Voya 2013 Annual Report Download - page 247

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
• The reputation and financial condition of the agent and any intermediate participants in the corporate
loan; and
• General economic and market conditions affecting the fair value of the corporate loan.
Other-than-temporary Impairments
The Company periodically evaluates its available-for-sale investments to determine whether there has been an
other-than-temporary decline in fair value below the amortized cost basis. Factors considered in this analysis
include, but are not limited to, the length of time and the extent to which the fair value has been less than
amortized cost, the issuer’s financial condition and near-term prospects, future economic conditions and market
forecasts, interest rate changes and changes in ratings of the security. An extended and severe unrealized loss
position on a fixed maturity may not have any impact on: (a) the ability of the issuer to service all scheduled
interest and principal payments and (b) the evaluation of recoverability of all contractual cash flows or the ability
to recover an amount at least equal to its amortized cost based on the present value of the expected future cash
flows to be collected. In contrast, for certain equity securities, the Company gives greater weight and
consideration to a decline in market value and the likelihood such market value decline will recover.
When assessing the Company’s intent to sell a security or if it is more likely than not it will be required to sell a
security before recovery of its amortized cost basis, management evaluates facts and circumstances such as, but
not limited to, decisions to rebalance the investment portfolio and sales of investments to meet cash flow or
capital needs.
When the Company has determined it has the intent to sell or if it is more likely than not that the Company will
be required to sell a security before recovery of its amortized cost basis and the fair value has declined below
amortized cost (“intent impairment”), the individual security is written down from amortized cost to fair value,
and a corresponding charge is recorded in Net realized capital gains (losses) in the Consolidated Statements of
Operations as an other-than-temporary impairment (“OTTI”). If the Company does not intend to sell the security
and it is not more likely than not that the Company will be required to sell the security before recovery of its
amortized cost basis, but the Company has determined that there has been an other-than-temporary decline in fair
value below the amortized cost basis, the OTTI is bifurcated into the amount representing the present value of the
decrease in cash flows expected to be collected (“credit impairment”) and the amount related to other factors
(“noncredit impairment”). The credit impairment is recorded in Net realized capital gains (losses) in the
Consolidated Statements of Operations. The noncredit impairment is recorded in Other comprehensive income
(loss).
The Company uses the following methodology and significant inputs to determine the amount of the OTTI credit
loss:
• When determining collectability and the period over which the value is expected to recover for U.S.
and foreign corporate securities, foreign government securities and state and political subdivision
securities, the Company applies the same considerations utilized in its overall impairment evaluation
process, which incorporates information regarding the specific security, the industry and geographic
area in which the issuer operates and overall macroeconomic conditions. Projected 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 the scheduled interest and
principal payments; the quality and amount of any credit enhancements; the security’s position within
the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and
changes to the rating of the security or the issuer by rating agencies.
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