Voya 2014 Annual Report Download - page 117

• Title VII of the Dodd-Frank Act creates a new framework for regulation of the OTC derivatives
markets. New margin and capital requirements on market participants that will be contained in final
regulations to be adopted by the SEC and the CFTC could substantially increase the cost of hedging
and related operations, affect the profitability of our products or their attractiveness to our customers,
or cause us to alter our hedging strategy or change the composition of the risks we do not hedge.
• Pursuant to requirements of the Dodd-Frank Act, the SEC and CFTC are currently considering whether
stable value contracts should be regulated as “swap” derivative contracts. In the event that stable value
contracts become subject to such regulation, certain aspects of our business could be adversely
impacted, including issuance of stable value contracts and management of assets pursuant to stable
value mandates.
• The Dodd-Frank Act establishes the FIO within the Treasury Department to be headed by a director
appointed by the Secretary of the Treasury. While not having a general supervisory or regulatory
authority over the business of insurance, the director of this office performs various functions with
respect to insurance, including participating in the FSOC’s decisions regarding insurers to be
designated for stricter regulation by the Federal Reserve. The Dodd-Frank Act also required the
director of FIO to conduct a study on how to modernize and improve the system of insurance
regulation in the United States, including by increasing national uniformity by federal involvement or
effective action by the states. The director issued that report in December 2013, recommending, in part,
increased federal involvement in certain areas of insurance regulation to improve uniformity, and
setting out recommendations in areas of near-term reform for the states, including prudential and
marketplace oversight. The report also recommended, in part, that states develop a uniform and
transparent solvency oversight regime for the transfer of risk to reinsurance captives, and adopt a
uniform capital requirement for reinsurance captives, including a prohibition on transactions that do not
constitute legitimate risk transfer. FIO reiterated its recommendations for captives and other reforms in
its 2014 annual report. FIO has an ongoing charge to monitor all aspects of the insurance industry and
will monitor state regulatory developments, including those called for in its report and present options
for federal involvement if deemed necessary.
• Under the Dodd-Frank Act, various federal regulators have adopted the Volcker Rule, which places
limitations and restrictions on the ability of certain deposit institutions and regulated banking entities,
as well as their affiliates, to engage in certain proprietary trading or sponsor and invest in private funds.
In the event that one of our affiliates becomes a depository institution or otherwise becomes subject to
the Volcker Rule, our investment activities could be restricted.
• The Dodd-Frank Act also includes various securities law reforms that may affect our business
practices. See “—Changes in U.S. federal and state securities laws and regulations may affect our
operations and our profitability” below.
Although the full impact of the Dodd-Frank Act cannot be determined until the various studies mandated by
the law are conducted and implementing regulations are adopted, many of the legislation’s requirements could
have profound and/or adverse consequences for the financial services industry, including for us. The Dodd-Frank
Act could make it more expensive for us to conduct business, require us to make changes to our business model
or satisfy increased capital requirements, subject us to greater regulatory scrutiny or to potential increases in
whistleblower claims in light of the increased awards available to whistleblowers under the Act and have a
material adverse effect on our results of operations or financial condition.
See “Item 1. Business—Regulation” for further discussion of the impact of the Dodd-Frank Act on our
businesses.
In addition to the Dodd-Frank Act, regulators and lawmakers in non-U.S. jurisdictions are engaged in
addressing the causes of the financial crisis of 2008-09 and means of avoiding such crises in the future. Although
currently we are not directly subject to non-U.S. regulation, we may be significantly affected by foreign
regulatory actions, due to ING Group continued significant ownership interest in us or because of business
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