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As Of Filer Filing For·On·As Docs:Size Issuer Agent 4/18/14 Tiaa Cref Life Sep Account Va-1 485BPOS 5/01/14 3:5.0M RR Donnelley/FA → Tiaa Cref Life Separate Account Va-1 ⇒ Single Premium Immediate Annuity |
Document/Exhibit Description Pages Size 1: 485BPOS Single Premium Immediate Variable HTML 3.22M 3: EX-99.(10)(A) Consents of Pricewaterhousecoopers LLP, HTML 8K Independent Registered Public Accounting 2: EX-99.(9) Legality Opinion and Consent of Meredith HTML 12K Kornreich, Esquire
Single Premium Immediate Variable |
As Filed with the Securities and Exchange Commission on April 18, 2014
Registration File Nos. 333-46414
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 | ¨ | |||
PRE-EFFECTIVE AMENDMENT NO. | ¨ | |||
POST-EFFECTIVE AMENDMENT NO. 14 | x | |||
and/or |
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 | ¨ | |||
AMENDMENT NO. 36 | x | |||
(Check appropriate box or boxes.) |
TIAA-CREF LIFE SEPARATE
ACCOUNT VA-1
(Exact name of registrant)
TIAA-CREF LIFE INSURANCE COMPANY
(Name of depositor)
730 Third Avenue
(Address of depositor’s principal executive offices)
Depositor’s Telephone Number, including Area Code: (800) 223-1200
John Piller | Ken Reitz | |
TIAA-CREF Life Insurance Company | TIAA-CREF Life Insurance Company | |
8500 Andrew Carnegie Boulevard, MS C2-04 | 8500 Andrew Carnegie Boulevard, MS C2-08 | |
Charlotte, North Carolina 28262-8500 | Charlotte, North Carolina 28262-8500 | |
(704) 988-5681 | (704) 988-4455 |
Approximate Date of Proposed Public Offering:
It is proposed that this filing will become effective (check appropriate box)
¨ | immediately upon filing pursuant to paragraph (b) of Rule 485 |
x | on May 1, 2014 pursuant to paragraph (b) of Rule 485 |
¨ | 60 days after filing pursuant to paragraph (a)(1) of Rule 485 |
¨ | on (date) pursuant to paragraph (a)(1) of Rule 485 |
If appropriate, check the following box:
¨ | This post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
PROSPECTUS
SINGLE PREMIUM IMMEDIATE ANNUITIES
Single Premium Immediate Variable Annuity Contracts Funded Through TIAA-CREF Life Separate Account VA-1 of TIAA-CREF Life Insurance Company
This prospectus describes information you should know before investing in the single Premium immediate variable annuity Contracts (SPIAs) offered by TIAA-CREF Life Insurance Company (TIAA-CREF Life) and funded through the TIAA-CREF Life Separate Account VA-1 (the separate account). Before you invest, please read this prospectus carefully, along with the Fund prospectus, and keep it for future reference.
The Contracts are designed to provide you with a stream of income for the life of the named Annuitant(s) or for a specified period of time you select. You can choose a combination of fixed and variable annuity payments by allocating your single Premium to a TIAA-CREF Life Fixed Account or to one or more of the following eight separate account variable Investment Accounts:
n Growth Equity Fund n Growth & Income Fund n International Equity Fund n Large-Cap Value Fund |
n Small-Cap Equity Fund n Stock Index Fund n Social Choice Equity Fund n Real Estate Securities Fund |
As with all variable annuities, your variable annuity payments will increase or decrease, depending on how well the Investment Account’s underlying Fund investment performs over time. TIAA-CREF Life doesn’t guarantee the investment performance of the Funds or the Investment Accounts, and you bear the entire investment risk.
A separate prospectus for the Funds provides more information about the Funds listed above. Note that the prospectus for the Funds may provide information for other Funds that are not available through the contract. When you consult the prospectus, you should be careful to refer only to the information regarding the Funds listed above.
More information about the separate account and the Contracts is on file with the Securities and Exchange Commission (SEC) in a “Statement of Additional Information” (SAI) dated May 1, 2014. You can receive a free SAI by writing us at TIAA-CREF Life, 730 Third Avenue, New York, New York 10017-3206 (attention: Central Services), or by calling 877 825-0411. The SAI is “incorporated by reference” into the prospectus; that means it’s legally part of the prospectus. The SAI’s table of contents is on the last page of this prospectus. The SEC maintains a website (www.sec.gov) that contains the SAI, material incorporated by reference and other information regarding the separate account.
The Contracts or certain investment options under the Contracts will not be available to you unless approved by the regulatory authorities in your state.
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
An investment in the Contracts is not a deposit of the TIAA-CREF Trust Company, FSB, and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Definitions | 3 | |||
Summary | 4 | |||
What are TIAA-CREF Life’s Single Premium Immediate Annuities (SPIAs)? |
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The SPIA contracts | 7 | |||
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Transfer policies regarding market timing and excessive trading |
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The variable investment accounts | 12 | |||
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The contract charges | 13 | |||
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Federal income taxes | 13 | |||
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Other information | 15 | |||
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General matters | 17 | |||
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Important information about procedures for opening a new account |
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Table of Contents for the Statement of Additional Information | 19 |
This prospectus describes the single Premium immediate variable annuities issued by TIAA-CREF Life. It doesn’t constitute an offering in any jurisdiction where such an offering can’t lawfully be made. No dealer, salesperson, or anyone else is authorized to give any information or to make any representation about this offering other than what is contained in this prospectus. If anyone does so, you shouldn’t rely on it.
Throughout the prospectus, “TIAA-CREF Life,” “we,” and “our” refer to TIAA-CREF Life Insurance Company. “You” and “your” mean any Contractowner or any prospective Contractowner.
1940 Act. The Investment Company Act of 1940, as amended.
Annuitant. The natural person whose life is used to determine the amount of annuity payments and how long those payments will be made. Once selected, the Annuitant may not be changed.
Annuity Unit. A measure used to calculate the amount of each variable annuity payment made under a contract.
Assumed Investment Return. 4%. This is the assumed annual rate of return used in calculating the amount of each variable annuity payment.
Beneficiary. The person or institution selected by the Contractowner to become the new Contractowner if the Contractowner dies while any annuity payments remain due.
Business Day. Any day that the New York Stock Exchange (NYSE) is open for trading. A Business Day ends at 4 p.m. Eastern Time, or when regular trading closes on the NYSE, if earlier.
Calendar Day. Any day of the year.
Commuted Value. The amount we will pay under certain circumstances in a lump sum instead of the remaining series of annuity payments. It’s less than the total of the future payments, because the future interest we’ve assumed in computing the series of payments will not be earned if payment is made in one sum. For the Fixed Account, the Commuted Value is the sum of payments less the interest that would have been earned from the effective date of the Commuted Value calculation to the date each payment would have been made. For any variable Investment Account, the Commuted Value is based on interest at an effective annual rate of 4%, calculated using the amounts that would have been paid if periodic payments were to continue and the Annuity Unit value used for each payment equaled the value as of the effective date of the calculation.
Contracts. The One-Life Annuity, the Two-Life Annuity, and the Fixed-Period Annuity single Premium immediate annuity Contracts.
Contractowner. The person (or persons) who controls all the rights and benefits under a contract.
Current Value. The Present Value of the future annuity payments, which for variable payments is computed using the assumption that the relevant Investment Account has an effective annual rate of 4%. In the case of the One-Life and Two-Life Annuities, the Present Value is determined based on the age of the Annuitant(s), if alive; the remaining guaranteed period, if any; the frequency of payment; and the mortality tables used to determine the initial amount of annuity payments. In the case of the Fixed-Period Annuity, it is determined based on the last periodic payment date and the frequency of payment. This “Current Value” definition is used in determining the value of a refund in the event a contract is cancelled during the free look period.
Fixed Account. The account under the contract supporting fixed annuity payments funded by assets in TIAA-CREF Life’s General Account.
Fund. An investment company that is registered with the Securities and Exchange Commission in which an Investment Account is invested. The contract allows you to indirectly invest in a series of investment companies that are listed on the front page of this prospectus.
General Account. All of TIAA-CREF Life’s assets other than those allocated to the separate account or to any other TIAA-CREF Life separate account.
Income Change Method. The method you select for how often your variable annuity payments will be revalued. You can choose a monthly or annual Income Change Method.
Income Option. The form of annuity benefit that you select under the Two-Life Annuity. The Income Options for the Two-Life Annuity are: the Two-Life Annuity with Full Benefit While Either Annuitant Survives; the Two-Life Annuity with Two-Thirds Benefit While Either Annuitant Survives; and the Two-Life Annuity with One-Half Benefit While Second Annuitant Survives First Annuitant.
Investment Account. A sub-account of the separate account that invests its assets in shares of a corresponding Fund.
IRC. The Internal Revenue Code of 1986, as amended.
Issue Date. The day that the contract is issued and becomes effective.
NYSE. The New York Stock Exchange.
Single Premium Immediate Annuities n Prospectus | 3 |
Premium. The amount you invest in the contract.
Present Value. The Present Value of a series of payments is the lump-sum amount that is the current equivalent of a series of future payments calculated on the basis of a specified interest rate and, where applicable, mortality table.
Second Annuitant. The natural person whose life, together with the Annuitant’s life, is used to determine the amount of annuity payments and how long those payments will be made under the Two-Life Annuity Contract.
Separate Account. TIAA-CREF Life Separate Account VA-1.
TIAA. Teachers Insurance and Annuity Association of America.
TIAA-CREF Life. TIAA-CREF Life Insurance Company, an indirect wholly-owned subsidiary of TIAA.
Valuation Day. Any Business Day. Valuation days end as of the close of all U.S. national exchanges where securities or other investments of the Separate Account are principally traded.
Read this summary together with the detailed information you’ll find in the rest of the prospectus.
WHAT ARE TIAA-CREF LIFE’S SINGLE PREMIUM IMMEDIATE ANNUITIES (SPIAs)?
TIAA-CREF Life’s Single Premium Immediate Annuities (SPIAs) allow you, the owner, to apply a single sum of money to one of three types of annuity Contracts and receive a stream of income for the life of the named Annuitant(s) (which may be you or another person) or for a specified period of time you select. The types of Contracts we offer are:
n | One-Life Annuity, which pays income as long as the Annuitant lives or until the end of an optional specified guaranteed period, whichever is longer; |
n | Two-Life Annuity, which pays income as long as either the Annuitant or the second Annuitant is alive or until the end of an optional specified guaranteed period, whichever is longer, and which, after the death of an Annuitant, continues at either the same or a reduced level for the life of the other Annuitant; and |
n | Fixed-Period Annuity, which pays income to you for a fixed period of between 5 and 30 years. |
A contract is available to you provided it has been approved by the insurance department of your state of residence.
WHAT ARE MY INVESTMENT OPTIONS UNDER THE CONTRACTS?
Under TIAA-CREF Life’s SPIAs, you can choose fixed or variable annuity payments (or any combination of fixed and variable payments) by allocating your single Premium to the Fixed Account or to one or more of the separate account’s variable Investment Accounts. Annuity payments from the Fixed Account are guaranteed over the life of the contract. Annuity payments from the separate account’s variable Investment Accounts increase or decrease, depending on how well the Funds underlying the Investment Account perform over time. Your payments will also change depending on the Income Change Method you choose—i.e., whether you choose to have your payments revalued monthly or annually. Currently, the separate account has eight variable Investment Accounts which invest in the following Funds of the TIAA-CREF Life Funds:
Ÿ Growth Equity Fund |
Ÿ Small-Cap Equity Fund | |
Ÿ Growth & Income Fund |
Ÿ Stock Index Fund | |
Ÿ International Equity Fund |
Ÿ Social Choice Equity Fund | |
Ÿ Large-Cap Value Fund |
Ÿ Real Estate Securities Fund |
TIAA-CREF Life doesn’t guarantee the investment performance of the Funds or the variable Investment Accounts, and you bear the entire investment risk.
If you live in Georgia, Hawaii, Idaho, Iowa, Louisiana, Massachusetts, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, Washington, West Virginia or Wisconsin: If in your application you allocated any portion of the Premium to the variable Investment Accounts, that portion of the Premium will initially be applied to the General Account until seven days plus the number of days in the free look period applicable in your state have passed from the Issue Date of your contract. At that time, the amount applied to the General Account, plus any interest credited on the amount, will automatically be transferred to the variable Investment Accounts you have chosen, and the number of Annuity Units payable from each variable Investment Account will be determined as of that date. While this amount is held in the General Account, it will be credited with interest at a rate guaranteed not to be less than an effective annual rate of 2.50%.
MAY I CHANGE THE ACCOUNTS FROM WHICH ANNUITY PAYMENTS ARE MADE AND HOW OFTEN MY PAYMENTS ARE VALUED UNDER THE CONTRACT?
You will be able to “transfer” all or part of the future annuity income payable one time each calendar quarter from each variable Investment Account to another variable Investment Account or to the Fixed Account. One time in a calendar year, under the One-Life or Two-Life Annuities, you will also be able to transfer the Present Value of future amounts payable from the Fixed Account to any of the variable Investment Accounts (provided they are equity accounts), with certain conditions. Once a
4 | Prospectus n Single Premium Immediate Annuities |
year you also may change how frequently your payments from a variable Investment Account are valued, i.e., you may change your Income Change Method. For more details on transfers and changing your Income Change Method, see “Changing Investment Accounts and Income Change Methods”.
WHAT EXPENSES MUST I PAY UNDER THE CONTRACTS?
The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the contract.
This first table lists certain categories of Contractowner transaction expenses for comparative purposes. State Premium taxes may be deducted depending on your state.
CONTRACTOWNER TRANSACTION EXPENSES
Sales load imposed on purchases (as a percentage of Premiums) |
None | |||
Deferred sales load (as a percentage of Premiums or amount surrendered, as applicable) |
None | |||
Premium taxes (as a percentage of Premiums, if applicable)(1) |
1.0–3.5% | |||
Surrender fees (as a percentage of amount surrendered) |
None | |||
Exchange fee |
None |
(1) | Only applicable in certain states. Where TIAA-CREF Life is required to pay this Premium tax, it may deduct the amount of the Premium tax paid from any Premium payment. |
This next table describes the fees and expenses that you will pay periodically during the time that you own the contract, not including Fund fees and expenses.
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Maximum Contractual Fees(1) |
Fee Waiver(1) |
Current | ||||||||||
Charges(1) |
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Annual Contract Fees |
None | None | None | |||||||||
Mortality and expense risk charge |
1.00% | 0.60% | 0.40% | |||||||||
Administrative expense charge |
0.20% | 0.00% | 0.20% | |||||||||
Total separate account annual charges |
1.20% | 0.60% | 0.60% |
(1) | TIAA-CREF Life has waived 0.60% of the mortality and expense risk charge, so that total current separate account annual charges are 0.60%. TIAA-CREF Life will provide at least three months’ notice before it raises these charges above 0.60%. |
TIAA-CREF LIFE FUNDS ANNUAL EXPENSES (as a percentage of Fund average net assets)
These next two tables show the operating expenses charged by the various TIAA-CREF Life Funds available under your contract that you may pay periodically during the time you own the contract. The first table shows the maximum and minimum total operating expenses charged by these Funds for the year ended December 31, 2013. The next table provides greater detail on the total operating expenses charged by each Fund, and shows the total separate account and Fund annual expenses. Expenses of the Funds may be higher or lower in the future. More detail concerning each Fund’s fees and expenses is also contained in the TIAA-CREF Life Funds prospectus.
RANGE OF TOTAL ANNUAL FUND OPERATING EXPENSES
Minimum Expenses |
Maximum Expenses |
|||||||
Total expenses that are deducted from Fund assets, including management fees and other expenses |
0.09% | 0.60% |
TOTAL ANNUAL FUND OPERATING EXPENSES BY FUND
Management (investment advisory) Fees |
Acquired Fund Fees and Expenses(1) |
Other Expenses |
Total Annual Fund Operating Expenses |
Waivers and Expense Reimbursements |
Net Annual Fund Operating Expenses |
Total Separate Account and Fund Annual Expenses(8) |
||||||||||||||||||||||
Growth Equity Fund |
0.45% | None | 0.21% | 0.66% | 0.14% | (2) | 0.52% | 1.12% | ||||||||||||||||||||
Growth & Income Fund |
0.45% | None | 0.16% | 0.61% | 0.09% | (2) | 0.52% | 1.12% | ||||||||||||||||||||
International Equity Fund |
0.50% | None | 0.24% | 0.74% | 0.14% | (3) | 0.60% | 1.20% | ||||||||||||||||||||
Large-Cap Value Fund |
0.45% | None | 0.15% | 0.60% | 0.08% | (2) | 0.52% | 1.12% | ||||||||||||||||||||
Small-Cap Equity Fund |
0.48% | 0.08% | 0.25% | 0.81% | 0.18% | (4) | 0.63% | 1.23% | ||||||||||||||||||||
Stock Index Fund |
0.06% | 0.01% | 0.10% | 0.17% | 0.07% | (5) | 0.10% | 0.70% | ||||||||||||||||||||
Social Choice Equity Fund |
0.15% | None | 0.18% | 0.33% | 0.11% | (6) | 0.22% | 0.82% | ||||||||||||||||||||
Real Estate Securities Fund |
0.50% | None | 0.13% | 0.63% | 0.064% | (7) | 0.57% | 1.17% |
(1) | “Acquired Fund Fees and Expenses” are the Fund’s proportionate amount of the expenses of any investment companies or pools in which the Fund invests. These expenses are not paid directly by Fund shareholders. Instead, Fund shareholders bear these expenses indirectly as a result of the Fund’s investments. Because “Acquired Fund Fees and Expenses” are included in the chart above, the Fund’s operating expenses here will not correlate with the expenses included in the Financial Highlights in this Prospectus and the Fund’s annual report. |
Single Premium Immediate Annuities n Prospectus | 5 |
(2) | Under the Funds’ expense reimbursement arrangements, the Fund’s investment adviser, Teachers Advisors, Inc. (“Advisors”) has contractually agreed to reimburse the Fund for any Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other transactional expenses, Acquired Fund Fees and Expenses and extraordinary expenses) that exceed 0.52% of average daily net assets for shares of the Fund. These expense reimbursement arrangements will continue through at least April 30, 2015 unless changed with approval of the Board of Trustees. |
(3) | Under the Fund’s expense reimbursement arrangements, the Fund’s investment adviser, Teachers Advisors, Inc. (“Advisors”) has contractually agreed to reimburse the Fund for any Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other transactional expenses, Acquired Fund Fees and Expenses and extraordinary expenses) that exceed 0.60% of average daily net assets for shares of the Fund. These expense reimbursement arrangements will continue through at least April 30, 2015 unless changed with approval of the Board of Trustees. |
(4) | Under the Fund’s expense reimbursement arrangements, the Fund’s investment adviser, Teachers Advisors Inc. (“Advisors”) has contractually agreed to reimburse the Fund for any Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other transactional expenses, Acquired Fund Fees and Expenses and extraordinary expenses) that exceed 0.55% of average daily net assets for the shares of the Fund. These expense reimbursement arrangements will continue through at least April 30, 2015 unless changed with approval of the Board of Trustees. |
(5) | Under the Fund’s expense reimbursement arrangements, the Fund’s investment adviser, Teachers Advisors, Inc. (“Advisors”) has contractually agreed to reimburse the Fund for any Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other transactional expenses, Acquired Fund Fees and Expenses and extraordinary expenses) that exceed 0.09% of average daily net assets for shares of the Fund. These expense reimbursement arrangements will continue through at least April 30, 2015 unless changed with approval of the Board of Trustees. |
(6) | Under the Fund’s expense reimbursement arrangements, the Fund’s investment adviser, Teachers Advisors, Inc. (“Advisors”) has contractually agreed to reimburse the Fund for any Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other transactional expenses, Acquired Fund Fees and Expenses and extraordinary expenses) that exceed 0.22% of average daily net assets for shares of the Fund. These expense reimbursement arrangements will continue through at least April 30, 2015 unless changed with approval of the Board of Trustees. |
(7) | Under the Fund’s expense reimbursement arrangements, the Fund’s investment adviser, Teachers Advisors, Inc. (“Advisors”) has contractually agreed to reimburse the Fund for any Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other transactional expenses, Acquired Fund Fees and Expenses and extraordinary expenses) that exceed 0.57% of average daily net assets for shares of the Fund. These expense reimbursement arrangements will continue through at least April 30, 2015 unless changed with approval of the Board of Trustees. |
(8) | If TIAA-CREF Life imposed the full amount of the administrative expense and mortality and expense risk charges, total annual separate account and Fund expenses would be 1.72% for the Growth Equity, 1.72% for the Growth & Income, 1.80% for the International Equity, 1.72% for the Large-Cap Value, 1.83% for the Small-Cap Equity, 1.30% for the Stock Index, 1.42% for the Social Choice Equity, and 1.77% for the Real Estate Securities. |
Fund expenses are deducted from each underlying Fund before TIAA-CREF Life is provided with the Fund’s daily net asset value. TIAA-CREF Life then deducts separate account charges from the corresponding Investment Account.
Examples
The next two tables provide examples that are intended to help you compare the cost of investing in the contract with the cost of investing in other variable annuity Contracts. These costs include Contractowner transaction expenses, separate account annual expenses, and maximum Fund fees and expenses.
These examples assume that you invest $10,000 in the contract for the time periods indicated. (Note that, notwithstanding this standard $10,000 example, the minimum investment is $25,000.) The examples also assume that your investment has a 5% return each year and assume the maximum fees and expenses of the Funds. The example assumes that the Fund’s expense reimbursement agreement will remain in place through April 30, 2015 but that there will be no waiver or expense reimbursement agreement in effect thereafter.
The first example assumes that there is no waiver of separate account charges. The second example assumes that the current separate account fee waivers are in place for each period.
Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
LIFE FUNDS — SPIA EXPENSE TABLE — WITHOUT SEPARATE ACCT WAIVERS AND FUND WAIVERS
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Growth Equity Fund |
$ | 175 | $ | 542 | $ | 933 | $ | 2,030 | ||||||||
Growth & Income Fund |
$ | 175 | $ | 542 | $ | 933 | $ | 2,030 | ||||||||
International Equity Fund |
$ | 183 | $ | 566 | $ | 975 | $ | 2,116 | ||||||||
Large-Cap Value Fund |
$ | 175 | $ | 542 | $ | 933 | $ | 2,030 | ||||||||
Small-Cap Equity Fund |
$ | 186 | $ | 576 | $ | 990 | $ | 2,148 | ||||||||
Stock Index Fund |
$ | 132 | $ | 412 | $ | 713 | $ | 1,568 | ||||||||
Social Choice Equity Fund |
$ | 145 | $ | 449 | $ | 776 | $ | 1,702 | ||||||||
Real Estate Securities Fund |
$ | 180 | $ | 557 | $ | 959 | $ | 2,084 |
LIFE FUNDS — SPIA EXPENSE TABLE — WITH FUND WAIVERS
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Growth Equity Fund |
$ | 114 | $ | 386 | $ | 678 | $ | 1,510 | ||||||||
Growth & Income Fund |
$ | 114 | $ | 375 | $ | 656 | $ | 1,458 | ||||||||
International Equity Fund |
$ | 122 | $ | 411 | $ | 721 | $ | 1,601 | ||||||||
Large-Cap Value Fund |
$ | 114 | $ | 373 | $ | 652 | $ | 1,447 | ||||||||
Small-Cap Equity Fund |
$ | 125 | $ | 429 | $ | 754 | $ | 1,675 | ||||||||
Stock Index Fund |
$ | 72 | $ | 239 | $ | 421 | $ | 948 | ||||||||
Social Choice Equity Fund |
$ | 84 | $ | 285 | $ | 504 | $ | 1,133 | ||||||||
Real Estate Securities Fund |
$ | 119 | $ | 385 | $ | 672 | $ | 1,488 |
6 | Prospectus n Single Premium Immediate Annuities |
These tables are provided to help you understand the various expenses you would bear directly or indirectly as an owner of a contract. Remember that they don’t represent actual past or future expenses or investment performance. Actual expenses may be higher or lower. For more information, see “The Contract Charges.”
For condensed financial information pertaining to each Investment Account, please see Appendix A.
To purchase a contract, you must complete an application and make a Premium payment of at least $25,000. For more information, see “Purchasing a Contract and Remitting Your Premium.”
You can examine the contract and return it to TIAA-CREF Life for a refund, until the end of the “free look” period specified in your contract. We’ll refund the Current Value of your contract calculated as of the date your refund request is postmarked and properly addressed with postage pre-paid or, if it’s not postmarked, as of the day we receive it. (Note that the Current Value of your contract may be less than your Premium.) In Georgia, Hawaii, Idaho, Iowa, Louisiana, Massachusetts, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, Washington, West Virginia and Wisconsin, where we are required to return your Premium, we’ll refund the greater of your contract value or your full Premium less any payments made as of the date we receive your request. In all cases, we will send you the refund within 7 days after we receive your refund request and your contract. Any Premium taxes and expense charges deducted from the Premium also will be refunded.
This prospectus describes the individual single Premium immediate variable annuities (SPIAs) offered by TIAA-CREF Life Insurance Company. The rights and benefits under the Contracts are summarized below. However, the descriptions you read here are qualified entirely by the Contracts themselves.
The Contracts are approved in all states including the District of Columbia.
Under the SPIA Contracts, TIAA-CREF Life promises to pay you, the owner, an income in the form of annuity payments. You choose the frequency of these payments. You can use the Contracts to provide you with a stream of income for the life of the named Annuitant(s) (which may be you or another person) or for a specified period of time you select. How long we make annuity payments under the contract will depend on the type of contract you choose: a One-Life Annuity, a Two-Life Annuity, or a Fixed-Period Annuity, as well as the length of any guaranteed period you choose.
The SPIA Contracts include both fixed and variable components—that is, you can allocate your single Premium between the Fixed Account or one or more separate account variable Investment Accounts. Annuity payments from the Fixed Account are guaranteed by TIAA-CREF Life over the life of the contract. Annuity payments from the separate account’s variable Investment Accounts increase or decrease, depending on how well the Funds underlying the Investment Account perform over time. Your variable payments will also change depending on the Income Change Method you choose—i.e., whether you choose to have your payments revalued monthly or annually.
PURCHASING A CONTRACT AND REMITTING YOUR PREMIUM
The Premium. We’ll issue you a contract as soon as we receive in good order at our Administrative Office your complete and accurate application, Premium and all other information necessary to process your application. Please send your check, payable to TIAA-CREF Life Insurance Company, along with the application to:
New Business Department
TIAA-CREF Life Insurance Company
P.O. Box 1291
Note that we cannot accept money orders or travelers checks. In addition, we will not accept a third-party check where the relationship of the payer to the account owner cannot be identified from the face of the check. The Premium must be for at least $25,000. Additional Premiums are not permitted. We will credit your Premium within two Business Days after we receive all necessary information or the Premium itself, whichever is later. If we don’t have the necessary information within five Business Days, we’ll return your Premium unless you instruct us otherwise upon being contacted.
We reserve the right to reject any Premium payment or to place dollar limitations on the amount of a Premium. If mandated under applicable law, including federal laws designed to counter terrorism and prevent money laundering, we may be required to reject a Premium payment. We may also be required to block a Contractowner’s account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans or death benefits, until instructions are received from the appropriate regulator. We may also be required to provide additional information about you and your contract to government regulators.
Federal law requires us to obtain, verify and record information that identifies each person who opens an account. Until we receive the information we need, we may not be able to effect transactions for you. Furthermore, if we are unable to verify your identity, or that of another person authorized to act on your behalf, or if we believe that we have identified potentially criminal activity, we reserve the right to take such action as we deem appropriate, which may include closing your account.
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Electronic Payment. You may pay your Premium by electronic payment. A federal wire is usually received the same day and an Automated Clearing House (“ACH”) credit or debit transfer is usually received by the second day after transmission. Be aware that your bank may charge you a fee to wire funds, although an ACH transfer is usually less expensive than a federal wire. Here’s what you need to do:
1. | Send us your application; |
2. | Instruct your bank to wire money to: |
Citibank, N.A.
ABA Number 021000089
New York, NY
Account of : TIAA-CREF Life Insurance Company
Account Number: 4068-4865
3. | Specify on the wire: |
• | Your name and address |
• | Social Security Number(s) or Taxpayer Identification Number |
• | Specify code “SPIA” |
You may elect to receive monthly, quarterly, semi-annual or annual payments under any of the SPIA Contracts. If your annuity payments would be less than $100 under the payment option you choose, we may make annuity payments less frequently than that.
Your first annuity payment date will be specified in your contract. If you choose monthly payments, the first annuity payment date will either be the first day of the next month, or the first day of the month after that if your Premium is received after the 20th day of a month. If you choose quarterly, semi-annual or annual payments, your first annuity payment date will be the first day of the month that is either three months, six months, or twelve months, as applicable, following the month we receive your Premium. We will generally issue your subsequent payments on the first of a month, at monthly, quarterly, semi-annual, or annual intervals from your first annuity payment date. Your first annuity check may be delayed while we process and calculate the amount of your initial payment.
We’ll send your payments by mail to your home address or (at your request) by mail or electronic funds transfer to your bank. If the address or bank where you want your payments changes, it’s your responsibility to let us know. We can send payments to your residence or most banks abroad.
Annuity payments are subject to our financial strength and claims-paying ability.
PAYMENTS FROM THE FIXED ACCOUNT
On the contract Issue Date, the dollar amount of each annuity payment is fixed, based on:
• | the amount of your Premium |
• | whether the contract is a One-Life, Two-Life or Fixed-Period Annuity |
• | the length of the fixed period or guaranteed period, as applicable |
• | the frequency of payment you choose |
• | the age of the Annuitant and any second Annuitant, as applicable |
• | the interest rates then in effect |
• | the Income Option selected, in the case of the Two-Life Annuity, and |
• | the mortality basis then in effect, in the case of One-Life or Two-Life Annuities |
Subsequent fixed payments will be for the same amount (except in the case of a Two-Life Annuity, in which fixed payments may change upon the Annuitant’s death). The amount of each annuity payment from the Fixed Account does not change as a result of the investment experience of any variable Investment Account.
There are significant limits on your right to “transfer” all or part of your future annuity payments from the Fixed Account to the variable Investment Accounts. Due to these limitations, if you want to transfer all of your future annuity payments from the Fixed Account to one or more variable Investment Accounts, it may take several years to do so. You should carefully consider whether payments from the Fixed Account meet your investment needs. See “Changing Investment Accounts and Income Change Methods.”
PAYMENTS FROM THE VARIABLE INVESTMENT ACCOUNTS
The amount of variable annuity payments we pay will depend upon the number and value of your Annuity Units in a particular Investment Account. The number of Annuity Units you purchase is determined on the contract Issue Date. (If you live in Georgia, Hawaii, Idaho, Iowa, Louisiana, Massachusetts, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, Washington, West Virginia or Wisconsin, the number of Annuity Units you purchase will
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be determined as of the date that we transfer your temporary investment in the General Account to the variable Investment Accounts, i.e., seven days plus the number of days in the free look period applicable in your state, calculated from the Issue Date of your contract.) Annuity unit values are calculated as of each Valuation Day based primarily on the net investment results of the Funds underlying the particular Investment Account. For the formulas used to determine Annuity Unit values, see the SAI.
Your initial annuity payments will be determined based on:
• | the amount of your Premium |
• | whether the contract is a One-Life, Two-Life or has a guaranteed period or is a Fixed-Period Annuity |
• | the length of the fixed period or guaranteed period, as applicable |
• | the frequency of payment you choose |
• | the age of the Annuitant and any second Annuitant, as applicable |
• | in the case of the Two-Life Annuity, the Income Option selected |
• | an assumed annual investment return of 4%, and |
• | the mortality basis then in effect, in the case of One-Life or Two-Life Annuities |
Over the life of the contract, payments will go up or down based on the investment experience of the Funds underlying the variable Investment Accounts relative to the 4% assumed annual investment return, and whether you choose to have your payments revalued monthly or annually (i.e., your choice of Income Change Method). In general, your payments will increase if the performance of the variable Investment Account (net of expenses) is greater than 4% and decrease if the performance is less than 4%.
You may choose either an annual or monthly Income Change Method for your variable annuity payments. Under the annual Income Change Method, the amount of payments from the variable Investment Accounts will change each May 1, based on the net investment results of the Funds underlying the Investment Account during the prior year (from the day following the last Valuation Day in March of the prior year through the last Valuation day in March of the current year). Under the monthly Income Change Method, payments from the variable Investment Accounts will change every month, based on the net investment results during the previous month. The amount of your next payment will be determined as of the 20th day of each month (or, if the 20th is not a Business Day, the prior Business Day).
For a more complete discussion of how we determine the amount of variable annuity payments, see “Calculating Variable Annuity Payments” and the SAI.
At the current time, you may purchase a One-Life Annuity, a Two-Life Annuity, or a Fixed-Period Annuity. Each of these Contracts uses a different method to determine the duration of annuity income payments. The total value of annuity payments made to you (or your Beneficiary) may be less than the Premium you paid depending on the duration of your contract.
• | One-Life Annuity. This option pays you or your Beneficiary income as long as the Annuitant lives, with or without an optional guaranteed period. If you elect a guaranteed period (10, 15 or 20 years) and the Annuitant dies before it’s over, annuity income payments will continue to you or your Beneficiary until the end of the period. The guaranteed period may be limited by applicable tax laws. If you do not elect a guaranteed period, all annuity income payments end when the Annuitant dies—so that it’s possible for you to receive only one payment if the Annuitant dies before the second payment is made, two payments if the Annuitant dies before the third payment is made, etc. |
• | Two-Life Annuity. This option pays income to you or your Beneficiary as long as the Annuitant or second Annuitant live or until the end of an optional specified guaranteed period, whichever period is longer. The guaranteed period may be limited by applicable tax laws. There are three types of Income Options under the Two-Life Annuity, all available with or without a guaranteed period—Two-Life Annuity with Full Benefit While Either Annuitant Survives, Two-Life Annuity with Two-Thirds Benefit While Either Annuitant Survives, and Two-Life Annuity with One-Half Benefit While Second Annuitant Survives First Annuitant. |
• | Fixed-Period Annuity. This option pays you or your Beneficiary income for a stated period of not less than five nor more than thirty years. At the end of the period you’ve chosen, payments stop. The period you choose may be limited by applicable tax laws. |
CHANGING INVESTMENT ACCOUNTS AND INCOME CHANGE METHODS
You will be able to “transfer” all or part of the future annuity payments one time in each calendar quarter from each variable Investment Account to another variable Investment Account or to the Fixed Account. One time in a calendar year, under the One-Life and Two-Life Annuities, you will also be able to transfer the Present Value of future amounts payable from the Fixed Account to any of the variable Investment Accounts (provided they are equity accounts), either in a lump sum of up to 20% of annuity income in any year, or in installment payments over a five-year period. Due to this limitation, it may take several years to transfer all of your future annuity payments from the Fixed Account to the variable Investment Accounts. Once income has been transferred from the Fixed Account to a variable Investment Account it cannot be transferred back to the Fixed Account.
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You may not transfer payments from the Fixed Account to the variable Investment Accounts under the Fixed-Period Annuity. All transfers must consist of a periodic payment of at least $100 or the entire payment.
We’ll process your transfer as of the Business Day we receive your request. Alternatively, you can choose to have a transfer take effect at the close of any future Business Day, or the last Calendar Day of the current or any future month, even if it’s not a Business Day. Transfers under the annual Income Change Method will affect your annuity payments beginning on the May 1 following the March 31 (or, if March 31 is not a Valuation Day, the immediately preceding Valuation Day) which is on or after the effective date of the transfer. Transfers under the monthly Income Change Method and all transfers into or out of the Fixed Account will affect your annuity payments beginning with the first payment due after the monthly payment Valuation Day that is on or after the transfer date. If you live in Georgia, Hawaii, Idaho, Iowa, Louisiana, Massachusetts, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, Washington, West Virginia or Wisconsin, during the period in which any portion of your Premium is temporarily held in the General Account, no transfers may be made. For more on how we calculate transfer amounts, see “Calculating Variable Annuity Payments.”
You can switch between the annual and monthly Income Change Methods at any time, but only once a year, and the switch will go into effect on March 31 (or, if March 31 is not a Valuation Day, the immediately preceding Valuation Day).
To request a transfer or to switch your Income Change Method, call our Insurance Planning Center, toll-free at 877 825-4011, or write to TIAA-CREF
Life’s home office at 730 Third Avenue, New York 10017-3206. Please note that telephone transactions may not always be available.
TRANSFER POLICIES REGARDING MARKET TIMING AND EXCESSIVE TRADING
Variable annuity contract owners could try to profit from transferring money back and forth among Investment Accounts in an effort to “time” the market or for other reasons. As money is shifted in and out of these accounts, we incur transaction costs and the underlying Funds incur expenses for buying and selling securities.
In addition, excessive trading can interfere with efficient portfolio management and cause dilution, if traders are able to take advantage of pricing inefficiencies. The risk of pricing inefficiencies may be increased for Funds invested primarily in foreign securities. These costs are borne by all contract owners, including long-term investors who do not generate the costs. The contract is not intended for market timing or frequent trading.
Under this SPIA contract, market timing is unlikely, due to the nature of the contract and its transfer limitations. In particular, transfers of all or part of the future annuity income payable are available only one time each calendar quarter from each variable Investment Account to another variable Investment Account or to the Fixed Account. Transfers of the Present Value of future amounts payable from the Fixed Account to any of the variable Investment Accounts are available only one time in a calendar year, with certain conditions.
The TIAA-CREF Life Funds may have adopted their own policies and procedures with respect to market timing and excessive trading of their respective shares. The TIAA-CREF Life Funds prospectus describes any such policies and procedures. While we reserve the right to enforce these policies and procedures, we may not have the contractual authority or the operational capacity to apply the market timing and excessive trading policies and procedures of the TIAA-CREF Life Funds. However, we have entered into a written agreement, as required by SEC regulation, with the principal underwriter of the TIAA-CREF Life Funds that obligates us to provide to the Fund promptly upon request certain information about the trading activity of individual Contractowners, and to execute instructions from the Fund to restrict or prohibit further purchases or transfers by specific Contractowners who violate the market timing and excessive trading policies established by the Fund.
We seek to apply our transfer policies uniformly to all Contractowners. No exceptions are made with respect to the policies. The contract is not appropriate for market timing. You should not invest in the contract if you want to engage in market timing activity.
You or your Beneficiary have the right to receive in a lump sum the Commuted Value of any periodic payments or other amounts remaining due (i) from a One-Life or Two-Life Annuity if the Annuitant(s) dies during the guaranteed period, or (ii) under a Fixed-Period Annuity from the variable Investment Accounts. (Under the One-Life and Two-Life Annuities, no lump sum payment is available during the lifetime of Annuitant(s), or if the Annuitant dies after the end of the guaranteed period. Under a Fixed-Period Annuity, a lump-sum payment from the Fixed Account is only available to your beneficiaries after your death.)
The Commuted Value will be less than the total of the future payments, because the future interest we’ve assumed in computing the series of payments won’t be earned if payment is made in one sum. The effective date of the calculation of the Commuted Value is the Business Day on which we receive the request for a Commuted Value, in a form acceptable to us.
A lump-sum payment is subject to tax and may be subject to a 10% penalty tax if made before age 59 1/2. (See “Federal Income Taxes.”)
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If you (the owner) die, your designated Beneficiar(y)(ies) or, if none, the person chosen as the Annuitant or second Annuitant (if applicable), will become the owner and remaining annuity income payments will be made to him or her. If there is no surviving Beneficiary and the Annuitant and second Annuitant, if any, has died before the end of a guaranteed period, the Commuted Value of any payments remaining due will be paid in one sum to your estate.
If your spouse (as defined under Federal law) is the sole Beneficiary entitled to payments, he or she may choose to become the owner and continue the contract. The right of a spouse to continue the Contract and all Contract provisions relating to spousal continuation are available only to a person who meets the definition of “spouse” under Federal law. The U.S. Supreme Court has held Section 3 of the federal Defense of Marriage Act (which purportedly did not recognize same-sex marriages, even those which are permitted under individual state laws) to be unconstitutional. Therefore, same-sex marriages recognized under state law will be recognized for federal law purposes. The Department of Treasury and the Internal Revenue Service have recently determined that for federal tax purposes, same-sex spouses will be determined based on the law of the state in which the marriage was celebrated irrespective of the law of the state in which the person resides. However, some uncertainty remains regarding the treatment of same-sex spouses. Consult a tax advisor for more information on this subject.
When you fill out an application for a contract, you can name one or more beneficiaries or contingent beneficiaries. You can change your Beneficiary at any time. For more information on designating beneficiaries, contact TIAA-CREF Life or your legal adviser.
CALCULATING VARIABLE ANNUITY PAYMENTS
The amount of each variable annuity payment from each Investment Account is equal to the number of Annuity Units payable multiplied by the then-Current Value of one Annuity Unit for the variable Investment Account and Income Change Method you chose.
Determining the Number of Annuity Units Payable. The number of Annuity Units you purchase under the contract is derived by dividing the portion of the Premium (net of any Premium taxes) you allocated to a particular Investment Account and Income Change Method by the product of the Annuity Unit value for that Investment Account and Income Change Method, and an annuity factor that represents the Present Value of an annuity that continues for as long as annuity payments would need to be paid. The annuity factor will reflect an interest rate for discounting future payments of 4 percent, the timing and frequency of future payments, and, if applicable, the mortality assumptions for the person(s) on whose life or lives the annuity payments will be based. Mortality assumptions will be based on the mortality basis then in effect under the contract.
The number of Annuity Units for each variable Investment Account and Income Change Method under a contract is generally determined on the contract Issue Date and remains fixed unless there is a “transfer” of Annuity Units or you change your Income Change Method. The number of Annuity Units payable from a particular Investment Account and Income Change Method under your contract will be reduced by the number of Annuity Units you transfer out of that Investment Account or Income Change Method. The number of Annuity Units payable will be increased by any internal transfers you make to that Investment Account and Income Change Method. If you live in Georgia, Hawaii, Idaho, Iowa, Louisiana, Massachusetts, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, Washington, West Virginia or Wisconsin, the number of Annuity Units payable from each variable Investment Account will be determined as of the date that we transfer your temporary investment in the General Account to the variable Investment Accounts. See “Temporary Investment in the General Account.”
Computing Annuity Unit Values. Annuity Unit valuations for each Investment Account will occur only on Business Days, and thus the last Calendar Day of each month will not be a Valuation Day unless it falls on a Business Day. If the last Calendar Day of a month does not fall on a Business Day, the last Valuation Day for such months shall be deemed to be the last Business Day of the month. The Annuity Unit value for each Income Change Method is determined by updating the Annuity Unit value from the previous Valuation Day to reflect the net investment performance of the account for the current valuation period relative to the 4 percent Assumed Investment Return. We further adjust the Annuity Unit value to reflect the fact that annuity payment amounts are redetermined only once a month or once a year (depending on the revaluation method chosen). The purpose of the adjustment is to equitably apportion any account gains or losses among those Annuitants who receive annuity income for the entire period between valuation dates and those who start or stop receiving annuity income between the two dates. In general, from period to period your payments will increase if the performance of the account is greater than a 4 percent net annual rate of return and decrease if the performance is less than a 4 percent net annual rate of return.
For participants under the annual Income Change Method, the value of the Annuity Unit for payments remains level until the following May 1. For those who have already begun receiving annuity income as of March 31, the value of the Annuity Unit for payments due on and after the next succeeding May 1 is equal to the Annuity Unit value determined as of the last Valuation Day in March. For participants under the monthly Income Change Method, the value of the Annuity Unit for payments changes on the payment Valuation Day of each month for the payment due on the first of the following month.
TIAA-CREF Life reserves the right to modify the specific dates that payments will change and the associated payment valuation date. We also can delete or stop offering the annual or monthly Income Change Methods.
For the more detailed formula we use for determining Annuity Unit values, see the SAI.
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THE VARIABLE INVESTMENT ACCOUNTS
You may allocate any portion of the Premium to the separate account, which currently has eight subaccounts, or variable Investment Accounts. These variable Investment Accounts invest in shares of the Funds of the TIAA-CREF Life Funds. TIAA-CREF Life Funds is an open-end management investment company that was organized as a statutory trust under Delaware law on August 13, 1998. The TIAA-CREF Life Funds currently consists of ten Funds but may add other Funds in the future.
Note that not all of the ten Funds described in the prospectus for the TIAA-CREF Life Funds are available under your contract. When you consult the TIAA-CREF Life Funds prospectus, you should be careful to refer only to the information regarding the Funds listed below.
The Funds available under your contract are:
Active Equity Funds:
The Growth Equity Fund seeks a favorable long-term return, mainly through capital appreciation, primarily from equity securities.
The Growth & Income Fund seeks a favorable long-term total return, through both capital appreciation and investment income, primarily from income-producing equity securities.
The International Equity Fund seeks a favorable long-term total return, mainly through capital appreciation, primarily from equity securities of foreign issuers.
The Large-Cap Value Fund seeks a favorable long-term total return, mainly through capital appreciation, primarily from equity securities of large domestic companies.
The Small-Cap Equity Fund seeks a favorable long-term total return, mainly through capital appreciation, primarily from equity securities of smaller domestic companies.
Index Funds:
The Stock Index Fund seeks a favorable long-term total return, mainly from capital appreciation, by investing primarily in a portfolio of equity securities selected to track the overall U.S. equity markets.
Specialty Funds:
The Social Choice Equity Fund seeks a favorable long-term total return that reflects the investment performance of the overall U.S. stock market while giving special consideration to certain social criteria.
The Real Estate Securities Fund seeks a favorable long-term total return through both capital appreciation and current income, by investing primarily in equity securities of companies principally engaged in or related to the real estate industry.
Teachers Advisors, Inc. (Advisors), an indirect subsidiary of TIAA, manages the assets of the TIAA-CREF Life Funds. Advisors also manages the Stock Index Account of the TIAA Separate Account VA-1, TIAA-CREF Mutual Funds, and TIAA-CREF Institutional Mutual Funds. The same personnel also manage the CREF accounts on behalf of TIAA-CREF Investment Management, LLC, an investment adviser that is also a TIAA subsidiary.
The investment objectives, techniques and restrictions of the TIAA-CREF Life Funds, including the risks of investing in the Funds, are described fully in their prospectus and SAI. The prospectus and SAI of the TIAA-CREF Life Funds may be obtained by writing TIAA-CREF Life Funds, 730 Third Avenue, New York, New York 10017-3206, by calling 877 825-0411, or by accessing our internet website at www.tiaa-cref.org. You should read the prospectus for the TIAA-CREF Life Funds carefully before investing in the separate account.
TEMPORARY INVESTMENT IN THE GENERAL ACCOUNT
If you live in Georgia, Hawaii, Idaho, Iowa, Louisiana, Massachusetts, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Rhode Island, South Carolina, Utah, Washington, West Virginia or Wisconsin: If in your application you allocated any portion of the Premium to the variable Investment Accounts, that portion of the Premium will initially be applied to the TIAA-CREF Life General Account until seven days plus the number of days in the free look period applicable in your state have passed from the Issue Date of your contract. At that time, the amount applied to the General Account, plus any interest credited on the amount, will automatically be transferred to the variable Investment Accounts you have chosen, and the number of Annuity Units payable from each variable Investment Account will be determined as of that date. While this amount is held in the General Account, it will be credited with interest at a rate guaranteed not to be less than an effective annual rate of 2.50%. Your first payment may not reflect participation in the variable Investment Accounts.
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We deduct charges each Valuation Day from the assets of each variable Investment Account for various services required to administer the separate account and the Contracts and to cover certain insurance risks borne by TIAA-CREF Life. The Contracts allow for total separate account charges (i.e., administrative expense and mortality and expense risk charges) at an annual rate of 1.20% of average daily net assets of each Investment Account. TIAA-CREF Life has waived a portion of the mortality and expense risk charges so that current separate account charges are at an annual rate of 0.60% of net assets annually. While TIAA-CREF Life reserves the right to increase the separate account charges at any time, we will provide at least three months’ notice before any raise.
Administrative Expense Charge. This charge is for administration and operations, such as allocating the Premium and administering the Contracts. The daily deduction is equal to an annual rate of 0.20% of average daily net assets.
Mortality and Expense Risk Charge. TIAA-CREF Life imposes a daily charge as compensation for bearing certain mortality and expense risks in connection with the Contracts. The current daily deduction is equal to 0.40% of net assets annually.
TIAA-CREF Life’s mortality risks come from its obligations under the Contracts to make annuity payments under the One-Life Annuity and the Two-Life Annuity. TIAA-CREF Life assumes the risk of making annuity payments regardless of how long the Annuitant(s) may live or whether the mortality experience of Annuitants as a group is better than expected.
TIAA-CREF Life’s expense risk is the possibility that TIAA-CREF Life’s actual expenses for administering and marketing the contract and for operating the separate account will be higher than the amount recovered through the administrative expense deduction.
If the mortality and expense risk charge allowed under the contract isn’t enough to cover TIAA-CREF Life’s costs, TIAA-CREF Life will absorb the deficit. On the other hand, if the charge more than covers costs, TIAA-CREF Life will profit. TIAA-CREF Life will pay a fee from its General Account assets, which may include amounts derived from the mortality and expense risk charge, to Teachers Personal Investors Services, Inc. (TPIS), the principal distributor of the variable component of the contract.
Fund Expenses. Each Investment Account purchases shares of the corresponding Fund at net asset value. Certain deductions and expenses of the TIAA-CREF Life Funds are paid out of the assets of the TIAA-CREF Life Funds. These expenses include charges for investment advice, portfolio accounting, custody, and similar services provided for a Fund. Advisors is entitled to an annual fee based on a percentage of the average daily net assets of each Fund, under an investment management agreement between Advisors and the TIAA-CREF Life Funds.
Fund expenses are not fixed or specified under the terms of the contract and may change periodically. For more information on Fund deductions and expenses, read the TIAA-CREF Life Funds prospectus.
No Deductions from Premium. The Contracts do not provide for charges or other deductions from the Premium.
Premium Taxes. Currently, residents of several states may be subject to Premium taxes on their contract. We will deduct any charges for Premium taxes from your Premium before it’s applied to provide annuity payments. State Premium taxes currently range from 1.00 percent to 3.50 percent of Premium payments.
The following discussion assumes the Contracts qualify as annuity Contracts for federal income tax purposes (see the SAI for more information). The following discussion is general in nature and is not intended as tax advice. It is based on our understanding of current federal income tax law, and is subject to change. No attempt is made to consider any applicable state or other income tax laws, any state and local estate or inheritance tax, or other tax consequences of ownership or receipt of distributions under a Contract. For complete information on your personal tax situation, check with a qualified tax adviser.
NON-NATURAL PERSONS
If a non-natural person (e.g., a corporation or a trust) owns a Contract, the taxpayer generally must include in income any increase in the excess of the account value over the investment in the Contract (generally, the Premiums or other consideration paid for the contract) during the taxable year. There are some exceptions to this rule and a prospective owner that is not a natural person should discuss these with a tax adviser.
Generally, the annuity payments from a nonqualified annuity contract include both a return of Premium and interest or investment gain. Accordingly, only a portion of the annuity payments you receive will be includable in your gross income and subject to federal income tax and state income tax, where applicable. However, when the entire Premium has been recovered or returned, the full amount of any additional annuity payments is includable in gross income.
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Currently capital gains tax rates are not applicable to annuities.
If, after the contract Issue Date, annuity payments stop because an Annuitant died, any Premium that has not been recovered is generally allowable as a deduction for your last taxable year.
Transferring, assigning, pledging, or exchanging a Contract, designating an Annuitant, payee, or other Beneficiary who is not the owner, or the selection of certain maturity dates may have adverse tax consequences including treatment as a distribution. An owner contemplating any such actions should consult a tax advisor.
The Internal Revenue Service currently takes the position that any lump-sum payment from an immediate annuity contract is fully taxable. The amount that is taxable is the excess of the amount distributed to you over the unrecovered investment in the contract. You should consult a tax adviser before taking a lump-sum payment from your contract. See “Receiving a Lump-sum Payment”.
The Internal Revenue Code (IRC) also provides that you may be subject to a penalty if you take a lump-sum payment from certain distributions from your contract. The amount of the penalty is equal to 10% of the amount that is includable in income. Some lump-sum payments will be exempt from the penalty. They include any amounts:
• | paid on or after the taxpayer reaches age 59 1/2; |
• | paid after an owner dies; |
• | paid if the taxpayer becomes totally disabled (as that term is defined in the Internal Revenue Code); or |
• | paid in a series of substantially equal payments made annually (or more frequently) under a lifetime annuity. |
Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with exceptions enumerated above. You should consult a tax advisor with regard to exceptions from the penalty tax.
Amounts may be distributed from the contract because of the death of an owner or the Annuitant. Generally, such amounts are includable in the income of the recipient:
• | if distributed in a lump sum, these amounts are taxed in the same manner as other lump-sum distributions; or |
• | if distributed under an annuity payment option, these amounts are taxed in the same manner as annuity payments. |
For these purposes, the “investment in the contract” is not affected by the owner’s or Annuitant’s death. That is, the “investment in the contract” remains generally the total Premium payments, less amounts received, which were not includable in gross income.
MEDICARE TAX
Beginning in 2013, distributions from non-qualified annuity Contracts will be considered “investment income” for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts.
Legislation is proposed from time to time that would change the taxation of annuity Contracts. It is possible that such legislation could be enacted and that it could be retroactive (that is, effective prior to the date of the change). You should consult a tax adviser regarding legislative developments and their effect on the contract. We also have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity Contract owners currently receive. We make no guarantee regarding the tax status of any Contract and do not intend the above discussion as tax advice.
All nonqualified deferred annuity Contracts that are issued by us (or our affiliates) to the same owner during any calendar year are treated as one annuity contract for purposes of determining the amount includible in such owner’s income when a taxable distribution occurs.
Annuity distributions usually are subject to withholding for the recipient’s federal income tax liability at rates that vary according to the type of distribution and the recipient’s tax status. However, recipients can usually choose not to have tax withheld from distributions.
POSSIBLE CHARGE FOR TIAA-CREF LIFE’S TAXES
Currently we don’t charge the separate account for any federal, state, or local taxes on it or its Contracts (other than Premium taxes—see “Other Charges and Expenses”), but we reserve the right to charge the separate account or the Contracts for any tax or other cost resulting from the tax laws that we believe should be attributed to them.
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DIVERSIFICATION AND DISTRIBUTION REQUIREMENTS
The IRC provides that the underlying investments for a variable annuity must satisfy certain diversification requirements in order for a nonqualified contract to be treated as an annuity contract. The contract must also meet certain distribution requirements at the death of an owner in order to be treated as an annuity contract. These diversification and distribution requirements are discussed in the Statement of Additional Information.
Federal Estate Taxes, Generation-Skipping Transfer Taxes. While no attempt is being made to discuss in detail the federal estate tax implications of the contract, a purchaser should keep in mind that the value of an annuity contract owned by a decedent and payable to a Beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump-sum payment payable to the designated Beneficiary or the actuarial value of the payments to be received by the Beneficiary. Consult an estate planning adviser for more information.
Under certain circumstances, the IRC may impose a “generation skipping transfer tax” (“GST”) when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the owner. Regulations issued under the IRC may require us to deduct the tax from your contract, or from any applicable payment, and pay it directly to the IRS.
For 2014, the federal estate tax, GST tax exemptions and maximum rates are $5,340,000 and 40%, respectively. The potential application of these taxes underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios.
Annuity purchases by residents of Puerto Rico. The Internal Revenue Service has announced that income received by residents of Puerto Rico under life insurance or annuity Contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States federal income tax.
Annuity purchases by nonresident aliens and foreign corporations. The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from annuity Contracts at a 30% rate, unless a lower treaty rate applies. In addition, such purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Additional withholding may occur with respect to entity purchasers (including foreign corporations, partnerships and trusts) that are not U.S. residents. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S., state, and foreign taxation with respect to an annuity contract purchase.
Foreign Tax Credits. We may benefit from any foreign tax credits attributable to taxes paid by certain Funds to foreign jurisdictions to the extent permitted under federal tax law.
Possible Tax Law Changes. Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation or otherwise. Consult a tax adviser with respect to legislative developments and their effect on the Contract. We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of any Contract and do not intend the above discussion as tax advice.
What we tell you here about federal and other taxes isn’t comprehensive and is for general information only. It doesn’t cover every situation. Taxation varies depending on the circumstances, and state and local taxes may also be involved. For complete information on your personal tax situation, check with a qualified tax adviser.
TIAA-CREF LIFE INSURANCE COMPANY AND TIAA
The Contracts are issued by TIAA-CREF Life Insurance Company, a stock life insurance company organized under the laws of the State of New York on November 20, 1996. All of the stock of TIAA-CREF Life is held by Teachers Insurance and Annuity Association of America (TIAA). TIAA-CREF Life’s headquarters are at 730 Third Avenue, New York, New York 10017-3206. TIAA-CREF Life is solely responsible for its contractual obligations.
TIAA is a stock life insurance company, organized under the laws of the State of New York. It was founded on March 4, 1918, by the Carnegie Foundation for the Advancement of Teaching. TIAA is the companion organization of the College Retirement Equities Fund (CREF), the first company in the United States to issue a variable annuity. CREF is a nonprofit membership corporation established in the State of New York in 1952. Together, TIAA and CREF, serving approximately 4.8 million people and approximately 17,000 institutions as of December 31, 2013, form one of the largest retirement systems in the U.S., based on assets under management. CREF does not stand behind TIAA’s guarantees and TIAA does not guarantee CREF products.
Single Premium Immediate Annuities n Prospectus | 15 |
On July 27, 1998, TIAA-CREF Life established TIAA-CREF Life Separate Account VA-1 as a separate Investment Account under New York law. The separate account is registered with the SEC as a unit investment trust under the 1940 Act. As part of TIAA-CREF Life, the separate account is also subject to regulation by the New York Department of Financial Services and the insurance departments of some other jurisdictions in which the Contracts are offered (see the SAI).
Although TIAA-CREF Life owns the assets of the separate account, and the obligations under the Contracts are obligations of TIAA-CREF Life, the separate account’s income, investment gains, and investment losses are credited to or charged against the assets of the separate account without regard to TIAA-CREF Life’s other income, gains, or losses. Under New York law, we can’t charge the separate account with liabilities incurred by any other TIAA-CREF Life separate account or other business activity TIAA-CREF Life may undertake.
The separate account currently has eight subaccounts, or variable Investment Accounts, which invest in shares of the Funds of the TIAA-CREF Life Funds.
This prospectus is designed to provide information mainly about the variable Investment Accounts. Following is a brief description of the Fixed Account. Amounts allocated to the Fixed Account become part of the General Account assets of TIAA-CREF Life, which support various insurance and annuity obligations. The General Account includes all the assets of TIAA-CREF Life, except those in the separate account (i.e., the Investment Accounts) or in any other TIAA-CREF Life separate account. Interests in the Fixed Account have not been registered under the Securities Act of 1933 (the “1933 Act”), nor is the Fixed Account registered as an investment company under the 1940 Act. Neither the Fixed Account nor any interests therein are generally subject to the 1933 Act or 1940 Act. For details about the Fixed Account, see your contract. Any amounts in the Fixed Account are subject to our financial strength and claims-paying ability.
We offer the Contracts to the public on a continuous basis. We anticipate continuing to offer the Contracts, but reserve the right to discontinue the offering.
The Contracts are offered by TIAA-CREF Individual & Institutional Services, LLC (“TC Services”), a subsidiary of TIAA which is registered with the SEC as broker-dealers and a member of Financial Industry Regulatory Authority or FINRA. TC Services may also enter into selling agreements with third parties to distribute the Contracts. TC Services is considered the “principal underwriter” for interests in the contract. Anyone distributing a contract must be a registered representative of TC Services or have entered into a selling agreement with TC Services. The main offices of TC Services is at 730 Third Avenue, New York, New York 10017-3206. No commissions are paid to TC Services or any other entity in connection with the distribution of the Contracts.
Neither the separate account, TIAA-CREF Life nor TC Services is involved in any legal action that we consider likely to have a material adverse effect on the Separate Account, the ability of TIAA-CREF to meet its obligations under the Contract, or the ability of TC Services to perform its contract with the Separate Account.
We may delay any payments from the separate account only if (1) the New York Stock Exchange is closed (or trading restricted by the SEC) on a day that isn’t a weekend or holiday; (2) an SEC-recognized emergency makes it impractical for us to sell securities or determine the value of assets in the separate account; or (3) the SEC says by order that we can or must postpone payments to protect you and other separate account Contractowners. In addition, transfers of accounts from and within the fixed and variable Investment Accounts may be deferred under these circumstances.
If, pursuant to Securities and Exchange Commission rules, the TIAA-CREF Life Money Market Fund suspends payment of redemption proceeds in connection with a liquidation of the Fund, we will delay payment of any transfer or annuity payment from the TIAA-CREF Life Money Market Sub-Account until the Fund is liquidated.
If a check has been submitted as the Premium, we have the right to defer any payments until the check has been honored.
The separate account is the legal owner of the shares of the Funds of the TIAA-CREF Life Funds offered through your contract. It therefore has the right to vote its shares at any meeting of the TIAA-CREF Life Funds’ shareholders. The TIAA-CREF Life Funds do not plan to hold annual shareholder meetings. However, when shareholder meetings are held, you have the right to instruct us how to vote the shares supporting your contract.
If we don’t receive timely instructions, we will vote your shares in the same proportion as the aggregate voting instructions received on all outstanding Contracts. Please note that the effect of proportional voting is that a small number of Contractowners may control the outcome of a vote. TIAA-CREF Life may vote the shares of the Funds in its own right in some cases, if it determines that it may legally do so.
16 | Prospectus n Single Premium Immediate Annuities |
The number of votes that a Contractowner has the right to instruct are calculated separately for each variable Investment Account, and include fractional votes. The Contractowner has a voting interest in each Investment Account from which variable annuity payments are made. The number of votes you have is calculated based on the amounts to be paid from each variable Investment Account to meet our future annuity obligations to you. As variable annuity payments are made to you, the number of votes you have diminishes.
ADDING AND CLOSING ACCOUNTS OR SUBSTITUTING FUNDS; ADDING OR DELETING CONTRACT OPTIONS OR INCOME METHODS
We can add new Investment Accounts in the future that would invest in other Funds. We don’t guarantee that the separate account, any existing Investment Account or any Investment Account added in the future, will always be available. We reserve the right to add or close accounts, substitute one Fund for another with the same or different fees and charges, combine accounts or investment portfolios, liquidate the Investment Accounts or add, delete or stop providing Contracts for use with any Investment Account. We can also stop or start providing certain contract options or Income Options under either the annual or monthly Income Change Methods from current or future Investment Accounts. We can also make any changes to the separate account or to the contract required by applicable laws relating to annuities or otherwise. TIAA-CREF Life can make these and some other changes at its discretion, subject to any required New York Department of Financial Services, SEC or state approval. The separate account can (1) operate under the 1940 Act as an investment company, or in any other form permitted by law, (2) deregister under the 1940 Act if registration is no longer required, or (3) combine with other separate accounts. As permitted by law, TIAA-CREF Life may transfer the separate account assets to another separate account or account of TIAA-CREF Life or another insurance company or transfer the contract to another insurance company.
FINANCIAL CONDITION OF TIAA-CREF LIFE
The benefits under your Contract are paid by us from our General Account assets and/or your Accumulation Value held in the Separate Account. It is important that you understand how your Contract works and how our ability to meet our obligations affects your Contract. Payment of your Contract benefits is not guaranteed and depends upon certain factors discussed below.
Assets in the Separate Account. You assume all of the investment risk for Accumulation Value allocated to the Investment Accounts. Your Accumulation Value in the Investment Accounts is part of the assets of the Separate Account. These assets are segregated and insulated from our General Account, and may not be charged with liabilities arising from any other business that we may conduct. This means that your Accumulation Value allocated to the Separate Account should generally not be adversely affected by the financial condition of our General Account. With very limited exceptions, all assets in the Separate Account attributable to your Accumulation Value and that of all other Contractowners would receive a priority of payment status over other claims in the event of an insolvency or receivership. See “SEPARATE ACCOUNT.”
Assets in the General Account. Any guarantees under the Contract that exceed your Accumulation Value in the Separate Account, such as those associated with the death benefit, are paid from our General Account (not the Separate Account). Therefore, any amounts that we may be obligated to pay under the Contract in excess of Accumulated Value in the Separate Account are subject to our financial strength and claims- paying ability and our long-term ability to make such payments. The assets of the Separate Account, however, are also available to cover the liabilities of our General Account, but only to the extent that the Separate Account assets exceed the Separate Account liabilities arising under the Contracts supported by it. We issue other types of insurance policies and financial products as well, such as market value adjusted annuities, and we also pay our obligations under these products from the assets in our General Account. These General Account products are subject to our claims-paying ability. In the event of an insolvency or receivership, payments we make from our General Account to satisfy claims under the Contract would generally receive the same priority as our other policy holder obligations.
Our Financial Condition. Among the laws and regulations applicable to us as an insurance company are those which regulate the investments we can make with assets held in our General Account. In general, those laws and regulations determine the amount and type of investments which we can make with General Account assets. In addition, state insurance regulations require that insurance companies calculate and establish on their financial statements a specified amount of reserves in order to meet the contractual obligations to pay the claims of our Contractowners. In order to meet our claims-paying obligations, we regularly monitor our reserves to ensure we hold sufficient amounts required under state law to cover actual or expected contract and claims payments. In addition, we actively hedge our investments in our General Account. However, it is important to note that there is no guarantee that we will always be able to meet our claims paying obligations; there are risks to purchasing any insurance product.
State insurance regulators also require insurance companies to maintain a minimum amount of capital, which acts as a cushion in the event that the insurer suffers a financial impairment, based on the inherent risks in the insurer’s operations. These risks include those associated with losses that we may incur as the result of defaults on the payment of interest or principal on our General Account assets, which include bonds, mortgages, general real estate investments, and stocks, as well as the loss in value of these investments resulting from a loss in their market value. We continually evaluate our investment portfolio to mitigate market risk and actively manage the investments in the portfolio.
Single Premium Immediate Annuities n Prospectus | 17 |
How to Obtain More Information. We encourage both existing and prospective Contractowners to read and understand our financial statements. We prepare our financial statements on a statutory basis. Our audited financial statements, as well as the financial statements of the Separate Account, are located in the Statement of Additional Information (“SAI”). For information on how to obtain a free copy of the SAI, see the cover page of this Prospectus.
We won’t consider any notice, form, request, or payment to have been received by TIAA-CREF Life until it reaches our administrative office. You can ask questions by calling toll-free 800 842 2252.
If you received this prospectus electronically and would like a paper copy, please call 800 852 2252, and we will send it to you.
To cut costs and eliminate duplicate documents sent to your home, we may begin mailing only one copy of the prospectus, prospectus supplements, annual and semi-annual reports, or any other required documents, to your household, even if more than one Contractowner lives there. If you would prefer to continue receiving your own copy of any of these documents, you may call us toll-free at 877 825-0411, or write us.
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To help the government fight the Funding of terrorism and money laundering activities, Federal law requires all financial institutions, including us, to obtain, verify and record information that identifies each person who opens an account.
What this means for you: When you apply for a contract, we will ask for your name, address, date of birth, social security number and other information that will allow us to identify you, such as your home telephone number. Until you provide us with the information we need, we may not be able to open an account or effect any transactions for you.
For some transactions, we may require your signature to be notarized or guaranteed by a commercial bank or a member of a national securities exchange.
We reserve the right to correct any errors or omissions on any form, report or statement that we send you.
OTHER INFORMATION
Every state has some form of unclaimed property laws that impose varying legal and practical obligations on insurers and, indirectly, on Contractowners, Annuitants, Beneficiaries and other payees of proceeds. Unclaimed property laws generally provide for escheatment to the state of unclaimed proceeds under various circumstances.
Contractowners are urged to keep their own, as well as their Annuitants’, Beneficiaries’ and other payees’, information up to date, including full names, postal and electronic media addresses, telephone numbers, dates of birth, and social security numbers. Such updates can be communicated in writing to TIAA-CREF 8500 Andrew Carnegie Blvd., Charlotte, NC 28262; or by calling us between the hours of 8:00 a.m. and 10:00 p.m. ET, Monday-Friday and 9:00 a.m. to 6:00 p.m. ET Saturday at 800 842 2252; or 24 hours a day via our website www.tiaa-cref.org.
18 | Prospectus n Single Premium Immediate Annuities |
TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION
Single Premium Immediate Annuities n Prospectus | 19 |
APPENDIX A—CONDENSED FINANCIAL INFORMATION
Presented below is condensed financial information for the separate account. The table shows per accumulation unit data and total returns for the Growth Equity, Growth & Income, International Equity, Large-Cap Value, Small-Cap Equity, Stock Index, Social Choice Equity, and Real Estate Securities variable Investment Accounts of the separate account. The data should be read in conjunction with the financial statements and other financial information included in the SAI. It is available without charge upon request.
For the year ended December 31 | ||||||||||||||||||||||||||||||||
Year | Accumulation Units Outstanding, End of Period (000’s) |
Accumulation Unit Value, Beginning of Period |
Accumulation Unit Value, End of Period |
Net Assets, End of Period (000’s) |
Ratio of Investment Income to Average Net Assets(b) |
Ratio of Expenses to Average Net Assets(a)(c) |
Total Return(d) | |||||||||||||||||||||||||
TIAA-CREF Life Growth Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 1,324 | $ | 19.27 | $ | 26.81 | $ | 37,777 | 0.28% | 0.60% | 39.10% | ||||||||||||||||||||||
2012 | 1,353 | $ | 16.57 | $ | 19.27 | $ | 27,451 | 0.71% | 0.60% | 16.29% | ||||||||||||||||||||||
2011 | 1,426 | $ | 16.37 | $ | 16.57 | $ | 24,877 | 0.27% | 0.60% | 1.22% | ||||||||||||||||||||||
2010 | 1,450 | $ | 14.52 | $ | 16.37 | $ | 24,804 | 0.47% | 0.60% | 12.74% | ||||||||||||||||||||||
2009 | 1,609 | $ | 10.78 | $ | 14.52 | $ | 24,282 | 0.93% | 0.60% | 34.66% | ||||||||||||||||||||||
2008 | 1,554 | $ | 18.30 | $ | 10.78 | $ | 17,451 | 0.87% | 0.60% | (41.05)% | ||||||||||||||||||||||
2007 | 1,683 | $ | 15.12 | $ | 18.30 | $ | 31,942 | 0.82% | 0.60% | 21.03% | ||||||||||||||||||||||
2006 | 1,513 | $ | 14.41 | $ | 15.12 | $ | 23,582 | 0.76% | 0.60% | 4.98% | ||||||||||||||||||||||
2005 | 1,733 | $ | 13.75 | $ | 14.41 | $ | 25,602 | 0.65% | 0.60% | 4.80% | ||||||||||||||||||||||
2004 | 1,848 | $ | 13.00 | $ | 13.75 | $ | 26,002 | 0.89% | 0.60% | 5.75% | ||||||||||||||||||||||
TIAA-CREF Life Growth & Income Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 1,189 | $ | 34.13 | $ | 45.59 | $ | 60,823 | 1.08% | 0.60% | 33.58% | ||||||||||||||||||||||
2012 | 1,227 | $ | 29.49 | $ | 34.13 | $ | 46,469 | 1.78% | 0.60% | 15.73% | ||||||||||||||||||||||
2011 | 1,268 | $ | 28.82 | $ | 29.49 | $ | 40,088 | 1.07% | 0.60% | 2.32% | ||||||||||||||||||||||
2010 | 1,342 | $ | 25.56 | $ | 28.82 | $ | 40,422 | 1.29% | 0.60% | 12.73% | ||||||||||||||||||||||
2009 | 1,406 | $ | 20.13 | $ | 25.56 | $ | 37,317 | 1.74% | 0.60% | 27.00% | ||||||||||||||||||||||
2008 | 1,506 | $ | 31.05 | $ | 20.13 | $ | 31,512 | 1.70% | 0.60% | (35.16)% | ||||||||||||||||||||||
2007 | 1,634 | $ | 26.31 | $ | 31.05 | $ | 52,889 | 1.54% | 0.60% | 18.02% | ||||||||||||||||||||||
2006 | 1,485 | $ | 22.66 | $ | 26.31 | $ | 40,516 | 1.59% | 0.60% | 16.15% | ||||||||||||||||||||||
2005 | 1,553 | $ | 21.39 | $ | 22.66 | $ | 36,489 | 1.35% | 0.60% | 5.93% | ||||||||||||||||||||||
2004 | 1,639 | $ | 19.57 | $ | 21.39 | $ | 35,832 | 1.62% | 0.60% | 9.28% | ||||||||||||||||||||||
TIAA-CREF Life International Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 1,260 | $ | 24.42 | $ | 30.14 | $ | 40,974 | 2.44% | 0.60% | 23.41% | ||||||||||||||||||||||
2012 | 1,285 | $ | 18.72 | $ | 24.42 | $ | 33,558 | 1.74% | 0.60% | 30.49% | ||||||||||||||||||||||
2011 | 1,423 | $ | 24.74 | $ | 18.72 | $ | 28,003 | 1.54% | 0.60% | (24.33)% | ||||||||||||||||||||||
2010 | 1,618 | $ | 20.80 | $ | 24.74 | $ | 41,512 | 1.28% | 0.60% | 18.92% | ||||||||||||||||||||||
2009 | 1,822 | $ | 15.88 | $ | 20.80 | $ | 38,962 | 3.77% | 0.60% | 30.96% | ||||||||||||||||||||||
2008 | 1,966 | $ | 31.95 | $ | 15.88 | $ | 32,107 | 0.04% | 0.60% | (50.29)% | ||||||||||||||||||||||
2007 | 2,569 | $ | 26.94 | $ | 31.95 | $ | 83,930 | 2.03% | 0.60% | 18.60% | ||||||||||||||||||||||
2006 | 2,203 | $ | 20.85 | $ | 26.94 | $ | 60,301 | 1.78% | 0.60% | 29.17% | ||||||||||||||||||||||
2005 | 1,840 | $ | 18.24 | $ | 20.85 | $ | 39,020 | 1.81% | 0.60% | 14.32% | ||||||||||||||||||||||
2004 | 1,572 | $ | 15.59 | $ | 18.24 | $ | 29,078 | 2.17% | 0.60% | 17.01% | ||||||||||||||||||||||
TIAA-CREF Life Large-Cap Value Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 300 | $ | 50.85 | $ | 67.89 | $ | 22,732 | 1.99% | 0.60% | 33.51% | ||||||||||||||||||||||
2012 | 292 | $ | 42.58 | $ | 50.85 | $ | 16,543 | 1.91% | 0.60% | 19.42% | ||||||||||||||||||||||
2011 | 321 | $ | 45.55 | $ | 42.58 | $ | 14,932 | 1.47% | 0.60% | (6.52)% | ||||||||||||||||||||||
2010 | 354 | $ | 38.71 | $ | 45.55 | $ | 17,099 | 1.56% | 0.60% | 17.65% | ||||||||||||||||||||||
2009 | 383 | $ | 29.63 | $ | 38.71 | $ | 15,557 | 1.96% | 0.60% | 30.68% | ||||||||||||||||||||||
2008 | 384 | $ | 50.28 | $ | 29.63 | $ | 11,969 | 1.49% | 0.60% | (41.07)% | ||||||||||||||||||||||
2007 | 491 | $ | 50.12 | $ | 50.28 | $ | 25,979 | 1.90% | 0.60% | 0.31% | ||||||||||||||||||||||
2006 | 503 | $ | 41.47 | $ | 50.12 | $ | 25,759 | 9.24% | 0.60% | 20.85% | ||||||||||||||||||||||
2005 | 443 | $ | 39.76 | $ | 41.47 | $ | 18,800 | 8.18% | 0.60% | 4.31% | ||||||||||||||||||||||
2004 | 406 | $ | 33.13 | $ | 39.76 | $ | 16,615 | 19.92% | 0.60% | 20.03% |
20 | Prospectus n Single Premium Immediate Annuities |
CONDENSED FINANCIAL INFORMATION
concluded
For the year ended December 31 | ||||||||||||||||||||||||||||||||
Year | Accumulation Units Outstanding, End of Period (000’s) |
Accumulation Unit Value, Beginning of Period |
Accumulation Unit Value, End of Period |
Net Assets, End of Period (000’s) |
Ratio of Investment Income to Average Net Assets(b) |
Ratio of Expenses to Average Net Assets(a)(c) |
Total Return(d) | |||||||||||||||||||||||||
TIAA-CREF Life Small-Cap Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 279 | $ | 58.24 | $ | 80.97 | $ | 24,203 | 0.71% | 0.60% | 39.03% | ||||||||||||||||||||||
2012 | 258 | $ | 51.38 | $ | 58.24 | $ | 16,104 | 1.11% | 0.60% | 13.34% | ||||||||||||||||||||||
2011 | 288 | $ | 53.98 | $ | 51.38 | $ | 15,621 | 0.52% | 0.60% | (4.82)% | ||||||||||||||||||||||
2010 | 317 | $ | 42.57 | $ | 53.98 | $ | 17,661 | 0.83% | 0.60% | 26.78% | ||||||||||||||||||||||
2009 | 277 | $ | 33.53 | $ | 42.57 | $ | 12,166 | 1.39% | 0.60% | 26.99% | ||||||||||||||||||||||
2008 | 309 | $ | 49.89 | $ | 33.53 | $ | 10,653 | 1.51% | 0.60% | (32.79)% | ||||||||||||||||||||||
2007 | 333 | $ | 53.17 | $ | 49.89 | $ | 17,330 | 1.38% | 0.60% | (6.17)% | ||||||||||||||||||||||
2006 | 409 | $ | 45.39 | $ | 53.17 | $ | 22,291 | 9.56% | 0.60% | 17.13% | ||||||||||||||||||||||
2005 | 388 | $ | 43.67 | $ | 45.39 | $ | 18,045 | 14.65% | 0.60% | 3.94% | ||||||||||||||||||||||
2004 | 415 | $ | 36.67 | $ | 43.67 | $ | 18,452 | 17.94% | 0.60% | 19.11% | ||||||||||||||||||||||
TIAA-CREF Life Stock Index Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 2,973 | $ | 39.74 | $ | 52.71 | $ | 167,268 | 1.90% | 0.60% | 32.63% | ||||||||||||||||||||||
2012 | 3,056 | $ | 34.36 | $ | 39.74 | $ | 128,944 | 2.15% | 0.60% | 15.65% | ||||||||||||||||||||||
2011 | 3,214 | $ | 34.24 | $ | 34.36 | $ | 116,331 | 1.82% | 0.60% | 0.35% | ||||||||||||||||||||||
2010 | 3,362 | $ | 29.50 | $ | 34.24 | $ | 120,888 | 1.81% | 0.60% | 16.09% | ||||||||||||||||||||||
2009 | 3,518 | $ | 23.12 | $ | 29.50 | $ | 107,829 | 2.01% | 0.60% | 27.59% | ||||||||||||||||||||||
2008 | 3,672 | $ | 36.95 | $ | 23.12 | $ | 88,233 | 1.84% | 0.60% | (37.44)% | ||||||||||||||||||||||
2007 | 3,915 | $ | 35.35 | $ | 36.95 | $ | 150,569 | 1.80% | 0.60% | 4.53% | ||||||||||||||||||||||
2006 | 4,056 | $ | 30.76 | $ | 35.35 | $ | 147,889 | 2.66% | 0.60% | 14.92% | ||||||||||||||||||||||
2005 | 4,303 | $ | 29.18 | $ | 30.76 | $ | 136,162 | 1.69% | 0.60% | 5.41% | ||||||||||||||||||||||
2004 | 4,449 | $ | 26.24 | $ | 29.18 | $ | 132,964 | 1.86% | 0.60% | 11.22% | ||||||||||||||||||||||
TIAA-CREF Life Social Choice Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 465 | $ | 32.98 | $ | 43.97 | $ | 22,151 | 1.64% | 0.60% | 33.33% | ||||||||||||||||||||||
2012 | 451 | $ | 29.10 | $ | 32.98 | $ | 16,020 | 1.91% | 0.60% | 13.33% | ||||||||||||||||||||||
2011 | 476 | $ | 29.29 | $ | 29.10 | $ | 14,675 | 1.72% | 0.60% | (0.65)% | ||||||||||||||||||||||
2010 | 487 | $ | 25.40 | $ | 29.29 | $ | 14,877 | 1.85% | 0.60% | 15.32% | ||||||||||||||||||||||
2009 | 521 | $ | 19.28 | $ | 25.40 | $ | 13,691 | 2.22% | 0.60% | 31.73% | ||||||||||||||||||||||
2008 | 555 | $ | 30.34 | $ | 19.28 | $ | 11,103 | 1.35% | 0.60% | (36.45)% | ||||||||||||||||||||||
2007 | 594 | $ | 29.28 | $ | 30.34 | $ | 18,828 | 1.79% | 0.60% | 3.62% | ||||||||||||||||||||||
2006 | 619 | $ | 25.70 | $ | 29.28 | $ | 18,655 | 2.25% | 0.60% | 13.95% | ||||||||||||||||||||||
2005 | 682 | $ | 24.13 | $ | 25.70 | $ | 17,928 | 1.61% | 0.60% | 6.47% | ||||||||||||||||||||||
2004 | 639 | $ | 21.60 | $ | 24.13 | $ | 15,490 | 1.88% | 0.60% | 11.71% | ||||||||||||||||||||||
TIAA-CREF Life Real Estate Securities Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 324 | $ | 67.95 | $ | 68.82 | $ | 24,504 | 1.66% | 0.60% | 1.28% | ||||||||||||||||||||||
2012 | 352 | $ | 57.06 | $ | 67.95 | $ | 25,720 | 1.90% | 0.60% | 19.07% | ||||||||||||||||||||||
2011 | 353 | $ | 53.79 | $ | 57.06 | $ | 21,199 | 1.22% | 0.60% | 6.08% | ||||||||||||||||||||||
2010 | 366 | $ | 41.25 | $ | 53.79 | $ | 20,662 | 2.36% | 0.60% | 30.38% | ||||||||||||||||||||||
2009 | 341 | $ | 33.17 | $ | 41.25 | $ | 14,857 | 4.13% | 0.60% | 24.36% | ||||||||||||||||||||||
2008 | 376 | $ | 54.07 | $ | 33.17 | $ | 13,218 | 4.26% | 0.60% | (38.64)% | ||||||||||||||||||||||
2007 | 453 | $ | 64.84 | $ | 54.07 | $ | 26,024 | 2.76% | 0.60% | (16.61)% | ||||||||||||||||||||||
2006 | 681 | $ | 48.67 | $ | 64.84 | $ | 45,401 | 10.27% | 0.60% | 33.24% | ||||||||||||||||||||||
2005 | 611 | $ | 45.67 | $ | 48.67 | $ | 30,623 | 15.47% | 0.60% | 6.56% | ||||||||||||||||||||||
2004 | 613 | $ | 34.55 | $ | 45.67 | $ | 28,643 | 22.68% | 0.60% | 32.18% |
(a) | Does not include expenses of underlying Fund. |
(b) | These amounts represent the dividends, excluding distributions of long-term capital gains, received by the Sub-Account from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contractowner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the underlying fund in which the Sub-Account invests. |
(c) | These amounts represent the annualized expenses of the Sub-Account, consisting primarily of mortality and expense charges, for each period indicated. These ratios include only these expenses that result in a direct reduction to unit values. Charges made directly to contractowner accounts through the redemption of units and expenses of the underlying fund have been excluded. |
(d) | These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Sub-Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. As the total return is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contractowners total returns may not be within the ranges presented. |
Single Premium Immediate Annuities n Prospectus | 21 |
For more information about Single Premium Immediate Annuity
How to reach us
TIAA-CREF website
Account performance, personal account information and transactions, product descriptions, and information about investment choices and income options
24 hours a day, 7 days a week
Administrative Office
800 842-2252
8:00 a.m. to 10:00 p.m. ET Monday–Friday
9:00 a.m. to 6:00 p.m. ET Saturday
To learn more about the Contract, you should read the Statement of Additional Information (“SAI”) dated the same date as this prospectus. The SAI contains more detailed information about the Contract than is contained in this prospectus. The SAI is incorporated by reference into this prospectus and is legally part of the prospectus. The table of contents for the SAI appears on the last page of this prospectus. For a free copy of the SAI or to request other information about the Contract, please call or write to us at our Administrative Office 800 842-2252.
The SAI has been filed with the SEC. The SEC maintains an Internet website (http://www.sec.gov) that contains the SAI and other information about the Policy and us. Information about us and the Policy (including the SAI) may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 450 Fifth Street, NW, Washington, DC 20549-0102. Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at 202 942-8090.
Investment Company Act of 1940
Registration File No. 811-08963
A10861
5/14
Statement of Additional Information
Single Premium Immediate Variable Annuity Contracts
Funded through
TIAA-CREF Life Separate Account VA-1
and
TIAA-CREF Life Insurance Company
This Statement of Additional Information is not a prospectus and should be read in connection with the current prospectus dated May 1, 2014 (the “Prospectus”), for the variable annuity that is the variable component of the contract. The Prospectus is available without charge by writing us at: TIAA-CREF Life Insurance Company, 730 Third Avenue, New York, N.Y. 10017-3206 or calling us toll-free at 877 825-0411. Terms used in the Prospectus are incorporated into this Statement of Additional Information.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACTS.
Calculating annuity unit values | B-2 | |
Tax status of the contract | B-2 | |
Statements and reports | B-3 | |
General matters | B-3 | |
State regulation | B-3 |
Legal matters | B-4 | |
Experts | B-4 | |
Additional information | B-4 | |
Financial statements | B-4 | |
Index to financial statements | B-5 |
Calculating annuity unit values
Separate Annuity Unit values are maintained for Annuity Units payable from each Investment Account under each Income Change Method. The values are calculated as of each Valuation Day. Annuity unit values for an Income Change Method are determined by multiplying each account’s Annuity Unit value at the end of the previous Valuation Day by that account’s net investment factor for the valuation period, and dividing the result by the value of $1.00 accumulated with interest over the valuation period at an effective annual rate of 4%. The resulting value is then adjusted to reflect that annuity income amounts are redetermined only on the payment valuation date for that Income Change Method. The purpose of the adjustment is to equitably apportion assets of each account among those who receive annuity income for the entire period between two payment valuation dates for an Income Change Method, and those who start or stop receiving annuity income under that Income Change Method between the two dates.
An Investment Account’s net investment factor equals its gross investment factor minus the separate account charge incurred since the previous Valuation Day. An Investment Account’s gross investment factor equals A divided by B, as follows:
A equals |
i. | the net asset value of the shares in the Fund(s) held by the account as of the end of the Valuation Day, excluding the net effect of Contractholders’ transactions (i.e., Premiums received, benefits paid, and transfers to and from the account) made during that day; plus | ||||
ii. | investment income and capital gains distributed to the account; less | |||||
iii. | any amount paid and/or reserved for tax liability resulting from the operation of the account since the previous Valuation Day. | |||||
B equals |
the value of the shares in the Fund(s) held by the account as of the end of the prior Valuation Day, including the net effect of Contractowners’ transactions made during the prior Valuation Day. |
Diversification Requirements. Section 817(h) of the Internal Revenue Code (“IRC”) and the regulations under it provide that separate account investments underlying a non-qualified contract must be “adequately diversified” for it to qualify as an annuity contract under IRC section 72. The separate account intends to comply with the diversification requirements of the regulations under section 817(h). This will affect how we make investments.
Under the IRC, you could be considered the owner of the assets of the separate account used to support your contract. If this happens, you’d have to include income and gains from the separate account assets in your gross income. The Internal Revenue Service (IRS) has published rulings stating that a variable Contractowner will be considered the owner of separate account assets if the Contractowner has any powers that the actual owner of the assets might have, such as the ability to exercise investment control.
Your ownership rights under the contract are similar but not identical to those described by the IRS in rulings that held that Contractowners were not owners of separate account assets, so the IRS therefore might not rule the same way in your case. TIAA-CREF Life Insurance Company (TIAA-CREF Life) reserves the right to change the contract if necessary to help prevent your being considered the owner of the separate account’s assets.
Required Distributions. All payments upon the death of a Contractowner will be made according to the requirements of section 72(s) of the IRC. Under that IRC section, if you die before we begin making annuity payments, all payments under the contract must be distributed within five years of your death. However, if your Beneficiary is a natural person and payments begin within one year of your death, and within 60 days of the date we receive due proof of death, the distribution may be made over the lifetime of your Beneficiary or over a period not to exceed your Beneficiary’s life expectancy, as defined in the Code. If your spouse (as defined under Federal law) is the sole Beneficiary entitled to payments, he or she may choose to become the owner and continue the contract. If you die on or after the date we begin making annuity payments, the remaining interest in the contract must be distributed at least as quickly as under the method of distribution being used as of the date of your death. If the owner is not a natural person, the death of the Annuitant is treated as the death of the owner for these distribution requirements.
The contract is designed to comply with section 72(s). TIAA-CREF Life will review the contract and amend it if necessary to make sure that it continues to comply with the section’s requirements.
B-2 | Statement of Additional Information n Single Premium Immediate Annuities |
You will receive a confirmation statement when you remit your Premium, or make a “transfer” to or from the separate account or among the variable Investment Accounts. The statement will show the date and amount of each transaction.
You will also receive, at least semi-annually, reports containing the financial statements of the TIAA-CREF Life Funds and a schedule of investments held by the TIAA-CREF Life Funds.
Payment to an estate, guardian, trustee, etc.
We reserve the right to pay in one sum the Commuted Value of any benefits due an estate, corporation, partnership, trustee or other entity not a natural person. Neither TIAA-CREF Life nor the separate account will be responsible for the conduct of any executor, trustee, guardian, or other third party to whom payment is made.
Benefits based on incorrect information
If the amounts of benefits provided under a contract were based on information that is incorrect, benefits will be recalculated on the basis of the correct data. If any overpayments or underpayments have been made by the separate account, appropriate adjustments will be made.
Proof of survival
We reserve the right to require satisfactory proof that anyone named to receive benefits under a contract is living on the date payment is due. If this proof is not received after a request in writing, the separate account will have the right to make reduced payments or to withhold payments entirely until such proof is received.
Financial support agreement
The Contracts are issued by TIAA-CREF Life. All of the stock of TIAA-CREF Life is held by TIAA-CREF Enterprises, Inc., a wholly-owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”).
TIAA-CREF Life has a financial support agreement with TIAA. Under this agreement, TIAA will provide support so that TIAA-CREF Life will have the greater of (a) capital and surplus of $250 million, (b) the amount of capital and surplus necessary to maintain TIAA-CREF Life’s capital and surplus at a level not less than 150% of the NAIC Risk Based Capital model or (c) such other amount as necessary to maintain TIAA-CREF Life’s financial strength rating at least the same as TIAA’s rating at all times. This agreement is not an evidence of indebtedness or an obligation or liability of TIAA and does not provide any contract owner of TIAA-CREF Life with recourse to TIAA.
Management related service contracts
We have an agreement with State Street Bank and Trust Company, a trust company established under the laws of the Commonwealth of Massachusetts, to perform investment accounting and recordkeeping functions for the investment securities, other non-cash investment properties, and/or monies in the separate account. TIAA-CREF Life, on behalf of the separate account, has entered an agreement whereby JPMorgan will provide certain custodial settlement and other associated services to the separate account.
McCamish Systems LLC is located at 6425 Powers Ferry Road Suite 300, Atlanta, GA 30339. For years 2013, 2012, and 2011 TIAA-CREF Life provided total compensation for product administrative services of $12,106,765, $12,281,977, and $6,889,292 for all life insurance and non-qualified annuities product administration. State Street Bank and Trust Company is located at One Lincoln Street, Boston, Massachusetts, 02111. For years 2013, 2012, and 2011, TIAA-CREF Life paid custody fees of $290,625, $305,206, and $288,019. JP Morgan is located at One Beacon Street, Floor 19, Boston, MA 02108. For years 2013, 2012, and 2011, TIAA-CREF Life provided compensation for trade settlement services of $68,650, $77,644, and $87,944.
TIAA-CREF Life and the separate account are subject to regulation by the New York Department of Financial Services (“Department”) as well as by the insurance regulatory authorities of other states and jurisdictions. TIAA-CREF Life and the separate account must file with the Department periodic statements on forms promulgated by the Department. The separate account books and assets are subject to review and examination by the Department and the Department’s agents at all times, and a full examination into the affairs of the separate account is made at least every five years. In addition, a full examination of the separate account’s operations is usually conducted periodically by some other states.
Single Premium Immediate Annuities n Statement of Additional Information | B-3 |
All matters of applicable state law pertaining to the Contracts, including TIAA-CREF Life’s right to issue the Contracts, have been passed upon by Meredith Kornreich General Counsel of TIAA-CREF Life.
PricewaterhouseCoopers LLP is the independent registered public accounting firm for the TIAA-CREF Life Separate Account VA-1. PricewaterhouseCoopers LLP is also the independent auditor of TIAA-CREF Life Insurance Company and Teachers Insurance and Annuity Association of America.
Separate Account Financial Statements
The financial statements of TIAA-CREF Life Separate Account VA-1 as of December 31, 2013 and for each of the periods indicated therein included in this Registration Statement have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, located at 100 East Pratt Street, Suite 1900, Baltimore, MD 21202 given on the authority of said firm as experts in auditing and accounting.
TIAA-CREF Life Insurance Company Statutory Basis Financial Statements
The statutory basis financial statements as of December 31, 2013 and 2012 and for each of the three years in the period ended December 31, 2013 included in this Registration Statement have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, located at 300 Madison Avenue, New York, New York 10017, given on the authority of said firm as experts in auditing and accounting.
Teachers Insurance and Annuity Association of America Statutory Basis Financial Statements
The statutory basis financial statements as of December 31, 2013 and 2012 and for each of the three years in the period ended December 31, 2013 included in this Registration Statement have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, located at 300 Madison Avenue, New York, New York 10017, given on the authority of said firm as experts in auditing and accounting.
A registration statement has been filed with the Securities and Exchange Commission (“SEC”), under the 1933 Act, with respect to the Contracts discussed in the Prospectus and in this Statement of Additional Information. Not all of the information set forth in the registration statement, and its amendments and exhibits has been included in the Prospectus or this Statement of Additional Information. Statements contained in this registration statement concerning the contents of the Contracts and other legal instruments are intended to be summaries. For a complete statement of the terms of these documents, you should refer to the instruments filed with the SEC.
Audited financial statements of the separate account and TIAA-CREF Life, and TIAA follow.
TIAA-CREF Life’s financial statements should be considered only as bearing upon TIAA-CREF Life’s ability to meet its obligations under the Contracts. They should not be considered as bearing on the investment performance of the assets held in the separate account.
TIAA financial statements should be considered only as bearing upon TIAA’s ability to meet its obligations under the financial support agreement with TIAA-CREF Life. They should not be considered as bearing on the ability of TIAA-CREF Life’s ability to meet its obligations under the Contracts nor on the investment performance of the assets held in the Separate Account.
B-4 | Statement of Additional Information n Single Premium Immediate Annuities |
TIAA-CREF LIFE SEPARATE ACCOUNT VA-1 Audited Financial Statements For the Fiscal Year Ended December 31, 2013: |
||
Report of Independent Registered Public Accounting Firm | B-6 | |
Statements of Assets and Liabilities | B-7 | |
Statements of Operations | B-7 | |
Statements of Changes in Net Assets | B-18 | |
Notes to Financial Statements | B-45 |
Single Premium Immediate Annuities n Statement of Additional Information | B-5 |
Report of independent registered public accounting firm
To the Contractowners of TIAA-CREF Life Separate Account VA-1 and
the Board of Directors of TIAA-CREF Life Insurance Company:
In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of each of the Sub-Accounts listed in Note 4 of TIAA-CREF Life Separate Account VA-1 at December 31, 2013, the results of each of their operations for the period then ended and the changes in each of their net assets for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of TIAA-CREF Life Insurance Company; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of the underlying investee mutual fund shares at December 31, 2013 with the transfer agent of the investee mutual funds or the investee mutual funds directly, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP (signed)
Baltimore, Maryland
B-6 | Statement of Additional Information n Single Premium Immediate Annuities |
Statements of assets and liabilities
TIAA-CREF Life Separate Account VA-1 n December 31, 2013
TIAA-CREF Life Bond Sub-Account |
TIAA-CREF Life Growth Equity Sub-Account |
TIAA-CREF Life Growth & Income Sub-Account |
TIAA-CREF Life International Equity Sub-Account |
TIAA-CREF Life Large-Cap Value Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 110,901,525 | $ | 58,173,186 | $ | 102,273,462 | $ | 90,184,423 | $ | 64,869,368 | ||||||||||
Total assets |
110,901,525 | 58,173,186 | 102,273,462 | 90,184,423 | 64,869,368 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 110,901,525 | $ | 55,886,189 | $ | 95,678,460 | $ | 87,179,446 | $ | 62,472,899 | ||||||||||
Annuity fund |
— | 2,286,997 | 6,595,002 | 3,004,977 | 2,396,469 | |||||||||||||||
Net assets |
$ | 110,901,525 | $ | 58,173,186 | $ | 102,273,462 | $ | 90,184,423 | $ | 64,869,368 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 114,495,853 | $ | 37,546,956 | $ | 78,970,423 | $ | 76,701,300 | $ | 51,047,936 | ||||||||||
Shares held in corresponding Funds |
4,443,170 | 2,206,037 | 2,762,654 | 4,475,654 | 1,770,452 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Personal Annuity Select/Single |
||||||||||||||||||||
Premium Immediate Annuity |
$ | — | $ | 26.81 | $ | 45.59 | $ | 30.14 | $ | 67.89 | ||||||||||
Lifetime Variable Select Annuity |
36.01 | 26.83 | 45.57 | 30.15 | 67.90 | |||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
36.23 | 26.98 | 45.85 | 30.31 | 68.28 | |||||||||||||||
Band 2 |
36.56 | 27.23 | 46.27 | 30.59 | 68.91 | |||||||||||||||
Band 3 |
36.78 | 27.39 | 46.55 | 30.78 | 69.33 | |||||||||||||||
Band 5 |
36.01 | 26.82 | 45.57 | 30.13 | 67.87 | |||||||||||||||
Band 6 |
36.34 | 27.06 | 45.99 | 30.41 | 68.49 | |||||||||||||||
Band 7 |
36.56 | 27.23 | 46.27 | 30.59 | 68.91 |
TIAA-CREF Life Separate Account VA-1 n For the period or year ended December 31, 2013
TIAA-CREF Life Bond Sub-Account |
TIAA-CREF Life Growth Equity Sub-Account |
TIAA-CREF Life Growth & Income Sub-Account |
TIAA-CREF Life International Equity Sub-Account |
TIAA-CREF Life Large-Cap Value Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 2,681,883 | $ | 137,455 | $ | 983,245 | $ | 1,956,870 | $ | 1,128,043 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
143,359 | 88,610 | 155,296 | 134,804 | 91,781 | |||||||||||||||
Mortality and expense risk charges |
322,652 | 179,875 | 320,164 | 275,433 | 188,447 | |||||||||||||||
Guaranteed minimum death benefits |
24,745 | 3,875 | 6,248 | 5,754 | 7,649 | |||||||||||||||
Total expenses |
490,756 | 272,360 | 481,708 | 415,991 | 287,877 | |||||||||||||||
Net investment income (loss) |
2,191,127 | (134,905 | ) | 501,537 | 1,540,879 | 840,166 | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
||||||||||||||||||||
Realized gain (loss) on investments |
694,148 | 3,059,710 | 4,255,059 | (32,567 | ) | 3,163,482 | ||||||||||||||
Capital gain distributions |
711,492 | — | 8,446,318 | — | 3,422,279 | |||||||||||||||
Net realized gain (loss) |
1,405,640 | 3,059,710 | 12,701,377 | (32,567 | ) | 6,585,761 | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
(5,766,309 | ) | 13,264,092 | 11,855,130 | 15,610,970 | 8,092,340 | ||||||||||||||
Net realized and unrealized gain (loss) on investments |
(4,360,669 | ) | 16,323,802 | 24,556,507 | 15,578,403 | 14,678,101 | ||||||||||||||
Net increase (decrease) in net assets from operations |
$ | (2,169,542 | ) | $ | 16,188,897 | $ | 25,058,044 | $ | 17,119,282 | $ | 15,518,267 | |||||||||
|
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-7 |
Statements of assets and liabilities
TIAA-CREF Life Separate Account VA-1 n December 31, 2013
TIAA-CREF Life Money Market Sub-Account |
TIAA-CREF Life Real Estate Securities Sub-Account |
TIAA-CREF Life Small-Cap Equity Sub-Account |
TIAA-CREF Life Social Choice Equity Sub-Account |
TIAA-CREF Life Stock Index Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 56,029,704 | $ | 49,958,432 | $ | 49,745,978 | $ | 44,113,489 | $ | 265,649,325 | ||||||||||
Total assets |
56,029,704 | 49,958,432 | 49,745,978 | 44,113,489 | 265,649,325 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 56,029,704 | $ | 47,777,598 | $ | 48,134,032 | $ | 42,394,459 | $ | 255,078,088 | ||||||||||
Annuity fund |
— | 2,180,834 | 1,611,946 | 1,719,030 | 10,571,237 | |||||||||||||||
Net assets |
$ | 56,029,704 | $ | 49,958,432 | $ | 49,745,978 | $ | 44,113,489 | $ | 265,649,325 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 56,029,704 | $ | 42,975,822 | $ | 41,063,323 | $ | 32,338,806 | $ | 183,548,680 | ||||||||||
Shares held in corresponding Funds |
56,029,704 | 1,701,581 | 1,369,658 | 1,212,242 | 6,444,671 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Personal Annuity Select/Single |
||||||||||||||||||||
Premium Immediate Annuity |
$ | — | $ | 68.82 | $ | 80.97 | $ | 43.97 | $ | 52.71 | ||||||||||
Lifetime Variable Select Annuity |
11.32 | 68.86 | 81.02 | 44.14 | 52.68 | |||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
11.39 | 69.23 | 81.45 | 44.22 | 53.01 | |||||||||||||||
Band 2 |
11.50 | 69.86 | 82.19 | 44.62 | 53.50 | |||||||||||||||
Band 3 |
11.57 | 70.29 | 82.69 | 44.89 | 53.82 | |||||||||||||||
Band 5 |
11.33 | 68.81 | 80.95 | 43.95 | 52.69 | |||||||||||||||
Band 6 |
11.43 | 69.44 | 81.69 | 44.35 | 53.17 | |||||||||||||||
Band 7 |
11.50 | 69.86 | 82.19 | 44.62 | 53.50 |
Statements of operations
TIAA-CREF Life Separate Account VA-1 n For the period or year ended December 31, 2013
TIAA-CREF Life Money Market Sub-Account |
TIAA-CREF Life Real Estate Securities Sub-Account |
TIAA-CREF Life Small-Cap Equity Sub-Account |
TIAA-CREF Life Social Choice Equity Sub-Account |
TIAA-CREF Life Stock Index Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 2,646 | $ | 916,960 | $ | 290,429 | $ | 628,817 | $ | 4,469,160 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
72,478 | 99,021 | 74,533 | 64,053 | 413,245 | |||||||||||||||
Mortality and expense risk charges |
162,973 | 203,761 | 151,867 | 133,583 | 834,502 | |||||||||||||||
Guaranteed minimum death benefits |
9,886 | 2,844 | 1,927 | 4,037 | 8,997 | |||||||||||||||
Total expenses |
245,337 | 305,626 | 228,327 | 201,673 | 1,256,744 | |||||||||||||||
Net investment income (loss) |
(242,691 | ) | 611,334 | 62,102 | 427,144 | 3,212,416 | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
||||||||||||||||||||
Realized gain (loss) on investments |
— | 3,530,069 | 2,204,815 | 1,317,012 | 7,934,206 | |||||||||||||||
Capital gain distributions |
— | — | 7,409,499 | — | 400,512 | |||||||||||||||
Net realized gain (loss) |
— | 3,530,069 | 9,614,314 | 1,317,012 | 8,334,718 | |||||||||||||||
Net change in unrealized appreciation (depreciation) |
— | (3,595,017 | ) | 3,425,040 | 8,644,374 | 53,120,223 | ||||||||||||||
Net realized and unrealized gain (loss) on investments |
— | (64,948 | ) | 13,039,354 | 9,961,386 | 61,454,941 | ||||||||||||||
Net increase (decrease) in net assets from operations |
$ | (242,691 | ) | $ | 546,386 | $ | 13,101,456 | $ | 10,388,530 | $ | 64,667,357 | |||||||||
|
B-8 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Calamos Growth and Income Portfolio Sub-Account |
ClearBridge Variable Aggressive Growth Portfolio—Class I Sub-Account |
ClearBridge Variable Small Cap Growth Portfolio—Class I Sub-Account |
Credit Suisse Trust- Commodity Return Strategy Portfolio Sub-Account |
DFA VA Global Bond Portfolio Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 4,162,177 | $ | 3,463,685 | $ | 2,232,218 | $ | 2,253 | $ | 2,718,884 | ||||||||||
Total assets |
4,162,177 | 3,463,685 | 2,232,218 | 2,253 | 2,718,884 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 4,162,177 | $ | 3,463,685 | $ | 2,232,218 | $ | 2,253 | $ | 2,718,884 | ||||||||||
Net assets |
$ | 4,162,177 | $ | 3,463,685 | $ | 2,232,218 | $ | 2,253 | $ | 2,718,884 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 3,787,730 | $ | 3,202,622 | $ | 2,140,706 | $ | 2,224 | $ | 2,772,063 | ||||||||||
Shares held in corresponding Funds |
268,874 | 129,872 | 92,739 | 358 | 255,294 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 19.88 | $ | 28.68 | $ | 29.30 | $ | — | $ | 25.41 | ||||||||||
Band 2 |
20.06 | 28.94 | 29.57 | — | 25.47 | |||||||||||||||
Band 3 |
20.18 | 29.12 | 29.75 | 25.31 | 25.51 | |||||||||||||||
Band 5 |
19.76 | 28.51 | 29.12 | — | 25.36 | |||||||||||||||
Band 6 |
19.94 | 28.77 | 29.39 | — | 25.43 | |||||||||||||||
Band 7 |
20.06 | 28.94 | 29.57 | — | 25.47 |
Calamos Growth and Income Portfolio Sub-Account |
ClearBridge Variable Aggressive Growth Portfolio—Class I Sub-Account |
ClearBridge Variable Small Cap Growth Portfolio—Class I Sub-Account |
Credit Suisse Trust- Commodity Return Strategy Portfolio Sub-Account(a) |
DFA VA Global Bond Portfolio Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 39,994 | $ | 7,491 | $ | 464 | $ | — | $ | 12,066 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
3,633 | 1,934 | 1,204 | — | 1,549 | |||||||||||||||
Mortality and expense risk charges |
8,899 | 4,681 | 3,161 | — | 3,387 | |||||||||||||||
Guaranteed minimum death benefits |
1,788 | 402 | 191 | — | 678 | |||||||||||||||
Total expenses |
14,320 | 7,017 | 4,556 | — | 5,614 | |||||||||||||||
Net investment income (loss) |
25,674 | 474 | (4,092 | ) | — | 6,452 | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
||||||||||||||||||||
Realized gain (loss) on investments |
90,694 | 421,837 | 234,792 | — | (10,425 | ) | ||||||||||||||
Capital gain distributions |
172,793 | 137,403 | 138,603 | — | 37,922 | |||||||||||||||
Net realized gain (loss) |
263,487 | 559,240 | 373,395 | — | 27,497 | |||||||||||||||
Net change in unrealized appreciation (depreciation) |
252,892 | 181,809 | 63,230 | 29 | (43,740 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments |
516,379 | 741,049 | 436,625 | 29 | (16,243 | ) | ||||||||||||||
Net increase (decrease) in net assets from operations |
$ | 542,053 | $ | 741,523 | $ | 432,533 | $ | 29 | $ | (9,791 | ) | |||||||||
|
(a) | For the period November 26, 2013 (commencement of operations) to December 31, 2013. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-9 |
Statements of assets and liabilities
TIAA-CREF Life Separate Account VA-1 n December 31, 2013
DFA VA International Small Portfolio Sub-Account |
DFA VA International Value Portfolio Sub-Account |
DFA VA Short-Term Fixed Portfolio Sub-Account |
DFA VA US Large Value Portfolio Sub-Account |
DFA VA US Targeted Value Portfolio Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 1,887,557 | $ | 3,276,219 | $ | 5,854,861 | $ | 4,115,624 | $ | 3,036,442 | ||||||||||
Total assets |
1,887,557 | 3,276,219 | 5,854,861 | 4,115,624 | 3,036,442 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 1,887,557 | $ | 3,276,219 | $ | 5,854,861 | $ | 4,115,624 | $ | 3,036,442 | ||||||||||
Net assets |
$ | 1,887,557 | $ | 3,276,219 | $ | 5,854,861 | $ | 4,115,624 | $ | 3,036,442 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 1,761,955 | $ | 2,917,439 | $ | 5,870,180 | $ | 3,972,136 | $ | 2,689,506 | ||||||||||
Shares held in corresponding Funds |
153,585 | 248,387 | 574,569 | 188,100 | 161,857 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 33.12 | $ | 32.78 | $ | 24.94 | $ | 38.06 | $ | 38.94 | ||||||||||
Band 2 |
33.20 | 32.86 | 25.01 | 38.15 | 39.04 | |||||||||||||||
Band 3 |
33.26 | 32.91 | 25.05 | 38.21 | 39.10 | |||||||||||||||
Band 5 |
33.06 | 32.72 | 24.90 | 37.99 | 38.88 | |||||||||||||||
Band 6 |
33.15 | 32.80 | 24.96 | 38.09 | 38.97 | |||||||||||||||
Band 7 |
33.20 | 32.86 | 25.01 | 38.15 | 39.04 |
Statements of operations
TIAA-CREF Life Separate Account VA-1 n For the period or year ended December 31, 2013
DFA VA |
DFA VA International Value Portfolio Sub-Account |
DFA VA Short-Term Fixed Portfolio Sub-Account |
DFA VA US Large Value Portfolio Sub-Account |
DFA VA US Targeted Value Portfolio Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 37,164 | $ | 71,099 | $ | 13,870 | $ | 47,713 | $ | 19,703 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
935 | 1,634 | 2,829 | 1,887 | 1,391 | |||||||||||||||
Mortality and expense risk charges |
2,052 | 3,239 | 6,713 | 4,023 | 2,841 | |||||||||||||||
Guaranteed minimum death benefits |
193 | 237 | 824 | 434 | 363 | |||||||||||||||
Total expenses |
3,180 | 5,110 | 10,366 | 6,344 | 4,595 | |||||||||||||||
Net investment income (loss) |
33,984 | 65,989 | 3,504 | 41,369 | 15,108 | |||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
||||||||||||||||||||
Realized gain (loss) on investments |
49,464 | 16,682 | (4,803 | ) | 135,751 | 138,461 | ||||||||||||||
Capital gain distributions |
50,776 | — | 4,623 | 272,867 | — | |||||||||||||||
Net realized gain (loss) |
100,240 | 16,682 | (180 | ) | 408,618 | 138,461 | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
115,936 | 346,827 | (11,232 | ) | 140,982 | 338,652 | ||||||||||||||
Net realized and unrealized gain (loss) on investments |
216,176 | 363,509 | (11,412 | ) | 549,600 | 477,113 | ||||||||||||||
Net increase (decrease) in net assets from operations |
$ | 250,160 | $ | 429,498 | $ | (7,908 | ) | $ | 590,969 | $ | 492,221 | |||||||||
|
B-10 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Delaware VIP Diversified Income Series— Standard Class Sub-Account |
Delaware VIP International Value Equity Series— Standard Class Sub-Account |
Delaware VIP Small Cap Value Series— Standard Class Sub-Account |
Franklin Income Securities Fund— Class 1 Sub-Account |
Franklin Small- Mid Cap Growth Securities Fund— Class 1 Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 40,572,854 | $ | 15,138,601 | $ | 11,295,855 | $ | 7,546,773 | $ | 3,362,010 | ||||||||||
Total assets |
40,572,854 | 15,138,601 | 11,295,855 | 7,546,773 | 3,362,010 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 40,572,854 | $ | 15,138,601 | $ | 11,295,855 | $ | 7,546,773 | $ | 3,362,010 | ||||||||||
Net assets |
$ | 40,572,854 | $ | 15,138,601 | $ | 11,295,855 | $ | 7,546,773 | $ | 3,362,010 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 41,547,938 | $ | 13,097,194 | $ | 9,294,067 | $ | 7,010,794 | $ | 2,940,650 | ||||||||||
Shares held in corresponding Funds |
3,853,073 | 1,241,887 | 270,754 | 456,826 | 118,464 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 14.62 | $ | 14.85 | $ | 50.99 | $ | 24.52 | $ | 35.38 | ||||||||||
Band 2 |
14.75 | 14.99 | 51.46 | 24.74 | 35.70 | |||||||||||||||
Band 3 |
14.84 | 15.08 | 51.77 | 24.89 | 35.92 | |||||||||||||||
Band 5 |
14.53 | 14.76 | 50.68 | 24.37 | 35.16 | |||||||||||||||
Band 6 |
14.67 | 14.90 | 51.15 | 24.59 | 35.48 | |||||||||||||||
Band 7 |
14.75 | 14.99 | 51.46 | 24.74 | 35.70 |
Delaware VIP Diversified Income Series— Standard Class Sub-Account |
Delaware VIP International Value Equity Series— Standard Class Sub-Account |
Delaware VIP Small Cap Value Series— Standard Class Sub-Account |
Franklin Income Securities Fund— Class 1 Sub-Account |
Franklin Small- Mid Cap Growth Securities Fund— Class 1 Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 783,277 | $ | 136,238 | $ | 53,750 | $ | 359,086 | $ | — | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
35,134 | 10,463 | 8,262 | 5,994 | 1,966 | |||||||||||||||
Mortality and expense risk charges |
85,772 | 24,389 | 16,861 | 14,490 | 5,085 | |||||||||||||||
Guaranteed minimum death benefits |
12,810 | 3,021 | 1,592 | 2,267 | 528 | |||||||||||||||
Total expenses |
133,716 | 37,873 | 26,715 | 22,751 | 7,579 | |||||||||||||||
Net investment income (loss) |
649,561 | 98,365 | 27,035 | 336,335 | (7,579 | ) | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS |
|
|||||||||||||||||||
Realized gain (loss) on investments |
(220,654 | ) | 200,271 | 248,539 | 161,003 | 113,390 | ||||||||||||||
Capital gain distributions |
454,904 | — | 340,804 | — | 106,065 | |||||||||||||||
Net realized gain (loss) |
234,250 | 200,271 | 589,343 | 161,003 | 219,455 | |||||||||||||||
Net change in unrealized appreciation (depreciation) |
(1,429,197 | ) | 1,821,945 | 1,733,052 | 279,910 | 428,358 | ||||||||||||||
Net realized and unrealized gain (loss) on investments |
(1,194,947 | ) | 2,022,216 | 2,322,395 | 440,913 | 647,813 | ||||||||||||||
Net increase (decrease) in net assets from operations |
$ | (545,386 | ) | $ | 2,120,581 | $ | 2,349,430 | $ | 777,248 | $ | 640,234 | |||||||||
|
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-11 |
Statements of assets and liabilities
TIAA-CREF Life Separate Account VA-1 n December 31, 2013
ING Clarion Global Real Estate Portfolio— Class I Sub-Account |
Janus Aspen Forty Portfolio—Institutional Shares Sub-Account |
Janus Aspen Overseas Portfolio—Institutional Shares Sub-Account |
Janus Aspen Perkins Mid Cap Value Portfolio—Institutional Shares Sub-Account |
MFS Growth Series—Initial Class Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 4,616,910 | $ | 4,297,284 | $ | 2,904,602 | $ | 8,593,065 | $ | 1,153,801 | ||||||||||
Total assets |
4,616,910 | 4,297,284 | 2,904,602 | 8,593,065 | 1,153,801 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 4,616,910 | $ | 4,297,284 | $ | 2,904,602 | $ | 8,593,065 | $ | 1,153,801 | ||||||||||
Net assets |
$ | 4,616,910 | $ | 4,297,284 | $ | 2,904,602 | $ | 8,593,065 | $ | 1,153,801 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 4,603,738 | $ | 3,179,483 | $ | 2,634,326 | $ | 7,292,475 | $ | 850,520 | ||||||||||
Shares held in corresponding Funds |
421,251 | 80,564 | 69,124 | 445,237 | 29,532 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 33.82 | $ | 53.08 | $ | 60.33 | $ | 25.05 | $ | 38.61 | ||||||||||
Band 2 |
34.00 | 53.56 | 60.89 | 25.28 | 38.96 | |||||||||||||||
Band 3 |
34.13 | 53.89 | 61.26 | 25.43 | 39.20 | |||||||||||||||
Band 5 |
33.69 | 52.76 | 59.97 | 24.90 | 38.37 | |||||||||||||||
Band 6 |
33.88 | 53.24 | 60.52 | 25.13 | 38.72 | |||||||||||||||
Band 7 |
34.00 | 53.56 | 60.89 | 25.28 | 38.96 |
Statements of operations
TIAA-CREF Life Separate Account VA-1 n For the period or year ended December 31, 2013
ING Clarion |
Janus Aspen Forty Portfolio—Institutional Shares Sub-Account |
Janus Aspen Overseas Portfolio—Institutional Shares Sub-Account |
Janus Aspen Perkins Mid Cap Value Portfolio—Institutional Shares Sub-Account |
MFS Growth Series—Initial Class Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 221,541 | $ | 26,978 | $ | 82,767 | $ | 95,413 | $ | 9,808 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
3,545 | 3,925 | 2,932 | 7,636 | 1,026 | |||||||||||||||
Mortality and expense risk charges |
8,608 | 9,564 | 7,235 | 18,773 | 2,661 | |||||||||||||||
Guaranteed minimum death benefits |
1,399 | 1,119 | 727 | 2,654 | 130 | |||||||||||||||
Total expenses |
13,552 | 14,608 | 10,894 | 29,063 | 3,817 | |||||||||||||||
Net investment income (loss) |
207,989 | 12,370 | 71,873 | 66,350 | 5,991 | |||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||||||
Realized gain (loss) on investments |
171,431 | 331,688 | (537,981 | ) | 336,559 | 39,555 | ||||||||||||||
Capital gain distributions |
— | — | — | 144,819 | — | |||||||||||||||
Net realized gain (loss) |
171,431 | 331,688 | (537,981 | ) | 481,378 | 39,555 | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
(264,183 | ) | 714,586 | 856,233 | 1,176,547 | 270,287 | ||||||||||||||
Net realized and unrealized gain (loss) on investments |
(92,752 | ) | 1,046,274 | 318,252 | 1,657,925 | 309,842 | ||||||||||||||
Net increase (decrease) in net assets from operations |
$ | 115,237 | $ | 1,058,644 | $ | 390,125 | $ | 1,724,275 | $ | 315,833 | ||||||||||
|
B-12 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
MFS Global Equity Series— Initial Class Sub-Account |
MFS Investors Growth Stock Series—Initial Class Sub-Account |
MFS Utilities Series—Initial Class Sub-Account |
Mutual Shares Securites Fund— Class 1 Sub-Account |
Neuberger Berman Advisers Management Trust Large Cap Value Portfolio—I Class Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 2,825,877 | $ | 3,405,621 | $ | 2,228,536 | $ | 2,464,066 | $ | 1,357,065 | ||||||||||
Total assets |
2,825,877 | 3,405,621 | 2,228,536 | 2,464,066 | 1,357,065 | |||||||||||||||
|
|
|
||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 2,825,877 | $ | 3,405,621 | $ | 2,228,536 | $ | 2,464,066 | $ | 1,357,065 | ||||||||||
Net assets |
$ | 2,825,877 | $ | 3,405,621 | $ | 2,228,536 | $ | 2,464,066 | $ | 1,357,065 | ||||||||||
|
|
|
||||||||||||||||||
Investments, at cost |
$ | 2,521,253 | $ | 3,022,688 | $ | 2,074,409 | $ | 1,986,788 | $ | 1,151,023 | ||||||||||
Shares held in corresponding Funds |
147,335 | 222,299 | 69,904 | 112,412 | 90,230 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 22.23 | $ | 17.42 | $ | 46.16 | $ | 25.71 | $ | 23.47 | ||||||||||
Band 2 |
22.43 | 17.58 | 46.59 | 25.95 | 23.69 | |||||||||||||||
Band 3 |
22.57 | 17.68 | 46.87 | 26.11 | 23.83 | |||||||||||||||
Band 5 |
22.10 | 17.31 | 45.89 | 25.56 | 23.33 | |||||||||||||||
Band 6 |
22.30 | 17.47 | 46.31 | 25.79 | 23.54 | |||||||||||||||
Band 7 |
22.43 | 17.58 | 46.59 | 25.95 | 23.69 |
MFS Global Equity Series— Initial Class Sub-Account |
MFS Investors Growth Stock Series—Initial Class Sub-Account |
MFS Utilities Series—Initial Class Sub-Account |
Mutual Shares Securites Fund— Class 1 Sub-Account |
Neuberger Berman Advisers Management Trust Large Cap Value Portfolio—I Class Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 17,903 | $ | 102,371 | $ | 63,853 | $ | 45,437 | $ | 10,470 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
1,957 | 2,262 | 1,574 | 1,994 | 890 | |||||||||||||||
Mortality and expense risk charges |
4,738 | 5,602 | 4,001 | 4,625 | 2,200 | |||||||||||||||
Guaranteed minimum death benefits |
712 | 1,031 | 569 | 938 | 328 | |||||||||||||||
Total expenses |
7,407 | 8,895 | 6,144 | 7,557 | 3,418 | |||||||||||||||
Net investment income (loss) |
10,496 | 93,476 | 57,709 | 37,880 | 7,052 | |||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||||||
Realized gain (loss) on investments |
283,952 | 164,069 | 99,699 | 113,598 | 75,915 | |||||||||||||||
Capital gain distributions |
— | — | — | — | — | |||||||||||||||
Net realized gain (loss) |
283,952 | 164,069 | 99,699 | 113,598 | 75,915 | |||||||||||||||
Net change in unrealized appreciation (depreciation) |
180,643 | 322,388 | 114,687 | 329,260 | 156,382 | |||||||||||||||
Net realized and unrealized gain (loss) on investments |
464,595 | 486,457 | 214,386 | 442,858 | 232,297 | |||||||||||||||
Net increase (decrease) in net assets from operations |
$ | 475,091 | $ | 579,933 | $ | 272,095 | $ | 480,738 | $ | 239,349 | ||||||||||
|
|
|
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-13 |
Statements of assets and liabilities
TIAA-CREF Life Separate Account VA-1 n December 31, 2013
Neuberger Berman Advisers Management Trust Mid Cap Intrinsic Value Portfolio—I Class Sub-Account |
PIMCO VIT All Asset Portfolio— Institutional Class Sub-Account |
PIMCO VIT Commodity Real Return Strategy Portfolio— Institutional Class Sub-Account |
PIMCO VIT Emerging Markets Bond Portfolio— Institutional Class Sub-Account |
PIMCO VIT Global Bond Portfolio (Unhedged)— Institutional Class Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 8,404,249 | $ | 6,168,240 | $ | 144,576 | $ | — | $ | 4,679,753 | ||||||||||
Total assets |
8,404,249 | 6,168,240 | 144,576 | — | 4,679,753 | |||||||||||||||
|
|
|
||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 8,404,249 | $ | 6,168,240 | $ | 144,576 | $ | — | $ | 4,679,753 | ||||||||||
Net assets |
$ | 8,404,249 | $ | 6,168,240 | $ | 144,576 | $ | — | $ | 4,679,753 | ||||||||||
|
|
|
||||||||||||||||||
Investments, at cost |
$ | 7,471,521 | $ | 6,423,803 | $ | 145,875 | $ | — | $ | 5,226,379 | ||||||||||
Shares held in corresponding Funds |
513,080 | 561,770 | 24,258 | — | 379,234 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 23.36 | $ | 16.25 | $ | 25.06 | $ | — | $ | 17.13 | ||||||||||
Band 2 |
23.57 | 16.39 | 25.07 | — | 17.28 | |||||||||||||||
Band 3 |
23.71 | 16.49 | — | — | 17.39 | |||||||||||||||
Band 5 |
23.22 | 16.15 | — | — | 17.02 | |||||||||||||||
Band 6 |
23.43 | 16.29 | — | — | 17.18 | |||||||||||||||
Band 7 |
23.57 | 16.39 | — | — | 17.28 |
Statements of operations
TIAA-CREF Life Separate Account VA-1 n For the period or year ended December 31, 2013
Neuberger Berman Advisers Management Trust Mid Cap Intrinsic Value Portfolio—I Class Sub-Account |
PIMCO VIT All Asset Portfolio— Institutional Class Sub-Account |
PIMCO VIT Commodity Real Return Strategy Portfolio— Institutional Class Sub-Account(a) |
PIMCO VIT Emerging Market |
PIMCO VIT Global Bond Portfolio (Unhedged)— Institutional Class Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 72,326 | $ | 373,371 | $ | — | $ | 6 | $ | 60,191 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
5,159 | 8,899 | 6 | — | 4,976 | |||||||||||||||
Mortality and expense risk charges |
12,291 | 19,146 | 15 | 1 | 12,759 | |||||||||||||||
Guaranteed minimum death benefits |
1,933 | 1,234 | — | — | 1,100 | |||||||||||||||
Total expenses |
19,383 | 29,279 | 21 | 1 | 18,835 | |||||||||||||||
Net investment income (loss) |
52,943 | 344,092 | (21 | ) | 5 | 41,356 | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||||||
Realized gain (loss) on investments |
51,065 | 102,285 | 12 | 4 | (147,207 | ) | ||||||||||||||
Capital gain distributions |
— | — | — | 37 | 32,229 | |||||||||||||||
Net realized gain (loss) |
51,065 | 102,285 | 12 | 41 | (114,978 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
1,403,853 | (491,644 | ) | (1,299 | ) | — | (390,135 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments |
1,454,918 | (389,359 | ) | (1,287 | ) | 41 | (505,113 | ) | ||||||||||||
Net increase (decrease) in net assets |
$ | 1,507,861 | $ | (45,267 | ) | $ | (1,308 | ) | $ | 46 | $ | (463,757 | ) | |||||||
|
|
|
B-14 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
PIMCO VIT Real Return Portfolio— Institutional Class Sub-Account |
Prudential Series Fund—Jennison 20/20 Focus Portfolio—Class II Sub-Account |
Prudential Series Fund—Natural Resources Portfolio—Class II Sub-Account |
Prudential Series Fund—Value Portfolio—Class II Sub-Account |
PVC Equity Income Account— Class 1 Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 33,579,622 | $ | 7,744,176 | $ | 2,784,842 | $ | 6,124,964 | $ | 26,699,187 | ||||||||||
Total assets |
33,579,622 | 7,744,176 | 2,784,842 | 6,124,964 | 26,699,187 | |||||||||||||||
|
||||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 33,579,622 | $ | 7,744,176 | $ | 2,784,842 | $ | 6,124,964 | $ | 26,699,187 | ||||||||||
Net assets |
$ | 33,579,622 | $ | 7,744,176 | $ | 2,784,842 | $ | 6,124,964 | $ | 26,699,187 | ||||||||||
|
||||||||||||||||||||
Investments, at cost |
$ | 37,300,448 | $ | 6,681,125 | $ | 2,691,449 | $ | 4,541,063 | $ | 22,560,972 | ||||||||||
Shares held in corresponding Funds |
2,665,049 | 384,517 | 75,716 | 253,937 | 1,271,390 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 16.23 | $ | 23.63 | $ | 59.05 | $ | 34.34 | $ | 26.18 | ||||||||||
Band 2 |
16.38 | 23.85 | 59.59 | 34.65 | 26.42 | |||||||||||||||
Band 3 |
16.48 | 23.99 | 59.95 | 34.87 | 26.58 | |||||||||||||||
Band 5 |
16.13 | 23.49 | 58.69 | 34.13 | 26.03 | |||||||||||||||
Band 6 |
16.28 | 23.70 | 59.23 | 34.44 | 26.26 | |||||||||||||||
Band 7 |
16.38 | 23.85 | 59.59 | 34.65 | 26.42 |
PIMCO VIT Real Return Portfolio— Institutional Class Sub-Account |
Prudential Series |
Prudential Series Fund—Natural Resources Portfolio—Class II Sub-Account |
Prudential Series Fund—Value Portfolio—Class II Sub-Account |
PVC Equity Income Account— Class 1 Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 656,454 | $ | — | $ | — | $ | — | $ | 632,325 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
33,104 | 4,700 | 2,962 | 5,722 | 19,670 | |||||||||||||||
Mortality and expense risk charges |
79,747 | 11,931 | 7,136 | 14,674 | 49,008 | |||||||||||||||
Guaranteed minimum death benefits |
10,252 | 1,139 | 1,088 | 1,765 | 6,814 | |||||||||||||||
Total expenses |
123,103 | 17,770 | 11,186 | 22,161 | 75,492 | |||||||||||||||
Net investment income (loss) |
533,351 | (17,770 | ) | (11,186 | ) | (22,161 | ) | 556,833 | ||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||||||
Realized gain (loss) on investments |
(42,500 | ) | 263,215 | (508,950 | ) | 594,358 | 1,261,890 | |||||||||||||
Capital gain distributions |
268,141 | — | — | — | — | |||||||||||||||
Net realized gain (loss) |
225,641 | 263,215 | (508,950 | ) | 594,358 | 1,261,890 | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
(4,067,976 | ) | 934,694 | 777,350 | 991,716 | 2,758,509 | ||||||||||||||
Net realized and unrealized gain (loss) |
(3,842,335 | ) | 1,197,909 | 268,400 | 1,586,074 | 4,020,399 | ||||||||||||||
Net increase (decrease) in net assets |
$ | (3,308,984 | ) | $ | 1,180,139 | $ | 257,214 | $ | 1,563,913 | $ | 4,577,232 | |||||||||
|
(a) | For the period November 20, 2013 (commencement of operations) to December 31, 2013. |
(b) | For the period December 9, 2013 (commencement of operations) to December 31, 2013. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-15 |
Statements of assets and liabilities
TIAA-CREF Life Separate Account VA-1 n December 31, 2013
PVC MidCap Account— Class 1 Sub-Account |
Royce Capital Fund Micro-Cap Portfolio— Investment Class Sub-Account |
Royce Capital Fund Small-Cap Portfolio— Investment Class Sub-Account |
T.Rowe
Price® Limited-Term Bond Portfolio Sub-Account |
Templeton Developing Markets Securities Fund— Class 1 Sub-Account |
||||||||||||||||
ASSETS |
||||||||||||||||||||
Investments, at value |
$ | 6,463,058 | $ | 602,885 | $ | 6,876,710 | $ | 15,453,514 | $ | 9,221,162 | ||||||||||
Total assets |
6,463,058 | 602,885 | 6,876,710 | 15,453,514 | 9,221,162 | |||||||||||||||
|
|
|
||||||||||||||||||
NET ASSETS |
||||||||||||||||||||
Accumulation fund |
$ | 6,463,058 | $ | 602,885 | $ | 6,876,710 | $ | 15,453,514 | $ | 9,221,162 | ||||||||||
Net assets |
$ | 6,463,058 | $ | 602,885 | $ | 6,876,710 | $ | 15,453,514 | $ | 9,221,162 | ||||||||||
|
|
|
||||||||||||||||||
Investments, at cost |
$ | 5,638,947 | $ | 521,350 | $ | 5,614,647 | $ | 15,561,288 | $ | 9,206,856 | ||||||||||
Shares held in corresponding Funds |
108,861 | 46,990 | 494,017 | 3,147,355 | 898,749 | |||||||||||||||
UNIT VALUE |
||||||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||||||
Band 1 |
$ | 28.76 | $ | 19.37 | $ | 17.62 | $ | 25.18 | $ | 14.41 | ||||||||||
Band 2 |
29.03 | 19.54 | 17.79 | 25.25 | 14.54 | |||||||||||||||
Band 3 |
29.20 | 19.66 | 17.89 | 25.29 | 14.63 | |||||||||||||||
Band 5 |
28.59 | 19.25 | 17.52 | 25.13 | 14.32 | |||||||||||||||
Band 6 |
28.85 | 19.43 | 17.68 | 25.20 | 14.45 | |||||||||||||||
Band 7 |
29.03 | 19.54 | 17.79 | 25.25 | 14.54 |
Statements of operations
TIAA-CREF Life Separate Account VA-1 n For the period or year ended December 31, 2013
PVC MidCap Account— Class 1 Sub-Account |
Royce Capital Fund Micro-Cap Portfolio— Investment Class Sub-Account |
Royce Capital Fund Small-Cap Portfolio— Investment Class Sub-Account |
T.Rowe
Price® Limited-Term Bond Portfolio Sub-Account |
Templeton Developing Markets Securities Fund— Class 1 Sub-Account |
||||||||||||||||
INVESTMENT INCOME |
||||||||||||||||||||
Dividends |
$ | 83,400 | $ | 2,841 | $ | 63,823 | $ | 156,924 | $ | 152,893 | ||||||||||
Expenses |
||||||||||||||||||||
Administrative expenses |
5,035 | 713 | 5,534 | 10,443 | 7,555 | |||||||||||||||
Mortality and expense risk charges |
11,890 | 1,733 | 14,193 | 24,746 | 16,266 | |||||||||||||||
Guaranteed minimum death benefits |
1,694 | 256 | 1,536 | 4,877 | 1,632 | |||||||||||||||
Total expenses |
18,619 | 2,702 | 21,263 | 40,066 | 25,453 | |||||||||||||||
Net investment income (loss) |
64,781 | 139 | 42,560 | 116,858 | 127,440 | |||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||||||
Realized gain (loss) on investments |
466,082 | 60,042 | 363,186 | (52,385 | ) | 12,588 | ||||||||||||||
Capital gain distributions |
265,957 | 14,886 | 331,740 | — | — | |||||||||||||||
Net realized gain (loss) |
732,039 | 74,928 | 694,926 | (52,385 | ) | 12,588 | ||||||||||||||
Net change in unrealized appreciation (depreciation) |
578,783 | 47,882 | 911,681 | (88,182 | ) | (179,390 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments |
1,310,822 | 122,810 | 1,606,607 | (140,567 | ) | (166,802 | ) | |||||||||||||
Net increase (decrease) in net assets from operations |
$ | 1,375,603 | $ | 122,949 | $ | 1,649,167 | $ | (23,709 | ) | $ | (39,362 | ) | ||||||||
|
|
|
B-16 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
concluded
Wanger International Sub-Account |
Wanger Select Sub-Account |
Wanger USA Sub-Account |
Western Asset Variable Global High Yield Bond Portfolio—Class I Sub-Account |
|||||||||||||
ASSETS |
||||||||||||||||
Investments, at value |
$ | 9,409,130 | $ | 1,972,929 | $ | 804,686 | $ | 8,009,425 | ||||||||
Total assets |
9,409,130 | 1,972,929 | 804,686 | 8,009,425 | ||||||||||||
|
||||||||||||||||
NET ASSETS |
||||||||||||||||
Accumulation fund |
$ | 9,409,130 | $ | 1,972,929 | $ | 804,686 | $ | 8,009,425 | ||||||||
Net assets |
$ | 9,409,130 | $ | 1,972,929 | $ | 804,686 | $ | 8,009,425 | ||||||||
|
||||||||||||||||
Investments, at cost |
$ | 8,488,738 | $ | 1,491,755 | $ | 720,038 | $ | 8,201,033 | ||||||||
Shares held in corresponding Funds |
272,334 | 54,186 | 19,564 | 986,382 | ||||||||||||
UNIT VALUE |
||||||||||||||||
Intelligent Variable Annuity |
||||||||||||||||
Band 1 |
$ | 55.23 | $ | 38.30 | $ | 57.66 | $ | 15.05 | ||||||||
Band 2 |
55.73 | 38.65 | 58.19 | 15.18 | ||||||||||||
Band 3 |
56.07 | 38.89 | 58.55 | 15.28 | ||||||||||||
Band 5 |
54.89 | 38.07 | 57.32 | 14.95 | ||||||||||||
Band 6 |
55.40 | 38.42 | 57.84 | 15.09 | ||||||||||||
Band 7 |
55.73 | 38.65 | 58.19 | 15.18 |
Wanger International Sub-Account |
Wanger Select Sub-Account |
Wanger USA Sub-Account |
Western Asset Variable Global High Yield Bond Portfolio—Class I Sub-Account |
|||||||||||||
INVESTMENT INCOME |
||||||||||||||||
Dividends |
$ | 197,912 | $ | 5,315 | $ | 1,525 | $ | 457,341 | ||||||||
Expenses |
||||||||||||||||
Administrative expenses |
7,266 | 1,837 | 845 | 6,072 | ||||||||||||
Mortality and expense risk charges |
17,689 | 4,458 | 1,901 | 13,330 | ||||||||||||
Guaranteed minimum death benefits |
2,584 | 558 | 142 | 1,760 | ||||||||||||
Total expenses |
27,539 | 6,853 | 2,888 | 21,162 | ||||||||||||
Net investment income (loss) |
170,373 | (1,538 | ) | (1,363 | ) | 436,179 | ||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) |
||||||||||||||||
Realized gain (loss) on investments |
737 | 137,384 | 62,869 | 183,375 | ||||||||||||
Capital gain distributions |
482,884 | 26,886 | 96,727 | — | ||||||||||||
Net realized gain (loss) |
483,621 | 164,270 | 159,596 | 183,375 | ||||||||||||
Net change in unrealized appreciation (depreciation) |
806,066 | 379,915 | 72,999 | (273,154 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments |
1,289,687 | 544,185 | 232,595 | (89,779 | ) | |||||||||||
Net increase (decrease) in net assets from operations |
$ | 1,460,060 | $ | 542,647 | $ | 231,232 | $ | 346,400 | ||||||||
|
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-17 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
TIAA-CREF Life Bond Sub-Account |
TIAA-CREF Life Growth Equity Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 2,191,127 | $ | 3,195,685 | $ | (134,905 | ) | $ | 42,330 | |||||||
Net realized gain (loss) |
1,405,640 | 1,838,808 | 3,059,710 | 2,342,557 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(5,766,309 | ) | 738,651 | 13,264,092 | 3,735,085 | |||||||||||
Net increase (decrease) in net assets from operations |
(2,169,542 | ) | 5,773,144 | 16,188,897 | 6,119,972 | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
13,088,676 | 11,777,631 | 4,266,031 | 1,648,426 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(109,648 | ) | 8,327,814 | 3,043,051 | (2,623,866 | ) | ||||||||||
Annuity payments |
— | — | (250,249 | ) | (174,074 | ) | ||||||||||
Withdrawals and death benefits (b) |
(5,030,557 | ) | (4,393,681 | ) | (5,371,635 | ) | (3,484,810 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
7,948,471 | 15,711,764 | 1,687,198 | (4,634,324 | ) | |||||||||||
Net increase (decrease) in net assets |
5,778,929 | 21,484,908 | 17,876,095 | 1,485,648 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
105,122,596 | 83,637,688 | 40,297,091 | 38,811,443 | ||||||||||||
End of period |
$ | 110,901,525 | $ | 105,122,596 | $ | 58,173,186 | $ | 40,297,091 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
2,837,781 | 2,404,268 | 2,016,262 | 2,263,842 | ||||||||||||
Units purchased |
358,835 | 326,577 | 164,553 | 88,842 | ||||||||||||
Units sold/transferred |
(145,168 | ) | 106,936 | (101,777 | ) | (336,422 | ) | |||||||||
End of period |
3,051,448 | 2,837,781 | 2,079,038 | 2,016,262 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-18 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
TIAA-CREF Life Growth & Income Sub-Account |
TIAA-CREF Life International Equity Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 501,537 | $ | 844,363 | $ | 1,540,879 | $ | 798,588 | ||||||||
Net realized gain (loss) |
12,701,377 | 2,616,166 | (32,567 | ) | (4,385,404 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on investments |
11,855,130 | 5,958,432 | 15,610,970 | 21,015,618 | ||||||||||||
Net increase (decrease) in net assets from operations |
25,058,044 | 9,418,961 | 17,119,282 | 17,428,802 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
9,281,700 | 5,807,147 | 5,039,461 | 3,445,691 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
3,238,713 | 2,408,257 | (161,075 | ) | (695,007 | ) | ||||||||||
Annuity payments |
(771,554 | ) | (540,905 | ) | (309,700 | ) | (251,613 | ) | ||||||||
Withdrawals and death benefits (b) |
(6,111,846 | ) | (4,015,208 | ) | (3,967,942 | ) | (5,020,073 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
5,637,013 | 3,659,291 | 600,744 | (2,521,002 | ) | |||||||||||
Net increase (decrease) in net assets |
30,695,057 | 13,078,252 | 17,720,026 | 14,907,800 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
71,578,405 | 58,500,153 | 72,464,397 | 57,556,597 | ||||||||||||
End of period |
$ | 102,273,462 | $ | 71,578,405 | $ | 90,184,423 | $ | 72,464,397 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
1,958,967 | 1,890,378 | 2,866,911 | 2,995,040 | ||||||||||||
Units purchased |
207,184 | 176,274 | 166,150 | 158,499 | ||||||||||||
Units sold/transferred |
(74,332 | ) | (107,685 | ) | (155,124 | ) | (286,628 | ) | ||||||||
End of period |
2,091,819 | 1,958,967 | 2,877,937 | 2,866,911 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-19 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
TIAA-CREF Life Large-Cap Value Sub-Account |
TIAA-CREF Life Money Market Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 840,166 | $ | 566,942 | $ | (242,691 | ) | $ | (228,574 | ) | ||||||
Net realized gain (loss) |
6,585,761 | 180,455 | — | — | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
8,092,340 | 6,189,921 | — | — | ||||||||||||
Net increase (decrease) in net assets from operations |
15,518,267 | 6,937,318 | (242,691 | ) | (228,574 | ) | ||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
5,951,898 | 2,937,242 | 60,338,509 | 37,404,382 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
4,294,177 | (114,956 | ) | (41,128,767 | ) | (24,257,057 | ) | |||||||||
Annuity payments |
(225,623 | ) | (140,397 | ) | — | — | ||||||||||
Withdrawals and death benefits (b) |
(3,327,246 | ) | (3,165,851 | ) | (13,708,907 | ) | (14,868,817 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
6,693,206 | (483,962 | ) | 5,500,835 | (1,721,492 | ) | ||||||||||
Net increase (decrease) in net assets |
22,211,473 | 6,453,356 | 5,258,144 | (1,950,066 | ) | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
42,657,895 | 36,204,539 | 50,771,560 | 52,721,626 | ||||||||||||
End of period |
$ | 64,869,368 | $ | 42,657,895 | $ | 56,029,704 | $ | 50,771,560 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
803,348 | 818,862 | 4,427,254 | 4,580,248 | ||||||||||||
Units purchased |
92,316 | 60,835 | 5,293,309 | 3,261,623 | ||||||||||||
Units sold/transferred |
19,703 | (76,349 | ) | (4,817,876 | ) | (3,414,617 | ) | |||||||||
End of period |
915,367 | 803,348 | 4,902,687 | 4,427,254 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-20 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
TIAA-CREF Life Real Estate Securities Sub-Account |
TIAA-CREF Life Small-Cap Equity Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 611,334 | $ | 636,201 | $ | 62,102 | $ | 171,496 | ||||||||
Net realized gain (loss) |
3,530,069 | 373,316 | 9,614,314 | 819,231 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(3,595,017 | ) | 7,001,468 | 3,425,040 | 2,923,380 | |||||||||||
Net increase (decrease) in net assets from operations |
546,386 | 8,010,985 | 13,101,456 | 3,914,107 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
5,479,616 | 4,816,034 | 3,116,874 | 1,903,002 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(2,514,168 | ) | (199,480 | ) | 3,850,490 | (1,242,797 | ) | |||||||||
Annuity payments |
(254,878 | ) | (166,664 | ) | (175,678 | ) | (105,685 | ) | ||||||||
Withdrawals and death benefits (b) |
(4,997,802 | ) | (3,535,243 | ) | (2,023,183 | ) | (3,155,910 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
(2,287,232 | ) | 914,647 | 4,768,503 | (2,601,390 | ) | ||||||||||
Net increase (decrease) in net assets |
(1,740,846 | ) | 8,925,632 | 17,869,959 | 1,312,717 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
51,699,278 | 42,773,646 | 31,876,019 | 30,563,302 | ||||||||||||
End of period |
$ | 49,958,432 | $ | 51,699,278 | $ | 49,745,978 | $ | 31,876,019 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
733,230 | 729,658 | 528,429 | 578,217 | ||||||||||||
Units purchased |
68,373 | 74,063 | 40,956 | 33,877 | ||||||||||||
Units sold/transferred |
(109,304 | ) | (70,491 | ) | 23,221 | (83,665 | ) | |||||||||
End of period |
692,299 | 733,230 | 592,606 | 528,429 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-21 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
TIAA-CREF Life Social Choice Equity Sub-Account |
TIAA-CREF Life Stock Index Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 427,144 | $ | 384,691 | $ | 3,212,416 | $ | 3,085,367 | ||||||||
Net realized gain (loss) |
1,317,012 | 482,429 | 8,334,718 | 6,757,965 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
8,644,374 | 2,402,820 | 53,120,223 | 17,062,846 | ||||||||||||
Net increase (decrease) in net assets from operations |
10,388,530 | 3,269,940 | 64,667,357 | 26,906,178 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
4,478,960 | 1,954,859 | 16,278,696 | 10,687,639 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
2,697,292 | 683,858 | 1,891,310 | (961,748 | ) | |||||||||||
Annuity payments |
(192,471 | ) | (121,522 | ) | (1,007,506 | ) | (824,649 | ) | ||||||||
Withdrawals and death benefits (b) |
(1,618,870 | ) | (1,378,458 | ) | (12,534,210 | ) | (11,953,273 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
5,364,911 | 1,138,737 | 4,628,290 | (3,052,031 | ) | |||||||||||
Net increase (decrease) in net assets |
15,753,441 | 4,408,677 | 69,295,647 | 23,854,147 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
28,360,048 | 23,951,371 | 196,353,678 | 172,499,531 | ||||||||||||
End of period |
$ | 44,113,489 | $ | 28,360,048 | $ | 265,649,325 | $ | 196,353,678 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
822,260 | 793,663 | 4,739,584 | 4,839,052 | ||||||||||||
Units purchased |
108,851 | 61,763 | 315,882 | 278,017 | ||||||||||||
Units sold/transferred |
28,530 | (33,166 | ) | (233,285 | ) | (377,485 | ) | |||||||||
End of period |
959,641 | 822,260 | 4,822,181 | 4,739,584 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-22 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Calamos Growth and Income Portfolio Sub-Account |
ClearBridge Variable Aggressive Growth Portfolio—Class I Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 25,674 | $ | 59,311 | $ | 474 | $ | 713 | ||||||||
Net realized gain (loss) |
263,487 | 129,786 | 559,240 | 122,904 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
252,892 | 89,857 | 181,809 | 82,689 | ||||||||||||
Net increase (decrease) in net assets from operations |
542,053 | 278,954 | 741,523 | 206,306 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
44,855 | 82,520 | 551,790 | 77,477 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
80,589 | (162,763 | ) | 845,536 | (14,869 | ) | ||||||||||
Withdrawals and death benefits (b) |
(81,529 | ) | (151,624 | ) | 9,799 | (24,954 | ) | |||||||||
Net increase (decrease) in net assets resulting from |
43,915 | (231,867 | ) | 1,407,125 | 37,654 | |||||||||||
Net increase (decrease) in net assets |
585,968 | 47,087 | 2,148,648 | 243,960 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
3,576,209 | 3,529,122 | 1,315,037 | 1,071,077 | ||||||||||||
End of period |
$ | 4,162,177 | $ | 3,576,209 | $ | 3,463,685 | $ | 1,315,037 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
207,216 | 220,911 | 66,960 | 64,538 | ||||||||||||
Units purchased |
3,465 | 4,883 | 28,656 | 4,043 | ||||||||||||
Units sold/transferred |
(2,654 | ) | (18,578 | ) | 24,020 | (1,621 | ) | |||||||||
End of period |
208,027 | 207,216 | 119,636 | 66,960 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-23 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
ClearBridge Variable Small Cap Growth Portfolio—Class I Sub-Account |
Credit Suisse Trust—Commodity Return Strategy Portfolio Sub-Account |
|||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013(c) | ||||||||||
FROM OPERATIONS |
||||||||||||
Net investment income (loss) |
$ | (4,092 | ) | $ | 2,035 | $ | — | |||||
Net realized gain (loss) |
373,395 | 32,364 | — | |||||||||
Net change in unrealized appreciation (depreciation) on investments |
63,230 | 36,756 | 29 | |||||||||
Net increase (decrease) in net assets from operations |
432,533 | 71,155 | 29 | |||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||
Premiums (a) |
292,867 | 27,114 | — | |||||||||
Net contractowner transfers between Sub-Accounts |
997,682 | 173,201 | 2,224 | |||||||||
Withdrawals and death benefits (b) |
(33,296 | ) | (78,615 | ) | — | |||||||
Net increase (decrease) in net assets resulting from |
1,257,253 | 121,700 | 2,224 | |||||||||
Net increase (decrease) in net assets |
1,689,786 | 192,855 | 2,253 | |||||||||
NET ASSETS |
||||||||||||
Beginning of period |
542,432 | 349,577 | — | |||||||||
End of period |
$ | 2,232,218 | $ | 542,432 | $ | 2,253 | ||||||
|
||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||
Beginning of period |
26,969 | 20,668 | — | |||||||||
Units purchased |
12,666 | 1,404 | — | |||||||||
Units sold/transferred |
35,899 | 4,897 | 89 | |||||||||
End of period |
75,534 | 26,969 | 89 | |||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
(c) | For the period November 26, 2013 (commencement of operations) to December 31, 2013. |
B-24 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
DFA VA Global Bond Portfolio Sub-Account |
DFA VA International Small Portfolio Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012(d) | December 31, 2013 | December 31, 2012(f) | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 6,452 | $ | 6,371 | $ | 33,984 | $ | 8,845 | ||||||||
Net realized gain (loss) |
27,497 | 4,718 | 100,240 | 6,138 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(43,740 | ) | (9,439 | ) | 115,936 | 9,666 | ||||||||||
Net increase (decrease) in net assets from operations |
(9,791 | ) | 1,650 | 250,160 | 24,649 | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,509,986 | 199,993 | 782,359 | 253,331 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
894,226 | 205,499 | 478,621 | 112,986 | ||||||||||||
Withdrawals and death benefits (b) |
(80,770 | ) | (1,909 | ) | (14,070 | ) | (479 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
2,323,442 | 403,583 | 1,246,910 | 365,838 | ||||||||||||
Net increase (decrease) in net assets |
2,313,651 | 405,233 | 1,497,070 | 390,487 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
405,233 | — | 390,487 | — | ||||||||||||
End of period |
$ | 2,718,884 | $ | 405,233 | $ | 1,887,557 | $ | 390,487 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
15,803 | — | 14,890 | — | ||||||||||||
Units purchased |
59,279 | 7,814 | 26,761 | 10,238 | ||||||||||||
Units sold/transferred |
31,687 | 7,989 | 15,192 | 4,652 | ||||||||||||
End of period |
106,769 | 15,803 | 56,843 | 14,890 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
(d) | For the period May 9, 2012 (commencement of operations) to December 31, 2012. |
(f) | For the period May 7, 2012 (commencement of operations) to December 31, 2012. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-25 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
DFA VA International Value Portfolio Sub-Account |
DFA VA Short-Term Fixed Portfolio Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012(g) | December 31, 2013 | December 31, 2012(h) | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 65,989 | $ | 12,134 | $ | 3,504 | $ | 2,785 | ||||||||
Net realized gain (loss) |
16,682 | (2,157 | ) | (180 | ) | 1,488 | ||||||||||
Net change in unrealized appreciation (depreciation) on investments |
346,827 | 11,952 | (11,232 | ) | (4,087 | ) | ||||||||||
Net increase (decrease) in net assets from operations |
429,498 | 21,929 | (7,908 | ) | 186 | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,922,476 | 250,798 | 2,799,099 | 1,430,622 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
547,421 | 144,757 | 2,560,569 | (766,514 | ) | |||||||||||
Withdrawals and death benefits (b) |
(40,021 | ) | (639 | ) | (161,027 | ) | (166 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
2,429,876 | 394,916 | 5,198,641 | 663,942 | ||||||||||||
Net increase (decrease) in net assets |
2,859,374 | 416,845 | 5,190,733 | 664,128 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
416,845 | — | 664,128 | — | ||||||||||||
End of period |
$ | 3,276,219 | $ | 416,845 | $ | 5,854,861 | $ | 664,128 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
15,372 | — | 26,545 | — | ||||||||||||
Units purchased |
76,916 | 9,820 | 112,098 | 57,164 | ||||||||||||
Units sold/transferred |
7,349 | 5,552 | 95,562 | (30,619 | ) | |||||||||||
End of period |
99,637 | 15,372 | 234,205 | 26,545 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
(g) | For the period July 10, 2012 (commencement of operations) to December 31, 2012. |
(h) | For the period June 27, 2012 (commencement of operations) to December 31, 2012. |
B-26 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
DFA VA US Large Value Portfolio Sub-Account |
DFA VA US Targeted Value Portfolio Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012(g) | December 31, 2013 | December 31, 2012(f) | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 41,369 | $ | 6,578 | $ | 15,108 | $ | 4,343 | ||||||||
Net realized gain (loss) |
408,618 | 2 | 138,461 | 121 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
140,982 | 2,506 | 338,652 | 8,284 | ||||||||||||
Net increase (decrease) in net assets from operations |
590,969 | 9,086 | 492,221 | 12,748 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,735,525 | 271,865 | 1,166,135 | 261,422 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
1,452,299 | 108,495 | 1,079,458 | 54,276 | ||||||||||||
Withdrawals and death benefits (b) |
(51,824 | ) | (791 | ) | (29,181 | ) | (637 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
3,136,000 | 379,569 | 2,216,412 | 315,061 | ||||||||||||
Net increase (decrease) in net assets |
3,726,969 | 388,655 | 2,708,633 | 327,809 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
388,655 | — | 327,809 | — | ||||||||||||
End of period |
$ | 4,115,624 | $ | 388,655 | $ | 3,036,442 | $ | 327,809 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
14,290 | — | 12,097 | — | ||||||||||||
Units purchased |
57,152 | 10,208 | 34,834 | 9,990 | ||||||||||||
Units sold/transferred |
36,401 | 4,082 | 30,820 | 2,107 | ||||||||||||
End of period |
107,843 | 14,290 | 77,751 | 12,097 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
(f) | For the period May 7, 2012 (commencement of operations) to December 31, 2012. |
(g) | For the period July 10, 2012 (commencement of operations) to December 31, 2012. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-27 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
Delaware VIP Diversified Income Series—Standard Class Sub-Account |
Delaware VIP International Value Equity Series—Standard Class Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 649,561 | $ | 951,694 | $ | 98,365 | $ | 111,288 | ||||||||
Net realized gain (loss) |
234,250 | 246,740 | 200,271 | (204,906 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(1,429,197 | ) | 312,093 | 1,821,945 | 930,357 | |||||||||||
Net increase (decrease) in net assets from operations |
(545,386 | ) | 1,510,527 | 2,120,581 | 836,739 | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
8,491,410 | 7,154,331 | 3,796,333 | 1,530,192 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
3,346,710 | 4,493,579 | 2,098,409 | 531,767 | ||||||||||||
Withdrawals and death benefits (b) |
(1,223,448 | ) | (853,585 | ) | (256,808 | ) | (172,654 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
10,614,672 | 10,794,325 | 5,637,934 | 1,889,305 | ||||||||||||
Net increase (decrease) in net assets |
10,069,286 | 12,304,852 | 7,758,515 | 2,726,044 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
30,503,568 | 18,198,716 | 7,380,086 | 4,654,042 | ||||||||||||
End of period |
$ | 40,572,854 | $ | 30,503,568 | $ | 15,138,601 | $ | 7,380,086 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
2,037,329 | 1,298,313 | 602,672 | 436,080 | ||||||||||||
Units purchased |
586,222 | 492,014 | 281,222 | 133,933 | ||||||||||||
Units sold/transferred |
131,139 | 247,002 | 127,050 | 32,659 | ||||||||||||
End of period |
2,754,690 | 2,037,329 | 1,010,944 | 602,672 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-28 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Delaware VIP Small Cap
Value Series—Standard Class Sub-Account |
Franklin Income Securities Fund— Class 1 Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 27,035 | $ | 27,847 | $ | 336,335 | $ | 263,264 | ||||||||
Net realized gain (loss) |
589,343 | 365,608 | 161,003 | 51,333 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
1,733,052 | 259,080 | 279,910 | 217,874 | ||||||||||||
Net increase (decrease) in net assets from operations |
2,349,430 | 652,535 | 777,248 | 532,471 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,911,078 | 659,445 | 783,316 | 565,339 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
1,179,735 | 163,806 | 1,114,180 | 96,707 | ||||||||||||
Withdrawals and death benefits (b) |
(137,722 | ) | (141,044 | ) | (303,772 | ) | (116,223 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
2,953,091 | 682,207 | 1,593,724 | 545,823 | ||||||||||||
Net increase (decrease) in net assets |
5,302,521 | 1,334,742 | 2,370,972 | 1,078,294 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
5,993,334 | 4,658,592 | 5,175,801 | 4,097,507 | ||||||||||||
End of period |
$ | 11,295,855 | $ | 5,993,334 | $ | 7,546,773 | $ | 5,175,801 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
154,656 | 136,477 | 238,397 | 212,361 | ||||||||||||
Units purchased |
42,924 | 17,871 | 36,397 | 26,863 | ||||||||||||
Units sold/transferred |
21,701 | 308 | 30,517 | (827 | ) | |||||||||||
End of period |
219,281 | 154,656 | 305,311 | 238,397 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-29 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
Franklin Small-Mid Cap Growth Securities Fund—Class 1 Sub-Account |
ING Clarion Global Real Estate Portfolio— Class I Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | (7,579 | ) | $ | (5,800 | ) | $ | 207,989 | $ | 7,376 | ||||||
Net realized gain (loss) |
219,455 | 67,438 | 171,431 | 7,260 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
428,358 | 65,015 | (264,183 | ) | 368,969 | |||||||||||
Net increase (decrease) in net assets from operations |
640,234 | 126,653 | 115,237 | 383,605 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
817,659 | 284,651 | 1,163,919 | 501,746 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
533,584 | (164,535 | ) | 1,260,235 | 457,523 | |||||||||||
Withdrawals and death benefits (b) |
(97,298 | ) | (114,920 | ) | (359,528 | ) | (67,400 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
1,253,945 | 5,196 | 2,064,626 | 891,869 | ||||||||||||
Net increase (decrease) in net assets |
1,894,179 | 131,849 | 2,179,863 | 1,275,474 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
1,467,831 | 1,335,982 | 2,437,047 | 1,161,573 | ||||||||||||
End of period |
$ | 3,362,010 | $ | 1,467,831 | $ | 4,616,910 | $ | 2,437,047 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
56,860 | 57,271 | 74,302 | 44,482 | ||||||||||||
Units purchased |
25,807 | 11,163 | 35,589 | 16,708 | ||||||||||||
Units sold/transferred |
11,677 | (11,574 | ) | 26,008 | 13,112 | |||||||||||
End of period |
94,344 | 56,860 | 135,899 | 74,302 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-30 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Janus Aspen Forty Portfolio— Institutional Shares Sub-Account |
Janus Aspen Overseas
Portfolio— Institutional Shares Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 12,370 | $ | 13,941 | $ | 71,873 | $ | 13,663 | ||||||||
Net realized gain (loss) |
331,688 | 133,388 | (537,981 | ) | (152,040 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on investments |
714,586 | 501,210 | 856,233 | 554,797 | ||||||||||||
Net increase (decrease) in net assets from operations |
1,058,644 | 648,539 | 390,125 | 416,420 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
175,895 | 391,517 | 125,649 | 196,167 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(566,170 | ) | 436,594 | (1,112,047 | ) | (1,110,299 | ) | |||||||||
Withdrawals and death benefits (b) |
(225,030 | ) | (142,003 | ) | (123,955 | ) | (215,172 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
(615,305 | ) | 686,108 | (1,110,353 | ) | (1,129,304 | ) | |||||||||
Net increase (decrease) in net assets |
443,339 | 1,334,647 | (720,228 | ) | (712,884 | ) | ||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
3,853,945 | 2,519,298 | 3,624,830 | 4,337,714 | ||||||||||||
End of period |
$ | 4,297,284 | $ | 3,853,945 | $ | 2,904,602 | $ | 3,624,830 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
94,189 | 76,154 | 68,033 | 92,040 | ||||||||||||
Units purchased |
4,804 | 10,191 | 2,224 | 4,012 | ||||||||||||
Units sold/transferred |
(18,649 | ) | 7,844 | (22,483 | ) | (28,019 | ) | |||||||||
End of period |
80,344 | 94,189 | 47,774 | 68,033 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-31 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
Janus Aspen Perkins Mid Cap Value Portfolio—Institutional Shares Sub-Account |
MFS Growth Series—Initial Class Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 66,350 | $ | 37,172 | $ | 5,991 | $ | (2,496 | ) | |||||||
Net realized gain (loss) |
481,378 | 437,855 | 39,555 | 68,224 | ||||||||||||
Net change in unrealized appreciation (depreciation) |
1,176,547 | 98,117 | 270,287 | 19,728 | ||||||||||||
Net increase (decrease) in net assets from operations |
1,724,275 | 573,144 | 315,833 | 85,456 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
380,142 | 1,096,360 | 21,520 | 276,824 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
151,871 | 567,484 | 6,831 | (6,125 | ) | |||||||||||
Withdrawals and death benefits (b) |
(352,577 | ) | (288,866 | ) | (6,278 | ) | (5,924 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
179,436 | 1,374,978 | 22,073 | 264,775 | ||||||||||||
Net increase (decrease) in net assets |
1,903,711 | 1,948,122 | 337,906 | 350,231 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
6,689,354 | 4,741,232 | 815,895 | 465,664 | ||||||||||||
End of period |
$ | 8,593,065 | $ | 6,689,354 | $ | 1,153,801 | $ | 815,895 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
333,091 | 261,465 | 28,587 | 19,109 | ||||||||||||
Units purchased |
18,219 | 57,183 | 696 | 9,911 | ||||||||||||
Units sold/transferred |
(10,875 | ) | 14,443 | 368 | (433 | ) | ||||||||||
End of period |
340,435 | 333,091 | 29,651 | 28,587 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-32 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
MFS Global Equity Series—Initial Class Sub-Account |
MFS Investors Growth Stock Series—Initial Class Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 10,496 | $ | 6,868 | $ | 93,476 | $ | 6,080 | ||||||||
Net realized gain (loss) |
283,952 | 47,188 | 164,069 | 89,469 | ||||||||||||
Net change in unrealized appreciation (depreciation) |
180,643 | 131,108 | 322,388 | 40,018 | ||||||||||||
Net increase (decrease) in net assets from operations |
475,091 | 185,164 | 579,933 | 135,567 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
476,094 | 54,067 | 840,967 | 230,048 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
639,903 | 309,417 | 928,764 | (34,102 | ) | |||||||||||
Withdrawals and death benefits (b) |
(39,261 | ) | (39,934 | ) | (34,676 | ) | (79,128 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
1,076,736 | 323,550 | 1,735,055 | 116,818 | ||||||||||||
Net increase (decrease) in net assets |
1,551,827 | 508,714 | 2,314,988 | 252,385 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
1,274,050 | 765,336 | 1,090,633 | 838,248 | ||||||||||||
End of period |
$ | 2,825,877 | $ | 1,274,050 | $ | 3,405,621 | $ | 1,090,633 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
72,423 | 53,487 | 80,803 | 72,354 | ||||||||||||
Units purchased |
23,601 | 3,394 | 56,425 | 17,698 | ||||||||||||
Units sold/transferred |
30,132 | 15,542 | 56,956 | (9,249 | ) | |||||||||||
End of period |
126,156 | 72,423 | 194,184 | 80,803 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-33 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
MFS Utilities Series–Initial Class Sub-Account |
Mutual Shares Securities Fund— Class 1 Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 57,709 | $ | 61,998 | $ | 37,880 | $ | 28,868 | ||||||||
Net realized gain (loss) |
99,699 | 35,598 | 113,598 | 13,202 | ||||||||||||
Net change in unrealized appreciation (depreciation) |
114,687 | 26,745 | 329,260 | 150,848 | ||||||||||||
Net increase (decrease) in net assets from operations |
272,095 | 124,341 | 480,738 | 192,918 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
218,553 | 191,040 | 233,245 | 203,924 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
638,514 | (370,006 | ) | 151,341 | 69,675 | |||||||||||
Withdrawals and death benefits (b) |
(32,017 | ) | (58,929 | ) | (95,793 | ) | (20,183 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
825,050 | (237,895 | ) | 288,793 | 253,416 | |||||||||||
Net increase (decrease) in net assets |
1,097,145 | (113,554 | ) | 769,531 | 446,334 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
1,131,391 | 1,244,945 | 1,694,535 | 1,248,201 | ||||||||||||
End of period |
$ | 2,228,536 | $ | 1,131,391 | $ | 2,464,066 | $ | 1,694,535 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
29,238 | 36,344 | 83,793 | 70,494 | ||||||||||||
Units purchased |
5,047 | 5,211 | 9,877 | 10,607 | ||||||||||||
Units sold/transferred |
13,623 | (12,317 | ) | 1,419 | 2,692 | |||||||||||
End of period |
47,908 | 29,238 | 95,089 | 83,793 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-34 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Neuberger Berman Advisers Management Trust Large Cap Value Portfolio–I Class Sub-Account |
Neuberger Berman Advisers Management Trust Mid Cap Intrinsic Value Portfolio—I Class Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 7,052 | $ | 287 | $ | 52,943 | $ | 7,904 | ||||||||
Net realized gain (loss) |
75,915 | (5,459 | ) | 51,065 | 733,066 | |||||||||||
Net change in unrealized appreciation (depreciation) |
156,382 | 95,090 | 1,403,853 | (404,673 | ) | |||||||||||
Net increase (decrease) in net assets from operations |
239,349 | 89,918 | 1,507,861 | 336,297 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
152,605 | 83,234 | 2,290,328 | 750,356 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
332,475 | 36,185 | 1,586,038 | 278,423 | ||||||||||||
Withdrawals and death benefits (b) |
(21,359 | ) | (90,028 | ) | (174,065 | ) | (122,063 | ) | ||||||||
Net increase (decrease) in net assets resulting from |
463,721 | 29,391 | 3,702,301 | 906,716 | ||||||||||||
Net increase (decrease) in net assets |
703,070 | 119,309 | 5,210,162 | 1,243,013 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
653,995 | 534,686 | 3,194,087 | 1,951,074 | ||||||||||||
End of period |
$ | 1,357,065 | $ | 653,995 | $ | 8,404,249 | $ | 3,194,087 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
36,176 | 34,328 | 185,342 | 130,239 | ||||||||||||
Units purchased |
7,464 | 4,932 | 108,575 | 45,937 | ||||||||||||
Units sold/transferred |
13,660 | (3,084 | ) | 63,161 | 9,166 | |||||||||||
End of period |
57,300 | 36,176 | 357,078 | 185,342 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-35 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
PIMCO VIT All Asset Portfolio— Institutional Class Sub-Account |
PIMCO VIT Commodity Real Return Strategy Portfolio—Institutional Class Sub-Account |
PIMCO VIT Emerging Markets Bond Portfolio— Institutional Class Sub-Account |
||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 (j) | December 31, 2013 (k) | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 344,092 | $ | 372,904 | $ | (21 | ) | $ | 5 | |||||||
Net realized gain (loss) |
102,285 | (33,002 | ) | 12 | 41 | |||||||||||
Net change in unrealized appreciation (depreciation) |
(491,644 | ) | 443,731 | (1,299 | ) | — | ||||||||||
Net increase (decrease) in net assets from operations |
(45,267 | ) | 783,633 | (1,308 | ) | 46 | ||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,073,455 | 1,008,084 | 112,854 | — | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(3,130,416 | ) | 3,333,418 | 33,024 | (46 | ) | ||||||||||
Withdrawals and death benefits (b) |
(833,297 | ) | (225,748 | ) | 6 | — | ||||||||||
Net increase (decrease) in net assets resulting from |
(2,890,258 | ) | 4,115,754 | 145,884 | (46 | ) | ||||||||||
Net increase (decrease) in net assets |
(2,935,525 | ) | 4,899,387 | 144,576 | — | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
9,103,765 | 4,204,378 | — | — | ||||||||||||
End of period |
$ | 6,168,240 | $ | 9,103,765 | $ | 144,576 | $ | — | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
555,015 | 294,698 | — | — | ||||||||||||
Units purchased |
66,350 | 64,194 | 4,463 | — | ||||||||||||
Units sold/transferred |
(245,070 | ) | 196,123 | 1,304 | — | |||||||||||
End of period |
376,295 | 555,015 | 5,767 | — | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
(j) | For the period November 20, 2013 (commencement of operations) to December 31, 2013. |
(k) | For the period December 9, 2013 (commencement of operations) to December 31, 2013. |
B-36 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
PIMCO VIT Global Bond
Portfolio (Unhedged)—Institutional Class Sub-Account |
PIMCO VIT Real Return Portfolio— Institutional Class Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 41,356 | $ | 298,100 | $ | 533,351 | $ | 1,823,692 | ||||||||
Net realized gain (loss) |
(114,978 | ) | 69,509 | 225,641 | 1,067,543 | |||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(390,135 | ) | (46,077 | ) | (4,067,976 | ) | (517,247 | ) | ||||||||
Net increase (decrease) in net assets from operations |
(463,757 | ) | 321,532 | (3,308,984 | ) | 2,373,988 | ||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
407,730 | 456,000 | 5,682,268 | 5,281,055 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(622,335 | ) | (984,890 | ) | (2,041,920 | ) | 3,521,685 | |||||||||
Withdrawals and death benefits (b) |
(168,029 | ) | (909,458 | ) | (1,118,263 | ) | (2,277,631 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
(382,634 | ) | (1,438,348 | ) | 2,522,085 | 6,525,109 | ||||||||||
Net increase (decrease) in net assets |
(846,391 | ) | (1,116,816 | ) | (786,899 | ) | 8,899,097 | |||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
5,526,144 | 6,642,960 | 34,366,521 | 25,467,424 | ||||||||||||
End of period |
$ | 4,679,753 | $ | 5,526,144 | $ | 33,579,622 | $ | 34,366,521 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
292,623 | 374,807 | 1,903,265 | 1,530,878 | ||||||||||||
Units purchased |
22,679 | 24,865 | 346,992 | 302,619 | ||||||||||||
Units sold/transferred |
(44,068 | ) | (107,049 | ) | (197,125 | ) | 69,768 | |||||||||
End of period |
271,234 | 292,623 | 2,053,132 | 1,903,265 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-37 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
Prudential Series Fund—Jennison 20/20 Focus Portfolio—Class II Sub-Account |
Prudential Series Fund—Natural Resources Portfolio—Class II Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | (17,770 | ) | $ | 100,256 | $ | (11,186 | ) | $ | 245,266 | ||||||
Net realized gain (loss) |
263,215 | 103,922 | (508,950 | ) | (314,638 | ) | ||||||||||
Net change in unrealized appreciation (depreciation) on investments |
934,694 | 100,386 | 777,350 | (35,260 | ) | |||||||||||
Net increase (decrease) in net assets from operations |
1,180,139 | 304,564 | 257,214 | (104,632 | ) | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
2,095,166 | 341,190 | 101,653 | 92,376 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
1,028,532 | 86,630 | (554,468 | ) | 159,022 | |||||||||||
Withdrawals and death benefits (b) |
(86,859 | ) | (61,720 | ) | (174,637 | ) | (55,554 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
3,036,839 | 366,100 | (627,452 | ) | 195,844 | |||||||||||
Net increase (decrease) in net assets |
4,216,978 | 670,664 | (370,238 | ) | 91,212 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
3,527,198 | 2,856,534 | 3,155,080 | 3,063,868 | ||||||||||||
End of period |
$ | 7,744,176 | $ | 3,527,198 | $ | 2,784,842 | $ | 3,155,080 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
190,912 | 170,442 | 57,990 | 54,473 | ||||||||||||
Units purchased |
96,641 | 18,868 | 2,133 | 1,735 | ||||||||||||
Units sold/transferred |
37,641 | 1,602 | (13,318 | ) | 1,782 | |||||||||||
End of period |
325,194 | 190,912 | 46,805 | 57,990 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-38 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Prudential Series Fund—Value Portfolio—Class II Sub-Account |
PVC Equity Income Account—Class 1 Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | (22,161 | ) | $ | 7,454 | $ | 556,833 | $ | 340,947 | |||||||
Net realized gain (loss) |
594,358 | 123,249 | 1,261,890 | 519,201 | ||||||||||||
Net change in unrealized appreciation (depreciation) on investments |
991,716 | 499,341 | 2,758,509 | 591,228 | ||||||||||||
Net increase (decrease) in net assets from operations |
1,563,913 | 630,044 | 4,577,232 | 1,451,376 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
231,541 | 108,891 | 4,922,119 | 2,176,072 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(570,413 | ) | (92,917 | ) | 3,180,162 | 1,006,703 | ||||||||||
Withdrawals and death benefits (b) |
(139,142 | ) | (246,138 | ) | (531,419 | ) | (634,962 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
(478,014 | ) | (230,164 | ) | 7,570,862 | 2,547,813 | ||||||||||
Net increase (decrease) in net assets |
1,085,899 | 399,880 | 12,148,094 | 3,999,189 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
5,039,065 | 4,639,185 | 14,551,093 | 10,551,904 | ||||||||||||
End of period |
$ | 6,124,964 | $ | 5,039,065 | $ | 26,699,187 | $ | 14,551,093 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
192,437 | 201,465 | 699,901 | 571,469 | ||||||||||||
Units purchased |
10,242 | 4,353 | 213,015 | 109,305 | ||||||||||||
Units sold/transferred |
(25,605 | ) | (13,381 | ) | 99,231 | 19,127 | ||||||||||
End of period |
177,074 | 192,437 | 1,012,147 | 699,901 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-39 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
PVC MidCap—Class 1 Sub-Account |
Royce Capital Fund Micro-Cap Portfolio—Investment Class Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 64,781 | $ | 10,047 | $ | 139 | $ | (3,282 | ) | |||||||
Net realized gain (loss) |
732,039 | 163,695 | 74,928 | (18,035 | ) | |||||||||||
Net change in unrealized appreciation (depreciation) on investments |
578,783 | 190,609 | 47,882 | 93,460 | ||||||||||||
Net increase (decrease) in net assets from operations |
1,375,603 | 364,351 | 122,949 | 72,143 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,237,314 | 606,162 | 22,108 | 48,369 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
1,028,049 | 153,445 | (457,339 | ) | (185,072 | ) | ||||||||||
Withdrawals and death benefits (b) |
(103,948 | ) | (59,642 | ) | (1,349 | ) | (51,465 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
2,161,415 | 699,965 | (436,580 | ) | (188,168 | ) | ||||||||||
Net increase (decrease) in net assets |
3,537,018 | 1,064,316 | (313,631 | ) | (116,025 | ) | ||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
2,926,040 | 1,861,724 | 916,516 | 1,032,541 | ||||||||||||
End of period |
$ | 6,463,058 | $ | 2,926,040 | $ | 602,885 | $ | 916,516 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
134,671 | 101,990 | 56,539 | 68,317 | ||||||||||||
Units purchased |
52,771 | 29,270 | 1,301 | 2,998 | ||||||||||||
Units sold/transferred |
35,396 | 3,411 | (26,863 | ) | (14,776 | ) | ||||||||||
End of period |
222,838 | 134,671 | 30,977 | 56,539 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-40 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Royce Capital Fund Small-Cap Portfolio—Investment Class Sub-Account |
T. Rowe Price® Limited-Term Bond Portfolio Sub-Account |
|||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012(l) | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 42,560 | $ | (12,197 | ) | $ | 116,858 | $ | 24,171 | |||||||
Net realized gain (loss) |
694,926 | 241,371 | (52,385 | ) | 13,291 | |||||||||||
Net change in unrealized appreciation (depreciation) on investments |
911,681 | 255,059 | (88,182 | ) | (19,592 | ) | ||||||||||
Net increase (decrease) in net assets from operations |
1,649,167 | 484,233 | (23,709 | ) | 17,870 | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
766,709 | 451,979 | 6,840,076 | 3,500,710 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(147,956 | ) | 247,326 | 4,020,687 | 2,099,370 | |||||||||||
Withdrawals and death benefits (b) |
(196,899 | ) | (168,332 | ) | (947,933 | ) | (53,557 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
421,854 | 530,973 | 9,912,830 | 5,546,523 | ||||||||||||
Net increase (decrease) in net assets |
2,071,021 | 1,015,206 | 9,889,121 | 5,564,393 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
4,805,689 | 3,790,483 | 5,564,393 | — | ||||||||||||
End of period |
$ | 6,876,710 | $ | 4,805,689 | $ | 15,453,514 | $ | 5,564,393 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
363,571 | 321,458 | 219,984 | — | ||||||||||||
Units purchased |
50,580 | 36,138 | 334,081 | 138,850 | ||||||||||||
Units sold/transferred |
(26,892 | ) | 5,975 | 58,443 | 81,134 | |||||||||||
End of period |
387,259 | 363,571 | 612,508 | 219,984 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
(l) | For the period March 19, 2012 (commencement of operations) to December 31, 2012. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-41 |
Statements of changes in net assets
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
Templeton Developing Markets Securities Fund—Class 1 Sub-Account |
Wanger International Sub-Account | |||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | 127,440 | $ | 67,762 | $ | 170,373 | $ | 49,437 | ||||||||
Net realized gain (loss) |
12,588 | (91,448 | ) | 483,621 | 190,843 | |||||||||||
Net change in unrealized appreciation (depreciation) on investments |
(179,390 | ) | 592,751 | 806,066 | 592,014 | |||||||||||
Net increase (decrease) in net assets from operations |
(39,362 | ) | 569,065 | 1,460,060 | 832,294 | |||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
1,729,138 | 855,110 | 1,772,585 | 1,382,605 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
1,033,848 | 1,193,533 | 695,538 | 651,571 | ||||||||||||
Withdrawals and death benefits (b) |
(229,518 | ) | (167,810 | ) | (365,085 | ) | (214,702 | ) | ||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
2,533,468 | 1,880,833 | 2,103,038 | 1,819,474 | ||||||||||||
Net increase (decrease) in net assets |
2,494,106 | 2,449,898 | 3,563,098 | 2,651,768 | ||||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
6,727,056 | 4,277,158 | 5,846,032 | 3,194,264 | ||||||||||||
End of period |
$ | 9,221,162 | $ | 6,727,056 | $ | 9,409,130 | $ | 5,846,032 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
457,345 | 328,577 | 128,085 | 84,774 | ||||||||||||
Units purchased |
122,432 | 62,124 | 35,561 | 32,971 | ||||||||||||
Units sold/transferred |
53,949 | 66,644 | 5,457 | 10,340 | ||||||||||||
End of period |
633,726 | 457,345 | 169,103 | 128,085 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-42 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
continued
Wanger Select Sub-Account | Wanger USA Sub-Account | |||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||
FROM OPERATIONS |
||||||||||||||||
Net investment income (loss) |
$ | (1,538 | ) | $ | 1,701 | $ | (1,363 | ) | $ | 62 | ||||||
Net realized gain (loss) |
164,270 | (21,435 | ) | 159,596 | 23,526 | |||||||||||
Net change in unrealized appreciation (depreciation) on investments |
379,915 | 227,487 | 72,999 | 130,878 | ||||||||||||
Net increase (decrease) in net assets from operations |
542,647 | 207,753 | 231,232 | 154,466 | ||||||||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||||||||||
Premiums (a) |
78,814 | 234,325 | 157,743 | 55,892 | ||||||||||||
Net contractowner transfers between Sub-Accounts |
(260,537 | ) | 230,708 | (495,150 | ) | (78,911 | ) | |||||||||
Withdrawals and death benefits (b) |
(69,722 | ) | (47,369 | ) | 2,116 | (66,500 | ) | |||||||||
Net increase (decrease) in net assets resulting from contractowner transactions |
(251,445 | ) | 417,664 | (335,291 | ) | (89,519 | ) | |||||||||
Net increase (decrease) in net assets |
291,202 | 625,417 | (104,059 | ) | 64,947 | |||||||||||
NET ASSETS |
||||||||||||||||
Beginning of period |
1,681,727 | 1,056,310 | 908,745 | 843,798 | ||||||||||||
End of period |
$ | 1,972,929 | $ | 1,681,727 | $ | 804,686 | $ | 908,745 | ||||||||
|
||||||||||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||||||||||
Beginning of period |
58,442 | 43,304 | 20,780 | 23,091 | ||||||||||||
Units purchased |
2,557 | 8,619 | 2,999 | 1,360 | ||||||||||||
Units sold/transferred |
(9,874 | ) | 6,519 | (9,943 | ) | (3,671 | ) | |||||||||
End of period |
51,125 | 58,442 | 13,836 | 20,780 | ||||||||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
See notes to financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-43 |
Statements of changes in net assets
concluded
TIAA-CREF Life Separate Account VA-1 n For the period or year ended
Western Asset Variable Global High Yield Bond Portfolio—Class I Sub-Account |
||||||||
December 31, 2013 | December 31, 2012 | |||||||
FROM OPERATIONS |
||||||||
Net investment income (loss) |
$ | 436,179 | $ | 340,434 | ||||
Net realized gain (loss) |
183,375 | 7,977 | ||||||
Net change in unrealized appreciation (depreciation) on investments |
(273,154 | ) | 289,177 | |||||
Net increase (decrease) in net assets from operations |
346,400 | 637,588 | ||||||
FROM CONTRACTOWNER TRANSACTIONS |
||||||||
Premiums (a) |
1,853,488 | 513,527 | ||||||
Net contractowner transfers between Sub-Accounts |
930,367 | 1,722,200 | ||||||
Withdrawals and death benefits (b) |
(347,507 | ) | (75,572 | ) | ||||
Net increase (decrease) in net assets resulting from contractowner transactions |
2,436,348 | 2,160,155 | ||||||
Net increase (decrease) in net assets |
2,782,748 | 2,797,743 | ||||||
NET ASSETS |
||||||||
Beginning of period |
5,226,677 | 2,428,934 | ||||||
End of period |
$ | 8,009,425 | $ | 5,226,677 | ||||
|
||||||||
CHANGES IN ACCUMULATION UNITS OUTSTANDING: |
||||||||
Beginning of period |
364,657 | 200,025 | ||||||
Units purchased |
130,768 | 38,748 | ||||||
Units sold/transferred |
32,083 | 125,884 | ||||||
End of period |
527,508 | 364,657 | ||||||
|
(a) | Amounts presented are net of premium tax charges. |
(b) | Amounts include payments for other daily and monthly fee and expense charges. |
B-44 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to financial statements |
TIAA-CREF Life Separate Account VA-1
Note 1—organization and significant accounting policies
TIAA-CREF Life Separate Account VA-1 (the “Separate Account”) was established by TIAA-CREF Life Insurance Company (“TIAA-CREF Life”) as a separate investment account under New York law on July 27, 1998 and is registered with the Securities and Exchange Commission (“Commission”) as a unit investment trust under the Investment Company Act of 1940, as amended (“1940 Act”). TIAA-CREF Life, which commenced operations as a legal reserve life insurance company under the insurance laws of the State of New York on December 18, 1996, is a wholly owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”), a legal reserve life insurance company which was established under the insurance laws of the State of New York in 1918.
Investors participate in the Separate Account by purchasing one of three different variable annuity contracts: the Personal Annuity Select and Single Premium Immediate Annuity (the “Original Contract”), the Lifetime Variable Select Annuity (the “Lifetime Contract”) and the Intelligent Variable Annuity (the “Intelligent VA”). Premiums received from the contracts are allocated to investment accounts, the (“Sub-Accounts”) of which some invest in the TIAA-CREF Life Funds (the “Funds”), an open-end management investment company registered with the Commission and managed by Teachers Advisors, Inc. (“Advisors”), a wholly owned indirect subsidiary of TIAA. Advisors is registered with the Commission as an investment adviser. The Original Contract currently offers 8 investment Sub-Account options, the Lifetime Contract currently offers 10 investment Sub-Account options and the Intelligent VA offers 55 investment Sub-Account options. Accumulation unit values are calculated daily for each investment account.
On November 1, 2007, the Intelligent VA was launched as an additional variable annuity contract funded through the Separate Account. Intelligent VA allows individual investors to accumulate funds on a tax-deferred basis for retirement or other long-term investment purposes, and to receive future payment based on the amounts accumulated as lifetime income or through other payment options.
Net assets allocated to contracts in the payout period are computed according to the Annuity 2000 Mortality Table with four year setbacks. The Annuity 2000 Mortality Table is used for determining the minimum standard of valuation for any individual annuity or pure endowment contract issued after April 1, 1998. The mortality risk is fully borne by TIAA-CREF Life and may result in additional amounts being transferred into the variable annuity account by TIAA-CREF Life to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company.
The following Sub-Accounts were added to the Separate Account:
Sub-Account | Inception Date | Commencement Date | ||||||
Credit Suisse Trust-Commodity Return Strategy Portfolio |
November 1, 2013 | November 26, 2013 | ||||||
DFA VA Global Moderate Allocation Portfolio |
November 1, 2013 | — | ||||||
PIMCO VIT Commodity Real Return Strategy Portfolio- Inst. Class |
November 1, 2013 | November 20, 2013 | ||||||
PIMCO VIT Emerging Markets Bond Portfolio- Inst. Class |
November 1, 2013 | December 9, 2013 |
On February 18, 2013, the MFS Growth Series-Initial Class and the Janus Aspen Overseas Portfolio-Institutional Shares closed to new investors.
Effective April 29, 2013, the Legg Mason Clearbridge Variable Aggressive Growth Portfolio—Class 1 and the Legg Mason Clearbridge Variable Small Cap Growth Portfolio—Class 1 changed their names to the ClearBridge Variable Aggressive Growth Portfolio—Class 1 and the ClearBridge Variable Small Cap Growth Portfolio—Class 1, respectively.
Effective May 1, 2013, the PVC MidCap Blend Account-Class 1 changed its name to the PVC Midcap Account-Class 1.
On August 15, 2013, the PVC MidCap Account-Class 1 closed to new investors.
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which may require the use of estimates made by management and the evaluation of subsequent events. Actual results may differ from those estimates. The following is a summary of the significant accounting policies consistently followed by the Sub-Accounts.
Security valuation: All investments in securities are recorded at their estimated fair value as described in the valuation of investments note to the financial statements.
Investments and investment income: Security transactions are accounted for as of the trade date for financial reporting purposes. Dividend income and capital gain distributions are recorded on the ex-dividend date. Realized gains and losses on security transactions are based on the specific identification method.
Income taxes: TIAA-CREF Life Separate Account VA-1 is a separate account of TIAA-CREF Life, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code. The Separate Account should incur no federal income tax liability. Under the rules of taxation applicable to life insurance companies, the Separate Account’s Accumulation and Annuity Funds for participants will generally be treated as life insurance reserves; therefore, any increase in such reserves will be deductible. The Separate Account’s federal income tax returns are generally subject to examination for a period of three fiscal years after filed. State and local tax returns may be subject to examination for an additional period of time depending on the jurisdiction. Management has analyzed the Separate Account’s tax positions taken for all open federal income tax years and has concluded that no provision for federal income tax is required in the Separate Account’s financial statements.
Single Premium Immediate Annuities n Statement of Additional Information | B-45 |
Notes to financial statements
TIAA-CREF Life Separate Account VA-1
New accounting pronouncement: In June 2013, the Financial Accounting Standards Board issued Accounting Standard Update No. 2013-08 Financial Services—Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements (the “Update”). The Update modifies the criteria used in determining an investment company under U.S. GAAP and establishes certain measurement and disclosure requirements. The Update establishes that an entity regulated under the 1940 Act is automatically an investment company under U.S. GAAP. The Update is effective for interim and annual reporting periods beginning after December 15, 2013. The Separate Account expects to adopt these new disclosure requirements for the December 31, 2014 annual report. Management has reviewed the new requirements and has determined the adoption of the Update will not have a material impact on the Separate Account’s financial statements and notes disclosures.
Note 2—valuation of investments
U.S. GAAP establishes a hierarchy that categorizes market inputs to valuation methods. The three levels of inputs are:
Ÿ | Level 1—quoted prices in active markets for identical securities |
Ÿ | Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, credit spreads, etc.) |
Ÿ | Level 3—significant unobservable inputs (including the Sub-Accounts’ own assumptions in determining the fair value of investments) |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
A description of the valuation techniques applied to the Sub-Accounts’ investments follows:
Investments in registered investment companies: These investments are valued at their net asset value on the valuation date. These investments are categorized in Level 1 of the fair value hierarchy.
Transfers between levels are recognized at the end of the reporting period. For the year ending December 31, 2013, there were no transfers between levels by the Sub-Accounts. As of December 31, 2013, all of the investments in the Sub-Accounts were valued based on Level 1 inputs.
Note 3—expense charges and affiliates
TIAA-CREF Life provides all administrative services for the Sub-Accounts. Daily charges are deducted from the net assets of the Sub-Accounts for services required to administer the Separate Account and the contracts, and to cover certain insurance risks borne by TIAA-CREF Life. The total expenses as presented in the Statements of Operations is net of fee waivers. The following are the current administrative expense charges for the contracts:
Administrative expense
(as a percentage of average account value)
Intelligent Variable Annuity |
Personal Annuity Select |
Lifetime Variable Select |
||||||||||
Maximum contractual fee |
0.30 | % | 0.20 | % | 0.20 | % | ||||||
Fee waiver |
0.20 | % | 0.00 | % | 0.00 | % | ||||||
Current fee |
0.10 | % | 0.20 | % | 0.20 | % |
TIAA-CREF Life imposes a daily charge that is deducted from the net assets of the Sub-Accounts for bearing certain mortality and expense risks in connection with the contracts. The following are the mortality and expense risk charges for the contracts:
Mortality and expense risk charges
(as a percentage of average account value)
Personal Annuity Select |
Lifetime Variable Select |
|||||||
Maximum contractual fee |
1.00 | % | 1.00 | % | ||||
Fee waiver |
0.60 | % | 0.60 | % | ||||
Current fee |
0.40 | % | 0.40 | % |
B-46 | Statement of Additional Information n Single Premium Immediate Annuities |
continued
Intelligent Variable Annuity
Maximum contractual fee |
Fee waiver |
Current fee |
||||||||||
If accumulation value is less than $100,000 |
0.40 | % | 0.00 | % | 0.40 | % | ||||||
If accumulation value is between $100,000-$500,000 |
0.25 | % | 0.00 | % | 0.25 | % | ||||||
If accumulation value is greater than $500,000 |
0.15 | % | 0.00 | % | 0.15 | % | ||||||
After the first 10 contract years |
0.00 | % | 0.00 | % | 0.00 | % |
There are other daily, monthly, and annual fees and expenses that a contractowner will pay when buying, owning and surrendering the policy. These fees and expenses include as follows:
Additional expense charges | Intelligent Variable Annuity |
Personal Annuity Select |
Lifetime Variable Select |
|||||||||
Maximum annual contract fees (waived for accumulation values > $25,000) |
$ | 25 | $ | 0 | $ | 25 | ||||||
Optional guaranteed minimum death benefit charge |
0.10% | None | None | |||||||||
Optional guaranteed lifetime withdrawal benefit charge |
1.20% | None | None | |||||||||
Premium taxes (a) |
1.00% to 3.50% | 1.00% to 3.50% | 1.00% to 3.50% | |||||||||
Maximum transfer fee |
$ | 0 | $ | 0 | $ | 25 |
(a) | Only applicable in certain states. |
The Sub-Accounts indirectly pay expenses of the underlying funds. With respect to investments in the Funds, these include management fees paid to Advisors. The contracts are distributed by TIAA-CREF Individual & Institutional Services, LLC (“Services”), a subsidiary of TIAA. Services may also enter into selling agreements with third parties to distribute the contracts.
Note 4—investments
Purchases and sales of securities for the Sub-Accounts for the year ended December 31, 2013 were as follows:
Sub-Account | Purchases | Sales | ||||||
TIAA-CREF Life Bond |
$ | 34,294,962 | $ | 23,443,872 | ||||
TIAA-CREF Life Growth Equity |
12,718,895 | 11,166,601 | ||||||
TIAA-CREF Life Growth & Income |
28,589,079 | 14,004,210 | ||||||
TIAA-CREF Life International Equity |
13,680,557 | 11,538,935 | ||||||
TIAA-CREF Life Large-Cap Value |
23,475,325 | 12,519,674 | ||||||
TIAA-CREF Life Money Market |
81,044,864 | 75,786,720 | ||||||
TIAA-CREF Life Real Estate |
11,865,854 | 13,541,753 | ||||||
TIAA-CREF Life Small-Cap Equity |
18,557,304 | 6,317,200 | ||||||
TIAA-CREF Life Social Choice |
11,550,449 | 5,758,394 | ||||||
TIAA-CREF Life Stock Index |
33,602,799 | 25,361,582 | ||||||
Calamos Growth and Income Portfolio |
1,088,335 | 845,953 | ||||||
ClearBridge Variable Aggressive Growth Portfolio—Class I |
3,727,523 | 2,182,521 | ||||||
ClearBridge Variable Small Cap Growth Portfolio—Class I |
2,596,765 | 1,205,001 | ||||||
Credit Suisse Trust-Commodity Return Strategy Portfolio |
2,224 | 1 | ||||||
DFA VA Global Bond Portfolio |
2,859,038 | 491,222 | ||||||
DFA VA International Small Portfolio |
1,652,510 | 320,839 | ||||||
DFA VA International Value Portfolio |
3,018,731 | 522,867 | ||||||
DFA VA Short-Term Fixed Portfolio |
7,526,015 | 2,319,247 | ||||||
DFA VA US Large Value Portfolio |
4,350,557 | 900,320 | ||||||
DFA VA US Targeted Value Portfolio |
3,049,448 | 817,928 | ||||||
Delaware VIP Diversified Income Series—Standard Class |
18,248,659 | 6,529,522 | ||||||
Delaware VIP International Value Equity Series—Standard Class |
8,030,104 | 2,293,805 | ||||||
Delaware VIP Small Cap Value Series—Standard Class |
5,025,730 | 1,704,801 | ||||||
Franklin Income Securities Fund—Class 1 |
4,524,937 | 2,594,880 | ||||||
Franklin Small-Mid Cap Growth Securities Fund—Class 1 |
2,437,054 | 1,084,623 | ||||||
ING Clarion Global Real Estate Portfolio—Class I |
3,616,277 | 1,343,661 | ||||||
Janus Aspen Forty Portfolio—Institutional Shares |
902,700 | 1,505,634 | ||||||
Janus Aspen Overseas Portfolio—Institutional Shares |
684,072 | 1,722,553 | ||||||
Janus Aspen Perkins Mid Cap Value Portfolio—Institutional Shares |
2,500,460 | 2,109,855 | ||||||
MFS Growth Series—Initial Class |
235,473 | 207,410 | ||||||
MFS Global Equity Series—Initial Class |
2,512,977 | 1,425,745 | ||||||
MFS Investors Growth Stock Series—Initial Class |
3,046,972 | 1,218,440 | ||||||
MFS Utilities Series—Initial Class |
1,767,842 | 885,083 |
Single Premium Immediate Annuities n Statement of Additional Information | B-47 |
Notes to financial statements
TIAA-CREF Life Separate Account VA-1 |
Sub-Account | Purchases | Sales | ||||||
Mutual Shares Securities Fund—Class 1 |
856,034 | 529,361 | ||||||
Neuberger Berman Advisers Management Trust Large Cap Value Portfolio—I Class |
893,241 | 422,469 | ||||||
Neuberger Berman Advisers Management Trust Mid Cap Intrinsic Value Portfolio—I Class |
5,425,590 | 1,670,347 | ||||||
PIMCO VIT All Asset Portfolio—Institutional Class |
3,944,764 | 6,490,931 | ||||||
PIMCO VIT Commodity Real Return Strategy Portfolio—Inst. Class |
152,894 | 7,032 | ||||||
PIMCO VIT Emerging Markets Bond Portfolio—Inst. Class |
4,295 | 4,298 | ||||||
PIMCO VIT Global Bond Portfolio (Unhedged)—Institutional Class |
1,641,045 | 1,950,095 | ||||||
PIMCO VIT Real Return Portfolio—Institutional Class |
15,480,194 | 12,156,616 | ||||||
Prudential Series Fund-Jennison 20/ 20 Focus Portfolio—Class II |
4,301,926 | 1,282,857 | ||||||
Prudential Series Fund-Natural Resources Portfolio—Class II |
1,217,710 | 1,856,347 | ||||||
Prudential Series Fund-Value Portfolio—Class II |
1,724,619 | 2,224,794 | ||||||
PVC Equity Income Account—Class 1 |
13,087,051 | 4,959,356 | ||||||
PVC MidCap Account—Class 1 |
4,599,651 | 2,107,496 | ||||||
Royce Capital Fund Micro-Cap Portfolio—Investment Class |
99,767 | 521,321 | ||||||
Royce Capital Fund Small-Cap Portfolio—Investment Class |
2,245,798 | 1,449,643 | ||||||
T. Rowe Price® Limited-Term Bond Portfolio |
13,732,781 | 3,703,093 | ||||||
Templeton Developing Markets Securities Fund—Class 1 |
5,376,943 | 2,716,036 | ||||||
Wanger International |
4,642,992 | 1,886,696 | ||||||
Wanger Select |
717,652 | 943,749 | ||||||
Wanger USA |
936,871 | 1,176,797 | ||||||
Western Asset Variable Global High Yield Bond Portfolio—Class I |
6,696,123 | 3,823,596 |
Note 5—condensed financial information
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
TIAA-CREF Life Bond Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 3,051 | $36.79 to $37.45 | $36.01 to $36.78 | $110,902 | 2.49% | 0.25% to 0.60% | (2.13)% to (1.79)% | |||||||||||||||||||||||||
2012 | 2,838 | $34.62 to $35.12 | $36.79 to $37.45 | $105,123 | 3.88% | 0.25% to 0.60% | 6.27% to 6.65% | |||||||||||||||||||||||||
2011 | 2,404 | $32.76 to $33.11 | $34.62 to $35.12 | $83,638 | 3.57% | 0.25% to 0.60% | 5.68% to 6.05% | |||||||||||||||||||||||||
2010 | 2,074 | $30.83 to $31.05 | $32.76 to $33.11 | $68,174 | 3.70% | 0.25% to 0.60% | 6.27% to 6.64% | |||||||||||||||||||||||||
2009 | 1,668 | $28.87 to $28.98 | $30.83 to $31.05 | $51,508 | 4.79% | 0.25% to 0.60% | 6.76% to 7.14% | |||||||||||||||||||||||||
TIAA-CREF Life Growth Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 2,079 | $19.27 to $19.63 | $26.81 to $27.39 | $58,173 | 0.28% | 0.25% to 0.60% | 39.10% to 39.59% | |||||||||||||||||||||||||
2012 | 2,016 | $16.57 to $16.82 | $19.27 to $19.63 | $40,297 | 0.68% | 0.25% to 0.60% | 16.29% to 16.70% | |||||||||||||||||||||||||
2011 | 2,264 | $16.37 to $16.55 | $16.57 to $16.82 | $38,811 | 0.28% | 0.25% to 0.60% | 1.24% to 1.60% | |||||||||||||||||||||||||
2010 | 2,101 | $14.52 to $14.63 | $16.37 to $16.55 | $35,506 | 0.48% | 0.25% to 0.60% | 12.74% to 13.13% | |||||||||||||||||||||||||
2009 | 2,304 | $10.78 to $10.83 | $14.52 to $14.63 | $34,383 | 0.97% | 0.25% to 0.60% | 34.66% to 35.13% | |||||||||||||||||||||||||
TIAA-CREF Life Growth & Income Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 2,092 | $34.11 to $34.73 | $45.57 to $46.55 | $102,273 | 1.13% | 0.25% to 0.60% | 33.58% to 34.04% | |||||||||||||||||||||||||
2012 | 1,959 | $29.48 to $29.90 | $34.11 to $34.73 | $71,578 | 1.82% | 0.25% to 0.60% | 15.73% to 16.14% | |||||||||||||||||||||||||
2011 | 1,890 | $28.80 to $29.11 | $29.48 to $29.90 | $58,500 | 1.09% | 0.25% to 0.60% | 2.35% to 2.71% | |||||||||||||||||||||||||
2010 | 1,865 | $25.55 to $25.74 | $28.80 to $29.11 | $55,502 | 1.30% | 0.25% to 0.60% | 12.73% to 13.13% | |||||||||||||||||||||||||
2009 | 1,957 | $20.12 to $20.20 | $25.55 to $25.74 | $51,421 | 1.77% | 0.25% to 0.60% | 26.99% to 27.44% | |||||||||||||||||||||||||
TIAA-CREF Life International Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 2,878 | $24.41 to $24.85 | $30.13 to $30.78 | $90,184 | 2.46% | 0.25% to 0.60% | 23.41% to 23.85% | |||||||||||||||||||||||||
2012 | 2,867 | $18.71 to $18.98 | $24.41 to $24.85 | $72,464 | 1.76% | 0.25% to 0.60% | 30.49% to 30.95% | |||||||||||||||||||||||||
2011 | 2,995 | $24.73 to $24.99 | $18.71 to $18.98 | $57,557 | 1.61% | 0.25% to 0.60% | (24.33)% to (24.07)% | |||||||||||||||||||||||||
2010 | 3,216 | $20.79 to $20.94 | $24.73 to $24.99 | $81,166 | 1.40% | 0.25% to 0.60% | 18.92% to 19.34% | |||||||||||||||||||||||||
2009 | 3,248 | $15.88 to $15.94 | $20.79 to $20.94 | $68,666 | 3.93% | 0.25% to 0.60% | 30.95% to 31.41% |
B-48 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
TIAA-CREF Life Large-Cap Value Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 915 | $50.83 to $51.74 | $67.87 to $69.33 | $64,869 | 2.04% | 0.25% to 0.60% | 33.51% to 33.98% | |||||||||||||||||||||||||
2012 | 803 | $42.57 to $43.18 | $50.83 to $51.74 | $42,658 | 1.97% | 0.25% to 0.60% | 19.42% to 19.84% | |||||||||||||||||||||||||
2011 | 819 | $45.54 to $46.03 | $42.57 to $43.18 | $36,205 | 1.54% | 0.25% to 0.60% | (6.51)% to (6.19)% | |||||||||||||||||||||||||
2010 | 824 | $38.70 to $38.98 | $45.53 to $46.03 | $38,594 | 1.61% | 0.25% to 0.60% | 17.65% to 18.06% | |||||||||||||||||||||||||
2009 | 831 | $29.62 to $29.73 | $38.70 to $38.98 | $32,932 | 1.96% | 0.25% to 0.60% | 30.67% to 31.13% | |||||||||||||||||||||||||
TIAA-CREF Life Money Market Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 4,903 | $11.38 to $11.60 | $11.32 to $11.57 | $56,030 | 0.00% | 0.25% to 0.60% | (0.59)% to (0.24)% | |||||||||||||||||||||||||
2012 | 4,427 | $11.45 to $11.62 | $11.38 to $11.60 | $50,772 | 0.02% | 0.25% to 0.60% | (0.58)% to (0.23)% | |||||||||||||||||||||||||
2011 | 4,580 | $11.52 to $11.65 | $11.45 to $11.62 | $52,722 | 0.03% | 0.25% to 0.60% | (0.57)% to (0.22)% | |||||||||||||||||||||||||
2010 | 4,835 | $11.57 to $11.66 | $11.52 to $11.65 | $55,889 | 0.12% | 0.25% to 0.60% | (0.48)% to (0.13)% | |||||||||||||||||||||||||
2009 | 5,908 | $11.58 to $11.63 | $11.57 to $11.66 | $68,467 | 0.58% | 0.25% to 0.60% | (0.06)% to 0.29% | |||||||||||||||||||||||||
TIAA-CREF Life Real Estate Securities Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 692 | $67.94 to $69.16 | $68.81 to $70.29 | $49,958 | 1.69% | 0.25% to 0.60% | 1.28% to 1.63% | |||||||||||||||||||||||||
2012 | 733 | $57.06 to $57.87 | $67.94 to $69.16 | $51,699 | 1.89% | 0.25% to 0.60% | 19.07% to 19.49% | |||||||||||||||||||||||||
2011 | 730 | $53.78 to $54.36 | $57.06 to $57.87 | $42,774 | 1.24% | 0.25% to 0.60% | 6.09% to 6.46% | |||||||||||||||||||||||||
2010 | 714 | $41.25 to $41.55 | $53.78 to $54.36 | $39,418 | 2.38% | 0.25% to 0.60% | 30.38% to 30.84% | |||||||||||||||||||||||||
2009 | 645 | $33.17 to $33.29 | $41.25 to $41.55 | $27,414 | 4.30% | 0.25% to 0.60% | 24.36% to 24.79% | |||||||||||||||||||||||||
TIAA-CREF Life Small-Cap Equity Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 593 | $58.23 to $59.27 | $80.95 to $82.69 | $49,746 | 0.72% | 0.25% to 0.60% | 39.03% to 39.52% | |||||||||||||||||||||||||
2012 | 528 | $51.37 to $52.11 | $58.23 to $59.27 | $31,876 | 1.11% | 0.25% to 0.60% | 13.34% to 13.74% | |||||||||||||||||||||||||
2011 | 578 | $53.97 to $54.55 | $51.37 to $52.11 | $30,563 | 0.53% | 0.25% to 0.60% | (4.81)% to (4.47)% | |||||||||||||||||||||||||
2010 | 631 | $42.57 to $42.88 | $53.97 to $54.55 | $34,648 | 0.83% | 0.25% to 0.60% | 26.78% to 27.23% | |||||||||||||||||||||||||
2009 | 529 | $33.52 to $33.65 | $42.57 to $42.88 | $22,878 | 1.43% | 0.25% to 0.60% | 26.99% to 27.43% | |||||||||||||||||||||||||
TIAA-CREF Life Social Choice Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 960 | $32.96 to $33.55 | $43.95 to $44.89 | $44,113 | 1.69% | 0.25% to 0.60% | 33.33% to 33.80% | |||||||||||||||||||||||||
2012 | 822 | $29.09 to $29.50 | $32.96 to $33.55 | $28,360 | 2.02% | 0.25% to 0.60% | 13.33% to 13.72% | |||||||||||||||||||||||||
2011 | 794 | $29.27 to $29.59 | $29.09 to $29.50 | $23,951 | 1.79% | 0.25% to 0.60% | (0.64)% to (0.29)% | |||||||||||||||||||||||||
2010 | 741 | $25.39 to $25.52 | $29.27 to $29.59 | $22,360 | 1.88% | 0.25% to 0.60% | 15.32% to 15.72% | |||||||||||||||||||||||||
2009 | 759 | $19.27 to $19.35 | $25.39 to $25.52 | $19,768 | 2.24% | 0.35% to 0.60% | 31.72% to 32.05% | |||||||||||||||||||||||||
TIAA-CREF Life Stock Index Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 4,822 | $39.72 to $40.44 | $52.68 to $53.82 | $265,649 | 1.94% | 0.25% to 0.60% | 32.63% to 33.10% | |||||||||||||||||||||||||
2012 | 4,740 | $34.35 to $34.84 | $39.72 to $40.44 | $196,354 | 2.20% | 0.25% to 0.60% | 15.65% to 16.06% | |||||||||||||||||||||||||
2011 | 4,839 | $34.23 to $34.60 | $34.35 to $34.84 | $172,500 | 1.86% | 0.25% to 0.60% | 0.35% to 0.70% | |||||||||||||||||||||||||
2010 | 4,807 | $29.48 to $29.70 | $34.23 to $34.60 | $170,557 | 1.87% | 0.25% to 0.60% | 16.10% to 16.50% | |||||||||||||||||||||||||
2009 | 4,853 | $23.11 to $23.20 | $29.48 to $29.70 | $147,271 | 2.05% | 0.25% to 0.60% | 27.59% to 28.04% | |||||||||||||||||||||||||
Calamos Growth and Income Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 208 | $17.08 to $17.38 | $19.76 to $20.18 | $4,162 | 1.10% | 0.25% to 0.60% | 15.70% to 16.11% | |||||||||||||||||||||||||
2012 | 207 | $15.84 to $16.07 | $17.08 to $17.38 | $3,576 | 2.01% | 0.25% to 0.60% | 7.78% to 8.16% | |||||||||||||||||||||||||
2011 | 221 | $16.24 to $16.42 | $15.84 to $16.07 | $3,529 | 1.47% | 0.25% to 0.60% | (2.46)% to (2.12)% | |||||||||||||||||||||||||
2010 | 203 | $14.65 to $14.75 | $16.24 to $16.42 | $3,325 | 1.90% | 0.25% to 0.60% | 10.92% to 11.31% | |||||||||||||||||||||||||
2009 | 118 | $10.57 to $10.61 | $14.65 to $14.75 | $1,732 | 2.76% | 0.25% to 0.60% | 38.59% to 39.07% | |||||||||||||||||||||||||
ClearBridge Variable Aggressive Growth Portfolio—Class I Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 120 | $19.41 to $19.75 | $28.51 to $29.12 | $3,464 | 0.39% | 0.25% to 0.60% | 46.90% to 47.41% | |||||||||||||||||||||||||
2012 | 67 | $16.44 to $16.68 | $19.41 to $19.75 | $1,315 | 0.41% | 0.25% to 0.60% | 18.01% to 18.43% | |||||||||||||||||||||||||
2011 | 65 | $16.14 to $16.32 | $16.44 to $16.68 | $1,071 | 0.20% | 0.25% to 0.60% | 1.86% to 2.22% | |||||||||||||||||||||||||
2010 | 44 | $12.99 to $13.09 | $16.14 to $16.32 | $711 | 0.19% | 0.25% to 0.60% | 24.26% to 24.70% | |||||||||||||||||||||||||
2009 | 17 | $9.72 | $12.99 to $13.09 | $217 | 0.00% | 0.25% to 0.60% | 33.76% to 34.23% |
Single Premium Immediate Annuities n Statement of Additional Information | B-49 |
Notes to financial statements
TIAA-CREF Life Separate Account VA-1 |
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
ClearBridge Variable Small Cap Growth Portfolio—Class I Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 76 | $19.92 to $20.28 | $29.12 to $29.75 | $2,232 | 0.04% | 0.25% to 0.60% | 46.17% to 46.68% | |||||||||||||||||||||||||
2012 | 27 | $16.78 to $17.02 | $19.92 to $20.28 | $542 | 0.86% | 0.25% to 0.60% | 18.71% to 19.13% | |||||||||||||||||||||||||
2011 | 21 | $16.65 to $16.83 | $16.78 to $17.02 | $350 | 0.00% | 0.25% to 0.60% | 0.78% to 1.13% | |||||||||||||||||||||||||
2010 | 193 | $13.38 to $13.48 | $16.65 to $16.83 | $3,235 | 0.00% | 0.25% to 0.60% | 24.43 to 24.87% | |||||||||||||||||||||||||
2009 | 10 | $9.43 to $9.45 | $13.38 to $13.48 | $134 | 0.00% | 0.25% to 0.60% | 41.92% to 42.42% | |||||||||||||||||||||||||
Credit Suisse Trust—Commodity Return Strategy Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | (r) | 89 | $25.00 | $25.31 | $2 | 0.00% | 0.29% | 1.26% | ||||||||||||||||||||||||
DFA VA Global Bond Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 107 | $25.61 to $25.67 | $25.36 to $25.51 | $2,719 | 0.78% | 0.25% to 0.60% | (0.95)% to (0.60)% | |||||||||||||||||||||||||
2012 | (k) | 16 | $25.07 | $25.61 to $25.67 | $405 | 3.04% | 0.25% to 0.60% | (0.12)% to 2.23% | ||||||||||||||||||||||||
DFA VA International Small Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 57 | $26.18 to $26.24 | $33.06 to $33.26 | $1,888 | 3.95% | 0.25% to 0.60% | 20.13% to 26.75% | |||||||||||||||||||||||||
2012 | (l) | 15 | $24.28 | $26.18 to $26.24 | $390 | 4.68% | 0.25% to 0.60% | 5.03% to 15.18% | ||||||||||||||||||||||||
DFA VA International Value Portfolio Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 100 | $27.06 to $27.12 | $32.72 to $32.91 | $3,276 | 4.32% | 0.25% to 0.60% | 19.28% to 21.35% | |||||||||||||||||||||||||
2012 | (m) | 15 | $22.87 | $27.06 to $27.12 | $417 | 6.75% | 0.25% to 0.60% | 3.38% to 18.40% | ||||||||||||||||||||||||
DFA VA Short-Term Fixed Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 234 | $24.99 to $25.05 | $24.90 to $25.05 | $5,855 | 0.50% | 0.25% to 0.60% | (0.35)% to 0% | |||||||||||||||||||||||||
2012 | (n) | 27 | $24.99 | $24.99 to $25.05 | $664 | 1.53% | 0.25% to 0.60% | (0.10)% to 0.17% | ||||||||||||||||||||||||
DFA VA US Large Value Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 108 | $27.14 to $27.21 | $37.99 to $38.21 | $4,116 | 2.48% | 0.25% to 0.60% | 25.18% to 40.47% | |||||||||||||||||||||||||
2012 | (m) | 14 | $23.57 | $27.14 to $27.21 | $389 | 4.42% | 0.25% to 0.60% | 1.56% to 15.22% | ||||||||||||||||||||||||
DFA VA US Targeted Value Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 78 | $27.04 to $27.11 | $38.88 to $39.10 | $3,036 | 1.38% | 0.25% to 0.60% | 26.94% to 44.26% | |||||||||||||||||||||||||
2012 | (l) | 12 | $24.30 | $27.04 to $27.11 | $328 | 2.33% | 0.25% to 0.60% | 2.30% to 11.35% | ||||||||||||||||||||||||
Delaware VIP Diversified Income Series—Standard Class Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 2,755 | $14.81 to $15.07 | $14.53 to $14.84 | $40,573 | 2.23% | 0.25% to 0.60% | (1.85)% to (1.51)% | |||||||||||||||||||||||||
2012 | 2,037 | $13.90 to $14.10 | $14.81 to $15.07 | $30,504 | 4.33% | 0.25% to 0.60% | 6.55% to 6.93% | |||||||||||||||||||||||||
2011 | 1,298 | $13.14 to $13.28 | $13.90 to $14.10 | $18,199 | 5.31% | 0.25% to 0.60% | 5.76% to 6.13% | |||||||||||||||||||||||||
2010 | 574 | $12.23 to $12.32 | $13.14 to $13.28 | $7,591 | 4.13% | 0.25% to 0.60% | 7.41% to 7.79% | |||||||||||||||||||||||||
2009 | 289 | $9.69 to $9.73 | $12.23 to $12.32 | $3,548 | 4.59% | 0.25% to 0.60% | 26.20% to 26.64% | |||||||||||||||||||||||||
Delaware VIP International Value Equity Series—Standard Class Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 1,011 | $12.09 to $12.31 | $14.76 to $15.08 | $15,139 | 1.30% | 0.25% to 0.60% | 22.05% to 22.48% | |||||||||||||||||||||||||
2012 | 603 | $10.56 to $10.71 | $12.09 to $12.31 | $7,380 | 2.29% | 0.25% to 0.60% | 14.51% to 14.91% | |||||||||||||||||||||||||
2011 | 436 | $12.42 to $12.55 | $10.56 to $10.71 | $4,654 | 1.24% | 0.25% to 0.60% | (14.95)% to (14.65)% | |||||||||||||||||||||||||
2010 | 502 | $11.26 to $11.35 | $12.42 to $12.55 | $6,292 | 3.55% | 0.25% to 0.60% | 10.26% to 10.65% | |||||||||||||||||||||||||
2009 | 224 | $8.41 to $8.44 | $11.26 to $11.35 | $2,538 | 2.76% | 0.25% to 0.60% | 33.92% to 34.39% | |||||||||||||||||||||||||
Delaware VIP Small Cap Value Series—Standard Class Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 219 | $38.19 to $38.88 | $50.68 to $51.77 | $11,296 | 0.65% | 0.25% to 0.60% | 32.71% to 33.17% | |||||||||||||||||||||||||
2012 | 155 | $33.73 to $34.22 | $38.19 to $38.88 | $5,993 | 0.84% | 0.25% to 0.60% | 13.22% to 13.62% | |||||||||||||||||||||||||
2011 | 136 | $34.39 to $34.76 | $33.73 to $34.22 | $4,659 | 0.52% | 0.25% to 0.60% | (1.92)% to (1.58)% | |||||||||||||||||||||||||
2010 | 130 | $26.16 to $26.35 | $34.39 to $34.76 | $4,524 | 0.45% | 0.25% to 0.60% | 31.48% to 31.94% | |||||||||||||||||||||||||
2009 | 28 | $19.96 to $20.04 | $26.16 to $26.35 | $746 | 0.90% | 0.25% to 0.60% | 31.04% to 31.50% |
B-50 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
Franklin Income Securities Fund—Class 1 Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 305 | $21.47 to $21.86 | $24.37 to $24.89 | $7,547 | 6.00% | 0.25% to 0.60% | 13.50% to 13.90% | |||||||||||||||||||||||||
2012 | 238 | $19.13 to $19.41 | $21.47 to $21.86 | $5,176 | 6.10% | 0.25% to 0.60% | 12.23% to 12.63% | |||||||||||||||||||||||||
2011 | 212 | $18.74 to $18.94 | $19.13 to $19.41 | $4,098 | 6.20% | 0.25% to 0.60% | 2.10% to 2.46% | |||||||||||||||||||||||||
2010 | 207 | $16.70 to $16.82 | $18.74 to $18.94 | $3,909 | 6.43% | 0.25% to 0.60% | 12.19% to 12.58% | |||||||||||||||||||||||||
2009 | 105 | $12.37 to $12.41 | $16.70 to $16.82 | $1,756 | 6.92% | 0.25% to 0.60% | 35.07% to 35.55% | |||||||||||||||||||||||||
Franklin Small-Mid Cap Growth Securities Fund—Class 1 Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 94 | $25.54 to $26.00 | $35.16 to $35.92 | $3,362 | 0.00% | 0.25% to 0.60% | 37.67% to 38.16% | |||||||||||||||||||||||||
2012 | 57 | $23.12 to $23.46 | $25.54 to $26.00 | $1,468 | 0.00% | 0.25% to 0.60% | 10.45% to 10.84% | |||||||||||||||||||||||||
2011 | 57 | $24.38 to $24.65 | $23.12 to $23.46 | $1,336 | 0.00% | 0.25% to 0.60% | (5.16)% to (4.83)% | |||||||||||||||||||||||||
2010 | 46 | $19.17 to $19.31 | $24.38 to $24.65 | $1,133 | 0.00% | 0.25% to 0.60% | 27.17% to 27.62% | |||||||||||||||||||||||||
2009 | 25 | $13.40 to $13.45 | $19.17 to $19.31 | $487 | 0.00% | 0.25% to 0.60% | 43.09% to 43.59% | |||||||||||||||||||||||||
ING Clarion Global Real Estate Portfolio—Class I Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 136 | $32.61 to $32.91 | $33.69 to $34.13 | $4,617 | 6.26% | 0.25% to 0.60% | 3.33% to 3.69% | |||||||||||||||||||||||||
2012 | 74 | $26.02 to $26.17 | $32.61 to $32.91 | $2,437 | 0.80% | 0.25% to 0.60% | 25.33% to 25.77% | |||||||||||||||||||||||||
2011 | 44 | $27.59 to $27.66 | $26.02 to $26.17 | $1,162 | 4.11% | 0.25% to 0.60% | (5.72)% to (5.39)% | |||||||||||||||||||||||||
2010 | (o) | 9 | $25.00 | $27.59 to $27.66 | $255 | 4.21% | 0.25% to 0.60% | 10.38% to 10.64% | ||||||||||||||||||||||||
Janus Aspen Forty Portfolio—Institutional Shares Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 80 | $40.45 to $41.17 | $52.76 to $53.89 | $4,297 | 0.69% | 0.25% to 0.60% | 30.44% to 30.90% | |||||||||||||||||||||||||
2012 | 94 | $32.77 to $33.24 | $40.45 to $41.17 | $3,854 | 0.77% | 0.25% to 0.60% | 23.41% to 23.85% | |||||||||||||||||||||||||
2011 | 76 | $35.33 to $35.72 | $32.77 to $33.24 | $2,519 | 0.40% | 0.25% to 0.60% | (7.25)% to (6.93)% | |||||||||||||||||||||||||
2010 | 59 | $33.30 to $33.54 | $35.33 to $35.72 | $2,110 | 0.38% | 0.25% to 0.60% | 6.11% to 6.48% | |||||||||||||||||||||||||
2009 | 44 | $22.89 to $22.98 | $33.30 to $33.54 | $1,480 | 0.04% | 0.25% to 0.60% | 45.46% to 45.97% | |||||||||||||||||||||||||
Janus Aspen Overseas Portfolio—Institutional Shares Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 48 | $52.66 to $53.60 | $59.97 to $61.26 | $2,905 | 2.82% | 0.25% to 0.60% | 13.88% to 14.28% | |||||||||||||||||||||||||
2012 | 68 | $46.69 to $47.36 | $52.66 to $53.60 | $3,625 | 0.66% | 0.25% to 0.60% | 12.79% to 13.18% | |||||||||||||||||||||||||
2011 | 92 | $69.25 to $69.99 | $46.69 to $47.36 | $4,338 | 0.58% | 0.25% to 0.60% | (32.57)% to (32.34)% | |||||||||||||||||||||||||
2010 | 81 | $55.60 to $56.00 | $69.25 to $69.99 | $5,627 | 0.74% | 0.25% to 0.60% | 24.56% to 24.99% | |||||||||||||||||||||||||
2009 | 50 | $31.15 to $31.27 | $55.60 to $56.00 | $2,794 | 0.63% | 0.25% to 0.60% | 78.49% to 79.11% | |||||||||||||||||||||||||
Janus Aspen Perkins Mid Cap Value Portfolio—Institutional Shares Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 340 | $19.86 to $20.22 | $24.90 to $25.43 | $8,593 | 1.25% | 0.25% to 0.60% | 25.34% to 25.78% | |||||||||||||||||||||||||
2012 | 333 | $17.98 to $18.24 | $19.86 to $20.22 | $6,689 | 1.02% | 0.25% to 0.60% | 10.47% to 10.86% | |||||||||||||||||||||||||
2011 | 261 | $18.58 to $18.78 | $17.98 to $18.24 | $4,741 | 0.84% | 0.25% to 0.60% | (3.22)% to (2.89)% | |||||||||||||||||||||||||
2010 | 178 | $16.16 to $16.28 | $18.58 to $18.78 | $3,324 | 0.79% | 0.25% to 0.60% | 14.97% to 15.37% | |||||||||||||||||||||||||
2009 | 207 | $12.16 to $12.21 | $16.16 to $16.28 | $3,370 | 0.72% | 0.25% to 0.60% | 32.90% to 33.36% | |||||||||||||||||||||||||
MFS Growth Series—Initial Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 30 | $28.21 to $28.71 | $38.37 to $39.20 | $1,154 | 0.96% | 0.25% to 0.60% | 36.03% to 36.51% | |||||||||||||||||||||||||
2012 | 29 | $24.18 to $24.42 | $28.21 to $28.71 | $816 | 0.00% | 0.25% to 0.60% | (1.50)% to 16.97% | |||||||||||||||||||||||||
2011 | 19 | $24.40 to $24.59 | $24.18 to $24.42 | $466 | 0.17% | 0.35% to 0.60% | (0.92)% to (0.67)% | |||||||||||||||||||||||||
2010 | 20 | $21.28 to $21.39 | $24.40 to $24.59 | $484 | 0.08% | 0.35% to 0.60% | 14.65% to 14.93% | |||||||||||||||||||||||||
2009 | 8 | $15.55 to $15.59 | $21.28 to $21.39 | $166 | 0.33% | 0.35% to 0.60% | 36.85% to 37.19% | |||||||||||||||||||||||||
MFS Global Equity Series—Initial Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 126 | $17.39 to $17.70 | $22.10 to $22.57 | $2,826 | 0.92% | 0.25% to 0.60% | 27.05% to 27.49% | |||||||||||||||||||||||||
2012 | 72 | $14.19 to $14.39 | $17.39 to $17.70 | $1,274 | 1.12% | 0.25% to 0.60% | 22.60% to 23.03% | |||||||||||||||||||||||||
2011 | 53 | $14.92 to $15.08 | $14.19 to $14.39 | $765 | 0.88% | 0.25% to 0.60% | (4.89)% to (4.56)% | |||||||||||||||||||||||||
2010 | 41 | $13.36 to $13.45 | $14.92 to $15.08 | $611 | 0.99% | 0.25% to 0.60% | 11.69% to 12.08% | |||||||||||||||||||||||||
2009 | 46 | $10.18 to $10.22 | $13.36 to $13.45 | $614 | 1.88% | 0.25% to 0.60% | 31.20% to 31.65% |
Single Premium Immediate Annuities n Statement of Additional Information | B-51 |
Notes to financial statements
TIAA-CREF Life Separate Account VA-1
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
MFS Investors Growth Stock Series—Initial Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 194 | $13.37 to $13.61 | $17.31 to $17.68 | $3,406 | 4.54% | 0.25% to 0.60% | 29.51% to 29.97% | |||||||||||||||||||||||||
2012 | 81 | $11.50 to $11.66 | $13.37 to $13.61 | $1,091 | 1.11% | 0.25% to 0.60% | 16.27% to 16.68% | |||||||||||||||||||||||||
2011 | 72 | $11.50 to $11.62 | $11.50 to $11.66 | $838 | 0.55% | 0.25% to 0.60% | (0.02)% to 0.33% | |||||||||||||||||||||||||
2010 | 75 | $10.29 to $10.34 | $11.50 to $11.62 | $864 | 0.41% | 0.25% to 0.60% | 11.80% to 12.19% | |||||||||||||||||||||||||
2009 | 37 | $7.41 to $7.44 | $10.29 to $10.34 | $384 | 0.75% | 0.35% to 0.60% | 38.72% to 39.07% | |||||||||||||||||||||||||
MFS Utilities Series—Initial Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 48 | $38.30 to $38.99 | $45.89 to $46.87 | $2,229 | 4.06% | 0.25% to 0.60% | 19.80% to 20.22% | |||||||||||||||||||||||||
2012 | 29 | $33.96 to $34.44 | $38.30 to $38.99 | $1,131 | 6.37% | 0.25% to 0.60% | 12.80% to 13.20% | |||||||||||||||||||||||||
2011 | 36 | $31.99 to $32.33 | $33.96 to $34.44 | $1,245 | 3.85% | 0.25% to 0.60% | 6.15% to 6.52% | |||||||||||||||||||||||||
2010 | 23 | $28.28 to $28.42 | $31.99 to $32.33 | $756 | 3.05% | 0.25% to 0.60% | 13.13% to 13.52% | |||||||||||||||||||||||||
2009 | 16 | $21.38 to $21.43 | $28.28 to $28.42 | $467 | 3.74% | 0.35% to 0.60% | 32.42% to 32.75% | |||||||||||||||||||||||||
Mutual Shares Securities Fund—Class 1 Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 95 | $20.01 to $20.36 | $25.56 to $26.11 | $2,464 | 2.28% | 0.25% to 0.60% | 27.76% to 28.21% | |||||||||||||||||||||||||
2012 | 84 | $17.56 to $17.81 | $20.01 to $20.36 | $1,695 | 2.34% | 0.25% to 0.60% | 13.92% to 14.32% | |||||||||||||||||||||||||
2011 | 70 | $17.81 to $18.00 | $17.56 to $17.81 | $1,248 | 2.87% | 0.25% to 0.60% | (1.38)% to (1.04)% | |||||||||||||||||||||||||
2010 | 55 | $16.07 to $16.19 | $17.81 to $18.00 | $990 | 1.75% | 0.25% to 0.60% | 10.80% to 11.19% | |||||||||||||||||||||||||
2009 | 44 | $12.80 to $12.84 | $16.07 to $16.19 | $705 | 2.20% | 0.25% to 0.60% | 25.60% to 26.03% | |||||||||||||||||||||||||
Neuberger Berman Advisers Management Trust Large Cap Value Portfolio—I Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 57 | $17.90 to $18.22 | $23.33 to $23.83 | $1,357 | 1.18% | 0.25% to 0.60% | 36.23% to 36.71% | |||||||||||||||||||||||||
2012 | 36 | $15.44 to $15.66 | $17.90 to $18.22 | $654 | 0.45% | 0.25% to 0.60% | 15.90% to 16.31% | |||||||||||||||||||||||||
2011 | 34 | $17.52 to $17.71 | $15.44 to $15.66 | $535 | 0.00% | 0.25% to 0.60% | (11.89)% to (11.58)% | |||||||||||||||||||||||||
2010 | 37 | $15.24 to $15.35 | $17.52 to $17.71 | $653 | 0.60% | 0.25% to 0.60% | 14.97% to 15.38% | |||||||||||||||||||||||||
2009 | 46 | $9.82 to $9.86 | $15.24 to $15.35 | $707 | 14.62% | 0.25% to 0.60% | 55.14% to 55.69% | |||||||||||||||||||||||||
Neuberger Berman Advisers Management Trust Mid Cap Intrinsic Value Portfolio—I Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 357 | $17.04 to $17.35 | $23.22 to $23.71 | $8,404 | 1.41% | 0.25% to 0.60% | 30.35% to 30.81% | |||||||||||||||||||||||||
2012 | 185 | $14.84 to $15.05 | $17.04 to $17.35 | $3,194 | 0.69% | 0.25% to 0.60% | 14.84% to 15.24% | |||||||||||||||||||||||||
2011 | 130 | $15.97 to $16.14 | $14.84 to $15.05 | $1,951 | 0.87% | 0.25% to 0.60% | (7.06)% to (6.73)% | |||||||||||||||||||||||||
2010 | 41 | $12.73 to $12.82 | $15.97 to $16.14 | $655 | 0.89% | 0.25% to 0.60% | 25.43% to 25.87% | |||||||||||||||||||||||||
2009 | 17 | $8.74 to $8.76 | $12.73 to $12.82 | $224 | 1.92% | 0.25% to 0.60% | 45.69% to 46.20% | |||||||||||||||||||||||||
PIMCO VIT All Asset Portfolio—Institutional Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 376 | $16.18 to $16.46 | $16.15 to $16.49 | $6,168 | 4.19% | 0.25% to 0.60% | (0.18)% to 0.17% | |||||||||||||||||||||||||
2012 | 555 | $14.14 to $14.34 | $16.18 to $16.46 | $9,104 | 6.58% | 0.25% to 0.60% | 14.42% to 14.82% | |||||||||||||||||||||||||
2011 | 295 | $13.93 to $14.08 | $14.14 to $14.34 | $4,204 | 7.78% | 0.25% to 0.60% | 1.47% to 1.82% | |||||||||||||||||||||||||
2010 | 169 | $12.37 to $12.46 | $13.93 to $14.08 | $2,376 | 7.35% | 0.25% to 0.60% | 12.64% to 13.03% | |||||||||||||||||||||||||
2009 | 118 | $10.22 to $10.25 | $12.37 to $12.46 | $1,464 | 10.76% | 0.25% to 0.60% | 21.01% to 21.43% | |||||||||||||||||||||||||
PIMCO VIT Commodity Real Return Strategy Portfolio—Inst. Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | (s) | 6 | $24.74 to $24.95 | $25.06 to $25.07 | $145 | 0.00% | 0.37% to 0.52% | 0.47% to 1.30% | ||||||||||||||||||||||||
PIMCO VIT Emerging Markets Bond Portfolio—Inst. Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | (t) | — | $24.43 | $24.60 | $— | 2.43% | 0.42% | 0.71% | ||||||||||||||||||||||||
PIMCO VIT Global Bond Portfolio (Unhedged)—Institutional Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 271 | $18.69 to $19.02 | $17.02 to $17.39 | $4,680 | 1.21% | 0.25% to 0.60% | (8.89)% to (8.57)% | |||||||||||||||||||||||||
2012 | 293 | $17.55 to $17.80 | $18.69 to $19.02 | $5,526 | 6.04% | 0.25% to 0.60% | 6.47% to 6.84% | |||||||||||||||||||||||||
2011 | 375 | $16.39 to $16.56 | $17.55 to $17.80 | $6,643 | 5.33% | 0.25% to 0.60% | 7.09% to 7.47% | |||||||||||||||||||||||||
2010 | 251 | $14.74 to $14.85 | $16.39 to $16.56 | $4,135 | 3.36% | 0.25% to 0.60% | 11.16% to 11.55% | |||||||||||||||||||||||||
2009 | 168 | $12.67 to $12.72 | $14.74 to $14.85 | $2,491 | 3.28% | 0.25% to 0.60% | 16.34% to 16.75% |
B-52 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
PIMCO VIT Real Return Portfolio—Institutional Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 2,053 | $17.85 to $18.17 | $16.13 to $16.48 | $33,580 | 1.98% | 0.25% to 0.60% | (9.63)% to (9.31)% | |||||||||||||||||||||||||
2012 | 1,903 | $16.49 to $16.72 | $17.85 to $18.17 | $34,367 | 6.42% | 0.25% to 0.60% | 8.27% to 8.65% | |||||||||||||||||||||||||
2011 | 1,531 | $14.83 to $14.99 | $16.49 to $16.72 | $25,467 | 5.02% | 0.25% to 0.60% | 11.18% to 11.57% | |||||||||||||||||||||||||
2010 | 1,213 | $13.78 to $13.88 | $14.83 to $14.99 | $18,112 | 2.54% | 0.25% to 0.60% | 7.62% to 8.01% | |||||||||||||||||||||||||
2009 | 863 | $11.69 to $11.74 | $13.78 to $13.88 | $11,946 | 3.10% | 0.25% to 0.60% | 17.86% to 18.28% | |||||||||||||||||||||||||
Prudential Series Fund—Jennison 20/20 Focus Portfolio—Class II Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 325 | $18.27 to $18.60 | $23.49 to $23.99 | $7,744 | 0.00% | 0.25% to 0.60% | 28.58% to 29.03% | |||||||||||||||||||||||||
2012 | 191 | $16.62 to $16.85 | $18.27 to $18.60 | $3,527 | 3.50% | 0.25% to 0.60% | 9.95% to 10.34% | |||||||||||||||||||||||||
2011 | 170 | $17.50 to $17.69 | $16.62 to $16.85 | $2,857 | 0.00% | 0.25% to 0.60% | (5.08)% to (4.74)% | |||||||||||||||||||||||||
2010 | 151 | $16.40 to $16.52 | $17.50 to $17.69 | $2,666 | 0.00% | 0.25% to 0.60% | 6.72% to 7.10% | |||||||||||||||||||||||||
2009 | 123 | $10.48 to $10.54 | $16.40 to $16.52 | $2,033 | 0.00% | 0.25% to 0.60% | 56.46% to 57.01% | |||||||||||||||||||||||||
Prudential Series Fund—Natural Resources Portfolio—Class II Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 47 | $53.80 to $54.76 | $58.69 to $59.95 | $2,785 | 0.00% | 0.25% to 0.60% | 9.10% to 9.48% | |||||||||||||||||||||||||
2012 | 58 | $55.75 to $56.55 | $53.80 to $54.76 | $3,155 | 8.05% | 0.25% to 0.60% | (3.50)% to (3.16)% | |||||||||||||||||||||||||
2011 | 54 | $69.54 to $70.29 | $55.75 to $56.55 | $3,064 | 0.00% | 0.25% to 0.60% | (19.83)% to (19.55)% | |||||||||||||||||||||||||
2010 | 45 | $54.88 to $55.27 | $69.54 to $70.29 | $3,176 | 0.06% | 0.25% to 0.60% | 26.72% to 27.16% | |||||||||||||||||||||||||
2009 | 32 | $31.29 to $31.46 | $54.88 to $55.27 | $1,756 | 0.24% | 0.25% to 0.60% | 75.36% to 75.97% | |||||||||||||||||||||||||
Prudential Series Fund—Value Portfolio—Class II Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 177 | $25.91 to $26.37 | $34.13 to $34.87 | $6,125 | 0.00% | 0.25% to 0.60% | 31.74% to 32.20% | |||||||||||||||||||||||||
2012 | 192 | $22.84 to $23.17 | $25.91 to $26.37 | $5,039 | 0.55% | 0.25% to 0.60% | 13.45% to 13.85% | |||||||||||||||||||||||||
2011 | 201 | $24.41 to $24.68 | $22.84 to $23.17 | $4,639 | 0.52% | 0.25% to 0.60% | (6.45)% to (6.12)% | |||||||||||||||||||||||||
2010 | 218 | $21.66 to $21.82 | $24.41 to $24.68 | $5,346 | 0.31% | 0.25% to 0.60% | 12.71% to 13.10% | |||||||||||||||||||||||||
2009 | 92 | $15.41 to $15.47 | $21.66 to $21.82 | $2,008 | 1.08% | 0.25% to 0.60% | 40.54% to 41.04% | |||||||||||||||||||||||||
PVC Equity Income Account—Class 1 Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 1,012 | $20.57 to $20.94 | $26.03 to $26.58 | $26,699 | 3.22% | 0.25% to 0.60% | 26.54% to 26.98% | |||||||||||||||||||||||||
2012 | 700 | $18.31 to $18.57 | $20.57 to $20.94 | $14,551 | 3.11% | 0.25% to 0.60% | 12.34% to 12.73% | |||||||||||||||||||||||||
2011 | 571 | $17.47 to $17.66 | $18.31 to $18.57 | $10,552 | 0.48% | 0.25% to 0.60% | 4.81% to 5.17% | |||||||||||||||||||||||||
2010 | 447 | $15.13 to $15.24 | $17.47 to $17.66 | $7,852 | 4.40% | 0.25% to 0.60% | 15.48% to 15.89% | |||||||||||||||||||||||||
2009 | 170 | $12.68 to $12.71 | $15.13 to $15.24 | $2,586 | 6.51% | 0.25% to 0.60% | (19.29)% to (19.71)% | |||||||||||||||||||||||||
PVC MidCap Account—Class 1 Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 223 | $21.48 to $21.86 | $28.59 to $29.20 | $6,463 | 1.66% | 0.25% to 0.60% | 33.13% to 33.59% | |||||||||||||||||||||||||
2012 | 135 | $18.09 to $18.35 | $21.48 to $21.86 | $2,926 | 0.83% | 0.25% to 0.60% | 18.73% to 19.15% | |||||||||||||||||||||||||
2011 | 102 | $16.80 to $16.99 | $18.09 to $18.35 | $1,862 | 0.00% | 0.25% to 0.60% | 7.64% to 8.02% | |||||||||||||||||||||||||
2010 | 67 | $13.62 to $13.72 | $16.80 to $16.99 | $1,140 | 2.45% | 0.25% to 0.60% | 23.36% to 23.79% | |||||||||||||||||||||||||
2009 | (p) | 50 | $13.12 to $13.20 | $13.62 to $13.72 | $684 | 0.00% | 0.25% to 0.60% | 3.84% to 3.91% | ||||||||||||||||||||||||
Royce Capital Fund Micro-Cap Portfolio—Investment Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 31 | $16.01 to $16.29 | $19.25 to $19.66 | $603 | 0.40% | 0.25% to 0.60% | 20.26% to 20.68% | |||||||||||||||||||||||||
2012 | 57 | $14.97 to $15.18 | $16.01 to $16.29 | $917 | 0.00% | 0.25% to 0.60% | 6.96% to 7.34% | |||||||||||||||||||||||||
2011 | 68 | $17.13 to $17.31 | $14.97 to $15.18 | $1,033 | 2.42% | 0.25% to 0.60% | (12.63)% to (12.32)% | |||||||||||||||||||||||||
2010 | 78 | $13.26 to $13.36 | $17.13 to $17.31 | $1,345 | 2.74% | 0.25% to 0.60% | 29.18% to 29.64% | |||||||||||||||||||||||||
2009 | 45 | $8.44 to $8.47 | $13.26 to $13.36 | $605 | 0.00% | 0.25% to 0.60% | 57.10% to 57.65% | |||||||||||||||||||||||||
Royce Capital Fund Small-Cap Portfolio—Investment Class Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 387 | $13.08 to $13.31 | $17.52 to $17.89 | $6,877 | 1.15% | 0.25% to 0.60% | 33.95% to 34.42% | |||||||||||||||||||||||||
2012 | 364 | $11.70 to $11.86 | $13.08 to $13.31 | $4,806 | 0.12% | 0.25% to 0.60% | 11.83% to 12.22% | |||||||||||||||||||||||||
2011 | 321 | $12.16 to $12.30 | $11.70 to $11.86 | $3,790 | 0.37% | 0.25% to 0.60% | (3.86)% to (3.52)% | |||||||||||||||||||||||||
2010 | 263 | $10.15 to $10.23 | $12.16 to $12.30 | $3,220 | 0.15% | 0.25% to 0.60% | 19.80% to 20.22% | |||||||||||||||||||||||||
2009 | 148 | $7.55 to $7.58 | $10.15 to $10.23 | $1,515 | 0.00% | 0.25% to 0.60% | 34.40% to 34.86% |
Single Premium Immediate Annuities n Statement of Additional Information | B-53 |
Notes to financial statements
TIAA-CREF Life Separate Account VA-1 |
For the period ended December 31 | ||||||||||||||||||||||||||||||||
Period | Accumulation units outstanding, end of period (000’s) |
Accumulation unit value, beginning of period lowest to highest |
Accumulation unit value, end of period lowest to highest |
Net assets, end of period (000’s) |
Ratio of investment income to average net assets (c)(f) |
Ratio of expenses to average net assets lowest to highest (a)(c)(g) |
Total return lowest to highest (b)(h) |
|||||||||||||||||||||||||
T. Rowe Price® Limited-Term Bond Portfolio Sub-Account |
| |||||||||||||||||||||||||||||||
2013 | 613 | $25.25 to $25.32 | $25.13 to $25.29 | $15,454 | 1.51% | 0.25% to 0.60% | (0.47)% to (0.12)% | |||||||||||||||||||||||||
2012 | (q) | 220 | $24.97 | $25.25 to $25.32 | $5,564 | 1.48% | 0.25% to 0.60% | 1.02% to 1.26% | ||||||||||||||||||||||||
Templeton Developing Markets Securities Fund—Class 1 Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 634 | $14.52 to $14.77 | $14.32 to $14.63 | $9,221 | 2.03% | 0.25% to 0.60% | (1.33)% to (0.98)% | |||||||||||||||||||||||||
2012 | 457 | $12.88 to $13.06 | $14.52 to $14.77 | $6,727 | 1.64% | 0.25% to 0.60% | 12.72% to 13.12% | |||||||||||||||||||||||||
2011 | 329 | $15.36 to $15.53 | $12.88 to $13.06 | $4,277 | 1.14% | 0.25% to 0.60% | (16.17)% to (15.88)% | |||||||||||||||||||||||||
2010 | 273 | $13.12 to $13.21 | $15.36 to $15.53 | $4,222 | 1.32% | 0.25% to 0.60% | 17.13% to 17.54% | |||||||||||||||||||||||||
2009 | 182 | $7.61 to $7.63 | $13.12 to $13.21 | $2,399 | 3.26% | 0.25% to 0.60% | 72.29% to 72.89% | |||||||||||||||||||||||||
Wanger International Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 169 | $45.13 to $45.94 | $54.89 to $56.07 | $9,409 | 2.73% | 0.25% to 0.60% | 21.64% to 22.06% | |||||||||||||||||||||||||
2012 | 128 | $37.35 to $37.88 | $45.13 to $45.94 | $5,846 | 1.47% | 0.25% to 0.60% | 20.83% to 21.26% | |||||||||||||||||||||||||
2011 | 85 | $44.01 to $44.48 | $37.35 to $37.88 | $3,194 | 4.82% | 0.25% to 0.60% | (15.13)% to (14.83)% | |||||||||||||||||||||||||
2010 | 34 | $35.44 to $35.70 | $44.01 to $44.48 | $1,496 | 2.75% | 0.25% to 0.60% | 24.17% to 24.61% | |||||||||||||||||||||||||
2009 | 21 | $23.80 to $23.87 | $35.44 to $35.70 | $748 | 3.13% | 0.25% to 0.60% | 48.89% to 49.41% | |||||||||||||||||||||||||
Wanger Select Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 51 | $28.46 to $28.97 | $38.07 to $38.89 | $1,973 | 0.29% | 0.25% to 0.60% | 33.77% to 34.24% | |||||||||||||||||||||||||
2012 | 58 | $24.17 to $24.51 | $28.46 to $28.97 | $1,682 | 0.49% | 0.25% to 0.60% | 17.75% to 18.16% | |||||||||||||||||||||||||
2011 | 43 | $29.54 to $29.85 | $24.17 to $24.51 | $1,056 | 1.86% | 0.25% to 0.60% | (18.17)% to (17.89)% | |||||||||||||||||||||||||
2010 | 36 | $23.48 to $23.65 | $29.54 to $29.85 | $1,085 | 0.49% | 0.25% to 0.60% | 25.81% to 26.25% | |||||||||||||||||||||||||
2009 | 46 | $14.21 to $14.25 | $23.48 to $23.65 | $1,078 | 0.00% | 0.25% to 0.60% | 65.19% to 65.77% | |||||||||||||||||||||||||
Wanger USA Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 14 | $43.11 to $43.88 | $57.32 to $58.55 | $805 | 0.18% | 0.25% to 0.60% | 23.85% to 33.42% | |||||||||||||||||||||||||
2012 | 21 | $36.14 to $36.65 | $43.11 to $43.88 | $909 | 0.33% | 0.25% to 0.60% | 19.30% to 19.72% | |||||||||||||||||||||||||
2011 | 23 | $37.67 to $38.08 | $36.14 to $36.65 | $844 | 0.00% | 0.25% to 0.60% | (4.07)% to (3.73)% | |||||||||||||||||||||||||
2010 | 18 | $30.72 to $30.95 | $37.67 to $38.08 | $695 | 0.00% | 0.25% to 0.60% | 22.61% to 23.04% | |||||||||||||||||||||||||
2009 | 14 | $21.73 to $21.81 | $30.72 to $30.95 | $430 | 0.00% | 0.25% to 0.60% | 41.38% to 41.87% | |||||||||||||||||||||||||
Western Asset Variable Global High Yield Bond Portfolio—Class I Sub-Account |
|
|||||||||||||||||||||||||||||||
2013 | 528 | $14.16 to $14.41 | $14.95 to $15.28 | $8,009 | 7.55% | 0.25% to 0.60% | 5.63% to 6.00% | |||||||||||||||||||||||||
2012 | 365 | $12.04 to $12.21 | $14.16 to $14.41 | $5,227 | 8.88% | 0.25% to 0.60% | 17.62% to 18.03% | |||||||||||||||||||||||||
2011 | 200 | $11.90 to $12.03 | $12.04 to $12.21 | $2,429 | 7.54% | 0.25% to 0.60% | 1.11% to 1.46% | |||||||||||||||||||||||||
2010 | 187 | $10.42 to $10.50 | $11.90 to $12.03 | $2,245 | 9.20% | 0.25% to 0.60% | 14.23 to 14.63% | |||||||||||||||||||||||||
2009 | 237 | $6.74 to $6.77 | $10.42 to $10.50 | $2,488 | 12.06% | 0.25% to 0.60% | 54.63% to 55.17% |
(a) | Does not include expenses of underlying TIAA-CREF Life Fund. |
(b) | Not annualized for periods less than one year. |
(c) | Periods less than one year are annualized and are not necessarily indicative of a full year of operations. |
(f) | These amounts represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contractowner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the underlying fund in which the Sub-Account invests. |
(g) | These amounts represent the annualized expenses of the Sub-Account, consisting primarily of mortality and expense charges, for each period indicated. These ratios include only these expenses that result in a direct reduction to unit values. Charges made directly to contractowner accounts through the redemption of units and expenses of the underlying fund have been excluded. |
(h) | These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Sub-Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. As the total return is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contractowners total returns may not be within the ranges presented. |
(k) | Sub-account commenced operations on May 9, 2012. |
(l) | Sub-account commenced operations on May 7, 2012. |
B-54 | Statement of Additional Information n Single Premium Immediate Annuities |
concluded |
(m) | Sub-account commenced operations on July 10, 2012. |
(n) | Sub-account commenced operations on June 27, 2012. |
(o) | Sub-account commenced operations on May 1, 2010. |
(p) | Sub-account commenced operations on October 23, 2009. |
(q) | Sub-account commenced operations on March 19, 2012. |
(r) | Sub-account commenced operations on November 26, 2013. |
(s) | Sub-account commenced operations on November 20, 2013. |
(t) | Sub-account commenced operations on December 9, 2013. |
Note 6–subsequent events
On May 1, 2014 the following Sub-Account name changes will occur:
Current Name: | New name: | |
Franklin Income Securities Fund—Class 1 Franklin Small-Mid Cap Growth Securities Fund—Class 1 ING Clarion Global Real Estate Portfolio—Class I Mutual Shares Securities Fund—Class 1 Templeton Developing Markets Securities Fund—Class 1 |
Franklin Income VIP Fund—Class 1 Franklin Small-Mid Cap Growth VIP Fund—Class 1 VY Clarion Global Real Estate Portfolio—Class I Franklin Mutual Shares VIP Fund—Class 1 Templeton Developing Markets VIP Fund—Class 1 |
Single Premium Immediate Annuities n Statement of Additional Information | B-55 |
Index to statutory–basis financial statements
TIAA-CREF LIFE INSURANCE COMPANY | ||
December 31, 2013 | ||
Page | ||
Report of Management Responsibility | B-57 | |
Independent Auditor’s Report | B-58 | |
Statutory–Basis Financial Statements: | ||
Statements of Admitted Assets, Liabilities and Capital and Surplus | B-59 | |
Statements of Operations | B-60 | |
Statements of Changes in Capital and Surplus | B-61 | |
Statements of Cash Flows | B-62 | |
Notes to Financial Statements | B-63 |
B-56 | Statement of Additional Information n Single Premium Immediate Annuities |
Report of management responsibility
To the Shareholder of
TIAA-CREF Life Insurance Company:
The accompanying statutory-basis financial statements of TIAA-CREF Life Insurance Company (“TIAA-CREF Life”) are the responsibility of management. They have been prepared on the basis of statutory accounting principles, a comprehensive basis of accounting comprised of accounting principles prescribed or permitted by the New York State Department of Financial Services. The financial statements of TIAA-CREF Life have been presented fairly and objectively in accordance with such statutory accounting principles.
TIAA-CREF Life internal control over financial reporting is a process effected by those charged with governance, management and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with statutory accounting principles. TIAA-CREF Life’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with statutory accounting principles, and the receipts and expenditures of the entity are being made only in accordance with authorizations of management and those charged with governance; and (3) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.
Management is responsible for establishing and maintaining effective internal control over financial reporting. Management assessed the effectiveness of the entity’s internal control over financial reporting as of December 31, 2013, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (originally published in 1992). Based on that assessment, management concluded that, as of December 31, 2013, TIAA-CREF Life’s internal control over financial reporting is effective based on the criteria established in Internal Control-Integrated Framework (published in 1992).
The independent auditors of PricewaterhouseCoopers LLP have audited the accompanying statutory-basis financial statements of TIAA-CREF Life for the years ended December 31, 2013, 2012 and 2011. To maintain auditor independence and avoid even the appearance of a conflict of interest, it continues to be TIAA-CREF Life’s policy that any management advisory or consulting service, which is not in accordance with TIAA-CREF Life’s specific auditor independence policies designed to avoid such conflicts, be obtained from a firm other than the independent auditor. The independent auditors’ report expresses an opinion in all material respect on the fairness of presentation of these statutory-basis financial statements.
The Audit Committee of the TIAA-CREF Life Board of Directors meets regularly with management, representatives of the independent accounting firm and internal audit personnel to review matters relating to financial reporting, internal controls and auditing. In addition to the annual independent audit of the TIAA-CREF Life statutory-basis financial statements, the New York State Department of Financial Services and other state insurance departments regularly examine the operations and financial statements of TIAA-CREF Life as part of their periodic corporate examinations.
/s/ David M. Anderson | /s/ Linda S. Dougherty | |
David M. Anderson | Linda S. Dougherty | |
President and Chief Executive Officer | Vice President and Chief Financial Officer |
Single Premium Immediate Annuities n Statement of Additional Information | B-57 |
Report of independent auditors
To the Board of Directors of
TIAA-CREF Life Insurance Company:
We have audited the accompanying statutory financial statements of TIAA-CREF Life Insurance Company (the “Company”), which comprise the statutory statements of admitted assets, liabilities and capital and surplus as of December 31, 2013 and 2012, and the related statutory statements of operations and changes in capital and surplus, and of cash flows for each of the three years in the period ended December 31, 2013.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
BASIS FOR ADVERSE OPINION ON U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the New York State Department of Financial Services, which is a basis of accounting other than accounting principles generally accepted in the United States of America.
The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.
ADVERSE OPINION ON U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2013 and 2012, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2013.
OPINION ON STATUTORY BASIS OF ACCOUNTING
In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and capital and surplus of the Company as of December 31, 2013 and 2012, and the results of its operations, changes in capital and surplus and its cash flows for each of the three years in the period ended December 31, 2013, in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services described in Note 2.
/s/ PricewaterhouseCooper LLP
New York, New York
B-58 | Statement of Additional Information n Single Premium Immediate Annuities |
Statutory–basis statements of admitted assets, liabilities and capital and surplus
TIAA-CREF Life Insurance Company
December 31, | ||||||||||
(in thousands) | 2013 | 2012 | ||||||||
ADMITTED ASSETS |
||||||||||
Bonds |
$ | 4,105,952 | $ | 3,684,513 | ||||||
Preferred stocks |
2,470 | 2,470 | ||||||||
Common stocks |
573 | 271 | ||||||||
Cash, cash equivalents and short-term investments |
114,882 | 87,953 | ||||||||
Contract loans |
10,467 | 7,129 | ||||||||
Other long-term investments |
12,773 | 12,803 | ||||||||
Investment income due and accrued |
39,261 | 37,935 | ||||||||
Federal income tax recoverable from TIAA |
— | 9,581 | ||||||||
Net deferred federal income tax asset |
11,799 | 6,272 | ||||||||
Other assets |
21,793 | 17,586 | ||||||||
Separate account assets |
3,668,669 | 1,789,814 | ||||||||
Total admitted assets |
$ | 7,988,639 | $ | 5,656,327 | ||||||
| ||||||||||
LIABILITIES, CAPITAL AND SURPLUS |
||||||||||
Liabilities |
||||||||||
Reserves for life and health, annuities and deposit-type contracts |
$ | 3,914,277 | $ | 3,440,716 | ||||||
Asset valuation reserve |
17,937 | 14,164 | ||||||||
Interest maintenance reserve |
7,769 | 6,934 | ||||||||
Federal income tax payable |
2,516 | — | ||||||||
Other liabilities |
33,566 | 21,093 | ||||||||
Separate account liabilities |
3,638,741 | 1,760,489 | ||||||||
Total liabilities |
7,614,806 | 5,243,396 | ||||||||
Capital and Surplus |
||||||||||
Capital (2,500 shares of $1,000 par value common stock issued and outstanding) |
2,500 | 2,500 | ||||||||
Additional paid-in capital |
357,500 | 357,500 | ||||||||
Surplus |
13,833 | 52,931 | ||||||||
Total capital and surplus |
373,833 | 412,931 | ||||||||
Total liabilities, capital and surplus |
$ | 7,988,639 | $ | 5,656,327 | ||||||
|
See notes to statutory-basis financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-59 |
Statutory–basis statements of operations
TIAA-CREF Life Insurance Company
For the Years Ended December 31, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2011 | |||||||||||
REVENUES |
||||||||||||||
Insurance and annuity premiums and other considerations |
$ | 481,814 | $ | 284,892 | $ | 225,388 | ||||||||
Net investment income |
150,329 | 147,749 | 132,685 | |||||||||||
Commissions and expense allowances on reinsurance ceded |
29,607 | 12,674 | 8,504 | |||||||||||
Reserve adjustments on reinsurance ceded |
58,534 | 9,764 | — | |||||||||||
Other revenue |
16,626 | 9,497 | 5,271 | |||||||||||
Total revenues |
$ | 736,910 | $ | 464,576 | $ | 371,848 | ||||||||
| ||||||||||||||
EXPENSES |
||||||||||||||
Policy and contract benefits |
$ | 118,156 | $ | 131,742 | $ | 128,247 | ||||||||
Increase in policy and contract reserves |
320,016 | 128,507 | 83,741 | |||||||||||
Insurance expenses and taxes (excluding Federal income taxes) |
110,293 | 83,007 | 56,214 | |||||||||||
Commissions on premiums |
31,785 | 5,366 | — | |||||||||||
Interest on deposit-type contracts |
26,752 | 26,374 | 17,580 | |||||||||||
Net transfers to separate accounts |
143,230 | 57,976 | 37,938 | |||||||||||
Other benefits and expenses |
9,020 | 9,858 | 17,268 | |||||||||||
Total expenses |
$ | 759,252 | $ | 442,830 | $ | 340,988 | ||||||||
| ||||||||||||||
Income before federal income tax and net realized capital gains (losses) |
(22,342 | ) | 21,746 | 30,860 | ||||||||||
Federal income tax expense |
6,949 | 1,243 | 10,545 | |||||||||||
Net realized capital gains (losses) less capital gains taxes, after transfers to the interest maintenance reserve |
(37 | ) | (2,360 | ) | 9,190 | |||||||||
Net income |
$ | (29,328 | ) | $ | 18,143 | $ | 29,505 | |||||||
|
B-60 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to statutory-basis financial statements |
Statutory–basis statements of changes in capital and surplus
TIAA-CREF Life Insurance Company
Capital Stock |
Additional Paid-In Capital |
Surplus (Deficit) |
Total | |||||||||||||
(in thousands) | ||||||||||||||||
Balance, December 31, 2010 |
$ | 2,500 | $ | 357,500 | $ | 10,581 | $ | 370,581 | ||||||||
Net income |
29,505 | 29,505 | ||||||||||||||
Net unrealized capital gain on investments |
2,723 | 2,723 | ||||||||||||||
Change in asset valuation reserve |
(2,789 | ) | (2,789 | ) | ||||||||||||
Change in surplus in separate accounts |
(82 | ) | (82 | ) | ||||||||||||
Change in net deferred income tax |
(14,040 | ) | (14,040 | ) | ||||||||||||
Change in non-admitted assets: |
||||||||||||||||
Deferred federal income tax asset |
13,773 | 13,773 | ||||||||||||||
Amount recoverable from reinsurers |
225 | 225 | ||||||||||||||
Deferred premium asset limitation |
(1,070 | ) | (1,070 | ) | ||||||||||||
Incremental deferred federal income tax asset |
(441 | ) | (441 | ) | ||||||||||||
Balance, December 31, 2011 |
$ | 2,500 | $ | 357,500 | $ | 38,385 | $ | 398,385 | ||||||||
|
||||||||||||||||
Net income |
18,143 | 18,143 | ||||||||||||||
Net unrealized capital gains on investments |
129 | 129 | ||||||||||||||
Change in asset valuation reserve |
(3,570 | ) | (3,570 | ) | ||||||||||||
Change in surplus in separate accounts |
1,978 | 1,978 | ||||||||||||||
Change in liability for reinsurance in unauthorized companies |
(1,190 | ) | (1,190 | ) | ||||||||||||
Change in net deferred income tax |
(7,005 | ) | (7,005 | ) | ||||||||||||
Change in non-admitted assets: |
||||||||||||||||
Deferred federal income tax asset |
7,836 | 7,836 | ||||||||||||||
Deferred premium asset limitation |
(1,775 | ) | (1,775 | ) | ||||||||||||
Balance, December 31, 2012 |
$ | 2,500 | $ | 357,500 | $ | 52,931 | $ | 412,931 | ||||||||
|
||||||||||||||||
Net income |
(29,328 | ) | (29,328 | ) | ||||||||||||
Net unrealized capital gains on investments |
314 | 314 | ||||||||||||||
Change in asset valuation reserve |
(3,773 | ) | (3,773 | ) | ||||||||||||
Change in surplus in separate accounts |
(3,680 | ) | (3,680 | ) | ||||||||||||
Change in liability for reinsurance in unauthorized companies |
(6,837 | ) | (6,837 | ) | ||||||||||||
Change in net deferred income tax |
16,015 | 16,015 | ||||||||||||||
Change in non-admitted assets: |
||||||||||||||||
Deferred federal income tax asset |
(10,488 | ) | (10,488 | ) | ||||||||||||
Deferred premium asset limitation |
(1,321 | ) | (1,321 | ) | ||||||||||||
Balance, December 31, 2013 |
$ | 2,500 | $ | 357,500 | $ | 13,833 | $ | 373,833 | ||||||||
|
See notes to statutory-basis financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-61 |
Statutory–basis statements of cash flows
TIAA-CREF Life Insurance Company
For the Years Ended December 31, | ||||||||||||||
(in thousands) | 2013 | 2012 | 2011 | |||||||||||
CASH FROM OPERATIONS |
||||||||||||||
Insurance and annuity premiums and other considerations |
$ | 500,895 | $ | 288,626 | $ | 223,405 | ||||||||
Miscellaneous income |
34,259 | 19,036 | 12,494 | |||||||||||
Net investment income |
149,421 | 146,894 | 132,287 | |||||||||||
Total Receipts |
684,575 | 454,556 | 368,186 | |||||||||||
Policy and contract benefits |
76,543 | 131,364 | 126,558 | |||||||||||
Commissions and expenses paid |
150,895 | 97,489 | 68,319 | |||||||||||
Federal income tax (benefit) expense |
(4,426 | ) | 7,097 | (7,346 | ) | |||||||||
Net transfers to separate accounts |
144,632 | 59,157 | 36,345 | |||||||||||
Total Disbursements |
367,644 | 295,107 | 223,876 | |||||||||||
Net cash from operations |
316,931 | 159,449 | 144,310 | |||||||||||
CASH FROM INVESTMENTS |
||||||||||||||
Proceeds from long-term investments sold, matured, or repaid: |
||||||||||||||
Bonds |
594,673 | 484,231 | 383,016 | |||||||||||
Stocks |
— | 5,129 | — | |||||||||||
Mortgage loans |
— | 13,726 | 38,926 | |||||||||||
Miscellaneous proceeds |
12 | (8 | ) | 51 | ||||||||||
Cost of investments acquired: |
||||||||||||||
Bonds |
1,014,981 | 992,311 | 1,067,103 | |||||||||||
Miscellaneous applications |
— | — | 4,990 | |||||||||||
Net increase in contract loans |
3,338 | 2,901 | 202 | |||||||||||
Net cash from investments |
(423,634 | ) | (492,134 | ) | (650,302 | ) | ||||||||
CASH FROM FINANCING AND OTHER |
||||||||||||||
Net deposits on deposit-type contracts funds |
127,392 | 317,384 | 520,049 | |||||||||||
Other cash provided (applied) |
6,240 | (3,248 | ) | 4,437 | ||||||||||
Net cash from financing and other |
133,632 | 314,136 | 524,486 | |||||||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS |
26,929 | (18,549 | ) | 18,494 | ||||||||||
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR |
87,953 | 106,502 | 88,008 | |||||||||||
| ||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS, END OF YEAR |
$ | 114,882 | $ | 87,953 | $ | 106,502 | ||||||||
|
B-62 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to statutory-basis financial statements |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
Note 1 – organization and operations
TIAA-CREF Life Insurance Company commenced operations as a legal reserve life insurance company under the insurance laws of the State of New York on December 18, 1996, under its former name, TIAA Life Insurance Company and changed its name to TIAA-CREF Life Insurance Company (“TIAA-CREF Life” or the “Company”) on May 1, 1998. TIAA-CREF Life is a direct wholly-owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA” or the “Parent”), a legal reserve life insurance company established under the insurance laws of the State of New York in 1918.
The Company issues non-qualified annuity contracts with fixed and variable components, fixed and variable universal life contracts, funding agreements, book value separate account agreements, term-life insurance and single premium immediate annuities.
Note 2 – significant accounting policies
Basis of presentation:
The accompanying financial statements have been prepared on the basis of statutory accounting principles prescribed or permitted by the New York State Department of Financial Services (the “Department”); a comprehensive basis of accounting that differs from accounting principles generally accepted in the United States (“GAAP”). The Department requires insurance companies domiciled in the State of New York to prepare their statutory basis financial statements in accordance with the National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures Manual (“NAIC SAP”), subject to any deviation prescribed or permitted by the Department (“New York SAP”).
The table below provides a reconciliation of the Company’s net income and capital and surplus between NAIC SAP and New York SAP annual statement filed with the Department. The primary differences arise because the Company maintains more conservative reserves, as prescribed or permitted by New York SAP, under which annuity reserves are generally discounted on the basis of contractually guaranteed interest rates and mortality tables.
The deferred premium asset limitation results from the Department requiring that any deferred premium asset established along with the corresponding mean reserve should be reduced by the proportionate amount reinsured on a coinsurance basis. Under this approach the deferred premium asset for reinsurance is adjusted based upon the premium mode of the direct policy rather than the premium mode of the reinsurance agreement.
For the Years Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(in thousands) | ||||||||||||||
Net Income, New York SAP |
$ | (29,328 | ) | $ | 18,143 | $ | 29,505 | |||||||
New York SAP Prescribed Practices: |
||||||||||||||
Additional Reserves for: |
||||||||||||||
Term Conversions |
340 | 349 | 107 | |||||||||||
Deferred and Payout Annuities issued after 2000 |
— | — | — | |||||||||||
Net Income, NAIC SAP |
$ | (28,988 | ) | $ | 18,492 | $ | 29,612 | |||||||
| ||||||||||||||
Capital and Surplus, New York SAP |
$ | 373,833 | $ | 412,931 | $ | 398,385 | ||||||||
New York SAP Prescribed Practices: |
||||||||||||||
Deferred Premium Asset Limitation |
29,068 | 27,747 | 25,972 | |||||||||||
Additional Reserves for: |
||||||||||||||
Term Conversions |
1,929 | 1,589 | 1,240 | |||||||||||
Deferred and Payout Annuities issued after 2000 |
2 | 2 | 2 | |||||||||||
Capital and Surplus, NAIC SAP |
$ | 404,832 | $ | 442,269 | $ | 425,599 | ||||||||
|
Accounting Principles Generally Accepted in the United States: The Financial Accounting Standards Board (“FASB”) dictates the accounting principles for financial statements that are prepared in conformity with GAAP with applicable authoritative accounting pronouncements. As a result, the Company cannot refer to financial statements prepared in accordance with NAIC SAP and New York SAP as having been prepared in accordance with GAAP.
The primary differences between GAAP and NAIC SAP can be summarized as follows.
Under GAAP:
• | The Asset Valuation Reserve (“AVR”) is eliminated as it is not recognized under GAAP. The AVR is established under NAIC SAP as a direct charge to surplus; |
• | The Interest Maintenance Reserve (“IMR”) is eliminated as it is not recognized under GAAP. The realized gains and losses resulting from changes in interest rates are reported as a component of net income under GAAP rather than being deferred and subsequently amortized into income over the remaining expected life of the investment sold; |
Single Premium Immediate Annuities n Statement of Additional Information | B-63 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
• | Certain assets designated as “non-admitted assets” and excluded from assets in the statutory balance sheet are included in the GAAP balance sheet; |
• | Policy acquisition costs, such as commissions, and other costs incurred in connection with acquiring new business, are deferred and amortized over the expected lives of the policies issued under GAAP rather than being expensed when incurred; |
• | Policy and contract reserves are based on estimates of expected mortality, morbidity, persistency and interest under GAAP rather than being based on statutory mortality, morbidity and interest requirements; |
• | Investments in wholly-owned subsidiaries, other entities under the control of the parent, and certain variable interest entities are consolidated in the parent’s financial statements rather than being carried at the parent’s share of the underlying GAAP equity or statutory surplus of a domestic insurance subsidiary; |
• | Investments in bonds considered to be “available for sale” are carried at fair value under GAAP rather than at amortized cost; |
• | Impairments on securities (other than loan-backed and structured securities) due to credit losses are recorded as other-than-temporary impairments (“OTTI”) through earnings for the difference between amortized cost and discounted cash flows when a security is deemed impaired. Other declines in fair value related to factors other than credit are recorded as other comprehensive income, which is a separate component of stockholder’s equity. Under NAIC SAP, an impairment for such securities is recorded through earnings for the difference between amortized cost and fair value; |
• | For loan-backed and structured securities that are other-than-temporarily impaired, declines in fair value related to factors other than credit are recorded as other comprehensive income, which is a separate component of stockholder’s equity. Under NAIC SAP, such declines in fair value are not recorded until a credit loss is projected to occur; |
• | Changes in the allowance for estimated uncollectible amounts related to mortgage loans are recorded through earnings rather than as unrealized losses, which is a component of surplus under NAIC SAP; |
• | Changes in the value of certain other long-term investments accounted for under the equity method of accounting are recorded through earnings rather than as unrealized gains (losses), which is a component of surplus under NAIC SAP; |
• | Deferred income taxes, subject to valuation allowance, include federal and state income taxes and changes in the deferred tax are reflected in earnings. Under NAIC SAP, deferred taxes exclude state income taxes and are admitted to the extent they can be realized within three years subject to a 15% limitation of capital and surplus with changes in the net deferred tax reflected as a component of surplus; |
• | Contracts that do not subject the Company to risks arising from policyholder mortality or morbidity are reported as a deposit liability. Under NAIC SAP, contracts that have any mortality and morbidity risk, regardless of significance, and contracts with life contingent annuity purchase rate guarantees are classified as insurance contracts and amounts received under these contracts are reported as revenue; |
• | Declines in fair value of derivatives are recorded through earnings rather than surplus. Derivatives embedded in host contracts are accounted for separately like a freestanding derivative if certain criteria are met. Replication Synthetic Asset Transactions (“RSAT”) are not recognized under GAAP; |
• | Certain reinsurance transactions are accounted for as financing transactions and as reinsurance for statutory purposes. Assets and liabilities are reported gross of reinsurance for GAAP and net of reinsurance for statutory purposes. Transactions recorded as financing under GAAP have no impact on premiums or losses incurred, while for statutory purposes, premiums paid to the reinsurer are recorded as ceded premiums (a reduction in revenue) and expected reimbursement for losses from the reinsurer are recorded as a reduction in losses. |
The effects of these differences, while not determined, are presumed to be material.
Reclassifications: Certain prior year amounts in the financial statements have been reclassified to conform to the 2013 presentation. These reclassifications did not affect the total assets, liabilities, net income or surplus previously reported.
Use of Estimates: The preparation of the Company’s statutory-basis financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses at the date of the financial statements. Actual results may differ from those estimates.
The most significant estimates include those used in the recognition of other-than-temporary impairments, reserves for life insurance (and health), annuities and deposit-type contracts and the valuation of deferred tax assets.
Accounting policies:
The following is a summary of the significant accounting policies followed by the Company:
Investments: Publicly traded securities are accounted for as of the date the investments are purchased or sold (trade date). Other investments are recorded on the settlement date. Realized capital gains and losses on investment transactions are accounted for under the specific identification method. A realized loss is recorded when an impairment is considered to be other-than-temporary.
B-64 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Bonds: Bonds are stated at amortized cost using the current effective interest method. Bonds in or near default (rated NAIC 6) are stated at the lower of amortized cost or fair value. Bonds the Company intends to sell prior to maturity (“held for sale”) are stated at the lower of amortized cost or fair value.
Included within bonds are loan-backed and structured securities. Estimated future cash flows and expected prepayment speeds are used to determine the amortization of loan-backed and structured securities under the prospective method. Expected future cash flows and prepayment speeds are evaluated quarterly. Certain loan-backed and structured securities are reported at the lower of cost or fair value as a result of the NAIC modeling process.
If it is determined that a decline in the fair value of a bond, excluding loan-backed and structured securities, is other-than-temporary, the cost basis of the bond is written down to fair value and the amount of the write down is accounted for as a realized loss. The new cost basis is not changed for subsequent recoveries in fair value. Future declines in fair value which are determined to be other-than-temporary are recorded as realized losses.
For loan-backed and structured securities, when an OTTI has occurred because the Company does not expect to recover the entire amortized cost basis of the security, with the intent and ability to hold, the amount of the OTTI recognized as a realized loss is the difference between the security’s amortized cost basis and the present value of cash flows expected to be collected, discounted at the loan-backed or structured securities’ effective interest rate.
For loan-backed and structured securities, when an OTTI has occurred because the Company intends to sell the securities or the Company does not have the intent and ability to retain the security for a period of time sufficient to recover the amortized cost basis, the amount of the OTTI recognized is the difference between the security’s amortized cost basis and fair value at the balance sheet date.
In periods subsequent to the recognition of an OTTI loss for a loan-backed and structured security, the Company accounts for the other-than-temporarily impaired security as if the security had been purchased on the measurement date of the impairment. The difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income in future periods based on prospective changes in cash flow estimates.
The fair values for publicly traded long term bond investments are generally determined using prices provided by third party pricing services. For privately placed long term bond investments without readily ascertainable market value, such values are determined with the assistance of independent pricing services utilizing a discounted cash flow methodology based on coupon rates, maturity provisions and credit assumptions.
Common Stocks: Common stocks of unaffiliated companies are stated at fair value, which is based on quoted market prices, where available. Changes in fair value are recorded through surplus. For common stocks without quoted market prices, fair value is estimated using independent pricing services or internally developed pricing models. When it is determined that a decline in fair value of an investment is other-than-temporary, the cost basis of the investment is reduced to its fair value and the amount of the reduction is accounted for as a realized loss.
Preferred Stocks: Preferred stocks are stated at amortized cost unless they have an NAIC rating designation of 4, 5, or 6 which are stated at the lower of amortized cost or fair value. The fair values of preferred stocks are determined using prices provided by third party pricing services or valuations from the NAIC. When it is determined that a decline in fair value of an investment is other-than-temporary, the cost basis of the investment is reduced to its fair value and the amount of the reduction is accounted for as a realized loss.
Mortgage Loans: Mortgage loans are stated at amortized cost, net of valuation allowances. Mortgage loans held for sale are stated at the lower of amortized cost or fair value. Mortgage loans are evaluated for impairment when it is probable that the receipt of contractual payments of principal and interest may not occur when scheduled. If the impairment is considered to be temporary, a valuation reserve is established for the excess of the carrying value of the mortgage over its estimated fair value. Changes in valuation reserves for mortgage loans are included in net unrealized capital gains and losses on investments. When an event occurs resulting in an impairment that is other-than-temporary, a direct write-down is recorded as a realized loss and a new cost basis is established. The fair value of mortgage loans is generally determined using a discounted cash flow methodology based on coupon rates, maturity provisions and credit assumptions.
Wholly-Owned Subsidiaries: Investments in wholly-owned subsidiaries are stated at the value of their underlying net assets as follows: (1) domestic insurance subsidiaries are stated at the value of their underlying statutory surplus; (2) non-insurance subsidiaries are stated at the value of their underlying audited GAAP equity. Dividends and distributions from subsidiaries are recorded in investment income and changes in the equity of subsidiaries are recorded directly to surplus as unrealized gains or losses.
Other long-term investments: Other long-term investments include the Company’s investments in surplus notes, which are stated at amortized cost. All of the Company’s investments in surplus notes have an NAIC 1 rating designation. The carrying amount of the Company’s investments in surplus notes was $11,633 thousand and $11,676 thousand at December 31, 2013 and 2012, respectively.
Single Premium Immediate Annuities n Statement of Additional Information | B-65 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
The Company monitors the effects of current and expected market conditions and other factors on these investments to identify and quantify any impairment in value. The Company assesses impairment information by performing analysis between the carrying value and the cost basis of the investments. The Company evaluates recoverability of the asset to determine if OTTI is warranted. When it is determined that a decline in fair value of an investment is other than temporary, the cost basis of the investment is reduced to its fair value and the amount of the reduction is accounted for as a realized loss.
Cash and Cash Equivalents: Cash includes cash on deposit and cash equivalents. Cash equivalents are short-term, highly liquid investments, with original maturities of three months or less at the date of purchase, and are stated at amortized cost.
Short-Term Investments: Short-term investments (investments with remaining maturities of one year or less at the time of acquisition, excluding those investments classified as cash equivalents) that are not impaired are stated at amortized cost using the straight line interest method. Short-term investments that are impaired are stated at the lower of amortized cost or fair value.
Contract Loans: Contract loans are stated at outstanding principal balances.
Derivative Instruments: The Company has filed a Derivatives Use Plan with the Department. This plan details the Company’s derivative policy objectives, strategies, controls and any restrictions placed on various derivative types. The plan also specifies the procedures and systems that the Company has established to evaluate, monitor and report on the derivative portfolio in terms of valuation, hedge effectiveness and counterparty credit quality. The Company may use derivative instruments for hedging, income generation, asset-liability management and asset replication purposes. Derivatives that can be used by the Company may include swaps, forwards, futures and options.
The carrying value of a derivative position may be at cost or fair value, depending on the type of instrument and accounting status. Hedge accounting is applied for some foreign currency swaps that hedge fixed income investments carried at amortized cost. The foreign exchange premium or discount for these foreign currency swaps is amortized into income and a currency translation adjustment computed at the spot rate is recorded as an unrealized gain or loss. The derivative component of a RSAT is carried at unamortized premiums received or paid, adjusted for any impairments. The cash component of a RSAT is classified as a bond on the Company’s balance sheet. Derivatives used in hedging transactions where hedge accounting is not being utilized are carried at fair value. The Company does not offset the carrying value amounts recognized for derivatives executed with the same counterparty under the same netting agreement.
Investment Income Due and Accrued: Investment income due is investment income earned and legally due to be paid to the Company at the reporting date. Investment income accrued is investment income earned but not legally due to be paid to the Company until subsequent to the reporting date. The Company writes off amounts deemed uncollectible as a charge against investment income in the period such determination is made. Amounts deemed collectible, but over 90 days past due for any invested asset except mortgage loans in default are non-admitted. Amounts deemed collectible, but over 180 days past due for mortgage loans in default are non-admitted. The Company accrues interest income on impaired loans to the extent it is deemed collectible.
Separate Accounts: Separate Accounts are established in conformity with insurance laws and are segregated from the Company’s general account and are maintained for the benefit of separate account contract holders. Separate accounts are generally accounted for at fair value, except the Stable Value Separate Account (“SVSA”) products which are accounted for at book value in accordance with NAIC guidance.
Foreign Currency Transactions and Translation: Investments denominated in foreign currencies and foreign currency contracts are valued in U.S. dollars, based on exchange rates at the end of the relevant period. Investment transactions in foreign currencies are recorded at the exchange rates prevailing on the respective transaction dates. All other asset and liability accounts denominated in foreign currencies are adjusted to reflect exchange rates at the end of the relevant period. Realized and unrealized gains and losses due to foreign exchange transactions and translation adjustments are not separately reported but are collectively included in realized and unrealized capital gains and losses, respectively.
Non-Admitted Assets: For statutory accounting purposes, certain assets are designated as non-admitted assets. The non-admitted portion of the Deferred Federal Income Tax (“DFIT”) asset was $26,886 thousand and $16,398 thousand at December 31, 2013 and 2012, respectively. The non-admitted portion of deferred premium assets was $29,068 thousand and $27,747 thousand at December 31, 2013 and 2012, respectively. Changes in non-admitted assets are charged or credited directly to surplus.
Insurance and Annuity Premiums: Life insurance premiums are recognized as revenue over the premium-paying period of the related policies. Annuity considerations are recognized as revenue when received. Deposits on deposit-type contracts are recorded directly as a liability when received. Expenses incurred when acquiring new business are charged to operations as incurred.
Reserves for Life and Health Insurance, Annuities and Deposit-type Contracts: Policy and contract reserves are determined in accordance with standard valuation methods approved by the Department and are computed in accordance with standard actuarial methodology. The reserves established utilize assumptions for interest, mortality and other risks insured. Such reserves are established to provide for adequate contractual benefits guaranteed under policy and contract provisions.
B-66 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Liabilities for deposit-type contracts, which do not contain any life contingencies, are equal to deposits received and interest credited to the benefit of contract holders, less surrenders or withdrawals (that represent a return to the contract holders) plus additional reserves (if any) necessitated by actuarial regulations.
The Company performed Asset Adequacy Analysis in order to test the adequacy of its reserves in light of the assets supporting such reserves and determined that its reserves were sufficient to meet its obligations.
Interest Maintenance Reserve: The IMR defers recognition of realized capital gains and losses resulting from changes in the general level of interest rates. These gains and losses are amortized into investment income over the expected remaining life of the investments sold. The IMR is calculated in accordance with the NAIC Annual Statement Instructions for Life and Accident and Health Insurance Companies.
A realized gain or loss on each bond sold, excluding loan-backed and structured securities, is interest-related if the security’s NAIC rating did not change by more than one classification from the date of purchase to the date of sale, and its NAIC rating was never a 6 during the holding period.
A realized gain or loss on each preferred stock sold is interest-related if the security did not have an NAIC rating of 4, 5 or 6 at any time during the holding period and the NAIC rating did not change by more than one classification from the date of purchase to the date of sale.
A realized gain or loss on each mortgage loan sold may be interest-related if interest is not more than 90 days past due, not in the process of foreclosure or voluntary conveyance, or the mortgage loan was not restructured over the prior two years.
A realized gain or loss on each derivative investment sold is interest-related based on the characteristics of the underlying invested asset.
For loan-backed and structured securities, realized gains or losses resulting from sale transactions and realized losses resulting from OTTI are bifurcated between IMR and AVR based upon the present value of cash flows and amortized cost at the time of the transaction.
Asset Valuation Reserve: The AVR is established to offset potential credit-related investment losses from bonds, stocks, mortgage loans, real estate, derivatives and other long-term investments. Changes in AVR are recorded directly to surplus. The AVR is calculated in accordance with the NAIC Annual Statement Instructions for Life and Accident and Health Insurance Companies.
Realized gains or losses resulting from the sale of U.S. Government securities and securities of agencies which are backed by the full faith and credit of the U.S. Government are exempt from the AVR.
A realized gain or loss on each bond sold, excluding loan-backed and structured securities, is non-interest-related if the security’s NAIC rating changed by more than one classification from the date of purchase to the date of sale, or its NAIC rating was a 6 at any time during the holding period.
A realized gain or loss on each preferred stock sold is non-interest-related if the security had an NAIC rating of 4, 5 or 6 at any time during the holding period or the NAIC rating changed by more than one classification from the date of purchase to the date of sale.
A realized gain or loss on each mortgage loan sold is non-interest-related if interest is more than 90 days past due, in the process of foreclosure or voluntary conveyance, or the mortgage loan was restructured over the prior two years.
A realized gain or loss on each derivative investment sold is non-interest-related based on the characteristics of the underlying invested asset.
For loan-backed and structured securities, realized gains or losses resulting from sale transactions and realized losses resulting from OTTI are bifurcated between IMR and AVR based upon the present value of cash flows and amortized cost at the time of the transaction. OTTI for non-loan backed and structured securities, stocks, mortgage loans, real estate and other long-term investments are considered non-interest related realized losses and included in the AVR calculation.
Application of new accounting pronouncements:
Effective January 1, 2012, the Company adopted SSAP No. 101 – Income Taxes, a Replacement of SSAP No. 10R—Income Taxes, A Temporary Replacement of SSAP No. 10 and SSAP No. 10—Income Taxes effective January 1, 2012. For purposes of accounting for federal and foreign income taxes, the Company adopted FASB Statement No. 109, Accounting for Income Taxes (FAS 109) with modifications for state income taxes, the realization criteria for deferred tax assets, and the recording of the impact of changes in deferred tax balances. Adoption of SSAP No. 101 did not have a material impact on the current and deferred taxes that had been presented under SSAP No. 10R.
Single Premium Immediate Annuities n Statement of Additional Information | B-67 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
Note 3 – long term bonds, preferred stocks and common stocks
The book/adjusted carrying value, estimated fair value, excess of fair value over book/adjusted carrying value and excess of book/adjusted carrying value over fair value of long-term bonds and preferred stocks at December 31 are shown below (in thousands):
2013 | ||||||||||||||||||
Excess of | ||||||||||||||||||
Book/ Adjusted Carrying Value |
Fair Value Over Book/Adjusted Carrying Value |
Book/Adjusted Carrying Value Over Fair Value |
Estimated Fair Value |
|||||||||||||||
Bonds: |
||||||||||||||||||
U.S. governments |
$ | 279,098 | $ | 6,748 | $ | (8,860 | ) | $ | 276,986 | |||||||||
All other governments |
19,402 | — | (443 | ) | 18,959 | |||||||||||||
States, territories & possessions |
38,287 | 357 | (1,666 | ) | 36,978 | |||||||||||||
Political subdivisions of states, territories, & possessions |
13,727 | 71 | (860 | ) | 12,938 | |||||||||||||
Special revenue & special assessment, non-guaranteed agencies & government |
322,629 | 13,348 | (7,113 | ) | 328,864 | |||||||||||||
Industrial & miscellaneous |
3,417,454 | 111,127 | (55,722 | ) | 3,472,859 | |||||||||||||
Credit tenant loans |
7,046 | 704 | — | 7,750 | ||||||||||||||
Hybrids |
8,309 | 123 | — | 8,432 | ||||||||||||||
Total bonds |
4,105,952 | 132,478 | (74,664 | ) | 4,163,766 | |||||||||||||
Preferred stocks |
2,470 | 3,859 | — | 6,329 | ||||||||||||||
Total bonds and preferred stocks |
$ | 4,108,422 | $ | 136,337 | $ | (74,664 | ) | $ | 4,170,095 | |||||||||
| ||||||||||||||||||
2012 | ||||||||||||||||||
Excess of | ||||||||||||||||||
Book/ Adjusted Carrying Value |
Fair Value Over Book/Adjusted Carrying Value |
Book/Adjusted Carrying Value Over Fair Value |
Estimated Fair Value |
|||||||||||||||
Bonds: |
||||||||||||||||||
U.S. governments |
$ | 204,896 | $ | 13,802 | $ | (7 | ) | $ | 218,691 | |||||||||
States, territories & possessions |
25,287 | 1,446 | — | 26,733 | ||||||||||||||
Political subdivisions of states, territories, & possessions |
11,957 | 119 | (50 | ) | 12,026 | |||||||||||||
Special revenue & special assessment, non-guaranteed agencies & government |
373,789 | 23,452 | (186 | ) | 397,055 | |||||||||||||
Industrial & miscellaneous |
3,052,644 | 235,989 | (9,171 | ) | 3,279,462 | |||||||||||||
Credit tenant loans |
7,619 | 762 | — | 8,381 | ||||||||||||||
Hybrids |
8,321 | 301 | — | 8,622 | ||||||||||||||
Total bonds |
3,684,513 | 275,871 | (9,414 | ) | 3,950,970 | |||||||||||||
Preferred stocks |
2,470 | 849 | — | 3,319 | ||||||||||||||
Total bonds and preferred stocks |
$ | 3,686,983 | $ | 276,720 | $ | (9,414 | ) | $ | 3,954,289 | |||||||||
|
Impairment Review Process: All securities are subjected to the Company’s process for identifying OTTI. The Company writes down securities that it deems to have an OTTI in value in the period that the securities are deemed to be impaired, based on management’s case-by-case evaluation of the decline in value and prospects for recovery. Management considers a wide range of factors in the impairment evaluation process, including, but not limited to, the following: (a) the length of time the fair value has been below amortized cost; (b) the financial condition and near-term prospects of the issuer; (c) whether the debtor is current on contractually obligated interest and principal payments; (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value or repayment; (e) information obtained from regulators, rating agencies and various public sources; (f) the potential for impairments in an entire industry sector or sub-sector; (g) the potential for impairments in certain economically-depressed geographic locations; and (h) the potential for impairment based on an estimated discounted cash flow analysis for loan-backed and structured securities. Where impairment is considered to be other-than-temporary, the Company recognizes a write-down as a realized loss and adjusts the cost basis of the security accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. Once an impairment write-down has been recorded, the Company continues to review the impaired security for appropriate valuation on an ongoing basis.
B-68 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Based upon the factors above in the Company’s impairment evaluation process, the securities discussed in the following section which were in an unrealized loss position at December 31, 2013 and 2012, were not deemed to be other-than-temporarily impaired.
Unrealized Losses on Bonds and Preferred Stocks: The gross unrealized losses and estimated fair values for bonds and preferred stocks by the length of time that individual securities had been in a continuous unrealized loss position are shown in the table below (in thousands):
Less than twelve months | Twelve months or more | |||||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
|||||||||||||||||||||||
All other bonds |
$ | 1,400,475 | $ | (58,205 | ) | $ | 1,342,270 | $ | 112,629 | $ | (9,430 | ) | $ | 103,199 | ||||||||||||||
Loaned-backed and structured bonds |
150,655 | (4,630 | ) | 146,025 | 33,140 | (2,399 | ) | 30,741 | ||||||||||||||||||||
Total bonds |
$ | 1,551,130 | $ | (62,835 | ) | $ | 1,488,295 | $ | 145,769 | $ | (11,829 | ) | $ | 133,940 | ||||||||||||||
Preferred stocks |
— | — | — | — | — | — | ||||||||||||||||||||||
Total bonds and preferred stocks |
$ | 1,551,130 | $ | (62,835 | ) | $ | 1,488,295 | $ | 145,769 | $ | (11,829 | ) | $ | 133,940 | ||||||||||||||
| ||||||||||||||||||||||||||||
Less than twelve months | Twelve months or more | |||||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
|||||||||||||||||||||||
All other bonds |
$ | 152,915 | $ | (843 | ) | $ | 152,072 | $ | 21,960 | $ | (1,332 | ) | $ | 20,628 | ||||||||||||||
Loaned-backed and structured bonds |
— | — | — | 71,292 | (7,239 | ) | 64,053 | |||||||||||||||||||||
Total bonds |
$ | 152,915 | $ | (843 | ) | $ | 152,072 | $ | 93,252 | $ | (8,571 | ) | $ | 84,681 | ||||||||||||||
Preferred stocks |
— | — | — | — | — | — | ||||||||||||||||||||||
Total bonds and preferred stocks |
$ | 152,915 | $ | (843 | ) | $ | 152,072 | $ | 93,252 | $ | (8,571 | ) | $ | 84,681 | ||||||||||||||
|
As of December 31, 2013, the categories of securities where the estimated fair value declined and remained below cost for less than twelve months were concentrated in manufacturing (19%), U.S. and other governments (12%) and public utilities (11%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
As of December 31, 2013, the categories of securities where the estimated fair value declined and remained below cost for twelve months or greater were concentrated in communication (27%), U.S. and other governments (14%), and commercial mortgage-backed securities (12%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
As of December 31, 2012, the categories of securities where the estimated fair value declined and remained below cost for less than twelve months were concentrated in public utilities (28%), revenue and special obligations (21%) and manufacturing (12%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
As of December 31, 2012, the categories of securities where the estimated fair value declined and remained below cost for twelve months or greater were concentrated in commercial mortgage-backed securities (55%) and residential mortgage-backed securities (21%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
Based upon the Company’s current evaluation of these securities in accordance with its impairment policy, the cause of the decline is primarily attributable to increased market yields for these particular securities since acquisition caused principally by credit spreads. The Company currently intends and has the ability to hold the securities with unrealized losses for a period of time sufficient for them to recover and the Company has concluded that these securities are not other–than-temporarily impaired.
Single Premium Immediate Annuities n Statement of Additional Information | B-69 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
Scheduled Maturities of Bonds: The carrying value and estimated fair value of bonds, categorized by contractual maturity, are shown below. Bonds not due at a single maturity date have been included in the following table based on the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may prepay obligations with or without call or prepayment penalties. Mortgage-backed and asset-backed securities are shown separately in the table below, as they are not due at a single maturity date (dollars in thousands):
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||||
Carrying Value |
% of Total |
Estimated Fair Value |
Carrying Value |
% of Total |
Estimated Fair Value |
|||||||||||||||||||||||
Due in one year or less |
$ | 355,309 | 8.7 | % | $ | 359,893 | $ | 338,034 | 9.2 | % | $ | 345,739 | ||||||||||||||||
Due after one year through five years |
1,354,124 | 33.0 | 1,378,917 | 1,361,867 | 37.0 | 1,422,373 | ||||||||||||||||||||||
Due after five years through ten years |
1,002,342 | 24.4 | 1,003,560 | 827,612 | 22.5 | 891,555 | ||||||||||||||||||||||
Due after ten years |
937,191 | 22.8 | 951,935 | 619,507 | 16.7 | 727,905 | ||||||||||||||||||||||
Subtotal |
3,648,966 | 88.9 | 3,694,305 | 3,147,020 | 85.4 | 3,387,572 | ||||||||||||||||||||||
Residential mortgage-backed securities |
266,957 | 6.5 | 276,293 | 333,499 | 9.0 | 354,369 | ||||||||||||||||||||||
Commercial mortgage-backed securities |
80,522 | 1.9 | 80,900 | 87,345 | 2.4 | 85,587 | ||||||||||||||||||||||
Asset-backed securities |
109,507 | 2.7 | 112,268 | 116,649 | 3.2 | 123,442 | ||||||||||||||||||||||
Subtotal |
456,986 | 11.1 | 469,461 | 537,493 | 14.6 | 563,398 | ||||||||||||||||||||||
Total |
$ | 4,105,952 | 100.0 | % | $ | 4,163,766 | $ | 3,684,513 | 100.0 | % | $ | 3,950,970 | ||||||||||||||||
|
For the year ended December 31, 2013, the preceding table includes no NAIC 6 long-term bond investments.
For the year ended December 31, 2013, the preceding table includes sub-prime mortgage investments totaling $10,456 thousand under residential mortgage-backed securities. 100% of the sub-prime securities were rated investment grade (NAIC 1 and 2).
For the year ended December 31, 2012, the preceding table includes no NAIC 6 long-term bond investments.
For the year ended December 31, 2012, the preceding table includes sub-prime mortgage investments totaling $13,248 thousand under residential mortgage-backed securities. 68% of the sub-prime securities were rated investment grade (NAIC 1 and 2).
Bond Diversification: The carrying values of long-term bond investments were diversified by the following classification at December 31 as follows:
2013 | 2012 | |||||||
Manufacturing |
23.6 | % | 25.0 | % | ||||
Finance and financial services |
16.5 | 12.4 | ||||||
Public utilities |
12.3 | 13.7 | ||||||
Oil and gas |
8.6 | 8.1 | ||||||
Residential mortgage-backed securities |
6.5 | 9.1 | ||||||
U.S. and other governments |
5.7 | 3.9 | ||||||
Mining |
4.4 | 3.6 | ||||||
Transportation |
4.2 | 3.5 | ||||||
Communication |
4.0 | 4.9 | ||||||
Asset Backed Securities |
2.7 | 3.2 | ||||||
Revenue and Special Obligation |
2.7 | 2.4 | ||||||
Services |
2.6 | 2.9 | ||||||
Real estate investment trusts |
2.3 | 3.1 | ||||||
Commercial mortgage backed securities |
2.0 | 2.4 | ||||||
Retail and wholesale trade |
1.9 | 1.8 | ||||||
Total |
100.0 | % | 100.0 | % | ||||
|
Troubled Debt Restructuring: There were no troubled debt restructurings during 2013 or 2012.
Exchanges: The Company acquired bonds and stocks through exchanges aggregating $120,379 thousand and $14,961 thousand during the year ended December 31, 2013 and 2012, respectively. When exchanging securities, the Company generally accounts for assets at their fair value with any gain or loss realized at the date of exchange, unless the exchange was as a result of restricted securities under SEC rule 144A exchanged for unrestricted securities, which are accounted for at book value.
Loan-backed and Structured Securities: The near-term prepayment assumptions for loan-backed and structured securities are based on historical averages drawing from performance experience for a particular transaction and may vary by security type. The long-term assumptions are adjusted based on expected performance.
B-70 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
The Company had no OTTI on securities which it lacked the ability to hold or had the intent to sell for the year ended December 31, 2013.
The following represents OTTI on securities with the intent to sell or the inability to retain for the year ended December 31, 2012 (in thousands):
1 | 2 | 3 | ||||||||||||||
Amortized Cost Basis Before OTTI |
OTTI Recognized in Loss | |||||||||||||||
2a Interest |
2b Non-interest |
Fair Value 1-(2a+2b) |
||||||||||||||
OTTI recognized |
||||||||||||||||
a. Intent to sell |
$ | 7,731 | $ | 1,486 | $ | 2,111 | $ | 4,134 | ||||||||
b. Inability to retain |
— | — | — | — | ||||||||||||
Total |
$ | 7,731 | $ | 1,486 | $ | 2,111 | $ | 4,134 | ||||||||
|
The Company had no loan-backed or structured securities where the present value of cash flows expected to be collected was less than amortized cost and did not recognize any OTTI for the year ended December 31, 2013.
Other disclosures:
At December 31, 2013 and 2012, the carrying value of common stock denominated in foreign currency was $573 thousand and $271 thousand, respectively. The Company had no bonds denominated in foreign currency as of December 31, 2013 or 2012.
Debt securities amounting to approximately $8,324 thousand and $8,401 thousand at December 31, 2013 and 2012, respectively, were on deposit with governmental authorities or trustees, as required by law.
The Company had no restricted stock as of December 31, 2013 or 2012.
Note 4 – mortgage loans
As of December 31, 2013, the Company did not have any mortgage loans. The Company did not originate conventional loans or acquire mezzanine loans during 2013 or 2012; therefore, there was no coupon rate or maximum percentage of any one loan to the value of the security at the time of the originated loans for 2013 or 2012.
Note 5 – subsidiaries and affiliates
TIAA-CREF Life Insurance Agency (“Agency”) is the sole operating subsidiary of TIAA-CREF Life. The Company has no investments in subsidiary, controlled and affiliated entities that exceed 10% of its admitted assets. Agency’s carrying value of $1,140 thousand and $1,128 thousand at December 31, 2013 and 2012, respectively, is included in other long-term investments on the statutory-basis statements of admitted assets, liabilities and capital and surplus. The carrying value of Agency was not audited or other-than-temporarily impaired for the years ended December 31, 2013 or 2012.
At December 31, 2013 and 2012, respectively, the Company reported $14,254 thousand and $11,744 thousand as amounts due to parent, subsidiaries and affiliates.
Note 6 – commitments
At December 31, 2013, the Company had no outstanding commitments to fund future investments.
Note 7 – investment income and capital gains and losses
Net Investment Income: The components of net investment income for the years ended December 31, were as follows (in thousands):
2013 | 2012 | 2011 | ||||||||||
Bonds |
$ | 151,290 | $ | 145,961 | $ | 131,395 | ||||||
Stocks |
151 | 385 | 491 | |||||||||
Mortgage loans |
— | 496 | 1,006 | |||||||||
Cash, cash equivalents and short-term investments |
28 | 441 | 514 | |||||||||
Other long-term investments |
1,181 | 1,047 | 457 | |||||||||
Total gross investment income |
$ | 152,650 | $ | 148,330 | $ | 133,863 | ||||||
Less investment expenses |
(3,846 | ) | (2,831 | ) | (2,224 | ) | ||||||
Net investment income before amortization of IMR |
148,804 | 145,499 | 131,639 | |||||||||
Amortization of IMR |
1,525 | 2,250 | 1,046 | |||||||||
Net investment income |
$ | 150,329 | $ | 147,749 | $ | 132,685 | ||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-71 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
The Company had no due and accrued income excluded from net income for the years ended December 31, 2013, 2012 or 2011.
Realized Capital Gains and Losses: The net realized capital gains (losses) on sales, redemptions of investments and write-downs due to OTTI for the years ended December 31 were as follows (in thousands):
2013 | 2012 | 2011 | ||||||||||
Bonds |
$ | 3,031 | $ | (2,804 | ) | $ | (5,022 | ) | ||||
Stocks |
— | 256 | — | |||||||||
Cash, cash equivalent and short-term investments |
13 | (7 | ) | 51 | ||||||||
Total before capital gain (loss) tax and transfers to IMR |
3,044 | (2,555 | ) | (4,971 | ) | |||||||
Transfers to IMR |
(2,360 | ) | (2,757 | ) | (1,299 | ) | ||||||
Capital loss tax benefit (expense) |
(721 | ) | 2,952 | 15,460 | ||||||||
Net realized capital gains (losses) less capital gains tax, after transfers to IMR |
$ | (37 | ) | $ | (2,360 | ) | $ | 9,190 | ||||
|
Write-downs of investments resulting from OTTI, included in the preceding table, were as follows for the years ended December 31 (in thousands):
2013 | 2012 | 2011 | ||||||||||
Other-than-temporary impairments: |
||||||||||||
Bonds |
$ | 876 | $ | 8,287 | $ | 8,243 | ||||||
Total |
$ | 876 | $ | 8,287 | $ | 8,243 | ||||||
|
The Company generally holds its investments until maturity. The Company performs periodic reviews of its portfolio to identify investments which may have deteriorated in credit quality to determine if any are candidates for sale in order to maintain a quality portfolio of investments. Investments which are deemed candidates for sale are continually monitored until sold and carried at the lower of amortized cost or fair value. In accordance with the Company’s valuation and impairment process the investment will be monitored quarterly for further declines in fair value at which point an OTTI will be recorded until actual disposal of the investment.
Proceeds from sales of long-term bond investments during 2013, 2012 and 2011 were $66,840 thousand, $199,747 thousand and $104,382 thousand, respectively. Gross gains of $4,605 thousand, $5,668 thousand and $5,143 thousand, and gross losses, excluding impairments considered to be other-than-temporary, of $698 thousand, $184 thousand and $1,922 thousand were realized during 2013, 2012 and 2011, respectively.
Wash Sales: The Company does not engage in the practice of wash sales, however, in isolated cases in the course of asset management activities, a security may be sold and repurchased in whole or in part within thirty days of the sale. There were no securities with a NAIC designation of 3 or below, or unrated, that were sold and reacquired within 30 days of the sale date during 2013, 2012 or 2011.
Unrealized Capital Gains and Losses: For the years ended December 31, 2013, 2012 and 2011, the net change in unrealized capital gains in investments, resulting in a net increase in carrying value of investments was $314 thousand, $129 thousand and $2,723 thousand, respectively.
Note 8 – disclosures about fair value of financial instruments
Fair value of financial instruments
Included in the Company’s financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value, such as when impaired, or for certain bonds and preferred stock when carried at the lower of cost or fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Fair values of financial instruments are based on quoted market prices when available. When market prices are not available, fair values are primarily provided by a third party-pricing service for identical or comparable assets, or through the use of valuation methodologies using observable market inputs. These fair values are generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality. In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that management believes market participants would use to determine a current transaction price. These valuation techniques involve management estimation and judgment for many factors including market bid/ask spreads, and such estimations may become significant with increasingly complex instruments or pricing models.
B-72 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
The following table provides information about the aggregate fair value for all financial instruments and the level within the fair value hierarchy at December 31, 2013 (in thousands):
Aggregate Fair Value |
Admitted Assets |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||
Bonds |
$ | 4,163,766 | $ | 4,105,952 | $ | — | $ | 4,148,745 | $ | 15,021 | $ | — | ||||||||||||||
Common Stock |
573 | 573 | 573 | — | — | — | ||||||||||||||||||||
Preferred Stock |
6,329 | 2,470 | 6,329 | — | — | — | ||||||||||||||||||||
Separate Accounts |
3,657,612 | 3,668,669 | 1,376,020 | 2,281,592 | — | — | ||||||||||||||||||||
Contract Loans |
10,467 | 10,467 | — | — | 10,467 | — | ||||||||||||||||||||
Cash, Cash Equivalent and Short Term Investments |
114,886 | 114,882 | 34,304 | 80,582 | — | — | ||||||||||||||||||||
Total |
$ | 7,953,633 | $ | 7,903,013 | $ | 1,417,226 | $ | 6,510,919 | $ | 25,488 | $ | — | ||||||||||||||
| ||||||||||||||||||||||||||
Aggregate Fair Value |
Statement Value |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||
Deposit-type Contracts |
$ | 2,013,451 | $ | 2,013,451 | $ | — | $ | — | $ | 2,013,451 | $ | — | ||||||||||||||
Separate Account |
3,638,741 | 3,638,741 | — | — | 3,638,741 | — | ||||||||||||||||||||
Total |
$ | 5,652,192 | $ | 5,652,192 | $ | — | $ | — | $ | 5,652,192 | $ | — | ||||||||||||||
|
The following table provides information about the aggregate fair value for all financial instruments and the level within the fair value hierarchy at December 31, 2012 (in thousands):
Aggregate Fair Value |
Admitted Assets |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||
Bonds |
$ | 3,950,970 | $ | 3,684,513 | $ | — | $ | 3,919,926 | $ | 31,044 | $ | — | ||||||||||||||
Common Stock |
271 | 271 | 271 | — | — | — | ||||||||||||||||||||
Preferred Stock |
3,319 | 2,470 | 3,319 | — | — | — | ||||||||||||||||||||
Separate Accounts |
1,797,512 | 1,789,814 | 967,553 | 829,959 | — | — | ||||||||||||||||||||
Contract Loans |
7,129 | 7,129 | — | — | 7,129 | — | ||||||||||||||||||||
Cash, Cash Equivalent and Short Term Investments |
87,951 | 87,953 | 22,457 | 65,494 | — | — | ||||||||||||||||||||
Total |
$ | 5,847,152 | $ | 5,572,150 | $ | 993,600 | $ | 4,815,379 | $ | 38,173 | $ | — | ||||||||||||||
| ||||||||||||||||||||||||||
Aggregate Fair Value |
Statement Value |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||
Deposit-type Contracts |
$ | 1,859,466 | $ | 1,859,466 | $ | — | $ | — | $ | 1,859,466 | $ | — | ||||||||||||||
Separate Account |
1,760,489 | 1,760,489 | — | — | 1,760,489 | — | ||||||||||||||||||||
Total |
$ | 3,619,955 | $ | 3,619,955 | $ | — | $ | — | $ | 3,619,955 | $ | — | ||||||||||||||
|
The estimated fair values of the financial instruments presented above were determined by the Company using market information available as of December 31, 2013 and 2012. Considerable judgment is required to interpret market data in developing the estimates of fair value for financial instruments for which there are no available market value quotations. The estimates presented are not necessarily indicative of the amounts the Company could have realized in a market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
Assets and liabilities measured and reported at fair value
The Company’s financial assets and liabilities measured and reported at fair value have been classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100, Fair Value Measurements. The fair value hierarchy prioritizes the inputs to
Single Premium Immediate Annuities n Statement of Additional Information | B-73 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
valuation techniques used to measure fair value into three broad levels. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and Level 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
• | Level 1—Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. |
• | Level 2—Other than quoted prices within Level 1 inputs that are observable for the asset or liability, either directly or indirectly. |
Level 2 inputs include:
Ÿ | Quoted prices for similar assets or liabilities in active markets, |
Ÿ | Quoted prices for identical or similar assets or liabilities in markets that are not active, |
Ÿ | Inputs other than quoted prices that are observable for the asset or liability, |
Ÿ | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3—Inputs are unobservable inputs for the asset or liability supported by little or no market activity. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company’s data used to develop unobservable inputs is adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different assumptions. |
Financial assets and liabilities measured and reported at fair value
The following table provides information about the Company’s financial assets and liabilities measured and reported at fair value at December 31 (in thousands):
2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets at fair value: |
||||||||||||||||
Common Stock |
||||||||||||||||
Industrial and miscellaneous |
$ | 573 | $ | — | $ | — | $ | 573 | ||||||||
Separate accounts assets, net |
1,309,909 | 79,037 | — | 1,388,946 | ||||||||||||
Total assets at fair value |
$ | 1,310,482 | $ | 79,037 | $ | — | $ | 1,389,519 | ||||||||
|
||||||||||||||||
Total liabilities at fair value |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
2012 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets at fair value: |
||||||||||||||||
Common Stock |
||||||||||||||||
Industrial and miscellaneous |
$ | 271 | $ | — | $ | — | $ | 271 | ||||||||
Separate accounts assets, net |
960,225 | 82,876 | — | 1,043,101 | ||||||||||||
Total assets at fair value |
$ | 960,496 | $ | 82,876 | $ | — | $ | 1,043,372 | ||||||||
|
||||||||||||||||
Total liabilities at fair value |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
For assets and liabilities held at December 31, 2013 and 2012, the Company had no transfers between Level 1 and Level 2 of the fair value hierarchy. The Company’s policy is to recognize transfers between levels at the actual date of the event or change in circumstances that caused the transfer.
Level 1 financial instruments
Unadjusted quoted prices for these securities are provided to the Company by independent pricing services. Common stocks and separate account assets in Level 1 primarily include mutual fund investments valued by the respective mutual fund companies and exchange traded equities.
Level 2 financial instruments
Separate account assets in Level 2 consist principally of corporate bonds, short term government agency notes and commercial paper.
Level 3 financial instruments
There are no securities measured and reported at fair value in Level 3 as of December 31, 2013 and 2012.
B-74 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Typical inputs to models used by independent pricing services include but are not limited to benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, and industry and economic events. Because such instruments do not trade daily, independent pricing services regularly derive fair values using recent trades of securities with similar features. When recent trades are not available, pricing models are used to estimate the fair values of securities by discounting future cash flows at estimated market interest rates.
If an independent pricing service is unable to provide the fair value for a security due to insufficient market information, such as for a private placement transaction, the Company will determine the fair value internally using tools such as matrix pricing model. Such models estimate fair value using discounted cash flows at a market yield considering the appropriate treasury rate plus a spread. The spread is derived by reference to similar securities, and may be adjusted based on specific characteristics of the security, including inputs that are not readily observable in the market. The Company assesses the significance of unobservable inputs for each security priced internally and classifies that security in Level 3 as a result of the significance of unobservable inputs.
Reconciliation of Level 3 assets and liabilities measured and reported at fair value:
At December 31, 2013 and 2012, there were no assets or liabilities measured and reported at fair value using Level 3 inputs. The Company’s policy is to recognize transfers into and out of Level 3 at the actual date of the event or change in circumstances that caused the transfer.
Note 9 – restricted assets
The following table provides information on amounts and the nature of any assets pledged to others as collateral or otherwise restricted by the Company.
Restricted Assets at December 31, 2013 (dollars in thousands):
Gross Restricted | Percentage | |||||||||||||||||||||||||||||||||||||||
Current Year |
|
|||||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||
Restricted Asset Category |
Total General Account (G/A) |
G/A Supporting (S/A) Activity |
Total Separate Account (S/A) Restricted Assets |
S/A Assets Supporting G/A Activity |
Total (1 plus 3) |
Total From Prior Year |
Increase/ (Decrease) (5 minus 6) |
Total Current Year Admitted Restricted |
Gross Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||||||||||||||
On deposit with states |
$ | 8,324 | $ | — | $ | — | $ | — | $ | 8,324 | $ | 8,402 | $ | (78 | ) | $ | 8,324 | 0.103 | % | 0.104 | % | |||||||||||||||||||
Total Restricted Assets |
$ | 8,324 | $ | — | $ | — | $ | — | $ | 8,324 | $ | 8,402 | $ | (78 | ) | $ | 8,324 | 0.103 | % | 0.104 | % | |||||||||||||||||||
|
Note 10 – derivative financial instruments
The Company uses derivative instruments for hedging and income generation. The Company does not engage in derivative financial instrument transactions for speculative purposes. As of December 31, 2013, the Company did not hold any derivative instruments and no collateral was held or posted.
Foreign Currency Swap Contracts: The Company enters into foreign currency swap contracts to exchange fixed and variable amounts of foreign currency at specified future dates and at specified rates (in U.S. dollars) as a cash flow hedge to manage currency risks on investments denominated in foreign currencies. The Company did not enter into any foreign currency swap contracts for the years ended December 31, 2013 and 2012.
Interest Rate Swap Contracts: The Company enters into interest rate swap contracts to hedge against the effect of interest rate fluctuations on certain variable interest rate bonds. These contracts are designated as economic cash flow hedges and allow the Company to lock in a fixed interest rate and to transfer the risk of rate changes. This type of derivative instrument is traded over-the-counter, and the Company is exposed to both market and counterparty risk. The Company also enters into interest rate swap contracts to exchange the cash flows on certain fixed interest rate bonds into variable interest rate cash flows. These contracts are designated as economic fair value hedges in connection with certain interest sensitive products, and are carried at fair value as hedge accounting is not applied. For the years ended December 31, 2013 and 2012, the Company did not enter into any interest rate swap contracts.
Credit Default Swaps: The Company purchases credit default swaps as protection against unexpected adverse credit events in selective investments in the Company’s portfolio. This type of derivative is traded over-the-counter, and the Company is exposed to market, credit, and counterparty risk. When these swap contracts are designated as hedges, the premium payment to the
Single Premium Immediate Annuities n Statement of Additional Information | B-75 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
counterparty is expensed as incurred. Derivative instruments used in hedging transactions that do not qualify for hedge accounting treatment are accounted for at fair value. For the years ended December 31, 2013 and 2012, the Company did not enter into any credit default swaps contracts.
Note 11 – separate accounts
The Company utilizes separate accounts to record and account for assets and liabilities for particular lines of business and/or transactions. As of December 31, 2013, the Company reported separate account assets and liabilities for the following products: Variable Life, Variable Annuity, Group Life, Modified Guaranteed Annuity and Group Annuity Guaranteed Investment Contract (“GIC”).
The Company’s Separate Account VLI-1 (“VLI-1”) is a unit investment trust and was organized on May 23, 2001, and established under New York Law for the purpose of issuing and funding flexible premium variable universal life insurance policies. The assets of this account are carried at market value.
The Company’s Separate Account VLI-2 (“VLI-2”) is a unit investment trust and was organized on February 15, 2012 and established under New York Law for the purpose of issuing and funding group and individual variable life insurance policies. The assets of this account are carried at market value.
The Company’s Separate Account VA-1 (“VA-1”) was established on July 27, 1998 to fund individual non-qualified variable annuities. VA-1 is registered with the Securities and Exchange Commission (the “Commission”) as a unit investment trust under the Investment Company Act of 1940. The assets of this account are carried at market value.
The Company’s Separate Account MVA-1 (“MVA-1”) was established on July 23, 2008, as a non-unitized Separate Account that supports flexible premium deferred fixed annuity contracts subject to withdrawal charges and a market value adjustment feature. The Company has $20,000 thousand of seed money in the Company’s MVA-1 product since 2008 when the separate account was established. The assets of this account are carried at fair value.
The Company’s Stable Value Separate Account-1 (“SVSA-1”) was established on May 14, 2012 as a non-unitized guaranteed separate account that supports book value separate account agreement contracts issued to certain externally managed stable value funds. The assets of this account are carried at book value.
The Company’s Stable Value Separate Account-2 (“SVSA-2”) was established on May 21, 2012 as a non-unitized guaranteed separate account that supports book value separate account agreement contracts issued to certain externally managed stable value funds. The assets of this account are carried at book value.
The Company’s Stable Value Separate Account-3 (“SVSA-3”) was established on November 13, 2013 as a non-unitized guaranteed separate account that supports book value separate account agreement contracts issued to certain externally managed stable value funds. The assets of this account are carried at book value.
For the SVSA accounts participant withdrawals are subject to restrictions and would typically be funded through a cash buffer account managed outside of the contract. Any excess benefit withdrawals would then be paid by the Company from the contract at book value. Plan sponsor withdrawals and certain participant-initiated withdrawals in excess of the cash buffer account are paid at the lesser of book or market value or at book value if 12 months advance notice is provided.
The Company does not engage in securities lending transactions within the separate accounts.
In accordance with the domiciliary state procedures for approving items within the separate account, the separate account classifications of the following items are supported by a specific state statute:
Product Identification | Product Classification | State Statute Reference | ||
TC Life VLI—1 |
Variable Life | Section 4240 of the New York Insurance Law | ||
TC Life VLI—2 |
Variable Life/Group Life | Section 4240 of the New York Insurance Law | ||
TC Life VA—1 |
Variable Annuity | Section 4240 of the New York Insurance Law | ||
TC Life MVA—1 |
Modified Guaranteed Annuity | Section 4240 of the New York Insurance Law | ||
TC Life SVSA—1 |
Group Annuity GIC | Section 4240 (a)(5)(ii) of the New York Insurance Law | ||
TC Life SVSA—2 |
Group Annuity GIC | Section 4240 (a)(5)(ii) of the New York Insurance Law | ||
TC Life SVSA—3 |
Group Annuity GIC | Section 4240 (a)(5)(ii) of the New York Insurance Law |
In accordance with the products recorded within the separate account, some assets are considered legally insulated while others are not legally insulated from the general account. The legal insulation of the separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account.
B-76 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
As of December 31, the Company’s separate account statement included assets legally insulated from the general account for the following products (in thousands):
2013 | 2012 | |||||||||||||||
Product | Legally Insulated Assets |
Separate Account Assets (Not Legally Insulated) |
Legally Insulated Assets |
Separate Account Assets (Not Legally Insulated) |
||||||||||||
TC Life VLI -1 |
$ | 83,355 | $ | — | $ | 59,367 | $ | — | ||||||||
TC Life VLI—2 |
29,494 | — | 6,277 | — | ||||||||||||
TC Life VA—1 |
1,189,555 | — | 886,060 | — | ||||||||||||
TC Life MVA—1 |
— | 86,542 | — | 91,397 | ||||||||||||
TC Life SVSA—1 |
1,014,856 | — | 746,713 | — | ||||||||||||
TC Life SVSA—2 |
514,387 | — | — | — | ||||||||||||
TC Life SVSA—3 |
750,480 | — | — | — | ||||||||||||
Total |
$ | 3,582,127 | $ | 86,542 | $ | 1,698,417 | $ | 91,397 | ||||||||
|
In accordance with the specific rules for products recorded within the separate account, some separate account liabilities are guaranteed by the general account.
As of December 31, 2013 and 2012, the general account of the Company had a maximum guarantee for separate account liabilities of $1,945 thousand and $3,801 thousand, respectively. The amount paid for risk charges is not explicit, but rather embedded within the mortality and expense charges. The separate accounts had no reserves for asset default risk that were recorded in lieu of contributions to AVR.
As of December 31, 2013, the general account of the Company had paid (received) $(11) thousand towards separate account guarantees. The total separate account guarantees paid (received) by the general account for the preceding four years ending at December 31, are as following (in thousands):
2012 |
$ | 203 | ||
2011 |
$ | 197 | ||
2010 |
$ | 111 | ||
2009 |
$ | 341 |
Although the Company owns the assets of these separate accounts, the separate accounts’ income, investment gains and investment losses are credited to or charged against the assets of the separate accounts without regard to the Company’s other income, gains or losses.
Information regarding separate accounts of the Company is as follows (in thousands):
December 31, 2013 | ||||||||||||||||
Non-indexed less than or |
Non-indexed Guarantee more than 4% |
Non-guaranteed Separate Accounts |
Total | |||||||||||||
Premiums, considerations or deposits |
$ | 1,540,355 | $ | — | $ | 247,444 | $ | 1,787,799 | ||||||||
Reserves at 12/31/2013 for accounts with assets at: |
||||||||||||||||
Fair value |
$ | 34,473 | $ | 22,367 | $ | 1,300,243 | $ | 1,357,083 | ||||||||
Amortized cost |
2,269,111 | — | — | 2,269,111 | ||||||||||||
Total reserves |
$ | 2,303,584 | $ | 22,367 | $ | 1,300,243 | $ | 3,626,194 | ||||||||
|
||||||||||||||||
By withdrawal characteristics: |
||||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||
With fair value adjustment |
$ | 34,473 | $ | 22,367 | $ | — | $ | 56,840 | ||||||||
At fair value |
2,269,111 | — | 1,300,243 | 3,569,354 | ||||||||||||
At book value without fair value adjustment and with current surrender charge less than 5% |
— | — | — | — | ||||||||||||
Total reserves |
$ | 2,303,584 | $ | 22,367 | $ | 1,300,243 | $ | 3,626,194 | ||||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-77 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
December 31, 2012 | ||||||||||||||||
Non-indexed Guarantee less than or equal to 4% |
Non-indexed Guarantee more than 4% |
Non-guaranteed Separate Accounts |
Total | |||||||||||||
Premiums, considerations or deposits |
$ | 726,731 | $ | — | $ | 152,204 | $ | 878,935 | ||||||||
Reserves at 12/31/2012 for accounts with assets at: |
||||||||||||||||
Fair value |
$ | 35,999 | $ | 24,499 | $ | 952,048 | $ | 1,012,546 | ||||||||
Amortized cost |
728,526 | — | — | 728,526 | ||||||||||||
Total reserves |
$ | 764,525 | $ | 24,499 | $ | 952,048 | $ | 1,741,072 | ||||||||
|
||||||||||||||||
By withdrawal characteristics: |
||||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||
With fair value adjustment |
$ | 32,123 | $ | 24,214 | $ | — | $ | 56,337 | ||||||||
At fair value |
728,526 | — | 952,048 | 1,680,574 | ||||||||||||
At book value without fair value adjustment and with current surrender charge |
3,876 | 285 | — | 4,161 | ||||||||||||
Total reserves |
$ | 764,525 | $ | 24,499 | $ | 952,048 | $ | 1,741,072 | ||||||||
|
December 31, 2011 | ||||||||||||||||
Non-indexed Guarantee less than or equal to 4% |
Non-indexed Guarantee more than 4% |
Non-guaranteed Separate Accounts |
Total | |||||||||||||
Premiums, considerations or deposits |
$ | 3,979 | $ | — | $ | 118,256 | $ | 122,235 | ||||||||
Reserves at 12/31/2011 for accounts with assets at: |
||||||||||||||||
Fair value |
$ | 41,352 | $ | 29,235 | $ | 777,106 | $ | 841,693 | ||||||||
Amortized cost |
— | — | — | — | ||||||||||||
Total reserves |
$ | 41,352 | $ | 23,235 | $ | 777,106 | $ | 841,693 | ||||||||
|
||||||||||||||||
By withdrawal characteristics: |
||||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||
With fair value adjustment |
$ | 32,839 | $ | 23,216 | $ | — | $ | 56,055 | ||||||||
At fair value |
— | — | 777,106 | 777,106 | ||||||||||||
At book value without fair value adjustment and with current surrender charge less than 5% |
8,513 | 19 | — | 8,532 | ||||||||||||
Total reserves |
$ | 41,352 | $ | 23,235 | $ | 777,106 | $ | 841,693 | ||||||||
|
The following is a reconciliation of transfers to or (from) the Company to the Separate Accounts (in thousands):
2013 | 2012 | 2011 | ||||||||||
Transfers as reported in the Summary of Operations of the Separate Accounts Statement: |
||||||||||||
Transfers to Separate Accounts |
$ | 266,154 | $ | 167,500 | $ | 133,624 | ||||||
Transfers from Separate Accounts |
(122,691 | ) | (109,352 | ) | (96,582 | ) | ||||||
Net transfers to Separate Accounts |
143,463 | 58,148 | 37,042 | |||||||||
Reconciling Adjustments: |
||||||||||||
Fund transfer exchange gain (loss) |
(233 | ) | (172 | ) | 896 | |||||||
Transfers as reported in the Statements of Operations of the Life, Accident & Health Annual Statement |
$ | 143,230 | $ | 57,976 | $ | 37,938 | ||||||
|
Note 12 – related party transactions
The majority of services for the operation of the Company are provided at cost by TIAA pursuant to a Service Agreement. Expense reimbursement payments under the Service Agreement are made quarterly by TIAA-CREF Life to TIAA based on TIAA’s costs for providing such services. The Company also reimburses TIAA, at cost, on a quarterly basis for certain investment management services, according to the terms of an Investment Management Agreement. Reimbursements of $91,136 thousand, $71,383 thousand and $47,383 thousand were made to TIAA for the years ended December 31, 2013, 2012 and 2011, respectively.
Teachers Advisors, Inc. (“Advisors”), a subsidiary of TIAA-CREF Asset Management LLC (“TCAM”), which is a wholly owned subsidiary of TIAA, provides investment advisory services and other administrative services for the TIAA-CREF Life Separate Accounts in accordance with an Investment Management Agreement. Teachers Personal Investors Services, Inc. (“TPIS”), a subsidiary of TCAM and TIAA-CREF Individual & Institutional Services, LLC (“Services”), a subsidiary of TIAA, are authorized to distribute contracts for the Separate Accounts. Reimbursement of $2,229 thousand, $702 thousand and $0 were made to Advisors for the years ended December 31, 2013, 2012 and 2011, respectively.
B-78 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Effective May 1, 2012, the Company reimbursed TPIS and Services, on an at cost basis, for distribution services for variable life and after tax annuities. Prior to May 1, 2012, the distribution services were paid for under a fee arrangement. Expenses associated with the distribution services agreement were $11,807 thousand, $7,062 thousand and $705 thousand for the years ended December 31, 2013, 2012 and 2011, respectively.
Services for certain funding agreements for qualified state tuition programs for which TIAA-CREF Tuition Financing, Inc. (“TFI”), a wholly-owned subsidiary of TCAM, is the program manager, are provided to TIAA-CREF Life by TFI pursuant to a service agreement between the Company and TFI. Payments associated with this service agreement were $8,754 thousand, $6,544 thousand and $4,621 thousand for the years ended December 31, 2013, 2012 and 2011, respectively.
The Company has a financial support agreement with TIAA. Under this agreement, TIAA will provide support so that TIAA-CREF Life will have the greater of (a) capital and surplus of $250 million, (b) the amount of capital and surplus necessary to maintain the Company’s capital and surplus at a level not less than 150% of the NAIC Risk Based Capital model or (c) such other amount as necessary to maintain TIAA-CREF Life’s financial strength ratings at least the same as TIAA’s rating. This agreement is not an evidence of indebtedness or an obligation or liability of TIAA and does not provide any creditor of TIAA-CREF Life with recourse to TIAA.
The Company maintains a $100 million unsecured 364-day revolving line of credit with TIAA. This line has an expiration date of July 14, 2014. As of December 31, 2013, $30 million of this facility was maintained on a committed basis for which the Company paid a commitment fee of 9.0 basis points on the unused committed amount. During the period ending December 31, 2013, 85 draw-downs totaling $228.5 million were made under this line of credit arrangement, with $76 thousand interest paid on these draw-downs, of which none were outstanding as of December 31, 2013.
Note 13 – federal income taxes
The Company has recorded current and deferred taxes in accordance with SSAP No. 101 Income Taxes – A Replacement of SSAP No. 10R and SSAP No. 10. The Company has exceeded the highest RBC threshold level which allows the Company to apply the smallest limitations to admit deferred tax assets under SSAP 101. The application of SSAP No. 101 requires a company to evaluate the recoverability of deferred tax assets and to establish a valuation allowance if necessary to reduce the deferred tax asset to an amount which is more likely than not to be realized. As of December 31, 2013 and December 31, 2012, the Company has not recorded a valuation allowance on deferred tax assets.
The components of Net Deferred Tax Assets (“DTA”) and Deferred Tax Liabilities (“DTL”) at December 31 are as follows (in thousands):
12/31/2013 | 12/31/2012 | Change | ||||||||||||||||||||||||||||||||||||
(1) Ordinary |
(2) Capital |
(3) (Col 1+2) Total |
(4) Ordinary |
(5) Capital |
(6) (Col 4+5) Total |
(7) (Col 1–4) Ordinary |
(8) (Col 2–5) Capital |
(9) (Col 7+8) Total |
||||||||||||||||||||||||||||||
a) Gross Deferred Tax Assets |
$ | 36,627 | $ | 6,218 | $ | 42,845 | $ | 18,299 | $ | 9,521 | $ | 27,820 | $ | 18,328 | $ | (3,303 | ) | $ | 15,025 | |||||||||||||||||||
b) Statutory Valuation Allowance Adjustments |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
c) Adjusted Gross Deferred Tax Assets (a—b) |
36,627 | 6,218 | 42,845 | 18,299 | 9,521 | 27,820 | 18,328 | (3,303 | ) | 15,025 | ||||||||||||||||||||||||||||
d) Deferred Tax Assets Nonadmitted |
22,078 | 4,808 | 26,886 | 7,321 | 9,077 | 16,398 | 14,757 | (4,269 | ) | 10,488 | ||||||||||||||||||||||||||||
e) Subtotal Net Admitted Deferred Tax Asset (c—d) |
14,549 | 1,410 | 15,959 | 10,978 | 444 | 11,422 | 3,571 | 966 | 4,537 | |||||||||||||||||||||||||||||
f) Deferred Tax Liabilities |
2,750 | 1,410 | 4,160 | 5,055 | 95 | 5,150 | (2,305 | ) | 1,315 | (990 | ) | |||||||||||||||||||||||||||
g) Net Admitted Deferred Tax Assets/(Net Deferred Tax Liability) (e—f) |
$ | 11,799 | $ | — | $ | 11,799 | $ | 5,923 | $ | 349 | $ | 6,272 | $ | 5,876 | $ | (349 | ) | $ | 5,527 | |||||||||||||||||||
|
12/31/2013 | 12/31/2012 | Change |
| |||||||||||||||||||||||||||||||||||
(1) Ordinary |
(2) Capital |
(3) (Col 1+2) Total |
(4) Ordinary |
(5) Capital |
(6) (Col 4+5) Total |
(7) (Col 1–4) Ordinary |
(8) (Col 2–5) Capital |
(9) (Col 7+8) Total |
||||||||||||||||||||||||||||||
Admission Calculation Components SSAP No. 101 |
|
|||||||||||||||||||||||||||||||||||||
a) Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks |
$ | 11,799 | $ | — | $ | 11,799 | $ | 5,923 | $ | 349 | $ | 6,272 | $ | 5,876 | $ | (349 | ) | $ | 5,527 | |||||||||||||||||||
b) Adjusted Gross DTA Expected To Be Realized (Excluding The Amount of DTA From 2(a) above After Application of the Threshold Limitation. (The Lesser of (b)1 and (b) 2 below) |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
1. Adjusted Gross DTA Expected to be Realized Following the Balance Sheet Date. |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
2. Adjusted Gross DTA Allowed per Limitation Threshold. |
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
c) Adjusted Gross DTA (Excluding The Amount of DTA From (a) and (b) above) Offset by Gross DTL. |
2,750 | 1,410 | 4,160 | 5,055 | 95 | 5,150 | (2,305 | ) | 1,315 | (990 | ) | |||||||||||||||||||||||||||
d) DTA Admitted as the result of application of SSAP No. 101. Total ((a)+(b)+(c)) |
$ | 14,549 | $ | 1,410 | $ | 15,959 | $ | 10,978 | $ | 444 | $ | 11,422 | $ | 3,571 | $ | 966 | $ | 4,537 | ||||||||||||||||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-79 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
2013 | 2012 | |||||||||
(a) Ratio Percentage Used to Determine Recovery Period and Threshold limitation Amount |
891 | % | 1,576 | % | ||||||
(b) Amount Of Adjusted Capital And Surplus Used To Determine Recovery Period And Threshold Limitation In (b)2 Above |
391,771 | 427,095 |
Impact of Tax Planning Strategies (in thousands):
12/31/2013 | 12/31/2012 | Change | ||||||||||||||||||||||||
(1) Ordinary |
(2) Capital |
(3) Ordinary |
(4) Capital |
(5) (Col 1–3) Ordinary |
(6) (Col 2-4) Capital |
|||||||||||||||||||||
Determination of adjusted gross deferred tax assets and net admitted deferred tax assets, by tax character as a percentage. |
||||||||||||||||||||||||||
1. Adjusted Gross DTAs amount from Note 9A1 (c) |
$ | 36,627 | $ | 6,218 | $ | 18,299 | $ | 9,521 | $ | 18,328 | $ | (3,303 | ) | |||||||||||||
2. Percentage of adjusted gross DTAs by tax character attributable to the impact of tax planning strategies |
— | — | — | — | — | — | ||||||||||||||||||||
3. Net admitted Adjusted Gross DTAs amount from |
$ | 14,549 | $ | 1,410 | $ | 10,978 | $ | 444 | $ | 3,571 | $ | 966 | ||||||||||||||
4. Percentage of net admitted adjusted gross DTAs by tax character admitted because of the impact of tax planning strategies |
— | — | — | — | — | — | ||||||||||||||||||||
Does the Company’s tax-planning strategy include the use of reinsurance? |
|
Yes | ¨ | No | x |
Current income taxes incurred consist of the following major components (in thousands):
12/31/2013 | 12/31/2012 | Change | ||||||||||
Current Income Tax: |
||||||||||||
Federal income taxes expense |
$ | 7,007 | $ | 1,240 | $ | 5,767 | ||||||
Foreign taxes |
— | — | — | |||||||||
Subtotal |
7,007 | 1,240 | 5,767 | |||||||||
Federal income taxes expense (benefit) on capital gains (losses) |
720 | (2,844 | ) | 3,564 | ||||||||
Other |
(57 | ) | (106 | ) | 49 | |||||||
Federal and foreign income taxes expense (benefit) |
$ | 7,670 | $ | (1,710 | ) | $ | 9,380 | |||||
|
12/31/2013 | 12/31/2012 | Change | ||||||||||
Deferred Tax Assets: |
||||||||||||
Ordinary |
||||||||||||
Policyholder reserves |
$ | 12,214 | $ | 4,976 | $ | 7,238 | ||||||
Deferred acquisition costs |
21,210 | 12,595 | 8,615 | |||||||||
Other (including items < 5% of total ordinary tax assets |
394 | 312 | 82 | |||||||||
Unauthorized reinsurance |
2,809 | 416 | 2,393 | |||||||||
Subtotal |
36,627 | 18,299 | 18,328 | |||||||||
Nonadmitted |
22,078 | 7,321 | 14,757 | |||||||||
Admitted ordinary deferred tax assets |
$ | 14,549 | $ | 10,978 | $ | 3,571 | ||||||
|
||||||||||||
Capital |
||||||||||||
Investments |
$ | 6,218 | $ | 9,521 | $ | (3,303 | ) | |||||
Net capital loss carry-forward |
— | — | — | |||||||||
Subtotal |
6,218 | 9,521 | (3,303 | ) | ||||||||
Statutory valuation allowance (“SVA”) adjustment |
— | — | — | |||||||||
Nonadmitted |
4,808 | 9,077 | (4,269 | ) | ||||||||
Admitted capital deferred tax assets |
1,410 | 444 | 966 | |||||||||
Admitted deferred tax assets |
$ | 15,959 | $ | 11,422 | $ | 4,537 | ||||||
|
||||||||||||
Deferred Tax Liabilities: |
||||||||||||
Ordinary |
||||||||||||
Investments |
$ | 2,750 | $ | 5,055 | $ | (2,305 | ) | |||||
Capital |
1,410 | 95 | 1,315 | |||||||||
Deferred tax liabilities |
$ | 4,160 | $ | 5,150 | $ | (990 | ) | |||||
|
||||||||||||
Net Deferred Tax Assets / Liabilities: |
||||||||||||
Assets/Liabilities |
$ | 11,799 | $ | 6,272 | $ | 5,527 | ||||||
|
B-80 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
The change in the net deferred income taxes is comprised of the following (this analysis is exclusive of non-admitted assets as the Change in Non-admitted Assets is reported separately from the Change in Net Deferred Income Taxes in the surplus section of the Annual Statement) for the years ended December 31 (in thousands):
2013 | 2012 | Change | ||||||||||
Total deferred tax assets |
$ | 42,845 | $ | 27,820 | $ | 15,025 | ||||||
Total deferred tax liabilities |
(4,160 | ) | (5,150 | ) | 990 | |||||||
Net deferred tax assets/liabilities |
38,685 | 22,670 | 16,015 | |||||||||
Statutory valuation allowance adjustment |
— | — | — | |||||||||
Net deferred tax assets/liabilities after SVA |
$ | 38,685 | $ | 22,670 | $ | 16,015 | ||||||
|
||||||||||||
Tax effect of unrealized gains/(losses) |
— | |||||||||||
Statutory valuation allowance adjustment allocated to unrealized |
— | |||||||||||
Other intra-period allocation of deferred tax movement |
— | |||||||||||
Change in net deferred income tax (charge) benefit |
$ | 16,015 | ||||||||||
|
The provision for federal and foreign income taxes incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference at December 31, 2013 are as follows (dollars in thousands):
Description | Amount | Effective Tax Rate |
||||||
Provision computed at statutory rate |
$ | (6,754 | ) | 35.00 | % | |||
Dividends received deduction |
(260 | ) | (1.35 | ) | ||||
Amortization of interest maintenance reserve |
(534 | ) | 2.77 | |||||
Prior year true-up |
350 | (1.82 | ) | |||||
Other |
(68 | ) | 0.35 | |||||
Total |
$ | (7,266 | ) | 37.65 | % | |||
|
||||||||
Federal and foreign income tax incurred |
$ | 7,670 | (39.75 | )% | ||||
Unauthorized reinsurance |
2,393 | (12.40 | ) | |||||
Change in net deferred income tax charge (benefit) |
(16,015 | ) | 82.99 | |||||
Tax effect on unrealized capital gain |
(1,314 | ) | 6.81 | |||||
Total statutory income taxes |
$ | (7,266 | ) | 37.65 | % | |||
|
At December 31, 2013, the Company had no net operating loss carry forwards or capital loss carry forwards.
Income tax, ordinary and capital available for recoupment from its parent, TIAA, in the event of future net losses include (in thousands):
Year Incurred | Ordinary | Capital | Total | |||||||||
2013 |
$ | 7,007 | $ | 720 | $ | 7,727 | ||||||
2012 |
1,182 | — | 1,182 | |||||||||
2011 |
10,379 | — | 10,379 | |||||||||
Total |
$ | 18,568 | $ | 720 | $ | 19,288 | ||||||
|
There was no deposits reported as admitted assets under IRC Section 6603.
The Company files a consolidated federal income tax return with its parent, TIAA and its affiliates:
1) TIAA-CREF Asset Management, Inc. *
2) Dan Properties, Inc.
3) JV Georgia One, Inc.
4). JWL Properties, Inc.
5) ND Properties, Inc.
6). TCT Holdings, Inc.
7) Teachers Advisors, Inc.
8) Teachers Personal Investors Service, Inc.
9) T-Investment Properties Corp.
10) TIAA-CREF Tuition Financing, Inc.
11) TIAA-CREF Trust Company, FSB.
12) GreenWood Resources, Inc.
13) 730 Texas Forest Holdings, Inc.
Single Premium Immediate Annuities n Statement of Additional Information | B-81 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
14) TIAA Global Markets, Inc.
15) T-C Sports Co., Inc.
16) TIAA Board of Overseers.
17) TIAA Park Evanston, Inc.
18) Oleum Holding Company, Inc.
19) Covariance Capital Management, Inc.
20) Westchester Group Investment Management, Inc.
21) Westchester Group Asset Management, Inc.
22) Westchester Group Investment Management Holding Company Inc.
23) Westchester Group Farm Management, Inc.
24) Westchester Group Real Estate, Inc.
* | TIAA-CREF Asset Management converted from a corporation to an LLC. effective December 31, 2013. |
The consolidating companies participate in a tax-sharing agreement. Under the agreement, current federal income tax expense (benefit) is computed on a separate return basis and provides that members shall make payments or receive reimbursements to the extent that their income (loss) contributes to or reduces consolidated federal tax expense. The consolidating companies are reimbursed for net operating losses or other tax attributes they have generated when utilized in the consolidated return.
The Company had no federal or foreign income tax loss contingencies as determined in accordance with SSAP No. 5R. Liabilities, Contingencies and Impairments of Assets, with the modifications provided in SSAP No. 101, Income Taxes – A Replacement of SSAP No. 10R and SSAP No. 10, for which it is reasonably possible that the total liability will significantly increase within 12 months of the reporting date.
The IRS examination for tax years 2007, 2008, and 2009 federal income tax returns is currently in progress.
Note 14 – pension plan and postretirement benefits
The Company has no employees. The Company’s parent, TIAA, allocates employee benefit expenses based on salaries attributable to the Company. The Company’s share of net expense for the qualified defined contribution plan was approximately $2,499 thousand, $2,022 thousand and $1,334 thousand for the years ended December 31, 2013, 2012 and 2011, respectively and for other postretirement benefit plans was $696 thousand, $463 thousand and $270 thousand for the years ended December 31, 2013, 2012 and 2011, respectively.
Note 15 – policy and contract reserves
Policy and contract reserves are determined in accordance with standard valuation methods approved by the Department and are computed in accordance with standard actuarial methodology. The reserves are based on assumptions for interest, mortality and other risks insured.
For annuities and supplementary contracts, policy and contract reserves are calculated using Commissioner’s Annuity Reserve Valuation Method (“CARVM”) in accordance with New York State Regulation 151, Actuarial Guideline 43 (“AG43”) for variable annuity products and Actuarial Guideline 33 for all other products.
The Company performed Asset Adequacy Analysis in order to test the adequacy of its reserves in light of the assets supporting such reserves, and determined that its reserves were sufficient to meet its obligations.
Withdrawal characteristics of annuity actuarial reserves and deposit-type contracts at December 31 are as follows (dollars in thousands):
2013 | General Account |
Separate with Guarantees |
Separate Account |
Total | % of Total |
|||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||||||
With fair value adjustment |
$ | — | $ | 56,840 | $ | — | $ | 56,840 | 0.8 | % | ||||||||||
At book value less current surrender charge of 5% or more |
665 | — | — | 665 | — | |||||||||||||||
At fair value |
— | 2,269,110 | 1,189,810 | 3,458,920 | 50.3 | |||||||||||||||
Total with adjustment or at fair value |
$ | 665 | $ | 2,325,950 | $ | 1,189,810 | $ | 3,516,425 | 51.1 | % | ||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
3,253,987 | — | — | 3,253,987 | 47.3 | |||||||||||||||
Not subject to discretionary withdrawal |
108,691 | — | — | 108,691 | 1.6 | |||||||||||||||
Total (gross) |
$ | 3,363,343 | $ | 2,325,950 | $ | 1,189,810 | $ | 6,879,103 | 100.0 | % | ||||||||||
Reinsurance ceded |
— | — | — | — | ||||||||||||||||
Total (net) |
$ | 3,363,343 | $ | 2,325,950 | $ | 1,189,810 | $ | 6,879,103 | ||||||||||||
|
B-82 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
2012 | General Account |
Separate with |
Separate Account Nonguaranteed |
Total | % of Total |
|||||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||||||||
With fair value adjustment |
$ | — | $ | 56,337 | $ | — | $ | 56,337 | 1.2 | % | ||||||||||||
At book value less current surrender charge of 5% or more |
562 | — | — | 562 | — | |||||||||||||||||
At fair value |
— | 728,526 | 886,396 | 1,614,922 | 33.3 | |||||||||||||||||
Total with adjustment or at fair value |
$ | 562 | $ | 784,863 | $ | 886,396 | $ | 1,671,821 | 34.5 | % | ||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
3,076,125 | 4,161 | — | 3,080,286 | 63.6 | |||||||||||||||||
Not subject to discretionary withdrawal |
89,688 | — | — | 89,688 | 1.9 | |||||||||||||||||
Total (gross) |
$ | 3,166,375 | $ | 789,024 | $ | 886,396 | $ | 4,841,795 | 100.0 | % | ||||||||||||
Reinsurance ceded |
— | — | — | — | ||||||||||||||||||
Total (net) |
$ | 3,166,375 | $ | 789,024 | $ | 886,396 | $ | 4,841,795 | ||||||||||||||
|
Annuity reserves and deposit-type contract funds for the year ended December 31 are as follows (in thousands):
2013 | 2012 | |||||||
General Account: |
||||||||
Total annuities (excluding supplementary contracts with life contingencies) |
$ | 1,348,130 | $ | 1,305,083 | ||||
Supplementary contracts with life contingencies |
1,762 | 1,826 | ||||||
Deposit-type contracts |
2,013,451 | 1,859,466 | ||||||
Subtotal |
3,363,343 | 3,166,375 | ||||||
Separate Accounts: |
||||||||
Annuities |
1,238,184 | 942,318 | ||||||
Supplementary contracts with life contingencies |
234 | 186 | ||||||
Deposit-type contracts |
2,277,342 | 732,916 | ||||||
Subtotal |
3,515,760 | 1,675,420 | ||||||
Total |
$ | 6,879,103 | $ | 4,841,795 | ||||
|
For Ordinary Life Insurance (including term plans, universal life and variable universal life), reserves for all policies are calculated in accordance with New York State Insurance Regulation 147 using the 1980 CSO Table or 2001 CSO Table and interest rates of 3.5% through 4.5%. Term conversion reserves are based on the Company’s term conversion mortality experience and interest at 4.0%.
Based on the asset adequacy analysis, the Company has added an additional $13 million in 2013, which consists of $8 million associated with the deferred annuity business and $5 million associated with the individual life insurance business. This is in addition to the $10 million which was recorded in 2009 for life insurance reserves. In addition, for variable annuities, the excess of the reserve over the accumulation was increased to $7 million. On this basis, it was determined that the Company’s reserves were sufficient to meet its obligations.
Liabilities for incurred but not reported life insurance claims and disability waiver of premium claims are based on historical experience and are set equal to a percentage of reserves. Reserves for amounts not yet due for incurred but not reported disability waiver of premium claims are a percentage of the total Active Lives Disability Waiver of Premium Reserve.
The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium beyond the date of death. The Company had no policies where the surrender values were in excess of the legally computed reserves at December 31, 2013 or December 31, 2012. The Company had $29.8 billion and $25.6 billion of insurance in force for which the gross premiums were less than the net premiums according to the standard of valuation set by the State of New York as of December 31, 2013 and 2012, respectively.
Premium deficiency reserves related to the above insurance totaled $15,600 thousand and $11,242 thousand at December 31, 2013 and 2012, respectively.
For retained assets, an accumulation account issued from the proceeds of annuity and life insurance policies, reserves are held equal to the current account balances.
The Tabular Interest, Tabular Less Actual Reserve Released and Tabular Cost have all been determined by formulae as prescribed by the NAIC except for deferred annuities, for which tabular interest has been determined from the basic data.
Single Premium Immediate Annuities n Statement of Additional Information | B-83 |
Notes to statutory–basis financial statements
TIAA-CREF Life Insurance Company n December 31, 2013
Note 16 – reinsurance
In 2004, the Company and TIAA entered into a series of agreements with Metropolitan Life Insurance Company (“MetLife”) including an administrative agreement for MetLife to service the long-term care business of the Company and TIAA, an indemnity reinsurance agreement where the Company and TIAA ceded to MetLife 100% of the long-term care liability and an assumption reinsurance agreement where, after appropriate filings in each jurisdiction, MetLife has been offering the Company policyholders the option of transferring the liability for policies from the Company and TIAA to MetLife. At December 31, 2013 and 2012, there were still premiums in force of $6,548 thousand and $6,242 thousand, respectively.
The Company enters into reinsurance agreements in the normal course of its insurance business to reduce overall risk. The Company remains liable for reinsurance ceded if the reinsurer fails to meet its obligation on the business assumed. All reinsurance is placed with unaffiliated reinsurers. A liability is established for reserves ceded to unauthorized reinsurers which are not secured by or in excess of letters of credit or trust agreements. The Company does not have reinsurance agreements in effect under which the reinsurer may unilaterally cancel the agreement. Amounts shown in the financial statements are reported net of the impact of reinsurance. The major lines in the accompanying financial statements that were reduced by the effect of these reinsurance agreements include (in thousands):
2013 | 2012 | 2011 | ||||||||||
Reinsurance ceded: |
||||||||||||
Aggregate reserve for life and health insurance |
$ | 437,220 | $ | 397,767 | $ | 357,638 | ||||||
Insurance and annuity premiums |
$ | 118,103 | $ | 56,650 | $ | 41,247 | ||||||
Policy and contract benefits |
$ | 26,240 | $ | 14,005 | $ | 15,014 | ||||||
Increase in policy and contract reserves |
$ | 39,454 | $ | 40,128 | $ | 40,654 |
Note 17 – capital and surplus and shareholders’ dividends restrictions
The portion of unassigned surplus increased or (reduced) by each item below as of December 31 are as follows (in thousands):
2013 | 2012 | |||||||
Net unrealized capital losses |
$ | 314 | $ | 129 | ||||
Asset valuation reserve |
$ | (3,773 | ) | $ | (3,570 | ) | ||
Net deferred federal income tax |
$ | 16,015 | $ | (7,005 | ) | |||
Change in non-admitted assets |
$ | (11,809 | ) | $ | 6,061 | |||
Change in liability for reinsurance of unauthorized companies |
$ | (6,837 | ) | $ | (1,190 | ) | ||
Change in surplus of separate accounts |
$ | (3,680 | ) | $ | 1,978 |
Capital: The Company has 2,500 shares of common stock authorized, issued and outstanding. All shares are Class A. The Company has no preferred stock outstanding.
Dividend Restrictions: Under the New York Insurance Law, the Company is permitted without prior insurance regulatory clearance to pay a stockholder dividend as long as the aggregated amount of all such dividends in any calendar year does not exceed the lesser of (i) 10% of its surplus to policyholders as of the immediately preceding calendar year and (ii) its net gain from operations for the immediately preceding calendar year (excluding realized investment gains). The Company generally has not paid dividends to its shareholder and has no plans to do so in the current year.
Note 18 – contingencies
It is the opinion of management that any liabilities which might arise from litigation, state guaranty fund assessments, and other matters, over and above amounts already provided for in the financial statements, are not considered material in relation to the Company’s financial position or the results of its operations.
The Company receives and responds to subpoenas or other inquiries from state regulators, including state insurance commissioners; state attorneys general and other state governmental authorities; Federal regulators, including the SEC and Federal governmental authorities. The Company cooperates in these inquiries.
Death Claim Notification and Unclaimed Property Practices. Throughout the U.S. insurance industry, there have been multiple state actions addressing insurer practices regarding death claim notification and escheatment of unclaimed property as they pertain to life insurance, annuities and retained asset accounts.
On June 6, 2013, the Company was one of many insurers who reached a Global Resolution Agreement resolving any potential claims arising out of a multistate unclaimed property exam conducted by Texas, California, Massachusetts and 26 other states. The Agreement became effective July 12, 2013.
B-84 | Statement of Additional Information n Single Premium Immediate Annuities |
Notes to statutory–basis financial statements | concluded |
TIAA-CREF Life Insurance Company n December 31, 2013
On June 24, 2013, the Company was one of many insurers who agreed to a multi-state settlement with insurance regulators that include the implementation of new business practices related to the payment of life insurance benefits. The Agreement became effective July 9, 2013. Forty-seven states, the District of Columbia, Guam and Puerto Rico have signed on to the Agreement. The settlement included a $203 thousand examination payment made by the Company for the costs incurred by the departments associated with the examination.
Note 19 – subsequent event
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through April 7, 2014, the date the financial statements were available to be issued. No such items were identified by the Company.
Single Premium Immediate Annuities n Statement of Additional Information | B-85 |
Index to statutory–basis financial statements
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA | ||
Report of Management Responsibility | B-87 | |
Report of Independent Auditors | B-88 | |
Statutory–Basis Financial Statements: | ||
Statements of Admitted Assets, Liabilities and Capital and Contingency Reserves | B-89 | |
Statements of Operations | B-90 | |
Statements of Changes in Capital and Contingency Reserves | B-91 | |
Statements of Cash Flows | B-92 | |
Notes to Financial Statements | B-93 |
B-86 | Statement of Additional Information n Single Premium Immediate Annuities |
Report of management responsibility
To the Policyholders of Teachers Insurance and Annuity Association of America:
The accompanying statutory-basis financial statements of Teachers Insurance and Annuity Association of America (“TIAA”) are the responsibility of management. They have been prepared on the basis of statutory accounting principles, a comprehensive basis of accounting comprised of accounting principles prescribed or permitted by the New York State Department of Financial Services. The financial statements of TIAA have been presented fairly and objectively in accordance with such statutory accounting principles.
TIAA’s internal control over financial reporting is a process effected by those charged with governance, management and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with statutory accounting principles. TIAA’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with statutory accounting principles, and the receipts and expenditures of the entity are being made only in accordance with authorizations of management and those charged with governance; and (3) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.
Management is responsible for establishing and maintaining effective internal control over financial reporting. Management assessed the effectiveness of the entity’s internal control over financial reporting as of December 31, 2013, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (originally published in 1992). Based on that assessment, management concluded that, as of December 31, 2013, TIAA’s internal control over financial reporting is effective based on the criteria established in Internal Control-Integrated Framework (published in 1992).
In addition, TIAA’s internal audit personnel provide regular reviews and assessments of the internal controls and operations of TIAA, and the Vice President of Internal Audit regularly reports to the Audit Committee of the TIAA Board of Trustees.
The independent auditors of PricewaterhouseCoopers LLP have audited the accompanying statutory-basis financial statements of TIAA for the years ended December 31, 2013, 2012 and 2011. To maintain auditor independence and avoid even the appearance of a conflict of interest, it continues to be TIAA’s policy that any management advisory or consulting service, which is not in accordance with TIAA’s specific auditor independence policies designed to avoid such conflicts, be obtained from a firm other than the independent auditor. The independent auditors’ report expresses an opinion in all material respect on the fairness of presentation of these statutory-basis financial statements.
The Audit Committee of the TIAA Board of Trustees, comprised entirely of independent, non-management trustees, meets regularly with management, representatives of the independent auditor and internal audit personnel to review matters relating to financial reporting, internal controls and auditing. In addition to the annual independent audit of the TIAA statutory-basis financial statements, the New York Department of Financial Services and other state insurance departments regularly examine the operations and financial statements of TIAA as part of their periodic corporate examinations.
Roger W. Ferguson, Jr. | Virginia M. Wilson | |
President and Chief Executive Officer | Executive Vice President and Chief Financial Officer |
Single Premium Immediate Annuities n Statement of Additional Information | B-87 |
Report of independent auditors
To the Board of Trustees of Teachers Insurance and Annuity Association of America:
We have audited the accompanying statutory-basis financial statements of Teachers Insurance and Annuity Association of America (the “Company”), which comprise the statutory statements of admitted assets, liabilities, and capital and contingency reserves as of December 31, 2013 and 2012 and the related statutory statements of operations, changes in capital and contingency reserves and cash flows for each of the three years in the period ended December 31, 2013. We also have audited the Company’s internal control over financial reporting as of December 31, 2013, based on criteria established in the 1992 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management is responsible for the preparation and fair presentation of these financial statements in accordance with the accounting practices prescribed or permitted by the New York State Department of Financial Services. Management is also responsible for maintaining effective internal control over financial reporting, and for its assertion of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management’s Responsibility. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.
We conducted our audit of the financial statements in accordance with auditing standards generally accepted in the United States of America and our audit of internal control over financial reporting in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audit of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and, testing and evaluating the design and operating effectiveness of internal control, based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
As described in Note 2 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the New York State Department of Financial Services, which is a basis of accounting other than accounting principles generally accepted in the United States of America. The effects on the financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2013 and 2012, or the results of its operations or its cash flows thereof for the years then ended.
In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities, and surplus of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended on the basis of accounting described in Note 2. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on criteria established in the 1992 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
A company’s internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, designed to provide reasonable assurance regarding the preparation of reliable financial statements in accordance with accounting practices prescribed or permitted by the New York State Department of Financial Services. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting practices prescribed or permitted by the New York State Department of Financial Services, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and those charged with governance; and (iii) provide reasonable assurance regarding prevention or timely detection and correction of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ PricewaterhouseCoopers LLP
New York, New York
B-88 | Statement of Additional Information n Single Premium Immediate Annuities |
Statutory–basis statements of admitted assets, liabilities and capital
and contingency
reserves
Teachers Insurance and Annuity Association of America
December 31, | ||||||||||
(in millions) | 2013 | 2012 | ||||||||
ADMITTED ASSETS |
||||||||||
Bonds |
$ | 181,121 | $ | 173,954 | ||||||
Preferred stocks |
48 | 38 | ||||||||
Common stocks |
2,675 | 3,495 | ||||||||
Mortgage loans |
14,246 | 12,956 | ||||||||
Real estate |
1,812 | 1,623 | ||||||||
Cash, cash equivalents and short-term investments |
1,362 | 1,681 | ||||||||
Contract loans |
1,466 | 1,358 | ||||||||
Derivatives |
60 | 96 | ||||||||
Other long-term investments |
20,059 | 17,973 | ||||||||
Investment income due and accrued |
1,763 | 1,772 | ||||||||
Federal income taxes |
6 | — | ||||||||
Net deferred federal income tax asset |
3,089 | 3,235 | ||||||||
Other assets |
439 | 437 | ||||||||
Separate account assets |
22,348 | 18,420 | ||||||||
Total admitted assets |
$ | 250,494 | $ | 237,038 | ||||||
| ||||||||||
LIABILITIES, CAPITAL AND CONTINGENCY RESERVES |
||||||||||
Liabilities |
||||||||||
Reserves for life and health insurance, annuities and deposit-type contracts |
$ | 185,946 | $ | 180,020 | ||||||
Dividends due to policyholders |
1,937 | 1,854 | ||||||||
Interest maintenance reserve |
2,283 | 1,687 | ||||||||
Federal income taxes |
— | 3 | ||||||||
Borrowed money |
— | 52 | ||||||||
Asset valuation reserve |
4,633 | 3,424 | ||||||||
Derivatives |
311 | 346 | ||||||||
Other liabilities |
2,262 | 2,276 | ||||||||
Separate account liabilities |
22,343 | 18,067 | ||||||||
Total liabilities |
219,715 | 207,729 | ||||||||
Capital and Contingency Reserves |
||||||||||
Capital (2,500 shares of $1,000 par value common stock issued and outstanding and $550,000 paid-in capital) |
3 | 3 | ||||||||
Surplus notes |
2,000 | 2,000 | ||||||||
Contingency reserves: |
||||||||||
For investment losses, annuity and insurance mortality, and other risks |
28,776 | 27,306 | ||||||||
Total capital and contingency reserves |
30,779 | 29,309 | ||||||||
Total liabilities, capital and contingency reserves |
$ | 250,494 | $ | 237,038 | ||||||
|
See notes to statutory-basis financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-89 |
Statutory–basis statements of operations
Teachers Insurance and Annuity Association of America
For the Years Ended December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||
REVENUES |
||||||||||||||
Insurance and annuity premiums and other considerations |
$ | 14,395 | $ | 12,085 | $ | 12,703 | ||||||||
Annuity dividend additions |
1,585 | 1,312 | 1,325 | |||||||||||
Net investment income |
11,274 | 11,042 | 10,910 | |||||||||||
Other revenue |
242 | 231 | 182 | |||||||||||
Total revenues |
$ | 27,496 | $ | 24,670 | $ | 25,120 | ||||||||
| ||||||||||||||
BENEFITS AND EXPENSES |
||||||||||||||
Policy and contract benefits |
$ | 12,900 | $ | 11,733 | $ | 11,341 | ||||||||
Dividends to policyholders |
3,409 | 3,128 | 3,082 | |||||||||||
Increase in policy and contract reserves |
5,749 | 4,604 | 5,460 | |||||||||||
Net operating expenses |
1,035 | 922 | 859 | |||||||||||
Net transfers to separate accounts |
1,879 | 1,518 | 1,661 | |||||||||||
Other benefits and expenses |
384 | 318 | 53 | |||||||||||
Total benefits and expenses |
$ | 25,356 | $ | 22,223 | $ | 22,456 | ||||||||
| ||||||||||||||
Income before federal income taxes and net realized capital gains (losses) |
$ | 2,140 | $ | 2,447 | $ | 2,664 | ||||||||
Federal income tax (benefit) |
(28 | ) | (11 | ) | (139 | ) | ||||||||
Net realized capital gains (losses) less capital gains taxes, after transfers to the interest maintenance reserve |
(417 | ) | (416 | ) | (444 | ) | ||||||||
Net income |
$ | 1,751 | $ | 2,042 | $ | 2,359 | ||||||||
|
B-90 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to statutory-basis financial statements |
Statutory–basis statements of changes in capital and contingency reserves
Teachers Insurance and Annuity Association of America
(in millions) | Capital Stock and Additional Paid-in Capital |
Contingency Reserves |
Total | |||||||||
Balance, December 31, 2010 |
$ | 3 | $ | 25,153 | $ | 25,156 | ||||||
Net income |
2,359 | 2,359 | ||||||||||
Net unrealized capital gains on investments |
390 | 390 | ||||||||||
Change in asset valuation reserve |
(802 | ) | (802 | ) | ||||||||
Change in accounting principle |
(23 | ) | (23 | ) | ||||||||
Change in surplus of separate accounts |
134 | 134 | ||||||||||
Change in net deferred income tax |
(1,129 | ) | (1,129 | ) | ||||||||
Change in non-admitted assets: |
||||||||||||
Deferred federal income tax asset |
953 | 953 | ||||||||||
Other assets |
93 | 93 | ||||||||||
Balance, December 31, 2011 |
$ | 3 | $ | 27,128 | $ | 27,131 | ||||||
|
||||||||||||
Net income |
2,042 | 2,042 | ||||||||||
Net unrealized capital gains on investments |
490 | 490 | ||||||||||
Change in asset valuation reserve |
(599 | ) | (599 | ) | ||||||||
Change in surplus of separate accounts |
64 | 64 | ||||||||||
Change in net deferred income tax |
(1,119 | ) | (1,119 | ) | ||||||||
Prior year surplus adjustment |
(5 | ) | (5 | ) | ||||||||
Change in non-admitted assets: |
||||||||||||
Deferred federal income tax asset |
1,285 | 1,285 | ||||||||||
Other assets |
20 | 20 | ||||||||||
Balance, December 31, 2012 |
$ | 3 | $ | 29,306 | $ | 29,309 | ||||||
|
||||||||||||
Net income |
1,751 | 1,751 | ||||||||||
Net unrealized capital gains on investments |
1,193 | 1,193 | ||||||||||
Change in asset valuation reserve |
(1,209 | ) | (1,209 | ) | ||||||||
Change in surplus of separate accounts |
(18 | ) | (18 | ) | ||||||||
Change in net deferred income tax |
(1,083 | ) | (1,083 | ) | ||||||||
Change in post-retirement benefit liability |
(11 | ) | (11 | ) | ||||||||
Change in non-admitted assets: |
||||||||||||
Deferred federal income tax asset |
937 | 937 | ||||||||||
Other assets |
(90 | ) | (90 | ) | ||||||||
Balance, December 31, 2013 |
$ | 3 | $ | 30,776 | $ | 30,779 | ||||||
|
See notes to statutory-basis financial statements | Single Premium Immediate Annuities n Statement of Additional Information | B-91 |
Statutory–basis statements of cash flows
Teachers Insurance and Annuity Association of America
For the Years Ended December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||
CASH FROM OPERATIONS |
||||||||||||||
Insurance and annuity premiums and other considerations |
$ | 14,398 | $ | 12,084 | $ | 12,705 | ||||||||
Net investment income |
10,770 | 10,590 | 10,948 | |||||||||||
Miscellaneous income |
219 | 199 | 180 | |||||||||||
Total receipts |
25,387 | 22,873 | 23,833 | |||||||||||
Policy and contract benefits |
12,954 | 11,722 | 11,321 | |||||||||||
Operating expenses |
1,276 | 1,127 | 853 | |||||||||||
Dividends paid to policyholders |
1,741 | 1,693 | 1,709 | |||||||||||
Federal income tax expense (benefit) |
(13 | ) | (16 | ) | (141 | ) | ||||||||
Net transfers to separate accounts |
1,505 | 597 | 1,666 | |||||||||||
Total disbursements |
17,463 | 15,123 | 15,408 | |||||||||||
Net cash from operations |
7,924 | 7,750 | 8,425 | |||||||||||
CASH FROM INVESTMENTS |
||||||||||||||
Proceeds from investments sold, matured, or repaid: |
||||||||||||||
Bonds |
26,969 | 26,689 | 19,042 | |||||||||||
Stocks |
872 | 843 | 669 | |||||||||||
Mortgage loans and real estate |
2,131 | 2,954 | 2,162 | |||||||||||
Other invested assets |
3,293 | 2,184 | 2,197 | |||||||||||
Miscellaneous proceeds |
12 | 13 | 66 | |||||||||||
Cost of investments acquired: |
||||||||||||||
Bonds |
32,998 | 31,963 | 24,768 | |||||||||||
Stocks |
936 | 559 | 486 | |||||||||||
Mortgage loans and real estate |
3,753 | 2,784 | 1,922 | |||||||||||
Other invested assets |
3,482 | 3,472 | 5,320 | |||||||||||
Miscellaneous applications |
248 | 270 | 448 | |||||||||||
Net cash from investments |
(8,140 | ) | (6,365 | ) | (8,808 | ) | ||||||||
CASH FROM FINANCING AND OTHER |
||||||||||||||
Borrowed money |
(51 | ) | (757 | ) | (151 | ) | ||||||||
Net deposits on deposit-type contracts funds |
70 | 53 | 32 | |||||||||||
Other cash provided (applied) |
(122 | ) | 403 | (266 | ) | |||||||||
Net cash from financing and other |
(103 | ) | (301 | ) | (385 | ) | ||||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS |
(319 | ) | 1,084 | (768 | ) | |||||||||
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR |
1,681 | 597 | 1,365 | |||||||||||
| ||||||||||||||
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS, END OF YEAR |
$ | 1,362 | $ | 1,681 | $ | 597 | ||||||||
|
B-92 | Statement of Additional Information n Single Premium Immediate Annuities | See notes to statutory-basis financial statements |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America n December 31, 2013
Note 1 – organization
Teachers Insurance and Annuity Association of America (“TIAA” or the “Company”) was established in 1918 as a legal reserve life insurance company under the insurance laws of the State of New York. All of the outstanding common stock of TIAA is held by the TIAA Board of Overseers (“Board of Overseers”), a not-for-profit corporation incorporated in the State of New York originally created for the purpose of holding the stock of TIAA.
The Company’s primary purpose is to aid and strengthen non-profit educational and research organizations, governmental entities and other non-profit institutions by providing retirement and insurance benefits for their employees and their families and by counseling such organizations and their employees on benefit plans and other measures of economic security.
Note 2 – significant accounting policies
Basis of presentation:
The accompanying financial statements have been prepared on the basis of statutory accounting principles prescribed or permitted by the New York State Department of Financial Services (the “Department”); a comprehensive basis of accounting that differs from accounting principles generally accepted in the United States (“GAAP”). The Department requires insurance companies domiciled in the State of New York to prepare their statutory-basis financial statements in accordance with the National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures Manual (“NAIC SAP”), subject to any deviation prescribed or permitted by the Department (“New York SAP”).
The table below provides a reconciliation of the Company’s net income and capital and contingency reserves between NAIC SAP and the New York SAP annual statement filed with the Department. The primary differences arise because the Company maintains more conservative reserves, as prescribed or permitted by New York SAP, under which annuity reserves are generally discounted on the basis of mortality tables and contractually guaranteed interest rates.
For the Years Ended December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||
Net Income, New York SAP |
$ | 1,751 | $ | 2,042 | $ | 2,359 | ||||||||
New York SAP Prescribed Practices: |
||||||||||||||
Additional Reserves for: |
||||||||||||||
Term Conversions |
2 | 2 | 1 | |||||||||||
Deferred and Payout Annuities issued after 2000 |
73 | 63 | 171 | |||||||||||
Net Income, NAIC SAP |
$ | 1,826 | $ | 2,107 | $ | 2,531 | ||||||||
| ||||||||||||||
Capital and Contingency Reserves, New York SAP |
$ | 30,779 | $ | 29,309 | $ | 27,131 | ||||||||
New York SAP Prescribed Practices: |
||||||||||||||
Additional Reserves for: |
||||||||||||||
Term Conversions |
20 | 18 | 16 | |||||||||||
Deferred and Payout Annuities issued after 2000 |
3,990 | 3,917 | 3,854 | |||||||||||
Capital and Contingency Reserves, NAIC SAP |
$ | 34,789 | $ | 33,244 | $ | 31,001 | ||||||||
|
Accounting Principles Generally Accepted in the United States: The Financial Accounting Standards Board (“FASB”) dictates the accounting principles for financial statements that are prepared in conformity with GAAP with applicable authoritative accounting pronouncements. As a result, the Company cannot refer to financial statements prepared in accordance with NAIC SAP and New York SAP as having been prepared in accordance with GAAP.
The primary differences between GAAP and NAIC SAP can be summarized as follows:
Under GAAP:
• | The Asset Valuation Reserve (“AVR”) is eliminated as it is not recognized under GAAP. The AVR is established under NAIC SAP with changes recorded as a direct charge to surplus; |
• | The Interest Maintenance Reserve (“IMR”) is eliminated as it is not recognized under GAAP. The realized gains and losses resulting from changes in interest rates are reported as a component of net income under GAAP rather than being deferred and subsequently amortized into income over the remaining expected life of the investment sold; |
• | Dividends on insurance policies and annuity contracts are accrued as the related earnings emerge from operations under GAAP rather than being accrued in the year when they are declared; |
• | Certain assets designated as “non-admitted assets” and excluded from assets in the statutory balance sheet are included in the GAAP balance sheet; |
• | Policy acquisition costs, such as commissions, and other costs incurred in connection with acquiring new business, are deferred and amortized over the expected lives of the policies issued under GAAP rather than being expensed when incurred; |
Single Premium Immediate Annuities n Statement of Additional Information | B-93 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
• | Policy and contract reserves are based on estimates of expected mortality, morbidity, persistency and interest under GAAP rather than being based on statutory mortality, morbidity and interest requirements; |
• | Surplus notes are reported as a liability rather than a component of capital and contingency reserves; |
• | Investments in wholly-owned subsidiaries, other entities under the control of the parent, and certain variable interest entities are consolidated in the parent’s financial statements rather than being carried at the parent’s share of the underlying GAAP equity or statutory surplus of a domestic insurance subsidiary; |
• | Investments in bonds considered to be “available for sale” are carried at fair value under GAAP rather than at amortized cost; |
• | Impairments on securities other than loan-backed and structured securities due to credit losses are recorded as other-than-temporary impairments (“OTTI”) through earnings for the difference between amortized cost and discounted cash flows when a security is deemed impaired. Other declines in fair value related to factors other than credit are recorded as other comprehensive income, which is a separate component of stockholder’s equity. Under NAIC SAP, an impairment for such securities is recorded through earnings for the difference between amortized cost and fair value; |
• | For loan-backed and structured securities that are other-than-temporarily impaired, declines in fair value related to factors other than credit are recorded as other comprehensive income, which is a separate component of stockholder’s equity. Under NAIC SAP, such declines in fair value are not recorded until a credit loss occurs; |
• | Changes in the allowance for estimated uncollectible amounts related to mortgage loans are recorded through earnings under GAAP rather than as unrealized losses, which is a component of surplus under NAIC SAP; |
• | Changes in the value of certain other long-term investments accounted for under the equity method of accounting are recorded through earnings under GAAP rather than as unrealized gains (losses), which is a component of surplus under NAIC SAP; |
• | Deferred income taxes, subject to valuation allowance, include federal and state income taxes and changes in the deferred tax are reflected in earnings. Under NAIC SAP, deferred taxes exclude state income taxes and are admitted to the extent they can be realized within three years subject to a 15% limitation of capital and surplus with changes in the net deferred tax reflected as a component of surplus; |
• | The calculation for the post-retirement benefit obligations includes both vested and non-vested employees. Prior to January 1, 2013, non-vested employees were not considered under NAIC SAP; |
• | Contracts that do not subject the Company to risks arising from policyholder mortality or morbidity are reported as a deposit liability. Under NAIC SAP, contracts that have any mortality and morbidity risk, regardless of significance, and contracts with life contingent annuity purchase rate guarantees are classified as insurance contracts and amounts received under these contracts are reported as revenue; |
• | Declines in fair value of derivatives are recorded through earnings rather than surplus. Derivatives embedded in host contracts are accounted for separately like a freestanding derivative if certain criteria are met under GAAP. Replication Synthetic Asset Transactions (“RSAT”) are not recognized under GAAP; |
• | Certain reinsurance transactions are accounted for as financing transactions under GAAP and as reinsurance for statutory purposes. Assets and liabilities are reported gross of reinsurance for GAAP and net of reinsurance for statutory purposes. Transactions recorded as financing under GAAP have no impact on premiums or losses incurred, while for statutory purposes, premiums paid to the reinsurer are recorded as ceded premiums (a reduction in revenue) and expected reimbursement for losses from the reinsurer are recorded as a reduction in losses. |
The effects of these differences, while not determined, are presumed to be material.
Reclassifications: Certain prior year amounts in the financial statements have been reclassified to conform to the 2013 presentation. These reclassifications did not affect the total assets, liabilities, net income or surplus previously reported.
Use of Estimates: The preparation of statutory-basis financial statements requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities at the date of the financial statements. Management is also required to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from those estimates.
The most significant estimates include those used in the recognition of other-than-temporary impairments, reserves for life insurance (and health), annuities and deposit-type contracts and the valuation of deferred tax assets.
Accounting policies:
The following is a summary of the significant accounting policies followed by the Company:
Investments: Publicly traded securities are accounted for as of the date the investments are purchased or sold (trade date). Other investments are recorded on the settlement date. Realized capital gains and losses on investment transactions are accounted for under the specific identification method. A realized loss is recorded when an impairment is considered to be other-than-temporary.
Bonds: Bonds are stated at amortized cost using the current effective interest method. Bonds in or near default (rated NAIC 6) are stated at the lower of amortized cost or fair value. Bonds the Company intends to sell prior to maturity (“held for sale”) are stated at the lower of amortized cost or fair value.
B-94 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Included within bonds are loan-backed and structured securities. Estimated future cash flows and expected prepayment speeds are used to determine the amortization of loan-backed and structured securities under the prospective method. Expected future cash flows and prepayment speeds are evaluated quarterly. Certain loan-backed and structured securities are reported at the lower of cost or fair value as a result of the NAIC modeling process.
If it is determined that a decline in the fair value of a bond, excluding loan-backed and structured securities, is other-than-temporary, the cost basis of the bond is written down to fair value and the amount of the write down is accounted for as a realized loss. The new cost basis is not changed for subsequent recoveries in fair value. Future declines in fair value which are determined to be other-than-temporary are recorded as realized losses.
For loan-backed and structured securities, when an OTTI has occurred because the Company does not expect to recover the entire amortized cost basis of the security, with the intent and ability to hold, the amount of the OTTI recognized as a realized loss is the difference between the security’s amortized cost basis and the present value of cash flows expected to be collected, discounted at the loan-backed or structured security’s effective interest rate.
For loan-backed and structured securities, when an OTTI has occurred because the Company intends to sell the security or the Company does not have the intent and ability to retain the security for a period of time sufficient to recover the amortized cost basis, the amount of the OTTI realized is the difference between the security’s amortized cost basis and fair value at the balance sheet date.
In periods subsequent to the recognition of an OTTI loss for a loan-backed or structured security, the Company accounts for the other-than-temporarily impaired security as if the security had been purchased on the measurement date of the impairment. The difference between the new amortized cost basis and the cash flows expected to be collected is accreted as interest income in future periods based on prospective changes in cash flow estimates.
The fair values for publicly traded long term bond investments are generally determined using prices provided by third party pricing services. For privately placed long term bond investments without readily ascertainable market value, such values are determined with the assistance of independent pricing services utilizing a discounted cash flow methodology based on coupon rates, maturity provisions and credit assumptions.
Preferred Stocks: Preferred stocks are stated at amortized cost unless they have an NAIC rating designation of 4, 5, or 6 which are stated at the lower of amortized cost or fair value. The fair values of preferred stocks are determined using prices provided by third party pricing services or valuations from the NAIC. When it is determined that a decline in fair value of an investment is other-than-temporary, the cost basis of the investment is reduced to its fair value and the amount of the reduction is accounted for as a realized loss.
Common Stocks: Unaffiliated common stocks are stated at fair value, which is based on quoted market prices, where available. Changes in fair value are recorded through surplus. For common stocks without quoted market prices, fair value is estimated using independent pricing services or internally developed pricing models. When it is determined that a decline in fair value of an investment is other-than-temporary, the cost basis of the investment is reduced to its fair value and the amount of the reduction is accounted for as a realized loss.
Mortgage Loans: Mortgage loans are stated at amortized cost, net of valuation allowances. Mortgage loans held for sale are stated at the lower of amortized cost or fair value. Mortgage loans are evaluated for impairment when it is probable that the receipt of contractual payments of principal and interest may not occur when scheduled. If the impairment is considered to be temporary, a valuation allowance is established for the excess of the carrying value of the mortgage over its estimated fair value. Changes in valuation allowance for mortgage loans are included in net unrealized capital gains and losses on investments. When an event occurs resulting in an impairment that is other-than-temporary, a direct write-down is recorded as a realized loss and a new cost basis is established. The fair value of mortgage loans is generally determined using a discounted cash flow methodology based on coupon rates, maturity provisions and credit assumptions.
Real Estate: Real estate occupied by the Company and real estate held for the production of income is carried at depreciated cost, less encumbrances. Real estate held for sale is carried at the lower of depreciated cost or fair value, less encumbrances, and estimated costs to sell. The Company utilizes the straight-line method of depreciation on real estate and is generally computed over a forty-year period. A real estate property may be considered impaired when events or circumstances indicate that the carrying value may not be recoverable. When the Company determines that an investment in real estate is impaired, a direct write-down is made to reduce the carrying value of the property to its estimated fair value based on an external appraisal, net of encumbrances, and a realized loss is recorded.
The Company makes investments in commercial real estate directly, through wholly owned subsidiaries and through real estate limited partnerships. The Company monitors the effects of current and expected market conditions and other factors on its real estate investments to identify and quantify any impairment in value. The Company assesses assets to determine if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company evaluates the recoverability of income producing investments based on undiscounted cash flows and then reviews the results of an independent third party appraisal to determine the fair value and if an adjustment is required.
Single Premium Immediate Annuities n Statement of Additional Information | B-95 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Wholly-Owned Subsidiaries: Investments in wholly-owned subsidiaries are stated at the value of their underlying net assets as follows: (1) domestic insurance subsidiaries are stated at the value of their underlying statutory surplus and (2) non-insurance subsidiaries are stated at the value of their underlying GAAP equity. Dividends and distributions from subsidiaries are recorded in investment income and changes in the equity of subsidiaries are recorded directly to surplus as unrealized gains or losses.
Other Long-term Investments: Other long-term investments primarily include investments in limited partnerships and limited liability companies which are carried at the Company’s percentage of the underlying U.S. GAAP, International Financial Reporting Standard or U.S. Tax basis equity as reflected on the respective entity’s financial statements. The Company monitors the effects of current and expected market conditions and other factors on these investments to identify and quantify any impairment in value. The Company assesses impairment information by performing analysis between the carrying value and the cost basis of the investments. The Company evaluates recoverability of the asset to determine if OTTI is warranted. When it is determined that a decline in fair value of an investment is other-than-temporary, the cost basis of the investment is reduced to its fair value and the amount of the reduction is accounted for as a realized loss.
Other long-term investments include the Company’s investments in surplus notes, which are stated at amortized cost. All of the Company’s investments in surplus notes have an NAIC 1 rating designation. The carrying amount of the Company’s investments in surplus notes was $91 million for both years ended December 31, 2013 and 2012.
Cash and Cash Equivalents: Cash includes cash on deposit and cash equivalents. Cash equivalents are short-term, highly liquid investments, with original maturities of three months or less at the date of purchase and are stated at amortized cost.
Short-Term Investments: Short-term investments (investments with remaining maturities of one year or less at the time of acquisition, excluding those investments classified as cash equivalents) that are not impaired are stated at amortized cost using the straight line interest method. Short-term investments that are impaired are stated at the lower of amortized cost or fair value.
Contract Loans: Contract loans are stated at outstanding principal balances.
Derivative Instruments: The Company has filed a Derivatives Use Plan with the Department. This plan details the Company’s derivative policy objectives, strategies, controls and any restrictions placed on various derivative types. The plan also specifies the procedures and systems that the Company has established to evaluate, monitor and report on the derivative portfolio in terms of valuation, hedge effectiveness and counterparty credit quality. The Company may use derivative instruments for hedging, income generation, and asset replication purposes.
Derivatives used by the Company may include swaps, forwards, futures and options.
The carrying value of a derivative position may be at cost or fair value, depending on the type of instrument and accounting status. Hedge accounting is applied for some foreign currency swaps that hedge fixed income investments carried at amortized cost. The foreign exchange premium or discount for these foreign currency swaps is amortized into income and a currency translation adjustment computed at the spot rate is recorded as an unrealized gain or loss. The derivative component of a RSAT is carried at unamortized premiums received or paid, adjusted for any impairments. The cash component of a RSAT is classified as a bond on the Company’s balance sheet. Derivatives used in hedging transactions where hedge accounting is not being utilized are carried at fair value. The Company does not offset the carrying value amounts recognized for derivatives executed with the same counterparty under a netting agreement.
Investment Income Due and Accrued: Investment income due is investment income earned and legally due to be paid to the Company at the reporting date. Investment income accrued is investment income earned but not legally due to be paid to the Company until subsequent to the reporting date. The Company writes off amounts deemed uncollectible as a charge against investment income in the period such determination is made. Amounts deemed collectible, but over 90 days past due for any invested asset except mortgage loans in default are non-admitted. Amounts deemed collectible, but over 180 days past due for mortgage loans in default are non-admitted. The Company accrues interest income on impaired loans to the extent it is deemed collectible.
Separate Accounts: Separate Accounts are established in conformity with insurance laws and are segregated from the Company’s general account and are maintained for the benefit of the separate account contract holders.
Foreign Currency Transactions and Translation: Investments denominated in foreign currencies and foreign currency contracts are valued in U.S. dollars, based on exchange rates at the end of the relevant period. Investment transactions in foreign currencies are recorded at the exchange rates prevailing on the respective transaction dates. All other asset and liability accounts denominated in foreign currencies are adjusted to reflect exchange rates at the end of the relevant period. Realized and unrealized gains and losses due to foreign exchange transactions and translation adjustments are not separately reported but are collectively included in realized and unrealized capital gains and losses, respectively.
Non-Admitted Assets: For statutory accounting purposes, certain assets are designated as non-admitted assets (principally a portion of deferred federal income tax (“DFIT”) assets, certain investments in other long-term investments, furniture and equipment, leasehold improvements, and prepaid expenses). The non-admitted portion of the DFIT asset was $8,027 million and $8,964 million at December 31, 2013 and 2012, respectively. Investment related non-admitted assets totaled $187 million and $267 million at December 31, 2013 and 2012, respectively. Other non-admitted assets were $795 million and $625 million at December 31, 2013 and 2012, respectively. Changes in non-admitted assets are charged or credited directly to surplus.
B-96 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Electronic Data Processing Equipment, Computer Software, Furniture and Equipment and Leasehold Improvements: Electronic data processing (“EDP”) equipment, computer software and furniture and equipment which qualify for capitalization are depreciated over the lesser of useful life or 3 years. Office alterations and leasehold tenant improvements which qualify for capitalization are depreciated over the lesser of useful life or 5 years or the remaining life of the lease, respectively.
The accumulated depreciation on EDP equipment and computer software was $1,246 million and $1,008 million at December 31, 2013 and 2012, respectively. Related depreciation expenses allocated to TIAA were $77 million, $51 million and $34 million for the years ended December 31, 2013, 2012 and 2011, respectively.
The accumulated depreciation on furniture and equipment and leasehold improvements was $455 million and $444 million at December 31, 2013, and 2012, respectively. Related depreciation expenses allocated to TIAA were $10 million, $18 million and $25 million for the years ended December 31, 2013, 2012 and 2011, respectively.
Insurance and Annuity Premiums: Life insurance premiums are recognized as revenue over the premium-paying period of the related policies. Annuity considerations are recognized as revenue when received. Deposits on deposit-type contracts are recorded directly as a liability when received. Expenses incurred when acquiring new business are charged to operations as incurred.
Reserves for Life and Health Insurance, Annuities and Deposit-type Contracts: Policy and contract reserves are determined in accordance with standard valuation methods approved by the Department and are computed in accordance with standard actuarial methodology. The reserves established utilize assumptions for interest, mortality and other risks insured. Such reserves are established to provide for adequate contractual benefits guaranteed under policy and contract provisions.
Liabilities for deposit-type contracts, which do not contain any life contingencies, are equal to deposits received and interest credited to the benefit of contract holders, less surrenders or withdrawals (that represent a return to the contract holders) plus additional reserves (if any) necessitated by actuarial regulations.
The Company performed Asset Adequacy Analysis in order to test the adequacy of its reserves in light of the assets supporting such reserves, and determined that its reserves were sufficient to meet its obligations.
Interest Maintenance Reserve: The IMR defers recognition of realized capital gains and losses resulting from changes in the general level of interest rates. These gains and losses are amortized into investment income over the expected remaining life of the investments sold. The IMR is calculated in accordance with the NAIC Annual Statement Instructions for Life and Accident and Health Insurance Companies.
A realized gain or loss on each bond sold, excluding loan-backed and structured securities, is interest-related if the security’s NAIC rating did not change by more than one classification from the date of purchase to the date of sale, and its NAIC rating was not a 6 at any time during the holding period.
A realized gain or loss on each preferred stock sold is interest-related if the security did not have an NAIC rating of 4, 5, or 6 at any time during the holding period and the NAIC rating did not change by more than one classification from the date of purchase to the date of sale.
A realized gain or loss on each mortgage loan sold is interest-related if interest is not more than 90 days past due, not in the process of foreclosure or voluntary conveyance, or the mortgage loan was not restructured over the prior two years.
A realized gain or loss on each derivative investment sold is interest-related based on the characteristics of the underlying invested asset.
For loan-backed and structured securities, realized gains or losses resulting from sale transactions and realized losses resulting from OTTI are bifurcated between IMR and AVR based upon the present value of cash flows and amortized cost at the time of the transaction.
Asset Valuation Reserve: The AVR is established to offset potential credit-related investment losses from bonds, stocks, mortgage loans, real estate, derivatives and other long-term investments. Changes in AVR are recorded directly to surplus. The AVR is calculated in accordance with the NAIC Annual Statement Instructions for Life and Accident and Health Insurance Companies.
Realized gains or losses resulting from the sale of U.S. Government securities and securities of agencies which are backed by the full faith and credit of the U.S. Government are exempt from the AVR.
A realized gain or loss on each bond sold, excluding loan-backed and structured securities, is non-interest-related if the security’s NAIC rating changed by more than one classification from the date of purchase to the date of sale, or its NAIC rating was a 6 at any time during the holding period.
A realized gain or loss on each preferred stock sold is non-interest-related if the security had an NAIC rating of 4, 5 or 6 at any time during the holding period or the NAIC rating changed by more than one classification from the date of purchase to the date of sale.
A realized gain or loss on each mortgage loan sold is non-interest-related if interest is more than 90 days past due, in the process of foreclosure or voluntary conveyance, or the mortgage loan was restructured over the prior two years.
A realized gain or loss on each derivative investment sold is non-interest-related based on the characteristics of the underlying invested asset.
For loan-backed and structured securities, realized gains or losses resulting from sale transactions and realized losses resulting from OTTI are bifurcated between IMR and AVR based upon the present value of cash flows and amortized cost at the time of the transaction.
Single Premium Immediate Annuities n Statement of Additional Information | B-97 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
OTTI for non-loan-backed and structured securities, stocks, mortgage loans, real estate and other long-term investments are considered non-interest related realized losses and included in the AVR calculation.
Repurchase Agreement: Repurchase agreements are agreements between a seller and a buyer, whereby the seller of securities sells and simultaneously agrees to repurchase the same or substantially the same securities from the buyer at a stated price on a specified date. Repurchase agreements are generally accounted for as secured borrowings. The assets transferred are not removed from the balance sheet, the cash collateral received is invested and reported on the balance sheet and accounted for based on the type of investment. An offsetting liability is reported in “Other liabilities.”
Dividends Due to Policyholders: Dividends on insurance policies and pension annuity contracts in the payout phase are declared by the TIAA Board of Trustees (the “Board”) in the fourth quarter of each year, and such dividends are credited to policyholders in the following calendar year. Dividends on pension annuity contracts in the accumulation phase are declared by the Board in February of each year, and such dividends on the various existing vintages of pension annuity contracts in the accumulation phase are credited to policyholders during the ensuing twelve month period beginning March 1.
Application of new accounting pronouncements:
Effective January 1, 2013, the Company adopted SSAP No. 92—Accounting for Postretirement Benefits Other Than Pensions, A Replacement of SSAP No. 14. SSAP No. 92 was effective for quarterly and annual reporting periods beginning on or after January 1, 2013 with early adoption permitted. This statement establishes financial accounting and reporting standards for an insurer that offers a defined benefit postretirement plan to its employees. Any unfunded defined benefit amounts, as determined when the projected benefit obligation exceeds the fair value of plan assets, is a liability under SSAP No. 5R and shall be reported in the first quarter statutory financial statements after the transition date with a corresponding entry to unassigned funds (surplus). Net periodic pension cost shall include a component for unrecognized prior service cost for non-vested employees beginning in 2013. The Company determined that SSAP No. 92 did not have a material impact.
Effective January 1, 2012, the Company adopted SSAP No. 101—Income Taxes, a Replacement of SSAP No. 10—Income Taxes and SSAP No. 10R—Income Taxes, A Temporary Replacement of SSAP No. 10. For purposes of accounting for federal and foreign income taxes, reporting entities shall adopt FASB Statement No. 109, Accounting for Income Taxes (“FAS 109”) with modifications for state income taxes, the realization criteria for deferred tax assets, and the recording of the impact of changes in deferred tax balances. SSAP No. 101 did not have a material impact on the current and deferred taxes presented under SSAP No. 10R.
Effective January 1, 2013, the Company adopted SSAP No. 103—Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SSAP No. 103 was effective for years beginning on and after January 1, 2013 and applied prospectively. Early application is prohibited. This statement must be applied to transfers occurring on or after the effective date. The concept of a qualifying special purpose entity is no longer relevant for statutory accounting purposes. The unit of account for sale treatment is defined to be an entire financial asset or a pro rata participating interest without subordination. The disclosure provisions of this statement are applied to transfers that occurred both before and after the effective date of this statement. SSAP No. 103 did not have an impact on the Company.
Note 3 – long-term bonds, preferred stocks, and common stocks
The book/adjusted carrying value, estimated fair value, excess of fair value over book/adjusted carrying value and excess of book/adjusted carrying value over fair value of long-term bonds and preferred stocks at December 31, are shown below (in millions):
2013 | ||||||||||||||||||
Excess of | ||||||||||||||||||
Book/ Adjusted Carrying Value |
Fair Value Over Book/Adjusted Carrying Value |
Book/Adjusted Carrying Value Over Fair Value |
Estimated Fair Value |
|||||||||||||||
Bonds: |
||||||||||||||||||
U.S. Governments |
$ | 41,161 | $ | 1,841 | $ | (1,169 | ) | $ | 41,833 | |||||||||
All Other Governments |
3,929 | 381 | (76 | ) | 4,234 | |||||||||||||
States, Territories and Possessions |
647 | 23 | (15 | ) | 655 | |||||||||||||
Political Subdivisions of States, Territories, and Possessions |
491 | 8 | (23 | ) | 476 | |||||||||||||
Special Revenue and Special Assessment, Non-guaranteed Agencies and Government |
18,862 | 1,307 | (652 | ) | 19,517 | |||||||||||||
Credit Tenant Loans |
5,796 | 365 | (92 | ) | 6,069 | |||||||||||||
Industrial and Miscellaneous |
107,416 | 6,447 | (2,155 | ) | 111,708 | |||||||||||||
Hybrids |
1,002 | 60 | (16 | ) | 1,046 | |||||||||||||
Parent, Subsidiaries and Affiliates |
1,817 | 54 | — | 1,871 | ||||||||||||||
Total Bonds |
181,121 | 10,486 | (4,198 | ) | 187,409 | |||||||||||||
Preferred Stocks |
48 | 40 | — | 88 | ||||||||||||||
Total Bonds and Preferred Stocks |
$ | 181,169 | $ | 10,526 | $ | (4,198 | ) | $ | 187,497 | |||||||||
|
B-98 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
2012 | ||||||||||||||||||
Excess of | ||||||||||||||||||
Book/ Adjusted Carrying Value |
Fair Value Over Book/Adjusted Carrying Value |
Book/Adjusted Carrying Value Over Fair Value |
Estimated Fair Value |
|||||||||||||||
Bonds: |
||||||||||||||||||
U.S. Governments |
$ | 41,456 | $ | 5,966 | $ | (55 | ) | $ | 47,367 | |||||||||
All Other Governments |
3,677 | 802 | (3 | ) | 4,476 | |||||||||||||
States, Territories and Possessions |
491 | 76 | — | 567 | ||||||||||||||
Political Subdivisions of States, Territories, and Possessions |
345 | 30 | — | 375 | ||||||||||||||
Special Revenue and Special Assessment, Non-guaranteed Agencies and Government |
20,256 | 2,398 | (16 | ) | 22,638 | |||||||||||||
Credit Tenant Loans |
5,025 | 431 | (23 | ) | 5,433 | |||||||||||||
Industrial and Miscellaneous |
99,209 | 10,556 | (1,060 | ) | 108,705 | |||||||||||||
Hybrids |
1,334 | 90 | (28 | ) | 1,396 | |||||||||||||
Parent, Subsidiaries and Affiliates |
2,161 | 75 | (2 | ) | 2,234 | |||||||||||||
Total Bonds |
173,954 | 20,424 | (1,187 | ) | 193,191 | |||||||||||||
Preferred Stocks |
38 | 13 | — | 51 | ||||||||||||||
Total Bonds and Preferred Stocks |
$ | 173,992 | $ | 20,437 | $ | (1,187 | ) | $ | 193,242 | |||||||||
|
Impairment Review Process: All securities are subjected to the Company’s process for identifying OTTI. The Company writes down securities it deems to have an OTTI in value during the period the securities are deemed to be impaired, based on management’s case-by-case evaluation of the decline in value and prospects for recovery. Management considers a wide range of factors in the impairment evaluation process, including, but not limited to, the following: (a) the length of time the fair value has been below amortized cost; (b) the financial condition and near-term prospects of the issuer; (c) whether the debtor is current on contractually obligated interest and principal payments; (d) the intent and ability of the Company to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value or repayment; (e) information obtained from regulators and ratings agencies; (f) the potential for impairments in an entire industry sector or sub-sector; (g) the potential for impairments in certain economically-depressed geographic locations and (h) the potential for impairment based on an estimated discounted cash flow analysis for structured and loan-backed securities. Where impairment is considered to be other-than-temporary, the Company recognizes a write-down as a realized loss and adjusts the cost basis of the security accordingly. The Company does not change the revised cost basis for subsequent recoveries in value. Once an impairment write-down has been recorded, the Company continues to review the impaired security for appropriate valuation on an ongoing basis.
Based upon the factors above in the Company’s impairment evaluation process, the securities discussed in the following section which were in an unrealized loss position at December 31, 2013 and 2012, were not deemed to be other-than-temporarily impaired.
Unrealized Losses on Bonds, Preferred Stocks and Unaffiliated Common Stocks: The gross unrealized losses and estimated fair values for securities by the length of time that individual securities had been in a continuous unrealized loss position are shown in the table below (in millions):
Less than twelve months | Twelve months or more | |||||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
|||||||||||||||||||||||
Loan-backed and structured bonds |
$ | 16,499 | $ | (1,026 | ) | $ | 15,473 | $ | 5,111 | $ | (565 | ) | $ | 4,546 | ||||||||||||||
All other bonds |
31,179 | (1,995 | ) | 29,184 | 5,485 | (702 | ) | 4,783 | ||||||||||||||||||||
Total bonds |
$ | 47,678 | $ | (3,021 | ) | $ | 44,657 | $ | 10,596 | $ | (1,267 | ) | $ | 9,329 | ||||||||||||||
Unaffiliated common stocks |
2 | — | 2 | 106 | (48 | ) | 58 | |||||||||||||||||||||
Preferred stocks |
— | — | — | 5 | (1 | ) | 4 | |||||||||||||||||||||
Total bonds and stocks |
$ | 47,680 | $ | (3,021 | ) | $ | 44,659 | $ | 10,707 | $ | (1,316 | ) | $ | 9,391 | ||||||||||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-99 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Less than twelve months | Twelve months or more | |||||||||||||||||||||||||||
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
Amortized Cost |
Gross Unrealized Loss |
Estimated Fair Value |
|||||||||||||||||||||||
Loan-backed and structured bonds |
$ | 1,719 | $ | (47 | ) | $ | 1,672 | $ | 7,887 | $ | (1,131 | ) | $ | 6,756 | ||||||||||||||
All other bonds |
5,988 | (154 | ) | 5,834 | 608 | (46 | ) | 562 | ||||||||||||||||||||
Total bonds |
$ | 7,707 | $ | (201 | ) | $ | 7,506 | $ | 8,495 | $ | (1,177 | ) | $ | 7,318 | ||||||||||||||
Unaffiliated common stocks |
138 | (22 | ) | 116 | — | — | — | |||||||||||||||||||||
Preferred stocks |
10 | (2 | ) | 8 | — | — | — | |||||||||||||||||||||
Total bonds and stocks |
$ | 7,855 | $ | (225 | ) | $ | 7,630 | $ | 8,495 | $ | (1,177 | ) | $ | 7,318 | ||||||||||||||
|
As of December 31, 2013, the major categories of securities where the estimated fair value declined and remained below cost for less than twelve months were diversified in residential mortgage-backed securities (22%), U.S., Canada and other government (22%) and public utilities (8%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
As of December 31, 2013, the major categories of securities where the estimated fair value declined and remained below cost for twelve months or greater were diversified in commercial mortgage-backed securities (25%), U.S., Canada and other government (23%), and residential mortgage-backed securities (14%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
As of December 31, 2012, the major categories of securities where the estimated fair value declined and remained below cost for less than twelve months were diversified in U.S., Canada and other government (25%), asset-backed securities (12%) and manufacturing (11%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
As of December 31, 2012, the major categories of securities where the estimated fair value declined and remained below cost for twelve months or greater were diversified in commercial mortgage-backed securities (73%) and residential mortgage-backed securities (19%). The preceding percentages were calculated as a percentage of the gross unrealized loss.
Based upon the Company’s current evaluation of these securities in accordance with its impairment policy, the cause of the decline is primarily attributable to increased market yields for these particular securities since acquisition caused principally by credit spreads. The Company currently intends and has the ability to hold the securities with unrealized losses for a period of time sufficient for them to recover and the Company has concluded that these securities are not other–than-temporarily impaired.
Scheduled Maturities of Bonds: The carrying value and estimated fair value of bonds, categorized by contractual maturity, are shown below. Bonds not due at a single maturity date have been included in the following table based on the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may prepay obligations with or without call or prepayment penalties. Mortgage-backed and asset-backed securities are shown separately in the table below, as they are not due at a single maturity date (dollars in millions):
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||||
Book/ Adjusted Carrying Value |
% of Total |
Estimated Fair Value |
Book/ Adjusted Carrying Value |
% of Total |
Estimated Fair Value |
|||||||||||||||||||||||
Due in one year or less |
$ | 4,724 | 2.6 | % | $ | 4,819 | $ | 3,923 | 2.3 | % | $ | 4,019 | ||||||||||||||||
Due after one year through five years |
20,503 | 11.3 | 22,126 | 20,380 | 11.6 | 22,183 | ||||||||||||||||||||||
Due after five years through ten years |
35,068 | 19.4 | 35,983 | 34,773 | 20.0 | 38,505 | ||||||||||||||||||||||
Due after ten years |
45,218 | 25.0 | 45,939 | 38,912 | 22.4 | 46,050 | ||||||||||||||||||||||
Subtotal |
105,513 | 58.3 | 108,867 | 97,988 | 56.3 | 110,757 | ||||||||||||||||||||||
Residential mortgage-backed securities |
47,094 | 26.0 | 49,304 | 51,170 | 29.5 | 56,525 | ||||||||||||||||||||||
Commercial mortgage-backed securities |
10,785 | 5.9 | 10,821 | 9,467 | 5.4 | 9,328 | ||||||||||||||||||||||
Asset-backed securities |
17,729 | 9.8 | 18,417 | 15,329 | 8.8 | 16,581 | ||||||||||||||||||||||
Subtotal |
75,608 | 41.7 | 78,542 | 75,966 | 43.7 | 82,434 | ||||||||||||||||||||||
Total |
$ | 181,121 | 100.0 | % | $ | 187,409 | $ | 173,954 | 100.0 | % | $ | 193,191 | ||||||||||||||||
|
For the year ended December 31, 2013, the preceding table includes sub-prime mortgage investments totaling $2,988 million under residential mortgage-backed securities. $2,712 million or 91% of the sub-prime securities were rated investment grade (NAIC 1 and 2).
For the year ended December 31, 2012, the preceding table includes sub-prime mortgage investments totaling $3,126 million under residential mortgage-backed securities. $2,511 million or 80% of the sub-prime securities were rated investment grade (NAIC 1 and 2).
Sub-prime securities are backed by loans that are in the riskiest category of loans and are typically sold in a separate market from prime loans.
B-100 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Bond Diversification: The carrying values of long-term bond investments were diversified by the following classification at December 31 as follows:
2013 | 2012 | |||||||
Residential mortgage-backed securities |
26.0 | % | 29.4 | % | ||||
U.S. and other governments |
11.4 | 12.2 | ||||||
Manufacturing |
10.2 | 9.8 | ||||||
Asset-backed securities |
9.8 | 8.8 | ||||||
Public utilities |
8.3 | 7.7 | ||||||
Commercial mortgage-backed securities |
6.0 | 5.5 | ||||||
Finance and financial services |
5.8 | 5.5 | ||||||
Oil and gas |
5.2 | 5.1 | ||||||
Services |
4.2 | 3.5 | ||||||
Revenue and special obligations |
3.3 | 2.5 | ||||||
Communications |
3.1 | 3.2 | ||||||
Retail and wholesale trade |
1.8 | 1.8 | ||||||
Mining |
1.3 | 1.4 | ||||||
Transportation |
1.3 | 1.3 | ||||||
Real estate investment trusts |
1.1 | 0.9 | ||||||
Other |
1.2 | 1.4 | ||||||
Total |
100.0 | % | 100.0 | % | ||||
|
At December 31, 2013 and 2012, 93.3% and 92.5%, respectively, of the long-term bond portfolio was comprised of investment grade securities (NAIC 1 and 2).
The following table presents the Company’s carrying value and estimated fair value for the residential mortgage-backed securities portfolio (“RMBS”) at December 31, (in millions):
2013 | 2012 | |||||||||||||||||||
NAIC Designation | Carrying Value |
Estimated Fair Value |
Carrying Value |
Estimated Fair Value |
||||||||||||||||
1 |
$ | 46,273 | $ | 48,511 | $ | 48,144 | $ | 53,539 | ||||||||||||
2 |
377 | 379 | 1,640 | 1,667 | ||||||||||||||||
3 |
172 | 153 | 985 | 974 | ||||||||||||||||
4 |
135 | 126 | 175 | 154 | ||||||||||||||||
5 |
116 | 112 | 214 | 176 | ||||||||||||||||
6 |
21 | 23 | 12 | 15 | ||||||||||||||||
Total |
$ | 47,094 | $ | 49,304 | $ | 51,170 | $ | 56,525 | ||||||||||||
|
With respect to the RMBS in the above table, approximately 99% and 97% were rated investment grade (NAIC 1 and 2) at December 31, 2013 and 2012, respectively. The Company has continued to maintain its historical procedures surrounding the evaluation of fundamental underwriting and investment standards within its investment portfolios, including investments in RMBS. Additionally, the Company continues to manage the RMBS portfolio to appropriately support its contractual obligations and will recognize impairments when diminishments in fair value are determined to be other-than-temporary based on evaluations of projected discounted cash flows as prescribed under SSAP 43R. Management continues to actively monitor the market, credit and liquidity risk of the RMBS portfolio as an integral component of its overall asset liability management program.
The following table presents the Company’s carrying value and estimated fair value for the commercial mortgage-backed securities (“CMBS”) portfolio at December 31, (in millions):
2013 |
|
2012 |
| |||||||||||||||||
NAIC Designation | Carrying Value |
Estimated Fair Value |
Carrying Value |
Estimated Fair Value |
||||||||||||||||
1 |
$ | 9,312 | $ | 9,384 | $ | 7,301 | $ | 7,528 | ||||||||||||
2 |
271 | 273 | 246 | 230 | ||||||||||||||||
3 |
219 | 212 | 607 | 481 | ||||||||||||||||
4 |
319 | 292 | 585 | 467 | ||||||||||||||||
5 |
469 | 428 | 564 | 409 | ||||||||||||||||
6 |
195 | 232 | 164 | 213 | ||||||||||||||||
Total |
$ | 10,785 | $ | 10,821 | $ | 9,467 | $ | 9,328 | ||||||||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-101 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
With respect to the CMBS in the above table, approximately 89% and 80% were rated investment grade (NAIC 1 and 2) and approximately 38% and 66% were issued prior to 2006 (based on carrying value) at December 31, 2013 and 2012, respectively. The Company has continued to maintain its historical procedures surrounding the evaluation of fundamental underwriting and investment standards within its investment portfolios, including investments in CMBS. Additionally, the Company continues to manage the CMBS portfolio to appropriately support its contractual obligations and will recognize impairments when diminishments in fair value are determined to be other-than-temporary based on evaluations of projected discounted cash flows as prescribed under SSAP 43R. Management continues to actively monitor the market, credit and liquidity risk of the CMBS portfolio as an integral component of its overall asset liability management program.
Included in the Company’s long-term investments are bonds with a NAIC designation of 6. The statutory carrying value of these investments and related contractual maturity is listed in the following table at December 31, (in millions):
2013 | 2012 | |||
Due after one year through five years |
$68 | $3 | ||
Due after ten years |
2 | 2 | ||
Subtotal |
70 | 5 | ||
Residential mortgage-backed securities |
21 | 12 | ||
Commercial mortgage-backed securities |
195 | 164 | ||
Asset-backed securities |
57 | 53 | ||
Total |
$343 | $234 | ||
|
Troubled Debt Restructuring: There were no troubled debt restructurings during 2013 or 2012.
Exchanges: During 2013 and 2012, the Company also acquired bonds and stocks through exchanges aggregating $2,623 million and $3,094 million, of which approximately $18 million and $26 million were acquired through non-monetary transactions, respectively. When exchanging securities, the Company generally accounts for assets at fair value unless the exchange was as a result of restricted 144As exchanged for unrestricted securities, which are accounted for at book value.
Loan-backed and Structured Securities: The near-term prepayment assumptions for loan-backed and structured securities are based on historical averages drawing from performance experience for a particular transaction and may vary by security type. The long-term assumptions are adjusted based on expected performance.
The following table represents OTTI on securities with the intent to sell or the inability to retain for the years ended December 31, (in millions):
1 | OTTI | 3 | ||||||||||||||
Amortized Cost Basis Before OTTI |
2a Interest |
2b Non-interest |
Fair Value 1-(2a+2b) |
|||||||||||||
OTTI recognized, 2013 |
||||||||||||||||
a. Intent to sell |
$ | 237 | $ | 20 | $ | 10 | $ | 207 | ||||||||
b. Inability to retain |
— | — | — | — | ||||||||||||
Total 2013 |
$ | 237 | $ | 20 | $ | 10 | $ | 207 | ||||||||
|
||||||||||||||||
OTTI recognized, 2012 |
||||||||||||||||
a. Intent to sell |
$ | 743 | $ | 98 | $ | 130 | $ | 515 | ||||||||
b. Inability to retain |
— | — | — | — | ||||||||||||
Total 2012 |
$ | 743 | $ | 98 | $ | 130 | $ | 515 | ||||||||
|
At December 31, 2013, the Company held loan-backed and structured securities with an OTTI recognized during 2013 where the present value of cash flows expected to be collected is less than the amortized cost. See Note 25 for listing of securities.
Other Disclosures: During 2013 and 2012, the Company acquired common stocks from other long term private equity fund investment distributions totaling $51 million and $47 million, respectively.
At December 31, 2013 and 2012, the carrying amount of restricted unaffiliated common stock was $494 million and $516 million, respectively. At December 31, 2013 and 2012, the carrying amount of restricted preferred stock was $5 million and $4 million, respectively. The restrictions include share sales, private sales, general partner approval for sale, contractual restrictions and public or free trade restrictions.
At December 31, 2013 and 2012, the carrying amount of bonds and stocks denominated in a foreign currency was $3,394 million and $3,766 million, respectively. Bonds denominated in foreign currency totaled $1,817 million and $2,120 million at December 31, 2013 and 2012, respectively and represent amounts due from related parties that are collateralized by real estate owned by the Company’s investment subsidiaries and affiliates.
B-102 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Note 4 – mortgage loans
The Company originates mortgage loans that are principally collateralized by commercial real estate. The coupon rates for non-mezzanine commercial mortgage loans originated during 2013 ranged from 3.49% to 4.99% and from 3.80% to 5.71% for 2012. The coupon rates for mezzanine mortgage loans originated during 2013 ranged from 5.00% to 6.25% and from 6.75% to 7.96% for 2012.
The maximum percentage of any one loan to the value of the property at the time of the loan, exclusive of insured, guaranteed or purchase money mortgages, was 70% and 98% for commercial loans for the years ended December 31, 2013 and 2012, respectively. In 2012, there was one loan issued with a loan to value of 98% with a value of $64 million at December 31, 2012. The loan is a full recourse construction loan with a committed tenant.
Impairment Review Process: The Company monitors the effects of current and expected market conditions and other factors on the collectability of mortgage loans to identify and quantify any impairment in value. Impairments are classified as either temporary, for which a recovery is anticipated, or other-than-temporary. Mortgage loans held to maturity with other-than-temporarily impaired values at December 31, 2013 and 2012 have been written down to net realizable values based upon independent appraisals of the collateral while mortgage loans held for sale have been written down to the current fair value of the loan. For impaired mortgage loans where the impairments were deemed to be temporary, an allowance for credit losses has been established.
The following table provides information on impaired loans classified as “Commercial—All Other” with or without allowance for credit losses as of December 31, (in millions):
Commercial – All Other | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
With Allowance for Credit Losses |
$ | — | $ | — | $ | — | ||||||||
No Allowance for Credit Losses |
$ | 202 | $ | 206 | $ | 248 |
The following table provides information for investment in impaired loans classified as “Commercial – All Other” – Average Recorded Investment, Interest Income Recognized, Recorded Investment on Nonaccrual Status and Amount of Interest Income Recognized Using a Cash-Basis Method of Accounting as of December 31, (in millions):
Commercial – All Other | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Average Recorded Investment |
$ | 34 | $ | 34 | $ | 35 | ||||||||
Interest Income Recognized |
$ | 14 | $ | 14 | $ | 16 | ||||||||
Recorded Investments on Nonaccrual Status |
$ | — | $ | — | $ | — | ||||||||
Amount of Interest Income Recognized Using a Cash-Basis Method of Accounting |
$ | 14 | $ | 14 | $ | 16 |
The Company had no allowance for credit losses for the years ended December 31, 2013 and 2012, respectively.
2011 | ||||
Allowance for credit losses (in millions): |
||||
Balance at the beginning of the period |
$ | 2 | ||
Additions charged to surplus |
— | |||
Direct write-downs/charges against the allowance |
— | |||
Recoveries of amounts previously added to surplus |
(2 | ) | ||
Balance at the end of the period |
$ | — | ||
|
For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan–to-value-ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the loan-to-value ratio, as well as the values utilized in calculating these ratios, are updated quarterly, with a portion of the loan portfolio updated annually.
For the agricultural mortgage loan, the Company’s primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are updated quarterly.
Single Premium Immediate Annuities n Statement of Additional Information | B-103 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Credit quality of commercial and agricultural mortgage loans
The credit quality of commercial and agricultural mortgage loans held-for-investment, were as follows (dollars in millions):
Recorded Investment | ||||||||||||||||||||||||
Loan-to-value Ratios | ||||||||||||||||||||||||
> 90% | 81% - 90% |
70% - 80% |
< 70% | Total | % of Total |
|||||||||||||||||||
Debt Service Coverage Ratios: |
||||||||||||||||||||||||
Greater than 1.20x |
$ | 26 | $ | 20 | $ | 641 | $ | 11,955 | $ | 12,642 | 88.4 | % | ||||||||||||
1.05x—1.20x |
— | — | 141 | 553 | 694 | 4.9 | ||||||||||||||||||
Less than 1.05x |
42 | 17 | 183 | 262 | 504 | 3.5 | ||||||||||||||||||
Agriculture |
— | — | — | 265 | 265 | 1.9 | ||||||||||||||||||
Construction |
188 | — | — | — | 188 | 1.3 | ||||||||||||||||||
Total |
$ | 256 | $ | 37 | $ | 965 | $ | 13,035 | $ | 14,293 | 100.0 | % | ||||||||||||
|
Mortgage Loan Age Analysis: The following table sets forth an age analysis of mortgage loans (dollars in millions):
Commercial | ||||||||||||||||||||
Farm | Insured | All Other | Mezzanine | Total | ||||||||||||||||
Year-End 2013 |
||||||||||||||||||||
Recorded Investment |
$ | 265 | $ | — | $ | 13,543 | $ | 485 | $ | 14,293 | ||||||||||
Current |
||||||||||||||||||||
Interest Reduced |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Recorded Investment |
||||||||||||||||||||
Number of Loans |
— | — | — | — | — | |||||||||||||||
Percent Reduced |
— | — | — | — | — | |||||||||||||||
Year-End 2012 |
||||||||||||||||||||
Recorded Investment |
||||||||||||||||||||
Current |
$ | 265 | $ | — | $ | 12,511 | $ | 225 | $ | 13,001 | ||||||||||
Interest Reduced |
||||||||||||||||||||
Recorded Investment |
$ | — | $ | — | $ | 363 | $ | — | $ | 363 | ||||||||||
Number of Loans |
— | — | 3 | — | 3 | |||||||||||||||
Percent Reduced |
— | — | 0.86 | % | — | 0.86 | % | |||||||||||||
Year-End 2011 |
||||||||||||||||||||
Recorded Investment |
||||||||||||||||||||
Current |
$ | 265 | $ | — | $ | 12,729 | $ | 187 | $ | 13,181 | ||||||||||
Interest Reduced |
||||||||||||||||||||
Recorded Investment |
$ | — | $ | — | $ | 216 | $ | — | $ | 216 | ||||||||||
Number of Loans |
— | — | 2 | — | 2 | |||||||||||||||
Percent Reduced |
— | — | 1.14 | % | — | 1.14 | % |
Mortgage Loan Diversification: The following tables set forth the commercial mortgage loan portfolio by property type and geographic distribution (dollars in millions):
Commercial Mortgage Loans by Property Type | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Carrying Value |
% of Total |
Carrying Value |
% of Total |
|||||||||||||
Shopping centers |
$ | 4,854 | 34.1 | % | $ | 4,278 | 33.0 | % | ||||||||
Office buildings |
4,774 | 33.5 | 4,288 | 33.1 | ||||||||||||
Industrial buildings |
2,068 | 14.5 | 2,118 | 16.4 | ||||||||||||
Apartments |
1,825 | 12.8 | 1,423 | 11.0 | ||||||||||||
Land |
265 | 1.9 | 265 | 2.0 | ||||||||||||
Mixed use |
259 | 1.8 | 264 | 2.0 | ||||||||||||
Hotel |
161 | 1.1 | 164 | 1.3 | ||||||||||||
Other |
40 | 0.3 | 156 | 1.2 | ||||||||||||
Total |
$ | 14,246 | 100.0 | % | $ | 12,956 | 100.0 | % | ||||||||
|
B-104 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Commercial Mortgage Loans by Geographic Distribution | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Carrying Value |
% of Total |
Carrying Value |
% of Total |
|||||||||||||
Pacific |
$ | 3,389 | 23.7 | % | $ | 3,312 | 25.6 | % | ||||||||
South Atlantic |
3,202 | 22.5 | 2,908 | 22.4 | ||||||||||||
Middle Atlantic |
2,848 | 20.0 | 2,373 | 18.3 | ||||||||||||
South Central |
2,486 | 17.5 | 2,199 | 17.0 | ||||||||||||
North Central |
1,223 | 8.6 | 1,209 | 9.3 | ||||||||||||
Mountain |
522 | 3.7 | 361 | 2.8 | ||||||||||||
New England |
263 | 1.8 | 230 | 1.8 | ||||||||||||
Other |
313 | 2.2 | 364 | 2.8 | ||||||||||||
Total |
$ | 14,246 | 100.0 | % | $ | 12,956 | 100.0 | % | ||||||||
|
Regional classification is based on American Council of Life Insurers regional chart. See below for details of regions.
Pacific states are AK, CA, HI, OR and WA
South Atlantic states are DE, DC, FL, GA, MD, NC, SC, VA and WV
Middle Atlantic states are PA, NJ and NY
South Central states are AL, AR, KY, LA, MS, OK, TN and TX
North Central states are IA, IL, IN, KS, MI, MN, MO, NE, ND, OH, SD and WI
New England states are CT, MA, ME, NH, RI and VT
Mountain states are AZ, CO, ID, MT, NV, NM, UT and WY
Other comprises investments in Australia and Canada.
At December 31, 2013 and 2012, approximately 16.9% and 18.9% of the mortgage loan portfolio, respectively, was invested in California and is included in the Pacific region shown above.
At December 31, 2013 and 2012, approximately 15.9% and 15.3% of the mortgage loan portfolio, respectively, was invested in Texas and is included in the South Central region shown above.
Scheduled Mortgage Loan Maturities: At December 31, contractual maturities for mortgage loans were as follows (dollars in millions):
2013 | 2012 | |||||||||||||||
Carrying Value |
% of Total |
Carrying Value |
% of Total |
|||||||||||||
Due in one year or less |
$ | 801 | 5.6 | % | $ | 804 | 6.2 | % | ||||||||
Due after one year through five years |
4,938 | 34.7 | 6,013 | 46.4 | ||||||||||||
Due after five years through ten years |
5,893 | 41.4 | 4,505 | 34.8 | ||||||||||||
Due after ten years |
2,614 | 18.3 | 1,634 | 12.6 | ||||||||||||
Total |
$ | 14,246 | 100.0 | % | $ | 12,956 | 100.0 | % | ||||||||
|
Actual maturities may differ from contractual maturities because borrowers may have the right to prepay mortgages, although prepayment premiums may be applicable.
There were no mortgage troubled debt restructurings during the periods ended December 31, 2013 or 2012. When restructuring mortgage loans, the Company generally requires participation features, yield maintenance stipulations, and/or the establishment of property-specific escrow accounts funded by the borrowers. With respect to impaired loans, the Company accrues interest income to the extent it is deemed collectible. Cash received on impaired mortgage loans that are performing according to their contractual terms is applied in accordance with those terms. For mortgage loans in the process of foreclosure, cash received is initially held in suspense and applied as a return of principal at the time that the foreclosure process is completed, or the mortgage is otherwise disposed. There were no mortgage loans with interest more than 180 days past due at December 31, 2013 or 2012.
During 2013, the Company did not reduce interest rates on any outstanding commercial loans.
During 2012, the Company reduced interest rates on three outstanding commercial loans. The first loan changed from 5.40% to 4.50% from November 1, 2012 through maturity on November 1, 2015. The other two loans changed from 7.50% to 6.69% from August 3, 2012 through maturity on January 1, 2019. The recorded investment excluding accrued interest of these loans was $363 million at December 31, 2012.
Single Premium Immediate Annuities n Statement of Additional Information | B-105 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
The Company did not have any taxes, assessments or amounts advanced that were not included in the mortgage loan totals for the years ended December 31, 2013 and 2012.
The Company has no reverse mortgages as of December 31, 2013 or 2012.
Mortgage loans of $53 million and $13 million at December 31, 2013 and 2012, respectively, represent the carrying value of amounts due from related parties that are collateralized by real estate owned by the Company’s investment subsidiaries and affiliates.
For the years ended December 31, 2013 and 2012, the carrying values of mortgage loans denominated in foreign currency were $313 million and $281 million, respectively.
The Company does not hold sub-prime mortgages in the commercial mortgage portfolio and does not have any material indirect exposure from sub-prime lenders who are tenants in buildings that are secured by commercial mortgages.
Note 5 – real estate
At December 31, 2013 and 2012, the Company’s directly owned real estate investments of $1,812 million and $1,623 million, respectively, were carried net of third party mortgage encumbrances. There were no third party mortgage encumbrances as of December 31, 2013 and 2012.
The carrying values of the directly owned real estate portfolio were diversified by property type and geographic region at December 31 as follows (dollars in millions):
Directly Owned Real Estate by Property Type | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Carrying Value |
% of Total |
Carrying Value |
% of Total |
|||||||||||||
Office buildings |
$ | 696 | 38.4 | % | $ | 836 | 51.5 | % | ||||||||
Industrial buildings |
639 | 35.3 | 501 | 30.9 | ||||||||||||
Mixed-use projects |
188 | 10.4 | 95 | 5.9 | ||||||||||||
Apartments |
160 | 8.8 | 59 | 3.6 | ||||||||||||
Retail |
112 | 6.2 | 114 | 7.0 | ||||||||||||
Land under development |
17 | 0.9 | 18 | 1.1 | ||||||||||||
Total |
$ | 1,812 | 100.0 | % | $ | 1,623 | 100.0 | % | ||||||||
|
||||||||||||||||
Directly Owned Real Estate by Geographic Region | ||||||||||||||||
2013 | 2012 | |||||||||||||||
Carrying Value |
% of Total |
Carrying Value |
% of Total |
|||||||||||||
Pacific |
$ | 971 | 53.6 | % | $ | 605 | 37.3 | % | ||||||||
South Atlantic |
683 | 37.7 | 699 | 43.1 | ||||||||||||
Middle Atlantic |
96 | 5.3 | 203 | 12.5 | ||||||||||||
South Central |
62 | 3.4 | 116 | 7.1 | ||||||||||||
Total |
$ | 1,812 | 100.0 | % | $ | 1,623 | 100.0 | % | ||||||||
|
At December 31, 2013 and 2012, approximately 32.5% and 19.4% of the real estate portfolio, respectively, was invested in California and is included in the Pacific region shown above.
At December 31, 2013 and 2012, approximately 16.4% and 18.5% of the real estate portfolio, respectively, was invested in Virginia and is included in the South Atlantic region shown above.
The Company monitors the effects of current and expected market conditions and other factors on its real estate investments to identify and quantify any impairment in value. The Company assesses assets to determine if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company evaluates the recoverability of income producing investments based on undiscounted cash flows and then reviews the results of an independent third party appraisal to determine the fair value and if an adjustment is warranted.
OTTI for directly owned real estate investments for the years ended December 31, 2013, 2012 and 2011 were $0, $17 million and $2 million, respectively and these amounts are included in the impairment table in Note 9. The OTTI during 2012 was for directly owned industrial properties in the states of Illinois and Texas and directly owned land in the State of Georgia. $13 million of OTTI during 2012 was a result of the Company’s intent to sell. The impairments were a result of unfavorable market conditions. The OTTI during 2011 was for directly owned land in California. The impairments are included in net realized capital losses in the statutory-basis statements of operations.
B-106 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
As of December 31, 2013 and 2012, $0 and $31 million, respectively, of the Company’s real estate investments were classified as held for sale. For the year ended December 31, 2013 and 2012, the Company recognized a net realized gain on real estate sold of $30 million and $84 million, respectively. The gains are included in net realized capital gains (losses) in the statutory-basis statements of operations.
Depreciation expense on directly owned real estate investments for the years ended December 31, 2013, 2012 and 2011, was $51 million, $53 million and $54 million, respectively. The amount of accumulated depreciation at December 31, 2013, 2012 and 2011 was $362 million, $337 million and $478 million, respectively.
There were no real estate properties acquired via the assumption or in satisfaction of debt during 2013, 2012 or 2011.
The Company’s real estate portfolio does not have any material exposure from sub-prime lenders who are tenants in the buildings that are directly owned.
The Company does not engage in retail land sales operations.
As of December 31, 2013, the Company does not have any low income housing tax credits.
Note 6 – subsidiaries and affiliates
The Company holds interests in certain subsidiaries and affiliates that are primarily involved in the ownership and management of investments for the Company. The carrying value, OTTI and net investment income of investment subsidiaries and affiliates at December 31 are shown below (in millions):
2013 | 2012 | 2011 | ||||||||||
Net carrying value of investment subsidiaries and affiliates |
||||||||||||
Reported as common stock |
$ | 633 | $ | 1,517 | $ | 1,901 | ||||||
Reported as other long-term investments |
10,884 | 8,915 | 7,532 | |||||||||
Total net carrying value |
$ | 11,517 | $ | 10,432 | $ | 9,433 | ||||||
|
||||||||||||
OTTI |
$ | 7 | $ | 9 | $ | 30 | ||||||
Net investment income (distributed from investment subsidiaries and affiliates) |
$ | 589 | $ | 460 | $ | 255 |
The larger investment subsidiaries and affiliates, included in the above table, are TIAA Global Public Investments, LLC, T-C GA RE Holdings, LLC, Covariance Capital Management Series, LLC (“CCMS 1”), Ceres Agricultural Properties, LLC, TIAA Oil & Gas Investments, LLC, Infra Alpha, LLC, ND Properties, Inc. and TIAA Super Regional Mall Member Sub, LLC.
The carrying value, OTTI and net investment income of operating subsidiaries and affiliates at December 31 are shown below (in millions):
2013 | 2012 | 2011 | ||||||||||
Net carrying value of operating subsidiaries and affiliates |
||||||||||||
Reported as common stock |
$ | 814 | $ | 695 | $ | 478 | ||||||
Reported as other long-term investments |
1,119 | 808 | 623 | |||||||||
Total net carrying value |
$ | 1,933 | $ | 1,503 | $ | 1,101 | ||||||
|
||||||||||||
OTTI |
$ | 138 | $ | 75 | $ | 94 | ||||||
Net investment income (distributed from operating subsidiaries and affiliates) |
$ | 7 | $ | 1 | $ | 1 |
The Company’s operating subsidiaries and affiliates primarily consist of, TIAA Global Ag Holdco, LLC, TIAA-CREF Life Insurance Company (“TIAA-CREF Life”), TCT Holdings, Inc., Oleum Holding Company, Inc., TIAA-CREF Asset Management LLC, TIAA Emerging Markets Debt Fund, TIAA-CREF Individual & Institutional Services, LLC and TIAA-CREF Asset Management Distressed Opportunities Fund, LP.
The 2013 and 2012 OTTI relates to a decline in the fair value of subsidiaries and affiliates for which the carrying value is not expected to recover. Fair value of subsidiaries and affiliates is generally determined using the net asset value of the underlying financial statements at the measurement date.
The Company held bonds of affiliates at December 31, 2013 and 2012 for $1,817 million and $2,161 million, respectively. One hundred percent (100%) and ninety eight percent (98%) of these affiliated bonds were issued by ND Properties, Inc. at December 31, 2013 and 2012, respectively.
As of December 31, 2013 and 2012, no investment in a subsidiary or affiliate exceeded 10% of the Company’s admitted assets and the Company does not have any investment in foreign insurance subsidiaries. For the years ended December 31, 2013, 2012 and 2011, the Company did not have any related party transactions which exceeded one-half of 1% of the Company’s admitted assets.
Single Premium Immediate Annuities n Statement of Additional Information | B-107 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
As of December 31, 2013 and December 31, 2012, the net amount due from subsidiaries and affiliates was $235 million and $184 million, respectively. The net amounts due are generally settled on a daily basis except for TIAA Realty, Inc., ND Properties, Inc., Teachers Advisors, Inc. (“Advisors”), TIAA-CREF Tuition Financing, Inc. (“TFI”), Teachers Personal Investors Services, Inc. (“TPIS”), TIAA-CREF Individual and Institutional Services, LLC (“Services”), and TIAA-CREF Asset Management LLC which are settled monthly.
The Company discloses contingencies and guarantees related to subsidiaries and affiliates in Note 22.
The Company holds investments in downstream non-insurance holding companies, which are valued by the Company utilizing the look-through approach. The financial statements for the downstream non-insurance holding companies listed in the table below are not audited and the Company has limited the value of its investment in these noninsurance holding companies to the value contained in the audited financial statements of the underlying investments and unamortized goodwill resulting from the statutory purchase method of accounting. All liabilities, commitments, contingencies, guarantees or obligations of these subsidiaries, which are required to be recorded as liabilities, commitments, contingencies, guarantees or obligations under applicable accounting guidance, are reflected in the Company’s determination of the carrying value of the investment in these subsidiaries, if not already recorded in the subsidiaries’ financial statements.
The following table summarizes the Company’s carrying value in each such downstream non-insurance holding company as of December 31, (in millions):
Subsidiary | 2013 | 2012 | ||||||
TIAA Oil & Gas Investments, LLC |
$ | 910 | $ | 550 | ||||
Infra Alpha, LLC |
637 | 298 | ||||||
TIAA Global Ag Holdco, LLC |
525 | 289 | ||||||
TIAA Super Regional Mall Member Sub, LLC |
430 | 217 | ||||||
Occator Agricultural Properties, LLC |
417 | 211 | ||||||
Dionysus Properties, LLC |
373 | 432 | ||||||
Mansilla Participacoes LTDA |
317 | 349 | ||||||
TIAA Infrastructure Investments, LLC |
171 | 31 | ||||||
TIAA-CREF Asset Management LLC |
122 | 105 | ||||||
T-C 685 Third Avenue Member, LLC |
121 | 107 | ||||||
T-C SBMC Joint Venture, LLC |
60 | — | ||||||
TIAA Stonepeak Investments I, LLC |
44 | 70 | ||||||
Broadleaf Timberland Investments, LLC |
30 | — | ||||||
T-C SMA II, LLC |
29 | 26 | ||||||
TIAA-CREF Redwood, LLC |
26 | 29 | ||||||
TIAA SynGas, LLC |
22 | 20 | ||||||
Almond Processors, LLC |
21 | 19 | ||||||
TIAA GTR Holdco, LLC |
11 | — | ||||||
T-C SMA III, LLC |
8 | 8 | ||||||
TIAA-CREF LPHC, LLC |
2 | — | ||||||
730 Texas Forest Holdings, Inc. |
1 | 1 | ||||||
TIAA Union Place Phase I, LLC |
— | 73 | ||||||
TIAA Stonepeak Investments II, LLC |
— | 3 | ||||||
Total |
$ | 4,277 | $ | 2,838 | ||||
|
Note 7 – other long-term investments
The components of the Company’s carrying value in other long-term investments at December 31 were (in millions):
2013 | 2012 | |||||||
Unaffiliated other invested assets |
$ | 7,966 | $ | 8,710 | ||||
Affiliated other invested assets |
12,003 | 9,185 | ||||||
Other long-term assets |
90 | 78 | ||||||
Total other long-term investments |
$ | 20,059 | $ | 17,973 | ||||
|
As of December 31, 2013, unaffiliated other invested assets of $7,966 million includes $7,403 million of investments in joint ventures, partnerships and LLCs with interests in venture capital, leveraged buy-out funds and other equity investments. The remaining $563 million represents real estate related joint ventures, partnerships and LLCs. As of December 31, 2013, affiliated other invested assets of $12,003 million includes investments in securities related holdings of $3,680 million, investments in agriculture and timber related holdings of $3,152 million, investments in real estate related holdings of $2,761 million and investments in energy and infrastructure of $1,891 million. The remaining $519 million of affiliated other invested assets represents other operating subsidiaries and affiliates.
B-108 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
As of December 31, 2012, unaffiliated other invested assets of $8,710 million includes $7,611 million of investments in joint ventures, partnerships and LLCs with interests in venture capital, leveraged buy-out funds and other equity investments. The remaining $1,099 million represents real estate related joint ventures, partnerships and LLCs. As of December 31, 2012, affiliated other invested assets of $9,185 million includes investments in agriculture and timber related holdings of $2,659 million, investments in real estate related holdings of $2,163 million, investments in energy and infrastructure of $971 million and investments in securities related holdings of $3,034 million. The remaining $358 million of affiliated other invested assets represents other operating subsidiaries and affiliates.
For the years ended December 31, 2013, 2012 and 2011, OTTI in other long-term investments for which the carrying value is not expected to be recovered were $178 million, $129 million and $233 million, respectively.
For the years ended December 31, 2013 and 2012, other long-term investments denominated in foreign currency were $1,739 million and $1,733 million, respectively.
Note 8 – investments commitments
The outstanding obligation for future investments at December 31, 2013, is shown below by asset category (in millions):
2014 | 2015 | In later years | Total Commitments | |||||||||||||
Bonds |
$ | 582 | $ | 58 | $ | 8 | $ | 648 | ||||||||
Stocks |
14 | 10 | 21 | 45 | ||||||||||||
Mortgage loans |
895 | — | — | 895 | ||||||||||||
Real Estate |
19 | — | — | 19 | ||||||||||||
Other long-term investments |
1,495 | 1,005 | 2,059 | 4,559 | ||||||||||||
Total |
$ | 3,005 | $ | 1,073 | $ | 2,088 | $ | 6,166 | ||||||||
|
The funding of bond commitments is contingent upon the continued favorable financial performance of the potential borrowers, funding of stock commitments is contingent upon their continued favorable financial performance and the funding of real estate commitments and mortgage commitments is generally contingent upon the underlying properties meeting specified requirements, including construction, leasing and occupancy. Due to the Company’s due diligence in closing mortgage commitments, there is a lag between commitment and closing. For other long–term investments, primarily fund investments, there are scheduled capital calls that extend into future years.
Note 9 – investment income and capital gains and losses
Net Investment Income: The components of net investment income for the years ended December 31 were as follows (in millions):
2013 | 2012 | 2011 | ||||||||||
Bonds |
$ | 9,206 | $ | 9,391 | $ | 9,462 | ||||||
Stocks |
61 | 82 | 27 | |||||||||
Mortgage loans |
772 | 796 | 810 | |||||||||
Real estate |
203 | 244 | 234 | |||||||||
Derivatives |
(8 | ) | 23 | 10 | ||||||||
Other long-term investments |
1,430 | 960 | 775 | |||||||||
Cash, cash equivalents and short-term investments |
7 | 3 | 3 | |||||||||
Total gross investment income |
11,671 | 11,499 | 11,321 | |||||||||
Less investment expenses |
(542 | ) | (574 | ) | (551 | ) | ||||||
Net investment income before amortization of IMR |
11,129 | 10,925 | 10,770 | |||||||||
Plus amortization of IMR |
145 | 117 | 140 | |||||||||
Net investment income |
$ | 11,274 | $ | 11,042 | $ | 10,910 | ||||||
|
The total due and accrued income excluded from net income was $1 million each for the years ended December 31, 2013, 2012 and 2011.
Future minimum rental income expected to be received over the next five years under existing real estate leases in effect as of December 31, 2013 (in millions):
2014 | 2015 | 2016 | 2017 | 2018 | Total | |||||||||||||||||||
Future rental income |
$ | 107 | $ | 98 | $ | 88 | $ | 76 | $ | 62 | $ | 431 |
Single Premium Immediate Annuities n Statement of Additional Information | B-109 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Realized Capital Gains and Losses: The net realized capital gains (losses) on sales, redemptions and write-downs due to OTTI for the years ended December 31 were as follows (in millions):
2013 | 2012 | 2011 | ||||||||||
Bonds |
$ | 604 | $ | 163 | $ | 422 | ||||||
Stocks |
(50 | ) | 89 | 40 | ||||||||
Mortgage loans |
— | 13 | 28 | |||||||||
Real estate |
30 | 68 | 15 | |||||||||
Derivatives |
(24 | ) | (61 | ) | (236 | ) | ||||||
Other long-term investments |
(115 | ) | (122 | ) | (200 | ) | ||||||
Cash, cash equivalents and short-term investments |
(121 | )* | 9 | (16 | ) | |||||||
Total before capital gains taxes and transfers to IMR |
324 | 159 | 53 | |||||||||
Transfers to IMR |
(741 | ) | (575 | ) | (497 | ) | ||||||
Net realized capital losses less capital gains taxes, after transfers to IMR |
$ | (417 | ) | $ | (416 | ) | $ | (444 | ) |
* | The realized loss is discussed further in Note 22 – TIAA Global Markets, Inc. Dissolution. |
Write-downs of investments resulting from OTTI, included in the preceding table, were as follows for the years ended December 31, (in millions):
2013 | 2012 | 2011 | ||||||||||
Other-than-temporary impairments: |
||||||||||||
Bonds |
$ | 281 | $ | 643 | $ | 509 | ||||||
Stocks |
77 | 52 | 8 | |||||||||
Mortgage loans |
— | 13 | 3 | |||||||||
Real estate |
— | 17 | 2 | |||||||||
Derivatives |
— | 8 | — | |||||||||
Other long-term investments |
178 | 129 | 233 | |||||||||
Total |
$ | 536 | $ | 862 | $ | 755 | ||||||
|
The Company generally holds its investments until maturity. The Company performs periodic reviews of its portfolio to identify investments which may have deteriorated in credit quality to determine if any are candidates for sale in order to maintain a quality portfolio of investments. Investments which are deemed candidates for sale are continually monitored until sold and carried at the lower of amortized cost or fair value. In accordance with the Company’s valuation and impairment process, the investment will be monitored quarterly for further declines in fair value at which point an OTTI will be recorded until actual disposal of the investment.
Proceeds from sales of long-term bond investments during 2013, 2012 and 2011 were $8,949 million, $11,211 million and $8,011 million, respectively. Gross gains of $948 million, $917 million and $973 million and gross losses, excluding impairments considered to be other-than-temporary of $74 million, $155 million and $42 million were realized during 2013, 2012 and 2011, respectively.
The Company has no contractual commitments to extend credit to debtors owning receivables whose terms have been modified in troubled debt restructurings.
Wash Sales: The Company does not engage in the practice of wash sales, however, in isolated cases in the course of asset management activities, a security may be sold and repurchased in whole or in part within thirty days of the sale. There were no securities with a NAIC designation of 3 or below, or unrated, that were sold and reacquired within 30 days of the sale date during 2013 and 2012.
The details by NAIC designation 3 or below securities sold during the year ended December 31, 2011 and reacquired within 30 days of the sale date are (dollars in million):
Number of Transactions |
Book Value of Securities Sold |
Cost of Securities Repurchased |
Gain (Loss) |
|||||||||||||
NAIC 3 |
5 | $ | 5 | $ | 5 | $ | — | |||||||||
NAIC 4 |
3 | $ | 4 | $ | 4 | $ | — |
Unrealized Capital Gains and Losses: The net changes in unrealized capital gains (losses) in investments, resulting in a net increase (decrease) in the carrying value of investments for the years ended December 31 were as follows (in millions):
2013 | 2012 | 2011 | ||||||||||
Bonds |
$ | 138 | $ | 172 | $ | (21 | ) | |||||
Stocks |
123 | 18 | 99 | |||||||||
Mortgage loans |
(21 | ) | (13 | ) | (36 | ) | ||||||
Derivatives |
(9 | ) | (109 | ) | 210 | |||||||
Other long-term investments |
962 | 422 | 138 | |||||||||
Total |
$ | 1,193 | $ | 490 | $ | 390 | ||||||
|
B-110 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Note 10 – securitizations
When the Company sells bonds and mortgages in a securitization transaction, it may retain interest-only strips, one or more subordinated tranches, residual interest, or servicing rights, all of which are retained interests in the securitized receivables. The Company’s ownership of the related retained interests may be held directly by the Company or indirectly through an investment subsidiary. The retained interests are associated with Special Purpose Entities (“SPEs”) that issue equity and debt which is non-recourse to the Company. Fair value used to determine gain or loss on a securitization transaction is based on quoted market prices, if available; however, quotes are generally not available for retained interests, so the Company either obtains an estimated fair value from an independent pricing service or estimates fair value internally based on the present value of future expected cash flows using management’s best estimates of future credit losses, forward yield curves, and discount rates that are commensurate with the risks involved.
The Company has not initiated any securitization transactions in which it sold assets held on its balance sheet into SPEs during 2013 or 2012. Teachers Advisors, Inc. (“Advisors”), an indirect subsidiary of TIAA, provides investment advisory services for most assets previously securitized by the Company.
The following sensitivity analysis represents changes in the fair value of the securitized assets. The following table as of December 31, 2013 summarizes the Company’s retained interests in securitized financial assets from transactions originated since 2001 (in millions):
Sensitivity Analysis of Adverse Changes in Key Assumptions |
||||||||||||||||||||||
Issue Year | Type of Collateral |
Carrying Value |
Estimated Fair Value |
10% Adverse |
20% Adverse |
|||||||||||||||||
2001 |
Bonds | $ | 1 | $ | 5 | (a) | $ | — | $ | — | ||||||||||||
2007 |
Mortgages | 19 | 18 | (b) | 1 | 3 | ||||||||||||||||
Total | $ | 20 | $ | 23 | $ | 1 | $ | 3 | ||||||||||||||
|
The key assumptions applied to both the fair values and sensitivity analysis of the retained interests on December 31, 2013 was as follows:
a) | The retained interests securitized in 2001 were valued using an independent third-party pricing service. The third-party pricing levels imply a yield rate of 4.70%. To test valuation sensitivity, the fair values of the retained interests were recalculated using 10% and 20% adverse changes in the implied overall discount rate. |
b) | The retained interests securitized in 2007 were valued using an independent third-party pricing service. The third-party pricing levels implied yields for the securities ranging from 6.65% to 31.01%. To test valuation sensitivity, the fair values of the retained interests were recalculated using 10% and 20% adverse changes in the implied overall discount rates. |
Note that the sensitivity analysis above does not give effect to any offsetting benefits of financial instruments which may hedge the risks inherent to these financial interests. Additionally, changes in particular assumptions, such as discount rates, may in practice change other valuation assumptions which may magnify or counteract the effect of these disclosed sensitivities.
Note 11 – disclosures about fair value of financial instruments
Fair value of financial instruments
Included in the Company’s financial statements are certain financial instruments carried at fair value. Other financial instruments are periodically measured at fair value, such as when impaired, or, for certain bonds and preferred stock when carried at the lower of cost or fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Fair values of financial instruments are based on quoted market prices when available. When market prices are not available, fair values are primarily provided by a third party-pricing service for identical or comparable assets, or through the use of valuation methodologies using observable market inputs. These fair values are generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality. In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair value using methods, models and assumptions that management believes market participants would use to determine a current transaction price. These valuation techniques involve management estimation and judgment for many factors including market bid/ask spreads, and such estimations may become significant with increasingly complex instruments or pricing models.
Single Premium Immediate Annuities n Statement of Additional Information | B-111 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
The following table provides information about the aggregate fair value for all financial instruments and the level within the fair value hierarchy at December 31, 2013 (in millions):
Aggregate Fair Value |
Admitted Assets |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Bonds |
$ | 187,409 | $ | 181,121 | $ | — | $ | 182,835 | $ | 4,574 | $ | — | ||||||||||||
Common Stock |
1,228 | 1,228 | 663 | 33 | 532 | — | ||||||||||||||||||
Preferred Stock |
88 | 48 | 42 | 23 | 23 | — | ||||||||||||||||||
Mortgage Loans |
14,823 | 14,246 | — | — | 14,823 | — | ||||||||||||||||||
Derivatives |
83 | 60 | — | 68 | 15 | — | ||||||||||||||||||
Contract Loans |
1,466 | 1,466 | — | — | 1,466 | — | ||||||||||||||||||
Separate Accounts |
22,349 | 22,348 | 6,615 | 3,344 | 12,390 | — | ||||||||||||||||||
Cash, Cash Equivalents and Short Term Investments |
1,362 | 1,362 | 1,078 | 284 | — | — | ||||||||||||||||||
Total |
$ | 228,808 | $ | 221,879 | $ | 8,398 | $ | 186,587 | $ | 33,823 | $ | — | ||||||||||||
|
||||||||||||||||||||||||
Aggregate Fair Value |
Statement Value |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Deposit-type contracts |
$ | 853 | $ | 853 | $ | — | $ | — | $ | 853 | $ | — | ||||||||||||
Separate account |
22,343 | 22,343 | — | — | 22,343 | — | ||||||||||||||||||
Derivatives |
330 | 311 | — | 330 | — | — | ||||||||||||||||||
Total |
$ | 23,526 | $ | 23,507 | $ | — | $ | 330 | $ | 23,196 | $ | — | ||||||||||||
|
The following table provided information about the aggregate fair value for all financial instruments and the level within the fair value hierarchy at December 31, 2012 (in millions):
Aggregate Fair Value |
Admitted Assets |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Bonds |
$ | 193,191 | $ | 173,954 | $ | 73 | $ | 177,418 | $ | 15,700 | $ | — | ||||||||||||
Common Stock |
1,178 | 1,178 | 619 | — | 559 | — | ||||||||||||||||||
Preferred Stock |
51 | 38 | 13 | 24 | 14 | — | ||||||||||||||||||
Mortgage Loans |
14,228 | 12,956 | — | — | 14,228 | — | ||||||||||||||||||
Derivatives |
123 | 96 | — | 104 | 19 | — | ||||||||||||||||||
Contract Loans |
1,358 | 1,358 | — | — | 1,358 | — | ||||||||||||||||||
Separate Accounts |
18,425 | 18,420 | 4,591 | 2,707 | 11,127 | — | ||||||||||||||||||
Cash, Cash Equivalents and Short Term Investments |
1,681 | 1,681 | 1,126 | 37 | 518 | — | ||||||||||||||||||
Total |
$ | 230,235 | $ | 209,681 | $ | 6,422 | $ | 180,290 | $ | 43,523 | $ | — | ||||||||||||
|
||||||||||||||||||||||||
Aggregate Fair Value |
Statement Value |
Level 1 | Level 2 | Level 3 | Not Practicable (Carrying Value) |
|||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||
Deposit-type contracts |
$ | 765 | $ | 765 | $ | — | $ | — | $ | 765 | $ | — | ||||||||||||
Separate account |
18,067 | 18,067 | — | — | 18,067 | — | ||||||||||||||||||
Derivatives |
372 | 346 | — | 372 | — | — | ||||||||||||||||||
Total |
$ | 19,204 | $ | 19,178 | $ | — | $ | 372 | $ | 18,832 | $ | — | ||||||||||||
|
The estimated fair values of the financial instruments presented above were determined by the Company using market information available as of December 31, 2013 and 2012. Considerable judgment is required to interpret market data in developing the estimates of fair value for financial instruments for which there are no available market value quotations. The estimates presented are not necessarily indicative of the amounts the Company could have realized in a market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
B-112 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Assets and liabilities measured and reported at fair value
The Company’s financial assets and liabilities measured and reported at fair value have been classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100, Fair Value Measurements. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). An asset’s or a liability’s classification is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and Level 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.
Level 2—Other than quoted prices within Level 1 inputs are observable for the asset or liability, either directly or indirectly.
Level 2 inputs include:
Ÿ | Quoted prices for similar assets or liabilities in active markets, |
Ÿ | Quoted prices for identical or similar assets or liabilities in markets that are not active, |
Ÿ | Inputs other than quoted prices that are observable for the asset or liability, |
Ÿ | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
Level 3—Inputs are unobservable inputs for the asset or liability supported by little or no market activity. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. The Company’s data used to develop unobservable inputs is adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different assumptions.
The following table provides information about the Company’s financial assets and liabilities measured and reported at fair value as of December 31, (in millions):
2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets at fair value: |
||||||||||||||||
Bonds |
||||||||||||||||
Industrial and Miscellaneous |
$ | — | $ | 176 | $ | 116 | $ | 292 | ||||||||
Total Bonds |
$ | — | $ | 176 | $ | 116 | $ | 292 | ||||||||
Common Stock |
||||||||||||||||
Industrial and Miscellaneous |
$ | 663 | $ | 33 | $ | 532 | $ | 1,228 | ||||||||
Total Common Stocks |
$ | 663 | $ | 33 | $ | 532 | $ | 1,228 | ||||||||
Total Preferred Stocks |
$ | — | $ | — | $ | 3 | $ | 3 | ||||||||
Derivatives: |
||||||||||||||||
Foreign Exchange Contracts |
$ | — | $ | 36 | $ | — | $ | 36 | ||||||||
Interest Rate Contracts |
— | 19 | — | 19 | ||||||||||||
Credit Default Swaps |
— | 2 | — | 2 | ||||||||||||
Total Derivatives |
$ | — | $ | 57 | $ | — | $ | 57 | ||||||||
Separate Accounts assets, net |
$ | 6,605 | $ | 3,120 | $ | 12,390 | $ | 22,115 | ||||||||
Total assets at fair value |
$ | 7,268 | $ | 3,386 | $ | 13,041 | $ | 23,695 | ||||||||
|
||||||||||||||||
Liabilities at fair value: |
||||||||||||||||
Derivatives |
||||||||||||||||
Foreign Exchange Contracts |
$ | — | $ | 200 | $ | — | $ | 200 | ||||||||
Interest Rate Contracts |
— | 1 | — | 1 | ||||||||||||
Credit Default Swaps |
— | 30 | — | 30 | ||||||||||||
Total liabilities at fair value |
$ | — | $ | 231 | $ | — | $ | 231 | ||||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-113 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
2012 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets at fair value: |
||||||||||||||||
Bonds |
||||||||||||||||
Industrial and Miscellaneous |
$ | — | $ | 23 | $ | 322 | $ | 345 | ||||||||
Total Bonds |
$ | — | $ | 23 | $ | 322 | $ | 345 | ||||||||
Common Stock |
||||||||||||||||
Industrial and Miscellaneous |
$ | 619 | $ | — | $ | 559 | $ | 1,178 | ||||||||
Total Common Stocks |
$ | 619 | $ | — | $ | 559 | $ | 1,178 | ||||||||
Total Preferred Stocks |
$ | — | $ | — | $ | 8 | $ | 8 | ||||||||
Derivatives: |
||||||||||||||||
Foreign Exchange Contracts |
$ | — | $ | 56 | $ | — | $ | 56 | ||||||||
Interest Rate Contracts |
— | 31 | — | 31 | ||||||||||||
Credit Default Swaps |
— | 2 | — | 2 | ||||||||||||
Total Derivatives |
$ | — | $ | 89 | $ | — | $ | 89 | ||||||||
Separate Accounts assets, net |
$ | 4,584 | $ | 2,570 | $ | 11,122 | $ | 18,276 | ||||||||
Total assets at fair value |
$ | 5,203 | $ | 2,682 | $ | 12,011 | $ | 19,896 | ||||||||
|
||||||||||||||||
Liabilities at fair value: |
||||||||||||||||
Derivatives |
||||||||||||||||
Foreign Exchange Contracts |
$ | — | $ | 198 | $ | — | $ | 198 | ||||||||
Credit Default Swaps |
— | 44 | — | 44 | ||||||||||||
Total liabilities at fair value |
$ | — | $ | 242 | $ | — | $ | 242 | ||||||||
|
Level 1 financial instruments
Unadjusted quoted prices for these securities are provided to the Company by independent pricing services. Common stock and separate account assets in Level 1 primarily include mutual fund investments valued by the respective mutual fund companies and exchange listed equities and public real estate investment trusts.
Level 2 financial instruments
Bonds included in Level 2 are valued principally by third party pricing services using market observable inputs. Because most bonds do not trade daily, independent pricing services regularly derive fair values using recent trades of securities with similar features. When recent trades are not available, pricing models are used to estimate the fair values of securities by discounting future cash flows at estimated market interest rates. Typical inputs to models used by independent pricing services include but are not limited to benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, and industry and economic events. Additionally, for loan-backed and structured securities, valuation is based primarily on market inputs including benchmark yields, expected prepayment speeds, loss severity, delinquency rates, weighted average coupon, weighted average maturity and issuance specific information. Issuance specific information includes collateral type, payment terms of underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans.
Common stocks included in Level 2 include those which are traded in an inactive market or for which prices for identical securities are not available. Valuations are based principally on observable inputs including quoted prices in markets that are not considered active.
Derivative assets and liabilities classified in Level 2 represent over-the-counter instruments that include, but are not limited to, fair value hedges using foreign currency swaps, foreign currency forwards, interest rate swaps and credit default swaps. Fair values for these instruments are determined internally using market observable inputs that include, but are not limited to, forward currency rates, interest rates, credit default rates and published observable market indices.
Separate account assets in Level 2 consist principally of short term government agency notes and commercial paper.
Level 3 financial instruments
Valuation techniques for bonds included in Level 3 are generally the same as those described in Level 2 except the techniques utilize inputs that are not readily observable in the market, including illiquidity premiums and spread adjustments to reflect industry trends or specific credit-related issues. The Company assesses the significance of unobservable inputs for each security and classifies that security in Level 3 as a result of the significance of unobservable inputs.
Estimated fair value for privately traded equity securities are principally determined using valuation and discounted cash flow models that require a substantial level of judgment.
B-114 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Separate account assets classified as Level 3 primarily include directly owned real estate properties, real estate joint ventures and real estate limited partnerships. Directly owned real estate properties are valued on a quarterly basis based on independent third party appraisals. Real estate joint venture interests are valued based on the fair value of the underlying real estate, any related mortgage loans payable and other factors such as ownership percentage, ownership rights, buy/sell agreements, distribution provisions and capital call obligations. Real estate limited partnership interests are valued based on the most recent net asset value of the partnership.
Transfers between Level 1 and Level 2
Periodically, the Company has transfers between Level 1 and Level 2 due to the availability of quoted prices for identical assets in active markets at the measurement date. The Company’s policy is to recognize transfers between levels as of the actual date of the event or change in circumstances that caused the transfer.
There were no transfers of common stock between Level 1 and Level 2 during 2013 or 2012.
Reconciliation of Level 3 assets and liabilities measured and reported at fair value:
The following is a reconciliation of the beginning and ending balances for assets and liabilities measured and reported at fair value using Level 3 inputs at December 31, 2013 (in millions):
Beginning Balance at 01/01/2013 |
Transfers into Level 3 |
Transfers out of Level 3 |
Total gains (losses) included in Net Income |
Total gains (losses) included in Surplus |
Purchases | Issuances (Sales) |
Settlements | Ending Balance at 12/31/2013 |
||||||||||||||||||||||||||||
Bonds |
$ | 322 | $ | 29 | a | $ | (250 | )b | $ | (12 | ) | $ | 32 | $ | 1 | $ | — | $ | (6 | ) | $ | 116 | ||||||||||||||
Common Stock |
559 | 19 | c | — | (36 | ) | (42 | ) | 38 | (6 | ) | — | 532 | |||||||||||||||||||||||
Preferred Stock |
8 | — | (5 | )d | — | — | — | — | — | 3 | ||||||||||||||||||||||||||
Separate Account |
11,122 | — | — | (13 | ) | 1,065 | (55 | )e | (436 | ) | 707 | e | 12,390 | |||||||||||||||||||||||
Total |
$ | 12,011 | $ | 48 | $ | (255 | ) | $ | (61 | ) | $ | 1,055 | $ | (16 | ) | $ | (442 | ) | $ | 701 | $ | 13,041 | ||||||||||||||
|
(a) | The Company transferred bonds which were not previously measured and reported at fair value into Level 3 primarily due to the Securities Valuation Office (“SVO”) valuation process related to Loan-Backed and Structured Securities. The pricing information used in the valuation of these securities was not readily observable in the market. |
(b) | The Company transferred bonds out of Level 3 that were not measured and reported at fair value as of December 31, 2013. |
(c) | The Company transferred common stocks into Level 3 due to the significance of unobservable market data used in the valuation of these securities. |
(d) | The Company transferred preferred stocks out of Level 3 that were not measured and reported at fair value as of December 31, 2013. |
(e) | Purchases and settlements include refinancing and loan settlement activity on mortgage loans for real estate purchased in prior periods. |
The following is a reconciliation of the beginning and ending balances for assets and liabilities measured and reported at fair value using Level 3 inputs at December 31, 2012 (in millions):
Beginning Balance at 01/01/2012 |
Transfers into Level 3 |
Transfers out of Level 3 |
Total gains (losses) included in Net Income |
Total gains (losses) included in Surplus |
Purchases | Issuances (Sales) |
Settlements | Ending Balance at 12/31/2012 |
||||||||||||||||||||||||||||
Bonds |
$ | 457 | $ | 207 | a | $ | (353 | )b | $ | (52 | ) | $ | 49 | $ | 28 | $ | (6 | ) | $ | (8 | ) | $ | 322 | |||||||||||||
Common Stock |
371 | 154 | c | (68 | )d | (36 | ) | 129 | 9 | — | — | 559 | ||||||||||||||||||||||||
Preferred Stock |
1 | 9 | e | — | (2 | ) | — | — | — | — | 8 | |||||||||||||||||||||||||
Separate Account |
9,925 | — | — | (116 | ) | 965 | 1,378 | (685 | ) | (345 | ) | 11,122 | ||||||||||||||||||||||||
Total |
$ | 10,754 | $ | 370 | $ | (421 | ) | $ | (206 | ) | $ | 1,143 | $ | 1,415 | $ | (691 | ) | $ | (353 | ) | $ | 12,011 | ||||||||||||||
|
(a) | The Company transferred bonds which were not previously measured and reported at fair value into Level 3 primarily due to the Securities Valuation Office (“SVO”) valuation process related to Loan-Backed and Structured Securities. The pricing information used in the valuation of these securities was not readily observable in the market. |
(b) | The Company transferred bonds out of Level 3 that were not measured and reported at fair value as of December 31, 2012. |
(c) | The Company transferred common stocks into Level 3 due the significance of unobservable market data used in the valuation of these securities. |
(d) | The Company transferred common stocks out of Level 3 due to the availability of observable or corroborated by market data at fair value as of December 31, 2012. |
(e) | The Company transferred preferred stocks into Level 3 which were not previously measured and reported at fair value primarily due to the decrease in NAIC rating to 4, 5 or 6. |
The Company’s policy is to recognize transfers into and out of Level 3 at the actual date of the event or change in circumstances that caused the transfer.
Characteristics of items being measured for Level 2 and Level 3:
Bonds Level 2 and Level 3:
As of December 31, 2013, the reported fair value of bonds in Level 2 and Level 3 was $292 million, representing 65 individual bonds. The bonds are carried at fair value due to being rated NAIC 6.
63 of the 65 bonds reported at fair value are categorized as loan-backed and structured securities. Of the loan-backed and structured securities reported at fair value, 40 bonds with a fair value of $241 million are collateralized by commercial mortgage
Single Premium Immediate Annuities n Statement of Additional Information | B-115 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
loans, 21 bonds with a fair value of $22 million are collateralized by residential mortgage loans, and 2 bonds with a fair value of $25 million are collateralized by other collateral. The loan-backed and structured securities reported at fair value have a weighted average coupon of 5.28%.
The remaining 2 bonds reported at fair value are categorized as Corporate securities and have a fair value of $4 million.
As of December 31, 2012, the reported fair value of bonds in Level 2 and Level 3 was $345 million, representing 80 individual bonds. The bonds are carried at fair value due to being rated NAIC 6.
The 80 bonds reported at fair value are all categorized as loan-backed and structured securities. Of the loan-backed and structured securities reported at fair value, 52 bonds with a fair value of $273 million are collateralized by commercial mortgage loans, 26 bonds with a fair value of $48 million are collateralized by residential mortgage loans, and 2 bonds with a fair value of $24 million are collateralized by other collateral. The loan-backed and structured securities reported at fair value have a weighted average coupon of 5.33%.
Common Stocks Levels 2 and Levels 3:
As of December 31, 2013, the reported fair value of common stocks in Level 2 and Level 3 was $565 million representing 22 individual common stocks. Common stocks are carried at fair value in accordance with SSAP No. 30.
Of the 22 common stocks, 6 common stocks with a fair value of $33 million were in Level 2 and 16 common stocks with a fair value of $532 million were reported in Level 3. Out of the 22 common stocks, 19 common stocks with a fair value of $553 million have a pricing method where the rate was determined by the reporting entity, and 3 common stocks with a fair value of $12 million have a pricing method where the rate is determined by a stock exchange.
As of December 31, 2012, the reported fair value of common stocks in Level 2 and Level 3 was $559 million representing 16 individual common stocks. Common stocks are carried at fair value in accordance with SSAP No. 30.
Of the 16 common stocks, 15 common stocks with a fair value of $559 million were reported in Level 3. Out of the 15 common stocks, 10 common stocks with a fair value of $277 million have a pricing method where the price per share is determined by the reporting entity; and 5 common stocks with a fair value of $282 million have a pricing method where the unit price is published by the NAIC Securities Valuation Office.
Preferred Stocks Level 3:
As of December 31, 2013, the reported fair value of preferred stocks in Level 3 was $3 million, representing 1 individual preferred stock with a pricing method where the price per share is determined by the reporting entity. In accordance with SSAP No. 32, redeemable preferred stocks and perpetual preferred stocks that are NAIC designated RP4-RP6 and P4 to P6 are reported at the lower of book value or fair value.
As of December 31, 2012, the reported fair value of preferred stocks in Level 3 was $8 million, representing 2 individual preferred stocks. 1 preferred stock with a fair value of $4 million has a pricing method where the price per share is determined by the reporting entity; and 1 preferred stock with a fair value of $4 million has a pricing method where the unit price is published by the NAIC Securities Valuation Office. In accordance with SSAP No. 32, redeemable preferred stocks and perpetual preferred stocks that are NAIC designated RP4-RP6 and P4 to P6 are reported at the lower of book value or fair value.
Quantitative information regarding level 3 fair value measurements
The following table provides quantitative information on significant unobservable inputs (Level 3) used in the fair value measurement of assets that are measured and reported at fair value at December 31, 2013 (in millions):
Financial Instrument | Fair Value |
Valuation Techniques |
Significant Unobservable Inputs |
Range of Inputs |
Weighted Average |
|||||||||||
Fixed Maturity Bonds: |
||||||||||||||||
RMBS |
$ | 9 | Discounted Cash Flow | Discount Rate | 5.8% – 17.4% | 10.5% | ||||||||||
Market Comparable | Credit Analysis/Market Comparable | $ | 2.85 – $100.50 | $ | 52.83 | |||||||||||
CMBS |
$ | 79 | Discounted Cash Flow | Discount Rate | 9.7% – 68.1% | 26.9% | ||||||||||
Market Comparable | Credit Analysis/Market Comparable | $ | 9.64 – $65.00 | $ | 26.85 | |||||||||||
ABS |
$ | 25 | Market Comparable | Credit Analysis/Market Comparable | $ | 99.00 | $ | 99.00 | ||||||||
Corporate |
$ | 3 | Enterprise Value | Book Value Multiple | 1.5x | 1.5x | ||||||||||
Equity Securities: |
||||||||||||||||
Common Stock |
$ | 532 | Equity Method | Book Value Multiple | 1.1x – 2.8x | 1.2x | ||||||||||
Market Comparable | EBITDA | 6.4x – 12.2x | 9.6x | |||||||||||||
Book Value Multiple | 0.0x – 1.2x | 0.6x | ||||||||||||||
Preferred Stock |
$ | 3 | Market Comparable | Book Value Multiple | 0.9x | 0.9x |
B-116 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Financial Instrument | Fair Value |
Valuation Techniques |
Significant Unobservable Inputs |
Range of Inputs |
Weighted Average |
|||||||||||
Separate Account Assets: |
||||||||||||||||
Real Estate Properties and Real Estate Joint Ventures |
$ | 14,307 | ||||||||||||||
Office Properties |
Income Approach—Discounted cash flow | Discount Rate | 6.0% – 9.5% | 7.0 | % | |||||||||||
Terminal Capitalization Rate |
5.0% – 8.3% | 5.9 | % | |||||||||||||
Income Approach—Direct Capitalization | Overall Capitalization Rate | 4.8% – 8.3% | 5.6 | % | ||||||||||||
Industrial Properties |
Income Approach—Discounted cash flow | Discount Rate | 6.7% – 10.0% | 7.4 | % | |||||||||||
Terminal Capitalization Rate |
5.5% – 8.0% | 6.3 | % | |||||||||||||
Income Approach—Direct Capitalization | Overall Capitalization Rate | 4.8% – 8.3% | 5.6 | % | ||||||||||||
Residential Properties |
Income Approach—Discounted cash flow | Discount Rate | 6.0% – 8.0% | 6.6 | % | |||||||||||
Terminal Capitalization Rate |
4.3% – 6.3% | 5.0 | % | |||||||||||||
Income Approach—Direct Capitalization | Overall Capitalization Rate | 3.8% – 5.8% | 4.4 | % | ||||||||||||
Retail Properties |
Income Approach—Discounted cash flow | Discount Rate | 6.0% –13.0% | 7.5 | % | |||||||||||
Terminal Capitalization Rate |
5.3% – 12.5% | 6.3 | % | |||||||||||||
Income Approach—Direct Capitalization | Overall Capitalization Rate | 4.5% – 12.0% | 5.7 | % |
Separate account real estate assets include the values of the related mortgage loans payable in the table below.
Financial Instrument | Fair Value |
Valuation Techniques |
Significant Unobservable Inputs |
Range of Inputs |
Weighted Average |
|||||||||||
Mortgage Loans Payable |
$ | (2,279 | ) | |||||||||||||
Office and Industrial Properties |
Discounted Cash Flow | Loan to Value Ratio | 38.7% – 57.3% | 45.2 | % | |||||||||||
Equivalency Rate | 2.2% – 4.8% | 3.9 | % | |||||||||||||
Net Present Value | Loan to Value Ratio | 38.7% – 57.3% | 45.2 | % | ||||||||||||
Weighted Average Cost of Capital Risk Premiums | 1.5% – 2.9% | 1.9 | % | |||||||||||||
Residential Properties |
Discounted Cash Flow | Loan to Value Ratio | 34.8% – 61.5% | 47.4 | % | |||||||||||
Equivalency Rate | 2.6% – 4.4% | 3.8 | % | |||||||||||||
Net Present Value | Loan to Value Ratio | 34.8% – 61.5% | 47.4 | % | ||||||||||||
Weighted Average Cost of Capital Risk Premiums | 1.4% – 3.2% | 2.1 | % | |||||||||||||
Retail Properties |
Discounted Cash Flow | Loan to Value Ratio | 26.5% – 130.7% | 59.9 | % | |||||||||||
Equivalency Rate | 2.4% – 7.4% | 4.3 | % | |||||||||||||
Net Present Value | Loan to Value Ratio | 26.5% – 130.7% | 59.9 | % | ||||||||||||
Weighted Average Cost of Capital Risk Premiums | 0.9% – 13.8% | 4.5 | % | |||||||||||||
Limited Partnerships |
$ | 362 | Net Asset Value | Net Asset Value (a) |
(a) | The range has not been disclosed due to the wide range of possible values given the diverse nature of the underlying investments. |
Additional qualitative information on fair valuation process
The Company has various processes and controls in place to ensure that fair value is reasonably estimated. The Risk Management Valuation group, which reports to the Chief Credit Risk Officer, sets the valuation policies for fixed income and equity securities and is responsible for the determination of fair value.
Risk Management Valuation (1) compares price changes between periods to current market conditions, (2) compares trade prices of securities to fair value estimates, (3) compares prices from multiple pricing sources, and (4) performs ongoing vendor due diligence to confirm that independent pricing services use market-based parameters for valuation. Internal and vendor valuation methodologies are reviewed on an ongoing basis and revised as necessary based on changing market conditions to ensure values represent a reasonable exit price.
Markets in which the Company’s fixed income securities trade are monitored by surveying the Company’s traders. Risk Management Valuation determines if liquidity is active enough to support a Level 2 classification. Use of independent non-binding broker quotations may indicate a lack of liquidity or the general lack of transparency in the process to develop these price estimates, causing them to be considered Level 3.
Level 3 equity investments generally include private equity co-investments along with general and limited partnership interests. Values are derived by the general partners. The partners generally fair value these instruments based on projected net earnings, earnings before interest, taxes depreciation and amortization, discounted cash flow, public or private market transactions, or valuations of comparable companies. When using market comparables, certain adjustments may be made for differences between the reference comparable and the investment, such as liquidity. Investments may also be valued at cost for a period of time after an acquisition, as the best indication of fair value.
Single Premium Immediate Annuities n Statement of Additional Information | B-117 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
With respect to real property investments in TIAA’s Real Estate Account, each property is appraised, and each mortgage loan is valued, at least once every calendar quarter. Each property is appraised by an independent, external appraiser whose appraisals are reviewed by the Company’s internal appraisal staff and by the Real Estate Account’s independent fiduciary. Any differences in the conclusions of the Company’s internal appraisal staff and the independent appraiser are reviewed by the independent fiduciary, who will make a final determination. The independent fiduciary was appointed by a special subcommittee of the Investment Committee of TIAA Board of Trustees to, among other things, oversee the appraisal process. The independent fiduciary must approve all independent appraisers used by the Real Estate Account.
Mortgage loans payable are valued internally by the Company’s internal valuation department, and reviewed by the Real Estate Account’s independent fiduciary, at least quarterly based on market factors, such as market interest rates and spreads for comparable loans, the performance of the underlying collateral (such as the loan-to-value ratio and the cash flow of the underlying collateral), the liquidity for mortgage loans of similar characteristics, the maturity date of the loan, the return demands of the market, and the credit quality of the Real Estate Account.
Note 12 – restricted assets
The following table provides information on amounts and the nature of any assets pledged to others as collateral or otherwise restricted by the Company.
Restricted Assets at December 31, 2013 (dollars in millions):
Gross Restricted | ||||||||||||||||||||||||||||||||||||||||
Current Year | Percentage | |||||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||
Restricted Asset Category | Total General Account (G/A) |
G/A Supporting (S/A) Activity |
Total Separate Account (S/A) Restricted Assets |
S/A Assets Supporting G/A Activity |
Total (1 plus 3) |
Total From Prior Year |
Increase / (Decrease |
Total Current Year Admitted Restricted |
Gross Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||||||||||||||
Subject to repurchase agreements |
$ | 471 | $ | — | $ | — | $ | — | $ | 471 | $ | 440 | $ | 31 | $ | 471 | 0.182 | % | 0.188 | % | ||||||||||||||||||||
On deposit with states |
7 | — | — | — | 7 | 7 | — | 7 | 0.003 | 0.003 | ||||||||||||||||||||||||||||||
Pledged as collateral not captured in other categories |
113 | — | — | — | 113 | 150 | (37 | ) | 113 | 0.044 | 0.045 | |||||||||||||||||||||||||||||
Total restricted assets |
$ | 591 | $ | — | $ | — | $ | — | $ | 591 | $ | 597 | $ | (6 | ) | $ | 591 | 0.229 | % | 0.236 | % | |||||||||||||||||||
|
Detail of assets pledged as collateral not captured in other categories (contracts that share similar characteristics, such as reinsurance and derivatives, are reported in the aggregate).
Gross Restricted | ||||||||||||||||||||||||||||||||||||||||
Current Year (in millions) | Percentage | |||||||||||||||||||||||||||||||||||||||
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||
Description of Assets | Total General Account (G/A) |
G/A Supporting (S/A) Activity |
Total Separate Account (S/A) Restricted Assets |
S/A Assets Supporting G/A Activity |
Total (1 plus 3) |
Total From Prior Year |
Increase / (Decrease |
Total Current Year Admitted Restricted |
Gross Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||||||||||||||
Derivative Collateral |
$ | 113 | $ | — | $ | — | $ | — | $ | 113 | $ | 92 | $ | 21 | $ | 113 | 0.044 | % | 0.045 | % | ||||||||||||||||||||
Term Asset-Backed Securities Loan Facility |
— | — | — | — | — | 58 | (58 | ) | — | — | — | |||||||||||||||||||||||||||||
Total |
$ | 113 | $ | — | $ | — | $ | — | $ | 113 | $ | 150 | $ | (37 | ) | $ | 113 | 0.044 | % | 0.045 | % | |||||||||||||||||||
|
Note 13 – derivative financial instruments
The Company uses derivative instruments for economic hedging, income generation, and asset replication purposes. The Company does not engage in derivative financial instrument transactions for speculative purposes. Derivative financial instruments used by the Company may be exchange-traded or contracted in the over-the-counter market (“OTC”). The Company’s OTC derivative transactions are cleared and settled through central clearing counterparties (“OTC-cleared”) or through bilateral contracts with other counterparties (“OTC-bilateral”). Should an OTC-bilateral counterparty fail to perform its obligations under contractual terms, the Company may be exposed to credit-related losses. The current credit exposure of the Company’s
B-118 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
derivatives is limited to the net positive fair value of derivatives at the reporting date, after taking into consideration the existence of netting agreements and any collateral received. All of the credit exposure for the Company from OTC-bilateral contracts is with investment grade counterparties. The Company also monitors its counterparty credit quality on an ongoing basis. Effective January 1, 2003 TIAA adopted SSAP 86, “Accounting for Derivative Instruments and Hedging Activities,” and has applied this statement to all derivative transactions entered into or modified on or after that date. The NAIC has also adopted disclosure requirements included within Accounting Standards Codification 815, “Derivatives and Hedging” (“ASC 815”) and Accounting Standards Codification 460, “Guarantees” (“ASC 460”), for annual audited statements in accordance with guidelines provided by the Statutory Accounting Principles Working Group. Additional information related to derivatives may also be found in Note 11, Disclosures about Fair Value of Financial Instruments.
Collateral: The Company currently has International Swaps and Derivatives Association (“ISDA”) master swap agreements in place with each derivative counterparty relating to over-the-counter transactions. In addition to the ISDA agreement, Credit Support Annexes (“CSA”), which are bilateral collateral agreements, have been put in place with thirteen of the Company’s seventeen derivative OTC-bilateral counterparties. The CSA’s allow TIAA’s mark-to-market exposure to a counterparty to be collateralized by the posting of cash or highly liquid U.S. government securities. The Company also exchanges cash and securities margin for derivatives traded through a central clearinghouse. As of December 31, 2013, TIAA held cash collateral of $8 million from its counterparties. The Company must also post collateral or margin to the extent its net position with a given counterparty or clearinghouse is at a loss relative to the counterparty. As of December 31, 2013, the Company pledged cash collateral or margin of $90 million and securities collateral or margin of $23 million to its counterparties.
Contingent Features: Certain of the Company’s master swap agreements governing its derivative instruments contain provisions that require the Company to maintain a minimum credit rating from two of the major credit rating agencies. If the Company’s credit rating were to fall below the specified minimum, each of the counterparties to agreements with such requirements could terminate all outstanding derivative transactions between such counterparty and the Company. The termination would require immediate payment of amounts expected to approximate the net liability positions of such transactions with such counterparty. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on December 31, 2013 is $214 million for which the Company has posted collateral of $82 million in the normal course of business.
Foreign Currency Swap Contracts: The Company enters into foreign currency swap contracts to exchange fixed and variable amounts of foreign currency at specified future dates and at specified rates (in U.S. dollars) as a cash flow hedge to manage currency risks on investments denominated in foreign currencies. This type of derivative instrument is traded OTC-bilateral, and the Company is exposed to both market and counterparty risk. The changes in the carrying value of foreign currency exchange rates are recognized as unrealized gains or losses. Derivative instruments used in hedging transactions that do not qualify for hedge accounting treatment are accounted for at fair value. The net unrealized loss as of December 31, 2013, from foreign currency swap contracts that do not qualify for hedge accounting treatment was $28 million. The net realized loss for the year ended December 31, 2013, from all foreign currency swap contracts was $28 million.
Foreign Currency Forward Contracts: The Company enters into foreign currency forward contracts to exchange foreign currency at specified future dates and at specified rates (in U.S. dollars) to manage currency risks on investments denominated in foreign currencies. This type of derivative instrument is traded OTC-bilateral, and the Company is exposed to both market and counterparty risk. The changes in the value of the contracts related to foreign currency exchange rates are recognized as unrealized gains or losses. A foreign exchange premium or (discount) is recorded at the time a contract is opened, based on the difference between the forward exchange rate and the spot rate. The Company amortizes the foreign exchange premium/(discount) into investment income over the life of the forward contract or at the settlement date, if the forward contract is less than a year. The net unrealized loss for the year ended December 31, 2013, from foreign currency forward contracts that do not qualify for hedge accounting treatment was $2 million. The net realized loss for the year ended December 31, 2013, from all foreign currency forward contracts was $11 million.
Interest Rate Swap Contracts: The Company enters into interest rate swap contracts to hedge against the effect of interest rate fluctuations on certain variable interest rate bonds. These contracts allow the Company to lock in a fixed interest rate and to transfer the risk of higher or lower interest rates. This type of derivative instrument may be traded OTC-cleared or OTC-bilateral, and the Company is exposed to both market and counterparty risk. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date. Net payments received and net payments made or accrued under interest rate swap contracts are included in net investment income. Derivative instruments used in hedging transactions that do not qualify for hedge accounting treatment are accounted for at fair value. The net unrealized loss for the year ended December 31, 2013, from interest rate swap contracts that do not qualify for hedge accounting treatment was $14 million. The net realized gain for the year ended December 31, 2013, from all interest rate swap contracts was $0.5 million.
Exchange Traded Interest Rate Futures: The Company enters into interest rate futures contracts as a hedge against the effect of interest rate fluctuations on certain fixed interest rate bonds. These contracts are designed as economic hedges and allow the
Single Premium Immediate Annuities n Statement of Additional Information | B-119 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Company to manage changes, due to interest rates, in the value of securities that it owns. This type of derivative instrument is exposed to market risk and is traded with regulated futures commission merchants who are members of a trading exchange. The interest rate futures contracts are initially carried at the amount of cash margin deposits outstanding, with subsequent changes in variation margin recognized in unrealized gains or unrealized losses. The net realized gain for the year ended December 31, 2013 from all interest rate futures contracts was $14 million.
Purchased Credit Default Swap Contracts: The Company uses credit default swaps to hedge against unexpected credit events on selective investments in the Company’s portfolio. This type of derivative is traded OTC-bilateral and is exposed to market, credit and counterparty risk. The premium payment to the counterparty on these contracts is expensed as incurred. Derivative instruments used in hedging transactions that do not qualify for hedge accounting treatment are accounted for at fair value. The net unrealized gain for the year ended December 31, 2013, from purchased credit default swap contracts that do not qualify for hedge accounting treatment was $11 million. The net realized gain for the year ended December 31, 2013 from all purchased credit default swap contracts was $0.2 million.
Written Credit Default Swaps used in Replication Transactions: A replication synthetic asset transaction is a derivative transaction (the derivative component) established concurrently with another fixed income instrument (the cash component) in order to “replicate” the investment characteristics of another instrument (the reference entity). As part of a strategy to replicate desired credit exposure in conjunction with high-rated host securities, the Company writes or sells credit default swaps on either single name corporate credits or credit indices and provides credit default protection to the buyer. This type of derivative instrument is traded OTC-bilateral, and the Company is exposed to market, credit and counterparty risk. The carrying value of credit default swaps used in RSATs represents the unamortized premium received/(paid) for selling the default protection. This premium is amortized into investment income over the life of the swap. The Company has negligible counterparty credit risk with the buyer. The net realized gain for the year ended December 31, 2013 from all written credit default swap contracts was $0.6 million.
Events or circumstances that would require the Company to perform under a written credit derivative position may include, but are not limited to, bankruptcy, failure to pay, debt moratorium, debt repudiation, restructuring of debt and acceleration, or default. The maximum potential amount of future payments (undiscounted) the Company could be required to make under the credit derivative is represented by the notional amount of the contract. Should a credit event occur, the amounts owed to a counterparty by the Company may be subject to recovery provisions that include, but are not limited to:
1. | Notional amount payment by the Company to Counterparty and/or delivery of physical security by Counterparty to the Company. |
2. | Notional amount payment by the Company to Counterparty net of contractual recovery fee. |
3. | Notional amount payment by the Company to Counterparty net of auction determined recovery fee. |
The following table contains information related to replication positions where credit default swaps have been sold by the Company on the Dow Jones North American Investment Grade Series of indexes (DJ.NA.IG). Each index is comprised of 125 liquid investment grade credits domiciled in North America and represents a broad exposure to the investment grade corporate market. The Company has written contracts on the “Super Senior” (60% to 100%) tranche of the Dow Jones North American Investment Grade Index Series 7 and 9 (DJ.NA.IG.7 and DJ.NA.IG.9, respectfully), whereby the Company is obligated to perform should the default rates of each index exceed 60%. The maximum potential amount of future payments (undiscounted) the Company could be required to make under these positions is represented by the notional amount of the contracts. The Company will record an impairment (realized loss) on a derivative position if an existing condition or set of circumstances indicates there is limited ability to recover an unrealized loss (dollars in millions):
Asset Class | Term | Notional | Average Annual Premium Received |
Fair Value |
2013 Impairment |
|||||||||||||||
DJ Investment Grade Index—Series 7 & 9 |
||||||||||||||||||||
Super Senior Tranche 60%-100% |
2–4 years | $ | 2,574 | 0.24 | % | $ | 15 | — |
The following table contains information related to Replication positions where Credit Default Swaps have been sold by the Company on individual debt obligations of corporations and sovereign nations. The maximum potential amount of future payments (undiscounted) the Company could be required to make under these positions is represented by the notional amount. TIAA will record an impairment (realized loss) on a derivative position if an existing condition or set of circumstances indicates there is limited ability to recover an unrealized loss (dollars in millions):
Asset Class | Term | Notional | Average Annual Premium Received |
Fair Value |
2013 Impairment |
|||||||||||||||
Corporate |
0–2 years | $ | 636 | 0.85 | % | $ | 5 | $ | — | |||||||||||
Corporate |
2–5 years | 40 | 1.00 | % | — | — | ||||||||||||||
Corporate |
5–8 years | 35 | 4.43 | % | 5 | — | ||||||||||||||
Sovereign |
0–2 years | 62 | 1.00 | % | 1 | — | ||||||||||||||
Sovereign |
2–5 years | 80 | 1.00 | % | (1 | ) | — | |||||||||||||
Total |
$ | 853 | $ | 10 | $ | — | ||||||||||||||
|
B-120 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Information related to the credit quality of replication positions where credit default swaps have been sold by the Company on indexes, individual debt obligations of corporations and sovereign nations appears below. The values are listed in order of their NAIC Credit Designation, with a designation of 1 having the highest credit quality and designations of 4 or below having the lowest credit quality based on the underlying asset referenced by the credit default swap (in millions):
RSAT NAIC Designation | Reference Entity Asset Class |
RSAT Notional Amount |
Derivative Component Fair Value |
Cash Component Fair Value |
RSAT Fair Value |
|||||||||||||
1 Highest Quality |
Tranche | $ | 2,574 | $ | 15 | $ | 2,717 | $ | 2,732 | |||||||||
Corporate | 561 | 5 | 548 | 553 | ||||||||||||||
Sovereign |
55 | — | 54 | 54 | ||||||||||||||
Subtotal | 3,190 | 20 | 3,319 | 3,339 | ||||||||||||||
Tranche | — | — | — | — | ||||||||||||||
2 High Quality |
Corporate | 85 | 1 | 86 | 87 | |||||||||||||
Sovereign | 77 | (1 | ) | 71 | 70 | |||||||||||||
Subtotal | 162 | — | 157 | 157 | ||||||||||||||
3 Medium Quality |
Tranche | — | — | — | — | |||||||||||||
Corporate | 35 | — | 43 | 43 | ||||||||||||||
Sovereign | 10 | — | 10 | 10 | ||||||||||||||
Subtotal | 45 | — | 53 | 53 | ||||||||||||||
4 Low Quality |
Tranche | — | — | — | — | |||||||||||||
Corporate | 30 | 5 | 30 | 35 | ||||||||||||||
Sovereign | — | — | — | — | ||||||||||||||
Subtotal | 30 | 5 | 30 | 35 | ||||||||||||||
Total |
$ | 3,427 | $ | 25 | $ | 3,559 | $ | 3,584 | ||||||||||
|
A summary of derivative asset and liability positions by carrying value, held by the Company, including notional amounts, carrying values and estimated fair values, appears below (in millions):
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||
Notional | Carrying Value |
Estimated FV |
Notional | Carrying Value |
Estimated FV |
|||||||||||||||||||||
Foreign Currency Swap Contracts |
Assets | $ | 354 | $ | 34 | $ | 34 | $ | 759 | $ | 55 | $ | 56 | |||||||||||||
Liabilities |
2,403 | (268 | ) | (291 | ) | 2,485 | (292 | ) | (322 | ) | ||||||||||||||||
Subtotal | 2,757 | (234 | ) | (257 | ) | 3,244 | (237 | ) | (266 | ) | ||||||||||||||||
Foreign Currency Forward Contracts |
Assets | 191 | 2 | 2 | 93 | 1 | 1 | |||||||||||||||||||
Liabilities |
331 | (7 | ) | (7 | ) | 184 | (4 | ) | (4 | ) | ||||||||||||||||
Subtotal | 522 | (5 | ) | (5 | ) | 277 | (3 | ) | (3 | ) | ||||||||||||||||
Interest Rate Swap Contracts |
Assets | 291 | 19 | 19 | 351 | 32 | 32 | |||||||||||||||||||
Liabilities |
55 | (1 | ) | (1 | ) | — | — | — | ||||||||||||||||||
Subtotal | 346 | 18 | 18 | 351 | 32 | 32 | ||||||||||||||||||||
Credit Default Swap Contracts—RSAT |
Assets | 3,290 | 3 | 26 | 3,460 | 6 | 32 | |||||||||||||||||||
Liabilities |
137 | (5 | ) | (1 | ) | 112 | (6 | ) | (2 | ) | ||||||||||||||||
Subtotal | 3,427 | (2 | ) | 25 | 3,572 | — | 30 | |||||||||||||||||||
Credit Default Swap Contracts (Purchased Default Protection) |
Assets | 98 | 2 | 2 | 83 | 2 | 2 | |||||||||||||||||||
Liabilities |
1,418 | (30 | ) | (30 | ) | 1,743 | (44 | ) | (44 | ) | ||||||||||||||||
Subtotal | 1,516 | (28 | ) | (28 | ) | 1,826 | (42 | ) | (42 | ) | ||||||||||||||||
Total |
Assets | 4,224 | 60 | 83 | 4,746 | 96 | 123 | |||||||||||||||||||
Liabilities |
4,344 | (311 | ) | (330 | ) | 4,524 | (346 | ) | (372 | ) | ||||||||||||||||
Total |
$ | 8,568 | $ | (251 | ) | $ | (247 | ) | $ | 9,270 | $ | (250 | ) | $ | (249 | ) |
For the twelve months ended December 31, 2013, there were no impairments of derivative positions. For the twelve months ended December 31, 2013, the average fair value of derivatives used for other than hedging purposes, which is the derivative component of RSATs, was $27.9 million in assets.
Single Premium Immediate Annuities n Statement of Additional Information | B-121 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
The table below illustrates the Fair Values of Derivative Instruments in the Statements of Admitted Assets, Liabilities and Capital and Contingency Reserves. Instruments utilizing hedge accounting treatment are shown as Qualifying Hedge Relationships. Hedging instruments that utilize fair value accounting are shown as Non-qualifying Hedge Relationships. Derivatives used in Replication strategies are shown as Derivatives used for other than Hedging Purposes (in millions):
Fair Value of Derivative Instruments | ||||||||||||||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||||||||
Qualifying Hedge Relationships | Balance Sheet Location |
Estimated FV |
Balance Sheet Location |
Estimated FV |
Balance Sheet Location |
Estimated FV |
Balance Sheet Location |
Estimated FV |
||||||||||||||||||||||||
Foreign Currency Swaps |
Derivatives | $ | — | Derivatives | $ | 1 | Derivatives | $ | (98 | ) | Derivatives | $ | (128 | ) | ||||||||||||||||||
Total Qualifying Hedge Relationships |
— | 1 | (98 | ) | (128 | ) | ||||||||||||||||||||||||||
Non-qualifying Hedge Relationships |
||||||||||||||||||||||||||||||||
Interest Rate Contracts |
Derivatives | 19 | Derivatives | 32 | Derivatives | (1 | ) | Derivatives | — | |||||||||||||||||||||||
Foreign Currency Swaps |
Derivatives | 34 | Derivatives | 55 | Derivatives | (193 | ) | Derivatives | (194 | ) | ||||||||||||||||||||||
Foreign Currency Forwards |
Derivatives | 2 | Derivatives | 1 | Derivatives | (7 | ) | Derivatives | (4 | ) | ||||||||||||||||||||||
Purchased Credit Default Swaps |
Derivatives | 2 | Derivatives | 2 | Derivatives | (30 | ) | Derivatives | (44 | ) | ||||||||||||||||||||||
Total Non-qualifying Hedge Relationships |
57 | 90 | (231 | ) | (242 | ) | ||||||||||||||||||||||||||
Derivatives used for other than Hedging Purposes |
||||||||||||||||||||||||||||||||
Written Credit Default Swaps |
Derivatives | 26 | Derivatives | 32 | Derivatives | (1 | ) | Derivatives | (2 | ) | ||||||||||||||||||||||
Total Derivatives used for other than Hedging Purposes |
26 | 32 | (1 | ) | (2 | ) | ||||||||||||||||||||||||||
Total Derivatives |
$ | 83 | $ | 123 | $ | (330 | ) | $ | (372 | ) | ||||||||||||||||||||||
|
The table below illustrates the Effect of Derivative Instruments in the Statements of Operations. Instruments utilizing hedge accounting treatment are shown as Qualifying Hedge Relationships. Instruments that utilize fair value accounting are shown as Non-qualifying Hedge Relationships. Derivatives used in Replication strategies are shown as Derivatives used for other than Hedging Purposes (in millions):
Effect of Derivative Instruments | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Qualifying Hedge Relationships | Income Statement Location |
Realized Gain (Loss) |
Income Statement Location |
Realized Gain (Loss) |
||||||||||||
Foreign Currency Swaps |
|
Net Realized Capital Gain (Loss) |
|
$ | (3 | ) | |
Net Realized Capital Gain (Loss) |
|
$ | (36 | ) | ||||
Amount of Gain or (Loss) Recognized in Income on Derivative |
|
Net Realized Capital Gain (Loss) |
|
— | |
Net Realized Capital Gain (Loss) |
|
— | ||||||||
Total Qualifying Hedge Relationships |
(3 | ) | (36 | ) | ||||||||||||
Non-qualifying Hedge Relationships | ||||||||||||||||
Interest Rate Contracts |
|
Net Realized Capital Gain (Loss) |
|
— | |
Net Realized Capital Gain (Loss) |
|
— | ||||||||
Foreign Currency Swaps |
|
Net Realized Capital Gain (Loss) |
|
(25 | ) | |
Net Realized Capital Gain (Loss) |
|
(41 | ) | ||||||
Foreign Currency Forwards |
|
Net Realized Capital Gain (Loss) |
|
(11 | ) | |
Net Realized Capital Gain (Loss) |
|
7 | |||||||
Purchased Credit Default Swaps |
|
Net Realized Capital Gain (Loss) |
|
— | |
Net Realized Capital Gain (Loss) |
|
(1 | ) | |||||||
Interest Rate Futures Contracts |
|
Net Realized Capital Gain (Loss) |
|
14 | |
Net Realized Capital Gain (Loss) |
|
— | ||||||||
Total Non-qualifying Hedge Relationships |
(22 | ) | (35 | ) | ||||||||||||
Derivatives used for other than Hedging Purposes | ||||||||||||||||
Written Credit Default Swaps |
|
Net Realized Capital Gain (Loss) |
|
1 | |
Net Realized Capital Gain (Loss) |
|
10 | ||||||||
Total Derivatives used for other than Hedging Purposes |
|
Net Realized Capital Gain (Loss) |
|
1 | |
Net Realized Capital Gain (Loss) |
|
10 | ||||||||
Total Derivatives |
$ | (24 | ) | $ | (61 | ) | ||||||||||
|
B-122 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Note 14 – separate accounts
The TIAA Separate Account VA-1 (“VA-1”) is a segregated investment account and was established on February 16, 1994 under the insurance laws of the State of New York for the purpose of issuing and funding after-tax variable annuity contracts for employees of non-profit institutions organized in the United States, including governmental institutions. VA-1 was registered with the Securities and Exchange Commission, (the “Commission”) effective November 1, 1994 as an open-end, diversified management investment company under the Investment Company Act of 1940. VA-1 consists of a single investment portfolio, the Stock Index Account (“SIA”). The SIA was established on October 3, 1994 and invests in a diversified portfolio of equity securities selected to track the overall market for common stocks publicly traded in the United States.
The TIAA Separate Account VA-3 (“VA-3”) is a segregated investment account and was organized on May 17, 2006 under the laws of the State of New York for the purposes of funding individual and group variable annuities for retirement plans of employees of colleges, universities, other educational and research organizations, and other governmental and non-profit institutions. VA-3 was registered with the Commission as an investment company under the Investment Company Act of 1940, effective September 29, 2006, and operates as a unit investment trust.
The TIAA Real Estate Account (“REA”) is a segregated investment account and was organized on February 22, 1995 under the insurance laws of the State of New York for the purpose of providing an investment option to the Company’s pension customers to direct investments to an investment vehicle that invests primarily in real estate. REA was registered with the Commission under the Securities Act of 1933 effective October 2, 1995. REA’s target is to invest between 75% and 85% of its assets directly in real estate or in real estate-related investments, with the remainder of its assets invested in publicly-traded securities and other instruments that are easily converted to cash to maintain adequate liquidity.
TIAA Stable Value is an insulated, non-unitized separate account and was established on March 31, 2010 qualifying under New York Insurance Law 4240(a)(5)(ii). The Separate Accounts support a flexible premium deferred fixed annuity contract that is intended initially to be offered to employer sponsored retirement plans.
In accordance with the domiciliary state procedures for approving items within the separate accounts, the separate accounts classification of the following items are supported by a specific state statute:
Product Identification | Product Classification | State Statute Reference | ||
TIAA Separate Account VA-1 |
Variable Annuity | Section 4240 of the New York Insurance Law | ||
TIAA Separate Account VA-3 |
Variable Annuity | Section 4240 of the New York Insurance Law | ||
TIAA Real Estate Account |
Variable Annuity | Section 4240 of the New York Insurance Law | ||
TIAA Stable Value |
Deferred Fixed Annuity | Section 4240(a)(5)(ii) of the New York Insurance Law |
The legal insulation of the separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account.
As of December 31, 2013 and 2012, the Company’s separate account statement included legally insulated assets of $22,348 million and $18,420 million, respectively. The assets legally insulated from the general account as of December 31, 2013 are attributed to the following products (in millions):
Product | Legally Insulated Assets |
Separate Account Assets (Not Legally Insulated) |
||||||
TIAA Separate Account VA-1 |
$ | 964 | $ | — | ||||
TIAA Separate Account VA-3 |
4,128 | — | ||||||
TIAA Real Estate Account |
17,023 | — | ||||||
TIAA Stable Value |
233 | — | ||||||
Total |
$ | 22,348 | $ | — | ||||
|
In accordance with the products recorded within the separate account, some separate account liabilities are guaranteed by the general account. (In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account.)
As of December 31, 2013 and 2012, the general account of the Company had a maximum guaranteed minimum death benefit for separate account liabilities of $0.4 million and $0.7 million, respectively. The amount paid for risk charges is not explicit, but rather embedded within the mortality and expense charge.
For the year ended December 31, 2013, the general account of the Company had paid (received) $0.4 million towards separate account guarantees. The total separate account guarantees paid (received) by the general account for the preceding five years ending at December 31, are as follows (in millions):
2012 |
$ | 0.4 | ||
2011 |
$ | 0.1 | ||
2010 |
$ | 0.5 | ||
2009 |
$ | 2.1 | ||
2008 |
$ | 3.4 |
Single Premium Immediate Annuities n Statement of Additional Information | B-123 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
The general account provides the Real Estate Separate Account with a liquidity guarantee to ensure it has funds available to meet participant transfer or cash withdrawal requests. If the Real Estate Separate Account cannot fund participant requests, the general account will fund them by purchasing accumulation units in the Real Estate Separate Account. Under this agreement, the Company guarantees that participants will be able to redeem their accumulation units at their accumulation unit value next determined after the transfer or withdrawal request is received in good order. To compensate the general account for the risk taken, the separate account paid liquidity charges as follows for the past five (5) years (in millions):
2013 |
$ | 30.5 | ||
2012 |
$ | 31.4 | ||
2011 |
$ | 23.7 | ||
2010 |
$ | 13.1 | ||
2009 |
$ | 12.1 |
The table below shows amounts that the TIAA general account has paid towards the separate account liquidity guarantees and thus purchased units in the Real Estate Separate Account for the past five (5) years (in millions):
2013 |
$ | — | ||
2012 |
$ | — | ||
2011 |
$ | — | ||
2010 |
$ | — | ||
2009 |
$ | 1,058.7 |
During 2013, there was $325 million of accumulation units redeemed by the Real Estate Separate Account. As of December 31, 2013, there were no outstanding accumulation units.
The Company engages in securities lending transactions through its VA-1 Separate Account.
As of December 31, 2013 and 2012, the VA-1 Separate Account had loaned securities of $25.3 million and $15.9 million and collateral of $25.8 million and $16.1 million, respectively.
The Company’s VA-1 Separate Account may lend securities to qualified institutional borrowers to earn additional income. The VA-1 Separate Account receives collateral (in the form of cash, Treasury securities, or other collateral permitted by applicable law) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of loaned securities during the period of the loan. Cash collateral received by the VA-1 Separate Account will generally be invested in high quality short-term instruments, or in one or more funds maintained by the securities lending agent for the purpose of investing cash collateral. The VA-1 Separate Account bears the market risk with respect to the collateral investment, securities loaned, and the risk that the counterparty may default on its obligations.
Additional information regarding separate accounts of the Company is as follows for the years ended December 31, (in millions):
2013 | ||||||||||||||||
Non-indexed Guarantee less than/equal to 4% |
Non-indexed Guarantee more than 4% |
Non-guaranteed Separate Accounts |
Total | |||||||||||||
Premiums, considerations |
$ | 121 | $ | — | $ | 3,415 | $ | 3,536 | ||||||||
Reserves |
||||||||||||||||
For accounts with assets at: |
||||||||||||||||
Fair value |
$ | — | $ | — | $ | 21,975 | $ | 21,975 | ||||||||
Amortized cost |
228 | — | — | 228 | ||||||||||||
Total reserves |
$ | 228 | $ | — | $ | 21,975 | $ | 22,203 | ||||||||
|
||||||||||||||||
By withdrawal characteristics: |
||||||||||||||||
Subject to discretionary withdrawal |
$ | 228 | $ | — | $ | — | $ | 228 | ||||||||
At fair value |
— | — | 21,975 | 21,975 | ||||||||||||
Not subject to discretionary withdrawal |
— | — | — | — | ||||||||||||
Total reserves |
$ | 228 | $ | — | $ | 21,975 | $ | 22,203 | ||||||||
|
B-124 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
2012 | ||||||||||||||||
Non-indexed Guarantee less than/equal to 4% |
Non-indexed Guarantee more than 4% |
Non-guaranteed Separate Accounts |
Total | |||||||||||||
Premiums, considerations |
$ | 92 | $ | — | $ | 2,545 | $ | 2,637 | ||||||||
Reserves |
||||||||||||||||
For accounts with assets at: |
||||||||||||||||
Fair value |
$ | — | $ | — | $ | 17,777 | $ | 17,777 | ||||||||
Amortized cost |
113 | — | — | 113 | ||||||||||||
Total reserves |
$ | 113 | $ | — | $ | 17,777 | $ | 17,890 | ||||||||
|
||||||||||||||||
By withdrawal characteristics: |
||||||||||||||||
Subject to discretionary withdrawal |
$ | 7 | $ | — | $ | — | $ | 7 | ||||||||
At fair value |
— | — | 17,777 | 17,777 | ||||||||||||
Not subject to discretionary withdrawal |
106 | — | — | 106 | ||||||||||||
Total reserves |
$ | 113 | $ | — | $ | 17,777 | $ | 17,890 | ||||||||
|
2011 | ||||||||||||||||
Non-indexed Guarantee less than/equal to 4% |
Non-indexed Guarantee more than 4% |
Non-guaranteed Separate Accounts |
Total | |||||||||||||
Premiums, considerations |
$ | 38 | $ | — | $ | 2,655 | $ | 2,693 | ||||||||
Reserves |
||||||||||||||||
For accounts with assets at: |
||||||||||||||||
Fair value |
$ | — | $ | — | $ | 14,615 | $ | 14,615 | ||||||||
Amortized cost |
67 | — | — | 67 | ||||||||||||
Total reserves |
$ | 67 | $ | — | $ | 14,615 | $ | 14,682 | ||||||||
|
||||||||||||||||
By withdrawal characteristics: |
||||||||||||||||
Subject to discretionary withdrawal |
$ | 4 | $ | — | $ | — | $ | 4 | ||||||||
At fair value |
— | — | 14,615 | 14,615 | ||||||||||||
Not subject to discretionary withdrawal |
63 | — | — | 63 | ||||||||||||
Total reserves |
$ | 67 | $ | — | $ | 14,615 | $ | 14,682 | ||||||||
|
The following is a reconciliation of transfers to (from) the Company to the Separate Accounts for the years ended December 31, (in millions):
2013 | 2012 | 2011 | ||||||||||
Transfers as reported in the Summary of Operations of the Separate Accounts Statement: |
||||||||||||
Transfers to Separate Accounts |
$ | 3,852 | $ | 2,935 | $ | 3,121 | ||||||
Transfers from Separate Accounts |
(1,973 | ) | (1,417 | ) | (1,463 | ) | ||||||
Net transfers (from) or to Separate Accounts |
1,879 | 1,518 | 1,658 | |||||||||
Reconciling Adjustments: |
||||||||||||
Fund transfer exchange gain (loss) |
— | — | 3 | |||||||||
Transfers as reported in the Summary of Operations of the Life, Accident & Health Annual Statement |
$ | 1,879 | $ | 1,518 | $ | 1,661 | ||||||
|
Note 15 – management agreements
Under Cash Disbursement and Reimbursement Agreements, the Company serves as the common pay-agent for its operating and investment subsidiaries and affiliates. The Company has allocated expenses of $1,719 million, $1,464 million and $1,252 million to its various subsidiaries and affiliates for the years ended December 31, 2013, 2012 and 2011, respectively. In addition, under management agreements, the Company provides investment advisory and administrative services for TIAA-CREF Life and administrative services to the TIAA-CREF Trust Company FSB and VA-1.
The expense allocation process determines the portion of the total investment and operating expenses that is attributable to each legal entity and to each line of business within an entity. Every month the Company allocates incurred expenses to each line of business supported by the Company and its affiliated companies. As part of this allocation process, every department with personnel and every vendor related expense is allocated to lines of business based on defined allocation methodologies. These methodologies represent either shared or direct costs depending on the nature of the service provided. At the completion of the allocation process all expenses are assigned to a line of business and legal entity.
Single Premium Immediate Annuities n Statement of Additional Information | B-125 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Activities necessary for the operation of the College Retirement Equities Fund (“CREF”), a companion organization, are provided at-cost by two subsidiaries of the Company. Such services are provided in accordance with an Investment Management Services Agreement, dated as of January 2, 2008, between CREF and TIAA-CREF Investment Management, LLC (“Investment Management”), and in accordance with a Principal Underwriting and Distribution Services Agreement for CREF, dated as of January 1, 2009, between CREF and TIAA-CREF Individual and Institutional Services, LLC (“Services”). The Company also performs administrative services for CREF, on an at-cost basis. The management fees collected under these agreements and the equivalent allocated expenses, which amounted to approximately $967 million, $878 million and $870 million for the years ended December 31, 2013, 2012 and 2011, respectively, are not included in the statement of operations and had no effect on the Company’s operations.
Advisors provides investment advisory services for VA-1, certain proprietary funds and other separately managed portfolios in accordance with investment management agreements. Teachers Personal Investors Services, Inc. (“TPIS”) and Services distribute variable annuity contracts for VA-1, REA and VA-3 as well as registered securities for certain proprietary funds and non-proprietary mutual funds.
All services necessary for the operation of REA are provided at-cost by the Company and Services. The Company provides investment management and administrative services for REA. Distribution services are provided in accordance with a Distribution Services Agreement between REA and Services. The Distribution and Administrative Services Agreement between REA and Services limits the work performed by Services to distribution activities with the Company assuming responsibility for all administrative activities. The Company and Services receive management fee payments from REA on a daily basis according to formulae established each year and adjusted periodically, with the objective of keeping the management fees as close as possible to actual expenses attributable to operating REA. Any differences between actual expenses and daily charges are adjusted quarterly.
The following amounts receivable from or payable to subsidiaries and affiliates are included in the lines Other assets and Other liabilities on the Balance Sheet, as of December 31 (in millions):
Receivable | Payable | |||||||||||||||
Subsidiary/Affiliate | 2013 | 2012 | 2013 | 2012 | ||||||||||||
CREF |
$ | — | $ | 11 | $ | 16 | $ | — | ||||||||
Investment Management |
— | 1 | 3 | — | ||||||||||||
TIAA-CREF Life |
13 | 10 | — | 0.3 | ||||||||||||
TPIS |
4 | 5 | — | — | ||||||||||||
Covariance |
4 | 7 | — | — | ||||||||||||
TIAA-CREF Alternative Advisors |
4 | — | — | — | ||||||||||||
Total |
$ | 25 | $ | 34 | $ | 19 | $ | 0.3 | ||||||||
|
Note 16 – federal income taxes
By charter, the Company is a stock life insurance company that operates on a non-profit basis and through December 31, 1997 was exempt from federal income taxation under the Internal Revenue Code. Any non-pension income, however, was subject to federal income taxation as unrelated business income. Effective January 1, 1998, as a result of federal legislation, the Company is no longer exempt from federal income taxation and is taxed as a stock life insurance company.
The Company has recorded current and deferred taxes in accordance with SSAP No. 101, Income Taxes – A Replacement of SSAP No. 10R and SSAP No. 10. The Company has exceeded the highest RBC threshold level which allows the Company to apply the smallest limitations to admit deferred tax assets under SSAP 101. The application of SSAP No. 101 requires a company to evaluate the recoverability of deferred tax assets and to establish a valuation allowance if necessary to reduce the deferred tax asset to an amount which is more likely than not to be realized. Based on the weight of available evidence the Company has recorded a valuation allowance of $9.8 million on foreign tax credit carryforwards as of December 31, 2013.
B-126 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Components of the net deferred tax asset/(liability) are as follows (in millions):
12/31/2013 | 12/31/2012 | Change | ||||||||||||||||||||||||||||||||||
(1) Ordinary |
(2) Capital |
(3) (Col 1+2) Total |
(4) Ordinary |
(5) Capital |
(6) (Col 4+5) Total |
(7) (Col 1–4) Ordinary |
(8) (Col 2–5) Capital |
(9) (Col 7+8) Total |
||||||||||||||||||||||||||||
a) Gross Deferred Tax Assets |
$ | 11,491 | $ | 1,279 | $ | 12,770 | $ | 12,057 | $ | 1,472 | $ | 13,529 | $ | (566 | ) | $ | (193 | ) | $ | (759 | ) | |||||||||||||||
b) Statutory Valuation Allowance Adjustments |
10 | — | 10 | 8 | — | 8 | 2 | — | 2 | |||||||||||||||||||||||||||
c) Adjusted Gross Deferred Tax Assets (a–b) |
11,481 | 1,279 | 12,760 | 12,049 | 1,472 | 13,521 | (568 | ) | (193 | ) | (761 | ) | ||||||||||||||||||||||||
d) Deferred Tax Assets Non-admitted |
8,027 | — | 8,027 | 8,560 | 404 | 8,964 | (533 | ) | (404 | ) | (937 | ) | ||||||||||||||||||||||||
e) Subtotal Net Admitted Deferred Tax Asset (c-d) |
3,454 | 1,279 | 4,733 | 3,489 | 1,068 | 4,557 | (35 | ) | 211 | 176 | ||||||||||||||||||||||||||
f) Deferred Tax Liabilities |
274 | 1,370 | 1,644 | 320 | 1,002 | 1,322 | (46 | ) | 368 | 322 | ||||||||||||||||||||||||||
g) Net Admitted Deferred Tax Assets/(Net Deferred Tax Liability) (e–f) |
$ | 3,180 | $ | (91 | ) | $ | 3,089 | $ | 3,169 | $ | 66 | $ | 3,235 | $ | 11 | $ | (157 | ) | $ | (146 | ) | |||||||||||||||
|
||||||||||||||||||||||||||||||||||||
12/31/2013 | 12/31/2012 | Change | ||||||||||||||||||||||||||||||||||
(1) Ordinary |
(2) Capital |
(3) (Col 1+2) Total |
(4) Ordinary |
(5) Capital |
(6) (Col 4+5) Total |
(7) (Col 1–4) Ordinary |
(8) (Col 2–5) Capital |
(9) (Col 7+8) Total |
||||||||||||||||||||||||||||
Admission Calculation Components Under SSAP |
||||||||||||||||||||||||||||||||||||
a) Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks |
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
b) Adjusted Gross DTA Expected To Be Realized (Excluding The Amount of DTA From (a) above After Application of the Threshold Limitation. (The Lesser of (b)1 and (b)2 below) |
$ | 3,008 | $ | 81 | $ | 3,089 | $ | 3,169 | $ | 66 | $ | 3,235 | $ | (161 | ) | $ | 15 | $ | (146 | ) | ||||||||||||||||
1. Adjusted Gross DTA Expected to be Realized Following the Balance Sheet Date |
$ | 3,008 | $ | 81 | $ | 3,089 | $ | 3,169 | $ | 66 | $ | 3,235 | $ | (161 | ) | $ | 15 | $ | (146 | ) | ||||||||||||||||
2. Adjusted Gross DTA Allowed per Limitation Threshold |
xxx | xxx | $ | 4,149 | xxx | xxx | $ | 3,897 | xxx | xxx | $ | 252 | ||||||||||||||||||||||||
c) Adjusted Gross DTA (Excluding The Amount of DTA From (a) and (b) above) Offset by Gross DTL |
$ | 446 | $ | 1,198 | $ | 1,644 | $ | 320 | $ | 1,002 | $ | 1,322 | $ | 126 | $ | 196 | $ | 322 | ||||||||||||||||||
d) DTA Admitted as the result of application of SSAP No. 101. Total ((a)+(b)+(c)) |
$ | 3,454 | $ | 1,279 | $ | 4,733 | $ | 3,489 | $ | 1,068 | $ | 4,557 | $ | (35 | ) | $ | 211 | $ | 176 | |||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||||||
(dollars in millions) | ||||||||||||||||||||||||||||||||||||
Ratio Percentage Used to Determine Recovery Period and Threshold Limitation Amount |
1109 | % | 1064 | % | ||||||||||||||||||||||||||||||||
Amount Of Adjusted Capital And Surplus Used To Determine Recovery Period And Threshold Limitation In (b)2 Above |
36,397 | 33,671 | ||||||||||||||||||||||||||||||||||
Single Premium Immediate Annuities n Statement of Additional Information | B-127 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
12/31/2013 | 12/31/2012 | Change | ||||||||||||||||||||||
(1) Ordinary |
(2) Capital |
(3) Ordinary |
(4) Capital |
(5) (Col 1–3) Ordinary |
(6) (Col 2–4) Capital |
|||||||||||||||||||
Impact of Tax Planning Strategies (dollars in millions): |
||||||||||||||||||||||||
Determination Of Adjusted Gross Deferred Tax Assets and Net Admitted Deferred Tax Assets, By Tax Character as a Percentage. |
||||||||||||||||||||||||
Adjusted Gross DTAs Amount From Note 9A1(c) |
$ | 11,481 | $ | 1,279 | $ | 12,049 | $ | 1,472 | $ | (568 | ) | $ | (193 | ) | ||||||||||
Percentage Of Adjusted Gross DTAs By Tax Character Attributable To The Impact of Tax Planning Strategies |
1.0 | % | — | 2.5 | % | — | (1.5 | )% | — | |||||||||||||||
Net Admitted Adjusted Gross DTAs Amount From Note 9A1(e) |
$ | 3,454 | $ | 1,279 | $ | 3,489 | $ | 1,068 | $ | (35 | ) | $ | 211 | |||||||||||
Percentage Of Net Admitted Adjusted Gross DTAs By Tax Character Admitted Because Of The Impact Of Tax Planning Strategies |
3.4 | % | — | 8.6 | % | — | (5.2 | )% | — |
TIAA does not have tax-planning strategies that include the use of reinsurance.
TIAA has no temporary differences for which deferred tax liabilities are not recognized.
Income taxes incurred consist of the following major components (in millions):
12/31/2013 | 12/31/2012 | Change | ||||||||||
Current Income Tax: |
||||||||||||
Federal income tax expense (benefit) |
$ | (307 | ) | $ | (763 | ) | $ | 456 | ||||
Foreign Taxes |
5 | — | 5 | |||||||||
Subtotal |
$ | (302 | ) | $ | (763 | ) | $ | 461 | ||||
Federal income taxes expense (benefit) on net capital gains |
701 | (24 | ) | 725 | ||||||||
Generation/(Utilization) of loss carry-forwards |
(427 | ) | 776 | (1,203 | ) | |||||||
|
|
|||||||||||
Federal and foreign income taxes incurred |
$ | (28 | ) | $ | (11 | ) | $ | (17 | ) | |||
|
|
|||||||||||
Deferred Tax Assets: |
||||||||||||
Ordinary: |
||||||||||||
Policyholder reserves |
$ | 327 | $ | 348 | $ | (21 | ) | |||||
Investments |
839 | 723 | 116 | |||||||||
Deferred acquisition costs |
27 | 28 | (1 | ) | ||||||||
Policyholder dividends accrual |
678 | 649 | 29 | |||||||||
Fixed assets |
183 | 154 | 29 | |||||||||
Compensation and benefits accrual |
243 | 286 | (43 | ) | ||||||||
Receivables – non-admitted |
117 | 36 | 81 | |||||||||
Net operating loss carry-forward |
1,682 | 2,136 | (454 | ) | ||||||||
Tax credit carry-forward |
48 | 43 | 5 | |||||||||
Other (including items < 5% of total ordinary tax assets |
689 | 512 | 177 | |||||||||
Intangible Assets – Business in Force and Software |
6,658 | 7,142 | (484 | ) | ||||||||
Subtotal |
$ | 11,491 | $ | 12,057 | $ | (566 | ) | |||||
Statutory valuation allowance adjustment |
10 | 8 | 2 | |||||||||
Non-admitted |
8,027 | 8,560 | (533 | ) | ||||||||
Admitted ordinary deferred tax assets |
$ | 3,454 | $ | 3,489 | $ | (35 | ) | |||||
|
||||||||||||
Capital: |
||||||||||||
Investments |
$ | 1,198 | $ | 1,421 | $ | (223 | ) | |||||
Real estate |
81 | 38 | 43 | |||||||||
Other (including items < 5% of total capital tax assets |
— | 13 | (13 | ) | ||||||||
Subtotal |
$ | 1,279 | $ | 1,472 | $ | (193 | ) | |||||
Statutory valuation allowance adjustment |
— | — | — | |||||||||
Non-admitted |
— | 404 | (404 | ) | ||||||||
Admitted capital deferred tax assets |
1,279 | 1,068 | 211 | |||||||||
Admitted deferred tax assets |
$ | 4,733 | $ | 4,557 | $ | 176 | ||||||
|
B-128 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
12/31/2013 | 12/31/2012 | Change | ||||||||||
Deferred Tax Liabilities: |
||||||||||||
Ordinary: |
||||||||||||
Investments |
$ | 267 | $ | 317 | $ | (50 | ) | |||||
Other (including items < 5% of total ordinary tax liabilities) |
7 | 3 | 4 | |||||||||
Subtotal |
$ | 274 | $ | 320 | $ | (46 | ) | |||||
Capital: |
||||||||||||
Investments |
1,370 | 1,002 | 368 | |||||||||
Subtotal |
$ | 1,370 | $ | 1,002 | $ | 368 | ||||||
Deferred tax liabilities |
$ | 1,644 | $ | 1,322 | $ | 322 | ||||||
|
||||||||||||
Net Admitted Deferred Tax: |
||||||||||||
Assets/Liabilities |
$ | 3,089 | $ | 3,235 | $ | (146 | ) | |||||
|
The change in the net deferred income taxes is comprised of the following (this analysis is exclusive of non-admitted assets as the Change in Non-admitted Assets is reported separately from the Change in Net Deferred Income Taxes in the surplus section of the Annual Statement) (in millions):
12/31/2013 | 12/31/2012 | Change | ||||||||||
Total deferred tax assets |
$ | 12,770 | $ | 13,529 | $ | (759 | ) | |||||
Total deferred tax liabilities |
(1,644 | ) | (1,322 | ) | (322 | ) | ||||||
Net deferred tax assets / liabilities |
$ | 11,126 | $ | 12,207 | $ | (1,081 | ) | |||||
Statutory valuation allowance (“SVA”) adjustment |
(10 | ) | (8 | ) | (2 | ) | ||||||
Net deferred tax assets / liabilities after SVA |
$ | 11,116 | $ | 12,199 | $ | (1,083 | ) | |||||
Tax effect of unrealized gains/(losses) |
378 | |||||||||||
Change in net deferred income tax (charge)/benefit from sources other than unrealized capital gains (losses) |
$ | (705 | ) | |||||||||
|
The provision for federal and foreign income taxes incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference at December 31, 2013 are as follows (dollars in millions):
Description | Amount | Tax Effect |
Effective Tax Rate |
|||||||||
Provision computed at statutory rate |
$ | 2,464 | $ | 862 | 35.00 | % | ||||||
Dividends received deduction |
37 | 13 | 0.52 | |||||||||
Amortization of interest maintenance reserve |
(145 | ) | (51 | ) | (2.07 | ) | ||||||
Meal disallowance, spousal travel, non-deductible lobbying, fines & penalties |
4 | 1 | 0.06 | |||||||||
Prior year true-ups |
(410 | ) | (144 | ) | (5.82 | ) | ||||||
Non-admitted assets |
(83 | ) | (29 | ) | (1.17 | ) | ||||||
Other |
70 | 25 | 0.92 | |||||||||
Total |
$ | 1,937 | $ | 677 | 27.44 | % | ||||||
|
||||||||||||
Federal and foreign income tax incurred expense (benefit) |
$ | (28 | ) | (1.14 | )% | |||||||
Change in net deferred income tax charge (benefit) |
1,083 | 43.93 | ||||||||||
Tax effect of unrealized capital gain |
(378 | ) | (15.35 | ) | ||||||||
Total statutory income taxes |
$ | 677 | 27.44 | % | ||||||||
|
At December 31, 2013, the Company had net operating loss carry forwards expiring through the year 2027 (in millions):
Year Incurred | Operating Loss | Year of Expiration | ||||||
2001 |
$ | 155 | 2016 | |||||
2002 |
780 | 2017 | ||||||
2003 |
467 | 2018 | ||||||
2004 |
356 | 2019 | ||||||
2008 |
1,035 | 2023 | ||||||
2012 |
2,012 | 2027 | ||||||
Total |
$ | 4,805 | ||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-129 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
At December 31, 2013, the Company had no capital loss carry forwards.
At December 31, 2013, the Company had foreign tax credit carry forwards as follows (in millions):
Year Incurred | Foreign Tax Credit | Year of Expiration | ||||||
2005 |
$ | 6 | 2015 | |||||
2006 |
3 | 2016 | ||||||
2007 |
2 | 2017 | ||||||
2008 |
2 | 2018 | ||||||
2009 |
2 | 2019 | ||||||
2010 |
2 | 2020 | ||||||
2011 |
5 | 2021 | ||||||
2012 |
3 | 2022 | ||||||
Total |
$ | 25 | ||||||
|
At December 31, 2013, the Company had General Business Credit carry forwards as follows (in millions):
Year Incurred | General Business Credit | Year of Expiration | ||||||
2004 |
$ | 1 | 2024 | |||||
2005 |
2 | 2025 | ||||||
2006 |
5 | 2026 | ||||||
2007 |
7 | 2027 | ||||||
2008 |
5 | 2028 | ||||||
2009 |
2 | 2029 | ||||||
2011 |
1 | 2031 | ||||||
Total |
$ | 23 | ||||||
|
The Company did not incur federal income taxes expense for 2013 or preceding years that would be available for recoupment in the event of future net losses.
The Company does not have any protective tax deposits on deposit with the internal Revenue Service under IRC Section 6603.
Beginning in 1998, the Company has filed a consolidated federal income tax return with its includable affiliates (the “consolidating companies”). The consolidating companies participate in a tax-sharing agreement. Under the agreement, current federal income tax expense (benefit) is computed on a separate return basis and provides that members shall make payments or receive reimbursements to the extent that their income (loss) contributes to or reduces consolidated federal tax expense. The consolidating companies are reimbursed for net operating losses or other tax attributes they have generated when utilized in the consolidated return. Amounts receivable from / (payable to) the Company’s subsidiaries for federal income taxes were $6 million and $(3) million at December 31, 2013 and 2012, respectively.
1) TIAA-CREF Life Insurance Company
2) TIAA-CREF Asset Management LLC*
3) Dan Properties, Inc.
4) JV Georgia One, Inc.
5) JWL Properties, Inc.
6) ND Properties, Inc.
7) TCT Holdings, Inc.
8) Teachers Advisors, Inc.
9) Teachers Personal Investors Service, Inc.
10) T-Investment Properties Corp.
11) TIAA-CREF Tuition Financing, Inc.
12) TIAA-CREF Trust Company, FSB
13) 730 Texas Forest Holdings, Inc.
14) TIAA Global Markets, Inc.
15) T-C Sports Co., Inc.
16) TIAA Board of Overseers
17) TIAA Park Evanston, Inc.
18) Oleum Holding Company, Inc.
19) Covariance Capital Management, Inc.
20) Westchester Group Investment Management, Inc.
21) Westchester Group Investment Management Holding Company, Inc.
22) Westchester Group Asset Management, Inc.
B-130 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
23) Westchester Group Farm Management, Inc.
24) Westchester Group Real Estate, Inc.
25) GreenWood Resources, Inc.
* | TIAA-CREF Asset Management, Inc. converted from a corporation to an LLC effective December 31, 2013. |
The Company has no federal or foreign income tax loss contingencies as determined in accordance with SSAP No. 5R—Liabilities, Contingencies and Impairments of Assets, with the modifications provided in SSAP No. 101 and there is no reasonable possibility that the total liability will significantly increase within 12 months of the reporting date.
The IRS examination for tax years 2007, 2008, and 2009 federal income tax returns is currently in process.
Note 17 – pension plan and post-retirement benefits
The Company maintains a qualified, non-contributory defined contribution pension plan covering substantially all employees. All employee pension plan liabilities are fully funded through retirement annuity contracts. Contributions are made to each participant’s contract based on a percentage of salary, with the applicable percentage varying by attained age. All contributions are fully vested after three years of service. Forfeitures arising from terminations prior to vesting are used to reduce future employer contributions. The accompanying statements of operations include contributions to the pension plan of approximately $38 million, $36 million and $33 million for the years ended December 31, 2013, 2012 and 2011, respectively. This includes supplemental contributions made to company-owned annuity contracts under a non-qualified deferred compensation plan.
In addition to the pension plan, the Company provides certain other post-retirement life and health insurance benefits to eligible retired employees who meet prescribed age and service requirements. The status of this plan for retirees and eligible active employees is summarized below (in millions):
Post-retirement Benefits | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Change in benefit obligation: |
||||||||||||
Benefit obligation at beginning of year |
$ | 167 | $ | 155 | $ | 130 | ||||||
Service cost |
1 | 10 | 7 | |||||||||
Interest cost |
7 | 6 | 7 | |||||||||
Actuarial gain (loss) |
(34 | ) | 4 | 17 | ||||||||
Benefits paid |
(7 | ) | (8 | ) | (6 | ) | ||||||
Plan amendments |
22 | — | — | |||||||||
Benefit obligation at end of year |
$ | 156 | $ | 167 | $ | 155 | ||||||
|
||||||||||||
Change in plan assets |
||||||||||||
Employer contribution |
$ | 7 | $ | 8 | $ | 6 | ||||||
Benefits paid |
(7 | ) | (8 | ) | (6 | ) | ||||||
Fair value of plan assets at end of year |
$ | — | $ | — | $ | — | ||||||
|
||||||||||||
Funded status: |
||||||||||||
Unamortized prior service cost |
$ | — | $ | (1 | ) | $ | (1 | ) | ||||
Unrecognized net loss |
— | 41 | 37 | |||||||||
Accrued liabilities |
145 | 127 | 119 | |||||||||
Liabilities for postretirement benefits |
11 | — | — | |||||||||
Unfunded accumulated benefit obligation—vested employees |
$ | 156 | $ | 167 | $ | 155 | ||||||
|
||||||||||||
Accumulated benefit obligation—non-vested employees |
$ | — | $ | 23 | $ | 32 | ||||||
|
The Company allocates benefit expenses to certain subsidiaries based upon salaries. The cost of postretirement benefits reflected in the accompanying statements of operations was approximately $12 million, $8 million and $7 million for 2013, 2012 and 2011, respectively.
The net periodic postretirement benefit cost for the years ended December 31, includes the following components (in millions):
Post-retirement Benefits | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Components of net periodic benefit cost: |
||||||||||||
Service cost |
$ | 1 | $ | 10 | $ | 7 | ||||||
Interest cost |
7 | 6 | 7 | |||||||||
Amount of recognized gains and losses |
3 | 1 | — | |||||||||
Amount of prior service cost recognized |
14 | — | — | |||||||||
Total net periodic benefit cost |
$ | 25 | $ | 17 | $ | 14 | ||||||
|
Single Premium Immediate Annuities n Statement of Additional Information | B-131 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
The assumptions used at December 31 by the Company to calculate the benefit obligations as of that date and to determine the benefit cost in the year are as follows:
2013 | 2012 | 2011 | ||||||||||
Weighted-average assumptions used to determine net periodic benefit cost as of December 31, |
||||||||||||
Weighted-average discount rate |
4.00 | % | 4.50 | % | 5.25 | % | ||||||
Rate of compensation increase |
N/A | N/A | N/A | |||||||||
Weighted-average assumptions used to determine projected benefit obligations as of December 31, |
||||||||||||
Weighted-average discount rate |
4.75 | % | 4.00 | % | 4.50 | % | ||||||
Rate of compensation increase |
N/A | N/A | N/A |
For measurement purposes, an 8.50% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2014. The rate was assumed to decrease gradually to 6.57% for 2045 and remain at that level thereafter.
A measurement date of December 31, 2013 was used to determine the above.
The Company has multiple non-pension postretirement benefit plans. The health care plans are contributory, with participants’ contributions adjusted annually; the life insurance plans are noncontributory. Postretirement life insurance is offered only to those who retired prior to 2011. Company subsidies for the postretirement health care plans are offered to any who qualify for eligibility prior to 2015, after which newly qualifying retirees will pay the full cost of the health care plans. The accounting for health care plans anticipates future cost-sharing changes to the written plan consistent with the Company’s express intent to reflect general health care trend rates in the employee premiums. For postretirement medical, this is consistent with pre-65 trend rate assumptions of 8.50% for 2014 gradually scaling down to 6.57% in 2045. For post-65 medical care, this is consistent with a trend rate assumption of 8.00% in 2014 scaling down to 6.33% in 2045.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.
A one-percentage-point change in assumed health care cost trend rates would have the following effects (in millions):
Post-retirement Benefits | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Effect of a 1% increase in benefit costs: |
||||||||||||
Change in post-retirement benefit obligation |
$ | 19 | $ | 23 | $ | 19 | ||||||
Change in service cost and interest cost |
$ | 1 | $ | 3 | $ | 2 | ||||||
Effect of a 1% decrease in benefit costs: |
||||||||||||
Change in post-retirement benefit obligation |
$ | (16 | ) | $ | (19 | ) | $ | (16 | ) | |||
Change in service cost and interest cost |
$ | (1 | ) | $ | (2 | ) | $ | (2 | ) |
The Company also maintains a non-qualified deferred compensation plan for non-employee trustees and members of the TIAA Board of Overseers. The plan provides an award equal to 50% of the annual stipend that is invested annually in company-owned annuity contracts. Payout of accumulations is normally made in a lump sum following the trustees’ or member’s separation from the Board.
The Company previously provided an unfunded Supplemental Executive Retirement Plan (“SERP”) to certain select executives and any TIAA associate deemed eligible by the Board of Trustees. The Plan was curtailed on July 31, 2007.
The SERP provided an annual retirement benefit payable at normal retirement calculated as 3.0% of the participant’s 5-year average total compensation based on an average of the highest five of the last ten years multiplied by the number of years of service not in excess of 15 years.
The accumulated benefit obligation totaled $41 million and $48 million as of December 31, 2013 and 2012, respectively. The Company had accrued pension cost of $39 million and $41 million and had an additional minimum liability accrued of $0 and $6 million as of December 31, 2013 and 2012, respectively. The Company did not have any projected benefit obligation for non-vested employees for 2013 or 2012.
The plan obligations were determined based upon a discount rate of 3.92%.
The obligations of TIAA under the SERP are unfunded, unsecured promises to make future payments. As such, the plan has no assets. Contributions for a given period are equal to the benefit payments for that period. The expected rate of return on plan assets is not applicable.
B-132 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Future benefits expected to be paid by the SERP are as follows (in millions):
2014 |
$ | 4 | ||
2015 |
$ | 4 | ||
2016 |
$ | 4 | ||
2017 |
$ | 4 | ||
2018 |
$ | 3 | ||
Thereafter |
$ | 15 |
The Company does not have any regulatory contribution requirements for 2013.
Impact of Medicare Modernization Act on Postretirement Benefits
The Company expects to receive a 28% federal subsidy for plan prescription benefits arising from the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) signed into law in December of 2003. The Act includes the following two new features to Medicare Part D that could affect the measurement of the accumulated postretirement benefit obligation (“APBO”) and net periodic postretirement cost for the plan.
• | A federal subsidy (based on 28% of an individual beneficiary’s annual prescription drug costs between $250 and $5,000), which is not taxable, to sponsors of retiree health care benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D, and |
• | The opportunity for a retiree to obtain a prescription drug benefit under Medicare. |
For the year ended December 31, 2013, the effect of the Act was a $5 million reduction in the Company’s net postretirement benefit cost for the subsidy related to benefits attributed to former employees. The Act also effected the net postretirement benefit cost by decreasing the 2013 service cost by $0.6 million and decreased the 2013 interest cost by $1 million.
Estimated Future Benefit Payments
The following benefit payments are expected to be paid and received relating to the Act (in millions):
Gross Cash Flows (Before Medicare Part D Subsidy Receipts) |
||||
2014 |
$ | 7 | ||
2015 |
$ | 7 | ||
2016 |
$ | 8 | ||
2017 |
$ | 8 | ||
2018 |
$ | 9 | ||
Thereafter |
$ | 49 | ||
Medicare Part D Subsidy Receipts |
||||
2014 |
$ | 1 | ||
2015 |
$ | 1 | ||
2016 |
$ | 1 | ||
2017 |
$ | 1 | ||
2018 |
$ | 1 | ||
Thereafter |
$ | 5 |
Note 18 – policy and contract reserves
Policy and contract reserves are determined in accordance with standard valuation methods approved by the Department and are computed in accordance with standard actuarial methodology. The reserves are based on assumptions for interest, mortality and other risks insured.
For annuities and supplementary contracts, policy and contract reserves are calculated using Commissioner’s Annuity Reserve Valuation Method (“CARVM”) in accordance with New York State Regulation 151, Actuarial Guideline 43 for variable annuity products and Actuarial Guideline 33 for all other products.
The Company performed Asset Adequacy Analysis in order to test the adequacy of its reserves in light of the assets supporting such reserves, and determined that its reserves were sufficient to meet its obligations.
The Tabular Interest, Tabular Less Actual Reserve Released and Tabular Cost have all been determined by formulae as prescribed by the NAIC except for deferred annuities, for which tabular interest has been determined from the basic data.
In aggregate, the reserves established for all annuity and supplementary contracts utilize assumptions for interest at a weighted average rate of approximately 3.0%. Approximately 93% of annuity and supplementary contract reserves are based on the 1983 Table set back at least 9 years or the Annuity 2000 table set back at least 4 years.
Single Premium Immediate Annuities n Statement of Additional Information | B-133 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Withdrawal characteristics of annuity actuarial reserves and deposit-type contract funds for the years ended December 31, are as follows (in millions):
2013 | ||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Nonguaranteed |
Total | % of Total | ||||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||||||
At fair value |
$ | — | $ | — | $ | 21,975 | $ | 21,975 | 10.6 | % | ||||||||||
Total with adjustment or at fair value |
$ | — | $ | — | $ | 21,975 | $ | 21,975 | 10.6 | % | ||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
46,189 | 228 | — | 46,417 | 22.4 | % | ||||||||||||||
Not subject to discretionary withdrawal |
138,650 | — | — | 138,650 | 67.0 | % | ||||||||||||||
Total (gross) |
$ | 184,839 | $ | 228 | $ | 21,975 | $ | 207,042 | 100.0 | % | ||||||||||
|
||||||||||||||||||||
Reinsurance ceded |
— | — | — | — | ||||||||||||||||
Total (net) |
$ | 184,839 | $ | 228 | $ | 21,975 | $ | 207,042 | ||||||||||||
|
2012 | ||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Nonguaranteed |
Total | % of Total | ||||||||||||||||
Subject to discretionary withdrawal: |
||||||||||||||||||||
At fair value |
$ | — | $ | — | $ | 17,777 | $ | 17,777 | 9.0 | % | ||||||||||
Total with adjustment or at fair value |
$ | — | $ | — | $ | 17,777 | $ | 17,777 | 9.0 | % | ||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
43,152 | 7 | — | 43,159 | 21.9 | % | ||||||||||||||
Not subject to discretionary withdrawal |
135,846 | 106 | — | 135,952 | 69.1 | % | ||||||||||||||
Total (gross) |
$ | 178,998 | $ | 113 | $ | 17,777 | $ | 196,888 | 100.0 | % | ||||||||||
|
||||||||||||||||||||
Reinsurance ceded |
— | — | — | — | ||||||||||||||||
Total (net) |
$ | 178,998 | $ | 113 | $ | 17,777 | $ | 196,888 | ||||||||||||
|
Annuity reserves and deposit-type contract funds for the years ended December 31 are as follows (in millions):
2013 | 2012 | |||||||
General Account Annual Statement: |
||||||||
Total annuities (excluding supplementary contracts with life contingencies) |
$ | 180,517 | $ | 175,041 | ||||
Supplementary contracts with life contingencies |
3,469 | 3,192 | ||||||
Deposit-type contract funds |
853 | 765 | ||||||
Subtotal |
184,839 | 178,998 | ||||||
Separate Accounts Annual Statement: |
||||||||
Annuities |
22,029 | 17,750 | ||||||
Supplementary contracts with life contingencies |
167 | 135 | ||||||
Deposit-type contract funds |
7 | 5 | ||||||
Subtotal |
22,203 | 17,890 | ||||||
Total |
$ | 207,042 | $ | 196,888 | ||||
|
For Ordinary and Collective Life Insurance, reserves for all policies are calculated in accordance with New York State Insurance Regulation 147. Reserves for regular life insurance policies are computed by the Net Level Premium method for issues prior to January 1, 1990, and by the Commissioner’s Reserve Valuation Method for issues on and after such date. Annual renewable and five-year renewable term policies issued on or after January 1, 1994 use segmented reserves, where each segment is equal to the term period. The Cost of Living riders issued on and after January 1, 1994 also use segmented reserves, where each segment is equal to one year in length.
Reserves for the vast majority of permanent and term insurance policies use Commissioners’ Standard Ordinary Mortality Tables with rates ranging from 2.25% to 6.00%. Term conversion reserves are based on TIAA term conversion mortality experience and 4.00% interest.
Liabilities for incurred but not reported life insurance claims and disability waiver of premium claims are based on historical experience and set equal to a percentage of paid claims. Reserves for amounts not yet due for incurred but not reported disability waiver of premium claims are a percentage of the total Active Lives Disability Waiver of Premium Reserve.
B-134 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium beyond the date of death. Surrender values of $0.2 million in excess of the legally computed reserves were held as an additional reserve liability at December 31, 2013, and $0.2 million at December 31, 2012. As of December 31, 2013 and 2012, the Company had $530.2 million and $568.6 million, respectively, of insurance in force for which the gross premiums were less than the net premiums according to the standard of valuation set by the Department. Reserves to cover these insurance amounts totaled $2.4 million and $2.8 million at December 31, 2013 and 2012, respectively.
Note 19 – reinsurance
In 2005 the Company entered into reinsurance agreements with RGA Reinsurance Company. Two of the agreements were recaptured during 2007 and the remaining agreement was recaptured as of January 1, 2011.
At December 31, the financial impact related to these assumed coinsurance agreements were (in millions):
2011 | ||||
(Decrease) Increase in policy and contract reserves |
$ | (17 | ) | |
Aggregated assumed premiums |
$ | (204 | ) | |
Modified coinsurance reserves |
$ | — |
The major lines in the accompanying financial statements that were reduced by ceded reinsurance agreements at December 31 are as follows (in millions):
2013 | 2012 | 2011 | ||||||||||
Insurance and annuity premiums |
$ | 15 | $ | 14 | $ | 14 | ||||||
Policy and contract benefits |
$ | 51 | $ | 55 | $ | 59 | ||||||
Increase in policy and contract reserves |
$ | 25 | $ | 20 | $ | 36 | ||||||
Reserves for life and health insurance |
$ | 429 | $ | 454 | $ | 474 |
Note 20 – repurchase program
Repurchase Program
During 2011, the Company commenced a repurchase program to sell and repurchase securities for the purposes of providing additional liquidity. The Company’s policy requires a minimum of 95% of the fair value of securities transferred under repurchase agreements to be maintained as collateral.
As of December 31, 2013, the Company had repurchase agreements where the securities pledged and scheduled for repurchase had a carrying value and fair value of $471 million and $490 million, respectively. The securities pledged as collateral have a maturity of 17 years and an interest rate of 5.375%. The pledged securities are included in Bonds and the offsetting collateral liability is included in Other Liabilities in the accompanying Statutory—Basis Statements of Admitted Assets, Liabilities and Capital and Contingency Reserves.
The Company received cash collateral of $500 million, which is in excess of the $490 million fair value of the securities lent. The cash collateral was not reinvested in other securities as of December 31, 2013.
The Company’s source of cash that it uses to return the cash collateral is dependent upon the liquidity of the current market conditions. The repurchase agreements outstanding at December 31, 2013 matured and were fully settled during January 2014.
As of December 31, 2012, the Company had repurchase agreements where the securities pledged and scheduled for repurchase had a carrying value and fair value of $440 million and $494 million, respectively. The securities pledged as collateral had a maturity of 8 years and an interest rate of 3.13%. The pledged securities were included in Bonds and the offsetting collateral liability is included in Other Liabilities in the accompanying Statutory—Basis Statements of Admitted Assets, Liabilities and Capital and Contingency Reserves.
The Company received cash collateral of $500 million, which is in excess of the $494 million fair value of the securities lent. The cash collateral was not reinvested in other securities as of December 31, 2012.
Single Premium Immediate Annuities n Statement of Additional Information | B-135 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Note 21 – capital and contingency reserves and shareholders’ dividends restrictions
The portion of contingency reserves represented or reduced by each item below for the years ended December 31 are as follows (in millions):
2013 | 2012 | |||||||
Net unrealized capital gains |
$ | 1,193 | $ | 490 | ||||
Change in asset valuation reserve |
$ | (1,209 | ) | $ | (599 | ) | ||
Change in net deferred federal income tax |
$ | (1,083 | ) | $ | (1,119 | ) | ||
Change in non-admitted assets |
$ | 846 | $ | 1,305 | ||||
Change in surplus of separate account |
$ | (18 | ) | $ | 64 | |||
Prior year surplus |
$ | — | $ | (5 | ) | |||
Change in post-retirement benefit liability |
$ | (11 | ) | $ | — |
Capital: The Company has 2,500 shares of Class A common stock authorized, issued and outstanding. All of the outstanding common stock of the Company is held by the TIAA Board of Overseers, a not-for-profit corporation created for the purpose of holding the common stock of the Company. By charter, the Company operates without profit to its sole shareholder.
Surplus Notes: On December 16, 2009, the Company issued Surplus Notes (“Notes”) in an aggregate principal amount of $2 billion. The Notes bear interest at an annual rate of 6.850%, and have a maturity date of December 16, 2039. Proceeds from the issuance of the Notes were $1,997 million, net of issuance discount. The Notes were issued in a transaction pursuant to Rule 144A under the Securities Act of 1933, as amended, and the Notes are evidenced by one or more global notes deposited with a custodian for, and registered in the name of a nominee of, The Depository Trust Company. Interest on these Notes is scheduled to be paid semiannually on June 16 and December 16 of each year through the maturity date. During 2013, interest of $137 million was paid and since issuance $548 million has been paid.
No subsidiary or affiliate of the Company is an obligor or guarantor of the Notes, which are solely obligations of the Company.
The Notes are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims of the Company. Under New York Insurance Law, the Notes are not part of the legal liabilities of the Company. The Notes are not scheduled to repay any principal prior to maturity. Each payment of interest and principal may be made only with the prior approval of the Superintendent and only out of the Company’s surplus funds, which the Superintendent of the Department determines to be available for such payments under New York Insurance Law. In addition, provided that approval is granted by the Superintendent of the Department, the Notes may be redeemed at the option of the Company at any time at the “make-whole” redemption price equal to the greater of the principal amount of the Notes to be redeemed, or the sum of the present values of the remaining scheduled interest and principal payments, excluding accrued interest as of the redemption date, discounted to the redemption date on a semi-annual basis at the adjusted Treasury rate plus 40 basis points, plus in each case, accrued and unpaid interest payments on the Notes to be redeemed to the redemption date.
No affiliates of the Company hold any portion of the Notes.
Dividend Restrictions: Under the New York Insurance Law, the Company is permitted without prior insurance regulatory clearance to pay a stockholder dividend as long as the aggregated amount of all such dividends in any calendar year does not exceed the lesser of (i) 10% of its surplus to policyholders as of the immediately preceding calendar year and (ii) its net gain from operations for the immediately preceding calendar year (excluding realized investment gains). TIAA has not paid dividends to its shareholder and has no plans to do so in the current year.
B-136 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Note 22 – contingencies and guarantees
Subsidiary and Affiliate Guarantees:
At December 31, 2013, the Company was obligor under the following guarantees, indemnities and support obligations:
Nature and circumstances of guarantee and key attributes, including date and duration of agreement. |
Liability recognition (Include amount exception allowed under SSAP No. 5R.) |
Ultimate financial statement impact if action under the guarantee is required. |
Maximum potential amount of future payments (undiscounted) the guarantor could be required to make under the guarantee. If unable to develop an estimate, this should be specifically noted. |
Current status of payment or performance risk of guarantee. Also provide additional discussion as warranted. | ||||
Commitment to maintain TIAA-CREF Trust Company as a “Well Capitalized” institution for Prompt Corrective Action purposes. | Guarantee made to/or on behalf of a wholly-owned subsidiary and as such are excluded from recognition. | Investment in Subsidiary, Controlled, or Affiliated |
Since this obligation is not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. |
Currently the capital of TIAA-CREF Trust Company is adequate. | ||||
Financial support agreement with TIAA-CREF Life Insurance Company to have (i) capital and surplus of $250.0 million; (ii) the amount of capital and surplus necessary to maintain TIAA-CREF Life’s capital and surplus at a level not less than 150% of the NAIC RBC model; or (iii) such other amounts as necessary to maintain TIAA-CREF Life’s financial strength rating the same or better than the Company’s rating at all times. | Guarantee made to/or on behalf of a wholly-owned subsidiary and as such are excluded from recognition. | Investment in Subsidiary, Controlled, or Affiliated |
Since this obligation is not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. |
At December 31, 2013, the capital and surplus of TIAA- CREF Life Insurance Company was in excess of the minimum capital and surplus amount referenced, and its total adjusted capital was in excess of the referenced RBC-based amount calculated at December 31, 2013. |
The Company has agreed that it will cause TIAA-CREF Life to be sufficiently funded at all times in order to meet all its contractual obligations on a timely basis including, but not limited to, obligations to pay policy benefits and to provide policyholder services. This agreement is not an evidence of indebtedness or an obligation or liability of the Company and does not provide any creditor of TIAA-CREF Life with recourse to or against any of the assets of the Company.
The Company provides a $100.0 million unsecured 364-day revolving line of credit arrangement with TIAA-CREF Life. This line has an expiration date of July 14, 2014. As of December 31, 2013, $30.0 million of this facility was maintained on a committed basis for which TIAA-CREF Life paid a commitment fee of 9.0 basis points on the unused committed amount. During the period ending December 31, 2013, 85 draw-downs totaling $228.5 million were made under this line of credit arrangement of which none were outstanding as of December 31, 2013.
The Company also provides a $1.0 billion uncommitted line of credit to certain accounts of College Retirement Equities Fund (“CREF”) and certain TIAA-CREF Funds (“Funds”). Loans under this revolving credit facility are for a maximum of 60 days and are made solely at the discretion of the Company to fund shareholder redemption requests or other temporary or emergency needs of CREF and the Funds. It is the intent of the Company, CREF and the Funds to use this facility as a supplemental liquidity facility, which would only be used after CREF and the Funds have exhausted the availability of the current $1.5 billion committed credit facility maintained with a group of banks.
TIAA Global Markets, Inc. Dissolution: Through December 16, 2013, the Company conducted investing through TIAA Global Markets, Inc. (“TGM”), a direct wholly-owned subsidiary of the Company established in 2002 for the purpose of issuing debt investments guaranteed by the Company and investing the proceeds in permissible investments in compliance with the investment guidelines approved by the TGM Board of Directors and by the Company. Other than its investment portfolio, TGM had no significant assets. TGM was dissolved on December 16, 2013, and TGM’s investment portfolio was transferred to the Company. TGM was in a deficit position at the time of dissolution due to unfavorable declines in the market value of its investment portfolio. The carrying value of the Company’s investment in TGM at the time of dissolution and at December 31, 2012, was negative $0.1 billion. Upon dissolution of TGM, the Company recognized a capital loss of $0.1 billion due to the un-winding of the TGM equity common stock and the extinguishment of the line of credit to TGM, which was in excess of the TGM investment portfolio balance transferred to the Company.
Single Premium Immediate Annuities n Statement of Additional Information | B-137 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
Separate Account Guarantees: The Company provides mortality and expense guarantees to VA-1, for which it is compensated. The Company guarantees that, at death, the total death benefit payable from the fixed and variable accounts will be at least a return of total premiums paid less any previous withdrawals. The Company also guarantees that expense charges to VA-1 participants will never rise above the maximum amount stipulated in the contract.
The Company provides mortality, expense and liquidity guarantees to REA and is compensated for these guarantees. The Company guarantees that once REA participants begin receiving lifetime annuity income benefits, monthly payments will never be reduced as a result of adverse mortality experience. The Company also guarantees that expense charges to REA participants will never rise above the maximum amount stipulated in the contract. The Company provides REA with a liquidity guarantee to ensure it has funds available to meet participant transfer or cash withdrawal requests. If REA cannot fund participant requests, TIAA’s general account will fund them by purchasing accumulation units. Under this agreement, TIAA guarantees that participants will be able to redeem their accumulation units at the accumulation unit value next determined after the transfer or withdrawal request is received in good order.
Under the Liquidity Guarantee agreement with the REA, on December 24, 2008, the TIAA general account purchased $156 million of accumulation units (measured based on the cost of such units) issued by REA. In 2009, the TIAA general account further purchased $1,059 million of accumulation units. The Company made no additional purchases in 2011 or 2012. During 2013, the Company redeemed the remaining accumulation units for $325 million. As of December 31, 2013 there were no outstanding liquidity units.
The Company provides mortality and expense guarantees to VA-3 and is compensated for these guarantees. The Company guarantees that once VA-3 participants begin receiving lifetime annuity income benefits, monthly payments will never be reduced as a result of adverse mortality experience. The Company also guarantees that expense charges to VA-3 participants will never rise above the maximum amount stipulated in the contract.
Leases: The Company occupies leased office space in many locations under various long-term leases. At December 31, 2013, the future minimum lease payments are estimated as follows (in millions):
Year | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | |||||||||||||||||||||
Amount |
$ | 37 | $ | 33 | $ | 30 | $ | 22 | $ | 21 | $ | 15 | $ | 158 |
Leased space expense is allocated among the Company and affiliated entities. Rental expense charged to the Company for the years ended December 31, 2013, 2012 and 2011 was approximately $37 million, $37 million and $34 million, respectively.
Other contingencies:
In the ordinary conduct of certain of its investment activities, the Company provides standard indemnities covering a variety of potential exposures. For instance, the Company provides indemnifications in connection with site access agreements relating to due diligence review for real estate acquisitions, and the Company provides indemnification to underwriters in connection with the issuance of securities by or on behalf of the Company or its subsidiaries. It is the Company management’s opinion that the fair value of such indemnifications are negligible and do not materially affect the Company’s financial position, results of operations or liquidity.
Other contingent liabilities arising from litigation and other matters over and above amounts already provided for in the financial statements or disclosed elsewhere in these notes are not considered material in relation to the Company’s financial position or the results of its operations.
The Company receives and responds to subpoenas or other inquiries from state regulators, including state insurance commissioners; state attorneys general and other state governmental authorities; Federal regulators, including the SEC; Federal governmental authorities; and the Financial Industry Regulatory Authority (“FINRA”) seeking a broad range of information. The Company cooperates in these inquiries.
Death Claim Notification and Unclaimed Property Practices. Throughout the U.S. insurance industry, there have been multiple state actions addressing insurer practices regarding death claim notification and escheatment of unclaimed property as they pertain to life insurance, annuities and retained asset accounts.
On June 6, 2013, the Company reached a Global Resolution Agreement resolving any potential claims arising out of a multistate unclaimed property exam conducted by Texas, California, Massachusetts and 26 other states. The Company was notified that the Agreement became effective July 12, 2013.
On June 24, 2013, the Company participated in a multi-state settlement with insurance regulators that will result in the implementation of new business practices related to the payment of life insurance benefits. The Agreement became effective July 9, 2013. Forty-seven states, the District of Columbia, Guam and Puerto Rico have signed on to the Agreement. The settlement included a $6.0 million examination payment made by the Company for the costs incurred by the departments associated with the examination.
B-138 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
Note 23 – borrowed money
Effective March 2009, the Company was authorized to execute investment transactions under the Term Asset-Backed Securities Loan Facility (“TALF”) program. Under the TALF program, the Federal Reserve Bank of New York (“FRBNY”) would lend up to $200 billion on a non-recourse basis to holders of certain AAA-rated Asset Backed Securities (“ABS”) backed by newly and recently originated consumer and small business loans. The FRBNY lent an amount equal to the market value of the ABS less a haircut and were secured at all times by the ABS. Loan proceeds were disbursed to the borrower, contingent on receipt by the FRBNY custodian bank of the eligible collateral.
As of December 31, 2013, the Company had fully settled all such loans with the FRBNY.
Note 24 – subsequent events
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through April 14, 2014, the date the financial statements were available to be issued.
On April 1, 2014, the Company and Henderson Global Investors (“Henderson”), one of Europe’s largest investment managers, launched a new global real estate investment management company, TIAA Henderson Real Estate, Ltd (“THRE”). THRE will offer clients expanded investment opportunities in the global real estate market and as of April 1, 2014 manages $22.6 billion of real estate and real estate related assets.
The Company will hold a 60% interest and Henderson a 40% interest in THRE. In a related transaction, the Company will acquire Henderson’s North American real estate business which manages $2.6 billion of real estate assets and real estate related assets.
On April 14, 2014, the Company announced that it had entered into an agreement with Windy City Investments Inc., an entity managed and controlled by Madison Dearborn Partners LLC to acquire Nuveen Investments Inc. (“Nuveen”). The closing of this acquisition is subject to certain customary closing conditions including regulatory approvals and client consents and, if consummated, the Company will indirectly acquire all of the common stock of Nuveen. Nuveen and its affiliates provide investment management and related services to retail and institutional investors, and at December 31, 2013, had approximately $220.5 billion of assets under management. The pending acquisition of Nuveen and its affiliates supports the Company’s strategy of further diversifying and enhancing the breadth of its asset management platform and is expected to expand the products and services available to the Company’s customers.
The acquisition is expected to be completed and formally close before the end of 2014, and the aggregate purchase price, including the assumption of certain aspects of Nuveen’s outstanding debt, will be approximately $6.25 billion. In accordance with statutory accounting principles, the transaction is expected to be recorded as an admitted asset on the Statement of Admitted Assets, Liabilities and Capital and Contingency Reserves upon the closing of the acquisition.
Note 25 – securities with a recognized other-than-temporary impairment
The following table represents loan-backed and structured securities with an other-than-temporary impairment recognized in 2013 and is currently held by the Company at December 31, 2013 where the present value of cash flows expected to be collected is less than the amortized cost (in whole dollars).
CUSIP | Book/Adj. Carrying Value Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized Other-Than- Temporary Impairment |
Amortized Cost After Other- Than-Temporary Impairment |
Fair Value as of Impairment Date |
Date of Reported |
||||||||||||||||||
$ | 6,895,836 | $ | 6,701,467 | $ | (194,369) | $ | 6,701,467 | $ | 7,635,787 | 12/31/2013 | ||||||||||||||
7,609,285 | 7,398,072 | (211,213) | 7,398,072 | 8,367,009 | 12/31/2013 | |||||||||||||||||||
10,080,967 | 9,917,353 | (163,614) | 9,917,353 | 9,859,510 | 12/31/2013 | |||||||||||||||||||
448,251 | 421,270 | (26,981) | 421,270 | 485,842 | 12/31/2013 | |||||||||||||||||||
1,027,544 | 1,022,810 | (4,734) | 1,022,810 | 828,063 | 12/31/2013 | |||||||||||||||||||
1,936,860 | 1,710,611 | (226,249) | 1,710,611 | 1,777,063 | 12/31/2013 | |||||||||||||||||||
6,998,007 | 6,809,616 | (188,391) | 6,809,616 | 7,216,646 | 12/31/2013 | |||||||||||||||||||
287,281 | 209,552 | (77,729) | 209,552 | 168,112 | 12/31/2013 | |||||||||||||||||||
1,390,549 | 727,166 | (663,383) | 727,166 | 1,525,000 | 12/31/2013 | |||||||||||||||||||
958,372 | 891,776 | (66,596) | 891,776 | 850,000 | 12/31/2013 | |||||||||||||||||||
9,402,770 | 7,700,629 | (1,702,141) | 7,700,629 | 6,966,671 | 12/31/2013 | |||||||||||||||||||
1,418,734 | 1,379,445 | (39,289) | 1,379,445 | 3,312,500 | 12/31/2013 | |||||||||||||||||||
19,671,179 | 18,913,642 | (757,537) | 18,913,642 | 17,299,590 | 12/31/2013 | |||||||||||||||||||
984,472 | — | * | (984,472) | — | 2,309,992 | 12/31/2013 | ||||||||||||||||||
2,980,205 | 2,291,073 | (689,131) | 2,291,073 | 2,186,376 | 12/31/2013 | |||||||||||||||||||
4,146,557 | 3,460,451 | (686,107) | 3,460,451 | 3,770,349 | 12/31/2013 |
Single Premium Immediate Annuities n Statement of Additional Information | B-139 |
Notes to statutory–basis financial statements
Teachers Insurance and Annuity Association of America
CUSIP | Book/Adj. Carrying Value Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized Other-Than- Temporary Impairment |
Amortized Cost After Other- Than-Temporary Impairment |
Fair Value as of Impairment Date |
Date of Reported |
||||||||||||||||||
$ | 2,366,579 | $ | 2,353,514 | $ | (13,064) | $ | 2,353,514 | $ | 1,471,050 | 12/31/2013 | ||||||||||||||
20,546,353 | 20,265,314 | (281,039) | 20,265,314 | 16,952,048 | 12/31/2013 | |||||||||||||||||||
14,086,172 | 11,747,488 | (2,338,684) | 11,747,488 | 12,127,562 | 12/31/2013 | |||||||||||||||||||
1,685,091 | 1,162,578 | (522,513) | 1,162,578 | 3,068,264 | 12/31/2013 | |||||||||||||||||||
193,852 | — | * | (193,852) | — | 1,700,000 | 12/31/2013 | ||||||||||||||||||
3,107,768 | 2,994,954 | (112,815) | 2,994,954 | 2,598,280 | 12/31/2013 | |||||||||||||||||||
8,822,765 | 8,698,018 | (124,747) | 8,698,018 | 5,892,739 | 12/31/2013 | |||||||||||||||||||
3,770,134 | 2,558,663 | (1,211,471) | 2,558,663 | 5,176,500 | 12/31/2013 | |||||||||||||||||||
9,267,853 | 9,064,551 | (203,303) | 9,064,551 | 7,072,073 | 12/31/2013 | |||||||||||||||||||
1,130,426 | 479,041 | (651,385) | 479,041 | 2,197,129 | 12/31/2013 | |||||||||||||||||||
7,682,041 | 2,266,986 | (5,415,055) | 2,266,986 | 7,500,000 | 12/31/2013 | |||||||||||||||||||
9,167,737 | 8,166,173 | (1,001,564) | 8,166,173 | 7,664,071 | 12/31/2013 | |||||||||||||||||||
5,521,562 | 5,271,816 | (249,746) | 5,271,816 | 5,937,171 | 12/31/2013 | |||||||||||||||||||
9,940,585 | 2,645,555 | (7,295,030) | 2,645,555 | 8,211,680 | 12/31/2013 | |||||||||||||||||||
13,956 | 4,632 | (9,324) | 4,632 | 3,624,710 | 12/31/2013 | |||||||||||||||||||
10,009,376 | 9,295,421 | (713,955) | 9,295,421 | 6,024,893 | 12/31/2013 | |||||||||||||||||||
4,906,538 | 3,789,184 | (1,117,354) | 3,789,184 | 3,758,341 | 12/31/2013 | |||||||||||||||||||
9,959,593 | 9,767,501 | (192,092) | 9,767,501 | 9,270,723 | 12/31/2013 | |||||||||||||||||||
356,527 | — | 1 | (177,202) | 179,325 | 179,325 | 12/31/2013 | ||||||||||||||||||
21,694,258 | 21,499,044 | (195,214) | 21,499,044 | 23,373,779 | 12/31/2013 | |||||||||||||||||||
9,476,520 | 9,434,787 | (41,733) | 9,434,787 | 9,956,630 | 12/31/2013 | |||||||||||||||||||
10,964,189 | 10,886,087 | (78,102) | 10,886,087 | 12,076,605 | 12/31/2013 | |||||||||||||||||||
41,068 | 30,826 | (10,243) | 30,826 | 49,645 | 12/31/2013 | |||||||||||||||||||
7,292,162 | 4,595,260 | (2,696,902) | 4,595,260 | 5,052,000 | 9/30/2013 | |||||||||||||||||||
1,905,154 | 1,809,862 | (95,292) | 1,809,862 | 1,487,500 | 9/30/2013 | |||||||||||||||||||
10,007,266 | 9,445,816 | (561,450) | 9,445,816 | 7,495,280 | 9/30/2013 | |||||||||||||||||||
2,686,596 | 1,681,250 | (1,005,346) | 1,681,250 | 4,276,340 | 9/30/2013 | |||||||||||||||||||
531,578 | 154,147 | (377,431) | 154,147 | 1,575,000 | 9/30/2013 | |||||||||||||||||||
2,441,981 | 2,434,292 | (7,690) | 2,434,292 | 2,507,733 | 9/30/2013 | |||||||||||||||||||
158,508 | — | 1 | (4,171) | 154,336 | 154,336 | 9/30/2013 | ||||||||||||||||||
173,588 | — | 1 | (5,786) | 167,801 | 167,801 | 9/30/2013 | ||||||||||||||||||
8,162,830 | 7,119,457 | (1,043,373) | 7,119,457 | 8,277,516 | 9/30/2013 | |||||||||||||||||||
9,031,401 | 7,854,961 | (1,176,440) | 7,854,961 | 9,068,011 | 9/30/2013 | |||||||||||||||||||
1,798,322 | 208,811 | (1,589,510) | 208,811 | 1,015,233 | 9/30/2013 | |||||||||||||||||||
10,132,034 | 10,047,465 | (84,570) | 10,047,465 | 9,920,233 | 9/30/2013 | |||||||||||||||||||
334,427 | 327,427 | (7,001) | 327,427 | 2,170,419 | 9/30/2013 | |||||||||||||||||||
4,919,541 | 4,158,253 | (761,288) | 4,158,253 | 3,516,265 | 9/30/2013 | |||||||||||||||||||
26,457,668 | 26,269,505 | (188,163) | 26,269,505 | 25,238,820 | 9/30/2013 | |||||||||||||||||||
992,016 | 723,237 | (268,779) | 723,237 | 1,297,213 | 9/30/2013 | |||||||||||||||||||
530,531 | 467,558 | (62,973) | 467,558 | 496,745 | 9/30/2013 | |||||||||||||||||||
5,510,861 | 5,033,221 | (477,639) | 5,033,221 | 3,751,966 | 9/30/2013 | |||||||||||||||||||
20,683,735 | 20,576,851 | (106,885) | 20,576,851 | 16,214,242 | 9/30/2013 | |||||||||||||||||||
4,300,834 | — | 1 | (2,664,910) | 1,635,925 | 1,635,925 | 9/30/2013 | ||||||||||||||||||
2,925,719 | 2,907,145 | (18,573) | 2,907,145 | 1,898,817 | 9/30/2013 | |||||||||||||||||||
1,090,443 | 1,033,415 | (57,028) | 1,033,415 | 576,113 | 9/30/2013 | |||||||||||||||||||
14,621,280 | 14,401,400 | (219,880) | 14,401,400 | 12,426,693 | 9/30/2013 | |||||||||||||||||||
2,024,698 | 1,745,693 | (279,005) | 1,745,693 | 3,002,829 | 9/30/2013 | |||||||||||||||||||
17,336,987 | 13,291,015 | (4,045,972) | 13,291,015 | 18,532,306 | 9/30/2013 | |||||||||||||||||||
3,205,279 | 2,610,402 | (594,877) | 2,610,402 | 2,554,992 | 9/30/2013 | |||||||||||||||||||
218,606 | 193,852 | (24,754) | 193,852 | 1,700,000 | 9/30/2013 | |||||||||||||||||||
10,030,288 | 9,555,845 | (474,443) | 9,555,845 | 8,703,172 | 9/30/2013 | |||||||||||||||||||
14,618,001 | 7,606,769 | (7,011,233) | 7,606,769 | 8,091,816 | 9/30/2013 | |||||||||||||||||||
9,986,000 | 8,822,765 | (1,163,235) | 8,822,765 | 5,792,879 | 9/30/2013 | |||||||||||||||||||
3,663,459 | 1,130,426 | (2,533,033) | 1,130,426 | 2,711,065 | 9/30/2013 | |||||||||||||||||||
9,807,609 | 8,483,865 | (1,323,744) | 8,483,865 | 11,844,366 | 9/30/2013 |
B-140 | Statement of Additional Information n Single Premium Immediate Annuities |
continued |
CUSIP | Book/Adj. Carrying Value Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized Other-Than- Temporary Impairment |
Amortized Cost After Other- Than-Temporary Impairment |
Fair Value as of Impairment Date |
Date of Reported |
||||||||||||||||||
$ | 9,225,352 | $ | 9,180,917 | $ | (44,435) | $ | 9,180,917 | $ | 7,219,240 | 9/30/2013 | ||||||||||||||
19,938,617 | 17,045,219 | (2,893,397) | 17,045,219 | 18,865,848 | 9/30/2013 | |||||||||||||||||||
18,285,924 | 17,906,830 | (379,094) | 17,906,830 | 18,327,797 | 9/30/2013 | |||||||||||||||||||
11,097,119 | 10,742,150 | (354,969) | 10,742,150 | 12,652,642 | 9/30/2013 | |||||||||||||||||||
307,935 | — | * | (307,935) | — | 2,800,000 | 9/30/2013 | ||||||||||||||||||
2,661,673 | 1,702,351 | (959,322) | 1,702,351 | 2,443,186 | 9/30/2013 | |||||||||||||||||||
5,000,000 | 2,597,923 | (2,402,077) | 2,597,923 | 2,236,615 | 9/30/2013 | |||||||||||||||||||
8,568,784 | 7,216,192 | (1,352,591) | 7,216,192 | 9,007,582 | 9/30/2013 | |||||||||||||||||||
12,550,693 | 9,993,350 | (2,557,343) | 9,993,350 | 8,409,056 | 9/30/2013 | |||||||||||||||||||
276,688 | 82,625 | (194,063) | 82,625 | 3,271,876 | 9/30/2013 | |||||||||||||||||||
3,610,964 | 3,575,474 | (35,490) | 3,575,474 | 4,657,758 | 9/30/2013 | |||||||||||||||||||
7,356,381 | 7,136,365 | (220,015) | 7,136,365 | 7,396,918 | 9/30/2013 | |||||||||||||||||||
16,820,518 | 16,195,314 | (625,204) | 16,195,314 | 22,443,837 | 9/30/2013 | |||||||||||||||||||
312,658 | 300,241 | (12,417) | 300,241 | 294,309 | 9/30/2013 | |||||||||||||||||||
8,897,738 | 8,467,127 | (430,611) | 8,467,127 | 7,848,852 | 9/30/2013 | |||||||||||||||||||
14,673,599 | 13,892,146 | (781,453) | 13,892,146 | 18,451,470 | 9/30/2013 | |||||||||||||||||||
2,523,033 | 2,142,851 | (380,182) | 2,142,851 | 7,564,132 | 9/30/2013 | |||||||||||||||||||
18,162,970 | 18,146,642 | (16,327) | 18,146,642 | 23,987,794 | 9/30/2013 | |||||||||||||||||||
8,338,722 | 7,367,731 | (970,991) | 7,367,731 | 4,440,000 | 6/30/2013 | |||||||||||||||||||
649,840 | — | * | (649,840) | — | 959,100 | 6/30/2013 | ||||||||||||||||||
5,257,773 | 4,270,842 | (986,931) | 4,270,842 | 6,126,000 | 6/30/2013 | |||||||||||||||||||
4,279,850 | 1,905,154 | (2,374,696) | 1,905,154 | 1,650,000 | 6/30/2013 | |||||||||||||||||||
10,009,383 | 2,686,596 | (7,322,787) | 2,686,596 | 4,332,633 | 6/30/2013 | |||||||||||||||||||
19,735,899 | 19,695,690 | (40,209) | 19,695,690 | 18,424,000 | 6/30/2013 | |||||||||||||||||||
4,978,716 | 4,921,120 | (57,596) | 4,921,120 | 3,239,000 | 6/30/2013 | |||||||||||||||||||
1,929,292 | 1,703,760 | (225,532) | 1,703,760 | 5,600,000 | 6/30/2013 | |||||||||||||||||||
27,134,235 | 26,432,590 | (701,645) | 26,432,590 | 24,228,000 | 6/30/2013 | |||||||||||||||||||
3,310,697 | 2,619,255 | (691,442) | 2,619,255 | 1,471,050 | 6/30/2013 | |||||||||||||||||||
3,736,312 | 3,515,726 | (220,586) | 3,515,726 | 3,733,100 | 6/30/2013 | |||||||||||||||||||
2,968,143 | 2,909,408 | (58,735) | 2,909,408 | 1,883,271 | 6/30/2013 | |||||||||||||||||||
5,382,446 | 2,022,769 | (3,359,677) | 2,022,769 | 2,500,937 | 6/30/2013 | |||||||||||||||||||
4,540 | — | * | (4,540) | — | 1,848,200 | 6/30/2013 | ||||||||||||||||||
21,540,995 | 17,525,110 | (4,015,885) | 17,525,110 | 17,359,958 | 6/30/2013 | |||||||||||||||||||
13,216,618 | 12,258,524 | (958,094) | 12,258,524 | 11,671,107 | 6/30/2013 | |||||||||||||||||||
516,003 | 358,834 | (157,169) | 358,834 | 1,390,000 | 6/30/2013 | |||||||||||||||||||
228,900 | — | * | (228,900) | — | 8,719 | 6/30/2013 | ||||||||||||||||||
4,230,360 | 3,887,880 | (342,480) | 3,887,880 | 5,916,000 | 6/30/2013 | |||||||||||||||||||
16,936,966 | 11,021,702 | (5,915,264) | 11,021,702 | 6,393,263 | 6/30/2013 | |||||||||||||||||||
3,914,589 | 3,673,848 | (240,741) | 3,673,848 | 3,068,898 | 6/30/2013 | |||||||||||||||||||
321,419 | — | * | (321,419) | — | 1,094,800 | 6/30/2013 | ||||||||||||||||||
10,982,023 | 9,807,609 | (1,174,414) | 9,807,609 | 15,206,157 | 6/30/2013 | |||||||||||||||||||
11,864,981 | 8,618,401 | (3,246,580) | 8,618,401 | 8,518,284 | 6/30/2013 | |||||||||||||||||||
14,467,633 | 12,564,485 | (1,903,148) | 12,564,485 | 9,213,032 | 6/30/2013 | |||||||||||||||||||
36,502 | 15,336 | (21,166) | 15,336 | 1,754,460 | 6/30/2013 | |||||||||||||||||||
6,638,233 | 6,611,634 | (26,599) | 6,611,634 | 4,269,158 | 6/30/2013 | |||||||||||||||||||
5,899,533 | 2,796,314 | (3,103,219) | 2,796,314 | 7,303,544 | 6/30/2013 | |||||||||||||||||||
35,430 | 30,603 | (4,827) | 30,603 | 92,500 | 6/30/2013 | |||||||||||||||||||
1,064,570 | 1,011,868 | (52,702) | 1,011,868 | 1,188,955 | 6/30/2013 | |||||||||||||||||||
8,245,679 | 8,095,622 | (150,057) | 8,095,622 | 8,166,000 | 6/30/2013 | |||||||||||||||||||
20,970,912 | 20,280,723 | (690,189) | 20,280,723 | 15,758,109 | 6/30/2013 | |||||||||||||||||||
3,411,431 | 3,253,149 | (158,282) | 3,253,149 | 2,879,721 | 6/30/2013 | |||||||||||||||||||
575,285 | 546,957 | (28,328) | 546,957 | 503,783 | 6/30/2013 | |||||||||||||||||||
7,771,739 | 7,635,508 | (136,231) | 7,635,508 | 8,420,052 | 6/30/2013 | |||||||||||||||||||
2,393,410 | 2,387,914 | (5,496) | 2,387,914 | 1,706,940 | 6/30/2013 | |||||||||||||||||||
18,363,093 | 18,210,499 | (152,594) | 18,210,499 | 20,045,056 | 6/30/2013 |
Single Premium Immediate Annuities n Statement of Additional Information | B-141 |
Notes to statutory–basis financial statements
continued
Teachers Insurance and Annuity Association of America
CUSIP | Book/Adj. Carrying Value Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized Other-Than- Temporary Impairment |
Amortized Cost After Other- Than-Temporary Impairment |
Fair Value as of Impairment Date |
Date of Reported |
||||||||||||||||||
$ | 573,046 | $ | 510,381 | $ | (62,665) | $ | 510,381 | $ | 540,860 | 6/30/2013 | ||||||||||||||
736,902 | 675,430 | (61,472) | 675,430 | 683,579 | 6/30/2013 | |||||||||||||||||||
950,984 | 848,445 | (102,539) | 848,445 | 955,732 | 6/30/2013 | |||||||||||||||||||
2,841,082 | 2,796,722 | (44,360) | 2,796,722 | 2,510,884 | 6/30/2013 | |||||||||||||||||||
2,417,982 | 2,132,069 | (285,913) | 2,132,069 | 1,676,888 | 6/30/2013 | |||||||||||||||||||
2,463,835 | — | 1 | (1,483,450) | 980,385 | 980,385 | 6/30/2013 | ||||||||||||||||||
171,227 | — | 1 | (12,719) | 158,508 | 158,508 | 6/30/2013 | ||||||||||||||||||
248,202 | — | 1 | (74,614) | 173,588 | 173,588 | 6/30/2013 | ||||||||||||||||||
4,226,864 | — | 1 | (207,393) | 4,019,471 | 4,019,471 | 6/30/2013 | ||||||||||||||||||
9,287,200 | — | 1 | (69,410) | 9,217,790 | 9,217,790 | 6/30/2013 | ||||||||||||||||||
7,078,572 | — | 1 | (326,208) | 6,752,364 | 6,752,364 | 6/30/2013 | ||||||||||||||||||
3,183,523 | 2,998,686 | (184,837) | 2,998,686 | 2,868,540 | 3/31/2013 | |||||||||||||||||||
1,024,734 | 1,002,456 | (22,278) | 1,002,456 | 924,795 | 3/31/2013 | |||||||||||||||||||
37,429,141 | 36,760,621 | (668,520) | 36,760,621 | 39,159,515 | 3/31/2013 | |||||||||||||||||||
12,198,658 | 12,137,478 | (61,180) | 12,137,478 | 11,610,349 | 3/31/2013 | |||||||||||||||||||
20,577,578 | 20,568,937 | (8,641) | 20,568,937 | 21,240,119 | 3/31/2013 | |||||||||||||||||||
23,069,095 | 22,995,519 | (73,576) | 22,995,519 | 24,492,987 | 3/31/2013 | |||||||||||||||||||
12,605,005 | 12,496,749 | (108,256) | 12,496,749 | 13,358,910 | 3/31/2013 | |||||||||||||||||||
43,585,337 | 43,451,715 | (133,622) | 43,451,715 | 45,324,094 | 3/31/2013 | |||||||||||||||||||
25,561,655 | 25,554,521 | (7,134) | 25,554,521 | 26,395,439 | 3/31/2013 | |||||||||||||||||||
12,666,734 | 12,639,580 | (27,155) | 12,639,580 | 13,365,785 | 3/31/2013 | |||||||||||||||||||
44,605,589 | 44,150,555 | (455,034) | 44,150,555 | 45,352,600 | 3/31/2013 | |||||||||||||||||||
22,479,811 | 22,467,786 | (12,024) | 22,467,786 | 24,145,795 | 3/31/2013 | |||||||||||||||||||
12,563,787 | 12,550,881 | (12,906) | 12,550,881 | 13,187,414 | 3/31/2013 | |||||||||||||||||||
9,464,338 | 9,087,515 | (376,823) | 9,087,515 | 10,081,814 | 3/31/2013 | |||||||||||||||||||
14,248,702 | 12,352,398 | (1,896,303) | 12,352,398 | 8,400,703 | 3/31/2013 | |||||||||||||||||||
7,529,824 | 6,825,422 | (704,402) | 6,825,422 | 7,509,767 | 3/31/2013 | |||||||||||||||||||
1,219,613 | 1,094,237 | (125,376) | 1,094,237 | 1,408,176 | 3/31/2013 | |||||||||||||||||||
8,432,734 | 8,265,872 | (166,862) | 8,265,872 | 7,678,830 | 3/31/2013 | |||||||||||||||||||
10,855,234 | 10,699,057 | (156,178) | 10,699,057 | 10,322,495 | 3/31/2013 | |||||||||||||||||||
3,485,363 | 3,458,080 | (27,283) | 3,458,080 | 3,148,250 | 3/31/2013 | |||||||||||||||||||
588,765 | 582,860 | (5,905) | 582,860 | 517,380 | 3/31/2013 | |||||||||||||||||||
3,332,570 | 3,221,758 | (110,812) | 3,221,758 | 3,178,621 | 3/31/2013 | |||||||||||||||||||
1,128,540 | —* | (1,128,540) | — | 489,866 | 3/31/2013 | |||||||||||||||||||
374,704 | 274,841 | (99,863) | 274,841 | 388,193 | 3/31/2013 | |||||||||||||||||||
2,974,732 | 2,886,946 | (87,786) | 2,886,946 | 1,859,391 | 3/31/2013 | |||||||||||||||||||
4,203,000 | 3,310,697 | (892,303) | 3,310,697 | 2,521,800 | 3/31/2013 | |||||||||||||||||||
7,000,000 | 3,736,312 | (3,263,688) | 3,736,312 | 3,187,144 | 3/31/2013 | |||||||||||||||||||
327,954 | —* | (327,954) | — | 1,876,540 | 3/31/2013 | |||||||||||||||||||
3,486,452 | 3,003,093 | (483,359) | 3,003,093 | 3,037,534 | 3/31/2013 | |||||||||||||||||||
2,445,219 | 2,385,174 | (60,045) | 2,385,174 | 1,017,302 | 3/31/2013 | |||||||||||||||||||
22,058,493 | 21,677,018 | (381,475) | 21,677,018 | 17,624,712 | 3/31/2013 | |||||||||||||||||||
32,377,133 | 30,951,060 | (1,426,073) | 30,951,060 | 18,437,500 | 3/31/2013 | |||||||||||||||||||
3,811,004 | 3,588,951 | (222,053) | 3,588,951 | 2,036,705 | 3/31/2013 | |||||||||||||||||||
10,118,627 | 10,051,716 | (66,911) | 10,051,716 | 7,629,795 | 3/31/2013 | |||||||||||||||||||
2,743,340 | 2,618,721 | (124,620) | 2,618,721 | 2,083,373 | 3/31/2013 | |||||||||||||||||||
218,575 | 4,540 | (214,035) | 4,540 | 1,866,496 | 3/31/2013 | |||||||||||||||||||
13,857,246 | 13,833,600 | (23,647) | 13,833,600 | 9,397,198 | 3/31/2013 | |||||||||||||||||||
4,737,810 | 3,926,762 | (811,048) | 3,926,762 | 2,863,727 | 3/31/2013 | |||||||||||||||||||
16,739,244 | 16,493,763 | (245,482) | 16,493,763 | 16,629,875 | 3/31/2013 | |||||||||||||||||||
3,427,212 | 3,272,309 | (154,903) | 3,272,309 | 4,668,899 | 3/31/2013 | |||||||||||||||||||
1,633,127 | 1,529,638 | (103,489) | 1,529,638 | 2,464,983 | 3/31/2013 | |||||||||||||||||||
6,956,803 | 4,425,984 | (2,530,819) | 4,425,984 | 2,283,573 | 3/31/2013 | |||||||||||||||||||
5,710,584 | 5,503,164 | (207,420) | 5,503,164 | 6,100,000 | 3/31/2013 | |||||||||||||||||||
14,972,731 | 14,480,570 | (492,161) | 14,480,570 | 11,927,926 | 3/31/2013 |
B-142 | Statement of Additional Information n Single Premium Immediate Annuities |
concluded |
CUSIP | Book/Adj. Carrying Value Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized Other-Than- Temporary Impairment |
Amortized Cost After Other- Than-Temporary Impairment |
Fair Value as of Impairment Date |
Date of Reported |
||||||||||||||||||
$ | 19,817,680 | $ | 17,360,507 | $ | (2,457,173) | $ | 17,360,507 | $ | 17,537,137 | 3/31/2013 | ||||||||||||||
1,437,174 | 1,057,464 | (379,710) | 1,057,464 | 1,367,634 | 3/31/2013 | |||||||||||||||||||
206,924 | 136,752 | (70,172) | 136,752 | 600,000 | 3/31/2013 | |||||||||||||||||||
9,319,682 | 9,250,087 | (69,595) | 9,250,087 | 6,851,698 | 3/31/2013 | |||||||||||||||||||
4,077,562 | 166,319 | (3,911,243) | 166,319 | 1,596,701 | 3/31/2013 | |||||||||||||||||||
20,346,714 | 20,013,853 | (332,862) | 20,013,853 | 17,281,096 | 3/31/2013 | |||||||||||||||||||
14,890,639 | 14,459,298 | (431,341) | 14,459,298 | 8,662,218 | 3/31/2013 | |||||||||||||||||||
2,607,686 | 2,421,076 | (186,611) | 2,421,076 | 1,433,028 | 3/31/2013 | |||||||||||||||||||
399,052 | 355,049 | (44,003) | 355,049 | 2,081,937 | 3/31/2013 | |||||||||||||||||||
4,154,166 | — | 1 | (203,826) | 3,950,340 | 3,950,340 | 3/31/2013 | ||||||||||||||||||
282,971 | — | 1 | (34,768) | 248,202 | 248,202 | 3/31/2013 | ||||||||||||||||||
600,049 | — | 1 | (428,822) | 171,227 | 171,227 | 3/31/2013 | ||||||||||||||||||
7,197,643 | — | 1 | (119,072) | 7,078,572 | 7,078,572 | 3/31/2013 | ||||||||||||||||||
3,159,042 | — | 1 | (137,052) | 3,021,990 | 3,021,990 | 3/31/2013 | ||||||||||||||||||
Total |
$ | (144,638,490) | ||||||||||||||||||||||
|
1 | Impairments based on Fair Value |
* | Securities identified as having a net present value of $0 |
Single Premium Immediate Annuities n Statement of Additional Information | B-143 |
730 Third Avenue |
Part C—OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) | Financial statements. | |||
Part A: None | ||||
Part B: Includes all required financial statements of the Separate Account and TIAA-CREF Life Insurance Company and Teachers Insurance and Annuity Association of America. | ||||
(b) | Exhibits: | |||
(1) | Resolutions of the Board of Directors of TIAA-CREF Life establishing the Registrant (1) | |||
(2) | None | |||
(3) | (A) | Distribution Agreement by and among TIAA-CREF Life, TIAA-CREF Life on behalf of the Registrant, and Teachers Personal Investors Services, Inc. (TPIS) (2) | ||
(B) | Selling Agreement between TPIS and TIAA-CREF Individual and Institutional Services, Inc. and Amendment thereto (1) | |||
(C) | Principal Underwriter Distribution Agreement for the TIAA-CREF Life Insurance Company Unit Investment Trust Separate Accounts. (12) | |||
(D) | Cash Disbursement and Reimbursement Agreement for the TIAA-CREF Life Insurance Company Unit Investment Trust Separate Accounts. (12) | |||
(4) | Forms of TIAA-CREF Life Single Premium Immediate Annuity (SPIA) Contracts | |||
(A) | One-Life Immediate Annuity contract (5) | |||
(B) | Two-Life Immediate Annuity contract (5) | |||
(C) | Fixed Period Immediate Annuity contract (5) | |||
(5) | Form of Application for the SPIA Contracts (5) | |||
(6) | (A) | Charter of TIAA-CREF Life (2) | ||
(B) | Bylaws of TIAA-CREF Life (2) | |||
(7) | None | |||
(8) | (A) | Participation/Distribution Agreement with TIAA-CREF Life Funds (2) | ||
(B) | Amendment to Participation/Distribution Agreement among TIAA-CREF Life Insurance Company, TIAA-CREF Life Funds, and Teachers Personal Investors Services, Inc., dated as of September 15, 2005 (7) | |||
(C) | Form of Shareholder Information Agreement between Teachers Personal Investors Services, Inc. and TIAA-CREF Life insurance Company (8) | |||
(D) | Investment Accounting Agreement by and between State Street Bank and Trust Company and Teachers Insurance and Annuity Association of America and TIAA-CREF Life Insurance Company on behalf of the Separate Account. (9) | |||
(E) | Investment Advisory Agreement between TIAA-CREF Life Funds and Teachers Advisors, Inc. (10) | |||
(F) | Administrative Services Agreement between TIAA-CREF Funds and Teachers Advisors, Inc. (10) |
C-1
(G) | Domestic Custody Agreement by and between JPMorgan Chase Bank, N.A. and TIAA-CREF Life Insurance Company on behalf of the Separate Account. (9) | |||
(H) | Participation Agreement among TIAA-CREF Life Funds, Teachers Personal Investors Services, Inc., Teachers Advisors, Inc. and TIAA-CREF Life Insurance Company. (13) | |||
(9) | Legality Opinion and Consent of Meredith Kornreich, Esquire * | |||
(10) | (A) | Consents of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm * | ||
(11) | None | |||
(12) | None | |||
(13) | (A) | Schedule of Computation of Performance Information (6) | ||
(B) | Powers of Attorney (14) | |||
(14) | Financial Data Schedule—not required | |||
* |
Filed herewith. |
1 | Previously filed as part of the initial filing of the Registration Statement on Form N-4 for the Personal Annuity Select variable annuity contracts, dated August 18, 1998 (File No. 333-61761). | |
2 | Previously filed as part of the Pre-Effective Amendments Nos. 1 and 2 to the Registration Statement on Form N-4 for the Personal Annuity Select variable annuity contracts, dated December 7, 1998 and December 22, 1998, respectively (File No. 333-61761). | |
3 | Previously filed as part of the initial filing of the Registration Statement on Form N-4 for the Single Premium Immediate Annuity Contracts, dated September 22, 2000 (File No. 333-46414). | |
4 | Previously filed as part of the Pre-Effective Amendment No. 2 to the Registration Statement on Form N-4 for the Single Premium Immediate Annuity Contracts, on April 30, 2001 (File No. 333-46414). | |
5 | Previously filed as part of the Post-Effective Amendment No. 2 to the Registration Statement on Form N-4 for the Single Premium Immediate Annuity Contracts, on October 25, 2002 (File No. 333-46414). | |
6 | Previously filed as part of the Post-Effective Amendment No. 4 to the Registration Statement on Form N-4 for the Single Premium Immediate Annuity Contracts, on April 30, 2004 (File No. 333-46414). | |
7 | Previously filed as part of the Post-Effective Amendment No. 12 to the Registration Statement on Form N-4 for the Personal Annuity Select variable annuity contracts, on May 1, 2006 (File No. 333-61761). | |
8 | Previously filed as part of the Post-Effective Amendment No. 20 to the Registration Statement on Form N-4 for the Single Premium Immediate Annuity Contracts on May 1, 2007 (File No. 333-46414). | |
9 | Previously filed as part of the Post-Effective Amendment No. 25 to the Registration Statement on Form N-4 for the Single Premium Immediate Annuity Contracts on May 1, 2008 (File No. 333-46414). | |
10 | Incorporated by reference to Post-Effective Amendment No. 29 to the Registration Statement on Form N-6, filed on May 1, 2010 (File No 333-46414). | |
11 | Incorporated by reference to the Registration Statement on Form N-6, filed on January 31, 2012 (File Nos 333-179272 and 811-22659). | |
12 | Incorporated by reference to Post-Effective Amendment No. 5 to the Registration Statement on Form N-4, filed on April 19, 2012 (File Nos 333-145064 and 811-08963). | |
13 | Incorporated by reference to the Post-Effective Amendment No. 8 to the Registration Statement on Form N-4, filed on February 28, 2014 (File Nos 333-145064 and 811-08963). | |
14 |
Incorporated by reference to the Registration Statement on Form N-6, filed on April 24, 2013 (File Nos 333-179272 and 811-22659). |
C-2
Item 25. Directors and Officers of the Depositor
Name and Principal Business Address* |
Position and Offices with Depositor |
|||
Director, Chairman | ||||
Kathie Andrade |
Director | |||
Elizabeth D. Black |
Director | |||
Matthew Halperin |
Director | |||
Nancy Heller |
Director | |||
Eric T. Jones |
Director | |||
Matthew Kurzweil |
Director | |||
Russell Noles |
Director | |||
Ronald R. Pressman |
Director | |||
Martin Snow |
Director | |||
Elizabeth Debenedictis |
Vice President, Third Party Insurance Wholesaling | |||
Linda Dougherty |
Vice President & Chief Financial Officer | |||
Margarita Echevarria |
Chief Compliance Officer | |||
Carol Fracasso |
Vice President, Operations | |||
Jorge Gutierrez |
Vice President, Treasurer | |||
Meredith Kornreich |
Vice President & General Counsel | |||
Richard Biegen |
Chief Compliance Officer of the Separate Account | |||
Marjorie Pierre-Merritt |
Vice President & Assistant Corporate Secretary | |||
Jeremy Ragsdale |
Vice President , Product Management |
* | The principal business address for each officer and director is 730 Third Avenue, New York, New York 10017-3206 |
C-3
Item 26. Persons Controlled by or under Common Control with the Depositor or Registrant
The following chart indicates subsidiaries of Teachers Insurance and Annuity Association of America. These subsidiaries are included in the consolidated financial statements of Teachers Insurance and Annuity Association of America.
All Teachers Insurance and Annuity Association of America subsidiary companies are Delaware corporations, except as indicated.
C-14
Item 27. Number of Contractowners
As of February 28, 2014, there were 443 owners of Contracts of the class presently offered by this Registration Statement.
Item 28. Indemnification
The TIAA-CREF Life bylaws provide that TIAA-CREF Life will indemnify, in the manner and to the fullest extent permitted by law, each person made or threatened to be made a party to any action, suit or proceeding, whether or not by or in the right of TIAA-CREF Life, and whether civil, criminal, administrative, investigative or otherwise, by reason of the fact that he or she or his or her testator or intestate is or was a director, officer or employee of TIAA-CREF Life, or is or was serving at the request of TIAA-CREF Life as director, officer or employee of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, if such director, officer or employee acted, in good faith, for a purpose which he reasonably believed to be in, or in the case of service for any other corporation or any partnership, joint venture trust, employee benefit plan or other enterprise, not opposed to, the best interests of TIAA-CREF Life and in criminal actions or proceedings, in addition, had no reasonable cause to believe his or her conduct was unlawful. To the fullest extent permitted by law such indemnification shall include judgments, fines, amounts paid in settlement, and reasonable expenses, including attorneys’ fees. No payment of indemnification, advance or allowance under the foregoing provisions shall be made unless a notice shall have been filed with the Superintendent of Insurance of the State of New York not less than thirty days prior to such payment specifying the persons to be paid, the amounts to be paid, the manner in which payment is authorized and the nature and status, at the time of such notice, of the litigation or threatened litigation.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to officers and directors of the Depositor, pursuant to the foregoing provision or otherwise, the Depositor has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in that Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Depositor of expenses incurred or paid by a director or officer in connection with the successful defense of any action, suit or proceeding) is asserted by a director or officer in connection with the securities being registered, the Depositor will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in that Act and will be governed by the final adjudication of such issue.
Item 29. Principal Underwriter
(a) TIAA-CREF Institutional and Individual Services, LLC (“TC Services”) acts as principal underwriter of the contracts as defined in the Investment Company Act of 1940, as amended. TC Services is also principal underwriter for TIAA-CREF Mutual Funds, TIAA-CREF Institutional Mutual Funds, TIAA-CREF Life Funds, and variable annuity issued by TIAA-CREF Life Separate Account VA-1 and TIAA Separate Account VA-1.
(b) Management
Name and Principal Business Address* |
Positions and Offices with Underwriter |
|||
Kathie J. Andrade |
President and Chief Executive Officer | |||
Stephen D. Collier |
Senior Vice President, Head of Tax | |||
William C. Bair |
Vice President and Chief Financial Officer | |||
Yves P. Denize |
Vice President and Chief Legal Officer | |||
Linda Dougherty |
Vice President and Controller | |||
Peter Kennedy |
Vice President and Chief Operating Officer | |||
Pamela Lewis Marlborough |
Vice President and Assistant Secretary | |||
Raymond Bellucci |
Vice President | |||
Kevin C. Brown |
Vice President | |||
Douglas Chittenden |
Vice President | |||
William Griesser |
Vice President | |||
Christopher J. Weyrauch |
Senior Managing Director | |||
Catherine McCabe |
Managing Director | |||
Peter Case |
Director of Operations | |||
Patricia Adams |
Assistant Director, Operations | |||
Samuel Turvey |
Chief Compliance Officer | |||
Jorge Gutierrez |
Treasurer | |||
Jennifer Sisom |
Assistant Treasurer | |||
Marjorie Pierre-Merritt |
Secretary | |||
Janet Acosta |
Assistant Secretary | |||
Henry W. Atkinson |
Assistant Secretary | |||
Nicholas Cifelli |
Assistant Secretary | |||
Gail Clinton |
Assistant Secretary | |||
Jamin R. Jenkins |
Assistant Secretary | |||
Ann Medeiros |
Assistant Secretary |
C-15
* | The address of each Director and Officer is c/o TIAA-CREF Institutional and Individual Services, LLC, 730 Third Avenue, New York, NY 10017-3206 |
C-16
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated there under are maintained at the Registrant’s home office, 730 Third Avenue, New York, New York 10017, and at other offices of the Registrant located at 8500 Andrew Carnegie Boulevard, Charlotte, North Carolina 28262. In addition, certain duplicated records are maintained at Iron Mountain 22 Kimberly Road East Brunswick, NJ 08816, Citistorage, 20 North 12th Street, Brooklyn, NY 11211, File Vault, 839 Exchange Street, Charlotte, NC 28208, State Street Bank and Trust Company, 801 Pennsylvania, Kansas City, MO 64105 and JPMorgan Chase Bank, 4 Chase Metrotech Center Brooklyn, NY 11245.
Item 31. Management Services
Not applicable.
Item 31. Management Services Undertakings
(a) The Registrant undertakes to file a post-effective amendment to this Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted.
(b) The Registrant undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information.
(c) The Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under Form N-4 promptly upon written or oral request.
(d) TIAA-CREF Life represents that the fees and charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by TIAA-CREF Life.
C-17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, TIAA Life Separate Account VA-1 certifies that it meets the requirements of Securities Act of 1933 Rule 485(b) for effectiveness of this registration statement and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of New York, and State of New York on the 18th day of April, 2014.
TIAA-CREF LIFE SEPARATE ACCOUNT VA-1 | ||
By: |
TIAA-CREF Life Insurance Company (On behalf of the Registrant and itself) | |
By: |
/s/ * | |
David M. Anderson | ||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on April 18, 2014 in the capacities and on the dates indicated.
Signature |
Title |
|||||
* |
President and Chief Executive Officer | |||||
David M. Anderson | ||||||
* |
Vice President and Chief Financial Officer | |||||
Linda S. Dougherty | (Principal Financial and Accounting Officer) | |||||
* |
Director, Chairman | |||||
David M. Anderson | ||||||
* |
Director | |||||
Kathie Andrade | ||||||
* |
Director | |||||
Elizabeth D. Black | ||||||
* |
Director | |||||
Matthew Halperin | ||||||
* |
Director | |||||
Nancy Heller | ||||||
* |
Director | |||||
Eric T. Jones | ||||||
* |
Director | |||||
Matthew Kurzweil | ||||||
* |
Director | |||||
Russell Noles | ||||||
* |
Director | |||||
Ronaold R. Pressman | ||||||
* |
Director | |||||
Martin Snow |
* | Signed by Kenneth W. Reitz, Esq. as attorney-in-fact pursuant to a Power of Attorney effective: April 19, 2013 |
/S/ KENNETH W. REITZ |
Kenneth W. Reitz, Esq. |
Attorney-in-fact |
C-18
(9) | Legality Opinion and Consent of Meredith Kornreich, Esquire |
(10) | (A) Consents of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm |
C- 19
This ‘485BPOS’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/1/19 | ||||
11/1/15 | ||||
4/30/15 | ||||
12/31/14 | ||||
7/14/14 | ||||
Effective on: | 5/1/14 | 485BPOS, 497 | ||
Filed on: | 4/18/14 | |||
4/17/14 | ||||
4/14/14 | ||||
4/7/14 | ||||
4/1/14 | ||||
2/28/14 | 485APOS | |||
12/31/13 | 24F-2NT, NSAR-U | |||
12/16/13 | ||||
12/15/13 | ||||
12/9/13 | ||||
11/26/13 | ||||
11/20/13 | ||||
11/13/13 | ||||
11/1/13 | 497 | |||
8/15/13 | ||||
7/12/13 | ||||
7/9/13 | ||||
6/24/13 | ||||
6/6/13 | ||||
5/1/13 | 485BPOS | |||
4/29/13 | ||||
4/24/13 | 485BPOS | |||
4/19/13 | ||||
2/18/13 | ||||
1/1/13 | ||||
12/31/12 | 24F-2NT, NSAR-U | |||
11/1/12 | ||||
8/3/12 | ||||
7/10/12 | ||||
6/27/12 | ||||
5/21/12 | ||||
5/14/12 | ||||
5/9/12 | ||||
5/7/12 | ||||
5/1/12 | 485BPOS | |||
4/19/12 | ||||
3/19/12 | ||||
2/15/12 | ||||
1/31/12 | ||||
1/1/12 | ||||
12/31/11 | 24F-2NT, NSAR-U | |||
1/1/11 | ||||
12/31/10 | 24F-2NT, NSAR-U | |||
5/1/10 | 485BPOS | |||
3/31/10 | ||||
12/16/09 | ||||
10/23/09 | ||||
1/1/09 | ||||
12/24/08 | ||||
7/23/08 | ||||
5/1/08 | 485BPOS | |||
1/2/08 | ||||
11/1/07 | ||||
7/31/07 | ||||
5/1/07 | 485BPOS | |||
9/29/06 | ||||
5/17/06 | ||||
5/1/06 | 485BPOS | |||
9/15/05 | ||||
4/30/04 | 485BPOS | |||
1/1/03 | ||||
10/25/02 | 485BPOS | |||
5/23/01 | ||||
4/30/01 | N-4/A | |||
9/22/00 | N-4 | |||
12/22/98 | N-4/A | |||
12/7/98 | ||||
8/18/98 | N-4, N-8A | |||
8/13/98 | ||||
7/27/98 | ||||
5/1/98 | ||||
4/1/98 | ||||
1/1/98 | ||||
12/31/97 | ||||
12/18/96 | ||||
11/20/96 | ||||
10/2/95 | ||||
2/22/95 | ||||
11/1/94 | ||||
10/3/94 | ||||
2/16/94 | ||||
1/1/94 | ||||
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