Voya 2014 Annual Report Download - page 191

We also enter into reverse repurchase agreements. These transactions involve a purchase of securities and an
agreement to sell substantially the same securities as those purchased. We require that, at all times during the
term of the reverse repurchase agreements, cash or other collateral types provided is sufficient to allow the
counterparty to fund substantially all of the cost of purchasing the replacement assets. As of December 31, 2014
and 2013, we did not have any securities pledged under reverse repurchase agreements.
The primary risk associated with short-term collateralized borrowings is that the counterparty will be unable
to perform under the terms of the contract. Our exposure is limited to the excess of the net replacement cost of
the securities over the value of the short-term investments. We believe the counterparties to the dollar rolls,
repurchase and reverse repurchase agreements are financially responsible and that the counterparty risk is
minimal.
FHLB
We are currently a member of the FHLB of Des Moines and the FHLB of Topeka and are required to
maintain a collateral deposit to back any advances, funding agreements issued or LOCs issued by the FHLB. We
have the ability to obtain funding from the FHLBs based on a percentage of the value of our assets and are
subject to the availability of eligible collateral. The limits across all programs are 20% of the total assets of the
general and separate accounts of VIAC and RLI and potentially up to 40% of the total assets of the general
account of SLD based on credit approval from FHLB of Topeka. Furthermore, collateral is pledged based on the
outstanding balances of FHLB advances, funding agreements, and LOCs. The amount varies based on the type,
rating and maturity of the collateral posted to the FHLB. Generally, mortgage securities, commercial real estate
and U.S. treasury securities are pledged to the FHLBs. Market value fluctuations resulting from changes in
interest rates, spreads and other risk factors for each type of assets are monitored and additional collateral is
either pledged or released as needed.
Our borrowing capacity under these credit facilities does not have an expiration date as long as we maintain
a satisfactory level of creditworthiness based on the FHLBs’ credit assessment. As of December 31, 2014 and
2013, we had $1.4 billion and $1.8 billion in non-putable funding agreements, respectively, which are included in
Contract owner account balances on the Consolidated Balance Sheets. As of December 31, 2014 and 2013, we
had assets with a market value of approximately $1.6 billion and $2.0 billion, respectively, which collateralized
the FHLB funding agreements. As of December 31, 2013, we had a $265.0 million LOC issued by the FHLB,
which was terminated on December 18, 2014. As of December 31, 2013, we had assets with a market value of
approximately $294.1 million, which collateralized the FHLB LOC. Assets pledged to the FHLB are included in
Fixed maturities, available-for-sale, on the Consolidated Balance Sheets.
Borrowings from NN Group
For information related to these arrangements, see the Related Party Transactions Note in our Consolidated
Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Borrowings from Subsidiaries
We maintain revolving reciprocal loan agreements with a number of our life and non-life insurance
subsidiaries that are used to fund short-term cash requirements that arise in the ordinary course of business.
Under these agreements, either party may borrow up to the maximum allowable under the agreement for a term
not more than 270 days. For life insurance subsidiaries, the amounts that either party may borrow from the other
under the agreement vary and are equal to 2%-5% of the insurance subsidiary’s statutory net admitted assets
(excluding separate accounts) as of the previous year end depending on the state of domicile. As of December 31,
2014, the aggregate amount that may be borrowed or lent under agreements with life insurance subsidiaries was
$2.4 billion. Each agreement with a life insurance subsidiary has received the necessary approvals from the
appropriate state insurance regulatory authorities. For non-life insurance subsidiaries, the maximum allowable
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