Ameriprise 2009 Annual Report Download - page 28

Threadneedle’’, above) as well as variable portfolio funds of other RiverSource variable annuities provide us with fee-based revenue
companies. RiverSource variable annuity products in force offer a in the form of mortality and expense risk fees, marketing support
fixed account investment option with guaranteed minimum and administrative fees, fees charged for optional features elected
interest crediting rates ranging up to 4% at December 31, 2009. by the contract holder, and other contract charges. We receive
marketing support payments from the VST Funds underlying our
Our Portfolio Navigator asset allocation program is available variable annuity products as well as Rule 12b-1 distribution and
under our variable annuities. The Portfolio Navigator program is servicing-related fees from the VST Funds and the underlying
designed to help a contract purchaser select an asset allocation funds of other companies. In addition, we receive marketing
model portfolio from the choices available under the program, support payments from the affiliates of other companies’ funds
based on the purchaser’s stated investment time horizon, risk included as investment options in our RiverSource variable
tolerance and investment goals. We believe the benefits of the annuity products.
Portfolio Navigator asset allocation program include a
well-diversified annuity portfolio, disciplined, professionally For the nine months ended September 30, 2009, RiverSource Life
created asset allocation models, simplicity and ease of use, access Insurance Companies ranked ninth in variable annuity sales
to multiple well-known money managers within each model according to LIMRA International .
portfolio and automatic rebalancing of the client’s contract value
Fixed Annuities
on a quarterly basis. RiverSource Investments, our investment
management subsidiary, designs and periodically updates the RiverSource fixed annuity products provide a contract holder with
model portfolios based on recommendations from Morningstar cash value that increases by a fixed or indexed interest rate. We
Associates, an unaffiliated investment advisor. periodically reset rates at our discretion subject to certain policy
terms establishing minimum guaranteed interest crediting rates.
The majority of the variable annuity contracts we issue include Our earnings from fixed annuities are based upon the spread
guaranteed minimum death benefit (‘‘GMDB’’) provisions. between rates earned on assets purchased with fixed annuity
Contract purchasers can choose optional benefit provisions to deposits and the rates at which interest is credited to our
their contracts to meet their needs, including guaranteed RiverSource fixed annuity contracts.
minimum withdrawal benefit (‘‘GMWB’’) and guaranteed
minimum accumulation benefit (‘‘GMAB’’) provisions. In 2007, we discontinued new sales of equity indexed annuities.
Approximately 98% of RiverSource Life’s overall variable annuity
RiverSource fixed annuity contracts in force provide guaranteed
assets include a GMDB provision and approximately 40% of
minimum interest crediting rates ranging from 1.5% to 5.0% at
RiverSource Life’s overall variable annuity assets include a GMWB
December 31, 2009. New contracts issued provide guaranteed
or GMAB provision. In general, these features can help protect
minimum interest rates in compliance with state laws providing
contract holders and beneficiaries from a shortfall in death or
for indexed guaranteed rates.
living benefits due to a decline in the value of their underlying
investment accounts.
Liabilities and Reserves for Annuities
The general account assets of our life insurance subsidiaries We maintain adequate financial reserves to cover the risks
support the contractual obligations under the guaranteed benefit associated with guaranteed benefit provisions added to variable
provisions the company issues (see ‘‘Business — Our Segments — annuity contracts in addition to liabilities arising from fixed and
Asset Management — Asset Management Offerings — variable annuity base contracts. You can find a discussion of
Management of Institutional Owned Assets’’ above). As a result, liabilities and reserves related to our annuity products in Note 2 to
we bear the risk that protracted under-performance of the our Consolidated Financial Statements included in Part II, Item 8
financial markets could result in guaranteed benefit payments of this Annual Report on Form 10-K.
being higher than what current account values would support. Our
exposure to risk from guaranteed benefits generally will increase Financial Strength Ratings
when equity markets decline, as evidenced by the significant Our insurance company subsidiaries that issue RiverSource
decline experienced in 2008 and early 2009. You can find a annuity products receive ratings from independent rating
discussion of liabilities and reserves related to our annuity organizations. Ratings are important to maintain public
products in Part II, Item 7A of this Annual Report on Form 10-K — confidence in our insurance subsidiaries and our protection and
‘‘Quantitative and Qualitative Disclosures About Market Risk’’, as annuity products. For a discussion of the financial strength ratings
well as in Note 11, Note 12 and Note 20 to our Consolidated of our insurance company subsidiaries, see the ‘‘Our Segments —
Financial Statements included in Part II, Item 8 of this Annual Protection — Financial Strength Ratings’’ section, below.
Report on Form 10-K.
ANNUAL REPORT 2009 13