Voya 2013 Annual Report Download - page 104

recently been proposed to the laws and regulations that govern the conduct 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 personalized investment advice to retail customers. This standard of conduct
would be to act in the best interest of the customer without regard to the financial or other interest of the broker
or dealer providing the advice. The SEC and FINRA have also recently announced that they will be making the
marketing and recommendation of IRA rollovers an examination priority in 2014; accordingly, sales of rollover
IRA products, particularly by ING U.S.-affiliated broker-dealer firms, could be affected by this heightened
regulatory scrutiny. Further, proposals have been made that the SEC establish a self-regulatory organization with
respect to registered investment advisers, which could increase the level of regulatory oversight over them.
Changes to these laws or regulations that restrict the conduct of our business could have an adverse effect on our
results of operations and financial condition.
Changes to federal regulations could adversely affect our distribution model by restricting our ability to
provide customers with advice.
The prohibited transaction rules of ERISA and the Internal Revenue Code generally restrict providing
investment advice to ERISA plans and participants and IRAs if the investment recommendation results in fees
paid to the individual advisor, his or her firm or their affiliates that vary according to the investment
recommendation chosen. In March 2010, the DOL issued proposed regulations that provide limited relief from
these investment advice restrictions. The DOL issued final rules in October of 2011 and did not provide
additional relief regarding these restrictions. As a result, the ability of certain of our investment advisory
subsidiaries and their advisory representatives to provide investment advice to ERISA plans and participants, and
with respect to IRAs, will likely be significantly restricted. Also, the fee and revenue arrangements of certain
advisory programs may be required to be revenue neutral, resulting in potential lost revenues for these
investment advisers and their affiliates.
Other proposed regulatory initiatives under ERISA may negatively impact our broker-dealer subsidiaries. In
particular, the DOL issued a proposed regulation in October 2010 that would, if adopted as proposed,
significantly broaden the circumstances under which a person or entity providing investment advice with respect
to ERISA plans or IRAs would be deemed a fiduciary under ERISA or the Internal Revenue Code. Although the
DOL has withdrawn this proposal, it has indicated its intent to re-propose the regulation in a modified form in
2014. If adopted as proposed, the investment related information and support that our advisors and employees
could provide to plan sponsors, participants and IRA holders on a non-fiduciary basis could be substantially
limited beyond what is allowed under current law. This could have a material impact on the level and type of
services we can provide as well as the nature and amount of compensation and fees we and our advisors and
employees may receive for investment-related services. In addition, the proposed regulations may make it easier
for the DOL in enforcement actions, and for plaintiffs’ attorneys in ERISA litigation, to attempt to extend
fiduciary status to advisors who would not be deemed fiduciaries under current regulations. See “Item 1.
Business—Regulation—Employee Retirement Income Security Act Considerations”.
Finally, the DOL has issued a number of regulations recently, and may issue additional similar regulations,
that increase the level of disclosure that must be provided to plan sponsors and participants. These ERISA
disclosure requirements will likely increase the regulatory and compliance burden upon us, resulting in increased
costs.
Changes in U.S. pension laws and regulations may affect our results of operations and our profitability.
Congress from time to time considers pension reform legislation that could decrease the attractiveness of
certain of our retirement products and services to retirement plan sponsors and administrators or have an
unfavorable effect on our ability to earn revenues from these products and services. In this regard, the Pension
Protection Act of 2006 made significant changes in employer pension funding obligations associated with
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