Farmers Union Mutual Insurance Company of ND (ND) and Farmers Union Mutual Insurance Company of Arkansas (AR) are proud to announce their recent affiliation. The two companies have been in talks for the past several months and have decided to join forces for the betterment of both companies.

FUMIC ND was founded in 1944 for the purpose of providing market-leading insurance products to members of North Dakota Farmers Union, with a specialty niche for farmers and ranchers. FUMIC AR was founded in 1934 to provide affordable fire and extended coverage insurance to members of Arkansas Farmers Union.

The combined entities will report over $70 million in combined premium. We believe that our separate strengths in different markets and geographic locations will help us be more effective. We believe that together we are better. While both the ND and AR legal entities will remain separate, they will eventually share products, services and people. How exactly does this work? The affiliation will beww controlled by three agreements: an Affiliation Agreement, a Cost Sharing and Management Agreement, and a Reinsurance Pooling Agreement.

The affiliation process has already begun and will continue over the foreseeable future.  Transition teams comprised of both ND and AR management will help lead the process by determining strengths and weaknesses of both companies’ processes and determining the best course of action to create and implement the most effective products and deliver exceptional customer service.

Merger vs. Affiliation

Hearing that two companies will soon work together to create an affiliation, management services and reinsurance agreements may leave you assuming they are becoming one company. It is important to understand the differences between a merger and an affiliation in order to fully understand how ND and AR will interact together going forward.

The fundamental difference is the number of legal entities that will exist. A merger turns two companies into one single surviving entity. ND and AR will continue to exist as two separate legal entities during the entirety of their affiliation. Two board of directors will continue to exist. The boards will have the same members in order to create more consistency between the two companies.

Affiliation Agreement. This agreement sets the legal terms of the affiliation in macro terms. The companies will continue to have separate boards of directors, but the management team will be comprised of the same set of people, with ND CEO Mark Anderson overseeing both companies.  Current AR president, Mike Bush, will serve as AR chief operating officer.

Cost Sharing and Management Agreement. This agreement allows for the combination of certain operations and creates a single management team. We expect a unified management to create a better cohesion between the two companies and cost savings. Over time, ND and AR will be able to utilize each other’s strengths to better suit customer needs.

Reinsurance Pooling Agreement. Prior to the affiliation, ND and AR each had separate reinsurance programs in place. Both programs will be modified and the affiliated entities will execute a single “pooled” reinsurance program. We will continue to rely on “A” rated reinsurers.

Approval Process

The changes occurring in the affiliation required approval from both the Arkansas Insurance Department and the North Dakota Insurance Department. Both departments have provided their approval of the agreements. We worked closely with both departments throughout the process, and deeply appreciate their professionalism and attention. Going forward, the companies will continue to report to and engage with both states’ insurance departments.

The policyholders of FUMIC AR also approved the affiliation in a special meeting held last fall.

A.M. Best Rating

Prior to the affiliation, ND had been assigned a financial strength rating of “A (Excellent)” with a stable outlook. AR had no rating. In the months leading up to the affiliation, A.M. Best met to discuss the rating impact to ND and determined that, based on the affiliation scenario described above and provided to them, there is no negative rating impact on ND.

Now that the affiliation has closed successfully, A.M. Best will meet again to analyze the potential of a pooled rating to the affiliated companies. ND and AR anticipate a single rating of “A (Excellent)” with a stable outlook to be assigned the affiliated companies.


This affiliation affords our companies the ability to highlight our customer service and to place a significant emphasis on personal relationships with all our customers. Questions concerning this information can be directed to either Mark Anderson, CEO, at or Kristi Schlosser Carlson, chief legal officer at