Ameriprise 2009 Annual Report Download - page 163

The following table presents the Company’s funding commitments:
December 31,
2009 2008
(in millions)
Commercial mortgage loan commitments $ 50 $ 44
Consumer mortgage loan commitments 387 298
Consumer lines of credit 1,389 392
Total funding commitments $ 1,826 $ 734
The Company’s life and annuity products all have minimum interest rate guarantees in their fixed accounts. As of December 31, 2009,
these guarantees range up to 5%. To the extent the yield on the Company’s invested asset portfolio declines below its target spread plus
the minimum guarantee, the Company’s profitability would be negatively affected.
See Note 5 for information on commitments related to the Company’s pending acquisition of Columbia.
Owing to conditions then-prevailing in the credit markets and the isolated defaults of unaffiliated structured investment vehicles held in
the portfolios of money market funds advised by its RiverSource Investments LLC subsidiary (the ‘‘2a-7 Funds’’), the Company closely
monitored the net asset value of the 2a-7 Funds during 2008 and 2009 and, as circumstances have warranted from time to time injected
capital to one or more of the 2a-7 Funds. Management believes that the market conditions which gave rise to those circumstances have
significantly diminished. The Company has not provided a formal capital support agreement or net asset value guarantee to any of the
2a-7 Funds.
The Company and its subsidiaries are involved in the normal course of business in legal, regulatory and arbitration proceedings, including
class actions, concerning matters arising in connection with the conduct of its activities as a diversified financial services firm. These
include proceedings specific to the Company as well as proceedings generally applicable to business practices in the industries in which it
operates. The Company can also be subject to litigation arising out of its general business activities, such as its investments, contracts,
leases and employment relationships. Uncertain economic conditions heightened volatility in the financial markets, such as those which
have been experienced from the latter part of 2007 through 2009, and significant regulatory reform proposals may increase the likelihood
that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of
examinations of the Company or the financial services industry generally.
As with other financial services firms, the level of regulatory activity and inquiry concerning the Company’s businesses remains elevated.
From time to time, the Company receives requests for information from, and/or has been subject to examination by, the SEC, FINRA,
Office of Thrift Supervision (‘‘OTS’’), state insurance and securities regulators, state attorneys general and various other governmental
and quasi-governmental authorities concerning the Company’s business activities and practices, and the practices of the Company’s
financial advisors. Pending matters about which the Company has during recent periods received information requests include: sales and
product or service features of, or disclosures pertaining to, mutual funds, annuities, equity and fixed income securities, insurance
products, brokerage services, financial plans and other advice offerings; supervision of the Company’s financial advisors; supervisory
practices in connection with financial advisors’ outside business activities; sales practices and supervision associated with the sale of fixed
and variable annuities and non-exchange traded (or ‘‘private placement’’) securities; information security; the delivery of financial plans
and the suitability of particular trading strategies, investments and product selection processes. The number of reviews and investigations
has increased in recent years with regard to many firms in the financial services industry, including Ameriprise Financial. The Company
has cooperated and will continue to cooperate with the applicable regulators regarding their inquiries.
These legal and regulatory proceedings and disputes are subject to uncertainties and, as such, the Company is unable to estimate the
possible loss or range of loss that may result. An adverse outcome in one or more of these proceedings could result in adverse judgments,
settlements, fines, penalties or other relief that could have a material adverse effect on the Company’s consolidated financial condition or
results of operations.
148 ANNUAL REPORT 2009