Voya 2014 Annual Report Download - page 70

defined as a dividend or distribution that, together with other dividends and distributions made within the
preceding twelve months, exceeds the lesser of: (1) 10% of the insurer’s policyholder surplus as of the preceding
December 31 or (2) the insurer’s net gain from operations for the twelve-month period ended the preceding
December 31, in each case determined in accordance with statutory accounting principles. New York has similar
restrictions, except that New York’s statutory definition of extraordinary dividend or distribution is an aggregate
amount in any calendar year that exceeds the lesser of (1) 10% of policyholder’s surplus as of the preceding
December 31 or (2) the insurer’s net gain from operations for the twelve-month period ended the preceding
December 31, not including realized capital gains. In addition, under the insurance laws applicable to our
insurance subsidiaries domiciled in the states of Connecticut, Iowa and Minnesota, no dividend or other
distribution exceeding an amount equal to an insurance company’s earned surplus may be paid without the
domiciliary insurance regulator’s prior approval (the “positive earned surplus requirement”).
Our captive reinsurance subsidiaries may not declare or pay dividends in any form to us other than in
accordance with their respective insurance securitization transaction agreements and their respective governing
licensing orders. Likewise, our Arizona captive may not declare or pay dividends in any form to us other than in
accordance with its annual capital and dividend plan as approved by the ADOI which includes a minimum capital
requirement. In addition, in no event may the dividends decrease the capital of the captive below the minimum
capital requirement applicable to it, and, after giving effect to the dividends, the assets of the captive paying the
dividend must be sufficient to satisfy its domiciliary insurance regulator that it can meet its obligations. Approval
by a captive’s domiciliary insurance regulator of an ongoing plan for the payment of dividends or other
distribution is conditioned upon the retention, at the time of each payment, of capital or surplus equal to or in
excess of amounts specified by, or determined in accordance with formulas approved for the captive by its
domiciliary insurance regulator.
In March and April of 2013 our Principal Insurance Subsidiaries received approvals or notices of non-
objection, as the case may be, from their respective domiciliary regulators to make extraordinary distributions in
the aggregate amount of $1,434.0 million to Voya Financial, Inc. or Voya Holdings and paid such approved
distributions on May 8, 2013 in connection with our IPO recapitalization activities.
The following table presents the extraordinary distributions paid by our Principal Insurance Subsidiaries in
2013:
($ in millions)
Insurance Subsidiary
State of
Domicile
Extraordinary
Dividends
Paid in 2013
Voya Insurance and Annuity Company .................. Iowa $230.0
Security Life of Denver Insurance Company ............. Colorado $447.0
ReliaStar Life Insurance Company ..................... Minnesota $583.0
Voya Retirement Insurance and Annuity Company ........ Connecticut $174.0
Prior to our IPO, our Principal Insurance Subsidiaries domiciled in Colorado, Iowa and Minnesota each had
negative earned surplus accounts, and therefore did not have capacity to make ordinary dividend payments to
Voya Financial, Inc. or Voya Holdings Inc. without regulatory approval. In order to obtain dividends or
distributions from these insurance companies, we historically obtained approval from the insurance companies’
respective state regulators, which could be granted or withheld at the regulators’ discretion, for extraordinary
dividends or distributions. On May 8, 2013, following the completion of our IPO and payment of $1,434.0
million of extraordinary distributions, these insurance companies each reset, on a one-time basis, their respective
negative unassigned funds account as of December 31, 2012 (as reported in their respective 2012 statutory annual
statements) to zero (with an offsetting reduction in gross paid-in capital and contributed surplus). These resets
were made pursuant to permitted practices in accordance with statutory accounting practices granted by their
respective domiciliary insurance regulators.
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