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What changed in Voya Financial, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Voya Financial, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+742 added−909 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in Voya Financial, Inc.'s 2023 10-K

742 paragraphs added · 909 removed · 588 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

161 edited+63 added−129 removed54 unchanged
Biggest changeThe MASS team also provides pension risk management, strategic and tactical asset allocation, liability-driven investing solutions and investment strategies that hedge out specific market exposures (e.g., portable alpha) for clients. 18 Table of Contents The following chart presents asset and net flow data as of December 31, 2022, broken out by Investment Management’s five investment platforms as well as by major client segment: AUM Net Flows As of Year Ended 12/31/2022 12/31/2022 $ in billions $ in millions Investment Platform Fixed income - Public $ 138.3 $ (2,218.4) Fixed income - Privates 83.3 5,017.8 Equities 83.4 (1,214.5) Alternatives 16.4 (511.0) Total $ 321.4 (1) $ 1,073.9 MASS (1) 30.8 795.5 Client Segment Retail $ 121.9 $ (2,600.8) Institutional 161.5 3,674.7 General Account 38.0 N/A Total $ 321.4 $ 1,073.9 Divested Businesses (2) 38.7 (2,156.4) (1) $24.2 billion of MASS assets are included in the fixed income, equity and alternatives AUM categories presented above.
Biggest changeThe following table presents asset and net flow data, broken out by Investment Management’s five investment platforms as well as by major client segment: AUM Net Flows As of Year Ended December 31, 2023 December 31, 2023 ($ in billions) ($ in millions) Investment Platform Fixed income - Public $ 135.2 $ (5,100.4) Fixed income - Privates 78.9 (1,451.2) Equities 91.6 (7,859.8) Alternatives 16.0 406.0 Total $ 321.7 * $ (14,005.4) MASS* 36.4 857.4 Client Segment Retail $ 138.2 $ 1,474.2 Institutional 148.7 (15,479.5) General Account 34.7 N/A Total $ 321.7 $ (14,005.3) Divested Businesses ** 30.0 (2,057.8) * $24.8 billion of MASS assets are included in the fixed income, equity and alternatives AUM categories presented above.
Through ING Group, we entered the U.S. life insurance market in 1975 with the acquisition of Wisconsin National Life Insurance Company, followed in 1976 with ING Group's acquisition of Midwestern United Life Insurance Company and Security Life of Denver Insurance Company in 1977.
Through ING Group, we entered the U.S. life insurance market in 1975 with the acquisition of Wisconsin National Life Insurance Company, followed with ING Group's acquisition of Midwestern United Life Insurance Company in 1976 and Security Life of Denver Insurance Company in 1977.
Stable value investment options may be offered within our full service institutional plans, or as investment-only options within our recordkeeping services plans or within other vendor plans. Our product offering includes both separate account guaranteed investment contracts ("GICs") and synthetic GICs managed by either proprietary or outside investment managers.
Stable Value. Stable value investment options may be offered within our full service institutional plans, or as investment-only options within our recordkeeping services plans or within other vendor plans. Our product offering includes both separate account guaranteed investment contracts ("GICs") and synthetic GICs managed by either proprietary or outside investment managers.
Voya MAP Select contains over 300 funds from well-known fund families for smaller plans or can be provided as an open architecture investment platform for larger plans (this platform offers most funds for which trades are cleared through the National Securities Clearing Corporation). This product also includes our general account and various stable value solutions as investment options.
Voya MAP Select contains over 300 funds from well-known fund families for smaller plans or can be provided as an open architecture investment platform for larger plans (which offers most funds for which trades are cleared through the National Securities Clearing Corporation). This product also includes our general account and various stable value solutions as investment options.
Our full-service business also competes on the breadth of our service and investment offerings, technical/regulatory expertise, industry experience, local enrollment and education support, investment flexibility and our ability to offer industry tailored product features to meet the financial wellness and retirement income needs of our clients.
Our full-service business also competes on the breadth of our service and investment offerings, technical and regulatory expertise, industry experience, local enrollment and education support, investment flexibility and our ability to offer industry tailored product features to meet the financial wellness and retirement income needs of our clients.
As a holding company with no significant business operations of our own, we depend on dividends and other distributions from our subsidiaries as the principal source of cash to meet our obligations, including the payment of interest on, and repayment of principal of, our outstanding debt obligations .
As a holding company with no significant business operations of our own, we depend on dividends and other distributions from our subsidiaries as the principal source of cash to meet our obligations, including the payment of dividends and the payment of interest on, and repayment of principal of, our outstanding debt obligations .
Commodities Futures Trading Commission ("CFTC"), state securities commissions, state banking and insurance departments and the Department of Labor ("DOL") and the Treasury Department are the principal regulators that regulate these products and services.
Commodities Futures Trading Commission ("CFTC"), state securities commissions, state banking and insurance departments, the Department of Labor ("DOL") and the Treasury Department are the principal regulators that regulate these products and services.
The current insurance holding company model act and regulations (the "NAIC Regulations"), versions of which have been adopted by our insurance subsidiaries' domicile states, include a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an "enterprise risk report" that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole .
The NAIC insurance holding company model act and regulations, versions of which have been adopted by our insurance subsidiaries' domicile states, include a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an "enterprise risk report" that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole .
Through our broad range of advisory programs, our financial advisers are provided with a wide set of solutions for building their clients' investment portfolios, including stocks, bonds and mutual funds, as well as managed accounts. Markets and Distribution Retail Wealth Management products and advisory services are primarily sold to individuals through representatives licensed through VFA, our broker-dealer and investment advisor.
Through our broad range of advisory programs, our financial advisers are provided with a wide set of solutions for building their clients' investment portfolios, including stocks, bonds and mutual funds, as well as managed accounts. Markets and Distribution Wealth Management products and advisory services are primarily sold to individuals through representatives licensed through VFA, our broker-dealer and investment advisor.
Voya no longer manufactures new RLI products for distribution by sales agents licensed with RLI. *** Offerings include administration services and investment options such as mutual funds, commingled trusts and separate accounts. ****Various solutions across tax codes are record-kept and accompanied by specialized administration services, consultative plan design and financing strategies, flexible funding options and tailored participant services.
Voya no longer manufactures RLI products for distribution by sales agents licensed with RLI. *** Offerings include administration services and investment options such as mutual funds, commingled trusts and separate accounts. ****Various solutions across tax codes are record-kept and accompanied by specialized administration services, consultative plan design and financing strategies, flexible funding options and tailored participant services.
Our recordkeeping retirement plan offerings are supported by participant communications and education programs, digital capabilities for intermediaries, sponsors and plan participants (plus mobile capabilities for participants), as well as financial guidance and personalized and objective participant investment advisory services offered through our Retail Wealth Management business and Voya Retirement Advisors (our registered investment advisor group serving in-plan participants with the in-plan advisory services program).
Our recordkeeping retirement plan offerings are supported by participant communications and education programs, digital capabilities for intermediaries, sponsors and plan participants (plus mobile capabilities for participants), as well as financial guidance and personalized and objective participant investment advisory services offered through our Wealth Management business and Voya Retirement Advisors (our registered investment advisor group serving in-plan participants with the in-plan advisory services program).
ING Group significantly expanded its presence in the U.S. in the late 1990s and 2000s with the acquisitions of Equitable Life Insurance Company of Iowa (1997), Furman Selz, an investment advisory company (1997), ReliaStar Life Insurance Company (including Pilgrim Capital Corporation) (2000), Aetna Life Insurance and Annuity Company (including Aeltus Investment Management) (2000) and CitiStreet (2008).
ING Group significantly expanded its presence in the U.S. in the late 1990s and early 2000s with the acquisitions of Equitable Life Insurance Company of Iowa (1997), Furman Selz, an investment advisory company (1997), ReliaStar Life Insurance Company (including Pilgrim Capital Corporation) (2000), Aetna Life Insurance and Annuity Company (including Aeltus Investment Management) (2000) and CitiStreet (2008).
We believe that our ability to offer an integrated approach to an individual customer’s entire financial picture, while saving for or living in retirement, presents a compelling reason for our Retirement Plans participants to partner with us as their principal investment and retirement plan provider.
We believe that our ability to offer an integrated approach to an individual customer’s entire financial picture, while saving for or living in retirement, presents a compelling reason for participants to partner with us as their principal investment and retirement plan provider.
Internal practices, procedures and controls are required to meet the increased obligations of financial institutions to identify their customers, watch for and report suspicious transactions, respond to requests for information by regulatory authorities and law enforcement agencies and share information with other financial institutions.
Internal practices, procedures and controls are required to meet the obligations of financial institutions to identify their customers, watch for and report suspicious transactions, respond to requests for information by regulatory authorities and law enforcement agencies and share information with other financial institutions.
("VINTCO"), are each trust subsidiaries chartered by the Connecticut Department of Banking and subject to its regulation, supervision and examination. Neither entity is permitted to accept deposits (other than incidental to trust or custodial activities).
("VINTCO") are trust subsidiaries chartered by the Connecticut Department of Banking and subject to its regulation, supervision and examination. Neither entity is permitted to accept deposits (other than incidental to trust or custodial activities).
Group Life, which includes Accidental Death and Dismemberment, cedes the excess over $750,000 of each coverage to a reinsurer. Group Long Term Disability cedes substantially all of the risk including the claims servicing, to a TPA and reinsurer.
Group Life, which includes Accidental Death and Dismemberment, cedes the excess over $750,000 of each coverage to a reinsurer. Group Long Term Disability cedes substantially all of the risk and the claims servicing, to a TPA and reinsurer.
With the exception of Pomona Capital and certain structured products, the different products and strategies associated with our investment platforms are distributed and serviced by these Retail and Institutional client-focused segments as follows: • Retail client segment : Registered open- and closed-end funds and Separately Managed Accounts through affiliate and third-party distribution platforms, including warehouses, brokerage firms, registered investment advisors, banks, trust companies and independent and regional broker-dealers.
With the exception of Pomona Capital and certain structured products, the different products and strategies associated with our investment platforms are distributed and serviced by these Retail and Institutional client-focused segments as follows: • Retail client segment : This segment consists of registered open- and closed-end funds and Separately Managed Accounts through affiliate and third-party distribution platforms, including warehouses, brokerage firms, registered investment advisors, banks, trust companies and independent and regional broker-dealers.
Certain of our activities are subject to the privacy regulations of the Gramm-Leach-Bliley Act of 1999 (the “GLBA”), along with its implementing regulations, which restricts certain collection, processing, storage, use and disclosure of personal information, requires notice to individuals of privacy practices, provides individuals with certain rights to prevent the use and disclosure of certain nonpublic or otherwise legally protected information and imposes requirements for the safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines.
Certain of our activities are subject to the privacy regulations of the Gramm-Leach-Bliley Act of 1999 (the "GLBA"), along with its implementing regulations, which restricts certain collection, processing, storage, use and disclosure of personal information, requires notice to individuals of privacy practices, provides individuals with certain rights to prevent the use and disclosure of certain nonpublic or otherwise legally protected information and imposes requirements for the safeguarding and proper destruction of personal information through the issuance of data security standards or guidelines.
Our insurance, investment management and retirement businesses provide services to employee benefit plans subject to ERISA, including limited services under specific contracts where we may act as an ERISA fiduciary.
Our insurance, investment management and retirement businesses provide services to employee benefit plans subject to ERISA, including services under specific contracts where we may act as an ERISA fiduciary.
In addition, our Health Solutions segment serves the employer market by providing stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits plans. Our Health Solutions segment is among the largest writers of stop-loss coverage in the U.S., currently ranking fourth among third-party carriers on a premium basis with approximately $1.3 billion of in-force premiums.
In addition, our Health Solutions segment serves the employer market by providing stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits plans. Our Health Solutions segment is among the largest writers of stop-loss coverage in the U.S., currently ranking fourth among third-party carriers on a premium basis with approximately $1.5 billion of in-force premiums.
The state insurance regulators, however, may find that "control" exists in circumstances in which a person owns or controls less than 10% of voting securities.
State insurance regulators, however, may find that "control" exists in circumstances in which a person owns or controls less than 10% of voting securities.
Additionally, we compete with our broad suite of products and financial wellness tools and services, including our innovative and robust digital and mobile capabilities, to help employers support the retirement preparedness and financial needs of their employees. Our long standing experience in the retirement market and strong stable value expertise allows us to effectively compete against existing and new providers.
Additionally, we compete with our broad suite of products and financial wellness tools and services, including our innovative and robust digital and mobile capabilities, to help employers support the retirement preparedness and financial needs of their employees. Our long standing experience in the retirement market and strong stable value expertise allow us to effectively compete against existing and new providers.
It includes a broad definition of personal information, affords California residents certain individual rights of access and deletion regarding their personal data, and limits the “sale” of such information, which is also broadly construed to include making personal information available to third parties for valuable consideration.
It includes a broad definition of personal information, affords California residents certain individual rights of access and deletion regarding their personal data, and limits the "sale" of such information, which is also broadly construed to include making personal information available to third parties for valuable consideration.
The VFA representatives help provide cohesiveness between our Retirement Plans and Retail Wealth Management businesses and are grouped into two primary categories: field-based and home office phone-based representatives. Field-based representatives are registered sales and investment advisory representatives that drive both fee-based and commissioned sales.
VFA representatives help provide cohesiveness between our Retirement Plans and Wealth Management businesses and are grouped into two primary categories: field-based and home office phone-based representatives. Field-based representatives are registered sales and investment advisory representatives that drive both fee-based and commissioned sales.
Some of our subsidiaries are registered as investment advisers under the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), and provide advice to registered investment companies, including mutual funds used in our annuity products, as well as an array of other institutional and retail clients.
Some of our subsidiaries are registered as investment advisers under the Investment Advisers Act and provide advice to registered investment companies, including mutual funds used in our annuity products, as well as an array of other institutional and retail clients.
VITC’s activities are primarily to serve as trustee or custodian for retirement plans, IRAs, Health Savings Accounts and trust and custodial accounts used by employers to fund health reimbursement arrangements, and VINTCO's activities are primarily to serve as trustee for and manage various collective and common trust funds.
VITC’s activities are primarily to serve as trustee or custodian for retirement plans, IRAs, HSAs and trust and custodial accounts used by employers to fund health reimbursement arrangements, and VINTCO's activities are primarily to serve as trustee for and manage various collective and common trust funds.
Typically, these associations levy assessments, up to prescribed limits, on member insurers on the basis of the member insurer’s proportionate share of the business in the relevant jurisdiction in the lines of business in which the impaired or insolvent insurer is engaged.
Typically, these associations levy assessments, up to prescribed limits, on member insurers based on of the member insurer’s proportionate share of the business in the relevant jurisdiction in the lines of business in which the impaired or insolvent insurer is engaged.
Plan sponsors may select from a variety of investment structures and products, such as general account, separate account, mutual funds, stable value or collective investment trusts and a variety of underlying asset types (including their own employer stock and socially responsible funds including a private equity option within non-qualified executive plans).
Plan sponsors may select from a variety of investment structures and products, such as general account, separate account, mutual funds, stable value or collective investment trusts and a variety of underlying asset types (including their own employer 7 Table of Contents stock, socially responsible funds, and a private equity option within non-qualified executive plans).
Utilizing core capabilities in asset allocation, manager selection, asset/liability modeling, risk management and financial engineering, the MASS team has developed a suite of target date and target risk funds that are distributed through our Wealth Solutions segment and to institutional and retail investors. These funds can incorporate multi-manager funds.
Utilizing core capabilities in asset allocation, manager selection, asset/liability modeling, risk management and financial engineering, the MASS team has developed a suite of target date and target risk funds that are distributed through our 15 Table of Contents Wealth Solutions segment and to institutional and retail investors. These funds can incorporate multi-manager funds.
Investment Management’s largest alternatives platform is Pomona Capital. Pomona Capital specializes in investing in private equity funds in three ways: by purchasing secondary interests in existing partnerships; by investing in new partnerships; and by co-investing alongside buyout funds in individual companies.
Investment Management’s largest alternatives platform is Pomona Capital. Pomona Capital specializes in investing in private equity funds: by purchasing secondary interests in existing partnerships; investing in new partnerships; and co-investing alongside buyout funds in individual companies.
The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the U.S., have the power to conduct administrative proceedings that can result in censure, fines, cease-and-desist orders or suspension, termination or limitation of the activities of the regulated entity or its employees.
The SEC and other governmental agencies and self-regulatory organizations, as well as state securities commissions in the U.S., have the power to conduct administrative proceedings that can result in censure, fines, cease-and-desist orders or suspension, termination or limitation of the activities of the regulated entity or its associated persons.
Cybersecurity Regulatory Activity The NAIC, numerous state and federal regulatory bodies and self-regulatory organizations like FINRA are focused on cybersecurity standards both for the financial services industry and for all companies that collect personal information, and have proposed and enacted legislation and regulations, and issued guidance regarding cybersecurity standards and protocols.
Other Laws and Regulations Cybersecurity Regulatory Activity The NAIC, numerous state and federal regulatory bodies, and self-regulatory organizations like FINRA are focused on cybersecurity standards both for the financial services industry and for all companies that collect personal information, and have proposed or enacted legislation and regulations, and issued guidance regarding cybersecurity standards and protocols.
The Patriot Act seeks to promote cooperation among financial institutions, 26 Table of Contents regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. Anti-money laundering laws outside of the U.S. contain provisions that may be different, conflicting or more rigorous.
The Patriot Act seeks to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering. Anti-money laundering laws outside of the U.S. contain provisions that may be different, conflicting or more rigorous.
We offer localized support to distribution partners and their clients during and after the sales process as well as a broad selection of investment options with flexibility of choice and comprehensive fiduciary solutions to help their clients meet or exceed plan guidelines and responsibilities. Unaffiliated Distribution: • Independent Sales Agents .
We offer localized support to distribution partners and their clients during and after the sales process as well as a broad selection of investment options with flexibility of choice and comprehensive fiduciary solutions to help their clients meet or exceed plan guidelines and responsibilities.
If such an opinion cannot be rendered, the affected insurer must set up additional statutory reserves by moving funds from available statutory surplus . Our insurance subsidiaries submit these opinions annually to applicable insurance regulatory authorities. Surplus and Capital Requirements.
If such an opinion cannot be rendered, the affected insurer must establish additional statutory reserves by moving funds from available statutory surplus . Our insurance subsidiaries submit these opinions annually to applicable insurance regulatory authorities. Surplus and Capital Requirements.
Item 1. Business For the purposes of this discussion, the term Voya Financial, Inc. refers to Voya Financial, Inc. and the terms "Voya," "the Company," "we," "our," and "us" refer to Voya Financial, Inc. and its subsidiaries.
Item 1. Business For the purposes of this discussion, the terms "Voya," "the Company," "we," "our," and "us" refer to Voya Financial, Inc. and its subsidiaries.
Broker-Dealers and Investment Advisers Our securities operations, principally conducted by a number of SEC-registered broker-dealers, are subject to federal and state securities, commodities and related laws, and are regulated principally by the SEC, the CFTC, state securities authorities, FINRA, the Municipal Securities Rulemaking Board and similar authorities.
Broker-Dealers and Investment Advisers Our securities operations, principally conducted by our SEC-registered broker-dealers, are subject to federal and state securities, commodities and related laws, and are regulated principally by the SEC, the CFTC, state securities authorities, FINRA, the Municipal Securities Rulemaking Board and similar authorities.
Pricing for our group disability products is determined by our reinsurer, FullScopeRMS, and we assume no underwriting risk in connection with such products. 16 Table of Contents Stop loss insurance pricing reflects the risk characteristics and claims experience for each employer group. The product is annually renewable and the underwriting information is reviewed annually as a result.
Pricing for our group disability products is determined by our reinsurer, FullScopeRMS, and we assume no underwriting risk in connection with such products. Stop-loss insurance pricing reflects the risk characteristics and claims experience for each employer group. The product is annually renewable and the underwriting information is reviewed annually as a result.
As of December 31, 2022, there were $16.4 billion in alternatives AUM. MASS. Investment Management’s MASS platform offers a variety of investment products and strategies that combine multiple asset classes using asset allocation techniques.
As of December 31, 2023, there were $16 billion in alternatives AUM. MASS. Investment Management’s MASS platform offers a variety of investment products and strategies that combine multiple asset classes using asset allocation techniques.
Our profitability also depends on the difference between the investment income we earn on our general account assets, or our portfolio yield, and crediting rates on client accounts. Wealth Solutions generated Adjusted operating earnings before income taxes of $707 million for the year ended December 31, 2022.
Our profitability also depends on the difference between the investment income we earn on our general account assets, or our portfolio yield, and crediting rates on client accounts. Wealth Solutions generated Adjusted operating earnings before income taxes of $632 million for the year ended December 31, 2023.
Voya Framework is distinguished by its flexible recordkeeping platform and contains over 300 funds from well-known fund families for smaller plans or can be provided as an 10 Table of Contents open architecture investment platform for larger plans (this platform offers most funds for which trades are cleared through the National Securities Clearing Corporation).
Voya Framework is distinguished by its flexible recordkeeping platform and contains over 300 funds from well-known fund families for smaller plans or can be provided as an open architecture investment platform for larger plans (which offers most funds for which trades are cleared through the National Securities Clearing Corporation).
For plans in the full service tax-exempt market, we offer a variety of products that include the following: • Voya Retirement Choice II and RetireFlex-MF , mutual fund products which provide flexible funding vehicles and are designed to provide a diversified menu 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 a fixed investment option held in the general account. • RetireFlex-SA , an unregistered group annuity product which features variable investment options held in a variable annuity separate account and a guaranteed option (available through a group fixed annuity contract or stable value product).
For plans in the full service tax-exempt market, we offer a variety of products including: • Voya Retirement Choice II and RetireFlex-MF , mutual fund products providing flexible funding vehicles and are designed to provide a diversified menu 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 a fixed investment option held in the general account. • RetireFlex-SA , an unregistered group annuity product featuring variable investment options held in a variable annuity separate account and a guaranteed option (available through a group fixed annuity contract or stable value product).
Benefitfocus helps organizations simplify the complexity of benefits administration. Benefitfocus solutions have a personalized user-friendly interface designed for people to choose and access a broad line-up of workplace benefits. As a result of our acquisition of Benefitfocus, we reach approximately 16.5 million subscription employees across employer and health plan clients.
Benefitfocus helps organizations simplify the complexity of benefits administration. Benefitfocus solutions have a personalized user-friendly interface designed for people to choose and access a broad line-up of workplace benefits. As a result of the acquisition, we reach approximately 12.2 million subscription employees across employer and health plan clients.
As of January 1, 2022, Stop Loss has a reinsurance program in place that limits our exposure on any one specific claim to $5.0 million, with aggregate stop-loss reinsurance that limits our exposure to $5.0 million over the Policyholder's Aggregate Excess Retention.
As of January 1, 2023, Stop Loss has a reinsurance program that limits our exposure on any one specific claim to $5.0 million, with aggregate stop-loss reinsurance that limits our exposure to $5.0 million over the Policyholder's Aggregate Excess Retention.
Under the laws and regulations of their states of domicile, our insurance subsidiaries are required to conduct annual analyses of the sufficiency of their statutory reserves . Other jurisdictions in which these subsidiaries are licensed may have certain reserve requirements that differ from those of their domiciliary jurisdictions .
Financial Regulation Policy and Contract Reserve Sufficiency Analysis. Under the laws and regulations of their states of domicile, our insurance subsidiaries are required to conduct annual analyses of the sufficiency of their statutory reserves . Other jurisdictions in which these subsidiaries are licensed may have certain reserve requirements that differ from those of their domiciliary jurisdictions .
Agents and employees registered or associated with any of our broker-dealer subsidiaries are subject to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and to regulation and examination by the SEC, FINRA and state securities commissioners.
Independent contractor representatives and employees registered or associated with any of our broker-dealer subsidiaries are subject to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and to regulation and examination by the SEC, FINRA and state securities commissioners.
These laws generally require each insurance company directly or indirectly owned by 21 Table of Contents the holding company to register with the insurance regulator in the insurance company’s state of domicile and to furnish annually financial and other information about the operations of companies within the holding company system.
These laws generally require each insurance company directly or indirectly owned by the holding company to register with the insurance regulator in the insurance company’s state of domicile and to furnish annually financial and other information about the operations of companies within the holding company system. Affiliate Transactions.
Our Investment Management segment also earns market-based fees from the management of the general account and mutual fund assets supporting the Retirement Plans business and certain Retail Wealth Management products and advisory solutions .
Our Investment Management segment also earns market-based fees from the management of the general account and mutual fund assets supporting the Retirement Plans business and certain Wealth Management products and advisory solutions . Retirement Plans Products and Services Full-Service .
As of December 31, 2022, Pomona Capital managed assets totaling $10.0 billion across a suite of limited partnerships and the Pomona Investment Fund, a registered investment fund that is available to accredited investors. In addition, Investment Management's alternatives platform includes privately-placed open-end and closed-end funds, the underlying strategies of which leverage our core private credit and mortgage loan investment capabilities.
As of December 31, 2023, Pomona Capital managed assets totaling $11 billion across a suite of limited partnerships and the Pomona Investment Fund, a registered investment fund available to accredited investors. In addition, Investment Management's alternatives platform includes privately-placed open-end and closed-end funds, the underlying strategies of which leverage our core private credit and mortgage loan investment capabilities.
Product/Service Model AUM/AUA (as of December 31, 2022) Key Market Segments/Product Lines Primary Internal Revenue Code section Core Products* Full Service Plans $162.7 billion** Small-Mid Corporate 401(k) Voya MAP Select, Voya Framework K-12 Education 403(b) Voya Custom Choice II, Voya Retirement Choice II, Voya Framework Higher Education 403(b) Voya Retirement Choice II, Voya Retirement Plus II, Voya Framework Healthcare & Other Non-Profits 403(b) Voya Retirement Choice II, Voya Retirement Plus II, Voya Framework Government (Local & State) 457 RetireFlex-SA, RetireFlex-MF, Voya Health Reserve Account, Voya Framework Recordkeeping Business $250.5 billion Mid-Large Corporate 401(k) *** Government (Local & State) 457 *** Non Qualified Business **** All Markets 409A **** Stable Value/Other $38.5 billion All Markets All tax codes Separate Account and Synthetic GICs * Core products actively being sold today. ** Includes a small block of assets associated with legacy K-12 Education market products, primarily fixed annuities, issued by RLI.
Product/ Service Model AUM/AUA (As of December 31, 2023) Key Market Segments/ Product Lines Primary Internal Revenue Code Section Core Products* Full Service Plans $185.4 billion** Small-Mid Corporate 401(k) Voya MAP Select, Voya Framework K-12 Education 403(b) Voya Custom Choice II, Voya Retirement Choice II, Voya Framework Higher Education 403(b) Voya Retirement Choice II, Voya Retirement Plus II, Voya Framework Healthcare & Other Non-Profits 403(b) Voya Retirement Choice II, Voya Retirement Plus II, Voya Framework Government (Local & State) 457 RetireFlex-SA, RetireFlex-MF, Voya Health Reserve Account, Voya Framework Recordkeeping Business $298.1 billion Mid-Large Corporate 401(k) *** Government (Local & State) 457 *** Non Qualified Business **** All Markets 409A **** Stable Value/Other $40.1 billion***** All Markets All tax codes Separate Account and Synthetic GICs * Core products actively being sold. ** Includes a small block of assets associated with legacy K-12 Education market products, primarily fixed annuities, issued by RLI.
Broker-dealers are subject to regulations that cover many aspects of the 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 and employees.
Broker-dealers are subject to regulations that cover many aspects of the securities business, including, among other things, sales methods and trading practices, whether investments for individual customers are in their best interest, the use and safekeeping of customers’ funds and securities, capital adequacy, recordkeeping, financial reporting and the conduct of directors, officers and employees.
We offer our products and services through a broad group of financial intermediaries, independent producers, affiliated advisors and dedicated sales specialists throughout the U.S., and also offer investment management services to international clients through our distribution partnership with Allianz Global Investors U.S. LLC ("AllianzGI"). As a result of our recent acquisition of Benefitfocus, Inc.
We offer our products and services through a broad group of financial intermediaries, independent producers, affiliated advisors and dedicated sales specialists throughout the U.S., and also offer investment management services to international clients through our distribution partnership with Allianz Global Investors U.S. LLC ("AllianzGI").
We also offer a range of privates and alternative asset solutions across fixed income and alternative investment products with AUM of $99.7 billion for such privates and alternatives products. On July 25, 2022, we completed the AllianzGI Transaction, pursuant to which we acquired assets and teams comprising specified strategies previously managed by AllianzGI.
We also offer a range of privates and alternative asset solutions across fixed income and alternative investment products with AUM of $95 billion for such privates and alternatives products as of December 31, 2023. On July 25, 2022, we completed the AllianzGI Transaction, pursuant to which we acquired assets and investment teams comprising specified strategies previously managed by AllianzGI.
The equities platform is a multi-cap and multi-style research-driven platform comprising thematic, fundamental and quantitative equity strategies for institutional and retail investors. As of December 31, 2022, there were $83.4 billion in AUM on the equities platform covering both domestic and international markets.
The equities platform is a multi-cap and multi-style research-driven platform comprising thematic, fundamental and quantitative equity strategies for institutional and retail investors. As of December 31, 2023, there were $91.6 billion in AUM on the equities platform covering both domestic and international markets.
Among other things, ERISA imposes reporting and disclosure obligations, prescribes standards of conduct that apply to plan fiduciaries and prohibits transactions known as "prohibited transactions," such as conflict-of-interest transactions, self-dealing and certain transactions between a benefit plan and a party in interest. ERISA also provides for a scheme of civil and criminal penalties and enforcement.
Among other things, ERISA imposes reporting and disclosure obligations, prescribes standards of conduct that apply to plan fiduciaries and disallows "prohibited transactions," such as conflict-of-interest transactions, self-dealing and certain transactions between a benefit plan and a party in interest without an approved exemption. ERISA also provides for a scheme of civil and criminal penalties and enforcement.
We do not anticipate regulatory action as a result of our 2022 IRIS ratio results. Insurance Guaranty Associations . Each state has insurance guaranty association laws that require insurance companies doing business in the state to participate in various types of guaranty associations or other similar arrangements.
We do not anticipate regulatory action as a result of our 2023 IRIS ratio results. Insurance Guaranty Associations . Each state has insurance guaranty association laws requiring insurance companies doing business in the state to participate in various types of guaranty associations or other arrangements.
Underwriting income derives from the difference between premiums and mortality charges collected and benefits and expenses paid for group life, stop loss and Voluntary Benefits. Fee income is generated from margin on expenses for services provided on Leave Management, HSA/FSA/HRA and COBRA administration and proprietary decision support tools.
Underwriting income comprises the majority of revenues in this segment and derives from the difference between premiums and mortality charges collected and benefits and expenses paid for group life, stop loss and voluntary benefits. Fee income is generated from margin on expenses for services provided on benefits administration, leave management, HSA/FSA/HRA and COBRA administration and proprietary decision support tools.
Department of Labor Rules Regarding Fiduciaries In December 2020, the Department of Labor (“DOL”) adopted a revised interpretation to the five-part test to determine investment advice fiduciary status under Title I of ERISA, and a new prohibited transaction exemption (PTE 2020-02) that, 24 Table of Contents subject to certain requirements, allows investment advice fiduciaries to receive compensation that might otherwise have been considered an ERISA prohibited transaction.
Department of Labor Rules Regarding Fiduciaries In December 2020, the DOL adopted a revised interpretation to determine investment advice fiduciary status under Title I of ERISA, and a new prohibited transaction exemption (PTE 2020-02) that, subject to certain requirements, allows investment advice fiduciaries to receive compensation that might otherwise have been considered an ERISA prohibited transaction.
In several states, this lien has 28 Table of Contents priority over the lien of an existing mortgage against such property.
In several states, this lien has priority over the lien of an existing mortgage against such property.
Because our fee income is generally tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement, which in turn depends on sales volumes to new and existing clients, net deposits from retirement plan participants, and changes in the market value of account assets.
Because a significant portion of our revenues are tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement, which in turn depends on sales volumes to new and existing clients, net deposits from retirement plan participants, and changes in the market value of account assets.
These products are issued through separate accounts that are registered as investment companies under the Investment Company Act, and are regulated by state law.
These products are issued through separate accounts that are registered as investment companies under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and are regulated by state insurance law.
The group life market is the most mature of our market segments and most often sold alongside disability where competitive drivers for both are price, claim servicing, and additional administrative capabilities (such as leave management). Our principal competitors include MetLife, New York Life and Unum.
Our principal competitors include Sun Life, Tokio Marine HCC (formerly Houston Casualty) and Symetra. The group life market is the most mature of our market segments and most often sold alongside disability where competitive drivers for both are price, claim servicing, and additional administrative capabilities (such as leave management). Our principal competitors include MetLife, New York Life and Unum.
Benefitfocus On January 24, 2023, we completed the acquisition of Benefitfocus, an industry-leading benefits administration technology company that serves employers, health plans and brokers. For further details, refer to the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
For further details, refer to the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. 6 Table of Contents Benefitfocus On January 24, 2023, we completed the acquisition of Benefitfocus, an industry-leading benefits administration technology company, that serves U.S. employers, health plans and brokers for a total purchase consideration of $595 million.
Certain of our products and services are subject to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which establishes privacy and security standards that limit the use and disclosure of protected health information and require the implementation of administrative, physical and technical safeguards to ensure the confidentiality, integrity, availability, and privacy of protected health information.
Certain of our products and services are subject to HIPAA, which establishes privacy and security standards that limit the use and disclosure of protected health information and require the implementation of administrative, physical and technical safeguards to ensure the confidentiality, integrity, availability, and privacy of protected health information.
For a summary of ordinary dividends and extraordinary distributions paid by each of our insurance subsidiaries to Voya Financial or Voya Holdings in 2021 and 2022, and a discussion of ordinary dividend capacity for 2023, see Liquidity and Capital Resources—Restrictions on Dividends and Returns of Capital from Subsidiaries in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K. 22 Table of Contents Financial Regulation Policy and Contract Reserve Sufficiency Analysis.
For a summary of ordinary dividends and extraordinary distributions paid by each of our insurance subsidiaries to Voya Financial, Inc. or Voya Holdings in 2022 and 2023, and a discussion of ordinary dividend capacity for 2024, see Liquidity and Capital Resources—Restrictions on Dividends and Returns of Capital from Subsidiaries in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K.
For further details, refer to the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
For further details, refer to the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. OUR BUSINESSES Workplace Solutions Our Workplace Solutions business comprises our Wealth Solutions and Health Solutions segments.
We have seen industry concentration in the large plan recordkeeping business, as providers seek to increase scale, improve cost efficiencies and enter new market segments. We emphasize our strong sponsor relationships, flexible value-added services, ability to customize recordkeeping and administration services to match client needs, and technical and regulatory expertise as our competitive strengths.
We have seen industry concentration in the large plan recordkeeping business, as providers seek to increase scale, improve cost efficiencies and enter new market segments. We emphasize our strong sponsor relationships, flexible value-added services, ability to support the most complex of 10 Table of Contents plans to match client needs, and technical and regulatory expertise as our competitive strengths.
Benefitfocus, as a healthcare clearinghouse, is a “Covered Entity” directly subject to HIPAA’s Privacy, Security, and Breach Notification Rules.
Benefitfocus, as a healthcare clearinghouse, is a "Covered Entity" directly subject to HIPAA’s Privacy, Security, and Breach Notification Rules.
Our full-service retirement plan offerings are supported by financial guidance and personalized and objective participant investment advisory services offered through our Retail Wealth Management business or through a third party to help prepare individuals for retirement. 9 Table of Contents Recordkeeping service products provide recordkeeping and plan administration support alongside a fully open architecture investment structure that employers can use to customize their plan's investment menu.
Our full-service retirement plan offerings are supported by financial guidance and personalized participant investment advisory services offered through our Wealth Management business or through a third party. Recordkeeping . Recordkeeping service products provide recordkeeping and plan administration support alongside a fully open architecture investment platform that employers can use to customize their plan's investment menu.
Generally, all transactions affecting the insurers in the holding company system must be fair and reasonable and, if material, require prior notice and approval or non-disapproval by the state’s insurance regulator. Change of Control .
Generally, all transactions affecting the insurers in the holding company system must be fair and reasonable and, if material, require prior notice and approval or non-disapproval by the insurance commissioner of the state of domicile of the insurance subsidiary proposing the material transaction. Change of Control .
As of December 31, 2022, on a consolidated basis, we had $741.2 billion in total assets under management ("AUM") and assets under administration ("AUA") and total shareholders' equity, excluding accumulated other comprehensive income/loss ("AOCI") and noncontrolling interests, of $6.3 billion.
As of December 31, 2023, on a consolidated basis, we had $813.5 billion in total assets under management ("AUM") and assets under administration ("AUA") and total shareholders' equity, excluding accumulated other comprehensive income/loss ("AOCI") and noncontrolling interest, of $6.6 billion.
The following chart presents the key Health Solutions products we offer, along with annualized in-force premiums for each product: ($ in millions) Annualized In-Force Premiums Health Solutions Products Year Ended December 31, 2022 Stop Loss $ 1,258 Voluntary Benefits 670 Group Life 610 Group Disability 224 Health Account Solutions 19 Markets and Distribution Our Health Solutions segment works primarily with national and regional benefits consultants, brokers, TPAs, enrollment firms and technology partners.
The following chart presents the key Health Solutions products we offer, along with annualized in-force premiums and fees for each product: ($ in millions) Annualized In-Force Premiums and Fees Health Solutions Products Year Ended December 31, 2023 Stop Loss $ 1,500 Group Life 636 Group Disability 268 Voluntary and Other 926 Markets and Distribution Our Health Solutions segment works primarily with national and regional benefits consultants, brokers, TPAs, enrollment firms and technology partners.
These areas include federal pension regulation, financial services regulation, federal tax laws relating to life insurance companies and their products and the USA PATRIOT Act of 2001 (the "Patriot Act") requiring, among other things, the establishment of anti-money laundering monitoring programs.
These areas include federal pension and retirement plan regulation, financial services regulation, federal tax laws relating to life insurance companies and their products, the USA PATRIOT Act of 2001 (the "Patriot Act") requiring, among other things, the establishment of anti-money laundering monitoring programs, and federal healthcare laws that may affect supplemental or stop-loss insurance.
Additionally, we may be required to enter into a HIPAA Business Associate Agreement (“BAA”) as a result of administering Flexible Spending Accounts (“FSAs”) and Health Reimbursement Arrangements (“HRAs”) on behalf of our customers, including Benefitfocus’ health plan customers, and in connection with the provision of certain services, such as medical claims integration.
Additionally, we may be required to enter into a HIPAA Business Associate Agreement ("BAA") as a result of administering FSAs and HRAs on behalf of our customers, including Benefitfocus’ health plan customers, and in connection with the provision of certain services, such as medical claims integration.
In February 2017, the New York Department of Financial Services ("NYDFS") issued final Cybersecurity Requirements for Financial Services Companies that is not based on the Model Law, that requires banks, insurance companies, and other financial services institutions regulated by the NYDFS, including us, to establish and maintain a comprehensive cybersecurity program "designed to protect consumers and ensure the safety and soundness of New York State's financial services industry".
In February 2017, the New York Department of Financial Services ("NYDFS") issued final Cybersecurity Requirements for Financial Services Companies that is not based on the Model Law, that requires banks, insurance companies, and other financial services institutions regulated by the NYDFS, including certain of our subsidiaries, to establish and maintain a comprehensive cybersecurity program.
In addition, broker-dealers are required to make certain monthly and annual filings with 25 Table of Contents FINRA, including monthly FOCUS reports (which include, among other things, financial results and net capital calculations) and annual audited financial statements prepared in accordance with U.S. GAAP.
In addition, broker-dealers are required to make certain monthly and annual filings with FINRA, including monthly FOCUS reports (which include, among other things, financial results and net capital calculations) and annual audited financial statements prepared in accordance with U.S. GAAP. In June 2019, the SEC adopted Regulation BI.
In accordance with statutory requirements, Voya Financial regularly prepares and submits ORSA summary reports. This initiative also resulted in the adoption by the NAIC and several of our insurance subsidiary domiciliary regulators of the Corporate Governance Annual Filing Model Act, which requires insurers, including Voya Financial, to make an annual confidential filing regarding their corporate governance policies. Dividend Payment Restrictions.
In accordance with statutory requirements, Voya regularly prepares and submits ORSA summary reports. Several of our insurance subsidiary domiciliary regulators have adopted the Corporate Governance Annual Filing Model Act, which requires insurers, including Voya, to make an annual confidential filing regarding their corporate governance policies. 18 Table of Contents Dividend Payment Restrictions.
These employers provide a health plan to their employees and generally pay all plan-related claims and administrative expenses. Our stop-loss product helps these employers contain their health expenses by reimbursing specified claim amounts above certain deductibles and by reimbursing claims that exceed a specified limit. We offer this product via two types of protection—individual stop-loss insurance and aggregate stop-loss insurance.
These employers provide a health plan to their employees and generally pay all plan-related claims and administrative expenses. Our stop-loss product helps these employers contain their health expenses by reimbursing specified claim amounts above certain deductibles and by reimbursing claims that exceed a specified limit.
Investment Management’s fixed income platform manages assets for domestic and international institutional investors, retail investors and our general account. As of December 31, 2022, there was $221.6 billion in AUM on the fixed income platform, of which $38.0 billion were general account assets.
Investment Management’s fixed income platform manages assets for domestic and international institutional investors, retail investors and our general account. As of December 31, 2023, there was $214.1 billion in AUM on the fixed income platform, of which $34.7 billion were general account assets.
Each U.S. state, the District of Columbia and U.S. territories and possessions have insurance laws that apply to companies licensed to carry on an insurance business in the jurisdiction. The primary regulator of an insurance company, however, is located in its state of domicile.
Each U.S. state, the District of Columbia and U.S. territories and possessions have insurance laws that apply to companies licensed to conduct insurance business in the jurisdiction. However, the primary regulator of an insurance company is its state of domicile. Each of our insurance subsidiaries is licensed and regulated in each state in which it conducts insurance business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe following is a summary of the more important factors that could affect our business, sales, revenues, AUM, reputation, results of operations, liquidity, profitability or financial condition. • Conditions in the global capital markets and the economy. • Adverse capital and credit market conditions and the cost of credit and capital. • The level of interest rates and in particular a recurrence of a low interest rate environment or a period of rapidly increasing interest rates. • The expected replacement of LIBOR and related reforms. • A downgrade or a potential downgrade in our financial strength or credit ratings. • Our ability to increase or maintain our market share in highly competitive markets. • Our ability to achieve the desired results from recent acquisitions. • The adequacy of our risk management policies and procedures, including hedging programs. • The inability of counterparties to meet their financial obligations. • Requirements to post collateral or make payments related to changes in market value of specified assets. • The diminishment in value of our invested assets and the investment returns credited to customers. • The relative illiquidity of some of our investments as well as significant market valuation fluctuations of certain asset classes. • Market and behavior risks associated with our CMO-B portfolio. • The complexity of our products and services and the reliance on intermediaries to properly perform services and not misrepresent our products or services. • The alteration of terms of our asset management agreements, termination of such agreements, or failure to realize certain performance hurdles. • Inherent uncertainty in various methodologies, estimations and assumptions that we use to value our investments. • Risks associated with our participation in a securities lending program and a repurchase program. • Differences between actual policy experience and pricing, reserving or actuarial assumptions. • Unfavorable developments in interest rates, credit spreads and policyholder behavior related to our stable value products, and the ability of our hedge program and risk mitigation features to offset potential consequences. • Potential acceleration of the amortization of DAC and/or VOBA. 29 Table of Contents • Credit risk associated with reinsurance, as well as its general availability, affordability or adequacy. • A decrease in the RBC ratio (as a result of a reduction in statutory surplus and/or increase in RBC requirements) of our insurance subsidiaries could result in increased scrutiny by insurance regulators and rating agencies. • A concentration of our institutional funding with two Federal Home Loan Banks. • Any failure to protect the privacy and confidentiality of customer information. • Interruption or other operational failures in telecommunication, information technology and other operational systems, including as a result of human error. • A failure to maintain the security, integrity, confidentiality or privacy of our telecommunication, information technology and other operational systems, or the sensitive data residing on such systems. • Changes in accounting standards. • Potential requirements to reduce the carrying value of our deferred income tax assets or establish an additional valuation allowance against the deferred income tax assets. • Potential limitations on our ability to use certain beneficial deferred tax assets. • The impact of recent U.S. tax law changes. • Adverse publicity or increased governmental and regulatory actions with respect to us, other well-known companies or the financial services industry in general. • Litigation or potential litigation. • A loss of, or significant change in, key product distribution relationships. • The occurrence of natural or man-made disasters, including the COVID-19 pandemic. • Potential difficulties arising from outsourcing relationships. • The application of regulations governing our businesses and those of our affiliates, as well as changes in such regulation. • The application of regulations governing our insurance businesses in particular, as well as changes in regulation, enforcement actions and regulatory investigations. • The regulation of our products, and failure to meet any of the complex product requirements. • Changes in tax laws and interpretations of existing tax law. • The dependence of Voya Financial, Inc. and Voya Holdings on the ability of their subsidiaries to transfer funds to them to meet their obligations.
Biggest changeThe following is a summary of the material factors that could adversely affect our business, sales, revenues, AUM, reputation, results of operations, liquidity, profitability or financial condition. • Global Market Risks ◦ Conditions in the global capital markets, the economy and geopolitical events. ◦ The level of interest rates and in particular a period of rapidly increasing interest rates or a recurrence of a low interest rate environment. ◦ Unfavorable developments in interest rates, credit spreads and policyholder behavior related to our stable value products. ◦ The adequacy of our risk management policies and procedures, including hedging programs. • Liquidity, Credit and Investment Risks ◦ A downgrade or potential downgrade in our financial strength or credit ratings. ◦ The inability of counterparties to meet their financial obligations. ◦ Requirements to post collateral or make payments related to changes in market value of specified assets. ◦ Risks associated with our participation in securities lending and repurchase programs. ◦ Risks associated with our institutional funding with the Federal Home Loan Bank system. ◦ Our dependence on our subsidiaries' ability to transfer funds to us to meet our obligations. ◦ Risk of a decrease in the value of our invested assets and the investment returns credited to customers. ◦ The relative illiquidity of some of our investments as well as significant market valuation fluctuations of certain asset classes. ◦ Inherent uncertainty in methodologies, estimations and assumptions used to value our investments and determine allowances and impairments on such investments. • Strategic and Business Risks ◦ Our ability to increase or maintain our market share in highly competitive markets. 25 Table of Contents ◦ Our ability to achieve the desired results from recent acquisitions. ◦ The complexity of our products and services and our reliance on intermediaries. ◦ A deterioration in our AUM or the alteration or termination of our asset management agreements or our failure to realize certain performance hurdles under these agreements. ◦ Differences between actual policy experience and pricing, reserving or actuarial assumptions. ◦ Credit risk associated with reinsurance, as well as its general availability, affordability or adequacy. ◦ Our ability to effectively apply technology or to adapt to disruptive technology or innovations. ◦ Our ability to maintain client satisfaction with our services. • Operational Risks ◦ Interruption or other operational failures in telecommunication, cybersecurity, information technology and other operational systems. ◦ Our ability to protect the privacy and confidentiality of customer information. ◦ Our ability to attract and retain qualified employees. ◦ The occurrence of natural or man-made disasters. ◦ Potential difficulties arising from outsourcing relationships. ◦ Our dependence on third party software licenses. ◦ Risks related to our international operations. • Tax, Regulatory and Legal Risks ◦ Potential requirements to reduce the carrying value of our deferred income tax assets or establish an additional valuation allowance against them. ◦ Potential limitations on our ability to use certain beneficial deferred tax assets. ◦ Changes in tax laws and interpretations of existing tax law. ◦ Potential failure to comply with regulations governing our business and our products or those of our affiliates. ◦ Potential failure to comply with regulations governing our insurance businesses in particular, enforcement actions and regulatory investigations. ◦ A decrease in the RBC ratio of our insurance subsidiaries. ◦ Litigation or potential litigation. ◦ Changes in accounting standards.
Furthermore, larger competitors may have lower operating costs and have an ability to absorb greater risk, while maintaining financial strength ratings, allowing them to price products more competitively. These competitive pressures could result in increased pressure on the pricing of certain of our products and services, and could harm our ability to maintain or increase profitability.
Furthermore, larger competitors may have lower operating costs and an ability to absorb greater risk, allowing them to price products more competitively while maintaining financial strength ratings. These competitive pressures could result in increased pressure on the pricing of certain of our products and services, and could harm our ability to maintain or increase profitability.
Pursuant to the terms of some transactions, we could be required to make payment to our counterparties related to any change in the market value of the specified collateral assets. Such requirements could have an adverse effect on liquidity.
Pursuant to the terms of some transactions, we could be required to make payment to our counterparties related to any change in the market value of the specified collateral assets. Such requirements could have an adverse effect on our liquidity.
Similarly, a ratings downgrade affecting a security we hold could indicate the credit quality of that security has deteriorated and could increase the capital we must hold to support that security to maintain our RBC ratio.
Similarly, a ratings downgrade affecting a security we hold could indicate that the credit quality of that security has deteriorated and could increase the capital we must hold to support that security to maintain our RBC ratio.
Each of our insurance subsidiaries is subject to RBC standards and/or other minimum statutory capital and surplus requirements imposed under the laws of its respective jurisdiction of domicile. For additional discussion of how the NAIC calculates RBC ratios, see —Regulation—Insurance Regulation—Financial Regulation—Risk-Based Capital in Part I, Item 1. of this Annual Report on Form 10-K.
Each of our insurance subsidiaries is subject to RBC standards or other minimum statutory capital and surplus requirements imposed under the laws of its respective jurisdiction of domicile. For additional discussion of how the NAIC calculates RBC ratios, see —Regulation—Insurance Regulation—Financial Regulation—Risk-Based Capital in Part I, Item 1. of this Annual Report on Form 10-K.
The failure of any of our insurance subsidiaries to meet its applicable RBC requirements or minimum capital and surplus requirements could subject it to further examination or corrective action imposed by insurance regulators, including limitations on its ability to write additional business, supervision by regulators or seizure or liquidation.
The failure of any of our insurance subsidiaries to meet its applicable RBC or minimum capital and surplus requirements could subject it to further examination or corrective action imposed by insurance regulators, including limitations on its ability to write additional business, supervision by regulators or seizure or liquidation.
Past or future misconduct by our employees, agents, intermediaries, representatives of our broker-dealer subsidiaries or employees of our vendors could result in violations of law by us or our subsidiaries, regulatory sanctions and/or serious reputational or financial harm, and the precautions we take to prevent and detect this activity may not be effective in all cases.
Past or future misconduct by our employees, agents, intermediaries, representatives of our broker-dealer subsidiaries or employees of our vendors could result in violations of law by us or our subsidiaries, regulatory sanctions or serious reputational or financial harm, and the precautions we take to prevent and detect this activity may not be effective in all cases.
Changes in federal tax laws that reduce the amount an individual can contribute on a pre-tax basis to an employer-provided, tax-deferred product (either directly by reducing current limits or indirectly by changing the tax treatment of such contributions from exclusions to deductions) or changes that would limit an individual’s aggregate amount of tax-deferred savings could make our Wealth Solutions products less attractive to customers.
Changes in federal tax laws that reduce the amount an individual can contribute on a pre-tax basis to an employer-provided, tax-deferred product (either directly by reducing current limits or indirectly by changing the tax treatment of such contributions from exclusions to deductions), or that would limit an individual’s aggregate amount of tax-deferred savings could make our Wealth Solutions products less attractive to customers.
The subsidiaries of Voya Financial, Inc. are legally distinct from Voya Financial, Inc. and, except in the case of Voya Holdings Inc., which is the guarantor of certain of our outstanding indebtedness, have no obligation to pay amounts due on the debt of Voya Financial, Inc. or to make funds available to Voya Financial, Inc. for such payments.
The subsidiaries of Voya Financial, Inc. are legally distinct from Voya Financial, Inc. and, except in the case of Voya Holdings, which is the guarantor of certain of our outstanding indebtedness, have no obligation to pay amounts due on the debt of Voya Financial, Inc. or to make funds available to Voya Financial, Inc. for such payments.
If triggered, the amount of the taxable income for any post-change year which may be offset by a pre-change loss is subject to an annual limitation. Generally speaking, this limitation is derived by multiplying the fair market value of the Company immediately before the date of the Section 382 event by the applicable federal long-term tax-exempt rate.
If triggered, the amount of the taxable income for any post-change year which may be offset by a pre-change loss is subject to an annual limitation. This limitation is generally derived by multiplying the fair market value of the company immediately before the date of the Section 382 event by the applicable federal long-term tax-exempt rate.
We manage a portfolio of various collateralized mortgage obligation ("CMO") tranches in combination with financial derivatives as part of a proprietary strategy we refer to as "CMO-B," as described under Investments—CMO-B Portfolio in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K.
In particular, we manage a portfolio of various collateralized mortgage obligation ("CMO") tranches in combination with financial derivatives as part of a proprietary strategy we refer to as "CMO-B," as described under Investments—CMO-B Portfolio in Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K.
Voya Financial, Inc. is the holding company for all our operations, and dividends, returns of capital and interest income on intercompany indebtedness from Voya Financial, Inc.’s subsidiaries are the principal sources of funds available to Voya Financial, Inc. to pay principal and interest on its outstanding indebtedness, to pay corporate operating expenses, to pay any stockholder dividends, to repurchase any stock, and to meet its other obligations.
Voya Financial, Inc. is the holding company for all our operations, and dividends, returns of capital and interest income on intercompany indebtedness from Voya Financial, Inc.’s subsidiaries are the principal sources of funds available to Voya Financial, Inc. to pay principal and interest on our outstanding indebtedness, corporate operating expenses and any stockholder dividends, to repurchase any stock, and to meet our other obligations.
Furthermore, the preferences of the end consumers for our products and services may shift, including as a result of technological innovations affecting the marketplaces in which we operate. To the extent our competitors are more successful than we are at adopting new technology and adapting to the changing preferences of the marketplace, our competitiveness may decline.
Furthermore, the preferences of the end consumers for our products and services may shift, including as a result of technological innovations affecting the marketplaces in which we operate. To the extent that our competitors are more successful than we are at adopting new technology and adapting to the changing preferences of the marketplace, our competitiveness may decline.
Our products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different governmental and self-regulatory authorities, including state insurance regulators, state securities administrators, state banking authorities, the SEC, FINRA, the DOL and the IRS.
Our products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by different governmental and self-regulatory authorities, including state insurance regulators, state securities administrators, state banking authorities, the SEC, FINRA, the DOL and the IRS.
For example, U.S. federal income tax law imposes requirements relating to insurance 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 and distribution and administration.
For example, U.S. federal income tax law imposes requirements relating to insurance 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 investment, insurance and annuity product design, offering and distribution and administration.
Should the FHLBs choose to change their definition of eligible collateral, change the lendable value against such collateral or if the market value of the pledged collateral decreases in value due to changes in interest rates or credit ratings, we may be required to post additional amounts of collateral in the form of cash or other eligible collateral.
Should the FHLBs choose to change their definition of eligible collateral, change the lendable value against such collateral or if the market value of the pledged collateral decreases in value due to changes in interest rates or credit ratings, we may be required to post additional collateral in the form of cash or other eligible collateral.
Requirements to post collateral or make payments related to changes in market value of specified assets may adversely affect liquidity. The amount of collateral we may be required to post under short-term financing agreements and derivative transactions may increase under certain circumstances.
Requirements to post collateral or make payments related to changes in market value of specified assets may adversely affect our liquidity. The amount of collateral we may be required to post under short-term financing agreements and derivative transactions may increase under certain circumstances.
Significant future increases to interest rates and/or the occurrence of other unexpected circumstances, such as changes in the economic environment, liquidity and investment strategy, could result in recording a related valuation allowance on our deferred tax assets in a future period.
Future increases to interest rates or the occurrence of other unexpected circumstances, such as changes in the economic environment, liquidity and investment strategy, could result in recording a related valuation allowance on our deferred tax assets in a future period.
Additionally, future changes in facts, circumstances, tax law, including a reduction in federal corporate tax rates, may result in a reduction in the carrying value of our total deferred income tax assets and the RBC ratios of our insurance subsidiaries, or an increase in the valuation allowance.
Additionally, future changes in facts, circumstances, or tax law, including a reduction in federal corporate tax rates, may result in a reduction in the carrying value of our deferred income tax assets and the RBC ratios of our insurance subsidiaries or an increase in the valuation allowance.
For a description of certain regulatory inquiries affecting the Company, see the Litigation and Regulatory Matters section of the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
For a description of certain regulatory inquiries affecting the Company, see the Litigation, Regulatory Matters and Loss Contingencies section of the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
During periods of market disruption, including periods of rapidly changing credit spreads or illiquidity, it may be difficult to value certain of our securities, such as certain mortgage-backed securities, if trading becomes less frequent and/or market data becomes less observable.
During periods of market disruption, including periods of rapidly changing credit spreads or illiquidity, it may be difficult to value certain of our securities, such as certain mortgage-backed securities, if trading becomes less frequent or market data becomes less observable.
During a period of decreasing interest rates or a prolonged period of low interest rates, our investment earnings may decrease because the interest earnings on our recently purchased fixed income investments will likely have declined in tandem with market interest rates.
Conversely, during a period of decreasing interest rates or a prolonged period of low interest rates, our investment earnings may decrease because the interest earnings on our recently purchased fixed income investments will likely have declined in tandem with market interest rates.
In this event, we would be required to establish additional statutory reserves. Similarly, the credit for reinsurance taken by our insurance subsidiaries under reinsurance agreements with affiliated and unaffiliated non-accredited reinsurers is, under certain conditions, dependent upon the non-accredited reinsurer's ability to obtain and provide sufficient qualifying assets in a qualifying trust or qualifying LOCs issued by qualifying lending banks.
In this event, we would be required to establish additional statutory reserves. Similarly, the credit for reinsurance taken by our insurance subsidiaries under reinsurance agreements with affiliated and unaffiliated non-accredited reinsurers is, under certain conditions, dependent on the non-accredited reinsurer's ability to obtain and provide sufficient qualifying assets in a qualifying trust or qualifying LOCs issued by qualifying lending banks.
A downgrade in our financial strength ratings, or the announced potential for a downgrade, could have a significant adverse effect on our financial condition and results of operations in many ways, including: (i) reducing new sales of insurance and annuity products and investment products; (ii) adversely affecting our relationships with 32 Table of Contents our advisors and third-party distributors of our products; (iii) materially increasing the number or amount of policy surrenders and withdrawals by contract holders and policyholders; (iv) requiring us to reduce prices for many of our products and services to remain competitive; and (v) adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.
A downgrade in our financial strength ratings, or the announced potential for a downgrade, could have a significant adverse effect on our financial condition and results of operations in many ways, including by: (i) reducing new sales of insurance and annuity products and investment products; (ii) adversely affecting our relationships with our advisors and third-party distributors of our products; (iii) materially increasing the number or amount of policy surrenders and withdrawals by contract holders and policyholders; (iv) requiring us to reduce prices for many of our products and services to remain competitive; and (v) adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.
The determination of the amount of allowances and impairments varies by investment type and is based upon our quarterly evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are subjective and require a high degree of judgment, and are revised as conditions change and new information becomes available.
The determination of the amount of allowances and impairments varies by investment type and is based on our quarterly evaluation and assessment of known and inherent risks associated with the respective asset class. Such evaluations and assessments are subjective and require a high degree of judgment, and are revised as conditions change and new information becomes available.
The funds we manage may be subject to an unanticipated large number of redemptions as a result of such events, causing the funds to sell securities they hold, possibly at a loss, or draw on any available lines of credit to obtain cash, or use securities held in the applicable fund, to settle these redemptions.
The funds we manage may be subject to an unanticipated large number of redemptions as a result of such developments, causing the funds to sell securities they hold, possibly at a loss, or draw on any available lines of credit to obtain cash, or use securities held in the applicable fund, to settle these redemptions.
Maintaining our credit ratings depends in part on strong financial results and in part on other factors, including the outlook of the rating agencies on our sector and the market generally. A credit rating downgrade could negatively impact our ability to obtain secured or unsecured financing and increase borrowing costs.
In turn, maintaining our credit ratings depends on strong financial results and on other factors, including the outlook of the rating agencies on our sector and the market generally. A credit rating downgrade could negatively impact our ability to obtain secured or unsecured financing and increase borrowing costs.
Further, rapidly changing and unprecedented credit and equity market conditions could materially impact the valuation of securities as reported within the financial statements, and the period-to-period changes in value could vary significantly. Decreases in value could have a material adverse effect on our results of operations and financial condition.
Further, rapidly changing and unprecedented market conditions could materially impact the valuation of securities as reported within the financial statements, and the period-to-period changes in value could vary significantly. Decreases in value could have a material adverse effect on our results of operations and financial condition.
In connection with the Individual Life Transaction, we have entered into large reinsurance agreements with SLD, our former insurance subsidiary, with respect to the portion of the Individual Life and other legacy businesses that have been written by our insurance subsidiaries domiciled in Minnesota, Connecticut and New York.
In connection with the Individual Life Transaction, we have entered into large reinsurance agreements with Security Life of Denver ("SLD"), our former insurance subsidiary, with respect to the portion of the Individual Life and other legacy businesses that have been written by our insurance subsidiaries domiciled in Minnesota, Connecticut and New York.
We have estimated the deferred tax asset based on projections of future taxable income and on tax planning related to unrealized gains on investment assets. To the extent our estimates of future taxable income decrease or if actual future taxable income is less than the projected amounts, the recognition of the deferred tax asset may be reduced.
We have estimated our deferred tax assets based on projections of future taxable income and on tax planning related to unrealized gains on investment assets. To the extent that our estimates of future taxable income decrease or if actual future taxable income is less than the projected amounts, recognition of our deferred tax assets may be reduced.
A decline in RBC ratios, whether or not it results in a failure to meet applicable RBC requirements, may still limit the ability of an insurance subsidiary to make dividends or distributions to us, could result in a loss of customers or new business, and could be a factor in causing ratings agencies to downgrade the insurer’s financial strength ratings, each of which could have a material adverse effect on our business, results of operations and financial condition.
A decline in RBC ratios, whether or not it results in a failure to meet applicable RBC requirements, may still limit the ability of an insurance subsidiary to make dividends 42 Table of Contents or distributions to us, could result in a loss of customers or new business, and could be a factor in causing ratings agencies to downgrade the insurer’s financial strength ratings, each of which could have a material adverse effect on our business, results of operations and financial condition.
Also, bank regulators and other supervisory authorities in the U.S. and elsewhere continue to scrutinize payment processing and other transactions under regulations governing such matters as money-laundering, prohibited transactions with countries subject to sanctions, and bribery or other anti-corruption measures.
Also, bank regulators and other supervisory authorities in the U.S. and elsewhere continue to scrutinize payment processing and other transactions under regulations governing such matters as money-laundering, prohibited transactions with countries subject to sanctions, and bribery or corruption.
If we are required to return significant amounts of cash collateral on short notice and we are forced to sell securities to meet the return obligation, we may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than we otherwise would have been able to realize under normal market conditions, or both.
If we are required to return 29 Table of Contents significant amounts of cash collateral on short notice and we are forced to sell securities to meet the return obligation, we may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than we otherwise would have been able to realize under normal market conditions, or both.
It is possible that our results of operations or cash flows in a particular interim or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation depending, in part, upon the results of operations or cash flows for such period.
It is possible that our results of operations or cash flows in a particular interim or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation depending, in part, on the results of operations or cash flows for such period.
Failure to administer product features in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities, or insurance requirements could subject us to administrative penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, harm to our reputation, interruption of our operations or adversely impact profitability.
Failure to manage or administer product features in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities, or insurance requirements, could subject us to administrative penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, harm to our reputation, interrupt our operations or adversely impact profitability.
The ability of our subsidiaries to pay dividends or other distributions to Voya Financial, Inc. in the future will depend on their earnings, tax considerations, covenants contained in any financing or other agreements and applicable regulatory restrictions.
The ability of our subsidiaries to pay dividends or make other distributions to Voya Financial, Inc. in the future will depend on their earnings, tax considerations, covenants contained in their financing or other agreements and applicable regulatory restrictions.
Changes in these laws and regulations, or in interpretations thereof, are often made for the benefit of the consumer at the expense of the insurer and could materially and adversely affect our business, results of operations or financial condition.
Changes in these laws and regulations, or in interpretations thereof, are often made for the protection of the consumer at the expense of the insurer and could materially and adversely affect our business, results of operations or financial condition.
Pricing of our Health Solutions products is also based in part upon expected persistency of these products, which is the probability that a policy will remain in force from one period to the next.
Pricing of our Health Solutions products is also based in part on expected persistency of these products, which is the probability that a policy will remain in force from one period to the next.
Our revenues from our investment management business operations are dependent on fees earned under asset management and related services agreements that we have with the clients and funds we advise. Adjusted operating revenues for this segment could be adversely affected if these agreements are altered significantly or terminated in the future.
Our revenues from our investment management business operations are also dependent on fees earned under asset management and related services agreements that we have with the clients and funds we advise. Revenues for this segment could be adversely affected if these agreements are altered significantly or terminated in the future.
There can be no assurance that management has accurately assessed the level of impairments taken and allowances reflected in our financial statements. Furthermore, additional impairments may need to be taken or allowances 37 Table of Contents provided for in the future if investments perform worse than our expectations. Historical trends may not be indicative of future impairments or allowances.
There can be no assurance that management has accurately assessed the level of impairments taken and allowances reflected in our financial statements. Furthermore, additional impairments may need to be taken or allowances provided for in the future if investments perform worse than our expectations. Historical trends may not be indicative of future impairments or allowances.
Although we maintain a hedge program and other risk mitigating features to offset these risks, such program and features may not operate as intended or may not be fully effective, and we may remain exposed to such risks.
Although we maintain a hedging program and other risk mitigating features to offset these risks, such program and features may not operate as intended or may not be fully effective, and we may remain exposed to such risks.
Although we employ controls and procedures designed to monitor associates' business decisions and to prevent us from taking excessive or inappropriate risks, associates may take such risks regardless of such controls and procedures.
Although we employ controls and procedures designed to monitor employees' and associates' business decisions and to prevent us from taking excessive or inappropriate risks, employees and associates may take such risks regardless of such controls and procedures.
In addition, rating agencies may implement changes to their capital models that may favorably or unfavorably affect our ratings. We cannot assure you that these ratings will remain in effect for any given period of time or that a rating will not be lowered, suspended or withdrawn.
In addition, rating agencies may implement changes to their capital models that may favorably or unfavorably affect our ratings. We cannot assure you that these ratings will remain in effect for any given period of time or that a rating will not be lowered, 28 Table of Contents suspended or withdrawn.
In addition to the potential effect of natural or man-made disasters, significant changes in mortality or morbidity could emerge gradually over time due to changes in the natural environment, the health habits of the insured population, technologies and treatments for disease or disability, the economic environment, or other factors.
In addition to the potential effect of natural or man-made disasters, significant changes in mortality or morbidity could emerge gradually over time due to changes in the natural environment, the health habits of the insured population, technologies and 34 Table of Contents treatments for disease or disability, the economic environment, or other factors.
The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including whether the insured losses meet the qualifying conditions of the reinsurance contract, whether reinsurers or their affiliates have the financial capacity and willingness to make payments under the terms of the reinsurance contract, and the degree to which our reinsurance balances are secured by sufficient qualifying assets in qualifying trusts or qualifying LOCs issued by qualifying lender banks.
The collectability of reinsurance recoverables is subject to uncertainty arising from a number of factors, including whether the insured losses meet the qualifying conditions of the reinsurance contract, whether reinsurers or their affiliates have the financial capacity and willingness to make payments under the terms of the reinsurance contract, and the degree to which our reinsurance balances are secured by sufficient qualifying assets in qualifying trusts or qualifying LOCs issued by qualifying lending institutions.
If we fail to address, or appear to fail to address, appropriately any of these matters, our reputation could be harmed and we could be subject to additional legal risk, which could increase the size and number of claims and damages asserted against us or subject us to enforcement actions, fines and penalties.
If we fail to address, or appear to fail to address, appropriately any of these matters, our reputation could be harmed and we could be subject to 41 Table of Contents additional legal risk, which could increase the size and number of claims and damages asserted against us or subject us to enforcement actions, fines and penalties.
If these steps are unsuccessful, or if unaffiliated non-accredited reinsurers that have reinsured business from our insurance subsidiaries are unsuccessful in obtaining sources of qualifying reinsurance collateral, our insurance subsidiaries might not be able to obtain full statutory reserve credit.
If these steps are unsuccessful, or if unaffiliated non-accredited 35 Table of Contents reinsurers that have reinsured business from our insurance subsidiaries are unsuccessful in obtaining sources of qualifying reinsurance collateral, our insurance subsidiaries might not be able to obtain full statutory reserve credit.
While in many cases we are permitted to require additional collateral from counterparties that experience financial difficulty, disputes 34 Table of Contents may arise as to the amount of collateral we are entitled to receive and the value of pledged assets.
While in many cases we are permitted to require additional collateral from counterparties that experience financial difficulty, disputes may arise as to the amount of collateral we are entitled to receive and the value of pledged assets.
If our joint ventures, affiliates or third-party service providers experience disruptions or do not perform as anticipated, or we experience problems with a transition, we may experience system failures, disruptions, or other operational difficulties, an inability to meet obligations, including, but not limited to, obligations to policyholders, customers, business partners and distribution partners, increased costs and a loss of business, and such events may have a material adverse effect on our business and results of operations.
If our third-party service providers experience disruptions or do not perform as anticipated, or we experience problems with a transition, we may experience system failures, disruptions, or other operational difficulties, an inability to meet obligations, including obligations to policyholders, customers, business partners and distribution partners, increased costs and loss of business, and such events may have a material adverse effect on our business and results of operations.
Best, each of which currently maintain an investment grade rating with respect to us. Our ability to obtain secured or unsecured debt financing and our cost of secured or unsecured debt financing is dependent, in part, on our credit ratings.
Best, each of which currently maintain an investment grade rating with respect to us. Our ability to obtain secured or unsecured debt financing and our cost of secured or unsecured debt financing depend, in part, on our credit ratings.
Unfavorable developments in interest rates, credit spreads and policyholder behavior can result in adverse financial consequences related to our stable value products, and our hedge program and risk mitigation features may not successfully offset these consequences.
Unfavorable developments in interest rates, credit spreads and policyholder behavior may result in adverse financial consequences related to our stable value products, and our hedging program and risk mitigation features may not successfully offset these consequences.
We compete with other financial institutions to attract and retain commercial relationships in each of these channels, and our success in competing for sales through these distribution intermediaries depends upon factors such as the amount of sales commissions and fees we pay, the breadth of our product offerings, the strength of our brand, our perceived stability and financial strength ratings, and the marketing and services we provide to, and the strength of the relationships we 44 Table of Contents maintain with, individual distributors.
We compete with other financial institutions to attract and retain commercial relationships in each of these channels, and our success in competing for sales through these distribution intermediaries depends on factors such as the amount of sales commissions and fees we pay, the breadth of our product offerings, the strength of our brand, our perceived stability and financial strength ratings, and the marketing and services we provide to, and the strength of the relationships we maintain with, individual distributors.
We set prices for many of our Health Solutions products based upon expected claims and payment patterns, using assumptions for mortality rates, or likelihood of death, and morbidity rates, or likelihood of sickness, of our policyholders.
We set prices for many of our Health Solutions products based on expected claims and payment patterns, using assumptions for mortality rates, or likelihood of death, and morbidity rates, or likelihood of sickness or accident, of our policyholders.
A number of these risks materialized in connection with the COVID-19 pandemic, which created material economic disruption worldwide and also had significant effects on our business operations, including the operations of our overseas joint venture and third-party outsourcing providers.
A number of these risks materialized in connection with the COVID-19 pandemic, which created material economic disruption worldwide and had significant effects on our business operations, including our operations in India and the overseas operations of our third-party outsourcing providers.
If we fail in the future to maintain adequate internal controls, including any failure to implement newly-required additional controls, or if our employees, contractors or representatives fail to comply with our policies and procedures, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or confidential customer information could occur.
If we fail in the future to maintain adequate internal controls, including any failure to implement newly-required additional controls, or if our employees, contractors or representatives fail to comply with our policies and procedures, or if we fail to implement or maintain such controls and policies and procedures when integrating acquired businesses, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or confidential customer information could occur.
The long-term profitability of such products depends upon how our actual mortality rates, and to a lesser extent actual morbidity rates, compare to our pricing assumptions. In addition, prolonged or severe adverse mortality or morbidity experience could result in increased reinsurance costs, and ultimately, reinsurers might not offer coverage at all.
The long-term profitability of such products depends on how our actual mortality and morbidity rates compare to our pricing assumptions. In addition, prolonged or severe adverse mortality or morbidity experience could result in increased reinsurance costs, and ultimately, reinsurers might not offer coverage at all.
Our businesses and relationships with customers are dependent upon our ability to maintain the privacy, security and confidentiality of our and our customers’ personal information, trade secrets and other confidential information (including customer transactional data and personal information about our customers, the employees and customers of our customers, and our own employees and agents).
Our business and relationships with customers are dependent on our ability to maintain the privacy, security and confidentiality of our and our customers’ personal information, trade secrets and other confidential information (including customer transactional data and personal information about our customers, the employees and customers of our customers, and our own employees and agents).
We need liquidity to pay our operating expenses, interest on our debt and dividends on our capital stock, to carry out any share repurchases that we may undertake, to maintain our securities lending activities, to collateralize certain obligations with respect to our indebtedness, and to replace certain maturing liabilities.
We need liquidity to pay our operating expenses, interest on our debt and dividends on our capital stock, to carry out any share repurchases that we may undertake, to maintain our securities lending activities, to collateralize certain obligations with respect to our indebtedness, to fund policyholder withdrawals and other benefits, and to replace certain maturing liabilities.
A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and adversely affect our results of operations and financial condition. We are currently subject to periodic review by independent credit rating agencies S&P, Moody's, Fitch and A.M.
Liquidity, Credit and Investment Risks A downgrade or a potential downgrade in our financial strength or credit ratings may result in a loss of business and adversely affect our results of operations and financial condition. We are currently subject to periodic review by independent credit rating agencies S&P, Moody's, Fitch and A.M.
Section 382 and Section 383 of the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), operate as anti-abuse rules, the general purpose of which is to prevent trafficking in tax losses and credits, but which can apply without regard to whether a "loss trafficking" transaction occurs or is intended.
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), operate as anti-abuse rules, the general purpose of which is to prevent trafficking in tax losses and credits, but which can apply without regard to whether a "loss trafficking" transaction occurs or is intended.
Governmental scrutiny with respect to matters relating to compensation, compliance with regulatory and tax requirements and other business practices in the financial services industry has increased dramatically in the past several years and has resulted in more aggressive and intense regulatory supervision and the application and enforcement of more stringent standards.
In addition, governmental scrutiny with respect to matters relating to compensation, compliance with regulatory and tax requirements, environmental laws and other business practices in the financial services industry has increased significantly in the past several years and has resulted in more aggressive and intense regulatory supervision and the application and enforcement of more stringent standards.
Our participation in a securities lending program and a repurchase program subjects us to potential liquidity and other risks. The repurchase of securities or our inability to enter into new repurchase agreements would reduce the amount of such cash collateral available to us.
Our participation in securities lending and repurchase programs subjects us to potential liquidity and other risks. The repurchase of securities or our inability to enter into new repurchase agreements would reduce the amount of cash collateral available to us.
Because we operate in highly competitive markets, we may not be able to increase or maintain our market share, which may have an adverse effect on our results of operations.
Strategic and Business Risks Because we operate in highly competitive markets, we may not be able to increase or maintain our market share, which may have an adverse effect on our results of operations.
For additional information regarding new accounting standards, see the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
For additional information regarding new accounting standards, see the Business, Basis of Presentation and Significant Accounting Policies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Item 1B. Unresolved Staff Comments None.
To the extent that an insurance subsidiary's RBC ratios are deemed to be insufficient, we may seek to take actions either to increase the capitalization of the insurer or to reduce the capitalization requirements. If we were unable to accomplish such actions, the rating agencies may view this as a reason for a ratings downgrade.
To the extent that any of our insurance subsidiary's RBC ratios are deemed to be insufficient, we may seek to take actions to increase its capitalization or reduce the capitalization requirements. If we were unable to accomplish such actions, the rating agencies may view this as a reason for a ratings downgrade.
For additional risks related to our potential failure to protect confidential information, see risk factors Interruption or other operational failures in telecommunication, information technology, and other operational systems, including as a result of human error, could harm our business and A failure to maintain the security, integrity, confidentiality or privacy of our telecommunication, information technology or other operational systems, or the sensitive data residing on such systems, could harm our business .
For additional risks related to our potential failure to protect confidential information, see risk factor Interruption or other operational failures in telecommunication, cybersecurity, information technology and other operational systems, including as a result of human and process error or a failure to maintain the security, integrity, confidentiality, or privacy of such systems, could harm our business .
Our business and results of operations are materially affected by conditions in the global capital markets and the economy generally, and are vulnerable to general economic disruption, decreases in asset prices, increases in market volatility and reductions in the availability of credit.
Our business and results of operations are affected by conditions in the global capital markets and the economy generally, and are vulnerable to general economic disruption, decreases in asset prices, increases in market volatility and reductions in the availability of credit. We are affected by both domestic and international macroeconomic developments.
The occurrence of natural or man-made disasters, including the COVID-19 pandemic, may adversely affect our results of operations and financial condition.
The occurrence of natural or man-made disasters may adversely affect our results of operations and financial condition.
Risks Related to Our Holding Company Structure As holding companies, Voya Financial, Inc. and Voya Holdings depend on the ability of their subsidiaries to transfer funds to them to meet their obligations.
As holding companies, Voya Financial, Inc. and Voya Holdings depend on the ability of their subsidiaries to transfer funds to them to meet their obligations.
We are highly dependent on automated and information technology systems to record and process both our internal transactions and transactions involving our customers, as well as to calculate reserves, value invested assets and complete certain other components of our U.S. GAAP and statutory financial statements.
We are highly dependent on automated and information technology systems, including off-premises systems provided by various cloud services providers, to record and process both our internal transactions and transactions involving our customers, as well as to calculate reserves, value invested assets and complete certain other components of our U.S. GAAP and statutory financial statements.
If we require significant amounts of cash on short notice in excess of normal cash requirements or are required to post or return collateral in connection with our investment portfolio, derivatives transactions or securities lending activities, we may have difficulty selling these investments in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both.
If we require significant amounts of cash on short notice in excess of normal cash requirements or are required to post or return collateral in connection with our investment portfolio, derivatives transactions or securities lending activities, we may have difficulty selling these investments in a timely manner, be forced to sell them for less than we otherwise would have been able to realize, or both. 31 Table of Contents We invest a portion of our invested assets in investment funds, many of which make private equity investments.
Other risk management methods depend on the evaluation of information regarding 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.
Our risk management methods depend on the evaluation of information regarding markets, customers, catastrophe occurrence or other matters that is publicly available or otherwise accessible to us, as well as on timely escalation of critical information regarding our operations and systems. This information may not always be accurate, complete, up-to-date or properly evaluated.
Profitability from new business emerges over a period of years, depending on the nature and life of the product, and is subject to variability as actual results may differ from pricing assumptions.
We monitor and manage pricing and sales to achieve target returns. Profitability from new business emerges over a period of years, depending on the nature and life of the product, and is subject to variability as actual results may differ from pricing assumptions.
GAAP, which is periodically revised or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the Financial Accounting Standards Board ("FASB").
Our financial statements are subject to the application of U.S. GAAP, which is periodically revised or expanded. Accordingly, from time to time we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the Financial Accounting Standards Board ("FASB").
Neither Voya Financial, Inc., nor Voya Holdings, has significant sources of cash flows other than from our subsidiaries that do not guarantee such indebtedness.
Voya Financial, Inc. and Voya Holdings do not have significant sources of cash flows other than from our subsidiaries that do not guarantee such indebtedness.
Risks Related to Our Business Conditions in the global capital markets and the economy generally have affected and may continue to affect our business and results of operations.
Global Market Risks Conditions in the global capital markets and the economy generally, as well as geopolitical events, have affected and may continue to affect our business and results of operations.
Changes in tax laws and interpretations of existing tax law could increase our tax costs, impact the ability of our insurance company subsidiaries to make distributions to Voya Financial, Inc. or make our products less attractive to customers.
Changes in tax laws and interpretations of existing tax law, including recent U.S. tax law changes, could impact the taxation of our operations or impact the ability of our insurance company subsidiaries to make distributions to Voya Financial, Inc. or make our products less attractive to customers.
The primary purpose of state regulation is to protect policyholders, and not necessarily to protect creditors or investors. See —Regulation—Insurance Regulation in Part I, Item 1. of this Annual Report on Form 10-K. State insurance regulators, the NAIC and other regulatory bodies regularly reexamine existing laws and regulations applicable to insurance companies and their products.
See —Regulation—Insurance Regulation in Part I, Item 1. of this Annual Report on Form 10-K. State insurance regulators, the NAIC and other regulatory bodies regularly reexamine existing laws and regulations applicable to insurance companies and their products.
Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, could result in some type of inquiry or investigation by regulators, legislators and/or law enforcement officials or in lawsuits.
Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, can lead to increased inquiries or investigation by regulators, legislators or law enforcement officials or in lawsuits.
The NAIC has established regulations that provide minimum capitalization requirements based on RBC formulas for 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 minimum death and living benefits.
The NAIC has established regulations that provide minimum capitalization requirements based on RBC formulas for 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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties As of December 31, 2022, we owned or leased 72 locations totaling approximately 1.7 million square feet, of which approximately 849 thousand square feet was owned properties and approximately 858 thousand square feet was leased properties throughout the U.S. and elsewhere.
Biggest changeItem 2. Properties As of December 31, 2023, we owned or leased 76 locations in the U.S. and elsewhere, totaling approximately 1.9 million square feet, of which approximately 849 thousand square feet was owned properties and approximately 1.1 million square feet was leased properties.
We believe that our owned and leased properties are suitable and adequate for our current business operations. 48
We believe that our owned and leased properties are suitable and adequate for our current business operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings See the Litigation and Regulatory Matters section of the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for a description of our material legal proceedings. Item 4. Mine Safety Disclosures Not Applicable. PART II
Biggest changeItem 3. Legal Proceedings See the Litigation, Regulatory Matters and Loss Contingencies section of the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for a description of our material legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe share repurchase authorization expires on June 30, 2023 (unless extended) and does not obligate the Company to purchase any shares. The authorization for the share repurchase program may be terminated, increased or decreased by the Board of Directors at any time.
Biggest changeThe authorization for the share repurchase program may be terminated, increased or decreased by the Board of Directors at any time. For equity compensation information, refer to the Share-based Incentive Compensation Plans Note in our Consolidated Financial Statements in Part II, Item 8. and to Part III, Item 12.
See Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K for further information regarding common stock dividends. At February 15, 2023, there were 53 stockholders of record of common stock.
See Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7. of this Annual Report on Form 10-K for further information regarding common stock dividends. At February 14, 2024, there were 61 stockholders of record of common stock.
Purchases 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, 2022: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (in millions) October 1, 2022 - October 31, 2022 23,737 $ 66.00 — $ 271 November 1, 2022 - November 30, 2022 6,789 67.63 — 271 December 1, 2022 - December 31, 2022 8,439 62.73 — 271 Total 38,965 $ 65.58 — N/A (1) In connection with exercise of vesting of equity-based compensation awards, employees may remit to Voya Financial, Inc., or Voya Financial, Inc. may withhold into treasury stock, shares of common stock in respect to tax withholding obligations and option exercise cost associated with such exercise or vesting.
Purchases 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, 2023: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (in millions) October 1, 2023 - October 31, 2023 749,773 $ 66.31 737,300 $ 506 November 1, 2023 - November 30, 2023 794,443 70.05 775,933 452 December 1, 2023 - December 31, 2023 759,336 73.34 744,875 397 Total 2,303,552 $ 69.92 2,258,108 N/A (1) In connection with exercise or vesting of equity-based compensation awards, employees may remit to Voya Financial, Inc., or Voya Financial, Inc. may withhold into treasury stock, shares of common stock in respect of tax withholding obligations and option exercise cost associated with such exercise or vesting.
For equity compensation information, refer to the Share-based Incentive Compensation Plans Note in our Consolidated Financial Statements in Part II, Item 8. and to Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this Annual Report on Form 10-K.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this Annual Report on Form 10-K.
Removed
For the three months ended December 31, 2022, there were 38,965 Treasury share increases in connection with such withholding activities. (2) On April 28, 2022, the Board of Directors provided its most recent share repurchase authorizations, increasing the aggregate amount of the Company's common stock authorized for repurchase by $500 million.
Added
Stockholders of record include institutional or omnibus accounts that hold common stock for many underlying investors.
Added
For the three months ended December 31, 2023, there were 45,444 Treasury share increases in connection with such withholding activities. (2) This share repurchase authorization expires on September 30, 2024 (unless extended), and does not obligate the Company to purchase any shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

228 edited+56 added−127 removed126 unchanged
Biggest changeSee DAC/VOBA Unlocking in Part II, Item 7. of this Annual Report on Form 10-K for further information. 61 Table of Contents The following tables present Total Client Assets, which comprise total AUM and AUA, for our Wealth Solutions segment as of the dates indicated: As of December 31, ($ in millions) 2022 2021 Full Service $ 162,664 $ 187,702 Recordkeeping 250,507 279,501 Total Defined Contribution 413,171 467,203 Investment-only Stable Value 38,148 40,246 Retail Client and Other Assets 22,958 28,796 Total Client Assets $ 474,277 $ 536,246 As of December 31, ($ in millions) 2022 2021 Fee-based $ 379,706 $ 434,340 Spread-based 33,881 33,359 Investment-only Stable Value 38,148 40,246 Retail Client Assets 22,543 28,300 Total Client Assets $ 474,277 $ 536,246 The following table presents Full Service, Recordkeeping, and Stable Value net flows for our Wealth Solutions segment for the periods indicated: As of December 31, ($ in millions) 2022 2021 Full Service - Corporate markets: Deposits $ 14,722 $ 14,740 Surrenders, benefits and product charges (11,910) (13,709) Net flows 2,812 1,031 Full Service - Tax-exempt markets: Deposits 6,143 6,239 Surrenders, benefits and product charges (6,002) (6,694) Net flows 141 (455) Total Full Service Net Flows $ 2,953 $ 576 Recordkeeping and Stable Value: Recordkeeping Net Flows $ 766 $ (6,731) Investment-only Stable Value Net Flows $ 1,215 $ (2,108) Wealth Solutions - Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Adjusted operating earnings before income taxes decreased $403 million from $1,110 million to $707 million primarily due to: • lower alternative asset returns, partially offset by higher investment margin primarily driven by higher portfolio yield; and • lower fee income and other revenue resulting from lower average equity markets, the sale of the Financial Planning Channel, and a lower earned rate, partially offset by favorable market value adjustments. 62 Table of Contents The decrease was partially offset by: • lower expenses primarily driven by the impact of the Financial Planning Channel sale, lower commissions as a result of equity market declines and a legal accrual in the prior year, partially offset by business growth; and • higher favorable DAC unlocking primarily due to third quarter annual assumption updates in the current year, partially offset by unfavorable DAC unlocking primarily due to equity market performance in the current year.
Biggest changeHistorical periods presented have been recast to conform with this change. 55 Table of Contents The following table presents Full Service, Recordkeeping, and Stable Value net flows for our Wealth Solutions segment for the periods indicated: As of December 31, ($ in millions) 2023 2022 Full Service - Corporate markets: Deposits $ 16,591 $ 14,722 Surrenders, benefits and product charges (14,627) (11,910) Net flows 1,964 2,812 Full Service - Tax-exempt markets: Deposits 5,585 6,143 Surrenders, benefits and product charges (10,495) (6,002) Net flows (4,910) 141 Total Full Service Net Flows $ (2,945) $ 2,953 Recordkeeping and Stable Value: Recordkeeping Net Flows $ 7,437 $ 766 Investment-only Stable Value Net Flows $ (4,265) $ 1,215 Wealth Solutions - Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Adjusted operating earnings before income taxes decreased $65 million from $697 million to $632 million primarily due to: • higher expenses primarily driven by business growth; • lower net investment income primarily due to lower alternative asset returns and lower spread-based assets due to participant surrenders and fund transfer activities, partially offset by a higher portfolio yield; and • higher crediting rates due to higher interest rates.
AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk, separate account assets in which the contract owner bears the investment risk and institutional/mutual funds, which are excluded from our balance sheets.
AUM includes general account assets managed by our Investment Management segment in which we bear the investment risk and separate account assets in which the contract owner bears the investment risk and institutional/mutual funds, which are excluded from our balance sheets.
Fees earned on AUA are generally based on the number of participants, asset levels and/or the level of services or product guarantees that are provided. Our consolidated AUM/AUA includes eliminations of AUM/AUA managed by our Investment Management segment that is also reflected in other segments’ AUM/AUA and adjustments for AUM not reflected in any segments.
Fees earned on AUA are generally based on the number of participants, asset levels or the level of services or product guarantees that are provided. Our consolidated AUM/AUA includes eliminations of AUM/AUA managed by our Investment Management segment that is also reflected in other segments’ AUM/AUA and adjustments for AUM not reflected in any segments.
We do not expect the annual limitation to impact our ability to utilize the losses or credits. For further information on our income taxes, including information on the valuation allowance, see the Income Taxes Note to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
We do not expect the annual limitation to impact our ability to utilize the losses or credits. For further information on our income taxes, including information on the valuation allowance, see the Income Taxes Note in our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
In addition, in 2015 we entered into a put option agreement with a Delaware trust that gives Voya Financial, Inc. the right, at any time over a 10-year period, to issue up to $500 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 addition, in 2015 we entered into a put option agreement with a Delaware trust that gives Voya Financial, Inc. the right, at any time over a 10.0-year period, to issue up to $500 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.
See Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K for additional information regarding specific hedging strategies we utilize to mitigate 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.
In addition, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K for additional information regarding specific hedging strategies we utilize to mitigate 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.
We also have investments in certain fixed maturities and have issued certain universal life-type and annuity products that contain embedded derivatives for which 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.
We also have investments in certain fixed maturities and have issued certain universal life-type ("UL-type") and annuity products that contain embedded derivatives for which 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.
Due to the significance of the assumptions used, the amounts presented could materially differ from actual results. (3) Contractual obligations related to certain closed blocks that were divested through reinsurance to third parties with reserves in the amount of $1.2 billion, have been excluded from the table.
Due to the significance of the assumptions used, the amounts presented could materially differ from actual results. (3) Contractual obligations related to certain closed blocks that were divested through reinsurance to third parties with reserves in the amount of $1.1 billion, have been excluded from the table.
As of December 31, 2022, we held $1.9 billion of energy sector fixed maturity securities, constituting 6.1% of the total fixed maturities portfolio, with gross unrealized capital losses of $160 million, including one energy sector fixed maturity security with unrealized capital losses in excess of $10 million. The unrealized capital losses on this fixed maturity security equaled $11 million.
As of December 31, 2022, we held $1.9 billion of energy sector fixed maturity securities, constituting 6.1% of the total fixed maturities portfolio, with gross unrealized capital losses of $160 million, including one energy sector fixed maturity security with unrealized capital losses in excess of $10 million. The unrealized capital loss on this fixed maturity security equaled $11 million.
For all of our segments, the first quarter of each year typically has elevated operating expenses, reflecting higher payroll taxes, equity compensation grants, and certain other expenses that tend to be concentrated in the first quarters. Additionally, alternative investment income tends to be lower in the first quarters.
For all of our segments, the first quarter of each year typically has elevated operating expenses, reflecting higher payroll taxes, equity compensation grants, and certain other expenses that tend to be concentrated in the first quarter. Additionally, alternative investment income tends to be lower in the first quarter.
Collectability of reinsurance balances are evaluated by monitoring ratings and evaluating the financial strength of our reinsurers. Large reinsurance recoverable balances with offshore or other non-accredited reinsurers are secured through various forms of collateral, including secured trusts, funds withheld accounts and irrevocable LOCs.
Collectability of reinsurance balances is evaluated by monitoring ratings and evaluating the financial strength of our reinsurers. Large reinsurance recoverable balances with offshore or other non-accredited reinsurers are secured through various forms of collateral, including secured trusts, funds withheld accounts and irrevocable LOCs.
Changes in, or deviations from, the assumptions used can significantly affect our reserve levels and related results of operations. Stabilizer and MCG : We issue stabilizer ("Stabilizer") contracts that contain embedded derivatives that are measured at estimated fair value separately from the host contracts.
Changes in, or deviations from, the assumptions used can significantly affect our reserve levels and related results of operations. Stabilizer and MCG : We also issue stabilizer ("Stabilizer") contracts that contain embedded derivatives that are measured at estimated fair value separately from the host contracts.
In addition, our Health Solutions segment provides stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits. Our Health Solutions segment generates revenue from premiums, investment income, mortality and morbidity income and policy and other charges.
In addition, our Health Solutions segment provides stop-loss coverage to employer plan sponsors that self-fund their pharmaceutical and medical benefits. Our Health Solutions segment generates revenue from premiums and fees, investment income, mortality and morbidity income and policy and other charges.
Our Wealth Solutions segment earns revenue from a diverse and complementary business mix, primarily fee income from asset and participant-based recordkeeping and advisory fees as well as investment income on our general account assets and other funds.
Our Wealth Solutions segment earns revenue from a diverse and complementary business mix, primarily fee income from asset based and participant based administrative, recordkeeping and advisory fees as well as investment income on our general account assets and other funds.
GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.
GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Credit Support of Subsidiaries Voya Financial, Inc. provides guarantees to certain of our subsidiaries to support various business requirements: • Voya Financial, Inc. guarantees the obligations of Voya Holdings under the $13 million principal amount 8.42% Series B Capital Securities due April 1, 2027, and provides a back-to-back guarantee to ING Group in respect of its guarantee of $358 million combined principal amount of Aetna Notes. • Voya Financial, Inc. and Voya Holdings provide a guarantee of payment of obligations to certain subsidiaries under certain surplus notes held by those subsidiaries.
Credit Support of Subsidiaries Voya Financial, Inc. provides guarantees to certain of our subsidiaries to support various business requirements: • Voya Financial, Inc. guarantees the obligations of Voya Holdings under the $13 million principal amount 8.42% Series B Capital Securities due April 1, 2027, and provides a back-to-back guarantee to ING Group in respect of its guarantee of $218 million combined principal amount of Aetna Notes. • Voya Financial, Inc. and Voya Holdings provide a guarantee of payment of obligations to certain subsidiaries under certain surplus notes held by those subsidiaries.
These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization. 72 Table of Contents The financial strength and credit ratings of Voya Financial, Inc. and its principal subsidiaries as of the date of this Annual Report on Form 10-K are summarized in the following table.
These ratings are not a recommendation to buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the rating organization. 66 Table of Contents The financial strength and credit ratings of Voya Financial, Inc. and its principal subsidiaries as of the date of this Annual Report on Form 10-K are summarized in the following table.
Share Repurchase Program and Dividends to Shareholders See the Shareholders' Equity Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information relating to authorizations by the Board of Directors to repurchase our shares and amounts of common stock repurchased pursuant to such authorizations for the years ended December 31, 2022 and 2021.
Share Repurchase Program and Dividends to Common Shareholders See the Shareholders' Equity Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information relating to authorizations by the Board of Directors to repurchase our shares and amounts of common stock repurchased pursuant to such authorizations for the years ended December 31, 2023 and 2022.
Also, for additional information on our sensitivity to interest rates, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K. 53 Table of Contents Seasonality and Other Matters Our business results can vary from quarter to quarter as a result of seasonal factors.
Also, for additional information on our sensitivity to interest rates, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A. of this Annual Report on Form 10-K. 48 Table of Contents Seasonality and Other Matters Our business results can vary from quarter to quarter as a result of seasonal factors.
(5) BBB+/stable Baa2/stable BBB+/stable Financial Strength Rating/Outlook: Voya Retirement Insurance and Annuity Company (5) A/stable A2/stable A+/stable ReliaStar Life Insurance Company A/stable A/stable A2/stable A+/stable ReliaStar Life Insurance Company of New York A/stable A/stable A2/stable A+/stable (1) A.M.
(5) BBB+/positive Baa2/stable BBB+/stable Financial Strength Rating/Outlook: Voya Retirement Insurance and Annuity Company (5) A/positive A2/stable A+/stable ReliaStar Life Insurance Company A/stable A/positive A2/stable A+/stable ReliaStar Life Insurance Company of New York A/stable A/positive A2/stable A+/stable (1) A.M.
Adjustments from Income (Loss) from Continuing Operations before Income Taxes to Adjusted Operating Earnings before Income Taxes For additional information on the reconciliation adjustments listed below, see the Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
Adjustments from Income (Loss) before Income Taxes to Adjusted Operating Earnings (Loss) before Income Taxes For additional information on the reconciliation adjustments listed below, see the Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
As of December 31, 2022, there were no preferred stock dividends in arrears. See the Shareholders' Equity Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on preferred stock issuances.
As of December 31, 2023, there were no preferred stock dividends in arrears. See the Shareholders' Equity Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further information on preferred stock issuances.
State insurance regulators use the RBC requirements to identify inadequately capitalized insurers. Not meeting the minimum amount of capital based upon RBC requirements may subject the insurer to varying levels of regulatory oversight. As of December 31, 2022, the Total Adjusted Capital of each of our insurance subsidiaries exceeded statutory minimum RBC levels.
State insurance regulators use the RBC requirements to identify inadequately capitalized insurers. Not meeting the minimum amount of capital based upon RBC requirements may subject the insurer to varying levels of regulatory oversight. As of December 31, 2023, the Total Adjusted Capital of each of our insurance subsidiaries exceeded statutory minimum RBC levels.
Recurring deposits in the Corporate Market may be lower in the fourth quarters as higher paid participants scale back or halt their contributions upon reaching the annual maximums allowed for the year. Finally, Corporate Market withdrawals tend to increase in the fourth quarters, as in the first quarters, due to departing sponsors.
Recurring deposits in the Corporate Market may be lower in the fourth quarter as higher paid participants scale back or halt their contributions upon reaching the annual maximums allowed for the year. Finally, Corporate Market withdrawals tend to increase in the fourth quarter, as in the first quarter, due to departing sponsors.
As part of our liquidity management process, we model different scenarios to determine whether existing assets are adequate to meet projected cash flows. 69 Table of Contents Capitalization The primary components of our capital structure consist of debt and equity securities.
As part of our liquidity management process, we model different scenarios to determine whether existing assets are adequate to meet projected cash flows. 63 Table of Contents Capitalization The primary components of our capital structure consist of debt and equity securities.
Although we are not relieved of legal liability to the contract holder for these closed blocks, third-party collateral of $1.3 billion has been provided for the payment of the related insurance obligations. The sufficiency of collateral held for any individual block may vary.
Although we are not relieved of legal liability to the contract holder for these closed blocks, third-party collateral of $1.2 billion has been provided for the payment of the related insurance obligations. The sufficiency of collateral held for any individual block may vary.
See A downgrade or a potential downgrade in our financial strength or credit ratings could result in a loss of business and adversely affect our results of operations and financial condition in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K.
See A downgrade or a potential downgrade in our financial strength or credit ratings may result in a loss of business and adversely affect our results of operations and financial condition in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K.
(2) The year ended December 31, 2022 loss ratio excludes $59 million of favorable reserve impact related to annual review of the assumptions. (3) Total Loss Ratio is presented on a trailing twelve month basis.
(2) The year ended December 31, 2022 loss ratio excludes $57 million of favorable reserve impact related to annual review of the assumptions. (3) Total Loss Ratio is presented on a trailing twelve month basis.
We did not recognize any asset or liability as of December 31, 2022 in relation to intercompany indemnifications, guarantees or support agreements. As of December 31, 2022, no guarantees existed in which we were required to currently perform under these arrangements.
We did not recognize any asset or liability as of December 31, 2023 in relation to intercompany indemnifications, guarantees or support agreements. As of December 31, 2023, no guarantees existed in which we were required to currently perform under these arrangements.
Primary uses of these funds are payments of policyholder benefits, commissions and operating expenses, interest credits, share repurchases, investment purchases, business acquisitions and contract maturities, withdrawals and surrenders. Parent Company Sources and Uses of Liquidity Voya Financial, Inc. is largely dependent on cash flows from its operating subsidiaries to meet its obligations.
Primary uses of these funds are payments of policyholder benefits, commissions and operating expenses, interest credits, dividends, debt maturities and redemptions, share repurchases, investment purchases, business acquisitions and contract maturities, withdrawals and surrenders. Parent Company Sources and Uses of Liquidity Voya Financial, Inc. is largely dependent on cash flows from its operating subsidiaries to meet its obligations.
See the Financing Agreements and Income Taxes Notes to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form10-K for more information on this agreement. Critical Accounting Judgments and Estimates General The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S.
See the Financing Agreements and Income Taxes Notes to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form10-K for more information on this agreement. 70 Table of Contents Critical Accounting Judgments and Estimates General The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S.
NAIC designations 3 through 6 include fixed maturity securities generally considered below investment grade by such rating organizations. 87 Table of Contents The NAIC designations for structured securities, including subprime and Alt-A RMBS, are based upon a comparison of the bond's amortized cost to the NAIC's loss expectation for each security.
NAIC designations 3 through 6 include fixed maturity securities generally considered below investment grade by such rating organizations. The NAIC designations for structured securities, including subprime and Alt-A RMBS, are based upon a comparison of the bond's amortized cost to the NAIC's loss expectation for each security.
Our nonperformance risk adjustment is based on a blend of observable, similarly rated peer holding company credit spreads, adjusted to reflect the credit quality of our individual insurance subsidiary that issued the guarantee, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.
Our nonperformance risk adjustment is based on a blend of observable, similarly rated peer holding company credit spreads, 72 Table of Contents adjusted to reflect the credit quality of our individual insurance subsidiary that issued the guarantee, as well as an adjustment to reflect the non-default spreads and the priority and recovery rates of policyholder claims.
If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. 80 Table of Contents When available, the estimated fair value of securities is based on quoted prices in active markets that are readily and regularly obtainable.
If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. When available, the estimated fair value of securities is based on quoted prices in active markets that are readily and regularly obtainable.
The valuation of financial assets and liabilities involves considerable judgment, is subject to considerable variability, is established using management's best estimate, and is revised as additional information becomes available. As such, changes in, or deviations from, the assumptions used in such valuations can significantly affect our results of operations.
The valuation of financial assets and liabilities involves considerable judgment, is subject to considerable variability, is established using management's best estimate, and is revised as additional information becomes available. As such, changes in, 73 Table of Contents or deviations from, the assumptions used in such valuations can significantly affect our results of operations.
Corporate Market withdrawals also tend to increase in the first quarters as departing sponsors change providers at the start of a new year. • In the third quarters, education tax-exempt markets typically have the lowest recurring deposits, due to the timing of vacation schedules in the academic calendar. • The fourth quarters tend to have the highest level of single/transfer deposits due to new Corporate Market plan sales as sponsors transfer from other providers when contracts expire at the fiscal or calendar year-end.
Corporate Market withdrawals also tend to increase in the first quarter as departing sponsors change providers at the start of a new year. • In the third quarter of each year, education tax-exempt markets typically have the lowest recurring deposits, due to the timing of vacation schedules in the academic calendar. • The fourth quarter of each year tends to have the highest level of single/transfer deposits due to new Corporate Market plan sales as sponsors transfer from other providers when contracts expire at the fiscal or calendar year-end.
Additionally, see the Consolidated and Nonconsolidated Investment Entities Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for more information. 97 Table of Contents Securitizations We invest in various tranches of securitization entities, including RMBS, CMBS and ABS.
Additionally, see the Consolidated and Nonconsolidated Investment Entities Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for more information. Securitizations We invest in various tranches of securitization entities, including RMBS, CMBS and ABS.
Product Guarantees and Index-crediting Features The assumptions used to establish the liabilities for our product guarantees require considerable judgment and are established as management's best estimate of future outcomes. We periodically review these assumptions and, if necessary, update them based on additional information that becomes available.
Product Guarantees The assumptions used to establish the liabilities for our product guarantees require considerable judgment and are established as management's best estimate of future outcomes. We periodically review these assumptions and, if necessary, update them based on additional information that becomes available.
Risk tolerances are established for credit risk, credit spread risk, market 85 Table of Contents risk, liquidity risk and concentration risk across issuers, sectors and asset types that seek to mitigate the impact of cash flow variability arising from these risks. Segmented portfolios are established for groups of products with similar liability characteristics.
Risk tolerances are established for credit risk, credit spread risk, market risk, liquidity risk and concentration risk across issuers, sectors and asset types that seek to mitigate the impact of cash flow variability arising from these risks. Segmented portfolios are established for groups of products with similar liability characteristics.
Our direct exposure in Eastern Europe is comparatively small, with only $6 million of exposure in Russia and none in Ukraine or Belarus. Consolidated and Nonconsolidated Investment Entities We use many forms of entities to achieve our business objectives and we have participated in varying degrees in the design and formation of these entities.
Our direct exposure in Eastern Europe is comparatively small, with $1 million of exposure in Russia and none in Ukraine or Belarus. Consolidated and Nonconsolidated Investment Entities We use many forms of entities to achieve our business objectives and we have participated in varying degrees in the design and formation of these entities.
The approach to testing this and other indefinite-lived intangibles is similar to the impairment testing approach applied to goodwill, except that the testing is performed with reference to the carrying amount and fair value of the intangible asset.
The approach to testing indefinite-lived intangibles is similar to the impairment testing approach applied to goodwill, except that the testing is performed with reference to the carrying amount and fair value of the intangible asset.
Fixed maturities include publicly issued corporate bonds, government bonds, privately placed notes and bonds, bonds issued by states and municipalities, ABS, traditional MBS and various CMO tranches managed in combination with financial derivatives as part of a proprietary strategy known as CMO-B.
Fixed maturities include publicly issued corporate bonds, government bonds, privately placed notes and bonds, bonds issued by states and municipalities, ABS, traditional MBS and various collateralized mortgage obligation ("CMO") tranches managed in combination with financial derivatives as part of a proprietary strategy known as CMO-B.
During the year ended December 31, 2022, we declared and paid dividends of $20 million and $16 million on the Series A and Series B preferred stock, respectively. During the year ended December 31, 2021, we declared and paid dividends of $20 million and $16 million on the Series A and Series B preferred stock, respectively.
During the year ended December 31, 2023, we declared and paid dividends of $20 million and $16 million on the Series A and Series B preferred stock, respectively. During the year ended December 31, 2022, we declared and paid dividends of $20 million and $16 million on the Series A and Series B preferred stock, respectively.
There can be no assurance that actual results will conform to estimates and assumptions and that reported results of operations 76 Table of Contents will not be materially affected by the need to make future accounting adjustments to reflect changes in these estimates and assumptions from time to time.
There can be no assurance that actual results will conform to estimates and assumptions and that reported results of operations will not be materially affected by the need to make future accounting adjustments to reflect changes in these estimates and assumptions from time to time.
The Parent Issuer and the Subsidiary Guarantor are hereby referred to below as the “Obligor Group.” The full and unconditional guarantees require the Subsidiary Guarantor to satisfy the obligations of the guaranteed security immediately, if and when the Parent Issuer has failed to make a scheduled payment thereunder.
The Parent Issuer and the Subsidiary Guarantor are hereby referred to below as the "Obligor Group." The full and unconditional guarantees require the Subsidiary Guarantor to satisfy the obligations of the guaranteed security immediately, if and when the Parent Issuer has failed to make a scheduled payment thereunder.
The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2022 and 2021, and financial condition as of December 31, 2022 and 2021.
The following discussion and analysis presents a review of our results of operations for the years ended December 31, 2023 and 2022, and financial condition as of December 31, 2023 and 2022.
Based on these factors, we expect that the assets will earn an average percentage per year over the long term. This estimation is based on an active return on a compound basis, with a reduction for administrative expenses and manager fees paid to non-affiliated companies from the assets.
Based on these factors, we expect that the assets will earn an average percentage per year over the long term. This estimation is based on an active return on a compound basis, with a reduction for administrative expenses and manager fees 77 Table of Contents paid to non-affiliated companies from the assets.
For additional information on the impact of the interest rate environment, see The level of interest rates may adversely affect our profitability, particularly in the event of a continuation of the current low interest rate environment or a period of rapidly increasing interest rates in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K.
For additional information on the impact of the interest rate environment, see The level of interest rates may adversely affect our profitability, particularly during a period of rapidly increasing interest rates or in the event of a recurrence of a low interest rate environment in Risk Factors in Part I, Item 1A. of this Annual Report on Form 10-K.
Securities lending agreements include provisions which permit us to call back securities with minimal notice and accordingly, the payable is classified as having a term of less than 1 year. Additionally, Securities lending agreements and collateral held include off-balance sheet non-cash collateral of $135 million and $117 million, respectively.
Securities lending agreements include provisions which permit us to call back securities with minimal notice and accordingly, the payable is classified as having a term of less than 1 year. Additionally, Securities lending agreements and collateral held include off-balance sheet non-cash collateral of $215 million and $11 million, respectively.
For additional information on each measure, see Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. AUM and AUA A substantial portion of our fees, other charges and margins are based on AUM.
For additional information on each measure, see Segments Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Assets Under Management ("AUM") and Assets Under Advisement ("AUA") A substantial portion of our fees, other charges and margins are based on AUM.
This item should be read in its entirety and in conjunction with the Consolidated Financial Statements and related notes contained in Part II, Item 8. of this Annual Report on Form 10-K.
This item should be read in its entirety and in conjunction with the Consolidated Financial Statements and related notes contained in Part II, Item 8. of this Annual Report on 45 Table of Contents Form 10-K.
The exposure to interest rate risk, the potential for changes in value that results from changes in the general level of interest rates, is managed to a defined target duration using 91 Table of Contents interest rate swaps and interest rate futures.
The exposure to interest rate risk, the potential for changes in value that results from changes in the general level of interest rates, is managed to a defined target duration using interest rate swaps and interest rate futures.
As of December 31, 2022, the aggregate amount that may be borrowed or lent under agreements with life insurance subsidiaries was $1.3 billion. For non-life insurance subsidiaries, the maximum allowable under the agreement is based on the assets of the subsidiaries and their particular cash requirements.
As of December 31, 2023, the aggregate amount that may be borrowed or lent under agreements with life insurance subsidiaries was $1.4 billion. For non-life insurance subsidiaries, the maximum allowable under the agreement is based on the assets of the subsidiaries and their particular cash requirements.
Federal net operating loss carryforwards. We do expect to be subject to the 1% excise tax but do not expect that it will have a material impact to our financial statements. Contingencies For information regarding our contingencies, see the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
We do expect to be subject to the 1% excise tax but do not expect that it will have a material impact to our financial statements. Contingencies For information regarding our contingencies, see the Commitments and Contingencies Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K.
We have certain CDS and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants.
We have certain credit default swaps ("CDS") and options that are priced by third party vendors or by using models that primarily use market observable inputs, but contain inputs that are not observable to market participants.
Such securities consist of (i) the 5.7% senior notes due 2043, the 3.65% senior notes due 2026, and the 4.8% senior notes due 2046, with an aggregate principal amount of $1.1 billion as of December 31, 2022 (collectively, the “Senior Notes”) and (ii) the 5.65% fixed-to-floating rate junior subordinated notes due 2053 and the 4.7% fixed-to-floating junior subordinated notes due 2048, with an aggregate principal amount of $724 million as of December 31, 2022 (collectively, the “Junior Subordinated Notes” and, together with the Senior Notes, the “Registered Notes”).
As of December 31, 2022 such securities consist of (i) the 5.7% senior notes due 2043, the 3.65% senior notes due 2026, the 4.8% senior notes due 2046, with an aggregate principal amount of $1.1 billion and (ii) the 5.65% fixed-to-floating rate junior subordinated notes due 2053 and the 4.7% fixed-to-floating rate junior subordinated notes due 2048, with an aggregate principal amount of $724 million.(collectively, the "Junior Subordinated Notes" and, together with the Senior Notes, the "Registered Notes").
As of December 31, 2022 and 2021, the weighted average NAIC quality rating of our fixed maturities portfolio was 1.5. The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated: ($ in millions) December 31, 2022 NAIC Quality Designation 1 2 3 4 5 6 Total Fair Value U.S.
As of December 31, 2023 and 2022, the weighted average NAIC quality rating of our fixed maturities portfolio was 1.5. 79 Table of Contents The following tables present credit quality of fixed maturities, including securities pledged, using NAIC designations as of the dates indicated: ($ in millions) December 31, 2023 NAIC Quality Designation 1 2 3 4 5 6 Total Fair Value U.S.
AUM is principally affected by net deposits (i.e., new deposits, less surrenders and other outflows) and investment performance (i.e., interest credited to contract owner accounts for assets that earn a fixed return or market performance for assets that earn a variable return).
AUM is principally affected by net deposits (i.e., new deposits, less surrenders and other outflows) and investment performance (i.e., interest credited to contract owner accounts for assets that earn 49 Table of Contents a fixed return or market performance for assets that earn a variable return).
Our expected long-term rate of return on our Retirement Plan assets was 4.85% and 5.60% for 2022 and 2021, respectively. Our expected return on Retirement Plan assets is calculated using 30-year forward looking assumptions based on the long-term target asset allocation.
Our expected long-term rate of return on our Retirement Plan assets was 5.82% and 4.85% for 2023 and 2022, respectively. Our expected return on Retirement Plan assets is calculated using 30-year forward looking assumptions based on the long-term target asset allocation.
Other seasonal factors that affect our business include: Wealth Solutions • The first quarters tend to have the highest level of recurring deposits in Corporate Markets, due to the increase in participant contributions from the receipt of annual bonus award payments or annual lump sum matches and profit sharing contributions made by many employers.
Other seasonal factors that affect our business include: Wealth Solutions • The first quarter of each year tends to have the highest level of recurring deposits in Corporate Markets, due to the increase in participant contributions from the receipt of annual bonus award payments or annual lump sum matches and profit sharing contributions made by many employers.
As the impact of sharply tighter global monetary policy works through the real economy, an increase in market volatility could affect our business, including through effects on the rate and spread component of yields we earn on invested assets, changes in required reserves and capital, and fluctuations in the value of our assets under management ("AUM"), administration or advisement ("AUA").
As the continued impact of sharply tighter global monetary policy works through the real economy, an increase in market volatility could affect our business, including through effects on the rate and spread component of yields we earn on invested assets, changes in required reserves and capital, and fluctuations in the value of our AUM and AUA.
As of December 31, 2022, Voya Financial, Inc. had $195 million in outstanding borrowings from subsidiaries and had loaned $89 million to its subsidiaries. Collateral - Derivative Contracts See the Derivatives Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information on collateral for derivatives.
As of December 31, 2023, Voya Financial, Inc. had $445 million in outstanding borrowings from subsidiaries and had loaned $293 million to its subsidiaries. Collateral - Derivative Contracts See the Derivatives Note to our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for information on collateral for derivatives.
For discussion and analysis of our results of operations for the years ended December 31, 2021 and 2020, refer to our 2021 Annual Report on Form 10-K filed with the SEC on February 22, 2022.
For discussion and analysis of our results of operations for the years ended December 31, 2022 and 2021, refer to our 2022 Annual Report on Form 10-K filed with the SEC on February 24, 2023.
The following table presents the amount of investment income (loss) on certain alternative investments that is included in segment Adjusted operating earnings before income taxes and the average level of assets in each segment, prior to intercompany eliminations, which excludes alternative investments and income that are a component of Income (loss) related to businesses exited or to be exited through reinsurance or divestment and Income (loss) from discontinued operations, net of tax, respectively, and alternative investments and income in Corporate.
The following table presents the amount of investment income (loss) on certain alternative investments that is included in segment Adjusted operating earnings before income taxes and the average level of assets in each segment, prior to intercompany eliminations, which excludes alternative investments and income that are a component of Income (loss) related to businesses exited or to be exited through reinsurance or divestment.
See the Reserves for Future Policy Benefits and Contract Owner Account Balances Note and the Guaranteed Benefit Features Note in our Consolidated 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.
See the Reserves for Future Policy Benefits and Contract Owner Account Balances Note in our Consolidated 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 and contract owner account balances.
On July 25, 2022, we completed a series of transactions pursuant to a Combination Agreement dated as of June 13, 2022 (the “AllianzGI Agreement”) with Voya IM and VIM Holdings LLC ("VIM Holdings"), both our indirect subsidiaries, Allianz SE (“Allianz”) and Allianz Global Investors U.S.
On July 25, 2022, we completed a series of transactions pursuant to a Combination Agreement dated as of June 13, 2022 (the "AllianzGI Agreement") with Voya Investment Management LLC ("Voya IM") and VIM Holdings LLC ("VIM Holdings"), both our indirect subsidiaries, Allianz SE ("Allianz") and Allianz Global Investors U.S.
For a summary of statutory capital and surplus of our Principal Insurance Subsidiaries, see the Insurance Subsidiaries Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. Financial Leverage Ratio The Financial Leverage Ratio is a measure that we use to monitor the level of our debt relative to our total capitalization.
For a summary of statutory capital and surplus of our Principal Insurance Subsidiaries, see the Insurance Subsidiaries Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. 68 Table of Contents Leverage Ratios Our Leverage Ratios are a measure that we use to monitor the level of our debt relative to our total capitalization.
In August 2022, President Biden signed into law the Inflation Reduction Act of 2022 (“IRA of 2022”), which includes a 15% book income alternative minimum tax (“CAMT”) on corporations and a 1% excise tax on the fair market value of stock that is repurchased by publicly traded U.S. corporations or their specified affiliates.
In August 2022, President Biden signed into law the Inflation Reduction Act of 2022, which includes a 15% corporate alternative minimum tax ("CAMT") and a 1% excise tax on the fair market value of stock that is repurchased by publicly traded U.S. corporations or their specified affiliates.
Voya Holdings (the “Subsidiary Guarantor”), a wholly owned subsidiary of the Parent Issuer, has guaranteed each of the Registered Notes on a full and unconditional basis. No other subsidiary of the Parent Issuer has guaranteed any of the Registered Notes.
Voya Holdings, Inc. (the "Subsidiary Guarantor"), a wholly owned subsidiary of the Parent Issuer, has guaranteed each of the Registered Notes on a full and unconditional basis. No other subsidiary of the Parent Issuer has guaranteed any of the Registered Notes.
We have identified the following accounting judgments and estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability: • Reserves for future policy benefits; • Deferred policy acquisition costs ("DAC") and value of business acquired ("VOBA"); • Valuation of investments and derivatives; • Investment impairments; • Goodwill and other intangible assets; • Income taxes; • Contingencies; and • Employee benefit plans.
We have identified the following accounting judgments and estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability: • Reserves for future policy benefits; • Valuation of investments and derivatives; • Investment impairments; • Goodwill and other intangible assets; • Income taxes; • Contingencies; and • Employee benefit plans.
This represents the estimate of actuarial gains (losses) that would be recognized immediately through Operating expenses in our Consolidated Statements of Operations: ($ in millions) Increase (Decrease) in Net Periodic Benefit Cost-Pension Plans Increase in discount rate by 100 basis points $ (167) Decrease in discount rate by 100 basis points 200 ($ in millions) Increase (Decrease) in Pension Benefit Obligation Increase in discount rate by 100 basis points $ (167) Decrease in discount rate by 100 basis points 200 The discount rate to be used to determine interest cost for 2023 is 5.47%.
This represents the estimate of actuarial gains (losses) that would be recognized immediately through Operating expenses in our Consolidated Statements of Operations: ($ in millions) Increase (Decrease) in Net Periodic Benefit Cost-Pension Plans Increase in discount rate by 100 basis points $ (181) Decrease in discount rate by 100 basis points 216 ($ in millions) Increase (Decrease) in Pension Benefit Obligation Increase in discount rate by 100 basis points $ (181) Decrease in discount rate by 100 basis points 216 The discount rate to be used to determine interest cost for 2024 is 5.28%.
The discount rate modeling process involves selecting a portfolio of high quality, non-callable bonds that will match the cash flows of the defined benefit pension plans. The weighted average discount rate in 2022 for the net periodic benefit cost was 3.00% for the Plans.
The discount rate modeling process involves selecting a portfolio of high quality, non-callable bonds that will match the cash flows of the defined benefit pension plans. The weighted average discount rate in 2023 for the net periodic benefit cost was 5.47% for the Plans.
Because our fee income is generally tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement, which in turn depends on sales volumes to new and existing clients, net deposits from retirement plan participants, and changes in the market value of account assets.
Because a significant portion of our revenues are tied to account values, our profitability is determined in part by the amount of assets we have under management, administration or advisement, which in turn depends on sales volumes to new and existing clients, net deposits from retirement plan participants, and changes in the market value of account assets.
This represents the estimate of actuarial gains (losses) that would be recognized immediately through Operating expenses in our Consolidated Statements of Operations: ($ in millions) Increase (Decrease) in Net Periodic Benefit Cost-Pension Plans Increase in actual rate of return by 100 basis points $ (22) Decrease in actual rate of return by 100 basis points 22 The expected rate of return for 2023 is 5.82%, net of expenses, for the Retirement Plan.
This represents the estimate of actuarial gains (losses) that would be recognized immediately through Operating expenses in our Consolidated Statements of Operations: ($ in millions) Increase (Decrease) in Net Periodic Benefit Cost-Pension Plans Increase in actual rate of return by 100 basis points $ (17) Decrease in actual rate of return by 100 basis points 17 The expected rate of return for 2024 is 6.0%, net of expenses, for the Retirement Plan.
Sales for Group Life, Stop Loss, and Voluntary Benefits also tend to be the highest in the first quarters, as most of our contracts have January start dates in alignment with the start of our clients' fiscal years. • The third quarters tend to have the second highest Group Life, Stop Loss, and Voluntary Benefits sales, as a large number of our contracts have July start dates in alignment with the start of our clients' fiscal years.
Sales for Group Life, Stop Loss, and Voluntary Benefits also tend to be the highest in the first quarter, as most of our contracts have January start dates in alignment with the start of our clients' fiscal years. • The third quarter of each year tends to have the second highest Group Life, Stop Loss, and Voluntary Benefits sales, as a large number of our contracts have July start dates in alignment with the start of our clients' fiscal years. • The fourth quarter of each year tends to have higher Voluntary Claims.
Debt As of December 31, 2022, we had $141 million of short-term debt borrowings outstanding consisting entirely of the current portion of long-term debt.
Debt As of December 31, 2023, we had $1 million of short-term debt borrowings outstanding consisting entirely of the current portion of long-term debt.
The expected rate of return for 2022 was 4.85%, net of expenses, for the Retirement Plan. As of December 31, 2022, the effect of a change in the actual rate of return on the net periodic benefit cost is presented in the table below.
The expected rate of return for 2023 was 5.82%, net of expenses, for the Retirement Plan. As of December 31, 2023, the effect of a change in the actual rate of return on the net periodic benefit cost is presented in the table below.
The estimated impact of this change as well as the actuarial loss experienced on plan assets in 2022 is expected to increase our net periodic benefit cost by approximately $8 million.
The estimated impact of this change as well as the actuarial gain experienced on plan assets in 2023 is expected to decrease our net periodic benefit cost by approximately $8 million.
As of December 31, 2022, we were authorized to repurchase shares up to an aggregate purchase price of $271 million.
As of December 31, 2023, we were authorized to repurchase shares up to an aggregate purchase price of $397 million.
Amounts presented in the table represent estimated cash payments under such contracts, including significant assumptions related to the receipt of future premiums, mortality, morbidity, lapse, renewal, retirement, disability and annuitization comparable with actual experience. These assumptions also include market growth and interest crediting consistent with assumptions used in amortizing DAC.
Amounts presented in the table represent estimated cash payments under such contracts, including significant assumptions related to the receipt of future premiums, mortality, morbidity, lapse, renewal, retirement, disability and annuitization comparable with actual experience. These assumptions also include market growth and interest crediting assumptions. Estimated cash payments are undiscounted for the time value of money.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022 Hypothetical Change in Fair Value (2) ($ in millions) Notional Fair Value (1) + 100 Basis Points Yield Curve Shift - 100 Basis Points Yield Curve Shift Financial assets with interest rate risk: Fixed maturity securities, including securities pledged $ — $ 30,357 $ (1,902) $ 2,145 Mortgage loans on real estate — 5,149 (179) 193 Financial liabilities with interest rate risk: Investment contracts: Funding agreements without fixed maturities and deferred annuities (3) — 36,385 (1,692) 2,737 Funding agreements with fixed maturities — 1,281 (41) 43 Supplementary contracts and immediate annuities — 636 (44) 7 Derivatives: Interest rate contracts 18,326 35 185 (185) Long-term debt — 1,935 (108) 123 Embedded derivatives on reinsurance — (49) 43 (50) Guaranteed benefit derivatives (3) : Other (4) — 30 11 1 (1) Separate account assets and liabilities which are interest sensitive are not included herein as any interest rate risk is borne by the holder of separate account.
Biggest changeAs a result, the actual change in fair value from a 100 basis point change in interest rates could be different from that indicated by these calculations. 90 Table of Contents The following table summarizes the net estimated potential change in fair value from hypothetical 100 basis point upward and downward shifts in interest rates as of December 31, 2023: As of December 31, 2023 Hypothetical Change in Fair Value (2) ($ in millions) Notional Fair Value (1) + 100 Basis Points Yield Curve Shift - 100 Basis Points Yield Curve Shift Financial assets with interest rate risk: Fixed maturity securities, including securities pledged $ — $ 28,611 $ (1,745) $ 1,948 Mortgage loans on real estate — 4,941 (157) 168 Financial liabilities with interest rate risk: Investment contracts: Funding agreements without fixed maturities and deferred annuities (3) — 34,856 (1,624) 1,934 Funding agreements with fixed maturities — 1,178 (1) 1 Supplementary contracts and immediate annuities — 571 (42) 5 Derivatives: Interest rate contracts 16,785 84 246 (259) Long-term debt — 1,998 (108) 123 Stabilizer and MCGs — 9 11 12 Embedded derivatives on reinsurance — (12) 29 (34) (1) Separate account assets and liabilities which are interest sensitive are not included herein as any interest rate risk is borne by the holder of separate account.
Examples include, but are not limited to, the following: • At-risk limits on sensitivities of earnings and regulatory capital; • Duration and convexity mismatch limits; • Credit risk limits; • Liquidity limits; • Mortality concentration limits; • Catastrophe and mortality exposure retention limits for our insurance risk; and • Investment and derivative guidelines.
Examples include, but are not limited to, the following: • At-risk limits on sensitivities of earnings and regulatory capital; • Duration mismatch limits; • Credit risk limits; • Liquidity limits; • Mortality concentration limits; • Catastrophe and mortality exposure retention limits for our insurance risk; and • Investment and derivative guidelines.
Percent collateralized is based on the total of individual contractual exposures aggregated at the reinsurer Parent Company level, which may differ for each individual contractual exposure. 104 Table of Contents
Percent collateralized is based on the total of individual contractual exposures aggregated at the reinsurer Parent Company level, which may differ for each individual contractual exposure. 93 Table of Contents
The analysis includes the effects of: • the timing and amount of redemptions and prepayments in our asset portfolio; • our derivative portfolio; • death benefits and other claims payable under the terms of our insurance products; • lapses and surrenders in our insurance products; • minimum interest guarantees in our insurance products; and • book value guarantees in our insurance products.
The analysis includes the effects of: • the timing and amount of redemptions and prepayments in our asset portfolio; • our derivative portfolio; • death benefits and other claims payable under the terms of our insurance products; • lapses and surrenders in our insurance products; 89 Table of Contents • minimum interest guarantees in our insurance products; and • book value guarantees in our insurance products.
We assess equity risk exposures for financial assets, liabilities and derivatives using hypothetical test scenarios that assume either an increase or decrease of 10% in all equity market benchmark levels.
Market Risk Related to Equity Market Prices We assess equity risk exposures for financial assets, liabilities and derivatives using hypothetical test scenarios that assume either an increase or decrease of 10% in all equity market benchmark levels.
Refer to The level of interest rates may adversely affect our profitability, particularly in the event of a continuation of the current low interest rate environment or a period of rapidly increasing interest rates in Risk Factors, Part I, Item 1A. of this Annual Report on Form 10-K.
Refer to The level of interest rates may adversely affect our profitability, particularly during a period of rapidly increasing interest rates or in the event of a recurrence of a low interest rate environment in Risk Factors, Part I, Item 1A. of this Annual Report on Form 10-K.
Product design and pricing strategies can include the use of surrender charges, withdrawal restrictions and the ability to reset credited interest rates. ALM strategies can include the use of derivatives and duration and convexity mismatch limits.
We use product design, pricing and ALM strategies to reduce the adverse effects of interest rate movement. Product design and pricing strategies can include the use of surrender charges, withdrawal restrictions and the ability to reset credited interest rates. ALM strategies can include the use of derivatives and duration and convexity mismatch limits.
We are not aware of any material disputes arising from these reviews or other communications with the counterparties that would affect collectability, and, therefore, as of December 31, 2022, no allowance for uncollectible amounts was recorded. 103 Table of Contents The following table summarizes our reinsurance recoverable balances, including collateral received and credit and financial strength ratings for our 10 largest reinsurance recoverable balances as of December 31, 2022: Financial Strength Rating Credit Rating Reinsurance Recoverable % Collateralized (1) S&P Moody's S&P Moody's ($ in millions) Parent Company/Principal Reinsurers Resolution Life Group Holdings LP 10,555 77% Security Life of Denver Insurance Co Baa1 Resolution Life Co Lincoln National Corp 1,047 100% BBB+ Baa1 Lincoln Life & Annuity Co of New York A+ A1 Lincoln National Life Insurance Co A+ A1 Reinsurance Group of America Inc 945 99% A Baa1 RGA Reinsurance Co AA- A1 Sun Life Financial Inc 272 99% A+ Sun Life Assurance Co of Canada (US) AA Aa3 Sun Life and Health Insurance Co AA Prudential Public Limited Company 138 0% A2 Jackson National Life Insurance Co A A2 Enstar Group Limited 94 99% BBB Fitzwilliam Ins Ltd Athene Holding Ltd 40 0% A- Baa1 Athene Life Re Ltd A+ A1 Swiss Re Ltd 18 0% A A2 Swiss Re Life & Health America Inc AA- Aa3 Westport Insurance Corp AA- Aa3 Scor SE 8 44% A+ A1 SCOR Global Life US Reinsurance Co Inc A+ SCOR Global Life Re Insurance Co of Delaware A+ Chubb Ltd 7 100% A Chubb Tempest Life Reinsurance Ltd AA Aa3 (1) Collateral includes LOCs, assets held in trust and funds withheld.
We are not aware of any material disputes arising from these reviews or other communications with the counterparties that would affect collectability, and, therefore, as of December 31, 2023, no allowance for uncollectible amounts was recorded. 92 Table of Contents The following table summarizes our reinsurance recoverable balances, including collateral received and credit and financial strength ratings for our 10 largest reinsurance recoverable balances as of December 31, 2023: Financial Strength Rating Credit Rating Reinsurance Recoverable % Collateralized (1) S&P Moody's S&P Moody's ($ in millions) Parent Company/Principal Reinsurers Resolution Life Group Holdings LP 9,241 83% Security Life of Denver Insurance Co Baa1 Resolution Life Co Lincoln National Corp 982 100% BBB+ Baa2 Lincoln Life & Annuity Co of New York A+ A2 Lincoln National Life Insurance Co Reinsurance Group of America Inc 936 99% A Baa1 RGA Reinsurance Co AA- A1 Sun Life Financial Inc 298 99% A+ Sun Life Assurance Co of Canada (US) AA Aa3 Sun Life and Health Insurance Co AA Prudential Public Limited Company 130 0% A A2 Jackson National Life Insurance Co Enstar Group Limited 81 100% BBB+ Fitzwilliam Ins Ltd Swiss Re Ltd 36 0% AA- Aa3 Swiss Re Life & Health America Inc AA- Aa3 Westport Insurance Corp AA- Aa3 Athene Holding Ltd 27 0% A- Baa1 Athene Life Re Ltd A+ A1 Cigna Corp 6 0% A- Baa1 Connecticut General Life Insurance Co A A2 Scor SE 6 44% A+ A1 SCOR Global Life US Reinsurance Co Inc A+ SCOR Global Life Re Insurance Co of Delaware A+ (1) Collateral includes LOCs, assets held in trust and funds withheld.
The impact of basis risk could result in larger differences between the change in fair value of the equity-based derivatives and the related living benefit features, in comparison to the hypothetical test scenarios. 102 Table of Contents The following table summarizes the net estimated potential change in fair value from an instantaneous increase and decrease in all equity market benchmark levels of 10% as of December 31, 2022: As of December 31, 2022 Hypothetical Change in Fair Value (1) ($ in millions) Notional Fair Value + 10% Equity Shock -10% Equity Shock Financial assets with equity market risk: Equity securities, at fair value $ — $ 336 $ 34 $ (34) Limited liability partnerships/corporations — 1,781 108 (108) Derivatives: Equity futures and total return swaps 214 — 12 (12) Equity options 34 — — — Financial liabilities with equity market risk: Guaranteed benefit derivatives: Other (2) — 30 — — (1) (Decreases) in assets or (decreases) in liabilities are presented in parentheses.
The impact of basis risk could result in larger differences between the change in fair value of the equity-based derivatives and the related living benefit features, in comparison to the hypothetical test scenarios. 91 Table of Contents The following table summarizes the net estimated potential change in fair value from an instantaneous increase and decrease in all equity market benchmark levels of 10% as of December 31, 2023: As of December 31, 2023 Hypothetical Change in Fair Value (1) ($ in millions) Notional Fair Value + 10% Equity Shock -10% Equity Shock Financial assets with equity market risk: Equity securities, at fair value $ — $ 236 $ 24 $ (24) Limited partnerships/corporations — 1,621 98 (98) Derivatives: Equity futures and total return swaps 220 1 17 (17) Equity options 35 1 — — (1) (Decreases) in assets or (decreases) in liabilities are presented in parentheses.
Each risk that is managed has been mapped for oversight by the Board of Directors or appropriate Board Committees. The Chief Risk Officer ("CRO") reports to the Vice Chairman and Chief Financial Officer and has direct access to the Board on a regular basis.
Each risk that is managed has been mapped for oversight by the Board of Directors or appropriate Board Committees. The Chief Risk Officer ("CRO") reports to the Chief Executive Officer and has direct access to the Board on a regular basis. The Company’s Board of Directors and Board Committees are directly involved within the risk framework.
While the test scenarios are for illustrative purposes only and do not reflect our expectations regarding future interest rates or the performance of fixed-income markets, they are a near-term, reasonably possible hypothetical change that illustrates the potential impact of such events. These tests do not measure the change in value that could result from non-parallel shifts in the yield curve.
While the test scenarios are for illustrative purposes only and do not reflect our expectations regarding future interest rates or the performance of fixed income markets, they are a near-term, reasonably possible hypothetical change that illustrates the potential impact of such events.
We are exposed to occasional cyclical economic downturns, during which impairment losses may be significantly higher than the long-term historical average. This is offset by years where we expect the actual impairment losses to be substantially lower than the long-term average. Credit risk in the portfolio can also materialize as increased capital requirements caused by rating down-grades.
Our credit risk materializes primarily as impairment losses and/or credit risk related trading losses. We are exposed to occasional cyclical economic downturns, during which impairment losses may be significantly higher than the long-term historical average. This is offset by years where we expect the actual impairment losses to be substantially lower than the long-term average.
(2) (Decreases) in assets or (decreases) in liabilities are presented in parentheses. Increases in assets or increases in liabilities are presented without parentheses. (3) Certain amounts included in Funding agreements without fixed maturities and deferred annuities section are also reflected within the Guaranteed benefit derivatives section of the tables above. (4) Includes GMWBL, GMWB, FIA, Stabilizer and MCG.
(2) (Decreases) in assets or (decreases) in liabilities are presented in parentheses. Increases in assets or increases in liabilities are presented without parentheses. (3) Certain amounts included in Funding agreements without fixed maturities and deferred annuities are also reflected within Stabilizer and MCGs.
We assess interest rate exposures for financial assets, liabilities and derivatives using hypothetical test scenarios that assume either increasing or decreasing 100 basis point parallel shifts in the yield curve. The following table summarizes the net estimated potential change in fair value from hypothetical 100 basis point upward and downward shifts in interest rates as of December 31, 2022.
We assess interest rate exposures for financial assets, liabilities and derivatives using hypothetical test scenarios that assume either increasing or decreasing 100 basis point parallel shifts in the yield curve.
In a rising interest rate environment, we are exposed to the risk of financial disintermediation through a potential increase in the level of book value withdrawals on certain stable value contracts.
In a rising interest rate environment, we are exposed to the risk of financial disintermediation through a potential increase 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.
These scenarios consider only the direct effect on the fair value of market instruments corresponding to declines or increases in equity benchmark market levels and not changes in asset-based fees recognized as revenue, changes in our estimates of total gross profits used as a basis for amortizing DAC/VOBA/URR and other costs, or changes in any other assumptions such as market volatility or mortality, utilization or persistency rates in variable contracts that could also impact the fair value of our living benefits features.
These scenarios consider only the direct effect on fair value of declines in equity benchmark market levels and not changes in asset-based fees recognized as revenue or changes in any other assumptions such as market volatility or mortality, utilization or persistency rates in insurance contracts.
The effect of rating migration on our capital requirements is also dependent on the economic cycle and increased asset impairment levels may go hand in hand with increased asset related capital requirements. We manage the risk of default and rating migration by applying disciplined credit evaluation and underwriting standards and prudently limiting allocations to lower quality, higher risk investments.
Credit risk in the portfolio can also materialize as increased capital requirements caused by rating down-grades. The effect of rating migration on our capital requirements is also dependent on the economic cycle and increased asset impairment levels may go hand in hand with increased asset related capital requirements.
The carrying value of our fixed maturity, including securities pledged, and equity portfolio totaled $30.7 billion and $37.5 billion as of December 31, 2022 and 2021, respectively. Our credit risk materializes primarily as impairment losses and/or credit risk related trading losses.
Increases in assets or increases in liabilities are presented without parentheses. 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 $28.8 billion and $30.7 billion as of December 31, 2023 and 2022, respectively.
We also have credit risk related to the ability of our derivatives and reinsurance counterparties to honor their obligations to pay the contract amounts under various agreements. In order to minimize the risk of credit loss on such contracts, we diversify our exposures among several counterparties and limit the amount of exposure to each based on credit rating.
In order to minimize the risk of credit loss on such contracts, we diversify our exposures among several counterparties and limit the amount of exposure to each based on credit rating. For most counterparties, we have collateral agreements in place that would substantially limit our credit losses in case of a counterparty default.
For most counterparties, we have collateral agreements in place that would substantially limit our credit losses in case of a counterparty default. We also generally limit our selection of counterparties that we do new transactions with to those with an "A-" credit rating or above.
We also generally limit our selection of counterparties that we do new transactions with to those with an "A-" credit rating or above. When exceptions are made to that principle, we ensure that we obtain collateral to mitigate our risk of loss.
Refer to the Derivative Financial Instruments Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further details of these items. In the normal course of business, certain reinsur ance recoverables are subject to reviews by the reinsurers.
For derivatives counterparty risk exposures (which includes reverse repurchase and securities lending transactions), we measure and monitor our risks on a market value basis daily. Refer to the Derivative Financial Instruments Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K for further details of these items.
In addition, we diversify our exposure by issuer and country, using rating based issuer and country limits, as well as by industry segment, using specific investment constraints. Limit compliance is monitored on a daily, monthly or quarterly basis. Limit violations are reported to senior management and we are actively involved in decisions around curing such limit violations.
Limit compliance is monitored on a daily, monthly or quarterly basis. Limit violations are reported to senior management and we are actively involved in decisions around curing such limit violations. We also have credit risk related to the ability of our derivatives and reinsurance counterparties to honor their obligations to pay the contract amounts under various agreements.
This functional approach is designed to promote consistent application of guidelines and procedures, regular reporting and appropriate communication through the risk management function, as well as to provide ongoing support for the business. The scope, roles, responsibilities and authorities of the risk management function at different levels are described in a Risk Management Policy to which our businesses must adhere.
The CRO and the Enterprise Risk Management team are responsible for managing and aggregating risk at a company-wide level. The scope, roles, responsibilities and authorities of the risk management function are described in a Risk Management Policy to which our businesses must adhere.
Removed
The Company’s Board of Directors and Board Committees are directly involved within the risk framework. 99 Table of Contents The CRO heads the risk management function and each of the businesses, as well as corporate, has a similar function that reports to the CRO.
Added
These tests do not measure the change in value that could result from non-parallel shifts in the yield curve.
Removed
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. 100 Table of Contents We use product design, pricing and ALM strategies to reduce the adverse effects of interest rate movement.
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We manage the risk of default and rating migration by applying disciplined credit evaluation and underwriting standards and prudently limiting allocations to lower quality, higher risk investments. In addition, we diversify our exposure by issuer and country, using rating based issuer and country limits, as well as by industry segment, using specific investment constraints.
Removed
As a result, the actual change in fair value from a 100 basis point change in interest rates could be different from that indicated by these calculations.
Added
In the normal course of business, certain reinsur ance recoverables are subject to reviews by the reinsurers.
Removed
For certain liability contracts, we provide the contract holder a guaranteed minimum interest rate ("GMIR"). These contracts include fixed annuities and other insurance liabilities. We are required to pay these guaranteed minimum rates even if earnings on our investment portfolio decline, with a resulting investment margin compression negatively impacting earnings. Credited rates are set either quarterly or annually.
Removed
See the Guaranteed Benefit Features Note in our Consolidated Financial Statements in Part II, Item 8. of this Annual Report on Form 10-K. 101 Table of Contents The following table summarizes detail on the differences between the interest rate being credited to contract holders as of December 31, 2022, and the respective GMIRs: Account Value (1) Excess of crediting rate over GMIR ($ in millions) At GMIR Up to .50% Above GMIR 0.51% - 1.00% Above GMIR 1.01% - 1.50% Above GMIR 1.51% - 2.00% Above GMIR More than 2.00% Above GMIR Total Guaranteed minimum interest rate Up to 1.00% $ 5,848 $ 2,967 $ 1,907 $ 1,112 $ 1,462 $ 102 $ 13,398 1.01% - 2.00% 707 51 35 2 2 7 804 2.01% - 3.00% 12,677 56 47 109 — 3 12,892 3.01% - 4.00% 9,448 153 — — — — 9,601 4.01% and Above 1,643 87 — — — — 1,730 Renewable beyond 12 months (MYGA) (2) 402 — — — 3 — 405 Total discretionary rate setting products $ 30,725 $ 3,314 $ 1,989 $ 1,223 $ 1,467 $ 112 $ 38,830 Percentage of Total 79.2 % 8.5 % 5.1 % 3.1 % 3.8 % 0.3 % 100.0 % (1) Includes only the account values for investment spread products with GMIRs and discretionary crediting rates, net of policy loans.
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Excludes Stabilizer products, which are fee based. Also, excludes the portion of the account value of FIA products for which the crediting rate is based on market indexed strategies. (2) Represents MYGA contracts with renewal dates after December 31, 2023 on which we are required to credit interest above the contractual GMIR for at least the next twelve months.
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Market Risk Related to Equity Market Prices Our general account equity securities are significantly influenced by global equity markets. Increases or decreases in equity markets impact certain assets and liabilities related to our variable products and our earnings derived from those products.
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Increases in assets or increases in liabilities are presented without parentheses. (2) Includes GMWBL, GMWB, FIA, Stabilizer and MCG. Market Risk Related to Credit Risk Credit risk is primarily embedded in the general account portfolio.
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When exceptions are made to that principle, we ensure that we obtain collateral to mitigate our risk of loss. For derivatives counterparty risk exposures (which includes reverse repurchase and securities lending transactions), we measure and monitor our risks on a market value basis daily.

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