Voya 2014 Annual Report Download - page 332

Voya Financial, Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Effective January 1, 2009, the Company executed a Master Asset Purchase Agreement (the “MPA”) with respect
to its individual reinsurance business with Scottish Re Group Limited, Scottish Holdings, Inc., Scottish Re
(U.S.), Inc., Scottish Re Life (Bermuda) Limited and Scottish Re (Dublin) Limited (collectively, “Scottish Re”)
and Hannover Re. Pursuant to the MPA, the Company recaptured business then-reinsured to Scottish Re, and
immediately ceded 100% of such business to Hannover Re on a modified coinsurance, funds withheld, and
coinsurance basis, which resulted in no gain or loss. The Company will remain obligated to maintain collateral
for certain reserve requirements of the business transferred from the Company to Hannover Re for the duration of
such reserve requirements, until the underlying reinsurance contracts are novated to Hannover Re, or Hannover
Re puts into place its own collateral for such reserve requirements. Effective October 1, 2013, on a 32% quota
share basis, the Company recaptured a portion of the business from HLRI and retroceded the recaptured business
to Hannover US. As a result, the Company’s collateral requirement was reduced to $2.3 billion as of
December 31, 2013. The Company’s remaining collateral requirement as of December 31, 2014 was $2.4 billion.
Of the Reinsurance recoverable on the Consolidated Balance Sheets, $2.5 billion and $2.4 billion as of
December 31, 2014 and 2013, respectively, is related to the reinsurance recoverable from Hannover Re under this
reinsurance agreement.
Effective October 1, 2014, the Company disposed of an in-force block of term life insurance policies to RGA
Reinsurance Company, a subsidiary of Reinsurance Group of America, Inc., (“RGA”) under an indemnity
reinsurance arrangement (the “Term Life Coinsurance Agreement”) for $448.1. Under the terms of the Term Life
Coinsurance Agreement, RGA contractually assumed from the Company the policyholder liabilities and
obligations related to the policies, although the Company remains obligated to policyholders.
The Company recognized a loss of $89.4, composed of $32.8 in Other net realized capital gains on assets
included in the transaction, $11.4 in Other-than-temporary impairments related to intent and $110.8 of
transaction and ongoing expenses, recorded in Operating expenses in the Consolidated Statements of Operations
for the year ended December 31, 2014. As of December 31, 2014, the Reinsurance recoverable on the
Consolidated Balance Sheets related to the Term Life Coinsurance Agreement was $461.3.
9. Goodwill and Other Intangible Assets
Goodwill
Goodwill is the excess of cost over the estimated fair value of net assets acquired. As of December 31, 2014 and
2013, the Company had $31.1 in goodwill, which was related to the Investment Management segment. There is
no accumulated impairment balance associated with this goodwill. The Company performs a goodwill
impairment analysis annually as of October 1 and more frequently if facts and circumstances indicate that
goodwill may be impaired.
Other Intangible Assets
The Company has the following assets included in Other intangible assets, which have been capitalized and are
amortized over their expected economic lives.
The Company recorded Value of Management Contracts (“VMCR”) from the acquisition of ReliaStar Life
Insurance Company in 2000 that represent the right by the mutual fund advisor company to manage the assets
that are held in the mutual funds business.
Customer relationship lists from the acquisition of CitiStreet, LLC in 2008 represent Value of Customer
Relationship Acquired (“VOCRA”) for contracts with customers that were in place at the time of the acquisition.
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