CUNA Mutual Life Insurance Co. policyholders today overwhelmingly approved the merger of CMLIC with CUNA Mutual Insurance Society (CMIS) at the policyholders' annual meeting.

The vote was 42,699 in favor, 3,013 opposed.

Both companies are part of Madison-based CUNA Mutual Group.

"Merging the two organizations creates efficiencies, flexibility and enhances our combined balance sheet, making us a stronger organization," Jeff Post, CUNA Mutual president and CEO, said in a statement. "This vote -- a more than 93 percent approval -- reflects policyholder understanding of the issue and sends a clear message that our owners agree a single, stronger mutual insurance company is better prepared to meet the future needs of credit unions and their members."

CMIS policyholders in April approved the merger and a domicile change to Iowa by more than a 9-1 margin.

The merger also must be approved by the Iowa Commissioner of Insurance and the Iowa Attorney General, who will review the merger and hold a public hearing on the proposal next Wednesday.

If approved by the Iowa, the merger is expected to be completed by the end of the year.

CMIS and CMLIC have operated on an affiliated basis since 1990 when the two companies signed an Agreement of Permanent Affiliation. Since that time, the CUNA Mutual Board has considered merging the two companies.

Until recently, the merger was not pursued because a significant, merger-related tax penalty offset the benefits. A change in tax law has not only removed that penalty, the companies said, but created an even larger, one-time tax benefit of $15 million to $20 million prompting the board to move forward with efforts to merge the two entities.

A union-backed research firm opposed the merger, which it views as a step toward demutualization or forming a public holding company. CUNA Mutual Group officials have said there are no plans at this point for the company to take either action.

Research Associates was hired by the international office of the Office and Professional Employees International Union. OPEIU Local 39 represents CUNA Mutual Group employees.

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