Voya 2014 Annual Report Download - page 65

Closed Block Institutional Spread Products
Prior to 2009, we operated a spread lending business, which we call Closed Block Institutional Spread
Products. However, following the financial crisis in 2008, investor appetite for uncollateralized liabilities not
rated “AAA” and collateralized funding became constrained causing funding spreads on new liabilities to widen.
We shifted the focus of the business strategy from growing assets and earnings to running off the business over
time. As of December 31, 2014, remaining assets in the institutional spread products portfolio had an amortized
cost of $1.3 billion, down from a peak of $14.3 billion in 2008. We continue to reduce the block by allowing the
assets and liabilities to mature or by finding opportunities to sell assets at prices deemed attractive. New liability
contracts may be issued from time to time or be terminated early in order to better match the run-off of the asset
portfolio. In addition, our Closed Block Institutional Spread Products segment wrote super senior credit default
swap (“CDS”) contracts of which, as of December 31, 2014, approximately $1 billion of notional amount
remained outstanding. As the business is in run-off, it is actively managed to limit liquidity risk and capital
requirements.
Closed Block Other
The third reporting segment making up our Closed Block business is Closed Block Other, which includes
continuing obligations and assets connected with the group reinsurance and individual reinsurance businesses we
sold between 2004 and 2009. Effective January 2009, we sold our group reinsurance business, ING Reinsurance
U.S., to RGA. The transaction was accounted for as a reinsurance transaction. To effect this sale, we entered into
coinsurance agreements with various subsidiaries of RGA. For more information on these reinsurance
arrangements, see the Reinsurance Note in our Consolidated Financial Statements in Part II, Item 8. in this
Annual Report on Form 10-K. Between 2004 and 2009, we entered into several reinsurance transactions with
Scottish Re and Hannover Re pursuant to which we ceded all liabilities related to our individual life reinsurance
block. The reinsurance arrangements with respect to both the group and life individual reinsurance businesses are
described more fully in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources—Reinsurance” below.
Employees
As of December 31, 2014, we had approximately 6,500 employees, with most working in one of our ten
major sites in nine states.
REGULATION
Our operations and businesses are subject to a significant number of Federal and state laws, regulations,
administrative determinations and similar legal constraints. Such laws and regulations are generally designed to
protect our policyholders, contract owners and other customers and not our stockholders or holders of our other
securities. Many of the laws and regulations to which we are subject are regularly re-examined and existing or
future laws and regulations may become more restrictive or otherwise adversely affect our operations. The
financial crisis of 2008-09 and the financial market disruptions have produced, and are likely to continue to
produce, extensive changes in existing laws and regulations applicable to our businesses, including the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) discussed below.
Following is a description of certain legal and regulatory frameworks to which we or our subsidiaries are or
may be subject.
Regulation Affecting Voya Financial, Inc. and its Subsidiaries
We are a holding company for all of our business operations, which we conduct through our subsidiaries.
We, as an insurance holding company, are not licensed as an insurer, investment advisor, broker-dealer, or other
regulated entity. However, because we own regulated insurers, we are subject to regulation as an insurance
holding company.
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