this product. These products give
policyowners additional flexibility in designing an appropriate combination of
permanent and term life insurance coverages to meet their specific needs at
varying premium levels.

For the year ended December 31, 1995, sales of participating whole life and
term life insurance products represented 66% and 9% of first year ANNUALIZED
PREMIUMS, respectively, for all individual life insurance products.

UNIVERSAL LIFE INSURANCE PRODUCTS. The Company offers universal life
insurance products, pursuant to which an insurance account is maintained for
each insurance policy. Premiums, net of specified expenses, are credited to the
account, as is interest, generally at a rate determined from time to time by the
Company. Specific charges are made against the account for the cost of insurance
protection and for the Company's expenses. The universal life form allows for
flexibility as to the amount and timing of premium payments and for the level of
death benefits provided.

The Company has maintained consistently competitive universal life products.
Based on annual surveys by A.M. Best measuring account and cash values of
universal life products, the Company's products have consistently ranked in the
top half of all companies included in the survey with respect to account values
and has ranked in the top quarter of all companies included in the survey with
respect to cash values. (Source: Best's Review, Rankings of 5-year Account and
Cash Values, 1991-1995; Rankings of 10-year Account and Cash Values, 1993-1995,
with 1993 the initial year of the survey of 10-year values).

The Company's universal life insurance products provide benefits for the
life of the insured. Within limits established by the Company and state
regulations, policyowners may vary the premiums and the amount of the policy's
death benefit as long as there are sufficient policy funds available to cover
all policy charges for the coming period. Interest is credited to the policy at
a rate determined from time to time by the Company. The weighted average
CREDITING RATE for the Company's universal life insurance liabilities was 6.67%
for the year 1995 and 6.31% for the nine months ended September 30, 1996.

For the year ended December 31, 1995, sales of universal life insurance
products represented 25% of first year annualized premiums for all individual
life insurance products.

FIXED ANNUITY PRODUCTS. Historically, the Company has offered a broad
portfolio of fixed annuity products. Annuities provide for the payment of
periodic benefits for a specified time period. Benefits may commence immediately
or may be deferred to a future date. Fixed annuities generally are backed by a
general investment account and credited with a rate of return that is
periodically reset.

The Company's fixed annuity products are also highly competitive within the
industry. The Company's single premium deferred annuity products were ranked
among the industry leaders in annual surveys by A.M. Best for 1991 through 1995
measuring account and cash values of single premium deferred annuity products of
participants in the industry. (Source: Best's Review, Rankings of 5- and 10-year
Account Values and 5- and 10-year Cash Values, 1991-1995).

From September 1993 until the commencement of the Ameritas Joint Venture,
the majority of the Company's fixed annuity sales consisted of its Advantage
Series of deferred annuities. The Advantage Series consists of three products
comprised of two book value annuities, which are fixed annuities, and one market
value adjusted annuity, which is a fixed annuity with a market adjustment
feature. Both book

64
<PAGE>
value annuities have a first year interest rate guarantee. One of the book value
annuities also provides a bonus interest rate for the first year. The market
value adjusted annuity has a first year interest rate guarantee and also
provides a bonus interest rate for the first year. In 1995, the Advantage Series
accounted for over $163 million in premiums, which represented approximately 85%
of the Company's total fixed annuity production for the year.

AMERITAS JOINT VENTURE PRODUCTS

On April 1, 1996, the Company commenced the Ameritas Joint Venture with
Ameritas, through which the Company's distribution systems now offer AVLIC's
fixed annuity products and have begun to offer AVLIC's variable life insurance
and annuity products. The fixed annuities currently offered by the Ameritas
Joint Venture are substantially similar to the Company's Advantage Series
products. The Company's investment in the Ameritas Joint Venture affords the
Company access to a line of existing variable life insurance and variable
annuity products while providing a lower-cost entry into an established
business, thereby eliminating significant start-up costs and allowing for
immediate potential earnings. See "--Ameritas Joint Venture."

The Ameritas Joint Venture offers, through AVLIC, flexible premium and
single premium variable universal life insurance products and variable
annuities. Variable products provide for allocation of funds to a GENERAL
ACCOUNT or to one or more separate accounts under which the owner bears the
investment risk. Through AVLIC's fund managers, which include Fidelity
Management and Research Company, Fred Alger Management, Inc. and Massachusetts
Financial Services Company, owners of variable annuities and life insurance
policies are able to choose from a range of investment funds offered by each
manager. In the future, AVLIC may also sell low load life insurance products,
which have a lower commission rate, and may acquire other companies or business
lines in appropriate circumstances.

Under the terms of the Joint Venture Agreement governing the Ameritas Joint
Venture, the Company and Ameritas will write a substantial portion of their new
single and flexible premium deferred fixed annuities and variable annuities and
variable life insurance through the Ameritas Joint Venture (provided that the
Company has retained the right to continue to issue business to its fixed
annuity customers in existence prior to the effective date of the Joint Venture
Agreement). In connection with executing the Joint Venture Agreement, the
parties also entered into a Management and Administrative Service Agreement
which was effective as of April 1, 1996 (the "Service Agreement"), pursuant to
which the parties agreed that all product development, administration and
investment management services relating to the fixed annuity products offered by
the Ameritas Joint Venture will be performed by the Company, and all such
functions relating to the variable life insurance and variable annuity products
offered by the Ameritas Joint Venture will be performed by Ameritas. Ameritas
also provides certain other administrative services to the Ameritas Joint
Venture under the Service Agreement.

The variable life insurance products and the fixed and variable annuities
offered by the Ameritas Joint Venture are distributed through the Company's
career general agency and PPGA distribution systems, as well as through the
distribution systems of Ameritas and AVLIC. See "--Ameritas Joint Venture" and
"Certain Transactions and Relationships."

In response to customer demand, the Company has developed an equity index
annuity which it anticipates will be offered through the Ameritas Joint Venture
beginning in the fourth quarter of 1996. An equity index annuity provides a
baseline fixed rate of return in addition to the possibility of sharing in a
portion of the appreciation realized from an investment in an indexed investment
fund, such as the S&P 500 stock index.

SPONSORED PRODUCTS

The Company also derives fee income from the sale of various sponsored
products through its career general agency and PPGA distribution systems under
co-marketing arrangements with leading insurance providers for such products.
Such sponsored products include individual long-term disability

65
<PAGE>
and group life, health and dental insurance products. In addition, the Company's
career general agency and PPGA distribution systems sell certificates of deposit
issued by AmerUs Bank, from which the Company obtains additional fee income.

The following table sets forth the Company's collected premiums for the
periods indicated:

COLLECTED PREMIUMS BY PRODUCT

<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED SEPTEMBER 30,
FOR THE YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Direct individual life premiums collected:
Traditional life:
First year & single...................... $ 51,890 $ 53,668 $ 70,786 $ 71,830 $ 71,267 $ 61,720 $ 58,512
Renewal.................................. 120,625 114,751 153,299 143,048 130,223 119,108 108,698
--------- --------- --------- --------- --------- --------- ---------
Total................................ $ 172,515 $ 168,419 $ 224,085 $ 214,878 $ 201,490 $ 180,828 $ 167,210
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Universal Life:
First year & single...................... $ 10,972 $ 10,773 $ 15,451 $ 10,224 $ 10,939 $ 17,235 $ 26,369
Renewal.................................. 57,199 58,687 77,151 80,338 83,372 84,405 80,114
--------- --------- --------- --------- --------- --------- ---------
Total................................ $ 68,171 $ 69,460 $ 92,602 $ 90,562 $ 94,311 $ 101,640 $ 106,483
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total direct life...................... $ 240,686 $ 237,879 $ 316,687 $ 305,440 $ 295,801 $ 282,468 $ 273,693
Reinsurance assumed........................ 1,098 1,030 1,337 1,114 1,154 988 1,178
Reinsurance ceded.......................... (10,269) (10,453) (13,795) (13,477) (15,020) (14,903) (14,776)
--------- --------- --------- --------- --------- --------- ---------
Total individual life, net of
reinsurance............................... $ 231,515 $ 228,456 $ 304,229 $ 293,077 $ 281,935 $ 268,553 $ 260,095
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Direct annuity premiums collected:
Individual (A)........................... $ 70,191 $ 142,359 $ 197,959 $ 189,097 $ 91,745 $ 66,750 $ 110,080
Group.................................... 50 (724) (665) 2,580 1,726 766 867
--------- --------- --------- --------- --------- --------- ---------
Total annuities........................ 70,241 141,635 197,294 191,677 93,471 67,516 110,947
Reinsurance ceded.......................... (424) (774) (853) (1,123) (1,147) (1,393) (1,467)
--------- --------- --------- --------- --------- --------- ---------
Total annuities, net of reinsurance........ $ 69,817 $ 140,861 $ 196,441 $ 190,554 $ 92,324 $ 66,123 $ 109,480
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total group life, net of reinsurance (B)... $ 2,171 $ 1,984 $ 6,634 $ 10,436 $ 9,669 $ 8,367 $ 8,287
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total accident & health, net of reinsurance
(C)....................................... $ 151 $ 184 $ 264 $ 387 $ 459 $ 607 $ 4,410
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total collected premiums, net of
reinsurance............................... $ 303,654 $ 371,485 $ 507,568 $ 494,454 $ 384,387 $ 343,650 $ 382,272
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>

- ------------------
(A) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

(B) The Company sold substantially all of its group life business as of July 1,
1996 and is no longer actively marketing this line of business.

(C) The Company sold substantially all of its accident and health business in
1991 and is no longer actively marketing this line of business.

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<PAGE>
The following table sets forth information regarding life insurance and
annuities in force for each date presented:

LIFE INSURANCE AND ANNUITIES IN FORCE

<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
SEPTEMBER 30, ---------------------------------------------------------------
1996 1995 1994 1993 1992 1991
-------------- ----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Individual life insurance:
Traditional
Number of policies............ 248,627 253,656 259,229 262,243 264,683 274,090
GAAP life reserves............ $ 1,184,259 $ 1,120,799 $ 1,033,909 $ 945,763 $ 846,661 $ 779,594
Face amounts.................. $ 16,557,000 $16,600,000 $15,871,000 $15,201,000 $14,094,000 $13,813,000
Universal life
Number of policies............ 119,615 121,619 124,225 127,658 131,196 129,429
GAAP life reserves............ $ 812,173 $ 784,363 $ 740,638 $ 700,556 $ 653,038 $ 596,721
Face amounts.................. $ 12,073,000 $12,211,000 $12,631,000 $12,744,000 $13,244,000 $12,607,000
Total individual life
Number of policies............ 368,242 375,275 383,454 389,901 395,879 403,519
GAAP life reserves............ $ 1,996,432 $ 1,905,162 $ 1,774,547 $ 1,646,319 $ 1,499,699 $ 1,376,315
Face amounts.................. $ 28,630,000 $28,811,000 $28,502,000 $27,945,000 $27,338,000 $26,420,000
Annuities (A):
Number of policies............ 49,128 56,054 52,616 50,322 44,177 42,372
GAAP reserves................. $ 1,227,023 $ 1,327,176 $ 1,337,395 $ 1,260,775 $ 1,157,313 $ 1,105,157
Group life insurance (B):
Number of lives............... 33,857 32,724 29,592 27,013 28,238 31,481
Face amounts.................. $ 894,000 $ 829,000 $ 741,000 $ 834,000 $ 846,000 $ 1,467,000
</TABLE>

- ------------------
(A) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

(B) The Company sold substantially all of its group life business as of July 1,
1996 and is no longer actively marketing this line of business.

The reductions in life insurance and annuities in force are attributable to
policy surrenders, policy terminations or expirations, and consolidations of one
or more outstanding policies into new policies. Many of the policies which have
terminated were of a lower face amount than the average for all policies in
force.

The Company has experienced higher persistency for its life insurance
products (i.e., lower lapse rates) than industry averages. Persistency is
measured in terms of renewal premiums. While the Company has experienced a
decrease in the number of policies outstanding, the size of policies outstanding
has increased and the amount of premiums collected has increased. Such increased
premium levels are in large part due to the Company's favorable persistency. The
ability to achieve higher persistency also results in lower unit costs. The
following table illustrates lapse rates on individual life insurance products
for the Company and for stock and mutual life insurance companies for the years
ended December 31, 1991 through 1995:

INDIVIDUAL LIFE INSURANCE LAPSE RATIOS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------
1995 1994 1993 1992
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Mutual life companies (A)............................................. 7.4% 7.4% 9.8% 8.5%
Stock life companies (A).............................................. 9.3 8.8 9.9 9.9
Total life insurance industry (A)................................... 8.6 8.3 9.8 9.4
Company............................................................... 7.2 7.1 6.9 6.9

1991
-----------
<S> <C>
Mutual life companies (A)............................................. 8.8%
Stock life companies (A).............................................. 10.7
Total life insurance industry (A)................................... 10.1
Company............................................................... 6.9
</TABLE>

- --------------
(A) Source: A.M. Best individual life lapse ratios (median values) as measured
by face amount of life insurance.

67
<PAGE>
DISTRIBUTION

The Company markets its insurance products on a national basis primarily
through a career general agency system, a PPGA system, independent insurance
brokers and certain of the Company's affiliates. The Company employs ten
Regional Vice Presidents who are responsible for supervising the career general
agencies and/or PPGA agents within their assigned geographic regions.

The following table illustrates sales activity of the Company's three
principal distribution sources for the nine months ended September 30, 1996 and
the year ended December 31, 1995:

SALES ACTIVITY BY DISTRIBUTION SOURCE

<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1996 DECEMBER 31, 1995
--------------------------- -------------------
(IN THOUSANDS)
<S> <C> <C>
Career General Agency System:
Traditional life insurance (A)................................ $ 10,454 $ 14,754
Universal life insurance...................................... 4,469 6,742
Individual annuity (B)........................................ 41,505 152,190
-------- ----------
Subtotal.................................................... $ 56,428 $ 173,686
-------- ----------
-------- ----------
PPGA System:
Traditional life insurance (A)................................ 5,242 8,761
Universal life insurance...................................... 1,343 1,121
Individual annuity (B)........................................ 15,017 26,615
-------- ----------
Subtotal.................................................... $ 21,602 $ 36,497
-------- ----------
-------- ----------
Sales through Affiliates:
Traditional life insurance (A)................................ 28 59
Universal life insurance...................................... 64 184
Individual annuity (B)........................................ 6,576 12,669
-------- ----------
Subtotal.................................................... $ 6,668 $ 12,912
-------- ----------
-------- ----------
Total Sales:
Traditional life insurance (A)................................ 15,724 23,574
Universal life insurance...................................... 5,876 8,047
Individual annuity (B)........................................ 63,098 191,474
-------- ----------
Total (A)(B)................................................ $ 84,698 $ 223,095
-------- ----------
-------- ----------
</TABLE>

- --------------
(A) Amounts for traditional and universal life insurance reflect direct first
year annualized premiums. Amounts for annuities reflect direct first year
and single collected premiums.

(B) Effective May 1996, substantially all new sales of individual deferred
annuities are made through the Ameritas Joint Venture. See "--Ameritas Joint
Venture."

CAREER GENERAL AGENCY SYSTEM AND BROKERS

Under the career general agency system, the Company enters into a
contractual arrangement with the career general agent for the sale of insurance
products by the career agents and brokers assigned to the career general agent's
agency. The career general agents are primarily compensated by receiving a
percentage of the first year commissions paid to career agents and brokers in
the career general agent's agency and by renewal commissions on premiums
subsequently collected on that business.

The career general agents are independent contractors and are generally
responsible for the expenses of operating their agencies, including office and
overhead expenses and the recruiting, selection, contracting, training and
development of career agents and brokers in their agency. Currently, the Company
has 33 career general agencies in 20 states, through which approximately 550
career

68
<PAGE>
agents sell the Company's products. While career agents in the career general
agency system are non-exclusive, the Company believes most agents use the
Company's products for a majority of their new business of the type of products
offered by the Company. No single career general agency accounts for more than
10% of the total first year commissions paid by the Company.

Career agents are also independent contractors and are primarily compensated
by commissions on first year and renewal premiums collected on business written
by them. In addition, career agents can earn bonus commissions, graded by
production and persistency on their business.

The Company believes the quality of the agents in its career general agency
system is competitive with that of other life insurance companies. The Company's
retention of its career general agency sales force has historically been above
the average retention rates of other companies in the industry. The Company
attributes its success in attracting and retaining qualified agents to the high
quality of its products, its marketing support and administrative services and
its competitive compensation structure. The Company also provides career general
agents with various screening tools which enable the general agents to screen
career agent applicants to eliminate those who may not be qualified.

The Company also sells its products through a network of approximately 1,700
insurance brokers in all jurisdictions in which the Company is licensed to sell
insurance. Brokers are independent contractors who sell a variety of insurance
products issued by various companies. Brokers operate through the career general
agency system but are compensated under a commission structure which is separate
from those used for career agents and in the PPGA system.

PERSONAL PRODUCING GENERAL AGENCY SYSTEM

Under the PPGA system, the Company contracts primarily with individuals who
are experienced individual agents or head a small group of experienced
individual agents. These individuals are independent contractors and are
responsible for all of their own expenses. These individuals often sell products
for other insurance companies, and may offer selected products of the Company
rather than the Company's full line of insurance products.

PPGAs are compensated by commissions on first year and renewal premiums
collected on business written by themselves and the agents in their units. In
addition to a base commission, PPGAs may earn bonus commissions on their
business, graded by production and persistency.

DISTRIBUTIONS THROUGH AFFILIATES

The Company also sells its products through certain of its affiliated
companies. The Company has arrangements with AmerUs Investments, Inc. ("AmerUs
Investments"), a wholly-owned subsidiary of AmerUs Bank, to market products of
the Company. The Company has entered into an agreement with AmerUs Investments
pursuant to which the Company and AVLIC pay AmerUs Investments fees in the form
of commissions in exchange for generating sales of such products. Persons
selling the Company's products under this arrangement are employees of AmerUs
Investments and are paid a regular salary in addition to being eligible for
commissions under a commission structure (which is distinct from the structure
used under the Company's career general agency and PPGA systems). See "Certain
Transactions and Relationships--Sale of Insurance Policies."

AVLIC has a separate arrangement with AmerUs Investments pursuant to which
AmerUs Investments sells variable and fixed annuities and variable life
insurance products.

MARKETING SUPPORT SERVICES

The Company also supports its distribution systems with a trained staff of
marketing and other professionals who provide the career general agency and PPGA
systems with a wide range of services in support of the sale of the Company's
products. In addition to providing information about the products offered by the
Company, these professionals are able to offer detailed advice on business
insurance, financial and estate planning and other advanced underwriting
services.

The Company also provides its agents in both the career general agency and
PPGA systems with insurance industry information support services and computer
technology. For example, an advanced

69
<PAGE>
illustration and sales presentation computer software package is provided to
agents to assist them in their selling efforts. In addition, the Company's
agents use computer technology to individualize marketing and product use
information at the point of sale to better service policyowners and potential
policyowners. The Company supports these systems with in-house computer
professionals to assist agents with software and systems questions relating to
its computer-assisted marketing tools.

The Company conducts an intensive annual educational conference as part of
its continuing efforts to educate and train agents and to market the Company's
products. The conference is generally well-attended by the Company's agents and
other interested persons who are not affiliated with the Company.

INSURANCE UNDERWRITING

The Company follows detailed, uniform underwriting practices and procedures
in its insurance business which are designed to assess risks before issuing
coverage to qualified applicants. The Company has professional underwriters who
evaluate policy applications on the basis of information provided by applicants
and others. As demonstrated by the following table, the Company's underwriting
standards produced mortality results which are generally more favorable than the
assumptions used in its product pricing, which are based upon industry
guidelines:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Ratio of actual mortality to pricing mortality (A)(B)............ 81.2% 90.5% 86.4% 88.8% 94.7%
</TABLE>

- --------------

(A) Results illustrated for 1991-1993 are for Central Life only. The 1991-1993
results for Old AML are unavailable. Management believes that the 1991-1993
mortality experience for Old AML would not materially change the statistics
reported for 1991-1993.

(B) Pricing mortality is established at a level below the 1975-1980 Basic Table,
an experience mortality table widely used in the industry as a basis of
mortality.

Management also believes that its actual mortality results compare favorably
to those of others in the industry. The Company believes that its favorable
mortality results are attributable to, among other things, the geographic
location of its customer base in rural and suburban areas (as opposed to urban
areas), the higher-income profile of its customer base and its consistent
application of appropriate underwriting criteria to the processing of new
customer applications.

RESERVES

In accordance with applicable insurance regulations, the Company records as
liabilities in its statutory financial statements actuarially determined
reserves that are calculated to meet future obligations of the Company's in
force life insurance and annuity contracts. The reserves are based on
actuarially recognized methods using prescribed MORBIDITY and mortality tables
and interest rates. Reserves include UNEARNED PREMIUMS, premium deposits, claims
that have been reported but are not yet paid, claims that have been incurred but
have not been reported, and claims in the process of settlement. The Company's
reserves comply with state insurance department statutory requirements.

The liability for future policy benefits reflected in the Consolidated
Financial Statements for traditional life insurance is computed using a NET
LEVEL METHOD, utilizing the guaranteed interest and mortality rates used in
calculating cash surrender values as described in the contracts. Benefit
reserves for traditional limited-payment life insurance policies include the
deferred portion of the premiums received during the premium-paying period.
Deferred premiums are recognized as income over the life of the policies. Policy
benefit claims are charged to expense in the period that the claims are
incurred. All insurance-related benefits, losses and expenses are reported net
of reinsurance.

70
<PAGE>
Future policy benefit reserves for universal life insurance and investment
products are computed under a retrospective deposit method and represent policy
account balances before applicable surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the period in
excess of related policy account balances.

REINSURANCE

In accordance with industry practices, the Company reinsures portions of its
life insurance and disability income exposure, generally with unaffiliated
insurance companies under traditional indemnity reinsurance agreements.
Reinsurance arrangements entered into with unaffiliated insurance companies are
in accordance with standard reinsurance practices within the industry. As of
December 31, 1995, the Company had reinsurance arrangements in place for life
insurance having a face amount of approximately $2.9 billion with 20
unaffiliated reinsurers. All of the companies with which the Company had life
reinsurance arrangements as of such date were rated "A-" or better by A.M. Best.
The Company's largest life reinsurance relationship as of December 31, 1995 was
with RGA Reinsurance Company with life reinsurance in the face amount of
approximately $1 billion. As of December 31, 1995, the Company's top five
reinsurers (by face amount reinsured) constituted approximately 80% of the total
face amount reinsured by the Company as of such date. Of the top five
reinsurers, four were rated "A+" and the other was rated "A" by A.M. Best as of
December 31, 1995.

The Company enters into indemnity reinsurance arrangements to assist in
diversifying its risks and to limit the maximum loss on risks that exceed the
Company's policy retention limits. The Company's present maximum retention limit
for life insurance policies is $1,000,000 per life insured. Indemnity
reinsurance does not fully discharge the Company's obligation to pay claims on
the reinsured business. The Company as the CEDING insurer remains responsible
for policy claims to the extent the reinsurer fails to pay such claims. The
Company annually monitors the creditworthiness of its primary reinsurers, and
has experienced no material reinsurance recoverability problems in recent years.

INVESTMENT PORTFOLIO

GENERAL

The Company maintains a diversified portfolio of investments which is
supervised by an experienced in-house staff of investment professionals. The
Company employs sophisticated asset management techniques in order to achieve
competitive yields, while maintaining risk at acceptable levels. The asset
portfolio is segmented by liability type, with tailored investment strategies
for specific product lines. Investment policies and significant individual
investments are subject to approval by the Investment Committee of the Board of
Directors of AmerUs Life. Management regularly monitors individual assets and
asset groups, in addition to monitoring the overall asset mix. In addition, the
Investment Committee reviews investment guidelines and monitors internal
controls.

INVESTMENT STRATEGY

The Company's investment philosophy is to employ an integrated
asset/liability management approach with separate investment portfolios for
specific product lines, such as traditional life, universal life and annuities,
to generate attractive risk-adjusted returns on capital. Essential to this
philosophy is coordinating investments in the investment portfolio with product
strategies, focusing on risk-adjusted returns and identifying and evaluating
associated business risks.

The Company's asset/liability management approach utilizes separate
investment portfolios for specific product lines, such as traditional life,
universal life and annuities. Investment policies and strategies have been
established based on the specific characteristics of each product line. The
portfolio investment policies and strategies establish asset duration, quality
and other guidelines. The Company utilizes analytical systems to establish an
optimal asset mix for each line of business. The Company seeks to manage the
asset/liability mismatch and the associated interest rate risk through active
management of the investment portfolio. Financial, actuarial, investment,
product development and product marketing professionals work together throughout
the product development, introduction and management phases to jointly develop
and implement product features, initial and renewal crediting strategies, and
investment strategies based on extensive modeling of a variety of factors under
a number of interest rate scenarios.

71
<PAGE>
In force reserves and the assets allocated to each segment are modeled to
analyze projected cash flows under a variety of economic scenarios. The result
of this modeling is used to modify asset allocation, investment portfolio
duration and convexity and renewal crediting strategies. The Company invests in
collateralized mortgage obligations ("CMOs") as part of its basic portfolio
strategy, but uses other types of derivatives only as a hedge against the
effects of interest rate fluctuations or to synthetically alter the investment
characteristics of specific assets. Currently, the Company utilizes derivatives
to support three specific targeted strategies. The first strategy involves the
conversion of floating rate assets to synthetic fixed rate assets to achieve a
greater risk-adjusted return. Secondly, the Company uses derivatives to help
protect the Company against disintermediation risk in the event of a general
rise in interest rates. Finally, the Company uses derivative products to assist
in the management of duration mismatch of the Company's assets and liabilities.

The Company seeks to manage the relationship between risk and expected
return to maintain a prudent balance between the two. Like others in the
industry, the Company is exposed to various potential sources of investment risk
including: credit risk relating to the uncertainty attached to the timing and
amount of principal and interest payments, interest rate risk relating to the
economic effects of changing interest rates, real estate risk relating to
changes in property value due to local economic and demographic conditions, and
liquidity risk relating to holding assets for which there is no active secondary
market. The Company manages credit risk principally by careful analysis of the
creditworthiness of each issuer, diversification of its holdings and prudent
asset allocation. It manages interest rate risk through sophisticated
asset/liability management techniques, including the selective use of derivative
instruments. It manages real estate risk principally by geographic and
demographic diversification, careful periodic monitoring of local economic and
other conditions and by limiting loan to value rates to acceptable levels. The
Company manages liquidity risk principally by asset allocation and by
maintaining various credit facilities and a portfolio of public, investment
grade securities in an amount not less than 50% of the total invested assets.

The objective of the Company's mortgage backed securities ("MBS")
investments is to provide incremental return, while maintaining reasonable
liquidity and cash flow stability. Each MBS is evaluated to determine its
interest rate sensitivity and average life variability. In general, the Company
seeks investments which provide improved cash flow stability through either
implicit or explicit prepayment protection. Investments with implicit prepayment
protection can take the form of pass-throughs or CMOs backed by seasoned pools
of loans which have already had ample opportunity to refinance but have failed
to do so. Explicit prepayment protection can take the form of prepayment
lockouts, yield maintenance provisions or prepayment penalties, which are common
features of multifamily MBS, commercial MBS and FHA-insured project loans. At
September 30, 1996, the Company's MBS investment portfolio composition was
approximately 14% fixed rate pass-throughs backed by seasoned loan pools, 19%
floating rate pass-throughs and 67% CMOs with some form of explicit prepayment
protection. The Company has established specific investment guidelines for the
management of MBS. As a general policy, the Company does not invest in
interest-only and principal-only or other similar leveraged derivative mortgage
instruments.

The Company has improved the quality of its investment portfolio in recent
years in a number of respects. The Company has reduced real estate-related
assets (defined as real estate loans and real estate equity investments) as a
percentage of total invested assets from previous levels. Real estate related
assets, which totaled 19.2% of invested assets as of December 31, 1993, were
reduced to 14.5% of invested assets as of December 31, 1994, to 10.2% of total
invested assets as of December 31, 1995 and to 7.8% (6.6% after giving effect to
the Capital Contribution and application of proceeds from the Bank Credit
Facility) of invested assets as of September 30, 1996. The Company's problem
loan ratio (defined as aggregate delinquent, in process of foreclosure and
restructured mortgage loans) also decreased from 21.3% as of December 31, 1994
to 9.4% as of December 31, 1995, and to 6.2% (4.3% after giving effect to the
Capital Contribution) as of September 30, 1996.

The Company in recent years has also reduced its exposure to higher risk
fixed maturity securities and common stock. The Company's percentage of higher
risk fixed maturity assets (defined as assets

72
<PAGE>
categorized in NAIC designations 3-6) was approximately 5.1% of total invested
assets as of September 30, 1996, as compared to 5.3% as of December 31, 1995 and
6.9% as of December 31, 1994. In addition, the Company decreased its common
stock holdings to 0.4% of total invested assets as of September 30, 1996, down
from 2.1% as of December 31, 1995 and 3.7% as of December 31, 1994.

INVESTMENT MONITORING AND VALUATION

As part of the Company's investment management process, it regularly
monitors its invested assets. Fixed maturity securities are reviewed upon
receipt of the obligor's financial statements, generally on a quarterly basis,
for financial performance and historical compliance with financial covenants.
Generally, the Company reviews its commercial mortgage loan and equity real
estate portfolios on a monthly basis and identifies all commercial mortgage
loans and equity real estate which cause management to conclude that such loans
or investments require increased management attention due to payment
delinquencies. Detailed property analyses and property valuations are performed
annually for each commercial mortgage loan. The Company generally requires
borrowers to submit their financial statements for annual review.

The Company has policies and procedures which management believes value
invested assets fairly and consistently. As a result of the implementation of
SFAS 115 as of December 31, 1993, certain fixed maturity securities are
classified as available-for-sale, and therefore are carried at fair value in the
Company's Consolidated Financial Statements. Public and private fixed maturity
securities are carried principally at fair value, which is based on quoted
market prices or dealer quotes. If a quoted market price is unavailable, fair
value is estimated using values obtained from independent pricing services. In
the case of private placements, if quotes are unavailable the price is estimated
by discounting expected future cash flows using a current market rate applicable
to the yield, credit quality and maturity of the investments.

Equity securities are carried principally at fair value, based on quoted
market prices. To value performing fixed interest rate mortgage loans, the
estimated net cash flows to maturity are discounted to derive an estimated
market value. The discount rate used is based on the individual loan's remaining
weighted average life and a basis point spread over the United States Treasury
yield curve at the date of valuation. Performing variable rate commercial loans
and residential loans are valued at par. Restructured, foreclosed or delinquent
loans, as well as loans to affiliates, are valued primarily at the lower of the
estimated net cash flows to maturity discounted at a market rate of interest, or
the current outstanding principal balance. Equity real estate is carried at
depreciated cost, or amortized cost for capital leases, less valuation
allowances. Equity real estate acquired in satisfaction of debt is valued at the
lower of cost or estimated fair value at the date of acquisition and is
periodically revalued. Valuation allowances for other than temporary impairments
in value are netted against the asset categories to which they apply, and
additions to valuation allowances are included in total investment results.

INVESTED ASSETS

The Company maintains a diversified portfolio of investments, including
public and private fixed maturity securities, commercial mortgage loans and
equity real estate. The Company's objective is to maintain a high-quality,
diversified fixed maturity securities portfolio that produces a yield and total
return that supports the various product line liabilities and the Company's
earnings goals.

As a result of establishing the Closed Block on June 30, 1996, the Company
allocated certain assets from its investment portfolio to the Closed Block. See
"The Reorganization and Distribution of the Non-Life Insurance
Subsidiaries--Establishment and Operation of the Closed Block." The following
table summarizes consolidated invested assets by asset category as of September
30, 1996 and as of December 31, 1995, 1994 and 1993, and sets forth the
allocation of such assets between the Closed Block and the general account. The
remaining information in this Prospectus relating to the Company's investment
portfolio presents information about the investment portfolio on a combined
basis (including invested assets in both the Closed Block and the general
account).

73
<PAGE>
CONSOLIDATED INVESTED ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, 1996 ------------------------------------------------
-------------------------------------------------
CARRYING CARRYING 1995 1994
VALUE-- VALUE-- COMBINED ----------------------- -----------------------
CLOSED GENERAL CARRYING CARRYING CARRYING
BLOCK ACCOUNT VALUE % OF TOTAL VALUE % OF TOTAL VALUE % OF TOTAL
----------- ----------- ----------- ---------- ----------- ---------- ----------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed maturity
securities:
Public.............. $ 667.6 $ 2,100.0 $ 2,767.6 72.2% $ 2,717.7 68.5% $ 2,056.4 58.9%
Private............. 176.2 197.6 373.8 9.7 424.4 10.7 510.3 14.6
----------- ----------- ----------- ----- ----------- ----- ----------- -----
Subtotal 843.8 2,297.6 3,141.4 81.9 3,142.1 79.2 2,566.7 73.5
Equity securities..... 15.5 74.6 90.1 2.4 109.7 2.8 178.8 5.1
Mortgage loans........ -- 260.2 260.2 6.8 353.6 8.9 447.7 12.8
Policy loans.......... 165.3 64.0 229.3 6.0 220.0 5.6 209.5 6.0
Real estate:
Investments......... -- 18.8 18.8 0.5 20.2 0.5 29.4 0.9
Foreclosures........ -- 21.2 21.2 0.5 31.9 0.8 28.8 0.8
----------- ----------- ----------- ----- ----------- ----- ----------- -----
Subtotal.......... -- 40.0 40.0 1.0 52.1 1.3 58.2 1.7
Other invested
assets............... -- 61.8 61.8 1.6 48.1 1.2 22.3 0.6
Short-term
investments.......... 0.7 12.0 12.7 0.3 39.4 1.0 8.5 0.3
----------- ----------- ----------- ----- ----------- ----- ----------- -----
Total invested
assets............... $ 1,025.3 $ 2,810.2 $ 3,835.5 100.0 % $ 3,965.0 100.0 % $ 3,491.7 100.0%
----------- ----------- ----------- ----- ----------- ----- ----------- -----
----------- ----------- ----------- ----- ----------- ----- ----------- -----

1993
-----------------------
CARRYING
VALUE % OF TOTAL
----------- ----------

<S> <C> <C>
Fixed maturity
securities:
Public.............. $ 2,015.8 55.4%
Private............. 516.6 14.2
----------- -----
Subtotal 2,532.4 69.6
Equity securities..... 174.4 4.8
Mortgage loans........ 652.2 17.9
Policy loans.......... 197.1 5.4
Real estate:
Investments......... 14.2 0.4
Foreclosures........ 32.6 0.9
----------- -----
Subtotal.......... 46.8 1.3
Other invested
assets............... 14.5 0.4
Short-term
investments.......... 22.4 0.6
----------- -----
Total invested
assets............... $ 3,639.8 100.0 %
----------- -----
----------- -----
</TABLE>

FIXED MATURITY SECURITIES. The fixed maturity securities portfolio consists
primarily of investment grade corporate fixed maturity securities, high-quality
MBS and United States government and agency obligations. As of September 30,
1996, fixed maturity securities were $3,141.4 million, or 81.9% of the carrying
value of invested assets with public and private fixed maturity securities
constituting $2,767.6 million, or 88.1%, and $373.8 million, or 11.9%, of total
fixed maturity securities, respectively.

The following table summarizes the composition of the fixed maturity
securities by category as of September 30, 1996 and December 31, 1995:

COMPOSITION OF FIXED MATURITY SECURITIES

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 DECEMBER 31, 1995
------------------------ ------------------------
CARRYING CARRYING
VALUE % OF TOTAL VALUE % OF TOTAL
---------- ------------ ---------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
U.S. government/agencies........................................ $ 57.0 1.8% $ 67.2 2.1%
State and political subdivisions................................ -- -- 1.7 0.1
Foreign governments............................................. 26.2 0.8 22.4 0.7
Corporate....................................................... 1,920.6 61.2 2,131.8 67.8
MBS:
U.S. government/agencies.................................... 673.4 21.4 686.8 21.9
Non-government/agencies..................................... 464.2 14.8 232.2 7.4
---------- ----- ---------- -----
Subtotal-MBS................................................ 1,137.6 36.2 919.0 29.3
---------- ----- ---------- -----
Total........................................................... $ 3,141.4 100.0% $ 3,142.1 100.0%
---------- ----- ---------- -----
---------- ----- ---------- -----
</TABLE>

74
<PAGE>
The following table summarizes corporate fixed maturity securities by
industry of the issuers:

COMPOSITION OF CORPORATE
FIXED MATURITY SECURITIES BY INDUSTRY

<TABLE>
<CAPTION>
% OF CORPORATE
SEPTEMBER 30, 1996 FIXED MATURITY
CLASSIFICATION CARRYING VALUE SECURITIES
- --------------------------------------------------------------------------- -------------------- -----------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Utilities.................................................................. $ 332.3 17.3%
Nondepository credit institutions.......................................... 210.0 10.9
Depository institutions.................................................... 194.7 10.1
Petroleum refining and related industries.................................. 101.8 5.3
Chemicals and related products............................................. 94.2 4.9
Air transportation......................................................... 89.3 4.6
Electrical and other electrical equipment (excluding computers)............ 76.2 4.0
Industrial, commercial machinery and computer equipment.................... 64.5 3.4
Oil and gas................................................................ 59.5 3.1
General merchandise stores................................................. 50.8 2.7
Other...................................................................... 647.3 33.7
-------- -----
Total.................................................................. $ 1,920.6 100.0%
-------- -----
-------- -----
</TABLE>

The following table summarizes fixed maturity securities by remaining
maturity as of September 30, 1996:

REMAINING MATURITY OF FIXED MATURITY SECURITIES

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
------------------------
CARRYING
VALUE % OF TOTAL
---------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Due:
In one year or less (1996)...................................... $ 11.3 0.4%
One to five years (1997-2001)................................... 475.2 15.1
Five to 10 years (2002-2006).................................... 961.9 30.6
10 to 20 years (2007-2016)...................................... 415.3 13.2
Over 20 years (2017 and after).................................. 140.1 4.5
---------- -----
Subtotal...................................................... 2,003.8 63.8
MBS............................................................. 1,137.6 36.2
---------- -----
Total....................................................... $ 3,141.4 100.0%
---------- -----
---------- -----
</TABLE>

The Company's portfolio of investment grade fixed maturity securities is
diversified by number and type of issuer. As of September 30, 1996, investment
grade fixed maturity securities included the securities of over 658 issuers,
with 1,039 different issues of securities. No issuer represents more than 1.8%
of investment grade fixed maturity securities.

Below-investment grade fixed maturity securities as of September 30, 1996
included the securities of 48 issuers representing 5.1% of total invested
assets, with the largest being a $9.9 million investment.

75
<PAGE>
As of September 30, 1996, 76.8% of total invested assets were investment
grade fixed maturity securities. The following table sets forth the credit
quality, by NAIC designation and Standard & Poor's rating equivalents, of fixed
maturity securities as of September 30, 1996:

FIXED MATURITY SECURITIES BY NAIC DESIGNATION

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
--------------------------------------------------------------------------
PUBLIC PRIVATE TOTAL
----------------------- ------------------------ -----------------------
NAIC STANDARD & POOR'S CARRYING CARRYING CARRYING
DESIGNATION EQUIVALENT DESIGNATION VALUE % OF TOTAL VALUE % OF TOTAL VALUE % OF TOTAL
- ------------ ------------------------------ ---------- ----------- ----------- ----------- ---------- -----------
(DOLLARS IN MILLIONS)
<C> <S> <C> <C> <C> <C> <C> <C>
1 A- or Higher.................. $ 1,853.2 67.0% $ 84.8 22.7% $ 1,938.0 61.7%
2 BBB- to BBB+.................. 758.9 27.4 248.2 66.4 1,007.1 32.1
---------- ----- ----------- ----- ---------- -----
Total investment grade........ 2,612.1 94.4 333.0 89.1 2,945.1 93.8
---------- ----- ----------- ----- ---------- -----
3 BB to BB+..................... 113.0 4.1 26.2 7.0 139.2 4.4
4 B............................. 42.5 1.5 13.0 3.5 55.5 1.8
5 CCC or lower.................. -- -- 0.1 -- 0.1 --
6 In or near default............ -- -- 1.5 0.4 1.5 --
---------- ----- ----------- ----- ---------- -----
155.5 5.6 40.8 10.9 196.3 6.2
---------- ----- ----------- ----- ---------- -----
$ 2,767.6 100.0% $ 373.8 100.0% $ 3,141.4 100.0%
---------- ----- ----------- ----- ---------- -----
---------- ----- ----------- ----- ---------- -----
</TABLE>

MBS comprise a core position within the Company's fixed maturity securities
investments. MBS investments include residential, commercial MBS, home equity
loans (including home equity loans purchased from one of the Company's
affiliates, see "Certain Transactions and Relationships--Purchase of Loans and
Securitization"), manufactured housing, FHA Title I and CMBS. Residential
mortgage pass-throughs and CMOs total $888.9 million or 23.2% of total invested
assets. As of September 30, 1996, MBS were $1,137.6 million or 29.7%, of total
invested assets of which $673.4 million, or 59.2% of MBS were guaranteed by the
United States government or an agency of the United States government. Other MBS
were $464.2 million, or 40.8%, of MBS as of September 30, 1996. Management
believes that the quality of assets in the MBS portfolio is generally high, with
87.1% of such assets representing agency backed or "AAA" rated securities.

The Company uses interest rate swaps and caps to reduce its exposure to
changes in interest rates and to manage duration mismatches. Although the
Company is subject to the risk that counterparties will fail to perform, credit
standings of counterparties are monitored regularly. The Company's policy is to
contract only with counterparties that are rated "AA" or higher; accordingly, it
is expected that counterparties will be able to satisfy their obligations under
such contracts. The Company is also subject to the risk associated with changes
in the value of contracts. However, such adverse changes in value generally are
offset by changes in the value of the items being hedged. The notional principal
amounts of the swaps and caps, which represent the extent of the Company's
involvement in such contracts but not the risk of loss, at September 30, 1996
amounted to $980.0 million. The swaps had a carrying value and a fair value
which amounted to a net receivable position of $6.0 million at September 30,
1996. The carrying value and fair value of interest rate caps and swaptions
amounted to $9.9 million and $10.0 million, respectively, and are reflected as
"other investments" on the Company's consolidated financial statements as of
September 30, 1996. The net amount payable or receivable from interest rate
swaps and caps is accrued as an adjustment to interest income.

MORTGAGE LOANS. As of September 30, 1996, mortgage loans in the investment
portfolio were $260.2 million, or 6.8% of the aggregate carrying value of
invested assets ($250.5 million, or 6.4%, after giving effect to the Capital
Contribution and application of proceeds from the Bank Credit Facility). Of the
September 30, 1996 amount, commercial mortgage loans were 98.8%, and residential
mortgage loans were 1.2%.

76
<PAGE>
In the last two years, the Company has significantly reduced its mortgage
loan investments as a percentage of its invested assets through sales of certain
mortgage loan assets; decreased originations of new loans and write-downs of
delinquent loans. As of December 31, 1993, mortgage loans totaled $652.2
million, or 17.9% of invested assets. By December 31, 1995, such investments
totaled $353.6 million, or 8.9% of invested assets and by September 30, 1996
such investments totaled $260.2 million, or 6.8% of invested assets. Commercial
mortgage loans consist primarily of fixed-rate mortgage loans on complete
properties. As of September 30, 1996, the Company held 156 individual commercial
mortgage loans having an average interest rate, maturity and balance of 9.1%, 73
months and $1.7 million, respectively.

The following table sets forth additions, reductions from payments and other
charges, foreclosures and miscellaneous adjustments to the mortgage loan
portfolio based on unpaid principal balances for the nine-month periods ended
September 30, 1996 and 1995 and for the years ended December 31, 1995, 1994 and
1993:

MORTGAGE LOAN ASSET FLOWS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------ -------------------------------------
1996 1995 1995 1994 1993
----------- ----------- ----------- ----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Commercial mortgage loans:
Beginning balance................................ $ 379.4 $ 504.0 $ 504.0 $ 723.6 $ 733.3
Plus: Additions.................................. 19.6 24.8 39.9 75.3 73.1
Less: Payments and other credits................. 75.1 93.0 134.9 123.3 73.1
Foreclosed properties....................... 6.2 24.8 18.0 14.0 9.7
Sales....................................... 47.2 -- 11.6 157.6 --
----------- ----------- ----------- ----------- -----------
Ending balance................................... 270.5 411.0 379.4 504.0 723.6
Residential mortgage loans......................... 3.3 5.0 4.3 9.2 8.8
----------- ----------- ----------- ----------- -----------
273.8 416.0 383.7 513.2 732.4
Valuation allowance for mortgage loan losses....... 13.6 41.1 30.1 65.5 80.2
----------- ----------- ----------- ----------- -----------
Total mortgage loans on real estate................ $ 260.2 $ 374.9 $ 353.6 $ 447.7 $ 652.2
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Valuation allowance as percentage of mortgage
loans............................................. 5.0% 9.9% 7.8% 12.8% 11.0%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

Substantially all of the new commercial mortgage loans were originated by
the Company through mortgage loan correspondents with whom the Company had an
ongoing relationship at the time such mortgage loans were originated. The
Company is not originating new commercial mortgage loans although it is renewing
existing loans in its portfolio in selected cases. The Company annually
estimates the current loan-to-value ratios of its commercial mortgage loans
based on an analysis of the operating statements of each mortgaged property.

77
<PAGE>
The following table sets forth the maturity and principal repayment schedule
for the commercial mortgage loan portfolio as of September 30, 1996:

COMMERCIAL MORTGAGE LOAN SCHEDULED
PRINCIPAL REPAYMENTS

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
---------------------------------------------------------------
MATURITY PAYMENTS ALL OTHER LOAN ANNUAL
YEAR ON BALLOON LOANS PAYMENTS TOTAL % OF TOTAL
- ------------------------------------------- ------------------- ----------------- --------- ------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
1996....................................... $ 20.4 $ 1.3 $ 21.7 8.0%
1997....................................... 60.8 7.7 68.5 25.3
1998....................................... 5.5 7.3 12.8 4.7
1999....................................... 14.9 7.1 22.0 8.2
2000-2015.................................. 105.0 40.5 145.5 53.8
------- ----- --------- -----
Total...................................... $ 206.6 $ 63.9 $ 270.5 100.0%
------- ----- --------- -----
------- ----- --------- -----
</TABLE>

As of September 30, 1996, only $5.2 million, or 1.9% ($2.4 million, or 0.9%,
after giving effect to the Capital Contribution), of the Company's loan
portfolio (as measured by principal balance) was classified as delinquent or in
foreclosure. As of the same date, only $11.8 million, or 4.5% ($8.9 million, or
3.6%, after giving effect to the Capital Contribution), of the Company's loan
portfolio (as measured by principal balance) was classified as restructured. For
the first nine months of 1996, the Company's foreclosures were approximately
$6.2 million (as measured by principal balance).

In November 1994, in a transaction approved by the Iowa Commissioner, the
Company securitized a pool of 89 fixed rate commercial/multifamily mortgage
loans with a then outstanding aggregate principal balance of approximately $158
million. The Company sold these mortgage loans to a trust. Several classes of
Commercial/Multifamily Mortgage Pass-Through Certificates, Series 1994-1 (the
"Certificates") representing undivided beneficial ownership interests in the
trust were then issued and sold in a private placement. The Company retained a
residual interest in the trust which had a carrying value as of September 30,
1996 of $3.7 million. The primary purpose of this securitization was to convert
the mortgage loans into cash, which could then be reinvested, and fixed maturity
securities so as to enhance the Company's liquidity, overall investment quality
and long-term economic value.

EQUITY REAL ESTATE. In recent years the Company has significantly reduced
its equity real estate portfolio. As of September 30, 1996, investment real
estate consisted of 22 properties located in eight states. The carrying value of
investment real estate as of September 30, 1996 was $18.8 million ($4.6 million
after giving effect to the Capital Contribution). As of September 30, 1996, the
Company's rental properties were 89% occupied by third parties or by the
Company.

OTHER. The Company held $229.2 million of policy loans on individual
insurance products as of September 30, 1996. Of these policy loans, 69.6% were
on traditional life policies and 30.4% were on universal life policies and
annuities. Policy loans are permitted to the extent of a policy's contractual
limits and are fully collateralized by policy cash values. Loan rates are fixed
in the contracts and range from 5.0% to 9.0%.

As of September 30, 1996, the Company held equity securities of $90.1
million (primarily preferred stock). The largest holding of equity securities
had a carrying value of $12.2 million as of September 30, 1996.

The Company held $74.6 million of other invested assets (including
short-term investments) on September 30, 1996. Other invested assets included
various joint venture investments, financial instruments and goodwill booked in
connection with the Company's investment in the Ameritas Joint Venture. See Note
13 to "Consolidated Financial Statements."

78
<PAGE>
COMPETITION

The Company operates in a highly competitive industry. Numerous life
insurance companies and other entities, including banks and other financial
institutions, compete with the Company, many of which have greater financial and
other resources as compared to the Company. The Company believes that the
principal competitive factors in the sale of insurance products are product
features, price, commission structure, perceived stability of the insurer,
claims-paying ratings, value-added service and name recognition. Many other
companies are capable of competing for sales in the Company's target markets
(including companies that do not presently compete in such markets). The
Company's ability to compete for sales is dependent upon its ability to address
the competitive factors described above.

In addition to competing for sales, the Company competes for qualified
agents and brokers to distribute its products. Strong competition exists among
insurance companies for agents and brokers with demonstrated ability. Management
believes that the bases of competition for the services of such agents and
brokers are commission structure, support services, prior relationships and the
strength of an insurer's products. Although the Company believes that it has
good relationships with its agents and brokers, its ability to compete will
depend on its continued ability to attract and retain qualified persons.

FEDERAL INCOME TAX CONSIDERATIONS

Certain of the life insurance products and annuities marketed and issued by
AmerUs Life and the Ameritas Joint Venture enjoy income tax advantages as
compared to other savings investments, such as certificates of deposit and
taxable bonds. One important tax advantage is the deferral of income taxation on
any increases in the contract values during the accumulation phase of the life
insurance and annuities in contrast to the current taxation of all earnings on
many other savings and investment products. In the event that the federal income
tax laws are changed so that accumulated earnings on these life insurance
policies and annuities do not enjoy the tax deferral described above, or so that
additional savings and investment products achieve similar tax deferral status,
or so that tax rates are significantly lower so that the policyowner's or
annuitant's ability to defer income tax on policy or annuity earnings is no
longer a significant factor for the policyowner, consumer demand for the
affected products could decline materially. From time to time, Congress has
considered proposals to revise or eliminate this tax deferral. There is no such
proposal currently pending in Congress, nor has the current administration
announced any consideration of any such proposal. If legislation were enacted to
eliminate the tax advantages of life insurance policies and annuities, such a
change could have an adverse effect on the ability of the Company to sell those
products.

EMPLOYEES

As of September 30, 1996, the Company had 407 full-time employees. None of
the Company's employees are covered by a collective bargaining agreement and the
Company believes that its relations with employees are satisfactory.

Certain employees of the Company also provide services to other affiliated
entities, including affiliates not directly owned by the Company. See "Certain
Transactions and Relationships."

SUBSIDIARIES

The Company was formed in August, 1996 in connection with the
Reorganization. See "The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries." AmerUs Life has three wholly-owned subsidiaries: CLA
Assurance Company, an Iowa life insurance company, Centralife Annuity Services,
Inc., an Arizona corporation, and American Vanguard Life Insurance Company, an
Iowa life insurance company. In addition, AmerUs Life currently owns a 34%
interest in AMAL Corporation, through whose wholly-owned subsidiaries the
Ameritas Joint Venture operates. See "--Ameritas Joint Venture."

LEGAL PROCEEDINGS

79
<PAGE>

individual life insurance policies which were underwritten and sold by AmerUs
Life within Texas from and after 1980. The complaint alleges that sales
presentations and policy illustrations misrepresented that premiums would
"vanish" after a stated number of years, without adequate disclosure of the
effect of changes in the policy dividends. AmerUs Life has denied the
allegations contained in such complaint and denies any wrongdoing in connection
with such allegations. The parties have engaged in discovery, but a hearing on
certification of the class has not yet been held.

The parties are engaged in a court-initiated mediation process in the Texas
litigation and, in light of the uncertainties, hazards and expenses of
litigation, have discussed a number of different settlement approaches,
including a nationwide class settlement of certain market conduct issues for a
substantial block of the Company's traditional whole life policies. Progress in
negotiating such a class settlement appears to have been made, but substantial
unresolved issues remain and no agreement has been reached. Even if such an
agreement were reached, the court would have to approve its terms. Should a
settlement satisfactory to the Company not be reached or not be approved, the
Company would continue to vigorously defend against the claims asserted,
including the existence of a legitimate class.

Due to the potential that a settlement may be reached in this case, the
Company has incurred a significant charge to income for the first nine months of
1996. Based upon its current estimates of the range of loss at between five and
eight million dollars, the Company has established a reserve of five million
dollars. The eventual costs of any settlement cannot be precisely determined at
this time, and may be more or less than the amount of the range.

A class action lawsuit was also filed in June 1996 in the United States
District Court for the Northern District of California. The complaint alleges
that AmerUs Life breached the terms of certain life and annuity policies, and
breached certain other duties owed to policyowners, when it allegedly passed an
increase in its corporate income taxes (known as the deferred acquisition cost,
or DAC, tax) through to owners of those policies. The plaintiff, an insured
under a universal life policy issued by Central Life, seeks unspecified actual
and punitive damages and injunctive relief on behalf of himself and all
policyowners of AmerUs Life with universal life, term and "blended" life
insurance policies and annuities. AmerUs Life has denied the allegations
contained in such complaint, including the existence of a legitimate class. The
litigation is in the early discovery stage and a hearing on certification of the
class has not yet been scheduled. The litigation is being vigorously defended by
AmerUs Life.

Despite the Company's vigorous defense of these class action lawsuits and
its denial of any wrongdoing, there can be no assurance that the outcome of such
lawsuits will not have a material adverse effect on the life insurance industry
generally or on the Company. See "Risk Factors -- Risks of Class Action
Litigation."

In the ordinary course of business, the Company and its subsidiaries are
also engaged in certain other litigation, none of which management believes is
material.

PROPERTIES

The Company's principal business operations are conducted from two
locations. The Company's executive offices consist of approximately 20,000
square feet located at 418 Sixth Avenue, Des Moines, Iowa. AmerUs Life's
executive offices consist of approximately 125,000 square feet located at 611
Fifth Avenue, Des Moines, Iowa. The Company and AmerUs Life will both lease
their executive offices from API after the Capital Contribution has been
effected, as both properties will be part of the Capital Contribution. See
"Certain Transactions and Relationships."

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SUPERVISION AND REGULATION

REGULATION OF THE COMPANY AND AMHC

A mutual insurance holding company is subject to regulation at a level
substantially equal to that of an Iowa domestic insurance company, and is
governed by statutory and regulatory requirements which are identical to, or
which parallel, the regulatory requirements imposed upon Iowa domestic insurance
companies. The Iowa Commissioner has jurisdiction over an intermediate holding
company, such as the Company, as if it were a mutual insurance holding company.

AMHC and the Company are each subject to the Iowa Insurer Supervision,
Rehabilitation and Liquidation Act, Iowa Code Chapter 507C. In addition, AMHC
and the Company are subject to the provisions of the Iowa Insurance Holding
Company Systems Act in the same manner and to the same extent as domestic
insurance companies. In addition, the assets of AMHC and the Company are
available to satisfy claims of policyowners, in the same manner as a domestic
insurance company in the event the Iowa Commissioner initiates a proceeding
under Chapter 507C.

AMHC and the Company may not merge with, be acquired by or acquire another
entity without approval of the Iowa Commissioner. In addition, in the case of a
merger or consolidation, separate approval by the Iowa Attorney General is
required. The statutory provisions applicable to the demutualization of a
domestic mutual life insurance company are applicable to the demutualization of
a mutual insurance holding company. In addition, no person may acquire or make
an offer to acquire voting stock in the Company if such acquisition would result
in such person's obtaining control over the Company. Generally, any person who,
directly or indirectly, owns, controls, holds with the power to vote, or holds
proxies representing 10% or more of the Company's voting securities (consisting
of both Class A Common Stock and Class B Common Stock) is deemed to have
control.

Under rules adopted by the Iowa Commissioner, AMHC is required to provide to
the Iowa Division of Insurance an annual report containing historical and
prospective information, including financial statements, an investment plan
covering all assets, any intention it has of borrowing money and information
regarding any "closed block" formed as part of a reorganization.

In addition to rules establishing the terms and conditions pursuant to which
the Iowa Commissioner will approve the sale of stock of an intermediate
insurance holding company or a subsidiary stock insurance company resulting from
a reorganization pursuant to Iowa law, the Iowa Commissioner has adopted rules
that also limit the activities and affiliations that are permissible for mutual
insurance holding companies. Under such rules, among other things, (i) at least
50 percent of the GAAP net worth of the mutual insurance holding company must be
invested in insurance company subsidiaries; (ii) a mutual insurance holding
company may not pay any policy credit, dividend or other distribution to any
policyowner member unless such payment has been approved by the Iowa
Commissioner; and (iii) a mutual insurance holding company must obtain the
approval of the Iowa Commissioner for any merger or acquisition (if at any time
it acquires or plans to acquire more than 50 percent of a stock insurance
company, a mutual insurance holding company must submit to the Iowa Commissioner
a plan describing any membership interests of policyowners).

The Iowa Commissioner also has issued rules which require prior approval by
the Iowa Commissioner of the issuance of stock by the Company. Pursuant to such
rules, the Company has filed an application with the Iowa Commissioner seeking
approval for the Offerings, which approval has been obtained. Under the rules,
the Company will be required to give notice to the Iowa Commissioner prior to
any subsequent public or private common stock offering.

Shares of the capital stock of the Company which carry the right to cast a
majority of the votes entitled to be cast by all of the outstanding shares of
the Company are required by Iowa law to at all times be owned, directly or
indirectly, by AMHC and may not be conveyed, transferred, assigned, pledged,
subjected to a security interest or lien, encumbered, or otherwise hypothecated
or alienated by AMHC or any intermediate holding company. Any conveyance,
transfer, assignment, pledge, security interest, lien, encumbrance or
hypothecation or alienation by AMHC, or any intermediate holding company, in or

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on such shares shall be deemed void in inverse chronological order of the date
of such transaction to the extent necessary to give the mutual insurance holding
company unencumbered direct or indirect ownership of shares representing a
majority of the votes entitled to be cast by all of the outstanding shares of
the Company.

REGULATION OF AMERUS LIFE

The Company will rely primarily on dividends and interest income from AmerUs
Life to make any dividend payments to its shareholders. The ability of AmerUs
Life to pay dividends to the Company is limited by law to earned profits
(statutory unassigned surplus) as of the date the dividend is paid, as
determined in accordance with accounting practices prescribed or permitted by
the insurance regulatory authorities of the State of Iowa. In addition, under
the Iowa Insurance Holding Company Systems Act, AmerUs Life may not pay an
"extraordinary" dividend without prior notice to and approval by the Iowa
Commissioner. An "extraordinary" dividend is defined under the Iowa Holding
Company Systems Act as any dividend or distribution of cash or other property
whose fair market value, together with that of other dividends or distributions
made within the preceding 12 months exceeds the greater of (i) 10% of
policyowners' surplus (total statutory capital stock and STATUTORY SURPLUS) as
of December 31 of the preceding year, or (ii) the statutory net gain from
operations of the insurer for the 12 month period ending the December 31 of the
preceding year. Iowa law gives the Iowa Commissioner broad discretion to
disapprove requests for dividends in excess of these limits. Based on this
limitation and 1995 statutory results, AmerUs Life would be able to pay
approximately $40 million in dividends to the Company in 1996 without obtaining
the Iowa Commissioner's approval. However, as a result of the Distribution,
AmerUs Life will not be able to pay any additional dividends to the Company in
the 12-month period following the Distribution without the prior consent of the
Iowa Commissioner.

AmerUs Life and its subsidiaries are subject to regulation and supervision
by the states in which they transact business. State insurance laws generally
establish supervisory agencies with broad administrative and supervisory powers
related to granting and revoking licenses, transacting business, establishing
guaranty fund associations, licensing agents, approving policy forms, regulating
premium rates for some lines of business, establishing reserve requirements,
prescribing the form and content of required financial statements and reports,
determining the reasonableness and adequacy of statutory capital and surplus,
and regulating the type and amount of investments permitted.

Every state in which AmerUs Life is licensed administers a guaranty fund,
which provides for assessments of licensed insurers for the protection of
policyowners of insolvent insurance companies. There has been an increase in the
number of insurance companies that are under supervision which has resulted in
an increase in the amount of assessments to cover losses to policyowners of such
companies. Assessments can be partially recovered through a reduction in future
premium taxes in some states. In these situations, the assessments are generally
capitalized and amortized against future reductions in premium taxes. Net
assessment expenses for AmerUs Life amounted to $0.4 million for the first nine
months of 1996, $0.4 million in 1995, $1.2 million in 1994 and $3.3 million in
1993. Management cannot reasonably predict the amount of future assessments, if
any.

Ethical sales practices and compliance with applicable laws and regulations
relevant to the life insurance industry have been a continuing focus of the
Company's support efforts. The Company has a continuing education program
focusing on ethical practices which is being provided to all agents. A program
is currently being implemented to further formalize the Company's current
practices and standards in the compliance and market conduct areas.

Recently, the insurance regulatory framework has been placed under increased
scrutiny by various states, the federal government and the NAIC. Various states
have considered or enacted legislation which changes, and in many cases
increases, the state's authority to regulate insurance companies. Although
legislation has been under consideration for several years in Congress which, if
enacted, would result in the federal government assuming some role in the
regulation of insurance companies, management does not expect the current
Congress to enact federal insurance regulation. The NAIC, in conjunction with
state regulators, has been reviewing existing insurance laws and regulations.
The NAIC

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recently approved and recommended to the states for adoption and implementation
several regulatory initiatives designed to reduce the risk of insurance company
insolvencies. Through the NAIC accreditation program, these recommendations for
state legislation have taken on an increased significance. Two such initiatives
are risk-based capital standards ("RBC") which have been adopted by the NAIC,
and a model investment law which is currently under consideration.

The RBC standards for life insurance companies were adopted by the NAIC in
1992 and require insurance companies to calculate and report for statutory basis
financial statements information under a risk-based capital formula. The formula
is embodied in the NAIC Model Act, which has been adopted by many states,
including Iowa. RBC requirements are intended to allow insurance regulators to
identify at an early stage inadequately capitalized insurance companies based
upon the types and mixtures of risks inherent in such companies' operations. The
formula includes components for asset risk, liability risk, interest rate
exposure and other factors.

The RBC requirements are intended to be used by insurance regulators as an
early warning tool to identify deteriorating or weakly capitalized companies for
the purpose of initiating regulatory actions. They are not designed as a ranking
mechanism for adequately capitalized companies. In addition, the formula defines
a new minimum capital standard which supplements the low, fixed minimum capital
and surplus requirements previously implemented on a state-by-state basis.

The Iowa RBC requirements categorize insurance companies according to the
extent to which they meet or exceed certain RBC thresholds. The law requires
increasing degrees of regulatory oversight and intervention based on the level
of an insurance company's authorized control level RBC as its RBC declines.
These degrees of regulatory action are triggered by the RBC level of an
insurance company as follows: (i) a "Company Action Level Event" (requiring the
insurance company to inform and obtain approval from the Director of a
comprehensive financial plan for increasing its RBC), which would occur if,
among other things, an insurance company's RBC falls below 200% of its
authorized control level RBC, or if an insurance company's RBC falls below 250%
of its authorized control level RBC and has a negative trend; (ii) a "Regulatory
Action Level Event" (resulting in, in addition to the requirement of a financial
plan, regulatory actions including examination of an insurance company's assets,
liabilities and operations followed by an order specifying such corrective
actions as the Director determines to be appropriate), which would occur if,
among other things, an insurance company's RBC falls below 150% of its
authorized control level RBC; (iii) an "Authorized Control Level Event"
(resulting in, in addition to the regulatory actions above, such actions as are
necessary to cause an insurance company to be placed under regulatory control in
a rehabilitation or liquidation proceeding if deemed to be in the best interests
of policyowners, creditors and the public), which would occur if, among other
things, an insurance company's RBC falls below 100% of its authorized control
level RBC; and (iv) a "Mandatory Control Level Event" (resulting in, on a
mandatory basis, such actions as are necessary to cause an insurance company to
be placed under regulatory control in a rehabilitation or liquidation
proceeding), which would occur if, among other things, an insurance company's
RBC falls below 70% of its authorized control level RBC.

As of September 30, 1996, AmerUs Life's RBC levels were significantly in
excess of RBC thresholds. Management believes that the RBC levels will be
significantly in excess of RBC thresholds as of the closing of the Offerings. As
a result, the RBC requirements are not expected to have an impact upon AmerUs
Life's operations, financial condition or operating results.

Approximately once every three to five years, as part of their routine
regulatory oversight process, state insurance departments conduct detailed
examinations of the books, records and accounts of insurance companies domiciled
in their states. Such examinations are generally conducted in cooperation with
the departments of two or three other states, under guidelines promulgated by
the NAIC. AmerUs Life was last examined by the Iowa Commissioner as of December
31, 1993. No material issues were raised by the Iowa Commissioner in such
examination.

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The NAIC has recently adopted model legislation to govern insurance company
investments. In addition, draft alternative model legislation is also under
discussion at the NAIC level. However, implementation of any investment model
law into state law is not anticipated in the foreseeable future. Management
believes that if the recently adopted model law or the current alternative
discussion draft were adopted without modification it would not have a material
impact on the Company.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information concerning the current
directors and executive officers of the Company and AmerUs Life.

<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY AND AMERUS LIFE
- ------------------------------ --- ---------------------------------------------------------------------------
<S> <C> <C>
John R. Albers 65 Director of the Company and AmerUs Life
Roger K. Brooks 59 Director of the Company and AmerUs Life; Chairman, President and Chief
Executive Officer of the Company and Chairman of AmerUs Life
Malcolm Candlish 61 Director of the Company and AmerUs Life
D T Doan 64 Director of the Company and AmerUs Life; Vice Chairman of the Company and
President of AmerUs Life
Thomas F. Gaffney 51 Director of the Company and AmerUs Life
Sam C. Kalainov 66 Director of the Company and AmerUs Life
John W. Norris, Jr. 60 Director of the Company and AmerUs Life
Jack C. Pester 61 Director of the Company and AmerUs Life
John A. Wing 61 Director of the Company and AmerUs Life
Thomas C. Godlasky 41 Executive Vice President and Chief Investment Officer of the Company and
AmerUs Life
Michael E. Sproule 49 Executive Vice President and Chief Financial Officer of the Company and
AmerUs Life
Victor N. Daley 53 Senior Vice President and Chief Human Resources Officer of the Company and
AmerUs Life
Michael G. Fraizer 46 Senior Vice President and Controller/Treasurer of the Company and AmerUs
Life
</TABLE>

Set forth below with respect to each of the directors and executive officers
of the Company and AmerUs Life is a description of such individual's business
experience, principal occupation and employment during at least the last five
years:

John R. Albers served as a director of American Mutual Life from November
1983 to June 1996. Since April 1996 Mr. Albers has served as a director of AMAL.
Mr. Albers is President and Chief Executive Officer of Fairfield Enterprises,
Inc., Dallas, Texas. From August 1988 to April 1995, Mr. Albers was the
Chairman, Chief Executive Officer & President of Dr. Pepper/Seven-Up Companies,
Dallas, Texas. From July 1995 to the present, Mr. Albers has served as a
director of First Alert, Inc., Aurora, Illinois. Mr. Albers also serves as a
director of AMHC.

Roger K. Brooks served as a director of American Mutual Life from February
1971 to June 1996. Mr. Brooks was the Chief Executive Officer of American Mutual
Life from December 1994 to June 1996, and prior thereto was the Chairman and
Chief Executive Officer of American Mutual Life. Since April 1996 Mr. Brooks has
served as a director of AMAL. Mr. Brooks also serves as a director of AMHC.

Malcolm Candlish served as a director of American Mutual Life from February
1987 to June 1996. From December 1992 to October 1996 Mr. Candlish was Chairman
and Chief Executive Officer of First

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Alert, Inc., Aurora, Illinois. Since December 1992 Mr. Candlish has been the
Chairman and, from May 1996 to October 1996, Mr. Candlish served as the
President of First Alert, Inc. From 1989 to 1992, Mr. Candlish was the Chairman
and Chief Executive Officer of Sealy, Inc., Cleveland, Ohio. Since 1991 Mr.
Candlish has served as a director of Black & Decker Corporation, Towson,
Maryland. Mr. Candlish also serves as a director of AMHC.

D T Doan served as a director and Vice Chairman of American Mutual Life from
December 1994 to June 1996. From October 1995 until June 1996, Mr. Doan was
President--Insurance Operations of American Mutual Life. Mr. Doan held the same
position from August 1992 to January 1995. From August 1987 to August 1992, Mr.
Doan was Executive Vice President--Corporate of American Mutual Life. Since
April 1996 Mr. Doan has served as a director of AMAL, AVLIC and AIC. Since April
1996, Mr. Doan has served as Executive Vice President of AMAL and AVLIC and
Senior Vice President of AIC. Mr. Doan also serves as a director of AMHC.

Thomas F. Gaffney served as a director of American Mutual Life from November
1983 to June 1996. Mr. Gaffney is a private investor who lives in Tierra Verde,
Florida. From 1987 to 1990, Mr. Gaffney was the Chairman of Oxford Investment
Group, Bloomfield Hills, Michigan. Mr. Gaffney also serves as a director of
AMHC.

Sam C. Kalainov served as a director of American Mutual Life from December
1994 to June 1996. Mr. Kalainov was the Chairman of American Mutual Life from
December 1994 until June 1996 and Chairman of AmerUs Life from July 1996 until
September 1996. From 1972 to 1983, Mr. Kalainov was a director of Old AML. From
1983 to December 1994, Mr. Kalainov was the Chairman and Chief Executive Officer
of Old AML. Mr. Kalainov also serves as a director of AMHC.

John W. Norris, Jr. served as a director of American Mutual Life from
November 1974 to June 1996. Mr. Norris is Chairman and Chief Executive Officer
of Lennox International, Inc., Dallas, Texas. Mr. Norris has also served as a
director of Atmos Energy Corporation, Dallas, Texas since August 1987. Mr.
Norris also serves as a director of AMHC.

Jack C. Pester served as a director of American Mutual Life from December
1994 to June 1996. From May 1981 to December 1994, Mr. Pester was a director of
Old AML. Mr. Pester is a Senior Vice President of The Coastal Corporation,
Houston, Texas. Since August 1994 Mr. Pester has also served as a director of
KFX, Inc., Denver, Colorado. Mr. Pester also serves as a director of AMHC.

John A. Wing served as a director of American Mutual Life from May 1991 to
June 1996. Mr. Wing is Chairman and Chief Executive Officer of The Chicago
Corporation, Chicago, Illinois.

Thomas C. Godlasky was Executive Vice President and Chief Investment Officer
of American Mutual Life from January 1995 to June 1996. From February 1988 to
January 1995, he was Manager of the Fixed Income and Derivatives Department of
Providian Corporation, Louisville, Kentucky. Since April 1996, Mr. Godlasky has
served as a director of AVLIC and AIC.

Michael E. Sproule was Executive Vice President and Chief Financial Officer
of American Mutual from August 1992 to June 1996. From January 1991 through July
1992, he was Executive Vice President and Chief Financial Officer of ICH
Corporation, Louisville, Kentucky and from January 1988 to December 1990, he was
a Consultant with Tillinghast, New York, New York. Since April 1996, Mr. Sproule
has served as a director of AVLIC and AIC.

Victor N. Daley was Senior Vice President and Chief Human Resources Officer
of American Mutual Life from September 1995 to June 1996. From April 1989 to
September 1995 Mr. Daley was Senior Vice President and Chief Administrative
Officer of Royal Insurance, Charlotte, North Carolina.

Michael G. Fraizer was Senior Vice President and Controller/Treasurer of
American Mutual Life from January 1993 to June 1996. From April 1991 to January
1993, Mr. Fraizer was Senior Vice President and Chief Financial Officer of Iowa
Realty Co., Inc. and from April 1977 to April 1991, he was a Partner with
McGladrey & Pullen, Des Moines, Iowa.

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<PAGE>
BOARD OF DIRECTORS OF THE COMPANY

The business of the Company is managed under the direction of the Company's
Board of Directors. The Board of Directors is presently composed of nine
directors and the Company intends to add two additional outside directors after
completion of the Offerings. The Board is divided into three classes. Messrs.
Candlish, Kalainov and Norris are in Class I, which class will stand for
election at the annual meeting of shareholders to be held in 1997. Messrs.
Albers, Doan and Gaffney are in Class II, which class will stand for election at
the annual meeting of shareholders to be held in 1998. Messrs. Brooks, Pester
and Wing are in Class III, which class will stand for election at the annual
meeting of shareholders to be held in 1999.

Consistent with proposed regulations recently promulgated by the Iowa
Commissioner, at least three of the Company's outside directors (including Mr.
Wing) will not be directors of AMHC or any of AMHC's subsidiaries. In addition,
at least two of the Company's outside directors, who have not yet been selected,
will have had no previous affiliation with the Company. The Company's
independent directors will review any intercompany transactions involving
potential conflicts of interest between the Company and AMHC and its
subsidiaries. At present, all of the members of the Company's Board of Directors
are outside directors except Messrs. Brooks, Doan and Kalainov.

The Company's Board of Directors has also established an Executive Committee
which will consist of between three and five members of the Board and will be
chaired by Mr. Brooks. The Executive Committee exercises the power and authority
of the Directors in all matters that do not require action by the entire Board
of Directors. The members of the Executive Committee will be appointed prior to
the Offerings.

The Company's Board of Directors has also established an Audit Committee and
a Human Resources Committee. The Audit Committee recommends the firm to be
appointed as independent accountants to audit financial statements and to
perform services related to the audit, reviews the scope and results of the
audit with the independent accountants, reviews with management and the
independent accountants the Company's year-end operating results and considers
the adequacy of the Company's internal accounting procedures. The Audit
Committee consists of Messrs. Wing, Gaffney and Pester. The Human Resources
Committee reviews and recommends the compensation arrangements for all executive
officers, approves such arrangements for other senior level employees, and takes
such actions as may be required in connection with certain compensation and
incentive plans of the Company. The Human Resources Committee consists of
Messrs. Albers, Candlish and Norris, each of whom qualifies as a Non-Employee
Director, as such term is used in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934.

BOARD OF DIRECTORS OF AMERUS LIFE

The Board of Directors of AmerUs Life is presently composed of the same nine
directors as the Company.

COMPENSATION OF DIRECTORS

It is currently contemplated that all non-employee directors will receive an
annual retainer of $15,000 plus a $2,000 fee for special meetings of the Board
of Directors or a committee thereof. Directors who are officers or employees of
the Company or any affiliate of the Company receive no compensation for serving
as directors. All directors are reimbursed for out-of-pocket expenses incurred
in connection with attendance at any meeting of the Board of Directors or
committee of the Board of Directors of the Company or AmerUs Life.

Directors are also eligible to participate in the Company's Non-Employee
Director Stock Plan, which the Company's Board of Directors approved on
September 15, 1996. See "Management Compensation--Compensation Pursuant to Stock
Plans of the Company."

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<PAGE>
MANAGEMENT COMPENSATION

EXECUTIVE OFFICER COMPENSATION

Since the formation of the Company, none of the executive officers has
received any compensation from the Company. All compensation received, earned or
accrued by such executive officers has been from AmerUs Life.

The following summary compensation table sets forth certain information
concerning compensation for services rendered in all capacities awarded or paid
by the Company (including compensation paid by AmerUs Life) to its Chief
Executive Officer and the other named executive officers (the "Named Executive
Officers") during the year ended December 31, 1995:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------- LTIP ALL OTHER
SALARY BONUS(A) PAYOUTS(B) COMPENSATION(C)
NAME AND PRINCIPAL POSITION FISCAL YEAR $ $ $ $
- ------------------------------------------------- ----------- --------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Roger K. Brooks
Chairman, President and Chief Executive Officer
of the Company and Chairman of AmerUs Life 1995 440,000 300,000 352,000
D T Doan
Vice Chairman of the Company and President of
AmerUs Life 1995 275,000 132,500 137,600
Thomas C. Godlasky
Executive Vice President and Chief Investment
Officer of the Company and AmerUs Life 1995 239,600 125,000 204,000(D)
Michael E. Sproule
Executive Vice President and Chief Financial
Officer of the Company and AmerUs Life 1995 250,000 200,000 125,000
Sam C. Kalainov
Former Chairman (E) 1995 440,000 300,000 352,000
</TABLE>

- ------------------
(A) Pursuant to the Management Incentive Plan.

(B) Long term incentive compensation pursuant to the Performance Share Plan (the
"LTIP"). LTIP payouts indicated were earned in 1995 and are payable in 1996.

(D) The amount shown reflects payment of a $204,000 sign-on bonus of which a
pro-rata portion is repayable in the event of termination during the initial
36 months of employment.

(E) Mr. Kalainov served as Chairman of AmerUs Life until September 1996. In
August 1996, Mr. Kalainov became Chairman of AMHC and AmerUs Group. Mr.
Kalainov is no longer an officer of the Company.

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<PAGE>
COMPENSATION PURSUANT TO STOCK PLANS OF THE COMPANY

STOCK INCENTIVE PLAN

On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Holdings, Inc. Stock Incentive Plan (the "Stock Plan" or the "Plan"). The
purpose of the Stock Plan is to enable the Company to attract and retain
employees who will contribute to the Company's long-term success by enabling
such employees to participate in the long-term success and growth of the Company
through an equity interest in the Company.

The Stock Plan provides for the grant of options (including incentive stock
options and non-qualified stock options), stock appreciation rights and
restricted stock awards. To date, no options or other awards have been granted
under the Stock Plan. In addition, consistent with rules recently promulgated by
the Iowa Commissioner, no options or awards will be granted by the Company
during the six-month period following the closing of the Offerings.

The summary of the Stock Plan which appears below is qualified in its
entirety by reference to the full text of such Plan.

TYPES OF AWARDS. The Stock Plan provides for the grant of any or all of the
following types of awards: (1) stock options, including incentive stock options
and non-qualified stock options; (2) stock appreciation rights; and (3)
restricted stock. Awards may be granted in combination as determined by the
Human Resources Committees of the Board of Directors (the "Committee"). The
initial grant will be in the form of Non-Qualified Stock Options.

TERM. The Company anticipates that the Stock Plan will be approved by the
Company's sole shareholder and become effective prior to the closing of the
Offerings. The Stock Plan will terminate ten years after its effective date (the
"Termination Date"). No awards shall be granted pursuant to the Plan after the
Termination Date, but awards granted prior thereto may extend beyond such time.
The Board of Directors may terminate the Plan prior to the Termination Date,
however, termination of the Plan will not affect awards made prior to
termination.

ELIGIBILITY. Officers and other key and high potential employees of the
Company, its affiliates and its subsidiaries (but excluding members of the
Committee and any person who serves only as a director) who are responsible for
or contribute to the management, growth and/or profitability of the business of
the Company are eligible to be granted stock options, stock appreciation rights,
or restricted stock awards. The options and participants under the Plan will be
selected from time to time by the Committee, in its sole discretion, from among
those eligible, and the Committee shall determine, in its sole discretion, the
number of shares covered by each award or grant.

SHARES SUBJECT TO THE STOCK PLAN. The total number of shares of Class A
Common Stock reserved and available for distribution under the Stock Plan shall
be 1.4 million. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares. If any shares of Class A Common Stock that
have been optioned cease to be subject to option, or if any shares subject to
Restricted Stock Award granted hereunder are forfeited or such awards otherwise
terminate, such shares shall again be available for distribution in connection
with future awards under the Plan. The maximum total number of shares subject to
awards which may be granted under the Plan in any one year will be 700,000, and
the maximum number of shares subject to awards which may be granted under the
Plan to any individual in any one year is 230,000 (in both cases, subject to
appropriate adjustments to reflect changes in capitalization of the Company).

STOCK OPTIONS. The Committee is authorized to determine the terms and
conditions of all option grants, subject to the limitations that the option
price per share may not be less than the fair market value of a share of the
Company's common stock on the date of grant and the term of an option may not be
longer than ten (10) years. Payment of the option price may be made in any
manner specified by the Committee (which may include cash or common stock of the
Company, or by "cashless exercise").

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STOCK APPRECIATION RIGHTS ("SARS"). The Committee is authorized to grant
SARs in tandem with options under the Stock Plan. An SAR can be exercised only
to the extent the options with respect to which it is granted is not exercised,
and is subject to the same terms and conditions as the option to which it
relates. Upon exercise of an SAR, the holder will be entitled to receive, for
each share with respect to which the SAR is exercised, an amount (the
"appreciation") equal to the difference between the option price of the related
option and the fair market value of a share of common stock of the Company on
the date of exercise of the SAR. The appreciation will be payable in cash or
Class A Common Stock, at the discretion of the Committee.

RESTRICTED STOCK. The Committee is authorized to award restricted stock
under the Stock Plan subject to the terms and conditions as the Committee may
determine. The Committee has the authority to determine the number of shares of
restricted stock to be awarded, the price, if any, to be paid by the recipient
of the restricted stock, and the date or dates on which the restricted stock
will vest. The vesting of restricted stock may be conditioned upon the
completion of a specific period of service with the Company, upon the attainment
of specified performance goals, or upon such other criteria as the Committee may
determine. The Stock Plan gives the Committee discretion to make loans to the
recipients for the purchase price of restricted stock and to accelerate the
vesting of restricted stock on a case by case basis at any time.

FEDERAL INCOME TAX ASPECTS. The following is a brief summary of the Federal
income tax consequences of awards made under the Stock Plan. This summary does
not describe state, local or foreign tax consequences. The information contained
in this section is based on present law and regulations, which are subject to be
changed prospectively or retroactively.

The optionee will recognize no taxable income upon the grant or exercise of
an incentive stock option (as defined under the Plan), and the Company will not
be entitled to any deduction. Upon a disposition of the shares after the later
of two years from the date of grant and one year from the date of exercise, the
participant will recognize long-term capital gain or loss equal to the
difference, if any, between the amount realized and the exercise price. The
excess, if any, of the fair market value of the shares of Class A Common Stock
on the date of exercise of the Incentive Stock Option over the exercise price
may be subject to alternative minimum tax. In such circumstances, no deduction
will be allowed to the Company for Federal income tax purposes.

If Class A Common Stock acquired upon the exercise of an Incentive Stock
Option is disposed of prior to the expiration of the holding periods described
above, (i) the optionee will recognize ordinary compensation income in the
taxable year of disposition in an amount equal to the excess, if any, of the
lesser of the fair market value of the shares on the date of exercise and the
amount realized on the disposition of the shares, over the exercise price paid
for such shares; and (ii) the Company will be entitled to a corresponding
deduction.

With respect to Non-Qualified Options (as defined under the Plan) (i) upon
grant of the option, the optionee will recognize no income; and (ii) upon
exercise of the option, the optionee will recognize ordinary compensation income
in an amount equal to the excess, if any, of the fair market value of the shares
on the date of exercise over the exercise price, and the Company will be
entitled to a corresponding deduction. On the disposition of the shares, the
optionee will recognize gain or loss equal to the amount realized and the sum of
the exercise price and the ordinary compensation income realized. Such gain or
loss will be treated as either short-term or long-term capital gain or loss,
depending upon the length of time that the optionee has held the shares.

An optionee recognizes no taxable income upon the grant of a SAR, and the
Company is not entitled to a deduction. An optionee will recognize ordinary
income, and the Company will be entitled to a deduction at the time of exercise
equal to the cash or fair market value of common stock payable upon such
exercise.

The grant of Restricted Stock (as defined under the Plan) under the Stock
Plan will not result in income for the grantee or in a deduction for the
Company, assuming the shares transferred are subject

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to a "substantial risk of forfeiture" as intended by the Company. If there are
no such restrictions, the grantee would recognize ordinary income upon receipt
of shares. Dividends paid to the grantee while the stock remains subject to
restriction will be treated as compensation for Federal income tax purposes. At
the time the restrictions lapse, the grantee will recognize ordinary income, and
the Company will be entitled to a deduction measured by the fair market value of
the shares at the time of lapse. However, an optionee may elect to recognize
income measured by the fair market value of the shares at the time of grant and
the Company will be entitled to a corresponding deduction.

Awards paid to certain executive officers may be subject to the limitations
under Section 162(m) of the Internal Revenue Code that prohibit the deduction of
certain compensation paid in excess of $1,000,000 in any taxable year. The
application of such section to awards made under plans adopted and approved
prior to the time at which a company's stock becomes publicly traded is not
clear. The Company believes that compensation payable pursuant to options
granted under the Stock Plan should not be limited as to deductibility by reason
of Section 162(m) and that compensation payable in respect of other awards may
fail to be deductible for Federal income tax purposes unless such awards qualify
for certain exemptive relief that may be available for grants made prior to the
first meeting of shareholders of the Company at which directors are elected in
1999.

NON-EMPLOYEE DIRECTOR STOCK PLAN

On September 15, 1996, the Company's Board of Directors adopted the AmerUs
Life Non-Employee Director Stock Plan (the "Director Plan"). The Company
anticipates the Director Plan will be approved by the Company's sole shareholder
and become effective prior to the closing of the Offerings. The purpose of the
Director Plan is to provide stock-based compensation to eligible Directors of
the Company in order to encourage a high level of Director performance and to
provide Directors with a proprietary interest in the Company's success.

The Director Plan provides for grants of restricted shares of the Company's
Class A Common Stock ("Restricted Shares") and for the grant of options. To
date, no Restricted Shares or options have been granted. In addition, consistent
with rules recently promulgated by the Iowa Commissioner, no Restricted Shares
or options will be granted under the Director Plan during the six-month period
following the closing of the Offerings.

The Director Plan is administered by the Committee. The total number of
shares of Class A Common Stock reserved and available for distribution under the
Director Plan shall be 150,000. Such shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares.

Each Non-Employee Director of the Company is eligible to participate in the
Director Plan. A "Non-Employee Director" for this purpose means Directors who
are not officers for purposes of Section 16 of the Exchange Act or otherwise
employed, or a consultant to, the Company or any of its affiliates, and who is
an outside director under Section 1.162-27(e)(3) of the regulations promulgated
under the Code.

STOCK OPTIONS. Beginning January 1, 1998, options covering 2,500 shares of
Class A Common Stock of the Company shall be granted to each Non-Employee
Director automatically on the first day of each calendar year in which the Class
A Common Stock is publicly traded on the NASDAQ National Market. Options granted
under the Director Plan shall be evidenced by a written agreement in such form
as the Committee shall from time to time approve. The option price per share of
Class A Common Stock purchasable under an option shall be 100% of the fair
market value of the Class A Common Stock on the date of the grant of the option.
Each option shall be exercisable for a term of ten (10) years from the date such
option is granted. Options will not become exercisable until the expiration of
twelve (12) months from the date of the grant of the option.

RESTRICTED STOCK AWARDS. Each Non-Employee Director may elect, pursuant to
a written irrevocable election, to receive Restricted Stock in lieu of part or
all of such Non-Employee Director's director fees. The number of shares of
Restricted Stock granted to a Non-Employee Director pursuant to such

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election shall be equal to the dollar amount of director fees which the
Non-Employee Director has elected not to receive, divided by seventy-five
percent (75%) of the fair market value of the Class A Common Stock as of the
date of payment.

Generally, a Non-Employee will not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock awarded under the Director Plan for a period
of two (2) years following the effective date of the Restricted Stock Agreement
pursuant to which such shares of Restricted Stock are awarded.

FEDERAL INCOME TAX ASPECTS. Federal income tax consequences of options and
Restricted Stock granted under the Director Plan are the same as those described
with respect to Non-Qualified Options and Restricted Stock under the Stock
Incentive Plan.

COMPENSATION PURSUANT TO AMERUS LIFE PLANS

MANAGEMENT INCENTIVE PLAN

AmerUs Life sponsors a Management Incentive Plan ("MIP") for officers and
key management employees of the Company and its subsidiaries. On an annual
basis, AmerUs Life establishes various and distinct goals for its executives and
key managers. Goals generally relate to objectives such as increased revenue,
expense levels and earnings. Attainment of individual and AmerUs Life goals can
generate payment of cash bonuses ranging from 15% to 70% of an executive's base
salary. Payment of these annual incentives is approved by the Board of Directors
and made in a separate lump-sum on or before the end of February of the ensuing
year.

LONG-TERM INCENTIVE COMPENSATION PLAN

AmerUs Life established a long-term incentive compensation Performance Share
Plan effective January 1, 1995 (the "LTIP"). Under the LTIP, the Human Resources
Committee of the Company's Board of Directors has the authority to grant
Performance Shares to eligible employees on such dates as the Human Resources
Committee shall determine. The LTIP will be integrated with the Stock Plan such
that long term compensation earned in connection with services provided to the
Company will be paid through the Stock Plan.

The Human Resources Committee determines the terms and conditions of the
Performance Share awards consistent with the LTIP. Each Performance Share has a
notional value of $100 and a maximum value of $200 at the end of the three-year
performance cycle to which the Performance Share relates (the "Performance
Cycle"). Performance goals are measured by the cumulative growth in AmerUs
Life's consolidated adjusted GAAP net worth ("Adjusted GAAP Value"), as
determined annually by the Human Resources Committee, and are set at a range of
levels for a given Performance Cycle. Goals are set to establish the level of
increase in Adjusted GAAP Value in the Performance Cycle that is required in
order for the value of the Performance Shares to reach its maximum level of $200
at the end of such Performance Cycle. Threshold levels are also set to establish
the level of increase in Adjusted GAAP Value in the Performance Cycle that is
required in order for the Performance Shares to maintain a value of $50 at the
end of such cycle. If threshold levels are not met, the Performance Shares will
have no value at the end of the Performance Cycle. Performance goals for a given
Performance Cycle under the LTIP are established at the time Performance Shares
are granted.

The first Performance Shares were awarded under the LTIP on January 1, 1995.
On such date, Performance Shares relating to three Performance Cycles were
awarded, one relating to the first full three-year Performance Cycle ending on
December 31, 1997, and the other two relating to two transitional one- and
two-year Performance Cycles ending on December 31, 1995 and December 31, 1996,
respectively. Performance Shares were also awarded on January 1, 1996 for the
three-year Performance Cycle ending on December 31, 1998.

The various performance goals set for the Performance Shares awarded on
January 1, 1995 and January 1, 1996 ranged from a minimum of 8% Adjusted GAAP
Value to 16% Adjusted GAAP Value. The

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increases in Adjusted GAAP Value necessary for the Performance Shares to reach
their maximum value for the Performance Cycles ending December 31, 1996, 1997
and 1998 are 15%, 16% and 16%, respectively.

LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF NON-STOCK
SHARES, PERFORMANCE OR PRICE-BASED PLANS
UNITS OR OTHER PERIOD -----------------------------------
OTHER RIGHTS UNTIL MATURATION THRESHOLD TARGET MAXIMUM
(#) OR PAYOUT ($) ($) ($)
------------- ---------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Roger K. Brooks 1,760 1/95 - 12/95 88,000 176,000 352,000
2,640 1/95 - 12/96 132,000 264,000 528,000
3,520 1/95 - 12/97 176,000 352,000 704,000
D T Doan 688 1/95 - 12/95 34,400 68,800 137,600
1,031 1/95 - 12/96 51,550 103,100 206,200
1,375 1/95 - 12/97 68,750 137,500 275,000
Thomas C. Godlasky 625 1/95 - 12/95 31,250 62,500 125,000
938 1/95 - 12/96 46,900 93,800 187,600
1,250 1/95 - 12/97 62,500 125,000 250,000
Michael E. Sproule 625 1/95 - 12/95 31,250 62,500 125,000
938 1/95 - 12/96 46,900 93,800 187,600
1,250 1/95 - 12/97 62,500 125,000 250,000
Sam C. Kalainov 1,760 1/95 - 12/95 88,000 176,000 352,000
2,640 1/95 - 12/96 132,000 264,000 528,000
3,520 1/95 - 12/97 176,000 352,000 704,000
</TABLE>

SAVINGS AND PROFIT SHARING PLANS

Each of the Named Executive Officers participates in the All*AmerUs Savings
& Retirement Plan for Employees of American Mutual Life (the "Savings &
Retirement Plan"), a profit sharing plan containing a qualified cash or deferred
arrangement and the All*AmerUs Supplemental Executive Retirement Plan (the
"Supplemental Plan"). Each of the Named Executive Officers also has a frozen
benefit under either the American Mutual Life Insurance Company Employees'
Pension Plan (the "AML Employees' Frozen Pension Plan") or the American Mutual
Life Insurance (formerly Central Life Assurance) Company Pension Plan (the "AML
(formerly Central Life) Frozen Pension Plan") (the AML Employees' Frozen Pension
Plan and the AML (formerly Central Life) Frozen Pension Plan are hereinafter
sometimes collectively referred to as the "Frozen Pension Plans"). Certain of
the Named Executive Officers additionally have a frozen benefit under the
American Mutual Life Insurance Company Supplemental Executive Retirement Plan
(the "AML Frozen SERP").

SAVINGS & RETIREMENT PLAN

Prior to December 31, 1995, the Company maintained three separate defined
contribution plans for eligible employees (collectively the "AmerUs Life Former
Savings Plans"). Contributions under the AmerUs Life Former Savings Plans ceased
as of December 31, 1995 and effective January 1, 1996, the AmerUs Life Former
Savings Plans were merged into the Savings & Retirement Plan. The Company's and
API's aggregate contributions to the AmerUs Life Former Savings Plans were
approximately $568,943 in 1995.

The Savings & Retirement Plan is intended to be qualified under Sections
401(a) and 501(a) of the Internal Revenue Code (the "Code") and is administered
by the AmerUs Life Benefit and Pension Committee (the "Committee"), whose
members are appointed by the Board of Directors of AmerUs Life. The Committee is
responsible for interpreting the Savings & Retirement Plan, making certain
amendments thereto and adopting rules and regulations reasonably necessary or
advisable to implement and

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<PAGE>
administer the plan. The Savings & Retirement Plan allows for elective employee
before-tax contributions, a set level of basic and matching contributions to be
made by AmerUs Life and API, a discretionary level of profit-sharing
contributions and an individually-determined supplemental contribution, if
applicable.

Employee contributions are governed by Code Section 401(k). Participants may
elect to make before-tax contributions to the Savings & Retirement Plan that are
at least 1% and not more than 15% of the participant's compensation. The
Committee may reduce, suspend or refund the contribution of a "highly
compensated member" (as defined in the Savings & Retirement Plan) in order to
ensure compliance with the nondiscrimination tests set forth in the Savings &
Retirement Plan.

AmerUs Life will contribute 4% of each eligible participating employee's
compensation as of the end of a plan year in accordance with the provisions of
the Savings & Retirement Plan ("Basic Contributions"). In addition, AmerUs Life
will make a matching contribution of 125% of an employee's before-tax
contribution, up to a maximum of 4% of an employee's compensation ("Matching
Contributions").

AmerUs Life may also contribute, on behalf of each participating employee
who was, as of December 31, 1995, an active participant in either Frozen Pension
Plan, a certain percentage of such employee's compensation ("Interim Benefit
Supplement"), in order to make up any shortfall between the amount to which such
employee would have been entitled under either of the Frozen Pension Plans as
compared to such employee's projected benefits under the Savings & Retirement
Plan. The amount of the Interim Benefit Supplement made on behalf of any
eligible employee is reduced by any profit sharing contribution allocated to
such employee under the Savings & Retirement Plan.

The Savings & Retirement Plan is generally available to all full-time
employees of AmerUs Life. An employee's compensation, for purposes of
contributions based thereon, consists of an employee's W-2 compensation with
certain adjustments. All contributions made by AmerUs Life are made to the
participants' individual accounts and the Basic Contributions, Matching
Contributions, Profit-Sharing Contributions and the Interim Benefit Supplement
are subject to forfeiture until fully vested under the Savings & Retirement
Plan's vesting schedule. The amount of before-tax contributions made by a
participant and contributions made by AmerUs Life are limited by the Code. In
the event the Committee determines that such limits are exceeded, it shall cause
any such excess contributions to be distributed, forfeited or placed in the
non-qualified Supplemental Plan in accordance with the terms of the Savings &
Retirement Plan and the Supplemental Plan. A distribution from the vested
portion of an employee's account is generally payable upon retirement at or
after normal retirement age (age 65) or upon other termination of employment.
AmerUs Life may terminate or amend the Savings & Retirement Plan, the
Supplemental Plan, or completely discontinue contributions, at any time it may
deem advisable.

SUPPLEMENTAL PLAN

AmerUs Life has adopted, effective January 1, 1996, the Supplemental Plan.
Certain employees whose benefits under the Savings & Retirement Plan are limited
by the provisions of Section 401(a)(17) of the Code and for whom compensation is
deferred, are eligible to participate in such plan. The Supplemental Plan is not
intended to meet the qualification requirements of Section 401 of the Code, and
no cash or funds shall be set aside or otherwise segregated for the payment of
benefits under such plan until such time as benefits are actually paid.

FROZEN PENSION PLANS

Prior to January 1, 1996, American Mutual Life maintained the Frozen Pension
Plans, which were qualified under Section 401(a) of the Code. The benefits under
both such plans were curtailed as of December 31, 1995 and the Frozen Pension
Plans were merged into the surviving American Mutual Life Insurance Company
Pension Plan (the "Surviving AML Pension Plan"). Retirement benefits under the
predecessor AML Employees' Frozen Pension Plan were based primarily on an
employee's years of service and compensation during the highest five consecutive
plan years of employment or the last 60 months, if greater, as of December 31,
1995; retirement benefits under the predecessor AML (formerly Central Life)
Frozen Pension Plan were based primarily on an employee's years of service and
career compensation as of December 31, 1995. All employees' frozen accrued
benefits as of December 31, 1995 are fully vested.

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<PAGE>
Prior to January 1, 1996, American Mutual Life also maintained the AML
Frozen SERP and the Central Life Frozen SERP, which were similar in operation to
the Supplemental Plan currently in effect. The benefits under these plans were
also curtailed as of December 31, 1995.

The following table sets forth the frozen accrued monthly benefits payable
as a straight life annuity to each of the Named Executive Officers under the
Surviving AML Pension Plan, including the AML Frozen SERP, assuming retirement
at age 65 (current normal retirement age):

<TABLE>
<CAPTION>
PENSION TABLE
FROZEN ACCRUED BENEFITS UNDER THE
SURVIVING AML PENSION PLAN INCLUDING THE FROZEN SERP
- ----------------------------------------------------------------------------------------------
NAME MONTHLY BENEFITS
- --------------------------------------------------------------------------- -----------------
<S> <C>
Roger K. Brooks............................................................ $ 27,550
D T Doan................................................................... 15,640
Thomas C. Godlasky......................................................... 321
Michael E. Sproule......................................................... 1,360
Sam C. Kalainov............................................................ 34,261(1)
</TABLE>

- --------------
(1) Included in this amount is $9,148 in monthly benefits due under the terms of
an Employment Agreement, dated February 1, 1995, between American Mutual
Life and Sam C. Kalainov. See
"--Employment Agreement."

EMPLOYMENT AGREEMENT

AmerUs Life entered into an employment agreement (the "Employment
Agreement") with Mr. Kalainov, dated February 1, 1995, under which he served as
the Chairman of the Board of Directors of AmerUs Life and Chairman of AmerUs
Life's Charitable Foundation (the "Foundation"). The term of the Employment
Agreement was to continue until May 15, 2000, but could expire earlier if Mr.
Brooks ceased to perform the duties of Chief Executive Officer ("CEO") of AmerUs
Life. If Mr. Kalainov's service as Chairman was terminated prior to May 15,
2000, AmerUs Life was required to execute a consulting contract with him
pursuant to which, among other things, AmerUs Life was obligated to pay the
difference between the benefits Mr. Kalainov received under AmerUs Life's
pension plans and the sum of his base salary plus incentive compensation for the
preceding 12 months. The Employment Agreement provided that Mr. Kalainov would
serve as Chairman of the Foundation until May 15, 2000.

Pursuant to the Employment Agreement, Mr. Kalainov received the annual
salary and incentive compensation described in the Summary Compensation Table.
Mr. Kalainov participated in AmerUs Life's employee benefit plan (the "Benefit
Plan") and was also entitled to certain perquisites and other incidental
expenses. Mr. Kalainov was also entitled to certain retirement benefits and
health insurance coverage upon his retirement. In December 1996, prior to the
consummation of the Offerings, Mr. Kalainov's employment agreement was
terminated by mutual agreement and Mr. Kalainov entered into an employment
agreement with AmerUs Group.

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

The Company's Articles of Incorporation provide that the Company shall
indemnify its directors to the fullest extent possible under the IBCA. The
Company's Bylaws extend the same indemnity to its officers. The Articles of
Incorporation provide that no director shall be liable to the Company or its
shareholders for monetary damages for breach of the individual's fiduciary duty
as a director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its shareholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for any transaction in which the director derived an improper
personal benefit, or (iv) under the IBCA provisions relating to improper
distributions. The Company has also entered into indemnification agreements with
its directors and executive officers with respect to liabilities arising out of
certain matters, including matters arising under the Securities Act.

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<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS

THE FOLLOWING SUMMARIES OF THE INTERCOMPANY AGREEMENT AND OTHER AGREEMENTS
IDENTIFIED DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO SUCH AGREEMENTS. A COPY OF THE INTERCOMPANY AGREEMENT AND THE OTHER
AGREEMENTS IDENTIFIED BELOW HAVE BEEN FILED AS EXHIBITS TO THE REGISTRATION
STATEMENT OF WHICH THIS PROSPECTUS IS A PART. AS USED HEREIN, "AMERUS AFFILIATED
GROUP" MEANS AMHC AND ITS DIRECT AND INDIRECT SUBSIDIARIES NOW OR HEREAFTER
EXISTING, OTHER THAN THE COMPANY AND ITS SUBSIDIARIES, AND "AMERUS CONTROL
GROUP" MEANS, COLLECTIVELY, AMHC AND AMERUS GROUP. CAPITALIZED TERMS USED BUT
NOT DEFINED HEREIN HAVE THE MEANINGS GIVEN TO THEM IN SUCH AGREEMENTS.

AmerUs Life is a wholly-owned direct subsidiary of the Company. The Company
is a direct subsidiary of AmerUs Group, which in turn is a wholly-owned direct
subsidiary of AMHC. As a result of such ownership, AMHC, AmerUs Group, the other
subsidiaries of AmerUs Group and the Company and its subsidiaries, including
AmerUs Life, have a variety of relationships, certain of which are summarized
below. Management believes that the terms of the agreements described herein are
on a basis no less favorable than could be obtained from unaffiliated third
parties.

OWNERSHIP OF VOTING INTERESTS OF THE COMPANY

As a result of the Reorganization of the Company and its affiliates into a
mutual insurance holding company structure, AMHC is required by Iowa law to own,
directly or indirectly through one or more intermediate holding companies,
shares of capital stock of the Company which carry the right to cast a majority
of the votes entitled to be cast by all of the outstanding shares of the capital
stock at a shareholders' meeting of the Company. See "Supervision and
Regulation--Regulation of the Company and AMHC." In compliance with this
requirement, all of the issued and outstanding shares of the Company's Class B
Common Stock are owned by AmerUs Group, a wholly-owned subsidiary of AMHC and
the Company's immediate parent. Such ownership will continue after the closing
of this Offering. Additionally, the Company's Articles of Incorporation provide
that no shares of its Class B Common Stock may be owned by any person other than
AMHC, a subsidiary of AMHC or another mutual insurance holding company or
intermediate holding company as expressly authorized by Iowa law or by the Iowa
Commissioner. See "Ownership of Common Stock--Ownership of Class B Common
Stock." Any proposed amendments to such provisions of the Company's Articles of
Incorporation are subject to approval by the Iowa Commissioner and the Iowa
Attorney General.

AMHC'S POLICY WITH RESPECT TO CORPORATE OPPORTUNITIES

The Company has been advised that AMHC has adopted a general policy with
respect to certain corporate opportunities presented to AMHC. The implementation
of such policy in any situation is expressly subject to any applicable
regulatory, tax, contractual or legal restrictions as well as issues as to
feasibility. Pursuant to such policy, so long as AMHC directly or indirectly
owns at least 50.1% of the voting power of the outstanding common stock of the
Company (the "Voting Control Period"), AMHC intends to first offer to the
Company any corporate opportunity relating to the acquisition of any stock life
insurance company or any company (other than a mutual insurance holding company)
primarily engaged in owning a stock life insurance company. During the Voting
Control Period, AMHC also intends to first offer to the Company any corporate
opportunity primarily relating to a joint venture, partnership, or similar
affiliation in the life insurance or annuity industry. During the Voting Control
Period, in the event that AMHC merges with a mutual insurance holding company
owning a stock life insurance company or a mutual insurance company is
reorganized pursuant to Chapter 521A of the Iowa Code into a stock life
insurance company subsidiary of AMHC, AMHC intends, if the other party to the
transaction agrees, to offer the Company the corporate opportunity to combine
such acquired company with the Company or a subsidiary thereof in exchange for
appropriate consideration.

Any combination would be on terms which are approved by a majority of the
independent directors of AMHC and the Company and set forth in a written
agreement between the parties. However, neither AMHC nor the Company is
obligated to take any action which is not consistent with their respective
fiduciary duties or applicable contractual, regulatory, tax or legal
requirements. Moreover, the results of negotiations with parties interested in a
potential transaction or other factors, such as feasibility or a

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desire to maintain the separate identities and assets of two insurers, may
result in AMHC not presenting a potential transaction to the Company or a
company acquired by AMHC not being combined with the Company or a subsidiary
thereof.

Under AMHC's policy, a corporate opportunity is considered to be a business
opportunity in the life insurance and annuity business known to AMHC which the
Company is legally and financially able to undertake, is of practical advantage
to the Company and is one in which the Company has an interest or a reasonable
expectancy. If the Company does not choose to pursue a corporate opportunity
within a reasonable period after such opportunity is first presented to it, AMHC
would not intend to afford the Company any further opportunity with respect to
such potential transaction.

INTERCOMPANY AGREEMENT

AMHC, AmerUs Group and the Company have entered into an Amended and Restated
Intercompany Agreement dated as of December 1, 1996 (the "Intercompany
Agreement"), certain provisions of which are summarized below.

LICENSE TO USE THE AMERUS NAME AND CERTAIN TRADEMARKS

Pursuant to the Intercompany Agreement, AmerUs Group and certain members of
the AmerUs Affiliated Group have granted to the Company and certain of its
subsidiaries, a non-exclusive, revocable license to use the AmerUs name and
certain trademarks (collectively, the "Trademarks") solely in connection with
the Company's life insurance business and activities related to such life
insurance business. The Intercompany Agreement provides, among other things,
that subject to AmerUs Group's ability to revoke the license in the
circumstances described below and subject to regulatory approval, within a
specified time from the date on which the AmerUs Control Group ceases to control
more than 50% of the combined voting power of the outstanding Common Stock (the
"License Trigger Date"), if the Company's name or any of its subsidiaries' names
at such time includes the "AmerUs" name, the Company and such subsidiaries will
be required to change their names and will be required to discontinue the use of
certain related marks. Following the License Trigger Date, the Company and its
subsidiaries will continue to have the right to use the AmerUs name in
connection with the identification of insurance products for an initial
five-year period with an option to renew for an additional five years, for which
the Company will pay a nominal annual fee to AmerUs Group until such time as the
Company and its subsidiaries completely discontinue use of the "AmerUs" name. In
addition, the Intercompany Agreement provides that the Company and its
subsidiaries will not, without the prior written consent of AmerUs Group, take
any action with respect to (i) any litigation or proceeding involving the
Trademarks, (ii) any change in the Company names, logos and other
identifications that might reasonably be expected to affect the Trademarks or
(iii) any advertising campaigns or strategies that use the Trademarks or that
refer to any member of the AmerUs Affiliated Group. AmerUs Group has the right
to revoke the license under certain circumstances relating to advertising,
promotion or use of the Trademarks in a manner contrary to AmerUs Group
guidelines. In addition, AmerUs Group can revoke any of the Company's
subsidiaries' use of the license if there is a change of control of any such
subsidiary of the Company that is licensed to use the Trademarks. A revocation
by AmerUs Group of the license to use the Trademarks could have a material
adverse effect on the Company's ability to conduct its business.

INDEMNIFICATION

The Intercompany Agreement provides that the Company will indemnify each
member of the AmerUs Affiliated Group and each of their respective officers,
directors, employees and agents (collectively, the "Indemnitees") against losses
based on, arising out of or resulting from (i) the use of the Trademarks by the
Company or its subsidiaries, (ii) the ownership or the operation of the assets
or properties, and the operation or conduct of the business, of the Company or
its subsidiaries, (iii) any other activities of the Company or its subsidiaries,
(iv) any other acts or omissions by the Company or its subsidiaries arising out
of performance of the Intercompany Agreement and certain other agreements, (v)
any guaranty, keep well, net worth or financial condition maintenance agreement
of or by any member of the AmerUs Affiliated Group provided to any parties with
respect to any actual or contingent obligation of the Company or its
subsidiaries, (vi) any breach by the Company of the Intercompany

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Agreement, and (vii) certain other matters. In addition, the Company has agreed
to indemnify the Indemnitees against certain civil liabilities, including
liabilities under the Securities Act, relating to misstatements in or omissions
from the Registration Statement of which this Prospectus forms a part and any
other registration statement that the Company files under the Securities Act
(other than misstatements or omissions made in reliance on information relating
to and furnished by any member of the AmerUs Affiliated Group for use in the
preparation thereof, against which AMHC has agreed to indemnify the Company).
AMHC has also agreed to indemnify the Company and its subsidiaries and each of
their respective officers, directors, employees and agents against losses based
on, arising out of or resulting from (i) any breach by the AmerUs Affiliated
Group of the Intercompany Agreement, (ii) the ownership or the operation of the
assets or properties, and the operation or conduct of the business of any member
of the AmerUs Affiliated Group, (iii) certain third party claims relating to the
Trademarks and (iv) certain other specifically identified matters.

AMHC CONSENT TO CERTAIN EVENTS

The Intercompany Agreement provides that until the date on which the members
of the AmerUs Control Group cease to control at least 50.1% of the combined
voting power of the outstanding Common Stock of the Company (the "Trigger
Date"), the prior written consent of AMHC will be required for: (i) any
consolidation or merger of the Company or any of its subsidiaries with any
person (other than certain transactions involving wholly owned subsidiaries);
(ii) any sale, lease, exchange or other disposition or any acquisition by the
Company or any of its subsidiaries (other than transactions to which the Company
and its wholly owned subsidiaries are the only parties), or any series of
related dispositions or acquisitions, involving consideration in excess of $20
million; (iii) any change in the authorized capital stock of the Company or the
creation of any class or series of capital stock of the Company, (iv) any
issuance by the Company or any subsidiary of the Company of any equity
securities or equity derivative securities, except (a) up to three million
shares of Common Stock pursuant to employee and director stock option, profit
sharing and other benefit plans of the Company and its subsidiaries, (b) the
issuance of Preferred Stock which is not convertible or exchangeable into Common
Stock and which only has voting rights required by law, (c) the issuance of
shares of capital stock of a wholly owned subsidiary of the Company and (d)
pursuant to the Transactions (defined as the Offerings and any corporate
reorganization or transaction undertaken in connection with the Offerings to
which the Company or any of its subsidiaries is a party); (v) the dissolution of
the Company; (vi) transactions or a series of related transactions with
affiliates of the Company (other than members of the AmerUs Affiliated Group)
involving consideration in excess of $10 million, other than (a) the
Transactions, (b) transactions on terms substantially the same as or more
favorable to the Company than those that would be available from an unaffiliated
third party and (c) transactions between or among any of the Company and its
wholly owned subsidiaries; and (vii) any corporate action by the Company which
would cause the Company or AmerUs Life to violate the requirements of Section
521A.14 of the Iowa Insurance Code (relating to mutual insurance holding
companies).

REGISTRATION RIGHTS

The Company has granted to the AmerUs Control Group certain demand and
"piggyback" registration rights with respect to shares of Common Stock owned by
it. The AmerUs Control Group has the right to request up to two demand
registrations in each calendar year. The AmerUs Control Group also has the
right, which it may exercise at any time and from time to time, to include the
shares of Common Stock held by it in certain other registrations of common
equity securities of the Company initiated by the Company on its own behalf or
on behalf of any shareholder of the Company. Such registration rights are
transferable by the AmerUs Control Group provided that such transferee is (i) a
member of the AmerUs Control Group or (ii) in the case of Class A Common Stock
only, an institutional accredited investor (as defined under Rule 501(a)
promulgated under the Securities Act) permitted to acquire such registrable
shares under applicable law. The Company has agreed to pay all costs and
expenses in connection with each such registration, except underwriting
discounts, commissions and legal fees of the AmerUs Control Group applicable to
the shares of Common Stock sold by the AmerUs Control Group. The

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Intercompany Agreement contains customary terms and provisions with respect to,
among other things, registration procedures and certain rights to
indemnification granted by parties thereunder in connection with the
registration of Common Stock on behalf of the AmerUs Control Group.

REIMBURSEMENT AGREEMENTS

The Company has agreed to pay all costs and expenses incurred in connection
with the Company's formation, the Transactions and all related transactions,
except as otherwise described in this Prospectus.

EQUITY PURCHASE RIGHTS

The Company has agreed that, to the extent permitted by Nasdaq National
Market, Inc. so long as the Company is listed on the Nasdaq National Market, and
so long as the AmerUs Control Group controls at least 50.1% of the combined
voting power of the outstanding Common Stock of the Company, the AmerUs Control
Group may purchase its pro rata share (based on its then current percentage
equity interest in the Company) of any voting equity security issued by the
Company (excluding any such securities offered in connection with employee and
director stock option or other benefit plans, dividend reinvestment plans and
other offerings other than for cash).

CERTAIN BUSINESS RELATIONSHIPS

The Company has agreed that all distribution arrangements in effect as of
September 15, 1996 pursuant to which members of the AmerUs Affiliated Group
distribute insurance products of the Company or its subsidiaries shall continue
until the Trigger Date.

MANAGEMENT SERVICES

Until the Trigger Date, the Company has agreed to provide to the AmerUs
Affiliated Group certain management and administrative services, including: (i)
general management services and (ii) assistance in matters relating to
operations, strategy and business planning and (iii) as requested, furnish
reports to the board of directors of AMHC or AmerUs Group with respect to
aspects of the business and affairs of the AmerUs Affiliated Group. In
connection with such services the Company will be subject to the exclusive
authority of the board of directors of AMHC or the AmerUs Affiliated Group
member for which such services are performed. AmerUs Group will pay the Company
$2.0 million per year in consideration for such services, commencing after the
Distribution.

TAX ALLOCATION AGREEMENT

The Company and AMHC have entered into an agreement relating to the
allocation of Federal and state income tax liabilities attributable to periods
before and after the Offerings (the "Tax Allocation Agreement"). Under the Tax
Allocation Agreement, the Company will be responsible for all income tax
liabilities that are attributable to the net income of the Company and its
subsidiaries under applicable Federal and state tax laws. The Company will have
no responsibility for income tax liabilities attributable to AMHC and its
wholly-owned subsidiaries under such laws, including any liabilities that may
have arisen while such subsidiaries were wholly-owned subsidiaries of AmerUs
Life. If and to the extent that losses of AMHC and its wholly-owned subsidiaries
are applied to reduce the Federal or state income taxes attributable to the net
income of the Company, the Company will be required to make a payment to AMHC
equal to such tax reduction. Conversely, if and to the extent that losses of the
Company are applied to reduce the Federal or state income tax liability
attributable to the net income of AMHC and its wholly-owned subsidiaries for any
year, AMHC will be required to make a payment to the Company equal to such tax
reduction. It is not anticipated that the Federal or state income tax liability
of the Company or its subsidiaries will be determined on a consolidated or
combined basis with that of AMHC or any of its wholly-owned subsidiaries for any
period after the Offerings.

AGREEMENTS INVOLVING REAL ESTATE

AmerUs Life has entered into asset and property management contracts with
API. Pursuant to such agreements, API provides asset and property management
services to AmerUs Life with respect to

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certain real estate owned by AmerUs Life. The total expenses incurred by AmerUs
Life pursuant to such agreements equaled approximately $1,422,000 and $839,000
for the year ended December 31, 1995 and the nine months ended September 30,
1996, respectively.

AmerUs Life, as lessor, has entered into leases of business property with
various members of the AmerUs Affiliated Group. These leases have varying terms
which call for combined monthly rentals of $36,000. These leases will be
assigned to API at the time the Capital Contribution is made, as the properties
to which they relate are to be included in the properties which will be
distributed as part of the Capital Contribution.

Total rental income earned by the Company under all agreements with members
of the AmerUs Affiliated Group was approximately $32,000 and $349,000 for the
year ended December 31, 1995 and the nine months ended September 30, 1996,
respectively.

The Company will enter into lease agreements with API at the time of the
Capital Contribution because the facilities occupied by the Company as its
executive and home offices will be transferred to API as part of the Capital
Contribution. The lease agreements will require monthly payments of $143,000 on
a net basis for a period of 5 years. API has acquired real estate which is
intended to be the combined executive and home office locations of the Company.
It is the Company's intention to relocate to such facilities in the near future
and enter into lease agreements with API with respect to such facilities which
will replace the Company's then-existing leases with API.

During 1995, AmerUs Life paid rentals to AmerUs Bank of $48,000 and $24,000
for the year ended December 31, 1995 and the nine months ended September 30,
1996, respectively, under the terms of a lease agreement which expired in 1996.

AmerUs Life has entered into various limited partnership and joint venture
agreements in which API or an affiliate serves as general partner. AmerUs Life
contributed portions of its joint venture interests to API and sold several of
these partnership interests to newly formed partnerships in which API has an
interest. Total proceeds from these sales were $10,956,600 and $1,638,000 in the
year ended December 31, 1995 and in the nine months ended September 30, 1996,
respectively. After such sales, AmerUs Life purchased a 9.75% limited
partnership interest in one of the newly formed partnerships for $2,160,000, of
which $1,026,000 had been contributed as of September 30, 1996. In addition,
AmerUs Life agreed to make loans to the newly formed partnerships in the
aggregate amount of up to $20,000,000, of which $19,600,000 was outstanding as
of September 30, 1996.

AmerUs Life has also entered into agreements with various partnerships in
which API has an interest pursuant to which AmerUs Life is obligated to make
future capital contribution to such partnerships in an amount not to exceed
$5,830,000.

As of September 30, 1996, AmerUs Life had a total investment of $16,420,000
in various partnerships and joint ventures in which API had an interest.

AmerUs Life sold certain limited partnership interests to API at their
carrying value of $1,697,000 in 1995.

LOAN SERVICING AGREEMENTS

AmerUs Life has entered into various loan servicing agreements with various
members of the AmerUs Affiliated Group. The total expenses incurred by AmerUs
Life for such services was approximately $1,533,000 and $1,189,000 for the year
ended December 31, 1995 and the nine months ended September 30, 1996,
respectively.

AmerUs Life has also entered into various loan servicing agreements with
AmerUs Bank. Pursuant to such agreements, AmerUs Life services certain
nonresidential mortgage loans on behalf of AmerUs Bank. The total revenues
earned by AmerUs Life for such services were approximately $30,000 and $21,000
for the year ended December 31, 1995 and the nine months ended September 30,
1996, respectively.

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OTHER SERVICE AGREEMENTS

AmerUs Life has entered into various miscellaneous services agreements with
members of the AmerUs Affiliated Group. Pursuant to such agreements, AmerUs Life
provides certain communications, tax, law department, accounting department,
internal audit, administrative and data processing services to such other
parties to the agreements, as requested. The aggregate revenues earned for
services performed by AmerUs Life in accordance with such agreements were
approximately $6,604,000 and $4,385,000 for the year ended December 31, 1995 and
the nine months ended September 30, 1996, respectively.

PURCHASE OF LOANS AND SECURITIZATION

AmerUs Life has entered into a purchase agreement with AmerUs Bank, dated as
of June 28, 1996, pursuant to which AmerUs Life acquired an HEL Asset-Backed
Class A Note (the "Note") and Class R Certificate Series 1996-1 (the
"Certificate"). The Note had a face amount of $43,715,845 and pays interest at
the rate of 8.35% per annum. The Certificate has a face amount of $3,039,069 and
pays interest at the rate of 16.81% per annum. The Note and Certificate are
backed by the assets of the AB Home Equity Loan Trust (the "AB Trust"), which
consist of approximately $47 million of second mortgage loans. Pursuant to a
Pooling and Servicing Agreement, dated as of June 28, 1996 (the "Pooling and
Servicing Agreement"), between AmerUs Bank and Boatmen's Trust Company
("Boatmen's"), and a Transfer Agreement, dated as of June 28, 1996, between
AmerUs Bank and Boatmen's, as trustee of the AB Trust, the AB Trust acquired
such loans from AmerUs Bank, and paid a purchase price of $46,754,914, the par
value of the loans. Under the Pooling and Servicing Agreement AmerUs Bank acts
as the servicer of the loans and receives a servicing fee equivalent to the
amount of all interest collected on the loans in excess of 8.9%.

SALE OF INSURANCE POLICIES

AmerUs Life has entered into an agreement, dated January 1, 1995, with
AmerUs Investments, Inc. ("AmerUs Investments"), a wholly-owned subsidiary of
AmerUs Bank, to market products of AmerUs Life. Pursuant to this agreement,
AmerUs Life pays AmerUs Bank fees in the form of commissions in exchange for
generating sales of such products. Total commissions paid to AmerUs Investments
were $1,259,000 and $321,000 for the year ended December 31, 1995 and nine
months ended September 30, 1996, respectively.

The Company has also entered into certain Affiliated Agent Contracts with
employees of AmerUs Investments (the "Affiliated Agents") to solicit, sell and
service AmerUs Life insurance products and has also entered into a Servicing
Agreement, dated March 1, 1992, with AmerUs Investments pursuant to which AmerUs
Investments agreed to service the business sold by any Affiliated Agent and
otherwise supervise its employees who are Affiliated Agents.

CAPITAL CONTRIBUTION

Prior to the Distribution, AmerUs Life made the Capital Contribution to or
for the benefit of its Non-Life Insurance Subsidiaries. The Capital Contribution
consisted of cash and other property having an approximate net carrying value of
$79 million. Following the Capital Contribution and prior to the Offerings,
AmerUs Life caused its Non-Life Insurance Subsidiaries to be distributed to
AmerUs Group pursuant to the Distribution. The Distribution effectively
separated AMHC's non-life insurance businesses from the life insurance
businesses owned by the Company, such that the companies engaged in non-life
insurance businesses will no longer be subsidiaries of the Company. See "The
Reorganization and Distribution of the Non-Life Insurance Subsidiaries."

From time to time AmerUs Life has made capital contributions to Lartnec
Investment Co. ("Lartnec"). Lartnec had previously been a subsidiary of AmerUs
Life and AFS had been a subsidiary of Lartnec. Prior to the Distribution, AFS
was merged into Lartnec and Lartnec was then merged upstream into AmerUs Life,
and pursuant to the Distribution the Non-Life Insurance Subsidiaries were
distributed to AmerUs Group, thereby becoming sister corporations to the
Company. In 1995, AmerUs Life made capital contributions to Lartnec in the
approximate aggregate amount of $41,156,000. In 1996, prior to the Distribution,
AmerUs Life made additional capital contributions to Lartnec in the approximate
total amount of $4,463,000.

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LOANS AND CREDIT SUPPORT TO THE AMERUS AFFILIATED GROUP

AmerUs Life has provided financing to members of the AmerUs Affiliated Group
or their affiliates for various purposes. The outstanding balance of all such
financings was $64.0 million and $75.4 million as of December 31, 1995 and
September 30, 1996, respectively. AmerUs Life recorded interest income of $6.0
million and $4.7 million for the year ended December 31, 1995 and the nine
months ended September 30, 1996, respectively. After giving effect to the
Capital Contribution, the amounts for such periods would have been $48.9 million
and $70.1 million, respectively.

AmerUs Life has also pledged investment securities as collateral for
indebtedness of the AmerUs Affiliated Group. AmerUs Life will be released from
this collateral agreement under the terms of the new Bank Credit Facility. The
value of the collateral pledged was $112.4 million and $141.7 million as of
December 31, 1995 and September 30, 1996, respectively. The pledges will be
released upon the effectiveness of the Bank Credit Facility.

In addition, AmerUs Life guaranteed various borrowings of members of the
AmerUs Affiliated Group with outstanding balances of approximately $7.3 million
and $7.2 million at December 31, 1995 and September 30, 1996, respectively.

AmerUs Life has outstanding loan commitments to various partnerships in
which API has an interest. At September 30, 1996, the outstanding loan
commitments were approximately $16,000,000.

SECURITY ARRANGEMENTS FOR BANK CREDIT FACILITY

In connection with the Bank Credit Facility, the Company has pledged to the
lenders approximately 49.9% of the common stock of AmerUs Life owned by the
Company and a $50 million 9% surplus note payable to the Company by AmerUs Life.
AmerUs Group has also pledged shares of the Company's Class A Common Stock owned
by AmerUs Group in an amount which is limited by Iowa law and which, together
with the voting shares owned by shareholders other than AmerUs Group, shall be
less than 50% of the total voting shares of the Company. Under Iowa law, AMHC
and AmerUs Group are prohibited from pledging a majority of the shares necessary
to elect the Board of Directors of the Company, approve matters submitted for
shareholder approval and effect a possible transaction to go private, and the
Company is prohibited from pledging a majority of the shares necessary to elect
the Board of Directors of AmerUs Life. AMHC and AmerUs Group have also
guaranteed the indebtedness of the Company under the Bank Credit Agreement.

OWNERSHIP OF COMMON STOCK

OWNERSHIP OF CLASS A COMMON STOCK

Immediately prior to the Offerings there will be 14.5 million issued and
outstanding shares of Class A Common Stock, all of which will be beneficially
owned by AmerUs Group. Other than such shares, as of the date of this Prospectus
no shares of Class A Common Stock were beneficially owned by any person,
including any director or officer of the Company or AmerUs Life.

OWNERSHIP OF CLASS B COMMON STOCK

Immediately prior to the Offerings, there will be five million issued and
outstanding shares of Class B Common Stock, all of which will be owned by AmerUs
Group. Pursuant to the Company's Articles of Incorporation, no shares of Class B
Common Stock may be owned by any person other than AMHC or another mutual
insurance holding company or intermediate holding company as authorized by
applicable law.

CLASS A COMMON STOCK SUBSCRIPTIONS BY MANAGEMENT

Directors and officers of the Company may subscribe for Shares in the
Subscription Offering if they are Subscription Policyowners. The terms pursuant
to which directors and officers of the Company may obtain Shares in the
Subscription Offering are identical to the terms for other Subscription
Policyowners. In addition, directors and officers as a group would be limited
under rules recently promulgated by the Iowa Commissioner to purchasing no more
than five percent of the shares offered in any offering of common stock made by
the Company.

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DESCRIPTION OF THE CAPITAL STOCK

The following description does not purport to be complete and is qualified
in its entirety by reference to the Company's Articles of Incorporation, a copy
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.

GENERAL

The Company is authorized to issue 75 million shares of Class A Common
Stock, no par value, and 50 million shares of Class B Common Stock, no par
value. As of the date hereof, there were 14.5 million shares of Class A Common
Stock outstanding and five million shares of Class B Common Stock outstanding,
all of which were held by the Selling Shareholder. In addition, 1.4 million and
150,000 shares of Class A Common Stock are reserved for issuance under options
granted or available for grant under the Stock Option Plan and Director Plan,
respectively, subject to the completion of the Offerings, and five million
shares of Class A Common Stock are reserved for issuance upon conversion of
Class B Common Stock. The Company is also authorized to issue shares of
preferred stock on such terms as determined by the Company Board of Directors
(the "Preferred Stock"). See "--Preferred Stock."

The Class B Common Stock (or any interest therein) may only be owned by AMHC
or a mutual insurance holding company or intermediate holding company which is
expressly authorized by applicable law to own or have a beneficial interest in
the Class B Common Stock (a "Permitted Class B Holder"). Under current Iowa law,
a Permitted Class B Holder must at all times possess the right to cast at least
a majority of the votes of the outstanding shares of the capital stock of the
Company.

The Articles of Incorporation provide that the number of outstanding shares
of Class A Common Stock (excluding shares of Class A Common Stock owned by AMHC
or another Permitted Class B Holder) shall exceed the number of outstanding
shares of Class B Common Stock plus the shares of Class A Common Stock owned by
AMHC or another Permitted Class B Holder only as authorized by law and never by
a ratio of more than three to one.

Following the closing of the Offerings, assuming that the underwriters in
the Public Offering do not exercise their over-allotment option, there will be
17 million shares of Class A Common Stock outstanding. At such time, AmerUs
Group will own 12 million shares of the Class A Common Stock (71% of the
outstanding shares of Class A Common Stock) and five million shares of Class B
Common Stock (100% of the outstanding shares of Class B Common Stock). AmerUs
Group's ownership of Class A Common Stock and Class B Common Stock will provide
it with approximately 77% of the voting power of the Common Stock and
approximately 77% of the economic value of the Company (assuming that the
underwriters in the Public Offering do not exercise their over-allotment
option).

COMMON STOCK

Each share of Class A Common Stock will entitle its holder to one vote per
share on all matters upon which shareholders are entitled to vote (including
election of directors, mergers, sales of assets, dissolution and amendments to
the Articles of Incorporation). Each share of Class B Common Stock will entitle
its holder to one vote per share on all such matters except that, if on the
record date for determining shares eligible to vote, the number of outstanding
shares of Class A Common Stock (excluding shares of Class A Common Stock owned
by a Permitted Class B Holder) and any outstanding shares of Preferred Stock
having voting rights, if any (excluding shares of Preferred Stock owned by a
Permitted Class B Holder), equals or exceeds the number of outstanding shares of
Class B Common Stock plus the number of outstanding shares of Class A Common
Stock owned by a Permitted Class B Holder, the voting rights for each share of
Class B Common Stock shall be equal to the aggregate number of shares of Class A
Common Stock (excluding shares of Class A Common Stock owned by a Permitted
Class B Holder) and Preferred Stock having voting rights, if any, then
outstanding (excluding shares of Preferred Stock owned by a Permitted Class B
Holder) plus one divided by the number of outstanding shares of Class B Common
Stock. Accordingly, even if the number of outstanding shares of

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Class A Common Stock (excluding shares of Class A Common Stock owned by a
Permitted Class B Holder) exceeds the number of outstanding shares of Class B
Stock, the Permitted Class B Holder will always have a majority of the votes.

Both classes of Common Stock will generally vote together as a single class
on all matters; however, the holders of Class A Common Stock and the holders of
Class B Common Stock will vote separately as a class with respect to certain
matters for which class voting is required under Iowa law, including (i)
approval of proposed amendments to the Company's Articles of Incorporation that,
among other things, would alter the designation, rights, preferences or
limitations of all or part of the shares of their respective class, increase or
decrease the aggregate number of authorized shares of such class, effect an
exchange or reclassification or create a right of exchange of all or part of the
shares of one class into shares of another class, create a new class of shares
or increase the rights, preferences, or number of authorized shares of any
existing class so that it would have rights or preferences with respect to
distribution or to dissolution that are prior, superior, or substantially equal
to, the shares of such class, provided that the Class A Common Stock and Class B
Common Stock are not affected by such amendment in the same or a substantially
similar way; (ii) approval of a proposed plan of merger or consolidation if such
plan contains any provisions which, if contained in a proposed amendment to the
Articles of Incorporation, would entitle such class of shares to vote as a class
(with certain limited exceptions for shareholders of the surviving corporation);
and (iii) approval of a plan of share exchange (to be voted upon by each class
included in the exchange).

There is no provision in the Company's Articles of Incorporation permitting
cumulative voting in the election of directors.

No cash dividends may be declared in any fiscal year on the Class B Common
Stock until and unless a cash dividend has been declared on the Class A Common
Stock. Any cash dividends will be declared and paid equally on both classes of
Common Stock.

The classes of Common Stock will rank equally and have equal rights with
respect to distributions and all other rights, including distributions upon
liquidation of the Company. However, in the case of dividends or other
distributions payable on the Common Stock in shares of such stock, including
distributions pursuant to stock splits or stock dividends, only Class A Common
Stock will be distributed with respect to Class A Common Stock and only Class B
Common Stock will be distributed with respect to Class B Common Stock. In no
event will either class of Common Stock be split, divided or combined unless the
other is split, divided or combined equally.

So long as the number of outstanding shares of Class A Common Stock
(excluding shares of Class A Common Stock owned by a Permitted Class B Holder)
shall exceed the number of outstanding shares of Class B Common Stock plus the
outstanding shares of Class A Common Stock owned by AMHC or another Permitted
Class B Holder only as authorized by law and never by a ratio of more than three
to one, the Class B Common Stock will be convertible at all times into Class A
Common Stock on a share-for-share basis by surrender of certificates to the
transfer agent for the Company. Such conversion will be without cost to the
shareholder, except for any transfer taxes which may be payable if certificates
for Class A Common Stock are issued in a name other than the one in which the
surrendered certificate is registered. Therefore, shareholders who subsequently
desire to sell some or all of their shares of Class B Common Stock may convert
those shares into an equal number of shares of Class A Common Stock and sell the
shares of Class A Common Stock in the public market. The Company will be
required to reserve shares of Class A Common Stock sufficient for issuance upon
conversion of Class B Common Stock. All shares of Class B Common Stock
surrendered upon conversion will have the status of authorized but unissued
shares of Class B Common Stock.

The Articles of Incorporation provide that a Permitted Class B Holder has
the preemptive right to purchase Common Stock to the extent necessary to
maintain the ratio of Class A Common Stock to Class B Common Stock set forth in
the preceding paragraph. The Intercompany Agreement also affords the AmerUs
Affiliated Group certain equity purchase rights. See "Certain Transactions and
Relationships--Intercompany Agreement."

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In the event that AMHC (or any successor mutual insurance holding company)
is demutualized and is converted into a stock company pursuant to Iowa law, then
immediately upon such conversion each share of the Class B Common Stock shall
automatically be converted into one share of Class A Common Stock. AMHC has no
present plans to demutualize.

A Permitted Class B Holder may pledge, subject to a security interest or
lien, encumber, or otherwise hypothecate shares of Class B Common Stock in
excess of the number of shares of Class B Common Stock which carry the right to
cast at least a majority of the votes of the outstanding shares of capital stock
of the Company having voting rights. However, except for a transfer to a
Permitted Class B Holder, a conversion of Class B Common Stock into Class A
Common Stock and except as described in the preceding sentence, no shares of
Class B Common Stock may be conveyed, pledged or otherwise transferred. Any
conveyance, transfer, assignment, pledge, security interest, lien, encumbrance
or hypothecation or alienation by AMHC or any intermediate holding company, in
or on the majority of the voting shares of AmerUs Life shall be deemed void in
inverse chronological order from the date of such transaction to the extent
necessary to give AMHC unencumbered direct or indirect ownership of a majority
of such voting shares.

PREFERRED STOCK

The Board of Directors of the Company is authorized, subject to any
limitations prescribed by law, from time to time to issue up to an aggregate of
20 million shares of Preferred Stock in one or more series, each of such series
to have such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other special
rights, and such qualifications, limitations or restrictions thereof, as shall
be determined by the Board of Directors in a resolution or resolutions providing
for the issue of such Preferred Stock; provided, however, that no Preferred
Stock may have more than one vote per share. Thus, any series may, if so
determined by the Board of Directors, have full voting rights with the Class A
Common Stock or superior or limited voting rights, be convertible into Class A
Common Stock or another security of the Company, and have such other relative
rights, preferences and limitations as the Company's Board of Directors shall
determine; provided, however, that no Preferred Stock may have more than one
vote per share. As a result, any class or series of Preferred Stock could have
rights which would adversely affect the rights of the holders of the Class A
Common Stock. The shares of any class or series of Preferred Stock need not be
identical. The issuance of a new series of Preferred Stock, while providing
desirable flexibility in connection with possible acquisitions or other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire, or discouraging a third party from acquiring, a majority
of the outstanding voting stock of the Company.

PREFERRED SECURITIES OF AMERUS CAPITAL I

AmerUs Capital I, a Delaware business trust and a wholly-owned subsidiary of
the Company, currently intends to issue approximately $75 million of trust
preferred securities (the "Preferred Securities") as part of the Company's
financing plan. The assets of the Trust will be invested in Junior Subordinated
Debt Securities of the Company, which debt securities are currently expected to
have a stated maturity of thirty years. If the Company redeems all or a portion
of the Junior Subordinated Debt Securities, the Trust must redeem a
corresponding amount of the Preferred Securities. The dividend rate on the
Preferred Securities will be determined at the time the Preferred Securities are
publicly sold. See the "Preferred Offering."

INDEMNIFICATION AND LIMITATION OF LIABILITY

The Company's Articles of Incorporation provide that no director of the
Company shall be liable to the Company or its shareholders for monetary damages
for any breach of fiduciary duty as a director, except to the extent otherwise
required by the Iowa Business Corporation Act (the "IBCA"). This provision does
not prevent shareholders from obtaining injunctive or other equitable relief
against directors nor does it shield directors from liability under Federal or
state securities laws. In addition, the Articles of Incorporation provide that
the Company shall, to the maximum extent permitted by law, indemnify any person
who incurs any loss by reason of the fact that he is or was or has agreed to be
a

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director or officer of the Company or while a director or officer of the Company
is or was serving at the request of the Company as a director, officer, partner,
trustee, employee or agent of any corporation, partnership, joint venture, trust
or other enterprise, including service with respect to employee benefit plans,
subject to such person having met the standards of conduct required for such
indemnification under Iowa law.

SUBSCRIPTION SERVICES AGENT

The Subscription Services Agent for the Class A Common Stock is ChaseMellon
Shareholder Services, L.L.C.

CERTAIN PROVISIONS OF THE ARTICLES OF INCORPORATION
AND BYLAWS OF THE COMPANY

The following discussion is a summary of certain provisions of the Amended
and Restated Articles of Incorporation (the "Articles of Incorporation") and
Bylaws of the Company relating to shareholder voting rights, advance notice
requirements and other provisions which may be deemed to have an "anti-takeover"
effect. In addition to these provisions, regulatory restrictions on dispositions
of Common Stock by the Company's parent corporation as well as the inability of
the holders of the Class A Common Stock to elect a majority of the Company's
Board of Directors may also deter attempts to effect, or prevent the
consummation of, a change in control of the Company. See "Description of the
Capital Stock." These and other provisions affect shareholder rights and should
be given careful attention. The following description of certain of these
provisions is necessarily general and is qualified in its entirety by reference
to the Articles of Incorporation and Bylaws, copies of which are included as
exhibits to the Registration Statement of which this Prospectus is a part.

ISSUANCE OF CLASS A COMMON STOCK, PREFERRED STOCK AND OTHER RIGHTS

The Company believes that its ability to issue, by action of a majority of
the Company's entire Board of Directors, and without shareholder consent, the
authorized but unissued shares of Class A Common Stock, shares of Preferred
Stock and other rights will provide the Company with the flexibility necessary
to meet its future needs without experiencing the time delay of having to seek
shareholder approval. Unissued shares of Class A Common Stock and Preferred
Stock will be issuable from time to time for any corporate purpose, including,
without limitation, stock splits, stock dividends, employee benefit and
compensation plans, acquisition and public or private sales for cash as a means
of raising capital. It is possible that the Company's Board of Directors might
use its authority (subject to the restrictions referred to above) to issue Class
A Common Stock, Preferred Stock or other rights in a way that could deter or
impede the completion of a tender offer or other attempt to gain control of the
Company of which the Company's Board of Directors does not approve. The Company
does not have any predetermined plans or commitments to use its authority to
effect any such issuance, but reserves the right to take any action in the
future which the Company's Board of Directors deems to be in the best interests
of the shareholders and the Company under the circumstances.

It is not possible to state the actual effect of any issuance of Preferred
Stock upon the rights of holders of Class A Common Stock because the Company's
Board of Directors has not determined any issuance price or prices, terms or
rights relating to Preferred Stock. However, such effects might include (i)
restrictions on Class A Common Stock dividends if Preferred Stock dividends have
not been paid; (ii) dilution of the voting power and equity interest of existing
holders of Class A Common Stock to the extent that any Preferred Stock series
has voting rights or would acquire voting rights upon the occurrence of certain
events (such as the failure to pay dividends for a specified period) or that any
Preferred Stock series is convertible into Class A Common Stock; and (iii)
current holders of Class A Common Stock not being entitled to share in the
Company's assets upon liquidation, dissolution or winding-up until satisfaction
of any liquidation preferences granted to any series of Preferred Stock.

BOARD OF DIRECTORS

The Articles of Incorporation provide that the number of Company directors
will be determined pursuant to the Bylaws, but will not be less than seven or
more than 21 directors (subject to the rights of

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the holders of any series of Preferred Stock). The Bylaws provide that the exact
number of directors will be determined from time to time by the affirmative vote
of a majority of the Company's entire Board of Directors. At any meeting of the
Company's Board of Directors, a majority of the Company's entire Board of
Directors will constitute a quorum for the transaction of business, and subject
to certain exceptions, at any meeting at which a quorum is present the
affirmative vote of a majority of the directors present will constitute the act
of the Company's Board of Directors. The Company's Board of Directors will be
divided into three classes, designated Classes I, II and III, which will be as
nearly equal in number as possible. Directors of Class I will hold office for a
term expiring at the annual meeting of shareholders to be held in 1997,
directors of Class II will hold office for a term expiring at the annual meeting
of shareholders to be held in 1998 and directors of Class III will be elected to
hold office for a term expiring at the annual meeting of shareholders to be held
in 1999. At each annual meeting of shareholders following such initial
classification and election, the respective successors of each class shall be
elected for three-year terms, and each director will hold office until such
annual meeting and until his or her successor is elected and qualified, unless
the director dies, resigns, is disqualified or is removed from office. Thus,
approximately two-thirds of the members of the Board of Directors at any time
will have had prior board experience. With such a staggered Board of Directors,
at least two annual meetings will normally be required to effect a change in the
composition of a majority of the Board of Directors.

Under the IBCA and the Company's Articles of Incorporation, and subject to
the rights of the holders of any series of Preferred Stock, a majority of the
Board of Directors though less than a quorum, or the sole remaining director,
may fill vacancies on the Board of Directors or newly created directorships
resulting from any increase in the authorized number of directors. The Articles
of Incorporation provide that the election of directors need not be by written
ballot unless the Bylaws so provide. The Bylaws do not require the use of such a
written ballot. The Bylaws provide that the holders of a majority of shares then
entitled to vote if an election of directors were held may remove any director
or the entire Board of Directors, with or without cause.

LIMITATIONS ON CALLING SPECIAL MEETINGS OF SHAREHOLDERS

Under Iowa law, special meetings of shareholders may be called by the Board
of Directors or by such other persons as may be authorized by the articles of
incorporation or the bylaws. In the case of the Company, the Bylaws provide that
special meetings may be called by the Chairman, the President, the Company's
Board of Directors pursuant to a resolution adopted by not less than a majority
of the total number of directors or at the request of the holders of not less
than 25% of the combined voting power of the then outstanding stock of the
Company entitled to vote generally in the election of directors. The notice for
a special meeting must set forth the purpose or purposes of the meeting and,
except as otherwise required by law or the Articles of Incorporation, no
business will be transacted at any special meeting of shareholders other than
the items of business stated in the notice.

ADVANCE NOTICE REQUIREMENTS

The Bylaws establish advance notice procedures with regard to (i) the
nomination, other than by or at the direction of the Company's Board of
Directors, of candidates for election to the Company's Board of Directors (the
"Nomination Provision") and (ii) certain business to be brought before an annual
meeting of shareholders of the Company (the "Business Provision").

The Nomination Provision, by requiring advance notice of nominations by
shareholders, affords the Company's Board of Directors a meaningful opportunity
to consider the qualifications of the proposed nominees and, to the extent
deemed necessary or desirable by the Company's Board of Directors, to inform
shareholders about such qualifications.

The Business Provision, by requiring advance notice of business proposed to
be brought before an annual meeting, provides a more orderly procedure for
conducting annual meetings of shareholders and provides the Company's Board of
Directors with a meaningful opportunity prior to the meeting to inform
shareholders, to the extent deemed necessary or desirable by the Company's Board
of Directors, of any business proposed to be conducted at such meeting, together
with any recommendation of the Company's Board of Directors. The Business
Provision does not affect the right of shareholders to make

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shareholder proposals for inclusion in proxy statements for the Company's annual
meetings of shareholders pursuant to the rules of the Commission. In addition,
neither the Nomination Provision nor the Business Provision will prevent any
shareholder or shareholders holding at least 25% of the shares entitled to vote
on a particular matter from requesting a special meeting with respect to such
matter as described above in "--Limitations on Calling Special Meetings of
Shareholders."

Although these Bylaw provisions do not give the Company's Board of Directors
any power to approve or disapprove of shareholder nominations for the election
of directors or of any other business desired by shareholders to be conducted at
an annual meeting, they may make it difficult for a third party to conduct a
solicitation of proxies to elect its own slate of directors or otherwise attempt
to obtain control of the Company, even if such a solicitation or attempt might
be beneficial to the Company and its shareholders.

AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

Except to the extent the Articles of Incorporation or Bylaws otherwise
provide, the Company's Board of Directors may, upon the affirmative vote of a
majority of the entire Board, amend or repeal any Bylaw. The Articles of
Incorporation may be amended with the affirmative vote of the holders of a
majority of the outstanding voting securities of the Company having the right to
vote generally in the election of directors; PROVIDED, that any proposed
amendment to the Articles of Incorporation which would alter the provision
relating to the ratio of outstanding shares of Class A Common Stock to
outstanding shares of Class B Common Stock would require the approval of a
majority of the outstanding shares of Class A Common Stock and Class B Common
Stock and a majority of the outstanding shares of Class A Common Stock
(excluding shares owned by the Permitted Class B Holders). Under Iowa law,
certain proposed amendments to the Articles of Incorporation which adversely
affect the rights of a particular class of stock must be approved by a majority
of such class.

STATE STATUTORY PROVISIONS

Any merger or acquisition of the Company by another entity or the
acquisition or attempted acquisition of more than 10% of the stock of the
Company is subject to regulatory approval by the Iowa Commissioner. See
"Supervision and Regulation--Regulation of the Company and AMHC."

Section 490.1108 of the IBCA provides that in considering acquisition
proposals, directors may consider, in addition to the consideration of the
effects of any action on shareholders, the effects on the company's employees,
suppliers, creditors, customers and the communities in which it operates, as
well as the long-term and short-term interests of the company. Consideration of
any or all community interest factors is not a violation of the business
judgment rule, even if the directors reasonably determine that effects on a
community or other factors outweigh the financial or other benefits to the
company or a shareholder or group of shareholders. Section 490.624A of the IBCA
also includes authorization of "poison pills" which include, without limitation,
terms and conditions of stock rights or options issued by a corporation that
preclude or limit the exercise, transfer or receipt of stock rights by persons
owning or offering to acquire a specified number or percentage of a
corporation's outstanding shares. Unlike most states, Iowa does not presently
have a "business combination" law prohibiting business combinations with a
shareholder who holds over a specified percentage of stock for less than a
specified period after crossing the threshold.

The foregoing provisions of state law could have the effect of delaying,
deferring or preventing a change in control of the Company if the Board of
Directors determines that a change of control is not in the best interests of
the Company, its shareholders and other constituencies. In addition, the
regulatory restrictions on the acquisition of securities of the Company may also
deter attempts to effect, or prevent the consummation of, a change in control of
the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offerings, the Company will have 17 million shares of
Class A Common Stock outstanding (assuming that the underwriters in the Public
Offering do not exercise their over-

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allotment option). All shares sold in the Offerings will be freely tradeable
without restriction or further registration under the Securities Act. However,
the shares of Class A Common Stock and Class B Common Stock owned by AmerUs
Group will constitute "restricted securities" within the meaning of Rule 144
promulgated under the Securities Act. Such shares will not be eligible for sale
under Rule 144 until two years after the date of their issuance. Thereafter,
such shares will be subject to the volume and timing requirements of Rule 144.

All officers and directors of the Company and its affiliates who purchase
shares of Class A Common Stock pursuant to the Subscription Offering would be
required, pursuant to proposed rules of the Iowa Commissioner, to refrain from
offering, selling, contracting to sell or otherwise disposing of such shares for
a period of 180 days following the date of purchase. In addition, AmerUs Group,
the Company and their officers and directors have agreed with the underwriters
not to sell any Common Stock for 180 days from the date of the Public Offering
prospectus without the prior written consent of Goldman, Sachs & Co.

Pursuant to the Intercompany Agreement, the Company has granted AmerUs Group
the right to require the Company to register shares of the Company's common
stock owned by it under the Securities Act. See "Certain Transactions and
Relationships--Intercompany Agreement."

PLAN OF DISTRIBUTION

The Company and the Selling Shareholder are offering up to an aggregate of
five million shares of Class A Common Stock in the Subscription Offering. The
Chicago Corporation, a registered broker-dealer, is acting as Subscription Agent
for the Company and the Selling Shareholder in connection with the solicitation
of subscriptions in the Subscription Offering and with offers and sales of the
Shares. The Company reserves the right to terminate the Subscription Offering at
any time in its sole discretion and to reject any subscription that is
improperly completed, unsigned, or not accompanied by a check or money order for
the purchase price. Subscriptions that are received after the Subscription
Expiration Date will be rejected. See "The Subscription Offering."

The minimum and maximum number of Shares which may be subscribed for are 100
and 5,000 Shares, respectively. Any subscription funds received will be held by
ChaseMellon Shareholder Services, L.L.C., as Subscription Services Agent pending
the closing of the Subscription Offering. The Subscription Offering is not
contingent on receipt of a minimum number of subscriptions, nor is it contingent
on the consummation of the Public Offering. The period during which
subscriptions will be accepted will end on the Subscription Expiration Date.

The Public Offering Price per share of Class A Common Stock in the Public
Offering will be negotiated among the Company, the Selling Shareholder, Goldman,
Sachs & Co., Donaldson, Lufkin & Jenrette Securities Corporation, Salomon
Brothers Inc and The Chicago Corporation, as representatives of the underwriters
in the Public Offering. Among the factors expected to be considered in
determining the Public Offering Price, in addition to prevailing market
conditions, will be the Company's historical performance, an estimate of the
business potential and the earnings prospects of the Company, an assessment of
the Company's management and the consideration of the above factors in relation
to market valuation of companies in related businesses. The representatives are
also expected to consider, among other factors, the market valuations and
certain financial ratios of selected comparable life insurance companies.

In consideration for the provision of certain advisory services and for
acting as Subscription Agent for the Company and the Selling Shareholder, the
Company and the Selling Shareholder have agreed to pay The Chicago Corporation a
sliding fee equal to between 1.0% and 0.5% of the aggregate proceeds of the
Subscription Offering, subject to a minimum fee of $25,000. The Company and the
Selling Shareholder have also agreed to reimburse The Chicago Corporation for
its reasonable costs and expenses and to indemnify it against certain
liabilities, including liabilities under the Securities Act and the Exchange
Act, and the Company, the Selling Shareholder and AmerUs Life expect to enter
into an arrangement with the representatives of the underwriters in the Public
Offering providing for the payment

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of a fee, reimbursement of expenses and indemnification in the event the
Subscription Offering is consummated but the Public Offering is not. John A.
Wing, a Director of the Company, is Chairman of The Chicago Corporation.

Goldman, Sachs & Co. and The Chicago Corporation have each from time to time
performed investment banking services for the Company and have received fees in
connection with such services. It is anticipated that Goldman, Sachs & Co. will
be one of the representatives of the underwriters for the Preferred Offering.

LEGAL MATTERS

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by James A. Smallenberger, Esq., Senior Vice
President and Secretary of the Company, and Sidley & Austin, Chicago, Illinois.
Sidley & Austin will rely as to matters governed by the laws of the State of
Iowa upon the opinion of James A. Smallenberger, Esq.

EXPERTS

The Consolidated Financial Statements and Schedules of the Company as of
September 30, 1996, December 31, 1995 and December 31, 1994 and for the nine
month period ended September 30, 1996 and each of the years in the three-year
period ended December 31, 1995, have been included herein and in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent auditors, appearing elsewhere herein, and upon the authority of said
firm as experts in accounting and auditing.

The Company retained Tillinghast, an actuarial consulting firm, to advise it
in connection with actuarial matters involved in the establishment and operation
of the Closed Block. The opinion of Tillinghast, dated October 26, 1995, states
(in reliance upon the matters and subject to the limitations described in such
opinion) that the establishment and operation of the Closed Block as
contemplated by the Plan make adequate provision for allocating to the Closed
Block assets which will be reasonably sufficient to enable the Closed Block to
provide for the guaranteed benefits, certain expenses and taxes associated with
the Closed Block policies, and to provide for the continuation of the current
dividend scales and interest credits in effect prior to the Reorganization if
the experience underlying those scales and credits continues.

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GLOSSARY OF CERTAIN INSURANCE AND
OTHER DEFINED TERMS

THE FOLLOWING GLOSSARY INCLUDES DEFINITIONS OF CERTAIN INSURANCE AND OTHER
DEFINED TERMS.

<TABLE>
<S> <C>
ACQUISITION COSTS............................ Costs including commissions, policy issue and
underwriting costs, and other costs incurred
to acquire or renew traditional life
insurance, universal life insurance and
annuity products.
AFFILIATE.................................... With respect to any person, any other Person
which directly or indirectly controls, is
controlled by or is under common control with
such Person.
A.M. BEST.................................... A.M. Best Company, Inc. A.M. Best financial
condition ratings are opinions of an
insurance company's financial strength,
operating performance and ability to meet its
obligations to policyowners. Such ratings are
based upon a comprehensive review of a
company's financial performance, which is
supplemented by certain data, including
responses to A.M. Best's questionnaires,
quarterly NAIC filings, state insurance
department examination reports, loss reserve
reports, annual reports and reports filed
with state insurance departments. A.M. Best
undertakes a quantitative evaluation based on
profitability, leverage and liquidity and a
qualitative evaluation based upon the
composition of a company's book of business
or spread of risk, the amount,
appropriateness and soundness of reinsurance,
the quality, diversification and estimated
market value of its assets, the adequacy of
its loss reserves and policyowners' surplus
and the experience and competence of its
management. A.M. Best Company, Inc. uses the
following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
A++ and A+ Superior
A and A- Excellent
B++ and B+ Very Good
B and B- Adequate
C++ and C+ Fair
C and C- Marginal
D Very Vulnerable
E Under State Supervision
F In Liquidation
</TABLE>

<TABLE>
<S> <C>
ANNUALIZED PREMIUM........................... The expected premium payment for a 12-month
period for each policy, excluding single
premium policies. Actual premium payments may
be higher or lower than annualized premiums.
ANNUITY...................................... A contract that pays a periodic income
benefit for the life of a person (the
annuitant), the lives of two or more persons
or a specific period of time.
</TABLE>

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<PAGE>
<TABLE>
<S> <C>
ASSET VALUATION RESERVE OR AVR............... The asset valuation reserve adopted by the
NAIC in December 1991 to replace the MSVR.
AVR appears as a liability on a life
insurer's statutory financial statements
beginning with the insurer's statutory
financial statements for 1992. AVR
establishes STATUTORY RESERVES for debt
securities, preferred stocks, common stock,
mortgage loans, equity real estate and joint
ventures and other invested assets. AVR
generally captures all realized and
unrealized gains and losses on such assets,
other than those resulting from changes in
interest rates. AVR has no effect on
financial statements prepared in conformity
with GAAP.
CAREER GENERAL AGENTS........................ Individuals who are in charge of an insurance
agency. They are independent contractors, who
are responsible for recruiting, training and
developing new agents in addition to
supervising experienced agents in their
agency; however, they may personally sell new
business. Career General Agents are paid
based on the business produced by their
agency and are also paid allowances to cover
their agency expenses and additional amounts
to compensate them for recruiting, training
and developing new agents.
CAREER GENERAL AGENCY SYSTEM................. The network of career general agencies
through which the Company distributes its
insurance and annuity products.
CEDING....................................... The reinsuring of all or a portion of an
insurer's risk with another insurer.
CLOSED BLOCK................................. The closed block of participating business to
be established, as of the Effective Date, by
AmerUs Life for the exclusive benefit of the
policies included therein.
CLOSED BLOCK BUSINESS........................ The policies within the classes specified in
the Plan (which policy classes constitute all
of the classes of individual traditional life
insurance policies and all universal life
insurance policies for which AmerUs Life had
a dividend scale in effect prior to the
Reorganization), but only to the extent such
policies are in force on the Effective Date.
CONVEXITY.................................... A measure of the shape of the price/yield
curve. Convexity explains the difference
between the prices estimated by standard
duration and the actual market prices of a
security resulting from a change in
market-required yield.
COST OF INSURANCE............................ The mortality charges assessed against
universal life insurance policies.
</TABLE>

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<TABLE>
<S> <C>
CREDITING RATES.............................. Interest rates applied to life insurance
policies and annuity contracts, whether
contractually guaranteed or currently
declared for a specified period.
DEFERRED FIXED ANNUITY....................... A fixed annuity that has a deferred or
accumulation period from the time of premium
payment(s) to the payout of a periodic income
benefit.
DIFFERENTIAL EARNINGS AMOUNT................. The amount of additional income which is
imputed to a mutual life insurance company
under Section 809 of the Internal Revenue
Code based on a comparison of the current
one-year average of mutual life insurance
company earnings rates with an adjusted
average of stock life insurance company
earnings rates for the previous three years.
The tax resulting from this additional income
is referred to as the "equity add-on tax."
DIVIDEND SCALE............................... The actuarial formula used by life insurance
companies to determine amounts payable as
dividends on participating policies based on
experience factors relating to, among other
things, investment results, mortality, lapse
rates, expenses and policy loan interest and
utilization rates.
DUFF & PHELPS................................ Duff & Phelps Credit Rating Co. Duff &
Phelp's claims-paying ability ratings are
opinions of an operating insurance company's
future ability to pay its policy and contract
obligations in a timely fashion. Duff &
Phelps claims-paying ability ratings are
based on certain qualitative and quantitative
factors including, among other factors, the
economic fundamentals of the company's
principal lines of business, the company's
competitive position and asset and liability
management practices. Duff & Phelps Credit
Rating Co. uses the following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
AAA Highest claims-paying
ability
AA+, AA and AA- Very high claims-paying
ability
A+, A and A- High claims-paying
ability
BBB+, BBB Adequate claims-paying
and BBB- ability
BB+, BB and BB- Uncertain claims-paying
ability
B+, B and B- Possessing risk that
policyowners and
contractholders will
not be paid when due
</TABLE>

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<TABLE>
<S> <C> <C>
CCC+, CCC and Substantial risk that
CCC- policyowners and
contractholders will
not be paid when due
DD Company is under order
of liquidation
</TABLE>

<TABLE>
<S> <C>
EQUITY ADD-ON TAX (OR DIFFERENTIAL EARNINGS
TAX)........................................ The tax resulting from the DIFFERENTIAL
EARNINGS AMOUNT, which is the amount of
additional income imputed to a mutual life
insurance company under Section 809 of the
Internal Revenue Code based on a comparison
of the current one-year average of mutual
life insurance company earnings rates with an
adjusted average of stock life insurance
company earnings rates from the previous
three years.
FIRST YEAR ANNUALIZED PREMIUMS............... The expected premium payment for the first
policy year for each policy, excluding single
premium policies. Actual premium payments may
be higher or lower than first year annualized
premiums. This is a common insurance industry
measurement of sales achievement.
FIXED ANNUITY................................ Contract that guarantees that a specific sum
of money will be paid in the future, usually
as monthly income, to an annuitant. The
dollar amount paid to the annuitant will not
fluctuate regardless of adverse changes in
the insurance company's mortality experience,
investment return and expenses.
GAAP......................................... United States generally accepted accounting
principles for life insurance companies.
GENERAL ACCOUNT.............................. All investment accounts maintained by an
insurer, other than the separate accounts.
IMR.......................................... The interest maintenance reserve adopted by
the NAIC in December 1991. IMR appears as a
liability on a life insurer's statutory
financial statements beginning with the
insurer's statutory financial statements for
1992 and applies to all types of fixed income
investments (bonds, preferred stock,
mortgage-backed securities and mortgage
loans). IMR captures the net gains or losses
arising from changes in the overall level of
interest rates which are realized upon the
sale of such investments, and IMR amortizes
these net realized gains into income over the
remaining life of each investment sold. IMR
has no effect on financial statements
prepared in conformity with GAAP.
IN FORCE..................................... A life insurance policy or annuity contract
that has not expired.
</TABLE>

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<PAGE>
<TABLE>
<S> <C>
INTEREST-SENSITIVE PRODUCTS.................. Insurance and annuity products for which
interest in excess of guaranteed levels is
credited to the policy.
MEMBER....................................... A person having rights or interests arising
under AMHC's articles of incorporation or
otherwise by law in respect of each insurance
policy or annuity contract of AmerUs Life,
including, but not limited to, any right to
vote.
MOODY'S...................................... Moody's Investors Service, Inc. Moody's
financial strength ratings are opinions of an
operating insurance company's ability to
discharge senior policyowner claims and
obligations pursuant to its insurance
policies. Moody's financial strength ratings
are based on information provided by the
company and federal and state regulators.
Moody's Investors Service, Inc. uses the
following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
Aaa Exceptional
Aa1, Aa2 and Aa3 Excellent
A1, A2 and A3 Good
Baa1, Baa2 and Adequate
Baa3
Ba1, Ba2 and Ba3 Questionable
B1, B2 and B3 Poor
Caa Very poor
Ca Extremely poor
C Lowest
</TABLE>

<TABLE>
<S> <C>
MORBIDITY.................................... The relative incidence of disability or
sickness due to disease or physical
impairment.
MORTALITY.................................... The relative incidence of death of life
insureds or annuitants.
MSVR......................................... Mandatory securities valuation reserve
required prior to 1992 statutory financial
statements by state insurance regulatory
authorities. MSVR was established as a
liability on a life insurer's statutory
financial statements and was intended to
absorb realized and unrealized gains and
losses sustained from time to time on a
portion of an insurer's general account debt
securities and preferred stock portfolios.
MSVR had no effect on financial statements
prepared in conformity with GAAP. The MSVR
was replaced by the AVR and IMR effective
with respect to an insurer's statutory
financial statements for 1992.
</TABLE>

<TABLE>
<S> <C>
NAIC......................................... The National Association of Insurance
Commissioners, an association of the chief
insurance supervisory officials of each
state, territory and insular possession of
the United States.
</TABLE>

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<PAGE>
<TABLE>
<S> <C>
NET LEVEL METHOD............................. Reserve method used for traditional life
insurance. Such method defines the reserve as
the excess of the present value of future
guaranteed benefits over the present value of
future net premiums.
PARTICIPATING WHOLE LIFE POLICIES OR
PARTICIPATING WHOLE LIFE INSURANCE.......... Whole life policies or insurance under which
the owner thereof is eligible to share in the
earnings of the insurer through dividends.
PERSISTENCY.................................. The percentage of life insurance policies or
annuity contracts remaining in force from
period to period.
PERSONAL PRODUCING GENERAL AGENTS OR PPGAS... Independent agents who sell products directly
to the consumer and write business directly
with insurance companies and who are
compensated primarily for personal
production.
PPGA SYSTEM.................................. The network of PPGAs through which the
Company distributes its insurance and annuity
products.
PLAN......................................... The Plan of Reorganization of American Mutual
Life, including all schedules and exhibits
thereto, pursuant to which American Mutual
Life reorganized into a mutual insurance
holding company structure, as such Plan may
be amended from time to time.
POLICY....................................... Generally, a life insurance policy
(including, without limitation, a pure
endowment contract) or annuity contract
issued by the Company.
PREMIUM...................................... Payments and considerations received on
insurance policies and annuity contracts
issued or reinsured by an insurance company.
Under GAAP, premiums on universal life and
deferred annuity contracts are not accounted
for as revenues.
REINSURANCE.................................. The practice whereby one party, called the
reinsurer or assuming company, in
consideration of a premium paid to such
party, agrees to indemnify another party,
called the ceding company or primary insurer,
for risks underwritten by the ceding company.
Reinsurance provides a primary insurer with
three major benefits: it reduces net
liability on individual risks; it helps to
protect against catastrophic losses; and it
helps to maintain acceptable surplus and
reserve ratios. Reinsurance provides a
primary insurer with additional underwriting
capacity in that the primary insurer can
accept larger risks and can expand the volume
of business it writes without increasing its
capital base. The ceding company remains
liable on its obligations under the policies
reinsured if the reinsurer fails to pay
claims on a reinsured policy.
</TABLE>

115
<PAGE>

<TABLE>
<S> <C>
RESERVES..................................... Liabilities established by insurers to
reflect the estimated discounted present
value of costs of claims, payments or
contract liabilities and the related expenses
that the insurer will ultimately be required
to pay in respect of insurance or annuities
it has written.
RISK-BASED CAPITAL REQUIREMENTS OR RBC....... Regulatory and rating agency targeted surplus
based on the relationship of statutory
surplus, with certain adjustments, to the sum
of stated percentages of each element of a
specified list of company risk exposures.
SFAS......................................... Statement of Financial Accounting Standards.
SECOND TO DIE WHOLE LIFE INSURANCE........... A whole life policy in which two persons are
named as insureds. The death benefit is paid
upon the death of the second to die of the
two insureds.
SEPARATE ACCOUNTS............................ Investment accounts maintained by an insurer
to which funds have been allocated for
certain policies under provisions of relevant
state law. The investments in each separate
account are maintained separately from those
in other separate accounts and the general
account. The investment results of the
separate account assets are passed through
directly to the separate account
policyowners, so that an insurer derives
management and other fees from, but bears no
investment risk on, these assets, except the
risk on a small number of products that
returns on separate assets will not meet the
relatively low minimum rate guaranteed on
these products.
STANDARD & POOR'S............................ Standard & Poor's Ratings Group. Standard &
Poor's claims-paying ability ratings are
opinions of an operating insurance company's
financial ability to meet its obligations
under its insurance policies. Standard &
Poor's claims-paying ability ratings are
based on current information provided by the
subject insurance company and other reliable
sources. Standard & Poor's Rating Group uses
the following rating scale:
</TABLE>

<TABLE>
<S> <C> <C>
AAA Superior
AA+, AA and AA- Excellent financial
security
A+, A and A- Good financial security
BBB+, BBB Adequate
and BBB-
BB+, Bb and BB- Financial security may
be adequate
B+, B and B- Vulnerable
CCC Extremely vulnerable
R Regulatory actions
BBBq, Bbq and Bq Qualified solvency
ratings
</TABLE>

116
<PAGE>

<TABLE>
<S> <C>
STATUTORY ACCOUNTING PRACTICES............... Accounting practices prescribed or permitted
by the Iowa Department of Insurance.
STATUTORY RESERVES........................... Monetary amounts established by state
insurance law that an insurer must have
available to provide for future obligations
with respect to all policies. Statutory
reserves are liabilities on the balance sheet
of financial statements prepared in
conformity with Statutory Accounting
Practices.
STATUTORY SURPLUS............................ The excess of statutory admitted assets over
statutory liabilities as shown on an
insurer's statutory financial statements.
SURRENDERS AND WITHDRAWALS................... Relinquishment of life insurance policies and
annuity contracts for their entire net cash
surrender values and withdrawals of a portion
of such values.
SUPPLEMENTARY CONTRACT....................... An agreement by an insurer to retain the lump
sum payable under an insurance policy and to
make payments in accordance with the
settlement option chosen.
TERM LIFE INSURANCE.......................... Insurance protection during a certain number
of years but expiring without policy cash
value if the insured survives the stated
period.
TRADITIONAL LIFE INSURANCE................... Consists of whole life insurance and term
life insurance.
UNDERWRITING................................. The insurer's process of examining, accepting
or rejecting insurance risks, and classifying
those accepted, in order to charge the
appropriate premium for each accepted risk.
UNEARNED PREMIUM............................. The portion of an insurance premium paid
other than that which has paid for the
insurance protection already provided on a
policy.
UNIVERSAL LIFE INSURANCE..................... A form of life insurance where an insurance
account is maintained for each insurance
policy. Premiums, net of specified expenses,
are credited to the account, as is interest,
generally at a rate determined from time to
time by the insurer. Specific charges are
made against the account for the cost of
insurance protection and for the insurer's
expenses. The universal life form allows
considerable flexibility as to the amount and
timing of premium payments and for the level
of death benefits provided.
VARIABLE ANNUITY............................. Annuity in which premium payments are used to
purchase accumulation units. The value of a
unit fluctuates in accordance with the
investment experience of a separate account;
variable annuity contracts typically include
a general account guaranteed interest
investment option. At the time of the payment
of benefits to the annuitant, the
</TABLE>

117
<PAGE>
<TABLE>
<S> <C>
annuitant can generally elect from a number
of payment options which provide either fixed
or variable benefit payments.
WHOLE LIFE INSURANCE OR WHOLE LIFE Insurance that may be kept in force for a
POLICIES.................................... person's entire life by paying one or more
premiums. It is paid for in one of three
different ways: (i) ordinary life insurance
(premiums are payable as long as the insured
lives), (ii) limited payment life insurance
(premiums are payable over a specified number
of years), and (iii) single premium life
insurance (a lump sum amount paid at the
inception of the policy). The insurance
policy pays a benefit (contractual amount
adjusted for items such as policy loans and
dividends, if any) at the death of the
insured. Whole life insurance also builds up
cash values.
</TABLE>

118
<PAGE>
AMERUS LIFE HOLDINGS, INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Independent Auditors' Report............................................................................... F-2
Consolidated Balance Sheets as of September 30, 1996 and December 31, 1995 and 1994........................ F-3
Consolidated Income Statements for the nine months ended September 30, 1996 and September 30, 1995
(unaudited) and the years ended December 31, 1995, 1994 and 1993.......................................... F-4
Consolidated Statements of Stockholder's Equity for the nine months ended September 30, 1996 and the years
ended December 31, 1995, 1994 and 1993.................................................................... F-5
Consolidated Statements of Cash Flows for the nine months ended September 30, 1996 and September 30, 1995
(unaudited) and the years ended December 31, 1995, 1994 and 1993.......................................... F-6
Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
AmerUs Life Holdings, Inc.:

We have audited the accompanying consolidated balance sheets of AmerUs Life
Holdings, Inc. and subsidiaries as of September 30, 1996, December 31, 1995 and
December 31, 1994, and the related consolidated statements of income,
stockholder's equity, and cash flows for the nine month period ended September
30, 1996, and each of the years in the three-year period ended December 31,
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
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, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of AmerUs Life
Holdings, Inc. and subsidiaries as of September 30, 1996, December 31, 1995, and
December 31, 1994, and the results of their operations and their cash flows for
the nine month period ended September 30, 1996 and each of the years in the
three-year period ended December 31, 1995, in conformity with generally accepted
accounting principles.

As discussed in note 1 to the consolidated financial statements, the Company
implemented the provisions of the Statement of Financial Accounting Standards
(SFAS) No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises
and by Insurance Enterprises for Certain Long-Duration Participating Contracts,"
and in 1993 the Company implemented the provisions of SFAS 106, "Employers
Accounting for Postretirement Benefits Other Than Pensions," and SFAS 115,
"Accounting for Certain Investments in Debt and Equity Securities. Also, as
discussed in note 1 to the consolidated financial statements, the Company has
restated its consolidated financial statements to reflect the spin-off of a
wholly owned subsidiary, which resulted in a change in the subsidiaries
comprising the consolidated financial statements.

KPMG Peat Marwick LLP

Des Moines, Iowa
December 2, 1996, except as to note 1,
which is as of December 11, 1996

F-2
<PAGE>

AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ----------------------
1996 1995 1994
SEPTEMBER 30, -------------- ---------- ----------
1996
PRO FORMA
AS ADJUSTED
FOR THE
CAPITAL
CONTRIBUTION
(NOTE 15)
--------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Investments (notes 2 and 5):
Securities available-for-sale at fair value:
Fixed maturity securities.............................. $2,294,031 $2,297,571 $3,142,096 $2,566,768
Equity securities...................................... 73,897 74,575 109,675 178,770
Short-term investments................................. 12,002 12,002 39,353 8,529
Mortgage loans on real estate (notes 3 and 5)............ 250,484 260,233 353,597 447,663
Real estate.............................................. 10,481 40,012 52,199 58,164
Policy loans............................................. 63,986 63,986 220,044 209,512
Other investments........................................ 61,831 61,831 48,064 22,256
-------------- -------------- ---------- ----------
Total investments.................................... 2,766,712 2,810,210 3,965,028 3,491,662
Cash....................................................... -- -- 4,620 23,382
Accrued investment income.................................. 42,125 42,125 49,226 50,711
Premiums and fees receivable............................... 7,011 7,011 6,908 6,220
Reinsurance receivables.................................... 95 95 1,392 1,169
Deferred policy acquisition costs (note 4)................. 123,546 123,546 267,711 404,361
Deferred income taxes (note 6)............................. 4,369 4,369 -- --
Property and equipment (less accumulated depreciation
1996-- $22,416; 1995--$19,229; and 1994--$20,133)......... 4,600 13,324 13,502 13,979
Other assets............................................... 53,994 53,994 63,559 45,467
Closed block assets........................................ 1,237,139 1,237,139 -- --
-------------- -------------- ---------- ----------
Total assets......................................... $4,239,591 $4,291,813 $4,371,946 $4,036,951
-------------- -------------- ---------- ----------
-------------- -------------- ---------- ----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Policy reserves and policyowner funds:
Future life and annuity policy benefits................ $2,077,923 $2,077,923 $3,435,505 $3,309,529
Policyowner funds...................................... 35,240 35,240 56,474 51,464
-------------- -------------- ---------- ----------
2,113,163 2,113,163 3,491,979 3,360,993
Checks drawn in excess of bank balances.................. 43,811 8,311 -- --
Accrued expenses......................................... 11,802 11,802 11,100 15,677
Dividends payable to policyowners........................ 760 760 129,558 126,041
Policy and contract claims............................... 4,887 4,887 16,617 9,803
Income taxes payable..................................... 34,077 34,077 18,760 15,462
Deferred income taxes (note 6)........................... -- -- 48,623 1,482
Other liabilities........................................ 60,095 60,095 78,939 51,213
Debt (note 5)............................................ 36,333 45,055 36,461 37,957
Closed block liabilities................................. 1,501,269 1,501,269 -- --
-------------- -------------- ---------- ----------
Total liabilities.................................... 3,806,197 3,779,419 3,832,037 3,618,628
-------------- -------------- ---------- ----------
Stockholder's equity (note 11):
Preferred stock, no par value, 20,000,000 shares
authorized, none issued................................. -- -- -- --
Common stock, Class A, no par value, 75,000,000 shares
authorized; 14,500,000 shares issued and outstanding.... 14,500 14,500 -- --
Common stock, Class B, no par value, 50,000,000 shares
authorized; 5,000,000 shares issued and outstanding..... 5,000 5,000 -- --
Unrealized appreciation of available-for-sale securities
(note 2)................................................ 22,718 22,718 108,714 15,320
Retained earnings........................................ 391,176 470,176 431,195 403,003
-------------- -------------- ---------- ----------
Total stockholder's equity........................... 433,394 512,394 539,909 418,323
-------------- -------------- ---------- ----------
Commitments and contingencies (note 10)
Total liabilities and stockholder's equity........... $4,239,591 $4,291,813 $4,371,946 $4,036,951
-------------- -------------- ---------- ----------
-------------- -------------- ---------- ----------
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER
30, YEARS ENDED DECEMBER 31,
--------------------------- ---------------------------------------
1996 1995 1994 1993
------------- 1995 ------------- ----------- -----------
------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues:
Insurance premiums......................... $ 133,704 $ 183,864 $ 244,087 $ 237,912 $ 226,360
Universal life and annuity product
charges................................... 39,135 42,561 57,370 56,362 57,473
Net investment income (note 2)............. 189,293 210,491 285,244 275,691 269,854
Realized gains (losses) on investments
(note 2).................................. 62,555 41,564 51,387 (19,930) 15,460
Other...................................... 2,280 2,285 5,390 2,391 2,498
Contribution from the Closed Block......... 2,659 -- -- -- --
------------- ------------ ------------- ----------- -----------
429,626 480,765 643,478 552,426 571,645
------------- ------------ ------------- ----------- -----------
Benefits and expenses:
Policyowner benefits....................... 222,929 279,682 374,620 369,896 364,273
Underwriting, acquisition, and insurance
expenses.................................. 46,892 39,839 58,655 68,604 58,637
Amortization of deferred policy acquisition
costs (note 4)............................ 31,865 41,096 50,239 42,756 47,441
Dividends to policyowners.................. 26,343 36,274 49,414 45,039 45,519
------------- ------------ ------------- ----------- -----------
328,029 396,891 532,928 526,295 515,870
------------- ------------ ------------- ----------- -----------
Income before income taxes and
cumulative effect of change in
accounting principles................. 101,597 83,874 110,550 26,131 55,775
Income tax expense (note 6)................ 38,653 29,866 41,202 19,464 21,352
------------- ------------ ------------- ----------- -----------
Income before cumulative effect of change
in accounting principle................... 62,944 54,008 69,348 6,667 34,423
Cumulative effect of change in accounting
principle, net of tax (note 7)............ -- -- -- -- (3,214)
------------- ------------ ------------- ----------- -----------
Net income............................. $ 62,944 $ 54,008 $ 69,348 $ 6,667 $ 31,209
------------- ------------ ------------- ----------- -----------
------------- ------------ ------------- ----------- -----------
Pro forma net income per common share
(note 15)............................... $ 2.86 $ 3.15
------------- -------------
------------- -------------
Weighted average Common Shares
outstanding 22,000,000 22,000,000
------------- -------------
------------- -------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996
AND YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS)

<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
(DEPRECIATION)
OF AVAILABLE-
COMMON STOCK FOR-SALE TOTAL
-------------------- SECURITIES RETAINED STOCKHOLDER'S
CLASS A CLASS B (NOTE 2) EARNINGS EQUITY
--------- --------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993.................... $ -- $ -- $ 50,768 $ 370,399 $ 421,167
Net income.................................... -- -- -- 31,209 31,209
Net unrealized appreciation................... -- -- 8,058 -- 8,058
Dividend to American Mutual Holding Company
(note 11).................................... -- -- -- (310) (310)
Cumulative effect of change in accounting for
investments (note 2)......................... -- -- 45,755 -- 45,755
--------- --------- -------------- -------------- --------------
Balance at December 31, 1993.................. -- -- 104,581 401,298 505,879
Net income.................................... -- -- -- 6,667 6,667
Net unrealized depreciation................... -- -- (89,261) -- (89,261)
Dividend to American Mutual Holding Company
(note 11).................................... -- -- -- (4,962) (4,962)
--------- --------- -------------- -------------- --------------
Balance at December 31, 1994.................. -- -- 15,320 403,003 418,323
Net income.................................... -- -- -- 69,348 69,348
Net unrealized appreciation................... -- -- 93,394 -- 93,394
Dividend to American Mutual Holding Company
(note 11).................................... -- -- -- (41,156) (41,156)
--------- --------- -------------- -------------- --------------
Balance at December 31, 1995.................. -- -- 108,714 431,195 539,909
Net income.................................... -- -- -- 62,944 62,944
Net unrealized depreciation................... -- -- (85,996) -- (85,996)
Dividend to American Mutual Holding Company
(note 11).................................... -- -- -- (4,463) (4,463)
Issuance of common stock...................... 14,500 5,000 -- (19,500) --
--------- --------- -------------- -------------- --------------
Balance at September 30, 1996 ................ $ 14,500 $ 5,000 $ 22,718 $ 470,176 $ 512,394
--------- --------- -------------- -------------- --------------
--------- --------- -------------- -------------- --------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
AMERUS LIFE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------------- -------------------------------
1996 1995 1994 1993
------------ 1995 --------- --------- ---------
------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................................... $ 62,944 $ 54,008 $ 69,348 $ 6,667 $ 31,209
Adjustments to reconcile net income to net cash provided
by operating activities:
Policyowner assessments on universal life and annuity
products.............................................. (43,792) (42,561) (57,370) (56,362) (57,473)
Interest credited to policyowner account balances...... 87,599 92,489 123,360 120,075 122,375
Realized investment (gains) losses..................... (62,555) (41,564) (51,387) 19,930 (15,460)
Change in:
Accrued investment income............................ (1,256) (1,104) 1,485 (1,250) 1,004
Reinsurance ceded receivables........................ 1,297 934 (223) 666 (1,473)
Deferred policy acquisition costs.................... 5,686 (3,564) (7,491) (11,682) (1,259)
Liabilities for future policy benefits............... 49,924 56,321 94,856 94,862 111,619
Policy and contract claims and other policyowner
funds............................................... (6,679) 5,099 6,814 (2,828) 4,390
Income taxes:
Current............................................ 15,317 14,130 3,298 6,727 (14,619)
Deferred........................................... (6,747) (14,856) (3,105) 2,602 (10,034)
Other, net............................................. (16,412) 9,106 22,437 (7,057) 3,366
------------ ------------ --------- --------- ---------
Net cash provided by operating activities.............. 85,326 128,438 202,022 172,350 173,645
------------ ------------ --------- --------- ---------
Cash flows from investing activities:
Purchase of fixed maturities available for sale.......... (1,114,052) (1,212,474) (887,971) (886,236) (817,520)
Maturities, calls, and principal reductions of fixed
maturities available for sale........................... 1,012,272 1,005,946 582,980 591,965 650,108
Purchase of equity securities............................ (102,814) (77,402) (117,345) (69,813) (846,038)
Proceeds from sale of equity securities.................. 122,147 105,853 178,115 48,117 825,223
Proceeds from repayment and sale of mortgage loans....... 71,575 77,973 112,484 234,722 61,131
Purchase of mortgage loans............................... -- (24,622) (37,328) (78,830) (73,704)
Purchase of real estate and other invested assets........ (10,601) (7,126) (28,490) (31,515) (3,825)
Proceeds from sale of real estate and other invested
assets.................................................. 13,087 9,174 31,484 18,806 2,822
Change in policy loans, net.............................. (9,205) (8,283) (10,532) (12,364) (7,498)
Tax on capital gains..................................... 7 (155) (16,524) 5,136 (8,817)
Other assets, net........................................ 23,431 36,133 44,855 45,150 25,974
------------ ------------ --------- --------- ---------
Net cash provided by (used in) investing activities.... 5,847 (94,983) (148,272) (134,862) (192,144)
------------ ------------ --------- --------- ---------
Cash flows from financing activities:
Change in checks drawn in excess of bank balances........ 8,311 -- -- -- --
Deposits to policyowner account balances................. 126,688 196,846 272,431 260,172 169,118
Withdrawals from policyowner account balances............ (234,923) (207,670) (302,291) (208,313) (175,246)
Change in debt, net...................................... 8,594 (4,659) (1,496) (71,708) 20,974
Dividends to American Mutual Holding Company............. (4,463) (40,977) (41,156) (4,962) (310)
------------ ------------ --------- --------- ---------
Net cash (used in) provided by financing activities.... (95,793) (56,460) (72,512) (24,811) 14,536
------------ ------------ --------- --------- ---------
Net (decrease) increase in cash........................ (4,620) (23,005) (18,762) 12,677 (3,963)
Cash at beginning of period................................ 4,620 23,382 23,382 10,705 14,668
------------ ------------ --------- --------- ---------
Cash at end of period...................................... $ -- $ 377 $ 4,620 $ 23,382 $ 10,705
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
Supplemental disclosure of cash activities:
Interest paid............................................ $ 1,154 $ 1,576 $ 2,356 $ 5,394 $ 6,991
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
Income taxes paid........................................ $ 42,000 $ 37,800 $ 51,900 $ 14,630 $ 45,172
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
Supplemental disclosure of non-cash investing and financing
activities:
Issuance of Class A and Class B Common Stock related to
the Reorganization as a reclassification of retained
earnings................................................ $ 19,500 $ -- $ -- $ -- $ --
------------ ------------ --------- --------- ---------
------------ ------------ --------- --------- ---------
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

AmerUs Life Holdings, Inc.'s (the Company) operations consist primarily of
marketing, underwriting, and distributing life insurance, annuities, and related
products to individuals throughout the United States. The Company's products are
sold through a career general agency system and a personal producing general
agency system. The life insurance and annuity operations are the Company's only
business segment.

ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

The Company was formed on August 1, 1996 in conjunction with a plan of
reorganization (the Reorganization) of the former American Mutual Life Insurance
Company (American Mutual Life). Pursuant to the Reorganization which became
effective on June 30, 1996 (the Effective Date), American Mutual Life was
converted to a mutual insurance holding company structure whereby American
Mutual Holding Company (AMHC), a mutual insurance holding company, was formed.
Additionally, American Mutual Life was converted to a stock life insurance
company and renamed AmerUs Life Insurance Company (AmerUs Life). All of the
initial shares of capital stock of AmerUs Life were issued to AMHC.

On August 1, 1996, AMHC contributed all of its shares of capital stock of
AmerUs Life to AmerUs Group Co. (AmerUs Group). On the same date, the Company
was formed, and all of its shares of capital stock were issued to AmerUs Group.

American Mutual Life was previously known as Central Life Assurance Company.
American Mutual Life Insurance Company merged with and into Central Life
Assurance Company on December 31, 1994, with Central Life Assurance Company as
the surviving company existing under the name American Mutual Life Insurance
Company. The accompanying consolidated financial statements present the pooling
of interests of both companies.

Prior to the distribution (Distribution) by AmerUs Life of its Non-Life
Insurance Subsidiaries (as defined below), AmerUs Life made a capital
contribution of cash and other property (Capital Contribution) to or for the
benefit of AmerUs Properties, Inc., AmerUs Bank and Iowa Realty Co., Inc., and
each of their respective subsidiaries (Non-Life Insurance Subsidiaries). The net
assets contributed in the Capital Contribution had an aggregate carrying value
of approximately $79 million as of the date of contribution. Following the
Capital Contribution, a series of transactions was undertaken by the Company and
its affiliates. AmerUs Life effected the Distribution, pursuant to which it
distributed the Non-Life Insurance Subsidiaries to AmerUs Group. Immediately
after the Distribution, AmerUs Group contributed all of its shares of common
stock in AmerUs Life to the Company. Under this structure, the Company is an
intermediate holding company, with AmerUs Group as its direct parent company and
AmerUs Life as its wholly-owned subsidiary. Under Iowa law, AMHC is required to
retain direct or indirect ownership and control of shares representing a
majority of the vote of the outstanding capital stock of the Company.
Immediately following the Distribution, the Company entered into a bank credit
facility pursuant to which it borrowed $100 million in term debt and $75 million
under a revolving line of credit (Bank Credit Facility). The Company used the
proceeds from such borrowings to make a $125 million capital contribution to
AmerUs Life and to purchase a $50 million surplus note from AmerUs Life.

The effect of the Distribution was to decrease (increase) net income by the
net income (loss) of $1,781,000, $10,539,000, ($101,000), and $6,055,000 in the
nine months ended September 30, 1996 and the years ended December 31, 1995,
1994, and 1993, respectively, of Lartnec Investment Co., a former subsidiary of
AmerUs Life, and its subsidiaries (collectively, Lartnec).

As a result of the Reorganization, AMHC indirectly owns, through AmerUs
Group, 14,500,000 shares of Class A Common Stock and 5,000,000 shares of Class B
Common Stock of the Company. The Class B Common Stock must be held, directly or
indirectly, by AMHC, which must have a majority of the

F-7
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

outstanding Common Stock of both classes. The Class B Common Stock is generally
convertible on a share-for-share basis for Class A Common Stock. Each share of
Class A and Class B Common Stock entitles its holder to one vote per share;
however, the voting rights are adjusted if the number of Class A shares exceed
the number of Class B shares such that the holders of Class B shares will always
have a majority of the votes. In addition, as long as the members of AMHC own
directly or indirectly at least 50.1 percent of the voting power of the
outstanding voting stock, AMHC is entitled to equity purchase rights which
provide for the Company to notify AMHC in writing of a proposed sale of voting
stock or any options, warrants, or rights to acquire voting stock. AMHC has the
right to purchase the same proportionate number of shares being offered for sale
as AMHC owns of the total shares at the time of the registration.

The accompanying consolidated financial statements include only the accounts
and operations, after intercompany eliminations, of AmerUs Life Holdings, Inc.
and its wholly owned subsidiaries, principally, AmerUs Life Insurance Company
and American Vanguard Life Insurance Company (American Vanguard Life).

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

CLOSED BLOCK

The Reorganization contained an arrangement, known as a closed block (the
Closed Block), to provide for dividends on policies that were in force on the
Effective Date and were within the classes of individual policies for which the
Company had a dividend scale in effect at the time of the Reorganization. The
Closed Block was designed to give reasonable assurance to owners of affected
policies that assets will be available to support such policies, including
maintaining dividend scales in effect at the time of the Reorganization, if the
experience underlying such scales continues. The assets, including revenue
therefrom, allocated to the Closed Block will accrue solely to the benefit of
the owners of policies included in the block until the block is no longer in
effect. The Company will not be required to support the payment of dividends on
Closed Block policies from its general funds.

F-8
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Summarized financial information of the Closed Block as of September 30,
1996, and from July 1, 1996 to September 30, 1996, is as follows (IN THOUSANDS):

<TABLE>
<CAPTION>
CLOSED BLOCK
-------------
<S> <C>
ASSETS:
Fixed maturity securities, at fair value (amortized cost of $839,212).............................. $ 843,809
Equity securities, at fair value................................................................... 15,488
Short-term investments, at fair value.............................................................. 718
Mortgage loans on real estate...................................................................... --
Real estate........................................................................................ --
Policy loans....................................................................................... 165,263
Other investments.................................................................................. --
Accrued investment income.......................................................................... 8,357
Premiums and fees receivable....................................................................... --
Reinsurance receivables............................................................................
Deferred policy acquisition costs.................................................................. 196,146
Deferred income taxes.............................................................................. --
Property and equipment............................................................................. --
Other assets....................................................................................... 7,358
-------------
$ 1,237,139
-------------
-------------
LIABILITIES:
Future life and annuity policy benefits............................................................ $ 1,339,695
Policyowner funds.................................................................................. 24,617
Checks drawn in excess of bank balances............................................................ --
Accrued expenses................................................................................... --
Dividends payable to policyowners.................................................................. 131,906
Policy and contract claims......................................................................... 5,051
Income taxes payable............................................................................... --
Other liabilities.................................................................................. --
Debt............................................................................................... --
-------------
$ 1,501,269
-------------
-------------
REVENUES AND EXPENSES:
Insurance premiums................................................................................. $ 48,747
Universal life and annuity product charges......................................................... 4,657
Net investment income.............................................................................. 26,826
Realized gains on investments...................................................................... 70
Other revenues..................................................................................... --
Policyowner benefits............................................................................... (51,028)
Underwriting, acquisition, and insurance expenses.................................................. (1,038)
Amortization of deferred policy acquisition costs.................................................. (11,244)
Dividends to policyowners.......................................................................... (14,331)
-------------
Income before income taxes..................................................................... $ 2,659(1)
-------------
-------------
</TABLE>

- --------------

(1) Represents contribution from the Closed Block

F-9
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company and its
wholly owned subsidiaries have been prepared in conformity with GAAP which, as
to the insurance company subsidiaries, differ from statutory accounting
practices prescribed or permitted by regulatory authorities.

The insurance company subsidiaries have adopted SFAS 120, "Accounting and
Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long-Duration Participating Contracts." SFAS 120 permits stock life
insurance companies to apply the provisions of the American Institute of
Certified Public Accountant's Statement of Position 95-1, "Accounting for
Certain Insurance Activities of Mutual Life Insurance Enterprises," to
participating life insurance contracts that meet the conditions in SFAS 120. The
accompanying consolidated financial statements have been restated for the
effects of implementing SFAS 120.

INTERIM FINANCIAL INFORMATION

The consolidated financial statements for the nine-month period ended
September 30, 1995, and related disclosures in these notes have not been
audited. The interim consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and notes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals unless noted otherwise
herein) considered necessary for a fair presentation have been included.

INVESTMENTS

Investments in fixed maturity and equity securities that are to be held for
indefinite periods of time are reported as securities available for sale.
Securities available for sale are reported in the accompanying consolidated
financial statements at fair value. Any valuation changes resulting from changes
in the fair value of these securities are reflected as a component of
stockholder's equity. These unrealized gains or losses in stockholder's equity
are reported net of taxes and adjustments to deferred policy acquisition costs.

Premiums and discounts on fixed maturity securities are amortized or
accreted over the life of the related security as an adjustment to yield using
the effective interest method. Realized gains and losses are included in
earnings and are determined using the specific identification method. The
carrying value of investments is reduced to its estimated realizable value if a
decline in fair value is considered other than temporary with such reduction
charged to earnings.

Mortgage loans on real estate and other long-term investments are stated at
cost less amortized discounts and allowances for possible losses. Policy loans
are stated at their aggregate unpaid balances. Real estate acquired by
foreclosure is stated at the lower of cost or fair value less estimated costs to
sell.

Investments in real estate and mortgage loans on real estate are considered
impaired when the Company determines that collection of all amounts due under
the contractual terms is doubtful or the carrying values exceed the fair value
of underlying collateral. The Company adjusts real estate and mortgage loans on
real estate to their estimated net realizable value at the point at which it
determines an impairment is other than temporary. Interest income on impaired
mortgage loans is recognized when cash is received. In addition, the Company has
established a valuation allowance for mortgage loans on real estate and other
invested assets. Valuation allowances for other than temporary impairments in
value are netted against the asset categories to which they apply, and additions
to valuation allowances are included in total investment results.

F-10
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INTEREST RATE SWAPS, CAPS AND SWAPTIONS

The Company uses interest rate swaps, caps, and swaptions as part of its
overall interest rate risk management strategy for certain life insurance and
annuity products. The book values of the underlying hedged investments or
anticipated investment transactions are amortized over the remaining lives of
the hedged investments as adjustments to investment income. Certain agreements
hedge assets which are carried at fair value; accordingly, such underlying
hedged investments are also carried at fair value. Any unamortized gains or
losses are recognized when the underlying investments are sold.

Interest rate swap contracts are used to convert the interest rate
characteristics (fixed or variable) of certain investments to match those of the
related insurance liabilities that the investments are supporting. The net
interest effect of such swap transactions is reported as an adjustment of
interest income as incurred.

Interest rate caps are used to limit the effects of changing interest rates
on yields of variable rate or short-term assets or liabilities. The initial cost
of any such agreement is amortized to investment income over the life of the
agreement. Periodic payments that are receivable as a result of the agreements
are accrued as an adjustment of investment income.

Swaption agreements are used in conjunction with interest rate caps to
protect against rising rates. Swaption agreements involve the right to enter
into a swap transaction at a pre-specified price. The initial cost of a swaption
agreement is amortized to investment income over the life of the agreement.

POLICY ACQUISITION COSTS

Certain commissions, policy issue and underwriting costs, and other variable
costs incurred to acquire or renew traditional life insurance, universal life
insurance, and annuity products have been deferred. The amortization method of
deferred policy acquisition costs for traditional life insurance products is
different, dependent upon whether the contract is participating or
non-participating. Participating contracts are those which are expected to pay
dividends to policyowners in proportion to their relative contribution to the
Company's surplus. Deferred policy acquisition costs for participating
traditional life insurance are being amortized over the life of the policies
generally in proportion to the present value of estimated gross margins.
Non-participating traditional life insurance deferred policy acquisition costs
are being amortized over the premium-paying period of the related policies in
proportion to the ratio of annual premium revenues to total anticipated premium
revenues using assumptions consistent with those used in computing policy
benefit reserves. For universal life insurance and annuity products, deferred
policy acquisition costs are being amortized generally in proportion to the
present value of estimated gross margins from surrender charges and investment,
mortality, and expense margins. The amortization for participating traditional
life, universal life, and annuity products is adjusted retrospectively when
current or estimated future gross profits or margins on the underlying policies
vary from previous estimates. Deferred policy acquisition costs are adjusted for
the impact on estimated gross profits of net unrealized gains and losses on
securities.

RECOGNITION OF REVENUES

Premiums for traditional life insurance products (including those products
with fixed and guaranteed premiums and benefits and which consist principally of
whole life insurance policies and certain annuities with life contingencies) are
recognized as revenues when due. For limited payment life insurance policies,
premiums are recorded as income when due with any excess profit deferred and
recognized over the expected lives of the contracts. Amounts received as
payments for universal life insurance policies and for annuity products
(including deferred annuities and annuities without life contingencies) are not
recorded as premium revenue. Revenues for such contracts consist of policy

F-11
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
charges for the cost of insurance, policy administration charges, and surrender
charges assessed against policyowner account balances during the period. All
insurance-related revenue is reported net of reinsurance ceded.

FUTURE POLICY BENEFITS

The liability for future policy benefits for traditional life insurance is
computed using a net level method, utilizing the guaranteed interest and
mortality rates used in calculating cash surrender values as described in the
contracts. Reserve interest assumptions range from 2.00 percent to 7.25 percent.
The weighted average assumed interest rate for all traditional life policy
reserves was 4.20 percent in 1996 and 1995, 4.10 percent in 1994, and 4.00
percent in 1993. Policy benefit claims are charged to expense in the period that
the claims are incurred. All insurance-related benefits, losses, and expenses
are reported net of reinsurance ceded.

Future policy benefit reserves for universal life insurance and annuity
products are computed under a retrospective deposit method and represent policy
account balances before applicable surrender charges. Policy benefits and claims
that are charged to expense include benefit claims incurred in the period in
excess of related policy account balances. The weighted average interest
crediting rate for universal life products was 6.31 percent in 1996, 6.67
percent in 1995, 6.44 percent in 1994, and 6.59 percent in 1993. The weighted
average interest crediting rate for annuity products was 5.39 percent in 1996,
6.16 percent in 1995, 6.41 percent in 1994, and 6.95 percent in 1993.

PARTICIPATING POLICIES

Participating policies entitle the policyowners to receive dividends based
on actual interest, mortality, morbidity, and expense experience for the related
policies. These dividends are distributed to the policyowners through an annual
dividend using current dividend scales which are approved by the board of
directors. Nearly 100 percent of traditional life policies are currently paying
dividends and traditional life policies represent 68 percent of the Company's
individual life policies in force.

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost and is depreciated principally
under the straight-line method.

GUARANTY FUND ASSESSMENTS

The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance companies
for the benefit of policyowners and claimants in the event of insolvency of
other life insurance companies. As of September 30, 1996, the Company has
accrued for the gross amount of guaranty fund assessments for known insolvencies
net of estimated recoveries of premium tax offsets.

BENEFIT PLAN COSTS

The Company recognizes pension costs for its defined benefit plans in
accordance with SFAS 87, "Employers' Accounting for Pensions." Pension costs are
funded according to regulations provided under the Internal Revenue Code.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Under SFAS 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," the cost of postretirement benefits must be recognized on an
accrual basis as employees perform services to earn the benefits. The Company
adopted SFAS 106 as of January 1, 1993. Prior to 1993, the cost of retiree
health care and life insurance benefits was recognized as an expense when paid.

F-12
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

The Company and its subsidiaries, with the exception of American Vanguard
Life, file a consolidated federal income tax return with the Non-Life Insurance
Subsidiaries. The separate return method is used to compute the Company's
provision for federal income taxes. Deferred income tax assets and liabilities
are determined based on differences among the financial reporting and tax bases
of assets and liabilities and are measured using the enacted tax rates and laws.

EMERGING ACCOUNTING MATTER

BUSINESS RISKS

The Company operates in a business environment which is subject to various
risks and uncertainties. Such risks and uncertainties include interest rate
risk, legal and regulatory changes, and default risk.

Interest rate risk is the potential for interest rates to change, which can
cause fluctuations in the value of investments. To the extent that fluctuations
in interest rates cause the duration of assets and liabilities to differ, the
Company may have to sell assets prior to their maturity and realize losses.
Interest rate exposure for the investment portfolio is managed through
asset/liability management techniques which attempt to match the duration of the
assets with the estimated duration of the liabilities. The Company also utilizes
derivative investment contracts to manage interest rate risk.

The potential also exists for changes in the legal or regulatory environment
in which the Company operates, which can create additional costs and expenses
not anticipated by the Company in pricing its products. In other words,
regulatory initiatives or new legal theories may create costs for the Company
beyond those recorded in the financial statements. The Company mitigates this
risk by operating in a geographically diverse area, which reduces its exposure
to any single jurisdiction, closely monitoring the regulatory environment to
anticipate changes, and by using underwriting practices which identify and
minimize the potential adverse impact of this risk.

Default risk is the risk that issuers of securities owned by the Company may
default or that other parties, including reinsurers, may not be able to pay
amounts due the Company. The Company minimizes this risk by adhering to a
conservative investment strategy, maintaining sound reinsurance and credit and
collection policies, and providing allowances or reserves for any amounts deemed
uncollectible.

(2) INVESTMENTS

On December 31, 1993, the Company adopted SFAS 115, "Accounting for Certain
Investments in Debt and Equity Securities," which expands the use of fair value
accounting for those securities that a company does not have positive intent and
ability to hold to maturity. Implementation of SFAS 115 increased stockholder's
equity by $45.8 million, which reflected the unrealized appreciation of fixed
maturity securities available for sale, net of related deferred policy
acquisition costs and deferred taxes.

F-13
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
The Company's investments are classified as available-for-sale securities
and are summarized as follows:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
------------- ----------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Available-for-sale securities at
September 30, 1996:
Fixed maturity securities:
Corporate bonds.................. $ 1,378,609 $ 47,669 $ 10,852 $ 1,415,426
U.S. government bonds............ 51,861 597 244 52,214
Foreign government bonds......... 20,147 1,272 64 21,355
Mortgage-backed bonds............ 794,870 17,654 3,948 808,576
------------- ----------- ----------- -------------
$ 2,245,487 $ 67,192 $ 15,108 $ 2,297,571
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Equity securities.................. $ 70,691 $ 4,800 $ 916 $ 74,575
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Short-term investments............. $ 12,002 $ -- $ -- $ 12,002
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
------------- ----------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Available-for-sale securities at
December 31, 1995:
Fixed maturity securities:
Corporate bonds.................. $ 1,977,567 $ 160,486 $ 6,208 $ 2,131,845
U.S. government bonds............ 65,513 1,652 -- 67,165
Foreign government bonds......... 20,149 2,267 -- 22,416
Mortgage-backed bonds............ 886,470 33,837 1,323 918,984
State and municipal bonds........ 1,550 136 -- 1,686
------------- ----------- ----------- -------------
$ 2,951,249 $ 198,378 $ 7,531 $ 3,142,096
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Equity securities.................. $ 52,869 $ 57,380 $ 574 $ 109,675
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Short-term investments............. $ 39,276 $ 77 $ -- $ 39,353
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
</TABLE>

F-14
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
------------- ----------- ----------- -------------
(IN THOUSANDS)
Available-for-sale securities at
December 31, 1994:
<S> <C> <C> <C> <C>
Fixed maturity securities:
Corporate bonds.................. $ 1,754,413 $ 19,003 $ 73,277 $ 1,700,139
U.S. government bonds............ 47,682 44 390 47,336
Foreign government bonds......... 12,147 80 226 12,001
Mortgage-backed bonds............ 847,390 4,945 47,272 805,063
State and municipal bonds........ 2,353 10 134 2,229
------------- ----------- ----------- -------------
$ 2,663,985 $ 24,082 $ 121,299 $ 2,566,768
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Equity securities.................. $ 112,992 $ 70,578 $ 4,800 $ 178,770
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Short-term investments............. $ 8,529 $ -- $ -- $ 8,529
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
</TABLE>

The amortized cost and estimated fair value of investments in fixed maturity
securities at September 30, are summarized by stated maturity as follows:

<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE
----------------------------
AMORTIZED
COST FAIR VALUE
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
Maturity:
Due in 1996................................................... $ 10,775 $ 10,796
Due in 1997 - 2001............................................ 353,409 366,059
Due in 2002 - 2006............................................ 705,786 724,845
Due after 2006................................................ 380,647 387,295
Mortgage-backed securities...................................... 794,870 808,576
------------- -------------
$ 2,245,487 $ 2,297,571
------------- -------------
------------- -------------
</TABLE>

The foregoing data is based on the stated maturities of the securities.
Actual maturities will differ for some securities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.

The ratings of the Company's fixed maturity securities at September 30,
1996, using Standard & Poor's rating service, are summarized as follows (in
thousands):

<TABLE>
<CAPTION>
Treasuries and AAA............................................. $ 824,245
<S> <C>
AA............................................................. 97,548
A.............................................................. 518,222
BBB............................................................ 654,848
BB............................................................. 155,344
Less than BB................................................... 47,364
----------
$2,297,571
----------
----------
</TABLE>

The Company's investment in non-income producing fixed maturity securities
and real estate was $7.8 million as of September 30, 1996.

F-15
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
Major categories of investment income are summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------- ----------------------------------------
1996 1995 1994 1993
-------------- ----------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Fixed maturity securities......... $ 162,038 $ 231,208 $ 206,346 $ 201,203
Equity securities................. 3,664 6,311 7,821 5,834
Mortgage loans on real estate..... 16,902 33,738 55,181 57,031
Real estate....................... 5,657 9,729 9,907 6,708
Policy loans...................... 7,639 14,043 12,745 12,572
Other............................. 3,056 5,211 2,329 722
-------------- ----------- ----------- --------------
Gross investment income....... 198,956 300,240 294,329 284,070
Investment expenses............... 9,663 14,996 18,638 14,216
-------------- ----------- ----------- --------------
Net investment income......... $ 189,293 $ 285,244 $ 275,691 $ 269,854
-------------- ----------- ----------- --------------
-------------- ----------- ----------- --------------
</TABLE>

Investment expenses include depreciation on real estate of $1.8 million,
$2.9 million, $2.0 million and $2.0 million in the nine months ended September
30, 1996, and the years ended December 31, 1995, 1994, and 1993, respectively.

Realized gains and losses on investments and provisions for losses are
summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------
1996 1995 1994 1993
-------------- --------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Securities available-for-sale:
Fixed maturity securities:
Gross realized gains................. $ 14,995 $ 18,652 $ 10,879 $ 18,679
Gross realized losses................ (11,182) (9,240) (36,423) (6,809)
Equity securities:
Gross realized gains................. 55,119 45,419 14,746 10,095
Gross realized losses................ (121) (3,634) (5,181) (2,887)
Other investments........................ 1,249 812 (2,744) (642)
Net provision for losses--mortgage loans
on real estate.......................... 2,495 (622) (1,207) (2,976)
-------------- --------- ---------- ---------
$ 62,555 $ 51,387 $ (19,930) $ 15,460
-------------- --------- ---------- ---------
-------------- --------- ---------- ---------
</TABLE>

The unrealized appreciation (depreciation) on invested assets available for
sale is reported as a separate component of stockholder's equity, reduced by
adjustments to deferred acquisition costs and a provision for deferred income
taxes.

F-16
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2) INVESTMENTS (CONTINUED)
A summary of the components of the net unrealized appreciation
(depreciation) on invested assets carried at fair value (in thousands) is as
follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-------------- ------------------------------------
1996 1995 1994 1993
-------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Unrealized appreciation
(depreciation):
Fixed maturity securities........... $ 52,084 $ 190,847 $ (97,217) $ 153,744
Equity securities................... 3,884 56,806 65,778 87,247
Short-term investments.............. -- 77 -- --
Other investments................... 3,103 6,335 (2,277) 211
Closed Block investments............ 5,085 -- -- --
Deferred policy acquisition costs..... (30,371) (88,039) 56,102 (81,492)
Deferred income taxes................. (11,067) (57,312) (7,066) (55,129)
-------------- ----------- ---------- -----------
$ 22,718 $ 108,714 $ 15,320 $ 104,581
-------------- ----------- ---------- -----------
-------------- ----------- ---------- -----------
</TABLE>

The change in unrealized appreciation (depreciation) on fixed maturity
securities was ($139) million, $288 million, ($251) million, and $154 million in
the nine months ended September 30, 1996, and for the years ended December 31,
1995, 1994 and 1993, respectively; the corresponding amounts for equity
securities were ($53) million, ($9) million, ($21) million, and $11 million.

At September 30, 1996, December 31, 1995, and December 31, 1994, investments
in fixed maturity securities with a carrying amount of $2.4 million, $2.4
million and $2.3 million, respectively, were on deposit with state insurance
departments to satisfy regulatory requirements.

No investment in any person or its affiliates exceeded 10 percent of
stockholder's equity at September 30, 1996.

(3) MORTGAGE LOANS ON REAL ESTATE
Mortgage loans on real estate consist almost entirely of commercial mortgage
loan investments, substantially all of which are made on a full recourse basis
and consist primarily of fixed-rate first mortgages on completed properties. The
following table sets forth additions, reductions from payments, and other
charges and foreclosures related to the mortgage loan portfolio (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
-------------- --------------------------
1996 1995 1994
-------------- ------------ ------------
<S> <C> <C> <C>
Commercial loans:
Beginning balance................................ $ 379,414 $ 504,034 $ 723,602
Additions........................................ 19,649 39,933 75,275
Payments and miscellaneous charges............... (75,090) (146,496) (280,871)
Sales............................................ (47,234) -- --
Foreclosed properties............................ (6,174) (18,057) (13,972)
-------------- ------------ ------------
Ending balance................................... 270,565 379,414 504,034
Residential and other mortgage loans............. 3,258 4,250 9,178
Valuation allowance.............................. (13,590) (30,067) (65,549)
-------------- ------------ ------------
Total mortgage loans......................... $ 260,233 $ 353,597 $ 447,663
-------------- ------------ ------------
-------------- ------------ ------------
</TABLE>

F-17
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3) MORTGAGE LOANS ON REAL ESTATE (CONTINUED)
The Company manages its credit risk associated with these loans by
diversifying its mortgage portfolio by property type and geographic location and
by seeking favorable loan to value ratios on secured properties. The portfolio
credit risk for mortgage loans was concentrated in the following geographic
regions (dollar amounts in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1996 1995 DECEMBER 31, 1994
------------------------ ------------------------ ------------------------
--------------------------------------------------
NUMBER AMOUNT NUMBER AMOUNT NUMBER AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Commercial:
California........... 22 $ 44,456 31 $ 69,946 42 $ 90,482
Florida.............. 4 15,429 6 21,964 9 28,677
Iowa................. 50 84,069 56 95,837 66 108,944
Kansas............... 11 21,211 14 29,249 16 39,643
Texas................ 7 21,651 9 28,053 14 59,233
Washington........... 4 10,762 8 15,172 10 28,949
Other................ 60 73,011 88 119,193 109 148,106
Residential............ 73 3,234 95 4,250 196 9,178
Valuation allowance.... -- (13,590) -- (30,067) -- (65,549)
--- ----------- --- ----------- --- -----------
231 260,233 307 $ 353,597 462 $ 447,663
--- ----------- --- ----------- --- -----------
--- ----------- --- ----------- --- -----------
</TABLE>

At September 30, 1996, the Company's investment in mortgage loans included
$33.1 million in loans that are considered to be impaired, for which the related
allowance for credit losses is $3.2 million. The average recorded investment in
impaired loans during the nine months ended September 30, 1996, was $55.3
million. For the nine months ended September 30, 1996, the Company collected
$3.9 million in interest income on those impaired loans.

No mortgage loan on any one individual property exceeded $14 million at
September 30, 1996.

Provisions for losses are summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------- ---------------------------------
1996 1995 1994 1993
-------------- ---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at beginning of period.......... $ 30,067 $ 65,549 $ 80,220 $ 81,040
-------------- ---------- ---------- ---------
Provisions for losses - mortgage
loans.................................. (2,495) 622 1,207 2,976
Provision on mortgages sold/ transferred
to real estate......................... (13,982) (36,104) (15,878) (3,796)
-------------- ---------- ---------- ---------
Net decrease for period............... (16,477) (35,482) (14,671) (820)
-------------- ---------- ---------- ---------
Balance at end of period................ $ 13,590 $ 30,067 $ 65,549 $ 80,220
-------------- ---------- ---------- ---------
-------------- ---------- ---------- ---------
</TABLE>

F-18
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(4) DEFERRED POLICY ACQUISITION COSTS
A summary of the policy acquisition costs deferred and amortized are as
follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------------------------- YEARS ENDED DECEMBER 31,
NON-CLOSED CLOSED --------------------------------------
BLOCK BLOCK TOTAL 1995 1994 1993
------------ ----------- -------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of
period...................... $ 162,103 $ 193,647 $ 355,750 $ 348,259 $ 336,577 $ 335,318
Policy acquisition costs
deferred.................... 23,679 13,743 37,422 57,730 54,438 48,700
Policy acquisition costs
amortized................... (31,865) (11,244) (43,109) (50,239) (42,756) (47,441)
------------ ----------- -------------- ------------ ----------- -----------
153,917 196,146 350,063 355,750 348,259 336,577
Unrealized (gain) loss on
available-for-sale
securities.................. (30,371) -- (30,371) (88,039) 56,102 (81,492)
------------ ----------- -------------- ------------ ----------- -----------
Balance at end of period..... $ 123,546 $ 196,146 $ 319,692 $ 267,711 $ 404,361 $ 255,085
------------ ----------- -------------- ------------ ----------- -----------
------------ ----------- -------------- ------------ ----------- -----------
</TABLE>

The components of the deferred policy acquisition costs are as follows (in
thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
----------------------------------------- DECEMBER 31,
NON-CLOSED CLOSED --------------------------------------
BLOCK BLOCK TOTAL 1995 1994 1993
------------ ----------- -------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Universal life insurance and
annuity products............ $ 150,989 $ 45,329 $ 196,318 $ 203,949 $ 197,256 $ 199,175
Participating traditional
life insurance.............. 2,276 131,235 133,511 131,602 131,500 119,487
Non-participating traditional
life insurance.............. 652 19,582 20,234 20,199 19,503 17,915
------------ ----------- -------------- ------------ ----------- -----------
$ 153,917 $ 196,146 $ 350,063 $ 355,750 $ 348,259 $ 336,577
Unrealized (gain) loss on
available-for-sale
securities.................. (30,371) -- (30,371) (88,039) 56,102 (81,492)
------------ ----------- -------------- ------------ ----------- -----------
$ 123,546 $ 196,146 $ 319,692 $ 267,711 $ 404,361 $ 255,085
------------ ----------- -------------- ------------ ----------- -----------
------------ ----------- -------------- ------------ ----------- -----------
</TABLE>

Commissions represent approximately 85 percent of policy acquisition costs
deferred.

F-19
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(5) DEBT

Debt consists of the following (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
-------------- --------------------
1996 1995 1994
-------------- --------- ---------
<S> <C> <C> <C>
Line of credit with Federal Home Loan Bank -- interest is paid
at a rate of 6.29% at September 30, 1996. The agreement
provides for maximum borrowings of $25,000,000. The Company has
assigned all Federal Home Loan Bank stock and has assigned
other securities as collateral on the line of credit........... $ 24,700 $ -- $ 3,665
The Iowa Housing Finance Authority variable rate (3.85% at
September 30, 1996) demand Multi-Family Housing Bond Series
1985-A......................................................... 8,722 8,813 8,948
Federal Home Loan Bank community investment long-term advances
with a weighted average interest rate of 6.53% at September 30,
1996 maturing at various dates through July 2010............... 11,633 11,765 --
The Housing and Redevelopment Authority of the City of St. Paul,
Minnesota, demand rental housing development revenue bonds
Series 1985-A were repaid in 1995.............................. -- -- 3,884
Class A certificate holders of 1988-1 REMIC with a weighted
average interest rate of 9.00% at December 31, 1995............ -- 15,883 21,268
Other........................................................... -- -- 192
-------------- --------- ---------
$ 45,055 $ 36,461 $ 37,957
-------------- --------- ---------
-------------- --------- ---------
</TABLE>

Maturities of long-term debt are as follows for each of the five years
ending September 30:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Year ending September 30:
1997.......................................................................... $ 33,658
1998.......................................................................... 203
1999.......................................................................... 218
2000.......................................................................... 233
2001.......................................................................... 249
Thereafter.................................................................... 10,494
--------------
$ 45,055
--------------
--------------
</TABLE>

At September 30, 1996, the carrying value of the securities assigned to the
Federal Home Loan Bank as collateral on the line of credit and long-term
advances totaled $49.7 million. The bonds are collateralized by certain mortgage
loans held by the Company with a carrying value of $8.7 million at September 30,
1996.

Interest paid totaled $1.2 million, $2.4 million, $5.4 million and $7.0
million in the nine months ended September 30, 1996, and the years ended
December 31, 1995, 1994, and 1993, respectively.

F-20
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6) FEDERAL INCOME TAXES
Comprehensive federal income tax expense is summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31
SEPTEMBER 30, --------------------------------
1996 1995 1994 1993
-------------- --------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Income tax expense on:
Operations....................................... $ 38,653 $ 41,202 $ 19,464 $ 21,352
Unrealized holding gains (losses) on
available-for-sale securities................... (46,245) 50,246 48,063 (28,975)
Accounting change for postretirement benefits.... -- -- -- (1,731)
-------------- --------- --------- ----------
$ (7,592) $ 91,448 $ 67,527 $ (9,354)
-------------- --------- --------- ----------
-------------- --------- --------- ----------
</TABLE>

The effective income tax rate on pre-tax income before cumulative effect of
changes in accounting principles is higher than the prevailing corporate federal
income tax rate and is summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------------
1996 1995 1994 1993
--------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Corporate federal income tax rate..................... 35.00% 35.00% 35.00% 35.00%
Differential earnings amount.......................... 4.44 -- 36.68 --
Tax-exempt investment income.......................... (.14) (.24) (1.66) (.59)
Cumulative effect of tax rate change.................. -- -- -- 1.57
Merger expenses....................................... .42 .48 2.29 --
Other items, net...................................... (1.67) 2.03 2.18 2.30
----- ----- ----- -----
Effective tax rate................................ 38.05% 37.27% 74.49% 38.28%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>

The differential earnings amount is an equity add-on tax which mutual life
insurance companies are required to pay. The amount is determined annually and
is calculated by comparing the earnings rate of mutual life insurance companies
and certain stock life insurance companies. In certain years, such as 1993 and
1995, the calculations have resulted in negative adjustments with no additional
tax amount to be paid.

The Company's federal income tax expense (benefit) is summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, --------------------------------
1996 1995 1994 1993
-------------- --------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Current............................................ $ 45,401 $ 44,307 $ 16,862 $ 31,386
Deferred........................................... (6,748) (3,105) 2,602 (10,034)
-------------- --------- --------- ----------
Total federal income tax expense............... $ 38,653 $ 41,202 $ 19,464 $ 21,352
-------------- --------- --------- ----------
-------------- --------- --------- ----------
</TABLE>

F-21
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6) FEDERAL INCOME TAXES (CONTINUED)
The significant components of net deferred income tax assets and liabilities
are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------------
1996 1995 1994
-------------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred income tax assets:
Policy reserves and policyholder funds................... $ 99,401 $ 106,813 $ 101,509
Policy acquisition costs capitalized for tax............. 29,985 26,588 21,208
Net unrealized depreciation on available-for-sale
securities.............................................. -- -- 11,801
Deferred policy acquisition costs related to unrealized
appreciation............................................ 10,630 30,813 --
Deferred compensation.................................... 10,289 10,134 7,109
Other.................................................... 21,332 23,344 31,422
-------------- ------------ ------------
Total gross deferred income tax assets................. 171,637 197,692 173,049
-------------- ------------ ------------
Deferred income tax liabilities:
Deferred policy acquisition costs........................ (122,522) (124,513) (121,891)
Net unrealized appreciation on available-for-sale
securities.............................................. (22,455) (88,922) --
Deferred policy acquisition costs related to unrealized
depreciation............................................ -- -- (19,636)
Reinsurance receivable................................... (14,894) (23,403) (22,838)
Other.................................................... (7,397) (9,477) (10,166)
-------------- ------------ ------------
Total gross deferred tax liability..................... (167,268) (246,315) (174,531)
-------------- ------------ ------------
Net deferred income tax asset (liability).............. $ 4,369 $ (48,623) $ (1,482)
-------------- ------------ ------------
-------------- ------------ ------------
</TABLE>

The Company is required to establish a "valuation allowance" for any portion
of the deferred tax asset that management believes will not be realized. In the
opinion of management, it is more likely than not that it will realize the
benefit of the deferred tax assets, and, therefore, no such valuation allowance
has been established.

Federal income tax returns for the Company for years through 1987 are closed
to further assessment of taxes. Examinations of federal income tax returns for
1988 and 1989 have been made by the Internal Revenue Service. The Internal
Revenue Service is examining federal income tax returns of the Company for 1990
through 1992. Management believes adequate provisions have been made for any
additional taxes which may become due with respect to open years.

Income taxes paid by the Company totaled $42.0 million, $51.9 million, $14.6
million, and $45.2 million in the nine months ended September 30, 1996, and the
years ended December 31, 1995, 1994, and 1993, respectively.

(7) DEFINED BENEFIT PENSION PLANS

The Company has defined benefit pension plans which cover substantially all
of the Company's employees, as well as employees of certain companies directly
or indirectly owned by the Company. The plans provide for benefits based upon
years of service and the employee's compensation. Information for the Company's
portion of the plans' funded status is not available. The Company has frozen the
defined benefit pension plans effective December 31, 1995, and has recognized
its portion of a curtailment gain amounting to $6.2 million, or $3.1 million
after federal excise taxes, as other revenues in 1995.

F-22
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7) DEFINED BENEFIT PENSION PLANS (CONTINUED)

Effective January 1, 1996, the defined benefit pension plans have been replaced
by a defined contribution savings and retirement plan which also replaces the
Company's defined contribution pension plans. The following information presents
the plans' funded status and pension cost as of September 30, 1996, December 31,
1995 (prior to revaluation for curtailment of the plans) and December 31, 1994:

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, ----------------------
1996 1995 1994
-------------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Actuarial present value of accumulated benefit obligation,
including vested benefits of $44,144; $44,144 and $32,141 in
1996, 1995 and 1994, respectively............................ $ (44,144) $ (45,505) $ (38,750)
-------------- ---------- ----------
-------------- ---------- ----------
Projected benefit obligation for service rendered to
date--includes effect of increase in compensation levels..... $ (44,144) $ (45,505) $ (45,697)
Plans' assets at fair value, primarily consisting of mutual
funds and certificates of deposit............................ 54,882 52,592 47,017
-------------- ---------- ----------
Plans' assets in excess of projected benefit obligations...... 10,738 7,087 1,320
Unrecognized (gain) loss from actual experience difference
from assumed and effects of changes in assumptions........... (4,024) (2,745) 376
Unrecognized prior service cost............................... (222) -- (1,473)
Net unrecognized transition asset............................. (965) -- 54
-------------- ---------- ----------
Prepaid pension cost.......................................... $ 5,527 $ 4,342 $ 277
-------------- ---------- ----------
-------------- ---------- ----------
Weighted average discount rate................................ 7.25% 7.25% 8.00%
-------------- ---------- ----------
-------------- ---------- ----------
Rate of increase in future compensation levels................ n/a 5.50% 5.00%
-------------- ---------- ----------
-------------- ---------- ----------
Expected long-term rate of return on assets................... 8.00% 8.00% 7.50%
-------------- ---------- ----------
-------------- ---------- ----------
</TABLE>

<TABLE>
<CAPTION>
NINE MONTHS YEARS ENDED
ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------
1996 1995 1994 1993
-------------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service cost--benefits earned during year............ $ -- $ 1,768 $ 2,325 $ 2,058
Interest cost on projected benefit obligation........ 3,101 3,609 3,282 3,155
Actual return on plan assets......................... (4,281) (3,729) (3,632) (3,769)
Net amortization and deferral........................ (90) (114) (37) 391
Special termination benefits due to early
retirement.......................................... -- -- 1,597 993
------- --------- --------- ---------
Defined benefit pension cost (benefit)........... $ (1,270) $ 1,534 $ 3,535 $ 2,828
------- --------- --------- ---------
------- --------- --------- ---------
Company's portion of net pension cost (benefit)...... $ (954) $ 696 $ 2,578 $ 1,267
------- --------- --------- ---------
------- --------- --------- ---------
</TABLE>

F-23
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7) DEFINED BENEFIT PENSION PLANS (CONTINUED)

During 1993, the Company offered an early retirement plan to qualifying
employees based on age and years of service. The Company's portion of the loss
recognized for the years ending December 31, 1994 and 1993, from the curtailment
and special termination benefits for the plan was approximately $1.6 million and
$1.0 million, respectively.

DEFINED CONTRIBUTION PENSION PLANS

The Company has three defined contribution 401(k) plans which cover
substantially all employees. The Company's total contribution under the plans
amounted to $0.6 million, $0.4 million, $0.6 million, and $0.7 million in the
nine months ended September 30, 1996, and the years ended December 31, 1995,
1994, and 1993, respectively. Effective January 1, 1996, the defined
contribution 401(k) plans together with the defined benefit pension plans have
been replaced by a single defined contribution savings and retirement plan.

NONQUALIFIED PENSION PLAN

The Company also has a nonqualified pension plan covering substantially all
of its career and general agents. Accumulated benefits of the plan are unfunded
and have been included in other liabilities at September 30, 1996, December 31,
1995, and December 31, 1994, amounting to $15.4 million, $13.6 million, and
$10.9 million, respectively.

POSTRETIREMENT PLANS

The Company has postretirement benefit plans to provide certain eligible
participants and dependents with certain medical, dental, and life insurance
benefits. As discussed in note 1, the Company adopted SFAS 106 as of January 1,
1993, based on a separate actuarial valuation report. The Company's transition
obligation as of January 1, 1993, amounted to $3.2 million, net of income tax
benefits of $1.7 million, and was recorded as a cumulative effect adjustment to
income. The Company's plan for medical and life insurance benefits is combined
with that of the subsidiaries of AMHC. Information for the Company's individual
funded status for 1995 and 1994 is not available. The following information is
presented on a combined plan basis accompanied by the Company's portion of the
net periodic postretirement benefit expense and sets forth the combined
postretirement benefit plans' funded status:

<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 30, --------------------
1996 1995 1994
-------------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Accumulated postretirement benefit obligation:
Fully eligible active plan participants.......................... $ 763 $ 491 $ 425
Other active plan participants................................... 1,641 1,716 1,724
Retirees......................................................... 5,745 6,121 5,481
------- --------- ---------
Accumulated postretirement benefit obligation...................... 8,149 8,328 7,630
Unrecognized prior service cost.................................... (1,072) (27) --
Unrecognized (loss) gain........................................... 1,057 (167) 124
------- --------- ---------
Accrued postretirement benefit cost................................ $ 8,134 $ 8,134 $ 7,754
------- --------- ---------
------- --------- ---------
</TABLE>

F-24
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(7) DEFINED BENEFIT PENSION PLANS (CONTINUED)

Net periodic postretirement benefit expense included the following
components:

<TABLE>
<CAPTION>
NINE MONTHS YEARS ENDED DECEMBER 31,
ENDED
SEPTEMBER 30, -------------------------------
1996 1995 1994 1993
--------------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service cost................................................ $ 409 $ 248 $ 268 $ 153
Interest cost............................................... 572 586 521 373
Net amortization and deferral............................... 57 5 19 --
Curtailment and special termination benefits................ -- -- -- 613
------- --------- --------- ---------
Net periodic postretirement benefit expense............. $ 1,038 $ 839 $ 808 $ 1,139
------- --------- --------- ---------
------- --------- --------- ---------
Company's portion of net periodic postretirement benefit
expense.................................................... $ 612 $ 639 $ 426 $ 727
------- --------- --------- ---------
------- --------- --------- ---------
</TABLE>

The weighted-average annual assumed rate of increase in the per capita cost
of covered benefits (i.e., health care cost trend rate) for the medical and
dental plan is approximately 9.00 percent, 9.50 percent, and 10.00 percent for
1995, 1994, and 1993, respectively, and is assumed to decrease gradually to 5.50
percent over nine years and remain at that level thereafter. The health care
cost trend rate assumption has a significant effect on the amounts reported. For
example, increasing the assumed health care cost trend rates by one percentage
point in each year would increase the accumulated postretirement benefit
obligation for the medical plan as of December 31, 1995 and 1994, by 7.70
percent and 4.50 percent, respectively, and the aggregate of the service and
interest cost components of net periodic postretirement benefit expense for
1995, 1994, and 1993 by $.06 million, $.02 million, and $.03 million,
respectively, on a combined basis. As of January 1, 1996, the plan was changed
to provide a fixed monthly benefit for medical benefits; accordingly,
information for the health care cost trend rate is not applicable for the nine
months ended September 30, 1996. The weighted-average discount rate used in
determining the accumulated postretirement benefit obligation was 7.25 percent,
7.25 percent, 8.00 percent, and 7.57 percent as of September 30, 1996, December
31, 1995, December 31, 1994, and December 31, 1993, respectively.

(8) RELATED PARTY TRANSACTIONS

The Company pledged bonds and securities with a carrying value of $131
million at September 30, 1996, as collateral for affiliates' indebtedness,
including the collateral pledged for the credit arrangements discussed in note
5.

F-25
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(8) RELATED PARTY TRANSACTIONS (CONTINUED)

The following summarizes transactions of the Company with Lartnec and its
subsidiaries:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEARS ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------
1996 1995 1994 1993
-------------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Capital contributions............................... $ 4,463 $ 41,157 $ 4,959 $ 310
Management, administrative, data processing, and
other services fees charged to certain subsidiaries
of Lartnec......................................... 7,508 9,164 8,162 7,500
Interest income from financings to partnerships in
which a subsidiary of Lartnec has an interest...... 4,700 6,000 4,890 4,813
Investments in bonds and accrued interest in Lartnec
and subsidiaries as of December 31................. 8,127 12,868 17,242 20,813
Contribution of joint venture interests and sale of
partnership interests to partnerships in which a
subsidiary of Lartnec has an interest.............. 1,638 10,957 -- --
Purchase of limited partnership interest in which a
subsidiary of Lartnec has an interest.............. 2,160 -- -- --
Investments in partnerships and joint ventures in
which a subsidiary of Lartnec has an interest...... 16,420 9,625 4,870 --
Purchase of investments backed by the assets of a
trust which acquired loans from a subsidiary of
Lartnec............................................ 46,755 -- -- --
Investments in mortgage loans from joint ventures in
which a subsidiary of Lartnec has a partnership
interest at December 31............................ 75,373 63,977 84,344 75,766
Payable to a subsidiary of Lartnec for purchase of
commercial mortgage loans at December 31........... -- 6,520 -- --
Transfer of partnership interests in certain joint
ventures to a subsidiary of Lartnec................ -- 1,697 -- --
Real estate management fees charged by a subsidiary
of Lartnec......................................... 2,026 2,555 1,301 1,811
</TABLE>

(9) REINSURANCE

At September 30, 1996, the Company's maximum retention limit for acceptance
of risk on life insurance was $1 million. The retention limit for certain
policies issued prior to July 1, 1985, was $125,000 and for certain policies
issued after June 30, 1985, and before December 1, 1994, was $250,000. There are
reinsurance agreements with various companies whereby insurance in excess of
these retention limits are reinsured. Insurance in-force ceded to nonaffiliated
companies under risk sharing arrangements at September 30, 1996, December 31,
1995, December 31, 1994, and December 31, 1993, totaled approximately $2,548
million, $2,916 million, $3,265 million, and $3,247 million, respectively.

F-26
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(9) REINSURANCE (CONTINUED)

Total life premiums ceded amounted to $11.3 million, $14.2 million, $13.7
million, and $15.3 million in September 30, 1996 and for the years ended
December 31, 1995, 1994, and 1993, respectively. Total life premiums assumed
amounted to $1.0 million, $4.9 million, $7.9 million, and $8.5 million,
respectively.

To the extent that reinsuring companies are unable to meet obligations under
these agreements, the Company remains liable. To limit the possibility of such
losses, the Company evaluates the financial condition of its reinsurers and
monitors concentration of credit risk.

(10) COMMITMENTS AND CONTINGENCIES

Lartnec had various credit lines and arrangements totaling $115 million at
September 30, 1996. Approximately $110 million was outstanding under these
agreements at September 30, 1996, which are collateralized by Company
investments of approximately $131 million.

The Company has agreed to make loans to newly formed partnerships, of which
$19,600,000 was outstanding as of September 30, 1996.

The Company guarantees the payment of 60 percent of a pool of mortgage loans
and the related interest, previously sold to an unrelated party. The outstanding
balance of such mortgage loans subject to this repayment guarantee at December
31, 1995, was approximately $11 million.

The Company is party to financial instruments in the normal course of
business to meet the financing needs of its customers having risk exposure not
reflected in the balance sheet. These financial instruments include commitments
to extend credit and standby letters of credit. Commitments to extend credit are
agreements to lend to customers. Commitments generally have fixed expiration
dates and may require payment of a fee. Since many commitments expire without
being drawn upon, the total amount of commitments does not necessarily represent
future cash requirements. At December 31, 1995, outstanding commitments to
extend credit totaled approximately $6 million.

AmerUs Life is a defendant in a class action lawsuit which was brought on
August 31, 1995 in the District Court for Travis County, Texas. The complaint,
which seeks unspecified damages, was filed by former policyowners on behalf of
themselves and all similarly situated persons who purchased certain individual
life insurance policies which were underwritten and sold by AmerUs Life within
Texas from and after 1980. The complaint alleges that sales presentations and
policy illustrations misrepresented that premiums would "vanish" after a stated
number of years, without adequate disclosure of the effect of changes in the
policy dividends. AmerUs Life has denied the allegations contained in such
complaint and denies any wrongdoing in connection with such allegations. The
parties have engaged in discovery, but a hearing on certification of the class
has not yet been held.

The parties are engaged in a court-initiated mediation process in the Texas
litigation, and, in light of the uncertainties, hazards and expenses of
litigation, have discussed a number of different settlement approaches,
including a nationwide class settlement of certain market conduct issues for a
substantial block of the Company's traditional whole life policies. Progress in
negotiating such a class settlement appears to have been made, but substantial
unresolved issues remain and no agreement has been reached. Even if such
agreement were reached, the court would have to approve its terms. Should a
settlement satisfactory to the Company not be reached or not be approved, the
Company would continue to vigorously defend against the claims asserted,
including the existence of a legitimate class.

Due to the potential that a settlement may be reached in this case, the
Company has incurred a significant charge to income for the first nine months of
1996. Based upon its current estimates of the

F-27
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(10) COMMITMENTS AND CONTINGENCIES (CONTINUED)

range of loss at between five and eight million dollars, the Company has
established a reserve of five million dollars. The eventual costs of any
settlement cannot be precisely determined at this time, and may be more or less
than the amount of the range.

In the ordinary course of business, the Company and subsidiaries are also
engaged in certain other litigation, none of which management believes is
material.

(11) STOCKHOLDER'S EQUITY

Generally, the stockholder's equity of the Company's insurance subsidiaries
available for distribution to the Company are limited to the amounts that the
insurance subsidiaries' net assets, as determined in accordance with statutory
accounting practices, exceed minimum statutory capital requirements; however,
payments of such amounts as dividends may be subject to approval by regulatory
authorities. In 1996, the Company's insurance subsidiaries could distribute
approximately $40 million in the form of dividends to the Company without prior
approval of such regulatory authorities. However, as a result of the spin off,
the Company will not be able to pay additional dividends in the 12-month period
following the Distribution of the Non-Life Insurance Subisidiaries without the
prior approval of the Iowa Commissioner.

The Company made additional contributions to the Non-Life Insurance
Subisidiaries amounting to $4.5 million, $41.2 million, $5.0 million, and $0.3
million in the nine months ended September 30, 1996 and the years ended December
31, 1995, 1994, and 1993, respectively, which have been considered dividends to
AMHC as a result of the Distribution.

(12) STATUTORY ACCOUNTING PRACTICES

The Company's statutory net income was $54.2 million, $49.3 million, $20.8
million and $28.2 million in the nine months ended September 30, 1996 and the
years ended December 31, 1995, 1994, and 1993, respectively.

The Company's statutory surplus and capital was $162.7 million, $155.1
million and $183.6 million at September 30, 1996, December 31, 1995, and
December 31, 1994, respectively.

The pro forma unaudited statutory surplus and capital as of September 30,
1996, after the Reorganization and assuming the Capital Contribution, is as
follows (in millions):

<TABLE>
<CAPTION>
(UNAUDITED)
-------------
<S> <C>
Statutory surplus and capital at September 30, 1996............................. $ 163
Capital Contribution............................................................ (79)
Capital contribution to AmerUs Life............................................. 175
------
Pro forma statutory surplus and capital at September 30, 1996................... $ 259
------
------
</TABLE>

F-28
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(12) STATUTORY ACCOUNTING PRACTICES (CONTINUED)
The Company's insurance subsidiaries are domiciled in Iowa and prepare their
statutory-basis financial statements in accordance with accounting practices
prescribed or permitted by the Iowa Department of Commerce (Iowa Department).
Prescribed statutory accounting practices include state laws, regulations, and
general administrative rules, as well as a variety of publications of the
National Association of Insurance Commissioners (NAIC). Permitted statutory
accounting practices encompass all accounting practices that are not prescribed;
such practices may differ from state to state, may differ from company to
company within a state, and may change in the future. The NAIC currently is in
the process of codifying statutory accounting practices, the result of which is
expected to constitute the only source of prescribed statutory accounting
practices. Accordingly, that project, which is expected to be completed in 1997,
will likely change, to some extent, prescribed statutory accounting practices
and may result in changes to the accounting practices that insurance enterprises
use to prepare their statutory financial statements.

The Company does not utilize any permitted practices in the preparation of
its statutory-basis financial statements which would have a material impact on
statutory surplus.

The Iowa Department imposes minimum risk-based capital requirements on
insurance enterprises that were developed by the National Association of
Insurance Commissioners (NAIC). The formulas for determining the amount of
risk-based capital (RBC) specify various weighting factors that are applied to
financial balances or various levels of activity based on the perceived degree
of risk. Regulatory compliance is determined by a ratio (the Ratio) of the
enterprise's regulatory total adjusted capital, as defined by the NAIC, to its
authorized control level, RBC, as defined by the NAIC. Enterprises below
specific trigger points or ratios are classified within certain levels, each of
which requires specified corrective action.

Each of the Company's insurance subsidiaries has a Ratio that is at least
400 percent of the minimum RBC requirements; accordingly, the Company's
subsidiaries meet the RBC requirements.

(13) FINANCIAL INSTRUMENTS

The Company utilizes a variety of off-balance-sheet financial instruments as
part of its efforts to hedge and manage fluctuations in the market value of its
portfolio of available-for-sale securities, attributable to changes in general
interest rate levels, and to manage duration mismatch of assets and liabilities.
Those instruments include interest rate exchange agreements (swaps, caps and
swaptions) and involve elements of credit and market risks in excess of the
amounts recognized in the accompanying financial statements at a given point in
time. The contract or notional amounts of those instruments reflect the extent
of involvement in the various types of financial instruments.

The Company's exposure to credit risk is the risk of loss from a
counterparty failing to perform according to the terms of the contract. That
exposure includes settlement risk (i.e., the risk that the counterparty defaults
after the Company has delivered funds or securities under terms of the contract)
that would result in an accounting loss and replacement cost risk (i.e., the
cost to replace the contract at current market rates should the counterparty
default prior to settlement date). To limit exposure associated with
counterparty nonperformance on interest rate exchange agreements, the Company
enters into master netting agreements with its counterparties.

The credit risk on all financial instruments, whether on or off the balance
sheet, is controlled through an on-going credit review, approval, and monitoring
process. The Company determines, on an individual counterparty basis, the need
for collateral or other security to support financial instruments with credit
risk and establishes individual and aggregate counterparty exposure limits.

F-29
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) FINANCIAL INSTRUMENTS (CONTINUED)

The Company's outstanding derivative positions shown in notional or contract
amounts, along with their carrying value and estimated fair values, are
summarized as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
---------------------------------
NOTIONAL CARRYING FAIR
AMOUNT VALUE VALUE
----------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest rate caps................................................. $ 500,000 $ 4,498 $ 4,583
Swaptions.......................................................... 255,000 5,383 5,429
Receive fixed...................................................... 150,000 5,823 5,823
Pay fixed.......................................................... 75,000 187 187
----------- --------- ---------
$ 980,000 $ 15,891 $ 16,022
----------- --------- ---------
----------- --------- ---------

DECEMBER 31, 1995
---------------------------------
NOTIONAL CARRYING FAIR
AMOUNT VALUE VALUE
----------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest rate caps................................................. $ 450,000 $ 4,112 $ 4,110
Received fixed..................................................... 150,000 11,887 11,887
Pay fixed.......................................................... 150,000 (3,392) (3,392)
----------- --------- ---------
$ 750,000 $ 12,607 $ 12,605
----------- --------- ---------
----------- --------- ---------
</TABLE>

There were no material derivative positions at December 31, 1994.

INTEREST RATE EXCHANGE AGREEMENTS

The Company enters into interest rate exchange agreements to reduce and
manage interest rate risk associated with individual assets and liabilities and
its overall aggregate portfolio. The interest rate swap agreements, which expire
between 1999 and 2001, generally involve the exchange of fixed and floating rate
interest payments, without an exchange of the underlying principal. The interest
rate cap agreements, which expire between 1997 and 2001, involve the payment of
a maximum fixed interest rate when an indexed rate exceeds that fixed rate.
Swaption agreements, which expire between 1999 and 2002, involve the right to
enter into a swap transaction at a pre-specified price. These agreements are
used in conjunction with interest rate caps to protect against rising rates. The
amounts to be received or paid pursuant to those agreements are accrued and
recognized in the accompanying consolidated statements of income through an
adjustment to investment income over the life of the agreements. The net effect
on income from amortization and interest paid or received was an increase of
$0.9 million in the nine months ended September 30, 1996 and $1.5 million for
1995. There were no material effects in 1994 and 1993. Gains or losses realized
on closed or terminated agreements accounted for as hedges are deferred and
amortized to investment income on a constant yield basis over the shorter of the
life of the agreements or the expected remaining life of the underlying assets
or liabilities. There was $0.5 million of deferred gains on interest rate
exchange agreements as of September 30, with no deferred gains as of December
31, 1995, 1994, and 1993.

F-30
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) FINANCIAL INSTRUMENTS (CONTINUED)
The following table shows unrealized gains and losses on derivative
positions.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
-----------------------------------------------------
TOTAL NET
NOTIONAL UNREALIZED UNREALIZED UNREALIZED
VALUE GAINS LOSSES GAINS (LOSSES)
----------- ----------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Receive fixed................................... $ 150,000 $ 4,295 $ -- $ 4,295
Pay fixed....................................... 75,000 187 -- 187
Interest rate caps.............................. 500,000 -- 1,552 (1,552)
Swaptions....................................... 255,000 -- -- --
----------- ----------- ----------- --------------
$ 980,000 $ 4,482 $ 1,552 $ 2,930
----------- ----------- ----------- --------------
----------- ----------- ----------- --------------

DECEMBER 31, 1995
-----------------------------------------------------
TOTAL NET
NOTIONAL UNREALIZED UNREALIZED UNREALIZED
VALUE GAINS LOSSES GAINS (LOSSES)
----------- ----------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Received fixed.................................. $ 150,000 $ 11,887 $ -- $ 11,887
Pay fixed....................................... 150,000 -- 3,392 (3,392)
Interest rate caps.............................. 450,000 183 2,518 (2,335)
----------- ----------- ----------- --------------
$ 750,000 $ 12,070 $ 5,910 $ 6,160
----------- ----------- ----------- --------------
----------- ----------- ----------- --------------
</TABLE>

The Company is exposed to credit loss in the event of nonperformance by
counterparties on interest rate cap and interest rate swap agreements. The
Company does not anticipate nonperformance by any of these counterparties. The
credit risk associated with such agreements is minimized by purchasing such
agreements from financial institutions with long-standing, superior performance
records. The amount of such exposure is essentially their replacement cost,
which is approximated by the unrealized gains in such contracts.

The Company has no current exposure to the counterparty when a contract
contains an unrealized loss.

F-31
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) FINANCIAL INSTRUMENTS (CONTINUED)
MATURITY SCHEDULE BY YEAR FOR DERIVATIVE PRODUCTS

<TABLE>
<CAPTION>
1996 1997 1998 1999 2000 2001 2002
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Receive fixed swaps:
Notional amount (in thousands)......... $ 150,000
Weighted average:
Receive rate........................... 7.86% 7.86% 7.86% 7.86%
Pay rate (A)........................... 5.63% 5.63% 5.63% 5.63%
Pay fixed swaps:
Notional amount (in thousands)......... $ 75,000
Weighted average:
Receive rate(A)........................ 5.63% 5.63% 5.63% 5.63% 5.63% 5.63%
Pay rate............................... 6.63% 6.63% 6.63% 6.63% 6.63% 6.63%
Total weighted average rates on swaps:
Receive rate........................... 7.11% 7.11% 7.11% 7.11% 5.63% 5.63%
Pay rate............................... 5.96% 5.96% 5.96% 5.96% 6.63% 6.63%
Interest rate caps
Notional amount (in thousands)......... $ 25,000 $ 125,000 $ 300,000 $ 50,000
Swaptions
Notional amount (in thousands)......... $ 50,000 $ 105,000 $ 100,000
Total notional value of swaps, caps and
swaptions (in thousands)................ $ 25,000 $ 325,000 $ 300,000 $ 230,000 $ 100,000
</TABLE>

- ------------------

(A) The actual variable rates in the agreements are based on three-month LIBOR,
and the table assumes that such rates will remain constant at September 30,
1996 levels. To the extent that actual rates change, the variable interest
rate information will change accordingly.

(14) FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS 107, "Disclosures about Fair Values of Financial Instruments," requires
disclosure of fair value information about financial instruments, whether
recognized or not recognized in a company's balance sheet, for which it is
practicable to estimate that value. In cases where quoted market prices are not
available, fair values are based on estimates using discounted cash flow or
other valuation techniques. Those techniques are significantly affected by the
assumptions used, including the discount rates and estimates of the amount and
timing of future cash flows. SFAS 107 excludes certain insurance liabilities and
other non-financial instruments from its disclosure requirements. The fair value
amounts presented herein do not include an amount for the value associated with
customer or agent relationships, the expected interest margin (interest earnings
over interest credited) to be earned in the future on investment-type products,
or other intangible items. Accordingly, the aggregate fair value amounts
presented herein do not necessarily represent the underlying value of the
Company; likewise, care should be exercised in deriving conclusions about the
Company's business or financial condition based on the fair value information
presented herein.

The Company closely monitors the level of its insurance liabilities, the
level of interest rates credited to its interest sensitive products, and the
assumed interest margin provided for within the pricing structure of its other
products. Those amounts are taken into consideration in the Company's overall
management of interest rate risk that attempts to minimize exposure to changing
interest rates through the matching of investment maturities with amounts
expected to be due under insurance contracts. As such, the Company believes that
it has reduced the volatility inherent in its fair value adjusted policyowners'
equity, although such volatility will not be reduced completely. The Company has
used discount rates in the determination of fair values for its liabilities that
are consistent with market yields for related assets. The use of the asset
market yield is consistent with management's opinion that the risks inherent in
the Company's asset and liability portfolios are similar, and the fact that fair
values for both assets and

F-32
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(14) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
liabilities generally will react in much the same manner during periods of
interest rate changes. However, that assumption might not result in fair values
that are consistent with values obtained through an actuarial appraisal of the
Company's business or values that might arise in a negotiated transaction.

The presentation on the following page reflects fair values for those
instruments specifically covered by SFAS 107, along with fair value amounts for
those traditional insurance liabilities for which disclosure is permitted but
not required; the fair values for all other assets and liabilities have been
reported at their carrying amounts.

VALUATION METHODS AND ASSUMPTIONS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Cash, short-term investments, policy loans, accrued investment income:
the carrying amounts for these instruments approximate their fair
values.

Fixed maturities and equity securities: fair values for bonds are based
on quoted market prices or dealer quotes. If a quoted market price is
not available, fair value is estimated using values obtained from
independent pricing services or, in the case of private placements, are
estimated by discounting expected future cash flows using a current
market rate applicable to the yield, credit quality, and maturity of the
investments. The fair values for preferred and common stocks are based
on quoted market prices.

Mortgage loans on real estate: for all performing fixed interest rate
loans, the estimated net cash flows to maturity were discounted to
derive an estimated market value. The discount rate used was based on
the individual loan's remaining weighted average life and a basis point
spread based on the market conditions for the type of loan and credit
quality. These spreads were over the September 30, 1996, United States
treasury yield curve. Performing variable rate commercial loans and
residential loans were valued at the current outstanding balance. Loans
which have been restructured, are in foreclosure, are significantly
delinquent, or are to affiliates were valued primarily at the lower of
the estimated net cash flows to maturity discounted at a market rate of
interest or the current outstanding principal balance.

Hedging instruments: fair values for derivative securities are based on
pricing models or formulas using current assumptions and are classified
as other assets or other liabilities.

Policy reserves: fair values of the Company's liabilities under
contracts not involving significant mortality or morbidity risks
(principally, annuities) are stated at the cost the Company would incur
to extinguish the liability; i.e., the cash surrender value.

Debt: fair values for debt are estimated using discounted cash flow
analysis based on the Company's current incremental borrowing rate for
similar types of borrowing arrangements.

The carrying amounts of other financial assets, dividends payable to
policyowners, and policy reserves including significant mortality or
morbidity risks approximate their fair values.

F-33
<PAGE>
AMERUS LIFE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(14) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The estimated fair values of the Company's significant financial
instruments are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------
SEPTEMBER 30, 1996 1995 1994
---------------------- ---------------------- ----------------------
CARRYING ESTIMATED CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE AMOUNT FAIR VALUE
---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Financial assets:
Securities available-for-sale:
Fixed maturity................... $2,297,571 $2,297,571 $3,142,096 $3,142,096 $2,566,768 $2,566,768
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Equity securities................ $ 74,575 $ 74,575 $ 109,675 $ 109,675 $ 178,770 $ 178,770
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Short-term investments........... $ 12,002 $ 12,002 $ 39,353 $ 39,353 $ 8,529 $ 8,529
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Mortgage loans on real estate...... $ 260,233 $ 278,827 $ 353,597 $ 369,706 $ 447,663 $ 431,812
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Interest rate swaps:
Net receivable position.......... $ 5,823 $ 5,823 $ 11,887 $ 11,887 $ -- $ --
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Net payable position............. $ 187 $ 187 $ (3,392) $ (3,392) $ (1,819) $ (1,819)
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Interest rate caps................... $ 4,498 $ 4,583 $ 6,445 $ 4,110 $ 3,648 $ 3,626
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Swaptions............................ $ 5,383 $ 5,429 $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Financial liabilities--policy
reserves for annuities.............. $1,433,003 $1,397,390 $1,524,801 $1,493,847 $1,575,131 $1,543,129
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Debt............................... $ 45,055 $ 45,055 $ 36,461 $ 36,461 $ 34,292 $ 34,292
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>

(15) UNAUDITED PRO FORMA ADJUSTMENT FOR THE CAPITAL CONTRIBUTION
The Company plans to make the Capital Contribution of certain assets and
liabilities having a net book value of $79.0 million prior to the Subscription
Offering as follows (dollars in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30,
1996
PRO FORMA PRO FORMA ----------------
AS ADJUSTED ADJUSTMENT FOR
FOR THE THE CAPITAL
CAPITAL CONTRIBUTION
CONTRIBUTION --------------
-------------- (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C>
Fixed maturity securities...................................... $ 2,294,031 $ (3,540) $ 2,297,571
-------------- -------------- ----------------
-------------- -------------- ----------------
Equity securities.............................................. $ 73,897 $ (678) $ 74,575
-------------- -------------- ----------------
-------------- -------------- ----------------
Mortgage loans on real estate.................................. $ 250,484 $ (9,749) $ 260,233
-------------- -------------- ----------------
-------------- -------------- ----------------
Real estate.................................................... $ 10,481 $ (29,531) $ 40,012
-------------- -------------- ----------------
-------------- -------------- ----------------
Property and Equipment......................................... $ 4,600 $ (8,724) $ 13,324
-------------- -------------- ----------------
-------------- -------------- ----------------
Checks drawn in excess of bank balances........................ $ 43,811 $ (35,500) $ 8,311
-------------- -------------- ----------------
-------------- -------------- ----------------
Debt........................................................... $ 36,333 $ 8,722 $ 45,055
-------------- -------------- ----------------
-------------- -------------- ----------------
Stockholder's Equity........................................... $ 433,394 $ (79,000) $ 512,394
-------------- -------------- ----------------
-------------- -------------- ----------------
</TABLE>

Earnings per share have been computed on a pro forma basis by giving
retroactive effect to the issuance of 17 million shares of Class A common stock
and 5 million shares of Class B common stock as if all such shares had been
issued at the beginning of the respective periods and by giving retroactive
effect to the Capital Contribution.

F-34
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO ITS DATE.
----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.............................. 2
Prospectus Summary................................. 4
Risk Factors....................................... 14
The Company........................................ 19
The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries............................ 19
The Subscription Offering.......................... 24
The Public Offering................................ 26
The Preferred Offering............................. 27
Use of Proceeds.................................... 28
Market for Common Stock............................ 28
Dividend Policy.................................... 29
Capitalization..................................... 30
Selected Consolidated Financial and Operating
Data.............................................. 31
Unaudited Pro Forma Condensed Consolidated
Financial Statements.............................. 34
Management's Discussion and Analysis of Results of
Operations and Financial Condition................ 41
Business........................................... 58
Supervision and Regulation......................... 81
Management......................................... 84
Management Compensation............................ 87
Certain Transactions and Relationships............. 95
Ownership of Common Stock.......................... 101
Description of the Capital Stock................... 102
Certain Provisions of the Articles of Incorporation
and Bylaws of the Company......................... 105
Shares Eligible for Future Sale.................... 107
Plan of Distribution............................... 108
Legal Matters...................................... 109
Experts............................................ 109
Glossary of Certain Insurance and Other Defined
Terms............................................. 110
Index to Financial Statements...................... F-1
</TABLE>

--------------

THROUGH AND INCLUDING JANUARY 6, 1997 (THE 25TH DAY AFTER THE DATE OF THIS
PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

5,000,000 SHARES

AMERUS LIFE HOLDINGS, INC.

CLASS A COMMON STOCK
(NO PAR VALUE)

---------------------

PROSPECTUS

---------------------

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

SUBJECT TO COMPLETION, DATED , 1996

AMERUS LIFE HOLDINGS, INC.

CLASS A COMMON STOCK
(NO PAR VALUE)
--------------

Of the shares of Class A Common Stock of AmerUs Life Holdings,
Inc., an Iowa corporation, offered hereby (the "Shares"), Shares are
being offered by the Company and Shares are being offered by the
Company's parent corporation, AmerUs Group Co., an Iowa Corporation ("AmerUs
Group" or the "Selling Shareholder"). See "Ownership of Common Stock."
Additional shares of Class A Common Stock were offered in a subscription
offering that expired on January 8, 1997 (the "Subscription Offering," and
together with the Public Offering, the "Offerings"). In connection with the
Subscription Offering, the Company and the Selling Shareholder received
subscriptions at the price of $19.00 per share (the "Subscription Price"),
subject to certain potential adjustments described below, for shares
of Class A Common Stock (the "Subscription Shares"). The Subscription Shares
were offered in accordance with the priority subscription rights provided under
the Plan (as defined therein) to eligible policyowners of the Company's
principal subsidiary, AmerUs Life Insurance Company, an Iowa stock life
insurance company ("AmerUs Life") as of June 30, 1996. See "The Subscription
Offering." The Company will not receive any of the proceeds from the sale of
Shares being offered by the Selling Shareholder.

The Company has two classes of authorized common stock, no par value (the
"Common Stock"), consisting of (i) the Class A Common Stock, which has one vote
per share, and (ii) the Class B Common Stock, the holder of which shall at all
times have a majority of the voting power of the Common Stock. Under Iowa law,
the Class B Common Stock must be held, directly or indirectly, by American
Mutual Holding Company, an Iowa mutual insurance holding company ("AMHC"), and
is automatically convertible into Class A Common Stock in the event of the
demutualization of AMHC. Following the Offerings, AMHC will own, directly or
indirectly, 71% of the Company's Class A Common Stock (assuming no exercise of
the underwriters' over-allotment option) and 100% of the Class B Common Stock,
which together will represent approximately 77% of the voting power of the
Common Stock and approximately 77% of the economic value of the Company. See
"Risk Factors--Control by AMHC; Anti-Takeover Effects of Iowa Law and the
Company's Articles of Incorporation and Bylaws" and "Description of the Capital
Stock."

Prior to the Offerings, there has been no public market for the Class A
Common Stock of the Company. It is currently estimated that the initial public
offering price (the "Public Offering Price") will be between $ and $ per
share. If the Public Offering Price is less than the Subscription Price, then
the Company and the Selling Shareholder will issue refunds to subscribing
policyowners in the form of a check equal to the amount of such difference
multiplied by the number of shares subscribed for by each such policyowner. If
the Public Offering Price is more than the Subscription Price, the subscription
policyowners who purchase Subscription Shares will not be required to pay any
additional amounts for the Subscription Shares, nor will there be any adjustment
in the number of Subscription Shares issued to them. As a result, the Public
Offering Price may be greater than the effective price per share of Class A
Common Stock received in the Subscription Offering. See "The Subscription
Offering." For factors to be considered in determining the Public Offering
Price, see "Underwriting."

The Class A Common Stock has been approved for quotation, subject to
official notice of issuance, on the Nasdaq National Market under the symbol
"AMRS".

SEE "RISK FACTORS" BEGINNING ON PAGE FOR A DISCUSSION OF CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE CLASS A COMMON STOCK.
-------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNT(1) COMPANY(2)
------------------- ------------------- ---------------------
<S> <C> <C> <C>
Per Share..................................... $ $ $
Total(3)...................................... $ $ $

<CAPTION>
PROCEEDS TO SELLING
SHAREHOLDER(2)
---------------------------
<S> <C>
Per Share..................................... $
Total(3)...................................... $
</TABLE>

- --------------------
(1) The Company, the Selling Shareholder and AmerUs Life have agreed to
indemnify the underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.

(2) Before deducting expenses of $ payable by the Company and $
payable by the Selling Shareholder.

(3) The Company and the Selling Shareholder have granted the Underwriters an
option for 30 days to purchase up to an additional shares at the
initial public offering price per share, less the underwriting discount,
solely to cover over-allotments. If such option is exercised in full, the
total initial public offering price, underwriting discount, proceeds to the
Company, and proceeds to the Selling Shareholder will be $ ,
$ , $ and $ , respectively. See
"Underwriting."
--------------------

The shares offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that certificates
for the shares will be ready for delivery in New York, New York, on or about
January , 1997, against payment therefor in immediately available funds.

GOLDMAN, SACHS & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
THE CHICAGO CORPORATION
---------

The date of this Prospectus is , 1997.

A-1
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

AVAILABLE INFORMATION

A-2
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

--------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

A-3
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

THE OFFERINGS

Prior to this Public Offering, the Company and the Selling Shareholder
offered up to five million shares of Class A Common Stock (the "Shares") in the
Subscription Offering that expired on January 8, 1997. The Company and the
Selling Shareholder have received subscriptions at a per share price of $19.00
(the "Subscription Price"), subject to certain potential adjustments if the
Public Offering Price is less than the Subscription Price, for Shares (the
"Subscription Shares"). The Subscription Shares were offered in accordance with
the priority subscription rights provided under the Plan to eligible
policyowners of AmerUs Life as of June 30, 1996 (the effective date of the
Reorganization). The Shares which were not subscribed for in the Subscription
Offering are being offered to the public in this Public Offering by the Company
and the Selling Shareholder, in equal proportion.

<TABLE>
<S> <C>
Class A Common Stock Offered by the
Company Pursuant to the Public Of-
fering (1)......................... shares

Class A Common Stock Offered by the
Selling Shareholder Pursuant to the
Public Offering (1)................ shares

Class A Common Stock Subcribed for
in the Subscription Offering....... shares

Total Class A Common Stock to be
Sold in the Offerings (1).......... 5,000,000 shares

Class A Common Stock to be Out-
standing Immediately After the
Offerings (1)...................... 17,000,000 shares

Class B Common Stock to be Out-
standing Immediately After the
Offerings.......................... 5,000,000 shares

Nasdaq Symbol....................... AMRS

Voting Rights....................... The Class A Common Stock has one vote per share. The
voting rights of the Class B Common Stock provide the
holder of the Class B Common Stock with a majority of
the voting power of the Class A Common Stock and the
Class B Common Stock combined. Both classes generally
vote together as a single class on all matters,
except that the holders of Class A Common Stock and
the holders of Class B Common Stock will vote
separately as a class with respect to certain matters
for which class voting is required under Iowa law.
See "Description of the Capital Stock."

Use of Proceeds..................... The amount of proceeds from the Offerings, if any,
will vary according to, among other things, the total
number of Shares subscribed for by Subscription
Policyowners. Assuming that the Public Offering Price
(or the Revised Subscription Price if the Public
Offering is not consummated) is equal to $15.50 per
Share, the net proceeds to the Company from the
Offerings are expected to be approximately $35
million after deducting the Company's share of the
estimated expenses of the Offerings. All such
estimated net proceeds will be used by the Company to
repay debt outstanding under the Bank Credit
Facility. The Company will
</TABLE>

A-4
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

<TABLE>
<S> <C>
not receive any proceeds from the sale of Class A
Common Stock by the Selling Shareholder. See "Use of
Proceeds" and "The Subscription Offering."

Dividend Policy..................... Subject to the Company's financial results,
applicable regulatory constraints and declaration by
the Board of Directors of the Company, the Company
currently intends to pay a quarterly dividend of
$0.10 per share of Common Stock commencing with the
quarter ending on March 31, 1997. However, there can
be no assurance that the Company will declare and pay
any dividends. See "Risk Factors--Holding Company
Structure; Limitation on Dividends" and "Dividend
Policy."
</TABLE>

- --------------

(1) Excludes an aggregate of shares subject to the underwriters'
over-allotment option.

A-5
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

THE PREFERRED OFFERING

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

The foregoing give effect to the Reorganization and the Distribution as if
both had been completed prior to the periods presented, but do not give effect
to the Capital Contribution. In the opinion of management, the financial
information presented for all interim periods reflects all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of such data. Results for the nine-month periods ended September
30, 1996 and 1995 are not necessarily indicative of results that may be expected
for any other interim period or the year as a whole. This data should be read in
conjunction with (i) "Management's Discussion and Analysis of Results of
Operations and Financial Condition," (ii) the audited Consolidated Financial
Statements of the Company as of September 30,
1996 and December 31, 1995 and 1994, and for the nine months ended September 30,
1996 and each of the years in the three-year period ended December 31, 1995,
which financial statements have been audited by KPMG Peat Marwick LLP,
independent auditors, together with the related notes and the report thereon,
(iii) the unaudited consolidated financial statements of the Company as of
September 30, 1995 and for the nine-months ended September 30, 1995 and (iv)
other financial data included elsewhere in this Prospectus.

A-6
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

Business, are expected to be sufficient to support the Closed Block Business,
including provisions for payment of claims, taxes and certain other expenses and
for the continuation of policyowner dividend scales and interest credits in
effect prior to the Reorganization, if the experience underlying such dividend
scales continues. The assets, including the revenue therefrom, allocated to the
Closed Block Business will accrue solely to the benefit of owners of the
policies included in the Closed Block Business until such time as the Closed
Block is no longer in effect; accordingly, such assets and the revenue therefrom
will not be available for the benefit of AmerUs Life or the Company.

CLASS A COMMON STOCK ELIGIBLE FOR FUTURE SALE

NO PRIOR MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF COMMON STOCK PRICE

A-7
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

THE SUBSCRIPTION OFFERING

Prior to this Public Offering, the Company and the Selling Shareholder
offered up to five million shares of Class A Common Stock (the "Shares") in the
Subscription Offering that expired on January 8, 1997. The Company and the
Selling Shareholder have received subscriptions at a per share price of $19.00
(the "Subscription Price"), subject to certain potential adjustments described
below, for Shares (the "Subscription Shares"). The Subscription Shares were
offered in accordance with the priority subscription rights provided under the
Plan to eligible policyowners of AmerUs Life as of June 30, 1996 (the effective
date of the Reorganization). The Shares which were not subscribed for in the
Subscription Offering are being offered by the Company and the Selling
Shareholder, in equal proportion, to the public in this Public Offering. The
Company and the Selling Shareholder intend to close the Subscription Offering
contemporaneously with the closing of this Public Offering. However, the Company
may, in its sole discretion, at any time prior to the closing of the
Subscription Offering, elect to cancel or rescind the Subscription Offering.

The issuance of Shares in the Subscription Offering is contingent upon the
sale by the Company and the Selling Shareholder of shares in the Offerings in an
aggregate amount of at least $50 million.

If the Public Offering Price is less than the Subscription Price, then the
Company and the Selling Shareholder will issue refunds to subscribing
policyowners in the form of a check equal to the amount of such difference
multiplied by the number of Shares subscribed for by each such policyowner. If
the Public Offering Price is more than the Subscription Price, the subscription
policyowners who purchase Shares in the Subscription Offering will not be
required to pay any additional amounts for the Shares nor will there be any
adjustment in the number of Shares issued to them. As a result, the Public
Offering Price may be greater than the effective price per Share of Class A
Common Stock received in the Subscription Offering.

On the closing date(s) of the Subscription Offering and this Public Offering
or as soon thereafter as reasonably practicable (but no more than 10 business
days after the closing date), the Company and the Selling Shareholder will issue
or deliver Shares sold pursuant to the Subscription Offering and this Preferred
Offering, respectively, and issue refunds, as applicable, for the excess of the
Subscription Price over the Public Offering Price.

USE OF PROCEEDS

The net proceeds to the Company from the Offerings are expected to be
approximately $35 million after deducting the Company's share of the estimated
expenses of the Offerings. All such estimated proceeds will be used by the
Company to repay a portion of the term debt under the Bank Credit Facility. The
term debt will be due during the next five years and bears interest at a
variable rate which rate was approximately 6.3% as of the date of this
prospectus. The term debt to be repaid was incurred in December, 1996 and the
proceeds of such debt were advanced to AmerUs Life in the form of a capital
contribution to replace capital which was distributed by AmerUs Life pursuant to
the Distribution. The Company will not receive any proceeds from the sale of
Class A Common Stock by the Selling Shareholder.

A-8
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

MARKET FOR COMMON STOCK

Prior to the Offerings, there has been no public market for shares of either
class of the Company's Common Stock. The Class A Common Stock has been approved
for quotation, subject to offical notice of issuance, on the Nasdaq National
Market under the symbol "AMRS". There can be no assurance, however, that an
active market for the Class A Common Stock will develop or, if developed, will
continue. See "Risk Factors--No Prior Market for Common Stock; Possible
Volatility of Common Stock Price."

A-9
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

capital contributions to Lartnec in the approximate aggregate amount of
$41,156,000. In 1996, prior to the Distribution, AmerUs Life made additional
capital contributions to Lartnec in the approximate total amount of $4,563,000.

LOANS AND CREDIT SUPPORT TO THE AMERUS AFFILIATED GROUP

AmerUs Life has provided financing to members of the AmerUs Affiliated Group
or their affiliates for various purposes. The outstanding balance of all such
financings was $63.9 million and $75.3 million as of December 31, 1995 and
September 30, 1996, respectively. AmerUs Life recorded interest income of $6.0
million and $4.7 million for the year ended December 31, 1995 and the nine
months ended September 30, 1996, respectively. After giving effect to the
Capital Contribution, the amounts for such periods would have been $48.9 million
and $70.1 million, respectively.

AmerUs Life has outstanding loan commitments to various partnerships in
which API has an interest. At September 30, 1996, the outstanding loan
commitments were approximately $16,000,000.

SECURITY ARRANGEMENTS FOR BANK CREDIT FACILITY

In connection with the Bank Credit Facility, the Company has pledged to the
lenders approximately 49.9% of the common stock of AmerUs Life owned by the
Company and a $50 million 9% surplus note payable to the Company by AmerUs Life.
AmerUs Group has also pledged shares of the Company's Class A Common Stock owned
by AmerUs Group in an amount which is limited by Iowa Law and which, together
with the voting shares owned by shareholders other than AmerUs Group, shall be
less than 50% of the total voting shares of the Company. The Company is
prohibited by Iowa law from pledging a majority of the shares necessary to elect
the board of directors of the Company. AMHC and AmerUs Group have also
guaranteed the indebtedness of the Company under the Bank Credit Agreement.

OWNERSHIP OF COMMON STOCK

OWNERSHIP OF CLASS A COMMON STOCK

OWNERSHIP OF CLASS B COMMON STOCK

CLASS A COMMON STOCK SUBSCRIPTIONS BY MANAGEMENT

Directors and officers of the Company have subscribed for Shares in the
Subscription Offering in their capacities as Subscription Policyowners. The
terms pursuant to which directors and officers of the Company may obtain Shares
in the Subscription Offering are identical to the terms for other Subscription
Policyowners. Directors and executive officers of the Company, as a group,
subscribed for Shares in the Subscription Offering.

A-10
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

registration under the Securities Act. However, the shares of Class A Common
Stock and Class B Common Stock owned by AmerUs Group will constitute "restricted
securities" within the meaning of Rule 144 promulgated under the Securities Act.
Such shares will not be eligible for sale under Rule 144 until two years after
the date of their issuance. Thereafter, such shares will be subject to the
volume and timing requirements of Rule 144.

All officers and directors of the Company and its affiliates who purchase
shares of Class A Common Stock pursuant to the Subscription Offering would be
required, pursuant to proposed rules of the Iowa Commissioner, to refrain from
offering, selling, contracting to sell or otherwise disposing of such shares for
a period of 180 days following the date of purchase. In addition, AmerUs Group,
the Company and their officers and directors have agreed with the Underwriters
not to sell any Common Stock for 180 days from the date of this prospectus
without the prior written consent of Goldman, Sachs & Co.

VALIDITY OF SHARES

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by James A. Smallenberger, Esq., Senior Vice
President and Secretary of the Company and Sidley & Austin, Chicago, Illinois,
and by Sullivan & Cromwell, New York, New York, for the Underwriters. Sidley &
Austin and Sullivan & Cromwell will rely as to matters governed by the laws of
the State of Iowa upon the opinion of James A. Smallenberger, Esq.

EXPERTS

A-11
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company and the Selling Shareholder have agreed to sell to each of the
Underwriters named below, and each of such underwriters, for whom Goldman, Sachs
& Co., Donaldson, Lufkin & Jenrette Securities Corporation, Salomon Brothers Inc
and The Chicago Corporation are acting as representatives, has severally agreed
to purchase from the Company and the Selling Shareholder, the respective number
of shares of Class A Common Stock set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
CLASS A
UNDERWRITER COMMON STOCK
- ----------------------------------------------------------------------------------------- -------------
<S> <C>
Goldman, Sachs & Co......................................................................
Donaldson, Lufkin & Jenrette Securities Corporation......................................
Salomon Brothers Inc.....................................................................
The Chicago Corporation..................................................................
-------------
Total..................................................................................
-------------
-------------
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the shares offered hereby, if
any are taken.

The Underwriters propose to offer the shares of Class A Common Stock in part
directly to the public at the Public Offering Price set forth on the cover page
of this Prospectus and in part to certain securities dealers at such Public
Offering Price less a concession of $ per share. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per share to
certain brokers and dealers. After the shares of Class A Common Stock are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the representatives.

The Company and the Selling Shareholder have granted the Underwriters an
option exercisable for 30 days after the date of this Prospectus to purchase up
to an aggregate of additional shares of Class A Common Stock solely to
cover over-allotments, if any. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of shares
to be purchased by each of them, as shown in the foregoing table, bears to the
shares of Class A Common Stock offered hereby.

The Company and the Selling Shareholder have agreed that, during the period
beginning from the date of this Prospectus and continuing to and including the
date 180 days after the date of this Prospectus, they will not offer, sell,
contract to sell or otherwise dispose of any securities of the Company (other
than pursuant to employee stock option plans existing on the date of this
Prospectus) which are substantially similar to the shares of Class A Common
Stock, including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Class A Common Stock
or any such substantially similar securities, without the prior written consent
of the representatives, except for the shares of Class A Common Stock offered in
connection with this Public Offering.

The representatives of the Underwriters have informed the Company and the
Selling Shareholder that they do not expect sales to accounts over which the
Underwriters exercise discretionary authority to exceed five percent of the
total number of shares of Class A Common Stock offered by them.

A-12
<PAGE>
ALTERNATE PAGE FOR PUBLIC OFFERING PROSPECTUS

Certain partners, managing directors, officers and other representatives of
the underwriters who are policyowners may be eligible to participate in the
Subscription Rights Offering. See "The Subscription Offering."

Prior to the Offerings, there has been no public market for the shares of
Class A Common Stock. The Public Offering Price will be negotiated between the
Company and the Selling Shareholder and the representatives. Among the factors
to be considered in determining the Public Offering Price of the Class A Common
Stock, in addition to prevailing market conditions, will be AmerUs Life's
historical performance, estimates of the business potential and earnings
prospects of the Company, an assessment of the Company's management and the
consideration of these factors in relation to market valuations of companies in
related businesses.

The Class A Common Stock has been approved for quotation, subject to
official notice of issuance, on the Nasdaq National Market under the symbol
"AMRS."

The Company, the Selling Shareholder and AmerUs Life have agreed to
indemnify the several underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.

A-13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information..............................
Prospectus Summary.................................
Risk Factors.......................................
The Company........................................
The Reorganization and Distribution of the Non-Life
Insurance Subsidiaries............................
The Subscription Offering..........................
The Preferred Offering.............................
Use of Proceeds....................................
Market for Common Stock............................
Dividend Policy....................................
Capitalization.....................................
Selected Consolidated Financial and Operating
Data..............................................
Unaudited Pro Forma Condensed Consolidated
Financial Statements..............................
Organizational Structure...........................
Management's Discussion and Analysis of Financial
Condition and Results of Operations...............
Business...........................................
Supervision and Regulation.........................
Management.........................................
Management Compensation............................
Certain Transactions and Relationships.............
Ownership of Common Stock..........................
Description of the Capital Stock...................
Certain Provisions of the Articles of Incorporation
and Bylaws of the Company.........................
Shares Eligible for Future Sale....................
Validity of Shares.................................
Experts............................................
Glossary of Certain Insurance and Other Defined
Terms.............................................
Index to Financial Statements...................... F-1
Underwriting....................................... U-1
</TABLE>

THROUGH AND INCLUDING , 1997 (THE 25TH DAY AFTER THE DATE OF
THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON
STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

AMERUS LIFE HOLDINGS, INC.

CLASS A COMMON STOCK
(NO PAR VALUE)

---------------------

PROSPECTUS

---------------------

GOLDMAN, SACHS & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
THE CHICAGO CORPORATION

REPRESENTATIVES OF THE UNDERWRITERS

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

A-14
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses payable by the Company in connection with the sale of the Class
A Common Stock offered hereby are set forth below. All such amounts (other than
the SEC registration fee, the NASD filing fee and Nasdaq National Market fee)
are estimated. Amounts shown reflect one-half of the total offering expenses of
$2,075,000. The Selling Shareholder has agreed to pay for one-half of the total
offering expenses.

<TABLE>
<CAPTION>
AMOUNT
-------------
<S> <C>
SEC registration fee........................................................... $ 19,828
NASD filing fee................................................................ 6,000
Nasdaq National Market entry fee............................................... 25,000
Printing and engraving expenses................................................ 187,500
Legal fees and expenses........................................................ 212,500
Accounting fees and expenses................................................... 125,000
Blue Sky fees and expenses (including legal fees and expenses)................. 7,500
Iowa Insurance Commissioner Financial Advisor.................................. 425,000
Subscription Agent fees and expenses........................................... 12,500
Miscellaneous.................................................................. 16,672
-------------
Total........................................................................ $ 1,037,500
-------------
-------------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Sections 851 and 856 of the Iowa Business Corporation Act ("IBCA") provide
that a corporation has the power to indemnify its directors and officers against
liabilities and expenses incurred by reason of such person serving in the
capacity of director or officer, if such person has acted in good faith and in a
manner reasonably believed by the individual to be in or 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. The
foregoing indemnity provisions notwithstanding, in the case of actions brought
by or in the right of the corporation, no indemnification shall be made to such
director or officer with respect to any matter as to which such individual has
been adjudged to be liable to the corporation unless, and only to the extent
that, a court determines that indemnification is proper under the circumstances.

The Company maintains a directors' and officers' liability insurance policy
to insure against losses arising from claims made against its directors and
officers, subject to the limitations and conditions as set forth in the
policies. In adition, the Company has entered into indemnification agreements
with its directors and certain of its executive officers providing for the
indemnification of such persons as permitted by the Company's Articles of
Incorporation and Iowa law.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On August 1, 1996, the Company issued 10,000 shares of common stock to
AmerUs Group (which shares subsequently became shares of Class A Common Stock).
Subsequently, in December 1996, the Company issued 14,490,000 shares of Class A
Common Stock and 5,000,000 shares of Class B

II-1
<PAGE>
Common Stock to AmerUs Group. See "The Reorganization and Distribution of the
Non-Life Insurance Subsidiaries." The issuance of the foregoing was made in
reliance upon exemptions from the registration provisions of the Securities Act
set forth in Section 3(a)(11) and Section 4(2) thereof (including the rules and
regulations promulgated thereunder) relative to, respectively, intrastate sales
by an issuer and sales not involving a public offering. No underwriters were
involved in the initial issuance of shares described in this paragraph.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) EXHIBITS:

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Subscription Agency Agreement
1.2 Subscription Agency Agreement, dated December, 1996, among the Company, AmerUs Group Co. and The
Chicago Corporation
2.1 Plan of Reorganization dated October 27, 1995
3.1 Articles of Incorporation of the Company
3.2 Bylaws of the Company
3.3 Proposed Amended and Restated Articles of Incorporation of the Company
3.4 Amended and Restated Articles of Incorporation of the Company (as adopted November 1, 1996)
*3.5 Amended and Restated Articles of Incorporation of the Company (as approved by the Iowa Insurance
Commissioner)
4.1 Form of Certificate for shares of Class A Common Stock
5.1 Opinion of James A. Smallenberger, Esq.
5.2 Opinion of James A. Smallenberger, Esq. dated December 3, 1996
10.1 Form of Intercompany Agreement dated as of November 1, 1996, among American Mutual Holding Company,
AmerUs Group Co. and the Company
10.2 Joint Venture Agreement, dated as of March 8, 1996, between American Mutual Insurance Company and
Ameritas Life Insurance Corp., and First Amendment thereto dated as of April 1, 1996 between
American Mutual Insurance Company and Ameritas Life Insurance Corp.
10.3 Management and Administrative Service Agreement, dated as of April 1, 1996, among American Mutual
Life Insurance Company, Ameritas Variable Life Insurance Company and Ameritas Life Insurance Corp.
10.4 Agreement and Plan of Merger, dated as of August 24, 1994, among Central Life Assurance Company and
American Mutual Life Insurance Company
10.5 Line of Credit Application and Approval, dated February 28, 1996 and April 22, 1996, respectively,
between American Mutual Life Insurance Company and Federal Home Loan Bank of Des Moines
10.6 All*AmerUs Supplemental Executive Retirement Plan, effective January 1, 1996
10.7 American Mutual Life Insurance Company Supplemental Pension Plan (which was curtailed as of December
31, 1995)
10.8 P Central Life Assurance Company Supplemental Pension Plan (which was curtailed as of December 31,
1995)
10.9 P Management Incentive Plan
10.10 P AmerUs Life Insurance Company Performance Share Plan
10.11 AmerUs Life Stock Incentive Plan
</TABLE>

II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.12 Employment Agreement, dated February 1, 1995, between American Mutual Life Insurance Company and Sam
C. Kalainov
10.13 AmerUs Life Non-Employee Director Stock Plan
10.14 Modification of Real Estate Contract, dated as of July 1, 1996, between AmerUs Life Insurance Company
and AmerUs Properties, Inc.
10.15 Asset Management and Disposition Agreement, dated January 3, 1995, between American Mutual Life
Insurance Company and Central Properties, Inc. (now AmerUs Properties, Inc.)
10.16 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
10.17 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.18 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.19 Management Contract, dated January 1, 1995, between American Mutual Life Insurance Company and
Central Properties, Inc. (now AmerUs Properties, Inc.)
10.20 Management Contract, dated July 1, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
10.21 P Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
10.22 Management Contract, dated May 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.23 Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.24 Management Contract, dated January 4, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
10.25 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.26 Lease - Business Property, dated December 1, 1995, between American Mutual Life Insurance Company and
AmerUs Leasing
10.27 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.28 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.29 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.30 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
10.31 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
10.32 P Assumption and Amendment of Lease Agreement, dated as of November 27, 1993 among Central Life
Assurance Company, Midland Savings Bank FSB (now AmerUs Bank) and Midland Financial Mortgages, Inc.
(now AmerUs Mortgage, Inc.)
10.33 Form of Indemnification Agreement executed with directors and certain officers
</TABLE>

II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.34 P Amended and Restated Agreement and Certificate of Limited Partnership of CPI Housing Partners I,
L.P., dated as of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance
Company and American Mutual Affordable Housing Partners, L.P.
10.35 Amended and Restated Agreement of Limited Partnership of American Mutual Affordable Housing Partners,
L.P., dated as of September 1, 1995, among GrA Partners Joint Venture, AmerUs Properties, Inc.,
American Mutual Life Insurance Company, NCC Polar Company and NCC Orion Company
10.36 P Amended and Restated Agreement and Certificate of Limited Partnership of 65th & Vista, L.P., dated as
of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
10.37 P Amended and Restated Agreement and Certificate of Limited Partnership of 60th & Vista, L.P., dated as
of September 1, 1995, among I.R.F.B. Joint Venture, American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
10.38 P Certificate of Limited Partnership and Limited Partnership Agreement of CPI Housing Partners II,
L.P., dated March 27, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.) and
American Mutual Life Insurance Company
10.39 P Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners III,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.40 P Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners IV,
L.P., dated as of June 1995, between AmerUs Properties, Inc. and American Mutual Life Insurance
Company
10.41 P Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners V,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.42 P Amended and Restated Agreement and Certificate of Limited Partnership of API-Chimney Ridge Partners,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.43 Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners VI,
L.P., dated as of October 10, 1995, between AmerUs Properties, Inc. and American Mutual Life
Insurance Company
10.44 P Certificate of Limited Partnership and Limited Partnership Agreement of 86th & Meredith Associates,
L.P., dated as of February 14, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.)
and American Mutual Life Insurance Company
10.45 Certificate of Limited Partnership and Limited Partnership Agreement of Altoona Meadows Investors,
L.P., dated as of February 22, 1995, between KPI Investments, Inc. and Dennis Galeazzi
10.46 First Amendment to the Certificate of Limited Partnership and Limited Partnership Agreement of
Altoona Meadows Investors, L.P., dated as of September 28, 1995, between KPI Investments, Inc. and
American Mutual Life Insurance Company
</TABLE>

II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.47 Loan Servicing Agreement, dated August 1, 1990, between Central Life Assurance Company and Midland
Financial Mortgages, Inc. (now AmerUs Mortgage), filed as Exhibit 10.30 to Central Resource Group,
Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June 4, 1992
10.48 Construction Loan Servicing Agreement, dated November 20, 1995, between American Mutual Life
Insurance Company and AmerUs Properties, Inc.
10.49 P Servicing Agreement, dated March 1996, between American Mutual Life Insurance Company and AmerUs
Properties, Inc.
10.50 Loan Servicing Agreement, dated September 1, 1994, between Central Life Assurance Company and Midland
Savings Bank, FSB (now AmerUs Bank)
10.51 Miscellaneous Services Agreement, dated as of January 1, 1996, among American Mutual Life Insurance
Company, AmerUs Group Co., AmerUs Bank, AmerUs Mortgage, Inc., Iowa Realty Company, Inc., Midland
Homes, Inc., Iowa Title Company, AmerUs Insurance, Inc., and AmerUs Finance Inc.
10.52 Amendment to Service Agreement, dated as of May 1, 1996, between American Mutual Life Insurance
Company and AmerUs Bank
10.53 Data Processing Service Agreement, dated November 1, 1989, between Central Life Assurance Company and
Midland Financial Savings and Loan Association (now AmerUs Bank), filed as Exhibit 10.29 to Central
Resource Group, Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June
4, 1992
10.54 First Amendment to Data Processing Service Agreement, dated as of September 30, 1990, between Central
Life Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.55 Second Amendment to Data Processing Service Agreement, dated as of May 1, 1991, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.56 Third Amendment to Data Processing Service Agreement, dated as of October 1, 1991, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.57 Fourth Amendment to Data Processing Service Agreement, dated as of January 2, 1992, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.58 Fifth Amendment to Data Processing Service Agreement, dated as of July 1, 1993, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.59 Sixth Amendment to Data Processing Service Agreement, dated as of September 1, 1995, between American
Mutual Insurance Company and AmerUs Bank
10.60 Seventh Amendment to Data Processing Service Agreement, dated as of January 1, 1996, between American
Mutual Life Insurance Company and AmerUs Bank
10.61 P Data Processing Support Services Agreement, dated as of July 1, 1993, between Central Life Assurance
Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.62 Miscellaneous Services Agreement, dated as of February 5, 1992, between Central Life Assurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.63 Investment Management Agreement, dated as of August 15, 1992, between Central Life Assurance Company
and Midland Savings Bank FSB (now AmerUs Bank)
</TABLE>

II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.64 Disbursement Services Agreement, dated as of April 15, 1995, between American Mutual Life Insurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.65 Purchase Agreement, dated as of June 28, 1996, between AmerUs Life Insurance Company and AmerUs Bank
10.66 Brokerage Contract dated January 1, 1995, among American Mutual Life Insurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
10.67 Servicing Agreement, dated March 1, 1992, between Central Life Assurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
10.68 Tax Allocation Agreement dated as of November 4, 1996
10.69 P Amended and Restated Articles of Limited Partnership of T.L.B. Limited Partnership, undated, among F.
Barry Tapp, Lartnec Investment Co., Michael H. Taylor, Michael Longley and Michael A. Hammond, along
with a Memorandum of Understanding Regarding Assignments of Partnership Interests dated December 21,
1988 and three corresponding Assignments of Partnership Interest dated December 6, 1988 wherein
Central Life Assurance Company is Assignee, and an Assignment of Partnership Interest of T.L.B.
Limited Partnership dated December 29, 1995, between Lartnec Investment Co. and AmerUs Properties,
Inc.
10.70 Assignment of Partnership Interest of T.L.B. Limited Partnership, dated December 28, 1994, between
Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and Assignment of
Limited Partnership Interest of T.L.B. Limited Partnership, dated December 30, 1995, between
American Mutual Life Insurance Company and AmerUs Properties, Inc.
10.71 P Limited Partnership Agreement of South 19th Limited Partnership, dated December 30, 1985, among
Lartnec Investment Co., F. Barry Tapp and Michael H. Taylor, along with a Memorandum of
Understanding Regarding Assignments of Partnership Interests dated December 21, 1988 and three
corresponding Assignments of Partnership Interest dated December 6, 1988 wherein Central Life
Assurance Company is Assignee, and an Assignment of Partnership Interest of South 19th Limited
Partnership dated December 29, 1995, between Lartnec Investment Co. and AmerUs Properties, Inc.
10.72 Assignment of Partnership Interest of South 19th Limited Partnership, dated December 28, 1994,
between Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and
Assignment of Partnership Interest of South 19th Limited Partnership, dated December 30, 1995,
between American Mutual Life Insurance Company and AmerUs Properties, Inc.
10.73 P Limited Partnership Agreement of Theater Project Limited Partnership dated March 15, 1985, among Tapp
Management, Inc., Tapp Development Co., Ltd., Michael Longley, Michael A. Hammond and Gary L. Wood
along with an Amendment to Certificate of Limited Partnership, dated August 22, 1986, and an
Assignment of Limited Partnership Interest, dated November 15, 1992, between F. Barry Tapp and Tapp
Development Co., Ltd., and an Amended Certificate of Limited Partnership dated December 24, 1992
10.74 Assignment of Limited Partnership Interest of Theater Project Limited Partnership, dated December 30,
1995, between American Mutual Life Insurance Company and AmerUs Properties, Inc.
10.75 P Certificate of Limited Partnership and Limited Partnership Agreement of Lagos Vista Limited
Partnership, dated August 10, 1994, between Central Properties, Inc. (now AmerUs Properties, Inc.)
and Central Life Assurance Company
</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.76 P Joint Venture Agreement, dated July 30, 1980, between F. Barry Tapp and Lartnec Investment Co., along
with an Assignment by F. Barry Tapp of Interest in Tapp & LICO Properties, dated December 24, 1981,
between F. Barry Tapp and Tapp Development Co., Ltd., an Assignment of Partnership Interest, dated
December 6, 1988, between Tapp Development Co., Ltd. and Central Life Assurance Company and an
Assignment of Joint Venture Interest of Tapp and LICO Properties, dated December 29, 1995, between
Lartnec Investment Co. and AmerUs Properties, Inc.
10.77 Assignment of Joint Venture Interest of Tapp and LICO Properties, dated December 28, 1994, between
Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and Assignment of
Joint Venture Interest of Tapp and LICO Properties, dated December 30, 1995, between American Mutual
Life Insurance Company and AmerUs Properties, Inc.
10.78 P Joint Venture Agreement, dated December 30, 1980, between MBT, Ltd. and Lartnec Investment Co., along
with an Assignment by F. Barry Tapp of Interest in MBT, Ltd., dated December 24, 1981, between F.
Barry Tapp and Tapp Development Co., Ltd., an Assignment by Michael H. Taylor of Interest in MBT,
Ltd., dated December 23, 1981, between Michael H. Taylor and Tapp Development Co., Ltd., an
Assignment of Limited Partnership Interest, dated December 6, 1988, between Tapp Development Co.,
Ltd. and Central Life Assurance Company, and an Assignment of Joint Venture Interest of Round Rock
Outlet, Ltd., dated December 29, 1995, between Lartnec Investment Co. and AmerUs Properties, Inc.
10.79 Assignment of Joint Venture Interest of Round Rock Outlet, Ltd., dated December 28, 1994, between
Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and Assignment of
Joint Venture Interest of Round Rock Outlet, Ltd., dated December 30, 1995, between American Mutual
Life Insurance Company and AmerUs Properties, Inc.
*10.80 Revolving Credit and Term Loan Agreement, dated as of December 1996, among the Company, certain
Signatory Banks thereto and The Chase Manhattan Bank, Note issued by the Company and Borrower Pledge
Agreement
*10.81 Amended and Restated Intercompany Agreement dated as of December 1, 1996, among American Mutual
Holding Company, AmerUs Group Co. and the Company
11.1 Computation of Pro Forma Earnings Per Share
21.1 List of Subsidiaries
*23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of James A. Smallenberger (to be included in Exhibit 5.1)
23.3 Consent of Tillinghast, a Towers Perrin Company
24.1 Powers of Attorney
27.1 Financial Data Schedule
*99.1 Form of Subscription Order Form for Subscription Policyowners in the Subscription Offering
*99.2 Form of Question and Answer Supplement to be delivered to Subscription Policyowners in the
Subscription Offering
99.3 Opinion of Tillinghast, a Towers Perrin Company, dated October 26, 1995, regarding the establishment
and operation of the Closed Block
</TABLE>

- --------------

* Filed herewith.

P Filed in paper form only.

II-7
<PAGE>
(b)FINANCIAL STATEMENT SCHEDULES:

Report of Independent Auditors on Schedules
Schedule I -- Summary of Investments (Other than Investments in Related
Parties)
Schedule III -- Supplementary Insurance Information
Schedule IV -- Reinsurance
Schedule V -- Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 14 above, 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 the
Securities 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 Securities
Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of a registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
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.

In the event the Public Offering is completed, the undersigned hereby
undertakes to provide to the underwriters at the closing specified in the
underwriting agreement, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each
purchaser.

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 and 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 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;

II-8
<PAGE>

(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.

II-9
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Des Moines,
Iowa on December 12, 1996.

AMERUS LIFE HOLDINGS, INC.

By: /s/ ROGER K. BROOKS

--------------------------------------
Roger K. Brooks
CHAIRMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed on December 12, 1996 by the
following persons in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE(S)
- ------------------------------------------------------ ---------------------------------------------------------

<C> <S>
/s/ ROGER K. BROOKS
------------------------------------------- Chairman, President and Chief Executive Officer
Roger K. Brooks (principal executive officer) and Director

/s/ MICHAEL E. SPROULE
------------------------------------------- Executive Vice President and Chief Financial Officer
Michael E. Sproule (principal financial officer)

/s/ MICHAEL G. FRAIZER
------------------------------------------- Senior Vice President and Controller/Treasurer (principal
Michael G. Fraizer accounting officer)

*
------------------------------------------- Director
John R. Albers

*
------------------------------------------- Director
Malcolm Candlish
</TABLE>

II-10
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE(S)
- ------------------------------------------------------ ---------------------------------------------------------

<C> <S>
*
------------------------------------------- Director
D T Doan

*
------------------------------------------- Director
Thomas F. Gaffney

*
------------------------------------------- Director
Sam C. Kalainov

*
------------------------------------------- Director
John W. Norris, Jr.

------------------------------------------- Director
Jack C. Pester

*
------------------------------------------- Director
John A. Wing

* By: /s/ JAMES A. SMALLENBERGER
--------------------------------------
James A. Smallenberger
(ATTORNEY IN FACT)
</TABLE>

II-11
<PAGE>
AMERUS LIFE HOLDINGS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
SCHEDULE PAGE
- --------- ---------

<C> <S> <C>
Report of Independent Auditors on Schedules

I Summary of Investments -- Other than Investments in Related Parties............................ II-14

III Supplementary Insurance Information............................................................ II-15

IV Reinsurance.................................................................................... II-16

V Valuation and Qualifying Accounts.............................................................. II-17
</TABLE>

All other schedules are omitted for the reason that they are not required, are
not applicable or that the equivalent information has been included in the
consolidated financial statements, and notes thereto, or elsewhere herein.

II-12
<PAGE>

REPORT OF INDEPENDENT AUDITORS ON SCHEDULES

The Board of Directors
AmerUs Life Holdings, Inc.:

Under date of December 2, 1996, except as to note 1 which is as of December 11,
1996 we reported on the consolidated balance sheets of AmerUs Life Holdings,
Inc. and subsidiaries as of September 30, 1996, December 31, 1995 and December
31, 1994, and the related consolidated statements of income, stockholder's
equity, and cash flows for the nine months ended September 30, 1996 and each of
the years in the three-year period ended December 31, 1995, which are included
in the prospectus.

As reported in note 1 to the consolidated financial statements, the Company
implemented the provisions of the Statement of Financial Accounting Standards
(SFAS) No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises
and by Insurance Enterprises for Certain Long-Duration Participating Contracts,"
and in 1993 the Company implemented the provisions of SFAS 106, "Employers
Accounting for Postretirement Benefits Other Than Pensions," and SFAS 115,
"Accounting for Certain Investments in Debt and Equity Securities." Also, as
discussed in note 1 to the consolidated financial statements, the Company has
restated its consolidated financial statements to reflect the spin-off of a
wholly owned subsidiary, which resulted in a change in the subsidiaries
comprising the consolidated financial statements.

In connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related consolidated financial statement
schedules in the registration statement. These financial statement schedules are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statement schedules based on our audits.

In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.

KPMG Peat Marwick LLP

Des Moines, Iowa
December 2, 1996, except as to
note 1, which is as of
December 11, 1996

II-13
<PAGE>
AMERUS LIFE HOLDINGS, INC.
SCHEDULE I
SUMMARY OF INVESTMENTS

<TABLE>
<CAPTION>
AMOUNT AT WHICH
AMORTIZED SHOWN IN THE
TYPE OF INVESTMENT COST MARKET VALUE BALANCE SHEET
- ------------------------------------------------------------------ ------------- ------------- ---------------
(IN THOUSANDS)
<S> <C> <C> <C>
September 30, 1996
Fixed Maturities:
Bonds
United States Government and government agencies and
authorities.................................................. $ 532,278 $ 543,581 $ 543,581
States, municipalities and political subdivisions............. 0 0 0
Foreign governments........................................... 20,147 21,355 21,355
Public utilities.............................................. 290,072 298,430 298,430
Convertibles and bonds with warrants attached................. 11,977 13,190 13,190
All other corporate bonds..................................... 1,391,013 1,421,015 1,421,015
------------- ------------- ---------------
Certificates of deposit......................................... 0 0 0
Redeemable preferred stock...................................... 0 0 0
------------- ------------- ---------------
Total fixed maturities...................................... 2,245,487 2,297,571 2,297,571
------------- ------------- ---------------
Equity securities:
Common stocks
Public utilities.............................................. 1 2 2
Banks, trust and insurance companies.......................... 23,628 25,459 25,459
Industrial, miscellaneous and all other....................... 1,250 2,148 2,148
Nonredeemable preferred stocks.................................. 45,812 46,966 46,966
------------- ------------- ---------------
Total equity securities..................................... 70,691 74,576 74,576
------------- ------------- ---------------
Mortgage loans on real estate..................................... 260,233 260,233
Real estate....................................................... 40,012 40,012
Policy loans...................................................... 63,986 63,986
Other long-term investments....................................... 61,831 61,831
Short-term investments............................................ 12,002 12,002
------------- ---------------
Total investments........................................... $ 2,754,242 $ 2,810,210
------------- ---------------
------------- ---------------
</TABLE>

II-14
<PAGE>
AMERUS LIFE HOLDINGS, INC.
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION

<TABLE>
<CAPTION>
FUTURE POLICY
BENEFITS, BENEFITS,
DEFERRED LOSSES, OTHER POLICY CLAIMS,
POLICY CLAIMS AND CLAIMS AND NET LOSSES AND
ACQUISITION LOSS UNEARNED BENEFITS PREMIUM INVESTMENT SETTLEMENT
SEGMENT COST EXPENSES (1) PREMIUMS PAYABLE (2) REVENUE INCOME EXPENSES
- ------------------------ ----------- ------------- ----------- ------------ ----------- ----------- -----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
LIFE INSURANCE
Nine months ended
September 30, 1996 $ 319,692 $ 3,610,141 $ 0 $ 9,938 $ 182,451 $ 216,119 $ 314,631
Year ended December 31,
1995 $ 267,711 $ 3,621,537 $ 0 $ 16,617 $ 244,087 $ 285,244 $ 424,034
Year ended December 31,
1994 $ 404,361 $ 3,487,034 $ 0 $ 9,803 $ 237,912 $ 275,691 $ 414,935
Year ended December 31,
1993 $ 226,360 $ 269,854 $ 409,792

AMORTIZATION
OF DEFERRED
POLICY OTHER
ACQUISITION OPERATING PREMIUMS
SEGMENT COSTS EXPENSES WRITTEN
- ------------------------ ------------- ----------- ---------------

<S> <C> <C> <C>
LIFE INSURANCE
Nine months ended
September 30, 1996 $ 43,109 $ 42,930 n/a
Year ended December 31,
1995 $ 50,239 $ 58,655 n/a
Year ended December 31,
1994 $ 42,756 $ 68,604 n/a
Year ended December 31,
1993 $ 47,441 $ 58,637 n/a
</TABLE>

- --------------
(1) Includes policy reserves, policyholder funds, and dividends payable
(2) Policy and contract claims

II-15
<PAGE>
AMERUS LIFE HOLDINGS, INC.
SCHEDULE IV
REINSURANCE

<TABLE>
<CAPTION>
PERCENTAGE
CEDED TO ASSUMED FROM OF AMOUNT
OTHER OTHER ASSUMED TO
GROSS AMOUNT COMPANIES COMPANIES NET AMOUNT NET
-------------- ------------- ------------- -------------- ------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995
Life insurance in force........... $ 29,640,037 $ 2,916,812 $ 56,226 $ 26,779,451 0.21%
Premiums
Life insurance premiums and
charges........................ $ 310,543 $ 14,186 $ 4,862 $ 301,219 1.61%
Accident and health insurance... 2,595 2,361 4 268 1.68%
-------------- ------------- ------------- -------------- ------------
Total premiums.................. $ 313,138 $ 16,547 $ 4,866 $ 301,457 1.61%
-------------- ------------- ------------- -------------- ------------
Year ended December 31, 1994
Life insurance in force........... $ 31,514,751 $ 3,265,105 $ 2,590,847 $ 30,840,493 8.40%
Premiums
Life insurance premiums and
charges........................ $ 299,769 $ 13,740 $ 7,857 $ 293,886 2.67%
Accident and health insurance... 3,024 2,697 61 388 15.72%
-------------- ------------- ------------- -------------- ------------
Total premiums.................. $ 302,793 $ 16,437 $ 7,918 $ 294,274 2.69%
-------------- ------------- ------------- -------------- ------------
Year ended December 31, 1993
Life insurance in force........... $ 33,152,140 $ 3,370,347 $ 4,689,689 $ 34,471,482 13.60%
Premiums
Life insurance premiums and
charges........................ $ 290,162 $ 15,292 $ 8,478 $ 283,348 2.99%
Accident and health insurance... 3,183 2,843 145 485 29.90%
-------------- ------------- ------------- -------------- ------------
Total premiums.................. $ 293,345 $ 18,135 $ 8,623 $ 283,833 3.04%
-------------- ------------- ------------- -------------- ------------
</TABLE>

II-16
<PAGE>
AMERUS LIFE HOLDINGS, INC.
SCHEDULE V
VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ADDITIONS
--------------------------------------------- DEDUCTIONS --
BALANCE AT CHARGED TO PROVISION ON
BEGINNING OF COSTS AND CHARGED TO MORTGAGES SOLD/ BALANCE AT
DESCRIPTION PERIOD EXPENSES OTHER ACCOUNTS TRANSFERRED END OF PERIOD
- -------------------- ------------- -------------------- ----------------------- ----------------- -------------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Mortgage Loans
1995.............. $ 65,549 $ 622 $ -- $ (36,104) $ 30,067
1994.............. $ 80,220 $ 1,207 $ -- $ (15,878) $ 65,549
1993.............. $ 81,040 $ 2,976 $ -- $ (3,796) $ 80,220
</TABLE>

II-17
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Subscription Agency Agreement
1.2 Subscription Agency Agreement, dated December, 1996, among the Company, AmerUs Group Co. and The
Chicago Corporation
2.1 Plan of Reorganization dated October 27, 1995
3.1 Articles of Incorporation of the Company
3.2 Bylaws of the Company
3.3 Proposed Amended and Restated Articles of Incorporation of the Company
3.4 Amended and Restated Articles of Incorporation of the Company (as adopted November 1, 1996)
*3.5 Amended and Restated Articles of Incorporation of the Company (as approved by the Iowa Insurance
Commissioner)
4.1 Form of Certificate for shares of Class A Common Stock
5.1 Opinion of James A. Smallenberger, Esq.
5.2 Opinion of James A. Smallenberger, Esq., dated December 3, 1996
10.1 Form of Intercompany Agreement dated as of November 1, 1996, among American Mutual Holding Company,
AmerUs Group Co. and the Company
10.2 Joint Venture Agreement, dated as of March 8, 1996, between American Mutual Insurance Company and
Ameritas Life Insurance Corp., and First Amendment thereto dated as of April 1, 1996 between American
Mutual Insurance Company and Ameritas Life Insurance Corp.
10.3 Management and Administrative Service Agreement, dated as of April 1, 1996, among American Mutual
Life Insurance Company, Ameritas Variable Life Insurance Company and Ameritas Life Insurance Corp.
10.4 Agreement and Plan of Merger, dated as of August 24, 1994, among Central Life Assurance Company and
American Mutual Life Insurance Company
10.5 Line of Credit Application and Approval, dated February 28, 1996 and April 22, 1996, respectively,
between American Mutual Life Insurance Company and Federal Home Loan Bank of Des Moines
10.6 All*AmerUs Supplemental Executive Retirement Plan, effective January 1, 1996
10.7 American Mutual Life Insurance Company Supplemental Pension Plan (which was curtailed as of December
31, 1995)
10.8 P Central Life Assurance Company Supplemental Pension Plan (which was curtailed as of December 31,
1995)
10.9 P Management Incentive Plan
10.10 P AmerUs Life Insurance Company Performance Share Plan
10.11 AmerUs Life Stock Incentive Plan
10.12 Employment Agreement, dated February 1, 1995, between American Mutual Life Insurance Company and Sam
C. Kalainov
10.13 AmerUs Life Non-Employee Director Stock Plan
10.14 Modification of Real Estate Contract, dated as of July 1, 1996, between AmerUs Life Insurance Company
and AmerUs Properties, Inc.
10.15 Asset Management and Disposition Agreement, dated January 3, 1995, between American Mutual Life
Insurance Company and Central Properties, Inc. (now AmerUs Properties, Inc.)
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.16 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
10.17 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.18 Management Contract, dated January 1, 1993, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.19 Management Contract, dated January 1, 1995, between American Mutual Life Insurance Company and
Central Properties, Inc. (now AmerUs Properties, Inc.)
10.20 Management Contract, dated July 1, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
10.21 P Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc.)
10.22 Management Contract, dated May 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.23 Management Contract, dated February 1, 1994, between Central Life Assurance Company and Central
Properties, Inc. (now AmerUs Properties, Inc. )
10.24 Management Contract, dated January 4, 1994, between Central Life Assurance Company and CPI Resource
Group (now AmerUs Group Co.)
10.25 Management Contract, dated November 1, 1994, between American Mutual Life Insurance Company and CPI
Resource Group (now AmerUs Group Co.)
10.26 Lease - Business Property, dated December 1, 1995, between American Mutual Life Insurance Company and
AmerUs Leasing
10.27 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.28 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.29 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Bank
10.30 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
10.31 Lease - Business Property, dated January 1, 1996, between American Mutual Life Insurance Company and
AmerUs Group
10.32 P Assumption and Amendment of Lease Agreement, dated as of November 27, 1993 among Central Life
Assurance Company, Midland Savings Bank FSB (now AmerUs Bank) and Midland Financial Mortgages, Inc.
(now AmerUs Mortgage, Inc.)
10.33 Form of Indemnification Agreement executed with directors and certain officers
10.34 P Amended and Restated Agreement and Certificate of Limited Partnership of CPI Housing Partners I,
L.P., dated as of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance
Company and American Mutual Affordable Housing Partners, L.P.
10.35 Amended and Restated Agreement of Limited Partnership of American Mutual Affordable Housing Partners,
L.P., dated as of September 1, 1995, among GrA Partners Joint Venture, AmerUs Properties, Inc.,
American Mutual Life Insurance Company, NCC Polar Company and NCC Orion Company
10.36 P Amended and Restated Agreement and Certificate of Limited Partnership of 65th & Vista, L.P., dated as
of September 1, 1995, among AmerUs Properties, Inc., American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.37 P Amended and Restated Agreement and Certificate of Limited Partnership of 60th & Vista, L.P., dated as
of September 1, 1995, among I.R.F.B. Joint Venture, American Mutual Life Insurance Company and
American Mutual Affordable Housing Partners, L.P.
10.38 P Certificate of Limited Partnership and Limited Partnership Agreement of CPI Housing Partners II,
L.P., dated March 27, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.) and
American Mutual Life Insurance Company
10.39 P Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners III,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.40 P Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners IV,
L.P., dated as of June 1995, between AmerUs Properties, Inc. and American Mutual Life Insurance
Company
10.41 P Amended and Restated Agreement and Certificate of Limited Partnership of API Housing Partners V,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.42 P Amended and Restated Agreement and Certificate of Limited Partnership of API-Chimney Ridge Partners,
L.P., dated as of March 1, 1996, among AmerUs Properties, Inc., American Mutual Life Insurance
Company, American Mutual Affordable Housing Partners II, L.P. and AmerUs Management, Inc.
10.43 Certificate of Limited Partnership and Limited Partnership Agreement of API Housing Partners VI,
L.P., dated as of October 10, 1995, between AmerUs Properties, Inc. and American Mutual Life
Insurance Company
10.44 P Certificate of Limited Partnership and Limited Partnership Agreement of 86th & Meredith Associates,
L.P., dated as of February 14, 1995, between Central Properties, Inc. (now AmerUs Properties, Inc.)
and American Mutual Life Insurance Company
10.45 Certificate of Limited Partnership and Limited Partnership Agreement of Altoona Meadows Investors,
L.P., dated as of February 22, 1995, between KPI Investments, Inc. and Dennis Galeazzi
10.46 First Amendment to the Certificate of Limited Partnership and Limited Partnership Agreement of
Altoona Meadows Investors, L.P., dated as of September 28, 1995, between KPI Investments, Inc. and
American Mutual Life Insurance Company
10.47 Loan Servicing Agreement, dated August 1, 1990, between Central Life Assurance Company and Midland
Financial Mortgages, Inc. (now AmerUs Mortgage), filed as Exhibit 10.30 to Central Resource Group,
Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June 4, 1992
10.48 Construction Loan Servicing Agreement, dated November 20, 1995, between American Mutual Life
Insurance Company and AmerUs Properties, Inc.
10.49 P Servicing Agreement, dated March 1996, between American Mutual Life Insurance Company and AmerUs
Properties, Inc.
10.50 Loan Servicing Agreement, dated September 1, 1994, between Central Life Assurance Company and Midland
Savings Bank, FSB (now AmerUs Bank)
10.51 Miscellaneous Services Agreement, dated as of January 1, 1996, among American Mutual Life Insurance
Company, AmerUs Group Co., AmerUs Bank, AmerUs Mortgage, Inc., Iowa Realty Company, Inc., Midland
Homes, Inc., Iowa Title Company, AmerUs Insurance, Inc., and AmerUs Finance Inc.
10.52 Amendment to Service Agreement, dated as of May 1, 1996, between American Mutual Life Insurance
Company and AmerUs Bank
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.53 Data Processing Service Agreement, dated November 1, 1989, between Central Life Assurance Company and
Midland Financial Savings and Loan Association (now AmerUs Bank), filed as Exhibit 10.29 to Central
Resource Group, Inc.'s Registration Statement on Form S-1, Registration No. 33-48359, filed on June
4, 1992
10.54 First Amendment to Data Processing Service Agreement, dated as of September 30, 1990, between Central
Life Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.55 Second Amendment to Data Processing Service Agreement, dated as of May 1, 1991, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.56 Third Amendment to Data Processing Service Agreement, dated as of October 1, 1991, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.57 Fourth Amendment to Data Processing Service Agreement, dated as of January 2, 1992, between Central
Life Assurance Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.58 Fifth Amendment to Data Processing Service Agreement, dated as of July 1, 1993, between Central Life
Assurance Company and Midland Savings Bank FSB (now AmerUs Bank)
10.59 Sixth Amendment to Data Processing Service Agreement, dated as of September 1, 1995, between American
Mutual Insurance Company and AmerUs Bank
10.60 Seventh Amendment to Data Processing Service Agreement, dated as of January 1, 1996, between American
Mutual Life Insurance Company and AmerUs Bank
10.61 P Data Processing Support Services Agreement, dated as of July 1, 1993, between Central Life Assurance
Company and Midland Savings Bank, FSB (now AmerUs Bank)
10.62 Miscellaneous Services Agreement, dated as of February 5, 1992, between Central Life Assurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.63 Investment Management Agreement, dated as of August 15, 1992, between Central Life Assurance Company
and Midland Savings Bank FSB (now AmerUs Bank)
10.64 Disbursement Services Agreement, dated as of April 15, 1995, between American Mutual Life Insurance
Company and Midland Savings Bank FSB (now AmerUs Bank)
10.65 Purchase Agreement, dated as of June 28, 1996, between AmerUs Life Insurance Company and AmerUs Bank
10.66 Brokerage Contract dated January 1, 1995, among American Mutual Life Insurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
10.67 Servicing Agreement, dated March 1, 1992, between Central Life Assurance Company and Midland
Investment Services, Inc. (now AmerUs Investments, Inc.)
10.68 Tax Allocation Agreement dated as of November 4, 1996
10.69 P Amended and Restated Articles of Limited Partnership of T.L.B. Limited Partnership, undated, among F.
Barry Tapp, Lartnec Investment Co., Michael H. Taylor, Michael Longley and Michael A. Hammond, along
with a Memorandum of Understanding Regarding Assignments of Partnership Interests dated December 21,
1988 and three corresponding Assignments of Partnership Interest dated December 6, 1988 wherein
Central Life Assurance Company is Assignee, and an Assignment of Partnership Interest of T.L.B.
Limited Partnership dated December 29, 1995, between Lartnec Investment Co. and AmerUs Properties,
Inc.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.70 Assignment of Partnership Interest of T.L.B. Limited Partnership, dated December 28, 1994, between
Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and Assignment of
Limited Partnership Interest of T.L.B. Limited Partnership, dated December 30, 1995, between American
Mutual Life Insurance Company and AmerUs Properties, Inc.
10.71 P Limited Partnership Agreement of South 19th Limited Partnership, dated December 30, 1985, among
Lartnec Investment Co., F. Barry Tapp and Michael H. Taylor, along with a Memorandum of Understanding
Regarding Assignments of Partnership Interests dated December 21, 1988 and three corresponding
Assignments of Partnership Interest dated December 6, 1988 wherein Central Life Assurance Company is
Assignee, and an Assignment of Partnership Interest of South 19th Limited Partnership dated December
29, 1995, between Lartnec Investment Co. and AmerUs Properties, Inc.
10.72 Assignment of Partnership Interest of South 19th Limited Partnership, dated December 28, 1994,
between Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and
Assignment of Partnership Interest of South 19th Limited Partnership, dated December 30, 1995,
between American Mutual Life Insurance Company and AmerUs Properties, Inc.
10.73 P Limited Partnership Agreement of Theater Project Limited Partnership dated March 15, 1985, among Tapp
Management, Inc., Tapp Development Co., Ltd., Michael Longley, Michael A. Hammond and Gary L. Wood
along with an Amendment to Certificate of Limited Partnership, dated August 22, 1986, and an
Assignment of Limited Partnership Interest, dated November 15, 1992, between F. Barry Tapp and Tapp
Development Co., Ltd., and an Amended Certificate of Limited Partnership dated December 24, 1992
10.74 Assignment of Limited Partnership Interest of Theater Project Limited Partnership, dated December 30,
1995, between American Mutual Life Insurance Company and AmerUs Properties, Inc.
10.75 P Certificate of Limited Partnership and Limited Partnership Agreement of Lagos Vista Limited
Partnership, dated August 10, 1994, between Central Properties, Inc. (now AmerUs Properties, Inc.)
and Central Life Assurance Company
10.76 P Joint Venture Agreement, dated July 30, 1980, between F. Barry Tapp and Lartnec Investment Co., along
with an Assignment by F. Barry Tapp of Interest in Tapp & LICO Properties, dated December 24, 1981,
between F. Barry Tapp and Tapp Development Co., Ltd., an Assignment of Partnership Interest, dated
December 6, 1988, between Tapp Development Co., Ltd. and Central Life Assurance Company and an
Assignment of Joint Venture Interest of Tapp and LICO Properties, dated December 29, 1995, between
Lartnec Investment Co. and AmerUs Properties, Inc.
10.77 Assignment of Joint Venture Interest of Tapp and LICO Properties, dated December 28, 1994, between
Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and Assignment of
Joint Venture Interest of Tapp and LICO Properties, dated December 30, 1995, between American Mutual
Life Insurance Company and AmerUs Properties, Inc.
10.78 P Joint Venture Agreement, dated December 30, 1980, between MBT, Ltd. and Lartnec Investment Co., along
with an Assignment by F. Barry Tapp of Interest in MBT, Ltd., dated December 24, 1981, between F.
Barry Tapp and Tapp Development Co., Ltd., an Assignment by Michael H. Taylor of Interest in MBT,
Ltd., dated December 23, 1981, between Michael H. Taylor and Tapp Development Co., Ltd., an
Assignment of Limited Partnership Interest, dated December 6, 1988, between Tapp Development Co.,
Ltd. and Central Life Assurance Company, and an Assignment of Joint Venture Interest of Round Rock
Outlet, Ltd., dated December 29, 1995, between Lartnec Investment Co. and AmerUs Properties, Inc.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
10.79 Assignment of Joint Venture Interest of Round Rock Outlet, Ltd., dated December 28, 1994, between
Lartnec Investment Co. and Central Properties, Inc. (now AmerUs Properties, Inc.) and Assignment of
Joint Venture Interest of Round Rock Outlet, Ltd., dated December 30, 1995, between American Mutual
Life Insurance Company and AmerUs Properties, Inc.
*10.80 Revolving Credit and Term Loan Agreement, dated as of December 1996, among the Company, certain
Signatory Banks thereto and The Chase Manhattan Bank, Note issued by the Company and Borrower Pledge
Agreement
*10.81 Amended and Restated Intercompany Agreement dated as of December 1, 1996, among American Mutual
Holding Company, Amerus Group Co. and th Company.
11.1 Computation of Pro Forma Earnings Per Share
21.1 List of Subsidiaries
*23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of James A. Smallenberger (to be included in Exhibit 5.1)
23.3 Consent of Tillinghast, a Towers Perrin Company
24.1 Powers of Attorney
27.1 Financial Data Schedule
*99.1 Form of Subscription Order Form for Subscription Policyowners in the Subscription Offering
*99.2 Form of Question and Answer Supplement to be delivered to Subscription Policyowners in the
Subscription Offering
99.3 Opinion of Tillinghast, a Towers Perrin Company, dated October 26, 1995, regarding the establishment
and operation of the Closed Block
</TABLE>

- --------------

* Filed herewith.

P Filed in paper form only.

<PAGE>

AMENDED AND RESTATED ARTICLES OF INCORPORATION

AMERUS LIFE HOLDINGS, INC.

TO THE SECRETARY OF STATE
OF THE STATE OF IOWA:

Pursuant to Section 1007 of the Iowa Business Corporation Act, Chapter 490,
Code of Iowa (1995), the corporation hereinafter named ("corporation"), does
hereby adopt the following Amended and Restated Articles of Incorporation:

1. The name of the corporation is AmerUs Life Holdings, Inc.

2. The Articles of Incorporation of the corporation are amended and
restated so as henceforth to read in their entirety as follows:

ARTICLE I

The name of the corporation is AmerUs Life Holdings, Inc.

ARTICLE II

The corporation shall have perpetual duration.

ARTICLE III

The purpose for which this corporation is organized is the transaction of
any and all lawful business for which corporations may be organized under the
Iowa Business Corporation Act.

ARTICLE IV

The aggregate number of shares of all classes of capital stock which the
corporation shall have authority to issue is one hundred and forty-five million
(145,000,000) shares, of which twenty million (20,000,000) shares shall be
Preferred Stock, no par value, issuable in one or more series, seventy-five
million (75,000,000) shares shall be Class A Common Stock, no par value, and
fifty million (50,000,000) shares shall be Class B Common Stock, no par value.

PREFERRED STOCK. The board of directors of the corporation is hereby
expressly

<PAGE>

authorized, at any time and from time to time, to divide the shares of
Preferred Stock into one or more series, to issue from time to time in
whole or in part the shares of Preferred Stock or the shares of any series
thereof, and in the resolution or resolutions providing for the issue of
shares of Preferred Stock or of a particular series to fix and determine
the voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof
that may be desired, to the fullest extent now or hereafter permitted by
Section 490.602 of the Iowa Business Corporation Act and Chapter 521A of
the Code of Iowa (1995) and rules adopted pursuant thereto, as amended from
time to time; provided, however, in no event shall Preferred Stock have
more than one vote for each share of Preferred Stock.

CLASS A COMMON STOCK AND CLASS B COMMON STOCK.. (A)(1) The powers,
preferences and rights of the Class A Common Stock and Class B Common
Stock, and the qualifications, limitations or restrictions thereof, shall
be in all respects identical, except as otherwise required by law or
expressly provided in these articles of incorporation.

(2) No person or persons shall own or have a beneficial interest in
shares of Class B Common Stock of the corporation except American Mutual
Holding Company, an Iowa mutual insurance holding company ("AMHC"), or any
other mutual insurance holding company or intermediate holding company
which is expressly authorized by applicable law (including, without
limitation, the Iowa Code, the Commissioner of Insurance of the State of
Iowa (the "Iowa Commissioner") or administrative rules adopted by the Iowa
Insurance Division to the extent that Iowa law is applicable) to own or
have a beneficial interest in Class B Common Stock (a "Permitted Class B
Holder"). Except as otherwise permitted by the second sentence of
Paragraph D (1) and by Paragraph D (8) hereof, the number of outstanding
shares of Class A Common Stock (excluding shares of Class A Common Stock
owned by a Permitted Class B Holder) shall exceed the number of outstanding
shares of Class B Common Stock plus outstanding shares of Class A Common
Stock owned by a Permitted Class B Holder only as authorized by law and
never by a ratio of more than three to one.

(B) (1) At each annual or special meeting of shareholders, each holder
of Class A Common Stock shall be entitled to one (1) vote in person or by
proxy for each share of Class A Common Stock standing in his name on the
stock transfer records of the corporation and, except as provided in the
next succeeding sentence and in Paragraph (E) hereof, each holder of Class
B Common Stock shall be entitled to one (1) vote in person or by proxy for
each share of Class B Common Stock standing in his name on the stock
transfer records of the corporation. If, on the record date for
determining shares eligible to vote, the number of any outstanding shares
of Class A Common Stock (excluding shares of Class A Common Stock owned by
a Permitted Class B Holder) and shares of Preferred Stock having voting
rights, if any, (excluding shares of Preferred Stock owned by a Permitted
Class B Holder) equals or exceeds the number of outstanding shares of Class
B Common Stock, plus the number of outstanding shares of Class A Common
Stock owned by a Permitted Class B Holder, the voting rights for each share
of Class B Common Stock shall be equal to the aggregate number

<PAGE>

of shares of Class A Common Stock (excluding shares of Class A Common Stock
owned by a Permitted Class B Holder) and Preferred Stock having voting
rights, if any, then outstanding (excluding shares of Preferred Stock
owned by a Permitted Class B Holder) plus one divided by the number of
outstanding shares of Class B Common Stock. Except as set forth herein or
pursuant hereto, all actions submitted to a vote of shareholders shall be
voted on by the holders of Class A Common Stock and Class B Common Stock
(as well as the holders of any series of Preferred Stock, if any, entitled
to vote thereon) voting together as a single class.

(2) The holders of Class A Common Stock and Class B Common Stock
shall each be entitled to vote separately as a class with respect to (i)
amendments to these Articles of Incorporation that alter or change the
powers, preferences or special rights of their respective class of stock so
as to affect them adversely and (ii) such other matters as may require
class votes under the Iowa Business Corporation Act.

(C) If and when dividends on the Class A Common Stock and Class B
Common Stock are declared payable from time to time by the board of
directors as provided in subdivision (H) of these Articles of
Incorporation, whether payable in cash, in property or in shares of stock
of the corporation, the holders of Class A Common Stock and the holders of
Class B Common Stock shall be entitled to share equally, on a per share
basis, in such dividends, except that if dividends are declared that are
payable in shares of Class A Common Stock or Class B Common Stock,
dividends shall be declared that are payable at the same rate on both
classes of stock and the dividends payable in shares of Class A Common
Stock shall be payable to holders of that class of stock and the dividends
payable in shares of Class B Common Stock shall be payable to holders of
that class of stock. If the corporation shall in any manner subdivide or
combine the outstanding shares of Class A Common Stock or Class B Common
Stock, the outstanding shares of the other such class of stock shall be
proportionally subdivided or combined in the same manner and on the same
basis as the outstanding shares of Class A Common Stock or Class B Common
Stock as the case may be, have been subdivided or combined.

(D)(1) Subject to the provisions of paragraph A(2) which requires a
certain minimum number of shares of Class B Common Stock to be outstanding
at all times, the holder of each outstanding share of Class B Common Stock
shall have the right at any time, or from time to time, at such holder's
option, to convert such share into one fully paid and non-assessable share
of Class A Common Stock, on and subject to the terms and conditions herein
set forth. In the event that Section 521A.14, subsection 7, or any
successor provision, of the Iowa Code ceases to require that a mutual
insurance holding company or an intermediate holding company own a
specified percentage of the capital stock of the Company having voting
rights or such requirement can be maintained even after conversion of the
Class B Common Stock to Class A Common Stock, the holder of each
outstanding share of Class B Common Stock shall have the right at any time,
or from time to time, at such holder's option, to convert such shares into
one fully paid and non-assessable share of Class A Common Stock, to the
extent permitted by the Iowa insurance laws and on and subject to the

<PAGE>

terms and conditions herein set forth.

(2) In order to exercise his, her or its conversion privilege, the
holder of any shares of Class B Common Stock to be converted shall present
and surrender the certificate representing such shares during usual
business hours at any office or agency of the corporation maintained for
the transfer of Class B Common Stock and shall deliver a written notice of
the election of the holder to convert the shares represented by such
certificate or any portion thereof specified in such notice. Such notice
shall also state the name or names (with address) in which the certificate
or certificates for shares of Class A Common Stock which shall be issuable
on such conversion shall be issued. If so required by the corporation, any
certificate for shares surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the corporation, duly
executed by the holder of such shares or his duly authorized
representative. Each conversion of shares of Class B Common Stock shall be
deemed to have been effected on the date (the "conversion date") on which
the certificate or certificates representing such shares shall have been
surrendered and such notice and any required instruments of transfer shall
have been received as aforesaid, and the person or persons in whose name or
names any certificate or certificates for shares of Class A Common Stock
shall be issuable on such conversion shall be deemed to have become
immediately prior to the close of business on the conversion date the
holder or holders of record of the shares of Class A Common Stock
represented thereby. The corporation shall not permit a conversion of
class B Common Stock to Class A Common Stock to the extent necessary to
maintain the minimum number of outstanding shares of Class B Common Stock
required by paragraph A(2).

(3) As promptly as practicable after the presentation and surrender
for conversion, as herein provided, of any certificate for shares of Class
B Common Stock, the corporation shall issue and deliver at such office or
agency, to or upon the written order of the holder thereof, certificates
for the number of shares of Class A Common Stock issuable upon such
conversion. In case any certificate for shares of Class B Common Stock
shall be surrendered for conversion of a part only of the shares
represented thereby, the corporation shall deliver at such office or
agency, to or upon the written order of the holder thereof, a certificate
or certificates for the number of shares of Class B Common Stock
represented by such surrendered certificate which are not being converted.
The issuance of certificates for shares of Class A Common Stock issuable
upon the conversion of shares of Class B Common Stock shall be made without
charge to the converting holder for any tax imposed on the corporation in
respect of the issue thereof. The corporation shall not, however, be
required to pay any tax which may be payable with respect to any transfer
involved in the issue and delivery of

<PAGE>

any certificate in a name other than that of the holder of the shares being
converted, and the corporation shall not be required to issue or deliver
any such certificate unless and until the person requesting the issue
thereof shall have paid to the corporation the amount of such tax or has
established to the satisfaction of the corporation that such tax has been
paid.

(4) Upon any conversion of shares of Class B Common Stock into shares
of Class A Common Stock pursuant hereto, no adjustment with respect to
dividends shall be made; only those dividends shall be payable on the
shares so converted as may be declared and may be payable to holders of
record of shares of Class B Common Stock on a date prior to the conversion
date with respect to the shares so converted; and only those dividends
shall be payable on shares of Class A Common Stock issued upon such
conversion as may be declared and may be payable to holders of record of
shares of Class A Common Stock on or after such conversion date.

(5) In case of any consolidation or merger of the corporation as a
result of which the holders of Class A Common Stock shall be entitled to
receive stock, other securities or other property with respect to or in
exchange for Class A Common Stock or in case of any sale or conveyance of
all or substantially all the property or business of the corporation as an
entirety, a holder of a share of Class B Common Stock shall have the right
thereafter, so long as the conversion right hereunder shall exist, to
convert such share into the kind and amount of shares of stock and other
securities and properties receivable upon such consolidation, merger, sale
or conveyance by a holder of one share of Class A Common Stock and shall
have no other conversion right with regard to such share. Any such
consolidation, merger or sale or conveyance of all or substantially all the
property or business of the corporation as an entity shall be subject to
approval of the Iowa Commissioner in accordance with Iowa law. The
provisions of this subparagraph shall similarly apply to successive
consolidations, mergers, sales or conveyances.

(6) All shares of Class B Common Stock which shall have been
surrendered for conversion as provided in this paragraph (D) shall no
longer be deemed to be outstanding, and all rights with respect to such
shares, including the rights, if any, to receive notices and to vote, shall
thereupon cease and terminate, except only the right of the holders
thereof, subject to the provisions of subparagraph (3) of this paragraph
(D), to receive shares of Class A Common Stock in exchange therefor.

(7) Such number of shares of Class A Common Stock as may from time to
time be required for such purpose shall be reserved for issuance upon
conversion of outstanding shares of Class B Common Stock; provided that
nothing contained herein shall be construed to preclude the corporation
from satisfying its obligations in respect of conversion by the delivery of
shares of Class A Common Stock which are held in the treasury of the

<PAGE>

corporation. The corporation will endeavor to list the shares of Class A
Common Stock required to be delivered upon conversion prior to such
delivery upon each national securities exchange, or securities quotation
system, if any, upon which the outstanding Class A Common Stock is listed
at the time of such delivery.

(8) In the event that AMHC (or any successor mutual insurance holding
company) is converted from a mutual insurance holding company to a stock
company pursuant to Chapter 508B of the Iowa Code or any successor
provision, then, immediately, the outstanding shares of Class B Common
Stock shall automatically be converted into shares of Class A Common Stock
on the date and at the same time that the plan of conversion relating to
AMHC (or any successor mutual insurance holding company) is consummated.

(E)(1) Notwithstanding any other provision of this articles of
incorporation, the shares of Class B Common Stock plus outstanding shares
of Class A Common Stock owned by a Permitted Class B Holder shall at all
times carry the right to cast at least 50.1% of the votes of the
outstanding shares of capital stock of the corporation (the "Required
Percentage"). A Permitted Class B Holder may pledge, subject to a
security interest or lien, encumber, or otherwise hypothecate shares of
Class B Common Stock only to the extent such shares exceed the Required
Percentage.

(2) Except as authorized by Paragraph (D) (with respect of the
conversion of Class B Common Stock to Class A Common Stock) and Paragraph
(E)(1) hereof, no shares of Class B Common Stock shall be conveyed,
transferred, assigned, pledged, subjected to a security interest or lien,
encumbered, or otherwise hypothecated or alienated by a Permitted Class B
Holder. Any conveyance, transfer, assignment, pledge, security interest,
lien, encumbrance or hypothecation or alienation of, in or on the Class B
Common Stock in violation of paragraph E(1) shall be void and ineffective
in inverse order of the date of such conveyance, transfer, assignment,
pledge, security interest, lien, encumbrance, or hypothecation or
alienation as to the shares necessary to comply with the provisions of
Paragraph E(1).

(3) Any transfer, or attempted or purported transfer of any shares of
Class B Common Stock or any interest therein or right thereof, which would
result in the ownership or control by one or more persons who is not a
Permitted Class B Holder in violation of Paragraph E(1) or Paragraph E(2)
hereof shall be void and shall be ineffective, and the corporation shall
not recognize, to the extent of such violation, the purported transferee as
a shareholder of the corporation for any purpose whatsoever except the
purpose of making a further transfer to a person who is a Permitted Class B
Holder.

(4) The corporation may, as a condition precedent to the transfer or
the registration of transfer of shares of Class B Common Stock, require the
furnishing of such representations, affidavits or other proof as it deems
necessary to establish that such transferee is a Permitted Class B Holder
or that the Permitted Class B Holder owns the Required Percentage. The
Board of Directors is authorized to adopt such bylaws and to take

<PAGE>
such other actions as it may deem necessary or desirable to implement the
restriction set forth in Paragraph (E).

(F)(1) Shares of Class B Common Stock shall be registered in the
name(s) of the beneficial owner(s) thereof (as hereafter defined) and not
in "street" or "nominee" names. For the purposes of this paragraph (F),
the term "beneficial owner(s)" of any shares of Class B Common Stock shall
mean the person or persons who possess the power to vote or dispose, or to
direct the voting or disposition, of such shares.

(2) The corporation shall note on the certificates representing the
shares of Class B Common Stock that there are restrictions on transfer and
registration of transfer imposed by paragraphs (D), (E) and this paragraph
(F) and any other appropriate legend or legends required by the board of
directors of the corporation.

(G) The Class A Common Stock and Class B Common Stock are subject to
all the powers, rights, privileges, preferences and priorities of the
Preferred Stock as may be stated herein and as shall be stated and
expressed in any resolution or resolutions adopted by the board of
directors pursuant to authority expressly granted to and vested in it by
the provisions of this Article IV.

(H) After dividends to which the holders of Preferred Stock may then
be entitled under the resolutions creating any series thereof have been
declared and paid or set aside in funds for this purpose, dividends may be
declared and paid to the holders of Class A Common Stock and Class B Common
Stock in cash, property, or other securities of the corporation out of any
net profits or net assets of the corporation legally available therefor.

(I) Upon any liquidation, dissolution or winding-up of the
corporation, whether voluntary or involuntary, and after the holders, if
any, of the Preferred Stock of each series shall have been paid in full the
amounts to which they respectively shall be entitled or a sum sufficient
for such payment in full shall have been set aside, the remaining net
assets of the corporation shall be distributed pro rata to the holders of
the Class A Common Stock and Class B Common Stock in accordance with such
holders' respective rights and interests, to the exclusion of the holders
of the Preferred Stock.

(J) Except as otherwise provided by law or by the resolution or
resolutions of the board of directors providing for the issue of any series
of the Preferred Stock, the holders of Class A Common Stock and Class B
Common Stock shall have the exclusive right to vote for the election of
directors and for all other purposes, each holder of the Class A Common
Stock and Class B Common Stock being entitled to vote as provided in
paragraphs (B) and (E)(1).

<PAGE>

(K) The shares of common stock outstanding prior to the date of the
amendment and restatement of the Articles of Incorporation authorizing the
issuance of Class A Common Stock and Class B Common Stock shall
automatically be redesignated as Class B Common Stock upon the
effectiveness of such amendment and restatement.

ARTICLE V

The business and affairs of the corporation shall be under the direction
of the Board of Directors. The authorized number of directors shall in no case
be fewer than seven (7) or more than twenty-one (21). The exact number of
directors shall be fixed from time to time by the Board of Directors pursuant to
a bylaw or resolution adopted by the affirmative vote of a majority of the
entire Board of Directors.

A. The directors of the corporation, other than those who may be
elected by the holders of any class or series of preferred stock, shall be
divided into three classes, as nearly equal in number as reasonably
possible: the first class, the second class and the third class. Each
such director shall serve for a term ending on the third annual meeting of
shareholders following the annual meeting at which such director was
elected; provided, however, that the directors first elected to the first
class shall serve for a term ending upon the election of directors at the
annual meeting next following the end of calendar year 1996, the directors
first elected to the second class shall serve for a term ending upon the
election of directors at the annual meeting next following the end of
calendar year 1997, and the directors first elected to the third class
shall serve for a term ending upon the election of directors at the annual
meeting next following the end of calendar year 1998.

B. At each annual election commencing at the first annual meeting
next following the end of calendar year 1996, the successors to the class
of directors whose term expires at that time shall be elected by the
shareholders to hold office for a term of three years to succeed those
directors whose term expires, so that the term of one class of directors
shall expire each year.

C. Notwithstanding the requirement that the three classes of
directors shall be as nearly equal in number of directors as reasonably
possible, in the event of any change in the authorized number of directors,
each director then continuing to serve as such shall nevertheless continue
as a director of the class of which he or she is a member until the
expiration of his or her current term, or his or her prior resignation,
disqualification, disability or removal. There shall be no cumulative
voting in the election of directors.

D. Subject to the rights of holders of a class or series of preferred
stock, any vacancy on the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office, an increase
in the number of directorships or other cause shall be filled only by the
affirmative vote of a majority of directors then in office, although less
than a quorum, or by the sole remaining director. A director so chosen
shall hold office for a term expiring at the annual meeting at which the
term of the class to which he or she has

<PAGE>

been elected expires. If the number of directors is changed, any increase
or decrease shall be apportioned among the three classes by a two-thirds
(2/3) vote of the directors then in office. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.

E. Advance notice of shareholder nominations for the election of
directors and of business to be brought by shareholders before any meeting
of the shareholders of the corporation shall be given in the manner
provided in the Bylaws of the corporation.

ARTICLE VI

The corporation reserves the right to amend, alter, change or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute. Notwithstanding the foregoing, the affirmative
vote of at least a majority of all the outstanding shares of Class A Common
Stock and Class B Common Stock and the affirmative vote of at least a majority
of the outstanding shares of Class A Common Stock (excluding outstanding shares
of Class A Common Stock owned by any Permitted Class B Holder) shall be required
to amend or repeal the second sentence of paragraph (A)(2) of Article IV of
these Articles of Incorporation.

ARTICLE VII

So long as AMHC is a mutual insurance holding company within the
meaning of Section 521A.14 of the Iowa Code or any successor provision, AMHC or
any Permitted Class B Holder shall have the preemptive right to purchase
unissued shares of voting stock (including, without limitation, Class A Common
Stock and Class B Common Stock) or any securities convertible into or
exchangeable for shares of voting stock or any options, warrants or rights to
acquire shares of voting stock ("Equity Purchase Rights") to the extent required
for AMHC or any Permitted Class B Holder to comply with the provisions of the
second sentence of paragraph (A)(2) of Article IV. The corporation is
authorized and empowered to enter into an agreement with AMHC and/or a
Permitted Class B Holder relating to Equity Purchase Rights.

ARTICLE VIII

A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for a breach of the director's duty
of loyalty to the corporation or its shareholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) for a transaction from which the director derives an improper
personal benefit; or (iv) under section 490.833 of the Iowa Business Corporation
Act. If the Iowa Business Corporation Act is hereafter amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the corporation, in addition to the limitation on
personal liability provided herein, shall be eliminated or limited to the extent
of such amendment, automatically and without any further action, to the maximum
extent permitted by law. Any repeal or modification of this Article by the
shareholders of the corporation shall be prospective only and shall not
adversely affect any limitation on the personal liability or any other right or
protection of a director of the corporation with

<PAGE>

respect to any state of facts existing at or prior to the time of such repeal or
modification.

3. The duly adopted Amended and Restated Articles of Incorporation
supersedes the original articles of incorporation and all amendments therein.

4. The Amended and Restated Articles of Incorporation amend the original
articles of incorporation which requires shareholders approval. The
designation, the number of outstanding shares, the number entitled to be voted
by the sole voting group entitled to vote on the said Amended and Restated
Articles of Incorporation, and the number of shares of the voting group which
indisputably voted with respect to the said Amended and Restated Articles of
Incorporation are as follows:

(a) Designation of voting group: Common Stock

(b) Number of outstanding shares of voting group:
10,000

(c) Number of shares of voting group entitled to vote separately on the
Amended and Restated Articles of Incorporation: None

(d) Number of shares of voting group which indisputably voted with respect
to the Amended and Restated Articles of Incorporation: 10,000

5. The total number of undisputed votes cast for the said Amended and
Restated Articles of Incorporation by the voting group entitled to vote on the
said Amended and Restated Articles of Incorporation is as follows:

Number of undisputed votes of voting group cast for the Amended
and Restated Articles of Incorporation: 10,000

6. The said number of votes cast for the said Amended and Restated
Articles of Incorporation was sufficient for the approval thereof by the said
voting group.

<PAGE>

7. The effective time and date of these Amended and Restated Articles of
Incorporation shall be on filing with the Iowa Secretary of State.

Dated this 4th day of December, 1996.

AmerUs Life Holdings, Inc.

By: /s/ Roger K. Brooks
------------------------------------
Roger K. Brooks, Chairman, President and
Chief Executive Officer

By: /s/ James A. Smallenberger
------------------------------------
James A. Smallenberger, Secretary

STATE OF IOWA )
) SS
COUNTY OF POLK )

On this 4th day of December, 1996, before me, the undersigned, a Notary
Public in and for said State, personally appeared Roger K. Brooks and James A.
Smallenberger, being by me duly sworn, did say that they are the Chairman,
President and Chief Executive Officer and Secretary, respectively, of AmerUs
Life Holdings, Inc., executing the within and foregoing instrument; that said
instrument was signed on behalf of said corporation by authority of its Board of
Directors; and the said Chairman, President and Chief Executive Officer and
Secretary, as such officers, acknowledged the execution of said instrument to be
the voluntary act and deed of said corporation, by it and by them voluntarily
executed.

/s/ Julie Lyn Ketterer
-----------------------------------
Notary Public in and for said State

<PAGE>

CERTIFICATE OF APPROVAL
ATTORNEY GENERAL

Pursuant to provisions of the Iowa Code, the undersigned approves the
Amended and Restated Articles of Incorporation of AmerUs Life Holdings, Inc.,
and finds them in conformance with the laws of the United States and with the
laws and Constitution of the State of Iowa.

THOMAS J. MILLER
Attorney General of Iowa

12-4-96 /s/ Scott M. Galenbeck
- ---------------- -----------------------------------
Date By: SCOTT M. GALENBECK
Assistant Attorney General

CERTIFICATE OF APPROVAL
COMMISSIONER OF INSURANCE

Pursuant to the provisions of the Iowa Code, the undersigned approves the
Amended and Restated Articles of Incorporation of AmerUs Life Holdings, Inc.

12-4-96 /s/ Therese M. Vaughan
- ---------------- -----------------------------------
Date By: THERESE M. VAUGHAN
Commissioner of Insurance

<PAGE>
- -------------------------------------------------------------------------------

REVOLVING CREDIT AND TERM LOAN AGREEMENT

by and among

AMERUS LIFE HOLDINGS, INC.,

THE SIGNATORY BANKS HERETO

and

THE CHASE MANHATTAN BANK,
as Administrative Agent

------------------------------

Dated as of December 11, 1996

------------------------------

$175,000,000

- -------------------------------------------------------------------------------

<PAGE>

TABLE OF CONTENTS

PAGE

ARTICLE I DEFINITIONS.................................... 1
Section 1.1. Defined Terms.................................. 1
Section 1.2. Other Definitional Provisions.................. 23
Section 1.3. Accounting Terms and Determinations............ 23
Section 1.4. Types of Loans................................. 24

ARTICLE II AMOUNTS AND TERMS OF REVOLVING CREDIT
LOANS AND TERM LOANS......................... 24
Section 2.1. Revolving Credit Loans......................... 24
Section 2.2. Term Loan...................................... 25
Section 2.3. The Notes...................................... 25
Section 2.4. Procedure for Borrowing........................ 25
Section 2.5. Reduction of Revolving Credit Commitment....... 27
Section 2.6. Prepayments of the Loans....................... 28
Section 2.7. Conversions.................................... 30
Section 2.8. Aggregation of Loans........................... 31
Section 2.9. Payments of Principal and Interest............. 31
Section 2.10. Use of Proceeds................................ 33
Section 2.11. Fees........................................... 33
Section 2.12. Payments....................................... 33
Section 2.13. Pro Rata Treatment............................. 34

ARTICLE III CONDITIONS PRECEDENT........................... 34
Section 3.1. Initial Loan................................... 34
Section 3.2. Further Conditions............................. 38

ARTICLE IV REPRESENTATIONS AND WARRANTIES................. 39
Section 4.1. Corporate Existence of the Borrower and its
Subsidiaries; Authority........................ 39
Section 4.2. Authority; Consents............................ 39
Section 4.3. No Legal Bar................................... 40
Section 4.4. Due Execution; Binding Effect.................. 40
Section 4.5. Statutory Statements; Financial Statements..... 41
Section 4.6. No Change...................................... 42
Section 4.7. Capitalization; Subsidiaries................... 43

(i)
<PAGE>

PAGE

Section 4.8. Patents, Trademarks, Insurance Licenses, Etc... 43
Section 4.9. Litigation..................................... 44
Section 4.10. No Default; No Breach.......................... 44
Section 4.11. Taxes.......................................... 44
Section 4.12. Use of Loans................................... 45
Section 4.13. ERISA.......................................... 45
Section 4.14. Governmental Regulation........................ 46
Section 4.15. Pledge Agreements.............................. 46
Section 4.16. Environmental Matters.......................... 46
Section 4.17. Insurance...................................... 47
Section 4.18. Regulatory Filings............................. 47
Section 4.19. Insurance Business............................. 47
Section 4.20. Reinsurance.................................... 47
Section 4.21. Reserves and Liabilities....................... 48
Section 4.22. Existing Indebtedness and Liens................ 48
Section 4.23. Accuracy of Information, Representations and
Warranties..................................... 48

ARTICLE V DELIVERY OF FINANCIAL REPORTS,
DOCUMENTS AND OTHER INFORMATION.............. 49
Section 5.1. Annual Statements.............................. 49
Section 5.2. Quarterly Statements........................... 49
Section 5.3. Financial Statements Information, Etc.......... 50
Section 5.4. Compliance Certificate......................... 51
Section 5.5. Additional Audit Information................... 51
Section 5.6. Other Documents; Other Information............. 51
Section 5.7. Notices........................................ 52

ARTICLE VI AFFIRMATIVE COVENANTS.......................... 54
Section 6.1. Maintenance of Books........................... 54
Section 6.2. Inspection..................................... 54
Section 6.3. Maintenance of Existence; Conduct of Business;
Compliance..................................... 54
Section 6.4. Amendments to Organizational Documents......... 55
Section 6.5. Payment of Obligations......................... 55
Section 6.6. Insurance...................................... 55
Section 6.7. Financial Ratios............................... 55
Section 6.8. Reinsurance.................................... 56
Section 6.9. Ratings........................................ 56
Section 6.10. Environmental Compliance....................... 56
Section 6.11. Dividend Payments to Repay Loans............... 56

(ii)

<PAGE>

PAGE

Section 6.12. Additional Security; Further Assurances........ 57

ARTICLE VII NEGATIVE COVENANTS............................. 58
Section 7.1. Indebtedness for Money Borrowed................ 58
Section 7.2. Liens.......................................... 59
Section 7.3. Mergers, Acquisitions, Etc..................... 61
Section 7.4. Dividends, Redemptions, Distributions, Etc..... 62
Section 7.5. Changes........................................ 62
Section 7.6. Fiscal Year.................................... 62
Section 7.7. Liability to PBGC, IRS......................... 62
Section 7.8. Transactions with Affiliates................... 62
Section 7.9. Capital Expenditures........................... 63
Section 7.10. Asset Disposition, Etc......................... 63
Section 7.11. Investments.................................... 64
Section 7.12. Foreclosure; Etc............................... 65

ARTICLE VIII EVENTS OF DEFAULT.............................. 66
Section 8.1. Failure to Pay................................. 66
Section 8.2. Breach of Covenants............................ 66
Section 8.3. Breach of Loan Documents....................... 66
Section 8.4. Breach of Debt Instrument...................... 67
Section 8.5. Breach of Representation....................... 68
Section 8.6. Insolvency, Etc................................ 68
Section 8.7. Judgments, Etc................................. 68
Section 8.8. Change in Ownership............................ 69
Section 8.9. Revocation of Insurance License................ 69
Section 8.10. Plans.......................................... 69
Section 8.11. Pledge Agreements.............................. 69
Section 8.12. Iowa Approvals and Regulations................. 69

ARTICLE IX YIELD PROTECTION; ILLEGALITY;
INDEMNIFICATION; CAPITAL ADEQUACY............ 70
Section 9.1. Increased Costs................................ 70
Section 9.2. Limitation on Types of Loans................... 72
Section 9.3. Illegality..................................... 73
Section 9.4. Treatment of Affected Loans.................... 73
Section 9.5. Compensation................................... 74
Section 9.6. Taxes.......................................... 74
Section 9.7. Change of Lending Office....................... 76
Section 9.8. Replacement of Banks........................... 76

(iii)
<PAGE>

PAGE

ARTICLE X THE ADMINISTRATIVE AGENT....................... 77
Section 10.1. Appointment, Powers and Immunities............. 77
Section 10.2. Reliance by Administrative Agent............... 78
Section 10.3. Defaults....................................... 78
Section 10.4. Rights as a Bank............................... 79
Section 10.5. Indemnification................................ 79
Section 10.6. Non-Reliance on Administrative Agent and
Other Banks.................................... 79
Section 10.7. Failure to Act................................. 80
Section 10.8. Resignation of Administrative Agent............ 80

ARTICLE XI MISCELLANEOUS PROVISIONS....................... 80
Section 11.1. Fees and Expenses.............................. 80
Section 11.2. Survival of Agreements and Representations..... 82
Section 11.3. Modifications, Consents and Waivers; Entire
Agreement...................................... 82
Section 11.4. Remedies Cumulative............................ 82
Section 11.5. Further Assurances............................. 83
Section 11.6. Notices........................................ 83
Section 11.7. Counterparts................................... 83
Section 11.8. Construction; Consent to Jurisdiction and
Service of Process; Waiver of Trial by Jury.... 83
Section 11.9. Severability................................... 84
Section 11.10. Successors and Assigns......................... 85
Section 11.11. Adjustments; Setoff............................ 86
Section 11.12. Confidentiality................................ 87
Section 11.13. Collateral Release............................. 88

Exhibit A Form of Note
Exhibit B Assignment and Acceptance Agreement
Exhibit C Form of Borrowing Request
Exhibit D-1 Form of Borrower Pledge Agreement
Exhibit D-2 Form of Group Pledge Agreement
Exhibit E Form of Covenant Agreement
Exhibit F Form of Holdings Guaranty

Schedule 0.1 Revolving Credit Commitments and Term Loan Commitments
Schedule 3.1(l) Certain Mortgages and Real Property
Schedule 4.2 Consents Obtained
Schedule 4.5(g) Material Liabilities

(iv)
<PAGE>

Schedule 4.7 Subsidiaries
Schedule 4.8 Insurance Licenses
Schedule 4.9 Litigation
Schedule 4.13 Pension Plans
Schedule 4.20 Reinsurance
Schedule 4.21 Reserve Exceptions
Schedule 4.22(a) Existing Indebtedness
Schedule 4.22(b) Existing Liens
Schedule 7.2 Permitted Liens

(v)

<PAGE>

REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of December 11,
1996, by and among AMERUS LIFE HOLDINGS, INC., a corporation organized under the
laws of the State of Iowa (together with its successors and permitted assigns,
the "Borrower"), each of the financial institutions signatory hereto (together
with its successors and permitted assigns, each a "Bank" and, collectively, the
"Banks"), and THE CHASE MANHATTAN BANK, as Administrative Agent for the Banks
(in such capacity, together with its successors in such capacity, the
"Administrative Agent").

The Borrower has requested that the Banks make certain revolving
credit and term loans to it. The Banks are willing to make such loans on the
terms and conditions hereof. Accordingly, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1. DEFINED TERMS. For the purposes of this Agreement,
the following capitalized terms shall have the respective meanings ascribed to
them below:

"ADJUSTED CAPITAL AND SURPLUS" means, at any time, with respect to
any Life Insurance Subsidiary, the sum of the following (without duplication):
(a) the amount of Capital and Surplus of such Life Insurance Subsidiary at such
time plus (b) the amount of any asset valuation reserve maintained by such Life
Insurance Subsidiary at such time.

"ADMINISTRATIVE AGENT" has the meaning set forth in the
introductory paragraph hereof.

"ADMINISTRATIVE AGENT'S OFFICE" means the office of the
Administrative Agent set forth on the signature pages hereof, or such other
office of the Administrative Agent as may be specified in accordance with the
provisions of Section 11.6 of this Agreement.

"ADVANCE" means the portion of a Loan advanced by a Bank.

"AFFILIATE" means, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with their respective correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise); provided, that, in any event, any Person which owns directly or
indirectly 10%

<PAGE>

or more of the securities having ordinary voting power for the election of
directors or any other governing body of a corporation or 10% or more of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to control such corporation
or other Person.

"AGREEMENT" means this Revolving Credit and Term Loan Agreement,
as amended, supplemented or modified from time to time, including all Exhibits
and Schedules annexed hereto.

"A.M. BEST" means A.M. Best & Company.

"AMERICAN MUTUAL" means American Mutual Life Insurance Company, a
mutual life insurance company and the predecessor in interest to AmerUs Life.

"AMERUS LIFE" means AmerUs Life Insurance Company, a stock life
insurance company.

"AMHC" means American Mutual Holding Company, a mutual insurance
holding company.

"ANNUAL STATEMENT" means, as to AmerUs Life or any other Life
Insurance Subsidiary, the annual financial statement of AmerUs Life or such Life
Insurance Subsidiary as required to be filed with the Applicable Insurance
Regulatory Authority, together with all exhibits and schedules filed therewith,
prepared in conformity with SAP.

"APPLICABLE INSURANCE REGULATORY AUTHORITY" means, when used with
respect to AmerUs Life or any other Life Insurance Subsidiary, the insurance
department or similar administrative authority or agency located in the State in
which AmerUs Life or such Life Insurance Subsidiary is domiciled.

"APPLICABLE LAWS" means all applicable laws and treaties,
judgments, decrees, injunctions, writs and orders of any court, arbitrator or
governmental agency or authority and rules, regulations, orders, licenses and
permits of any governmental body, instrumentality, agency or authority.

"APPLICABLE LENDING OFFICE" means, with respect to each Type of
Advance (or principal portion thereof), the lending office as designated for
such Type of Advance below each Bank's name on the signature pages hereof or
such other office of such Bank or of an Affiliate of such Bank as such Bank may
from time to time specify to the Administrative Agent and the Borrower in
accordance with the provisions of Section 11.6 of this Agreement as the office
at which such Type of Advances are to be made and maintained.

-2-
<PAGE>

"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and
Acceptance Agreement substantially in the form of EXHIBIT B.

"AUTHORIZED CONTROL LEVEL" means, with respect to any Life
Insurance Subsidiary, the dollar amount computed as such Life Insurance
Subsidiary's authorized control level Risk-Based Capital in accordance with the
RBC Instructions.

"AVLIC GUARANTIES" means and includes each of the guaranty
agreements (i) by Ameritas Life Insurance Corp. in favor of Ameritas Variable
Life Insurance Company ("AVLIC") dated as of the 8th day of July, 1991, (ii) by
AMAL Corporation for the benefit of AVLIC dated as of 1 April 1996, and (iii) by
American Mutual in favor of AVLIC dated as of 1 April 1996.

"BANK OBLIGATIONS" means all present and future obligations and
Indebtedness of the Borrower to the Administrative Agent and the Banks under
this Agreement or any other Loan Document, including, without limitation, the
obligation to pay the Indebtedness evidenced by the Notes, the obligation to pay
interest on the Notes (including interest accruing subsequent to the
commencement of insolvency, liquidation, dissolution, rehabilitation, or similar
proceedings with respect to the Borrower), obligations under Interest Rate
Agreements entered into with any Bank or any affiliate of a Bank, Fees and other
fees, expenses and charges from time to time owed hereunder or under any other
Loan Document.

"BANKS" has the meaning set forth in the introductory paragraph
hereof.

"BASE RATE" means, on any day on which a Loan is a Base Rate Loan,
a rate per annum equal to the higher of (a) the Prime Rate in effect on such day
and (b) the Federal Funds Rate on such day plus 0.50% per annum.

"BASE RATE ADVANCE" means the portion of a Base Rate Loan advanced
by a Bank.

"BASE RATE LOAN" means any Loan or portion of the principal amount
thereof that bears interest at a rate based upon the Base Rate.

"BASLE ACCORD" has the meaning set forth in Section 9.1(c).

"BENEFITED BANK" has the meaning set forth in Section 11.11(a).

"BORROWER" has the meaning set forth in the introductory paragraph
hereof.

-3-
<PAGE>

"BORROWER PLEDGE AGREEMENT" means the Pledge Agreement executed by
the Borrower in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Banks, substantially in the form of EXHIBIT D-1,
as the same may be amended, modified or supplemented from time to time.

"BORROWING DATE" means the date on which a Loan is requested to be
made hereunder, as set forth in the Borrowing Request for such Loan.

"BORROWING REQUEST" means a request for Loans substantially in the
form of EXHIBIT C.

"BUSINESS DAY" means (a) for all purposes other than as set forth
in clause (b) below, any day other than Saturday, Sunday or any day on which
commercial banks in New York are authorized or required to close under the laws
of the State of New York and (b) with respect to all notices and determinations
in connection with, and payments of principal of and interest on Eurodollar
Loans, any day that is a Business Day described in clause (a) above and on which
dealings in Dollar deposits are carried out in the London interbank market.

"CAPITAL AND SURPLUS" means, as of the last day of any calendar
quarter (including the last day of the calendar year), with respect to any Life
Insurance Subsidiary, the capital and surplus of such Life Insurance Subsidiary
as set forth in the Statutory Statement of such Life Insurance Subsidiary for
such date, or, if there is no such Statutory Statement for such date, the amount
computed and certified as correct by the chief financial officer of such Life
Insurance Subsidiary, as the case may be, that would be set forth in such a
Statutory Statement for such date, based on SAP, consistently applied.

"CAPITAL LEASE" means any lease under which the obligations to pay
rent or other amounts constitute Capitalized Lease Obligations.

"CAPITAL LEASE OBLIGATIONS" means, for any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board) and, for purposes
of this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP (including such Statement No.
13).

"CASH FLOW" means, with respect to the Borrower, for any period,
the difference between (a) and (b), where (a) is equal to the sum of (i) maximum
dividends available to the Borrower under Applicable Laws from all Life
Insurance Subsidiaries,

-4-
<PAGE>

provided that in the event any Life Insurance Subsidiary has a net operating
loss (as determined on a GAAP basis) for two consecutive fiscal years,
dividends available from such Life Insurance Subsidiary for such second
fiscal year shall not be included in this clause (i), plus (ii) management
fees, administrative fees, service fees, home office charges, consulting fees
and technical service charges paid to the Borrower plus (iii) gross tax
sharing payments received by the Borrower plus (iv) all Surplus Note interest
received by the Borrower plus (v) net investment income of the Borrower and
(b) is equal to the sum of (i) cash operating expenses paid by the Borrower
and (ii) taxes paid by the Borrower; PROVIDED that in the event that the
Commissioner of Insurance of the State of Iowa does not give AmerUs Life
approval to exclude the Transaction from consideration in determining the
maximum amount of dividends available to be paid by AmerUs Life, then for any
period ending during fiscal years 1996 or 1997 only, clause (a)(i) hereof
shall equal an amount equal to one dollar ($1.00) less than 3% of the assets
of all Life Insurance Subsidiaries of the Borrower as of the last day of the
then most recently ended fiscal year.

"CATEGORY A PERIOD" means a period during which the Leverage Ratio
of the Borrower as of the last day of the then most recently ended calendar
quarter for which the Borrower has delivered financial statements pursuant to
Section 5.3(a) or (b) is less than 0.15:1.0 (it being understood that if the
foregoing ratio is satisfied, such period shall be a Category A Period from and
including the date of delivery of such financial statements to but excluding the
date of the next delivery of such financial statements).

"CATEGORY B PERIOD" means a period during which the Leverage Ratio
of the Borrower as of the last day of the then most recently ended calendar
quarter for which the Borrower has delivered financial statements pursuant to
Section 5.3(a) or (b) is greater than or equal to 0.15:1.0 but less than 0.2:1.0
(it being understood that if the foregoing ratio is satisfied, such period shall
be a Category B Period from and including the date of delivery of such financial
statements to but excluding the date of the next delivery of such financial
statements).

"CATEGORY C PERIOD" means a period during which the Leverage Ratio
of the Borrower as of the last day of the then most recently ended calendar
quarter for which the Borrower has delivered financial statements pursuant to
Section 5.3(a) or (b) is greater than or equal to 0.2:1.0 but less than 0.25:1.0
(it being understood that if the foregoing ratio is satisfied, such period shall
be a Category C Period from and including the date of delivery of such financial
statements to but excluding the date of the next delivery of such financial
statements).

"CATEGORY D PERIOD" means a period during which the Leverage Ratio
of the Borrower as of the last day of the then most recently ended calendar
quarter for which the Borrower has delivered financial statements pursuant to
Section 5.3(a) or (b) is greater than or equal to 0.25:1.0 but less than 0.3:1.0
(it being understood that if the foregoing

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<PAGE>

ratio is satisfied, such period shall be a Category D Period from and including
the date of delivery of such financial statements to but excluding the date of
the next delivery of such financial statements).

"CATEGORY E PERIOD" means a period during which the Leverage Ratio
of the Borrower as of the last day of the then most recently ended calendar
quarter for which the Borrower has delivered financial statements pursuant to
Section 5.3(a) or (b) is greater than or equal to 0.3:1.0 (it being understood
that if the foregoing ratio is satisfied, such period shall be a Category E
Period from and including the date of delivery of such financial statements to
but excluding the date of the next delivery of such financial statements).

"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq., and
any successor statute of similar import, and regulations promulgated thereunder,
in each case as in effect from time to time. Reference to sections of CERCLA
shall be construed to also refer to any successor sections.

"CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) the acquisition, directly or indirectly, by any one "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) (other than
an employee benefit plan or stock ownership plan of the Borrower) of more than
35% of the common stock of the Borrower; (ii) failure of Group at any time to
own a majority of the voting shares of the Borrower as determined pursuant to
Section 521A.14 of the Iowa Code; or (iii) during any period of 25 consecutive
calendar months, individuals who at the beginning of such period constituted the
Board of Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders or members, as the case may be, of the Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of such Board of Directors then in office.

"CHASE" means The Chase Manhattan Bank and shall include any
successor thereto by merger.

"CMO DERIVATIVE INVESTMENTS" means Z bonds, floaters/inverse
floaters, PAC II, PAC III, Ioettes, support bonds, interest only investments,
principal only investments, residuals, inverse IO's, super floaters, any bonds
backed in whole or in part by tranches of these bonds (including component or
kitchen sink bonds) and any bonds or investments similar to any of the
foregoing.

"CODE" means the Internal Revenue Code of 1986, and any successor
statute of similar import, and the regulations promulgated and rulings issued
thereunder, in each

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<PAGE>

case as in effect from time to time. References to sections of the Code shall
be construed to also refer to any successor sections.

"COLLATERAL" has the meaning set forth in the Pledge Agreements.

"COLLATERAL RELEASE DATE" has the meaning set forth in Section
11.13.

"COMMITMENT" means, as to each Bank, the obligation of such Bank
to make Advances in an aggregate amount up to but not exceeding (a) in the case
of a Bank that is a party to this Agreement as of the date hereof, the amount
set forth opposite the name of such Bank on Schedule 0.1 under the heading
"Total Commitment" or (b) in the case of any other Bank, the aggregate amount of
the Commitments of other Banks acquired by it pursuant to Section 11.10(b) (in
each case, as the same may be reduced from time to time pursuant to Section 2.5
or 2.6 or increased or reduced from time to time pursuant to Section 11.10(b)).
The original aggregate principal amount of the Commitments is $175,000,000.

"COMMITMENT FEE" means the fee payable with respect to the amount
of the Revolving Credit Commitment that is unused at 5:00 P.M. New York City
time on each calendar day in the period from and including the Effective Date to
but not including the earlier of the date the Revolving Credit Commitment is
terminated and the Revolving Credit Termination Date. Such fee shall be
calculated for each day in the period with respect to which such fee is to be
paid by multiplying the aggregate principal amount of the unused Revolving
Credit Commitments by the rate per annum set forth below and dividing the result
by 360; the aggregate fee for such period shall equal the sum of the fees so
computed for each day in such period. The rate per annum of the Commitment Fee
shall be: (a) with respect to a Category A Period, .15%; (b) with respect to a
Category B Period, .20%, (c) with respect to a Category C Period, .25%, (d) with
respect to a Category D Period, .30%, and (e) with respect to a Category E
Period, .375%.

"COMMITMENT PERCENTAGE" means, with respect to a Bank, a
percentage equal to a fraction, the numerator of which is the Commitment of such
Bank and the denominator of which is the aggregate principal amount of the
Commitments of all Banks.

"COMMON EQUITY ISSUANCE" means (a) any issuance or sale by the
Borrower or any Subsidiary of the Borrower after the Effective Date of (i) any
of its common stock, (ii) any warrants or options exercisable in respect of its
common stock or (iii) any other security or instrument representing a common
equity interest (or the right to obtain a common equity interest) in the
Borrower or any such Subsidiary, or (b) the receipt by the Borrower or any
Subsidiary of the Borrower after the Effective Date of any cash contribution to
the Borrower's or such Subsidiary's capital (whether or not evidenced by any new
equity security issued by the Borrower or such Subsidiary); PROVIDED that the

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<PAGE>

following shall not constitute Common Equity Issuances: (x) any issuance or
sale of capital stock, warrants, options or other securities or instruments
issued to, or capital contributions by, the Borrower or any wholly owned
Subsidiary of the Borrower and (y) options or warrants issued to management of
the Borrower or any of its Subsidiaries.

"COMPANY ACTION LEVEL" means, with respect to any Life Insurance
Subsidiary, the dollar amount computed as such Life Insurance Subsidiary's
company action level Risk-Based Capital in accordance with the RBC Instructions.

"COMPLIANCE CERTIFICATE" has the meaning set forth in Section 5.4.

"CONSOLIDATED NET WORTH" means, with respect to any Person, the
Net Worth of such Person and its Subsidiaries determined on a consolidated basis
in accordance with GAAP after appropriate deduction for any minority interests
in Subsidiaries and excluding, as set forth in the definition of Net Worth, the
effects of Financial Accounting Statement No. 115.

"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
Property owned by it or used in the conduct of its business is bound or
affected.

"CONTRIBUTION TO SURPLUS" has the meaning set forth in Section
3.1(l)(f).

"CONVERSION DATE" means the date on which a Loan of one Type is
converted to a Loan of another Type or the date on which a Eurodollar Loan is
converted to a new Eurodollar Loan, all in accordance with Section 2.7.

"COVENANT AGREEMENT" means the Covenant Agreement executed by
Group for the benefit of the Administrative Agent and the Banks, substantially
in the form of EXHIBIT E, as the same may be amended, modified or supplemented
from time to time.

"CREDIT PARTY" means and includes Group, the Borrower, each
Pledging Subsidiary (if any) and, for the period prior to the Collateral Release
Date, AMHC.

"DEBT INSTRUMENT" has the meaning set forth in Section 8.4.

"DEFAULT" means any event, other condition or act, which, with
notice or lapse of time, or both, would constitute an Event of Default.

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<PAGE>

"DISPOSITION" means any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Borrower or any of its Subsidiaries to any Person. The term "Disposition" shall
not include Equity Issuances.

"DOLLAR" OR "$" means lawful money of the United States of
America.

"EFFECTIVE DATE" means the date of the making of the Term Loan.

"ENVIRONMENTAL CONSULTANT" has the meaning set forth in Section
7.12.

"ENVIRONMENTAL LAWS AND REGULATIONS" means any and all applicable
federal, state, local, municipal or foreign laws, rules, orders, regulations,
statutes, ordinances, codes, decrees or requirements of any Governmental
Authority regulating, relating to or imposing liability or standards of conduct
concerning environmental, health and safety matters, including, without
limitation, Environmental Matters, as now or may anytime hereinafter be in
effect.

"ENVIRONMENTAL LIABILITY" means any liability of a Person to any
other Person under Environmental Laws and Regulations and under any other
applicable law relating to any Environmental Matter, and, including, without
limitation, any liability for the costs of any investigation, clean-up or other
remedial action with respect to or in connection with any Environmental Matter.

"ENVIRONMENTAL MATTER" means a release caused by the seeping,
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of hazardous wastes or other toxic
substance, pollutant or contaminant into the environment or the generation,
treatment, storage or disposal of any hazardous wastes or other toxic substance,
pollutant, or contaminant.

"ENVIRONMENTAL PROCEEDING" means any judgment, action, proceeding
or investigation (including, without limitation, any federal, state, local or
foreign investigation evaluating whether any remedial action is needed to
respond to an Environmental Matter) pending before any Governmental Authority,
including, without limitation, any environmental regulatory body, with respect
to or threatened against or affecting the assets or liability of a Person,
including, without limitation, in respect of any "facility" owned, leased or
operated under CERCLA or under any Environmental Law and Regulation, in
connection with any Environmental Matter.

"EQUITY ISSUANCE" means and includes a Common Equity Issuance and
a Preferred Equity Issuance.

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<PAGE>

"EQUITY RIGHTS" means, with respect to any Person, any outstanding
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or outstanding
securities convertible into, any additional shares of capital stock of any
class, or partnership or other ownership interests of any type in, such Person.

"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, and the regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed to also refer to any successor sections.

"ERISA AFFILIATE" means any corporation or trade or business which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or is under common control (within
the meaning of Section 414(c), (m) or (o) of the Code) with the Borrower.

"EURODOLLAR ADVANCE" means the portion of a Eurodollar Loan
advanced by a Bank.

"EURODOLLAR LOAN" means any Loan or portion of the principal
amount thereof that bears interest at the Eurodollar Rate.

"EURODOLLAR MARGIN" means (a) with respect to a Category A Period,
.40% per annum; (b) with respect to a Category B Period, .50% per annum; (c)
with respect to a Category C Period, .625% per annum; (d) with respect to a
Category D Period, .75% per annum; and (e) with respect to a Category E Period,
.875% per annum.

"EURODOLLAR RATE" means, with respect to any Eurodollar Loan for
any Interest Period therefor, (a) the Eurodollar Margin as in effect from time
to time during such Interest Period plus (b) the rate per annum determined by
the Administrative Agent to be equal to the quotient of (i) the arithmetic mean
(rounded upwards, if necessary, to the nearest 1/16 of 1%) of the offered rates
for deposits in Dollars having a term comparable to such Interest Period and in
an amount comparable to the principal amount of such Eurodollar Loan which
appear on the Reuters Screen LIBO Page, determined as of 10:00 A.M. London time
(or as soon thereafter as practicable) on the date two Business Days prior to
the first day of such Interest Period, divided by (ii) a number equal to 1 minus
the Reserve Requirement, if any (rounded upwards, if necessary, to the nearest
1/16 of 1%).

"EVENT OF DEFAULT" has the meaning set forth in Article VIII.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

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<PAGE>

"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Chase on such day on such transactions as determined by the
Administrative Agent.

"FEES" means all amounts payable pursuant to, or referred to in,
Section 2.11.

"FIXED CHARGES" means the sum of (a) all dividends paid in respect
of preferred equity of the Borrower plus (b) all interest and principal payments
on Indebtedness for Money Borrowed of the Borrower.

"GAAP" means United States generally accepted accounting
principles applied on a basis consistent with those which, in accordance with
Section 1.3, are to be used in making the calculations for purposes of
determining compliance with this Agreement.

"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial (including an arbitrator), regulatory or administrative
functions of or pertaining to government.

"GROUP" means AmerUs Group Co., an Iowa corporation.

"GROUP PLEDGE AGREEMENT" means the Pledge Agreement executed by
Group in favor of the Administrative Agent for the benefit of the Administrative
Agent and the Banks, substantially in the form of EXHIBIT D-2, as the same may
be amended, modified or supplemented from time to time.

"GUARANTY" means a guaranty, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to,
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guaranty of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase
materials, supplies or services primarily for the purpose of enabling a debtor
to make payment of such debtor's obligations or an agreement to assure a
creditor

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<PAGE>

against loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other similar instrument
for the benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms "guarantee" and
"guaranteed" used as a verb shall have a correlative meaning.

"HOLDINGS GUARANTY" means the Guaranty executed by each of AMHC
and Group for the benefit of the Administrative Agent and the Banks,
substantially in the form of EXHIBIT F, as the same may be amended, modified
or supplemented from time to time.

"INCREASED COSTS" has the meaning set forth in Section 9.1(a).

"INDEBTEDNESS" means, as to any Person, without duplication, all
(i) liabilities or obligations, direct and contingent (other than contingent
liabilities which, in accordance with GAAP, would be referred to only in a
footnote to a balance sheet), which in accordance with GAAP would be included in
determining total liabilities of such Person at the date as of which
Indebtedness is to be determined, including, without limitation, Capital Lease
Obligations, (ii) liabilities or obligations of others for which a Person is
directly or indirectly liable, by way of Guaranty or otherwise and (iii)
liabilities or obligations secured by Liens on any assets of such Person,
whether or not such liabilities or obligations shall have been assumed by it;
PROVIDED, HOWEVER, that Indebtedness shall not include obligations with
respect to Policies.

"INDEBTEDNESS FOR MONEY BORROWED" means, as to any Person, (a) all
Indebtedness (without duplication) (i) in respect of money borrowed or for the
deferred purchase price of property or services (including, without limitation,
obligations to pay money pursuant to agreements or covenants not to compete
other than obligations pursuant to employment agreements which may in part
represent consideration for a non-compete covenant in such agreement), (ii) in
respect of Capital Lease Obligations, (iii) in respect of obligations under
conditional sale or other title retention agreements, (iv) consisting of the net
exposure in respect of Interest Rate Agreements, (v) in respect of letters of
credit issued for the account of such Person and (vi) all Guaranties of any of
the foregoing, but excluding, however, (b) Indebtedness in respect of trade
payables and accrued expenses incurred in the ordinary course of business.

"INDUSTRIAL FACILITY" has the meaning set forth in Section 7.12.

"INSURANCE LICENSE" has the meaning set forth in Section 4.8(b).

"INTEREST PERIOD" means, with respect to any Eurodollar Loan, the
period of one, two, three or six months duration selected by the Borrower in
either the Borrowing Request or the notice provided for pursuant to Section 2.7;
PROVIDED that (i) each Interest Period which commences on the last Business
Day of a calendar month (or on any day for

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<PAGE>

which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month, (ii) no Interest Period with respect to a Loan that begins prior
to the maturity date of the Note representing the Indebtedness created by such
Loan shall end later than the maturity date thereof, (iii) if any Interest
Period so selected would otherwise end on a day which is not a Business Day,
such Interest Period shall end on the next succeeding Business Day (or if such
next succeeding Business Day falls in the next succeeding calendar month, on the
next preceding Business Day) and (iv) subject to the foregoing clauses (i)
through (iii), only a one month Interest Period shall be available to be
selected prior to the Syndication Date, with all Advances constituting
Eurodollar Advances during such period to be outstanding pursuant to a single
Eurodollar Loan.

"INTEREST RATE AGREEMENT" means any interest rate or equity index
protection agreement, future, cap, option, swap, collar or other hedge agreement
or arrangement to fix or place a limit on the Borrower's or any of its
Subsidiaries' interest or other obligations to which the Borrower or such
Subsidiary is a party on the date hereof or becomes a party hereafter, PROVIDED
that such agreements are entered into for bona fide hedging purposes in the
ordinary course of business and not for speculative purposes.

"INVESTED ASSETS" means, at any date for the Life Insurance
Subsidiaries (on a consolidated basis), the total amount as would be shown on
line 10A, page 2, column 1 of a Statutory Statement (or the equivalent line,
page and column if the format of the Statutory Statements changes after the
Effective Date) for the Life Insurance Subsidiaries (on a consolidated basis)
prepared as of such date.

"INVESTMENT" shall mean any capital contribution, debt or other
equity security or ownership interest of any kind.

"IOWA CODE" means Code of Iowa in effect on the date hereof and as
amended and supplemented hereafter.

"INVESTMENT GRADE" means, with respect to securities, securities
having (i) with the exception of private placements, a rating assigned by S&P of
"BBB-" or better, or by Moody's of "Baa3" or better and (ii) an NAIC rating of
"1" or "2".

"IRS" means the United States Internal Revenue Service.

"LARTNEC" shall have the meaning provided in Section 3.1(l)(a).

"LEVERAGE RATIO" means, at any time and as to any Person, the
ratio of (a) Indebtedness for Money Borrowed of such Person at such time to (b)
Total Capital of such Person at such time, PROVIDED that (x) Indebtedness for
Money Borrowed of the

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<PAGE>

Borrower incurred pursuant to Section 7.1(c)(ii) shall not be included in clause
(a) hereof so long as the proceeds of such Indebtedness are used to pay
obligations in respect of other Indebtedness of the Borrower permitted
hereunder, but (y) clause (a) hereof shall include Indebtedness consisting of
Permitted Junior Debt Securities.

"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, security interest, lien (statutory
or other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction).

"LIFE INSURANCE SUBSIDIARY" means AmerUs Life, American Vanguard
Life Insurance Company and any other Subsidiary of the Borrower that is licensed
to do life insurance business, whether in existence on the Effective Date or
acquired thereafter.

"LOAN" and "LOANS" means, collectively, the Revolving Credit
Loans and the Term Loans.

"LOAN DOCUMENTS" means this Agreement, the Notes, the Pledge
Agreements, the Holdings Guaranty, the Covenant Agreement, and all other
documents, instruments and agreements executed or delivered to the
Administrative Agent and/or the Banks in connection herewith or therewith,
including all amendments, modifications and supplements of or to all such
documents, instruments and agreements.

"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the Property, business, operations, financial condition, liabilities or
capitalization of any of Group (prior to the Collateral Release Date), the
Borrower or AmerUs Life individually or the Borrower and its Subsidiaries taken
as a whole, (b) the ability of any Credit Party to perform its obligations under
any of the Loan Documents, (c) the validity or enforceability of any of the Loan
Documents, (d) the rights and remedies of the Banks or the Administrative Agent
under any of the Loan Documents, or (e) the Collateral or the validity,
perfection or priority of the security interest of the Administrative Agent
therein.

"MATERIAL LIFE INSURANCE SUBSIDIARY" shall mean each Life
Insurance Subsidiary of the Borrower which has a statutory surplus equal to or
greater than $1,000,000; PROVIDED that (i) American Vanguard Life Insurance
Company shall not be considered a Material Life Insurance Subsidiary unless and
until it has a statutory surplus equal to or greater than $15,000,000, and (ii)
CLA Assurance Company shall not be

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<PAGE>

considered a Material Life Insurance Subsidiary unless and until it has a
statutory surplus equal to or greater than $7,500,000.

"MOODY'S" means Moody's Investors Service, Inc.

"NAIC" means the National Association of Insurance Commissioners
or any successor organization thereto.

"NASD" means the National Association of Securities Dealers, Inc.

"NET AVAILABLE PROCEEDS" means (a) in the case of any Disposition,
the amount of Net Cash Payments received in connection with such Disposition;
and (b) in the case of any Equity Issuance, the aggregate amount of all cash
received by the Borrower in respect of such Equity Issuance net of reasonable
discounts, commissions and expenses incurred by the Borrower in connection
therewith.

"NET CASH AVAILABLE" means net income (loss) as determined by GAAP
plus any non-cash expenses less any non-cash revenues (in the case of any
regulated Person only to the extent permitted to be dividended by such Person).

"NET CASH PAYMENTS" means, with respect to any Disposition, the
aggregate amount of all cash payments, and the fair market value of any non-cash
consideration, received by the Borrower and its Subsidiaries directly or
indirectly in connection with such Disposition; provided that (a) Net Cash
Payments shall be net of (i) the amount of any legal, title and recording tax
expenses, commissions and other fees and expenses paid by the Borrower or its
Subsidiaries in connection with such Disposition and (ii) any federal, state and
local income or other taxes estimated to be payable by the Borrower or its
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant federal, state or local
governmental authority within three months of the date of such Disposition), and
(b) Net Cash Payments shall be net of any repayments by the Borrower or any of
its Subsidiaries of Indebtedness (other than Bank Obligations) to the extent
that such Indebtedness is secured by a Lien on the Property that is the subject
of such Disposition.

"NET WORTH" means, as to any Person, the sum of its capital stock,
capital in excess of par or stated value of shares of its capital stock,
retained earnings and any other account which, in accordance with GAAP,
constitutes stockholders equity (it being understood and agreed that (i)
treasury stock shall be subtracted in determining Net Worth, and (ii) Net Worth
shall be determined without giving effect to Financial Accounting Statement No.
115).

"1940 ACT" means the Investment Company Act of 1940, as amended.

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<PAGE>

"NON-INVESTMENT GRADE SECURITIES" means any securities (as defined
in Section 8-102(1)(c) of the Uniform Commercial Code as in effect in the State
of New York on the Effective Date) (i) that are not rated by any of S&P, Moody's
or the NAIC or (ii) that are not Investment Grade Securities.

"NON-LIFE CREDIT FACILITY" means the Credit Agreement, dated as of
May 31, 1996, among Lartnec Investment Co. (and, after the Transaction, Group),
the lending institutions party thereto, and The Chase Manhattan Bank and
Boatmen's Bank Iowa, N.A., as Arrangers and The Chase Manhattan Bank, as
Administrative Agent, as amended, supplemented, modified, refinanced or replaced
from time to time.

"NON-U.S. BANK" means any Bank which is not organized under the
laws of the United States of America or any State thereof or the District of
Columbia.

"NOTE" and "NOTES" have the meaning set forth in Section 2.3.

"OFFERING" means and includes, collectively, the Subscription
Offering, the Public Offering and the Preferred Offering.

"OTHER TAXES" has the meaning set forth in Section 9.6(b).

"PARTICIPANT" has the meaning set forth in Section 11.10(c).

"PBGC" has the meaning set forth in Section 4.13(a).

"PERMITTED INVESTMENTS" means: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by (i) any U.S.
commercial bank or trust company rated C or better by Thomson BankWatch, Inc. or
(ii) any European, Canadian or Japanese bank having assets in excess of
$30,000,000,000 and rated 3 or better by Thomson BankWatch, Inc., maturing not
more than 90 days from the date of acquisition thereof; and (c) commercial paper
rated A-1 or better or P-1 or better by Standard & Poor's Corporation or
Moody's, respectively, maturing not more than 90 days from the date of
acquisition thereof.

"PERMITTED JUNIOR DEBT SECURITIES" means unsecured, fixed-rate
subordinated debt, in an aggregate principal amount not to exceed in the
aggregate at any time prior to July 1, 1997, $100,000,000, to be issued by
the Borrower in connection with the Preferred Offering, provided that such
Indebtedness, and the agreements and other documents entered into by the
Borrower and/or any of its Subsidiaries

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<PAGE>

in connection therewith shall contain terms and conditions (including, without
limitation, with respect to the obligor and guarantors, if any, in respect of
such Indebtedness, amortization schedules, interest rates (including pay-in-kind
provisions), covenants, defaults, remedies and subordination provisions) in form
and substance satisfactory to the Administrative Agent and the Required Banks
(it being understood and agreed that terms and conditions substantially the same
as the terms and conditions of the Permitted Junior Debt Securities to be issued
pursuant to the Preferred Offering, as described in the S-1 Registration
Statement draft dated October 8, 1996, are satisfactory).

"PERSON" means any individual, corporation, partnership, trust,
limited liability company, joint stock company, trust, association, joint
venture, Governmental Authority or any other entity, and whether acting in an
individual, fiduciary or other capacity.

"PHASE I ENVIRONMENTAL REVIEW" has the meaning set forth in
Section 7.12.

"PLAN" has the meaning set forth in Section 4.13(a).

"PLEDGE AGREEMENTS" means (i) the Borrower Pledge Agreement, (ii)
the Group Pledge Agreement and (iii) any Pledge Agreement entered into by a
direct Subsidiary of the Borrower in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Banks pursuant to Section 6.12, as
the same may be amended, modified or supplemented from time to time.

"PLEDGING SUBSIDIARIES" means any Subsidiary of the Borrower which
enters into a Pledge Agreement pursuant to Section 6.12.

"POLICIES" means all insurance policies, annuity contracts,
guaranteed interest contracts and funding agreements (including riders to any
such policies or contracts, certificates issued with respect to group life
insurance or annuity contracts and any contracts issued in connection with
retirement plans or arrangements) and assumption certificates issued or to be
issued (or filed pending current review by applicable Governmental Authorities)
by any Life Insurance Subsidiary and any coinsurance agreements entered into or
to be entered into by any Life Insurance Subsidiary.

"POST-DEFAULT RATE" means, in respect of any Loan, any Advance
made with respect thereto, any installment thereof or any other amounts payable
by the Borrower hereunder or under any of the Loan Documents, not paid in full
when due (whether at stated maturity, by acceleration or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date on which such amount is paid in full equal to 2% plus the Base Rate as in
effect from time to time (PROVIDED that, if the amount so in default is
principal of a Eurodollar Loan and the due date thereof is a day other than the

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last day of the Interest Period therefor, the "Post-Default Rate" for such
principal shall be, for the period from and including such due date to but
excluding the last day of the Interest Period, 2% plus the interest rate for
such Loan as provided in Section 2.9 and, thereafter, the rate provided for
above in this definition).

"PREFERRED EQUITY ISSUANCE" means any issuance or sale by the
Borrower or any Subsidiary of the Borrower after the Effective Date of (i) any
of its capital stock (other than common stock), (ii) any warrants or options
exercisable in respect of its capital stock (other than common stock) or (iii)
any other security or instrument representing an equity interest (other than a
common equity interest), or the right to obtain such an equity interest in the
Borrower or any such Subsidiary; PROVIDED that the following shall not
constitute Preferred Equity Issuances: (x) any issuance or sale of capital
stock, warrants, options or other securities or instruments issued to, or
capital contributions by, the Borrower or any wholly owned Subsidiary of the
Borrower; (y) options or warrants issued to management of the Borrower or any of
its Subsidiaries; and (z) statutory rights and remedies of a creditor.

"PREFERRED OFFERING" means, collectively, the sale of Permitted
Junior Debt Securities of the Borrower to a Delaware statutory business trust
which constitutes a Subsidiary of the Borrower and the concurrent sale by such
Subsidiary of preferred equity securities as contemplated by the Form S-1
Registration Statement draft of October 8, 1996 filed by the Borrower with the
SEC or any subsequent filings replacing such filing or amendatory thereof.

"PRIME RATE" means the rate publicly announced by Chase from time
to time at its principal office in New York City as its prime lending rate for
domestic commercial loans. The Borrower, the Banks and the Administrative Agent
acknowledge that Chase may regularly offer domestic commercial loans at rates of
interest less than such announced prime lending rate. Each interest rate
provided for herein based upon the Prime Rate shall change when and as the Prime
Rate changes, and each such change shall take effect as of the opening of
business on the day on which any such change in the Prime Rate is publicly
announced by Chase.

"PROPERTY" means any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed, and whether tangible or
intangible.

"PSD INTEREST PERIOD" means an Interest Period commenced prior to
the Syndication Date, each of which Interest Periods must satisfy the
requirements of clause (iv) of the definition of "Interest Period".

"PUBLIC OFFERING" means the initial public offering of common
equity of the Borrower or a secondary offering of common equity of the Borrower
by Group, each

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as contemplated by the Form S-1 Registration Statement draft of November 7, 1996
filed by the Borrower with the SEC or any subsequent filings replacing such
filing or amendatory thereof.

"PURCHASE MONEY SECURITY INTEREST" has the meaning set forth in
Section 7.2(d).

"QUARTERLY DATES" means the last Business Day of each March, June,
September and December in each year, the first of which shall be the first such
day after the date of this Agreement.

"QUARTERLY STATEMENT" means, as to any Life Insurance Subsidiary,
the quarterly financial statements of such Life Insurance Subsidiary as required
to be filed with the Applicable Insurance Regulatory Authority.

"RBC INSTRUCTIONS" means the NAIC Life Risk Based Capital Report,
Overview and Instructions for Companies dated May 1, 1993, adopted by the NAIC,
as the same may be amended from time to time.

"REGULATORY CHANGE" means, with respect to any Bank, any change
after the date of this Agreement in federal or state or foreign law or
regulations (including, without limitation, Regulation D of the Federal Reserve
Board) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks including such Bank of or
under any federal or state or foreign law or regulations (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.

"REINSURANCE AGREEMENT" means any agreement, contract, treaty or
other arrangement (other than Surplus Relief Reinsurance) whereby other insurers
assume insurance from any Life Insurance Subsidiary or any Subsidiary of such
Life Insurance Subsidiary.

"REPLACED BANK" has the meaning provided in Section 9.8.

"REPLACEMENT BANK" has the meaning provided in Section 9.8.

"REQUIRED BANKS" means, at any time, Banks whose outstanding Term
Loans and Revolving Credit Commitments (or, after the Revolving Credit
Commitments have terminated, outstanding Revolving Credit Advances) equal or
exceed 66-2/3% of the sum of all outstanding Term Loans and all Revolving Credit
Commitments (or, after the

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<PAGE>

Revolving Credit Commitments have terminated, all outstanding Revolving Credit
Advances) at such time.

"REQUIREMENT OF LAW" means, as to any Person, the certificate of
limited partnership, partnership agreement, charter and by-laws, or other
organizational or governing documents of such Person, and any treaty,
constitution, law, rule, order, regulation, statute, ordinance, code, decree or
determination of any Governmental Authority, in each case applicable to, binding
upon or affecting any such Person or any of its Property or to which such Person
or any of its Property is subject.

"RESERVE REQUIREMENT" means, for any Interest Period for any
Eurodollar Loan, the average maximum rate (expressed as a decimal) at which
reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall include any other reserves required to be maintained
by such member banks by reason of any Regulatory Change against (i) any category
of liabilities which includes deposits by reference to which the Eurodollar Rate
is to be determined as provided in the definition of "Eurodollar Rate" in this
Section 1.1 or (ii) any category of extensions of credit or other assets which
includes Eurodollar Loans.

"RESPONSIBLE OFFICER" means, as to any corporation, the Chief
Executive Officer, the President, any Vice President or the Treasurer, and, with
respect to financial matters, any Senior Financial Officer, or Chief Actuary of
such corporation.

"RETROCESSION AGREEMENT" means any agreement, contract, treaty or
other arrangement (other than Surplus Relief Reinsurance) whereby any Life
Insurance Subsidiary or any Subsidiary of such Life Insurance Subsidiary cedes
reinsurance to other insurers.

"REUTERS SCREEN" means, when used in connection with any
designated page in determining the applicable Eurodollar Rate for an Interest
Period, the display page so designated on the Reuters Monitor Money Rates
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates).

"REVOLVING CREDIT ADVANCE" has the meaning set forth in Section
2.1.

"REVOLVING CREDIT COMMITMENT" means, as to each Bank, the
obligation of such Bank to make Revolving Credit Advances in an aggregate amount
up to but not exceeding (a) in the case of a Bank that is a party to this
Agreement as of the date hereof, the amount set forth opposite the name of such
Bank on Schedule 0.1 under the heading "Revolving Credit Commitment" or (b) in
the case of any other Bank, the aggregate amount

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of the Revolving Credit Commitments of other banks acquired by it pursuant to
Section 11.10(b) (in each case, as the same may be reduced from time to time
pursuant to Section 2.5 or 2.6 or increased or reduced from time to time
pursuant to Section 11.10(b)). The original aggregate principal amount of the
Revolving Credit Commitments is $75,000,000.

"REVOLVING CREDIT COMMITMENT PERIOD" means the period from and
including the Effective Date (but in no event prior to the funding of the Term
Loan) to, but excluding, the Revolving Credit Termination Date.

"REVOLVING CREDIT LOAN" has the meaning set forth in Section 2.1.

"REVOLVING CREDIT TERMINATION DATE" means the fifth anniversary of
the Effective Date, or such earlier date on which the Revolving Credit
Commitment shall terminate or be reduced to zero, whether by acceleration,
amendment or otherwise.

"RISK-BASED CAPITAL" means "Total Adjusted Capital" as defined by
the NAIC and as applied in the context of the RBC Instructions.

"S&P" means Standard & Poor's Ratings Group.

"SAP" means statutory accounting practices prescribed or permitted
by the Applicable Insurance Regulatory Authority, applied on a consistent basis.

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"STATUTORY STATEMENT" means, as to AmerUs Life or any other Life
Insurance Subsidiary, a statement of the condition and affairs of AmerUs Life or
other such Life Insurance Subsidiary, prepared in accordance with SAP and filed
with the Applicable Insurance Regulatory Authority.

"SUBSCRIPTION OFFERING" means the offering of common equity of the
Borrower to subscription policy holders as contemplated by the Form S-1
Registration Statement, draft of November 7, 1996 filed by the Borrower with the
SEC or any subsequent filings replacing such filing or amendatory thereof.

"SUBJECT PROPERTY" has the meaning set forth in Section 7.12.

"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, trust or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof voting power
to elect a majority of the

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<PAGE>

board of directors or other persons performing similar functions of such
corporation, partnership, trust or other entity (irrespective of whether or not
at the time securities or other ownership interests of any other class or
classes of such corporation, partnership or other entity shall have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person. All
references to a "Subsidiary" in this Agreement shall include predecessors in
interest to such Subsidiary. However, for all purposes, references to a
"Subsidiary" of a Person shall mean each Subsidiary of such Person after giving
effect to the Transaction.

"SURPLUS NOTE" shall mean a surplus note issued by AmerUs Life to
the Borrower in an aggregate principal amount which, when combined with the
Contribution to Surplus, shall equal $175,000,000, which note shall be in form
and substance satisfactory to the Administrative Agent.

"SURPLUS RELIEF REINSURANCE" means any transaction in which any
Life Insurance Subsidiary or any Subsidiary of such Life Insurance Subsidiary
cedes business under a reinsurance agreement that would be considered a
"financing-type" reinsurance agreement as determined by the independent
certified public accountants of such Life Insurance Subsidiary in accordance
with principles published by the Financial Accounting Standards Board or the
Second Edition of the AICPA Audit Guide for Stock Life Insurance Companies (pp.
91-92), as the same may be revised from time to time.

"SYNDICATION DATE" means the earlier of (x) the date which is 30
days after the Effective Date and (y) the date on which the Administrative Agent
determines in its sole discretion that the primary syndication has been
completed.

"TAXES" has the meaning set forth in Section 9.6(a).

"TERM ADVANCE" has the meaning set forth in Section 2.2.

"TERM LOAN" has the meaning set forth in Section 2.2.

"TERM LOAN COMMITMENT" means, as to each Bank, the obligation of
such Bank to make Term Advances in an aggregate amount up to but not exceeding
(a) in the case of a Bank that is a party to this Agreement as of the date
hereof, the amount set forth opposite the name of such Bank on Schedule 0.1
under the heading "Term Commitment" or (b) in the case of any other Bank, the
aggregate amount of the Term Commitments of other Banks acquired by it pursuant
to Section 11.10(b) (in each case, as the same may be increased or reduced from
time to time pursuant to Section 11.10(b)). The original aggregate principal
amount of the Term Commitments is $100,000,000.

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<PAGE>

"TOTAL CAPITAL" means, at any time and as to any Person, the sum
of Indebtedness for Money Borrowed of such Person and the Net Worth of such
Person at such time.

"TRANSACTION" has the meaning set forth in Section 3.1(l)(f).

"TYPE" has the meaning provided in Section 1.4.

"U.S. GOVERNMENT OBLIGATIONS" means and includes (a) securities
that are (x) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or (y) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act of 1933, as amended), as
custodian with respect to any such U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligation held
by such custodian for the account of the holder of such depository receipt;
PROVIDED, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt and (b) to the
extent in each case having an S&P rating of AAA, obligations issued or
guaranteed by the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association, the Government National Mortgage Association, the Student
Loan Marketing Association and the Federal Home Loan Bank.

Section 1.2. OTHER DEFINITIONAL PROVISIONS. (a) All terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein.

(b) The words "hereof," "hereto," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
Section, Schedule and Exhibit references contained in this Agreement are
references to Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation."

(c) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.

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<PAGE>

Section 1.3. ACCOUNTING TERMS AND DETERMINATIONS. (a) Except as
otherwise expressly provided herein, (i) all accounting terms used herein shall
be interpreted, (ii) all financial statements and all certificates and reports
as to financial matters required to be delivered to the Administrative Agent
hereunder shall (unless otherwise disclosed to the Administrative Agent and the
Banks in writing at the time of delivery thereof in the manner described in
subsection (b) below) be prepared, and (iii) all calculations made for the
purposes of determining compliance with this Agreement shall (except as
otherwise expressly provided herein) be made, in accordance with, or by
application of, GAAP or SAP, as the case may be, applied on a basis consistent
with those used in the preparation of the latest corresponding financial
statements furnished to the Administrative Agent hereunder unless (x) the
Borrower shall notify the Banks of its objection thereto at the time of delivery
of any financial statements pursuant to Section 5.3 or (y) the Required Banks
shall notify the Borrower (through the Administrative Agent) of their objection
within 30 days after the delivery of any such financial statements, in either of
which events such interpretations, statements, certificates, reports and
calculations shall be made in accordance with, or by application of, accounting
principles or accounting practices, as the case may be, on a basis consistent
with those used in the preparation of the most recent financial statements as to
which no such objection shall have been made.

(b) The Borrower shall deliver to the Administrative Agent, at the
same time as the delivery of any financial statement under Sections 5.1, 5.2 or
5.3, a description in reasonable detail of any material variation between the
application of accounting principles employed in the preparation of such
financial statement and the application of accounting principles employed in the
preparation of the next preceding applicable financial statement as to which no
objection has been made in accordance with the last sentence of subsection (a)
above, and reasonable estimates of the difference between such financial
statements arising as a consequence thereof.

(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Articles 6 and 7, the Borrower will not, and
will not permit any of its Subsidiaries existing on the date hereof (after
giving effect to the Transaction) to, change the last day of its fiscal year
from December 31 of each year, or the last days of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 and September 30 of
each year, respectively.

Section 1.4. TYPES OF LOANS. Loans hereunder are distinguished by
"Type." The "TYPE" of a Loan refers to whether such Loan is a Base Rate Loan
or a Eurodollar Loan, each of which constitutes a Type.

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ARTICLE II

AMOUNTS AND TERMS OF
REVOLVING CREDIT LOANS AND TERM LOANS

Section 2.1. REVOLVING CREDIT LOANS. Subject to the terms and
conditions of this Agreement, each Bank severally agrees to make advances (each,
a "REVOLVING CREDIT ADVANCE" and, collectively with the Revolving Credit
Advances of all the Banks in connection with a single borrowing hereunder, a
"REVOLVING CREDIT LOAN") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed such Bank's Revolving Credit Commitment;
provided, however, that (x) prior to the Syndication Date, Revolving Advances
may only be incurred as Eurodollar Loans on the first day of a PSD Interest
Period and (y) each Revolving Credit Loan shall be in an amount equal to
$5,000,000 or integral multiples of $1,000,000 in excess thereof, unless the
aggregate principal amount of the Revolving Credit Commitments is less than
$5,000,000, in which case the amount of the Revolving Credit Loan shall equal
the aggregate principal amount of the Revolving Credit Commitments. Subject to
the provisions of Sections 2.4, 2.7, 2.8, 2.9, 9.1, 9.2 and 9.3, each Revolving
Credit Loan shall bear interest from time to time at (a) the Base Rate or (b)
the Eurodollar Rate or any combination thereof as specified by the Borrower.
Subject to the terms and conditions of this Agreement, during the Revolving
Credit Commitment Period, the Borrower may borrow, repay and reborrow the
aggregate principal amount of the Revolving Credit Commitments.

Section 2.2. TERM LOAN. Subject to the terms and conditions of
this Agreement, on the Effective Date, each Bank severally agrees to make an
advance (each, a "TERM ADVANCE" and, collectively with the Term Advances of
all the Banks, the "TERM LOAN") to the Borrower, in a principal amount equal
to such Bank's Term Loan Commitment. Subject to the provisions of Sections 2.4,
2.7, 2.8. 2.9, 9.1, 9.2 and 9.3, the Term Loan shall bear interest from time to
time at (a) the Base Rate or (b) the Eurodollar Rate or any combination thereof
as specified by the Borrower. Once repaid, Term Advances may not be reborrowed.

Section 2.3. THE NOTES. All Advances made by each Bank shall be
evidenced by a promissory note of the Borrower, substantially in the form of
EXHIBIT A (as indorsed or modified from time to time, including all
replacements thereof and substitutions therefor, a "NOTE" and, collectively
with the Notes of all the Banks, the "NOTES"), payable to the order of such
Bank. Each Bank is hereby authorized to record on the schedule (and any
continuation thereof) annexed to and constituting a part of its Note (i) the
date and principal amount of each Advance it shall make, (ii) each payment,
prepayment or repayment of principal of each Advance, and (iii) the remaining
unpaid principal amount of each Advance. No failure to so record or any error
in so recording shall affect the

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obligation of the Borrower to repay the Loans, with interest thereon, as
provided herein and in the Notes.

Section 2.4. PROCEDURE FOR BORROWING. (a) Subject to the terms
and conditions of this Agreement, the Borrower may borrow (i) the Term Loan on
the Effective Date and (ii) the Revolving Credit Loans on any Business Day,
including the Effective Date, during the Revolving Credit Commitment Period, in
each case by notifying the Administrative Agent (by telephone or telecopy) no
later than 11:00 A.M., New York City time, at least three Business Days prior to
the requested Borrowing Date in the case of Eurodollar Loans, and no later than
11:00 A.M., New York City time, at least one Business Day prior to the requested
Borrowing Date in the case of Base Rate Loans, specifying (1) the aggregate
principal amounts to be borrowed under the Term Loan Commitments or the
Revolving Credit Commitments, as the case may be, (2) the requested Borrowing
Date for such Loans, (3) the Type or Types of Loans and, if more than one Type,
how such Types of Loans are to be allocated between the Term Loan and the
Revolving Credit Loan, and (4) if the Loans are to be Eurodollar Loans, the
length of the initial Interest Period for such Loans. Each such notice shall be
irrevocable and confirmed immediately by delivery to the Administrative Agent of
a Borrowing Request. In no event shall the number of Eurodollar Loans that are
outstanding at any one time and that differ from one another in terms of length
or last day of Interest Period or in terms of the Eurodollar Rate borne exceed
four with respect to Revolving Credit Loans or four with respect to Term Loans,
nor may the Borrower submit a Borrowing Request with respect to a Revolving
Credit Loan bearing interest at the Eurodollar Rate more than once every
calendar week. Any borrowing made when the aggregate principal amount of the
Commitments is less than $5,000,000 shall be a Base Rate Loan. Upon receipt of
a Borrowing Request from the Borrower, the Administrative Agent shall promptly
notify each Bank thereof. Subject to its receipt of notice of such a Borrowing
Request, each Bank will make the amount of its Commitment Percentage of each
Loan requested therein available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent set forth on the
signature pages hereof not later than 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower, in funds immediately available to the
Administrative Agent at such office. The amounts so made available to the
Administrative Agent on a Borrowing Date will then, subject to the satisfaction
of the terms and conditions of this Agreement as determined by the
Administrative Agent, be made available on such date to the Borrower by the
Administrative Agent at the office of the Administrative Agent specified on the
signature pages hereof by crediting the account of the Borrower on the books of
such office with the aggregate of said amounts received by the Administrative
Agent.

(b) Unless the Administrative Agent shall have received prior
notice from a Bank (by telephone or otherwise, such notice to be confirmed by
telecopy or other writing) that such Bank will not make available to the
Administrative Agent the amount of

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<PAGE>

such Bank's Commitment Percentage of the Loans requested by the Borrower, the
Administrative Agent may assume that such Bank has made the amount of its
Commitment Percentage of the Loans available to the Administrative Agent on such
Borrowing Date in accordance with this Section, and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
Borrowing Date a corresponding amount. If and to the extent such Bank shall not
have so made the amount of its Commitment Percentage of the Loans available to
the Administrative Agent, the parties hereto agree that (i) such corresponding
amount shall, until repaid to the Administrative Agent, be treated as a
Revolving Credit Advance or Term Advance, as the case may be, made by the
Administrative Agent for all purposes of this Agreement, and (ii) such Bank and
the Borrower severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount (to the extent not previously paid by the
other), with interest thereon, in the case of the Borrower (to the extent not
paid by such Bank), at the applicable interest rate set forth in Section 2.09
and, in the case of such Bank (to the extent not paid by the Borrower), at a
rate per annum equal to the Federal Funds Rate (as determined by the
Administrative Agent), in each case for each day from and including the date
such amount is made available to the Borrower until and excluding the date such
amount is paid to the Administrative Agent. If such Bank shall thereafter pay
to the Administrative Agent such corresponding amount, such amount so paid shall
constitute such Bank's Advance as part of such Loan for purposes of this
Agreement, which Advance shall be deemed to have been made by such Bank on the
Borrowing Date applicable to such Loan.

(c) Unless the Administrative Agent shall have received notice
from the Borrower (by telephone or otherwise, such notice to be confirmed by
telecopy or other writing) prior to the date on which any payment is due to the
Banks hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date, and the Administrative Agent, in its
sole discretion, may, but shall not be obligated to, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Borrower shall
not have so made such payment in full to the Administrative Agent, each Bank
shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Administrative Agent, at the Federal Funds Rate (as
determined by the Administrative Agent).

Section 2.5. REDUCTION OF REVOLVING CREDIT COMMITMENT.

(a) MANDATORY REDUCTIONS. The Revolving Credit Commitments shall
be terminated on the Revolving Credit Termination Date after giving effect to
any incurrence of Revolving Credit Loans on such date, and shall be reduced as
provided in Sections

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2.6(b) and 2.6(c). The Term Loan Commitments shall be terminated on the
Effective Date after giving effect to the incurrence of the Term Loans on such
date.

(b) VOLUNTARY REDUCTIONS. Prior to the Revolving Credit
Termination Date, the Borrower shall have the right, upon at least three
Business Days' prior written notice to the Administrative Agent, to reduce
permanently the aggregate principal amount of the Revolving Credit Commitments,
in whole at any time or in part from time to time, without premium or penalty
(other than as provided in Section 9.6), PROVIDED that the aggregate amount of
each partial reduction of the Revolving Credit Commitments shall be in an amount
equal to $5,000,000 or an integral multiple thereof.

(c) OTHER. The aggregate principal amount of the Revolving
Credit Commitments shall be terminated pursuant to the operation of Section 8.6
and may be terminated by the Administrative Agent pursuant to the introductory
paragraph of Article 8.

(d) NO REINSTATEMENT. The Revolving Credit Commitments, once
terminated or reduced, may not be reinstated and, if terminated, no Bank shall
have any further obligation to make any Advances hereunder.

(e) IN GENERAL. Reductions of the aggregate principal amount of
the Revolving Credit Commitments shall be applied PRO RATA according to the
Commitment Percentage of each Bank. Simultaneously with each reduction in whole
(including by termination) or in part of the aggregate principal amount of the
Revolving Credit Commitments, the Borrower shall pay the accrued Commitment
Fees, if any, on the amount by which the aggregate principal amount of the
Revolving Credit Commitments has been so reduced. In the event of any such
reduction, SCHEDULE 0.1 shall be deemed to have been correspondingly amended,
and the Administrative Agent shall promptly prepare and distribute copies of
SCHEDULE 0.1 as so amended to the Borrower and the Banks; PROVIDED,
HOWEVER, that any failure of the Administrative Agent to so distribute such
amended SCHEDULE 0.1 shall not affect the effectiveness of such amendment.

Section 2.6. PREPAYMENTS OF THE LOANS.

(a) VOLUNTARY PREPAYMENTS. Subject to Section 2.6(f), the
Borrower may, at its option, prepay the Loans in whole or in part, without
premium or penalty, at any time and from time to time upon prior written notice
to the Administrative Agent of at least three Business Days specifying the Loans
to be prepaid, the amount to be prepaid and the date of prepayment. Upon
receipt of such notice, the Administrative Agent shall promptly notify each Bank
thereof. If any such notice of the Borrower is given pursuant to this Section
2.6(a), such notice shall be irrevocable, and the amount of such prepayment
specified in such notice shall be due and payable on the date specified.
Voluntary partial

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<PAGE>

prepayments of the Loans shall be in an aggregate principal amount of $2,500,000
or an integral multiple of $500,000 in excess thereof or, if less, the
outstanding principal balance of the Loans.

(b) MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS RELATING TO
ASSET SALES. If, on any date after the Effective Date, the Borrower or any of
its Subsidiaries shall make any Disposition, other than a Disposition permitted
under Section 7.10(a), (b), (c), (d) or (e), the Borrower shall promptly notify
the Administrative Agent of such Disposition, including the amount of Net
Available Proceeds received by the Borrower or any Subsidiary in respect of such
Disposition (and the amount and other type of consideration so received) and the
Borrower shall apply an amount equal to such Net Available Proceeds promptly
after the receipt from time to time of such Net Available Proceeds as set forth
below. Such amounts shall be applied first as a prepayment of the Term Loans
and, to the extent the Net Available Proceeds of any such Disposition exceed the
amount of the Term Loans then outstanding, or, at the time of such Disposition,
the Term Loans shall have been paid in full, such Net Available Proceeds shall
next be applied to reduce the Revolving Credit Commitments.

(c) MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS RELATING TO
EQUITY ISSUANCES. (i) Upon consummation of any Equity Issuance (including in
connection with the Offering), the Borrower shall promptly notify the
Administrative Agent of such Equity Issuance, including the amount of Net
Available Proceeds received by the Borrower or any Subsidiary in respect of such
Equity Issuance (and the amount and other type of consideration so received) and
the Borrower shall apply the Net Available Proceeds thereof as set forth in
clause (ii) below, PROVIDED that, from and after the date on which the
Borrower shall have paid an aggregate amount of $50,000,000 of the Term Loans,
(x) the Borrower shall not be required to apply further proceeds pursuant to
this clause (i) to the extent received from a Preferred Equity Issuance
consummated prior to June 30, 1997 and to the extent received from a Preferred
Equity Issuance thereafter, shall only be required to apply further Net
Available Proceeds in an aggregate amount equal to 50% of such Net Available
Proceeds, and (y) the Borrower shall not be required to apply further proceeds
pursuant to this clause (i) to the extent received from any Common Equity
Issuance.

(ii) Each amount required to be applied pursuant to this Section
2.6(c) shall be applied first as a prepayment of the Term Loans and, to the
extent such required prepayment exceeds the amount of the Term Loans then
outstanding, or, at the time of such Equity Issuance, the Term Loans shall have
been paid in full, such amount shall next be applied to reduce the Revolving
Credit Commitments.

(d) MANDATORY PREPAYMENTS RELATING TO REDUCTION OF REVOLVING
CREDIT COMMITMENT. If at any time, including after giving effect to any
reduction of the aggregate

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Revolving Credit Commitments pursuant to Section 2.5 or 2.6, the aggregate
outstanding principal amount of the Revolving Credit Loans would exceed the
aggregate Revolving Credit Commitments, the Borrower shall prepay the Revolving
Credit Loans in the amount of such excess on such date.

(e) APPLICATION OF PREPAYMENTS. All prepayments of the Loans
shall be applied as follows:

(i) Each prepayment of the Revolving Credit Loans shall be applied
to the reduction of the outstanding principal balances of such Revolving
Credit Loans as shall be selected by the Borrower at the time of such
prepayment (or, in the absence of such selection, as the Administrative
Agent shall designate) and, as to such selected or designated Revolving
Credit Loans shall be applied to the reduction of the outstanding
principal balances of the Advances comprising part of such Revolving
Credit Loans ratably in proportion to their outstanding principal amounts;
and

(ii) Each prepayment of the Term Loans shall be applied to the
reduction of the outstanding principal balance of the Advances comprising
part of the Term Loans ratably in proportion to their outstanding
principal amounts; and with respect to each Term Loan and the Advances
comprising such Term Loan such prepayment shall be applied to reduce the
remaining principal installments thereof as set forth in Section 2.9(a) on
a PRO RATA basis, based upon the then remaining amount of each such
principal installment.

(f) IN GENERAL. All prepayments made pursuant to this Section
2.6 shall be made together with accrued interest to the date of such prepayment
on the amount so prepaid. In addition, if any prepayment is made under this
Section 2.6 with respect to any Eurodollar Loan, in whole or in part, prior to
the last day of the applicable Interest Period, the Borrower shall indemnify the
Banks in accordance with Section 9.5. All prepayments of Term Loans or
Revolving Credit Loans under this Section 2.6 shall be applied, first, to the
portion (if any) of such Loans outstanding as Base Rate Loans, and second, to
the portion (if any) of such Loans outstanding as Eurodollar Loans. The
Administrative Agent is hereby authorized to prepare and distribute to the
Borrower and each Bank, for informational purposes, new schedules of
installments of principal due on the Notes after the application of prepayments.

Section 2.7. CONVERSIONS. (a) The Borrower may elect from time
to time to convert a Loan or Loans of one Type to a Loan or Loans of any other
Type, or to convert a Eurodollar Loan to a new Eurodollar Loan by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election, specifying the amount to be so converted and the Conversion Date,
provided, that (x) any such conversion

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of a Eurodollar Loan to a Base Rate Loan or a new Eurodollar Loan shall only be
madeon the last day of the Interest Period applicable to such Eurodollar Loan
and (y) no conversion of a Base Rate Loan to a Eurodollar Loan or of a
Eurodollar Loan to a new Eurodollar Loan may be made prior to the Syndication
Date, except for a conversion made on the first day of a PSD Interest Period.
The Administrative Agent shall promptly provide the Banks with notice of any
such election. Loans may be converted pursuant to this Section 2.7(a) in whole
or in part, provided that each such conversion shall be in the principal amount
of at least $5,000,000 or an integral multiple of $1,000,000 in excess thereof.

(b) Notwithstanding anything in this Section 2.7 to the contrary,
upon the election of the Administrative Agent, or at the direction of the
Required Banks, no Base Rate Loans may be converted to Eurodollar Loans and no
Eurodollar Loan may be converted to a new Eurodollar Loan, if an Event of
Default has occurred and is continuing at the time the Borrower shall notify the
Administrative Agent of its election to make such conversion. In the event of
such election or direction, all Base Rate Loans shall be automatically continued
as Base Rate Loans, and all existing Eurodollar Loans shall be automatically
converted to Base Rate Loans on the last days of the respective Interest Periods
applicable to such existing Eurodollar Loans.

(c) Each conversion (including any automatic conversions under
Section 2.7(b) or 2.8) shall be effected by each Bank's applying the proceeds of
its new Base Rate Advance or Eurodollar Advance, as the case may be, to the
existing Advance (or portion thereof) being converted (it being understood that
such conversion shall not constitute an Advance for purposes of Article III or a
reduction for purposes of Section 2.5.

Section 2.8. AGGREGATION OF LOANS. On any date on which the
principal amount of any Eurodollar Loan shall be reduced, by payment or
prepayment or otherwise, to less than $5,000,000, such Loan shall automatically
convert to a Base Rate Loan; provided, however, that if any such Eurodollar Loan
shall, together with any other outstanding Eurodollar Loan or Loans, with the
same Interest Period, have an aggregate principal amount equalling or exceeding
$5,000,000, the Borrower shall have the right to continue such Eurodollar Loans
as one Eurodollar Loan.

Section 2.9. PAYMENTS OF PRINCIPAL AND INTEREST.

(a) PRINCIPAL PAYMENTS. The Borrower promises to repay to the
Administrative Agent for the account of the Banks:

(i) subject to reduction as set forth in Section 2.6(e)(ii), the
aggregate principal amount of the Term Loans in ten equal semiannual
installments of

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$10,000,000 each, commencing on the date occurring six months after the
Effective Date and on each date occurring six months thereafter; and

(ii) the lesser of $75,000,000 or the aggregate principal amount
of the Revolving Credit Loans outstanding on the Revolving Credit
Termination Date.

(b) INTEREST RATE. The Borrower promises to pay to the
Administrative Agent for the account of the Banks interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan shall be paid in full at the following rates per annum:

(i) during such periods that such Loan (or any portion thereof)
is a Base Rate Loan, as to such Loan or portion thereof, as the case may
be, the Base Rate shall be computed on the basis of a 360 day year, for
actual days elapsed (including the first day but excluding the last); and

(ii) during such periods that such Loan (or any portion thereof)
is a Eurodollar Loan, as to such Loan or portion thereof, as the case may
be, the Eurodollar Rate for the applicable Interest Period shall be
computed on the basis of a 360 day year, for actual days elapsed
(including the first day but excluding the last).

Notwithstanding the foregoing, the Borrower promises to pay to the
Administrative Agent for the account of the Banks interest on any Loan or any
installment thereof, and on any other amounts (including, to the extent
permitted by applicable law, interest), payable by the Borrower hereunder or
under any other Loan Document, which shall not be paid in full when due (whether
on demand, at stated maturity, by acceleration or otherwise) for the period
commencing on the due date thereof until the same is paid in full (and whether
before or after judgment or after the commencement of bankruptcy, insolvency or
similar proceedings with respect to the Borrower) at the applicable Post-Default
Rate.

(i) As to any Base Rate Loan, quarterly on the Quarterly Dates,
on the payment or prepayment thereof and, if it is converted into a
Eurodollar Loan, on the Quarterly Date next succeeding the date of such
conversion (but only on the principal so paid, prepaid or converted).

(ii) As to any Eurodollar Loan, the last day of the Interest
Period selected by the Borrower for such Eurodollar Loan (and if such
Interest Period exceeds three months duration, on each Quarterly Date
during such Interest Period)

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and on the payment or prepayment thereof or the conversion thereof into a
Base Rate Loan or new Eurodollar Loan (but only on the principal so paid,
prepaid or converted).

(iii) Interest payable at the Post-Default Rate shall be payable
from time to time on demand of the Administrative Agent or the Required
Banks.

(d) COMPUTATION. Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Banks in the absence of manifest
error, and, upon the request of the Borrower, the Administrative Agent shall
provide the Borrower with a writing setting forth such determination in
reasonable detail.

Section 2.10. USE OF PROCEEDS. The Borrower shall use the proceeds
of the Term Loans and the Revolving Credit Loans incurred on the Effective Date
(i) to fund the Contribution to Surplus and (ii) to advance funds to AmerUs Life
in exchange for the Surplus Note, in an aggregate amount for (i) and (ii) above
equal to $175,000,000. The Borrower shall use the proceeds of Revolving Credit
Loans incurred after the Effective Date for general corporate purposes.

Section 2.11. FEES.

(a) COMMITMENT FEE. The Borrower shall pay to the Administrative
Agent for the account of each Bank the Commitment Fee in arrears, on (i) each
Quarterly Date, (ii) the earlier of the date the Revolving Credit Commitment of
each Bank is terminated and the Revolving Credit Termination Date, and (iii)
each date on which the aggregate principal amount of the Revolving Credit
Commitments is reduced (to the extent the Commitment Fee is accrued and unpaid
on the amount so reduced).

(b) OTHER FEES. The Borrower shall pay to the Administrative
Agent and/or the Banks, for their respective accounts, when and as due, such
fees as have been, or are from time to time, separately agreed upon.

Section 2.12. PAYMENTS. (a) Except to the extent otherwise
provided herein, all payments of principal, interest and other amounts to be
made by the Borrower under this Agreement and the Notes shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at account number 323-5-09568
maintained by the Administrative Agent at Chase at One Chase Manhattan Plaza,
8th Floor, New York, New York 10081, not later than 12:00 Noon, New York time on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day).

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(b) The Borrower shall, at the time of making each payment under
this Agreement or any Note, specify to the Administrative Agent (which shall so
notify the intended recipient(s) thereof) the Loans or other amounts payable by
the Borrower hereunder to which such payment is to be applied pursuant to the
terms hereof. In the event that it fails to so specify, the Administrative Agent
shall instruct the Banks as to such application, unless an Event of Default has
occurred and is continuing, in which case each Bank may apply the amount of such
payment received by it from the Administrative Agent in such manner as such Bank
may determine to be appropriate.

(c) Each payment received by the Administrative Agent under this
Agreement or any Note for account of any Bank shall be paid by the
Administrative Agent promptly to such Bank, in immediately available funds, for
account of such Bank's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.

(d) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day which is not a Business Day, such date shall
be extended to the next succeeding Business Day and interest shall be payable
for any principal so extended for the period of such extension, except as
otherwise provided for interest on Eurodollar Loans.

Section 2.13. PRO RATA TREATMENT. Except to the extent otherwise
provided herein: (a) each Revolving Credit Loan made hereunder shall be made by
the Banks, each payment of fees under Section 2.11(a) shall be made for account
of the Banks, and each termination or reduction of the aggregate principal
amount of the Revolving Credit Commitments shall be applied to the respective
Revolving Credit Commitments of the Banks, PRO RATA according to the amounts
of their respective Revolving Credit Commitments; (b) the making and conversion
of Loans of a particular Type (other than conversions provided for by Section
9.4) shall be made PRO RATA among the Banks according to the amounts of
their respective relevant Revolving Credit or Term Loan Commitments, as the case
may be (in the case of making of Loans) or their Advances with respect to the
relevant Loan (in the case of conversions of Types of Loans); (c) each payment
or optional or mandatory prepayment of principal of Loans by the Borrower
(except as otherwise provided in Section 9.4) shall be made for account of the
Banks PRO RATA in accordance with the respective unpaid principal amounts of
the Loans held by them; and each payment of interest on Loans by the Borrower
shall be made for account of the Banks pro rata in accordance with the amounts
of interest on such Loans then due and payable to the respective Banks.

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ARTICLE III

CONDITIONS PRECEDENT

Section 3.1. INITIAL LOAN. The obligation of each Bank to make
its Advance with respect to the Term Loan and the initial Revolving Credit
Loan hereunder is subject to the following conditions precedent and the
conditions precedent set forth in Section 3.2:

(a) NOTES. The Borrower shall have duly executed and delivered
to the Administrative Agent a Note in favor of each Bank.

(b) PLEDGE AGREEMENTS. The Administrative Agent shall have
received (i) a Borrower Pledge Agreement, duly executed and delivered by the
Borrower, together with all Pledged Securities (as defined therein), and stock
powers or endorsements, as the case may be, (ii) a Group Pledge Agreement duly
executed and delivered by Group together with all Pledged Securities (as defined
therein) and stock powers or endorsements, as the case may be and (iii) to the
extent the provisions of Section 6.12 are then applicable, a Pledge Agreement,
duly executed and delivered by each Pledging Subsidiary, together with all
Pledged Securities (as defined therein) and stock powers or endorsements, as the
case may be.

(c) FILINGS, REGISTRATIONS AND RECORDINGS. Any documents
(including, without limitation, financing statements) required to be filed,
registered or recorded under each Pledge Agreement shall have been properly
filed, registered or recorded in each office in each jurisdiction in which such
filing, registration or recording is required in order to create in favor of the
Administrative Agent for the ratable benefit of the Administrative Agent and the
Banks a perfected first Lien on the collateral described in each Pledge
Agreement; the Administrative Agent shall have received acknowledgment copies of
all such filings, registrations, and recordings stamped by the appropriate
filing, registration or recording officer (or, in lieu thereof, other evidence
satisfactory to the Administrative Agent that all such filings, registrations
and recordings have been made or are in the process of being made); the
Administrative Agent shall have received evidence that all necessary filing,
subscription and inscription fees and all recording and other similar fees, and
all taxes and other expenses related to such filings, registrations and
recordings have been paid in full.

(d) COVENANT AGREEMENT. The Administrative Agent shall have
received a Covenant Agreement duly executed and delivered by Group.

(e) HOLDINGS GUARANTY. The Administrative Agent shall have
received a Holdings Guaranty duly executed and delivered by each of AMHC and
Group.

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(f) ORGANIZATIONAL AND OTHER DOCUMENTS. The Administrative
Agent shall have received true and complete copies of each of the following
documents (accompanied by a certificate of a Responsible Officer of the
respective Person to which such document relates, dated the Effective Date, to
such effect):

(i) The certificate of incorporation of AMHC, Group, the Borrower
and each of the Subsidiaries of the Borrower, together with all amendments
thereto, certified by the Secretary of State of the state of the
incorporation thereof not earlier than thirty days prior to the Effective
Date; and

(ii) The by-laws of AMHC, Group, the Borrower and each of the
Subsidiaries of the Borrower, together with all amendments thereto.

(g) CORPORATE PROCEEDINGS. The Administrative Agent shall have
received documents representing corporate action taken by AMHC, Group, the
Borrower and each Pledging Subsidiary (if any), in form and substance reasonably
satisfactory to the Administrative Agent, authorizing (x) the execution,
delivery and performance of the Loan Documents, (y) the consummation of the
transactions contemplated hereby and (z) the borrowings hereunder and the
granting of the Liens pursuant to the Pledge Agreements, certified as of the
Effective Date by the Secretary or an Assistant Secretary of AMHC, Group, the
Borrower or such Pledging Subsidiary, as the case may be. Such certification
shall also state that the authorizations set forth therein have not been
amended, modified, revoked or rescinded as of the date of such certificate and
remain in full force and effect.

(h) INCUMBENCY CERTIFICATES. The Administrative Agent shall
have received a certificate of the Secretary or the Assistant Secretary of AMHC,
Group, the Borrower and each Pledging Subsidiary (if any), dated the Effective
Date, as to the incumbency, authority and signature of the officers of AMHC,
Group, the Borrower or such Subsidiary, as the case may be, together with
evidence of the incumbency of such Secretary or Assistant Secretary. The
Administrative Agent and the Banks may conclusively rely on such incumbency
certificate as to all notices required hereunder until they receive notice in
writing from AMHC, Group, the Borrower or such Pledging Subsidiary to the
contrary.

(i) LEGAL OPINIONS. The Administrative Agent shall have
received opinions with respect to the transactions contemplated hereby from the
following counsel, each of which opinions shall be dated the Effective Date and
shall be in form and substance reasonably satisfactory to the Administrative
Agent, the Required Banks and their counsel:

(i) Joseph Haggerty, Esq., counsel to the Borrower; and

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(ii) Any other counsel whose opinion the Administrative Agent or
the Required Banks reasonably determine to be necessary or desirable.

(j) CONSENTS. The Administrative Agent shall have received the
original, or a copy, certified by a Responsible Officer of the Borrower, of each
consent or approval of any Person, including, without limitation, any insurance
regulatory authority that has or asserts jurisdiction over AMHC, Group, the
Borrower, its Subsidiaries, the Transaction or the other transactions
contemplated by the Loan Documents which has been obtained in connection with
the transactions contemplated by the Loan Documents (including the granting of
the Liens and other agreements pursuant to the Pledge Agreements) or is
otherwise required for the validity of the Loan Documents and the enforcement
thereof in accordance with their respective terms (including, without
limitation, for the validity, perfection and enforceability of the Liens and
security interests granted by the Pledge Agreements), all of which consents and
approvals shall be in full force and effect and be reasonably satisfactory in
form and substance to the Administrative Agent and the Required Banks.

(k) GOOD STANDING CERTIFICATES. The Administrative Agent shall
have received a good standing certificate, dated not earlier than thirty days
prior to the Effective Date, with respect to AMHC, Group, the Borrower and each
of its Subsidiaries except for Centralife Annuities Service, Inc., from the
Secretary of State or the Department of Insurance, as the case may be, of the
State of Iowa.

(l) THE TRANSACTION. (i) On or prior to the Effective Date,

(A) (I) AmerUs Financial Services, Inc. ("AFS") and Lartnec
Investment Co. ("Lartnec") shall have contributed a substantial portion of
their assets to their subsidiaries referred to in clause (D) below and
(ii) AFS shall have merged with and into Lartnec;

(B) Group shall have assumed certain of the obligations of Lartnec
(including, without limitation, its obligations under the Non-Life Credit
Facility);

(D) AmerUs Life shall have spun-off its non-life subsidiaries to
Group after giving effect to which such subsidiaries shall be owned,
directly or indirectly, by Group but shall not be subsidiaries of the
Borrower;

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(E) Group shall have transferred to the Borrower 100% of the capital
stock of AmerUs Life and the Borrower shall be the legal and beneficial
owner of such stock free and clear of any lien or any adverse claim; and

(F) concurrently with the incurrence of Loans hereunder on the
Effective Date, the Borrower shall have (I) contributed a portion of the
proceeds of same to the capital of AmerUs Life (such contribution, the
"Contribution to Surplus") and (II) advanced a portion of the proceeds of
the same to AmerUs Life in exchange for the Surplus Note, with the amount
applied pursuant to (I) and (II) to equal $175,000,000 (the transactions
described in clauses (A) through (F) above, collectively, the
"Transaction").

(ii) On or before the Effective Date, the Administrative Agent
shall have received true and complete copies of each of the documents governing
or evidencing all or a portion of the Transaction, and such documents shall be
satisfactory in form and substance to the Administrative Agent and the Required
Banks, and all terms and conditions of the Transaction shall be satisfactory to
the Administrative Agent and the Required Banks and in compliance with all
applicable laws and regulations.

(m) NON-LIFE CREDIT FACILITY AMENDMENT. Lartnec, Group and the
lenders under the Non-Life Credit Facility shall have entered into an amendment
thereto permitting the Transaction (including, without limitation, Group's
assumption of all of Lartnec's obligations with the Non-Life Credit Facility)
and such amendment shall be in form and substance satisfactory to the
Administrative Agent and the Required Banks.

(n) FEES. The Borrower shall have paid all costs, fees and
expenses, and all other compensation in respect of this Agreement and the
transactions contemplated hereby, due to the Administrative Agent or the Banks
(including, without limitation, legal fees and expenses of the Administrative
Agent payable under Section 11.1), to the extent then due and payable.

(o) IOWA REGULATIONS. The Administrative Agent shall have
received true and complete copies of the final regulations under Section 521A.14
of the Iowa Insurance Code and the Administrative Agent and the Required Banks
shall be satisfied with such regulations.

Section 3.2. FURTHER CONDITIONS. The obligation of each Bank to
make its Advance with respect to each Loan shall be subject to the following
conditions precedent:

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(a) No Default or Event of Default shall have occurred and be
continuing or shall occur by reason of the making of such Loan and the use
of the proceeds thereof.

(b) The representations and warranties contained in Article 4 of
this Agreement or in the Loan Documents shall be, and the making of a
request for a Loan hereunder shall be a representation by the Borrower to
the Administrative Agent and the Banks that the same are, true and
complete in all material respects as of the date of such Loan (after
taking into account changes permitted by the Loan Documents), after giving
effect to such Loan and the use of the proceeds thereof, with the same
effect as though such representations and warranties had been made on and
as of such date (unless any such representation or warranty is stated to
relate to a specific earlier date, in which case such representation or
warranty shall have been true and correct in all material respects as of
such earlier date).

(c) The Borrower shall have delivered to the Administrative Agent
a Borrowing Request, duly completed and executed by a Responsible Officer
of the Borrower, and a certificate signed by such officer with respect to
the foregoing provisions of this Section 3.2. It shall be a condition
precedent to the obligation of the Banks to make such Loan that the
matters so certified are in fact true and complete as of the date of such
certificate and as of the date of the Loan (provided that any
representation or warranty contained therein stated to relate to a
specific earlier date shall have been true and correct in all material
respects as of such earlier date).

(d) The Administrative Agent shall have received such additional
information and materials as it has reasonably requested.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

In order to induce the Administrative Agent and the Banks to enter
into this Agreement and make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and the Banks that:

Section 4.1. CORPORATE EXISTENCE OF THE BORROWER AND ITS
SUBSIDIARIES; AUTHORITY. Except to the extent not reasonably expected to have
a Material Adverse Effect, each of the Borrower and its Subsidiaries (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (b) has all necessary corporate power
and authority necessary to entitle it to use its name, to own, lease or
otherwise hold its properties and assets, to carry on its business as currently

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conducted and to perform its obligations, (c) is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which the conduct of its business requires such qualification, and (d) is in
compliance with all Requirements of Law.

Section 4.2. AUTHORITY; CONSENTS. (a) The Borrower has full
corporate power and authority to execute, deliver and perform each of the Loan
Documents to which it is a party and to borrow hereunder, and has taken all
necessary corporate and other action (x) to authorize the borrowings hereunder
on the terms and conditions of this Agreement and the Notes, (y) to authorize
the execution, delivery and performance of each of the Loan Documents to which
it is a party, and (z) to grant the Liens to be created pursuant to the Pledge
Agreement to which it is a party.

(b) Each Pledging Subsidiary has full corporate power and
authority to execute, deliver and perform the Pledge Agreement to which it is a
party and has taken all necessary corporate and other action to authorize the
execution, delivery and performance of the Pledge Agreement to which it is a
party and to grant the Liens to be created thereby.

(c) Except as shall have been obtained and set forth on SCHEDULE
4.2, no consent or approval of any Person, no waiver of any Lien or right of
distraint or other similar right, and no consent, license, approval,
authorization or declaration of, filing with or other act by or in respect of
any Governmental Authority, was, is or will be required in connection with the
borrowings hereunder or the execution, delivery, performance, validity,
enforceability, or priority of the Loan Documents (or any Lien created or
granted thereunder) in accordance with their terms.

(d) Each Life Insurance Subsidiary is able to lend up to the
Borrower an amount up to one dollar ($1.00) less than 3% of the assets of such
Life Insurance Subsidiary as set forth in the proviso in the definition of "Cash
Flow" contained in Section 1.1. No consent, license, approval, authorization or
declaration of, filing with or other act by or in respect of any Governmental
Authority, was, is or will be required in connection with such loans.

Section 4.3. NO LEGAL BAR. The execution, delivery and
performance of the Loan Documents, the borrowings hereunder and the use of the
proceeds thereof, and the granting and enforcement of the Liens pursuant to the
Pledge Agreements in accordance with their respective terms, (a) will not
violate, conflict with, result in a breach of, or create (with or without the
giving of notice or lapse of time, or both) a default under, any Requirement of
Law, including, without limitation, any state or federal insurance laws or
regulations, Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System, the Securities Act, the Exchange Act, the 1940 Act, or any rule,
regulation or order of any Governmental Authority or any Contractual Obligation
of the Borrower or any Subsidiary of the Borrower, and (b) will not (with or
without the giving of notice or lapse

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of time, or both) result in or require the creation or imposition of any Lien
upon any of the Property owned by or used in connection with the business of the
Borrower or any Subsidiary of the Borrower except for the Liens created and
granted to the Administrative Agent for the benefit of the Administrative Agent
and the Banks, pursuant to the Pledge Agreements.

Section 4.4. DUE EXECUTION; BINDING EFFECT. This Agreement has
been, and each of the other Loan Documents has been or, on or prior to the
Effective Date, will be, duly executed and delivered by the Borrower, AMHC,
Group or the Pledging Subsidiaries, as the case may be, and each such document
constitutes, or upon such execution and delivery will constitute, the valid and
legally binding obligation of the Borrower, AMHC, Group or such Pledging
Subsidiary, as the case may be, enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally.

Section 4.5. STATUTORY STATEMENTS; FINANCIAL STATEMENTS. (a) The
Borrower has delivered to the Administrative Agent complete and correct copies
of: (i) the audited financial statements of American Mutual for the fiscal year
ended December 31, 1995; (ii) the pro forma financial statements of the Borrower
contained in the Form S-1 Registration Statement draft dated November 6, 1996;
(iii) the Annual Statement of American Mutual filed with the Insurance
Department of the State of Iowa for the years ended December 31, 1994 and 1995,
together with the exhibits and schedules thereto, the Statement of Actuarial
Opinion, any affirmations and certifications filed therewith and any
Management's Discussion and Analysis prepared in connection therewith; and (iv)
the Quarterly Statement of American Mutual for the period ended March 31, 1996
and the Quarterly Statements of AmerUs Life for the periods ended June 30, 1996
and September 30, 1996, filed with the Insurance Department of the State of Iowa
together with the exhibits and schedules thereto.

(b) The financial statements of American Mutual for the period
specified in Section 4.5(a)(i) have been examined by KPMG Peat Marwick,
independent certified public accountants, who delivered an opinion in respect
thereof, which opinion was not qualified as to the scope of the audit or the
status of the Borrower as a going concern, and present fairly in all material
respects the financial condition of American Mutual at such date, and its
results of operations and cash flows for the period then ended. All such
financial statements have been prepared in accordance with GAAP consistently
applied except to the extent provided in the notes to said financial statements.
The pro forma financial statements of the Borrower for the period specified in
Section 4.5(a)(ii) present fairly in all material respects the pro forma
financial condition of the Borrower at the date of such financial statements and
based upon the specified assumptions therein. The Statutory Statements of
American Mutual for the periods specified in Section

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4.5(a)(iii): (i) have been prepared in accordance with SAP (except as set forth
in the notes, exhibits or schedules thereto); (ii) present fairly in all
material respects, to the extent required and in conformity with SAP, the
financial condition of American Mutual at their respective dates, and its
results of operations, changes in capital and surplus, and cash flows for each
of the periods then ended; (iii) were correct in all material respects when
filed; and (iv) had no material omissions therefrom when filed. Neither the
Borrower nor any of its Affiliates (including any predecessor thereof) has
received written notice from the Iowa Commissioner of Insurance asserting any
material deficiency with respect to the Statutory Statements of American Mutual
nor, to the knowledge of the Borrower, has the Iowa Commissioner of Insurance
threatened to assert any such material deficiency.

(c) All books of account of the Borrower and its Subsidiaries
fully and fairly disclose all of the material transactions, properties, assets,
investments, liabilities and obligations of the Borrower and its Subsidiaries
and all of such books of account are in the possession of the Borrower and its
Subsidiaries and are true, correct and complete in all material respects.

(d) The investments of American Mutual reflected in the Statutory
Statements for the periods specified in Section 4.5(a)(iii) complied in all
material respects, as of the dates of such statements, with the applicable
requirements of the Iowa Department of Insurance and of the insurance regulatory
authorities of any other applicable jurisdiction relating to investments in
respect of which it may invest its funds.

(e) The provisions made by American Mutual in its Statutory
Statements for the periods specified in Section 4.5(a)(iii) for reserves, policy
and contract claims and statutory liabilities complied in all material respects,
as of the dates of such statements, with the applicable requirements of the Iowa
Department of Insurance and of the insurance regulatory authorities of any other
applicable jurisdiction, and have been computed in accordance with SAP.

(f) Marketable securities and debt instruments with remaining
maturities of 60 days or less reflected in the Statutory Statements of American
Mutual for the periods specified in Section 4.5(a)(iii) are valued at cost,
amortized cost or market value or as otherwise permitted by Applicable Laws as
of the date of such statements.

(g) As of the Effective Date, there are no liabilities of the
Borrower or any of its Subsidiaries, fixed or contingent, which are material but
are not reflected in the financial statements for American Mutual referred to in
Section 4.5(a)(i) or the Form S-1 referred to in Section 4.5(a)(ii), other than
(i) liabilities arising in the ordinary course of business since December 31,
1995 and (ii) the liabilities listed on SCHEDULE 4.5(g) hereto. No information,
exhibit, or report furnished by the Borrower or its Subsidiaries to the
Administrative Agent or any Bank in connection with the negotiation of this
Agreement and

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the other Loan Documents contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, and at the
time they were made, not materially misleading.

Section 4.6. NO CHANGE. Since December 31, 1995, there has been no
material adverse change in the business, operations, assets, properties,
condition, financial or other, of the Borrower, AmerUs Life or of the Borrower
and its Subsidiaries taken as a whole.

Section 4.7. CAPITALIZATION; SUBSIDIARIES. As of the Effective
Date, after giving effect to the transaction, the authorized capital stock of
the Borrower consists of (i) 75,000,000 shares of Class A common stock, no par
value per share, and 50,000,000 shares of Class B common stock, [no] par value
per share, and, prior to the Offering, 14,500,000 shares of Class A Common Stock
and 5,000,000 shares of Class B Common Stock are issued and outstanding and, in
each case, owned by Group free and clear of Liens (other than Liens created
pursuant to the Pledge Agreements) and after the Offering, approximately
17,375,000 shares of Class A Common Stock are issued and outstanding of which
approximately 66.9% remain owned by Group free and clear of Liens and 5,000,000
shares of Class B Common Stock are issued and outstanding of which 100% remain
owned by Group free and clear of all Liens. Set forth on SCHEDULE 4.7 is a
complete and correct list, as of the Effective Date, of all of the Subsidiaries
of the Borrower, together with, for each such Subsidiary, (i) the jurisdiction
of organization of such Subsidiary, (ii) the number of authorized and issued
shares of each class of capital stock of such Subsidiary, (iii) each Person
holding ownership interests in such Subsidiary and (iv) the nature of the
ownership interests held by each such Person and the percentage of ownership of
such Subsidiary represented by such ownership interests. Except as disclosed on
SCHEDULE 4.7, as of the Effective Date (a) each of the Borrower and its
Subsidiaries owns, free and clear of Liens (other than Liens created pursuant to
the Pledge Agreements), and has the unencumbered right to vote, all outstanding
ownership interests in each Subsidiary shown to be held by it on SCHEDULE 4.7,
(b) all of the issued and outstanding capital stock of each such Subsidiary that
is organized as a corporation is validly issued, fully paid and nonassessable
and (c) there are no outstanding Equity Rights with respect to such Subsidiary.

Section 4.8. PATENTS, TRADEMARKS, INSURANCE LICENSES, ETC. (a)
The Borrower and its Subsidiaries own or possess all patents, trademarks,
trademark rights, trade names, trade name rights and copyrights and all
franchises, permits and licenses (including the Insurance Licenses, as defined
below) necessary to conduct their respective businesses, each of which is in
full force and effect.

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(b) As of the Effective Date, SCHEDULE 4.8 sets forth a true,
correct and complete list of: (a) each of the jurisdictions in which each Life
Insurance Subsidiary is duly licensed and in good standing to write insurance
(each, an "INSURANCE LICENSE"); (b) the lines of insurance that each Life
Insurance Subsidiary is authorized to write in such jurisdictions (including a
notation as to any restriction that may exist with respect to any of the
Insurance Licenses); and (c) the dates of expiration of each of the Insurance
Licenses. No event has occurred that, with or without notice or lapse of time
or both, could reasonably be expected to result in the revocation or restriction
of any of the Insurance Licenses, and none of the Life Insurance Subsidiaries is
transacting any insurance or reinsurance business in any jurisdiction requiring
a license or qualification therefor in which it does not possess such a license
or qualification; in each case to the extent reasonably likely to have a
Material Adverse Effect.

Section 4.9. LITIGATION. There are no outstanding judgments, and
no actions, investigations or proceedings of or before, and no complaints lodged
with, any Governmental Authority are pending or, to the best knowledge of the
Borrower, threatened, by or against or affecting the Borrower, any of its
Subsidiaries, any of their Properties or revenues, except for (a) actions,
investigations and proceedings in which the relief sought is the payment of
money and the amounts involved do not exceed $500,000 individually or $2,000,000
in the aggregate and (b) as set forth on SCHEDULE 4.9 which may be amended
from time to time in the future to reflect new actions, investigations or
proceedings. No such outstanding judgments, actions, investigations or
proceedings (whether or not in excess of $500,000 individually or $2,000,000 in
the aggregate and whether or not set forth on Schedule 4.9), singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. No
such outstanding judgments, actions, investigations or proceedings relate to the
Loan Documents or any of the transactions contemplated thereby.

Section 4.10. NO DEFAULT; NO BREACH. (a) No Default or Event of
Default has occurred and is continuing.

(b) None of the execution and delivery by the Borrower of this
Agreement and the Notes and the other Loan Documents, the consummation by the
Borrower of the transactions herein and therein contemplated or compliance by
the Borrower with the terms and provisions hereof and thereof, the execution and
delivery by the Pledging Subsidiaries of the Pledge Agreements, the consummation
by the Pledging Subsidiaries of the transactions therein contemplated or
compliance by the Pledging Subsidiaries with the terms and provisions thereof,
will conflict with or result in a breach of, or require any consent under, the
charter or by-laws of the Borrower or any such Pledging Subsidiary, as the case
may be, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any material
agreement or instrument to which the Borrower or any of its Subsidiaries is a
party or by which any of them or any of their Property is bound or to which any
of them is subject,

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or constitute a default under any such material agreement or instrument, or
(except for the Liens created pursuant to the Pledge Agreements)
result in the creation or imposition of any Lien upon any Property of the
Borrower or any of its Subsidiaries pursuant to the terms of any such agreement
or instrument, PROVIDED that the incurrence of Indebtedness and granting of
Liens under the Loan Documents may be subject to the approval of the Department
of Insurance of the State of Iowa, which approval has been obtained and remains
in full force and effect.

Section 4.11. TAXES. (a) The Borrower and its Subsidiaries have
filed or have obtained valid extensions with respect to all material income and
other material tax returns which are required to be filed and have paid, on or
before the due dates thereof, all taxes shown to be due and payable on said
returns or on any assessments made against them or their Property and all other
material taxes, assessments, fees or other charges imposed on them or any of
their Property by any Governmental Authority (other than (x) those not yet due
and payable and (y) those contested in good faith and for which adequate
reserves have been established), and there are no waivers or agreements for the
extension of time for the assessment of any tax other than those not reasonably
likely to have a Material Adverse Effect. No tax Liens have been filed and no
claims are pending or, to the best knowledge of the Borrower, proposed or
threatened with respect to any such taxes, fees or other charges for any fiscal
period, which are reasonably likely to have a Material Adverse Effect.

(b) Each Life Insurance Subsidiary qualifies as a "life insurance
company" within the meaning of Section 816 of the Code, except for CLA Assurance
Company.

Section 4.12. USE OF LOANS. The Borrower is not engaged nor will
it engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Loan will
be used, directly or indirectly, for the purpose of purchasing or carrying, or
for payment in full or in part of indebtedness which was incurred for the
purpose of purchasing or carrying, any margin stock or for any purpose which
violates, or would be inconsistent with, the provisions of the Regulations of
such Board of Governors. If requested by the Administrative Agent, the Borrower
will furnish to the Bank a statement in conformity with the requirements of
Federal Reserve Form U1 referred to in said Regulation U to the foregoing
effect.

Section 4.13. ERISA. (a) The Borrower has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to any pension or other employee benefit plan which is subject to the
provisions of ERISA (each a "Plan"

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and, collectively, the "Plans"). A list of all such Plans which are in effect
on the Effective Date is contained in SCHEDULE 4.13. The Borrower has not
incurred any liability, other than to make contributions in the ordinary course
of business, to any such Plan or to the Pension Benefit Guaranty Corporation
("PBGC") and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Code. The Borrower is not a
participating employer in any Plan under which more than one employer makes
contributions as described in Sections 4063 and 4064 of ERISA. The liabilities
of any Plan for any year have not been disproportionately large compared to the
liabilities of such Planfor the next preceding year. Except as listed on
Schedule 4.13, no litigation is pending or, to the best knowledge of the
Borrower, threatened with respect to any such Plan.

(b) For the purposes of this Agreement, all references to the
Borrower in this Section 4.13, or in any other Section of this Agreement
relating to ERISA, shall be deemed to refer to the Borrower and all other
entities which are part of a controlled or affiliated group or under common
control with the Borrower within the meaning of Sections 414(b), 414(c), 414(m),
414(o) and 415(h) of the Code and Section 4001(a)(2) of ERISA.

Section 4.14. GOVERNMENTAL REGULATION. Neither the Borrower nor
any Subsidiary of the Borrower is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the 1940 Act or the
Interstate Commerce Act. The Borrower is not subject to any statute or
regulation which prohibits or restricts the incurrence of Indebtedness under the
Loan Documents or the granting of the Liens under the Pledge Agreements in
accordance with the provisions thereof, including, without limitation, statutes
or regulations relative to the underwriting or sale of insurance, common or
contract carriers or to the sale of electricity, gas, steam, water, telephone,
telegraph or other public utility services, PROVIDED that the incurrence of
Indebtedness and granting of Liens under the Loan Documents may be subject to
the approval of the Department of Insurance of the State of Iowa, which approval
has been obtained and remains in full force and effect.

Section 4.15. PLEDGE AGREEMENTS. (a) The provisions of the Pledge
Agreements are effective to create and grant to the Administrative Agent, for
the benefit of the Administrative Agent and the Banks, a legal, valid and
enforceable security interest in all right, title and interest of the Borrower,
Group (prior to the Collateral Release Date) and the Pledging Subsidiaries (if
any) in the Collateral, and when the Administrative Agent has taken possession
of all Pledged Securities pursuant to the Pledge Agreements, the Administrative
Agent, for the benefit of itself and the Banks, will have a fully perfected
first security interest in all right, title and interest of Group (prior to the
Collateral Release Date), the Borrower or such Pledging Subsidiary, as the case
may be, in such Collateral, superior in right to any other Liens, existing or
future, which any Person may have against such Collateral, except for Liens
accorded priority by rule of law or statute and except as expressly set forth in
the Pledge Agreements.

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(b) The shares of stock pledged pursuant to the Borrower Pledge
Agreement represent all of the issued and outstanding stock of each direct
Subsidiary of the Borrower with respect to which any shares of stock are
pledged, except for AmerUs Life. The shares of stock of AmerUs Life pledged by
the Borrower represent at least 49% of the voting shares of AmerUs Life. The
shares of stock of the Borrower pledged pursuant to the Group Pledge Agreement
represent the maximum percentage of the voting shares available to be pledged to
the Banks under Applicable Laws.

Section 4.16. ENVIRONMENTAL MATTERS. The Borrower and its
Subsidiaries have complied in all material respects with all applicable
Environmental Laws and Regulations. There are no conditions or circumstances
associated with the currently or, to the best knowledge of the Borrower,
previously owned, or leased Properties or operations of the Borrower, any of its
Subsidiaries or tenants thereof which may give rise to any Environmental
Liabilities which are reasonably likely to have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries (a) has received written notice
or otherwise learned of any Environmental Proceeding which could reasonably be
expected to have a Material Adverse Effect, (b) is, to the best knowledge of the
Borrower, subject to any threatened Environmental Liability which could
reasonably be expected to have a Material Adverse Effect or (c) is subject to
any actual Environmental Liability which could reasonably be expected to have a
Material Adverse Effect.

Section 4.17. INSURANCE. The Borrower maintains insurance with
financially sound and reputable insurance companies with respect to the
respective properties and businesses of itself and its Subsidiaries and against
at least such liabilities, casualties and contingencies and in at least such
types and amounts as is customary in the case of corporations engaged in the
same or a similar business or having similar properties similarly situated.

Section 4.18. REGULATORY FILINGS. Each of the Borrower and its
Subsidiaries has filed or otherwise provided all material reports, data,
registrations, filings, other information and applications required to be filed
with or otherwise provided to Governmental Authorities with jurisdiction over
the Borrower or any such Subsidiary, as the case may be, or any of its
respective operations, and all required regulatory approvals in respect thereof
are in full force and effect on the date hereof, except where the failure to
file or the failure of such approvals to be in full force and effect could not,
singly or in the aggregate, reasonably be expected to have a Material Adverse
Effect. All such regulatory filings were in material compliance with applicable
laws, rules and regulations when filed, and no material deficiencies have been
asserted by any such Governmental Authority with respect to such regulatory
filings that have not been satisfied.

Section 4.19. INSURANCE BUSINESS. All insurance policies issued by
the Life Insurance Subsidiaries are, to the extent required under Applicable
Law, on forms approved

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by the insurance regulatory authorities of the jurisdiction where issued or have
been filed with and not objected to by such authorities within the period
provided for objection, except for those forms with respect to which a failure
to obtain such approval or make such a filing without it being objected to,
could not, singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

Section 4.20. REINSURANCE. As of the Effective Date, the
reinsurance agreements described in SCHEDULE 4.20 are the only contracts
regarding reinsurance, coinsurance, excess insurance, ceding of insurance,
assumption of insurance or indemnification with respect to insurance
("Reinsurance") to which any Life Insurance Subsidiary is a party.

Section 4.21. RESERVES AND LIABILITIES. Except as set forth in
SCHEDULE 4.21, all reserves and other liabilities reflected on the Annual
Statement of American Mutual for the year ended December 31, 1995 and the
Quarterly Statement of AmerUs Life for the quarter ended September 30, 1996 were
determined in accordance with commonly accepted actuarial standards, were fairly
stated in accordance with sound actuarial principles, were based on actuarial
assumptions that were in accordance with or more conservative than those called
for in relevant policy and contract provisions and met the requirements of the
Iowa Insurance Law. AmerUs Life owns assets invested pursuant to Section 511.8
of the Iowa Insurance Code equivalent to its legal reserve as defined therein,
and maintains local deposits sufficient to comply in all material respects with
applicable state insurance laws in each jurisdiction from which more than one
percent of its revenues are derived.

Section 4.22. EXISTING INDEBTEDNESS AND LIENS. (a) Schedule
4.22(a) sets forth a complete and correct list, as of the date of this
Agreement, of each credit agreement, loan agreement, indenture, securities
purchase agreement, guarantee, letter of credit or other arrangement providing
for or otherwise relating to any Indebtedness for Money Borrowed or any
extension of credit (or commitment for any extension of credit) to, or Guaranty
by, the Borrower or any of its Subsidiaries the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $2,500,000, and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Schedule 4.22(a).

(b) Schedule 4.22(b) sets forth a complete and correct list, as of
the date of this Agreement, of each Lien securing Indebtedness of any Person the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $2,500,000 and covering any Property of the Borrower or any of its
Subsidiaries, and the aggregate Indebtedness secured (or which may be secured)
by each such Lien and the Property covered by each such Lien is correctly
described in Schedule 4.22(b).

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Section 4.23. ACCURACY OF INFORMATION, REPRESENTATIONS AND
Warranties. Neither the representations or warranties of AMHC, Group or the
Borrower made in this Agreement or any of the other Loan Documents, nor any
certificate, opinion, or any other statement made or furnished to the
Administrative Agent or any Bank from time to time by or on behalf of AMHC or
any of its Subsidiaries in connection with the Loan Documents, the Transaction
or the other transactions contemplated hereby, contains or will contain (as
of the date delivered or made) any untrue statement of a material fact, or omits
or will omit to state a material fact necessary in order to make the statements
contained therein or herein, in light of the circumstances under which they were
made, not misleading. There is no fact known to the Borrower or any of its
Subsidiaries (excluding general economic conditions and conditions affecting
generally the insurance industry or any other business in which the Borrower or
any of its Subsidiaries is engaged as of the Effective Date) which has, or could
in the foreseeable future reasonably be expected to have, a Material Adverse
Effect, which fact has not been set forth herein or in any certificate, opinion,
or other statement made or furnished to the Administrative Agent.

ARTICLE V

DELIVERY OF FINANCIAL REPORTS,
DOCUMENTS AND OTHER INFORMATION

So long as any Loan is outstanding or any Commitments exist, and
until payment in full after the Revolving Credit Termination Date of all amounts
payable by the Borrower hereunder, the Borrower shall deliver to the
Administrative Agent and each Bank:

Section 5.1. ANNUAL STATEMENTS. Annually, as soon as available
and in any event (a) within 90 days after the close of each fiscal year of
AmerUs Life, the Annual Statement of AmerUs Life as filed with the Insurance
Department of the State of Iowa for such fiscal year, together with a
certificate of a Senior Financial Officer of AmerUs Life stating that such
Annual Statement presents the financial condition and results of operations of
AmerUs Life in accordance with SAP, consistently applied, (b) within 90 days
after the close of each fiscal year of each other Life Insurance Subsidiary, the
Annual Statement of such Life Insurance Subsidiary as filed with the Insurance
Department in the state of domicile of such Life Insurance Subsidiary for such
fiscal year, together with a certificate of a Senior Financial Officer of such
Life Insurance Subsidiary stating that such Annual Report presents the financial
condition and results of operations of such Life Insurance Subsidiary in
accordance with SAP, consistently applied, (c) within 120 days after the close
of each fiscal year of AmerUs Life, the report of a firm of independent public
accountants of nationally recognized standing, which accountants shall have
examined the Annual Statements referred to in clauses (a) and (b) above and
which report shall not be qualified as to the scope of the audit or the status
of AmerUs Life or any such other Life Insurance Subsidiary as a going concern,
and (d) within 90 days after the close of each fiscal year of

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each other Life Insurance Subsidiary (but only to the extent it is a Material
Life Insurance Subsidiary), a written review of and favorable opinion on the
methodology and assumptions used to calculate the loss reserves of such Material
Life Insurance Subsidiary at the end of such fiscal year (as shown on the Annual
Statement of such Life Insurance Subsidiary, prepared in accordance with SAP)
and, based on the application of the methodology and assumptions to the
information provided to such firm, the conclusions contained therein,in form and
substance reasonably satisfactory to the Administrative Agent and the Required
Banks, by the appointed actuary of such Material Life Insurance Subsidiary.

Section 5.2. QUARTERLY STATEMENTS. Promptly after filing with the
Applicable Insurance Regulatory Authority and in any event within 60 days after
the end of each of the first three quarterly fiscal periods of each fiscal year
of each Life Insurance Subsidiary (including AmerUs Life), (i) the Quarterly
Statement of such Life Insurance Subsidiary for such quarterly fiscal period,
together with the opinion thereon of a Senior Financial Officer of such Life
Insurance Subsidiary stating that such Statutory Statement presents fairly, in
all material respects, the financial condition of such Life Insurance Subsidiary
for such quarterly fiscal period in accordance with SAP, and (ii) a certificate
of the chief actuary of such Life Insurance Subsidiary, affirming the adequacy
of reserves taken by such Life Insurance Subsidiary in respect of future
policyholder benefits as at the end of such quarterly fiscal period (as shown on
such Quarterly Statement).

Section 5.3. FINANCIAL STATEMENTS INFORMATION, ETC. The Borrower
shall deliver to each of the Banks:

(a) as soon as available and in any event within 60 days after the
end of each of the first three quarterly fiscal periods of each fiscal
year of the Borrower, consolidated and consolidating statements of
operations and cash flows of the Borrower and its Subsidiaries for such
period and for the period from the beginning of the respective fiscal year
to the end of such period, and the related consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as at the end of such
period, setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a Senior Financial
Officer of the Borrower, which certificate shall state that said
consolidated and consolidating financial statements present fairly, in all
material respects, the consolidated and consolidating financial position
of the Borrower and its Subsidiaries and the results of operations and
cash flows of the Borrower and its Subsidiaries in accordance with GAAP,
as at the end of, and for, such period (subject to normal year-end audit
adjustments);

(b) as soon as available and in any event within 95 days after the
end of each fiscal year of the Borrower, consolidated and consolidating
statements of

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operations and cash flows of the Borrower and its Subsidiaries for such
fiscal year and the related consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries as at the end of such fiscal year,
setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the preceding fiscal year, and
accompanied by an opinion thereon of KPMG Peat Marwick (or other
independent certified public accountants of recognized national standing),
which opinion shall state that said consolidated financial statements
present fairly, in all material respects, the consolidated financial
position of the Borrower and its Subsidiaries and the results of
operations and cash flows of the Borrower and its Subsidiaries as at the
end of, and for, such fiscal year in accordance with GAAP, and a
certificate of such accountants stating that, in the course of their
regular audit of the business of the Borrower and its Subsidiaries, they
obtained no knowledge, except as specifically stated, of any Default
(insofar as they relate to accounting or financial matters);

(c) promptly after any Life Insurance Subsidiary receives the
results of a triennial examination by the NAIC of the financial condition
and operations of such Life Insurance Subsidiary, a copy thereof;

(d) promptly following the release by the Borrower or any of its
Subsidiaries to the press of any material statement or other material
written communication, a copy thereof; and

(e) as soon as available and in any event within 60 days after the
end of each fiscal year of the Borrower, with respect to all Reinsurance
Agreements and Retrocession Agreements entered into by one or more Life
Insurance Subsidiaries during such fiscal year, (i) a list of the Persons
party to such agreements other than the Life Insurance Subsidiaries and
(ii) for each such Person, the rating by A.M. Best most recently published
on or prior to the last day of such fiscal year (if so rated).

Section 5.4. COMPLIANCE CERTIFICATE. At the same time that the
Borrower delivers the financial statements required under the provisions of
Section 5.3 and the Statutory Statements required under the provisions of
Sections 5.1 and 5.2, a certificate (each, a "COMPLIANCE CERTIFICATE") signed
by a Senior Financial Officer of the Borrower to the effect that, except as
otherwise may be set forth in such certificate, to the best of his knowledge
after due inquiry, no Default or Event of Default hereunder has occurred and
specifying in reasonable detail the exceptions, if any, to such statement. Such
certificate shall be accompanied by a detailed calculation indicating compliance
with the covenants contained in Section 6.7 as applicable to the respective GAAP
or SAP statements.

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Section 5.5. ADDITIONAL AUDIT INFORMATION. Promptly upon receipt
thereof, copies of all other reports, including management letters, submitted to
the Borrower by its independent public accountants in connection with any
annual, interim or special audit of the books of the Borrower made by such
accountants.

Section 5.6. OTHER DOCUMENTS; OTHER INFORMATION. Promptly upon
their becoming available, copies of (a) financial statements, reports and
notices delivered by or on behalf of the Borrower to any other lending
institutions, (b) material non-routine correspondence or official notices
received by the Borrower or any of its Subsidiaries from, and material
non-routine reports filed with, any Governmental Authority or self-regulatory
organization that regulates the operations of the Borrower or any of its
Subsidiaries, (c) any regular, periodic or special reports, filed by the
Borrower or any of its Subsidiaries with the SEC, the NASD or other entity
succeeding any or all of the functions of the SEC or the NASD and copies of all
news releases sent to financial analysts, (d) any material, non-routine reports
filed by the Borrower or any of its Subsidiaries with any Governmental Authority
(other than those referred to in clause (c) above), (e) each annual report which
is filed with respect to each Plan with the IRS, the Secretary of Labor or the
PBGC, (f) all material non-routine correspondence with the PBGC, the Secretary
of Labor or any representative of the IRS with respect to any Plan, (g) all
reports received by the Borrower or any of its Subsidiaries from its actuary
with respect to any Plan, and (h) promptly after a written request therefor,
such other financial data or information regarding the financial condition or
performance of the Borrower and its Subsidiaries or evidencing compliance with
the requirements of the Loan Documents, as the Administrative Agent or any Bank
may reasonably request from time to time.

Section 5.7. NOTICES. Promptly after management of the Borrower
or any of its Subsidiaries becomes aware of any of the following, notice of:

(a) The occurrence of any Default or Event of Default hereunder;

(b) (i) Any violation in any material respect of the certificate
of incorporation of the Borrower; (ii) any litigation, claim,
investigation or proceeding relating to marketing practices or alleging
fraud brought by any insurance regulatory body, the SEC, the NASD or any
other Person against any entity or any natural person engaged in the
distribution of variable annuity products on behalf of the Borrower or any
Subsidiary of the Borrower, including, without limitation, the Borrower
and any Subsidiary of the Borrower, if such litigation, claim,
investigation or proceeding alleges damages in excess of $1,000,000 or
seeks the revocation of material licenses; (iii) any litigation, claim,
investigation or proceeding which may exist at any time involving the
Borrower (or any of its Subsidiaries) and any Governmental Authority,
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect, any notice

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pursuant to clause (ii) or (iii) to be accompanied by a copy of any
citation, summons, subpoena, order to show cause or other order received
by the Borrower or such entity or natural person in connection with any
such litigation, claim, proceeding, or investigation;

(d) Any (i) refusal or ultimate failure by the Insurance
Department of the State of Iowa or the insurance regulatory authority of
any other jurisdiction in which any Life Insurance Subsidiary obtains more
than 5% of its gross revenues, to renew or extend any Insurance License
(other than any such License with respect to which any such failure to
renew or extend, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect); or (ii) proposed or actual
abandonment, revocation, termination or material modification (whether
favorable or adverse) of any Insurance License; or (iii) material dispute
or other action with respect to any Insurance License (including, without
limitation, the imposition of any fines or penalties or forfeitures); or
(iv) denial or threatened denial by a Governmental Authority of any other
material authorization required by law in respect of the Borrower or any
of its Subsidiaries; or (v) written threats of or notices with respect to
any of the foregoing or with respect to any proceeding or hearing which
could reasonably be expected to result in the occurrence of any of the
foregoing;

(e) Any notice given to the Borrower by any Person or any other
action taken by any person with respect to a claimed default or event or
condition of the type referred to in Section 8.4;

(f) The occurrence or expected occurrence of any (i) "reportable
event" as such term is defined in Section 4043 of ERISA, or "prohibited
transaction" as such term is defined in Section 4975 of the Code, in
connection with any Plan or any trust created thereunder; or (ii) the
institution of proceedings or the taking or expected taking of any other
action by the PBGC or any Borrower or the administrator of any Plan to
terminate, withdraw or partially withdraw from such Plan, together with
copies of any notices delivered by the Borrower to the PBGC or IRS, or
received by the Borrower from the PBGC or IRS with respect to any of the
foregoing;

(g) Any change in the business, operations, prospects, Property or
condition, financial or otherwise, of the Borrower or any of its
Subsidiaries that has or could reasonably be expected to have a Material
Adverse Effect; and

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(h) In addition to the requirements of Sections 5.1 and 5.2 above,
as promptly as reasonably practicable following the reasonable request of
the Required Banks, a copy of the most recent certificate of evaluation
from the Insurance Department of the State of Iowa; PROVIDED, HOWEVER,
that if an Event of Default shall occur and be continuing, the Required
Banks may request that a report be prepared by an independent actuarial
consulting firm reasonably acceptable to the Required Banks reviewing the
adequacy of loss reserves of each Material Life Insurance Subsidiary,
which firm shall (i) be provided access to or copies of all reserve
analyses and valuations relating to the insurance business of such
Material Life Insurance Subsidiary in the possession of or available to
the Borrower and (ii) agree to keep such material confidential in
accordance with terms and conditions reasonably satisfactory to the
Borrower.

Each notice pursuant to this Section 5.7 shall be accompanied by a
statement of a Responsible Officer of the Borrower providing such notice setting
forth the details of the occurrence referred to therein and stating what action
the Borrower has taken, is taking and proposes to take with respect thereto.
For all purposes of subsection (f) of this Section 5.7, the Borrower shall be
deemed to have all knowledge of all facts attributable to the administrator of
such Plan.

ARTICLE VI

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that so long as any Loan is
outstanding or any Commitments exist, and until payment in full, after the
Revolving Credit Termination Date, of all amounts payable by the Borrower
hereunder:

Section 6.1. MAINTENANCE OF BOOKS. The Borrower shall keep, and
shall cause each of its Subsidiaries to keep, proper books of record and account
in a manner reasonably satisfactory to the Banks in which full, true and correct
entries in accordance with SAP or GAAP, as appropriate, consistently applied,
and all Requirements of Law shall be made of all dealings or transactions in
relation to its business and activities.

Section 6.2. INSPECTION. The Borrower shall permit
representatives of each Bank to visit and inspect any of its Properties and to
make, or cause to be made, at the Borrower's expense, inspections and audits of
any books, records and papers of the Borrower and each of its Subsidiaries and
to make extracts therefrom and copies thereof all at such reasonable times and
as often as such Bank may reasonably require, and to discuss the business,
operations, Properties and financial and other condition of the Borrower and
each of its Subsidiaries with officers and employees of the Borrower and with
its independent public accountants.

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Section 6.3. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS;
COMPLIANCE. The Borrower shall do or cause to be done, and shall cause each of
its Subsidiaries to do or cause to be done, all things necessary and appropriate
to preserve and keep in full force and effect its existence and all franchises,
rights and privileges necessary for the lawful and orderly conduct of its
business, including, without limitation, each Insurance License and each
necessary registration or filing with the SEC and the NASD (other than any such
Insurance Licenses, registrations or filings the termination, ineffectiveness or
invalidity of which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect), continue to engage in the type of
business in which it is engaged on the Effective Date, and comply with all
Contractual Obligations and Requirements of Law (other than such noncompliance
which could not reasonably be expected to have a Material Adverse Effect).

Section 6.4. AMENDMENTS TO ORGANIZATIONAL DOCUMENTS. Subject to
the prohibitions set forth in Section 7.5, the Borrower shall promptly deliver
to the Administrative Agent copies of any amendments or modifications to its
certificate of incorporation, as certified by the Secretary of State of the
State of Iowa or to its by-laws, as certified by its Secretary or Assistant
Secretary.

Section 6.5. PAYMENT OF OBLIGATIONS. The Borrower shall pay and
discharge, and shall cause each of its Subsidiaries to pay and discharge, all of
its obligations and liabilities, including, without limitation, all taxes,
assessments and governmental charges upon its income and Properties, when due,
unless and to the extent only (i) that such obligations, liabilities, taxes,
assessments and governmental charges shall be contested in good faith and by
appropriate proceedings and, to the extent required by SAP or GAAP, as
appropriate, then in effect, adequate reserves relating thereto are established
on the books of the Borrower or (ii) the failure to pay and discharge,
individually or in the aggregate, such obligations, liabilities, taxes,
assessments and governmental charges could not reasonably be expected to have
any Material Adverse Effect.

Section 6.6. INSURANCE. The Borrower shall maintain, and shall
cause each of its Subsidiaries to maintain, with financially sound and reputable
insurance companies insurance on all its Property, in at least such amounts and
against at least such risks as are customarily insured against by similar
businesses.

Section 6.7. FINANCIAL RATIOS. The Borrower shall:

(a) CONSOLIDATED NET WORTH; ADJUSTED CAPITAL AND SURPLUS. (i)
Not permit Consolidated Net Worth of the Borrower to be less than (i) at
any time prior to the Collateral Release Date, $400,000,000, and (ii) at
any time after the Collateral Release Date, $425,000,000.

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(ii) Not permit Adjusted Capital and Surplus of AmerUs Life to be
less than (i) $300,000,000 at any time during 1996 and 1997 and (ii)
$325,000,000 at any time thereafter.

(b) RISK-BASED CAPITAL. Not permit, at any time, the Risk-Based
Capital of any Material Life Insurance Subsidiary to fall below 150% of
the Company Action Level or 300% of the Authorized Control Level. This
ratio shall be measured as of the end of each calendar quarter for the
four calendar quarters then ended.

(c) CASH FLOW TO FIXED CHARGES. Not permit the ratio of Cash
Flow to Fixed Charges of the Borrower to be less than (i) for the fiscal
quarter ending March 31, 1997, 1.2:1.0 (or, if all or a portion of the
Offering has been consummated, 1.5:1.0), (ii) for the period of two
consecutive fiscal quarters ending June 30, 1997, 1.2:1.0 (or, if all or a
portion of the Offering has been consummated, 1.5:1.0), (iii) for the
period of three consecutive fiscal quarters ending September 30, 1997,
1.2:1.0 (or, if all or a portion of the Offering has been consummated,
1.5:1.0), (iv) for the period of four consecutive fiscal quarters ending
December 31, 1997, 1.2:1.0 (or, if all or any portion of the Offering has
been consummated, 1.5:1.0) and (v) for each period of four consecutive
fiscal quarters ending after December 31, 1997, 1.3:1.0 (or, if all or any
portion of the Offering has been consummated, 1.5:1.0).

(d) LEVERAGE RATIO. Not permit the Leverage Ratio of the
Borrower to exceed .35:1.00 at any time.

Section 6.8. REINSURANCE. The Borrower will ensure that, with
respect to all reinsurance ceded by a Life Insurance Subsidiary, such Life
Insurance Subsidiary will (i) comply with all requirements of its Applicable
Insurance Regulatory Authority and (ii) not engage in any material bulk
reinsurance transaction without the prior written approval of the Required
Banks.

Section 6.9. RATINGS. The Borrower will cause AmerUs Life to
maintain at all times a rating by A.M. Best of "A-" or better; provided, that,
no Default or Event of Default shall occur pursuant to this Section 6.9 until
the earlier to occur of AmerUs Life's rating by A.M. Best falling below "B++" or
12 months after AmerUs Life's rating by A.M. Best falling below "A-."

Section 6.10. ENVIRONMENTAL COMPLIANCE. The Borrower will operate,
and will cause each of its Subsidiaries to operate, all Property owned or leased
by it in such a manner that no Environmental Liability shall arise or continue
to exist under any

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Environmental Law or Regulation which could reasonably be expected to have a
Material Adverse Effect.

Section 6.11. DIVIDEND PAYMENTS TO REPAY LOANS. On and after the
Effective Date, the Borrower shall (a) use commercially reasonable efforts to
cause its Subsidiaries from time to time to pay cash dividends or make other
distributions or payments in cash (directly or, through other Subsidiaries of
the Borrower, indirectly) to the Borrower in amounts that, taken together, are
sufficient to permit the Borrower to pay all principal of and interest on the
Loans and all other amounts payable hereunder as the same shall become due and
payable (whether at stated maturity, by mandatory prepayment, by acceleration or
otherwise), (b) cause each Life Insurance Subsidiary and each other regulated
Subsidiary to request, on a timely basis, regulatory approval to the extent
necessary for such Life Insurance Subsidiary or other Subsidiary to pay such
dividends or make such distributions or payments and (c) notify the Banks
promptly of the failure to obtain such regulatory approval.

Section 6.12. ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) In
the event that at any time the Borrower is permitted by Applicable Laws to
grant a security interest, as provided in this sentence, in equity or debt
securities issued by any direct Subsidiary, (other than the trust formed in
connection with the Preferred Offering) of the Borrower other than those
issued by AmerUs Life or if the Borrower has any direct Subsidiaries, (other
than the trust formed in connection with the Preferred Offering) which are
permitted by Applicable Laws to grant a security interest as provided in this
sentence, the Borrower shall so inform the Administrative Agent and the
Banks, and, at the request of the Administrative Agent or the Required Banks,
the Borrower shall, or shall cause each such Subsidiary to, grant to the
Administrative Agent a security interest in all capital stock, other equity
interests and surplus notes issued by any Subsidiary and owned by it and in
which it is permitted by Applicable Law to grant a security interest. In
addition, if at any time the Borrower is permitted by applicable law to
pledge more than the percentage of the voting stock of AmerUs Life pledged as
of the Effective Date, the Borrower shall grant to the Administrative Agent a
security interest in such assets to the maximum extent permitted by
applicable law. All such security interests created pursuant to this Section
6.12 shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Administrative Agent and shall constitute valid and
enforceable perfected security interests superior to and prior to the rights
of all third Persons and subject to no other Liens. The additional security
documents or instruments related thereto shall have been duly recorded or
filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the liens in favor of the Administrative Agent
required to be granted pursuant to such additional security documents and all
taxes, fees and other charges payable in connection therewith shall have been
paid in full by the Borrower.

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(b) The Borrower will, and will cause each of its Pledging
Subsidiaries to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Administrative Agent from time to time
such vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
reports and other assurances or instruments and take such further steps relating
to the collateral covered by any of the Pledge Agreements as the Administrative
Agent may reasonably require. Furthermore, the Borrower shall cause to be
delivered to the Administrative Agent such opinions of counsel and other related
documents as may be reasonably requested by the Administrative Agent to assure
itself that this Section 6.12 has been complied with.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Loan is outstanding or any Commitments exist, and
until payment in full, after the Revolving Credit Termination Date, of all
amounts payable by the Borrower hereunder, the Borrower covenants and agrees
that the Borrower will not do, agree to do, or permit to be done, and will cause
each of its Subsidiaries not to do, not to agree to do and not permit to be
done, any of the following:

Section 7.1. INDEBTEDNESS FOR MONEY BORROWED. Create, incur,
assume, permit to exist or have outstanding any Indebtedness for Money Borrowed,
except:

(a) Indebtedness of the Borrower to the Administrative Agent and
the Banks under this Agreement and the Notes;

(b) Indebtedness for Money Borrowed secured by Liens permitted
under Section 7.2(d) and any extensions thereof;

(c) Indebtedness for Money Borrowed (i) of any wholly-owned
Subsidiary to the Borrower or any other wholly-owned Subsidiary or (ii) of
the Borrower to any wholly-owned Subsidiary of the Borrower, in each case
to the extent such Indebtedness is not otherwise prohibited or restricted
by any other Section of this Agreement;

(d) Indebtedness for Money Borrowed of a Person, other than a
trust formed in connection with the Preferred Offering, which becomes a
Subsidiary after the date hereof; PROVIDED that (i) such Indebtedness
existed at the time such Person became a Subsidiary and was not created in
anticipation thereof, (ii) immediately after giving effect to the
acquisition of such Person by the

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Borrower no Default or Event of Default shall have occurred and be
continuing, and (iii) the Borrower shall not become liable therefor;

(e) Indebtedness of AmerUs Life owing to the Federal Home Loan
Bank (the "FHLB") under a liquidity facility provided by the FHLB, and
Indebtedness of AmerUs Life consisting of Federal Home Loan Bank Community
Investment Long-Term Advances, so long as the aggregate outstanding
principal amount of Indebtedness under this clause (e) does not exceed
$50,000,000 at any time after the application of the proceeds of the
Loans;

(f) Indebtedness of AmerUs Life owing to the Borrower under the
Surplus Note, so long as (i) the aggregate outstanding principal amount
under such Surplus Note does not exceed $100,000,000 at any time and (ii)
the Surplus Note is pledged to the Banks pursuant to the Borrower Pledge
Agreement;

(g) Indebtedness of AmerUs Life consisting of letter of credit
reimbursement obligations relating to IDR Bonds outstanding as of the
Effective Date and having a principal amount not in excess of $8,730,000;

(h) Indebtedness of AmerUs Life consisting of Guaranties of other
Indebtedness outstanding as of the Effective Date and having an aggregate
principal amount not in excess of $10,000,000;

(i) Indebtedness of the Borrower and the trust formed in
connection with the Preferred Offering under the Permitted Junior Debt
Securities, the Preferred Offering and the Guaranty provided in connection
therewith, when and if issued so long as, prior to the Collateral Release
Date, the aggregate principal amount of such Permitted Junior Debt
Securities shall not exceed $100,000,000;

(j) Indebtedness of the Borrower under letters of credit issued in
the ordinary course of business so long as the aggregate stated amount of
all such letters of credit at no time exceeds $25,000,000;

(k) Indebtedness of the Borrower or any of its Subsidiaries
pursuant to Interest Rate Agreements;

(l) AmerUs Life's obligations with respect to the Indebtedness
with respect to the Non-Life Credit Facility to the extent secured by a
Lien on assets of AmerUs Life permitted under Section 7.2(i);

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(m) Indebtedness in respect of Capital Leases in an aggregate
amount (for the Borrower and its Subsidiaries) not to exceed
$10,000,000 at any time outstanding;

(n) Indebtedness of AmerUs Life under the Support Agreement
between AmerUs Life and Mortgage, Inc., AmerUs Group, Inc. and Cooper River
Funding, Inc. to cause AmerUs Mortgage, Inc. to maintain a Consolidated Tangible
Net Worth of at least $9,000,000 and to enable the Company to pay its debts and
obligations as they become due; and

(o) other Indebtedness for Money Borrowed of the Borrower not to
exceed $25,000,000 in aggregate outstanding principal amount at any time.

Section 7.2. LIENS. Create, incur, assume or permit to exist, any
Lien upon any of its Property, whether now owned or hereafter acquired, except:

(a) Liens in favor of the Administrative Agent and the Banks
created and granted pursuant to the Pledge Agreements;

(b) Liens imposed by or in favor of any Governmental Authority for
taxes, assessments or other charges which are not yet due or which are
being contested in good faith and by appropriate proceedings and for which
adequate reserves with respect thereto shall have been established on the
books of the Borrower or its respective Subsidiary as required in
accordance with SAP or GAAP, as the case may be;

(c) (i) Pledges or deposits to secure the Borrower's or such
Subsidiary's obligations under worker's compensation laws, unemployment
insurance laws or similar legislation; (ii) deposits to secure the
performance of bids, tenders, contracts (other than for borrowed money) or
leases to which the Borrower or such Subsidiary is a party; (iii) deposits
as required by any Governmental Authority to enable the Borrower or such
Subsidiary to transact business; (iv) deposits to secure public or
statutory obligations of the Borrower or such Subsidiary; (v)
materialmen's, mechanics', carriers', repairmen's or other like Liens, or
deposits to obtain the release of such Liens, in an aggregate amount not
exceeding $250,000 at any one time and outstanding no longer than 30 days;
and (vi) deposits to secure surety or appeal bonds on which the Borrower
or such Subsidiary is the obligor; as to all of the foregoing, however,
only to the extent arising and continuing in the ordinary course of
business; and provided, however, that none of the above shall be deemed to
except from the prohibition of this Section 7.2 any Liens or deposits that
might arise under ERISA in favor of the PBGC or any other Person;

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(d) Purchase money mortgages or security interests, conditional
sale arrangements and other similar security interests, on equipment and
motor vehicles acquired by the Borrower or such Subsidiary (hereinafter
referred to individually as a "PURCHASE MONEY SECURITY INTEREST");
PROVIDED, HOWEVER, that:

(i) the transaction in which any Purchase Money Security
Interest is proposed to be created is not then prohibited by any
other Section of this Agreement;

(ii) any Purchase Money Security Interest shall attach only
to the property or asset acquired in such transaction and shall not
extend to or cover any other assets or properties of the Borrower;

(iii) the Indebtedness secured or covered by any Purchase
Money Security Interest shall not exceed the lesser of the cost or
fair market value of the property or asset acquired and shall not be
prepaid from the proceeds of any borrowing by the Borrower or such
Subsidiary; and

(iv) the aggregate outstanding amount of all Indebtedness of
the Borrower and all of its Subsidiaries secured by Purchase Money
Security Interests shall not at any time exceed an amount equal to
$10,000,000;

(e) Easements, rights-of-way, restrictions and other similar
encumbrances affecting real Property incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and which
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business of
the Borrower;

(f) Landlords' Liens for rental not yet due and payable;

(g) Liens described on SCHEDULE 7.2 or any extensions or
replacements thereof as long as the assets subject to such Liens do not change
and the obligations secured by such Liens are not increased;

(h) Liens on the property or assets of a Person which becomes
a Subsidiary after the date hereof securing Indebtedness permitted by
subsection 7.1(e), provided that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any additional property
or assets of such corporation, or any property of the Borrower or any
other Subsidiary, after the time such corporation becomes a Subsidiary,
and (iii) the amount of Indebtedness secured thereby is not increased;

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(i) Liens on marketable securities of AmerUs Life securing the
Non-Life Credit Facility;

(j) Trustee's Lien for fees pursuant to the Preferred Offering;

(k) Liens on marketable securities securing the Indebtedness
permitted under Section 7.1(e); and

(l) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all Subsidiaries)
$5,000,000 in aggregate amount at any time outstanding.

Section 7.3. MERGERS, ACQUISITIONS, ETC. Enter into any
transaction of merger, consolidation or amalgamation with any Person, except
that:

(a) Any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more
wholly-owned Subsidiaries of the Borrower (provided that the wholly-owned
Subsidiary or Subsidiaries shall be the continuing or surviving
corporation); and

(b) Any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of, at no more than market value and on terms and
subject to conditions no less favorable than those available from
unaffiliated Persons, any or all of its assets (upon voluntary liquidation
or otherwise) to the Borrower or any other wholly owned Subsidiary of the
Borrower.

Section 7.4. DIVIDENDS, REDEMPTIONS, DISTRIBUTIONS, ETC.
Except in the case of any Subsidiary wholly owned by the Borrower, (including
but not limited to the trust to be formed in connection with the Preferred
Offering and the dividends paid on the Preferred Stock with respect thereto)
declare or pay any dividends payable in cash or other Property or apply any
of its Property to the purchase, redemption or other retirement of, or set
apart any sum for the payment of any dividends on or for the purchase,
redemption, retirement or other acquisition of, or make any other
distribution by reduction of capital or otherwise in respect of, any shares
of its capital stock, or of any warrants, options or other rights to acquire
the same, now or hereafter outstanding; PROVIDED that for any fiscal year
(commencing with fiscal year 1997) following the consummation of all or part
of the Offering by the Borrower, the Borrower may declare and pay dividends
in an amount not to exceed 4% of the Consolidated Net Worth of the Borrower
as of the last day of the previous fiscal year.

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Section 7.5. CHANGES. Change its name or the address of its chief
executive offices without giving at least 10 Business Days' prior notice thereof
to the Administrative Agent, make any material change in its business, or in the
nature of its operations, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), or, except in the ordinary course of its
business, convey, sell, assign, lease or otherwise dispose of, voluntarily or
involuntarily, in one transaction or a series of transactions, all or (except
for dispositions of obsolete or worn out Property) any material part of its
business, property or assets, whether now owned or hereafter acquired
(including, without limitation, receivables and leasehold interests); PROVIDED
that (a) the Transaction shall be permitted and (b) any Disposition permitted by
Section 7.3(b) or 7.10 shall be permitted.

Section 7.6. FISCAL YEAR. Change its fiscal year.

Section 7.7. LIABILITY TO PBGC, IRS. Be or become obligated to,
or allow or suffer to exist any event or condition which presents a material
risk of the Borrower or such Subsidiary being or becoming obligated to, the PBGC
in any material amount.

Section 7.8. TRANSACTIONS WITH AFFILIATES. Directly or
indirectly enter into any transaction with or for the benefit of, or make any
payment to (including, without limitation, on account of any management fees,
administrative fees, service fees, home office charges, consulting fees or
technical service charges), or otherwise deal with, in the ordinary course of
business, or otherwise, any Affiliate; provided, however, that (a) the
Borrower or any such Subsidiary may enter into transactions with its
Affiliates on economic terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than the Borrower or such Subsidiary would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate (as determined by the Borrower in good faith) PROVIDED, HOWEVER,
that (i) in no event may the aggregate amount of investments, advances and
loans (determined on a cost basis, exclusive of retained earnings, write-offs
and write-downs) pursuant to contracts or other arrangements entered into by
the Borrower and its Subsidiaries after the Effective Date in or to Group or
Subsidiaries of Group other than the Borrower and its Subsidiaries exceed
$20,000,000 at any one time, (ii) AmerUs Life may make investments, advances
and/or loans in or to AMAL Corporation, in an aggregate amount not to exceed
$50,000,000 so long as AmerUs Life retains the ability to elect at least 50%
of the board of directors of AMAL Corporation and (iii) on and after December
31, 1997, the aggregate amount of outstanding investments in Affiliates and
guaranties of obligations of Affiliates (whether or not entered into on an
arm's length basis, but excluding the transactions referred to in clauses
(ii) above and (iv), (v), (vi), (vii) and (c) below and the AVLIC Guaranties)
shall not exceed $75,000,000, and (iv) the Borrower may make payments or
loans pursuant to the guaranty provided in connection with the Preferred
Offering or the Support Agreement referenced in Section 7.1(n), and the
Borrower and its Subsidiaries may lend or borrow such amounts as are
contemplated in connection with the Preferred Offering and the Permitted
Junior Debt Securities (v) each of the Borrower and AmerUs Life may make any
investments, advances and loans to, enter into contracts with and guaranty
the obligations of, its respective wholly-owned Subsidiaries, (vi) AmerUs
Life may pay dividends and make investments, advances and loans to the
Borrower, and (vii) the wholly-owned Subsidiaries of AmerUs Life may pay
dividends and make investments, advances and loans to AmerUs Life; (b) to the
extent such Indebtedness is used to pay principal and/or interest

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on other Indebtedness of the Borrower permitted hereunder, the Borrower may
incur Indebtedness pursuant to Section 7.1(c)(ii); (c) transactions contemplated
by Sections 7.1(l) and 7.2(i) shall be permitted; and (d) that the Life
Insurance Subsidiaries may enter into reinsurance transactions with one another.

Section 7.9. CAPITAL EXPENDITURES. Make capital expenditures
that, in the aggregate, shall exceed $10,000,000 in any fiscal year of the
Borrower.

Section 7.10. ASSET DISPOSITION, ETC. Make a Disposition, unless a
prepayment is made pursuant to SECTION 2.6(b) or:

(a) such Disposition is in the ordinary course of its business;

(b) the fair market value of any asset the subject of such
Disposition, taken together with the fair market value of all other assets
the subject of Dispositions pursuant to this Section 7.10(b) in the same
fiscal year, does not exceed $3,000,000;

(c) such Disposition is with respect to the sale of the Borrower's
capital assets and the Net Available Proceeds of such sale are used to
replace such capital assets within 90 days after receipt of such Net
Available Proceeds or are otherwise employed in the business of the
Borrower and its Subsidiaries;

(d) such Disposition is with respect to the assets of a Subsidiary
of the Borrower and the Net Available Proceeds of such Disposition are
employed in the business of the Borrower and its Subsidiaries or
reinvested within 180 days after receipt of such Net Available Proceeds in
assets used in the business of the Borrower or any of its Subsidiaries; or

(e) such Disposition is with respect to the assets of a Subsidiary
of the Borrower and the Net Available Proceeds of such Disposition are
used within 180 days after receipt of such Net Available Proceeds to repay
Indebtedness of the Borrower or any of its Subsidiaries.

Notwithstanding the foregoing provisions of this Section 7.10, neither the
Borrower nor any of its Subsidiaries may make a Disposition of or with respect
to any capital stock of a Material Life Insurance Subsidiary.

Section 7.11. INVESTMENTS. (a) The Borrower shall not make or
have outstanding any Investment except (i) Investments in wholly-owned
Subsidiaries of the Borrower to the extent any such Investment is not otherwise
prohibited or restricted by any other Section of this Agreement, (ii) Permitted
Investments, (iii) Investments (determined

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on a cost basis, exclusive of retained earnings, write-offs and write-downs) of
up to $100,000 and (iv) other Investments so long as at least 75% of such other
Investments (determined on a cost basis) are Investment Grade Securities.

(b) The Borrower shall not permit any Life Insurance Subsidiary
to make or have outstanding any Investment except: (i) Investments in
Subsidiaries of the Borrower; (ii) Investments of the kind that any Life
Insurance Subsidiary is not prohibited from making under insurance laws and
regulations, provided that (a) Non-Investment Grade fixed or floating rate
Securities held by all Life Insurance Subsidiaries shall be limited to 7% of
combined Invested Assets of all Life Insurance Subsidiaries determined in
accordance with SAP, (b) common stock, preferred stock and other equity
securities (other than (x) Investments in Subsidiaries and (y) Investments in
AMAL Corporation) held by all Life Insurance Subsidiaries shall be limited to
33.3% of combined Adjusted Capital and Surplus of all Life Insurance
Subsidiaries determined in accordance with SAP, (c) Investments in interests
in real property including mortgage loans and short and long-term leases
(other than mortgage backed securities that are otherwise in compliance with
this Section 7.11) held by all Life Insurance Subsidiaries shall be limited
to 15% of combined Invested Assets of all Life Insurance Subsidiaries
determined in accordance with SAP, (d) Investments held by all Life Insurance
Subsidiaries in any one securities issuer (other than (x) Investments in
Subsidiaries, (y) Investments in AMAL Corporation and (z) Investments in U.S.
Government Obligations) shall not at any time exceed 2% of combined statutory
Invested Assets of all Life Insurance Subsidiaries determined in accordance
with SAP, (e) Investments in CMO Derivative Investments by any Life Insurance
Subsidiary shall be limited to 2% of the Invested Assets of such Life
Insurance Subsidiary determined in accordance with SAP, and (f) Investments
in securities which are not publicly tradeable (other than Investments in
Subsidiaries) by all Life Insurance Subsidiaries shall not exceed 20% of
combined Invested Assets of all Life Insurance Subsidiaries determined in
accordance with SAP; PROVIDED, that, to the extent that non-compliance with
clause (ii)(a) results from a change in an Investment's rating by the NAIC or
a rating agency, no Default or Event of Default shall be deemed to occur as a
result thereof until 30 days after the date of such rating change; (iii)
Permitted Investments; (iv) operating deposits with banks; (v) deposits
established in connection with Liens permitted pursuant to Section 7.2; and
(viii) loans and other advances of money to employees in the ordinary course
of business.

Section 7.12. FORECLOSURE; ETC. Acquire ownership of or operating
control of any real property on which an Industrial Facility (as defined below)
is located by means of the exercise of any rights of foreclosure, power of sale
or other remedy it may avail itself of by way of any indenture of mortgage or
similar instrument relating to such Industrial Facility and the underlying real
property (the "SUBJECT PROPERTY"), or accept a deed to the Subject Property in
lieu of foreclosure, unless the Borrower shall have theretofore caused a Phase I
Environmental Review (as defined below) with respect to the Subject Property to
be conducted. As used herein, the term "INDUSTRIAL FACILITY" shall mean

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those establishments having Standard Industrial Classification ("SIC") numbers
in the following ranges 01-09, 10-14, 15-17, 20-39, 40-49, 50-51, 55-59, 72-84
but excluding real property which is used primarily as (i) residential
dwellings, including but not limited to apartment buildings, condominiums,
single family dwellings and duplexes; (ii) shopping centers or similar retail
complexes (except those shopping centers including gasoline service stations);
(iii) office buildings; and (iv) vacant land. Further, as used herein, the term
"PHASE I ENVIRONMENTAL REVIEW" shall mean an environmental survey and written
assessment prepared by an independent consultant selected by the Borrower who is
expert in the identification and analysis of environmental risks (such
individual and his/her agents being referred to as the "ENVIRONMENTAL
CONSULTANT"), such survey and assessment to (a) estimate current material
liabilities and assess potential sources of material future liabilities of any
owner or operator of, or any other Person having control of, the Subject
Property arising under the Comprehensive Environmental Response, Compensation
andLiability Act, the Resource Conservation and Recovery Act, in each case as
amended, and any other analogous act or regulation of any Federal, state or
local environmental authority having authority in respect of the Subject
Property and (b) be based upon (i) a physical on-site inspection by the
Environmental Consultant of the Subject Property (without any excavation of the
Subject Property), (ii) interviews by the Environmental Consultant of
individuals who have direct managerial responsibility for operations of the
Subject Property, (iii) a review by the Environmental Consultant of available
records relating to current and historical operations conducted at the Subject
Property and (iv) as deemed appropriate by the Environmental Consultant,
interviews by the Environmental Consultant of individuals in the area in which
the Subject Property is located who may have knowledge of current and historical
operations conducted at the Subject Property. The Borrower agrees to provide to
any Bank a copy of such Phase I Environmental Review within 60 days of any
request by such Bank therefor.

ARTICLE VIII

EVENTS OF DEFAULT.

If any one or more of the following events ("EVENTS OF DEFAULT")
shall occur and be continuing, the Administrative Agent shall, upon the request
or with the consent of the Required Banks, by notice to the Borrower, terminate
the Commitments and/or declare the entire unpaid balance of the principal of and
interest on the Loans and all of the other Bank Obligations of the Borrower to
be forthwith due and payable, and thereupon the same shall immediately become
due and payable without further act, except that in the case of the occurrence
of any Event of Default described in Section 8.6 with respect to the Borrower,
the Commitments shall automatically terminate and the unpaid balance of the
principal of and interest on the Loans and all of the other Bank Obligations
outstanding shall automatically become due and payable without any requirement
of notice. Except for

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the notice provided for in the preceding sentence, the Borrower hereby expressly
waives any presentment, demand, protest, notice of protest or other notice of
any kind.

Section 8.1. FAILURE TO PAY. (a) Failure by the Borrower to make
any payment of principal upon the Loans when due, whether at maturity or at a
date fixed for any installment or prepayment thereof or otherwise.

(b) Failure by the Borrower to make any payment of interest on or
fees or other charges in respect of any of the Loans or other Bank Obligations,
within three Business Days after the date when due.

Section 8.2. BREACH OF COVENANTS. (a) Failure by the Borrower to
perform or observe any of the agreements of the Borrower contained in Sections
5.7(a), 6.7, 6.8, 7.1 through 7.5, 7.9, 7.10 and 7.12.

(b) Failure by the Borrower to perform or observe any of the
agreements of the Borrower contained in Section 7.8 or 7.11 which shall remain
unremedied for a period of five Business Days or more after notice to the
Borrower by the Administrative Agent or the Required Banks.

(c) Failure by the Borrower to perform or observe any other term,
covenant or condition of this Agreement which shall remain unremedied or
unwaived for a period of 30 days or more after notice to the Borrower by the
Administrative Agent or the Required Banks.

Section 8.3. BREACH OF LOAN DOCUMENTS. The Borrower or any other
Credit Party shall fail to perform or observe any material term, condition or
covenant of the Loan Documents (other than this Agreement and the Notes), which
failure shall remain unremedied for more than the period of grace, if any,
specified therein and shall not have been waived pursuant thereto, or any such
Loan Documents shall cease to be in full force and effect or the obligations of
any party thereto (other than the Administrative Agent or any Bank) shall have
been disaffirmed by or on behalf of such party or declared invalid by any court
of competent jurisdiction, or the security interests granted by any Pledge
Agreement shall become void or unperfected or shall fail or cease to constitute
a first priority security interest.

Section 8.4. BREACH OF DEBT INSTRUMENT. (a) A default by AMHC
(prior to the Collateral Release Date), Group (prior to the Collateral Release
Date), the Borrower or any Subsidiary of the Borrower in the payment of
principal of or interest on any Indebtedness for Money Borrowed (other than
Indebtedness for Money Borrowed to the Administrative Agent and the Banks under
this Agreement) in an outstanding amount equal to or greater than $2,500,000
(beyond the period of grace, if any, provided in the

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instrument or agreement under which such Indebtedness for Money Borrowed was
created and shall not have been waived pursuant thereto), or the failure to
observe or perform any other agreement or condition relating to any such
Indebtedness for Money Borrowed or contained in any bond, note, debenture, loan
agreement, indenture, guaranty, trust agreement, mortgage or similar instrument
to which AMHC (prior to the Collateral Release Date), Group (prior to the
Collateral Release Date), the Borrower or any such Subsidiary is a party or by
which it is bound, or by which any of its Property may be affected (a "DEBT
INSTRUMENT"), evidencing, securing or relating thereto, or the occurrence or
failure to occur of any other event or condition, so that, as a result of any
such default, failure to observe or perform, occurrence or failure to occur
(assuming the giving of appropriate notice thereof, if required), such
Indebtedness for Money Borrowed with an aggregate amount of principal and
interest outstanding equal to or greater than $2,500,000 may be declared due and
payable prior to the date on which such Indebtedness would otherwise become due
and payable.

(b) A default by Group in the payment of principal of or interest
on any Debt Instrument (other than Indebtedness for Money Borrowed to the
Administrative Agent and the Banks under this Agreement) in an outstanding
amount equal to or greater than $2,500,000 (beyond the period of grace, if any,
provided in the instrument or agreement under which such Debt Instrument was
created), or the failure to observe or perform any other agreement or condition
relating to any such Debt Instrument or contained in any bond, note, debenture,
loan agreement, indenture, guaranty, trust agreement, mortgage or similar
instrument to which Group is a party or by which it is bound, or by which any of
its Property may be affected, evidencing, securing or relating thereto, or the
occurrence or failure to occur of any other event or condition, so that, as a
result of any such default, failure to observe or perform, occurrence or failure
to occur (assuming the giving of appropriate notice thereof, if required), such
Debt Instrument with an aggregate amount of principal and interest outstanding
equal to or greater than $2,500,000 has been declared due and payable prior to
the date on which such Debt Instrument would otherwise become due and payable.

Section 8.5. BREACH OF REPRESENTATION. Any representation or
warranty made to the Administrative Agent and/or the Banks in any of the Loan
Documents, or in connection with the making of the Loans, or any certificate,
document, financial or other statement or report furnished at any time under or
in connection with this Agreement, shall prove to have been false in any
material respect when made.

Section 8.6. INSOLVENCY, ETC. (a) AMHC, Group, the Borrower or
any Subsidiary of the Borrower shall make an assignment for the benefit of
creditors, be adjudicated insolvent, suffer an order for relief under any state
insurance law or the Federal Bankruptcy Code of 1978, as amended from time to
time, petition or apply to any tribunal or insurance regulatory body for the
appointment of a custodian, receiver, rehabilitator,

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liquidator, trustee or similar official for it or a substantial part of its
assets, or shall commence any proceeding under any bankruptcy, liquidation,
rehabilitation, conservatorship, receivership, reorganization, arrangement,
readjustment of debt dissolution or similar law or statute of any jurisdiction,
whether now or hereafter in effect; or there shall have been filed any such
petition or application, or any such proceeding shall have been commenced
against it (and such petition or application is not controverted within 10 days
and is not dismissed within 30 days after the filing thereof); or AMHC, Group,
the Borrower or such Subsidiary by any act or omission shall indicate its
consent to, approval of or acquiescence in any such petition, application or
proceeding or the appointment of a custodian, receiver, rehabilitator,
liquidator, trustee or similar official for it or any substantial part of any of
its properties; or

(b) AMHC, Group, the Borrower or any Subsidiary of the Borrower
shall generally not pay its debts as such debts become due; or

(c) AMHC, Group, the Borrower or any Subsidiary of the Borrower
shall have concealed, removed, or permitted to be concealed or removed, any part
of its Property, with intent to hinder, delay or defraud its creditors or any of
them, or made or suffered a transfer of any of its Property which is fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or shall have made
any transfer of its Property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or shall have suffered or
permitted, while insolvent, any creditor to obtain a Lien upon any of its
Property through legal proceedings or distraint which is not vacated within 60
days from the date thereof.

Section 8.7. JUDGMENTS, ETC. Any judgment against AMHC, Group,
the Borrower or any Subsidiary of the Borrower or any attachment, levy or
execution against any of its properties for any amount either individually or in
the aggregate in excess of $2,500,000 shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 60 days or more.

Section 8.8. CHANGE IN OWNERSHIP. (a) The Borrower shall cease to
own, directly, or indirectly through wholly-owned Subsidiaries, 100% of the
issued and outstanding voting stock of AmerUs Life ordinarily entitled to vote
for the election of directors, or any other class of stock of AmerUs Life of
which the Borrower owns 50% or less shall become entitled to elect a majority of
AmerUs Life's board of directors; or (b) a Change of Control shall occur.

Section 8.9. REVOCATION OF INSURANCE LICENSE. Any Insurance
License shall be suspended or revoked and such suspension or revocation shall
continue for 30 days, or any renewal application for any Insurance License shall
be disapproved or ultimately fail

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to be approved, if such suspension, revocation, disapproval or ultimate failure
to win approval could reasonably be expected to have a Material Adverse Effect;

Section 8.10. PLANS. (a) The termination of any Plan or the
institution by the PBGC of proceedings for the involuntary termination of any
Plan, in either case, with a vested unfunded liability in excess of $2,500,000;

(b) Failure by the Borrower to fund, in accordance with the
applicable provisions of ERISA and the Code, each of the Plans hereafter
established or assumed by the Borrower and such failure, either individually or
in the aggregate with other continuing failures, could reasonably be expected to
have a Material Adverse Effect; or either individually or in the aggregate with
other "reportable events," could reasonably be expected to have a Material
Adverse Effect.

(c) A "reportable event" as described in Section 5.7(f), other
than such an event with respect to which the 30-day notice requirement has been
waived under regulations promulgated by the PBGC, shall have occurred and such
"reportable events,"

Section 8.11. PLEDGE AGREEMENTS. (a) Except for expiration or
termination in accordance with its terms, any Pledge Agreement shall be
terminated or shall cease to be in full force and effect, for whatever reason
(other than a wilful action on the part of the Banks); or (b) at any time there
shall cease to be pledged pursuant to the Pledge Agreements capital stock
representing at least 49% of the voting stock in AmerUs Life.

Section 8.12. IOWA APPROVALS AND REGULATIONS. (a) The Department
of Insurance of the State of Iowa shall at any time withdraw or materially
modify any approvals or consents it may have granted with respect to any Pledge
Agreement, and such withdrawal or material modification shall remain in effect
for a period of 60 days or more; or (b) the State of Iowa shall enact or modify
any law or statute, or any agency or instrumentality thereof (including, without
limitation, the Department of Insurance of the State of Iowa) shall promulgate
or modify any rule or regulation, in any such case which has or is reasonably
likely to have a Material Adverse Effect.

In the event an Event of Default shall have occurred and be
continuing, the Administrative Agent and the Banks may thereupon or thereafter,
in addition to their other rights and remedies referred to herein, take any
action at law or in equity to enforce the obligations and Indebtedness of the
Borrower to the Administrative Agent and the Banks under this Agreement and the
other Loan Documents and to enforce performance and observance of such Bank
Obligations by the Borrower and may, in connection therewith, exercise any and
all rights and remedies available at law or in equity or under any Pledge
Agreement with respect to the security interest created and granted thereunder.

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ARTICLE IX

YIELD PROTECTION; ILLEGALITY;
INDEMNIFICATION; CAPITAL ADEQUACY

Section 9.1. INCREASED COSTS. (a) The Borrower shall pay
directly to each Bank from time to time such amounts as such Bank may determine
to be necessary to compensate it or any Applicable Lending Office for any costs
incurred by such Bank or Applicable Lending Office, or any reduction of the rate
of return on assets or equity of such Bank or Applicable Lending Office to a
level below that which such Bank or Applicable Lending Office could have
achieved, which such Bank reasonably determines are attributable to its making
or maintaining of any Eurodollar Advances or its commitment to make any
Eurodollar Advances hereunder, or any reduction in any amount receivable by such
Bank hereunder in respect of any of such Loans or such commitment (such
increases in costs and reductions in amounts receivable being herein called
"INCREASED COSTS"), resulting from any Regulatory Change which:

(i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Note in respect of any of such Advances
(other than taxes imposed on or measured by the overall net income of such
Bank or of its Applicable Lending Office for any of such Loans by the
jurisdiction in which such Bank has its principal office or such
Applicable Lending Office); or

(ii) imposes or modifies any reserve, special deposit, capital
adequacy, capital maintenance or similar requirements (other than the
Reserve Requirement utilized in the determination of the Eurodollar Rate
for the Loan of which such Advance is a part) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities
of, such Bank (including any of such Advances, Loans or any deposits
referred to in the definition of "Eurodollar Rate"), or any commitment of
such Bank (including the Commitment of such Bank hereunder); or

(iii) imposes any other condition materially affecting this
Agreement or such Bank's Note (or any of such extensions of credit or
liabilities) or such Bank's Commitment.

(b) Without limiting the effect of the provisions of paragraph (a)
of this Section 9.1, in the event that, by reason of any Regulatory Change, any
Bank either (i) incurs Increased Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or other liabilities
of such Bank which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or commitments or other assets of such Bank which includes
Eurodollar Loans or such Bank's Commitment or (ii) becomes subject

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to restrictions on the amount of such category of liabilities or assets which it
may hold, then, if such Bank so elects by notice to the Borrower (with a copy to
the Administrative Agent), the obligation of such Bank to make Eurodollar
Advances or to convert Eurodollar Advances into new Eurodollar Advances or Base
Rate Advances into Eurodollar Advances shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 9.4 shall
be applicable).

(c) Without limiting the effect of the foregoing provisions of
this Section 9.1 (but without duplication), the Borrower shall pay directly to
each Bank from time to time on request such amounts as such Bank may reasonably
determine to be necessary to compensate such Bank (or, without duplication, any
Applicable Lending Office or the bank holding company of which such Bank is a
subsidiary) for any costs which it reasonably determines are attributable to the
maintenance by such Bank (or such Applicable Lending Office or such bank holding
company), pursuant to any law or regulation or any interpretation, directive or
request (whether or not having the force of law) of any court or governmental or
monetary authority (i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or requirement (whether or not having the force of
law and whether or not the failure to comply therewith would be unlawful)
heretofore or hereafter issued by any government or governmental or supervisory
authority implementing at the national level the Basle Accord (including,
without limitation, the Final Risk-Based Capital Guidelines of the Board of
Governors of the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR
Part 225, Appendix A) and the Final Risk-Based Capital Guidelines of the Office
of the Comptroller of the Currency (12 CFR Part 3, Appendix A)), of capital in
respect of its Commitments or Advances (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Bank (or any Applicable Lending Office or such bank holding
company) to a level below that which such Bank (or any Applicable Lending Office
or such bank holding company) could have achieved but for such law, regulation,
interpretation, directive or request). For purposes of this Section 9.1(c),
"BASLE ACCORD" shall mean the proposals for risk-based capital framework
described by the Basle Committee on Lending Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time or any replacement thereof.

(d) Each Bank shall notify the Borrower of any event occurring
after the date of this Agreement that will entitle such Bank to compensation
under paragraph (a) or (c) of this Section 9.1 as promptly as practicable after
such Bank obtains actual knowledge thereof. Each Bank will furnish to the
Borrower a certificate setting forth the basis and amount of each request by
such Bank for compensation under paragraph (a) or (c) of this Section 9.1.
Determinations and allocations by any Bank for purposes of this Section 9.1 of
the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this
Section 9.1 or of the effect of capital maintained pursuant to paragraph (c) of
this Section 9.1 on its

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costs or rate of return of maintaining Loans or its obligation to make Loans, or
on amounts receivable by it in respect of Loans, and of the amounts required to
compensate such Bank under this Section 9.1 shall be conclusive, absent manifest
error.

Section 9.2. LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Rate for any Interest Period:

(a) the Administrative Agent determines, which determination shall
be conclusive if made in good faith and in the absence of manifest error,
that quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in Section 1.1 are not being provided
in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein; or

(b) the Required Banks determine, which determination shall be
conclusive, and notify the Administrative Agent that the relevant rates of
interest referred to in the definition of "Eurodollar Rate" in Section 1.1
upon the basis of which the rate of interest for Eurodollar Loans for such
Interest Period is to be determined are not likely adequately to cover the
cost to such Banks of making or maintaining Eurodollar Loans for such
Interest Period;

then the Administrative Agent shall give the Borrower and each Bank prompt
notice thereof, and so long as such condition remains in effect, the Banks shall
be under no obligation to make additional Eurodollar Loans, to convert
Eurodollar Loans into new Eurodollar Loans or to convert Base Rate Loans into
Eurodollar Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or convert such Loans into Base Rate Loans in accordance with Section 2.7.

Section 9.3. ILLEGALITY. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Advances hereunder, then such Bank shall promptly notify the Borrower thereof
(with a copy to the Administrative Agent) and such Bank's obligation to make or
continue, or to convert other types of Advances into, Eurodollar Advances, or to
convert Eurodollar Advances into new Eurodollar Advances, shall be suspended
until such time as such Bank may again make and maintain Eurodollar Loans (in
which case the provisions of Section 9.4 shall be applicable).

Section 9.4. TREATMENT OF AFFECTED LOANS. If the obligation of
any Bank to make Eurodollar Advances, to convert Eurodollar Advances into new
Eurodollar Advances or to convert other types of Advances into Eurodollar
Advances shall be

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suspended pursuant to Section 9.1(b) or 9.3, such Bank's Eurodollar Advances, as
the case may be, shall be automatically converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for such Eurodollar Advances
(or on such earlier date as such Bank may specify to the Borrower with a copy to
the Administrative Agent) and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 9.1(b) or 9.3 which
gave rise to such conversion no longer exist:

(a) To the extent that such Bank's Eurodollar Advances have been
so converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Eurodollar Advances shall be applied
instead to its Base Rate Advances; and

(b) All Advances which would otherwise be made or continued by
such Bank as Eurodollar Advances shall be made or continued instead as
Base Rate Advances and all Advances of such Bank which would otherwise be
converted into Eurodollar Advances shall be converted instead into (or
shall remain as) Base Rate Advances.

If such Bank gives notice to the Borrower with a copy to the Administrative
Agent that the circumstances specified in Section 9.1(b) or 9.3 which gave rise
to the conversion of such Bank's Advances pursuant to this Section 9.4 no longer
exist (which such Bank agrees to do promptly upon such circumstances ceasing to
exist) at a time when Eurodollar Loans are outstanding, such Bank's Base Rate
Loans shall be automatically converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar Loans, to the
extent necessary so that, after giving effect thereto, all Loans held by the
Banks holding Eurodollar Loans and by such Bank are held pro rata (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.

Section 9.5. COMPENSATION. The Borrower shall pay to the
Administrative Agent for account of each Bank, upon the request of such Bank
through the Administrative Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Bank) to compensate it for any loss, cost or
expense which such Bank determines is attributable to:

(a) Any payment, prepayment or conversion of a Eurodollar Advance
made by such Bank for any reason (including, without limitation, the
prepayment of any Loans pursuant to Section 2.6 or 9.7 and the
acceleration of the Loans pursuant to Article 8) on a date other than the
last day of the Interest Period for such Advance; or

(b) Any failure by the Borrower for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 3 to

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be satisfied) to borrow a Eurodollar Advance from such Bank on the date
for such borrowing specified in the relevant Borrowing Request given
pursuant to Section 2.4.

Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of such payment,
prepayment, conversion or failure to borrow to the last day of the then current
Interest Period for such Advance (or, in the case of a failure to borrow, the
Interest Period for the related Loan which would have commenced on the date
specified for such borrowing) at the applicable rate of interest for such Loan
provided for herein over (ii) the amount of interest which otherwise would have
accrued on such principal amount at a rate per annum equal to the interest
component of the amount such Bank would have bid in the London interbank market
for Dollar deposits of leading banks in amounts comparable to such principal
amount and with maturities comparable to such period (as reasonably determined
by such Bank).

Section 9.6. TAXES. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings imposed by the United
States of America (or any political subdivision or tax authority of or in such
jurisdiction) and all liabilities with respect thereto, EXCLUDING, in the case
of each Bank and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Bank or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank's Applicable Lending Office (or, in the case of the Administrative Agent,
in which the office performing the functions of the Administrative Agent is
located) or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Bank or the Administrative Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
9.6) such Bank or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made
(provided, however, that the Borrower shall not be required to increase any such
sums with respect to any payments to be made to an Applicable Lending Office
located outside the United States if the Bank maintaining such Office fails to
comply with the requirements of Section 9.6(f)), (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with Applicable
Laws.

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(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").

(c) The Borrower will indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 9.6) paid by such Bank or the Administrative Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall
be made within 30 days from the date such Bank or the Administrative Agent (as
the case may be) makes written demand therefor.

(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to in
Section 11.6, the original or a certified copy of a receipt evidencing payment
thereof.

(e) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 9.6 shall survive the payment in full of principal and interest
hereunder and under the Notes.

(f) Each Non-U.S. Bank agrees that it shall deliver to the
Borrower and the Administrative Agent (a) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
as the case may be, certifying that such Bank is entitled to receive payments
under this Agreement and its Note without deduction or withholding of any United
States federal income taxes and (b) an Internal Revenue Service Form W-8 or W-9
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Each Non-U.S. Bank which delivers a Form
1001 or 4224 and Form W-8 or W-9 pursuant to the next preceding sentence further
undertakes to deliver to the Borrower and the Administrative Agent, two further
copies of Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms,
or other manner of certification, as the case may be, on or before the date that
any form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it, and such
extensions or renewals thereof as may reasonably be requested by the Borrower,
certifying in the case of a Form 1001 or 4224 that such Bank is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless in any such cases an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such

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forms inapplicable or which would prevent a Bank from duly completing and
delivering any such form with respect to it and such Bank advises the Borrower
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of a Form W-8
or W-9, establishing an exemption from United States backup withholding tax.
Each Person that shall become a Bank, or shall become a Participant pursuant to
Section 11.10(c), shall, upon the effectiveness of the related transfer, be
required to provide all of the relevant forms and statements required pursuant
to this Section 9.6(f); provided, that in the case of a Participant such
Participant shall furnish all such required forms and statements to both the
Borrower and the Bank from which the related participation shall have been
purchased.

Section 9.7. CHANGE OF LENDING OFFICE. Each Bank agrees that,
upon the occurrence of any event giving rise to the operation of Section 9.1(a)
or (c), 9.3 or 9.6(a) with respect to such Bank, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for any Advances affected by such
event; PROVIDED that such designation is made on such terms that, in the
reasonable opinion of such Bank, such Bank and its lending office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 9.7 shall affect or postpone any of the obligations of
the Borrower or the right of any Bank provided in Section 9.1, 9.3 or 9.6.

Section 9.8. REPLACEMENT OF BANKS. Upon the occurrence of any
event giving rise to the operation of Section 9.1(a) or (c), 9.3 or 9.6(a) with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the other Banks,
the Borrower shall have the right, if no Default or Event of Default then
exists, to replace such Bank (the "REPLACED BANK") with one or more other
lending institutions (collectively, the "REPLACEMENT BANK") reasonably
acceptable to the Administrative Agent; PROVIDED that (i) at the time of any
replacement pursuant to this Section 9.8, the Replacement Bank shall enter into
one or more Assignment and Acceptance Agreements pursuant to Section 11.10(b)
(and with all fees payable pursuant to said Section 11.10(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire the
Commitment (if any) and outstanding Advances of the Replaced Bank and, in
connection therewith, shall pay to the Replaced Bank in respect thereof an
amount equal to the sum of (a) an amount equal to the principal of, and all
accrued interest on, all outstanding Advances of the Replaced Bank, and (b) an
amount equal to all accrued, but theretofore unpaid, Commitment Fees owing to
the Replaced Bank pursuant to Section 2.11(a), and (ii) all obligations
(including, without limitation, all such amounts, if any, owing under Section
9.5) of the Borrower owing to the Replaced Bank (other than those specifically
described in clause (i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in full to such Replaced
Bank concurrently with such replacement. Upon the execution of the

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respective Assignment and Acceptance Agreements, the payment of amounts referred
to in clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Bank.

ARTICLE X

THE ADMINISTRATIVE AGENT

Section 10.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Bank hereby
irrevocably appoints and authorizes Chase to act as its Administrative Agent
hereunder with such powers as are specifically delegated to the Administrative
Agent by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 shall
include reference to Chase's Affiliates and its own and its Affiliates'
officers, directors, employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement, and shall
not by reason of this Agreement be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements, representations or
warranties contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other document
referred to or provided for herein or for any failure by the Borrower or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder; and (d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith, except for its own
gross negligence or willful misconduct. The Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Administrative Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a notice of the assignment or
transfer thereof shall have been filed with the Administrative Agent, together
with the consent of the Borrower to such assignment or transfer.

Section 10.2. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected

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by the Administrative Agent. For purposes of providing a certificate or
statement as to amounts owing to a Bank, each Bank shall provide a certificate
or other statement to the Administrative Agent setting forth such amounts and
the Administrative Agent may exclusively rely on such certificate or statement.
As to any matters not expressly provided for by this Agreement, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions given by the
Required Banks (or all of the Banks, if the approval of all Banks is expressly
required by the terms of this Agreement), and such instructions of such Banks
and any action taken or failure to act pursuant thereto shall be binding on all
of the Banks.

Section 10.3. DEFAULTS. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default (other than
the non-payment of principal of or interest on Loans or of commitment fees)
unless the Administrative Agent has received notice from a Bank or the Borrower
specifying such Default and stating that such notice is a "Notice of Default."
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Banks (and shall give each Bank prompt notice of each such
non-payment). The Administrative Agent shall (subject to Section 10.7 of this
Agreement) take such action with respect to such Default as shall be directed by
the Required Banks, provided, that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Banks except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Banks, or all of the Banks.

Section 10.4. RIGHTS AS A BANK. Chase (and any successor acting as
Administrative Agent) and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with the Borrower (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and Chase and its Affiliates may accept fees and other consideration from
the Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Banks.

Section 10.5. INDEMNIFICATION. The Banks agree to defend,
indemnify and hold harmless the Administrative Agent (to the extent not
reimbursed under Sections 11.1 and 11.11(c), but without limiting the
obligations of the Borrower under Sections 11.1 and 11.11(c)) ratably in
accordance with the aggregate principal amount of the Loans held by the Banks
(or, if no Loans are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative

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Agent (including by any Bank) arising out of or by reason of any investigation
or any way relating to or arising out of this Agreement or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
(including, without limitation, the costs and expenses which the Borrower is
obligated to pay under Section 11.1 but excluding, unless a Default has occurred
and is continuing, normal administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or of any such other documents, provided that no Bank shall
beliable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.

Section 10.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS.
Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by the Borrower of this Agreement or any other document referred to
or provided for herein or to inspect the Properties or books of the Borrower or
any of its Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
of its Subsidiaries (or any of their affiliates) which may come into the
possession of the Administrative Agent or any of its affiliates.

Section 10.7. FAILURE TO ACT. Except for action expressly required
of the Administrative Agent hereunder, the Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
receive further assurances to its satisfaction from the Banks of their
indemnification obligations under Section 10.5 against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.

Section 10.8. RESIGNATION OF ADMINISTRATIVE AGENT. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Banks and the Borrower. Upon any such resignation, the Required Banks
shall have the right to appoint a successor Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld). If
no successor Administrative Agent shall have been so appointed by the Required
Banks and shall have accepted such appointment within 30 days

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after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a bank with a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from itsduties
and obligations hereunder. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article 10 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent.

ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.1. FEES AND EXPENSES. Whether or not the transactions
herein contemplated shall be consummated, (a) the Borrower agrees to pay or
reimburse the Administrative Agent for, and indemnify and hold the
Administrative Agent harmless from, all reasonable costs and expenses
(including, without limitation, fees, costs and disbursements of counsel)
incurred in connection with the development, preparation and execution of the
Loan Documents and the issuance of the Notes; (b) the Borrower agrees to pay or
reimburse the Administrative Agent for, and indemnify and hold the
Administrative Agent harmless from, all reasonable costs and expenses
(including, without limitation, fees, costs and disbursements of counsel)
incurred in connection with the development, preparation and execution of any
amendment, supplement or modification to the Loan Documents (whether or not any
such amendment, supplement or modification is executed and delivered); and (c)
the Borrower agrees to pay or reimburse the Administrative Agent and each Bank
for, and indemnify and hold the Administrative Agent and each Bank harmless
from, the Borrower's performance of and compliance with all agreements and
conditions contained herein on their part to be performed or complied with
(including, without limitation, all costs of filing or recording any financing
statements and other documents) and the reasonable fees and expenses and
disbursements of all counsel in connection with the enforcement of or
preservation of any rights under or pursuant to the Loan Documents, including,
without limitation, in connection with any restructuring or workout, whether or
not consummated. In addition, the Borrower shall, promptly upon request
therefor, pay to the Administrative Agent and each Bank such amount or amounts
as shall be necessary to indemnify the Administrative Agent or such Bank and its
directors, officers, employees and agents against, and to hold the
Administrative Agent and such Bank and such persons harmless from, any and all
other losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees and expenses, incurred by or asserted against the
Administrative Agent or such Bank or any such Persons arising out of, in any

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way connected with, or as a result of (i) the Loan Documents and the other
documents contemplated hereby, the performance by the parties hereto and thereto
of their respective obligations hereunder and thereunder (including, but not
limited to, the making of the Commitments), (ii) the use of the proceeds of the
Loans or (iii) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not the Administrative Agent and such Bank or
any such Person is a party thereto; provided, however, that such indemnity shall
not, as to the Administrative Agent or such Bank, apply to any such
losses,claims, damages, liabilities or related expenses which (x) shall have
been determined in a final, nonappealable judgment of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Administrative Agent or such Bank, or (y) result from legal proceedings
commenced against the Administrative Agent or such Bank by any security holder
or creditor of such Agent or Bank arising out of and based upon rights afforded
any such security holder or creditor solely in its capacity as such. The
obligations of the Borrower under this Section 11.1 with respect to all costs
and expenses so arising prior to or in connection with the payment in full of
the Notes and the discharge of the Liens securing the same shall continue in
full force and effect, and shall survive the termination of this Agreement,
notwithstanding the payment of the Notes (or any evidence of indebtedness
hereafter issued in exchange or substitution therefor) or any disposition
thereof by the Banks.

Section 11.2. SURVIVAL OF AGREEMENTS AND REPRESENTATIONS. All
agreements, representations and warranties made herein and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the delivery of this Agreement and the Notes.

Section 11.3. MODIFICATIONS, CONSENTS AND WAIVERS; ENTIRE
Agreement. (a) With the written consent of the Required Banks, the
Administrative Agent and the appropriate parties to the Loan Documents may, from
time to time, enter into written amendments, supplements or modifications
thereof and, with the consent of the Required Banks, the Administrative Agent on
behalf of the Banks may execute and deliver to any such parties a written
instrument waiving, on such terms and conditions as the Administrative Agent may
specify in such instrument, any of the requirements of the Loan Documents or any
Default or Event of Default and its consequences; PROVIDED, HOWEVER, that no
such amendment, supplement, modification or waiver shall (i) increase the
Commitment of any Bank, (ii) extend the maturity of any Note, (iii) decrease the
rate of interest of, extend the time or change the method of payment of or
increase or forgive the principal amount of, or accrued interest on, any Note,
(iv) decrease the Commitment Fee, or extend the time of payment thereof, (v)
except as otherwise provided herein and in the Pledge Agreements, release all or
any material part of the Collateral, (vi) change the provisions of this Section
11.3 or (vii) change the definition of Required Banks, without the consent of
all of the Banks; and PROVIDED FURTHER, that no such amendment, supplement,
modification or waiver shall amend, modify or waive any provision of Article 10
or

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otherwise change any of the rights, fees or obligations of the Administrative
Agent hereunder or under the Loan Documents without the written consent of the
Administrative Agent. Any such amendment, supplement, modification or waiver
shall apply equally to each of the Banks and shall be binding upon the parties
to the applicable agreement, the Banks, the Administrative Agent and all future
holders of the Notes. In the case of any waiver, the parties to the applicable
Loan Document, the Banks and the Administrative Agent shall be restored to their
former position and rights hereunder and under theoutstanding Notes and other
Loan Documents, and any waiver of any Default or Event of Default shall not
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.

(b) Except with respect to certain Fees which are subject to
separate agreements, this Agreement and the Loan Documents embody the entire
agreement and understanding between the Banks, the Administrative Agent and the
Borrower and supersede all prior agreements and understandings relating to the
subject matter hereof.

Section 11.4. REMEDIES CUMULATIVE. Each and every right granted to
the Administrative Agent and the Banks hereunder or under any other document
delivered hereunder or in connection herewith, or allowed them by law or equity,
shall be cumulative and may be exercised from time to time. No failure on the
part of the Administrative Agent or any Bank or the holder of any Note to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other or future exercise thereof or the exercise of any other right. The due
payment and performance of the Borrower's indebtedness, liabilities and
obligations under the Notes, this Agreement and the other Loan Documents shall
be without regard to any counterclaim, right of offset or any other claim
whatsoever which the Borrower may have against the Administrative Agent or any
Bank and without regard to any other obligation of any nature whatsoever which
the Administrative Agent or any Bank may have to the Borrower.

Section 11.5. FURTHER ASSURANCES. At any time and from time to
time, upon the request of the Administrative Agent, the Borrower shall execute,
deliver and acknowledge or cause to be executed, delivered and acknowledged,
such further documents and instruments (including, without limitation,
additional financing statements) and do such other acts and things as the
Administrative Agent may request in order fully to effect the purposes of the
Loan Documents and any other agreements, instruments and documents delivered
pursuant hereto or in connection with the Loans.

Section 11.6. NOTICES. Except as otherwise expressly provided for
herein, all notices and other communications provided for herein shall be by
telecopy, telegraph, cable, or in writing and telecopied, telegraphed, cabled,
mailed or delivered by personal delivery or by overnight delivery service to the
intended recipient at the telecopy number

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or "Address for Notices" specified below its name on the signature pages hereof;
or, as to any party, at such other telecopier number or address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided for herein, all notices and other communications hereunder shall be
deemed to have been duly given when transmitted by telecopier (provided an
indication of good transmission has been generated), delivered to the telegraph
or cable office or personally delivered or, in the case of a mailed notice,on
the date deposited in the mails (registered or certified mail, return receipt
requested, postage prepaid), in each case given or addressed as aforesaid.

Section 11.7. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which shall constitute an original and all of
which shall constitute one and the same instrument.

Section 11.8. CONSTRUCTION; CONSENT TO JURISDICTION AND SERVICE OF
Process; Waiver of Trial by Jury. (a) The headings used in this Agreement are
for convenience only and shall not be deemed to constitute a part hereof. THE
LOAN DOCUMENTS HAVE BEEN ENTERED INTO AND CONSUMMATED IN THE STATE OF NEW YORK,
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. The Loan Documents shall be
construed without regard to any presumption or other rule requiring construction
against the party causing the Loan Documents to be drafted.

(b) The Borrower irrevocably consents that any legal action or
proceeding against it under, arising out of or in any manner relating to, this
Agreement, the Notes, or any of the other Loan Documents, may be brought in any
court of the State of New York located within the Southern District of New York
or in the United States District Court for the Southern District of New York or
the United States Court of Appeals for the Second Circuit. The Borrower, by the
execution and delivery of this Agreement, expressly and irrevocably consents and
submits to the personal jurisdiction of any of such courts in any such action or
proceeding. The Borrower further irrevocably consents to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to it or to its registered agent by hand or by
mail in the manner provided for in Section 11.6 hereof. The Borrower hereby
expressly and irrevocably waives any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper venue or
FORUM NON CONVENIENS or any similar basis. Nothing in this Section 11.8 shall
affect or impair in any manner or to any extent the right of the Administrative
Agent or any Bank to commence legal proceedings or otherwise proceed against any
Borrower in any jurisdiction or to serve process in any manner permitted by law.

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(c) THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH BANK HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM IN RESPECT OF THISAGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH BANK AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT EITHER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 11.9. SEVERABILITY. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity on
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision in this Agreement in
any jurisdiction.

Section 11.10. SUCCESSORS AND ASSIGNS. (a) This Agreement, the
Notes and the other Loan Documents shall be binding upon and inure to the
benefit of the Borrower, the Banks, the Administrative Agent, all future holders
of the Notes and their respective successors and assigns, except that the
Borrower may not assign, delegate or transfer any of its rights or obligations
under this Agreement, the Notes and the other Loan Documents without the prior
written consent of the Administrative Agent and each Bank.

(b) Each Bank may assign in whole or in part any of its
Commitment, its Advances and its Note (but only with the consent of the
Administrative Agent, which consent will not be unreasonably withheld);
PROVIDED that (i) no such consent by the Administrative Agent shall be
required in the case of any assignment by a Bank to any of its Affiliates or to
another Bank; (ii) any such partial assignment shall be in an amount at least
equal to $5,000,000 or, if less, the entire amount of the assignor Bank's
Commitment, Advances and Note; and (iii) each such assignment by a Bank of its
Advances, Note, or Commitment shall be made in such manner so that the same
portion of its Advances, Note, and Commitment is assigned to the respective
assignee. Upon execution and delivery by the assignor and the assignee to the
Administrative Agent of an Assignment and Acceptance Agreement pursuant to which
such assignee agrees to become a "Bank" hereunder (if not

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<PAGE>

already a Bank) having the Commitment(s) and Advances specified in such
instrument, and upon consent thereto by the Administrative Agent to the extent
required above, the assignee shall have, to the extent of such assignment
(unless otherwise provided in such assignment with the consent of the
Administrative Agent), the obligations, rights and benefits of a Bank hereunder
holding the Commitment(s) and Advances (or portions thereof) assigned to it (in
addition to the Commitment(s) and Advances, if any, theretofore held by such
assignee) and the assignor Bank shall, to the extent of such assignment, be
released from the Commitment(s) (or portion(s) thereof) so assigned. Upon each
such assignment the assignor Bank shall pay the Administrative Agent an
assignment fee of $3,500.

(c) A Bank may sell or agree to sell to one or more other Persons
a participation in all or any part of any Advances made by it, or in its
Commitments, in which event each purchaser of a participation (a
"PARTICIPANT") shall not have any rights or benefits under this Agreement or
any Note (the Participant's rights against such Bank in respect of such
participation to be those set forth in the agreements executed by such Bank in
favor of the Participant). All amounts payable by the Borrower to any Bank
under Article 9 in respect of Advances made by it, and its Commitments, shall be
determined as if such Bank had not sold or agreed to sell any participations in
such Advances and Commitments, and as if such Bank were funding each of such
Advances and Commitments in the same way that it is funding the portion of such
Advances and Commitments in which no participations have been sold. In no event
shall a Bank that sells a participation agree with the Participant to take or
refrain from taking any action hereunder except that such Bank may agree with
the Participant that it will not, without the consent of the Participant, agree
to (i) increase or extend the term, or extend the time or waive any requirement
for the reduction or termination, of such Bank's related Commitment, (ii) extend
the date fixed for the payment of principal of or interest on the related Loan
or Loans, (iii) reduce the amount of any such payment of principal, (iv) reduce
the rate at which interest is payable thereon to a level below the rate at which
the Participant is entitled to receive such interest, or (v) release all or any
material part of the Collateral.

(d) Anything in this Section 11.10 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of its
Advances and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Bank from its obligations hereunder.

(e) Schedule 0.1 shall be deemed modified to reflect the
respective Commitments of the Banks immediately upon the effectiveness of
assignment made in accordance with Section 11.10(b) above, and the
Administrative Agent shall promptly distribute a new Schedule 0.1 to the
Borrower and the Banks to reflect such modification; provided, however, that any
failure to distribute such a modified Schedule 0.1 shall not affect the
effectiveness of such modification.

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<PAGE>

Section 11.11. ADJUSTMENTS; SETOFF. (a) If any Bank (a
"BENEFITED BANK") shall at any time receive any payment of all or any part of
its Advances, or interest thereon, or receive any Collateral in respect thereof
(whether voluntarily or involuntarily, by setoff, pursuant to events or
proceedings of the nature referred to in Section 8.6, or otherwise) in a greater
proportion than any such payment to and Collateral received by any other Bank,
if any, in respect of such other Bank's Advances, or interest therein, such
Benefited Bank shall purchase for cash from the other Banks such portion of each
such other Bank's Advances, or shall provide such other Banks with the benefits
of any such Collateral, or the proceeds thereof, as shall be necessary to cause
such Benefited Bank to share the excess payment or benefits of such Collateral
or proceeds ratably with each of the Banks; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefited Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Bank so purchasing a portion of another Bank's
Advances may exercise all rights of payment (including, without limitation,
rights of setoff) with respect to such portion as fully as if such Bank were the
direct holder of such portion.

(b) In addition to any rights and remedies of the Banks provided
by law, upon the occurrence of an Event of Default and acceleration of the
obligations owing in connection with this Agreement, or at any time upon the
occurrence and during the continuance of an Event of Default under Section 8.1,
each Bank shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, to set off and apply against any indebtedness or account,
whether matured or unmatured, general or special, of the Borrower to such Bank,
any amount owing from such Bank to the Borrower, at, or at any time after, the
happening of any of the above mentioned events. To the extent permitted by
Applicable Laws, the aforesaid right of setoff may be exercised by such Bank
against the Borrower or against any custodian, debtor in possession, assignee
for the benefit of creditors, receiver, liquidator, rehabilitator or execution,
judgment or attachment creditor of the Borrower, or against anyone else claiming
through or against the Borrower or such custodian, debtor in possession,
assignee for the benefit of creditors, receiver, liquidator, rehabilitator or
execution, judgment or attachment creditor, notwithstanding the fact that such
right of setoff shall not have been exercised by such Bank prior to the making,
filing or issuance, or service upon such Bank of, or of notice of, any
insolvency, liquidation or rehabilitation, petition, assignment for the benefit
of creditors, appointment or application for the appointment of a receiver,
liquidator or rehabilitator or issuance of execution, subpoena, order or
warrant. Each Bank agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Bank,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

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<PAGE>

(c) The provisions of Section 11.11(a) shall remain operative and
in full force and effect regardless of the expiration of the term of the
Commitment or the Loan Documents, the consummation of the transactions
contemplated hereby and thereby, the repayment of all or a portion of the Loans,
the payment in full of the Notes, the invalidity or unenforceability of any term
or provision of the Loan Documents, or any investigation made by or on behalf of
the Administrative Agent, any Bank or the Borrower or the contentor accuracy of
any representation or warranty made by the Borrower under any Loan Document or
any other document contemplated hereby. The provisions of Section 11.11(b)
shall remain operative and in full force and effect regardless of the repayment
of a portion of the Loans, the invalidity or unenforceability of any term or
provision of the Loan Documents, or any investigation made by or on behalf of
the Administrative Agent, any Bank or the Borrower or the content or accuracy of
any representation or warranty made by the Borrower under any Loan Document or
any other document contemplated hereby.

Section 11.12. CONFIDENTIALITY. The Administrative Agent and the
Banks each agree to keep confidential, in accordance with their respective
customary practices, all non-public information provided to them by the Borrower
pursuant to this Agreement that is designated by the Borrower in writing as
confidential; provided that nothing herein shall prevent any such Person from
disclosing any such information (a) to any other such Person, (b) to any Person
that may or shall become a Bank, or a Participant pursuant to Section 11.10(c),
provided the recipient of such information has been made aware of, and has
acknowledged, the confidential nature thereof, (c) to its Subsidiaries or other
affiliates, provided, that (i) such disclosure would not violate commitments
made to bank or securities regulatory authorities regarding the sharing of
customer information, and (ii) such subsidiary or affiliate has been made aware
of, and has acknowledged, the confidential nature thereof, (d) to its employees,
directors, agents, attorneys, accountants and other professional advisors,
provided, that (i) such disclosure would not violate commitments made to bank or
securities regulatory authorities regarding the sharing of customer information
and (ii) the Administrative Agent or Bank disclosing such confidential
information pursuant to this clause (d) shall remain liable for any
non-permitted disclosure of such information by any such employee, director,
agent, attorney, accountant or professional advisor, (e) upon the request or
demand of any Governmental Authority having jurisdiction over such Person, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, or (g) which has been
publicly disclosed other than in breach of this Agreement.

Section 11.13. COLLATERAL RELEASE. At such time as (i) all or
part of the Offering has been consummated, and (ii) the Borrower shall have
prepaid the Term Loans in an aggregate principal amount equal to or greater than
$50,000,000 (such date, the "Collateral Release Date"), so long as no Default
shall exist at such time, each of the Holdings Guaranty and the Group Pledge
Agreement shall be terminated and no longer be of any force or effect and the
Administrative Agent is hereby authorized and directed at

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<PAGE>

such time to take such actions as are appropriate to give effect to such
termination and such release.

* * *

-89-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

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<PAGE>

AMERUS LIFE HOLDINGS, INC.

By /s/ Michael G. Fraizer
-------------------------------------
Name: Michael G. Fraizer
Title: Senior Vice President

By /s/ Michael E. Sproule
-------------------------------------
Name: Michael E. Sproule
Title: Executive Vice President

Address for Notices:

418 Sixth Avenue
Des Moines, Iowa 50309
Telephone No.: (515) 283-2371
Telecopier No.: (515) 283-3402
Attention: Michael Fraizer

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<PAGE>

THE CHASE MANHATTAN BANK,
individually and as Administrative Agent

By /s/ Isoldl O'Hanlon
-------------------------------------
Name: Isoldl O'Hanlon
Title: Managing Director

Address for Notices and Applicable
Lending Office:

The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081
Telephone No.: (212) 270-3545
Telecopier No.: (212) 270-1063
Attention: Helen Newcomb

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<PAGE>

MAOF 0210 FLEET BANK (BOSTON)
1 Federal Street
Boston, MA 02110-2010 /s/ Sandra M. Anselment
Attn: Sandra Anselment -----------------------------
Telephone: (617) 346-5827 By: Sandra M. Anselment
Telecopy: (617) 346-5825 Title: AVP

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<PAGE>

75 Wall Street, 35th Floor DRESDNER BANK AG,
New York, NY 10005-2889 NEW YORK BRANCH
Attn: Latisha Azweem AND GRAND CAYMAN
Telephone: (212) 429-2249 BRANCH
Telecopy: (212) 429-2524
/s/ Thomas J. Nadeamia
-------------------------------
By: Thomas J. Nadeamia
Title: Vice President

/s/ John W. Sweeney
-------------------------------
By: John W. Sweeney
Title: Assistant Vice President

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<PAGE>

1251 Avenue of the Americas BANK OF TOKYO
12th Floor MITSUBISHI TRUST
New York, NY 10020-1104 COMPANY
Attn: Dane Holmes (NEW YORK)
Telephone: (212) 782-4354
Telecopy: (212) 782-4935 /s/ Hiroaki Fuchida
-----------------------------
By: Hiroaki Fuchida
Title: Senior Vice President
and Manager

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<PAGE>

115 South Lasalle Street BANK OF MONTREAL
Chicago, Illinois 60603 (CHICAGO)
Attn: Kathy Betz
Telephone: (312) 750-3785 /s/ Robert C. Meyer
Telecopy: (312) 750-4352 -----------------------------
By: Robert C. Meyer
Title: Director

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<PAGE>

Banc One Center/ BANK ONE
Tower 111 Monument Circle (INDIANAPOLIS)
Suite 1921
Indianapolis, IN 46204
Attn: Peter Little /s/ Peter S. Little
Telephone: (317) 321-3074 -----------------------------
Telecopy: (317) 321-8079 By: Peter S. Little
Title: Vice President

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<PAGE>

One Mellon Bank Center, Room 370 MELLON BANK
Pittsburgh, PA 15258-0001 (PITTSBURGH)
Attn: Sally J. Schurko
Telephone: (412) 234-7541 /s/ signature
Telecopy: (412) 234-8087 -----------------------------
By: (name)
Title: (title)

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<PAGE>

317 Sixth Avenue BOATMEN'S BANK IOWA
Des Moines, IA 50309 (DES MOINES)
Attn: Jeff Sims
Telephone: (515) 235-7210 /s/ Jeff A. Sims
Telecopy: (515) 282-9514 -----------------------------
By: Jeff A. Sims
Title: Vice President

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<PAGE>

666 Walnut Street NORWEST BANK IOWA,
Des Moines,IA 50304 NATIONAL
Attn: Diane Ramsey ASSOCIATION
Telephone: (515) 245-8491
Telecopy: (515) 245-3128 /s/ Diane S. Ramsey
-------------------------------
By: Diane S. Ramsey
Title: Assistant Vice President

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<PAGE>

[Nine separate Notes were executed by AmerUs Life Holdings, Inc. in the form
indicated below, to the banks and in the amounts indicated on the schedule
following this Note]

NOTE

$________________ New York, New York
December 11, 1996

FOR VALUE RECEIVED, AMERUS LIFE HOLDINGS, INC., a corporation duly
organized under the laws of the State of Iowa (the "Borrower"), hereby promises
to pay to the order of _________________________ (the "Bank"), in lawful money
of the United States of America in immediately available funds, at the
Administrative Agent's Office (as defined in the Agreement referred to below)
initially located at One Chase Manhattan Plaza, New York, New York 10081, the
principal sum of _______________ DOLLARS ($_____) or, if less, the then unpaid
principal amount of all Advances (as defined in the Agreement) made by the Bank
pursuant to the Agreement, on the date or dates specified in the Agreement.

The Borrower also promises to pay interest on the unpaid principal
amount of each Advance in like money at said office from the date such Advance
is made until paid at the rates and at the times provided in Section 2.9 of the
Agreement.

This Note is one of the Notes referred to in Section 2.3 of the Credit
Agreement, dated as of December 11, 1996, among the Borrower, the financial
institutions from time to time party thereto (including the Bank), and The Chase
Manhattan Bank, as Administrative Agent (as from time to time in effect, the
"Agreement") and is entitled to the benefits thereof. This Note is secured by
the Pledge Agreements (as defined in the Agreement) and is entitled to the
benefits of the Loan Documents (as defined in the Agreement). As provided in
the Agreement, this Note is subject to voluntary and mandatory prepayment, in
whole or in part.

In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may become
or be declared to be due and payable in the manner and with the effect provided
in the Agreement.

<PAGE>

Page 2

The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.

AMERUS LIFE HOLDINGS, INC.

By /s/ Michael G. Fraizer
-----------------------------
Title: Senior Vice President

<PAGE>
SCHEDULE OF NOTES

BANK AMOUNT
The Chase Manhattan Bank $21,750,000.00
Dresdner Bank AG, New York
Branch and Grand Cayman Branch 19,750,000.00
Bank of Tokyo Mitsubishi Trust
Company (New York) 19,750,000.00
Bank of Montreal (Chicago) 19,750,000.00
Bank One, Indianapolis, N.A. 19,750,000.00
Mellon Bank (Pittsburgh) 19,750,000.00
Boatmen's Bank Iowa (Des Moines) 19,750,000.00
Fleet National Bank 19,750,000.00
Norwest Bank Iowa, National
Association 15,000,000.00

<PAGE>

BORROWER PLEDGE AGREEMENT

BORROWER PLEDGE AGREEMENT, dated as of December 11, 1996 (as
amended, modified or supplemented from time to time, this "Agreement"), made by
AMERUS LIFE HOLDINGS, INC., a corporation organized under the laws of the State
of Iowa (the "Pledgor"), in favor of THE CHASE MANHATTAN BANK, as Administrative
Agent (the "Pledgee"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.

W I T N E S S E T H :

WHEREAS, the Pledgor, various financial institutions from time to time
party thereto (the "Banks"), and The Chase Manhattan Bank, as Administrative
Agent (together with any successor agent, the "Administrative Agent", and
together with the Banks, the "Bank Creditors"), have entered into a Credit
Agreement, dated as of December 11, 1996 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), providing for the making of Loans to
the Pledgor as contemplated therein;

WHEREAS, the Pledgor desires to incur Loans pursuant to the Credit
Agreement;

WHEREAS, the Pledgor may from time to time after the date hereof enter
into one or more (i) interest rate agreements, interest rate cap agreements,
interest rate collar agreements or other similar agreements or arrangements,
(ii) foreign exchange contracts, currency swap agreements or similar agreements
or arrangements designed to protect against the fluctuations in currency values
and/or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement (but only as to which all parties thereto have notified
the Pledgee that such agreement or arrangement will be secured by this
Agreement) with an Other Creditor (as hereinafter defined), an "Interest Rate
Protection Agreement or Other Hedging Agreement"), with a Bank or an affiliate
of a Bank (each such Bank or affiliate, even if the respective

<PAGE>

Page 2

Bank subsequently ceases to be a Bank under the Credit Agreement for any reason,
together with such Bank's or affiliate's successors and assigns, collectively,
the "Other Creditors," and together with Bank Creditors, the "Secured
Creditors");

WHEREAS, it is a condition precedent to the making of Loans to the
Pledgor under the Credit Agreement that the Pledgor shall have executed and
delivered to the Pledgee this Agreement;

WHEREAS, the Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;

NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:

1. SECURITY FOR OBLIGATIONS. This Agreement is made by the Pledgor
for the benefit of the Secured Creditors to secure:

(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) of the Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
the Credit Agreement, the Notes, this Agreement and the other Loan
Documents (the Loan Documents, together with Interest Rate Protection
Agreements and Other Hedging Agreements being hereinafter collectively
called the "Secured Debt Agreements") and the due performance and
compliance by the Pledgor with the terms of the Loan Documents (all such
obligations and liabilities under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Interest Rate
Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations");

(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of the Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
any Interest Rate Protection

<PAGE>

Page 3

Agreement or Other Hedging Agreement (all such obligations and liabilities
under this clause (ii) being herein collectively called the "Other
Obligations");

(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest
in the Collateral;

(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of the Pledgor referred to
in clauses (i), (ii) and (iii) above, after an Event of Default (such term,
as used in this Agreement, shall mean any Event of Default under, and as
defined in, the Credit Agreement, or any payment default by the Pledgor
under any Interest Rate Protection Agreement or Other Hedging Agreement and
shall in any event include, without limitation, any payment default (after
the expiration of any applicable grace period) on any of the Obligations
(as hereinafter defined)) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing or realizing on the Collateral, or of any
exercise by the Pledgee of its rights hereunder, together with reasonable
attorneys' fees and court costs; and

(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement;

all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".

2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein: (i)
subject to the immediately succeeding sentence, the term "Stock" shall mean all
of the issued and outstanding shares of capital stock of any Subsidiary at any
time directly owned by the Pledgor, including, without limitation, all
outstanding shares of AmerUs Life but excluding the stock of the Trust formed in
connection with the Preferred Offering, (ii) subject to the immediately
succeeding sentence, the term "Notes" shall mean all surplus notes or surplus
debentures (including, without limitation, the Surplus Note) from time to time
issued by a Subsidiary of the Pledgor and owned by the Pledgor, including,
without limitation, any surplus notes or surplus debentures issued by AmerUs
Life and owned by the Pledgor, but excluding the Junior Subordinated Debenture
issued by Borrower in connection with Preferred Offering and (iii) the term
"Securities" shall mean all of the Stock and Notes. Notwithstanding anything to
the contrary contained in this Agreement, the terms Stock,

<PAGE>

Page 4

Notes, Securities and Collateral shall not include any stock or notes which the
Pledgor is prohibited by statute from pledging; PROVIDED that in any event the
Pledgor shall ensure that at all times there is pledged hereunder capital stock
representing the maximum number of shares of AmerUs Life permitted by Applicable
Law at any time to be pledged to the Banks hereunder. The Pledgor represents
and warrants that on the date hereof (i) each direct Subsidiary of the Pledgor,
and the direct ownership thereof, is listed in Annex A hereto; (ii) the Stock
held by the Pledgor consists of the number and type of shares of the stock of
the corporations as described in Annex B hereto; (iii) such Stock constitutes
that percentage of the issued and outstanding capital stock of the issuing
corporation as is set forth in Annex B hereto; (iv) the Notes held by the
Pledgor consist of the promissory notes described in Annex C hereto; (v) the
stock and the Notes pledged hereunder are those described in Annexes A and B and
(vi) on the date hereof, the Pledgor owns no other Securities.

3. PLEDGE OF SECURITIES, ETC.

3.1. PLEDGE. To secure the Obligations and for the purposes set
forth in Section 1 hereof, the Pledgor hereby: (i) grants to the Pledgee a
security interest in all of the Collateral owned by the Pledgor; (ii) pledges
and deposits as security with the Pledgee the Securities owned by the Pledgor on
the date hereof, and delivers to the Pledgee certificates or instruments
therefor, duly endorsed in blank in the case of Notes and accompanied by undated
stock powers duly executed in blank by the Pledgor in the case of Stock, or such
other instruments of transfer as are acceptable to the Pledgee; and (iii)
assigns, transfers, hypothecates, mortgages, charges and sets over to the
Pledgee all of the Pledgor's right, title and interest in and to such Securities
(and in and to all certificates or instruments evidencing such Securities), to
be held by the Pledgee, upon the terms and conditions set forth in this
Agreement.

3.2. SUBSEQUENTLY ACQUIRED SECURITIES. If the Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, the Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
therefor or instruments thereof, duly endorsed in blank in the case of Notes and
accompanied by undated stock powers duly executed in blank in the case of Stock,
or such other instruments of transfer as are acceptable to the Pledgee, and will
promptly thereafter deliver to the Pledgee a certificate executed by any
authorized officer of the Pledgor describing such Securities and certifying that
the same have been duly pledged with the Pledgee hereunder.

<PAGE>

Page 5

3.3. UNCERTIFICATED SECURITIES. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2 hereof, if any Securities (whether
now owned or hereafter acquired) are uncertificated securities, the Pledgor
shall promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law
(including, in any event, under Sections 8-313 and 8-321 of the New York UCC, if
applicable). The Pledgor further agrees to take such actions as the Pledgee
deems reasonably necessary or desirable to effect the foregoing and to permit
the Pledgee to exercise any of its rights and remedies hereunder, and agrees to
provide an opinion of counsel reasonably satisfactory to the Pledgee with
respect to any such pledge of uncertificated Securities promptly upon request of
the Pledgee.

3.4 DEFINITIONS OF PLEDGED STOCK, PLEDGED NOTES, PLEDGED SECURITIES
AND COLLATERAL. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock," all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes," and all of the Pledged Stock and Pledged Notes together are hereinafter
called the "Pledged Securities." The Pledged Securities, together with all
proceeds of such Pledged Securities, including any securities and moneys
received and at the time held by the Pledgee hereunder, is hereinafter called
the "Collateral."

4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a
sub-agent appointed by the Pledgee. The Pledgee agrees to promptly notify the
Pledgor after the appointment of any sub-agent; PROVIDED, HOWEVER, that the
failure to give such notice shall not affect the validity of such appointment.

5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until (i) an
Event of Default shall have occurred and be continuing and (ii) written notice
thereof shall have been given by the Pledgee to the Pledgor (PROVIDED, that if
an Event of Default specified in Section 8.6 of the Credit Agreement shall
occur, no such notice shall be required), the Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Pledged Securities and to give all consents, waivers or ratifications in respect
thereof; PROVIDED, that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of any Secured Debt Agreements, or which would

<PAGE>

Page 6

have the effect of impairing the position or interests of the Pledgee or any
other Secured Creditor. All the rights of the Pledgor to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing and, to the extent applicable, written notice
thereof shall have been given as provided in clause (ii) above, in which case
Section 7 shall become applicable.

6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing, all cash dividends payable in respect of
the Pledged Stock and all payments in respect of the Pledged Notes shall be paid
to the Pledgor; PROVIDED, that all cash dividends payable in respect of the
Pledged Stock which are determined by the Pledgee to represent in whole or in
part an extraordinary, liquidating or other distribution in return of capital
shall be paid, to the extent so determined to represent an extraordinary,
liquidating or other distribution in return of capital, to the Pledgee and
either applied by the Pledgor to reduce the Obligations or retained by the
Pledgee as part of the Collateral. The Pledgee shall also be entitled to
receive directly, and to retain as part of the Collateral:

(i) all other or additional stock or other securities or property
(other than cash) paid or distributed by way of dividend or otherwise in
respect of the Pledged Stock;

(ii) all other or additional stock or other securities or property
(including cash), which may be paid or distributed in respect of the
Pledged Stock by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and

(iii) all other or additional stock or other securities or property
(including cash) which may be paid in respect of the Collateral by reason
of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.

All dividends, distributions or other payments which are received by the Pledgor
in contravention of the provisions of this Section 6 or Section 7 shall be
received in trust for the benefit of the Pledgee, shall be segregated from other
property or funds of the Pledgor and shall be forthwith paid over to the Pledgee
as Collateral in the same form as so received (with any necessary endorsement).

7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default
shall have occurred and be continuing, the Pledgee shall be entitled to

<PAGE>

Page 7

exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or by any other Secured Debt Agreement or by law) for the protection
and enforcement of its rights in respect of the Collateral, including, without
limitation, all the rights and remedies of a secured party upon default under
the Uniform Commercial Code of the State of New York, and the Pledgee shall be
entitled, without limitation, to exercise the following rights, which the
Pledgor hereby agrees to be commercially reasonable:

(i) to receive all amounts payable in respect of the Collateral
payable to Pledgor under Section 6 hereof;

(ii) to transfer all or any part of the Pledged Securities into the
Pledgee's name or the name of its nominee or nominees (the Pledgee agrees
to promptly notify the Pledgor after such transfer; PROVIDED, HOWEVER, that
the failure to give such notice shall not affect the validity of such
transfer);

(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon any
Pledged Note (including, without limitation, to make any demand for payment
thereon);

(iv) subject to the giving of written notice to the Pledgor to the
extent required in accordance with clause (ii) of Section 5 hereof, to vote
all or any part of the Pledged Stock (whether or not transferred into the
name of the Pledgee) and give all consents, waivers and ratifications in
respect of the Collateral and otherwise act with respect thereto as though
it were the outright owner thereof (the Pledgor hereby irrevocably
constituting and appointing the Pledgee the proxy and attorney-in-fact of
the Pledgor, with full power of substitution to do so); and

(v) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by the Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; PROVIDED, that at least 10 days' notice
of the time and place of any such sale shall be given to the Pledgor. The
Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether

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Page 8

before or after sale hereunder, and all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise. At any
such sale, unless prohibited by applicable law, the Pledgee on behalf of
the Secured Creditors may bid for and purchase all or any part of the
Collateral so sold free from any such right or equity of redemption.
Neither the Pledgee nor any Secured Creditor shall be liable for failure to
collect or realize upon any or all of the Collateral or for any delay in so
doing nor shall any of them be under any obligation to take any action
whatsoever with regard thereto.

8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Secured Debt Agreement or
now or hereafter existing at law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any other
Secured Creditor of any one or more of the rights, powers or remedies provided
for in this Agreement or any other Secured Debt Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any other Secured Creditor of
all such other rights, powers or remedies, and no failure or delay on the part
of the Pledgee or any other Secured Creditor to exercise any such right, power
or remedy shall operate as a waiver thereof. The Secured Creditors agree that
this Agreement may be enforced only by the action of the Administrative Agent or
the Pledgee, in each case acting upon the instructions of the Required Banks
(or, after the date on which all Credit Document Obligations have been paid in
full, the holders of at least the majority of the outstanding Other Obligations)
and that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement or to realize upon the security to be
granted hereby, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Pledgee, as the case maybe, for
the benefit of the Secured Creditors upon the terms of this Agreement.

9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to the terms of
this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied as follows:

(i) first, to the payment of all Obligations owing the Pledgee of
the type provided in clauses (iii) and (iv) of the definition of
Obligations;

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Page 9

(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Obligations shall be paid to the Secured Creditors as provided in Section
9(c) hereof with each Secured Creditor receiving an amount equal to its
outstanding Obligations or, if the proceeds are insufficient to pay in full
all such Obligations, its Pro Rata Share (as defined below) of the amount
remaining to be distributed; and

(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii) and following the
termination of this Agreement pursuant to Section 18 hereof, to the Pledgor
or, to the extent directed by the Pledgor or a court of competent
jurisdiction, to whomever may be lawfully entitled to receive such surplus.

(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
calculating a Secured Creditor's portion of any distribution or amount, that
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then unpaid amount of such Secured Creditor's Obligations and the
denominator of which is the then outstanding amount of all Obligations.

(c) All payments required to be made to the Bank Creditors hereunder
shall be made to the Administrative Agent under the Credit Agreement for the
account of the Bank Creditors and all payments required to be made to the Other
Creditors hereunder shall be made directly to the respective Other Creditor.

(d) For purposes of applying payments received in accordance with
this Section 9, the Pledgee shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the Pledgee)
of the outstanding Obligations owed to the Bank Creditors or the Other
Creditors, as the case may be. Unless it has actual knowledge (including by way
of written notice from a Bank Creditor or an Other Creditor) to the contrary,
the Administrative Agent under the Credit Agreement, in furnishing information
pursuant to the preceding sentence, and the Pledgee, in acting hereunder, shall
be entitled to assume that (x) no Credit Document Obligations other than
principal, interest and regularly accruing fees are owing to any Bank Creditor
and (y) no Interest Rate Protection Agreement or Other Hedging Agreement, or
Other Obligations in respect thereof, are in existence.

<PAGE>

Page 10

(e) It is understood and agreed that the Pledgor shall remain liable
to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of the Obligations.

10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.

11. INDEMNITY. The Pledgor agrees (i) to indemnify and hold harmless
the Pledgee in such capacity and each other Secured Creditor from and against
any and all claims, demands, losses, judgments and liabilities of whatsoever
kind or nature, and (ii) to reimburse the Pledgee and each other Secured
Creditor for all costs and expenses, including attorneys' fees, growing out of
or resulting from this Agreement or the exercise by the Pledgee of any right or
remedy granted to it hereunder or under any other Secured Debt Agreement except,
with respect to clauses (i) and (ii) above, for those arising from the Pledgee's
or such other Secured Creditor's gross negligence or willful misconduct. In no
event shall the Pledgee be liable, in the absence of gross negligence or willful
misconduct on its part, for any matter or thing in connection with this
Agreement other than to account for moneys actually received by it in accordance
with the terms hereof. If and to the extent that the obligations of the Pledgor
under this Section 11 are unenforceable for any reason, the Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

12. FURTHER ASSURANCES, POWER OF ATTORNEY. (a) The Pledgor agrees
that it will join with the Pledgee in executing and, at the Pledgor's own
expense, file and refile under the applicable UCC or appropriate local
equivalent, such financing statements, continuation statements and other
documents in such offices as the Pledgee may deem necessary or appropriate and
wherever required or permitted by law in order to perfect and preserve the
Pledgee's security interest in the Collateral and hereby authorizes the Pledgee
to file financing statements and amendments thereto relative to all or any part
of the Collateral without the signature of the Pledgor where permitted by law,
and agrees to do such further acts and things and to execute and deliver to the
Pledgee such additional conveyances, assignments, agreements and instruments as
the Pledgee may reasonably require or deem advisable to carry into

<PAGE>

Page 11

effect the purposes of this Agreement or to further assure and confirm unto the
Pledgee its rights, powers and remedies hereunder. The Pledgor will pay any
applicable filing fees, recordation taxes and related expenses relating to its
Collateral.

(b) The Pledgor hereby appoints the Pledgee the Pledgor's attorney in
fact, with full authority in the place and stead of the Pledgor and in the name
of the Pledgor or otherwise, from time to time after the occurrence and during
the continuance of an Event of Default, in the Pledgee's discretion to take any
action and to execute any instrument which the Pledgee may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement.

13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. The Pledgee shall act hereunder on the
terms and conditions set forth herein and in Article 10 of the Credit Agreement.

14. TRANSFER BY THE PLEDGOR. Except for sales of Collateral
permitted pursuant to the Credit Agreement, the Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except in
accordance with the terms of this Agreement).

15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR.

(a) The Pledgor represents, warrants and covenants that (i) it is the
legal, record and beneficial owner of, and has good and marketable title to, all
Securities pledged by it hereunder, subject to no pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance
whatsoever, except the liens and security interests created by this Agreement or
otherwise provided by law, including but not limited to any pursuant to Section
521A.14 of the Iowa Code; (ii) it has full power, authority and legal right to
pledge all the Securities pledged by it pursuant to this Agreement; (iii) this
Agreement has been duly authorized, executed and delivered by the Pledgor and
constitutes a legal, valid and binding obligation of the Pledgor enforceable
against it in accordance with its terms, except to the extent that the
enforceability hereof may be limited by applicable bankruptcy, insolvency,

<PAGE>

Page 12

reorganization, moratorium or other similar laws affecting creditors' rights
generally and by equitable principles (regardless of whether enforcement is
sought in equity or at law); (iv) no consent of any other party (including,
without limitation, any stockholder or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by the Pledgor in
connection with the execution, delivery or performance of this Agreement, or in
connection with the exercise of the Pledgee's rights and remedies pursuant to
this Agreement, except as may be required in connection with the disposition of
the Securities by laws affecting the offering and sale of securities generally
and except for any consents or approvals of the Applicable Insurance Regulatory
Authority or other Applicable Laws; (v) the execution, delivery and performance
of this Agreement by the Pledgor does not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, or of the
certificate of incorporation or by-laws of the Pledgor or of any securities
issued by the Pledgor or any of its Subsidiaries, or of any mortgage, indenture,
lease, deed of trust, agreement, instrument or undertaking to which the Pledgor
or any of its Subsidiaries is a party or which purports to be binding upon the
Pledgor or any of its Subsidiaries or upon any of their respective assets and
will not result in the creation or imposition of any lien or encumbrance on any
of the assets of the Pledgor or any of its Subsidiaries except as contemplated
by this Agreement; (vi) all of the shares of Pledged Stock have been duly and
validly issued, are fully paid and nonassessable; (vii) each of the Pledged
Notes is the legal, valid and binding obligation of the respective obligor,
enforceable against such obligor in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by equitable principles (regardless of whether
enforcement is sought in equity or at law); and (viii) the pledge and assignment
of the Securities pursuant to this Agreement, together with the delivery of such
Securities pursuant to this Agreement (which delivery has been made), creates a
valid and perfected first security interest in such Securities and the proceeds
thereof (subject to the release of proceeds constituting dividends as provided
in Section 6), subject to no prior lien or encumbrance or to any agreement
purporting to grant to any third party a lien or encumbrance on the property or
assets of the Pledgor which would include the Securities. The Pledgor covenants
and agrees that it will defend the Pledgee's right, title and security interest
in and to the Securities and the proceeds thereof against the claims and demands
of all persons whomsoever; and the Pledgor covenants and agrees that it will
have like title to and right to pledge any other property at any time hereafter
pledged to the Pledgee as

<PAGE>

Page 13

Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the other Secured Creditors.

(b) The Pledgor represents, warrants, and covenants that all filings,
registrations and recordings necessary or appropriate to create, preserve and
perfect the security interest granted by the Pledgor to the Pledgee hereby in
respect of the Collateral have been accomplished and the security interest
granted to the Pledgee pursuant to this Agreement in and to the Collateral
creates a perfected security interest therein prior to the rights of all other
Persons therein and subject to no other Liens and is entitled to all the
rights, priorities and benefits afforded by the Uniform Commercial Code or other
relevant law as enacted in any relevant jurisdiction to perfected security
interests.

(c) The Pledgor represents, warrants, and covenants that as of the
date hereof, there is no financing statement (or similar statement or instrument
of registration under the law of any jurisdiction) covering or purporting to
cover any interest of any kind in the Collateral, and so long as the Commitments
have not been terminated or any Note remains unpaid or any of the Obligations
remain unpaid or any Interest Rate Protection Agreement or Other Hedging
Agreement remains in effect or any Obligations are owed with respect thereto,
the Pledgor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by the Pledgor.

16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such agreement or instrument or this Agreement; (iii) any furnishing of any
additional security to the Pledgee or its assignee or any acceptance thereof or
any release of any security by the Pledgee or its assignee; (iv) any limitation
on any party's liability or obligations under any such instrument or agreement
or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency,

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Page 14

reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Pledgor or any Subsidiary of the Pledgor, or any
action taken with respect to this Agreement by any trustee or receiver, or by
any court, in any such proceeding, whether or not the Pledgor shall have notice
or knowledge of any of the foregoing.

17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, the Pledgor as
soon as practicable and at its expense will use its reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
reasonable efforts to cause such qualification and compliance to be effected
(and be kept effective) as may be so requested and as would permit or facilitate
the sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933 as then in effect (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other government
requirements; PROVIDED, that the Pledgee shall furnish to the Pledgor such
information regarding the Pledgee as the Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee, each other Secured Creditor and all others participating in the
distribution of the Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances under which made, not misleading, except
insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to the Pledgor by the Pledgee or
such other Secured Creditor expressly for use therein.

(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7
hereof, such Pledged Securities or the part thereof to be sold shall not, for
any reason whatsoever,

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Page 15

be effectively registered under the Securities Act of 1933, as then in effect,
the Pledgee may, in its sole and absolute discretion, sell such Pledged
Securities or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or advisable in order that such
sale may legally be effected without such registration; PROVIDED, that at least
10 days' notice of the time and place of any such sale shall be given to the
Pledgor. Without limiting the generality of the foregoing, in any such event
the Pledgee, in its sole and absolute discretion: (i) may proceed to make such
private sale notwithstanding that a registration statement for the purpose of
registering such Pledged Securities or part thereof shall have been filed under
such Securities Act; (ii) may approach and negotiate with a single possible
purchaser to effect such sale; and (iii) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Securities or part thereof. In the event of any such sale, the Pledgee
shall incur no responsibility or liability for selling all or any part of the
Pledged Securities at a price which the Pledgee, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until after registration as aforesaid.

18. TERMINATION, RELEASE. (a) On the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein in Section 11 hereof shall survive any such termination) and the Pledgee,
at the request and expense of the Pledgor, will promptly execute and deliver to
the Pledgor a proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement, and will duly release from the security
interest created hereby and assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the date upon which the Commitments and
all Interest Rate Protection Agreements or Other Hedging Agreements have been
terminated, no Note (as defined in the Credit Agreement) is outstanding and all
other Obligations (other than indemnities described in Section 11 hereof and in
Section 11.1 of the Credit Agreement which are not then due and payable) have
been paid in full.

(b) In the event that any part of the Collateral is released at the
direction of the Required Banks (or all the Banks if required by Section 11.3 of
the Credit Agreement), the Pledgee, at the request and expense of the Pledgor
will duly release from the security interest created hereby and assign, transfer
and deliver to the Pledgor

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Page 16

(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
possession of the Pledgee and has not theretofore been released pursuant to this
Agreement.

(c) At any time that a Pledgor desires that Collateral be released as
provided in the foregoing Section 18(a) or (b), it shall deliver to the Pledgee
a certificate signed by an authorized officer of the Pledgor stating that the
release of the respective Collateral is permitted pursuant to Section 18(a) or
(b).

(d) At any time that the Applicable Insurance Regulatory Authority
determines that the pledge of all or a part of the Collateral is prohibited by
law to be pledged hereunder, that portion of the Collateral in question shall be
released so long as the Pledgor delivers to the Pledgee a certificate signed by
an authorized officer of the Pledgor stating that the release of the respective
Collateral is required pursuant to this Section 18(d).

19. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, or telecopied, addressed:

(a) if to the Pledgor, at its address set forth opposite its
signature below;

AmerUs Life Holdings, Inc.
418 Sixth Avenue
Des Moines, Iowa 50309
Attention: Michael G. Fraizer
Telephone No.: (515) 283-3234
Telecopier No.: (515) 283-3402

(b) if to the Pledgee, at:

The Chase Manhattan Bank
One Chase Manhattan Plaza
New York, New York 10081
Attention: Ms. Helen Newcomb
Telephone No.:(212) 552-5545
Telecopier No.:(212) 552-1999

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Page 17

(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to the Pledgor and the Pledgee;

or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.

20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgor and the Pledgee (with the written
consent of either (x) the Required Banks (or all the Banks if required by
Section 11.3 of the Credit Agreement) at all times prior to the time on which
all Credit Document Obligations have been paid in full or (y) the holders of at
least a majority of the outstanding Other Obligations at all times after the
time on which all Credit Document Obligations have been paid in full; PROVIDED,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors (as defined below) of such Class. For the purpose of
this Agreement, the term "Class" shall mean each class of Secured Creditors,
i.e., whether (i) the Bank Creditors as holders of the Credit Document
Obligations or (ii) the Other Creditors as holders of the Other Obligations.
For the purpose of this Agreement, the term "Requisite Creditors" of any Class
shall mean each of (i) with respect to the Credit Document Obligations, the
Required Banks and (ii) with respect to the Other Obligations, the holders of at
least a majority of all obligations outstanding from time to time under the
Interest Rate Protection Agreements or Other Hedging Agreements.

21. PLEDGOR'S DUTIES. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that the Pledgor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral, and the Pledgee shall not have any obligations or liabilities with
respect to any Collateral by reason of or arising out of this Agreement, nor
shall the Pledgee be required or obligated in any manner to perform or fulfill
any of the obligations of the Pledgor under or with respect to any Collateral.

22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be

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enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.

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IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.

AMERUS LIFE HOLDINGS, INC.
418 Sixth Avenue as Pledgor
Des Moines, Iowa 50309
Attention: Michael G. Fraizer
Tel: (515) 283-3234
Fax: (515) 283-3402 By /s/ Michael G. Fraiser
----------------------------
Title: Senior Vice President

THE CHASE MANHATTAN BANK
as Pledgee
One Chase Manhattan Plaza
New York, New York 10081
Attention: Helen Newcomb
Tel: (212) 552-5545 By /s/ signature
Fax: (212) 552-1999 ------------------------
Title: Managing Director

<PAGE>

ANNEX A
to
BORROWER PLEDGE AGREEMENT

SUBSIDIARY OWNERSHIP
---------- ---------
AmerUs Life Insurance Company AmerUs Life Holdings, Inc.

<PAGE>

ANNEX B
to
BORROWER PLEDGE AGREEMENT

% of Issued & No. of
Subsidiary No. Shares Held Outstanding Shares Pledged Shares
---------- --------------- ------------------ --------------
AmerUs Life Insurance 10,000,000 100.00% 4,999,999*
Company

*As this may be reduced from time to time due to requirements of law.

<PAGE>

ANNEX C
to
BORROWER PLEDGE AGREEMENT

Notes
- -----
Surplus Note of AmerUs Insurance Co.

<PAGE>

EXHIBIT 10.81

AMENDED AND RESTATED INTERCOMPANY AGREEMENT

BY AND AMONG

AMERICAN MUTUAL HOLDING COMPANY

AMERUS GROUP CO.

AND

AMERUS LIFE HOLDINGS, INC.

DATED AS OF DECEMBER 1, 1996.

<PAGE>

ARTICLE I

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Certain Definitions. . . . . . . . . . . . . . . . . . . . 1

ARTICLE II

COSTS AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.1 Allocation of Costs and Expenses . . . . . . . . . . . . . 5

ARTICLE III

CORPORATE GOVERNANCE. . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1 AMHC Consent to Certain Actions. . . . . . . . . . . . . . 6

ARTICLE IV
LICENSING AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.1 Grant of License . . . . . . . . . . . . . . . . . . . . . 8
SECTION 4.2 AmerUs Group Guidelines and Standards. . . . . . . . . . . 10
SECTION 4.3 AmerUs Group Retention of Ownership. . . . . . . . . . . . 10
SECTION 4.4 License Fee. . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.5 Transactions Affecting the Company, AmerUs
Group, and the Marks . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.6 Termination of License . . . . . . . . . . . . . . . . . . 14
SECTION 4.7 Further Assurances; Attorney-in-Fact . . . . . . . . . . . 15
SECTION 4.8 Trademark Usage Marking Requirements and Quality Control . 15
SECTION 4.9 Name Changes; Discontinuance of Use of Certain Marks . . . 16

ARTICLE V

EQUITY PURCHASE RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.1 Equity Purchase Rights . . . . . . . . . . . . . . . . . . 17

ARTICLE VI

FINANCIAL AND OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.1 Ownership Threshold. . . . . . . . . . . . . . . . . . . . 20
SECTION 6.2 AMHC Annual Statements . . . . . . . . . . . . . . . . . . 21
SECTION 6.3 Confidentiality. . . . . . . . . . . . . . . . . . . . . . 22

ARTICLE VII

REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 7.1 Piggyback Registrations. . . . . . . . . . . . . . . . . . 23
SECTION 7.2 Requested Registration . . . . . . . . . . . . . . . . . . 24
SECTION 7.3 Registration Procedures. . . . . . . . . . . . . . . . . . 27
SECTION 7.4 Restriction on Disposition of Registrable Shares.. . . . . 31

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<PAGE>

SECTION 7.5 Selection of Underwriters. . . . . . . . . . . . . . . . . 32
SECTION 7.6 Registration Expenses. . . . . . . . . . . . . . . . . . . 32
SECTION 7.7 Conversion of Other Securities . . . . . . . . . . . . . . 33
SECTION 7.8 Rule 144.. . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 7.9 Transfer of Registration Rights. . . . . . . . . . . . . . 33

ARTICLE VIII

BUSINESS AND REGISTRATION STATEMENT INDEMNIFICATION . . . . . . . . . . 34
SECTION 8.1 General Cross Indemnification. . . . . . . . . . . . . . . 34
SECTION 8.2 Registration Statement Indemnification . . . . . . . . . . 36
SECTION 8.3 Contribution . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.4 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.5 Other Matters. . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.6 Infringement . . . . . . . . . . . . . . . . . . . . . . . 40

ARTICLE IX

OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.1 Keepwell Payments. . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.2 Business Relationship. . . . . . . . . . . . . . . . . . . 41
SECTION 9.3 Management Services. . . . . . . . . . . . . . . . . . . . 41
SECTION 9.4 Miscellaneous Services . . . . . . . . . . . . . . . . . . 42
SECTION 9.5 Regulatory Approvals . . . . . . . . . . . . . . . . . . . 43

ARTICLE X

DISPUTE RESOLUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.1 Negotiation . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . 45

ARTICLE XI

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.2 Binding Nature of Agreement . . . . . . . . . . . . . . . 46
SECTION 11.3 Descriptive Headings. . . . . . . . . . . . . . . . . . . 46
SECTION 11.4 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.7 Severability. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 11.8 Amendment and Modification. . . . . . . . . . . . . . . . 48
SECTION 11.9 Entire Agreement. . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.10 No Assignment. . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.11 Recapitalization, Dilution
Adjustments, etc. . . . . . . . . . . . . . . . . . . . 48
SECTION 11.12 Further Assurances . . . . . . . . . . . . . . . . . . . 48
SECTION 11.13 No Third Party Beneficiaries . . . . . . . . . . . . . . 49
SECTION 11.14 Effectiveness of Certain Provisions. . . . . . . . . . . 49

-ii-

<PAGE>

AMENDED AND RESTATED INTERCOMPANY AGREEMENT

AMENDED AND RESTATED INTERCOMPANY AGREEMENT, dated as of December 1,
1996, by and among American Mutual Holding Company, an Iowa mutual insurance
holding company ("AMHC"), AmerUs Group Co., an Iowa corporation ("AmerUs
Group"), and AmerUs Life Holdings, Inc., an Iowa corporation (the "Company").

AMHC is the indirect owner of all of the issued and outstanding common
stock of the Company as of the date hereof. In contemplation of the Company
ceasing to be so wholly owned by AMHC and for good and valuable consideration,
the receipt and adequacy of which is acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1 CERTAIN DEFINITIONS. In addition to the terms defined
elsewhere in this Agreement, the following terms shall have the following
meanings:

"AGREEMENT" and "HEREOF" and "HEREIN" means this Intercompany
Agreement, including all amendments, modifications and supplements and any
exhibits or schedules to any of the foregoing, and shall refer to the Agreement
as the same may be in effect at the time such reference becomes operative.

"AMERUS AFFILIATED GROUP" means, collectively, AMHC and all of its
direct and indirect subsidiaries now or hereafter existing, other than the
Company and its Subsidiaries.

"AMERUS CONTROL GROUP" means, collectively, AMHC and AmerUs Group.

"AMERUS LIFE" means AmerUs Life Insurance Company, an Iowa
corporation.

"BUSINESS DAY" or "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in Des Moines, Iowa are authorized or obligated by law or executive order to
close.

"CLASS A COMMON STOCK" means the Class A Common Stock, no par value,
of the Company.

"CLASS B COMMON STOCK" means the Class B Common Stock, no par value,
of the Company.

<PAGE>

"COMMON STOCK" means, collectively, the Class A Common Stock and Class
B Common Stock and any other class or series of common stock of the Company
hereafter created.

"EQUITY PURCHASE SHARES" means shares of Voting Stock or any
securities convertible into or exchangeable for shares of Voting Stock or any
options, warrants or rights to acquire shares of Voting Stock.

"EXCHANGE ACT" means the Securities Exchange Act of 1934.

"FAIR MARKET VALUE" means, with respect to shares of Voting Stock, the
fair market value thereof as jointly determined by the Company and AMHC or, in
the event the Company and AMHC are unable to agree, as determined by a mutually
acceptable nationally recognized investment banking or other financial advisory
firm.

"GAAP" means United States generally accepted accounting principles.

"IPO S-1" means the Company's registration statement on Form S-1
relating to the registration of certain shares of Class A Common Stock under the
Securities Act, as the same may be amended or supplemented from time to time.

"INDEBTEDNESS" means, with respect to any Person, any liability of
such Person in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments and shall also include (a) any liability of
such Person under any agreement related to the fixing of interest rates on any
Indebtedness, (b) any capitalized lease obligations of such Person (if and to
the extent the same would appear on a balance sheet of such Person prepared in
accordance with GAAP), (c) reimbursement obligations of such Person in respect
of letters of credit (regardless of whether such items would appear on a balance
sheet of such Person) and (d) guarantees by such Person with respect to the
items described in (a), (b) and (c) above (regardless of whether such guarantees
would appear on a balance sheet of such Person).

"INITIAL PUBLIC OFFERING" means the proposed initial public offering
of Common Stock as contemplated by the IPO S-1.

"KEEPWELL" means any guaranty, keepwell, net worth or financial
condition maintenance agreement of or by any member of the AmerUs Affiliated
Group provided to any Person (including, but not limited to, any insurance
regulatory authority) with respect to any actual or contingent obligation of the
Company, or any Subsidiary of the Company.

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<PAGE>

"LICENSE TRIGGER DATE" means the date on which the members of the
AmerUs Control Group shall cease to own, in the aggregate, more than 50% of the
voting power of the Outstanding Voting Stock.

"OUTSTANDING VOTING STOCK" means the shares of the Voting Stock issued
and outstanding, and shall not include shares of Voting Stock held by the
Company as treasury stock or by any subsidiary of the Company.

"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association or other business entity and any
trust, unincorporated organization or government or any agency or political
subdivision thereof.

"PUBLIC COMPANY STOCK" means any class or series of Voting Stock
registered under the Exchange Act and broadly held and actively traded by public
stockholders.

"PROSPECTUS" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus supplement
and by all other amendments and supplements to such prospectus, including post-
effective amendments and all material incorporated by reference in such
prospectus or prospectuses.

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<PAGE>

"REGISTRABLE SHARES" means any shares of Common Stock or any other
equity security issued by the Company held by any member of the AmerUs Control
Group or by any transferee thereof described in Section 7.9 hereof.

"REGISTRATION STATEMENT" means any registration statement of the
Company filed with the SEC under the Securities Act, including, but not limited
to, the IPO S-1, and any registration statement which relates to any of the
Registrable Shares, including in each such case the Prospectus relating thereto,
amendments and supplements to such Registration Statement, including post-
effective amendments, all exhibits and all materials incorporated by reference
in such Registration Statement and Prospectus.

"REGULATION S-K" means Regulation S-K of the General Rules and
Regulations under the Securities Act.

"REGULATION S-X" means Regulation S-X of the General Rules and
Regulations under the Securities Act.

"REIMBURSEMENT AGREEMENTS" means, collectively, all agreements in
existence on the date of this Agreement to which the Company or a Subsidiary is
a party and a member of the AmerUs Affiliated Group is a party which relate to
the provision of administrative, management or data processing services by the
Company or a Subsidiary or a member of the AmerUs Affiliated Group or vice verse
and provide for the reimbursement, payment or allocation of the costs, fees or
expenses of such services.

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933.

"SUBSCRIPTION OFFERING" means the Subscription Offering to
policyholders of AmerUs Life undertaken in conjunction with the Initial Public
Offering.

"SUBSIDIARY" of the Company shall include all corporations,
partnerships, joint ventures, limited liability companies, associations and
other entities (a) in which the Company owns (directly or indirectly) fifty
percent or more of the outstanding voting stock, voting power, partnership
interests or similar ownership interests, (b) of which the Company otherwise
directly or indirectly controls or directs the policies or operations or (c)
which would be considered subsidiaries of the Company within the meaning of
Regulation S-K or Regulation S-X.

"TRANSACTIONS" means the Subscription Offering, the Initial Public
Offering and any corporate reorganization or transaction undertaken in
connection with the Subscription

-4-

<PAGE>

Offering or the Initial Public Offering to which the Company or any Subsidiary
is a party.

"TRIGGER DATE" means the date on which the members of the AmerUs
Control Group shall cease to own, in the aggregate, more than 50% of the voting
power of the Outstanding Voting Stock.

"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" means a
registration in which securities of the Company are sold to underwriters for
reoffering to the public.

"VOTING STOCK" means all securities issued by the Company having the
ordinary power to vote in the election of directors of the Company, other than
securities having such power only upon the occurrence of a default or any other
extraordinary contingency.

"WHOLLY OWNED SUBSIDIARY" of the Company shall include all
Subsidiaries of the Company in which the Company owns (directly or indirectly)
all of the outstanding voting stock, voting power, partnership interests or
similar ownership interests, except for director's qualifying shares in nominal
amounts.

ARTICLE II

COSTS AND EXPENSES

SECTION 2.1 ALLOCATION OF COSTS AND EXPENSES. The Company shall pay
(or, to the extent incurred by and paid for by any member of the AmerUs
Affiliated Group, will promptly reimburse such member of the AmerUs Affiliated
Group for any and all amounts so paid) for all fees, costs and expenses incurred
by the Company or any member of the AmerUs Affiliated Group in connection with
the Transactions, including, but not limited to, any and all fees, costs and
expenses related to (a) the preparation and negotiation of this Agreement and of
all of the documentation related to the Transactions and all related
transactions, (b) the preparation and execution or filing of any and all further
documents, agreements, forms, applications, contracts or consents associated
with the Transactions and all related transactions, (c) the Company's formation
and organization, (d) the preparation, printing and filing of the registration
statement for the Initial Public Offering, and any other registration statements
relating to any of the Transactions, including all fees and expenses of
complying with applicable federal, state or foreign securities laws and domestic
or foreign securities exchange rules and regulations, together with fees and
expenses of counsel retained to effect such compliance, (e) the preparation,
printing and distribution of each of the prospec-

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<PAGE>

tuses for the Initial Public Offering and any other financing Transactions and
(f) the listing of the Class A Common Stock and any other securities of the
Company on any domestic or foreign securities exchange.

ARTICLE III

CORPORATE GOVERNANCE

SECTION 3.1 AMHC CONSENT TO CERTAIN ACTIONS. Until the date on which
the members of the AmerUs Control Group shall cease to own, in the aggregate, at
least 50.1% of the voting power of the Outstanding Voting Stock, the Company
will not permit any of the following to occur without the prior written consent
of AMHC:

(i) any consolidation or merger of the Company with or into any
Person or of any Person with or into the Company (other than a merger
or consolidation of the Company with or into a Wholly Owned Subsidiary
of the Company);

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<PAGE>

(ii) any consolidation or merger of any Subsidiary of the
Company with or into any Person or of any Person with or into any
Subsidiary of the Company (other than a merger or consolidation of a
Subsidiary of the Company with or into a Wholly Owned Subsidiary of
the Company);

(iii) the entry into or consummation by the Company or a
Subsidiary of the Company of any transaction, or series of related
transactions valued in the aggregate, involving consideration in
excess of $10 million with any affiliate of the Company (other than a
member of the AmerUs Affiliated Group), other than (x) the
Transactions, (y) transactions which are on terms substantially the
same as or more favorable to the Company than those that would be
available from an unaffiliated third party, and (z) transactions
between or among any of the Company and its Wholly Owned Subsidiaries;

(iv) any sale, lease, exchange or other disposition or any
acquisition (by way of merger or consolidation, acquisition of stock,
other securities or assets, or otherwise), in each case by the Company
or any Subsidiary of the Company, directly or indirectly in a single
transaction, or series of related transactions valued in the
aggregate, involving consideration in excess of $20 million (other
than acquisitions, dispositions and transfers of securities pursuant
to portfolio investment decisions in the ordinary course of business
and transactions to which the Company and one or more Wholly Owned
Subsidiaries of the Company are the only parties);

(v) any increase or decrease in the authorized capital stock of
the Company or the creation of any class or series of capital stock of
the Company (other than the creation of a series of preferred stock
which is not convertible or exchangeable into Common Stock and which
only has voting rights required by law);

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<PAGE>

(vi) any issuance by the Company or any Subsidiary of the
Company of any shares of its respective capital stock or any options,
warrants or rights to acquire such capital stock or securities
convertible into or exchangeable for capital stock, except (w) up to
three million shares of Common Stock of the Company issuable pursuant
to employee and director stock option, profit sharing and other
benefit plans of the Company and its Subsidiaries and any options
exercisable for such shares of Common Stock, (x) the issuance of
preferred stock which is not convertible or exchangeable into Common
Stock and which only has voting rights required by law, (y) the
issuance of shares of capital stock of a Wholly Owned Subsidiary of
the Company and (z) pursuant to the Transactions;

(vii) the dissolution, liquidation or winding up of the Company
or AmerUs Life;

(viii) any corporate action by the Company which would cause the
Company or AmerUs Life to violate the requirements of Section 521A.14
of the Iowa insurance laws or any successor provision.

ARTICLE IV

LICENSING AGREEMENT

SECTION 4.1 GRANT OF LICENSE. AmerUs Group hereby grants, or to the
extent another member of the AmerUs Affiliated Group owns the Marks (as defined
below) AmerUs Group will cause such member to grant, to the Company a non-
exclusive license (which is revocable under the circumstances set forth below)
(the "License") to use the name "AmerUs" and the trademarks (including the
trademarks pending approval that are referred to in Section 4.3(c) hereto) as
are specified in EXHIBIT A hereto, as such EXHIBIT A may be amended from time
to time in accordance with Section 4.3(b) hereof (such name and trademarks
hereinafter collectively referred to as the "Marks"), but only in the manner
identified in EXHIBIT A hereto or otherwise approved in advance in writing by
AmerUs Group, in each case, solely for the purpose of identifying and
advertising the insurance business and activities related to such insurance
business (E.G., claims services, payment services, and insurance products) in
the United States as presently conducted by the Company and AmerUs Life and as
may be conducted from time to time subsequently, subject to any and all legal
requirements and legal or AmerUs Group policy limitations on such licensing
which may arise from time to time in any jurisdiction (the "Scope of the
License"). Notwithstanding the foregoing, the Company shall only use the

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<PAGE>

Marks in connection with operations, services and products of a nature and
quality specified by AmerUs Group or, if not so specified, which are at least of
a nature and quality equal to that currently used by the Company or any of its
Subsidiaries in connection with the Marks. The Company shall have no right to
license or sublicense the Marks or the use thereof; PROVIDED, HOWEVER, that any
Wholly Owned Subsidiary of the Company which is specifically approved in advance
in writing by AmerUs Group (a "Designated Subsidiary") and which enters into an
agreement (a "Designated Subsidiary Agreement") may use the Marks in accordance
with the terms of such agreement and in the forms and manner and in connection
with such operations, services and products of such Designated Subsidiary as
shall be identified and approved in advance in writing by AmerUs Group. This
Agreement and any Designated Subsidiary Agreement supersedes all prior
agreements (whether written, oral or implied) between any member of the AmerUs
Affiliated Group and the Company or any Subsidiary of the Company, with respect
to the use of the Marks.

Notwithstanding the foregoing, in the event that a Designated
Subsidiary Agreement is terminated in accordance with the provisions thereof,
from and after the date of such termination, the Scope of the License shall
automatically be deemed amended (without any action by the parties hereto or
thereto) to no longer license hereunder the Marks for use by such Designated
Subsidiary, and such Designated Subsidiary shall, and the Company shall cause
such Designated Subsidiary to, promptly cease all use of the Marks in connection
with all of such Designated Subsidiary's operations, products and services.

The Company and each Designated Subsidiary shall execute all
additional documents which AmerUs Group may request, both prior and subsequent
to the expiration or earlier termination of the License, in order to perfect,
maintain, defend or terminate any right of any party in the Marks in any country
of the world, as determined by AmerUs Group in its sole discretion.

SECTION 4.2 AMERUS GROUP GUIDELINES AND STANDARDS. The Company
agrees that all advertising, promotion and use of the Marks by the Company and
its Designated Subsidiaries shall in all material respects be consistent with
such AmerUs Group guidelines as may be issued from time to time. The Company
agrees that, in the conduct of the business and activities of the Company and
its Designated Subsidiaries under the Marks, it shall, and shall cause each
Designated Subsidiary to, adhere to the appropriate ethical standards pertaining
to the Company's and its Designated Subsidiaries' businesses and operations, and
shall, and shall cause each Designated Subsidiary to, do nothing to bring
disrepute to or in any manner damage the goodwill symbolized by the Marks and
shall make available to AmerUs Group any requested

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<PAGE>

information necessary for AmerUs Group to evaluate any such effect on said
goodwill.

SECTION 4.3 AMERUS GROUP RETENTION OF OWNERSHIP. (a) The Company
acknowledges and agrees that AmerUs Group, or such other member of the AmerUs
Affiliated Group referred to in the first sentence of Section 4.1 hereof, as the
case may be, is the owner of all of the right, title and interest in the Marks
and all goodwill associated therewith and acknowledges the validity of all
trademark and service mark registration of each member of the AmerUs Affiliated
Group pertaining thereto. The Company agrees that it shall, and shall cause
each of its officers, directors and subsidiaries to, uphold the goodwill
inherent in the Marks and to assist AmerUs Group in any way reasonably possible
to protect the rights of AmerUs Group and the other members of the AmerUs
Affiliated Group therein. All use of the Marks by the Company and all
Designated Subsidiaries (including all past, present and future use), and the
goodwill generated thereby, shall inure to the benefit of AmerUs Group and shall
not vest in the Company or in any Designated Subsidiary, and, for purposes of
trademark registration, all use of the Marks by the Company and the Designated
Subsidiaries shall be deemed to have been made for the benefit of AmerUs Group.
The Company and the Designated Subsidiaries shall not, without the written
consent of AmerUs Group, file or prosecute any trademark or service mark
application to register the Marks or any trademarks or service marks similar
thereto.

(b) Additional trademarks and service marks using the AmerUs Group
name may be added to EXHIBIT A hereto if (i) the Company makes a written request
therefor to such effect, which request shall specify in reasonable detail a
description or drawing of such trademarks or service marks and a description of
the manner in which such marks are to be used, (ii) the Company shall have
provided to AmerUs Group all additional information requested by AmerUs Group
with respect thereto during the period referred to in clause (iii) below, and
(iii) within 5 Business Days after its receipt of such written request referred
to in clause (i) above AmerUs Group does not notify the Company that it does not
consent to the inclusion of such trademark or service mark on EXHIBIT A hereto.
If the conditions set forth in clause (i), (ii) and (iii) above are satisfied,
EXHIBIT A shall be deemed to have been automatically amended, as of the first
date all such conditions are satisfied, to include such mark (and such mark
shall become part of the Marks) and promptly thereafter the parties shall
execute and deliver to each other a written instrument acknowledging such
amendment and attaching EXHIBIT A, as so amended, thereto. The Company
acknowledges that AmerUs Group shall be the owner of all of the right, title and
interest in all the marks which become part of the Marks subsequently to the
date hereof. The addition of Marks to EXHIBIT A hereto shall not effect the
Scope of the License or any other term thereof.

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<PAGE>

(c) The Company acknowledges that all trademark or service mark
applications pending as of the date hereof of (i) the Company or any Subsidiary
of the Company which contain the name "AmerUs" and (ii) any member of the AmerUs
Affiliated Group, have been filed for the benefit of AmerUs Group, or such other
member of the AmerUs Affiliated Group as such application may specify, and
AmerUs Group, or such other member, is the beneficial owner of all right, title
and interest in such Marks.

SECTION 4.4 LICENSE FEE. From and after the License Trigger Date and
until such time as the License completely expires or completely terminates in
accordance with the terms of this Agreement, the Company shall pay AmerUs Group
an annual fee (the "License Fee") as set forth below:

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<PAGE>

Amount of Annual
Period License Fee
------ -----------

1st 12-month period following the License Trigger Date $100,000

2nd 12-month period following the License Trigger Date $200,000

3rd 12-month period following the License Trigger Date $300,000

4th 12-month period following the License Trigger Date $400,000

Each 12-month period thereafter $500,000

The License Fee with respect to each 12-month period referred to above shall be
payable in equal installments quarterly in advance on the first business day of
each calendar quarter (each a "Quarterly Payment Date") commencing on the first
Quarterly Payment Date following the License Trigger Date. Within two Business
Days following the License Trigger Date, the Company shall pay AmerUs Group a
fee equal to the product of (i) $274 and (ii) the number of days elapsing from
and including the License Trigger Date to and excluding the first Quarterly
Payment Date occurring after the License Trigger Date, in payment of the fee for
such interim period. If the Company and the Designated Subsidiaries shall
completely terminate the rights of the Company and all Designated Subsidiaries
to use in any manner all of the Marks (a "Use Termination"), then the Company's
obligation to pay such fee shall terminate after the payment in full of all
quarterly payments due on or before the Quarterly Payment Date immediately
preceding the date of such Use Termination. Upon a Use Termination, AmerUs
Group shall reimburse the Company in an amount equal to the product of (i) the
Per Diem Refund Amount (as defined below) and (ii) the number of days remaining
after the date of termination but prior to the Quarterly Payment Date next
succeeding such date of termination. As used herein, the "Per Diem Refund
Amount" means a fraction, the numerator of which is the annual License Fee
applicable to the 12-month period in which the Use Termination has occurred and
the denominator of which is 365.

SECTION 4.5 TRANSACTIONS AFFECTING THE COMPANY, AMERUS GROUP, AND THE
MARKS. The Company shall not, and shall cause each of its Subsidiaries not to,
take any action with respect to the following without informing AmerUs Group in
advance in writing of all material facts relating thereto and without obtaining
AmerUs Group's prior written consent thereto:

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(a) the commencement, settlement, defense of, consent to a
judgment or decree or other activity with respect to any suit, action
or proceeding before any federal, state, local or foreign court,
agency, authority, instrumentality, arbitration panel or other
governmental body or authority involving the Marks;

(b) any changes in the Company's or its Subsidiaries' names,
logos, signs, trademarks or other identifications which might
reasonably be expected to affect the appearance of, the reputation of
or the goodwill associated with the Marks or any member of the AmerUs
Affiliated Group; or

(c) any television, radio, newspaper, magazine or other
advertising, promotional or marketing campaign or strategy and any
television, radio, newspaper, magazine or other advertisement using
the Marks or using or referring, directly or indirectly, to any member
of the AmerUs Affiliated Group (an "Advertising Campaign"); PROVIDED,
HOWEVER, that an Advertising Campaign shall be deemed to be consented
to by AmerUs Group in the event that AmerUs Group does not notify the
Company in writing that it is not consenting to such Advertising
Campaign within 5 Business Days following the Company providing AmerUs
Group with written notice of such planned Advertising Campaign and
complete descriptions and presentations thereof; PROVIDED, FURTHER,
that the Company is expressly allowed to continue or implement any
Advertising Campaign that is substantially similar to any Advertising
Campaign in effect on the date hereof or used by any Subsidiary of the
Company during the 36-month period immediately prior to the date
hereof.

SECTION 4.6 TERMINATION OF LICENSE. (a) The License granted
pursuant to this Article IV shall automatically expire (subject to earlier
termination in accordance with Section 4.6(d) hereof) upon the earlier to occur
of (i) the date on which the Company gives notice to AmerUs Group of the
complete termination of the use of the Marks by the Company and all Designated
Subsidiaries and (ii) subject to the automatic reduction in the Scope of the
License referred to in Section 4.6(b) hereof and subject to the renewal option
referred to in Section 4.6(c) hereof, the fifth anniversary of the License
Trigger Date.

(b) From and after the License Trigger Date, the Scope of the License
shall automatically be deemed amended (without any action by the parties hereto
or the parties to any Designated Subsidiary Agreement) to no longer license the
Marks hereunder or pursuant to any Designated Subsidiary Agreement, except to
use the "AmerUs" name solely in connection with the identification of

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the Company's insurance products, but not for any other purpose or to use any of
the other Marks.

(c) If, prior to the occurrence of the fifth anniversary of the
License Trigger Date, the Company notifies AmerUs Group in writing of its desire
to extend the term of the License, then the License (as the scope of the License
shall have been automatically reduced pursuant to Section 4.6(b) hereof) shall
expire on the date specified in such written notice; PROVIDED that in no event
shall such specified date be later than the tenth anniversary of the License
Trigger Date.

(d) Notwithstanding the foregoing Sections of this Article IV or
anything else to the contrary contained in this Agreement, AmerUs Group shall
have the right to terminate the License at any time if AmerUs Group notifies the
Company in writing that, in the judgment of AmerUs Group, the Company or any
Designated Subsidiary has failed to comply with any term or provision of this
Article IV or of such Subsidiary's Designated Subsidiary Agreement, as the case
may be, and in either case such non-compliance is not cured to the satisfaction
of AmerUs Group within 30 days of the Company's receipt of such notice. Any
determination made by AmerUs Group pursuant to this Section 4.6(d) shall be made
in good faith and shall be binding and conclusive on the Company, its Designated
Subsidiaries and all other parties.

(e) Nothing contained in this Section 4.6 shall affect the
obligations of the Company to change its corporate name and to discontinue use
of the Marks and to cause its Subsidiaries to change their corporate names and
to discontinue use of the Marks in accordance with Section 4.9 hereof.

SECTION 4.7 FURTHER ASSURANCES; ATTORNEY-IN-FACT. Upon the
expiration or earlier termination of the License in accordance with the terms of
this Agreement, (a) the Company shall, and shall cause each of the Designated
Subsidiaries to, discontinue all uses of the Marks within 90 days after such
expiration or earlier termination; PROVIDED, HOWEVER, that AmerUs Group in its
sole and absolute discretion may reduce such time period within which the
Company and its Designated Subsidiaries shall discontinue any and all such uses
of the Marks if, in AmerUs Group's sole and absolute determination, continuation
of the use of the Marks would have an adverse effect upon the appearance of, the
reputation of or the goodwill associated with the Marks or upon any member of
the AmerUs Affiliated Group and (b) to the extent requested by AmerUs, the
Company shall, and shall cause each Designated Subsidiary to, promptly at its
own expense take all legal and administrative steps which may be required to
protect AmerUs Group's ownership of and goodwill symbolized by the Marks. The
Company hereby appoints AmerUs Group or its duly authorized representatives or
attorneys as its

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agent and attorney-in-fact to execute on its behalf and its name any documents
which AmerUs Group, in its good faith reasonable judgment, deems necessary in
order to terminate any rights of the Company or its Designated Subsidiaries,
howsoever created, anywhere in the world under or pursuant to this Agreement.
This provision shall not relieve the Company of its obligations to promptly
execute any such documents upon the request of AmerUs Group.

SECTION 4.8 TRADEMARK USAGE MARKING REQUIREMENTS AND QUALITY CONTROL.
(a) The Company shall, and shall cause the Designated Subsidiaries to, apply
appropriate statutory notice (I.E., the letter "R" in a circle) or such other
notice as may be required by foreign jurisdictions in connection with the use of
the Marks and will, to the extent reasonably practicable, disclose that use of
the Marks is pursuant to the License granted herein by AmerUs Group.

(b) The quality standards applied to the products and services
bearing the Marks, or offered in connection with the Marks shall be as specified
from time to time in writing by AmerUs Group. Notwithstanding any other
provision in this Article IV, all operations, products and services offered in
connection with the Marks by the Company and any Designated Subsidiary shall
conform in all material respects to such quality standards. To assure that the
applicable quality standards are maintained, AmerUs Group shall have the right
to periodically inspect and evaluate the products, operations and services of
the Company or any Designated Subsidiary bearing the Marks. Upon request, the
Company shall deliver to AmerUs Group samples of such use. If AmerUs Group
disapproves of the quality of such samples, the Company will have thirty (30)
days to cure the deficiency and the Company shall not conduct its operations or
sell its products or services under the Marks unless and until such deficiency
is cured to AmerUs Group's reasonable satisfaction.

SECTION 4.9 NAME CHANGES; DISCONTINUANCE OF USE OF CERTAIN MARKS.
Not later than the earlier to occur (a) the 30th day following the expiration or
earlier termination of the License pursuant to this Article IV and (b) the last
day of the six month period commencing on the License Trigger Date, the Company
shall, and shall cause each of its present and future direct and indirect
Subsidiaries the corporate, partnership, trade name or d/b/a of which includes
the word "AmerUs" or any variant or derivative thereof, to amend their
respective charter or other organizational documents to change each such
entity's name to one which does not include the word "AmerUs" or any variant or
derivative thereof. Not later than the last day of the six month period
commencing on the License Trigger Date, the Company shall, and shall cause each
of the Designated Subsidiaries to, discontinue all use of the Marks, except for
the use of the "AmerUs" name to the limited extent permitted by Section 4.6(b)
hereof.

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ARTICLE V

EQUITY PURCHASE RIGHTS

SECTION 5.1 EQUITY PURCHASE RIGHTS. So long as the members of the
AmerUs Control Group own, in the aggregate, directly or indirectly, at least
50.1% of the voting power of the Outstanding Voting Stock, the members of the
AmerUs Control Group shall have the equity purchase rights set forth in this
Section 5.1 (the "Equity Purchase Rights"); PROVIDED that the members of the
AmerUs Control Group shall not be entitled to Equity Purchase rights to the
extent that the principal national securities exchange in the United States on
which the Common Stock is listed, if any, or the NASDAQ Stock Market Inc., in
the case any Common Stock is listed on the NASDAQ National Market, prohibits or
limits the granting by the Company of such Equity Purchase Rights or to the
extent that the purchase of Voting Stock by any member of the AmerUs Control
Group would cause the Company to be a member of an "affiliated group," as
defined in Section 1504(a) of the Internal Revenue Code, which includes AMHC or
AmerUs Group.

As soon as practicable after determining to issue Equity Purchase
Shares, but in any event at least five Business Days prior to the issuance of
Equity Purchase Shares to any Person other than to a member of the AmerUs
Control Group (and other than Equity Purchase Shares (i) described in clause (x)
of Section 3.1(vi) hereof, (ii) if the Company then has outstanding Public
Company Stock, issued under dividend reinvestment plans which offer Voting Stock
to securityholders at a discount from Average Market Price (as defined below) no
greater than is then customary for public corporation, (iii) issued pursuant to
the Transactions or (iv) issued in mergers, acquisitions and exchange offers),
the Company shall notify AMHC in writing of such proposed sale (which notice
shall specify, to the extent practicable, the purchase price for, and terms and
conditions of, such Equity Purchase Shares) and shall offer to sell to AMHC
(which offer may be assigned by AMHC to AmerUs Control Group) at the purchase
price (net of any underwriting discounts or commissions), if any, to be paid by
the transferee(s) of such Equity Purchase Shares an amount of Equity Purchase
Shares determined as provided below. Immediately after the amount of Equity
Purchase Shares to be sold to other Persons is known to the Company, it shall
notify AMHC (or such assignee) of such amount. If such offer is accepted in
writing within five Business Days after the notice of such proposed sale (or
such longer period as is necessary for the members of the AmerUs Control Group
to obtain regulatory approvals), the Company shall sell to such member of the
AmerUs Control Group an amount of Equity Purchase Shares (the "Equity Purchase
Share Amount") equal to the product of (A) the quotient of (x) the number of
shares of Voting Stock owned by the members of the AmerUs Control Group, in

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the aggregate, immediately prior to the issuance of the Equity Purchase Shares
by (y) the aggregate number of shares of Outstanding Voting Stock owned by
Persons other than by members of the AmerUs Control Group immediately prior to
the issuance of the Equity Purchase Shares, multiplied by (B) the aggregate
number of Equity Purchase Shares being issued by the Company to Persons other
than to members of the AmerUs Control Group rounded up to the nearest whole
Equity Purchase Share. If, at the time of the determination of any Equity
Purchase Share Amount, any other Person has preemptive or other equity purchase
rights similar to the Equity Purchase Rights, such Equity Purchase Share Amount
shall be recalculated to take into account the amount of Voting Stock to be sold
to such Persons, rounding up such Equity Purchase Share Amount to the nearest
whole Equity Purchase Share. If the Company determines in good faith that, in
light of the advice of an investment banking firm advising it or of its other
financial advisors, it must consummate the issuance and sale of the Equity
Purchase Shares prior to the members of the AmerUs Control Group having obtained
the necessary regulatory approvals, the Company shall notify AMHC in writing of
such determination and shall then be free so to consummate such issuance and
sale without the members of the AmerUs Control Group having the right then to
purchase its proportionate share of such Equity Purchase Shares; PROVIDED,
HOWEVER, that in such event the members of the AmerUs Control Group shall have
the right to purchase from the Company, within 60 Business Days (or such longer
period (up to two years) as is necessary for the members of the AmerUs
Affiliated Group to obtain regulatory approvals) Voting Stock in an amount equal
to the amount of Voting Stock it would have received had it been able to
purchase (and, in the case of Equity Purchase Shares other than Voting Stock,
securities exercisable or exchangeable for or convertible into Voting Stock) the
Equity Purchase Shares offered to it pursuant to this Section 5.1, at a per
share purchase price equal to the lower of (i) the sum of the purchase price
(net of any underwriting discounts or commissions), if any, paid by the
transferee(s) plus the exercise price, if any, of such Equity Purchase Shares,
or (ii) the Average Market Price per share of Voting Stock and, if there is no
Average Market Price, the Fair Market Value per share of Voting Stock, in each
case, at the time of purchase by the members of the AmerUs Control Group.

The purchase and sale of any Equity Purchase Shares pursuant to this
Section 5.1 shall take place at 9:00 a.m. on the latest of (i) the fifth
Business Day following the acceptance of such offer, (ii) the Business Day on
which such Equity Purchase Shares are issued to Persons other than the members
of the AmerUs Control Group and (iii) the fifth Business Day following the
expiration of any required governmental or other regulatory waiting periods or
the obtaining of any required governmental or other regulatory consents or
approvals, at the offices of AMHC indicated in Section 11.1 hereof, or at such
other time and place

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in Des Moines, Iowa as AMHC and the Company shall agree. At the time of
purchase, the Company shall deliver to AMHC (or such assignee) certificates
registered in the name of the appropriate members of the AmerUs Control Group
representing the shares purchased and the members of the AmerUs Control Group
shall transfer to the Company the purchase price in United States dollars by
bank check or wire transfer of immediately available funds, as specified by the
Company, to an account designated by the Company not less than five Business
Days prior to the date of purchase. The Company and the members of the AmerUs
Control Group will use their best efforts to comply as soon as practicable with
all federal and state laws and regulations and stock exchange listing
requirements applicable to any purchase and sale of securities under this
Section 5.1.

As used herein, "Average Market Price" of any security on any date
means the average of the daily closing prices for the 10 consecutive trading
days selected by the Company commencing not less than 20 days nor more than 30
trading days before the day in question. The closing price for each day shall
be the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange, Inc. or, if
such security is not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Association of Securities Dealers, Inc.
Automated Quotations National Market System or, if such security is not listed
or admitted to trading on any national securities exchange or quoted on such
National Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose. For the purpose of
this definition, the term "trading day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day on which securities are not
traded on such exchange or in such market.

ARTICLE VI

FINANCIAL AND OTHER INFORMATION

SECTION 6.1 OWNERSHIP THRESHOLD. The Company agrees that, during any
period in which the members of the AmerUs Control Group own, in the aggregate,
at least 50.1 percent of the voting power of the Outstanding Voting Stock:

(a) MAINTENANCE OF BOOKS AND RECORDS. The Company shall, and
shall cause each of its consolidated subsidiaries to, (i) make and
keep books, records and accounts, which, in reasonable detail,
accurately and

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fairly reflect the transactions and dispositions of the assets of the
Company and such Subsidiaries and (ii) devise and maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that: (w) transactions are executed in accordance with management's
general or specific authorization, (x) transactions are recorded as
necessary (1) to permit preparation of financial statements in conformity
with GAP or any other criteria applicable to such statements and (2) to
maintain accountability for assets, and (y) access to assets is permitted
only in accordance with management's general or specific authorization.

(b) INFORMATION. With reasonable promptness, the Company shall
deliver to AMHC such financial and other information and data with
respect to the Company and its Subsidiaries and their business,
properties, financial position, results of operations and prospects as
from time to time may be reasonably requested by AMHC.

SECTION 6.2 AMHC ANNUAL STATEMENTS. In connection with any AmerUs
Affiliated Group member's preparation of its audited annual financial statements
and its annual reports (collectively the "AMHC Annual Statements"), during any
period in which the members of the AmerUs Control Group own, in the aggregate,
at least 50.1% of the voting power of the Outstanding Voting Stock of the
Company, the Company agrees as follows:

(a) COORDINATION OF AUDITORS' OPINIONS. The Company will use
its best efforts to enable its independent certified public
accountants (the "Company Auditors") to complete their audit such that
they will date their opinion on the Company's audited annual financial
statements (the "Company Annual Financial Statements") on the same
date that AMHC independent certified public accountants (the "AMHC
Auditors") date their opinion on the AMHC Annual Statements, and to
enable AMHC to meet its timetable for the printing, filing and public
dissemination of the AMHC Annual Statements.

(b) COOPERATION. Each of AMHC and the Company will provide to
the other party on a timely basis all information that such other
party or any of its subsidiaries reasonably requires to meet its
schedule for the preparation, printing, filing, and public
dissemination of its annual and quarterly statutory statements, its
audited annual financial statements, its Annual Reports to
Shareholders or Members, its annual, quarterly and current reports
under the

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Exchange Act, and any of its registration statements, prospectuses and
other filings made with the SEC (collectively, the "Filings"). In this
respect, AMHC or the Company, as the case may be, will provide all required
financial information with respect to it and its consolidated subsidiaries
to the other party's auditors and management in a sufficient and reasonable
time and in sufficient detail to permit such auditors to take all steps and
perform all review necessary to provide sufficient assistance to such
auditors with respect to information to be included or contained in the
Filings, such assistance to such auditors to be in conformity with current
and past practices.

(c) ACCESS TO PERSONNEL AND WORKING PAPERS. The Company will
authorize the Company Auditors to make available to the AMHC Auditors
both the personnel who performed or are performing the annual audit of
the Company and, consistent with customary professional practice and
courtesy of such auditors with respect to the furnishing of work
papers, work papers related to the annual audit of the Company, in all
cases within a reasonable time after the Company Auditor's opinion
date, so that the AMHC Auditors are able to perform the procedures
they consider necessary to take responsibility for the work of the
Company Auditors as it relates to the AMHC Auditors' report on the
AMHC Annual Statements, all within sufficient time to enable AMHC to
meet its timetable for the printing, filing and public dissemination
of the AMHC Annual Statements.

SECTION 6.3 CONFIDENTIALITY. All information provided by the Company
pursuant to this Article VI will, except if the purpose for which such
information is furnished to AMHC pursuant to this Agreement contemplates such
disclosure and except for disclosure to the other members of the AmerUs
Affiliated Group by AMHC be kept confidential by AMHC and the other members of
the AmerUs Affiliated Group, and AMHC and the other members of the AmerUs
Affiliated Group will not disclose any such information in any manner
whatsoever, until such information is disclosed by the Company or otherwise
becomes generally available to the public, except as such disclosure may be
required by law, rule or regulation. Any information furnished to AMHC by the
Company pursuant to Sections 6.1(b) and 6.2(c) hereof shall be used solely for
financial reporting, planning, control and record keeping purposes of the
members of the AmerUs Affiliated Group.

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ARTICLE VII
REGISTRATION RIGHTS

SECTION 7.1 PIGGYBACK REGISTRATIONS.

(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to register
any of its Common Stock (or securities convertible into or exchangeable or
exercisable for Common Stock) under the Securities Act for its own account or
the account of any shareholder of the Company (other than an initial public
offering of the Company's Common Stock, offerings pursuant to employee benefit
plans, or noncash offerings in connection with a proposed acquisition or merger,
exchange offer, recapitalization or similar transaction) and the registration
form to be used may be used for the registration of Registrable Shares (a
"Piggyback Registration"), the Company will give prompt written notice to AMHC
and to all other holders of Common Stock having similar registration rights, of
its intention to effect such a registration and, subject to Section 7.1(b)
hereof, shall include in such registration all Registrable Shares with respect
to which the Company has received written request for inclusion therein within
15 days after receipt of the Company's notice.

(b) PRIORITY. If a registration pursuant to this Section 7.1
involves an Underwritten Offering and the managing underwriter advises the
Company in good faith that in its opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in such
offering without having an adverse effect on such offering, including the price
at which such securities can be sold, then the Company will be required to
include in such registration the maximum number of shares that such underwriter
advises can be so sold, allocated

(i) if such registration was initiated by the Company, (x)
first, to the securities the Company proposes to sell, (y) second,
among the shares of Common Stock requested to be included in such
registration by members of the AmerUs Control Group and any other
stockholder of the Company owning shares of Common Stock eligible for
registration, PRO RATA, on the basis of the number of shares of Common
Stock each holder requests be included in such registration, and (z)
third, among other securities, if any, requested and otherwise
eligible to be included in such registration; and

(ii) if such registration was initiated by a securityholder of
the Company, (w) first, among the shares of Common Stock requested to
be included in such registration by such requesting securityholder,
(x) second, among the shares of Common Stock requested to be included
in such registration by any member of AmerUs Control Group, (y) third,
among the shares of

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Common Stock requested to be included in such registration by any other
shareholder of the Company owning shares of Common Stock eligible for such
registration, pro rata, on the basis of the number of shares of Common
Stock each holder requests be included in such registration, and (z)
fourth, among other securities, if any, requested and otherwise eligible to
be included in such registration (including securities to be sold for the
account of the Company).

(c) In the case of a registration initiated by the Company, nothing
contained herein shall prohibit the Company from determining, at any time, not
to file a registration statement or, if filed, to withdraw such registration or
terminate or abandon the registration related thereto, without prejudice,
however, to the rights of the members of the AmerUs Control Group to immediately
request a registration pursuant to Section 7.2 hereof.

SECTION 7.2 REQUESTED REGISTRATION.

(a) RIGHT TO REQUEST REGISTRATION. At any time after the date
hereof, upon the written request of any member of the AmerUs Control Group
requesting that the Company effect the registration under the Securities Act of
all or part of the Registrable Shares (a "Demand Registration"), the Company
shall use its best efforts to effect, as expeditiously as possible, the
registration under the Securities Act of such number of Registrable Shares
requested to be so registered; PROVIDED that the Company shall not be required
to file a registration statement pursuant to this Section 7.2(a), (i) within a
period of six months after the effective date of any other registration
statement of the Company requested hereunder or pursuant to which any member of
the AmerUs Control Group shall have been given an opportunity to participate
pursuant to Section 7.1 hereof, (ii) relating to an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Securities Act if the Company is not, at the time,
eligible to register shares of Common Stock on Form S-3 (or a successor form)
(iii) with respect to any offering which would cause the Company to violate the
provisions of Section 521A.14 of the Iowa insurance laws or any successor
provision; or (iv) with respect to any offering that is not reasonably expected
to yield gross proceeds of at least $20 million; PROVIDED that in the event that
the members of the AmerUs Control Group, collectively, do not own at the time of
such request such amount of Registrable Shares of the kind and type being so
registered that would be reasonably expected to yield gross proceeds of at least
$20 million, then the restriction contained in clause (iii) of this Section
7.2(a) shall be disregarded with respect to such registration.

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Promptly after receipt of any such request for Demand Registration,
the Company shall give written notice of such request to all other holders of
Common Stock having rights to have their shares included in such registration
and shall, subject to the provisions of Section 7.2(c) hereof, include in such
registration all such Registrable Shares with respect to which each member of
the AmerUs Control Group or such other shareholder has requested to be so
registered.

(b) EFFECTIVE REGISTRATION. A registration requested pursuant to
this Section 7.2 shall not be deemed to have been effected (and, therefore, not
requested for purposes of Section 7.2(a) above) (i) unless the registration
statement relating thereto has become effective under the Securities Act, (ii)
if after it has become effective such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason other than a misrepresentation or an
omission by any member of the AmerUs Control Group and, as a result thereof, the
Registrable Shares requested to be registered cannot be completely distributed
in accordance with the plan of distribution, (iii) if the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived other than by
reason of some act or omission by any member of the AmerUs Control Group or (iv)
if, pursuant to Section 7.2(c) hereof, less than all of the Registrable Shares
requested be registered were actually registered.

(c) PRIORITY. If a requested registration pursuant to this Section
7.2 involves an underwritten offering and the managing underwriter shall advise
the Company that in its opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without having adverse effect on such offering, including the price at
which such securities can be sold, then the Company will be required to include
in such registration the maximum number of shares that such underwriter advises
can be so sold, allocated (i) first, to Registrable Shares requested by the
members of the AmerUs Control Group to be included in such registration, (ii)
second, among all shares of Common Stock requested to be included in such
registration by any other shareholder of the Company owning shares of Common
Stock eligible for such registration, PRO RATA on the basis of the number of
shares of Common Stock requested to be included in such registration and (iii)
third, among other securities, if any, requested and otherwise eligible to be
included in such registration (including securities to be sold for the account
of the Company).

(d) PREEMPTION OF DEMAND REGISTRATION. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in its good faith
judgment, (i) after consultation

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with a nationally recognized investment banking firm, that there will be an
adverse effect on a then contemplated public offering of the Company's
securities, (ii) that the disclosures that would be required to be made by the
Company in connection with such registration would be materially harmful to the
Company because of transactions then being considered by, or other events then
concerning, the Company or (iii) that registration at the time would require the
inclusion of pro forma or other information, which requirement the Company is
reasonably unable to comply with, then the Company may defer the filing (but not
the preparation) of the registration statement which is required to effect any
registration pursuant to this Section 7.2 for a reasonable period of time, but
not in excess of 90 calendar days (or any longer period agreed to by the
requesting holders of Registrable Shares), PROVIDED that at all times the
Company is in good faith using all reasonable efforts to file the registration
statement as soon as practicable.

(e) OTHER REGISTRATION RIGHTS. The Company shall not grant to any
Person the right, other than as set forth herein and except to employees and
directors of the Company, to request the Company to register any securities of
the Company except such rights as are not more favorable than the rights granted
to the members of the AmerUs Control Group herein, without the written consent
of AMHC.

SECTION 7.3 REGISTRATION PROCEDURES. If and whenever the Company is
required to use its best efforts to effect or cause the registration of any
Registrable Shares under the Securities Act as provided in this Agreement, the
Company shall:

(a) prepare and file with the SEC as expeditiously as possible
but in no event later than 90 days after receipt of a request for
registration with respect to such Registrable Shares, a registration
statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate, which form shall be
available for the sale of the Registrable Shares in accordance with
the intended methods of distribution thereof, and use its best efforts
to cause such registration statement to become effective as soon as
practicable; PROVIDED that before filing with the SEC a registration
statement or prospectus or any amendments or supplements thereto,
including any documents incorporated by reference therein, the Company
shall (x) furnish to AMHC and to one counsel selected by AMHC (or by
AMHC and holders of other securities covered by such registration
statement, but in no event to more than one firm of attorneys for all
such selling securityholders) copies of all such documents proposed to
be filed, which documents shall be subject to the review of AMHC and

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such counsel, and (y) notify AMHC of any stop order issued or threatened by
the SEC and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered;

(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of not less than 180 days or such
shorter period which shall terminate when all Registrable Shares
covered by such registration statement have been sold (but not before
the expiration of the 90-day period referred to in Section 4(3) of the
Securities Act and Rule 174, or any successor provision, if
applicable), and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in
such registration statement;

(c) furnish, without charge, to AMHC and each underwriter, if
any, such number of copies of such registration statement, each
amendment and supplement thereto (including one conformed copy to AMHC
and one signed copy to each managing underwriter and in each case
including all exhibits thereto), and the prospectus included in such
registration statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents as AMHC may reasonably request in order to facilitate the
disposition of the Registrable Shares registered thereunder;

(d) use its best efforts to register or qualify such Registrable
Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the selling
holders, and the managing underwriter, if any, reasonably requests and
do any and all other acts and things which may be reasonably necessary
or advisable to enable the selling holders and each underwriter, if
any, to consummate the disposition in such jurisdictions of the
Registrable Shares registered thereunder; PROVIDED that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any
such jurisdiction;

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(e) use its best efforts to cause the Registrable Shares covered
by such registration statement to be registered with or approved by
such insurance regulatory authorities as may be necessary by virtue of
the business and operations of the Company to enable the selling
holders to consummate the disposition of Registrable Shares registered
thereunder;

(f) immediately notify the managing underwriter, if any, AMHC
and the selling holders at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening
of any event which comes to the Company's attention if as a result of
such event the prospectus included in such registration statement
contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company shall promptly
prepare and furnish to the selling holders a supplement or amendment
to such prospectus so that as thereafter delivered, such prospectus
shall not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED, HOWEVER, that if
the Company determines in good faith that the disclosure that would be
required to be made by the Company would be materially harmful to the
Company because of transactions then being considered by, or other
events then concerning, the Company, or a supplement or amendment to
such prospectus at such time would require the inclusion of pro forma
or other information, which requirement the Company is reasonably
unable to comply with, then the Company may defer, for a reasonable
period of time not to exceed 90 days, furnishing to the selling
holders a supplement or amendment to such prospectus; PROVIDED
further, that at all times the Company is in good faith using all
reasonable efforts to file such amendment as soon as practicable;

(g) use its best efforts to cause all such securities being
registered to be listed on each securities exchange on which similar
securities issued by the Company are then listed or any Interdealer
quotation system (including the NASDAQ National Market), and enter
into such customary agreements including a listing application and
indemnification agreement in customary form, PROVIDED that the
applicable listing requirements are satisfied, and to provide a
transfer agent and register for such Registrable Shares covered by
such registration

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statement no later than the effective date of such registration
statement;

(h) make available for inspection by AMHC and any holder of
securities covered by such registration statement, any underwriter
participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by
such persons (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the Company
and its subsidiaries (collectively, "Records"), if any, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibilities, and cause the Company's and its Subsidiaries'
officers, directors and employees to supply all information and
respond to all inquiries reasonably requested by any such Inspector in
connection with such registration statement. Notwithstanding the
foregoing, the Company shall have no obligation to disclose any
Records to the Inspectors in the event the Company determines that
such disclosure is reasonable likely to have an adverse effect on the
Company's ability to assert the existence of an attorney-client
privilege with respect thereto;

(i) if requested, use its best efforts to obtain a "cold
comfort" letter from the Company's independent public accountants in
customary form and covering such matters of the type customarily
covered by "cold comfort" letters;

(j) make available senior management personnel to participate
in, and cause them to cooperate with the underwriters in connection
with, "road show" and other customary marketing activities, including
"one-on-one" meetings with prospective purchasers of the Registrable
Shares;

(k) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earning statement
covering a period of at least 12 months, beginning with the first
month after the effective date of the registration statement (as the
term "effective date" is defined in Rule 158(c) under the Securities
Act), which earning statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder; and

(l) if requested to do so by the selling holders, use its best
efforts to create a depositary arrangement whereby depositary shares
representing fractional

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shares of Registrable Shares will be issued and to cause to be
prepared and to execute customary documentation with respect to such
depositary arrangement and such other documentation that the selling
holders may reasonably request in order to facilitate the disposition
of the depositary shares created thereunder (including, but not
limited to, engaging a depositary and preparing and executing a
depositary agreement).

It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Agreement in respect of the Registrable Shares
which are to be registered at the request of any member of the AmerUs Control
Group shall furnish to the Company such information regarding the securities
held by any member of the AmerUs Control Group and the intended method of
disposition thereof as the Company shall reasonably request and as shall be
required in connection with the action taken by the Company.

SECTION 7.4 RESTRICTION ON DISPOSITION OF REGISTRABLE SHARES. AMHC
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 7.3(f) hereof, AMHC shall, and shall
cause each member of the AmerUs Control Group to, discontinue disposition of
Registrable Shares pursuant to the registration statement covering such
Registrable Shares until receipt of the copies of the supplemented or amended
prospectus contemplated by Section 7.3(f) hereof, or until otherwise notified by
the Company, and, if so directed by the Company, AMHC shall, and shall cause
each member of the AmerUs Control Group to, deliver to the Company (at the
Company's expense) all copies (including, without limitation, any and all
drafts), other than permanent file copies, then in their possession, of the
prospectus covering such Registrable Shares at the time of receipt of such
notice. In the event the Company shall give any such notice, the period
mentioned in Section 7.3(b) hereof shall be extended by the greater of (x) three
months or (y) the number of days during the period from and including the date
of the giving of such notice pursuant to Section 7.3(f) hereof to and including
the date when the selling holders shall have received the copies of the
supplemented or amended prospectus contemplated by Section 7.3(f) hereof.

SECTION 7.5 SELECTION OF UNDERWRITERS. If any offering pursuant to a
registration requested pursuant to Section 7.2 hereof is to be an Underwritten
Offering, AMHC shall have the right to select a managing underwriter or
underwriters to administer the offering.

SECTION 7.6 REGISTRATION EXPENSES. The Company shall pay for the
following costs and expenses with respect to its compliance with its obligations
in connection with a registration hereunder, including, but not limited to: (i)
all registration

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and filing fees, (ii) fees and expenses of compliance with securities or blue
sky laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Shares), (iii) printing
expenses, (iv) internal expenses (including without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
(v) the fees and expenses incurred in connection with the listing of the
Registrable Shares on any national securities exchange or interdealer quotation
system, (vi) the reasonable fees and disbursements of counsel for the Company
and customary fees and expenses for independent certified public accountants
retained by the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of a
comfort letter or comfort letters), (vii) the fees and expenses of any registrar
and transfer agent or any depositary, (viii) the underwriting fees, discounts
and commissions applicable to any Common Stock sold for the account of the
Company and (ix) the cost of preparing all documentation in connection
therewith. Except as otherwise provided in clause (viii) of this Section 7.6,
the Company shall have no obligation to pay any underwriting fees, discounts,
commissions or expenses attributable to the sale of Registrable Shares,
including, without limitation, the fees and expenses of any underwriters and
such underwriters' counsel. The Company shall have no obligation to pay the
legal fees and disbursements of counsel for AMHC or any other shareholder
selling Registrable Shares. Notwithstanding the foregoing, the Company and
AmerUs Group shall share pro rata (based on the number of shares sold by the
Company and AmerUs Group, respectively) in all of the costs and expenses of the
IPO S-1 (including the Subscription Offering).

SECTION 7.7 CONVERSION OF OTHER SECURITIES. If any holder of
Registrable Shares offers any options, rights, warrants or other securities
issued by it or any other person that are offered with, convertible into or
exercisable or exchangeable for any Registrable Shares, the Registrable Shares
underlying such options, rights, warrants or other securities shall be eligible
for registration pursuant to Sections 7.1 and 7.2 hereof.

SECTION 7.8 RULE 144. If and for so long as the Company is subject
to the reporting requirements of the Exchange Act, the Company shall take such
measures and file such information, documents and reports as shall be required
by the SEC as a condition to the availability of Rule 144 (or any successor
provision) under the Securities Act.

SECTION 7.9 TRANSFER OF REGISTRATION RIGHTS.

(a) any member of the AmerUs Control Group may transfer all or any
portion of its rights under this Article VII and Article VIII hereof to any
transferee (each, a "transferee")

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of Registrable Shares provided that such transferee is (i) a member of the
AmerUs Control Group or (ii) in the case of Class A Common Stock only, an
institutional Accredited Investor (as defined under Rule 501(a) of the
Securities Act) permitted to acquire such Registrable Shares under applicable
law. Any transfer of registration rights pursuant to this Section 7.9 shall be
effective upon receipt by the Company of written notice from such member of the
AmerUs Control Group stating the name and address of any transferee and
identifying the amount of Registrable Shares with respect to which the rights
under this Article VII (and Article VIII hereof) are being transferred and the
nature of the rights so transferred. In connection with any such transfer, the
term "AMHC" or "member of the AmerUs Control Group" as used in this Agreement
shall, where appropriate to assign such rights and obligations to such
transferee, be deemed to refer to the transferee holder of such Registrable
Shares. Any member of the AmerUs Control Group and such transferees may
exercise the registration rights hereunder in such proportion as they shall
agree among themselves.

(b) After such transfer, each member of the AmerUs Control Group
shall retain its rights under this Agreement with respect to all other
Registrable Shares owned by such member of the AmerUs Control Group.

(c) Upon the request of any member of the AmerUs Control Group, the
Company shall execute a Registration Rights Agreement with such transferee or a
proposed transferee substantially similar to the applicable sections of this
Agreement.
ARTICLE VIII

BUSINESS AND REGISTRATION STATEMENT INDEMNIFICATION

SECTION 8.1 GENERAL CROSS INDEMNIFICATION.

(a) AMHC agrees to indemnify and hold harmless the Company and its
Subsidiaries and each of the officers, directors, employees and agents of the
Company and its Subsidiaries against any and all cost and expenses arising out
of third party claims (including, without limitation, attorneys' fees, interest,
penalties and cost of investigation or preparation of defense), judgments,
fines, losses, claims, damages, liabilities, demands, assessments and amounts
paid in settlement (collectively, "Losses"), in each case, based on, arising out
of, resulting from or in connection with any claim, action, cause of action,
suit, proceeding or investigation, whether civil, criminal, administrative,
investigative or other (collectively, "Actions"), based on, arising out of,
pertaining to or in connection with (i) any breach by AMHC of this Agreement,
any Designated Subsidiary Agreement or any other agreement between the Company
and its subsidiaries and any member of the AmerUs Affiliated Group, (ii)

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the ownership or the operation of the assets or properties (other than capital
stock of the Company) and the operation or conduct of the business, of the
members of the AmerUs Affiliated Group, whether before, on or after the date
hereof, (iii) any third party claims that AmerUs Group or another member of the
AmerUs Affiliated Group, as the case may be, does not have the right to use or
license the Marks in the United States in connection with the products and
services within the Scope of the License and (iv) any untrue statement or
alleged untrue statement of a material fact contained in any Filing of the
Company or any Subsidiary of the Company, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only with respect to financial
information, if any, provided by any member of the AmerUs Affiliated Group in
writing to the Company or any Subsidiary of the Company expressly for use in
such Filing of the Company or Subsidiary of the Company.

(b) The Company agrees to indemnify and hold harmless each member of
the AmerUs Affiliated Group and each of the officers, directors, employees and
agents of each member of the AmerUs Affiliated Group against any and all Losses,
in each case, based on, arising out of, resulting from or in connection with any
Actions, based on, arising out of, pertaining to or in connection with (i) any
activities, action or inaction on the part of the Company or any of its
Subsidiaries or any of their officers, directors, employees, affiliates (other
than a member of the AmerUs Affiliated Group), fiduciaries or agents, (ii) any
breach by the Company of this Agreement or any breach by any Subsidiary of the
Company of any Designated Subsidiary Agreement or any other agreement between
the Company or any of its Subsidiaries and any member of the AmerUs Affiliated
Group, (iii) the ownership or the operation of the assets or properties, and the
operation of the assets or properties, and the operation or conduct of the
business, of the Company or any Subsidiary of the Company, whether before, on or
after the date hereof, (iv) any use of the Marks by the Company and its
Subsidiaries, (v) any Keepwell and (vi) any untrue statement or alleged untrue
statement of a material fact contained in any Filing of any member of the AmerUs
Affiliated Group, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with respect to information, if any, provided
by the Company or a Subsidiary of the Company in writing to any member of the
AmerUs Affiliated Group expressly for use in such Filing and which is, or would
be required to be, included in any Filing of the Company or any of its
Subsidiaries.

(c) The indemnity agreement contained in this Section 8.1 shall be
applicable whether or not any Action or the facts or transactions giving rise to
such Action arose prior to, on or subsequent to the date of this Agreement.

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SECTION 8.2 REGISTRATION STATEMENT INDEMNIFICATION.

(a) The Company agrees to indemnify and hold harmless each member of
the AmerUs Affiliated Group, each Person to whom registration rights shall have
been transferred pursuant to Section 7.9 hereof and each person, if any, who
controls any of the foregoing within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (collectively, the "Registration
Indemnitees") from and against any and all Losses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or Prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such Losses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with (i)
information relating to a Registration Indemnitee furnished in writing to the
Company by or on behalf of such Registration Indemnitee expressly for use in the
Registration Statement or Prospectus, (ii) financial information, if any,
provided by a Registration Indemnitee in writing to the Company expressly for
use in the Registration Statement or Prospectus; and (iii) information relating
to any underwriter furnished in writing to the Company by or on behalf of such
underwriter expressly for use in the Registration Statement or Prospectus.

(b) Each Registration Indemnitee agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers who sign
any Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Registration Indemnitee, but only with respect to (i) information relating to
such Registration Indemnitee furnished in writing to the Company by or on behalf
of such Registration Indemnitee expressly for use in the Registration Indemnitee
expressly for use in the Registration Statement or Prospectus and (ii) financial
information, if any, provided by such Registration Indemnitee in writing to the
Company expressly for use in the Registration Statement or Prospectus. For
purposes of this Section 8.2(b), any information relating to any underwriter
that is contained in a Registration Statement or Prospectus shall not be deemed
to be information relating to a Registration Indemnitee. If any Action shall be
brought against the Company, any of its directors, any such officer, or any such
controlling person based on any Registration Statement or Prospectus and in
respect of which indemnity may be sought against a Registration Indemnitee
pursuant to this paragraph (b), such Registration Indemnity shall have the
rights and duties given to the Company by Section 8.4 hereof (except that if the
Company shall have

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assumed the defense thereof, such Registration Indemnitee shall not be required
to do so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such Registration
Indemnitee's expense), and the Company, its directors, any such officer, and any
such controlling person shall have the rights and duties given to such
Registration Indemnitee by Section 8.4 hereof.

SECTION 8.3 CONTRIBUTION. (a) If the indemnification provided for in
this Article VIII is unavailable to an indemnified party under Section 8.2
hereof in respect of any Losses referred to therein, then an indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the applicable Registration Indemnitee on the other
hand from the offering of the securities covered by such Registration Statement
and Prospectus or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the applicable Registration Indemnitee
on the other in connection with the statements or omissions that resulted in
such Losses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and a Registration
Indemnitee on the other shall be deemed to be in the same proportion as the
total net proceeds from the applicable securities offering (before deducting
expenses) received by such Registration Indemnitee. The relative fault of the
Company on the one hand and the applicable Registration Indemnitee on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or by such Registration Indemnitee on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

(b) the Company and each Registration Indemnitee agree that it would
not be just and equitable if contribution pursuant to this Section 8.3 were
determined by a PRO RATA allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
(a) above. The amount paid or payable by an indemnified party as a result of
the Losses referred to in paragraph (a) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such Action. Notwithstanding the provisions of this
Section 8.3, a Registration Indemnitee shall not be required to contribute any

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amount in excess of the amount by which the proceeds to such Registration
Indemnitee exceeds the amount of any damages which such Registration Indemnitee
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

SECTION 8.4 PROCEDURE. If any Action shall be brought against a
Registration Indemnitee or any other person entitled to indemnification pursuant
to this Article VIII (collectively with the Registration Indemnitees, the
"Indemnitees") in respect of which indemnity may be sought against the Company,
such Indemnitee shall promptly notify the Company, and the Company shall assume
the defense thereof, including the employment of counsel and payment of all fees
and expenses. Such Indemnitee shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such person unless (i) the Company has agreed in writing to pay such fees and
expenses, (ii) the Company has failed to assume the defense and employ counsel,
or (iii) the named parties to an Action (including any impleaded parties)
include both an Indemnitee and the Company and such Indemnitee shall have been
advised by its counsel that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
Action on behalf of such Indemnitee). It is understood, however, that the
Company shall, in connection with any one such Action or separate but
substantially similar or related Actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such indemnified persons not having actual or
potential differing interests among themselves, and that all such fees and
expenses shall be reimbursed as they are incurred. The Company shall not be
liable for any settlement of any such Action effected without its written
consent, but if settled with such written consent, or if there be a final
judgment of the plaintiff in any such Action, the Company agrees to indemnify
and hold harmless each Indemnitee, to the extent provided in the preceding
paragraph, from and against any Losses by reason of such settlement or judgment.

SECTION 8.5 OTHER MATTERS. (a) No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Action

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in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Action.

(b) Any Losses for which an indemnified party is entitled to
indemnification or contribution under this Article VIII shall be paid by the
indemnifying party to the indemnified party as such Losses are incurred. The
indemnity and contribution agreements contained in this Article VIII shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Indemnitee, the Company, its directors
or officers, or any person controlling the Company, and (iii) any termination of
this Agreement.

(c) The parties hereto shall, and shall cause their respective
subsidiaries to, cooperate with each other in a reasonable manner with respect
to access to unprivileged information and similar matters in connection with any
Action. The provisions of this Article VIII are for the benefit of, and are
intended to created third party beneficiary rights in favor of, each of the
indemnified parties referred to herein.

SECTION 8.6 INFRINGEMENT. (a) The Company shall, and shall cause
each Designated Subsidiary to, promptly notify AmerUs Group in writing of any
threatened or actual unauthorized use, infringement or dilution by third parties
of the Marks which may come to such party's attention. AmerUs Group shall have
the sole initial right to determine whether or not any action shall be taken
against any such unauthorized use, infringement or dilution. AmerUs Group shall
promptly notify the Company of its determination and shall briefly describe the
action, if any, which it shall take. In the event the AmerUs Group initiates
litigation against a third party, AmerUs Group shall choose the attorneys,
control the litigation, pay the litigation expenses, and retain any damages
recovered as a result of any judgement in favor of AmerUs Group.

(b) In the event that AmerUs Group takes no action to stop such
alleged infringement within 30 days following notice by the Company of such
infringement, then the Company may bring an action with respect to such alleged
unauthorized use, infringement or dilution, provided that the Company obtains
AmerUs Group's prior written consent (which consent shall not be unreasonably
withheld), and AmerUs Group shall join in such suit if necessary to maintain the
Company's standing. Any recovery from a suit brought by the Company shall be
divided between the parties in proportion to the expenses each incurred in
connection with the prosecution of such suit. The Company shall not settle any
such action without the prior written consent of AmerUs Group such consent shall
not be unreasonably withheld.

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(c) AmerUs Group and the Company agree to provide reasonable
cooperation to each other in any litigation or other action taken to enforce the
Marks.

ARTICLE IX

OTHER PROVISIONS

SECTION 9.1 KEEPWELL PAYMENTS. The Company agrees to reimburse any
member of the AmerUs Affiliated Group who has provided a Keepwell for any and
all amounts paid or payable (including all fees, costs and expenses incurred) by
such member of the AmerUs Affiliated Group in connection with performance by
such member of its obligations under any Keepwell.

SECTION 9.2 BUSINESS RELATIONSHIP. The parties hereto agree that all
arrangements in existence as of the date hereof pursuant to which the Company or
any of its Subsidiaries utilize the distribution channels of any member of the
AmerUs Affiliated Group for the distribution of the Company or its Subsidiaries'
insurance products shall continue until the Trigger Date on such payment terms
that are consistent with the past cost allocation practices of the member of the
AmerUs Affiliated Group and on such other terms as are consistent with past
practices (including utilizing such distribution channels on an exclusive basis
to the extent that such distribution channels are utilized on an exclusive basis
as of the date hereof).

SECTION 9.3 MANAGEMENT SERVICES. Until the Trigger Date, the Company
shall provide to the AmerUs Affiliated Group the following management services
and assistance, or cause such services to be rendered on behalf of the Company
by any Subsidiary, by such personnel as are deemed appropriate: (i) general
management services and support, including the services of executive employees
of the Company or any Subsidiary; (ii) assistance and participation in matters
relating to operations, strategy, and business planning; and (iii) as requested,
furnish reports to the board of directors of AMHC or AmerUs Group with respect
to aspects of the business and affairs of the AmerUs Affiliated Group. In
performing its duties hereunder, the Company shall be subject to the continuing
and exclusive authority of the board of directors of AMHC or the board of
directors of the member of the AmerUs Affiliated Group for which services are
being performed and shall act consistently with and subject to the provisions of
the Articles of Incorporation and By-Laws of AMHC and the other members of the
AmerUs Affiliated Group. AMHC and AmerUs Group acknowledge that the provision
by the Company of such management services and assistance will save the AmerUs
Affiliated Group significant administrative expenses and involve considerable
time and effort of many of the officers and employees of the Company and its
Subsidiaries. In consideration of such services to the AmerUs

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<PAGE>

Affiliated Group, AmerUs Group agrees to pay with respect to each 12-month
period the sum of $2,000,000 per year. The sum shall be payable in equal
installments quarterly in advance on the first business day of each calendar
quarter; PROVIDED, HOWEVER, that if the provisions of Article IX become
effective during a calendar quarter, the payment for such quarter shall be pro-
rated based on the number of days remaining in such quarter and shall be paid
within fifteen business days of such effective date.

SECTION 9.4 MISCELLANEOUS SERVICES. Until the Trigger Date and only
to extent not otherwise provided for in this Agreement, and the Reimbursement
Agreements (i) AMHC may, or may cause another member of the AmerUs Affiliated
Group to continue to provide to the Company and any Subsidiary of the Company
(ii) the Company may, or may cause one or more of its Subsidiaries to continue
to provide to the members of the AmerUs Affiliated Group, any and all
administrative services which have been, consistent with past practices,
provided by any member of the AmerUs Affiliated Group to any Subsidiary of the
Company and vice-versa. If such services shall be reimbursed by the user of
such services for all costs, fees and expenses incurred by such provider,
including reasonable allocations of salaries (including benefits) of personnel
and overhead on a basis that is consistent with the past cost allocation
practices of the members of the AmerUs Affiliated Group; PROVIDED that the
provision of such services shall only be required to the extent that they are
consistent with appropriate standards of business conduct.

SECTION 9.5 REGULATORY APPROVALS. To the extent that any regulatory
or other approvals shall be necessary to effect and perform any of the
provisions of this Agreement, the parties hereto shall use their best efforts to
obtain such approvals prior to the date upon which not obtaining such approvals
would result in a default of such party's obligations hereunder. If such
approvals have not been obtained by such date, then each party hereto shall not
be deemed to be in default of its obligations hereunder so long as such party is
in good faith diligently using their best efforts to obtain such approvals as
soon as practicable. To the extent that any such regulatory approval is not
obtained within a reasonable period of time after such date, AMHC and the
Company shall in good faith use their best efforts to find and effect an
alternative means to achieve the same or substantially the same result as that
contemplated by such provision.

ARTICLE X

DISPUTE RESOLUTION

SECTION 10.1 NEGOTIATION.

-37-

<PAGE>

(a) In the event of any dispute, controversy or claim arising out of
or relating to this Agreement or the breach, termination or validity thereof (a
"Dispute"), upon the written notice ("Notice") of either party hereto ("Party"),
the Parties shall attempt in good faith to negotiate a resolution of the
Dispute; PROVIDED, however, that this Article X shall not apply to any dispute,
controversy or claim arising out of or relating to Article IV of this Agreement
or the breach, termination or validity thereof and AMHC shall have the right to
pursue equitable remedies in a court of equity to the extent permitted by
Section 11.4 hereof.

(b) If the Parties are unable to resolve the Dispute within 30 days
after the receipt of the Notice, then either Party may submit the Dispute to
arbitration in accordance with Section 10.2 hereof as the exclusive means to
resolve the Dispute.

SECTION 10.2 ARBITRATION.

(a) Any Dispute not resolved pursuant to Section 10.1 hereof shall,
at the request of either Party, be finally settled by arbitration administered
by the American Arbitration Association (the "AAA") under its Commercial
Arbitration Rules then in effect the (the "Rules") except as modified herein.
The arbitration shall be held in Des Moines Iowa.

(b) There shall be three arbitrators of whom each Party shall select
one within 15 days of respondent's receipt of claimant's demand for arbitration.
The two party-appointed arbitrators shall select a third arbitrator to serve as
Chair of the tribunal within 15 days of the section of the second arbitrator.
If any arbitrator has not been appointed within the time limits specified
herein, such appointment shall be made by the AAA in accordance with the Rules
upon the written request of either Party within 15 days of such request.

(d) The arbitral tribunal shall permit prehearing discovery that is
relevant to the subject matter of the Dispute taking into account the Parties'
desire that the arbitration be conducted expeditiously and cost effectively.
All discovery shall be completed within 60 days of the appointment of the third
arbitrator.

(e) The award shall be final and binding and shall be the sole and
exclusive remedy between the Parties regarding any claims, counterclaims,
issues, or accounting presented to the arbitral tribunal. The arbitration shall
be governed by the United States Arbitration Act, 9 U.S.C. Section 1-16, and
judgment upon any award may be entered in any court having jurisdiction.

-38-

<PAGE>

(f) The Parties will bear equally all fees, costs, disbursements and
other expenses of the arbitration, and each Party shall be solely responsible
for all fees, costs, disbursements and other expenses incurred in the
preparation and prosecution of their own case; PROVIDED that in the event that a
Party fails to comply with the orders or decision of the arbitral tribunal, then
such noncomplying party shall be liable for all costs and expenses (including,
without limitation, attorneys fees) incurred by the other Party in its effort to
obtain either an order to compel, or an enforcement of an award, from a court of
competent jurisdiction.

(g) The arbitral tribunal shall be authorized in its discretion to
grant pre-award and post-award interest at commercial rates. The arbitral
tribunal shall have no authority to award punitive damages or any other damages
not measured by the prevailing parties' actual damages.

(h) All notices by one party to the other in connection with the
arbitration shall be in accordance with the provisions of Section 11.1 hereof,
except that all notices made pursuant to this Article X must be made by personal
delivery or overnight courier. This agreement to arbitrate shall be binding
upon the successors and permitted assigns of each Party. This Agreement and the
rights and obligations of the Parties shall remain in full force and effect
pending the award in any arbitration proceeding hereunder.

SECTION 10.3 CONFIDENTIALITY. Except to the extent necessary in
connection with a court challenge to the arbitration contemplated by Section
10.2 hereof, information concerning (i) the existence of negotiations pursuant
to Section 10.1 hereof, (ii) the existence of an arbitration pursuant to Section
10.2 hereof, (iii) any documentary or other evidence given by a Party or a
witness in the arbitration or (iv) the arbitration award may not be disclosed by
the tribunal administrator, the arbitrators, any Party or its counsel to any
person or entity not connected with the proceeding unless required to do so by
law or by a court or competent regulatory body, and then only to the extent of
disclosing what is legally required.

-39-

<PAGE>

ARTICLE XI

MISCELLANEOUS

SECTION 11.1 NOTICES. All notices and other communications provided
for hereunder shall be dated and in writing and shall be deemed to have been
given (a) when delivered, if delivered personally, sent by confirmed telecopy or
sent by registered or certified mail, return receipt requested, postage prepaid,
(b) on the next business day if sent by overnight courier and (c) when received
if delivered otherwise. Such notices shall be delivered to the address set
forth below, or to such other address as a party shall have furnished to the
other party in accordance with this Section.

If to AMHC or any other member of the AmerUs Affiliated Group, to:

American Mutual Holding Company
418 6th Avenue
Des Moines, Iowa 50306
Attention: General Counsel

If to the Company, to:

AmerUs Life Holdings, Inc.
418 6th Avenue
Des Moines, Iowa 50306
Attention: General Counsel

SECTION 11.2 BINDING NATURE OF AGREEMENT. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto or their successors in interest, except as expressly otherwise provided
herein.

SECTION 11.3 DESCRIPTIVE HEADINGS. The descriptive headings of the
several articles and sections of this Agreement are inserted for reference only
and shall not limit or otherwise effect the meaning hereof.

SECTION 11.4 REMEDIES. Without limiting the rights of each party
hereto to pursue any and all other legal and equitable rights available to such
party for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
Without limiting the generality of the foregoing, the Company acknowledges and
agrees that (a) its covenants and obligations hereunder are special, unique and
relate to matters of extraordinary importance to AMHC,

-40-

<PAGE>

that in the event the Company fails to perform, observe or discharge any of its
obligations under this agreement AMHC will be irreparably harmed and that no
remedy at law will provide adequate relief to AMHC and (b) AMHC shall be
entitled to a temporary restraining order and temporary and permanent injunctive
and other equitable relief in case of any failure by the Company to perform,
observe or discharge any of its covenants or obligations hereunder and without
the necessity of proving actual damages. The remedies provided herein shall be
cumulative and shall not preclude assertion by any party hereto of any other
rights or the seeking of any other remedies, either legal or equitable, against
any other party hereto.

SECTION 11.5 GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights and duties of the parties shall be
governed by, the laws of the State of Iowa, without regard to the principles of
conflicts of the law.

SECTION 11.6 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.

SECTION 11.7 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal, or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.

SECTION 11.8 AMENDMENT AND MODIFICATION. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement executed by the parties hereto.

SECTION 11.9 ENTIRE AGREEMENT. This Agreement, including any
schedules or exhibits annexed hereto, embodies the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

SECTION 11.10 NO ASSIGNMENT. Except as otherwise provided in Section
7.9 hereof, neither this Agreement nor any of the rights, interests or
obligations of any party hereto may be assigned by such party without the prior
written consent of the

-41-

<PAGE>

other parties; PROVIDED, HOWEVER, that AMHC or AmerUs Group may assign all or
part of its rights or obligating hereunder to one or more other member of the
AmerUs Affiliated Group without the prior consent of the Company.

SECTION 11.11 RECAPITALIZATION, DILUTION ADJUSTMENTS, ETC. In the
event that any capital stock or other securities are issued in respect of, in
exchange for, or in substitution of, any shares of Common Stock by reason of any
reorganization, recapitalization, reclassification, merger, consolidation, spin-
off, partial or complete liquidation, stock dividend, split-up, sale of assets,
distribution to Shareholders or combination of the shares of Common Stock or any
demutualization or conversion to stock form of AMHC then, in each such case,
appropriate adjustments shall be made to as to fairly and equitably preserve, as
far as practicable, the original rights and obligations of the parties hereto
under this Agreement.

SECTION 11.12 FURTHER ASSURANCES. Each party hereto shall, on notice
of request from any other party hereto, take such further action not
specifically required hereby at the expense of the requesting party, as the
requesting party may reasonably request for the implementation of the
transactions contemplated hereby.

SECTION 11.13 NO THIRD PARTY BENEFICIARIES. Except as expressly set
forth herein, nothing in this Agreement shall convey any rights upon any person
or entity which is not a party or a permitted assignee of a party to this
Agreement.

SECTION 11.14 EFFECTIVENESS OF CERTAIN PROVISIONS. The provisions of
Article III, IV, V, VI, VII, VIII and IX shall not become effective until the
date that AmerUs Life becomes a wholly-owned Subsidiary of the Company.

-42-

<PAGE>

IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the partner hereto as of the date
list above written.

AMERICAN MUTUAL HOLDING COMPANY

By /s/ Sam C. Kalainov
-------------------------------

AMERUS GROUP CO.

By /s/ Michael E. Sproule
-------------------------------

AMERUS LIFE HOLDINGS, INC.

By /s/ Michael G. Fraizer
-----------------------------

-43-

<PAGE>

EXHIBIT A

Federal Registration Marks
--------------------------

MARK CLASS(ES AP FILED REG. STATUS
- ---- -------- -------- -----------
AMERUS 37 10/21/94 Pending
AMERUS 36 & 42 10/21/94 Pending
AMERUS (Stylized Letters) 36 & 42 01/17/95 Pending
AMERUS (Stylized Letters) 36 11/16/95 Pending
AMERUS (Stylized Letters) 37 01/17/95 Pending
AMERUS (Stylized Letters in Color) 36 & 42 02/03/95 Pending
AMERUS (Stylized Letters in Color) 36 02/03/95 Pending
AMERUS INSURANCE 36 05/16/95 Pending
AMERUS LIFE None 12/07/95 Pending
AMERUS LIFE 36 10/20/95 Pending
AMERUS LIFE INSURANCE 36 10/20/95 Pending
AMERUS LIFE INSURANCE COMPANY 36 10/20/95 Pending

-44-

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
AmerUs Life Holdings, Inc.:

We consent to the use of our reports included herein and to the
reference to our firm under the heading "Experts" in the Prospectus.

/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP

Des Moines, Iowa
December 11, 1996

<PAGE>
EXHIBIT 99.1
SUBSCRIPTION ORDER FORM
AB
AMERUS LIFE HOLDINGS, INC.
----------------------------------------------------------------
EXPIRATION DATE

The Subscription Offering will expire
at 4:00 P.M., NEW YORK TIME, ON
WEDNESDAY, JANUARY 8, 1997. In order to
subscribe for shares, this completed
Subscription Order Form and payment in
full must be RECEIVED by the Subscription
Services Agent by such time on such date.
Subscriptions for shares of Class A
Common Stock of AmerUs Life Holdings,
Inc. are irrevocable. If you do not wish
to subscribe for shares, you do not need
to return this Subscription Order Form.
- --------------------------------------------------------------------------------
GENERAL

THIS FORM IS TO BE COMPLETED AND RETURNED TO THE SUBSCRIPTION SERVICES AGENT
BY ALL SUBSCRIPTION POLICYOWNERS ELECTING TO SUBSCRIBE FOR SHARES OF CLASS A
COMMON STOCK OF AMERUS LIFE HOLDINGS, INC.
BEFORE COMPLETING THIS SUBSCRIPTION ORDER FORM, YOU ARE URGED TO READ
CAREFULLY THE PROSPECTUS MAILED TO YOU WITH THIS FORM, AND, IF YOU HAVE ANY
QUESTIONS, TO REFER TO THE ACCOMPANYING QUESTIONS AND ANSWERS SUPPLEMENT. IF YOU
DO NOT COMPLETE AND SIGN THIS SUBSCRIPTION ORDER FORM PROPERLY, IT MAY BE
REJECTED.
AmerUs Life Holdings, Inc. may determine to cancel or rescind the Subscription
Offering at any time prior to the closing of the Subscription Offering. In such
case, cash payments made by subscribers will be promptly refunded with accrued
interest as described in the Prospectus.

- --------------------------------------------------------------------------------

NUMBER OF SHARES

Fill in the number of shares you wish to purchase (which must be a whole
number and which must be at least 100 and no more than 5,000):

<TABLE>
<S> <C> <C> <C> <C>
SHARES X SUBSCRIPTION PRICE
= AMOUNT DUE
X $19.00 = $
</TABLE>

- --------------------------------------------------------------------------------
PAYMENT

If you are purchasing shares, you must enclose a check or money order in U.S.
dollars representing "good funds" payable to "AmerUs Life Holdings, Inc." for
the total amount of your purchase, as indicated above. Your right to purchase
shares is non-transferable and non-assignable.

When you have completed this Subscription Order Form, please mail the form
with your check or money order in the postage-paid envelope provided. Your
Subscription Order Form and payment in full must be received by the Subscription
Services Agent by 4:00 P.M., NEW YORK TIME, ON WEDNESDAY, JANUARY 8, 1997. If
the postage-paid envelope is lost, your Subscription Order Form and payment in
full should be returned by mail to AmerUs Life Holdings, Inc., c/o ChaseMellon
Shareholder Services, Midtown Station, P.O. Box 876, New York, NY 10138-0878. If
delivered by hand, express mail or overnight courier, deliver to ChaseMellon
Shareholder Services, 120 Broadway, 13th Floor, New York, NY 10271. Stock
certificates will be mailed to you within 10 days after the closing of the
Subscription Offering.

- --------------------------------------------------------------------------------
STOCK REGISTRATION (PLEASE PRINT CLEARLY)

Please indicate the name(s) in which your stock should be registered and check
the appropriate box for the form in which your stock should be registered. You
may make any corrections to your name and address (from that shown at the top of
this form) on the lines provided.

--------------------------------------------------------------------------------------------------------------------------------
Social Security #Tax ID# (certificate will show
(First Name) (M.I.) (Last Name) this number)
--------------------------------------------------------------------------------------------------------------------------------
(First Name) (M.I.) (Last Name) Social Security #Tax ID#
--------------------------------------------------------------------------------------------------------------------------------
(Street Address)
---------------------------------------------------------------------------
(City) (State) (County) (Zip)
</TABLE>
<TABLE>
<S> <C> <C>
Form of Stock Ownership (check one)
/ / Individual / / Joint Tenants / / Tenants in Common
/ / Individual Retirement Account (IRA) / / Corporation

<CAPTION>
Form of Stock Ownership (c
/ / Uniform Transfer to Minors
/ / Individual / / Fiduciary (Under Agreement Dated , 199 )
/ / Individual Retirement / / Other -------------
</TABLE>

- --------------------------------------------------------------------------------
NASD AFFILIATION

/ / Check here if you are a member of the National Association of Securities
Dealers, Inc. (NASD) or a person associated with an NASD member. Participation
by such persons in the Subscription Offering is only permissible in accordance
with, and subject to the limitations of, Rule 2110 of the Conduct Rules of the
NASD and the "Free-Riding and Withholding Interpretation" promulgated
thereunder. In general, "associated with" an NASD member includes (i) every
officer, director, general partner, employee or agent of a broker/dealer that is
a member of the NASD (a "member"), (ii) every sole proprietor, partner, officer,
director, or branch manager of any member, or any natural person occupying a
similar status or performing similar functions, or any natural person engaged in
the investment banking or securities business who is directly or indirectly
controlling or controlled by such member, whether or not any such person is
registered or exempt from registration with the NASD and (iii) any immediate
family member of any such person; and "immediate family" includes parents,
mother-in-law or father-in-law, husband or wife, brother or sister,
brother-in-law or sister-in-law, son-in-law or daughter-in-law, and children and
any other person who is supported, directly or indirectly, to a material extent
by any person referred to in clause (i) or (ii). To comply with conditions under
which an exemption from the NASD's Interpretation With Respect to Free-Riding
and Withholding is available, you agree, if you have checked the NASD
Affiliation box, (i) not to sell, transfer or hypothecate the stock for a period
of 180 days following issuance and (ii) to report this subscription in writing
to the applicable NASD member within one day of payment therefor.

- --------------------------------------------------------------------------------

TELEPHONE NUMBERS

Please provide a phone number at which you can be reached in the event that we
have questions regarding the information that you have supplied:

Daytime ( )
Evening ( )

- --------------------------------------------------------------------------------
ACKNOWLEDGMENTS AND SIGNATURE

In order for you to purchase shares of Class A Common Stock of AmerUs Life
Holdings, Inc. in the Subscription Offering, you must sign this Subscription
Order Form and date it.

Please sign exactly as your name or names appear at the top of this Form. If
more than one name is listed at the top of this form, all those listed must
sign. When signing as attorney, executor, adminstrator, trustee or guardian,
please give your full title as such. If signing for a corporation, sign by an
authorized officer and indicate title. If a partnership, sign in the name of an
authorized person.

I (WE) ACKNOWLEDGE RECEIPT OF THE PROSPECTUS AND MY (OUR) OFFER TO PURCHASE
SHARES, AS SET FORTH ON THIS SUBSCRIPTION ORDER FORM. UNDER PENALTIES OF
PERJURY, I (WE) CERTIFY THAT (1) THE SOCIAL SECURITY #(S) OR TAX ID#(S) GIVEN
ABOVE IS (ARE) CORRECT; AND (2) I (WE) AM (ARE) NOT SUBJECT TO BACKUP WITH-
HOLDING TAX (YOU MUST CROSS OUT #2 IF YOU HAVE BEEN NOTIFIED BY THE INTERNAL
REVENUE SERVICE THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF REPORTING
INTEREST OR DIVIDENDS ON YOUR TAX RETURN).

<TABLE>
<S> <C>
SIGNATURE DATE
X
SIGNATURE (IF SECOND SIGNATURE REQUIRED) DATE
X
</TABLE>

IF YOU HAVE ANY QUESTIONS, PLEASE CALL THE INFORMATION CENTER AT 1-800-235-1725,
TOLL FREE.

<PAGE>
EXHIBIT 99.2
SUBSCRIPTION
OFFERING
QUESTIONS
AND
ANSWERS

[LOGO]

AMERUS LIFE HOLDINGS, INC.
<PAGE>
AMERUS LIFE HOLDINGS, INC.

SUBSCRIPTION OFFERING: QUESTIONS AND ANSWERS

AmerUs Life Holdings, Inc. (the "Company"), the parent company of AmerUs Life
Insurance Company ("AmerUs Life") is "going public." Five million (5,000,000)
shares of the Company's Class A Common Stock will be offered to eligible
policyowners of AmerUs Life (the "Subscription Offering"), on a priority basis.
The following information is designed to answer several basic questions about
the Subscription Offering and the transactions to be completed by the Company in
going public. Please refer to the Prospectus for a detailed explanation of the
Subscription Offering. If you have any questions, please contact the Information
Center toll-free at 1-800-235-1725.

1. WHAT IS THE SUBSCRIPTION OFFERING?

The Subscription Offering is an offering of the Company's Class A Common
Stock to eligible policyowners of AmerUs Life ("Eligible Policyowners"). The
right to participate in the Subscription Offering is non-transferable.

2. AM I ELIGIBLE TO PARTICIPATE IN THE SUBSCRIPTION OFFERING?

Yes. As a result of (i) owning a policy of insurance with AmerUs Life as of
June 30, 1996, and (ii) requesting a Prospectus be mailed to you, you have
received this package of information and are eligible to subscribe for
shares of the Company's Class A Common Stock in the Subscription Offering.
If you choose to participate in the Subscription Offering, your Order and
payment must be RECEIVED BY WEDNESDAY, JANUARY 8, 1997. Please see detailed
instructions in Question 7.

3. WILL THE COMPANY'S SUBSCRIPTION OFFERING AFFECT MY INSURANCE POLICY?

No. The Subscription Offering will not, in any way, change premiums or
reduce policy values, guarantees or any other obligations of AmerUs Life to
its policyowners. In addition to these
<PAGE>
contractual rights, dividends will continue to be paid on insurance policies
as declared by the Board of Directors of AmerUs Life. As always, dividends
on insurance policies are not guaranteed and may vary from year to year.

4. HOW MANY SHARES OF CLASS A COMMON STOCK CAN I BUY AND WHAT IS THE PRICE?

You may subscribe for a minimum of 100 shares and up to a maximum of 5,000
shares (or any number of shares in between), at a per share subscription
price of $19 (the "Subscription Price"). The Subscription Price may
subsequently be adjusted downward and cash refunds reflecting the difference
will be returned to all subscribers. The price per share will in no event
exceed the Subscription Price.

5. CAN MORE THAN ONE PERSON PER HOUSEHOLD SUBSCRIBE FOR SHARES IN THIS
SUBSCRIPTION OFFERING?

Yes, provided that each person is an Eligible Policyowner. (See requirements
in Question 2).

6. ARE THERE ANY RISKS ASSOCIATED WITH AN INVESTMENT IN THE CLASS A COMMON
STOCK?

As with any stock, there are certain risks inherent in an investment in the
Class A Common Stock. These risks are discussed in detail in the "Risk
Factors" section beginning on page 14 of the Prospectus and in other areas
of the Prospectus. As a potential investor, you should carefully consider
the "Risk Factors" and other information in the Prospectus prior to making
an investment decision regarding the Class A Common Stock.

7. HOW DO I SUBSCRIBE FOR SHARES?

(1) Complete and sign the enclosed Subscription Order Form related to the
Subscription Offering;

(2) Mail the Form with a check or money order (a certified check is
acceptable, but not required) for the number of shares in the enclosed
envelope. The envelope is for United States Postal Service (USPS)
Priority Mail. It is pre-addressed and postage-paid.
<PAGE>
You can send it by (1) dropping it off at your local post office or (2)
placing it in a mailbox. If you would prefer to have your envelope
picked up, call 1-800-222-1811; the USPS will charge you a fee for the
pick-up service.

If you misplace the envelope, mail your Form and payment to:

AmerUs Life Holdings, Inc.
c/o ChaseMellon Shareholder Services
P.O. Box 876
Midtown Station
New York, NY 10138-0878

or, if delivery is by hand, express mail or overnight courier, use the
following address:

ChaseMellon Shareholder Services
120 Broadway
13th Floor
New York, NY 10271

ChaseMellon is the Company's Subscription Services Agent (the
"Subscription Services Agent"); and
(3) Your Form and payment MUST BE RECEIVED BY THE SUBSCRIPTION SERVICES
AGENT NO LATER THAN 4:00 P.M., NEW YORK TIME, ON WEDNESDAY, JANUARY
8, 1997.

Note: Your check must be in "good funds" meaning that: it must be
drawn on a U.S. bank, payable in U.S. dollars; a check returned
for insufficient funds is not "good funds"--at the option of
the Company it may be returned to the sender with no attempt to
redeposit. A money order must be payable in U.S. dollars.

8. WHAT IS THE SUBSCRIPTION ORDER FORM?

The Subscription Order Form is the document that you must complete, sign and
return to the Subscription Services Agent in order to purchase shares in the
Subscription Offering. The document requires certain important
<PAGE>
information, such as your name, address and social security number, or
Taxpayer Identification Number, as appropriate. The Subscription Order Form
also requires you to confirm that you have received the Prospectus. A
Subscription Order Form is included in this Subscription Package.
Photocopies of the Subscription Order Form may be returned to the
Subscription Services Agent, but must include your original signature.

9. WHAT FORM OF PAYMENT SHOULD I USE WHEN I RETURN THE SUBSCRIPTION ORDER FORM?

Payment may be made only by check or money order. Cash or credit card
payments will not be accepted. Upon receipt of your Subscription Order Form
by the Subscription Services Agent, your check or money order will be
deposited by the Subscription Services Agent in an account with the
Subscription Services Agent, for safekeeping until the earlier of (i) the
closing of the Subscription Offering currently scheduled for late January,
1997, or (ii) at the option of the Company, the termination of the
Subscription Offering.

10. WHO SHOULD BE THE PAYEE ON MY CHECK OR MONEY ORDER?

Your check or money order should be made payable to "AmerUs Life Holdings,
Inc." Please ensure your name is on your check or shown as the remitter on a
money order.

11. HOW SHOULD I RETURN MY SUBSCRIPTION ORDER FORM?

Return your fully completed and signed Subscription Order Form along with
your check or money order to the Subscription Services Agent in the enclosed
envelope. If you lose the envelope, the address is listed in Question 7.
Please be sure to allow adequate mailing time for your Subscription Order
Form and check or money order to be RECEIVED BY THE SUBSCRIPTION SERVICES
AGENT NO LATER THAN THE SUBSCRIPTION EXPIRATION DATE (4:00 P.M., NEW YORK
TIME, ON WEDNESDAY, JANUARY 8, 1997).
<PAGE>
12. WILL I EARN INTEREST ON FUNDS SUBMITTED TO PURCHASE SHARES IN THE
SUBSCRIPTION OFFERING?

Funds you submit to purchase shares in the Subscription Offering will not
earn interest unless (i) the Subscription Offering is canceled, or (ii) the
period from the Subscription Expiration Date until the closing of the
Subscription Offering exceeds 60 days (in which case interest will be paid
for such period). The interest paid in either case will be at the rate of
3.5% per annum.

13. WHAT IS THE DEADLINE TO SUBMIT MY SUBSCRIPTION ORDER FORM AND CHECK FOR GOOD
FUNDS TO THE SUBSCRIPTION SERVICES AGENT?

The completed and signed Subscription Order Form accompanied by checks or
money orders for good funds must be RECEIVED BY THE SUBSCRIPTION SERVICES
AGENT NO LATER THAN 4:00 P.M., NEW YORK TIME, ON WEDNESDAY, JANUARY 8, 1997,
to be considered for acceptance by the Company.

14. CAN I FIND OUT IF MY SUBSCRIPTION ORDER FORM HAS BEEN RECEIVED BY THE
SUBSCRIPTION SERVICES AGENT PRIOR TO THE CLOSING OF THE SUBSCRIPTION
OFFERING?

Yes, an acknowledgment of receipt will be mailed by the Subscription
Services Agent to you.

15. MAY I REVOKE MY SUBSCRIPTION ORDER FORM ONCE IT HAS BEEN RECEIVED BY THE
SUBSCRIPTION SERVICES AGENT?

No. Once your Subscription Order Form has been received by the Subscription
Services Agent, it is irrevocable. After the Company has gone public, you
can buy/sell shares as with any other publicly traded stock.

16. IF I AM QUALIFIED TO INVEST IN THE SUBSCRIPTION OFFERING AND SUBMIT MY CHECK
OR MONEY ORDER FOR GOOD FUNDS TOGETHER WITH A PROPERLY COMPLETED AND SIGNED
SUBSCRIPTION ORDER FORM,
<PAGE>
WILL I DEFINITELY BECOME A STOCKHOLDER OF THE COMPANY?

Not necessarily. The Company reserves the right to cancel the Subscription
Offering at any time prior to the closing of the Subscription Offering. If
this occurred, your funds would be returned in full, with interest at the
rate of 3.5% per annum.

17. WHEN CAN I EXPECT TO RECEIVE THE STOCK CERTIFICATE FOR MY CLASS A COMMON
STOCK?

It is expected that the Subscription Offering will close in late January,
1997. A stock certificate for your shares and any refund check, if
applicable, will be mailed to you within 10 days thereafter.

18. HOW MANY STOCK CERTIFICATES WILL I RECEIVE FOR MY SHARES OF CLASS A COMMON
STOCK?

You will receive one stock certificate representing all shares of Class A
Common Stock purchased by you in the Subscription Offering. Unfortunately,
you may NOT request additional certificates for smaller denominations of
shares.

19. HOW MUCH WILL I PAY PER SHARE FOR THE COMPANY'S CLASS A COMMON STOCK?

The Subscription Price of the Class A Common Stock offered in the
Subscription Offering is $19 per share. However, if the Public Offering is
priced at an initial public offering price per share lower than $19 per
share, or if the Subscription Price is adjusted downward, then subscribers
in the Subscription Offering will be entitled to a refund for the difference
between $19 and the final initial public offering price or adjusted
Subscription Price times the number of shares purchased. Subscribers will be
mailed a check for the amount of such refund.

20. WHAT IS THE "PUBLIC OFFERING"?

If the 5,000,000 shares offered in the Prospectus are not fully subscribed
for in the Subscription Offering, the Company intends to sell all or a
portion of the remaining shares in an underwritten offering to the public
called the "Public Offering."
<PAGE>
21. WHAT IF MY ADDRESS CHANGES EITHER DURING THE SUBSCRIPTION OFFERING OR BEFORE
I RECEIVE MY STOCK CERTIFICATE?

The stock certificate and any refund check will be mailed to the address
provided in the Subscription Order Form. Therefore, it is your
responsibility to provide appropriate forwarding instructions to your post
office, or, when completing your Subscription Order Form, provide an address
where you will be sure your mail will be safely received.

22. WILL I BE CHARGED A COMMISSION ON THE PURCHASE OF THE CLASS A COMMON STOCK
IN THE SUBSCRIPTION OFFERING?

No brokerage commission will be charged on the sale of shares in the
Subscription Offering.

23. CAN I PURCHASE SHARES OF CLASS A COMMON STOCK IN THE SUBSCRIPTION OFFERING
THROUGH MY BROKER?

No. Shares offered in the Subscription Offering may be purchased only
through the subscription process described in the Prospectus and herein. See
"The Subscription Offering" beginning on page 24 of the Prospectus. After
the Company has gone public, its Class A Common Stock can be bought/sold
like any other common stock.

24. WHAT STOCK EXCHANGE WILL THE CLASS A COMMON STOCK BE TRADED ON AND WHAT WILL
THE TICKER SYMBOL BE?

The Class A Common Stock has been authorized for listing on the Nasdaq
National Market under the symbol "AMRS", subject to official notice of
issuance.

25. CAN I CALL THE SUBSCRIPTION SERVICES AGENT OR THE SUBSCRIPTION AGENT WITH
ANY QUESTIONS?

You may call the Subscription Services Agent or the Subscription Agent, The
Chicago Corporation, toll-free at 1-800-235-1725.

December 12, 1996
THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY STOCK. THE
OFFER WILL BE MADE ONLY BY THE PROSPECTUS.