Ameriprise 2014 Annual Report Download - page 190

required due diligence and misrepresented various aspects of the REIT including fees charged to clients, risks associated
with the product, and valuation of the shares on client account statements. Plaintiffs seek unspecified damages. The
Company was served in December 2012, and, on April 19, 2013, moved to dismiss the complaint. On June 10, 2014,
the Court granted the Company’s motion to dismiss. On July 10, 2014, the plaintiff filed an amended complaint, naming
only Ameriprise Financial Services, Inc. as a defendant. On August 11, 2014, the Company moved to dismiss the
amended complaint. Briefing is complete. The Company is awaiting the Court’s ruling. The Company cannot reasonably
estimate the range of loss, if any, that may result from this matter due to the early procedural status of the case, the
absence of class certification, the lack of a formal demand on the Company by the plaintiffs and plaintiffs’ failure to allege
any specific, evidence-based damages.
In September 2011, the California Department of Insurance (‘‘CA DOI’’) issued an Order to Show Cause administrative
action against the Company’s life insurance subsidiary alleging that certain claims handling practices reviewed in
connection with a 2007-2008 market conduct exam did not comply with applicable law. In August 2014, the Company’s
life insurance subsidiary and the CA DOI reached an agreement in principle to settle all pending allegations for $800,000,
with the exception of a single allegation related to certain coverage determinations made under long term care insurance
policies issued between 1989-1992. An administrative hearing on this remaining allegation concluded in November 2014.
The Company cannot reasonably estimate the range of loss, if any, that may result from this matter given the procedural
status of the matter, the lack of evidence supporting the CA DOI’s penalty allegations, and the difficulty of predicting
outcomes in these administrative proceedings which involve multiple phases and appellate procedures.
In November 2014, a lawsuit was filed against the Company’s London-based asset management affiliate in England’s High
Court of Justice Commercial Court, entitled Otkritie Capital International Ltd and JSC Otkritie Holding v. Threadneedle Asset
Management Ltd. and Threadneedle Management Services Ltd. (‘‘Threadneedle Defendants’’). Claimants allege that the
Threadneedle Defendants should be held liable for the wrongful acts of one of its former employees, who in February 2014
was held jointly and severally liable with several other parties for conspiracy and dishonest assistance in connection with a
fraud perpetrated against Claimants in 2011. Claimants allege they were harmed by that fraud in the amount of
$120 million. The Threadneedle Defendants have applied to the Court for an Order dismissing the proceedings as an
abuse of process of the court. The Company cannot reasonably estimate the range of loss, if any, that may result from this
matter due to the early procedural status of the case and the failure to allege any specific, evidence based damages.
24. Related Party Transactions
The Company may engage in transactions in the ordinary course of business with significant shareholders or their
subsidiaries, between the Company and its directors and officers or with other companies whose directors or officers may
also serve as directors or officers for the Company or its subsidiaries. The Company carries out these transactions on
customary terms. The transactions have not had a material impact on the Company’s consolidated results of operations or
financial condition.
The Company’s executive officers and directors may have transactions with the Company or its subsidiaries involving
financial products and insurance services. All obligations arising from these transactions are in the ordinary course of the
Company’s business and are on the same terms in effect for comparable transactions with the general public. Such
obligations involve normal risks of collection and do not have features or terms that are unfavorable to the Company’s
subsidiaries.
25. Segment Information
The Company’s reporting segments are Advice & Wealth Management, Asset Management, Annuities, Protection and
Corporate & Other.
In the first quarter of 2014, the Company made the following changes to its previously reported segment data:
• Ameriprise interest and debt expense was allocated to all segments to more accurately reflect management’s
assessment of capital allocation.
• Interest accretion income from the intercompany transfer of former bank assets was eliminated for segment reporting
resulting in this accretion no longer being allocated to the Annuities and Protection segments. The corresponding offset
is no longer reported in the Corporate & Other segment.
• Certain fixed wholesaling costs were reclassified from distribution expenses to general and administrative expense to
improve consistency in our presentation of wholesaling distribution expense across all segments.
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