Voya 2013 Annual Report Download - page 168

reinsuring business to our captive reinsurance subsidiaries and our Arizona captive, we are 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, Scottish Holdings, Inc., Scottish Re (U.S.), Inc. (“SRUS”), Scottish Re Life (Bermuda) Limited
(“Scottish Bermuda”) and Scottish Re (Dublin) Limited (collectively, “Scottish Re”) and Hannover Re. Pursuant
to the MPA, we recaptured individual life reinsurance business which had previously been reinsured to Scottish
Re and immediately ceded 100% of such business to Hannover Re on a modified coinsurance, funds withheld
and coinsurance basis, which resulted in no gain or loss. We will remain obligated to maintain collateral for the
statutory reserve requirements associated with Statutory Regulations XXX and AG38 on the business transferred
from us to Hannover Re for the duration of such reserve requirements or until the underlying reinsurance
contracts are novated to Hannover Re or Hannover Re puts into place its own collateral for such reserve
requirements. Hannover Re reimburses us for a portion of our fees for these credit facilities. We refer to this
block as the Hannover Re block and its results are reported as part of the Closed Block Other segment.
Pursuant to the MPA, Hannover Re has the option to put into place its own collateral (“Buyers Facility”)
therefore, effective October 1, 2013 on a 32% quota share basis, we recaptured a portion of the business from
Hannover Re (Ireland) Limited (“HLRI”) and retroceded the recaptured business to Hannover Life Reassurance
Company of America (“HLRUS”). As a result, our collateral requirement was reduced to $2.3 billion as of
December 31, 2013.
We also utilize LOCs to provide credit for reinsurance on portions of the Closed Block Variable Annuity
segment liabilities reinsured to our Arizona captive in order to meet statutory reserve requirements at those times
when the assets and other capital backing the reinsurance liabilities may be less than the statutory reserve
requirement. As of December 31, 2013, there was no LOC requirement and the actual amount of the LOCs
outstanding was $1.2 billion.
In addition to the $5.8 billion of Individual Life, Hannover Re block and CBVA credit facilities utilized,
$491.0 million of LOCs were outstanding to support miscellaneous requirements. In total, $6.3 billion of credit
facilities were utilized as of December 31, 2013. As of December 31, 2013, the capacity of our unsecured and
uncommitted credit facilities totaled $17.0 million and the capacity of our unsecured and committed credit
facilities totaled $9.0 billion. We also have approximately $275.0 million in secured facilities.
Total fees associated with credit facilities for the years ended December 31, 2013, 2012 and 2011 were
$149.3 million, $223.2 million and $103.4 million, respectively.
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