Voya 2013 Annual Report Download - page 155

Closed Block Other
Operating earnings before income taxes increased $77.0 million from $(13.0) million to $64.0 million as a
result of several factors. Favorable reserve development in the retained portion of the group reinsurance business
was partially offset by a reduction in net investment income. In addition to the impact from the group reinsurance
business, a $52.5 million decline in operating expenses resulted primarily from the elimination of certain
Corporate functions that supported ING Group’s Latin America business, as well as a $22.0 million
reimbursement of expenses by ING Group. These expenses were paid in 2011 by ING U.S., Inc. on behalf of
ING Group’s Latin American business. In 2011, operating expenses included $24.6 million of previously
unreimbursed Latin America expenses. The continuing run-off of this segment contributed to a decline in fee
income and a corresponding decrease in operating expenses.
Closed Block Variable Annuity
The following table presents Income (loss) before income taxes of our CBVA segment for the periods
indicated:
Years Ended December 31,
($ in millions) 2013 2012 2011
Revenues:
Net investment income ..................... $ 97.6 $ 52.7 $ 85.8
Fee income .............................. 1,287.1 1,235.9 1,280.7
Premiums ............................... 79.2 — —
Net realized capital gains (losses) ............ (2,208.6) (1,382.8) (609.7)
Other revenue ............................ 18.5 24.2 38.1
Total revenues ................................ (726.2) (70.0) 794.9
Benefits and expenses:
Interest credited and other benefits to contract
owners/policyholders .................... (51.9) 113.6 882.9
Operating expenses and interest expense ....... 467.6 450.4 421.2
Net amortization of DAC/VOBA ............. 67.4 58.3 55.3
Total benefits and expenses ..................... 483.1 622.3 1,359.4
Income (loss) before income taxes ............... $(1,209.3) $ (692.3) $ (564.5)
The following table presents certain notable items that result in volatility in Income (loss) before income
taxes for the periods indicated:
Years Ended December 31,
($ in millions) 2013 2012 2011
Net gains (losses) related to incurred guaranteed
benefits and guarantee hedge program, excluding
nonperformance risk .......................... $(1,429.5) $(858.3) $(2,062.3)
Gain (losses) related to CHO program .............. (244.8) (351.0) (129.9)
Gain (loss) due to nonperformance risk ............. (494.5) (443.6) 517.0
Net investment gains (losses) ..................... 12.6 26.6 63.5
DAC/VOBA and other intangibles unlocking and loss
recognition ................................. (4.7) 1.8 21.1
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