Voya 2013 Annual Report Download - page 262

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge
Accounting Purposes” (“ASU 2013-10”), which permits an entity to use the Fed Funds Effective Swap Rate
(“OIS”) to be used as a U.S. benchmark interest rate for hedge accounting purposes. In addition, the guidance
removes the restriction on using different benchmark rates for similar hedges.
The provisions of ASU 2013-10 were adopted by the Company on July 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
In October 2010, the FASB issued ASU 2010-26, “Financial Services—Insurance (ASC Topic 944): Accounting
for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”), which provides new
guidance related to acquisition costs of new or renewal insurance contracts that qualify for deferral. Costs that
should be capitalized include (1) incremental direct costs of successful contract acquisition and (2) certain costs
related directly to successful acquisition activities (underwriting, policy issuance and processing, medical and
inspection, and sales force contract selling) performed by the insurer for the contract. Advertising costs should be
included in DAC only if the capitalization criteria for direct-response advertising guidance is met. All other
acquisition-related costs should be charged to expense as incurred.
The Company early adopted the provisions of ASU 2010-26 on January 1, 2011, and applied the provisions
retrospectively. If the Company’s Consolidated Balance Sheet as of December 31, 2010 had been issued prior to
implementation, the impact to the Company’s January 1, 2011 Retained earnings, as a result of implementation,
would have been a decrease of $1.2 billion, net of income taxes of $300.8.
Presentation and Disclosure
Disclosures about Offsetting Assets and Liabilities
In December 2011, FASB issued ASU 2011-11, “Balance Sheet (ASC Topic 210): Disclosures about Offsetting
Assets and Liabilities” (“ASU 2011-11”), which requires an entity to disclose both gross and net information
about instruments and transactions eligible for offset in the statement of financial position, as well as instruments
and transactions subject to an agreement similar to a master netting arrangement. In addition, the standard
requires disclosure of collateral received and posted in connection with master netting agreements or similar
arrangements.
In January 2013, the FASB issued ASU 2013-01, “Balance Sheet (ASC Topic 210): Clarifying the Scope of
Disclosures about Offsetting Assets and Liabilities” (“ASU 2013-01”), which clarifies that the scope of ASU
2011-11 applies to derivatives accounted for in accordance with ASU Topic 815, Derivatives and Hedging,
including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and
securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-
45 or Section 815-10-45 or subject to an enforceable master netting arrangement or similar agreement.
The provisions of ASU 2013-01 and ASU 2011-11 were adopted retrospectively by the Company on January 1,
2013. The adoption had no effect on the Company’s financial condition, results of operations or cash flows, as
the pronouncement only pertains to additional disclosure. The disclosures required by ASU 2011-11 and ASU
2013-01 are included in Note 3. Derivative Financial Investments to these Consolidated Financial Statements.
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