Ameriprise 2015 Annual Report Download - page 58

by changing the condition and behaviors of our customers, business counterparties and regulators, as well as by causing
declines or volatility in the economic and financial markets.
The potential effects of natural and man-made disasters and catastrophes on certain of our businesses include but are not
limited to the following: (i) a catastrophic loss of life may materially increase the amount of or accelerate the timing in
which benefits are paid under our insurance policies; (ii) significant widespread property damage may materially increase
the amount of claims submitted under our property casualty insurance policies; (iii) an increase in claims and any resulting
increase in claims reserves caused by a disaster may harm the financial condition of our reinsurers, thereby impacting the
cost and availability of reinsurance and the probability of default on reinsurance recoveries; and (iv) declines and volatility
in the financial markets may decrease the value of our assets under management and administration, which could harm
our financial condition and reduce our management fees.
We cannot predict the timing and frequency with which natural and man-made disasters and catastrophes may occur, nor
can we predict the impact that changing climate conditions may have on the frequency and severity of natural disasters or
on overall economic stability and sustainability. As such, we cannot be sure that our actions to identify and mitigate the
risks associated with such disasters and catastrophes, including predictive modeling, establishing liabilities for expected
claims, acquiring insurance and reinsurance and developing business continuity plans, will be effective.
Legal, Regulatory and Tax Risks
Legal and regulatory actions are inherent in our businesses and could result in financial losses or harm our
businesses.
We are, and in the future may be, subject to legal and regulatory actions in the ordinary course of our operations, both
domestically and internationally. Actions brought against us may result in awards, settlements, penalties, injunctions or
other adverse results, including reputational damage. In addition, we may incur significant expenses in connection with our
defense against such actions regardless of their outcome. Various regulatory and governmental bodies have the authority
to review our products and business practices and those of our employees and independent financial advisors and to bring
regulatory or other legal actions against us if, in their view, our practices, or those of our employees or advisors, are
improper. Pending legal and regulatory actions include proceedings relating to aspects of our businesses and operations
that are specific to us and proceedings that are typical of the industries and businesses in which we operate. Some of
these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the
plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. See Item 3 of this
Annual Report on Form 10-K — ‘‘Legal Proceedings.’’ In or as a result of turbulent times, the volume of claims and
amount of damages sought in litigation and regulatory proceedings generally increase.
Our businesses are regulated heavily, and changes to the laws and regulations applicable to our businesses may
have an adverse effect on our operations, reputation and financial condition.
Virtually all aspects of our business, including the activities of our parent company and our various subsidiaries, are subject
to various federal, state and international laws and regulations. For a discussion of the regulatory framework in which we
operate, see Item 1 of this Annual Report on Form 10-K — ‘‘Business — Regulation.’’ Compliance with these applicable
laws and regulations is time-consuming and personnel-intensive, and we have invested and will continue to invest
substantial resources to ensure compliance by our parent company and our subsidiaries, directors, officers, employees,
registered representatives and agents. Any enforcement actions, investigations or other proceedings brought against us or
our subsidiaries, directors, employees or advisors by our regulators may result in fines, injunctions or other disciplinary
actions that could harm our reputation or impact our results of operations. Further, any changes to the laws and
regulations applicable to our businesses, as well as changes to the interpretation and enforcement of such laws and
regulations, may affect our operations and financial condition. Such changes may impact our operations and profitability
and the practices of our advisors, including with respect to the scope of products and services provided, the manner in
which products and services are marketed and sold and the incurrence of additional costs of doing business. Ongoing
changes to regulation and oversight of the financial industry may produce results, the full impact of which cannot be
immediately ascertained. In addition, we expect the worldwide demographic trend of population aging will cause
policymakers to continue to focus on the framework of U.S. and non-U.S. retirement systems, which may drive additional
changes regarding the manner in which individuals plan for and fund their retirement, the extent of government
involvement in retirement savings and funding, the regulation of retirement products and services and the oversight of
industry participants. For example, we continue to see enhanced legislative and regulatory interest regarding retirement
investing, financial advisors and investment professionals, and we will continue to closely review and monitor any legislative
or regulatory proposals and changes. Any incremental requirements, costs and risks imposed on us in connection with
such current or future legislative or regulatory changes may constrain our ability to market our products and services to
potential customers, and could negatively impact our profitability and make it more difficult for us to pursue our growth
strategy.
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