Ameriprise 2008 Annual Report Download - page 44

activities of our trust company, fall within the compliance oversight of the U.S. Departments of Labor and Treasury, particularly
the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA, and the tax reporting requirements
applicable to such accounts.
The Minnesota Department of Commerce (Insurance Division), the Wisconsin Office of the Commissioner of Insurance and
the New York State Insurance Department (the ‘‘Domiciliary Regulators’’) regulate certain of the RiverSource Life companies,
IDS Property Casualty, and Ameriprise Insurance Company depending on each company’s state of domicile, which affects
both our Protection and Annuities segments. The New York State Insurance Department regulates RiverSource Life of NY. In
addition to being regulated by their Domiciliary Regulators, our RiverSource Life companies and Property Casualty companies
are regulated by each of the insurance regulators in the states where each is authorized to transact the business of insurance.
Other states also regulate such matters as the licensing of sales personnel and, in some cases, the underwriting, marketing
and contents of insurance policies and annuity contracts. The primary purpose of such regulation and supervision is to protect
the interests of contractholders and policyholders. Financial regulation of our RiverSource Life companies and Property
Casualty companies is extensive, and their financial and intercompany transactions (such as intercompany dividends, capital
contributions and investment activity) are often subject to pre-notification and continuing evaluation by the Domiciliary
Regulators. Virtually all states require participation in insurance guaranty associations which assess fees to insurance
companies in order to fund claims of policyholders and contractholders of insolvent insurance companies.
The National Association of Insurance Commissioners (‘‘NAIC’’) defines risk-based capital (‘‘RBC’’) requirements for
insurance companies. The RBC requirements are used by the NAIC and state insurance regulators to identify companies that
merit regulatory actions designed to protect policyholders. Our RiverSource Life companies and Property Casualty companies
would be subject to various levels of regulatory intervention should their total adjusted statutory capital fall below the RBC
requirement. At the ‘‘company action level,’’ defined as total adjusted capital level between 100% and 75% of the RBC
requirement, an insurer must submit a plan for corrective action with its primary state regulator. The ‘‘regulatory action level,’’
which is between 75% and 50% of the RBC requirement, subjects an insurer to examination, analysis and specific corrective
action prescribed by the primary state regulator. If a company’s total adjusted capital falls between 50% and 35% of its RBC
requirement, referred to as ‘‘authorized control level,’’ the insurer’s primary state regulator may place the insurer under
regulatory control. Insurers with total adjusted capital below 35% of the requirement will be placed under regulatory control.
RiverSource Life, RiverSource Life of NY, IDS Property Casualty and Ameriprise Insurance Company maintain capital well in
excess of the company action level required by their state insurance regulators. For RiverSource Life, the company action level
RBC was $551 million as of December 31, 2008, and the corresponding total adjusted capital was $2.7 billion, which
represents 494% of company action level RBC. For RiverSource Life of NY, the company action level RBC was $58 million as
of December 31, 2008, and the corresponding total adjusted capital was $229 million, which represents 395% of company
action level RBC. As of December 31, 2008, the company action level RBC was $124 million for IDS Property Casualty and
$2 million for Ameriprise Insurance Company. As of December 31, 2008, IDS Property Casualty had $436 million of total
adjusted capital, or 352% of the company action level RBC, and Ameriprise Insurance Company had $47 million of total
adjusted capital, or 2350% of the company action level RBC.
At the federal level, there is periodic interest in enacting new regulations relating to various aspects of the insurance industry,
including taxation of annuities and life insurance policies, accounting procedures, the use of travel in underwriting, and the
treatment of persons differently because of gender with respect to terms, conditions, rates or benefits of an insurance policy.
Adoption of any new federal regulation in any of these or other areas could potentially have an adverse effect upon our
RiverSource Life companies.
The instability and decline in global financial markets experienced during 2008 and through the present time have resulted in
an unprecedented amount of government intervention in financial markets, including direct investment in financial
institutions. Governments and regulators in the U.S. and abroad are considering or have implemented new and more
expansive laws and regulations which may directly impact our businesses. Additional discussion of potential risks arising from
enactment of new regulations can be found in Item 1A of this Annual Report on Form 10-K—‘‘Risk Factors.’’
Client Information
Many aspects of our business are subject to increasingly comprehensive legal requirements by a multitude of different
functional regulators concerning the use and protection of personal information, particularly that of clients, including those
adopted pursuant to the Gramm-Leach-Bliley Act, the Fair and Accurate Credit Transactions Act, an ever increasing number of
state laws, and the European Union data protection legislation (‘‘EU law’’) as domestically implemented in the respective EU
member states. We have implemented policies and procedures in response to such requirements in the UK. We continue our
efforts to safeguard the data entrusted to us in accordance with applicable law and our internal data protection policies,
including taking steps to reduce the potential for identity theft or other improper use or disclosure of personal information,
while seeking to collect and use data to properly achieve our business objectives and to best serve our clients.
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