Ameriprise 2015 Annual Report Download - page 177

20. Regulatory Requirements
Restrictions on the transfer of funds exist under regulatory requirements applicable to certain of the Company’s
subsidiaries. At December 31, 2015, the aggregate amount of unrestricted net assets was approximately $2.0 billion.
The National Association of Insurance Commissioners (‘‘NAIC’’) defines Risk-Based Capital (‘‘RBC’’) requirements for
insurance companies. The RBC requirements are used by the NAIC and state insurance regulators to identify companies
that merit regulatory actions designed to protect policyholders. These requirements apply to both the Company’s life and
property casualty insurance companies. In addition, IDS Property Casualty is subject to the statutory surplus requirements
of the State of Wisconsin. The Company’s life and property casualty companies each met their respective minimum RBC
requirements.
The Company’s life and property casualty insurance companies are required to prepare statutory financial statements in
accordance with the accounting practices prescribed or permitted by the insurance departments of their respective states
of domicile, which vary materially from GAAP. Prescribed statutory accounting practices include publications of the NAIC, as
well as state laws, regulations and general administrative rules. The more significant differences from GAAP include
charging policy acquisition costs to expense as incurred, establishing annuity and insurance reserves using different
actuarial methods and assumptions, valuing investments on a different basis and excluding certain assets from the balance
sheet by charging them directly to surplus, such as a portion of the net deferred income tax assets.
State insurance statutes contain limitations as to the amount of dividends or distributions that insurers may make without
providing prior notification to state regulators. For RiverSource Life, dividends or distributions in excess of unassigned
surplus, as determined in accordance with accounting practices prescribed by the State of Minnesota, require advance
notice to the Minnesota Department of Commerce, RiverSource Life’s primary regulator, and are subject to potential
disapproval. RiverSource Life’s statutory unassigned surplus aggregated $954 million and $638 million as of
December 31, 2015 and 2014, respectively.
In addition, dividends or distributions, whose fair market value, together with that of other dividends or distributions made
within the preceding 12 months, exceeds the greater of the previous year’s statutory net gain from operations or 10% of
the previous year-end statutory capital and surplus are referred to as ‘‘extraordinary dividends.’’ Extraordinary dividends also
require advance notice to the Minnesota Department of Commerce, and are subject to potential disapproval. Statutory
capital and surplus for RiverSource Life was $3.7 billion and $3.3 billion at December 31, 2015 and 2014, respectively.
Statutory capital and surplus for IDS Property Casualty was $684 million and $560 million at December 31, 2015 and
2014, respectively.
Statutory net gain from operations and net income (loss) are summarized as follows:
Years Ended December 31,
2015 2014 2013
(in millions)
RiverSource Life
Statutory net gain from operations(1) $ 1,033 $ 1,412 $ 1,633
Statutory net income(1) 633 1,154 1,337
IDS Property Casualty
Statutory net income (loss) (44) (25) 11
(1) Statutory net gain (loss) from operations and statutory net income (loss) are significantly impacted by changes in reserves for variable
annuity guaranteed benefits, however, these impacts are substantially offset by unrealized gains (losses) on derivatives which are not
included in statutory income but are recorded directly to surplus.
Government debt securities of $5 million at both December 31, 2015 and 2014, held by the Company’s life insurance
subsidiaries were on deposit with various states as required by law.
Ameriprise Certificate Company (‘‘ACC’’) is registered as an investment company under the Investment Company Act of
1940 (the ‘‘1940 Act’’). ACC markets and sells investment certificates to clients. ACC is subject to various capital
requirements under the 1940 Act, laws of the State of Minnesota and understandings with the Securities and Exchange
Commission (‘‘SEC’’) and the Minnesota Department of Commerce. The terms of the investment certificates issued by ACC
and the provisions of the 1940 Act also require the maintenance by ACC of qualified assets. Under the provisions of its
certificates and the 1940 Act, ACC was required to have qualified assets (as that term is defined in Section 28(b) of the
1940 Act) in the amount of $4.8 billion and $4.2 billion at December 31, 2015 and 2014, respectively. ACC had
qualified assets of $5.1 billion and $4.5 billion at December 31, 2015 and 2014, respectively.
Ameriprise Financial and ACC entered into a Capital Support Agreement on March 2, 2009, pursuant to which Ameriprise
Financial agrees to commit such capital to ACC as is necessary to satisfy applicable minimum capital requirements.
Effective April 30, 2014, this agreement was amended to revise the maximum commitment to $50 million. The previous
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