Ameriprise 2009 Annual Report Download - page 35

The National Association of Insurance Commissioners (‘‘NAIC’’) investment in certain financial institutions. Governments and
defines risk-based capital (‘‘RBC’’) requirements for insurance regulators in the U.S. and abroad are considering or have
companies. The RBC requirements are used by the NAIC and state implemented new and more expansive laws and regulations which
insurance regulators to identify companies that merit regulatory may directly impact our businesses. Additional discussion of
actions designed to protect policyholders. Our RiverSource Life potential risks arising from enactment of new regulations can be
companies and Property Casualty companies are subject to found in Item 1A of this Annual Report on Form 10-K — ‘‘Risk
various levels of regulatory intervention should their total Factors.’’
adjusted statutory capital fall below the RBC requirement. At the
Client Information
‘‘company action level,’’ defined as total adjusted capital level
between 100% and 75% of the RBC requirement, an insurer must Many aspects of our business are subject to increasingly
submit a plan for corrective action with its primary state regulator. comprehensive legal requirements by a multitude of different
The ‘‘regulatory action level,’’ which is between 75% and 50% of functional regulators concerning the use and protection of
the RBC requirement, subjects an insurer to examination, analysis personal information, particularly that of clients, including those
and specific corrective action prescribed by the primary state adopted pursuant to the Gramm-Leach-Bliley Act, the Fair and
regulator. If a company’s total adjusted capital falls between 50% Accurate Credit Transactions Act, an ever increasing number of
and 35% of its RBC requirement, referred to as ‘‘authorized state laws, and the European Union data protection legislation
control level,’’ the insurer’s primary state regulator may place the (‘‘EU law’’) as domestically implemented in the respective EU
insurer under regulatory control. Insurers with total adjusted member states. We have implemented policies and procedures in
capital below 35% of the requirement will be placed under response to such requirements in the UK. We continue our efforts
regulatory control. to safeguard the data entrusted to us in accordance with applicable
law and our internal data protection policies, including taking
RiverSource Life, RiverSource Life of NY, IDS Property Casualty steps to reduce the potential for identity theft or other improper
and Ameriprise Insurance Company maintain capital well in use or disclosure of personal information, while seeking to collect
excess of the company action level required by their state and use data to properly achieve our business objectives and to
insurance regulators. For RiverSource Life, the company action best serve our clients.
level RBC was $803 million as of December 31, 2009, and the
corresponding total adjusted capital was $3.5 billion, which General
represents 430% of company action level RBC. For RiverSource The Uniting and Strengthening America by Providing Appropriate
Life of NY, the company action level RBC was $44 million as of Tools Required to Intercept and Obstruct Terrorism Act,
December 31, 2009, and the corresponding total adjusted capital commonly referred to as the USA Patriot Act, was enacted in
was $286 million, which represents 653% of company action level October 2001 in the wake of the September 11th terrorist attacks.
RBC. As of December 31, 2009, the company action level RBC was The USA Patriot Act broadened substantially existing anti-money
$133 million for IDS Property Casualty and $2 million for laundering legislation and the extraterritorial jurisdiction of the
Ameriprise Insurance Company. As of December 31, 2009, IDS United States. In response, we have enhanced our existing
Property Casualty had $405 million of total adjusted capital, or anti-money laundering programs and developed new procedures
305% of the company action level RBC, and Ameriprise Insurance and programs. For example, we have implemented a customer
Company had $46 million of total adjusted capital, or 2300% of identification program applicable to many of our businesses and
the company action level RBC. have enhanced our ‘‘know your customer’’ and ‘‘enhanced due
diligence’’ programs in others. In addition, we have taken and will
At the federal level, there is periodic interest in enacting new take steps to comply with anti-money laundering legislation in the
regulations relating to various aspects of the insurance industry, UK derived from applicable EU directives and to take account of
including taxation of annuities and life insurance policies, international initiatives adopted in other jurisdictions in which we
accounting procedures, the use of travel in underwriting, and the conduct business.
treatment of persons differently because of gender with respect to
terms, conditions, rates or benefits of an insurance policy. We have operations in the EU through Threadneedle and certain
Adoption of any new federal regulation in any of these or other of our other subsidiaries. We monitor developments in EU
areas could potentially have an adverse effect upon our legislation, as well as in the other markets in which we operate, to
RiverSource Life companies. ensure that we comply with all applicable legal requirements,
including EU directives applicable to financial institutions as
The instability and impacted values and liquidity in global implemented in the various member states. Because of the mix of
financial markets experienced during 2008 and 2009 and through Asset Management, Advice & Wealth Management, Annuities and
the present time have resulted in an unprecedented amount of Protection activities we conduct, we are continually assessing the
government intervention in financial markets, including direct
20 ANNUAL REPORT 2009