Voya 2014 Annual Report Download - page 200

The following table summarizes the statutory capital and surplus of our principal insurance subsidiaries as
of the dates indicated:
As of December 31,
($ in millions) 2014 2013
Subsidiary Name (State of domicile):
Voya Insurance and Annuity Company (IA) ............. $2,119.4 $1,941.6
Voya Retirement Insurance and Annuity Company (CT) .... 2,007.9 2,010.8
Security Life of Denver Insurance Company (CO) ........ 1,128.8 1,034.0
ReliaStar Life Insurance Company (MN) ................ 1,944.7 1,942.5
We monitor the ratio of our insurance subsidiaries’ TAC to Company Action Level Risk-Based Capital
(“CAL”). A ratio in excess of 125% indicates that the insurance subsidiary is not required to take any corrective
actions to increase capital levels at the direction of the applicable state of domicile.
The following table summarizes the ratio of TAC to CAL on a combined basis primarily for our principal
insurance subsidiaries, with adjustments for certain intercompany transactions, as of the dates indicated below:
($ in millions) ($ in millions)
As of December 31, 2014 As of December 31, 2013
CAL TAC Ratio CAL TAC Ratio
$1,387.3 $7,458.7 538% $1,406.3 $7,068.4 503%
Statutory reserves established for variable annuity contracts and riders are sensitive to changes in the equity
markets and are affected by the level of account values relative to the level of any guarantees, product design and
reinsurance arrangements. As a result, the relationship between reserve changes and equity market performance
is non-linear during any given reporting period. Market conditions greatly influence the ultimate capital required
due to its effect on the valuation of reserves and derivative assets hedging these reserves.
The sensitivity of our insurance subsidiaries’ statutory reserves and surplus established for variable annuity
contracts and certain minimum interest rate guarantees to changes in the interest rates, credit spreads and equity
markets will vary depending on the magnitude of the decline. The sensitivity will be affected by the level of
account values, the level of guaranteed amounts and product design. Should statutory reserves increase, this
could result in future reductions in our insurance subsidiaries’ surplus, which may also impact RBC. Adverse
changes in interest rates and the continued widening of credit spreads may result in an increase in the reserves for
product guarantees which adversely impact statutory surplus, which may also impact RBC.
RBC is also affected by the product mix of the in force book of business (i.e., the amount of business
without guarantees is not subject to the same level of reserves as the business with guarantees). RBC is an
important factor in the determination of the credit and financial strength ratings of Voya Financial, Inc. and our
insurance subsidiaries.
Captive Reinsurance Subsidiaries
Our captive reinsurance subsidiaries provide reinsurance to the Company’s insurance subsidiaries in order
to facilitate the financing of statutory reserves including those associated with Regulation XXX or AG38 and to
fund certain statutory annuity and reserve requirements. Each of the captive reinsurance subsidiaries in operation
as of December 31, 2014 is a wholly owned direct or indirect subsidiary of one of the Principal Insurance
Subsidiaries or Voya Holdings Inc. Each of the captive reinsurance subsidiaries is subject to specific minimum
capital requirements set forth in the insurance statutes of Missouri, the state of domicile and is required to
prepare statutory financial statements in accordance with statutory accounting practices prescribed in the
Missouri insurance statutes or permitted by the Missouri insurance department. There are no prescribed practices
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