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2015 Annual Report
PLAN | INVEST | PROTECT

Table of contents

  • Page 1
    2015 Annual Report P L A N | I N V E S T | P R OT E C T

  • Page 2
    ...clear mission to make a secure financial future possible - one person, one family, one institution at a time. We are equally committed to conducting business in a way that is socially, environmentally, economically and ethically responsible. In the pages of this annual report, we invite you to read...

  • Page 3
    Voya Financial at a glance (as of December 31, 2015) $452 billion in assets under management and administration 13 million customers 7,000 employees 1

  • Page 4
    ...years since Voya Financial became a public company, we have achieved a tremendous amount for both our customers and shareholders. We met our 2016 Ongoing Business Adjusted Operating Return on Equity (Adjusted ROE) target two years ahead of schedule; generated significant excess capital and returned...

  • Page 5
    ...At Investor Day, we also outlined more than 20 as well as our strong performance - to grow. For growth, margin and capital initiatives across our example, we won several new mandates last year to Ongoing Business - Retirement, Annuities, Investment help insurance companies with their general-account...

  • Page 6
    ... taken actions to manage our in-force block of business in Retirement and, when it comes to new business, we are targeting full-service client opportunities based on the value proposition that we provide. Similarly, in Individual Life and Annuities, we are adjusting crediting rates, where possible...

  • Page 7
    ...FY'14 FY'15 2018 Target 1 Ongoing Business Adjusted Operating Return on Equity is a non-GAAP ...Business Operating Earnings Before Income Taxes by Segment - 2015 12% 14% 39% Retirement & Investment Solutions Retirement Annuities Investment Management 15% 20% Insurance Solutions Individual Life...

  • Page 8
    ... Capital Group; • Earned 51 best-in-class awards from PLANSPONSOR magazine for its Retirement business; • Received rating upgrades from Standard & Poor's, Moody's Investors Service and Fitch Ratings; and • Received the number-one ranking for overall customer satisfaction in the life insurance...

  • Page 9
    ... Chairman of Insurance and Asset Management Americas, ING Group Rodney O. Martin, Jr. Chairman and Chief Executive Officer, Voya Financial, Inc. Byron H. Pollitt, Jr. Retired Executive Vice President and Chief Financial Officer, Visa Inc. Joseph V. Tripodi Chief Marketing Officer, The Subway...

  • Page 10
    ... secure financial future possible - one person, one family, one institution at a time. Our Guiding Principle: Dedicated to helping Americans become financially and emotionally ready for retirement by providing our customers and clients with quality asset accumulation, asset protection Our Values...

  • Page 11
    ... New York, New York (Address of principal executive offices) 10169 (Zip Code) (212) 309-8200 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name on each exchange on which registered Common Stock, $.01 Par Value...

  • Page 12
    Voya Financial, Inc. Form 10-K for the period ended December 31, 2015 Table of Contents ITEM NUMBER PAGE PART I. Item 1. Business ...5 48 80 80 80 80 Item 1A. Risk Factors ...Item 1B. Unresolved Staff Comments ...Item 2. Item 3. Item 4. Properties ...Legal Proceedings ...Mine Safety Disclosures ...

  • Page 13
    .... In this Annual Report on Form 10-K, the term "customers" refers to retirement plan sponsors, retirement plan participants, institutional investment clients, retail investors, corporations or professional groups offering employee benefits solutions, insurance policyholders, annuity contract holders...

  • Page 14
    ... managed healthcare providers in their market positions survey. The MyHealthguide survey is a recurring publication that compiles a ranking of medical stop loss providers and their most recently sourced annual premium data. Employee Benefits tracks market segment leadership positions by new premiums...

  • Page 15
    ... retirement accounts ("IRAs"), fixed annuities, brokerage accounts, mutual funds and accumulation insurance products to help our customers achieve their financial objectives. Our income products such as target date funds, guaranteed income funds, fixed annuities, IRAs, mutual funds and accumulation...

  • Page 16
    ... Customer Products Mass Market $50,000-$100,000

  • Page 17
    ..., stable value and pension risk transfer business and $3.3 billion was Retail Wealth Management business. Annuities provides fixed and indexed annuities, tax-qualified mutual fund custodial and other investment-only products and payout annuities for pre-retirement wealth accumulation and...

  • Page 18
    ... public offering in May 2013, we were a wholly owned subsidiary of ING Groep N.V. ("ING Group"), a global financial institution based in the Netherlands. Through ING Group, we entered the United States life insurance market in 1975 through the acquisition of Wisconsin National Life Insurance Company...

  • Page 19
    ...-sponsored retirement savings plan and administrative services to corporations of all sizes, public and private school systems, higher education institutions, state and local governments, hospitals and healthcare facilities and not-for-profit organizations. We also offer stable value products and...

  • Page 20
    ... for defined contribution plans for tax-advantaged retirement savings, as well as nonqualified executive benefit plans and employer stock option plans. Plan sponsors may select from a variety of investment structures and products, such as general account, separate account, mutual funds, stable value...

  • Page 21
    ... are cleared through the National Securities Clearing Corporation) as well as our general account and various stable value options. Voya Framewor(k), a mutual fund program offered to fund qualified retirement plans. The product contains over 300 funds from well-known fund families (larger plans are...

  • Page 22
    ... of mutual funds in addition to a guaranteed option (available through a group fixed annuity contract or stable value product). Voya Retirement Plus II and Voya Custom Choice II, registered group annuity products featuring variable investment options held in a variable annuity separate account and...

  • Page 23
    ... only business can occur in either our recordkeeping only plans or within other vendors' plans. Pension risk transfer solutions may be sold to our existing clients or to new clients that need a solution for de-risking their defined benefit plan. For large corporate plans, stable value products and...

  • Page 24
    ...new insurance company competitors enter the stable value space because demand from participant and plan sponsors remains strong for these products. The pension risk transfer business has also seen a few new competitors enter the market to provide defined benefit derisking solutions for institutional...

  • Page 25
    ... Wealth Management advisory services and product solutions compete for rollover and other asset consolidation opportunities against integrated financial services companies and independent broker-dealers who also offer individual retirement products, all of which currently have more market share than...

  • Page 26
    ...Services Our Annuities segment product offerings include immediate and deferred fixed annuities designed to address customer needs for tax-advantaged savings and retirement income and their wealth-protection concerns. New sales comprise primarily FIAs and tax-qualified mutual fund custodial accounts...

  • Page 27
    ... offerings to Allstate customers. These fixed annuity products are issued by VIAC and VRIAC. In addition, during 2015, we engaged in a strategic alliance with Farmers Financial Solutions, a part of the Farmers Insurance Group of Companies, under which we will be the exclusive provider of indexed...

  • Page 28
    ...Hartley Act defined-benefit and defined-contribution retirement plans, endowments and foundations, and insurance companies through our institutional distribution channel and through affiliates. We also serve individual investors by offering our mutual funds and separately managed accounts through an...

  • Page 29
    ... covering both domestic and international markets including Real Estate. Our fundamental equity capabilities are bottom-up, research driven and cover growth, value and core strategies in the large, mid and small cap spaces. Our quantitative equity capabilities are used to create quantitative and...

  • Page 30
    ... in separately managed accounts, collective investment trusts and structured vehicles. • Investment Management manages a variety of variable portfolio, mutual fund and stable value assets, sold through our Retirement, Annuities, and Insurance Solutions businesses. As of December 31, 2015, total...

  • Page 31
    ... UL, IUL, variable universal life and term life, insurance. These offerings are designed to address customer needs for death benefit protection, tax-advantaged wealth transfer and accumulation, premium financing, business planning, executive benefits and supplemental retirement income. We believe...

  • Page 32
    ... products we offer provides up to a lifetime death benefit guarantee coupled with significant long term surrender value potential through the ability to earn an index credit linked, in part, to any increases in the S&P 500. In October 2013, we introduced a re-priced Index Universal Life-Guaranteed...

  • Page 33
    ... required reserves. We use assumptions for mortality, interest, expenses, policy persistency and premium payment pattern in pricing policies. In addition, certain of our insurance products that include guaranteed returns or crediting rates underwrite equity market or interest rate risks. We seek to...

  • Page 34
    ... adding profitable new business to our in-force block, improving our persistency by retaining more of our best performing groups, and managing our loss ratios to below 80%, particularly on stop loss policies. Products and Services Our Employee Benefits segment offers stop loss insurance, group life...

  • Page 35
    ...TPAs to market to members of association and affinity groups. Voya Employee Benefits breadth of distribution gives us access to and the products to meet the needs of employers and their employees. Our Employee Benefits segment primarily targets mid-sized and large corporate employers through brokers...

  • Page 36
    ... in separate accounts established by the Company and registered with the SEC as unit investment trusts. The deposits were invested, largely at the customer's direction, in a variety of U.S. and international equity, fixed income, real estate and other investment options. Many of these policies...

  • Page 37
    ... financial reporting and information technology maintenance expense efficiencies. The block continues to generate revenue from asset-based fees. On a U.S. GAAP basis, we continue to amortize capitalized acquisition costs over estimated gross revenues and we incur operating costs and benefit expenses...

  • Page 38
    ... for withdrawals. We offered an alternative design that guaranteed the account value to be at least 200% of the eligible premiums paid by contract owners after 20 years. • Reserves for Future Policy Benefits We establish and carry actuarially-determined reserves that are calculated to meet our...

  • Page 39
    ...excludes $3.0 billion of Payout, Policy Loan and life insurance business which is included in consolidated account values. Capital Management Considerations The focus of the management of the CBVA segment is on regulatory reserve and capital requirements. As of December 31, 2015, we held regulatory...

  • Page 40
    ... of the performance of targeted fund groups (i.e., the fund groups that can be covered by indices where liquid futures markets exist). Total return swaps are also used to mitigate the risk of the change in value of certain policyholder-directed separate account funds. These include fund classes such...

  • Page 41
    ... and the hedge gain or loss from our CHO program and the Variable Annuity Guarantee Hedge Program for various shocks in both equity markets and interest rates. This reflects the hedging we had in place at the close of business on December 31, 2015 in light of our determination of risk tolerance at...

  • Page 42
    ...reinsured guaranteed living benefits, we enter into futures positions and total return swaps on various public market equity indices chosen to closely replicate contract owner variable fund returns. We also mitigate most of the foreign currency risk arising from its international fund exposure using...

  • Page 43
    ... our Consolidated Financial Statements in Part II, Item 8. in this Annual Report on Form 10-K. Market Risk Related to Equity Market Price and Interest Rates. Our variable products, FIA products and general account equity securities are significantly influenced by global equity markets. Increases or...

  • Page 44
    ... to the risk of increased costs and/or liabilities for benefits guaranteed in excess of account values during periods of adverse economic market conditions. Our risk management program is constantly re-evaluated to respond to changing market conditions and achieve the optimal balance and trade...

  • Page 45
    .... Other Risks. Despite the closure of new product sales, some new policy amounts continue to be deposited as additional premium to existing contracts. Benefit designs do limit the attractiveness of additional premium, but in some cases these additional premiums may increase the guarantee available...

  • Page 46
    ... managed to limit liquidity risk and capital requirements. In addition, we wrote super senior credit default swap ("CDS") contracts of which, as of December 31, 2015, approximately $1 billion of notional amount remained outstanding. Effective January 2009, we sold our group reinsurance business, ING...

  • Page 47
    ... products, approving policy forms, regulating unfair trade and claims practices, establishing reserve requirements and solvency standards, establishing credit for reinsurance requirements, fixing maximum interest rates on life insurance policy loans and minimum accumulation or surrender values...

  • Page 48
    ... reduce sales. See "Item 1A. Risk Factors-Risks Related to Regulation-Our insurance businesses are heavily regulated, and changes in regulation in the United States, enforcement actions and regulatory investigations may reduce profitability". Insurance Holding Company Regulation Voya Financial, Inc...

  • Page 49
    ..., the financial condition of its affiliates, the source and amount of funds by which it will effect the acquisition, the criteria used in determining the nature and amount of consideration to be paid for the acquisition, proposed changes in the management and operations of the insurance company and...

  • Page 50
    ... 2013, in connection with the completion of our IPO and payment of $1,434.0 million of extraordinary distributions, these insurance companies each were permitted to reset their respective negative unassigned funds account as of December 31, 2012 (as reported in their respective 2012 statutory annual...

  • Page 51
    ... business operations, taking into account the risk characteristics of the company's assets, liabilities and certain off-balance sheet items. State insurance regulators use the RBC requirements as an early warning tool to identify possibly inadequately capitalized insurers. An insurance company...

  • Page 52
    ... "Investment Company Act"). Our mutual funds, and in certain states, our variable life insurance and variable annuity products, are subject to filing and other requirements under state securities laws. Federal and state securities laws and regulations are primarily intended to protect investors and...

  • Page 53
    ..., the variable annuity contracts and variable life insurance policies issued by the separate accounts and certain fixed and indexed annuities supported by some of our insurance subsidiaries' general accounts, as well as mutual funds we sponsor, are registered with the SEC under the Securities Act...

  • Page 54
    ... securities business, including, among other things, sales methods and trading practices, the suitability of investments for individual customers, the use and safekeeping of customers' funds and securities, capital adequacy, recordkeeping, financial reporting and the conduct of directors, officers...

  • Page 55
    ... small employers to make traditional 401(k) plans available to their workers-an approach that we believe would more effectively address the currently underserved market. Trust Activities Regulation Voya Institutional Trust Company ("VITC"), our wholly owned subsidiary, was formed in 2014 as a trust...

  • Page 56
    ... duration risks within many of our insurance and annuity products and investment portfolios. In addition, inconsistencies between the Dodd-Frank Act regime and parallel regimes in other jurisdictions, such as the EU, may increase costs of hedging or inhibit our ability to access market liquidity in...

  • Page 57
    ... to closing any new commercial mortgage loans or to taking title to real estate. Although unexpected environmental liabilities can always arise, we seek to minimize this risk by undertaking these environmental assessments and complying with our internal environmental policies and procedures. Health...

  • Page 58
    ... affected by conditions in the global capital markets and the economy generally. Slowing growth rates globally and the uncertain consequences of changing monetary policies among the world's large central banks could create economic disruption, decrease asset prices, increase market volatility and...

  • Page 59
    ...financial condition and liquidity, including in the following respects: • We provide a number of insurance, annuity, retirement and investment products that expose us to risks associated with fluctuations in interest rates, market indices, securities prices, default rates, the value of real estate...

  • Page 60
    ... risk based upon the discount rate and expected long-term rate of return assumptions associated with our pension and other retirement benefit obligations. Sustained declines in long-term interest rates or equity returns could have a negative effect on the funded status of these plans and/or increase...

  • Page 61
    ... insurance premiums and fees, annuity deposits and cash flow from investments and assets. At the holding company level, sources of liquidity in normal markets also include a variety of short-term liquid investments and short-and long-term instruments, including credit facilities, equity securities...

  • Page 62
    ... rapidly increasing interest rates, policy loans, withdrawals from, and/or surrenders of, life insurance and annuity contracts and certain GICs may increase as policyholders choose to seek higher investment returns. Obtaining cash to satisfy these obligations may require us to liquidate fixed income...

  • Page 63
    ... insurance companies, brokerdealers, financial advisors, asset managers and diversified financial institutions, banks, technology companies and start-up financial services providers, both for the ultimate customers for our products and for distribution through independent distribution channels...

  • Page 64
    ... markets, customers, catastrophe occurrence or other matters that is publicly available or otherwise accessible to us. This information may not always be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks requires, among other things, policies...

  • Page 65
    ... equity investments with counterparties and customers in the financial services industry, including broker-dealers, commercial and investment banks, mutual and hedge funds, institutional clients, futures clearing merchants, swap dealers, insurance companies and other institutions, resulting in large...

  • Page 66
    ... hold certain assets that may lack liquidity, such as privately placed fixed income securities, commercial mortgage loans, policy loans and limited partnership interests. These asset classes represented 29.6% of the carrying value of our total cash and invested assets as of December 31, 2015. If we...

  • Page 67
    ...on our revenues and income. Our operations include, among other things, retirement plan administration, policy administration, portfolio management, investment advice, retail and wholesale brokerage, fund administration, shareholder services, benefits processing and servicing, contract and sales and...

  • Page 68
    ...certain private equity funds that we sponsor, we earn both a fixed management fee and a performancebased incentive fee, or "carried interest". Our receipt of performance-based fees is dependent on the fund exceeding a specified investment return hurdle over the life of the fund. The profitability of...

  • Page 69
    ... market prices of comparable securities. Factors considered in estimating the fair values of embedded derivatives and derivatives related to product guarantees and index-crediting features (collectively, "guaranteed benefit derivatives") include risk-free interest rates, long-term equity implied...

  • Page 70
    ... significant judgment, including assumptions as to the levels and/or timing of receipt or payment of premiums, benefits, claims, expenses, interest credits, investment results (including equity market returns), retirement, mortality, morbidity and persistency. We periodically review the adequacy of...

  • Page 71
    .... We offer stable value products primarily as a fixed rate, liquid asset allocation option for employees of our plan sponsor customers within the defined contribution funding plans offered by our Retirement business. These products are designed to provide a guaranteed annual credited rate (currently...

  • Page 72
    ..., we regularly review the estimates and assumptions underlying DAC, DSI and VOBA. The projection of estimated gross profits, gross premiums or gross revenues requires the use of certain assumptions, principally related to separate account fund returns in excess of amounts credited to policyholders...

  • Page 73
    ...insurance companies. The RBC formula for life insurance companies establishes capital requirements relating to asset, insurance, interest rate and business risks, including equity, interest rate and expense recovery risks associated with variable annuities and group annuities that contain guaranteed...

  • Page 74
    ... Federal Home Loan Banks, which subjects us to liquidity risks associated with sourcing a large concentration of our funding from two counterparties. A significant portion of our institutional funding agreements originates from the Federal Home Loan Bank of Topeka and the Federal Home Loan Bank of...

  • Page 75
    ... for our insurance contracts and financial instruments and how our financial statements are presented. The changes to U.S. GAAP could affect the way we account for and report significant areas of our business, could impose special demands on us in the areas of governance, employee training, internal...

  • Page 76
    ... retention and new sales, which could adversely affect our businesses and results of operations. Litigation may adversely affect our profitability and financial condition. We are, and may be in the future, subject to legal actions in the ordinary course of insurance, investment management and other...

  • Page 77
    ... in our investment portfolio due to significant volatility in global financial markets or the failure of counterparties to perform; changes in the rate of mortality, claims, withdrawals, lapses and surrenders of existing policies and contracts, as well as sales of new policies and contracts; and...

  • Page 78
    ... balance sheet date, less the fair value of each plan's assets. We determine our defined benefit plan obligations based on external actuarial models and calculations using the projected unit credit method. Inherent in these actuarial models are assumptions including discount rates, rates of increase...

  • Page 79
    ...2015, 2014, and 2013, respectively. See "Item 1. Business-Closed Blocks-CBVA." These products offered long-term savings vehicles in which customers (policyholders) made deposits that were invested, largely at the customer's direction, in a variety of U.S. and international equity, fixed income, real...

  • Page 80
    ...to us. An increase in interest rates could result in decreased fee income associated with a decline in the value of variable annuity account balances invested in fixed income funds, which also might affect the value of the underlying guarantees within these variable annuities. The performance of our...

  • Page 81
    ... from variable annuity contracts, and long-term volatility. Annual assumption changes and revisions to projection model inputs implemented during 2014 resulted in a gain of $102.3 million (excluding a gain of $37.9 million due to changes in the technique used to estimate nonperformance risk). This...

  • Page 82
    ...to net income. Risks Related to Regulation Our businesses and those of our affiliates are heavily regulated and changes in regulation or the application of regulation may reduce our profitability. We are subject to detailed insurance, asset management and other financial services laws and government...

  • Page 83
    ... and capital, particularly for products with contractual guarantees such as variable annuities and universal life policies, and are considering further potentially significant changes in these requirements. The NAIC is currently working on comprehensive reforms related to life insurance reserves...

  • Page 84
    ... and annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Internal Revenue Code. Additionally, state and federal securities and insurance laws impose requirements relating to insurance and annuity product design, offering...

  • Page 85
    ... Act on our businesses. Changes in U.S. federal and state securities laws and regulations may affect our operations and our profitability. U.S. federal and state securities laws apply to sales of our mutual funds and to our variable annuity and variable life insurance products (which are considered...

  • Page 86
    ... laws and regulations. A number of changes have recently been proposed to the laws and regulations that govern the conduct of our variable insurance products business and our distributors that could have a material adverse effect on our results of operations and financial condition. For example, the...

  • Page 87
    ... obligations to an insurance company. As part of our retirement services segment, we offer general account and separate account group annuity products that enable a plan sponsor to transfer these risks, often in connection with the termination of defined benefit pension plans. Consequently, this...

  • Page 88
    ... law could increase our tax costs, impact the ability of our insurance company subsidiaries to make distributions to Voya Financial, Inc. or make our insurance, annuity and investment product less attractive to customers. Changes in tax laws could increase our taxes and our effective tax rates. For...

  • Page 89
    ... 2013, in connection with the completion of our IPO and payment of $1,434.0 million of extraordinary distributions, these insurance companies each were permitted to reset their respective negative unassigned funds account as of December 31, 2012 (as reported in their respective 2012 statutory annual...

  • Page 90
    ..., the assets of the captive paying the dividend must be sufficient to satisfy its domiciliary insurance regulator that it can meet its obligations. 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...

  • Page 91
    ... Stockholder Matters and Issuer Purchases of Equity Securities Issuer Common Equity Voya Financial, Inc.'s common stock, par value $0.01 per share, began trading on the NYSE under the symbol "VOYA" on May 2, 2013. The following table summarizes high and low sales prices for the common stock on the...

  • Page 92
    ...of Equity Securities by the Issuer The following table summarizes Voya Financial, Inc.'s repurchases of its common stock for the three months ended December 31, 2015: Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or...

  • Page 93
    ... capital gains (losses) ...(733.3) (878.4) Total revenues ...11,341.2 11,086.9 Benefits and expenses: Interest credited and other benefits to contract owners/ policyholders ...6,510.0 5,937.9 Operating expenses ...3,103.0 3,561.7 Net amortization of Deferred policy acquisition costs and Value...

  • Page 94
    ...) Balance Sheet Data: Total investments ...Assets held in separate accounts ...Total assets ...Future policy benefits and contract owner account balances ...Short-term debt ...Long-term debt ...Liabilities related to separate accounts ...Total Voya Financial, Inc. shareholders' equity, excluding...

  • Page 95
    ... common share ...Balance Sheet Data: Total investments ...Assets held in separate accounts ...Total assets ...Future policy benefits and contract owner account balances ...Short-term debt ...Long-term debt ...Liabilities related to separate accounts ...Total Voya Financial, Inc. shareholders' equity...

  • Page 96
    ... common share ...Balance Sheet Data: Total investments ...Assets held in separate accounts ...Total assets ...Future policy benefits and contract owner account balances ...Short-term debt ...Long-term debt ...Liabilities related to separate accounts ...Total Voya Financial, Inc. shareholders' equity...

  • Page 97
    ...large defined contribution plans, stable value business and pension risk transfer solutions, as well as a team of affiliated brokers who sell our products in person, via telephone and online. • Our Annuities segment provides fixed and indexed annuities, tax-qualified mutual fund custodial products...

  • Page 98
    ...blocks and are managed separately from our Ongoing Business. • The Closed Block Variable Annuity ("CBVA") segment consists of variable annuity contracts that were designed to offer long-term savings products in which individual contract owners made deposits that are maintained in separate accounts...

  • Page 99
    ...Certain of our products pay guaranteed minimum rates. For example, fixed accounts and a portion of the stable value accounts included within defined contribution retirement plans, universal life ("UL") policies and individual fixed annuities include guaranteed minimum credited rates. We are required...

  • Page 100
    ... withdrawing assets to convert their savings into income. Competition Our Ongoing Business operates in highly competitive markets. We face a variety of large and small industry participants, including diversified financial institutions, investment managers and insurance companies. These companies...

  • Page 101
    ... dates in alignment with the start of our clients' fiscal years. In addition to these seasonal factors, our results are impacted by the annual review of assumptions related to future policy benefits and contract owner account balances and deferred policy acquisition costs ("DAC"), value of business...

  • Page 102
    ...estimated cost of these benefits. The estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if markets perform in line with our long-term expectations and includes the cost of hedging. Other derivative and reserve changes related to guaranteed benefits...

  • Page 103
    .../mutual funds. Customer account values reflect the amount of policyholder equity that has accumulated within retirement, annuity and universal-life type products. AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk, separate account...

  • Page 104
    ...morbidity on health products. In-force face amount is defined as the total life insurance coverage in effect as of the end of the period presented for business written and assumed. This measure provides information as to changes in policy growth and persistency with respect to death benefit coverage...

  • Page 105
    ...investment income ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Interest credited and other benefits to contract owners/policyholders ...Operating expenses ...Net amortization of Deferred policy acquisition costs and Value of business...

  • Page 106
    ... 2013 AUM and AUA: Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Eliminations/Other ...Total Ongoing Business ...Closed Blocks: Closed Block Variable Annuity ...Closed Block Other ...Total Closed...

  • Page 107
    ... 31, 2015 2014 2013 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks:(1) Closed Block Other ...Total operating earnings before income taxes...

  • Page 108
    ..., 2015 2014 2013 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks:(1) Closed Block Other ...Total operating revenues ...Adjustments: Closed Block...

  • Page 109
    ... projections of estimated gross profits. During the third quarter of 2015, 2014 and 2013, we completed our annual review of the assumptions, including projection model inputs, in each of our segments (except for the Investment Management and Corporate segments, for which assumption reviews are not...

  • Page 110
    ..., 2013 Net investment income (loss) DAC/VOBA and other intangibles amortization(1) DAC/VOBA and other intangibles unlocking(1) Net gain from Lehman Recovery/ LIHTC ($ in millions) Retirement ...Annuities ...Investment Management ...Individual Life ...Employee Benefits ...Corporate ...Closed Block...

  • Page 111
    ... by increased cost of insurance fees on the aging in-force universal life block and the impact of prospective assumptions changes in our Individual Life segment, as well as an increase in fees from growth in assets of mutual fund custodial products in our Annuities segment. Premiums increased $398...

  • Page 112
    ... of our Strategic Investment Program. In addition, an unfavorable change in mortality largely driven by higher claims severity primarily in our Individual Life segment and lower fee income in our recordkeeping and full service businesses in our Retirement segment also contributed to the decrease...

  • Page 113
    ... with higher AUM in our Retirement, Annuities, and Investment Management segments. Higher Fee income was also driven by increased cost of insurance fees on the aging inforce universal life block. Higher fees within our Investment Management segment, including fees associated with affiliated and CLO...

  • Page 114
    ... in 2014 compared to 2013 as a result of prospective assumption changes in our Individual Life and CBVA segments and lower amortization on guaranteed benefit hedging gains (losses). Additionally, lower amortization on Individual Life segment's universal life blocks was driven by lower gross profits...

  • Page 115
    ... 7. of this Annual Report on Form 10-K. Net investment gains increased $3.0 million from $212.1 million to $215.1 million as a result of several factors which largely offset. Changes in fair value adjustments on our CMO-B portfolio were offset by unfavorable derivative mark to market adjustments due...

  • Page 116
    used to value benefit obligations and an update to mortality assumptions. A net actuarial gain of $405.2 million was recorded in 2013, primarily due to strong investment returns in the assets of the pension plan and an increase in the discount rate. Other adjustments to operating earnings changed $...

  • Page 117
    ...millions) Year Ended December 31, 2015 2014 2013 Operating revenues: Net investment income and net realized gains (losses) ...Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits and expenses: Interest credited and other benefits to contract owners/policyholders...

  • Page 118
    ... and AUA for our Retirement segment as of the dates indicated: ($ in millions) 2015 As of December 31, 2014 2013 Corporate markets ...Tax exempt markets(1) ...Total full service plans ...Stable value(2) and pension risk transfer ...Retail wealth management ...Total AUM ...AUA ...Total AUM and AUA...

  • Page 119
    ... increased due to the growth of general account assets and higher prepayment income partially offset by lower alternative investment income and lower CMO-B investment income. The decrease in investment income on the CMO-B portfolio was primarily driven by market conditions and reinvestment rates...

  • Page 120
    ... $72.4 million primarily due to changes in market value adjustments related to plan sponsors upon surrender and higher broker-dealer revenues during 2014. Operating benefits and expenses Interest credited and other benefits to contract owners/policyholders increased $11.9 million from $848.4 million...

  • Page 121
    ... to $63.6 million primarily due to growth in assets of mutual fund custodial products. Average assets of mutual fund custodial products increased from $3.7 billion to $4.4 billion during the current year due to positive net flows and market performance. Premiums decreased $52.6 million from $169...

  • Page 122
    ... from changes to the mix of the portfolio. Fee income increased $11.9 million from $45.1 million to $57.0 million due to growth in assets of mutual fund custodial products. Average assets of the mutual fund custodial products increased 28% from $2.9 billion in the prior year to $3.7 billion in 2014...

  • Page 123
    ... improved margins related to the change in mix of business between AR/MYGAs and FIAs, an increase in Fee income from mutual fund custodial products and a lower amortization rate on DAC/VOBA and other intangibles. Retirement and Investment Solutions-Investment Management The following table presents...

  • Page 124
    ... Management sourced ...Affiliate sourced ...Total ... $ (517.7) (4,088.0) $(4,605.7) $1,136.4 1,879.4 $3,015.8 $7,777.7 978.7 $8,756.4 Investment Management-Year Ended December 31, 2015 Compared to Year Ended December 31, 2014 Operating revenues Net investment income and net realized gains...

  • Page 125
    ...millions) Year Ended December 31, 2015 2014 2013 Operating revenues: Net investment income and net realized gains (losses) ...Fee income ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits and expenses: Interest credited and other benefits to contract owners/policyholders...

  • Page 126
    ..., 2014 2013 Sales by Product Line: Universal life: Guaranteed ...Accumulation ...Indexed ...Total universal life ...Variable life ...Whole life ...Term ...Total sales by product line ...Total gross premiums and deposits ...End of period: In-force face amount ...In-force policy count ...New business...

  • Page 127
    ... assumption changes and an increase in cost of insurance fees on the aging in-force universal life block. Premiums decreased $151.6 million from $699.6 million to $548.0 million primarily due to the impacts of the Fourth Quarter 2014 and 2015 Reinsurance Transactions. Other revenue decreased...

  • Page 128
    ... changes. Excluding the impact from unlocking, Fee income increased primarily due to an increase in cost of insurance fees on the aging in-force universal life block. Premiums decreased $38.3 million from $737.9 million to $699.6 million primarily due to the impact of the Fourth Quarter 2014...

  • Page 129
    .... The unlocking in 2015 was driven primarily by inforce assumption changes. The following table presents the impact of the annual review of assumptions by line item for the periods indicated: ($ in millions) Year Ended December 31, 2015 2014 2013 Fee income ...Net amortization of DAC/VOBA ...Total...

  • Page 130
    ... assumption changes as discussed below. Premiums increased $140.4 million from $1,196.2 million to $1,336.6 million primarily due to higher sales of group stop loss as well as favorable persistency on group life and voluntary product lines. Operating benefits and expenses Interest credited...

  • Page 131
    ... due to changes in our risk assumption. Operating expenses increased $18.6 million from $236.1 million to $254.7 million primarily due to higher sales-related expenses from higher sales of group stop loss and voluntary products in 2014 and a reduction in estimated variable compensation accruals...

  • Page 132
    ... our Closed Block Other segment for the periods indicated: ($ in millions) Year Ended December 31, 2015 2014 2013 Operating revenues: Net investment income and net realized gains (losses) ...Premiums ...Other revenue ...Total operating revenues ...Operating benefits and expenses: Interest credited...

  • Page 133
    .... Closed Block Variable Annuity The following table presents Income (loss) before income taxes of our CBVA segment for the periods indicated: ($ in millions) Year Ended December 31, 2015 2014 2013 Revenues: Net investment income ...Fee income ...Premiums ...Net realized capital gains (losses...

  • Page 134
    ... products in accumulation and payout phase, policy loans and life insurance business. Closed Block Variable Annuity-Year Ended December 31, 2015 Compared to Year Ended December 31, 2014 Loss before income taxes decreased $65.9 million from $239.2 million to $173.3 million. Annual assumption changes...

  • Page 135
    ... of life contingent contracts and higher net investment income, primarily due to higher general account AUM, were offset by corresponding reserve changes in Interest credited and other benefits to contract owners/policyholders. Closed Blocks Variable Annuity-Year Ended December 31, 2014 Compared...

  • Page 136
    ... Ongoing Business: Alternative investment income ...Average alternative investments ...Corporate:(1) Alternative investment income ...Average alternative investments ...Closed Block Other:(2) Alternative investment income ...Average alternative investments ...Total Voya Financial, Inc.: Alternative...

  • Page 137
    ... the emergence of estimated gross profits. Net cost of reinsurance is amortized in a similar manner. Assumptions as to mortality, persistency, interest crediting rates, returns associated with separate account performance, impact of hedge performance, expenses to administer the business and certain...

  • Page 138
    ...income taxes for the periods presented: ($ in millions) Year Ended December 31, 2015 2014 2013 CBVA ...Ongoing Business ...Total DAC/VOBA and other intangibles unlocking(1) ...(1) $ 1.7 (74.8) $(73.1) $ 34.4 81.6 $116.0 $ (4.7) 73.3 $68.6 Includes the impacts of the annual review of assumptions...

  • Page 139
    ... deposits and securities lending. Primary uses of these funds are payments of policyholder benefits commissions and operating expenses, interest credits, share repurchases, investment purchases and contract maturities, withdrawals and surrenders. Parent Company Sources and Uses of Liquidity In...

  • Page 140
    ... credit facility borrowings ...New issuances of loans to subsidiaries, net of repayments ...Payment of income taxes, net ...Debt issuance costs ...Common stock acquired-Share repurchase ...Share-based compensation ...Dividends paid ...Acquisition of short term investments ...Other, net ...Total uses...

  • Page 141
    ... and equity market hedges, anticipated contract owner behavior, market value of general account assets, variable separate account performance and implications of rating agency actions. Description of Certain Indebtedness We borrow funds to provide liquidity, invest in the growth of the business and...

  • Page 142
    ... ended December 31, 2014: ($ in millions) Beginning Balance Issuance Maturities and Repayment Other Changes Ending Balance Long-Term Debt: Debt securities ...Windsor property loan ...Subtotal ...Less: Current portion of long-term debt ...Total long-term debt ...As of December 31, 2015, we were in...

  • Page 143
    ... with our acquisition of Aetna's life insurance and related businesses. In addition, Equitable of Iowa Capital Trust II, a limited purpose trust, has outstanding $13.0 million principal amount of 8.42% Series B Capital Securities due April 1, 2027 (the "Equitable Notes"). ING Group guarantees the...

  • Page 144
    ...benefiting ING Group with a third-party collateral agent. On December 31, 2015, we deposited $77.0 million of cash collateral into the control account. The cash collateral may be exchanged at any time upon the posting of any other form of acceptable collateral to the account. Senior Unsecured Credit...

  • Page 145
    business to Hannover Re on a modified coinsurance, funds withheld and coinsurance basis, which resulted in no gain or loss. We refer to this block as the Hannover Re block and its results are reported as part of the Closed Block Other segment. Prior to September 24, 2015, we were obligated to ...

  • Page 146
    ... / Applicant Business Supported Expiration Voya Financial, Inc...Individual Life CBVA Other SLDI ...Retirement Voya Financial, Inc./ Langhorne I, LLC ...Retirement SLDI ...Hannover Re block Voya Financial, Inc. / SLDI ...Individual Life Voya Financial, Inc...Individual Life Voya Financial, Inc...

  • Page 147
    ... Required Obligor / Applicant Product Expiration Capacity Utilization SLDI ... LOC Facility Trust Note Individual & Group Deferred Annuities Stable Value 01/24/2018 01/15/2019 $175.0 500.0 $675.0 $157.0 - $157.0 $157.0 - $157.0 Voya Financial, Inc./ Langhorne I, LLC ...Total ... 137

  • Page 148
    Closed Block Variable Annuity ($ in millions) Financing Structure Estimated amount of Collateral Required Obligor / Applicant Product Expiration Utilization Voya Financial, Inc. / SLDI ...Total ... Credit Facility GMWBL/ GMIB 02/14/2018 $500.0 $500.0 $- $- Of the $500.0 million LOC ...

  • Page 149
    ... any institution with whom the lending agent transacts on our behalf. Initial collateral, primarily cash, is required at a rate of 102% of the market value of the loaned securities. The lending agent retains the collateral and invests it in short-term liquid assets on our behalf. The market value of...

  • Page 150
    ... on the Consolidated Balance Sheets. As of December 31, 2015 and 2014, collateral retained by the lending agent and invested in liquid assets on our behalf was $484.4 million and $563.9 million, respectively, and is recorded in Short-term investments under securities loan agreements, including...

  • Page 151
    ... our ability to market products, reduce our competitiveness, increase the number or value of policy surrenders and withdrawals, increase our borrowing costs and potentially make it more difficult to borrow funds, adversely affect the availability of financial guarantees or LOCs, cause additional...

  • Page 152
    ...ongoing insurance policy and contract obligations. It is based on a comprehensive quantitative and qualitative evaluation of a company's balance sheet strength, operating performance and business profile. A.M. Best's long-term credit ratings reflect its assessment of the ability of an obligor to pay...

  • Page 153
    ...- or long-term trend in credit fundamentals, which if continued, may lead to a rating change. Ratings actions affirmation and outlook changes by A.M. Best, Fitch, Moody's and S&P from December 31, 2014 through December 31, 2015 and subsequently through the date of this Annual Report on Form 10-K are...

  • Page 154
    ... risks and guaranteed death and living benefits under our life insurance and annuity contracts. We remain liable to the extent our reinsurers do not meet their obligations under the reinsurance agreements. We reinsure our business through a diversified group of well capitalized, highly rated...

  • Page 155
    ... plan arrangements, see the Employee Benefit Arrangements Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Restrictions on Dividends and Returns of Capital from Subsidiaries Our business is conducted through operating subsidiaries. U.S. insurance...

  • Page 156
    ... owned non-life insurance subsidiaries such as brokerdealers, investment management entities and intermediate holding companies. For the years ended December 31, 2015 and 2014, dividends net of capital contributions received by Voya Financial, Inc. and Voya Holdings from non-life subsidiaries were...

  • Page 157
    ... account values relative to the level of any guarantees, product design and reinsurance arrangements. As a result, the relationship between reserve changes and equity market performance is non-linear during any given reporting period. Market conditions greatly influence the ultimate capital required...

  • Page 158
    ... action application of the Standard to captives that assume variable annuity business. As drafted, it appears that the Standard would apply to our Arizona captive. During 2015, the NAIC Financial Conditions (E) Committee (the "E Committee") established the Variable Annuities Issues (E) Working Group...

  • Page 159
    ... gives Voya Financial, Inc. the right, at any time over a ten-year period, to issue up to $500.0 million of senior notes to the trust in return for principal and interest strips of U.S. Treasury securities that are held by the trust. In return, we agreed to pay a semi-annual put premium to the trust...

  • Page 160
    ... growth and interest crediting consistent with assumptions used in amortizing DAC. Estimated cash payments are undiscounted for the time value of money. Accordingly, the sum of cash flows presented of $111.6 billion significantly exceeds the sum of Future policy benefits and Contract owner account...

  • Page 161
    ... Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on our reserves for future policy benefits, contract owner account balances and product guarantees. Insurance and Other Reserves Reserves for traditional life insurance contracts (term insurance...

  • Page 162
    ...estimating the value of expected benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. Expected experience is based on a range of scenarios. Assumptions used, such as the long-term equity market return...

  • Page 163
    ...than our current best estimate assumes. We expect customers decisions on withdrawal will be influenced by their financial plans and needs, as well as by interest rate and market conditions over time, and by the availability and features of competing products. We also make estimates of expected lapse...

  • Page 164
    ... risk for the product guarantees, as well as sensitivities of the embedded derivative and stand-alone derivative liabilities to changes in certain capital markets assumptions. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles DAC represents policy acquisition costs...

  • Page 165
    ...the assumptions used to calculate reserves for future policy benefits. • Assumptions related to interest rate spreads and credit losses also impact estimated gross profits for applicable products with credited rates. These assumptions are based on the current investment portfolio yields and credit...

  • Page 166
    ...-term rate of return assumption by 100 basis points ...A change to the long-term interest rate assumption of -50 basis points ...A change to the long-term interest rate assumption of +50 basis points ...An assumed increase in future mortality by 1% ...A one-time, 10% decrease in equity market values...

  • Page 167
    ... public and private fixed maturity securities, commercial mortgage and other loans, equity securities, short-term investments, other invested assets and derivative financial instruments. Fixed maturity and equity securities are primarily classified as available-for-sale and are carried at fair value...

  • Page 168
    ...life-type and product features that contain embedded derivatives whose fair value is at least partially determined by levels of or changes in domestic and/or foreign interest rates (short-term or long-term), exchange rates, prepayment rates, equity markets, or credit ratings/spreads. The fair values...

  • Page 169
    ... Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Income Taxes Valuation Allowances We use certain assumptions and estimates in determining the income taxes payable or refundable for the current year, the deferred income tax liabilities and assets for items...

  • Page 170
    ... to the $1.83 billion valuation release in 2014, we considered our forecasts of future income using comparisons to historical results and actual and planned business and operational changes, which included assumptions about future macroeconomic and Company-specific conditions and events. We also...

  • Page 171
    ... limitation on the use of certain of the Company's federal tax attributes that will apply as a consequence of the Section 382 event. Under the IA, this annual limitation is estimated to be (i) for the 2014 to 2018 tax years, approximately $520.0 million per year, plus certain capital gains and (ii...

  • Page 172
    ... such as the discount rate, rate of return on plan assets, rate of future compensation increases and health care cost trend rates. These assumptions require considerable judgment, are subject to considerable variability and are established using our best estimate. Actual results could vary...

  • Page 173
    ...long-term rate of return on our Voya Retirement Plan (the "Retirement Plan") assets was 7.5% for 2015 and 2014. Our expected return on plan assets is calculated using 10-year forward looking assumptions based on the long term target asset allocation. In 2015, the actual return on our Retirement Plan...

  • Page 174
    ... and manager fees paid to non-affiliated companies from the assets. For estimation purposes, we assume the long-term asset mix will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension income or expense, the funded status of the Retirement Plan and...

  • Page 175
    ... portfolio consists largely of high quality fixed maturities and short-term investments, investments in commercial mortgage loans, alternative investments and other instruments, including a small amount of equity holdings. Fixed maturities include publicly issued corporate bonds, government bonds...

  • Page 176
    ...The Securities Valuation Office ("SVO") of the NAIC evaluates the fixed maturity security investments of insurers for regulatory reporting and capital assessment purposes and assigns securities to one of six credit quality categories called "NAIC designations." An internally developed rating is used...

  • Page 177
    ...fixed maturity portfolio generally includes securities, that have not yet been rated by the SVO as of each balance sheet date, such as private placements. Pending receipt of SVO ratings, the categorization of these securities by NAIC designation is based on the expected ratings indicated by internal...

  • Page 178
    The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated: ($ in millions) December 31, 2015 1 2 3 4 5 6 Total Fair Value NAIC Quality Designation U.S. Treasuries ...U.S. Government agencies and authorities ......

  • Page 179
    .... The following tables present credit quality of fixed maturities, including securities pledged, using ARO ratings as of the dates indicated: ($ in millions) December 31, 2015 AAA AA A BBB BB and Below Total Fair Value ARO Quality Ratings U.S. Treasuries ...U.S. Government agencies and authorities...

  • Page 180
    ... corporate private securities ...Foreign corporate public securities and foreign governments(1) ...Foreign corporate private securities(1) ...Residential mortgage-backed securities ...Commercial mortgage-backed securities ...Other asset-backed securities ...Total fixed maturities ...% of Fair Value...

  • Page 181
    ...depends on a number of factors, including conditions in both credit markets and housing markets. Changes in the prepayment behavior of homeowners represent both a risk and potential source of return for our CMO-B portfolio. As a result, we seek to invest in securities that are broadly diversified by...

  • Page 182
    ... market values. For details on the NAIC designation methodology, please see "Fixed Maturities Credit Quality-Ratings" above. The following table presents the notional amounts and fair values of interest rate derivatives used in our CMO-B portfolio as of the dates indicated: December 31, 2015 Asset...

  • Page 183
    ... are replaced with lower yielding new assets. The following table presents returns for our CMO-B portfolio for the periods indicated: ($ in millions) Year Ended December 31, 2015 2014 2013 Net investment income (loss) ...Net realized capital gains (losses)(1) ...Total income (pre-tax) ...(1) $ 737...

  • Page 184
    ... total fixed maturities, including securities pledged, based on fair value. The following table presents our exposure to subprime mortgage-backed securities by credit quality using NAIC designations, ARO ratings and vintage year as of the dates indicated: NAIC Quality Designation % of Total Subprime...

  • Page 185
    ... exposure to Alt-A RMBS by credit quality using NAIC designations, ARO ratings and vintage year as of the dates indicated: NAIC Quality Designation % of Total Alt-A Mortgage-backed Securities ARO Quality Ratings Vintage December 31, 2015 1 2 3 4 5 6 96.1% 2.0% 1.0% 0.1% 0.1% 0.7% 100.0% December 31...

  • Page 186
    ... table presents our exposure to CMBS holdings by credit quality using NAIC designations, ARO ratings and vintage year as of the dates indicated: NAIC Quality Designation % of Total CMBS ARO Quality Ratings Vintage December 31, 2015 1 2 3 4 5 6 99.8% 0.1% - % 0.1% - % - % 100.0% AAA AA A BBB BB and...

  • Page 187
    ...Annual Report on Form 10-K for further information on troubled debt restructuring. Mortgage Loans on Real Estate We rate commercial mortgages to quantify the level of risk. We place those loans with higher risk on a watch list and closely monitor these loans for collateral deficiency or other credit...

  • Page 188
    ... Annual Report on Form 10-K for further information on mortgage loans on real estate. Recorded Investment Debt Service Coverage Ratios Commercial mortgage loans secured by land >1.0x or construction 1.25x < 1.0x loans ($ in millions) > 1.5x >1.25x 1.5x Total % of Total December 31, 2015 Loan...

  • Page 189
    ...Closed Block Variable Annuity Hedging See Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K for further information. Invested Asset and Credit Hedging Interest rate caps and interest rate swaps are used to manage the interest rate risk...

  • Page 190
    ...portfolio management process, we closely monitor compliance with a credit limit hierarchy designed to minimize overly concentrated risk exposures by geography, sector and issuer. This framework takes into account various factors such as internal and external ratings, capital efficiency and liquidity...

  • Page 191
    ... at fair value and amortized cost as of December 31, 2015: Fixed Maturities and Equity Securities Derivative Assets Loan and Receivables Less: Total Sovereign NonMargin Total (Amortized (Amortized Financial Financial & (Fair Cost) Cost) Sovereign Institutions Institutions Collateral Value) ($ in...

  • Page 192
    ... our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for estimated impact of future adoption of this accounting pronouncement. We have no right to the benefits from, nor do we bear the risks associated with, these investments beyond our direct equity and debt...

  • Page 193
    ...Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K and unrealized capital gains (losses) on these securities are recorded directly in AOCI, except for certain RMBS which are accounted for under the FVO whose change in fair value is reflected in Other...

  • Page 194
    ... rate risk, equity market price risk, and credit risk. We do not have material market risk exposure to "trading" activities in our Consolidated Financial Statements. Risk Management As a financial services company active in retirement, investment management and insurance products and services...

  • Page 195
    ... in the level of book value withdrawals on certain stable value contracts. Conversely, a steady increase in interest rates would tend to improve financial results due to reduced hedging costs, lower costs of guaranteed benefits and improvement to fixed margins. We use product design, pricing and ALM...

  • Page 196
    ... 31, 2015 Hypothetical Change in Fair Value(2) + 100 Basis - 100 Basis Points Yield Points Yield Fair Value(1) Curve Shift Curve Shift ($ in millions) Notional Financial assets with interest rate risk: Fixed maturity securities, including securities pledged ...Commercial mortgage and other loans...

  • Page 197
    ... 31, 2014 Hypothetical Change in Fair Value(2) + 100 Basis - 100 Basis Points Yield Points Yield Fair Value(1) Curve Shift Curve Shift Financial assets with interest rate risk: Fixed maturity securities, including securities pledged ...$ - Commercial mortgage and other loans ...- Derivatives...

  • Page 198
    ... to Equity Market Prices Our variable products, Fixed-Indexed Annuity ("FIA") products, indexed universal life ("IUL") insurance products and general account equity securities are significantly influenced by global equity markets. Increases or decreases in equity markets impact certain assets and...

  • Page 199
    ... related to Closed Block Variable Annuity hedging programs. As of December 31, 2014 Hypothetical Change in Fair Value(1) Fair +10% -10% Value Equity Shock Equity Shock ($ in millions) Notional Financial assets with equity market risk: Equity securities, available for sale ...Limited liability...

  • Page 200
    ... of the benefit means that the customers give up any future increase in the guaranteed benefit that might accrue if they were to delay exercise to a later date. The discount rates used in the GMIB NAR methodology grade from current U.S. Treasury rates plus a spread to long-term best estimates over...

  • Page 201
    ... of the performance of targeted fund groups (i.e., the fund groups that can be covered by indices where liquid futures markets exist). Total return swaps are also used to mitigate the risk of the change in value of certain policyholder directed separate account funds. These include fund classes such...

  • Page 202
    ... and rating agency capital from market movements. For Voya Insurance and Annuity Company ("VIAC"), a wholly-owned subsidiary of the Company, our hedge resources related to equity movements (which include guarantee and overlay equity hedges, as well as other assets) increased by approximately...

  • Page 203
    ... assumptions in the above table. Hedging of FIA and IUL Benefits We mitigate FIA and IUL market risk exposures through a combination of capital market hedging and product design. For FIAs, these risks stem from the minimum guaranteed contract value offered and the additional interest credits (Equity...

  • Page 204
    Market Risk Related to Credit Risk Credit risk is primarily embedded in the general account portfolio. The carrying value of our fixed maturity, including securities pledged, and equity portfolio totaled $72.4 billion and $74.9 billion as of December 31, 2015 and 2014, respectively. Our credit risk ...

  • Page 205
    ...(1) Financial Strength Rating S&P Moody's Credit Rating S&P Moody's Hannover RE Group ...Hannover Life Reassurance Co of America ...Hannover Re (Ireland) Ltd ...Lincoln National Corp ...Lincoln Life & Annuity Company of New York ...Lincoln National Life Insurance Co ...Reinsurance Group of...

  • Page 206
    ... cleared derivatives, as of December 31, 2015 and 2014: As of December 31, 2015 Derivative Notional Amounts Exchange Over The Total Traded Counter (OTC) Notional ($ in millions) Type of Contract Credit Contracts ...Equity Contracts ...Foreign Exchange Contracts ...Interest Rate Contracts ...Total...

  • Page 207
    ..., fair value and the net exposure as of dates indicated, demonstrating that we do not have a concentration of credit risk with our OTC derivative counterparties, which includes cleared derivative counterparties: As of December 31, 2015 Concentration of OTC Derivative Counterparty OTC Notional Asset...

  • Page 208
    ...Consolidated Balance Sheets as of December 31, 2015 and 2014 ...Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013 ...Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013 ...Consolidated Statements of Changes in...

  • Page 209
    Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders Voya Financial, Inc. We have audited the accompanying consolidated balance sheets of Voya Financial, Inc. (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of ...

  • Page 210
    ...as of 2015 and $1,089.3 as of 2014) ...Total investments ...Cash and cash equivalents ...Short-term investments under securities loan agreements, including collateral delivered ...Accrued investment income ...Reinsurance recoverable ...Deferred policy acquisition costs and Value of business acquired...

  • Page 211
    ..., 2015 and 2014 (In millions, except share and per share data) As of December 31, 2015 2014 (As Adjusted) Liabilities and Shareholders' Equity: Future policy benefits ...Contract owner account balances ...Payables under securities loan agreement, including collateral held ...Long-term debt ...Funds...

  • Page 212
    ... investment income ...Changes in fair value related to collateralized loan obligations ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balances ...Operating expenses ...Net amortization of Deferred policy acquisition costs and Value of business acquired...

  • Page 213
    Voya Financial, Inc. Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2015, 2014 and 2013 (In millions) 2015 Year Ended December 31, 2014 2013 (As Adjusted) (As Adjusted) Net income (loss) ...$ 538.6 Other comprehensive income (loss), before tax: Unrealized gains (...

  • Page 214
    ... of Changes in Shareholders' Equity For the Years Ended December 31, 2015, 2014 and 2013 (In millions) Total Accumulated Voya Additional Other Financial, Inc. Total Retained Earnings (Deficit) Common Treasury Paid-In Comprehensive Shareholders' Noncontrolling Shareholders' Stock Stock Capital Income...

  • Page 215
    ... of deferred policy acquisition costs, value of business acquired and sales inducements ...729.3 417.0 495.5 Net accretion/amortization of discount/premium ...9.2 13.6 54.9 Future policy benefits, claims reserves and interest credited ...2,222.6 1,929.4 493.2 Deferred income tax (benefit) expense...

  • Page 216
    Voya Financial, Inc. Consolidated Statements of Cash Flows For the Years Ended December 31, 2015, 2014 and 2013 (In millions) Year Ended December 31, 2015 2014 2013 (As Adjusted) (As Adjusted) Short-term investments, net ...Policy loans, net ...Derivatives, net ...Other investments, net ...Sales ...

  • Page 217
    ... Depository Shares listed on the New York Stock Exchange. In 2009, ING Group announced the anticipated separation of its global banking and insurance businesses, including the divestiture of the Company. On April 11, 2013, the Company announced plans to rebrand as Voya Financial. On May 2, 2013, the...

  • Page 218
    ... quarter of 2015, the Company identified improper inputs to the calculation of the estimated fair value of the embedded derivative in certain of its guaranteed minimum withdrawal benefits with life payouts ("GMWBL") products. The products are included in the Company's Closed Block Variable Annuity...

  • Page 219
    ...; • Income taxes; • Contingencies; and • Employee benefit plans. Fair Value Measurement The Company measures the fair value of its financial assets and liabilities based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions...

  • Page 220
    ... Company's fixed maturities and equity securities are currently designated as available-for-sale, except those accounted for using the fair value option ("FVO"). Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities are recorded directly...

  • Page 221
    ... right to approve any institution with whom the lending agent transacts on its behalf. Initial collateral, primarily cash, is required at a rate of 102% of the market value of the loaned securities. The lending agent retains the collateral and invests it in short-term liquid assets on behalf of the...

  • Page 222
    ... macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from the Company's best estimates of likely scenario-based outcomes, after giving consideration to a variety of variables that includes, but is not limited to: general payment terms of the security; the...

  • Page 223
    ... and manage risks associated with its universal life-type and annuity products. Derivative contracts are reported as Derivatives assets or liabilities on the Consolidated Balance Sheets at fair value. Changes in the fair value of derivatives are recorded in Other net realized capital gains (losses...

  • Page 224
    ... The Company also has investments in certain fixed maturities and has issued certain universal life-type and annuity products that contain embedded derivatives whose fair value is at least partially determined by levels of or changes in domestic and/or foreign interest rates (short-term or long-term...

  • Page 225
    ... crediting rates, fee income, returns associated with separate account performance, impact of hedge performance, expenses to administer the business and certain economic variables, such as inflation, are based on the Company's experience and overall capital markets. At each valuation date, estimated...

  • Page 226
    ... are calculated to meet its future obligations, including estimates of unpaid claims and claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. The principal assumptions used to establish liabilities for future policy benefits are based on...

  • Page 227
    ...product and ranged up to 8.0% for the years 2015, 2014 and 2013. Account balances for group immediate annuities without life contingent payouts are equal to the discounted value of the payment at the implied break-even rate. • For fixed-indexed annuity contracts ("FIAs") and indexed universal life...

  • Page 228
    ... index term of the related contracts, which takes into account best estimate actuarial assumptions, such as partial withdrawals, full surrenders, deaths and maturities. Stabilizer and MCG: Guaranteed credited rates give rise to an embedded derivative in the Stabilizer products and a stand-alone...

  • Page 229
    ...The Company reports separate account assets that meet the above criteria at fair value on the Consolidated Balance Sheets based on the fair value of the underlying investments. Separate account liabilities equal separate account assets. Investment income and net realized and unrealized capital gains...

  • Page 230
    ...or other performance targets. Carried interest is accrued quarterly based on measuring cumulative fund performance against the performance hurdle stated in the relevant investment management agreement, as if the fund were liquidated at its estimated fair value as of the applicable balance sheet date...

  • Page 231
    ... are consistent with those used for the underlying contracts. Ceded Future policy benefits and Contract owner account balances are reported gross on the Consolidated Balance Sheets. Long-duration: For reinsurance of long-duration contracts that transfer significant insurance risk, the difference, if...

  • Page 232
    ... and the accumulated postretirement benefit obligation ("APBO") for other postretirement plans on the Consolidated Balance Sheets. Net periodic benefit cost is determined using management estimates and actuarial assumptions to derive service cost, interest cost and expected return on plan assets for...

  • Page 233
    ... which awards remain outstanding. Both the Voya Financial, Inc. and the ING Group share-based compensation plans are subject to certain vesting conditions. The Company measures the cost of the share-based awards at their grant date fair value, based on the market value of the stock, and recognizes...

  • Page 234
    ... on the Consolidated Balance Sheets if it is probable that a loss has been incurred and the amount can be reasonably estimated, based on the Company's best estimate of the ultimate outcome. Adoption of New Pronouncements Repurchase Agreements In June 2014, the Financial Accounting Standards Board...

  • Page 235
    ... income of the portion of the total change in fair value of a liability resulting from a change in own credit risk if the liability is measured at fair value under the fair value option. • Separate presentation on the balance sheet or financial statement notes of financial assets and financial...

  • Page 236
    ...balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB issued ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" ("ASU 2015-15"), to confirm that ASU 2015-03 does not address...

  • Page 237
    ... value of the financial liabilities. The provisions of ASU 2014-13 are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015, with early adoption permitted, using either a retrospective or modified retrospective approach. The Company plans...

  • Page 238
    ... and FVO fixed maturities and equity securities were as follows as of December 31, 2015: Gross Gross Unrealized Unrealized Amortized Capital Capital Embedded Cost Gains Losses Derivatives(2) Fair Value OTTI(3) Fixed maturities: U.S. Treasuries ...$ 3,136.4 $ 517.6 $ 5.0 U.S. Government agencies and...

  • Page 239
    ... Financial Statements (Dollar amounts in millions, unless otherwise stated) Available-for-sale and FVO fixed maturities and equity securities were as follows as of December 31, 2014: Gross Gross Unrealized Unrealized Amortized Capital Capital Embedded Cost Gains Losses Derivatives(2) Fair Value...

  • Page 240
    ... the fixed maturity portfolio by industry category as of the dates indicated: Gross Unrealized Capital Gains Gross Unrealized Capital Losses Amortized Cost Fair Value December 31, 2015 Communications ...Financial ...Industrial and other companies ...Energy ...Utilities ...Transportation ...Total...

  • Page 241
    ... Equity Securities The Company's fixed maturities and equity securities are currently designated as available-for-sale, except those accounted for using the FVO. Available-for-sale securities are reported at fair value and unrealized capital gains (losses) on these securities are recorded directly...

  • Page 242
    ... by class of collateral pledged for the dates indicated: December 31, 2015 December 31, 2014 U.S. Treasuries ...U.S. Government agencies and authorities ...U.S. corporate public securities ...Foreign corporate public securities and foreign governments ...Payables under securities loan agreements...

  • Page 243
    ... Fair Capital Fair Capital Fair Capital Value Losses Value Losses Value Losses Total Unrealized Fair Capital Value Losses U.S. Treasuries ...U.S. Government agencies and authorities ...State, municipalities and political subdivisions ...U.S. corporate public securities ...U.S. corporate private...

  • Page 244
    Voya Financial, Inc. Notes to the Consolidated Financial Statements (Dollar amounts in millions, unless otherwise stated) Unrealized capital losses (including noncredit impairments) in fixed maturities, including securities pledged, for instances in which fair value declined below amortized cost by ...

  • Page 245
    ... securities pledged, by market sector for instances in which fair value declined below amortized cost by greater than or less than 20% were as follows as of the dates indicated: Amortized Cost < 20% > 20% Unrealized Capital Losses Number of Securities < 20% > 20% < 20% > 20% December 31, 2015...

  • Page 246
    ... following tables summarize loan-to-value, credit enhancement and fixed floating rate details for RMBS and Other ABS in a gross unrealized loss position as of the dates indicated: Loan-to-Value Ratio Amortized Cost Unrealized Capital Losses < 20% > 20% < 20% > 20% December 31, 2015 RMBS and Other...

  • Page 247
    ...updated loan-to-value ratios reflecting current home prices of underlying collateral, forecasted loss severity, the payment priority within the tranche structure of the security and amount of any credit enhancements. The Company's assessment of current levels of cash flows compared to estimated cash...

  • Page 248
    ... up to 75% of the estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage loans based on relevant current information including a review of loan-specific credit quality, property characteristics and market trends. Loan performance is monitored on...

  • Page 249
    ... were no mortgage loans in the Company's portfolio in process of foreclosure as of December 31, 2015 and 2014. There were two loans 30 days or less in arrears, with respect to principal and interest as of December 31, 2015, with a total amortized cost of $3.1. There were no loans in arrears, with...

  • Page 250
    ... as of the dates indicated: December 31, 2015(1) December 31, 2014(1) Debt Service Coverage Ratio: Greater than 1.5x ...>1.25x-1.5x ...>1.0x-1.25x ...Less than 1.0x ...Commercial mortgage loans secured by land or construction loans ...Total Commercial mortgage loans ...(1) $ 8,112.1 1,489.5 550...

  • Page 251
    ... stated) December 31, 2015(1) Gross Carrying % of Value Total December 31, 2014(1) Gross Carrying % of Value Total Commercial Mortgage Loans by Property Type: Retail ...Industrial ...Apartments ...Office ...Hotel/Motel ...Other ...Mixed Use ...Total Commercial mortgage loans ...(1) $ 3,672.8 2,161...

  • Page 252
    ...dollar denominated. The Company may sell securities during the period in which fair value has declined below amortized cost for fixed maturities or cost for equity securities. In certain situations, new factors, including changes in the business environment, can change the Company's previous intent...

  • Page 253
    ... 3.5 8.1 - 23.7 $114.2 Year Ended December 31, 2015 2014 2013 Fixed maturities ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Policy loans ...Short-term investments and cash equivalents ...Other ...Gross investment income ...Less: investment expenses ...Net investment...

  • Page 254
    ...payout from the interest rate caps fund this increased exposure. The Company pays an upfront premium to purchase these caps. The Company utilizes these contracts in non-qualifying hedging relationships. Interest rate swaps: Interest rate swaps are used by the Company primarily to reduce market risks...

  • Page 255
    ... starting effective date. The Company uses swaptions to hedge the interest rate exposure associated with the minimum crediting rate and book value guarantees embedded in the retirement products that the Company offers. Increases in interest rates will generate losses on assets that are backing...

  • Page 256
    ...rate risk, credit risk, foreign exchange risk and equity market risk. The majority of derivatives used by the Company are designated as product hedges, which hedge the exposure arising from insurance liabilities or guarantees embedded in the contracts the Company offers through various product lines...

  • Page 257
    ...-term investments. Collateral held is used in accordance with the CSA to satisfy any obligations. Investment grade bonds owned by the Company are the source of noncash collateral posted, which is reported in Securities pledged on the Consolidated Balance Sheets. As of December 31, 2015, the Company...

  • Page 258
    ... of credit risk from one party to another in exchange for periodic payments. As of December 31, 2015, the fair values of credit default swaps of $26.3 and $22.7 were included in Derivatives assets and Derivatives liabilities, respectively, on the Consolidated Balance Sheets. As of December 31, 2014...

  • Page 259
    ...derived internally or obtained from a third party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. When available, the estimated fair value of financial instruments is based on quoted prices in active markets that...

  • Page 260
    ... ...Equity contracts ...Credit contracts ...Cash and cash equivalents, short-term investments and short-term investments under securities loan agreements ...Assets held in separate accounts ...Total assets ...Percentage of Level to total ...Liabilities: Derivatives: Guaranteed benefit derivatives...

  • Page 261
    ... ...Equity contracts ...Credit contracts ...Cash and cash equivalents, short-term investments and shortterm investments under securities loan agreements ...Assets held in separate accounts ...Total assets ...Percentage of Level to total ...Liabilities: Derivatives: Guaranteed benefit derivatives...

  • Page 262
    ... the presence of guarantees, and prices and quotes for comparably rated publicly traded securities. RMBS, CMBS and ABS: Fair value is determined using third-party commercial pricing services, with the primary inputs being credit spreads off benchmark yields, prepayment speed assumptions, current and...

  • Page 263
    ... relevant market. Using this data, the model generates estimated market values, which the Company considers reflective of the fair value of each privately placed bond. Equity securities, available-for-sale: Fair values of publicly traded equity securities are based upon quoted market price and are...

  • Page 264
    .... The actuarial and capital market assumptions for each liability are approved by each product's Chief Risk Officer ("CRO"), including an independent annual review by the CRO. Models used to value the embedded derivatives must comply with the Company's governance policies. Quarterly, an attribution...

  • Page 265
    ..., whether derived internally or obtained from a third party, use critical assumptions that are not widely available to estimate market participant expectations in valuing the asset or liability. In addition, the Company has determined, for certain financial instruments, an active market is such...

  • Page 266
    ...corporate private securities ...978.8 Foreign corporate public securities and foreign governments(1) ...13.5 Foreign corporate private securities(1) ...435.2 Residential mortgage-backed securities ...94.2 Commercial mortgage-backed securities ...22.0 Other asset-backed securities ...10.1 Total fixed...

  • Page 267
    ... Statements of Operations. The Company's policy is to recognize transfers in and transfers out as of the beginning of the reporting period. For financial instruments still held as of December 31 amounts are included in Net investment income and Total net realized capital gains (losses) in the...

  • Page 268
    ... the change in fair value of the Company's Level 3 assets and liabilities and transfers in and out of Level 3 for the period indicated: Year Ended December 31, 2014 Total Realized/Unrealized Gains (Losses) Included in: Fair Value as of January 1 Net Income OCI Change In Unrealized Gains Transfers...

  • Page 269
    Voya Financial, Inc. Notes to the Consolidated Financial Statements (Dollar amounts in millions, unless otherwise stated) Year Ended December 31, 2014 Total Realized/Unrealized Gains (Losses) Included in: Fair Value as of January 1 Net Income OCI Change In Unrealized Gains Transfers Transfers (...

  • Page 270
    ... based on historical fund returns and swap rates from external sources. Nonperformance Risk: For the estimate of the fair value of embedded derivatives associated with the Company's product guarantees, the Company uses a blend of observable, similarly rated peer company credit default swap spreads...

  • Page 271
    ... near or beyond retirement age and contracts that have accumulated their maximum GMWB or GMWBL benefit amount. There is also a higher utilization rate, though indirectly, for contracts which are highly "in the money". The chart below provides the GMWBL account value by current age group and average...

  • Page 272
    ...% to 98% - Equity and Fixed Income Funds ...-38% to 62% -38% to 62% - Interest Rates and Equity Funds ...-32% to -4% -32% to -4% - Nonperformance risk ...0.13% to 1.1% 0.13% to 1.1% 0.13% to 1.1% Actuarial Assumptions: Benefit Utilization ...85% to 100% (2) - - Partial Withdrawals ...0% to 10% 0% to...

  • Page 273
    ... near or beyond retirement age and contracts that have accumulated their maximum GMWB or GMWBL benefit amount. There is also a higher utilization rate, though indirectly, for contracts which are highly "in the money". The chart below provides the GMWBL account value by current age group and average...

  • Page 274
    ...) 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 Changes in fund correlations may increase or decrease the fair value depending on the direction of the...

  • Page 275
    ... values and estimated fair values of the Company's financial instruments as of the dates indicated: December 31, 2015 Carrying Fair Value Value December 31, 2014 Carrying Fair Value Value Assets: Fixed maturities, including securities pledged ...$72,072.6 Equity securities, available-for-sale...

  • Page 276
    ... Consolidated Balance Sheets: Mortgage loans on real estate: The fair values for mortgage loans on real estate are estimated on a monthly basis using discounted cash flow analyses and rates currently being offered in the marketplace for similar loans to borrowers with similar credit ratings. Loans...

  • Page 277
    ...Financial Statements (Dollar amounts in millions, unless otherwise stated) 5. Deferred Policy Acquisition Costs and Value of Business Acquired The following table presents a rollforward of DAC and VOBA for the periods indicated: DAC VOBA Total Balance at January 1, 2013 ...Deferrals of commissions...

  • Page 278
    ..., 2015 and 2014: 2015 2014 Future policy benefits: Individual and group life insurance contracts ...Product guarantees on universal life and deferred annuity contracts, and payout contracts with life contingencies ...Accident and health ...Total ...Contract owner account balances: GICs ...Universal...

  • Page 279
    ... are guaranteed for life. Guaranteed Minimum Accumulation Benefit (GMAB): Guarantees that the account value will be at least 100% of the eligible premiums paid by the customer after 10 years, adjusted for withdrawals. The Company offered an alternative design that guaranteed the account value to...

  • Page 280
    ... 31, 2015 and 2014: Area Assumptions/Basis for Assumptions Data used Mean investment performance Based on 1,000 investment performance scenarios. GMDB: The mean investment performance varies by fund group. In general, the Company groups separate account returns into 6 fund groups, and generate...

  • Page 281
    ... 2015, 2014 and 2013: Variable Life and Universal Life Stabilizer and MCGs(1) GMDB GMAB/ GMWB GMIB GMWBL Separate account liability at December 31, 2015 ...Separate account liability at December 31, 2014 ...Additional liability balance: Balance at January 1, 2013 ...Incurred guaranteed benefits...

  • Page 282
    ...Account balances of contracts with guarantees invested in variable separate accounts were as follows as of December 31, 2015 and 2014: December 31, 2015 December 31, 2014 Equity securities (including mutual funds): Equity funds ...Bond funds ...Balanced funds ...Money market funds ...Other ...Total...

  • Page 283
    Voya Financial, Inc. Notes to the Consolidated Financial Statements (Dollar amounts in millions, unless otherwise stated) In addition, the aggregate fair value of fixed income securities supporting separate accounts with Stabilizer benefits as of December 31, 2015 and 2014 was $6.9 billion and $8.3 ...

  • Page 284
    ... 31, 2015 2014 2013 Premiums: Direct premiums ...Reinsurance assumed ...Reinsurance ceded ...Net premiums ...Fee income: Gross fee income ...Reinsurance ceded ...Net fee income ...Interest credited and other benefits to contract owners / policyholders: Direct interest credited and other benefits to...

  • Page 285
    ... 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...

  • Page 286
    ... its employees under the ING U.S., Inc. 2013 Omnibus Employee Incentive Plan (the "2013 Omnibus Plan") and the Voya Financial, Inc. 2014 Omnibus Employee Incentive Plan (the "2014 Omnibus Plan"). At inception of the 2013 Omnibus Plan, a total of 7,650,000 shares of Company common stock were reserved...

  • Page 287
    ... the applicable performance criteria and service conditions are met. During each of the years ended December 31, 2015, 2014 and 2013 the Company awarded RSUs and PSUs to its employees under the Omnibus Plans. The PSU awards entitle recipients to receive, upon vesting, a number of shares of common...

  • Page 288
    ... which was designed to mirror the value of an equity-settled RSU or PSU awarded under the Omnibus Plans, with the cash settlement value determined based on the closing price of a share of Company common stock on the New York Stock Exchange on the trading day immediately preceding the date such award...

  • Page 289
    ... on the proportion of the total service period of the award falling after March 25, 2014. The corresponding amount for the 2012 ING Group LSPP awards, which were settled through the issuance of new ING Group equity securities, was recorded as a capital contribution. The corresponding amount for the...

  • Page 290
    ...PSU Awards Stock Options Unrecognized compensation cost ...Expected remaining weighted-average period of expense recognition (in years) ... $47.1 1.5 $- - $8.0 0.3 $44.6 3.0 The total grant date fair value of shares vested for the year ended December 31, 2015 was $22.2, $2.1 and $28.8 for RSUs...

  • Page 291
    ... accomplished through various means, including, without limitation, open market transactions, privately negotiated transactions, forward, derivative, or accelerated repurchase transactions or tender offers. Share repurchase authorizations typically expire if unused by a prescribed date. On February...

  • Page 292
    .... The warrants also provide for, upon the occurrence of certain change of control events affecting the Company, an increase in the number of shares to which a warrant holder will be entitled upon payment of the aggregate exercise price of the warrant. The warrants became exercisable (subject to the...

  • Page 293
    ... Net Income (Loss) 2015 2014 2013 Statutory Capital and Surplus 2015 2014 Subsidiary Name (State of Domicile): Voya Insurance and Annuity Company ("VIAC") (IA) ...$ 553.3 $335.6 Voya Retirement Insurance and Annuity Company ("VRIAC") (CT) ...317.5 321.7 Security Life of Denver Insurance Company (CO...

  • Page 294
    ... Paid Year Ended December 31, 2015 2014 Subsidiary Name (State of domicile): Voya Insurance and Annuity Company (IA) ...Voya Retirement Insurance and Annuity Company (CT) ...Security Life of Denver Insurance Company (CO) ...ReliaStar Life Insurance Company (MN) ... $394.0 321.0 111.0 194...

  • Page 295
    ... Insurance Subsidiary of Voya Financial, Inc. SLDI has recorded a receivable for these assets. The effect of the permitted practice was to increase SLDI's Shareholder's equity by $456.6 and $482.0 as of December 31, 2015 and 2014, respectively, but has no effect on the Company's consolidated Total...

  • Page 296
    ... credited monthly based on a 30-year U.S. Treasury securities bond rate published by the Internal Revenue Service in the preceding August of each year. The accrued vested cash pension balance benefit is portable; participants can take it if they leave the Company. For participants in the Retirement...

  • Page 297
    ... Financial Statements (Dollar amounts in millions, unless otherwise stated) Obligations, Funded Status and Net Periodic Benefit Costs The Company's qualified pension plans were fully funded in compliance with Employee Retirement Income Security Act ("ERISA") guidelines as of December 31, 2014...

  • Page 298
    ... of December 31, 2015 and 2014: Pension Plans 2015 2014 Other Postretirement Benefits 2015 2014 Amounts recognized in the Consolidated Balance Sheets consist of: Accrued benefit cost ...Net amount recognized ...Accumulated other comprehensive (income) loss: Prior service cost (credit) ...Tax effect...

  • Page 299
    ... Benefits 2015 2014 2013 Net Periodic (Benefit) Costs Recognized in Consolidated Statements of Operations: Service cost ...Interest cost ...Expected return on plan assets ...Amortization of prior service cost (credit) ...Net (gain) loss recognition ...Net periodic (benefit) costs ...Other Changes...

  • Page 300
    ... current market environment. The discount rate modeling process involves selecting a portfolio of high quality, noncallable bonds that will match the cash flows of the Retirement Plan. The weighted-average assumptions used in determining net benefit cost were as follows: Pension Plans 2015 2014 2013...

  • Page 301
    ... 2015 2014 Equity securities: Target allocation range ...Large-cap domestic ...Small/Mid-cap domestic ...International commingled funds ...Other ...Total equity securities ...Fixed maturities: Target allocation range ...U.S. Treasuries, short term investments, cash and futures ...U.S. Government...

  • Page 302
    ...(2) ...U.S. Government securities ...U.S. corporate, state and municipalities ...Foreign securities ...Commercial mortgage-backed securities ...Other asset-backed securities ...Total fixed maturities ...Equity securities: Large-cap domestic ...Small/Mid-cap domestic ...International commingled funds...

  • Page 303
    ...objective to achieve long-term growth primarily by investing in a diversified portfolio of equity securities of companies located in any country other than the United States. Silchester clients may contribute to and redeem moneys from the funds on a monthly basis as of the first business day of each...

  • Page 304
    ... a quoted market price determined in an active market and are included in Level 1. The valuations obtained from broker-dealers are non-binding. Real estate: Real estate is based on unobservable inputs. The fair value used relies on the investment manager's own assumptions and the use of appraisals...

  • Page 305
    ... largest defined contribution plan is the Voya Financial Savings Plan and ESOP (the "Savings Plan"). The assets of the Savings Plan are held in independently administered funds. Substantially all employees of the Company are eligible to participate, other than the Company's agents. The Savings Plan...

  • Page 306
    ... imposed by applicable law. These plans do not give rise to balance sheet provisions, other than relating to short-term timing differences included in Other liabilities. The amount of cost recognized for the defined contribution pension plans for the years ended December 31, 2015, 2014 and 2013 was...

  • Page 307
    ...for-sale securities: Fixed maturities ...Equity securities ...Other ...OTTI ...Adjustments for amounts recognized in Net realized capital gains (losses) in the Consolidated Statements of Operations ...DAC/VOBA ...Sales inducements ...Change in unrealized gains/losses on available-for-sale securities...

  • Page 308
    ... Financial Statements (Dollar amounts in millions, unless otherwise stated) December 31, 2014 Before-Tax Income After-Tax Amount Tax Amount Available-for-sale securities: Fixed maturities ...Equity securities ...Other ...OTTI ...Adjustments for amounts recognized in Net realized capital gains...

  • Page 309
    ... Financial Statements (Dollar amounts in millions, unless otherwise stated) December 31, 2013 BeforeTax Amount Income Tax After-Tax Amount Available-for-sale securities: Fixed maturities ...Equity securities ...Other ...OTTI ...Adjustments for amounts recognized in Net realized capital gains...

  • Page 310
    ...Investments ...Insurance reserves ...Compensation and benefits ...Other assets ...Total gross assets before valuation allowance ...Less: Valuation allowance ...Assets, net of valuation allowance ...Deferred tax liabilities Net unrealized investment gains ...Deferred policy acquisition costs ...Other...

  • Page 311
    ... of the Company's Ongoing Business, reduction in the ING Group ownership to below 20%, the sale of certain under-performing businesses via indemnity reinsurance, entry into an Issue Resolution Agreement ("IA") with the Internal Revenue Service ("IRS") regarding the Internal Revenue Code ("IRC...

  • Page 312
    ... interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense net of federal income tax. The total amounts of gross accrued interest and penalties on the Company's Consolidated Balance Sheets as of December 31, 2015 and 2014 were $1.2 and $7.0, respectively. The...

  • Page 313
    ... the carrying value of the Company's long-term debt securities issued and outstanding as of December 31, 2015 and 2014: Maturity 2015 2014 7.25% Voya Holdings Inc. debentures, due 2023(1) ...7.63% Voya Holdings Inc. debentures, due 2026(1) ...8.42% Equitable of Iowa Companies Capital Trust II Notes...

  • Page 314
    .... The 2018 Notes are guaranteed by Voya Holdings. Interest is paid semi-annually, in arrears, on each February 15 and August 15, commencing on August 15, 2013. The Company made payments totaling $850.0 on the Term Loan portion of the Company's Senior Unsecured Credit Facility from the proceeds of...

  • Page 315
    ... on August 14, 2013. The offer to exchange the 2043 Notes was completed on December 23, 2013. Aetna Notes ING Group guarantees various debentures of Voya Holdings that were assumed by Voya Holdings in connection with the Company's acquisition of Aetna's life insurance and related businesses in 2000...

  • Page 316
    ....6 as security for its repayment obligations with respect to the loan. As of December 31, 2015 and 2014, the amount of the loan outstanding was $4.9, which is reflected in Long-term debt on the Consolidated Balance Sheets. Credit Facilities The Company maintains credit facilities used primarily for...

  • Page 317
    ... the Company's credit facilities as of December 31, 2015: Secured/ Unsecured Committed/ Uncommitted Expiration Capacity Utilization Unused Commitment Obligor / Applicant Voya Financial, Inc...Security Life of Denver International Limited ...Voya Financial, Inc./ Langhorne I, LLC ...Security Life of...

  • Page 318
    ... or sell securities, mortgage loans, or money market instruments, at a specified future date and at a specified price or yield. The inability of counterparties to honor these commitments may result in either a higher or lower replacement cost. Also, there is likely to be a change in the value of the...

  • Page 319
    ... 31, 2015 and 2014, the Company delivered securities as collateral of $646.2 and $638.7, respectively. Loaned securities and securities delivered as collateral are included in Securities pledged on the Consolidated Balance Sheet. Federal Home Loan Bank Funding Agreements The Company is a member...

  • Page 320
    ...wife/trust) assert that SMMS, which was purchased in 2000 and sold in 2003, breached a duty to monitor the performance of investments that Plaintiffs made with independent financial advisors they met in conjunction with retirement planning seminars presented at Fireman's Fund Insurance Company. SMMS...

  • Page 321
    ... as of December 31, 2014 are shown below: Assets Liabilities NN Group ...ING Group ...ING Bank ...Other ...Total ... $ 0.1 1.9 12.9 2.2 $17.1 $0.2 1.2 4.0 1.4 $6.8 As of March 9, 2015, ING Group and its affiliates are no longer considered related parties of Voya Financial, Inc. The material...

  • Page 322
    ...with ING Bank and NN Group was $464.1 (consisting of currency forwards of $178.0 and equity options of $286.1). As of December 31, 2014, the market value for these contracts was $11.5. For the years ended December 31, 2015, 2014 and 2013, the Company recorded Other net realized capital gains (losses...

  • Page 323
    ... fund. The Company is invested in the Voya Strategic Income Opportunities Fund, which is a separately managed series fund. The Voya Strategic Income Opportunities Fund is a multi-credit unconstrained Fixed Income Mutual Fund that invests in a combination of underlying funds and direct fixed income...

  • Page 324
    ... Financial Statements. The Company provided certain guarantees of the Borrower's performance obligations to the Securities Lenders as collateral for the Borrower's obligations under the securities lending agreements. Additional collateral in the form of liquidity obligations was provided by banks...

  • Page 325
    ...as of the dates indicated: December 31, 2015 December 31, 2014 Assets of Consolidated Investment Entities VIEs-CLO entities: Cash and cash equivalents ...Corporate loans, at fair value using the fair value option ...Other assets ...Total CLO entities ...VOEs-Private equity funds and single strategy...

  • Page 326
    ... of the dates indicated: Before Consolidation(1) CLOs VOEs CLOs VOEs Adjustments(2) Adjustments(2) Total December 31, 2015 Total investments and cash ...Other assets ...Assets held in consolidated investment entities ...Assets held in separate accounts ...Total assets ...Future policy benefits and...

  • Page 327
    ...(2) Adjustments(2) CLOs VOEs Total December 31, 2014 Total investments and cash ...Other assets ...Assets held in consolidated investment entities ...Assets held in separate accounts ...Total assets ...Future policy benefits and contract owner account balances ...Other liabilities ...Liabilities...

  • Page 328
    ... December 31, 2015 Revenues: Net investment income ...Fee income ...Premiums ...Net realized capital losses ...Other income ...Income related to consolidated investment entities ...Total revenues ...Benefits and expenses: Policyholder benefits and Interest credited and other benefits to contract...

  • Page 329
    ...VOEs Total December 31, 2014 Revenues: Net investment income ...Fee income ...Premiums ...Net realized capital losses ...Other income ...Income related to consolidated investment entities ...Total revenues ...Benefits and expenses: Policyholder benefits and Interest credited and other benefits to...

  • Page 330
    ... held by consolidated private equity funds and single strategy hedge funds are measured and reported at fair value in the Company's Consolidated Financial Statements. Changes in the fair value of consolidated investment entities are recorded as a separate line item within Income (loss) related to...

  • Page 331
    ... and liquidity of the asset being measured. The inputs used by independent commercial pricing services, such as benchmark yields and credit risk adjustments, are those that are derived principally from, or corroborated by, observable market data. Hence, the fair value measurement of corporate loans...

  • Page 332
    ... its assumptions and relevant market inputs to determine if a price change is warranted. The following table summarizes significant unobservable inputs for Level 3 fair value measurements as of the dates indicated: Fair Value Valuation Technique Unobservable Inputs December 31, 2015 Assets: CLO...

  • Page 333
    ... manager or from other sources. The fair value of securities received in-kind from fund investments is determined based on the restrictions around the securities Unrestricted, publicly traded securities are valued at the closing public market price on the reporting date; Restricted, publicly...

  • Page 334
    ... commercial pricing service, independent broker quotes are solicited. Securities that rely upon a vendor supplied price are classified as Level 2. Securities priced using independent broker quotes are classified as Level 3. During the years ended December 31, 2015 and 2014, this Fund sold securities...

  • Page 335
    ... investment entities as of December 31, 2014: Level 1 Level 2 Level 3 Total Assets VIEs-CLO entities: Cash and cash equivalents ...Corporate loans, at fair value using the fair value option ...VOEs-Private equity funds and single strategy hedge funds: Cash and cash equivalents ...Limited...

  • Page 336
    ... loans, at fair value using the fair value option ...VOEs-Private equity funds and single strategy hedge funds: Limited partnerships/corporations, at fair value ...Total assets, at fair value ...Liabilities VIEs-CLO entities: CLO notes, at fair value using the fair value option ...Total liabilities...

  • Page 337
    ... loans, at fair value using the fair value option ...VOEs-Private equity funds and single strategy hedge funds: Limited partnerships/corporations, at fair value ...Total assets, at fair value ...Liabilities VIEs-CLO entities: CLO notes, at fair value using the fair value option ...Total liabilities...

  • Page 338
    ...its principal products and services in two ongoing businesses ("Ongoing Business") and reports results through five ongoing segments as follows: Business Segment Retirement and Investment Solutions ... Retirement Annuities Investment Management Individual Life Employee Benefits Insurance Solutions...

  • Page 339
    ... non-profit and government entities, stable value products and pension risk transfer solutions to institutional clients where the Company may or may not be providing defined contribution products and services, as well as individual retirement accounts ("IRAs"), other retail financial products and...

  • Page 340
    ...cost of these benefits. The estimated cost, which is reflected in operating results, reflects the expected cost of these benefits if markets perform in line with the Company's long-term expectations and includes the cost of hedging. Other derivative and reserve changes related to guaranteed benefits...

  • Page 341
    ... December 31, 2015 2014 2013 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks: Closed Block Other ...Total operating earnings before income taxes...

  • Page 342
    ... 31, 2015 2014 2013 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks: Closed Block Other ...Total operating revenues ...Adjustments: Closed Block...

  • Page 343
    ..., 2014 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Total Ongoing Business ...Corporate ...Closed Blocks: Closed Block Variable Annuity ...Closed Block Other ...Closed Blocks ...Total assets of...

  • Page 344
    ... ...Securities pledged ...Total investments ...Cash and cash equivalents ...Short-term investments under securities loan agreements, including collateral delivered ...Accrued investment income ...Reinsurance recoverable ...Deferred policy acquisition costs, Value of business acquired ...Sales...

  • Page 345
    ... Consolidated Liabilities and Shareholders' Equity: Future policy benefits ...Contract owner account balances ...Payables under securities loan agreement, including collateral held ...Short-term debt with affiliates ...Long-term debt ...Funds held under reinsurance agreements ...Derivatives...

  • Page 346
    ... ...Securities pledged ...Total investments ...Cash and cash equivalents ...Short-term investments under securities loan agreements, including collateral delivered ...Accrued investment income ...Reinsurance recoverable ...Deferred policy acquisition costs, Value of business acquired ...Sales...

  • Page 347
    ... Consolidated Liabilities and Shareholders' Equity: Future policy benefits ...Contract owner account balances ...Payables under securities loan agreement, including collateral held ...Short-term debt with affiliates ...Long-term debt ...Funds held under reinsurance agreements ...Derivatives...

  • Page 348
    ... to collateralized loan obligations ...- - Total revenues ...5.4 0.5 Benefits and expenses: Policyholder benefits ...- - Interest credited to contract owner account balance ...- - Operating expenses ...10.4 (0.6) Net amortization of Deferred policy acquisition costs and Value of business acquired...

  • Page 349
    ... ...Changes in fair value related to collateralized loan obligations . . Total revenues ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balance ...Operating expenses ...Net amortization of Deferred policy acquisition costs and Value of business acquired...

  • Page 350
    ... ...Changes in fair value related to collateralized loan obligations ...Total revenues ...Benefits and expenses: Policyholder benefits ...Interest credited to contract owner account balance . . Operating expenses ...Net amortization of Deferred policy acquisition costs and Value of business acquired...

  • Page 351
    ... noncontrolling interest ...Other comprehensive income (loss), before tax: Unrealized gains/losses on securities ...Other-than-temporary impairments ...Pension and other postretirement benefit liability ...Other comprehensive income (loss), before tax ...Income tax expense (benefit) related to items...

  • Page 352
    ... noncontrolling interest ...Other comprehensive income (loss), before tax: Unrealized gains/losses on securities ...Other-than-temporary impairments ...Pension and other postretirement benefit liability ...Other comprehensive income (loss), before tax ...Income tax expense (benefit) related to items...

  • Page 353
    ... noncontrolling interest ...Other comprehensive income (loss), before tax: Unrealized gains/losses on securities ...Other-than-temporary impairments ...Pension and other postretirement benefit liability ...Other comprehensive income (loss), before tax ...Income tax expense (benefit) related to items...

  • Page 354
    ... ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Limited partnerships/corporations ...Acquisition of: Fixed maturities ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Limited partnerships/corporations ...Short-term investments, net ...Policy...

  • Page 355
    ... and withdrawals from investment contracts ...Repayment of debt with maturities of more than three months ...Debt issuance costs ...Intercompany loans with maturities of more than three months ...Net (repayments of) proceeds from short-term intercompany loans ...Return of capital contributions and...

  • Page 356
    ... ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Limited partnerships/corporations ...Acquisition of: Fixed maturities ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Limited partnerships/corporations ...Short-term investments, net ...Policy...

  • Page 357
    ... and withdrawals from investment contracts ...Debt issuance costs ...Intercompany loans with maturities more than three months ...Net (repayments of) proceeds from short-term intercompany loans ...Return of capital contributions and dividends to parent ...Contributions of capital from parent...

  • Page 358
    ... ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Limited partnerships/corporations ...Acquisition of: Fixed maturities ...Equity securities, available-for-sale ...Mortgage loans on real estate ...Limited partnerships/corporations ...Short-term investments, net ...Policy...

  • Page 359
    ... months ...Short-term debt, net ...Debt issuance costs ...Intercompany loans with maturities of more than three months ...Net (repayments of) proceeds from short-term intercompany loans ...Return of capital contributions and dividends to parent ...Contributions of capital from parent ...Borrowings...

  • Page 360
    ... declared per common share ...$ 2015 (Effect of Change) Total revenues ...$ Total benefits and expenses ...Income (loss) before income taxes ...Net income (loss) ...Less: Net income (loss) attributable to noncontrolling interest ...Net income (loss) available to Voya Financial, Inc.'s common...

  • Page 361
    ...declared per common share ...2014 (Effect of Change) Total revenues ...Total benefits and expenses ...Income (loss) before income taxes ...Net income (loss) ...Less: Net income (loss) attributable to noncontrolling interest ...Net income (loss) available to Voya Financial, Inc.'s common shareholders...

  • Page 362
    ... mortgage-backed securities ...Commercial mortgage-backed securities ...Other asset-backed securities ...Total fixed maturities, including securities pledged ...Equity securities, available-for-sale ...Short-term investments ...Mortgage loans on real estate ...Policy loans ...Limited partnerships...

  • Page 363
    Voya Financial, Inc. Schedule II Condensed Financial Information of Parent Balance Sheets December 31, 2015 and 2014 (In millions, except share and per share data) As of December 31, 2015 2014 (As Adjusted) Assets Investments: Equity securities, available-for-sale, at fair value ...Short-term ...

  • Page 364
    ... Financial Information of Parent Statements of Operations For the Years Ended December 31, 2015, 2014 and 2013 (In millions) 2015 Year Ended December 31, 2014 2013 (As Adjusted) (As Adjusted) Revenues: Net investment income ...Net realized capital gains (losses) ...Other revenue ...Total revenues...

  • Page 365
    ... 31, 2015, 2014 and 2013 (In millions) 2015 Year Ended December 31, 2014 2013 (As Adjusted) (As Adjusted) Net income (loss) available to Voya Financial, Inc.'s common shareholders ...Other comprehensive income (loss), after tax ...Comprehensive income (loss) attributable to Voya Financial, Inc...

  • Page 366
    ...Acquisition of equity securities, available-for-sale ...Short-term investments, net ...Derivatives, net ...Maturity of intercompany loans issued to subsidiaries with maturities more than three months ...Net maturity of short-term intercompany loans to subsidiaries ...Return of capital contributions...

  • Page 367
    ... 31, 2015 2014 2013 Cash Flows from Financing Activities: Proceeds from issuance of debt with maturities of more than three months ...Repayment of debt with maturities of more than three months ...Short-term debt, net ...Debt issuance costs ...Net (repayments of) proceeds from loans to subsidiaries...

  • Page 368
    ... Depository Shares listed on the New York Stock Exchange. In 2009, ING Group announced the anticipated separation of its global banking and insurance businesses, including the divestiture of the Company. On April 11, 2013, the Company announced plans to rebrand in the future as Voya Financial, Inc...

  • Page 369
    ...market rate for similar third-party borrowings for securities. Borrowings by Voya Alternative Asset Management LLC ("VAAM") occur to enable VAAM to make capital contributions to the Voya Multi-Strategy Opportunity Fund LLC ("the fund"), the fund that it manages. The applicable variable interest rate...

  • Page 370
    ...charged at the prevailing market interest rate for similar thirdparty borrowings for securities. Long-term Debt The following table summarizes Voya Financial, Inc.'s long-term debt securities for the periods indicated: Interest Rate As of December 31, 2015 2014 Maturity 5.5% Senior Notes, due 2022...

  • Page 371
    ... obligations and Voya Financial, Inc. has guarantee obligations, up to the full principal amount of the note, if Security Life of Denver Company ("SLD") or SLDI were to direct the sale or liquidation of the note other than as permitted by the Buyer Facility Agreement, or fails to return reinsurance...

  • Page 372
    ...Ended December 31, 2015 2014 2013 Voya Financial, Inc. received returns of capital and dividends from the following subsidiaries for the periods indicated: Voya Holdings Inc...Security Life of Denver Insurance Company ...Voya Financial Products Company, Inc...Total ...5. Income Taxes $1,467.5 241...

  • Page 373
    ... Balances Segment DAC and VOBA Unearned Premiums(1) 2015 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Corporate ...Closed Blocks: Variable Annuity ...Closed Block Other ...Total ...2014...

  • Page 374
    ... ...Closed Blocks: Variable Annuity ...Closed Block Other ...Total ...2014 Retirement and Investment Solutions: Retirement ...Annuities ...Investment Management ...Insurance Solutions: Individual Life ...Employee Benefits ...Corporate ...Closed Blocks: Variable Annuity ...Closed Block Other ...Total...

  • Page 375
    Voya Financial, Inc. Schedule IV Reinsurance Years Ended December 31, 2015, 2014 and 2013 (In millions) Percentage of Assumed to Net Gross Ceded Assumed Net 2015 Life insurance in force ...Premiums: Life insurance ...Accident and health insurance ...Annuities ...Total premiums ...2014 Life ...

  • Page 376
    Voya Financial, Inc. Schedule V Valuation and Qualifying Accounts Years Ended December 31, 2015, 2014 and 2013 (In millions) Balance at January 1, Charged to Costs and Expenses Write-offs/ Payments/ Other Balance at December 31, 2015 Valuation allowance on deferred tax assets ...2014 Valuation ...

  • Page 377
    ...of the Treadway Commission. In the opinion of management, Voya Financial, Inc. has maintained effective internal control over financial reporting as of December 31, 2015. Attestation Report of the Company's Registered Public Accounting Firm The Company's independent registered public accounting firm...

  • Page 378
    ... the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Voya Financial, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, changes in shareholders' equity and cash flows for...

  • Page 379
    ... of 2015 in which ING Group continued to be an affiliate of Voya Financial, Inc., ING Bank had gross revenues of approximately $5.8 million related to these activities, which was principally related to legacy loan repayments and commissions on guarantees. ING Bank estimates that it had net profit of...

  • Page 380
    ... Proxy Statement relating to the Company's 2016 Annual Meeting of Shareholders, which will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. Item 14. Principal Accounting Fees and Services The information required by this Item...

  • Page 381
    ..., 2013, among ING U.S., Inc., Lion Connecticut Holdings Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q (File No. 001-35897) filed on May 23, 2013) Indenture, dated as of August 1, 1993, between Aetna Life...

  • Page 382
    ... to the Company's Current Report on Form 8-K (File No. 001-35897) filed on February 21, 2014) Credit Agreement, dated as of December 30, 2011, by and between Security Life of Denver International Limited, ING Bank N.V., London Branch, as administrative agent, and the Issuing Banks described therein...

  • Page 383
    ...Security Life of Denver International Limited and ING Bank N.V., London Branch (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-35897) filed on May 8, 2013) Master Claim Agreement, dated April 17, 2012, between ING Groep N.V., ING America Insurance...

  • Page 384
    ...filed on January 23, 2013) Form of ING Group Long-Term Equity Ownership Plan Grant (incorporated by reference to Exhibit 10.57 to the Company's Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-184847) filed on January 23, 2013) ING Group Standard Share Option Plan (incorporated by...

  • Page 385
    ... and an annual long -term incentive award to "Identified Staff" (as defined by the European Union's Capital Requirements Directive) pursuant to the ING Group Long-Term Sustainable Performance Plan (incorporated by reference to Exhibit 10.09 to the Company's Quarterly Report on Form 10- Q/A (File...

  • Page 386
    ... performance shares granted in 2013 to non-"Identified Staff" (as defined by the European Union's Capital Requirements Directive) pursuant to the ING Group Long-Term Sustainable Performance Plan (incorporated by reference to Exhibit 10.11 to Amendment No. 1 to the Company's Quarterly Report on Form...

  • Page 387
    ... Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-35897) filed on December 18, 2015) Offer Letter of Charles P. Nelson, dated April 7, 2015 Statement of Computation of Ratios of Earnings to Fixed Charges List of Subsidiaries of Voya Financial...

  • Page 388
    ... report to be signed on its behalf by the undersigned, thereunto duly authorized. February 25, 2016 (Date) By: /s/ Voya Financial, Inc. (Registrant) Ewout L. Steenbergen Ewout L. Steenbergen Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer...

  • Page 389
    Signatures Title Date /s/ Rodney O. Martin, Jr. Rodney O. Martin, Jr. /s/ Lynne Biggar Lynne Biggar /s/ Jane P. Chwick Jane ...Chief Financial Officer (Principal Financial Officer) February 25, 2016 /s/ C. Landon Cobb, Jr. C. Landon Cobb, Jr. Chief Accounting Officer (Principal Accounting Officer...

  • Page 390

  • Page 391
    ...the S&P 500 Financials Index. The graph assumes $100 was invested on May 2, 2013 in the Company's common stock, the S&P 500 index, and the S&P 500 financials index, as applicable, and that dividends were reinvested on the date of payment without deduction of any commissions. The performance shown in...

  • Page 392
    ...on the company's investor website at investors.voya.com. Voya Financial Calculation and Reconciliation of Ongoing Business Adjusted Operating Return on Equity and US GAAP Return on Equity Year ended December 31, 2015 $ 408.3 $ 16,146 $ 13,436 $ 15,019 2.7% Year ended December 31, 2014 $2,295.0 $ 13...

  • Page 393
    ... 31, 2015 As of December 31, 2014 As of December 31, 2013 As of December 31, 2012 End of Period Capital for Ongoing Business ...Closed Block Variable Annuity, Corporate, and Other Closed Blocks ...End of Period Capital ...Financial Leverageb ...Voya Financial, Inc. shareholders' equity excluding...

  • Page 394
    ... of Financial Leverage to Short-term and Long-term Debt ($ in millions) As of December 31, 2015 As of December 31, 2014 As of December 31, 2013 As of December 31, 2012 Short-term debt ...Long-term debt ...Total Debt ...Less operating leverage ...Plus loans from subsidiaries ...Financial Leverage...

  • Page 395
    ... those described under "Risk Factors" and "Management's Discussion and Analysis of Results of Operations and Financial Condition - Trends and Uncertainties" in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on February 25...

  • Page 396
    Voya Financial 230 Park Avenue New York, NY 10169 voya.com P L A N | I N V E S T | P R OT E C T