Ameriprise 2015 Annual Report Download - page 59

Certain examples of legislative and regulatory changes that may impact our businesses are described below. Some of the
changes resulting from rules and regulations called for under the Dodd-Frank Act could present operational challenges and
increase costs. For example, in the area of derivatives, higher margin and capital requirements, coupled with more
restrictive collateral rules, could impact our ability to effectively manage and hedge risk. Ultimately these complexities and
increased costs could have an impact on our ability to offer cost-effective and innovative insurance products to our clients.
As a result of our deregistration as a savings and loan holding company, we are no longer subject to regulation, supervision
and examination as such by the Board of Governors for the FRB. However, the Dodd-Frank Act authorizes the Financial
Stability Oversight Committee (‘‘FSOC’’) to designate certain non-bank institutions as systemically important financial
institutions subject to regulation as such by the FRB. In the event we are so designated in the future, we would again be
subject to enhanced supervision and prudential standards, including requirements related to risk-based capital, leverage,
liquidity, credit exposure, stress-testing, resolution plans, early remediation, and certain risk management requirements.
Any such designation could cause us to alter our business practices or otherwise adversely impact our results of operation.
In September 2013, at the FSOC’s request, the OFR issued a report entitled ‘‘Asset Management and Financial Stability’’
discussing whether the asset-management industry of selected firms should be subject to enhanced prudential standards
and functional supervision. Although the report remains under significant scrutiny, the scope of the FSOC’s focus on the
asset management industry continues to evolve, and our asset management businesses are currently under the illustrative
assets under management thresholds mentioned in the report as possible triggers for increased supervision, potential
impacts on our asset management businesses could include additional reporting requirements, redemption restrictions,
imposition of standardized risk management practices, imposition of securities lending and cash collateral reinvestment
practices, personnel compensation restrictions, and consolidated supervision of asset managers and their parent
companies, any of which could adversely affect our results of operations.
Any mandated reductions or restructuring of the fees we charge for our products and services resulting from regulatory
initiatives or proceedings could reduce our revenues and/or earnings. Fees paid by mutual funds in accordance with plans
and agreements of distribution adopted under Rule 12b-1 promulgated under the Investment Company Act and by other
sources of managed products are commonly found as a means for product manufacturers and distribution platforms to
address the costs of these products and investor education. The SEC has in the past and could again propose measures
that would establish a new framework to repeal Rule 12b-1. Certain industry-wide reduction or restructuring of Rule 12b-1
fees, or other servicing fees, could impact our ability to distribute our own mutual funds and/or the fees we receive for
distributing other companies’ mutual funds, which could, in turn, impact our revenues and/or earnings.
On April 20, 2015, the Department of Labor proposed regulations seeking to change the definition of who is an investment
advice fiduciary under ERISA and how such advice can be provided to account holders in 401(k) plans and IRAs and other
types of ERISA clients. On January 29, 2016, after a lengthy public comment period and public hearing, the Department of
Labor sent a proposed fiduciary rule to the Office of Management and Budget where the rule remains confidential until the
final rule is published in the Federal Register. These regulations focus on conflicts of interest related to investment
recommendations made by financial advisors or registered investment advisors to clients holding qualified accounts and
other types of ERISA clients as well as how financial advisors are able to discuss IRA rollovers. Qualified accounts,
specifically IRAs, make up a significant portion of our assets under management and administration. We are continuing to
review and analyze the potential impact of the proposed regulations on our clients and prospective clients as well as the
potential impact on our business. We cannot predict how any final regulations may differ from the proposed regulation. If
final regulations were to be issued with provisions substantially similar to the proposed regulations, they could impact how
we receive fees, how we compensate our advisors, how we are able to retain advisors, and how we design our investments
and services for qualified accounts, any of which could negatively impact our results of operations.
Our insurance companies are subject to state regulation and must comply with statutory reserve and capital requirements.
State regulators, as well as the NAIC, continually review and update these requirements and other requirements relating to
the business operations of insurance companies, including their underwriting and sales practices and their use of affiliated
captive insurers. Changes in these requirements that are made for the benefit of the consumer sometimes lead to
additional expense for the insurer and, thus, could have a material adverse effect on our financial condition and results of
operations. In December 2012, the NAIC adopted a new reserve valuation manual that applies principles-based reserve
standards to life insurance products. The valuation manual becomes the effective reserve valuation method for the
RiverSource Life companies when adopted by 42 jurisdictions that account for at least 75% of U.S. insurance premiums
combined and by Minnesota and New York. To date, 39 states have adopted the valuation manual, which does not include
Minnesota or New York. A three-year transition period is available to defer implementation of this reserve standard. The
requirement for principles-based life insurance reserves may result in statutory reserves being more sensitive to changes in
interest rates, policyholder behavior and other market factors. It is not possible at this time to estimate the potential
impact of future changes in statutory reserve and capital requirements on our insurance businesses. Further, we cannot
predict the effect that proposed federal legislation may have on our businesses or competitors, such as the option of
federally chartered insurers, a mandated federal systemic risk regulator, future initiatives of the FIO within the Department
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