Voya 2014 Annual Report Download - page 320

Voya Financial, Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
(4) The Company makes dynamic adjustments to lower the lapse rates for contracts that are more “in the
money.” The table below shows an analysis of policy account values according to whether they are in or out
of the surrender charge period and to whether they are “in the money” or “out of the money” as of
December 31, 2013 (account value amounts are in $ billions):
GMAB GMWB/GMWBL
Moneyness
Account
Value Lapse Range
Account
Value Lapse Range
During Surrender Charge Period
In the Money** $— * 0.08% to 8.2% $5.7 0.08% to 5.5%
Out of the Money — * 0.41% to 12% 3.3 0.36% to 11%
After Surrender Charge Period
In the Money** $— * 2.5% to 21% $5.6 1.5% to 21%
Out of the Money 0.1 12% to 31% 2.8 6.9% to 40%
* Less than $0.1.
** The low end of the range corresponds to policies that are highly “in the money.” The high end of the
range corresponds to the policies that are close to zero in terms of “in the moneyness.”
(5) Stabilizer contracts with recordkeeping agreements have a different range of lapse and policyholder deposit
assumptions from Stabilizer (Investment only) and MCG contracts as shown below:
Percentage of
Plans
Overall
Range of
Lapse Rates
Range of
Lapse Rates
for 85% of
Plans
Overall
Range of
Policyholder
Deposits
Range of
Policyholder
Deposits for 85%
of Plans
Stabilizer (Investment Only) and
MCG Contracts ................ 88% 0-30% 0-15% 0-55% 0-15%
Stabilizer with Recordkeeping
Agreements ................... 12% 0-55% 0-25% 0-60% 0-30%
Aggregate of all plans ............. 100% 0-55% 0-25% 0-60% 0-30%
(6) Measured as a percentage of assets under management or assets under administration.
(7) The mortality rate is based on the Annuity 2000 Basic table with mortality improvements.
(8) The mortality rate is based on the 2012 Individual Annuity Mortality Basic table with mortality
improvements.
Generally, the following will cause an increase (decrease) in the GMAB, GMWB and GMWBL embedded
derivative fair value liabilities:
• An increase (decrease) in long-term equity implied volatility
• An increase (decrease) in interest rate implied volatility
• An increase (decrease) in equity-interest rate correlations
• A decrease (increase) in nonperformance risk
• A decrease (increase) in mortality
• An increase (decrease) in benefit utilization
• A decrease (increase) in lapses
297