Ameriprise 2013 Annual Report Download - page 33

Term Life Insurance
Term life insurance provides a death benefit, but it does not build up cash value. The policyholder chooses the term of
coverage with guaranteed premiums at the time of issue. During the chosen term, we cannot raise premium rates even if
claims experience deteriorates. At the end of the chosen term, coverage may continue with higher premiums until the
maximum age is attained, or the policy expires with no value. We also offer a term life insurance product that pays the
death benefit in the form of a monthly income stream.
Disability Income Insurance
Disability income insurance provides monthly benefits to individuals who are unable to earn income either at their
occupation at time of disability (‘‘own occupation’’) or at any suitable occupation (‘‘any occupation’’) for premium
payments that are guaranteed not to change. Depending upon occupational and medical underwriting criteria, applicants
for disability income insurance can choose ‘‘own occupation’’ and ‘‘any occupation’’ coverage for varying benefit periods. In
some states, applicants may also choose various benefit provisions to help them integrate individual disability income
insurance benefits with Social Security or similar benefit plans and to help them protect their disability income insurance
benefits from the risk of inflation.
Long Term Care Insurance
As of December 31, 2002, the RiverSource Life companies discontinued underwriting stand-alone long term care
insurance. However, our advisors sell long term care insurance issued by other companies, including Genworth Life
Insurance Company, John Hancock Life Insurance Company and Prudential Insurance Company.
In 2004, the RiverSource Life companies began to file for approval to implement rate increases on most of their existing
blocks of nursing home-only indemnity long term care insurance policies. Implementation of these rate increases began in
early 2005 and continues. We have received approval for some or all requested increases in the 50 states where
increases have been requested, with an average approved cumulative rate increase of 95.7% of premium on all such
policies where an increase was requested.
In 2007, the RiverSource Life companies began to file for approval to implement rate increases on most of their existing
blocks of comprehensive reimbursement long term care insurance policies. Implementation of these rate increases began
in late 2007 and continues. We have received approval for some or all requested increases in 48 states, with an average
approved cumulative rate increase of 33.9% of premium on all such policies where an increase was requested.
We intend to seek additional rate increases with respect to these and other existing blocks of long term care insurance
policies, subject to regulatory approval.
Ameriprise Auto & Home Insurance Products
We offer personal auto, home, excess personal liability, travel and specialty insurance products through IDS Property
Casualty and its subsidiary, Ameriprise Insurance Company (the ‘‘Property Casualty companies’’). We offer a range of
coverage options under each product category. Our Property Casualty companies provide personal auto, home and liability
coverage to clients in 43 states and the District of Columbia.
Distribution and Marketing Channels
Our Property Casualty companies do not have field agents; rather, we use co-branded direct marketing to sell our personal
auto, home and travel insurance products through alliances with commercial institutions and affinity groups, and directly to
our clients and the general public. We also receive referrals through our financial advisor network. Our Property Casualty
companies have a multi-year distribution agreement with Costco Insurance Agency, Inc., Costco’s affiliated insurance
agency. Costco members represented 51% of all new policy sales of our Property Casualty companies in 2013. Through
other alliances, we market our property casualty products to customers of Ford Motor Credit Company and offer personal
home insurance products to customers of the Progressive Group.
We offer RiverSource life insurance products almost exclusively through our advisors. Our advisors offer insurance products
issued predominantly by the RiverSource Life companies, though they may also offer insurance products of unaffiliated
carriers, subject to certain qualifications.
Reinsurance
We reinsure a portion of the insurance risks associated with our life, disability income, long term care and property
casualty insurance products through reinsurance agreements with unaffiliated reinsurance companies. We use reinsurance
to limit losses, reduce exposure to large and catastrophic risks and provide additional capacity for future growth. To
manage exposure to losses from reinsurer insolvencies, we evaluate the financial condition of reinsurers prior to entering
into new reinsurance treaties and on a periodic basis during the terms of the treaties. Our insurance companies remain
primarily liable as the direct insurers on all risks reinsured.
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