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RETIREMENT | INVESTMENTS | INSURANCE
2013 Annual Report

Table of contents

  • Page 1
    2013 Annual Report RETIREMENT | INVESTMENTS | INSUR ANCE

  • Page 2

  • Page 3
    ... in the Retirement, Investment, and Insurance markets demonstrate that we are ready to provide our individual customers and institutional clients with quality financial solutions, including asset accumulation, asset protection, and asset distribution products and services, supported by guidance...

  • Page 4
    ... by offering a number of fixed indexed annuity products, in addition to other asset distribution solutions. For example, our mutual fund custodial product, SelectAdvantage, had positive net flows of almost $600 million in 2013. This fee-based product is designed to meet the needs of customers who...

  • Page 5
    ...way in which our Insurance Solutions business provides value to our customers and addresses their financial planning needs. Individual Life provides term, universal, indexed universal, and variable universal life insurance products to help our customers with their asset accumulation, protection, and...

  • Page 6
    Ready to Create Long-Term Value: 200 Basis Points of ROE Improvement A central financial goal of the Voya Financial transformation story is to improve our Ongoing Business Adjusted Operating Return on Equity (Adjusted ROE)2 by 400 to 500 basis points, to 12% to 13% over the period between 2012 ...

  • Page 7
    ... we can both meet our financial targets and help Americans meet theirs. Voya Financial's business profile aligns perfectly with the market opportunity: a scaled worksite/ individual retirement business, bolstered by investment and insurance businesses. Three separate solid businesses deliver so much...

  • Page 8
    ... Americans build a secure financial future - one person, one family, one institution at a time. As we aspire to be America's Retirement Companyâ„¢, we stand ready to help all Americans with their unique financial journeys. On behalf of the 7,000 men and women of Voya Financial, we appreciate your...

  • Page 9
    ...Address of principal executive offices) 10169 (Zip Code) (212) 309-8200 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class: Name of each exchange on which registered: Common stock, par value $.01 per share New York...

  • Page 10

  • Page 11
    ... FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, including "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business", contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of...

  • Page 12
    ... of Equity Securities ...Selected Financial Data ...Part II Management's Discussion and Analysis of Financial Condition and Results of Operations ...Quantitative and Qualitative Disclosures About Market Risk ...Financial Statements and Schedules ...Changes in and Disagreements With Accountants on...

  • Page 13
    ... as universal life ("UL"), indexed universal life ("IUL"), term life and stable value products, allow our customers to protect against unforeseen life events and mitigate market risk. Enjoy. Our income products such as target date funds, guaranteed income funds, fixed annuities, IRAs, mutual funds...

  • Page 14
    ... Customer Products Mass Market $50,000-$100,000

  • Page 15
    ... 31, 2013, we managed $120.3 billion in our commercial business (comprised of $75.2 billion for third-party institutions and individual investors, and $45.1 billion in separate account assets for our Retirement Solutions, Insurance Solutions and Closed Block businesses) and $79.0 billion in general...

  • Page 16
    ... independent managing directors supporting approximately 7,200 additional producers) and specialty markets (95 general agents with access to over 7,100 producers). • Employee Benefits provides stop loss, group life, voluntary employee-paid and disability products to mid-sized and large businesses...

  • Page 17
    ...advisory company (1997), ReliaStar Life Insurance Company (including Pilgrim Capital Corporation) (2000), Aetna Life Insurance and Annuity Company (including Aeltus Investment Management) (2000) and CitiStreet (2008). Plan of Divestment from ING Group Prior to our initial public offering in May 2013...

  • Page 18
    ...to 76% in 2013. The ING U.S. brand is associated with retirement, investment and insurance products and solutions that deliver financial security, and as we become a standalone company, we plan to leverage our high brand awareness and brand strength to create a new brand that supports our mission of...

  • Page 19
    ... market-based fees from the management of the general account and mutual fund assets supporting Institutional Retirement Plans and Individual Markets rollover products. Distribution of Investment Management products and services using the Retirement segment continues to present a growth opportunity...

  • Page 20
    ...stock) to best meet the needs of their employees. A broad selection of funds is available for our products in all asset categories from over 100 fund companies, including the ING family of mutual funds managed by our Investment Management business. Our full-service retirement plan offerings are also...

  • Page 21
    ... options such as mutual funds, commingled trusts and separate accounts. For plans in the full service small-mid corporate segment, our core products are: • ING MAP Select, a group funding agreement/group annuity contract offered to fund qualified retirement plans. The product contains over 300...

  • Page 22
    ... management and administration as of September 30, 2013. • • Products for Institutional Retirement Plans are distributed nationally through multiple unaffiliated channels or via affiliated distribution including direct sales teams. We offer localized support to these groups and their clients...

  • Page 23
    ... as of December 31, 2013, who provide services to our large clients. Some of these firms are also utilized in the Tax Exempt Market. • • Competition. Our Institutional Retirement Plans business competes with other large, well-established insurance companies, asset managers, record keepers and...

  • Page 24
    ... use us as their principal investment and retirement plan provider. Through our broad range of advisory programs, our financial advisers have access to a wide set of solutions for our customers for building investment portfolios, including stocks, bonds and mutual funds, as well as managed accounts...

  • Page 25
    ... risk by actively managing market and credit risks associated with investments and through asset/ liability matching portfolio management. Annuities The Annuities segment provides fixed and indexed annuities, tax-qualified mutual fund custodial products and payout annuities for pre-retirement...

  • Page 26
    ... Disclosures About Market Risk-Risk Management." Products and Services Our Annuities segment product offerings include immediate and deferred fixed annuities designed to address customer needs for tax-advantaged savings and retirement income and their wealth-protection concerns. New sales comprise...

  • Page 27
    ... AUM for each product, excluding payout annuities: ($ in billions) Annuity Product AUM As of December 31, 2013 Fixed Indexed Annuities (FIA) ...Multi-Year Guarantee Annuities (MYGA) & other Fixed Annuities ...Mutual Funds Custodial Products ...Markets and Distribution $12.6 $ 7.3 $ 3.4 Our target...

  • Page 28
    ...Hartley Act defined-benefit and defined-contribution retirement plans, endowments and foundations, and insurance companies through our institutional distribution channel and through affiliates. We also serve individual investors by offering our mutual funds and separately managed accounts through an...

  • Page 29
    ... growth, value and core strategies in the large, mid and small cap spaces. Our quantitative equity capabilities are used to create quantitative and enhanced indexed strategies, support other fundamental equity analysis and create extension products. MASS. Investment Management's MASS platform offers...

  • Page 30
    ... Ended December 31, 2013 $ in millions Investment Platform Fixed Income ...Equities ...Senior Bank Loans ...Alternatives ...Total ...MASS(1) ...Client Segment Retail ...Institutional ...General Account ...Mutual Fund Manager Re-assignments(2) . Total ...ING U.S. affiliate sourced, excluding CBVA...

  • Page 31
    ...trusts and structured vehicles. Investment Management manages a variety of variable portfolios and mutual funds which are sold through our Retirement Solutions and Insurance Solutions businesses. As of December 31, 2013, total AUM from these channels was $53.9 billion with the majority of the assets...

  • Page 32
    ...funding, supplemental retirement income and leaving a legacy for heirs. Other features include flexible premium payments that can change to meet policyholders' evolving financial needs. IUL. For customers looking for an opportunity for a higher return in a low rate environment, we offer IUL products...

  • Page 33
    ..., while independent, use our brand and sell a wide range of our products, including life, annuity and mutual funds. Finally, we employ a specialty markets channel to focus on alternative distribution. This includes life insurance quote agencies, internet direct marketers, and other forms of non...

  • Page 34
    ... persistency and premium payment pattern in pricing policies. In addition, certain of our insurance products that include guaranteed returns or crediting rates underwrite equity market or interest rate risks. We seek to maintain a spread between the return on our general account invested assets and...

  • Page 35
    ... life and Voluntary Benefits ("VB") markets on a premium basis. As of December 31, 2013, Employee Benefits total in-force premiums were $1.3 billion. The Employee Benefits segment generates revenue from premiums, investment income, mortality and morbidity income and policy and other charges. Profits...

  • Page 36
    ... term disability products for mid-sized to large employers. This product offering is typically packaged for sale with group life products, especially in the middle-market. The following chart presents the key employee benefits products we offer, along with data on annual premiums for each product...

  • Page 37
    ... December 31, 2013 Brokerage (Commissions Paid) ...Benefits Consulting Firms (Fee Based Consulting) ...Worksite Sales ...Competition $170.2 $ 72.7 $ 20.0 64.7% 27.7% 7.6% The group insurance market is mature and, due to the large number of participants in this segment, price and service are key...

  • Page 38
    ... third quarters tend to have the second highest Group Life and Stop Loss sales, as a large number of our contracts have July start dates in alignment with the start of the fiscal year of those clients. • Closed Blocks We separated our CBVA and Closed Block Institutional Spread Products segments...

  • Page 39
    ..., rating agency capital, risk-based capital ("RBC"), liquidity, earnings, and economic value. There is significant operational scale (approximately 455,000 variable policy holders and $45.7 billion in AUM in our CBVA segment as of December 31, 2013) which ensures ongoing hedging, financial reporting...

  • Page 40
    ...amount in certain conditions. Earlier versions of the withdrawal benefit guarantee that annual withdrawals of up to 7.0% of eligible premiums may be made until eligible premiums previously paid by the contract owner are returned, regardless of account value performance. Asset allocation requirements...

  • Page 41
    ...fees. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk free rates. The projection of future guaranteed benefits and future attributed fees require the use of assumptions for capital...

  • Page 42
    ... exercise of the benefit means that the customers give up any future increase in the guaranteed benefit that might accrue if they were to delay exercise to a later date. The discount rates used in the GMIB NAR methodology grade from current U.S. Treasury rates to long-term best estimates over ten...

  • Page 43
    ...GMAB/GMWBL blocks to refine the impact of interest rate movements on regulatory and rating agency capital. Equity index futures on various equity indices are used to mitigate the risk of the change in value of the policyholder-directed separate account funds underlying the variable annuity contracts...

  • Page 44
    ..., after giving effect to our CHO program and the Variable Annuity Guarantee Hedge Program for various shocks in equity markets and interest rates. This reflects the hedging we had in place as well as any collateral (in the form of a letter of credit ("LOC")) or change in underlying asset values that...

  • Page 45
    ... as the market and closed book of business evolve or if assumptions or methodologies that affect reserves or hedge targets are refined. In February 2014, we purchased equity indexed options in our CHO program and refined the impact of equity movements on regulatory and rating agency capital to up...

  • Page 46
    ... benefits, we enter into futures positions and total return swaps on various public market equity indices chosen to closely replicate contract owner variable fund returns. We also mitigate most of the foreign currency risk arising from its international fund exposure using forward contracts. We use...

  • Page 47
    ... financial strength and credit ratings of our reinsurers. CBVA Risks and Risk Management The amounts ultimately due to policyholders under GMDB and guaranteed minimum living benefits, and the reserves required to support these liabilities, are driven by a variety of factors, including equity market...

  • Page 48
    ... GMDB and fees related to these benefits, we enter derivative contracts on various public market indices chosen to closely replicate contract owner variable fund returns. The Company's risk management program is constantly re-evaluated to respond to changing market conditions and manage trade-offs...

  • Page 49
    ... elect or delay the utilization of such benefits. The development of a secondary market for third-party investor strategies in the annuities business could also adversely affect the profitability of existing business by reducing lapse rates of in-the-money contracts in excess of current expectations...

  • Page 50
    ... senior credit default swap ("CDS") contracts of which, as of December 31, 2013, approximately $1 billion of notional amount remained outstanding. As the business is in run-off, it is actively managed to limit liquidity risk and capital requirements. Closed Block Other The third financial reporting...

  • Page 51
    ... 2013, in a registered offering. The divestment of 50% of the Company is measured in terms of a divestment of over 50% of the shares of ING U.S., Inc., the loss of ING Group's majority of directors on ING U.S., Inc.'s board of directors and the accounting deconsolidation of the Company (in line with...

  • Page 52
    ... line with IFRS accounting rules. The 2012 Amended Restructuring Plan also places limitations on ING Group's ability to call or buy back Tier 2 capital and Tier 1 hybrid debt instruments until the earlier of November 18, 2014 or the date on which ING Group has fully repaid the Core Tier 1 securities...

  • Page 53
    ... aspects of the insurance business including: licensing to transact business, licensing agents, admittance of assets to statutory surplus, regulating premium rates for certain insurance products, approving policy forms, regulating unfair trade and claims practices, establishing reserve requirements...

  • Page 54
    ...report and what impact such changes will have on our financial condition and results of operation. Like many life insurance companies, we utilize captive reinsurers to satisfy certain reserve requirements related to certain of our policies. If state insurance regulators determine to restrict our use...

  • Page 55
    ..., the financial condition of its affiliates, the source and amount of funds by which it will effect the acquisition, the criteria used in determining the nature and amount of consideration to be paid for the acquisition, proposed changes in the management and operations of the insurance company and...

  • Page 56
    ... of financial regulation affecting insurance companies. Though broad in scope, the NAIC has stated that the Solvency Modernization Initiative will focus on: (1) capital requirements; (2) corporate governance and risk management; (3) group supervision; (4) statutory accounting and financial reporting...

  • Page 57
    ... Extraordinary Distributions Paid in 2013 Extraordinary Distributions Paid in 2012 ING USA Annuity and Life Insurance Company ...Security Life of Denver Insurance Company ...ReliaStar Life Insurance Company ...ING Life Insurance and Annuity Company ...(1) Iowa Colorado Minnesota Connecticut...

  • Page 58
    ... also account for 75% of the premium by U.S. life insurance companies (measured as of 2008). The new VM is expected to become effective no earlier than January 1, 2015, and we anticipate that its provisions will require us to make changes to certain of our term and universal life insurance policies...

  • Page 59
    ... they paid through full or partial premium tax offsets, usually over a period of years. Marketing and Sales State insurance regulators are becoming more active in adopting and enforcing suitability standards with respect to sales of fixed, indexed and variable annuities. In particular, the NAIC has...

  • Page 60
    ... variable life insurance and variable annuities that are registered with and regulated by the SEC as securities under the Securities Act of 1933, as amended (the "Securities Act"). These products are issued through separate accounts that are registered as investment companies under the Investment...

  • Page 61
    ... investment advice, sales and related activities for these products. Some of our subsidiaries issue certain fixed and indexed annuities supported by the company's general account and/or variable annuity contracts and variable life insurance policies through the company's separate accounts. These...

  • Page 62
    ... management of those investment companies, including mutual funds included in annuity products. Investment advisory clients may also need to approve, or consent to, investment advisory agreements upon a change in control. In addition, broker-dealers are required to make certain monthly and annual...

  • Page 63
    ... services are marketed and sold to ERISA plans and their plan participants and to purchasers of individual retirement accounts and individual retirement annuities. The SEC also has indicated that it may propose rules creating a uniform standard of conduct applicable to broker-dealers and investment...

  • Page 64
    ... collective trust funds managed by ING Investment Trust Co. are generally subject to ERISA. Financial Reform Legislation and Initiatives Dodd-Frank Wall Street Reform and Consumer Protection Act On July 21, 2010, President Obama signed into law the Dodd-Frank Act, which effects comprehensive changes...

  • Page 65
    ... various risks, including equity and interest rate market risk features within many of our insurance and annuity products. The CFTC and SEC jointly adopted final rules, which (subject to certain exceptions) became effective on October 12, 2012, to further define the terms "swap" and "security-based...

  • Page 66
    ... II Directive will effect a full revision of the European insurance industry's solvency framework and prudential regime (in particular, minimum capital and solvency requirements, governance requirements, risk management and public reporting standards) and will impose, among other things, group-level...

  • Page 67
    ...Act The Patriot Act contains anti-money laundering and financial transparency laws applicable to broker-dealers and other financial services companies, including insurance companies. The Patriot Act seeks to promote cooperation among financial institutions, regulators and law enforcement entities in...

  • Page 68
    ... to closing any new commercial mortgage loans or to taking title to real estate. Although unexpected environmental liabilities can always arise, we seek to minimize this risk by undertaking these environmental assessments and complying with our internal environmental policies and procedures. Health...

  • Page 69
    ...financial condition and liquidity, including in the following respects: • We provide a number of insurance, annuity, retirement and investment products that expose us to risks associated with fluctuations in interest rates, market indices, securities prices, default rates, the value of real estate...

  • Page 70
    ...fee income on certain annuity, retirement and investment products. Because these products and services generate fees related primarily to the value of AUM, a decline in the equity markets could reduce our revenues because of the reduction in the value of the investments we manage. A change in market...

  • Page 71
    ... insurance premiums and fees, annuity deposits and cash flow from investments and assets. At the holding company level, sources of liquidity in normal markets also include a variety of short-term liquid investments and short-and long-term instruments, including credit facilities, equity securities...

  • Page 72
    ... Changes in interest rates may negatively affect the value of our assets and our ability to realize gains or avoid losses from the sale of those assets, all of which also ultimately affect earnings. In addition, our insurance and annuity products and certain of our retirement and investment products...

  • Page 73
    ... reduce our total company estimated combined RBC ratio (which includes the effect from the Closed Blocks) in an amount that could be material. Conversely, in periods of rapidly increasing interest rates, policy loans, withdrawals from, and/or surrenders of, life insurance and annuity contracts and...

  • Page 74
    ... businesses we face intense competition, including from domestic and foreign insurance companies, broker-dealers, financial advisors, asset managers and diversified financial institutions, both for the ultimate customers for our products and for distribution through independent distribution channels...

  • Page 75
    ...the objective of mitigating risks inherent in our business and operations. These risks include current or future changes in the fair value of our assets and liabilities, current or future changes in cash flows, the effect of interest rates, equity markets and credit spread changes, the occurrence of...

  • Page 76
    ... and equity investments with counterparties and customers in the financial services industry, including brokers and dealers, commercial and investment banks, mutual and hedge funds, institutional clients, futures clearing merchants, swap dealers, insurance companies and other institutions, resulting...

  • Page 77
    ... Capital Resources-Potential Impact of a Ratings Downgrade." Our investment portfolio is subject to several risks that may diminish the value of our invested assets and the investment returns credited to customers, which could reduce our sales, revenues, AUM and results of operations. Fixed income...

  • Page 78
    ... hold certain assets that may lack liquidity, such as privately placed fixed income securities, commercial mortgage loans, policy loans and limited partnership interests. These asset classes represented 28.4% of the carrying value of our total cash and invested assets as of December 31, 2013. If we...

  • Page 79
    ... can be reasonably estimated. These valuation allowances are based on loan risk characteristics, historical default rates and loss severities, real estate market fundamentals and outlook as well as other relevant factors. As of December 31, 2013, our commercial loan portfolio included $5.1 million...

  • Page 80
    ...on our revenues and income. Our operations include, among other things, retirement plan administration, policy administration, portfolio management, investment advice, retail and wholesale brokerage, fund administration, shareholder services, benefits processing and servicing, contract and sales and...

  • Page 81
    ... and quoted market prices of comparable securities. Factors considered in estimating the fair values of embedded derivatives and derivatives related to product guarantees (collectively, "guaranteed benefit derivatives") include risk-free interest rates, long-term equity implied volatility, interest...

  • Page 82
    ... our results of operations and financial condition. Furthermore, historical trends may not be indicative of future impairments or allowances. Fixed income and equity securities classified as available-for-sale are reported at their estimated fair value. Unrealized gains or losses on available-for...

  • Page 83
    ... significant judgment, including assumptions as to the levels and/or timing of receipt or payment of premiums, benefits, claims, expenses, interest credits, investment results (including equity market returns), retirement, mortality, morbidity and persistency. We periodically review the adequacy of...

  • Page 84
    .... We offer stable value products primarily as a fixed rate, liquid asset allocation option for employees of our plan sponsor customers within the defined contribution funding plans offered by our Retirement business. These products are designed to provide a guaranteed annual credited rate (currently...

  • Page 85
    ..., management regularly reviews the estimates and assumptions underlying DAC, DSI and VOBA. The projection of estimated gross profits, gross premiums or gross revenues requires the use of certain assumptions, principally related to separate account fund returns in excess of amounts credited to...

  • Page 86
    ... sensitive to equity market and credit market conditions), the amount of additional capital such insurer must hold to support business growth, changes in equity market levels, the value and credit ratings of certain fixed-income and equity securities in its investment portfolio, the value of certain...

  • Page 87
    ... Financial Condition and Results of Operations-Liquidity and Capital Resources-Credit Facilities and Subsidiary Credit Support Arrangements." A significant portion of our institutional funding originates from two Federal Home Loan Banks, which subjects us to liquidity risks associated with sourcing...

  • Page 88
    ... adverse effect on the Company's results of operations and financial condition. As of December 31, 2013, we have recognized deferred tax assets based on tax planning related to unrealized gains on investment assets. To the extent these unrealized gains decrease, the tax benefit will be reduced by...

  • Page 89
    ...speaking, this limitation is derived by multiplying the fair market value of the stock of the taxpayer immediately before the date of the ownership change by the applicable federal long-term tax-exempt rate. In addition, to the extent that a company has a net unrealized built-in loss or deduction at...

  • Page 90
    ... retention and new sales, which could adversely affect our businesses and results of operations. Litigation may adversely affect our profitability and financial condition. We are, and may be in the future, subject to legal actions in the ordinary course of insurance, investment management and other...

  • Page 91
    ... losses in our investment portfolio due to significant volatility in global financial markets or the failure of counterparties to perform; changes in the rate of mortality, claims, withdrawals, lapses and surrenders of existing policies and contracts, as well as sales of new policies and contracts...

  • Page 92
    ... our internal transactions and transactions involving our customers, as well as to calculate reserves, value invested assets and complete certain other components of our U.S. GAAP and statutory financial statements. We could experience a failure of one of these systems, our employees or agents could...

  • Page 93
    ... our defined benefit retirement plans and may result in increased expenses and reduce our profitability. When contributing to the plan, we will take into consideration the minimum and maximum amounts required by ERISA, the attained funding target percentage of the plan, the variable-rate premiums...

  • Page 94
    ...2013, 2012, and 2011, respectively. See "Item 1. Business-Closed Blocks-CBVA." These products offered long-term savings vehicles in which customers (policyholders) made deposits that were invested, largely at the customer's direction, in a variety of U.S. and international equity, fixed income, real...

  • Page 95
    ... period of low interest rates can result in an increase in the valuation of future policy benefits, reducing our net income. Declining market values for bonds and equities also reduce the account balances of our variable annuity contracts, and since we collect fees and risk charges based on these...

  • Page 96
    ...the next. Lapse rates of our annuity products may be significantly impacted by the value of guaranteed minimum benefits relative to the value of the underlying separate accounts (account value or account balance). In general, policies with guarantees that are "in the money" (i.e., where the notional...

  • Page 97
    ... from equity market movements and less on the U.S. GAAP earnings impact of this block. U.S. GAAP accounting differs from the methods used to determine regulatory and rating agency capital measures. Therefore our Variable Annuity Hedge Program may create earnings volatility in our U.S. GAAP financial...

  • Page 98
    ...contracts reasonably matches the performance of the contract owners' variable fund returns. In addition, our Variable Annuity Hedge Program does not hedge certain non-market risks inherent in this segment, including business, credit, insurance and operational risks; any of these risks could cause us...

  • Page 99
    ... bank holding companies and their affiliates to conduct proprietary trading in securities and derivatives as well as certain activities related to hedge funds and private equity funds. However, the rules provide an exemption for a regulated insurance company trading solely for its general account...

  • Page 100
    ... or financial condition. We currently use captive reinsurance subsidiaries primarily to reinsure term life insurance, universal life insurance with secondary guarantees, and stable value annuity business. We also use our Arizona captive primarily to reinsure life insurance and annuity business from...

  • Page 101
    ... and annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Internal Revenue Code. Additionally, state and federal securities and insurance laws impose requirements relating to insurance and annuity product design, offering...

  • Page 102
    ...in which we operate and could materially and adversely impact the profitability of one or more of our business lines or the level of capital required to support our activities. In designating non-bank financial companies for heightened prudential regulation by the Federal Reserve, the FSOC considers...

  • Page 103
    ...of our Affiliation with ING Group". Changes in U.S. federal and state securities laws and regulations may affect our operations and our profitability. U.S. federal and state securities laws apply to sales of our mutual funds and to our variable annuity and variable life insurance products (which are...

  • Page 104
    ... of our variable insurance products business and our distributors that could have a material adverse effect on our results of operations and financial condition. For example, the Dodd-Frank Act authorizes the SEC to establish a standard of conduct applicable to brokers and dealers when providing...

  • Page 105
    ... obligations to an insurance company. As part of our retirement services segment, we offer general account and separate account group annuity products that enable a plan sponsor to transfer these risks, often in connection with the termination of defined benefit pension plans. Consequently, this...

  • Page 106
    ... make our insurance, annuity and investment products less attractive to customers. Changes in tax laws could increase our taxes and our effective tax rates. For example, the Obama Administration has proposed modifying the dividends received deduction for life insurance company separate accounts, and...

  • Page 107
    ...all of its global insurance and investment management business. See "Item 1. Business-ING Group Restructuring Plan with European Commission". It is thus expected that ING Group will sell its controlling ownership interest in ING U.S., Inc. through one or more additional public offerings of our stock...

  • Page 108
    ... with the EC. Our separation from ING Group could adversely affect our business and profitability due to ING Group's strong brand and reputation. Prior to our initial public offering, as a wholly owned subsidiary of ING Group, we marketed our products and services using the "ING" brand name and logo...

  • Page 109
    ... and retain highly qualified independent sales intermediaries and dedicated sales specialists for our products may also be negatively affected. We may be required to lower the prices of our products, increase our sales commissions and fees, change long-term selling and marketing agreements and...

  • Page 110
    ... subject to change. Until our initial public offering, ING Group performed or supported many important corporate functions for our operations, including investor relations, advertising and brand management, corporate audit, certain risk management functions, corporate insurance, corporate governance...

  • Page 111
    ... of our initial public offering, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act of 2002. Also, as described in "-Our separation from ING Group could adversely affect our business and profitability due to ING Group's strong brand and...

  • Page 112
    ..., these insurance companies each reset, on a one-time basis, their respective negative unassigned funds account as of December 31, 2012 (as reported in their respective 2012 statutory annual statements) to zero (with an offsetting reduction in gross paid-in capital and contributed surplus...

  • Page 113
    ... of the captive below the minimum capital requirement applicable to it, and, after giving effect to the dividends, the assets of the captive paying the dividend must be sufficient to satisfy its domiciliary insurance regulator that it can meet its obligations. Likewise, our Arizona captive may...

  • Page 114
    ...Equity ING U.S., Inc.'s common stock, par value $0.01 per share, began trading on the NYSE under the symbol "VOYA" on May 7, 2013. The following table summarizes high and low prices for the common stock on the NYSE for the periods indicated: 1st Quarter 2013 2nd Quarter 3rd Quarter 4th Quarter High...

  • Page 115
    ..., except per share amounts) 2009 Statement of Operations Data: Revenues Net investment income ...$ 4,689.0 $ 4,697.9 $ 4,968.8 $ 4,987.0 $ 5,568.6 Fee income ...3,666.3 3,515.4 3,603.6 3,516.5 3,325.1 Premiums ...1,956.3 1,861.1 1,770.0 1,707.5 1,985.5 Total net realized capital gains (losses...

  • Page 116
    ... Sheet Data: Total investments ...$ 87,050.8 $ 95,487.6 $ 92,819.2 $ 86,886.1 $ 83,128.8 Assets held in separate accounts ...106,827.1 97,667.4 88,714.5 95,588.1 88,849.4 Total assets ...221,023.2 216,394.2 203,572.8 204,376.5 194,621.2 Future policy benefits and contract owner accounts ...84,006...

  • Page 117
    ...large defined contribution plans and stable value business, as well as a team of affiliated brokers who sell our products both in person and via telephone. Our Annuities segment provides fixed and indexed annuities, tax-qualified mutual fund custodial products and payout annuities for pre-retirement...

  • Page 118
    ...our broker-dealers to sell a range of products including our branded life, annuity and mutual funds. Finally, our specialty markets channel focuses on alternative distribution and consists of a large team of producers, in addition to banks, life insurance quote agencies and internet direct marketers...

  • Page 119
    ...to seek solutions combining elements of capital preservation, income and growth. Thus, as a company with strong retirement, investment management and insurance capabilities, we believe current market conditions may ultimately enhance the attractiveness of our broad portfolio of products and services...

  • Page 120
    ...to seek solutions combining elements of capital preservation, income and growth. Thus, as a company with strong retirement, investment management and insurance capabilities, we believe current market conditions may ultimately enhance the attractiveness of our broad portfolio of products and services...

  • Page 121
    ... business operates in highly competitive markets. We face a variety of large and small industry participants, including diversified financial institutions, investment managers and insurance companies. These companies compete in one form or another for the growing pool of retirement assets driven...

  • Page 122
    ... segment's revenue for the following items: • Net realized investment gains (losses) and related charges and adjustments, which include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the FVO unrelated to the implied loan-backed security income...

  • Page 123
    ...sheet institutional/mutual funds. Customer account values reflect the amount of policyholder equity that has accumulated within retirement, annuity and UL products. AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk, separate account...

  • Page 124
    ... defined as the ratio of benefits expense to premium revenue exclusive of the discount component in the change in benefit reserve. This measure reports the loss ratio related to mortality on life products and morbidity on health products. In-force face amount is defined as the total life insurance...

  • Page 125
    ... ...Fee income ...Premiums ...Net realized capital gains (losses) ...Other revenue ...Income (loss) related to consolidated investment entities: Net investment income ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Interest credited and...

  • Page 126
    ... AUM and AUA Retirement Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Eliminations/Other ...Total Ongoing Businesses ...Closed Blocks: Closed Block Variable Annuity ...Closed Block Institutional Spread Products ...Closed...

  • Page 127
    ... 31, 2013 2012 2011 Retirement Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks: Closed Block Institutional Spread Products ...Closed Block Other ...Total Closed Blocks...

  • Page 128
    ... revenues: ($ in millions) Years Ended December 31, 2013 2012 2011 Retirement Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks: Closed Block Institutional Spread Products...

  • Page 129
    ... the sale of securities ...Other, including changes in the fair value of derivatives ...Total investment gains (losses) ...Net amortization of DAC/VOBA and other intangibles on above ...Net investment gains (losses), including Closed Block Variable Annuity ...Less: Closed Block Variable Annuity net...

  • Page 130
    ...these reviews, we typically make a number of changes to our assumptions. The unlocking related to these quarterly updates and the third quarter annual assumption reviews is included in DAC/VOBA and other intangibles unlocking. During 2013, the Company received distributions of cash and securities in...

  • Page 131
    ... Lehman Recovery/ LIHTC ($ in millions) Net investment income (loss) Retirement ...Annuities ...Investment Management ...Individual Life ...Employee Benefits ...Corporate ...Closed Block Institutional Spread Products ...Closed Block Other ...Net gain included in segment Operating earnings before...

  • Page 132
    ... driven by changes in fair value adjustments on our CMO-B portfolio and lower gains on the sale of securities, partially offset by derivative mark to market adjustments as a result of rising interest rates. Changes in the fair value of guaranteed benefit derivatives due to nonperformance risk in our...

  • Page 133
    ... Operating expenses. Changes in market value adjustments related to retirement plan sponsors upon surrender and an increase in production and performance related fees earned by our Investment Management segment also contributed to the increase. Interest credited and other benefits to contract owners...

  • Page 134
    ... Closed Block Variable Annuity is discussed in "Results of Operations-Segment by Segment-CBVA." Net investment gains decreased $243.4 million from $455.5 million to $212.1 million primarily driven by changes in fair value adjustments on our CMO-B portfolio and lower gains on the sale of securities...

  • Page 135
    ... offset by an increase in assets in our Retirement segment driven by positive net flows, including customer transfers from variable separate accounts as well as improved performance of funds and partnership income from our Investment Management segment. Fee income decreased $88.2 million from $3,603...

  • Page 136
    ... in net realized investment gains as well as favorable results from hedging activity in our Retirement Solutions business, higher assets and margins in our Retirement segment, improved fund performance in our Investment Management segment, and favorable claim results in our Employee Benefit segment...

  • Page 137
    ... earnings changed $22.4 million from $(77.7) million to $(100.1) million due to increased expenses related to the divestment of the Company by ING Group. Results of Operations-Ongoing Business We consider the Retirement, Annuities, Investment Management, Individual Life, and Employee Benefits...

  • Page 138
    ... as a result of several factors. Higher Fee income in our Retirement and Investment Management segments and improved margins in our Annuities segment related to MYGA run-off contributed to the increase. In addition, higher Net investment income due to the Net gain from Lehman Recovery/LIHTC in the...

  • Page 139
    ...before income taxes of our Retirement segment for the periods indicated: ($ in millions) Years Ended December 31, 2013 2012 2011 Operating revenues: Net investment income and net realized gains (losses) ...Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits and...

  • Page 140
    ... to increases in full service plan fees, recordkeeping advisory fees and change order fees for the recordkeeping business. The increase in fees related to full service retirement plans was driven by net increases in separate account and institutional/ mutual fund AUM. These increases were partially...

  • Page 141
    ... growth of general account assets. General account assets increased from $25.5 billion to $27.2 billion in 2012 compared to 2011. The volatility in the equity market during the second half of 2011 resulted in participants transferring funds from variable investment options into the fixed investment...

  • Page 142
    ...Annuities segment for the periods indicated: ($ in millions) Years Ended December 31, 2013 2012 2011 Operating revenues: Net investment income and net realized gains (losses) ...Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits and expenses: Interest credited...

  • Page 143
    ... the sale of certain alternative assets. Fee income increased $9.6 million from $35.5 million to $45.1 million due to growth in assets of mutual fund custodial products, which are sold by the annuity distribution force as an alternative retirement product. Average assets of the mutual fund custodial...

  • Page 144
    ..., largely due to crediting rates that were lower than the crediting rates during their initial term. Fee income increased $5.7 million from $29.8 million to $35.5 million due to growth in assets of mutual fund products which are sold by the annuity distribution force as an alternative retirement...

  • Page 145
    ...summarizes AUM and AUA for our Investment Management segment as of the dates indicated: ($ in millions) 2013 As of December 31, 2012 2011 AUM: Institutional/retail ...Investment Management sourced ...Affiliate sourced(1) ...General account ...Total AUM ...AUA: Affiliated sourced(2) ...Total AUM and...

  • Page 146
    ... affiliate sourced AUM resulting in higher management and administrative fees earned. Other revenue increased $15.4 million from $13.8 million to $29.2 million primarily due to an increase in service fees earned as part of services provided in connection with the sale by ING Group of its ING Direct...

  • Page 147
    ... Life segment for the periods indicated: ($ in millions) Years Ended December 31, 2013 2012 2011 Operating revenues: Net investment income and net realized gains (losses) ...Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits and expenses: Interest credited...

  • Page 148
    ...) 2013 2012 2011 Sales by Product Line: Universal life: Guaranteed ...Accumulation ...Indexed ...Total universal life ...Variable life ...Whole life ...Term ...Total sales by product line ...Total gross premiums ...End of period: In-force face amount ...In-force policy count ...New business policy...

  • Page 149
    ...on the term block providing less benefit. Operating expenses increased $57.7 million from $332.8 million to $390.5 million primarily due to increased credit facility fees supporting reinsurance transactions. The higher credit facility fees are the results of higher rates and general growth in credit...

  • Page 150
    ... 2013 2012 2011 Operating revenues: Net investment income and net realized gains (losses) ...$ 117.6 $ 114.3 $ 124.3 Fee income ...63.0 62.5 61.8 Premiums ...1,085.9 1,078.1 1,063.4 Other revenue ...(4.0) (3.7) (3.3) Total operating revenues ...Operating benefits and expenses: Interest credited and...

  • Page 151
    ...2013 2012 2011 Sales by Product Line: Group life ...Group stop loss ...Other group products ...Total group products ...Voluntary products ...Total sales by product line ...Total gross premiums and deposits ...Total annualized in-force premiums ...Loss Ratios: Group life (interest adjusted) ...Group...

  • Page 152
    ... Ended December 31, 2013 2012 2011 Interest expense (including interest rate swap settlements) ...Closed Block Variable Annuity contingent capital LOC ...Amortization of intangibles ...Reserve increase related to the use of SSDMF ...Other ...Operating earnings before income taxes ... $(179.7) $(127...

  • Page 153
    ... Block Institutional Spread Products segment for the periods indicated: ($ in millions) Years Ended December 31, 2013 2012 2011 Operating revenues: Net investment income and net realized gains (losses) . . Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits...

  • Page 154
    ... income taxes of our Closed Block Other segment for the periods indicated: ($ in millions) Years Ended December 31, 2013 2012 2011 Operating revenues: Net investment income and net realized gains (losses) ...Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits...

  • Page 155
    .... Closed Block Variable Annuity The following table presents Income (loss) before income taxes of our CBVA segment for the periods indicated: ($ in millions) Years Ended December 31, 2013 2012 2011 Revenues: Net investment income ...Fee income ...Premiums ...Net realized capital gains (losses...

  • Page 156
    ... credited and investment performance ...Balance as of end of period ... $43,198.4 661.0 (4,579.9) (3,918.9) 6,419.5 $45,699.0 $42,645.5 500.5 (4,019.3) (3,518.8) 4,071.7 $43,198.4 $47,978.0 543.3 (4,332.9) (3,789.6) (1,542.9) $42,645.5 Closed Block Variable Annuity-Year Ended December 31, 2013...

  • Page 157
    ... our incurred guaranteed benefits and Variable Annuity Guarantee Hedge Program decreased $1,204.0 million due to lower impacts of policyholder behavior and other assumption changes in 2012 compared to 2011, the impact of favorable fund returns relative to overall equity market returns in 2012, and...

  • Page 158
    ...Closed Blocks(1) Alternative investment income Average alternative investment ... Total ING US Alternative investment income ...Average alternative investment ...(1) $ 162.2 $1,350.6 $ 126.2 $1,646.0 Our Closed Block Variable Annuity segment is managed to focus on protecting regulatory and rating...

  • Page 159
    ...of estimated gross profits. For variable deferred annuity contracts within the CBVA segment, we amortize DAC, VOBA and DSI in relation to the emergence of estimated gross revenue. Assumptions as to mortality, persistency, interest crediting rates, returns associated with separate account performance...

  • Page 160
    ... contribute to future growth. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of the businesses, timing of cash flows on investments and products, general economic conditions and access to the capital markets and the alternate sources of liquidity...

  • Page 161
    ...adequate to meet projected cash flows. Key variables in the modeling process include interest rates, equity market movements, quantity and type of interest and equity market hedges, anticipated contract owner behavior, market value of general account assets, variable separate account performance and...

  • Page 162
    ...Ended December 31, 2013 2012 Return of Capital Distributions Years Ended December 31, 2013 2012 ($ in millions) Subsidiary Name (State of domicile): ING USA Annuity and Life Insurance Company (IA)(1) ...ING Life Insurance and Annuity Company (CT)(2) ...Security Life of Denver Insurance Company (CO...

  • Page 163
    ... dividends from or contribute capital to our wholly owned non-life insurance subsidiaries such as broker-dealers, investment management entities and intermediate holding companies. For the years ended December 31, 2013 and 2012, dividends net of capital contributions received by ING U.S., Inc. and...

  • Page 164
    ... on January 15, 2013. ING Financial Markets, LLC, an affiliate, served as Joint Book Running Manager for the 2022 Notes and was paid $0.3 million for its services. We used the proceeds of the 2022 Notes to repay $500.0 million of the direct borrowings under the Revolving Credit Agreement. The...

  • Page 165
    ... then-applicable rate. ING Financial Markets, LLC, an affiliate, served as a Senior Co-Manager on the 2053 Notes and was paid $0.2 million for its services. At any time following notice of our plan to defer interest and during the period interest is deferred, we and our subsidiaries generally, with...

  • Page 166
    ...-party collateral agent, for the benefit of ING Group, which may consist of cash collateral; certain investment-grade debt instruments; an LOC meeting certain requirements; or senior debt obligations of ING Group or a wholly owned subsidiary of ING Group (other than the Company or its subsidiaries...

  • Page 167
    ... bps to 175 bps. ING Bank, an affiliate, acted as Joint Lead Arranger, Joint Book Manager and Documentation Agent and received $0.7 million for its services and participation in the syndicate. Credit Facilities and Subsidiary Credit Support Arrangements We use credit facilities primarily to provide...

  • Page 168
    ... able to use alternative sources of collateral to fund the statutory reserve requirements and are generally able to secure longer term financing on a more capital efficient basis. Effective January 1, 2009, we entered into a master asset purchase agreement (the "MPA") with Scottish Re Group Limited...

  • Page 169
    ... Life Insurance Company ...ING U.S., Inc. / SLDI ...ING U.S., Inc... Unsecured Committed 4/20/2015 $3,500.0 $2,103.9 685.0 1,200.0 145.0 73.9 $1,396.1 Individual Life Hannover Re block Hannover Re block Hannover Re block Hannover Re block Institutional Spread Products Individual Life Other...

  • Page 170
    ... subsidiary of the Company, completed a financing arrangement with a third-party trust to provide up to $500.0 million of trust note collateral funding. The financing arrangement is designed to manage reserve and capital requirements in connection with the stable value business and matures on...

  • Page 171
    ... deposited the contributed capital as cash collateral into a funds withheld trust account to support its reinsurance obligation to ING USA related to variable annuity cessions from ING USA to SLDI. Following the deposit by SLDI of the contributed capital into the funds withheld trust account, the...

  • Page 172
    ....0 million of the principal and interest of a bond insured by an unrelated insurance company. The bond payments are supported by the insurer's closed block. Surplus from the closed block, in the form of dividends, is used to pay the bond principal and interest. In order to collateralize obligations...

  • Page 173
    ...We engage in securities lending for cash or cash equivalents, on a direct basis, or through an agent, whereby certain securities from our portfolio are loaned to other institutions for short periods of time. Initial collateral, primarily cash, is required at a rate of 102% of the market value of the...

  • Page 174
    .... Market value fluctuations resulting from changes in interest rates, spreads and other risk factors for each type of assets are monitored and additional collateral is either pledged or released as needed. Our borrowing capacity under these credit facilities does not have an expiration date as long...

  • Page 175
    ... our profitability, liquidity and/or capital. In addition, we consider nonperformance risk in determining the fair value of our liabilities. Therefore, changes in our credit or financial strength ratings may affect the fair value of our liabilities. Additionally, ratings of certain of our securities...

  • Page 176
    ... ...ING Life Insurance and Annuity Company Financial Strength Rating ...ING USA Annuity & Life Insurance Financial Strength Rating ...Short-term Issuer Credit Rating ...ReliaStar Life Insurance Company Financial Strength Rating ...Short-term Issuer Credit Rating ...Security Life of Denver Insurance...

  • Page 177
    ... financial strength. In making their ratings decisions, the agencies consider past and expected future capital and earnings, asset quality and risk, profitability and risk of existing liabilities and current products, market share and product distribution capabilities and direct or implied support...

  • Page 178
    ...to post is principally in the form of cash and U.S. Treasury securities. Alternative forms of collateral, such as LOC, may also be used. Based on the amount of credit outstanding as of December 31, 2013 and 2012, a one notch downgrade of the credit ratings of NN Group would not result in an increase...

  • Page 179
    ... risks and guaranteed death and living benefits under our life insurance and annuity contracts. We remain liable to the extent our reinsurers do not meet their obligations under the reinsurance agreements. We reinsure our business through a diversified group of well capitalized, highly rated...

  • Page 180
    ..., establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and accounting for deferred taxes on a different basis. Certain assets that are not admitted under statutory accounting principles are charged directly to surplus...

  • Page 181
    ... account values relative to the level of any guarantees, product design and reinsurance arrangements. As a result, the relationship between reserve changes and equity market performance is non-linear during any given reporting period. Market conditions greatly influence the ultimate capital required...

  • Page 182
    ... the value of letters of credit, surplus notes and trust notes as admitted assets supporting the statutory reserves ceded to such subsidiaries. The effect of these prescribed practices was to increase statutory capital and surplus by $1,612.0 million and $1,339.0 million as of December 31, 2013 and...

  • Page 183
    ... 13. Employee Benefit Arrangements." Off-Balance Sheet Arrangements Through the normal course of investment operations, we commit to either purchase or sell securities, commercial mortgage loans, or money market instruments, at a specified future date and at a specified price or yield. The inability...

  • Page 184
    ... market growth and interest crediting consistent with assumptions used in amortizing DAC. All estimated cash payments are undiscounted for the time value of money. Accordingly, the sum of cash flows presented for all years of $105.8 billion significantly exceeds the sum of Future policy benefits...

  • Page 185
    ... generally vary by annuity plan type, year of issue, and policy duration. Interest rates used to calculate the present value of future benefits ranged from 3.0% to 8.3%. Although assumptions are "locked-in" upon the issuance of traditional life insurance contracts, certain accident and health...

  • Page 186
    ... value of expected benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. Expected experience is based on a range of scenarios. Assumptions used, such as the long-term equity market return, lapse rate...

  • Page 187
    ...the next. Lapse rates of our annuity products may be significantly impacted by the value of guaranteed minimum benefits relative to the value of the underlying separate accounts (account value or account balance). In general, policies with guarantees that are "in the money" (i.e., where the notional...

  • Page 188
    ... reinsurance we utilize to mitigate risk for the product guarantees, as well as sensitivities of the embedded derivative liabilities and the stand-alone derivative to changes in certain capital markets assumptions. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles...

  • Page 189
    ... contracts and fixed and variable deferred annuity contracts over the estimated lives of the contracts in relation to the emergence of estimated gross profits. Assumptions as to mortality, persistency, interest crediting rates, fee income, returns associated with separate account performance, impact...

  • Page 190
    ... rate spreads and credit losses also impact estimated gross profits for all applicable products with credited rates. These assumptions are based on the current investment portfolio yields and credit quality, estimated future crediting rates, capital markets and estimates of future interest rates...

  • Page 191
    ... Future policy benefit, thus increasing Income before income taxes. Valuation of Investments and Derivatives Our investment portfolio consists of public and private fixed maturity securities, commercial mortgage and other loans, equity securities, short-term investments, other invested assets and...

  • Page 192
    ...the change in the fair value of the underlying assets held in the trust using the valuation methods and assumptions described for our investments held. The valuation of derivatives involves considerable judgment, is subject to considerable variability, is established using management's best estimate...

  • Page 193
    ... future cash flows are estimated using assumptions derived from our best estimates of likely scenario-based outcomes, after giving consideration to a variety of variables that include, but are not limited to: general payment terms of the security; the likelihood that the issuer can service the...

  • Page 194
    ... ("NOLs"), capital loss carryforwards and tax credit carryforwards. Positive evidence includes a recent history of earnings, projected earnings attributable to our ongoing insurance and investment businesses, plans or the ability to sell certain assets and streams of revenues, plans to reduce...

  • Page 195
    ...an income tax benefit. At this time, we are unable to estimate if or when such a reduction may occur. As of December 31, 2013, we have recognized $728.5 million deferred tax assets based on tax planning related to unrealized gains on investment assets. This tax planning strategy supports recognition...

  • Page 196
    ... to use beneficial U.S. tax attributes will be subject to limitations. As of December 31, 2013 and 2012, we did not record a valuation allowance giving specific consideration to a Section 382 ownership change event because the ultimate divestiture by ING Group of its interest in the Company has...

  • Page 197
    ... change following the final Section 382 calculations. Under statutory accounting, a Section 382 event could reduce the admitted deferred tax asset by approximately $39 million if measured as of December 31, 2013. However, using the estimated Section 382 value of the Company based on the share price...

  • Page 198
    ... upon current market information provided by plan actuaries. The discount rate modeling process involves selecting a portfolio of high quality, non-callable bonds that will match the cash flows of the Retirement Plan. The weighted average discount rate in 2013 for the net periodic benefit cost and...

  • Page 199
    ... and manager fees paid to non-affiliated companies from the assets. For estimation purposes, we assume the long-term asset mix will be consistent with the current mix. Changes on the asset mix could impact the amount of recorded pension income or expense, the funded status of the Retirement Plan and...

  • Page 200
    ... exposure to the cash flow variability of assets and liabilities, interest rate risk, credit risk and market risk. In addition, we use credit derivatives to replicate exposure to individual securities or pools of securities as a means of achieving credit exposure similar to bonds of the underlying...

  • Page 201
    Fixed Maturities Total fixed maturities by market sector, including securities pledged, were as summarized below as of the dates indicated: ($ in millions) Amortized Cost December 31, 2013 % of Total Fair Value % of Total Fixed maturities: U.S. Treasuries ...U.S. Government agencies and authorities...

  • Page 202
    ... ("SVO") of the NAIC evaluates the fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and assigns securities to one of six credit quality categories called "NAIC designations." An internally developed rating is used as permitted by the NAIC if no...

  • Page 203
    The following tables summarize credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated: ($ in millions) NAIC Quality Designation 1 2 December 31, 2013 3 4 5 6 Total Fair Value U.S. Treasuries ...U.S. Government agencies and authorities ......

  • Page 204
    ... of our fixed maturities portfolio was A, respectively. The following tables summarize credit quality of fixed maturities, including securities pledged, using ARO ratings as of the dates indicated: ($ in millions) ARO Quality Ratings AAA AA A December 31, 2013 BBB BB B and Below Total Fair Value...

  • Page 205
    ... which in turn depends on a number of factors, including conditions in both credit markets and housing markets. Changes in the prepayment behavior of homeowners represent both a risk and potential source of return for our CMO-B portfolio. As a result, we seek to invest in securities that are broadly...

  • Page 206
    ... the market values. For details on the NAIC designation methodology, please see "-Fixed Maturities Credit Quality-Ratings" above. The following table summarizes the notional amounts and fair values of interest rate derivatives used in our CMO-B portfolio as of the dates indicated: December 31, 2013...

  • Page 207
    ... various market risks. For example, in the third quarter of 2013, the upward momentum in bond prices and market liquidity was disrupted, at least in part, by the pick-up in interest rate volatility. As this volatility dissipated, prices and liquidity recovered into the end of the year, supported by...

  • Page 208
    ... on fair value. The following tables summarize our exposure to subprime mortgage-backed securities by credit quality using NAIC designations, ARO ratings and vintage year as of the dates indicated: % of Total Subprime Mortgage-backed Securities NAIC Designation ARO Ratings Vintage December 31, 2013...

  • Page 209
    ... our exposure to Alt-A RMBS by credit quality using NAIC designations, ARO ratings and vintage year as of the dates indicated: NAIC Designation % of Total Alt-A Mortgage-backed Securities ARO Ratings Vintage December 31, 2013 1 2 3 4 5 6 77.4% 10.8% 6.7% 4.3% - % 0.8% 100.0% December 31, 2012...

  • Page 210
    ...credit quality using NAIC designations, ARO ratings and vintage year as of the dates indicated: NAIC Designation % of Total CMBS ARO Ratings Vintage December 31, 2013...31, 2013 the fair value, amortized cost and gross unrealized losses of our Other ABS, excluding subprime exposure, totaled $1.3 ...

  • Page 211
    .... As of December 31, 2013 and 2012, we did not have any commercial mortgage loans or private placements modified in a troubled debt restructuring with a subsequent payment default. Mortgage Loans on Real Estate We rate all commercial mortgages to quantify the level of risk. We place those loans with...

  • Page 212
    ... and Qualitative Disclosures About Market Risk of this Annual Report on Form 10-K for further information. Invested Asset and Credit Hedging Interest rate caps and interest rate swaps are used to manage the interest rate risk in our fixed maturities portfolio. Interest rate swaps include forward...

  • Page 213
    ...portfolio management process, we closely monitor compliance with a credit limit hierarchy designed to minimize overly concentrated risk exposures by geography, sector and issuer. This framework takes into account various factors such as internal and external ratings, capital efficiency and liquidity...

  • Page 214
    ... financial institutions based in peripheral Europe. For purposes of calculating the derivative assets exposure, we have aggregated exposure to single name and portfolio product CDS, as well as all non-CDS derivative exposure for which it either has counterparty or direct credit exposure to a company...

  • Page 215
    ...2013: Fixed Maturities and Equity Securities Derivative Assets Loan and Receivables Less: Total Sovereign Margin Total Net Non(Amortized (Amortized Financial Non-Financial & (Fair US Cost) Cost) Sovereign Institutions Institutions Collateral Value) Funded(1) ($ in millions) Financial Non-Financial...

  • Page 216
    ... change in the fair value of CLO liabilities. Investments held by consolidated private equity funds and single strategy hedge funds are reported in our Consolidated Financial Statements. Changes in the fair value of consolidated investment entities are recorded as a separate line item within Income...

  • Page 217
    ... to include credit risk, interest rate risk and equity market price risk. We do not have material market risk exposure to "trading" activities in our Consolidated Financial Statements. Risk Management As a financial services company active in Retirement, Investment Management and Insurance, taking...

  • Page 218
    ... of changes in interest rate assumptions on asset and liability cash flows. The analysis includes the effects of the timing and amount of redemptions and prepayments in our asset portfolio; our derivative portfolio; death benefits and other claims payable under the terms of our insurance products...

  • Page 219
    ... result of investing life insurance premiums, fixed annuity and guaranteed investment contract deposits received in interest-sensitive assets and carrying these funds as interest-sensitive liabilities. We are also subject to interest rate risk on our variable annuity business, stable value contracts...

  • Page 220
    ...Interest rate swaps, caps, forwards ...Financial liabilities with interest rate risk: Investment contracts: Funding agreements without fixed maturities and deferred annuities(3) ...Funding agreements with fixed maturities and GICs ...Supplementary contracts and immediate annuities ...Long-term debt...

  • Page 221
    ... Yield Fair Value(1) Curve Shift Curve Shift Financial assets with interest rate risk: Fixed maturity securities, including securities pledged ...Commercial mortgage and other loans ...Derivatives: Interest rate swaps, caps, forwards ...Financial liabilities with interest rate risk: Investment...

  • Page 222
    ...the net estimated potential change in fair value from an instantaneous increase and decrease in all equity market benchmark levels of 10% as of December 31, 2013 and 2012. In calculating these amounts, we exclude separate account equity securities related to products for which the investment risk is...

  • Page 223
    ... Fair Value Financial assets with equity market risk: Equity securities, available for sale ...Limited liability partnerships/corporations ...Derivatives: Equity futures and total return swaps(2) ...Equity options ...Financial liabilities with equity market risk: Guaranteed benefit derivatives...

  • Page 224
    ... exercise of the benefit means that the customers give up any future increase in the guaranteed benefit that might accrue if they were to delay exercise to a later date. The discount rates used in the GMIB NAR methodology grade from current U.S. Treasury rates to long-term best estimates over ten...

  • Page 225
    ... groups (i.e. the fund groups that can be covered by indices where liquid futures markets exist). Total return swaps are also used to mitigate the risk of the change in value of certain policyholder directed separate account funds. These include fund classes such as emerging markets and real estate...

  • Page 226
    ..., after giving effect to our CHO program and the Variable Annuity Guarantee Hedge Program for various shocks in equity markets and interest rates. This reflects the hedging we had in place as well as any collateral (in the form of LOC) or change in underlying asset values that would be used to...

  • Page 227
    ... as the market and closed book of business evolve or if assumptions or methodologies that affect reserves or hedge targets are refined. In February 2014, we purchased equity indexed options in our CHO program and refined the impact of equity movements on regulatory and rating agency capital to up...

  • Page 228
    ...of FIA Benefits We mitigate FIA market risk exposures through a combination of capital market hedging, product design and capital management. For the FIA book of business, these risks stem from the minimum guaranteed contract value offered and the additional interest credits (Equity Participation or...

  • Page 229
    .... The interest rate swaptions offset this increased expense. Market Risk Related to Credit Risk Credit risk is primarily embedded in the general account portfolio. The carrying value of our fixed maturity and equity portfolio totaled $73.0 billion and $75.6 billion as of December 31, 2013 and 2012...

  • Page 230
    ... % Collateralized(1) Financial Strength Rating S&P Moody's Credit Rating S&P Moody's Hannover RE Group ...Hannover Life Reassurance Co of America . . Hannover Re (Ireland) plc ...Lincoln National Corp ...Lincoln Life & Annuity Company of New York ...Lincoln National Life Insurance Co ...Prudential...

  • Page 231
    ... we measure and monitor our risks on a market value basis daily. The following tables summarize the outstanding notional amount of derivatives by contract type as of December 31, 2013 and 2012: As of December 31, 2013 Derivative Notional Amounts Exchange Over The Total Traded Counter (OTC) Notional...

  • Page 232
    ... ...Credit Suisse International ...Citibank NA ...Goldman Sachs International ...Deutsche Bank AG ...JP Morgan Chase Bank ...Wells Fargo ...Morgan Stanley Capital Services LLC ...Barclays Bank ...Bank of America, NA ...UBS AG ...ING Capital Markets ...HSBC Bank ...Societe Generale ...The Royal Bank...

  • Page 233
    ... reduce our exposure to credit-related events as well as taking credit risks. For every subsidiary or internal portfolio, the net notional amount of credit risk taken using credit derivatives is limited to the amount of U.S. Treasury security investments in the same portfolio. We also place a limit...

  • Page 234
    ... December 31, 2013, 2012 and 2011: Schedule I-Summary of Investments Other than Investments in Affiliates ...Schedule II-Condensed Financial Information of Parent ...Schedule III-Supplementary Insurance Information ...Schedule IV-Reinsurance ...Schedule V-Valuation and Qualifying Accounts ... 225...

  • Page 235
    ... income, changes in shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedules listed in Item 15(a). These financial statements and schedules are the responsibility of the Company's management...

  • Page 236
    ...465.7 1,605.5 Total investments ...Cash and cash equivalents ...Short-term investments under securities loan agreements, including collateral delivered ...Accrued investment income ...Reinsurance recoverable ...Deferred policy acquisition costs and Value of business acquired ...Sales inducements to...

  • Page 237
    ... investment entities: Collateralized loan obligations notes, at fair value using the fair value option ...5,161.6 3,829.4 Other liabilities ...903.3 292.4 Liabilities related to separate accounts ...106,827.1 97,667.4 Total liabilities ...Shareholders' equity: Common stock (900,000,000 shares...

  • Page 238
    ... investment entities: Net investment income (loss) ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balance ...Operating expenses ...Net amortization of deferred policy...

  • Page 239
    ...2013 2012 2011 Net income (loss) ...Other comprehensive income (loss), before tax: Unrealized gains/losses on securities ...Other-than-temporary impairments ...Pension and other postretirement benefits liability ...Other comprehensive income (loss), before tax ...Income... Financial Statements. 229

  • Page 240
    ... Statements of Changes in Shareholders' Equity For the Years Ended December 31, 2013, 2012 and 2011 (In millions) Common Stock Accumulated Total Retained Earnings Additional Other ING U.S., Inc. Total (Deficit) Paid-In Comprehensive Shareholders' Noncontrolling Shareholders' Capital Income (Loss...

  • Page 241
    ... of deferred policy acquisition costs, value of business acquired and sales inducements ...495.5 784.9 401.0 Net accretion/amortization of discount/premium ...54.9 70.8 133.4 Future policy benefits, claims reserves and interest credited ...493.2 949.2 2,946.0 Deferred income tax (benefit) expense...

  • Page 242
    ING U.S., Inc. Consolidated Statements of Cash Flows For the Years Ended December 31, 2013, 2012 and 2011 (In millions) Years Ended December 31, 2013 2012 2011 Cash Flows from Financing Activities: Deposits received for investment contracts ...Maturities and withdrawals from investment contracts ...

  • Page 243
    ... Solutions) and reports results through five ongoing operating segments, including Retirement, Annuities, Investment Management, Individual Life and Employee Benefits. The Company also has a Corporate segment, which includes the financial data not directly related to the businesses, and Closed Block...

  • Page 244
    ... cash flows. Investments The accounting policies for the Company's principal investments are as follows: Fixed Maturities and Equity Securities: The Company's fixed maturities and equity securities are currently designated as available-for-sale, except those accounted for using the fair value...

  • Page 245
    .... Assets Held in Separate Accounts: Assets held in separate accounts are reported at the fair values of the underlying investments in the separate accounts. The underlying investments include mutual funds, short-term investments, cash and fixed maturities. Mortgage Loans on Real Estate: The Company...

  • Page 246
    ...Net investment income using the contractually agreed upon interest rate. Generally, interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as these loans are collateralized by the cash surrender value of the associated insurance contracts...

  • Page 247
    ... future cash flows are estimated using assumptions derived from the Company's best estimates of likely scenario-based outcomes, after giving consideration to a variety of variables that includes, but is not limited to: general payment terms of the security; the likelihood that the issuer can service...

  • Page 248
    .... The Company enters into interest rate, equity market, credit default and currency contracts, including swaps, futures, forwards, caps, floors and options, to reduce and manage various risks associated with changes in value, yield, price, cash flow or exchange rates of assets or liabilities...

  • Page 249
    ...capital gains (losses). The Company also has investments in certain fixed maturities and has issued certain annuity products, that contain embedded derivatives whose fair value is at least partially determined by levels of or changes in domestic and/or foreign interest rates (short-term or long-term...

  • Page 250
    ..., and changes in the fair value of the embedded derivative are recorded in Policyholder benefits in the Consolidated Statements of Operations. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks and other highly liquid investments, such as money market...

  • Page 251
    ... universal life ("VUL") contracts and fixed and variable deferred annuity contracts over the estimated lives of the contracts in relation to the emergence of estimated gross profits. Assumptions as to mortality, persistency, interest crediting rates, fee income, returns associated with separate...

  • Page 252
    ... profits associated with the Company's variable products. One significant assumption is the assumed return associated with the variable account performance. To reflect the volatility in the equity markets, this assumption involves a combination of near-term expectations and long-term assumptions...

  • Page 253
    .... Credited interest rates vary by product and ranged up to 8.0% for the years 2013, 2012 and 2011. Account balances for group immediate annuities without life contingent payouts are equal to the discounted value of the payment at the implied break-even rate. For fixed-indexed annuity contracts...

  • Page 254
    ... adverse changes in the equity markets. GMAB, GMWB, GMWBL and FIA: The Company also issues certain products which contain embedded derivatives that are measured at estimated fair value separately from the host contracts. These products include annuity guaranteed minimum accumulation benefits ("GMAB...

  • Page 255
    ... business of the Company. Separate account assets supporting variable options under variable annuity contracts are invested, as designated by the contract owner or participant under a contract, in shares of mutual funds that are managed by the Company or in other selected mutual funds not managed...

  • Page 256
    ...The Company reports separate account assets that meet the above criteria at fair value on the Consolidated Balance Sheets based on the fair value of the underlying investments. Separate account liabilities equal separate account assets. Investment income and net realized and unrealized capital gains...

  • Page 257
    .... Amounts received as payment for investment-type, universal life-type, fixed annuities, payout contracts without life contingencies and FIA contracts are reported as deposits to contract owner account balances. Revenues from these contracts consist primarily of fees assessed against the contract...

  • Page 258
    ...the remaining life of the underlying contracts. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and...

  • Page 259
    ... as age of retirements, withdrawal rates and mortality. Management determines these assumptions based upon a variety of factors such as historical performance of the plan and its assets, currently available market and industry data and expected benefit payout streams. The assumptions used may differ...

  • Page 260
    .... The Company provides investment management services to, and has transactions with, various CLO entities, private equity funds, real estate funds, fund-of-hedge funds, single strategy hedge funds, insurance entities, securitizations and other investment entities in the normal course of business. In...

  • Page 261
    ...'s best estimate of the ultimate outcome. If determined to meet the criteria for a reserve, the Company also evaluates whether there are external legal or other costs directly associated with the resolution of the matter and accrues such costs if estimable. Adoption of New Pronouncements Financial...

  • Page 262
    ... 17, 2013 for qualifying new or redesigned hedges entered into on or after that date. The adoption had no effect on the Company's financial condition, results of operations or cash flows. Deferred Policy Acquisition Costs Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts...

  • Page 263
    ... benefits that exist at the effective date. The Company does not expect ASU 2013-11 to have an impact on its financial condition, results of operations or cash flows as the guidance is consistent with that currently applied. Investment Companies In June 2013, the FASB issued ASU 2013-08, "Financial...

  • Page 264
    ...-04 to have an impact on its financial condition, results of operations or cash flows, as the Company does not have any fixed obligations under joint and several liable arrangements as of December 31, 2013. Fees Paid to the Federal Government by Health Insurers In July 2011, the FASB issued ASU 2011...

  • Page 265
    ...within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations. Represents OTTI reported as a component of Other comprehensive income. 255

  • Page 266
    ... - - - $174.0 (3) Primarily U.S. dollar denominated. Embedded derivatives within fixed maturity securities are reported with the host investment. The changes in fair value of embedded derivatives are reported in Other net realized capital gains (losses) in the Consolidated Statements of Operations...

  • Page 267
    ... foreign corporate securities within the fixed maturity portfolio by industry category as of the dates indicated: Gross Unrealized Capital Gains Gross Unrealized Capital Losses Amortized Cost Fair Value December 31, 2013 Communications ...Financial ...Industrial and other companies ...Utilities...

  • Page 268
    ... Equity Securities The Company's fixed maturities and equity securities are currently designated as available-for-sale, except those accounted for using the fair value option ("FVO"). Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities...

  • Page 269
    ING U.S., Inc. Notes to the Consolidated Financial Statements (Dollar amounts in millions, unless otherwise stated) Unrealized Capital Losses Unrealized capital losses (including noncredit impairments), along with the fair value of fixed maturity securities, including securities pledged, by market ...

  • Page 270
    ...) in fixed maturities, including securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated: Amortized Cost < 20% > 20% Unrealized Capital Losses < 20% > 20% Number of Securities < 20...

  • Page 271
    ... tables summarize loan-to-value, credit enhancement and fixed floating rate details for RMBS and Other ABS in a gross unrealized loss position as of the dates indicated: Loan-to-Value Ratio Amortized Cost Unrealized Capital Losses < 20% > 20% < 20% > 20% December 31, 2013 RMBS and Other ABS...

  • Page 272
    ... loan-to-value ratios reflecting current home prices of underlying collateral, forecasted loss severity, the payment priority within the tranche structure of the security and amount of any credit enhancements. The Company's assessment of current levels of cash flows compared to estimated cash flows...

  • Page 273
    ... manages risk when originating commercial mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates all mortgage loans based on relevant current information including a review of loan-specific credit...

  • Page 274
    ... Financial Statements (Dollar amounts in millions, unless otherwise stated) The following table summarizes the Company's investment in mortgage loans as of the dates indicated: December 31, 2013 December 31, 2012 Commercial mortgage loans ...Collective valuation allowance ...Total net commercial...

  • Page 275
    ... as part of the review process described above. The following table presents the LTV ratios as of the dates indicated: December 31, 2013(1) December 31, 2012(1) Loan-to-Value Ratio: ...0% - 50% ...50% - 60% ...60% - 70% ...70% - 80% ...80% and above ...Total Commercial mortgage loans ...(1) $1,782...

  • Page 276
    ...for mortgage loan credit losses. December 31, 2013(1) Gross Carrying % of Value Total December 31, 2012(1) Gross Carrying % of Value Total Commercial Mortgage Loans by Property Type: Retail ...Industrial ...Apartments ...Office ...Hotel/Motel ...Mixed Use ...Other ...Total Commercial mortgage loans...

  • Page 277
    ...-Temporary Impairments The Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities and equity securities in accordance with its impairment policy in order to evaluate whether such investments are other...

  • Page 278
    ...dollar denominated. The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities or cost for equity securities. In certain situations, new factors, including changes in the business environment, can change the Company's previous intent...

  • Page 279
    ..., 2013 2012 2011 Fixed maturities Equity securities, available-for-sale Mortgage loans on real estate Policy loans Short-term investments and cash equivalents Other Gross investment income Less: investment expenses Net investment income (1) $3,952.5 $4,184.0 $4,402.1 10.0 17.7 27.3 483.9 500.0 500...

  • Page 280
    ... 31, 2013 2012 2011 Fixed maturities, available-for-sale, including securities pledged Fixed maturities, at fair value option Equity securities, available-for-sale Derivatives Embedded derivatives-fixed maturities Embedded derivatives-product guarantees Other investments Net realized capital gains...

  • Page 281
    ...a decrease in variable annuity account values, which are invested in certain indices. Using total return swaps, the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of assets or a market index and the LIBOR rate, calculated by...

  • Page 282
    ... on the changes in equity volatility over a defined period. The Company utilizes equity variance swaps in non-qualifying hedging relationships. Managed custody guarantees ("MCG"): The Company issues certain credited rate guarantees on externally managed variable bond funds that represent stand-alone...

  • Page 283
    ... mainly to hedge exposure to variability in cash flows, interest rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded...

  • Page 284
    ...below as of the dates indicated: Notional Amount December 31, 2013 Assets Fair Value Liability Fair Value Credit contracts ...Equity contracts ...Foreign exchange contracts ...Interest rate contracts ...Counterparty netting(1) ...Cash collateral netting(1) ...Securities collateral netting(1) ...Net...

  • Page 285
    .... Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Consolidated Balance Sheets. As of December 31, 2013, the Company held $214.7 and $18.8 of net cash collateral related to OTC derivative contracts and cleared...

  • Page 286
    ... in short-term investments. Collateral held is used in accordance with the CSA to satisfy any obligations. Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Consolidated Balance Sheets. As of December 31, 2013, the...

  • Page 287
    ...-for-sale ...Derivatives: Interest rate contracts ...Foreign exchange contracts ...Equity contracts ...Credit contracts ...Cash and cash equivalents, short-term investments and shortterm investments under securities loan agreements ...Assets held in separate accounts ...Total assets ...Percentage...

  • Page 288
    ...-for-sale ...Derivatives: Interest rate contracts ...Foreign exchange contracts ...Equity contracts ...Credit contracts ...Cash and cash equivalents, short-term investments and shortterm investments under securities loan agreements ...Assets held in separate accounts ...Total assets ...Percentage...

  • Page 289
    ... through several commercial pricing services, which provide the estimated fair values and are classified as Level 2 assets. These services incorporate a variety of market observable information in their valuation techniques, including benchmark yields, broker-dealer quotes, credit quality, issuer...

  • Page 290
    ... 3 assets. Derivatives: Derivatives are carried at fair value, which is determined using the Company's derivative accounting system in conjunction with observable key financial data from third-party sources, such as yield curves, exchange rates, S&P 500 Index prices, London Interbank Offered Rates...

  • Page 291
    ... in separate accounts: Assets held in separate accounts are reported at the quoted fair values of the underlying investments in the separate accounts. The underlying investments include mutual funds, short-term investments and cash, the valuations of which are based upon a quoted market price and...

  • Page 292
    ... actuarial and capital market assumptions for each liability are approved by each product's Chief Risk Officer ("CRO"), including an independent annual review by the U.S. CRO. Models used to value the embedded derivatives must comply with the Company's governance policies. Quarterly, an attribution...

  • Page 293
    ... Statements of Operations. The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which result in a net zero impact on net income for the Company.

  • Page 294
    ... Statements of Operations. The investment income and realized gains (losses) and change in unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities, which result in a net zero impact on net income for the Company.

  • Page 295
    ... including securities pledged, equity securities and separate accounts, were due to the variation in inputs relied upon for valuation each quarter. Securities that are primarily valued using independent broker quotes when prices are not available from one of the commercial pricing services are...

  • Page 296
    ... - - Equity and Fixed Income Funds ...-33% to 62% -33% to 62% - - Interest Rates and Equity Funds ...-30% to -14% -30% to -14% - - Nonperformance risk ...-0.1% to 0.79% -0.1% to 0.79% -0.1% to 0.79% -0.1% to 0.79% Actuarial Assumptions: Benefit Utilization ...85% to 100%(2) - - - Partial Withdrawals...

  • Page 297
    ... in the year immediately after the end of the surrender charge period. The Company makes dynamic adjustments to lower the lapse rates for contracts that are more "in the money." The table below shows an analysis of policy account values according to whether they are in or out of the surrender charge...

  • Page 298
    ... Stabilizer / MCG Long-term equity implied volatility ...Interest rate implied volatility ...Correlations between: Equity Funds ...Equity and Fixed Income Funds ...Interest Rates and Equity Funds ...Nonperformance risk ...Actuarial Assumptions: Benefit Utilization ...Partial Withdrawals ...Lapses...

  • Page 299
    ...) in equity-interest rate correlations A decrease (increase) in nonperformance risk A decrease (increase) in mortality An increase (decrease) in benefit utilization A decrease (increase) in lapses Changes in fund correlations may increase or decrease the fair value depending on the direction of the...

  • Page 300
    ... the projected number of policies that are available to use the GMWBL benefit and may also increase the fair value of the GMWBL. Generally, an increase (decrease) in benefit utilization will decrease (increase) lapses for GMWB and GMWBL. Generally, an increase (decrease) in interest rate volatility...

  • Page 301
    ... Value Value Assets: Fixed maturities, including securities pledged ...$ 72,718.8 Equity securities, available-for-sale ...314.4 Mortgage loans on real estate ...9,312.2 Policy loans ...2,147.0 Limited partnerships/corporations ...236.4 Cash, cash equivalents, short-term investments and short-term...

  • Page 302
    ... Policy loans are collateralized by the cash surrender value of the associated insurance contracts and are classified as Level 2. Limited partnerships/corporations: The fair value for these investments, primarily private equity fund of funds and hedge funds, is based on actual or estimated Net Asset...

  • Page 303
    ... capital gains (losses). In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments. In evaluating the Company's management of interest rate, price and liquidity risks...

  • Page 304
    ...2013 and 2012: 2013 2012 Future policy benefits: Individual and group life insurance contracts ...Guaranteed benefits on annuity contracts, and payout contracts with life contingencies ...Accident and health ...Total ...Contract owner account balances: GICs ...Universal life type contracts ...Fixed...

  • Page 305
    ... the account is equal to deposits plus interest, less any withdrawals. The fair value is estimated using the income approach. The Company also offers optional guaranteed withdrawal benefit provisions on its indexed annuity products. This provision guarantees an annual withdrawal amount for life that...

  • Page 306
    ... variable annuity contracts at December 31, 2013 and 2012: Area Assumptions/Basis for Assumptions Data used Mean investment performance Based on 1,000 investment performance scenarios. GMDB: The mean investment performance varies by fund group. In general, the Company groups all separate account...

  • Page 307
    ... managed assets, which are not reported on the Company's Consolidated Balance Sheets. The Company also calculates additional liabilities for FIA contracts with guaranteed withdrawal benefits. The additional liability represents the expected value of these benefits in excess of the projected account...

  • Page 308
    ... benefit for retail variable annuity contracts were as follows as of December 31, 2013 and 2012: 2013 At Annuitization, Maturity, or Withdrawal GMAB/ GMWB GMIB GMWBL In the Event of Death GMDB Annuity Contracts: Minimum Return or Contract Value Separate account value ...Net amount at risk...

  • Page 309
    ...balances of contracts with guarantees invested in variable separate accounts were as follows as of December 31, 2013 and 2012: 2013 2012 Equity securities (including mutual funds): Equity funds ...Bond funds ...Balanced funds ...Money market funds ...Other ...Total ... $34,084.4 5,186.4 5,438.2 812...

  • Page 310
    ... Financial Statements (Dollar amounts in millions, unless otherwise stated) 2012 Direct Assumed Ceded Total, Net of Reinsurance Assets Premiums receivable ...Reinsurance recoverable ...Total ...Liabilities ...Future policy benefits and contract owner account balances ...Liability for funds...

  • Page 311
    ... economic lives. The Company recorded Value of Management Contracts ("VMCR") from the acquisition of ReliaStar Life Insurance Company in 2000 that represent the right by the mutual fund advisor company to manage the assets that are held in the mutual funds business. Customer relationship lists from...

  • Page 312
    ... inception of the Omnibus Plan, a total of 7,650,000 shares of Company common stock were reserved and available for issuance under the Omnibus Plan. During 2013, the Company provided awards under the Omnibus Plan in connection with (1) the conversion of ING Group equity-based awards granted in March...

  • Page 313
    ... equivalents are credited to the recipient and are paid only to the extent the applicable performance criteria and service conditions are met. In 2013, the Company awarded only RSUs and PSUs under the Omnibus Plan. RSUs were awarded in respect of (1) conversion of ING Group equity awards under...

  • Page 314
    ... form of ING Group equity awards, pursuant to equity compensation plans adopted by ING Group. These plans included: Long-term Sustainable Performance Plan: In 2011, 2012 and 2013 employees of the Company received ING Group-based equity awards under the Long-Term Sustainable Performance Plan ("LSPP...

  • Page 315
    ...date. Equity Compensation Plan: In 2011, 2012, and 2013, certain employees of the Company (principally those employed within the Investment Management business) received equity-based awards under ING Group's ING America Insurance Holdings, Inc. Equity Compensation Plan (the "Equity Compensation Plan...

  • Page 316
    ... represent the Company's allocated portion of ING Group share-based compensation plans and ING Group stock option plans. The Company recognized no income tax benefit due to recognized valuation allowances for all periods presented. See Note 15. Income Taxes to these Consolidated Financial Statements...

  • Page 317
    ... Omnibus Plan and ING Group share-based compensation plans for the periods indicated: RSUs-Deal Incentive RSUs Awards PSU Awards Weighted Weighted Weighted Number of Average Grant Number of Average Grant Number of Average Grant (1) Awards Date Fair Value Awards Date Fair Value Awards Date Fair Value...

  • Page 318
    ... April 11, 2013; the Company's common shares began trading under the ticker symbol VOYA on the New York Stock Exchange; ING U.S., Inc. issued 30,769,230 shares of the Company's common stock to the public in the IPO; ING Group sold 44,201,773 shares of the Company's common stock to the public in the...

  • Page 319
    ...give retroactive effect to the 2,295.248835-to-1 stock split effected on April 11, 2013. Dividends to Common Shareholders The declaration and payment of dividends is subject to the discretion of the Board of Directors, and depends on ING U.S., Inc.'s financial condition, results of operations, cash...

  • Page 320
    ... 2012 Minimum Capital Requirements(1) 2013 Statutory Net Income (Loss) 2013 2012 2011 Subsidiary Name (State of Domicile): ING USA Annuity and Life Insurance Company ("ING USA") (IA) ...ING Life Insurance and Annuity Company ("ILIAC") (CT) ...Security Life of Denver Insurance Company ("SLD") (CO...

  • Page 321
    ..., 2013 2012 Return of Capital Distributions As of December 31, 2013 2012 Subsidiary Name (State of domicile): ING USA Annuity and Life Insurance Company (IA)(1) ...ING Life Insurance and Annuity Company (CT)(2) ...Security Life of Denver Insurance Company (CO)(3) ...ReliaStar Life Insurance Company...

  • Page 322
    ... stated the intended use of the proceeds was to provide $500.0 to the captive reinsurance subsidiary, Security Life of Denver International Limited ("SLDI"), and retain the balance at ING U.S., Inc. for general corporate purposes. On June 26, 2012, ING U.S., Inc. made a capital contribution to SLDI...

  • Page 323
    ... legal requirements. The Plans comply with applicable regulations concerning investments and funding levels. Effective October 1, 2013, the Compensation and Benefits Committee of the Board of Directors of the Company, approved changing the Plan's name from the ING Americas Retirement Plan to the ING...

  • Page 324
    ...pension plans for insurance sales representatives who have entered into a career agent agreement and certain other individuals. These plans are non-qualified defined benefit plans which means all benefits are payable from the general assets of the sponsoring company. The Company also offers deferred...

  • Page 325
    ...1 ...Service cost ...Interest cost ...Plan participants' contribution ...Net actuarial (gains) losses ...Benefits paid ...Benefit obligations, December 31 ...Change in plan assets: Fair value of plan net assets, January 1 ...Actual return on plan assets ...Employer contributions ...Plan participants...

  • Page 326
    ... experience on pension plan assets or projected benefit obligation during a given period. The Company immediately recognizes actuarial losses (gains) on the qualified and nonqualified retirement plans as well as the other postretirement benefit plans. Amortization of Prior Service Cost: This cost...

  • Page 327
    ... cost ...Interest cost ...Expected return on plan assets ...Amortization of prior service cost (credit) ...(Gain) loss recognized due to curtailments ...Net (gain) loss recognition ...Net periodic (benefit) costs ...Other Changes in Plan Assets and Benefit Obligations Recognized in AOCI: Prior...

  • Page 328
    ...Retirement Plan's financial management is to promote stability and, to the extent appropriate, growth in funded status (i.e. the ratio of market value of assets to liabilities). The investment strategy for the Fund balances the requirement to generate returns with the need to control risk. The asset...

  • Page 329
    ... 2012: Actual Asset Allocation 2013 2012 Equity securities: Target allocation range ...Large-cap domestic ...Small/Mid-cap domestic ...International commingled funds ...Other ...Total equity securities ...Fixed maturities: Target allocation range ...U.S. Treasuries, short term investments, cash and...

  • Page 330
    ... collective trust funds invested in the EB Temporary Investment Fund of The Bank of New York Mellon ("Short-term Investment Fund"). The Short-term Investment Fund is designed to provide a rate of return by investing in a full range of high-quality, short-term money market securities. Participant...

  • Page 331
    ... Council of Real Estate investment Fiduciaries Open-End Diversified Core ("NFI_ODCE") index over any given three-to-five-year period. The Fund's real return performance objective is to achieve at least a 5.0% real rate of return (i.e., inflation-adjusted return), before advisory fees, over any...

  • Page 332
    ... designed to provide a rate of return by investing in a full range of highquality, short-term money market securities. Participants redemptions in the Short-term Investment Fund were the result of the normal course of business, the Trustee permitted redemptions in cash. In order to control liquidity...

  • Page 333
    ...reflect the assets' fair value. The fair values for cash and cash equivalents are determined based on quoted market prices. These assets are classified as Level 1. Short-term Investment Funds : Short term investment funds are valued by investment managers and are reported as a NAV per share in which...

  • Page 334
    ... investment manager's use of unobservable inputs in its valuation assumptions. The fair value of the investments in this category has been estimated using the NAV per share. Derivatives: For the interest rate swaps, the fair values are derived using market observable inputs from thirdparty sources...

  • Page 335
    ... plans in 2014. Defined Contribution Plans Certain of the Company's subsidiaries sponsor defined contribution plans. The largest defined contribution plan is the ING U.S. Savings Plan and ESOP (the "Savings Plan"). The assets of the Savings Plan are held in independently administered funds...

  • Page 336
    ... capital gains (losses) in the Consolidated Statements of Operations ...DAC/VOBA ...Sales inducements ...Change in unrealized gains/losses on available-for-sale securities ...Derivatives: Derivatives ...Adjustments related to effective cash flow hedges for amounts recognized in Net investment income...

  • Page 337
    ... capital gains (losses) in the Consolidated Statements of Operations ...DAC/VOBA ...Sales inducements ...Change in unrealized gains/losses on available-for-sale securities ...Derivatives: Derivatives ...Adjustments related to effective cash flow hedges for amounts recognized in Net investment income...

  • Page 338
    ... capital gains (losses) in the Consolidated Statements of Operations ...DAC/VOBA ...Sales inducements ...Change in unrealized gains/losses on available-for-sale securities ...Derivatives: Derivatives ...Adjustments related to effective cash flow hedges for amounts recognized in Net investment income...

  • Page 339
    ... Consolidated Financial Statements (Dollar amounts in millions, unless otherwise stated) 15. Income Taxes Income tax expense (benefit) consisted of the following for the periods indicated: Years Ended December 31, 2013 2012 2011 Current tax expense (benefit): Federal ...State ...Total current tax...

  • Page 340
    ...that give rise to deferred tax assets and deferred tax liabilities as of December 31, 2013 and 2012, are presented below: 2013 2012 Deferred tax assets Federal and state loss carryforwards ...Investments ...Insurance reserves ...Compensation and benefits ...Other assets ...Total gross assets before...

  • Page 341
    ... comprehensive income was directly related to the appreciation of the Company's available-for-sale portfolio during those years and not due to changes in expectations of taxable income in future periods. Unrecognized Tax Benefits Reconciliations of the change in the unrecognized income tax benefits...

  • Page 342
    ...the commercial paper program as a fee for this guarantee. The Company's commercial paper borrowings were generally used to fund the working capital needs of the Company's subsidiaries and provide short-term liquidity. All outstanding amounts were repaid in April 2013. On October 3, 2013, the Company...

  • Page 343
    ... Consolidated Financial Statements (Dollar amounts in millions, unless otherwise stated) Long-term Debt The following table summarizes the carrying value of the Company's long-term debt securities issued and outstanding as of December 31, 2013 and 2012: Maturity 2013 2012 2.21% Syndicated Bank Term...

  • Page 344
    ... January 15, 2013. ING Financial Markets, LLC, an affiliate, served as Joint Book Running Manager for the 2022 Notes and was paid $0.3 for its services. The Company used the proceeds of the 2022 Notes to repay $500.0 of the direct borrowings under a $3.5 billion committed Revolving Credit Agreement...

  • Page 345
    ...party collateral agent, for the benefit of ING Group, which may consist of cash collateral; certain investment-grade debt instruments; a letter of credit ("LOC") meeting certain requirements; or senior debt obligations of ING Group or a wholly owned subsidiary of ING Group (other than the Company or...

  • Page 346
    ... business trust organized by HSBC Securities (USA), Inc. ("HSBC"), as part of an insurance securitization transaction. Under the WWII Purchase Agreement, Whisperingwind II is provided opportunity for issuance and sale, and for the STARTS Trust to purchase one or more floating rate variable funding...

  • Page 347
    ... and secured facilities totaled $275.0. Of the aggregate $9.3 billion ($1.4 billion with ING Bank, N.V. ("ING Bank"), an affiliate) capacity available, the Company utilized $6.3 billion ($734.9 with ING Bank) in credit facilities outstanding as of December 31, 2013. Total fees associated with credit...

  • Page 348
    ... Company's credit facilities, their dates of expiration, capacity and utilization as of December 31, 2013: Secured/ Unsecured Committed/ Uncommitted Expiration Capacity Unused Utilization Commitment Obligor / Applicant ING U.S., Inc.(1)(2) ...ING U.S., Inc. / Security Life of Denver International...

  • Page 349
    ... reinsurance subsidiary of the Company, completed a financing arrangement with a third-party trust to provide up to $500.0 of trust note collateral funding. The financing arrangement is designed to manage reserve and capital requirements in connection with the stable value business and matures on...

  • Page 350
    ... $250.0 in financing. ING Bank acted as Joint Lead Arranger, Joint Book Manager and Documentation Agent for these transactions. For these services, ING Bank received various fees totaling $3.3. On May 21, 2013, ING U.S., Inc. repaid all amounts outstanding under the Term Loan Agreement. This action...

  • Page 351
    ... regulatory authorities to support its insurance operations. The Company may also post collateral in connection with certain securities lending, repurchase agreements, funding agreements, credit facilities and derivative transactions. The components of the fair value of the restricted assets were as...

  • Page 352
    ... of the Healthcare Strategies Inc. 401(k) Plan v. ING Life Insurance and Annuity Company (U.S.D.C. D. CT, filed February 22, 2011), in which sponsors of 401(k) plans governed by ERISA, claim that ILIAC has entered into revenue sharing agreements with mutual funds and others in violation of the...

  • Page 353
    ... relating to claims, and use of the SSDMF, including efforts to identify owners and beneficiaries of unclaimed benefits. The RSA establishes procedures for determining whether benefits may be payable under certain life insurance policies, annuity contracts, and retained asset accounts. It also...

  • Page 354
    ... following table: Assets 2013 Liabilities Assets 2012 Liabilities ING V ...ING Group ...ING Bank ...Other ...Total ... $ 0.5 1.3 13.8 2.6 $18.2 $0.2 0.9 5.8 2.0 $8.9 $ 0.3 3.4 33.6 2.2 $39.5 $501.9 0.1 33.6 1.1 $536.7 The material agreements whereby the Company generates revenues and expenses...

  • Page 355
    ... market values for these contracts were $10.5 and $15.6, respectively. For the years ended December 31, 2013, 2012 and 2011, the Company recorded net realized capital gains (losses) of $1.7, $20.1 and $376.4, respectively, with ING Bank and ING V. The Company has sold protection under certain credit...

  • Page 356
    ...the divestiture of ING Group's Latin American pensions, life insurance and investment management businesses in December 2011, the Company provided a variety of services to its Latin American affiliates, including personnel, legal, compliance, IT, finance and accounting and other services pursuant to...

  • Page 357
    ..., IIM managed the underlying assets and provided services related to the Company's securities subject to the Alt-A Back-up Facility pursuant to services agreements with each of the participating subsidiaries. ING, ING Bank and ING Direct U.S., as part of ING's divestiture of ING Direct U.S., entered...

  • Page 358
    ...$5.5 and $7.7 in fees related to the Alt-A Asset Management Agreement. 19. Consolidated Investment Entities The Company provides investment management services to and has transactions with, various collateralized loan obligations, private equity funds, single strategy hedge funds, insurance entities...

  • Page 359
    ... to sell certain general account private equity limited partnership investment interest holdings with a carrying value of $812.2 as of March 31, 2012 included in Assets related to consolidated investment entities to a group of private equity funds that are managed by Pomona Management LLC, also...

  • Page 360
    ...as of the dates indicated: December 31, 2013 December 31, 2012 Assets of Consolidated Investment Entities VIEs-CLO entities: Cash and cash equivalents ...Corporate loans, at fair value using the fair value option ...Other assets ...Total CLO entities ...VOEs-Private equity funds and single strategy...

  • Page 361
    ... of the dates indicated: Before Consolidation(1) CLOs VOEs CLOs Adjustments(2) VOEs Adjustments(2) Total December 31, 2013 Total investments and cash ...Other assets ...Assets held in consolidated investment entities ...Assets held in separate accounts ...Total assets ...Future policy benefits and...

  • Page 362
    ... VOEs CLOs Adjustments(2) VOEs Adjustments(2) Total December 31, 2012 Total investments and cash ...Other assets ...Assets held in consolidated investment entities ...Assets held in separate accounts ...Total assets ...Future policy benefits and contract owner account balances ...Other liabilities...

  • Page 363
    ... in the investment products accounted for as equity method (private equity and real estate partnership funds) and available-for-sale investments (CLOs). The net income arising from consolidation of CLOs is completely attributable to other investors in these CLOs, as the Company's share has been...

  • Page 364
    ... in the investment products accounted for as equity method (private equity and real estate partnership funds) and available-for-sale investments (CLOs). The net income arising from consolidation of CLOs is completely attributable to other investors in these CLOs, as the Company's share has been...

  • Page 365
    ... in the investment products accounted for as equity method (private equity and real estate partnership funds) and available-for-sale investments (CLOs). The net income arising from consolidation of CLOs is completely attributable to other investors in these CLOs, as the Company's share has been...

  • Page 366
    ... liquidity of the asset being measured. The inputs used by independent commercial pricing services, such as benchmark yields and credit risk adjustments, are those that are derived principally from or corroborated by observable market data. Hence, the fair value measurement of corporate loans priced...

  • Page 367
    ...are used to project future cash flows and determine the fair value of the CLO notes. In the event that the Company's modeled prices differ significantly from the observed market transactions, the Company reviews its assumptions and may adjust the fair value of such subordinated and equity classes if...

  • Page 368
    ..., at fair value, primarily represent the Company's investments in private equity funds and single strategy hedge funds. The fair value for these investments is estimated based on the NAV from the latest financial statements of these funds, provided by the fund's investment manager or third-party...

  • Page 369
    ... on a variety of factors, including the price of recent transactions in the company's securities and the company's earnings, revenue and book value. As of December 31, 2013, certain private equity funds maintained revolving lines of credit of $400.0, which renew annually and bear interest at LIBOR...

  • Page 370
    ...levels of consolidated investment entities as of December 31, 2013: Level 1 Level 2 Level 3 Total Assets VIEs-CLO entities: Cash and cash equivalents ...Corporate loans, at fair value using the fair value option ...VOEs-Private equity funds and single strategy hedge funds: Cash and cash equivalents...

  • Page 371
    ... VIEs-CLO entities: Corporate loans, at fair value using the fair value option ...$ - VOEs-Private equity funds and single strategy hedge funds: Limited partnerships/corporations, at fair value ...2,931.2 Total assets, at fair value ...$ 2,931.2 Liabilities VIEs-CLO entities: CLO notes, at fair...

  • Page 372
    ..., any financial or other support to these entities. The Company reviews its assumptions on a periodic basis to determine if conditions have changed such that the projection of these contingent fees becomes significant enough to reconsider the Company's consolidation status as variable interest...

  • Page 373
    ... private equity funds and single strategy hedge funds. With these entities, the Company serves as the investment manager and is entitled to receive investment management fees and contingent performance fees that are generally expected to be insignificant. Although the Company has the power to direct...

  • Page 374
    ... alternative asset classes, geographies and styles, in separate accounts, pooled accounts, annuity portfolios and mutual funds. Products and services are offered to institutional clients, including public, corporate and union retirement plans, endowments and foundations and insurance companies, as...

  • Page 375
    ... Closed Block Variable Annuity and Closed Block Institutional Spread Products (which issues guaranteed investment contracts and funding agreements) are no longer being actively marketed and sold, but are managed to protect regulatory and rating agency capital from equity market movements. The Closed...

  • Page 376
    ...: 2013 2012 2011 Retirement Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Businesses ...Corporate ...Closed Blocks: Closed Block Institutional Spread Products ...Closed Block Other ...Closed Blocks ...Total...

  • Page 377
    ... other items where the income is passed on to third parties. • • • • Operating revenues also do not reflect the revenues of the Company's Closed Block Variable Annuity segment, since this segment is managed to focus on protecting regulatory and rating agency capital rather than achieving...

  • Page 378
    ...Retirement Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Businesses ...Corporate ...Closed Blocks: Closed Block Institutional Spread Products ...Closed Block Other ...Closed Blocks ...Total operating revenues...

  • Page 379
    ... 2013 2012 Retirement Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Businesses ...Corporate ...Closed Blocks: Closed Block Variable Annuity ...Closed Block Institutional Spread Products ...Closed Block Other...

  • Page 380
    ... Assets: Investments: Fixed maturities, available-for-sale, at fair value ...Fixed maturities, at fair value using the fair value option ...Equity securities, available-for-sale, at fair value ...Short-term investments ...Mortgage loans on real estate, net of valuation allowance ...Policy...

  • Page 381
    ... investment entities: Collateralized loan obligations notes, at fair value using the fair value option ...- Other liabilities ...- Liabilities related to separate accounts ...- Total liabilities ...Shareholders' equity: Total ING U.S., Inc. shareholders' equity ...Noncontrolling interest ...Total...

  • Page 382
    ... Assets: Investments: Fixed maturities, available-for-sale, at fair value ...Fixed maturities, at fair value using the fair value option ...Equity securities, available-for-sale, at fair value ...Short-term investments ...Mortgage loans on real estate, net of valuation allowance ...Policy...

  • Page 383
    ...to consolidated investment entities: Collateralized loan obligations notes, at fair value using the fair value option ...- - Other liabilities ...- - Liabilities related to separate accounts ...- - Total liabilities ...Shareholder's equity: Total ING U.S., Inc. shareholder's equity ...Noncontrolling...

  • Page 384
    ... investment entities: Net investment income (loss) ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balance ...Operating expenses ...Net amortization of deferred policy...

  • Page 385
    ... investment entities: Net investment income (loss) ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balance ...Operating expenses ...Net amortization of deferred policy...

  • Page 386
    ... investment entities: Net investment income (loss) ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balance ...Operating expenses ...Net amortization of deferred policy...

  • Page 387
    ... (loss), before tax: Unrealized gains/losses on securities ...(2,989.8) (1,894.2) Other-than-temporary impairments ...48.0 26.8 Pension and other post-employment benefit liability ...(13.8) (3.2) Other comprehensive income (loss), before tax ...Income tax (benefit) expense related to items of other...

  • Page 388
    ...noncontrolling interest ...Other comprehensive income (loss), before tax: Unrealized gains/losses on securities ...Other-than-temporary impairments ...Pension and other post-employment benefit liability ...Other comprehensive income (loss), before tax ...Income tax (benefit) expense related to items...

  • Page 389
    ...noncontrolling interest ...Other comprehensive income (loss), before tax: Unrealized gains/losses on securities ...Other-than-temporary impairments ...Pension and other post-employment benefit liability ...Other comprehensive income (loss), before tax ...Income tax (benefit) expense related to items...

  • Page 390
    ... of short-term intercompany loans to subsidiaries ...Return of capital contributions from subsidiaries ...Capital contributions to subsidiaries ...Collateral received (delivered), net ...Purchases of fixed assets, net ...Other, net ...Net cash provided by (used in) investing activities ...Cash Flows...

  • Page 391
    ...Net maturity of short-term intercompany loans . . Return of capital contributions from subsidiaries ...Capital contributions to subsidiaries ...Collateral received (delivered), net ...Purchases of fixed assets, net ...Net cash provided by (used in) investing activities ...Cash Flows from Financing...

  • Page 392
    ... maturity of short-term intercompany loans ...Return of capital contributions from subsidiaries ...Capital contributions to subsidiaries ...Collateral received (delivered), net ...Purchases of fixed assets, net ...Other, net ...Net cash provided by (used in) investing activities ...Cash Flows from...

  • Page 393
    ...) 2013 Total revenues ...Total benefits and expenses ...Income (loss) before income taxes ...Net income (loss) ...Less: Net income (loss) attributable to noncontrolling interest ...Net income (loss) available to ING U.S., Inc.'s common shareholders ...Earnings Per Share(1) Basic ...Diluted ...Cash...

  • Page 394
    ... securities(1) ...Residential mortgage-backed securities ...Commercial mortgage-backed securities ...Other asset-backed securities ...Total fixed maturities, including securities pledged ...Equity securities, available-for-sale ...Short-term investments ...Mortgage loans on real estate ...Policy...

  • Page 395
    ... share data) As of December 31, 2013 2012 Assets Investments: Equity securities, available-for-sale, at fair value (cost of $76.6 at 2013 and $52.4 at 2012) ...Derivatives ...Investments in subsidiaries ...Total investments ...Cash and cash equivalents ...Short-term investments under securities...

  • Page 396
    ... investment income ...$ 36.4 $ 2.4 Net realized capital gains (losses) ...(39.2) - Other income ...4.2 12.5 Total revenues ...Expenses: Interest expense ...Other expense ...Total expenses ...Loss before income taxes and equity in earnings of subsidiaries ...Income tax (benefit) expense ...Net income...

  • Page 397
    ... Inc. Schedule II Financial Information of Parent Statements of Comprehensive Income (In millions) Years Ended December 31, 2013 2012 2011 Net income (loss) available to ING U.S., Inc.'s common shareholders ...Other comprehensive income (loss), after tax ...Comprehensive income (loss) attributable...

  • Page 398
    ... to ING U.S., Inc.'s common shareholders to net cash provided by (used in) operating activities: Equity in earnings of subsidiaries ...Net accretion/amortization of discount premium ...Provision for deferred income taxes ...Realized investment losses, net ...Change in: Receivable and asset accruals...

  • Page 399
    ING U.S., Inc. Schedule II Financial Information of Parent Statements of Cash Flows (Continued) (In millions) Years Ended December 31, 2013 2012 2011 Cash Flows from Financing Activities: Short-term debt, net ...Proceeds from issuance of long-term debt ...Repayment of long-term debt ...Debt ...

  • Page 400
    ... securities. Borrowings by ING Alternative Asset Management LLC ("IAAM") occur to enable IAAM to make capital contributions to the ING Multi-Strategy Opportunity Fund LLC ("the fund"), the fund that it manages. The applicable variable interest rate is equal to the rate of return on capital invested...

  • Page 401
    ... millions, unless otherwise stated) Subsidiaries Rate Maturity Date 2013 2012 ING Alternative Asset Management LLC ...ING Institutional Plan Services, LLC ...ING Institutional Plan Services, LLC ...ING Investment Management ...ING North America Insurance Corporation ...Lion Connecticut Holdings Inc...

  • Page 402
    ... Inc.'s subsidiary life insurance companies ING Life Insurance and Annuity Company, ING USA Annuity and Life Insurance Company, ReliaStar Life Insurance Company, Security Life of Denver Insurance Company, Midwestern United Life Insurance Company and ReliaStar Life Insurance Company of New York. 392

  • Page 403
    ... maintained in Roaring River III for a total of $225.0. This amount will vary over time based on a percentage of Roaring River III in force life insurance. On January 1, 2014, ING U.S., Inc. entered into a reimbursement agreement with a third-party bank for its wholly owned subsidiary, Roaring River...

  • Page 404
    ... on December 31, 2013 with a third-party bank in order to guarantee certain reimbursement obligations of Security Life of Denver International Limited, a wholly owned subsidiary of ING U.S., Inc., under a $250.0 letter of credit facility with a third party. ING V issued a $500.0 loan to Lion...

  • Page 405
    ... Lion Connecticut Holdings Inc...Security Life of Denver Insurance Company ...Total ... $ 987.0 447.0 $1,434.0 $733.0 80.0 $813.0 $ - 200.0 $200.0 5. Income Taxes As of December 31, 2013 and 2012, ING U.S., Inc. held deferred tax assets related to loss and credit carryforwards, which have not...

  • Page 406
    ... Policy Benefits and Contract Owner Account Balances Segment 2013 Retirement Solutions: Retirement ...Annuities ...Insurance Solutions: Individual Life ...Employee Benefits ...Investment Management ...Corporate ...Closed Blocks: Variable Annuity ...Institutional Spread Products ...Other ...Total...

  • Page 407
    ... Premiums Written (Excluding Life) Segment 2013 Retirement Solutions: Retirement ...Annuities ...Insurance Solutions: Individual Life ...Employee Benefits ...Investment Management ...Corporate ...Closed Blocks: Variable Annuity ...Institutional Spread Products ...Other ...Total ...2012 Retirement...

  • Page 408
    ING U.S., Inc. Schedule IV Reinsurance Years Ended December 31, 2013, 2012 and 2011 (In millions) Percentage of Assumed to Net Gross Ceded Assumed Net 2013 Life insurance in force ...Premiums: Life insurance ...Accident and health insurance ...Annuities ...Total premiums ...2012(1) Life ...

  • Page 409
    ... $175.0 $ (65.6)(1) $ - $2,821.9 $2,974.1 $2,875.0 $(387.0)(1) For 2013 and 2011, these amounts represent valuation allowances allocated to Other comprehensive income directly related to the appreciation of the Company's available-for-sale portfolio, and not pertaining to expectations of taxable...

  • Page 410
    .... This annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for...

  • Page 411
    ... Proxy Statement relating to the Company's 2014 Annual Meeting of Shareholders, which will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. Item 14. Principal Accounting Fees and Services The information required by this Item...

  • Page 412
    ... of Comprehensive Income Consolidated Statements of Changes in Shareholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm 2. Schedule I-Summary of Investments Other than Investments in Affiliates...

  • Page 413
    ..., 2013, among ING U.S., Inc., Lion Connecticut Holdings Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q (File No. 001-35897) filed on May 23, 2013) Indenture, dated as of August 1, 1993, between Aetna Life...

  • Page 414
    ... No. 1 to Registration Statement on Form S1 (File No. 333-184847) filed on January 23, 2013) Amended and Restated Institutional Custody Agreement, dated as of May 12, 2004, by and between Security Life of Denver Insurance Company and the Federal Home Loan Bank of Topeka (incorporated by reference to...

  • Page 415
    ... Insurance and Annuity Company and Lincoln Life & Annuity Company of New York (incorporated by reference to Exhibit 10.28 to the Company's Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-184847) filed on January 23, 2013) Master Services Agreement for Business Processes, dated...

  • Page 416
    ...May 3, 2013, between Security Life of Denver International Limited and ING Bank N.V., London Branch (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 8, 2013) Master Claim Agreement, dated April 17, 2012, between ING Groep N.V., ING America Insurance...

  • Page 417
    ...filed on January 23, 2013) Form of ING Group Long-Term Equity Ownership Plan Grant (incorporated by reference to Exhibit 10.57 to the Company's Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-184847) filed on January 23, 2013) ING Group Standard Share Option Plan (incorporated by...

  • Page 418
    ... 2013) ING Investment Management-Deferred Compensation Plan (incorporated by reference to Exhibit 10.70 to the Company's Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-184847) filed on January 23, 2013) ING Americas Insurance Holdings, Inc. Equity Compensation Plan (incorporated...

  • Page 419
    ... performance shares granted in 2013 to non-"Identified Staff" (as defined by the European Union's Capital Requirements Directive) pursuant to the ING Group Long-Term Sustainable Performance Plan (incorporated by reference to Exhibit 10.11 to Amendment No. 1 to the Company's Quarterly Report on Form...

  • Page 420
    ... 10.96 to the Company's Registration Statement on Form S-1 (File No. 333-191163) filed on September 13, 2013) Form of 2014 Restricted Stock Unit Award Agreement under the ING U.S., Inc. 2013 Omnibus Employee Incentive Plan Statement of Computation of Ratios of Earnings to Fixed Charges List of...

  • Page 421
    ... Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ING U.S., Inc. (Registrant) March 10, 2014 (Date) By: EWOUT L. STEENBERGEN Ewout L. Steenbergen Executive Vice President and Chief Financial Officer...

  • Page 422
    Signatures Title Date /S/ WILLEM F. NAGEL Willem F. Nagel DAVID ZWIENER David Zwiener Director March 10, 2014 /S/ Director Chief Financial Officer (Principal Financial Officer) Chief Accounting Officer (Principal Accounting Officer) March 10, 2014 /S/ EWOUT L. STEENBERGEN Ewout L. ...

  • Page 423
    ... of incorporation or organization) Voya Financial, Inc. 52-1222820 (I.R.S. Employer Identification No.) 230 Park Avenue New York, N.Y. (Address of principal executive offices) 10169 (Zip Code) (212) 309-8200 (Registrant's telephone number, including area code) Securities registered pursuant to...

  • Page 424
    ... Chief Executive Officer, Investment Management Executive Vice President and Chief Legal Officer Executive Vice President and Chief Risk Officer Executive Vice President and Chief Human Resources Officer Chief Executive Officer, Insurance Solutions and Closed Block Variable Annuities Designates...

  • Page 425
    ... in the financial services industry, spanning institutional, high net-worth and retail markets across asset management, retirement and banking sectors and has run both international and domestic businesses. Prior to joining the Company, Ms. Beams served as president and chief executive officer of...

  • Page 426
    ... past Chairman of the Life Insurance Council of New York (LICONY). Chetlur S. Ragavan has served as executive vice president and chief risk officer of the Company since January 2014. Prior to assuming this role, Mr. Ragavan served as the chief risk officer of Investment Management since April 2008...

  • Page 427
    ... to joining Principal Financial Group in 1988, Mr. Griswell served as President and Chief Executive Officer of MetLife Marketing Corporation, a subsidiary of Metropolitan Life Insurance Company. In 2011, Mr. Griswell joined the board of directors of Och-Ziff Capital Management Group, where he serves...

  • Page 428
    .... Willem F. Nagel was appointed a director of Voya Financial, Inc. in 2011. He has been a member of the Executive Board and chief risk officer of ING Group since May 2012. He also serves as chief risk officer on the Management Boards of ING Bank and ING Insurance Eurasia N.V. and is a member of the...

  • Page 429
    ... directors with respect to financial policies, allocation of capital to our businesses and methods of financing our businesses; monitoring our capital needs and financing arrangements, our ability to access capital markets and management's financing plans; and reviewing and approving or recommending...

  • Page 430
    ... from our investor relations website at investors.voya.com. The Company intends to satisfy any disclosure requirement under Item 5.05(c) of Form 8-K with respect to its code of ethics through a notice posted at investors.voya.com. "Controlled Company" Exemption Until March 25, 2014, ING Group owned...

  • Page 431
    ... committees each consist solely of independent directors. As of March 25, 2014, we have ceased to be a "controlled company," and no longer have the benefit of the controlled company exemption. Accordingly, we will become subject to all of the applicable NYSE corporate governance rules over a one...

  • Page 432
    ... Beams ...Jeffrey T. Becker ... Chairman and Chief Executive Officer Executive Vice President and Chief Operating Officer Executive Vice President and Chief Financial Officer Chief Executive Officer, Retirement Solutions Chief Executive Officer, Investment Management Throughout this CD&A, we refer...

  • Page 433
    ... that ensures that our investors receive an appropriate return on their investment in the Company. NEO target levels for each element of compensation and for overall total direct compensation (base salary, annual cash and deferred equity-based incentives and long-term equity-based incentives) should...

  • Page 434
    ... the market capitalization of most comparison group companies be within 50% and 300% of the market capitalization of the Company), and various other factors, including the revenues, workforce size and assets under management or assets under administration of potential member companies. For 2013, the...

  • Page 435
    ...1, 2013, is provided below under "-Expatriate Arrangements and Localization of Mr. Steenbergen". Loomis, Sayles & Company, L.P. MFS Investment Management Morgan Stanley Investment Management New York Life Investment Management LLC Nuveen Investments Old Mutual Asset Management Oppenheimer Funds, Inc...

  • Page 436
    ... in the form of equity awards in respect of 2012 performance. Determination of 2013 Annual Incentive Compensation. The Compensation and Benefits Committee determined 2013 annual incentive compensation for our NEOs by applying a multi-step process. First, the target annual incentive opportunity and...

  • Page 437
    ...the approval of, ING Group. Achievement against these targets was assessed by our Compensation and Benefits Committee during the first quarter of 2014, following the availability of Company financial information for 2013. For 2013 annual incentive awards, preliminary annual compensation amounts were...

  • Page 438
    ..., the Closed Block Variable Annuity performance was actively and effectively managed so as to protect regulatory and rating agency capital. Ongoing Business Adjusted Operating Return on Equity for the year was increased to 10.3% during 2013, well on track to meet the year-end 2016 target of 12...

  • Page 439
    .... The Closed Block Variable Annuity performance was actively and effectively managed so as to protect regulatory and rating agency capital. Ongoing Business Adjusted Operating Return on Equity for the year was increased to 10.3% during 2013, well on track to meet the year-end 2016 target of 12...

  • Page 440
    ... College Savings Plans and Defined Contribution Investment Only mandates. • Following this assessment, the Compensation and Benefits Committee considered the total 2013 compensation package being proposed for each NEO, including long-term incentive amounts and the amount of 2013 annual incentive...

  • Page 441
    ... were not yet a publicly traded company, and we therefore followed our historical practice of granting equity-based awards in the form of plan shares of ING Group. In 2013, these plan shares were awarded under the ING Group Long-Term Sustainable Performance Plan ("LSPP"). Upon the closing of our IPO...

  • Page 442
    ... of our NEOs' overall total direct compensation opportunity, and, based in part on this review, total direct compensation opportunities were set at or below median total target compensation as reflected in the comparative data. Our NEO target long-term equity incentive amounts for 2013, expressed as...

  • Page 443
    ..., offered on the same terms and conditions as those made generally available to all full-time and part-time employees. Basic health, life insurance, disability benefits and similar programs are provided to give employees access to healthcare and income protection for themselves and their family...

  • Page 444
    ... relating to Mr. Steenbergen's retirement benefits. Perquisites and Other Benefits During 2013, we provided the NEOs with Company-selected independent advisors to assist them with financial planning, tax and legal issues. In addition, certain of our NEOs have personal use of a company car and driver...

  • Page 445
    ... certain circumstances. Under both the CRD policies described below (which became applicable to the Company on January 1, 2012) and the terms of the LSPP (pursuant to which both performance plan shares and deferred plan shares of ING Group have been granted), ING Group has the right to claw back...

  • Page 446
    ... or one of its business lines suffers a significant failure in risk management. Grants of Company RSUs to the NEOs made pursuant to the Omnibus Plan are subject to similar clawback provisions in respect of the Company. Capital Requirements Directive The European Commission's CRD affects compensation...

  • Page 447
    ...2012 Restructuring Plan of ING Group. See "Item 1. Business-Plan of Divestment from ING Group" in the Original Filing. Deal Incentive Awards for all other NEOs have been valued at the price to the public in our IPO, because no change was made to the terms of such awards. If valued at the date of the...

  • Page 448
    ...narrative under "-Retirement and Other Deferred Compensation Plans" for a description of the material terms of the DCSP. Amounts in this column represent the amounts actually paid by the Company, on behalf of each NEO, to the Company-selected financial advisor in 2013. The Company provided tax gross...

  • Page 449
    ... Table for 2013 Estimated Future Payouts Under Non-Equity Incentive Plan Awards Grant Date(1) Estimated Future Payouts Under Equity Grant Incentive Plan Awards Number Date Fair Threshold Target Maximum of Other Value of Number Number Number Stock Stock Maximum of Shares of Shares of Shares Awards...

  • Page 450
    ... of Annual ICP Award) Converted ADS Units(4) Deal Incentive Award(3) Annual Incentive Plan Threshold Target Estimated Future Payouts Under Equity Grant Incentive Plan Awards Number Date Fair Threshold Target Maximum of Other Value of Number Number Number Stock Stock Maximum of Shares of Shares of...

  • Page 451
    ... outstanding as of December 31, 2013. Outstanding Equity Awards Table at 2013 Year End Option Awards Stock Awards Equity Equity Incentive Incentive Plan Plan Awards: Awards: Market or Number of Payout Unearned Value of Market Shares, Unearned Value of Units or Shares, Shares or Other Units or Units...

  • Page 452
    ...15, the closing price of a share of Voya Financial, Inc. common stock, as reported by the NYSE, on December 31, 2013, by the number of shares or units; and the market value of ING Group equity awards was determined by multiplying $14.01, the closing price per ADS of ING Group ADS, as reported by the...

  • Page 453
    ...both Voya Financial equity awards and ING Group equity awards. All option exercises were in respect of ING Group equity awards. Option Exercises and Stock Vested Table for 2013 Option Awards Number of Shares Value Realized on Acquired on Exercise Exercise Stock Awards Number of Shares Value Realized...

  • Page 454
    ... of material importance to the Company. The Retirement Plan and the SERP were closed to new participants effective January 1, 2009. Beginning January 1, 2012, all Voya Financial employees transitioned to a new cash balance pension formula under the Retirement Plan. A similar change to the SERP was...

  • Page 455
    ... under prior AFS benefits is 2.2%. Assumptions for the ING Group Directors' Plan include The discount rate is 3.668% and general inflation is 2.00%. The long-term rate of return on plan assets is not applicable but would be equal to the discount rate under IAS19 reporting. Mortality is based...

  • Page 456
    ...excluding sales-based commissions) and up to 100% of their long-term variable compensation and may also elect to defer compensation they would have contributed to their 401(k) Plan accounts were it not for the compensation and contribution limits under the Internal Revenue Code. The Company provides...

  • Page 457
    ... date: (i) prior to December 31, 2016, if the Company completes one or more additional public offerings, a number of shares underlying the RSUs shall vest equal to (I) the total number of shares underlying the original RSU award multiplied by (II) the percentage of Company shares held by ING Group...

  • Page 458
    ... Executive Vice President and Chief Operating Officer of the Company, reporting to the CEO. Certain terms and conditions of his employment are set forth in an offer letter dated April 5, 2011, as amended as of July 25, 2013. Mr. Karaoglan is employed at will, and the Company may change the terms of...

  • Page 459
    ...he may receive a long-term incentive award of ING Group restricted stock and/or performance shares with a target value of 100% of his salary (following our IPO, awards to employees of the Company are made in the form of Voya Financial, Inc. equity grants pursuant to the Omnibus Plan, rather than the...

  • Page 460
    ... may receive a long-term incentive award of ING Group restricted stock and/or performance shares with a target value of 125% of her base salary (following our IPO, awards to employees of the Company are made in the form of Voya Financial, Inc. equity grants pursuant to the Omnibus Plan, rather than...

  • Page 461
    ... that takes into account service and salary. The Plan's maximum severance benefit is equal to 52 weeks of eligible pay. Under the terms of his employment agreement, cash severance payments to Mr. Martin would be made in a lump sum by the Company. Under the terms of the Severance Plan and subject to...

  • Page 462
    ... determined using the Voya Financial, Inc. closing share price and ING Group closing ADS price, in each case on December 31, 2013. Deferred Equity Deal Incentive Performance Shares (ING Group) (Voya Financial, Inc. Restricted ADS Awards (ING Total Value Prorated Value and ING Group) (ING Group...

  • Page 463
    ...ING Group, the parent of the Company, and Frederick S. Hubbell, who was previously an officer of ING Group, each served on the Compensation and Benefits Committee. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. As of March 25, 2014, ING Group...

  • Page 464
    ... presented in the table below is c/o Voya Financial, Inc., 230 Park Avenue, New York, New York 10169. Shares of Common Stock Beneficially Owned Number of Percentage Shares of Class Name and Address of Beneficial Owners ING Groep N.V.(1) ...Named executive officers and directors (13 persons) Rodney...

  • Page 465
    ... shares of ING Group. These shares consist of 201,128 ordinary shares owned directly by Mr. Hubbell, 262,002 ordinary shares owned indirectly by Mr. Hubbell through family and charitable trusts and 164,023 shares issuable upon the exercise of currently exercisable options. As of March 1, 2014...

  • Page 466
    ... take, mutual rights that we and ING Group will have with respect to business and financial information and financial accounting matters and ING Group rights with respect to subsequent sales of our common stock. The Shareholder Agreement has been filed as an exhibit to our Annual Report on Form 10...

  • Page 467
    ... of the Audit Committee shall be an ING Group Director; until the Third Threshold Date, ING Group is entitled to have observers present at meetings of our Management Risk Committee and Management Investment Committee and to receive all materials, reports and other communications from such committees...

  • Page 468
    ...-party collateral agent, for the benefit of ING Group, which may consist of cash collateral; certain investment-grade debt instruments; a letter of credit meeting certain requirements; or senior debt obligations of ING Group or a wholly owned subsidiary of ING Group (other than the Company or its...

  • Page 469
    ... each of our and our subsidiaries' businesses, in the countries in which such business provides products or services prior to the closing of our IPO (the "Territory") in the fields of insurance, retirement and investment management (excluding the field of banking, subject to limited exceptions). The...

  • Page 470
    ... financing in connection with our initial public offering, we expect to retain direct financing and guarantee arrangements with ING Group, NN Group and ING Bank for some period of time. Guarantees NN Group or ING Group has guaranteed the obligations of the Company and its subsidiaries under various...

  • Page 471
    ...a Term Loan Agreement, with a syndicate of banks, including ING Bank, which replaced financing that was either internally funded or guaranteed by ING V. (See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Senior Unsecured Credit...

  • Page 472
    ... direct borrowings remain thereunder. Securities Offerings ING Financial Markets LLC ("ING Financial Markets"), a non-subsidiary affiliate of Voya Financial, Inc., served as a Joint Book Running Manager or as a Senior Co-Manager for three offerings of debt securities made by the Company during 2013...

  • Page 473
    ...-managers for various funds pertaining to the asset management subsidiaries of ING Group or the general and separate accounts of non-U.S. insurance company subsidiaries of ING Group. The amount of fees we receive depends, in part, on the performance of the funds or the returns earned on the accounts...

  • Page 474
    ...services to funds and asset management subsidiaries of ING Group. These services generally include, but are not limited to, providing research materials and recommendations, trading services, legal and tax advice, sales support services, compliance support and back office and administrative services...

  • Page 475
    ... market data services. We reimbursed ING Bank approximately $1.3 million for the year ended December 31, 2013. In many cases, we have existing relationships with these vendors and have begun to contract directly with them. Insurance Coverage The Company continues to benefit from the Risk Management...

  • Page 476
    ... premiums directly to the insurer. The insurer, in turn, cedes 100% of the RMP risks, along with 100% of the remitted premiums, to ING Re. The annual premiums paid by the Company include taxes, fees and premiums. The RMP coverage applies to (i) any claims reported under the RMP prior to May 2, 2013...

  • Page 477
    ...distribution solicitation and portfolio management agreements fees ...Reinsurance Transactions ...Human resources services and compensation arrangements ...Sourcing/procurement services ...Insurance policies ...Other administrative services, overhead allocations ...Total ... $(43.8) 5.5 0.3 10.9 (10...

  • Page 478
    ... fees ...(1) $17.0 $ 1.6 $ 0.4 $ 0 $20.4 $ 1.5 $ 0.3 $ 0 (2) Includes the audit of the financial statements of employee benefit plans, service organization control reports, and accounting consultations. Includes tax compliance services provided to the Company and to consolidated investment funds...

  • Page 479
    Item 15. Exhibits Exhibit No. Description 31.1 31.2 Rule 13a-14(a)/15d-14(a) Certification of Rodney O. Martin, Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certification of Ewout L. Steenbergen, Chief Financial Officer 57

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  • Page 481
    ... Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VOYA FINANCIAL, INC. April 30, 2014 (Date) By: /S/ EWOUT L. STEENBERGEN. Name: Ewout L. Steenbergen Title: Executive Vice President and Chief Financial Officer

  • Page 482
    ... April 30, 2014 April 30, 2014 Director April 30, 2014 Director April 30, 2014 Director April 30, 2014 Director April 30, 2014 Director Chief Financial Officer (Principal Financial Officer) Chief Accounting Officer (Principal Accounting Officer) April 30, 2014 April 30, 2014 April 30...

  • Page 483
    ... public offering) through December 31, 2013, with the S&P 500 Index and the S&P 500 Financials Index. The graph assumes $100 was invested on May 2, 2013 in each of the Company's Common Stock, the S&P 500 Index and the S&P 500 Financials Index, and the dividends were reinvested on the date of payment...

  • Page 484
    ... of DAC, VOBA, sales inducements and unearned revenue. Net investment gains (losses) include gains (losses) on the sale of securities, impairments, changes in the fair value of investments using the fair value option unrelated to the implied loan-backed security income recognition for certain...

  • Page 485
    ... these calculations, we use an assumed income tax rate of 35%. The most directly comparable GAAP measure to adjusted operating ROE is return on equity. For a reconciliation, see the tables below. Voya Financial Calculation and Reconciliation of Return on Equity and Return on Capital ($ in millions...

  • Page 486
    ... 31, 2013 End of Period Capital for Ongoing Business ...Closed Block Variable Annuity, Corporate, and Other Closed Blocks ...End of Period Capital ...Total Debt ...Voya Financial, Inc. shareholders' equity excluding AOCI end of period ...AOCI ...Voya Financial, Inc. shareholders' equity: end...

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  • Page 489
    ...Vice President and Chief Human Resources Officer Michael S. Smith Chief Executive Officer, Insurance Solutions CORPORATE HEADQUARTERS 230 Park Avenue New York, NY 10169 TRANSFER AGENT Computershare P.O. Box 30170 College Station, TX 77842 877-373-6374 www.computershare.com/investor VOYA FINANCIAL...

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