Voya 2014 Annual Report Download - page 116

and enforced by a number of different governmental and self-regulatory authorities, including state insurance
regulators, state securities administrators, state banking authorities, the SEC, FINRA, the DOL and the IRS.
For example, U.S. federal income tax law imposes requirements relating to insurance and annuity product
design, administration and investments that are conditions for beneficial tax treatment of such products under the
Internal Revenue Code. Additionally, state and federal securities and insurance laws impose requirements
relating to insurance and annuity product design, offering and distribution and administration. Failure to
administer product features in accordance with contract provisions or applicable law, or to meet any of these
complex tax, securities, or insurance requirements could subject us to administrative penalties imposed by a
particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure
or other claims, harm to our reputation, interruption of our operations or adversely impact profitability.
The Dodd-Frank Act, its implementing regulations and other financial regulatory reform initiatives could
have adverse consequences for the financial services industry, including us, and/or materially affect our
results of operations, financial condition or liquidity.
On July 21, 2010, the Dodd-Frank Act was signed into law. It effects comprehensive changes to the
regulation of financial services in the United States. The Dodd-Frank Act directs existing and newly-created
government agencies and bodies to perform studies and promulgate a multitude of regulations implementing the
law, a process that is underway and is expected to continue over the next few years. While some studies have
already been completed and the rule-making process is well underway, there continues to be significant
uncertainty regarding the results of ongoing studies and the ultimate requirements of regulations that have not yet
been adopted. We cannot predict with certainty how the Dodd-Frank Act and such regulations will affect the
financial markets generally, or impact our business, ratings, results of operations, financial condition or liquidity.
Key aspects we have identified to date of the Dodd-Frank Act’s potential impact on us include:
• If designated by the FSOC as a nonbank financial company subject to supervision by the Federal
Reserve, we would become subject to a comprehensive system of prudential regulation, including,
among other matters, minimum capital requirements, liquidity standards, credit exposure requirements,
overall risk management requirements, management interlock prohibitions, a requirement to maintain a
plan for rapid and orderly dissolution in the event of severe financial distress, stress testing, additional
fees and assessments and restrictions on proprietary trading and certain investments. The exact scope
and consequences of these standards are subject to ongoing rulemaking activity by various federal
banking regulators and therefore are currently unclear. However, this comprehensive system of
prudential regulation, if applied to us, would significantly impact the manner in which we operate and
could materially and adversely impact the profitability of one or more of our business lines or the level
of capital required to support our activities. In designating non-bank financial companies for
heightened prudential regulation by the Federal Reserve, the FSOC considers, among other matters,
their scope, size, and potential impact of their activities on the financial stability of the United States.
Further, if ING Group were deemed to “control” the Company, the FSOC may consider the Company
together with ING Group’s other operations in the United States for purposes of making this
determination. Therefore, while we believe it is unlikely that the Company, either on a standalone basis
or together with ING Group’s other operations in the United States, will ultimately receive this
designation, there is a greater likelihood of such a designation being made for as long as ING Group
has a significant ownership interest in the Company.
• Title II of the Dodd-Frank Act provides that a financial company, such as us, may be subject to a
special orderly liquidation process outside the federal bankruptcy code, administered by the Federal
Deposit Insurance Corporation as receiver, upon a determination that it is in default or in danger of
default and presents a systemic risk to U.S. financial stability. We cannot predict how rating agencies,
or creditors of us or our subsidiaries, will evaluate this potential or whether it will impact our financing
or hedging costs.
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