Voya 2014 Annual Report Download - page 276

Voya Financial, Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
premiums are due over a significantly shorter period than the period over which benefits are provided, any gross
premium in excess of the net premium (i.e., the portion of the gross premium required to provide for expected
future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in
force. Benefits are recorded in Policyholder benefits in the Consolidated Statements of Operations when
incurred.
Amounts received as payment for investment-type, universal life-type, fixed annuities, payout contracts without
life contingencies and FIA contracts are reported as deposits to contract owner account balances. Revenues from
these contracts consist primarily of fees assessed against the contract owner account balance for mortality and
policy administration charges and are reported in Fee income. Surrender charges are reported in Other revenue.
In addition, the Company earns investment income from the investment of contract deposits in the Company’s
general account portfolio, which is reported in Net investment income in the Consolidated Statements of
Operations. Fees assessed that represent compensation to the Company for services to be provided in future
periods and certain other fees are established as a URR liability and amortized into revenue over the expected life
of the related contracts in proportion to estimated gross profits in a manner consistent with DAC for these
contracts. URR is reported in Future policy benefits and amortized into Fee income. Benefits and expenses for
these products include claims in excess of related account balances, expenses of contract administration and
interest credited to contract owner account balances.
Income Taxes
The Company files a consolidated federal income tax return, which includes many of its subsidiaries, in
accordance with the Internal Revenue Code of 1986, as amended.
The Company’s deferred tax assets and liabilities resulting from temporary differences between financial
reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates
expected to apply to taxable income in the years the temporary differences are expected to reverse.
Deferred tax assets represent the tax benefit of future deductible temporary differences, net operating loss
carryforwards and tax credit carryforwards. The Company evaluates and tests the recoverability of its deferred
tax assets. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence, it is more
likely than not that some portion, or all, of the deferred tax assets will not be realized. Considerable judgment and
the use of estimates are required in determining whether a valuation allowance is necessary and, if so, the amount
of such valuation allowance. In evaluating the need for a valuation allowance, the Company considers many
factors, including:
• The nature, frequency and severity of book income or losses in recent years;
• The nature and character of the deferred tax assets and liabilities;
• The nature and character of income by life and non-life subgroups;
• The recent cumulative book income (loss) position after adjustment for permanent differences;
• Taxable income in prior carryback years;
• Projected future taxable income, exclusive of reversing temporary differences and carryforwards;
• Projected future reversals of existing temporary differences;
• The length of time carryforwards can be utilized;
253