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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 9/30/20 WRL Series Annuity Account N-4 6:9.6M Donnelley … Solutions/FA → WRL Series Annuity Account ⇒ New WRL Freedom Bellwether VA |
Document/Exhibit Description Pages Size 1: N-4 Wrl Freedom Bellwether Va HTML 6.07M 2: EX-99.(1)(C) Miscellaneous Exhibit HTML 7K 3: EX-99.(1)(D) Miscellaneous Exhibit HTML 7K 5: EX-99.10 Exhibit 10 HTML 6K 6: EX-99.13 Exhibit 13 HTML 62K 4: EX-99.9 Exhibit 9 HTML 8K
WRL Freedom Bellwether VA |
As filed with the Securities and Exchange Commission on September 30, 2020
Registration No. 333-
811- 05672
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.
and
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 349
WRL SERIES ANNUITY ACCOUNT
(Exact Name of Registrant)
TRANSAMERICA LIFE INSURANCE COMPANY
(Name of Depositor)
(Former Depositor, Transamerica Premier Life Insurance Company)
4333 Edgewood Road, NE
(Address of Depositor’s Principal Executive Offices)
Depositor’s Telephone Number: (319) 355-8511
Brian Stallworth, Esq.
Transamerica Life Insurance Company
c/o Office of the General Counsel
4333 Edgewood Road, N.E.
(Name and Address of Agent for Service)
Title of Securities Being Registered: Flexible Premium Individual Deferred Variable Annuity Contracts
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of the Registration statement.
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Registrant is filing this Registration Statement for the purpose of registering interests under WRL Freedom BellwetherSM variable annuity contracts (“Contracts”) on a new Form N-4. This filing complies with the pre-July 2020 version of Form N-4 (OMB number 3235-0318). Interests under the Contracts were previously registered on Form N-4 (File No. 333-199075) and funded by WRL Series Annuity Account (File No. 811-05672). Upon effectiveness of the merger between Transamerica Premier Life Insurance Company with and into Transamerica Life Insurance Company (“TLIC”), TLIC became the obligor and Depositor of the Contracts and WRL Series Annuity Account which was transferred intact to TLIC.
WRL FREEDOM BELLWETHERSM
Issued by
TRANSAMERICA LIFE INSURANCE COMPANY
(Former Depositor, Transamerica Premier Life Insurance Company)
WRL Series Annuity Account
Supplement Dated October 1, 2020
to the
Prospectus dated May 1, 2008
Home Office: 4333 Edgewood Road NE
Service Center: 4333 Edgewood Road NE
Phone: (800) 355-8511
Transamerica Life Insurance Company (“TLIC” or “the Company”) is amending the prospectus dated May 1, 2008 for the WRL Freedom BellwetherSM contracts (the “Contract”) to provide information regarding the merger (the “Merger”) of the issuer of your Contract, Transamerica Premier Life Insurance Company (“TPLIC”, formerly known as Western Reserve Life Assurance Co. of Ohio), with and into TLIC. Please read this supplement carefully and retain it for future reference. Capitalized terms not otherwise defined in this supplement have the meanings given to them in the prospectus. Except as modified in this supplement, all other terms and information in the prospectus remain unchanged.
TPLIC no longer sells the Contract. Following the Merger, TLIC will not issue new Contracts. Although Contracts will no longer be sold, additional purchase payments will continue to be permitted.
Effective on October 1, 2020, TPLIC merged with and into its affiliate TLIC. Before the Merger, TPLIC was the issuer of the Contracts. Upon consummation of the Merger, TPLIC’s corporate existence ceased by operation of law, and TLIC assumed legal ownership of all of the assets of TPLIC, including WRL Series Annuity Account (the “Separate Account”) that fund the Contracts, and the assets of the Separate Accounts. As a result of the merger, TLIC became responsible for all liabilities and obligations of TPLIC, including those created under the Contracts. The Contracts have thereby become flexible premium individual deferred variable annuity contracts funded by a separate account of TLIC.
The Merger did not affect the terms of, or the rights and obligations under your Contract, other than to change the insurance company that provides your Contract benefits from TPLIC to TLIC. The Merger also did not result in any adverse tax consequences for any Contract owners, and Contract owners will not be charged additional fees or expenses as a result of the Merger. Contract values will not change as a result of the Merger. You will receive a Contract endorsement from TLIC that reflects the change from TPLIC to TLIC. Until we amend all forms we use that are related to the Contracts, we may still reflect TPLIC in correspondence and disclosure to you. As a result, all references in the prospectus to Transamerica Premier Life Insurance Company (formerly, Western Reserve Life Assurance Co. of Ohio) are amended to refer to Transamerica Life Insurance Company.
More detailed information, including an explanation of the underlying portfolio’s fees and investment objectives, may be found in the current prospectuses for the underlying fund portfolios, which you can receive by contacting our Service Center at the phone number above.
Please note the change regarding your fund reports:
We want to let you know that beginning January 1, 2021, we will no longer mail copies of shareholder reports for funds in your portfolio. This change is permitted by regulations adopted by the Securities and Exchange Commission. Instead, the reports will be made available on our website. We’ll let you know by mail each time a report is posted. The notification will have a URL for accessing the report.
If you’ve already elected to receive documents from us electronically, you’re not affected by this change. You’re already receiving an email with a link to the reports so there’s nothing you need to do.
You do have the option of continuing to receive paper copies of all future shareholder reports free of charge. If you’d like this option, give us a call at the number on your account statement.
I. With respect to (i) the list of portfolios on the prospectus cover page, Page 2, and (ii) the Investment Choices set forth in the prospectus Summary section, Page 7, and (iii) the Investment Choices section, Page 18, such investment choices are replaced by the following:
SUBACCOUNT |
PORTFOLIO |
ADVISOR/SUB-ADVISER | ||
Access VP High Yield FundSM | Access VP High Yield FundSM | ProFund Advisors LLC | ||
ProFund VP Asia 30 | ProFund VP Asia 30 | ProFund Advisors LLC | ||
ProFund VP Basic Materials | ProFund VP Basic Materials | ProFund Advisors LLC | ||
ProFund VP Bull | ProFund VP Bull | ProFund Advisors LLC | ||
ProFund VP Consumer Services | ProFund VP Consumer Services | ProFund Advisors LLC | ||
ProFund VP Emerging Markets | ProFund VP Emerging Markets | ProFund Advisors LLC | ||
ProFund VP Europe 30 | ProFund VP Europe 30 | ProFund Advisors LLC | ||
ProFund VP Falling U.S. Dollar | ProFund VP Falling U.S. Dollar | ProFund Advisors LLC | ||
ProFund VP Financials | ProFund VP Financials | ProFund Advisors LLC | ||
ProFund VP Government Money Market | ProFund VP Government Money Market | ProFund Advisors LLC | ||
ProFund VP International | ProFund VP International | ProFund Advisors LLC | ||
ProFund VP Japan | ProFund VP Japan | ProFund Advisors LLC | ||
ProFund VP Mid-Cap | ProFund VP Mid-Cap | ProFund Advisors LLC | ||
ProFund VP NASDAQ-100 | ProFund VP NASDAQ-100 | ProFund Advisors LLC | ||
ProFund VP Oil & Gas | ProFund VP Oil & Gas | ProFund Advisors LLC | ||
ProFund VP Pharmaceuticals | ProFund VP Pharmaceuticals | ProFund Advisors LLC | ||
ProFund VP Precious Metals | ProFund VP Precious Metals | ProFund Advisors LLC | ||
ProFund VP Short Emerging Markets | ProFund VP Short Emerging Markets | ProFund Advisors LLC | ||
ProFund VP Short International | ProFund VP Short International | ProFund Advisors LLC | ||
ProFund VP Short NASDAQ-100 | ProFund VP Short NASDAQ-100 | ProFund Advisors LLC | ||
ProFund VP Short Small-Cap | ProFund VP Short Small-Cap | ProFund Advisors LLC | ||
ProFund VP Small-Cap | ProFund VP Small-Cap | ProFund Advisors LLC | ||
ProFund VP Small-Cap Value | ProFund VP Small-Cap Value | ProFund Advisors LLC | ||
ProFund VP Telecommunications | ProFund VP Telecommunications | ProFund Advisors LLC | ||
ProFund VP UltraSmall-Cap | ProFund VP UltraSmall-Cap | ProFund Advisors LLC | ||
ProFund VP U.S. Government Plus | ProFund VP U.S. Government Plus | ProFund Advisors LLC | ||
ProFund VP Utilities | ProFund VP Utilities | ProFund Advisors LLC | ||
TA Aegon High Yield Bond | Transamerica Aegon High Yield Bond VP | Aegon USA Investment Management, LLC | ||
TA Aegon U.S. Government Securities | Transamerica Aegon U.S. Government Securities VP | Aegon USA Investment Management, LLC | ||
TA Barrow Hanley Dividend Focused | Transamerica Barrow Hanley Dividend Focused VP | Barrow, Hanley, Mewhinney, & Strauss, LLC | ||
TA BlackRock Global Real Estate Securities | Transamerica BlackRock Global Real Estate Securities VP | BlackRock Investment Management, LLC | ||
TA BlackRock Government Money Market | Transamerica BlackRock Government Money Market VP | BlackRock Investment Management, LLC | ||
TA BlackRock iShares Edge 40 | Transamerica BlackRock iShares Edge 40 VP | BlackRock Investment Management, LLC | ||
TA International Growth | Transamerica International Growth VP | TDAM USA Inc. | ||
TA Janus Mid-Cap Growth | Transamerica Janus Mid-Cap Growth VP | Janus Capital Management LLC | ||
TA JPMorgan Asset Allocation - Conservative | Transamerica JPMorgan Asset Allocation - Conservative VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan Asset Allocation - Growth | Transamerica JPMorgan Asset Allocation - Growth VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan Asset Allocation - Moderate | Transamerica JPMorgan Asset Allocation - Moderate VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan Asset Allocation - Moderate Growth | Transamerica JPMorgan Asset Allocation - Moderate Growth VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan Core Bond | Transamerica JPMorgan Core Bond VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan Enhanced Index | Transamerica JPMorgan Enhanced Index VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan International Moderate Growth | Transamerica JPMorgan International Moderate Growth VP | J.P. Morgan Investment Management Inc. | ||
TA JPMorgan Tactical Allocation | Transamerica JPMorgan Tactical Allocation VP | J.P. Morgan Investment Management Inc. | ||
TA Managed Risk - Balanced ETF | Transamerica Managed Risk - Balanced ETF VP | Milliman Financial Risk Management LLC | ||
TA Managed Risk – Growth ETF | Transamerica Managed Risk – Growth ETF VP | Milliman Financial Risk Management LLC | ||
TA Morgan Stanley Capital Growth | Transamerica Morgan Stanley Capital Growth VP | Morgan Stanley Investment Management Inc. | ||
TA Multi-Managed Balanced | Transamerica Multi-Managed Balanced VP | J.P. Morgan Investment Management Inc. and Aegon USA Investment Management, LLC | ||
TA PIMCO Total Return | Transamerica PIMCO Total Return VP | Pacific Investment Management Company LLC | ||
TA Small/Mid Cap Value | Transamerica Small/Mid Cap Value VP | Systematic Financial Management L.P. & Thompson, Siegel & Walmsley LLC | ||
TA T. Rowe Price Small Cap | Transamerica T. Rowe Price Small Cap VP | T. Rowe Price Associates, Inc. | ||
TA WMC US Growth | Transamerica WMC US Growth VP | Wellington Management Company, LLP |
II. In the ANNUITY CONTRACT FEE TABLE, we replace the Total Annual Operating Expenses of the underlying fund portfolios, page 12:
Total Annual Portfolio Operating Expenses |
Lowest | Highest | ||||||
Expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses |
0.29 | % | 5.49 | % |
III. In the ANNUITY CONTRACT FEE TABLE, we replace the Expense Example (Highest Gross) tables, page 12:
Example
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
If you surrender the policy at the end of the applicable time period. |
$ | 719 | $ | 2117 | $ | 3462 | $ | 6604 | ||||||||
If you annuitize* or remain invested in the policy at the end of the applicable time period. |
$ | 719 | $ | 2117 | $ | 3462 | $ | 6604 |
IV. In the “Investment Choices” section in the prospectus, we replace the text in the sub-section entitled Market Timing and Disruptive Trading with the following, pages 21-24:
Market Timing and Disruptive Trading
The market timing policy and the related procedures (discussed below) do not apply to the ProFunds or Access subaccounts because the corresponding portfolios are specifically designed to accommodate frequent transfer activity. If you invest in the ProFunds or Access subaccounts, you should be aware that you may bear the costs and increased risks of frequent transfers discussed below.
Statement of Policy. This variable annuity was not designed to accommodate market timing or frequent or large transfers among the subaccounts or between the subaccounts and the fixed account. (Both frequent and large transfers may be considered disruptive.) Market timing and disruptive trading can adversely affect you, other owners, beneficiaries and underlying fund portfolios. The adverse effects may include: (1) dilution of the interests of long-term investors in a subaccount if purchases or transfers into or out of an underlying fund portfolio are made at prices that do not reflect an accurate value for the underlying fund portfolio’s investments (some market timers attempt to do this through methods known as “time-zone arbitrage” and “liquidity arbitrage”); (2) an adverse effect on portfolio management, such as (a) impeding a portfolio manager’s ability to seek or sustain an investment objective; (b) causing the underlying fund portfolio to maintain a higher level of cash than would otherwise be the case; or (c) causing an underlying fund portfolio to liquidate investments prematurely (or otherwise at an inopportune time) in order to pay Withdrawals or transfers out of the underlying fund portfolio; and (3) increased brokerage and administrative expenses. These costs are borne by all owners invested in those subaccounts, not just those making the transfers.
We have developed policies and procedures with respect to market timing and disruptive trading (which vary for certain subaccounts at the request of the corresponding underlying fund portfolios) and we do not make special arrangements or grant exceptions to accommodate market timing or potentially disruptive trading. As discussed herein, we cannot detect or deter all market timing or potentially disruptive trading. Do not invest with us if you intend to conduct market timing or potentially disruptive trading.
Detection. We employ various means in an attempt to detect and deter market timing and disruptive trading. However, despite our monitoring we may not be able to detect nor halt all harmful trading. In addition, because other insurance companies (and retirement plans) with different policies and procedures may invest in the underlying fund portfolios, we cannot guarantee that all harmful trading will be detected or that an underlying fund portfolio will not suffer harm from market timing and disruptive trading among subaccounts of variable products issued by these other insurance companies or retirement plans.
Deterrence. If we determine you or anyone acting on your behalf is engaged in market timing or disruptive trading, we may take one or more actions in an attempt to halt such trading. Your ability to make transfers is subject to modification or restriction if we determine, in our sole opinion, that your exercise of the transfer privilege may disadvantage or potentially harm the rights or interests of other owners (or others having an interest in the variable insurance products). As described below, restrictions may take various forms, but under our current policies and procedures will include loss of expedited transfer privileges. We consider transfers by telephone, fax, overnight mail, or the Internet to be “expedited” transfers. This means that we would accept only written transfer requests with an original signature transmitted to us only by U.S. mail. We may also restrict the transfer privileges of others acting on your behalf, including your registered representative or an asset allocation or investment advisory service.
We reserve the right to reject any purchase payment or transfer request from any person without prior notice, if, in our judgment, (1) the purchase payment or transfer, or series of purchase payments or transfers, would have a negative impact on an underlying fund portfolio’s
operations, or (2) if an underlying fund portfolio would reject or has rejected our purchase order or has instructed us not to allow that purchase or transfer, or (3) because of a history of market timing or disruptive trading. We may impose other restrictions on transfers, or even prohibit transfers for any owner who, in our view, has abused, or appears likely to abuse, the transfer privilege on a case-by-case basis. We may, at any time and without prior notice, discontinue transfer privileges, modify our procedures, impose holding period requirements or limit the number, size, frequency, manner, or timing of transfers we permit. Because determining whether to impose any such special restrictions depends on our judgment and discretion, it is possible that some owners could engage in disruptive trading that is not permitted for others. We also reserve the right to reverse a potentially harmful transfer if an underlying fund portfolio refuses or reverses our order; in such instances some owners may be treated differently than others in that some transfers may be reversed and others allowed. For all of these purposes, we may aggregate two or more trades or variable insurance products that we believe are connected by owner or persons engaged in trading on behalf of owners.
In addition, transfers for multiple policies invested in the Transamerica Series Trust underlying fund portfolios which are submitted together may be disruptive at certain levels. At the present time, such aggregated transactions likely will not cause disruption if less than one million dollars total is being transferred with respect to any one underlying fund portfolio (a smaller amount may apply to smaller portfolios). Please note that transfers of less than one million dollars may be disruptive in some circumstances and this general amount may change quickly.
Please note: If you engage a third party investment adviser for asset allocation services, then you may be subject to these transfer restrictions because of the actions of your investment adviser in providing these services.
In addition to our internal policies and procedures, we will administer your variable annuity to comply with any applicable state, federal, and other regulatory requirements concerning transfers. We reserve the right to implement, administer, and charge you for any fee or restriction, including redemption fees, imposed by any underlying fund portfolio. To the extent permitted by law, we also reserve the right to defer the transfer privilege at any time that we are unable to purchase or redeem shares of any of the underlying fund portfolios.
Under our current policies and procedures, we do not:
• | impose redemption fees on transfers; or |
• | expressly limit the number or size of transfers in a given period except for certain subaccounts where an underlying fund portfolio has advised us to prohibit certain transfers that exceed a certain size; or |
• | provide a certain number of allowable transfers in a given period. |
Redemption fees, transfer limits, and other procedures or restrictions imposed by the underlying funds or our competitors may be more or less successful than ours in deterring market timing or other disruptive trading and in preventing or limiting harm from such trading.
In the absence of a prophylactic transfer restriction (e.g., expressly limiting the number of trades within a given period or limiting trades by their size), it is likely that some level of market timing and disruptive trading will occur before it is detected and steps taken to deter it (although some level of market timing and disruptive trading can occur with a prophylactic transfer restriction). As noted above, we do not impose a prophylactic transfer restriction and, therefore, it is likely that some level of market timing and disruptive trading will occur before we are able to detect it and take steps in an attempt to deter it.
Please note that the limits and restrictions described herein are subject to our ability to monitor transfer activity. Our ability to detect market timing or disruptive trading may be limited by operational and technological systems, as well as by our ability to predict strategies employed by owners (or those acting on their behalf) to avoid detection. As a result, despite our efforts to prevent harmful trading activity among the variable investment choices available under this variable insurance product, there is no assurance that we will be able to detect or deter market timing or disruptive trading by such owners or intermediaries acting on their behalf. Moreover, our ability to discourage and restrict market timing or disruptive trading may be limited by decisions of state regulatory bodies and court orders that we cannot predict.
Furthermore, we may revise our policies and procedures in our sole discretion at any time and without prior notice, as we deem necessary or appropriate (1) to better detect and deter harmful trading that may adversely affect other owners, other persons with material rights under the variable insurance products, or underlying fund shareholders generally, (2) to comply with state or federal regulatory requirements, or (3) to impose additional or alternative restrictions on owners engaging in market timing or disruptive trading among the investment choices under the variable insurance product. In addition, we may not honor transfer requests if any variable investment choices that would be affected by the transfer is unable to purchase or redeem shares of its corresponding underlying fund portfolio.
Underlying Fund Portfolio Frequent Trading Policies. The underlying fund portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. Underlying fund portfolios may, for example, assess a redemption fee (which we reserve the right to collect) on shares held for less than a certain period of time. The prospectuses for the underlying fund portfolios describe any such policies and procedures. The frequent trading policies and procedures of an underlying fund portfolio may be different, and more or less restrictive, than the frequent trading policies and procedures of other underlying fund portfolios and the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading. Owners should be aware that we do not monitor transfer requests from owners or persons acting on behalf of owners against, nor do we apply, the frequent trading policies and procedures of the respective underlying fund portfolios that would be affected by the transfers.
Owners should be aware that we are required to provide to an underlying fund portfolio or its payee, promptly upon request, certain information about the trading activity of individual owners, and to restrict or prohibit further purchases or transfers by specific owners or persons acting on their behalf, identified by an underlying fund portfolio as violating the frequent trading policies established for the underlying fund portfolio.
Omnibus Orders. Owners and other persons with material rights under the variable insurance products also should be aware that the purchase and redemption orders received by the underlying fund portfolios generally are “omnibus” orders from intermediaries such as retirement plans and separate accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and individual owners of variable insurance products. The omnibus nature of these orders may limit the underlying fund portfolios’ ability to apply their respective frequent trading policies and procedures.
We cannot guarantee that the underlying fund portfolios will not be harmed by transfer activity relating to the retirement plans or other insurance companies that may invest in the underlying fund portfolios. These other insurance companies are responsible for their own policies and procedures regarding frequent transfer activity. If their policies and procedures fail to successfully discourage harmful transfer activity, it may affect other owners of underlying fund portfolio shares, as well as the owners of all of the variable annuity or life insurance policies, including ours, whose variable investment options correspond to the affected underlying fund portfolios. In addition, if an underlying fund portfolio believes that an omnibus order we submit may reflect one or more transfer requests from owners engaged in market timing and disruptive trading, the underlying fund portfolio may reject the entire omnibus order and thereby delay o
V. The following replaces the “Taxes” section of the prospectus, pages 29-32:
TAX INFORMATION
NOTE: We have prepared the following information on federal taxes as a general discussion of the subject. It is not intended as tax advice to any taxpayer. The federal tax consequences discussed herein reflects our understanding of current law, and the law may change. No representation is made regarding the likelihood of continuation of the present federal tax law or of the current interpretations by the Internal Revenue Service. The discussion briefly references federal estate, gift and generation-skipping transfer taxes, but principally discusses federal income taxes. 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 the policy. You should consult your own financial professional about your own circumstances.
Introduction
Deferred annuity policies are a way of setting aside money for future needs like retirement. Congress recognized how important saving for retirement is and provided special rules in the Internal Revenue Code (the “Code”) for annuities. Simply stated, these rules generally provide that individuals will not be taxed on the earnings, if any, on the money held in an annuity policy until withdrawn. This is referred to as tax deferral. When a non-natural person (e.g., corporation or certain trusts) owns a nonqualified policy, the policy will generally not be treated as an annuity for tax purposes. Thus, the owner must generally include in income any increase in the policy value over the investment in the policy during each taxable year.
There are different rules as to how you will be taxed depending on how you take the money out and the type of policy-qualified or nonqualified.
If you purchase the policy as an individual retirement annuity or as a part of a 403(b) plan, 457 plan, a pension plan, a profit sharing plan (including a 401(k) plan), or certain other employer sponsored retirement programs, your policy is referred to as a qualified policy. There is no additional tax deferral benefit derived from placing qualified funds into a variable annuity. Features other than tax deferral should be considered in the purchase of a qualified policy. There are limits on the amount of contributions you can make to a qualified policy. Other restrictions may apply including terms of the plan in which you participate. To the extent there is a conflict between a plan’s provisions and a policy’s provisions, the plan’s provisions will control.
If you purchase the policy other than as part of any arrangement described in the preceding paragraph, the policy is referred to as a nonqualified policy.
You will generally not be taxed on increases in the value of your policy, whether qualified or nonqualified, until a distribution occurs (e.g., as a surrender, withdrawal, or as annuity payments). However, you may be subject to current taxation if you assign or pledge or enter into an agreement to assign or pledge any portion of the policy. You may also be subject to current taxation if you make a gift of a nonqualified policy without valuable consideration. All amounts received from the policy that are includible in income are taxed at ordinary income rates; no amounts received from the policy are taxable at the lower rates applicable to capital gains.
The Internal Revenue Service (“IRS”) has not reviewed the policy for qualification as an IRA annuity, and has not addressed in a ruling of general applicability whether the death benefit options and riders available, with the policy, if any, comport with IRA qualification requirements.
The value of living and death benefit options and riders elected may need to be taken into account in calculating minimum required distributions from a qualified plan/or policy.
We may occasionally enter into settlements with owners and beneficiaries to resolve issues relating to the policy. Such settlements will be reported on the applicable tax form (e.g., Form 1099) provided to the taxpayer and the taxing authorities.
Taxation of Us
We are at present taxed as a life insurance company under part I of Subchapter L of the Code. The separate account is treated as a part of us and, accordingly, will not be taxed separately as a “regulated investment company” under Subchapter M of the Code. We do not expect to incur any federal income tax liability with respect to investment income and net capital gains arising from the activities of the separate account retained as part of the reserves under the policy. Based on this expectation, it is anticipated that no charges will be made against the separate account for federal income taxes. If in future years, any federal income taxes are incurred by us with respect to the separate account, we may make a charge to that account. We may benefit from any dividends received or foreign tax credits attributable to taxes paid by certain underlying fund portfolios to foreign jurisdictions to the extent permitted under federal tax law.
Tax Status of a Nonqualified Policy
Diversification Requirements. In order for a nonqualified variable policy which is based on a segregated asset account to qualify as an annuity policy under Section 817(h) of the Code, the investments made by such account must be “adequately diversified” in accordance with Treasury Regulations. The Regulations apply a diversification requirement to each of the subaccounts. Each separate account, through its underlying fund portfolios and their portfolios, intends to comply with the diversification requirements of the Regulations. We have entered into agreements with each underlying fund portfolio company that require the portfolios to be operated in compliance with the Regulations but we do not have control over the underlying fund portfolio companies. The owners bear the risk that the entire policy could be disqualified as an annuity policy under the Code due to the failure of a subaccount to be deemed to be “adequately diversified.”
Owner Control. In some circumstances, owners of variable policies who retain excessive control over the investment of the underlying separate account assets may be treated as the owners of those assets and may be subject to tax on income produced by those assets. In Revenue Ruling 2003-91, the IRS stated that whether the owner of a variable policy is to be treated as the owner of the assets held by the insurance company under the policy will depend on all of the facts and circumstances.
Revenue Ruling 2003-91 also gave an example of circumstances under which the owner of a variable policy would not possess sufficient control over the assets underlying the policy to be treated as the owner of those assets for federal income tax purposes. To the extent the circumstances relating to the issuance and ownership of a policy vary from those described in Revenue Ruling 2003-91, owners bear the risk that they will be treated as the owner of Separate Account assets and taxed accordingly.
We believe that the owner of a policy should not be treated as the owner of the underlying assets. We reserve the right to modify the policies to bring them into conformity with applicable standards should such modification be necessary to prevent owners of the policies from being treated as the owners of the underlying separate account assets. Concerned owners should consult their own financial professional regarding the tax matter discussed above.
Distribution Requirements. The Code requires that nonqualified policies contain specific provisions for distribution of policy proceeds upon the death of any owner. In order to be treated as an annuity policy for federal income tax purposes, the Code requires that such policies provide that if any owner dies on or after the annuity starting date and before the entire interest in the policy has been distributed, the remaining portion must be distributed at least as rapidly as under the method in effect on such owner’s death. If any owner dies before the annuity starting date, the entire interest in the policy must generally be distributed (1) within 5 years after such owner’s date of death or (2) be used to provide payments to a designated beneficiary for the life of the beneficiary or for a period not extending beyond the life expectancy of the beneficiary. The designated beneficiary must be an individual and payments must begin within one year of such owner’s death. However, if upon such owner’s death the owner’s surviving spouse is the sole beneficiary of the policy, then the policy may be continued with the surviving spouse as the new owner. If any owner is a non-natural person (except in the case of certain grantor trusts), then for purposes of these distribution requirements, the primary annuitant shall be treated as an owner and any death or change of such primary annuitant shall be treated as the death of an owner.
In certain instances a designated beneficiary may be permitted to elect a “stretch” payment option as a means of disbursing death proceeds from a nonqualified annuity. The only method we use for making distribution payments from a nonqualified “stretch” payment option is the required minimum distribution method as set forth in Revenue Ruling 2002-62. The applicable payments are calculated using the Single Life Expectancy Table set forth in Treasury Regulation § 1.401(a)(9)-9, A-1.
The nonqualified policies contain provisions intended to comply with these requirements of the Code. No regulations interpreting these requirements of the Code have yet been issued and thus no assurance can be given that the provisions contained in the policies satisfy all such Code requirements. The provisions contained in the policies will be reviewed and modified if necessary to assure that they comply with the Code requirements when clarified by regulation or otherwise.
Taxation of Nonqualified Annuities
The following discussion assumes the policy qualifies as an annuity policy for federal income tax purposes.
In General. Code Section 72 governs taxation of annuities in general. We believe that an owner who is an individual will not be taxed on increases in the value of a policy until such amounts are surrendered or distributed. For this purpose, the assignment, pledge, or agreement to assign or pledge any portion of the policy value as collateral for a loan generally will be treated as a distribution of such portion. You may also be subject to current taxation if you make a gift of a nonqualified policy without valuable consideration. The taxable portion of a distribution is taxable as ordinary income.
Non-Natural Persons. Pursuant to Section 72(u) of the Code, a nonqualified policy held by a taxpayer other than a natural person generally will not be treated as an annuity policy under the Code; accordingly, an owner who is not a natural person will recognize as ordinary income for a taxable year the excess, if any, of the policy value over the “investment in the policy.” There are some exceptions to this rule and a prospective purchaser of the policy that is not a natural person should discuss these rules with a competent financial professional. A policy owned by a trust using the grantor’s social security number as its taxpayer identification number will be treated as owned by the grantor (natural person) for the purposes of our application of Section 72 of the Code. Consult a financial professional for more information on how this may impact your policy.
Different Individual Owner and Annuitant
If the owner and annuitant on the policy are different individuals, there may be negative tax consequences to the owner and/or beneficiaries under the policy if the annuitant predeceases the owner including, but not limited, to the assessment of penalty tax and the loss of certain death benefit distribution options. You may wish to consult your legal counsel or financial professional if you are considering designating a different individual as the annuitant on your policy to determine the potential tax ramifications of such a designation.
Annuity Starting Date
This section makes reference to the annuity starting date as defined in Section 72 of the Code and the applicable regulations. Generally, the definition of annuity starting date will correspond with the definition of maturity date used in your policy and the dates will be the same. However, in certain circumstances, your annuity starting date and maturity date will not be the same date. If there is a conflict between the definitions, we will interpret and apply the definitions in order to ensure your policy maintains its status as an annuity policy for federal income tax purposes. You may wish to consult a financial professional for more information on when this issue may arise.
It is possible that at certain advanced ages a policy might no longer be treated as an annuity policy if the policy has not been annuitized before that age or have other tax consequences. You should consult with a financial professional about the tax consequences in such circumstances.
Taxation of Annuity Payments
Although the tax consequences may vary depending on the annuity payment option you select, in general, for nonqualified and certain qualified policies, only a portion of the annuity payments you receive will be includable in your gross income.
In general, the excludable portion of each annuity payment you receive will be determined as follows:
• | Fixed payments-by dividing the “investment in the policy” on the annuity starting date by the total expected return under the policy (determined under Treasury regulations) for the term of the payments. This is the percentage of each annuity payment that is excludable. |
• | Variable payments-by dividing the “investment in the policy” on the annuity starting date by the total number of expected periodic payments. This is the amount of each annuity payment that is excludable. |
The remainder of each annuity payment is includable in gross income. Once the “investment in the policy” has been fully recovered, the full amount of any additional annuity payments is includable in gross income and taxed as ordinary income. The “investment in the policy” is generally equal to the premiums you pay for the policy, reduced by any amounts you have previously received from the policy that are excludible from gross income.
If you select more than one annuity payment option, special rules govern the allocation of the policy’s entire “investment in the policy” to each such option, for purposes of determining the excludable amount of each payment received under that option. We advise you to consult a competent financial professional as to the potential tax effects of allocating amounts to any particular annuity payment option.
If, after the annuity starting date, annuity payments stop because an annuitant died, the excess (if any) of the “investment in the policy” as of the annuity starting date over the aggregate amount of annuity payments received that was excluded from gross income may possibly be allowable as a deduction on your tax return.
Taxation of Surrenders and Withdrawals - Nonqualified Policies
When you surrender your policy, you are generally taxed on the amount that your surrender proceeds exceeds the “investment in the policy.” The “investment in the policy” is generally equal to the premiums you pay for the policy, reduced by any amounts you have previously received from the policy that are excludible from gross income. Withdrawals are generally treated first as taxable income to the extent of the excess in the policy value over the “investment in the policy.” Distributions made under the systematic payout option are treated for tax purposes as withdrawals, not annuity payments. In general, loans, pledges and collateral assignments as security of a loan are taxed in the same manner as withdrawals and surrenders. You may also be subject to current taxation if you make a gift of a nonqualified policy without valuable consideration. All taxable amounts received under a policy are subject to tax at ordinary rather than capital gain tax rates.
If your policy contains an excess interest adjustment feature (also known as a market value adjustment), then your policy value immediately before a policy withdrawal (or transaction taxed like a withdrawal) may have to be increased by any positive excess interest adjustments that result from the transaction. There is, however, no definitive guidance on the proper tax treatment of excess interest adjustments, and you may want to discuss the potential tax consequences of an excess interest adjustment with your financial professional.
The Code also provides that amounts received from the policy that are includible in gross income (including the taxable portion of some annuity payments) may be subject to a penalty tax. The amount of the penalty tax is equal to 10% of the amount that is includable in income. Some surrender withdrawals and other amounts will be exempt from the penalty tax. Amounts received that are not subject to the penalty tax include, among others, any amounts: (1) paid on or after the taxpayer reaches age 591⁄2; (2) paid after an owner (or where the owner is a non-natural person, an annuitant) dies; (3) paid if the taxpayer becomes disabled (as that term is defined in the Code); (4) paid in a series of substantially equal payments made annually (or more frequently) over the life of the taxpayer or the joint life of the taxpayer and the taxpayer’s designated beneficiary; (5) paid under an immediate annuity; or (6) which come from purchase payments made prior to August 14, 1982. Regarding the disability exception, because we cannot verify that the owner is disabled, we will report such withdrawals to the IRS as early withdrawals with no known exception from the penalty tax.
Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. You may wish to consult a financial professional for more information regarding the imposition of penalty tax.
Aggregation
All nonqualified deferred annuity policies that are issued by us (or our affiliates) to the same owner (policyholder) during the same calendar year are treated as one annuity for purposes of determining the amount includable in the owner’s income when a taxable distribution (other than annuity payments) occurs. If you are considering purchasing multiple policies from us (or our affiliates) during the same calendar year, you may wish to consult with your financial professional regarding how aggregation will apply to your policies.
Tax-Free Exchanges of Nonqualified Policies
We may issue the nonqualified policy in exchange for all or part of another annuity policy that you own. Such an exchange will be tax free if certain requirements are satisfied. If the exchange is tax free, your investment in the policy immediately after the exchange will generally be the same as that of the annuity policy exchanged, increased by any additional purchase payment made as part of the exchange. Your policy value immediately after the exchange may exceed your investment in the policy. That excess may be includable in income should amounts subsequently be withdrawn or distributed from the policy (e.g., as a withdrawal, surrender, annuity income payment or death benefit).
If you exchange part of an existing policy for the policy, and within 180 days of the exchange you received a payment other than certain annuity payments (e.g., you make a withdrawal) from either policy, the exchange may not be treated as a tax free exchange. Rather, some or all of the amount exchanged into the policy could be includible in your income and subject to a 10% penalty tax.
You should consult your financial professional in connection with an exchange of all or part of an annuity policy for the policy, especially if you may make a withdrawal from either policy within 180 days after the exchange.
Medicare Tax
Distributions from nonqualified annuity policies are considered “investment income” for purposes of the 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, trusts, and estates whose income exceeds certain threshold amounts. We are required to report distributions made from nonqualified annuity policies as being potentially subject to this tax. While distributions from qualified policies are not subject to the tax, such distributions may be includable in income for purposes of determining whether certain Medicare Tax thresholds have been met. As such, distributions from your qualified policy could cause your other investment income to be subject to the tax. Please consult a financial professional for more information.
Same Sex Relationships
Same sex couples have the right to marry in all states. The parties to each marriage that is valid under the law of any state will each be treated as a spouse as defined in this policy. Individuals in other arrangements, such as civil unions, registered domestic partnerships, or other similar arrangements, that are treated as spouses under the applicable state law, will each be treated as spouse as defined in this policy for state law purposes. However, individuals in other arrangements, such as civil unions, registered domestic partnerships, or other similar arrangements, that are not recognized as marriage under the relevant state law, will not be treated as married or as spouses as defined in this policy for federal tax purposes. Therefore, exercise of the spousal continuation provisions of this policy or any riders by individuals who do not meet the definition of “spouse” may have adverse tax consequences and/or may not be permissible. Please consult a financial professional for more information on this subject.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the policy because of your death or the death of the annuitant. Generally, such amounts should be includable in the income of the recipient: (1) if distributed in a lump sum, these amounts are taxed in the same manner as a surrender; (2) if distributed via withdrawals, these amounts are taxed in the same manner as a Withdrawal; or (3) if distributed under an annuity payment option, these amounts are taxed in the same manner as annuity payments.
Transfers, Assignments or Exchanges of Policies
A transfer of ownership or assignment of a policy, the designation of an annuitant or payee or other beneficiary who is not also the owner, the exchange of a policy and certain other transactions, or a change of annuitant other than the owner, may result in certain income or gift tax consequences to the owner that are beyond the scope of this discussion. An owner contemplating any such transaction or designation should contact a competent financial professional with respect to the potential tax effects.
Charges
It is possible that the IRS may take a position that fees for certain optional benefits (e.g., death benefits other than the Return of Premium death benefit) are deemed to be taxable distributions to you. In particular, the IRS may treat fees associated with certain optional benefits as a taxable withdrawal, which might also be subject to a tax penalty if the withdrawal occurs prior to age 591⁄2. Although we do not believe that the fees associated with any optional benefit provided under the policy should be treated as taxable withdrawals, the tax rules associated with these benefits are unclear, and we advise that you consult your financial professional prior to selecting any optional benefit under the policy.
Federal Estate, Gift and Generation-Skipping Transfer Taxes
The estate and gift tax unified credit basic exclusion amount is $10,000,000, subject to inflation adjustments (using the C-CPI-U), for taxable years beginning after December 31, 2017, and before January 1, 2026. The maximum rate is 40%.
There is no guarantee that the transfer tax exemptions and maximum rates will remain the same in the future. The uncertainty as to how the current law might be modified in coming years underscores the importance of seeking guidance from a competent legal adviser to help ensure that your estate plan adequately addresses your needs and that of your beneficiaries under all possible scenarios.
Federal Estate Taxes. While no attempt is being made to discuss the Federal estate tax implications of the policy in detail, a purchaser should keep in mind that the value of an annuity policy 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 policy, 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.
Generation-Skipping Transfer Tax. Under certain circumstances, the Code may impose a “generation skipping transfer tax” when all or part of an annuity policy is transferred to, or a death benefit is paid to, an individual two or more generations younger than the owner. Regulations issued under the Code may require us to deduct the tax from your policy, or from any applicable payment, and pay it directly to the IRS.
Qualified Policies
The qualified policy is designed for use with several types of tax-qualified retirement plans which are briefly described below. The tax rules applicable to participants and beneficiaries in tax-qualified retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits, distributions prior to age 591⁄2 (subject to certain exceptions), distributions that do not conform to specified commencement and minimum distribution rules, and in other specified circumstances. The distribution rules under Section 72(s) of the Code do not apply to annuities provided under a plan described in Sections 401(a), 403(a), 403(b), 408 or 408A of the Code, but other similar rules may. Some retirement plans are subject to distribution and other requirements that are not incorporated into the policies or our policy administration procedures. Owners, employers, participants, and beneficiaries are responsible for determining that contributions, distributions, and other transactions with respect to the policies comply with applicable law.
Traditional Individual Retirement Annuities. In order to qualify as a traditional individual retirement annuity under Section 408(b) of the Code, a policy must satisfy certain conditions: (i) the owner must be the annuitant; (ii) the policy generally is not transferable by the owner, e.g., the owner may not designate a new owner, designate a contingent owner or assign the policy as collateral security; (iii) subject to special rules, the total purchase payments for any calendar year may not exceed the amount specified in the Code for the year, except in the case of a rollover amount or contribution under Section 402(c), 402(e)(6), 403(a)(4), 403(b)(8), 403(b)(10), 408(d)(3) or 457(e)(16) of the Code; (iv) annuity payments or Withdrawals according to the requirements in the IRS regulations (minimum required distributions) must begin no later than April 1 of the calendar year following the calendar year in which the annuitant attains age 72 (or age 70 1⁄2 if the Annuitant attained 70 1⁄2 before 1/1/2020); (v) an annuity payment option with a period certain that will guarantee annuity payments
beyond the life expectancy of the annuitant and the beneficiary may not be selected; (vi) certain payments of death benefits must be made in the event the annuitant dies prior to the distribution of the policy value; (vii) the entire interest of the owner is non-forfeitable; and (viii) the premiums must not be fixed. Policies intended to qualify as traditional individual retirement annuities under Section 408(b) of the Code contain such provisions. Amounts in the individual retirement annuity (other than nondeductible contributions) generally are taxed only when distributed from the annuity. Distributions prior to age 591⁄2 (unless certain exceptions apply) are subject to a 10% penalty tax.
SIMPLE and SEP IRAs are types of IRAs that allow employers to contribute to IRAs on behalf of their employees. SIMPLE IRAs permit certain small employers to establish SIMPLE plans as provided by section 408(p) of the Code, under which employees may elect to defer to a SIMPLE IRA a specified percentage of compensation. The sponsoring employer is required to make matching or non-elective contributions on behalf of employees. Distributions from SIMPLE IRAs are subject to the same restrictions that apply to IRA distributions. Subject to certain exceptions, distributions prior to age 591⁄2 are subject to a 10 percent penalty tax, which is increased to 25 percent if the distribution occurs within the first two years after the commencement of the employee’s participation in the plan. SEP IRAs permit employers to make contributions to IRAs on behalf of their employees, up to a specified dollar amount for the year and subject to certain eligibility requirements as provided by Section 408(k) of the Code. Distributions from SEP IRAs are subject to the same rules that apply to IRA distributions and are taxed as ordinary income.
The IRS has not reviewed this policy for qualification as a traditional IRA, SIMPLE IRA or SEP IRA, and has not addressed in a ruling of general applicability whether any death benefits available under the policy comport with qualification requirements.
Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section 408A of the Code, contains many of the same provisions as a traditional IRA. However, there are some differences. First, the contributions are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA, a traditional IRA or other allowed qualified plan. A rollover from or conversion of an IRA to a Roth IRA may be subject to tax. The ability to make cash contributions to Roth IRAs is available to individuals with earned income and whose modified adjusted gross income is under a specified dollar amount for the year. Subject to special rules, the amount per individual that may be contributed to all IRAs (Roth and traditional) is an amount specified in the Code for the year. Secondly, the distributions are taxed differently. The Roth IRA offers tax-free distributions when made 5 tax years after the first contribution to any Roth IRA of the individual and made after one of the following: attaining age 591⁄2, to pay for qualified first time home buyer expenses (lifetime maximum of $10,000), or due to death or disability. All other distributions are subject to income tax when made from earnings and may be subject to a penalty tax unless an exception applies. Please note that specific tax ordering rules apply to Roth IRA distributions. Unlike the traditional IRA, there are no minimum required distributions during the owner’s lifetime; however, minimum required distributions at death are generally the same as for traditional IRAs.
The IRS has not reviewed this policy for qualification as a ROTH IRA, and has not addressed in a ruling of general applicability whether any death benefits available under the policy comport with qualification requirements.
Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public school systems and certain tax exempt organizations to purchase policies for their employees are generally excludable from the gross income of the employee, subject to certain limitations. However, such payments may be subject to Federal Insurance Contributions Act (FICA or Social Security) taxes. The policy includes a death benefit that in some cases may exceed the greater of the purchase payments or the policy value.
Additionally, in accordance with the requirements of the Code, Section 403(b) annuities generally may not permit distribution of (i) elective contributions made in years beginning after December 31, 1988, and (ii) earnings on those contributions, and (iii) earnings on amounts attributed to elective contributions held as of the end of the last year beginning before January 1, 1989, unless certain events have occurred. Specifically, distributions of such amounts will be allowed only upon the death of the employee, on or after attainment of age 591⁄2, severance from employment, disability, or financial hardship, except that income attributable to elective contributions may not be distributed in the case of hardship. These rules may prevent the payment of guaranteed withdrawals under a guaranteed lifetime withdrawal benefit prior to age 591⁄2. For policies issued after 2008, amounts attributable to non-elective contributions may be subject to distribution restrictions specified in the employer’s section 403(b) plan. Employers using the policy in connection with Section 403(b) plans may wish to consult with their financial professional.
Pursuant to tax regulations, we generally are required to confirm, with your 403(b) plan sponsor or otherwise, that surrenders, loans or transfers you request from a 403(b) policy comply with applicable tax requirements before we process your request. We will defer such payments you request until all information required under the tax law has been received. By requesting a surrender or transfer, you consent to the sharing of confidential information about you, the policy, and transactions under the policy and any other 403(b) policies or accounts you have under the 403(b) plan among us, your employer or plan sponsor, any plan administrator or record keeper, and other product providers.
Pension and Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of retirement plans for employees and self-employed individuals to establish qualified plans for themselves and their employees. Such retirement plans may permit the purchase of the policies to accumulate retirement savings. Adverse tax consequences to the plan, the participant or both may result if the policy is assigned or transferred to any individual as a means to provide benefit payments.
Contributions to and distributions from such plans are limited by the Code and may be subject to penalties.
Deferred Compensation Plans. Section 457(b) of the Code, while not actually providing for a qualified plan as that term is normally used, provides for certain deferred compensation plans established and maintained by state and local governments (and their agencies and instrumentalities) and tax exempt organizations. Under such plans a participant may be able to specify the form of investment in which his or her participation will be made. For non-governmental Section 457(b) plans, all such investments, however, are typically owned by, and are subject to, the claims of the general creditors of the sponsoring employer. Depending on the terms of the particular plan, a non-government employer may be entitled to draw on deferred amounts for purposes unrelated to its Section 457(b) plan obligations. In general, all amounts received under a non-governmental Section 457 plan are taxable in the year paid (or in the year paid or made available in the case of a non-governmental 457(b) plan). Distributions from non-governmental 457(b) plans are subject to federal income tax withholding as wages, distributions from governmental 457(b) plans are subject to withholding as “eligible rollover distributions” as described in the section entitled Withholding below. Contributions to and distributions from such plans are limited by the Code and may be subject to penalties. Deferred compensation plans of governments and tax-exempt entities that do not meet the requirements of Section 457(b) are taxed under Section 457(f ), which means compensation deferred under the plan is included in gross income in the first year in which the compensation is not subject to substantial risk of forfeiture.
Ineligible Owners-Qualified
We currently will not issue new policies to/or for the following plans: 403(a), 403(b), 412(i)/412(e)(3), 419, 457 (we will in certain limited circumstances accept 457(f ) plans), employee stock ownership plans, Keogh/H.R.-10 plans and any other types of plans at our sole discretion.
Taxation of Surrenders and Withdrawals - Qualified Policies
In the case of a withdrawal under a qualified policy (other than from a deferred compensation plan under Section 457 of the Code), a pro rata portion of the amount you receive is taxable, generally based on the ratio of your “investment in the policy” to your total account balance or accrued benefit under the retirement plan. Your “investment in the policy” generally equals the amount of any non-deductible purchase payments made by you or on your behalf. If you do not have any non-deductible purchase payments, your investment in the policy will be treated as zero.
In addition, a penalty tax may be assessed on amounts withdrawn from the policy prior to the date you reach age 591⁄2, unless you meet one of the exceptions to this rule which are similar to the penalty exceptions for distributions from nonqualified policies discussed above. However, the exceptions applicable for qualified policies differ from those provided to nonqualified policies. You may wish to consult a financial professional for more information regarding the application of these exceptions to your circumstances. You may also be required to begin taking minimum distributions from the policy by a certain date. The terms of the plan may limit the rights otherwise available to you under the policy.
Qualified Plan Required Distributions
For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the owner (or plan participant) (i) reaches age 72 (or 701⁄2 if the owner/participant attained age 701⁄2 prior to 1/1/2020) or (ii) retires, and must be made in a specified form or manner. If a participant is a “5 percent owner” (as defined in the Code), or in the case of an IRA (other than a Roth IRA which is not subject to the lifetime required minimum distribution rules), distributions generally must begin no later than April 1 of the year following the calendar year in which the owner (or plan participant) reaches age 72 (or 701⁄2 if the owner/participant attained age 701⁄2 prior to 1/1/2020). The actuarial present value of death and/or living benefit options and riders elected may need to be taken into account in calculating required minimum distributions. Please consult with your financial professional to learn more about an optional living or death benefit prior to purchase.
Each owner is responsible for requesting distributions under the policy that satisfy applicable tax rules. We do not attempt to provide more than general information about the use of the policy with the various types of retirement plans. Purchasers of policies for use with any retirement plan should consult their legal counsel and financial professional regarding the suitability of the policy.
The Code generally requires that interest in a qualified policy be non-forfeitable. If your policy contains a bonus rider with a recapture, forfeiture, or “vesting” feature, it may not be consistent with those requirements. Consult a financial professional before purchasing a bonus rider as part of a qualified policy.
You should consult your legal counsel or financial professional if you are considering purchasing an enhanced death benefit or other optional rider, or if you are considering purchasing a policy for use with any qualified retirement plan or arrangement.
Optional Living Benefits
For policies with a guaranteed lifetime withdrawal benefit or a guaranteed maximum accumulation benefit the application of certain tax rules, particularly those rules relating to distributions from your policy, are not entirely clear. The tax rules for qualified policies may impact the value of these optional benefits. Additionally, the actions of the qualified plan as policy holder may cause the qualified plan participant to lose the benefit of the guaranteed lifetime withdrawal benefit. In view of this uncertainty, you should consult a financial professional before purchasing this policy as a qualified policy.
Withholding
The portion of any distribution under a policy that is includable in gross income will be subject to federal income tax withholding unless the recipient of such distribution elects not to have federal income tax withheld. Election forms will be provided at the time distributions are requested or made. The amount of withholding varies according to the type of distribution. The withholding rates applicable to the taxable portion of periodic payments (other than eligible rollover distributions) are the same as the withholding rates generally applicable to payments of wages. A 10% withholding rate applies to the taxable portion of non-periodic payments.
Regardless of whether you elect not to have federal income tax withheld, you are still liable for payment of federal income tax on the taxable portion of the payment. For qualified policies taxable, “eligible rollover distributions” from Section 401(a) plans, Section 403(a) annuities, Section 403(b) tax-sheltered annuities, and governmental 457 plans are subject to a mandatory federal income tax withholding of 20%. An eligible rollover distribution is any distribution from such a plan, other than specified distributions such as distributions required by the Code, distributions in a specified annuity form or hardship distributions. The 20% withholding does not apply, however, to nontaxable distributions or if (i) the employee (or employee’s spouse or former spouse as beneficiary or alternate payee) chooses a “direct rollover” from the plan to a tax-qualified plan, IRA, Roth IRA or 403(b) tax-sheltered annuity or to a governmental 457 plan that agrees to separately account for rollover contributions; or (ii) a non-spouse beneficiary chooses a “direct rollover” from the plan to an IRA established by the direct rollover.
Annuity Purchases by Residents of Puerto Rico
The IRS has announced that income received by residents of Puerto Rico under life insurance or annuity policies 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 Policies Purchased by Non-resident Aliens and Foreign Corporations
The discussion above provided general information (but not tax advice) regarding U.S. federal income tax consequences to annuity owners that are U.S. persons. Taxable distributions made to owners who are not U.S. persons will generally be subject to U.S. federal income tax withholding at a 30% rate, unless a lower treaty rate applies. In addition, distributions may be subject to state and/or municipal taxes and taxes that may be imposed by the owner’s country of citizenship or residence. Prospective foreign owners are advised to consult with a qualified financial professional regarding U.S., state, and foreign taxation for any annuity policy purchase.
Foreign Account Tax Compliance Act (“FATCA”)
If the payee of a distribution from the policy is a foreign financial institution (“FFI”) or a non-financial foreign entity (“NFFE”) within the meaning of the Code as amended by the Foreign Account Tax Compliance Act (“FATCA”), the distribution could be subject to U.S. federal withholding tax on the taxable amount of the distribution at a 30% rate irrespective of the status of any beneficial owner of the policy or the distribution. The rules relating to FATCA are complex, and a financial professional should be consulted if an FFI or NFFE is or may be designated as a payee with respect to the policy.
Possible Tax Law Changes
Although the likelihood and nature of legislative or regulatory changes is uncertain, there is always the possibility that the tax treatment of the policy could change by legislation, regulation, or otherwise. You should consult a financial professional with respect to legal or regulatory developments and their effect on the policy.
We have the right to modify the policy to meet the requirements of any applicable laws or regulations, including legislative changes that could otherwise diminish the favorable tax treatment that annuity owners currently receive.
VI. In the following (i) the sub-section entitled Transamerica Life Insurance Company replaces the sub-section entitled Western Reserve Life Assurance Co. of Ohio (reflecting TLIC as the new Contract issuer), page 41 (ii) the sub-section entitled Legal Proceedings replaces the counterpart section in the prospectus, page 44. The other sub-sections are added to the OTHER INFORMATION section in the prospectus, pages 41-44:
Abandoned or Unclaimed Property
Every state has unclaimed property laws that generally provide for escheatment to the state of unclaimed property (including proceeds of annuity, life and other insurance policies) under various circumstances. In addition to the state unclaimed property laws, we may be required to escheat property pursuant to regulatory demand, finding, agreement or settlement. To help prevent such escheatment, it is important that you keep your contact and other information on file with us up to date, including the names, contact information and identifying information for owners, insureds, annuitants, beneficiaries and other payees. Such updates should be communicated in a form and manner satisfactory to us.
Legal Proceedings
We, like other life insurance companies, are subject to regulatory and legal proceedings, in the ordinary course of our business. Such legal and regulatory matters include proceedings specific to us and other proceedings generally applicable to business practices in the
industry in which we operate. In some lawsuits and regulatory proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation or regulatory proceeding cannot be predicted with certainty, at the present time, we believe that there are no pending or threatened proceedings or lawsuits that are likely to have a material adverse impact on the separate account, on TCI’s ability to perform under its principal underwriting agreement, or on our ability to meet our obligations under the policy.
Business Continuity
Our business operations maybe adversely affected by volatile natural and man-made disasters, including (but not limited to) hurricanes, earthquakes, terrorism, civil unrest, military action, fires and explosions, pandemic diseases, and other catastrophes (“Catastrophic Events”). Over the past several years, changing weather patterns and climatic conditions have added to the unpredictability and frequency of natural disasters in certain parts of the world. Such uncertainty as to future trends and exposure may lead to financial losses to our businesses. Furthermore, Catastrophic Events may disrupt our operations and result in the loss of, or restricted access to, property and information about Transamerica and its clients. Such events may also impact the availability and capacity of our key personnel. If our business continuity plans have not included effective contingencies for Catastrophic Events, we may experience business disruption, damage to corporate reputation, and damage to financial condition for a prolonged period of time.
Cyber Security
Our operations support complex transactions and are highly dependent on the proper functioning of information technology and communication systems. Any failure of our information technology or communications systems may result in a material adverse effect on our results of operations and corporate reputation.
Any failure of or gap in the systems and processes necessary to support complex transactions and avoid systems failure, fraud, information security failures, processing errors, cyber intrusion, loss of data and breaches of regulation may lead to a materially adverse effect on our results of operations and corporate reputation. In addition, we must commit significant resources to maintain and enhance its existing systems in order to keep pace with applicable regulatory requirements, industry standards and customer preferences. If we fail to maintain secure and well-functioning information systems, we may not be able to rely on information for product pricing, compliance obligations, risk management and underwriting decisions. In addition, we cannot assure investors or consumers that interruptions, failures or breaches in security of these processes and systems will not occur, or if they do occur, that they can be timely detected and remediated. The occurrence of any of these events may have a materially adverse effect on our businesses, results of operations and financial condition.
A computer system failure or security breach may disrupt our business, damage our reputation and adversely affect our results of operations, financial condition and cash flows.
We rely heavily on computer and information systems and internet and network connectivity to conduct a large portion of our business operations. This includes the need to securely store, process, transmit and dispose of confidential information, including personal information, through a number of complex systems. In many cases this also includes transmission and processing to or through commercial customers, business partners and third-party service providers. The introduction of new technologies, computer system failures, cyber-crime attacks or security or data privacy breaches may materially disrupt our business operations, damage our reputation, result in regulatory and litigation exposure, investigation and remediation costs, and materially and adversely affect our results of operations, financial condition and cash flows.
The information security risk that we face includes the risk of malicious outside forces using public networks and other methods, including social engineering and the exploitation of targeted offline processes, to attack our systems and information. It also includes inside threats, both malicious and accidental. For example, human error, unauthorized user activity and lack of sufficiently automated processing can result in improper information exposure or use. We also face risk in this area due to its reliance in many cases on third-party systems, all of which may face cyber and information security risks of their own. Third-party administrators or distribution partners used by us or our affiliates may not adequately secure their own information systems and networks, or may not adequately keep pace with the dynamic changes in this area. Potential bad actors that target us and our applicable third parties may include, but are not limited to, criminal organizations, foreign government bodies, political factions, and others.
In recent years information security risk has increased sharply due to a number of developments in how information systems are used by companies such as us, but also by society in general. Threats have increased as criminals and other bad actors become more organized and employ more sophisticated techniques. At the same time companies increasingly make information systems and data available through the internet, mobile devices or other network connections to customers, employees and business partners, thereby expanding the attack surface that bad actors can exploit.
Large, global financial institutions such as us have been, and will continue to be subject to information security attacks for the foreseeable future. The nature of these attacks will also continue to be unpredictable, and in many cases may arise from circumstances that are beyond our control. If we fail to adequately invest in defensive infrastructure, timely response capabilities, technology and processes or to effectively execute against its information security strategy, it may suffer material adverse consequences.
To date the highest impact information security incidents that we have experienced are believed to have been the result of e-mail phishing attacks targeted at our business partners and commercial customers. This in turn led to unauthorized use of valid our website credentials to engage in fraudulent transactions and improper data exfiltration. Additionally, we have also faced other types of attacks, including but not limited to other types of phishing attacks and distributed denial of service (DDoS) attacks, as well as certain limited cases of unauthorized internal user activity, including activity between other units of Aegon. Although to our knowledge these events have thus far not been material in nature, our management recognizes the need to establish and maintain adequate information security systems that are capable of addressing the possibility of these types of attacks, as well as for the possibility of more significant and sophisticated information security attacks, in the future. There is no guarantee that the measures that we take will be sufficient to stop all types of attacks or mitigate all types of information security or data privacy risks.
We maintain cyber liability insurance to help decrease the impact of cyber-attacks and information security events, subject to the terms and conditions of the policy, however such insurance may not be sufficient to cover all applicable losses that we may suffer.
A breach of data privacy or security obligations may disrupt our business, damage our reputation and adversely affect financial conditions and results of operations.
Pursuant to applicable laws, various government agencies and independent administrative bodies have established numerous rules protecting the privacy and security of personal information and other confidential information held by us. For example, our businesses are subject to laws and regulations enacted by U.S. federal and state governments, including various regulatory organizations relating to the privacy and/or security of the information of customers, employees or others. These laws, among other things, increased compliance obligations, impacted our businesses’ collection, processing and retention of personal data, reporting of data breaches, and provide for penalties for non-compliance. As an examples the New York Department of Finance Services (NYDFS), pursuant to its cybersecurity regulation, requires financial institutions regulated by the NYDFS, including certain of our entities, to, among other things, satisfy an extensive set of minimum cyber security requirements, including but not limited to governance, management, reporting, policy, technology and control requirements. Numerous other U.S. laws also impose various information security and privacy related obligations with respect to various Company affiliates operating in the U.S., including but not limited to the Gramm-Leach-Bliley Act and related state laws (GLBA), the California Consumer Privacy Act (CCPA) and the Health Insurance Portability and Accountability Act (HIPAA), among many others. Other legislators and regulators with jurisdiction over our businesses are considering, or have already enacted, enhanced information security risk management and privacy rules and regulations. A number of our entities and affiliates are also subject to contractual restrictions with respect to the information of our clients and business partners. The Company, and numerous of its, employees and business partners have access to, and routinely process, the personal information of consumers and employees. We rely on various processes and controls to protect the confidentiality, integrity and availability of personal information and other confidential information that is accessible to, or in the possession of, us, our systems, employees and business partners. It is possible that an employee, business partner or system could, intentionally or unintentionally, inappropriately disclose or misuse personal or confidential information. Our data or data in our possession could also be the subject of an unauthorized information security attack. If we fail to maintain adequate processes and controls or if we or our business partners fail to comply with relevant laws and regulations, policies and procedures, misappropriation or intentional or unintentional inappropriate disclosure or misuse of personal information or other confidential information could occur. Such control inadequacies or non-compliance could cause disrupted operations and misstated or unreliable financial data, materially damage our reputation or lead to increased regulatory scrutiny or civil or criminal penalties or litigation, which, in turn, could have a material adverse effect on our business, financial condition and results of operations. In addition, we analyze personal information and customer data to better manage our business, subject to applicable laws and regulations and other restrictions. It is possible that additional regulatory or other restrictions regarding the use of such techniques may be imposed. Additional privacy and information security obligations have been imposed by various governments with jurisdiction over the Company or its affiliates in recent years, and more such obligations are likely to be imposed in the near future across our operations. Such restrictions and obligations could have material impacts on our business, financial conditions and/or results of operations.
For a complete description regarding Transamerica’s policies for its websites, including the Privacy Policy and Terms of Use for such websites, please visit: www.transamerica.com/individual/privacy-policy and www.transamerica.com/individual/terms of use.
Transamerica Life Insurance Company
We are engaged in the sale of life and health insurance and annuity policies. Transamerica Life Insurance Company located at 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499, is the insurance company issuing the Policy was incorporated under the laws of the State of Iowa on April 19, 1961 as NN Investors Life Insurance Company Inc., and is licensed in all states except New York and the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Transamerica Financial Life Insurance Company was incorporated under the laws of the State of New York on October 3, 1947 and is licensed in all states and the District of Columbia. We are a wholly-owned indirect subsidiary of Transamerica Corporation which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by Aegon N.V. of The Netherlands, the securities of which are publicly traded. Aegon N.V., a holding company, conducts its business through subsidiary companies engaged primarily in the insurance business.
All obligations arising under the policies, including the promise to make annuity payments, are general corporate obligations of ours and subject to our claims paying ability. Accordingly, no financial institution, brokerage firm or insurance agency is responsible for our financial obligations arising under the policies.
Financial Condition of the Company
How to Obtain More Information. We encourage both existing and prospective policy Owners to read and understand our financial statements. We prepare our financial statements on a statutory basis. Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the Iowa Department of Insurance as well as the audited financial statements of the Separate Account are located in the Statement of Additional Information (SAI). For a free copy of the SAI, simply call or write us at the phone number or address of our Administrative Office referenced in this prospectus. In addition, the SAI is available on the SEC’s website at www.sec.gov. Our financial strength ratings which reflect the opinions of leading independent rating agencies of our ability to meet our obligations to our policy Owners, are available on our website (www.transamerica.com/individual/what-we-do/about-us/financial-strength/), and the websites of these nationally recognized statistical ratings organizations – A.M. Best Company (www.ambest.com), Moody’s Investors Service (www.moodys.com), Standard & Poor’s Rating Services (www.standardandpoors.com) and Fitch, Inc. (www.fitchratings.com).
V. The following hereby updates the Condensed Financial Information Appendix section of the prospectus:
APPENDIX
CONDENSED FINANCIAL INFORMATION
The following tables list the accumulation unit values and the number of accumulation units outstanding for the total separate account expenses listed therein (including any applicable fund facilitation fees) for each subaccount available on December 31, 2019.
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
Access VP High Yield FundSM |
2019 | $ | 17.225077 | $ | 19.098955 | 52,580.973 | ||||||||
2018 | $ | 17.575053 | $ | 17.225077 | 60,632.547 | |||||||||
2017 | $ | 17.005174 | $ | 17.575053 | 66,968.908 | |||||||||
2016 | $ | 15.818871 | $ | 17.005174 | 92,669.899 | |||||||||
2015 | $ | 16.015674 | $ | 15.818871 | 70,505.342 | |||||||||
2014 | $ | 15.868720 | $ | 16.015674 | 96,669.035 | |||||||||
2013 | $ | 14.625629 | $ | 15.868720 | 71,596.849 | |||||||||
2012 | $ | 12.995774 | $ | 14.625629 | 52,593.952 | |||||||||
2011 | $ | 12.825272 | $ | 12.995774 | 177,926.814 | |||||||||
2010 | $ | 11.174934 | $ | 12.825272 | 151,230.690 | |||||||||
Fidelity® VIP Contrafund® – Service Class 2 |
2019 | $ | 23.849382 | $ | 30.876026 | 435,325.930 | ||||||||
2018 | $ | 25.905338 | $ | 23.849382 | 484,925.759 | |||||||||
2017 | $ | 21.603342 | $ | 25.905338 | 528,151.992 | |||||||||
2016 | $ | 20.333187 | $ | 21.603342 | 563,697.225 | |||||||||
2015 | $ | 20.532577 | $ | 20.333187 | 654,258.409 | |||||||||
2014 | $ | 18.646841 | $ | 20.532577 | 763,798.173 | |||||||||
2013 | $ | 14.438626 | $ | 18.646841 | 833,903.731 | |||||||||
2012 | $ | 12.606947 | $ | 14.438626 | 930,276.878 | |||||||||
2011 | $ | 13.149181 | $ | 12.606947 | 1,042,833.101 | |||||||||
2010 | $ | 11.403002 | $ | 13.149181 | 1,201,203.352 | |||||||||
Fidelity® VIP Equity-Income – Service Class 2 |
2019 | $ | 20.099715 | $ | 25.195432 | 146,362.380 | ||||||||
2018 | $ | 22.285332 | $ | 20.099715 | 156,355.009 | |||||||||
2017 | $ | 20.058954 | $ | 22.285332 | 187,978.868 | |||||||||
2016 | $ | 17.279045 | $ | 20.058954 | 204,375.794 | |||||||||
2015 | $ | 18.296445 | $ | 17.279045 | 239,263.836 | |||||||||
2014 | $ | 17.102396 | $ | 18.296445 | 288,673.109 | |||||||||
2013 | $ | 13.566541 | $ | 17.102396 | 338,094.741 | |||||||||
2012 | $ | 11.752963 | $ | 13.566541 | 398,204.167 | |||||||||
2011 | $ | 11.839639 | $ | 11.752963 | 485,352.795 | |||||||||
2010 | $ | 10.446909 | $ | 11.839639 | 618,473.798 | |||||||||
Fidelity® VIP Growth Opportunities – Service Class 2 |
2019 | $ | 20.569737 | $ | 28.500404 | 74,106.859 | ||||||||
2018 | $ | 18.589532 | $ | 20.569737 | 87,965.245 | |||||||||
2017 | $ | 14.047860 | $ | 18.589532 | 101,590.281 | |||||||||
2016 | $ | 14.235016 | $ | 14.047860 | 113,815.184 | |||||||||
2015 | $ | 13.702154 | $ | 14.235016 | 121,598.210 | |||||||||
2014 | $ | 12.411180 | $ | 13.702154 | 142,829.378 | |||||||||
2013 | $ | 9.150025 | $ | 12.411180 | 170,083.196 | |||||||||
2012 | $ | 7.776136 | $ | 9.150025 | 208,396.825 | |||||||||
2011 | $ | 7.732542 | $ | 7.776136 | 233,053.332 | |||||||||
2010 | $ | 6.350134 | $ | 7.732542 | 260,668.794 |
ProFund VP Asia 30 |
2019 | $ | 8.154400 | $ | 10.157267 | 72,047.530 | ||||||||
2018 | $ | 10.158228 | $ | 8.154400 | 64,443.322 | |||||||||
2017 | $ | 7.751524 | $ | 10.158228 | 82,300.564 | |||||||||
2016 | $ | 7.809767 | $ | 7.751524 | 70,230.782 | |||||||||
2015 | $ | 8.738796 | $ | 7.809767 | 108,131.893 | |||||||||
2014 | $ | 9.002362 | $ | 8.738796 | 153,272.133 | |||||||||
2013 | $ | 7.939673 | $ | 9.002362 | 184,802.700 | |||||||||
2012 | $ | 6.972297 | $ | 7.939673 | 156,287.802 | |||||||||
2011 | $ | 9.681490 | $ | 6.972297 | 133,346.502 | |||||||||
2010 | $ | 8.620847 | $ | 9.684190 | 350,586.955 | |||||||||
ProFund VP Basic Materials |
2019 | $ | 11.045384 | $ | 12.822928 | 71,710.892 | ||||||||
2018 | $ | 13.603016 | $ | 11.045384 | 82,927.059 | |||||||||
2017 | $ | 11.217667 | $ | 13.603016 | 141,190.734 | |||||||||
2016 | $ | 9.599314 | $ | 11.217667 | 118,332.593 | |||||||||
2015 | $ | 11.308108 | $ | 9.599314 | 105,427.244 | |||||||||
2014 | $ | 11.276288 | $ | 11.308108 | 170,311.880 | |||||||||
2013 | $ | 9.654577 | $ | 11.276288 | 165,794.952 | |||||||||
2012 | $ | 9.024606 | $ | 9.654577 | 179,829.870 | |||||||||
2011 | $ | 10.913501 | $ | 9.024606 | 412,982.864 | |||||||||
2010 | $ | 8.532448 | $ | 10.913501 | 353,918.662 | |||||||||
ProFund VP Bull |
2019 | $ | 17.585538 | $ | 22.351571 | 241,438.459 | ||||||||
2018 | $ | 19.001190 | $ | 17.585538 | 132,426.784 | |||||||||
2017 | $ | 16.143880 | $ | 19.001190 | 261,832.698 | |||||||||
2016 | $ | 14.927259 | $ | 16.143880 | 201,190.279 | |||||||||
2015 | $ | 15.205902 | $ | 14.927259 | 221,060.550 | |||||||||
2014 | $ | 13.832441 | $ | 15.205902 | 427,769.158 | |||||||||
2013 | $ | 10.809542 | $ | 13.832441 | 351,128.298 | |||||||||
2012 | $ | 9.624843 | $ | 10.809542 | 160,356.086 | |||||||||
2011 | $ | 9.759244 | $ | 9.624843 | 201,554.610 | |||||||||
2010 | $ | 8.790225 | $ | 9.759244 | 238,449.988 | |||||||||
ProFund VP Consumer Services |
2019 | $ | 22.526522 | $ | 27.689186 | 80,922.776 | ||||||||
2018 | $ | 22.703972 | $ | 22.526522 | 86,502.668 | |||||||||
2017 | $ | 19.448717 | $ | 22.703972 | 88,967.937 | |||||||||
2016 | $ | 18.928105 | $ | 19.448717 | 92,901.798 | |||||||||
2015 | $ | 18.333369 | $ | 18.928105 | 131,880.192 | |||||||||
2014 | $ | 16.530216 | $ | 18.333369 | 128,129.383 | |||||||||
2013 | $ | 11.983754 | $ | 16.530216 | 143,570.950 | |||||||||
2012 | $ | 9.952766 | $ | 11.983754 | 89,464.412 | |||||||||
2011 | $ | 9.565845 | $ | 9.952766 | 210,911.933 | |||||||||
2010 | $ | 7.990594 | $ | 9.565845 | 71,315.343 | |||||||||
ProFund VP Emerging Markets |
2019 | $ | 7.014977 | $ | 8.594694 | 466,477.712 | ||||||||
2018 | $ | 8.395687 | $ | 7.014977 | 420,422.091 | |||||||||
2017 | $ | 6.388258 | $ | 8.395687 | 599,043.487 | |||||||||
2016 | $ | 5.835046 | $ | 6.388258 | 332,126.057 | |||||||||
2015 | $ | 7.159979 | $ | 5.835046 | 320,661.383 | |||||||||
2014 | $ | 7.517359 | $ | 7.159979 | 368,119.224 | |||||||||
2013 | $ | 8.145803 | $ | 7.517359 | 502,892.868 | |||||||||
2012 | $ | 7.751171 | $ | 8.145803 | 468,205.646 | |||||||||
2011 | $ | 9.788213 | $ | 7.751171 | 403,371.064 | |||||||||
2010 | $ | 9.041882 | $ | 9.788213 | 870,583.963 | |||||||||
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
ProFund VP Europe 30 |
2019 | $ | 7.829695 | $ | 9.095097 | 18,447.762 | ||||||||
2018 | $ | 9.246377 | $ | 7.829695 | 23,306.206 | |||||||||
2017 | $ | 7.831715 | $ | 9.246377 | 30,519.619 | |||||||||
2016 | $ | 7.365848 | $ | 7.831715 | 62,828.253 | |||||||||
2015 | $ | 8.380616 | $ | 7.365848 | 73,078.381 | |||||||||
2014 | $ | 9.302362 | $ | 8.380616 | 85,133.301 | |||||||||
2013 | $ | 7.754767 | $ | 9.302362 | 20,569.255 | |||||||||
2012 | $ | 6.744553 | $ | 7.754767 | 15,372.477 | |||||||||
2011 | $ | 7.505741 | $ | 6.744553 | 9,509.399 | |||||||||
2010 | $ | 7.415490 | $ | 7.505741 | 21,320.582 | |||||||||
ProFund VP Falling U.S. Dollar |
2019 | $ | 6.169777 | $ | 5.942196 | 2,080.683 | ||||||||
2018 | $ | 6.678053 | $ | 6.169777 | 2,841.031 | |||||||||
2017 | $ | 6.243177 | $ | 6.678053 | 2,923.104 | |||||||||
2016 | $ | 6.724302 | $ | 6.243177 | 3,642.197 | |||||||||
2015 | $ | 7.576797 | $ | 6.724302 | 7,571.951 | |||||||||
2014 | $ | 8.790430 | $ | 7.576797 | 5,808.620 | |||||||||
2013 | $ | 9.096403 | $ | 8.790430 | 15,305.852 | |||||||||
2012 | $ | 9.296031 | $ | 9.096403 | 15,319.118 | |||||||||
2011 | $ | 9.689828 | $ | 9.296031 | 25,521.177 | |||||||||
2010 | $ | 10.086471 | $ | 9.689828 | 23,862.368 |
ProFund VP Financials |
2019 | $ | 9.018556 | $ | 11.586302 | 202,141.167 | ||||||||
2018 | $ | 10.210408 | $ | 9.018556 | 213,571.532 | |||||||||
2017 | $ | 8.759627 | $ | 10.210408 | 252,002.603 | |||||||||
2016 | $ | 7.702005 | $ | 8.759627 | 249,179.638 | |||||||||
2015 | $ | 7.928335 | $ | 7.702005 | 185,325.049 | |||||||||
2014 | $ | 7.119678 | $ | 7.928335 | 360,936.424 | |||||||||
2013 | $ | 5.465971 | $ | 7.119678 | 427,215.563 | |||||||||
2012 | $ | 4.443855 | $ | 5.465971 | 130,149.364 | |||||||||
2011 | $ | 5.229310 | $ | 4.443855 | 163,946.194 | |||||||||
2010 | $ | 4.780050 | $ | 5.229310 | 277,364.087 | |||||||||
ProFund VP Government Money Market |
2019 | $ | 9.037257 | $ | 8.981160 | 135,729.751 | ||||||||
2018 | $ | 9.126261 | $ | 9.037257 | 262,291.077 | |||||||||
2017 | $ | 9.251819 | $ | 9.126261 | 185,407.472 | |||||||||
2016 | $ | 9.379106 | $ | 9.251819 | 183,153.859 | |||||||||
2015 | $ | 9.508152 | $ | 9.379106 | 402,626.675 | |||||||||
2014 | $ | 9.639312 | $ | 9.508152 | 512,679.975 | |||||||||
2013 | $ | 9.772295 | $ | 9.639312 | 410,399.705 | |||||||||
2012 | $ | 9.907889 | $ | 9.772295 | 656,356.108 | |||||||||
2011 | $ | 10.044256 | $ | 9.907889 | 866,890.710 | |||||||||
2010 | $ | 10.182840 | $ | 10.044256 | 320,885.045 | |||||||||
ProFund VP International |
2019 | $ | 6.926603 | $ | 8.147330 | 67,229.114 | ||||||||
2018 | $ | 8.338147 | $ | 6.926603 | 72,794.154 | |||||||||
2017 | $ | 6.941537 | $ | 8.338147 | 122,192.701 | |||||||||
2016 | $ | 7.104212 | $ | 6.941537 | 105,882.894 | |||||||||
2015 | $ | 7.466703 | $ | 7.104212 | 74,758.256 | |||||||||
2014 | $ | 8.239303 | $ | 7.466703 | 76,399.977 | |||||||||
2013 | $ | 6.991730 | $ | 8.239303 | 155,442.534 | |||||||||
2012 | $ | 6.115654 | $ | 6.991730 | 142,284.674 | |||||||||
2011 | $ | 7.239199 | $ | 6.115654 | 95,804.745 | |||||||||
2010 | $ | 6.809167 | $ | 7.239199 | 343,553.858 | |||||||||
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
ProFund VP Japan |
2019 | $ | 8.141953 | $ | 9.635292 | 15,238.831 | ||||||||
2018 | $ | 9.343785 | $ | 8.141953 | 15,704.109 | |||||||||
2017 | $ | 7.998392 | $ | 9.343785 | 16,758.642 | |||||||||
2016 | $ | 8.076747 | $ | 7.998392 | 28,836.879 | |||||||||
2015 | $ | 7.740218 | $ | 8.076747 | 46,915.194 | |||||||||
2014 | $ | 7.603286 | $ | 7.740218 | 28,212.393 | |||||||||
2013 | $ | 5.200955 | $ | 7.603286 | 49,727.194 | |||||||||
2012 | $ | 4.289653 | $ | 5.200955 | 2,120.712 | |||||||||
2011 | $ | 5.339560 | $ | 4.289653 | 37,433.078 | |||||||||
2010 | $ | 5.792799 | $ | 5.339560 | 2,298.594 | |||||||||
ProFund VP Mid-Cap |
2019 | $ | 14.794834 | $ | 18.023207 | 48,461.284 | ||||||||
2018 | $ | 17.217607 | $ | 14.794834 | 53,850.786 | |||||||||
2017 | $ | 15.390459 | $ | 17.217607 | 59,983.509 | |||||||||
2016 | $ | 13.204039 | $ | 15.390459 | 150,041.746 | |||||||||
2015 | $ | 14.012441 | $ | 13.204039 | 95,161.865 | |||||||||
2014 | $ | 13.199102 | $ | 14.012441 | 94,004.316 | |||||||||
2013 | $ | 10.232956 | $ | 13.199102 | 237,615.537 | |||||||||
2012 | $ | 8.981224 | $ | 10.232956 | 297,962.655 | |||||||||
2011 | $ | 9.504332 | $ | 8.981224 | 128,623.034 | |||||||||
2010 | $ | 7.769054 | $ | 9.504332 | 272,918.110 | |||||||||
ProFund VP NASDAQ-100 |
2019 | $ | 31.447479 | $ | 42.395888 | 106,824.293 | ||||||||
2018 | $ | 32.497881 | $ | 31.447479 | 114,044.029 | |||||||||
2017 | $ | 25.275102 | $ | 32.497881 | 120,294.279 | |||||||||
2016 | $ | 24.348334 | $ | 25.275102 | 115,116.515 | |||||||||
2015 | $ | 22.976433 | $ | 24.348334 | 130,452.280 | |||||||||
2014 | $ | 19.911911 | $ | 22.976433 | 172,280.774 | |||||||||
2013 | $ | 15.036840 | $ | 19.911911 | 157,769.767 | |||||||||
2012 | $ | 13.118962 | $ | 15.036840 | 207,260.656 | |||||||||
2011 | $ | 13.111457 | $ | 13.118962 | 169,162.889 | |||||||||
2010 | $ | 11.243597 | $ | 13.111457 | 114,382.976 | |||||||||
ProFund VP Oil & Gas |
2019 | $ | 6.866598 | $ | 7.348466 | 148,032.921 | ||||||||
2018 | $ | 8.728508 | $ | 6.866598 | 152,347.430 | |||||||||
2017 | $ | 9.140528 | $ | 8.728508 | 166,909.690 | |||||||||
2016 | $ | 7.463220 | $ | 9.140528 | 212,584.313 | |||||||||
2015 | $ | 9.876064 | $ | 7.463220 | 191,517.652 | |||||||||
2014 | $ | 11.235374 | $ | 9.876064 | 244,360.587 | |||||||||
2013 | $ | 9.182348 | $ | 11.235374 | 252,137.596 | |||||||||
2012 | $ | 9.049374 | $ | 9.182348 | 274,545.675 | |||||||||
2011 | $ | 8.974236 | $ | 9.049374 | 506,578.706 | |||||||||
2010 | $ | 7.727316 | $ | 8.974236 | 627,073.315 |
ProFund VP Pharmaceuticals |
2019 | $ | 17.225145 | $ | 19.372433 | 45,895.183 | ||||||||
2018 | $ | 18.622000 | $ | 17.225145 | 56,173.831 | |||||||||
2017 | $ | 17.109881 | $ | 18.622000 | 62,447.040 | |||||||||
2016 | $ | 18.021663 | $ | 17.109881 | 79,050.158 | |||||||||
2015 | $ | 17.496558 | $ | 18.021663 | 121,149.198 | |||||||||
2014 | $ | 14.863873 | $ | 17.496558 | 179,704.867 | |||||||||
2013 | $ | 11.450483 | $ | 14.863873 | 91,266.095 | |||||||||
2012 | $ | 10.380952 | $ | 11.450483 | 76,217.793 | |||||||||
2011 | $ | 9.063861 | $ | 10.380952 | 224,425.739 | |||||||||
2010 | $ | 9.147177 | $ | 9.063861 | 56,601.099 | |||||||||
ProFund VP Precious Metals |
2019 | $ | 3.913547 | $ | 5.634126 | 225,843.247 | ||||||||
2018 | $ | 4.586418 | $ | 3.913547 | 251,738.699 | |||||||||
2017 | $ | 4.417309 | $ | 4.586418 | 229,792.629 | |||||||||
2016 | $ | 2.874526 | $ | 4.417309 | 187,069.978 | |||||||||
2015 | $ | 4.340896 | $ | 2.874526 | 181,234.182 | |||||||||
2014 | $ | 5.781563 | $ | 4.340896 | 234,735.458 | |||||||||
2013 | $ | 9.447469 | $ | 5.781563 | 268,800.615 | |||||||||
2012 | $ | 11.211332 | $ | 9.447469 | 369,731.116 | |||||||||
2011 | $ | 14.071929 | $ | 11.211332 | 433,769.581 | |||||||||
2010 | $ | 10.734125 | $ | 14.071929 | 417,283.825 | |||||||||
ProFund VP Short Emerging Markets |
2019 | $ | 2.766927 | $ | 2.155864 | 36,184.517 | ||||||||
2018 | $ | 2.492187 | $ | 2.766927 | 39,556.829 | |||||||||
2017 | $ | 3.502014 | $ | 2.492187 | 41,716.210 | |||||||||
2016 | $ | 4.239427 | $ | 3.502014 | 25,472.898 | |||||||||
2015 | $ | 3.854765 | $ | 4.239427 | 190,585.883 | |||||||||
2014 | $ | 4.026694 | $ | 3.854765 | 44,580.439 | |||||||||
2013 | $ | 4.092505 | $ | 4.026694 | 34,849.093 | |||||||||
2012 | $ | 4.772669 | $ | 4.092505 | 39,403.544 | |||||||||
2011 | $ | 4.373115 | $ | 4.772669 | 43,702.942 | |||||||||
2010 | $ | 5.435592 | $ | 4.373115 | 72,257.110 | |||||||||
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
ProFund VP Short International |
2019 | $ | 3.798546 | $ | 3.093565 | 3,491.878 | ||||||||
2018 | $ | 3.335807 | $ | 3.798546 | 3,868.376 | |||||||||
2017 | $ | 4.261846 | $ | 3.335807 | 4,016.355 | |||||||||
2016 | $ | 4.592142 | $ | 4.261846 | 6,101.057 | |||||||||
2015 | $ | 4.839456 | $ | 4.592142 | 5,732.501 | |||||||||
2014 | $ | 4.773570 | $ | 4.839456 | 6,561.979 | |||||||||
2013 | $ | 6.127722 | $ | 4.773570 | 12,119.832 | |||||||||
2012 | $ | 7.782626 | $ | 6.127722 | 14,322.523 | |||||||||
2011 | $ | 7.751595 | $ | 7.782626 | 17,245.399 | |||||||||
2010 | $ | 9.214366 | $ | 7.751595 | 21,464.738 | |||||||||
ProFund VP Short NASDAQ-100 |
2019 | $ | 1.359250 | $ | 0.964403 | 91,171.970 | ||||||||
2018 | $ | 1.419356 | $ | 1.359250 | 88,993.448 | |||||||||
2017 | $ | 1.925233 | $ | 1.419356 | 83,109.270 | |||||||||
2016 | $ | 2.170466 | $ | 1.925233 | 89,281.985 | |||||||||
2015 | $ | 2.531004 | $ | 2.170466 | 98,305.824 | |||||||||
2014 | $ | 3.183492 | $ | 2.531004 | 194,330.533 | |||||||||
2013 | $ | 4.572615 | $ | 3.183492 | 51,076.712 | |||||||||
2012 | $ | 5.710281 | $ | 4.572615 | 59,693.463 | |||||||||
2011 | $ | 6.467603 | $ | 5.710281 | 51,754.992 | |||||||||
2010 | $ | 8.321079 | $ | 6.467603 | 62,355.367 | |||||||||
ProFund VP Short Small-Cap |
2019 | $ | 1.568890 | $ | 1.225638 | 514,439.369 | ||||||||
2018 | $ | 1.441192 | $ | 1.568890 | 518,667.298 | |||||||||
2017 | $ | 1.703198 | $ | 1.441192 | 520,096.551 | |||||||||
2016 | $ | 2.202666 | $ | 1.703198 | 241,813.581 | |||||||||
2015 | $ | 2.252013 | $ | 2.202666 | 38,108.826 | |||||||||
2014 | $ | 2.515774 | $ | 2.252013 | 37,844.618 | |||||||||
2013 | $ | 3.710607 | $ | 2.515774 | 23,750.677 | |||||||||
2012 | $ | 4.643333 | $ | 3.710607 | 51,238.332 | |||||||||
2011 | $ | 5.178980 | $ | 4.643333 | 66,168.473 | |||||||||
2010 | $ | 7.390741 | $ | 5.178980 | 37,463.245 | |||||||||
ProFund VP Small-Cap |
2019 | $ | 15.777452 | $ | 19.232253 | 24,493.542 | ||||||||
2018 | $ | 18.367887 | $ | 15.777452 | 34,702.173 | |||||||||
2017 | $ | 16.565713 | $ | 18.367887 | 83,290.861 | |||||||||
2016 | $ | 14.034648 | $ | 16.565713 | 95,163.695 | |||||||||
2015 | $ | 15.173002 | $ | 14.034648 | 82,481.045 | |||||||||
2014 | $ | 15.013427 | $ | 15.173002 | 64,471.160 | |||||||||
2013 | $ | 11.097242 | $ | 15.013427 | 257,852.225 | |||||||||
2012 | $ | 9.806954 | $ | 11.097242 | 235,470.314 | |||||||||
2011 | $ | 10.540083 | $ | 9.806954 | 164,483.844 | |||||||||
2010 | $ | 8.564508 | $ | 10.540083 | 194,854.190 |
ProFund VP Small-Cap Value |
2019 | $ | 14.450996 | $ | 17.467190 | 35,026.565 | ||||||||
2018 | $ | 17.082931 | $ | 14.450996 | 22,271.813 | |||||||||
2017 | $ | 15.788224 | $ | 17.082931 | 75,856.172 | |||||||||
2016 | $ | 12.431448 | $ | 15.788224 | 120,070.686 | |||||||||
2015 | $ | 13.743193 | $ | 12.431448 | 30,290.516 | |||||||||
2014 | $ | 13.169900 | $ | 13.743193 | 47,117.591 | |||||||||
2013 | $ | 9.699822 | $ | 13.169900 | 143,574.375 | |||||||||
2012 | $ | 8.468064 | $ | 9.699822 | 46,573.851 | |||||||||
2011 | $ | 8.953762 | $ | 8.468064 | 146,544.459 | |||||||||
2010 | $ | 7.435629 | $ | 8.953762 | 30,585.760 | |||||||||
ProFund VP Telecommunications |
2019 | $ | 9.150967 | $ | 10.357463 | 30,864.948 | ||||||||
2018 | $ | 10.930862 | $ | 9.150967 | 24,016.243 | |||||||||
2017 | $ | 11.323944 | $ | 10.930862 | 41,518.753 | |||||||||
2016 | $ | 9.438108 | $ | 11.323944 | 120,365.515 | |||||||||
2015 | $ | 9.426815 | $ | 9.438108 | 77,936.444 | |||||||||
2014 | $ | 9.505007 | $ | 9.426815 | 12,653.170 | |||||||||
2013 | $ | 8.600105 | $ | 9.505007 | 12,436.994 | |||||||||
2012 | $ | 7.484772 | $ | 8.600105 | 223,340.354 | |||||||||
2011 | $ | 7.450223 | $ | 7.484772 | 11,183.615 | |||||||||
2010 | $ | 6.530163 | $ | 7.450223 | 161,025.869 | |||||||||
ProFund VP UltraSmall-Cap |
2019 | $ | 12.296309 | $ | 17.865975 | 99,838.651 | ||||||||
2018 | $ | 17.070521 | $ | 12.296309 | 113,327.823 | |||||||||
2017 | $ | 13.825049 | $ | 17.070521 | 101,497.284 | |||||||||
2016 | $ | 10.042197 | $ | 13.825049 | 78,914.753 | |||||||||
2015 | $ | 11.701077 | $ | 10.042197 | 76,756.320 | |||||||||
2014 | $ | 11.259263 | $ | 11.701077 | 139,206.077 | |||||||||
2013 | $ | 6.116354 | $ | 11.259263 | 268,258.731 | |||||||||
2012 | $ | 4.788925 | $ | 6.116354 | 109,196.571 | |||||||||
2011 | $ | 5.982620 | $ | 4.788925 | 166,751.165 | |||||||||
2010 | $ | 4.086707 | $ | 5.982620 | 185,413.362 | |||||||||
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
ProFund VP U.S. Government Plus |
2019 | $ | 16.066229 | $ | 18.731486 | 26,128.560 | ||||||||
2018 | $ | 17.226650 | $ | 16.066229 | 31,269.679 | |||||||||
2017 | $ | 15.953565 | $ | 17.226650 | 32,849.497 | |||||||||
2016 | $ | 16.226228 | $ | 15.953565 | 79,213.899 | |||||||||
2015 | $ | 17.437123 | $ | 16.226228 | 41,383.148 | |||||||||
2014 | $ | 12.963537 | $ | 17.437123 | 102,928.245 | |||||||||
2013 | $ | 16.250759 | $ | 12.963537 | 34,238.558 | |||||||||
2012 | $ | 16.320537 | $ | 16.250759 | 78,542.805 | |||||||||
2011 | $ | 11.530571 | $ | 16.320537 | 105,963.875 | |||||||||
2010 | $ | 10.617934 | $ | 11.530571 | 70,573.048 | |||||||||
ProFund VP Utilities |
2019 | $ | 15.428491 | $ | 18.696074 | 61,244.388 | ||||||||
2018 | $ | 15.207037 | $ | 15.428491 | 63,421.662 | |||||||||
2017 | $ | 13.936557 | $ | 15.207037 | 71,044.429 | |||||||||
2016 | $ | 12.279884 | $ | 13.936557 | 125,422.972 | |||||||||
2015 | $ | 13.303596 | $ | 12.279884 | 78,362.890 | |||||||||
2014 | $ | 10.716034 | $ | 13.303596 | 99,037.204 | |||||||||
2013 | $ | 9.589393 | $ | 10.716034 | 76,998.437 | |||||||||
2012 | $ | 9.710597 | $ | 9.589393 | 243,137.362 | |||||||||
2011 | $ | 8.379158 | $ | 9.710597 | 490,844.697 | |||||||||
2010 | $ | 8.019287 | $ | 8.379158 | 295,606.175 | |||||||||
TA Aegon High Yield Bond - Initial Class |
2019 | $ | 21.779281 | $ | 24.531298 | 119,461.381 | ||||||||
2018 | $ | 22.617565 | $ | 21.779281 | 139,862.110 | |||||||||
2017 | $ | 21.344645 | $ | 22.617565 | 188,985.653 | |||||||||
2016 | $ | 18.764018 | $ | 21.344645 | 250,749.089 | |||||||||
2015 | $ | 19.865571 | $ | 18.764018 | 273,466.243 | |||||||||
2014 | $ | 19.373178 | $ | 19.865571 | 323,418.571 | |||||||||
2013 | $ | 18.428727 | $ | 19.373178 | 475,419.921 | |||||||||
2012 | $ | 15.922521 | $ | 18.428727 | 811,225.856 | |||||||||
2011 | $ | 15.409945 | $ | 15.922521 | 790,359.596 | |||||||||
2010 | $ | 13.897142 | $ | 15.409945 | 930,927.334 | |||||||||
TA Aegon U.S. Government Securities - Initial Class |
2019 | $ | 13.956361 | $ | 14.672222 | 173,157.463 | ||||||||
2018 | $ | 14.116510 | $ | 13.956361 | 190,353.335 | |||||||||
2017 | $ | 13.943162 | $ | 14.116510 | 214,815.963 | |||||||||
2016 | $ | 14.095533 | $ | 13.943162 | 273,732.781 | |||||||||
2015 | $ | 14.278755 | $ | 14.095533 | 292,650.621 | |||||||||
2014 | $ | 13.834624 | $ | 14.278755 | 334,345.624 | |||||||||
2013 | $ | 14.349109 | $ | 13.834624 | 419,619.527 | |||||||||
2012 | $ | 13.839288 | $ | 14.349109 | 557,286.779 | |||||||||
2011 | $ | 13.040639 | $ | 13.839288 | 893,106.164 | |||||||||
2010 | $ | 12.665517 | $ | 13.040639 | 823,655.823 |
TA Barrow Hanley Dividend Focused - Initial Class |
2019 | $ | 35.710464 | $ | 43.637286 | 713,774.544 | ||||||||
2018 | $ | 40.919788 | $ | 35.710464 | 782,688.113 | |||||||||
2017 | $ | 35.636732 | $ | 40.919788 | 853,225.551 | |||||||||
2016 | $ | 31.444593 | $ | 35.636732 | 906,534.276 | |||||||||
2015 | $ | 33.073730 | $ | 31.444593 | 1,047,381.127 | |||||||||
2014 | $ | 29.898186 | $ | 33.073730 | 1,246,045.974 | |||||||||
2013 | $ | 23.276942 | $ | 29.898186 | 1,392,110.492 | |||||||||
2012 | $ | 21.127668 | $ | 23.276942 | 1,491,689.829 | |||||||||
2011 | $ | 20.852527 | $ | 21.127668 | 1,725,495.064 | |||||||||
2010 | $ | 19.144721 | $ | 20.852527 | 2,065,791.664 | |||||||||
TA BlackRock Global Real Estate Securities - Initial Class |
2019 | $ | 30.815974 | $ | 38.046189 | 302,057.135 | ||||||||
2018 | $ | 34.756793 | $ | 30.815974 | 330,771.276 | |||||||||
2017 | $ | 31.658663 | $ | 34.756793 | 366,882.715 | |||||||||
2016 | $ | 31.901254 | $ | 31.658663 | 427,880.701 | |||||||||
2015 | $ | 32.543740 | $ | 31.901254 | 483,636.619 | |||||||||
2014 | $ | 29.057844 | $ | 32.543740 | 533,209.754 | |||||||||
2013 | $ | 28.359777 | $ | 29.057844 | 597,259.967 | |||||||||
2012 | $ | 22.960569 | $ | 28.359777 | 726,086.443 | |||||||||
2011 | $ | 24.698281 | $ | 22.960569 | 821,421.441 | |||||||||
2010 | $ | 21.651621 | $ | 24.698281 | 925,530.855 | |||||||||
TA BlackRock Government Money Market - Initial Class |
2019 | $ | 12.808139 | $ | 12.880417 | 936,514.554 | ||||||||
2018 | $ | 12.758097 | $ | 12.808139 | 1,338,176.194 | |||||||||
2017 | $ | 12.935572 | $ | 12.758097 | 945,402.745 | |||||||||
2016 | $ | 13.115456 | $ | 12.935572 | 1,261,935.349 | |||||||||
2015 | $ | 13.298405 | $ | 13.115456 | 1,338,876.259 | |||||||||
2014 | $ | 13.483904 | $ | 13.298405 | 1,839,298.169 | |||||||||
2013 | $ | 13.672000 | $ | 13.483904 | 1,718,696.246 | |||||||||
2012 | $ | 13.863770 | $ | 13.672000 | 1,967,208.427 | |||||||||
2011 | $ | 14.056626 | $ | 13.863770 | 2,998,242.194 | |||||||||
2010 | $ | 14.252712 | $ | 14.056626 | 2,907,574.601 | |||||||||
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
TA BlackRock iShares Edge 40 - Initial Class |
2019 | $ | 16.819372 | $ | 19.126233 | 70,727.048 | ||||||||
2018 | $ | 17.792294 | $ | 16.819372 | 81,361.846 | |||||||||
2017 | $ | 16.439055 | $ | 17.792294 | 88,809.384 | |||||||||
2016 | $ | 16.305958 | $ | 16.439055 | 99,069.169 | |||||||||
2015 | $ | 16.546813 | $ | 16.305958 | 121,342.584 | |||||||||
2014 | $ | 15.894718 | $ | 16.546813 | 143,167.006 | |||||||||
2013 | $ | 15.037048 | $ | 15.894718 | 160,463.340 | |||||||||
2012 | $ | 14.366351 | $ | 15.037048 | 172,769.836 | |||||||||
2011 | $ | 14.307516 | $ | 14.366351 | 434,633.516 | |||||||||
2010 | $ | 13.274611 | $ | 14.307516 | 532,782.217 | |||||||||
TA BlackRock Tactical Allocation - Service Class |
2019 | $ | 10.957203 | $ | 12.648367 | 199,231.011 | ||||||||
2018 | $ | 11.624544 | $ | 10.957203 | 236,110.783 | |||||||||
2017 | $ | 10.553960 | $ | 11.624544 | 273,061.182 | |||||||||
2016 | $ | 10.200696 | $ | 10.553960 | 292,157.130 | |||||||||
2015 | $ | 10.356405 | $ | 10.200696 | 285,957.380 | |||||||||
TA International Growth - Initial Class |
2019 | $ | 15.218905 | $ | 19.163504 | 955,603.595 | ||||||||
2018 | $ | 18.753769 | $ | 15.218905 | 1,032,500.483 | |||||||||
2017 | $ | 14.943989 | $ | 18.753769 | 1,178,057.070 | |||||||||
2016 | $ | 15.140752 | $ | 14.943989 | 1,207,487.764 | |||||||||
2015 | $ | 15.341020 | $ | 15.140752 | 1,326,526.173 | |||||||||
2014 | $ | 16.404620 | $ | 15.341020 | 1,605,183.481 | |||||||||
2013 | $ | 14.085900 | $ | 16.404620 | 1,707,346.489 | |||||||||
2012 | $ | 11.693275 | $ | 14.085900 | 1,824,035.619 | |||||||||
2011 | $ | 13.182523 | $ | 11.693275 | 1,960,716.366 | |||||||||
2010 | $ | 12.097230 | $ | 13.182523 | 2,358,691.392 | |||||||||
TA Janus Balanced - Service Class |
2019 | $ | 1.404586 | $ | 1.686805 | 1,807,781.225 | ||||||||
2018 | $ | 1.425288 | $ | 1.404586 | 1,049,695.745 | |||||||||
2017 | $ | 1.238015 | $ | 1.425288 | 958,772.090 | |||||||||
2016 | $ | 1.205646 | $ | 1.238015 | 868,529.484 | |||||||||
2015 | $ | 1.221037 | $ | 1.205646 | 858,459.015 | |||||||||
2014 | $ | 1.148231 | $ | 1.221037 | 848,109.815 | |||||||||
2013 | $ | 0.978247 | $ | 1.148231 | 862,600.039 | |||||||||
2012 | $ | 0.881788 | $ | 0.978247 | 565,438.024 | |||||||||
2011 | $ | 1.002498 | $ | 0.881788 | 734,730.138 | |||||||||
2010 | $ | 0.985954 | $ | 1.002498 | 715,920.107 |
TA Janus Mid-Cap Growth - Initial Class |
2019 | $ | 73.183235 | $ | 98.667732 | 546,001.772 | ||||||||
2018 | $ | 75.129006 | $ | 73.183235 | 590,772.433 | |||||||||
2017 | $ | 59.048412 | $ | 75.129006 | 657,816.110 | |||||||||
2016 | $ | 61.122104 | $ | 59.048412 | 746,797.643 | |||||||||
2015 | $ | 65.261933 | $ | 61.122104 | 832,182.810 | |||||||||
2014 | $ | 66.165999 | $ | 65.261933 | 932,207.804 | |||||||||
2013 | $ | 48.218425 | $ | 66.165999 | 1,092,713.582 | |||||||||
2012 | $ | 44.826337 | $ | 48.218425 | 1,237,160.089 | |||||||||
2011 | $ | 48.721854 | $ | 44.826337 | 1,486,671.370 | |||||||||
2010 | $ | 36.895352 | $ | 48.721854 | 1,361,781.890 | |||||||||
TA JPMorgan Asset Allocation - Conservative - Initial Class |
2019 | $ | 17.526444 | $ | 19.687325 | 1,000,809.858 | ||||||||
2018 | $ | 18.509572 | $ | 17.526444 | 1,039,179.738 | |||||||||
2017 | $ | 16.636863 | $ | 18.509572 | 1,224,165.835 | |||||||||
2016 | $ | 16.123798 | $ | 16.636863 | 1,360,060.590 | |||||||||
2015 | $ | 16.675867 | $ | 16.123798 | 1,598,677.959 | |||||||||
2014 | $ | 16.547157 | $ | 16.675867 | 1,978,551.715 | |||||||||
2013 | $ | 15.341882 | $ | 16.547157 | 2,289,582.116 | |||||||||
2012 | $ | 14.477634 | $ | 15.341882 | 3,232,882.008 | |||||||||
2011 | $ | 14.300152 | $ | 14.477634 | 3,227,328.508 | |||||||||
2010 | $ | 13.311365 | $ | 14.300152 | 3,861,273.424 | |||||||||
TA JPMorgan Asset Allocation – Growth - Initial Class |
2019 | $ | 19.637584 | $ | 24.411659 | 1,777,402.165 | ||||||||
2018 | $ | 22.224158 | $ | 19.637584 | 1,827,774.343 | |||||||||
2017 | $ | 18.080448 | $ | 22.224158 | 1,968,790.821 | |||||||||
2016 | $ | 17.282649 | $ | 18.080448 | 2,164,774.371 | |||||||||
2015 | $ | 17.869579 | $ | 17.282649 | 2,465,100.638 | |||||||||
2014 | $ | 17.638309 | $ | 17.869579 | 3,211,219.886 | |||||||||
2013 | $ | 14.103865 | $ | 17.638309 | 3,632,513.372 | |||||||||
2012 | $ | 12.702216 | $ | 14.103865 | 3,905,346.296 | |||||||||
2011 | $ | 13.617413 | $ | 12.702216 | 4,593,977.587 | |||||||||
2010 | $ | 12.012034 | $ | 13.617413 | 5,571,331.354 | |||||||||
TA JPMorgan Asset Allocation – Moderate - Initial Class |
2019 | $ | 18.997538 | $ | 21.811608 | 1,870,274.510 | ||||||||
2018 | $ | 20.306123 | $ | 18.997538 | 2,013,482.804 | |||||||||
2017 | $ | 17.678421 | $ | 20.306123 | 2,157,155.163 | |||||||||
2016 | $ | 16.980381 | $ | 17.678421 | 2,397,442.035 | |||||||||
2015 | $ | 17.610295 | $ | 16.980381 | 2,834,839.851 | |||||||||
2014 | $ | 17.376133 | $ | 17.610295 | 3,692,010.691 | |||||||||
2013 | $ | 15.523639 | $ | 17.376133 | 4,295,849.999 | |||||||||
2012 | $ | 14.384826 | $ | 15.523639 | 4,861,833.012 | |||||||||
2011 | $ | 14.500819 | $ | 14.384826 | 5,930,673.620 | |||||||||
2010 | $ | 13.321511 | $ | 14.500819 | 7,639,880.293 | |||||||||
TA JPMorgan Asset Allocation - Moderate Growth - Initial Class |
2019 | $ | 19.668175 | $ | 23.278006 | 2,900,939.816 | ||||||||
2018 | $ | 21.462503 | $ | 19.668175 | 3,193,785.949 | |||||||||
2017 | $ | 18.169326 | $ | 21.462503 | 3,541,842.231 | |||||||||
2016 | $ | 17.291048 | $ | 18.169326 | 4,092,391.122 | |||||||||
2015 | $ | 17.933619 | $ | 17.291048 | 4,667,758.473 | |||||||||
2014 | $ | 17.728700 | $ | 17.933619 | 5,947,816.235 | |||||||||
2013 | $ | 15.058219 | $ | 17.728700 | 7,056,443.302 | |||||||||
2012 | $ | 13.800916 | $ | 15.058219 | 7,605,801.510 | |||||||||
2011 | $ | 14.281142 | $ | 13.800916 | 8,914,350.662 | |||||||||
2010 | $ | 12.846013 | $ | 14.281142 | 10,000,906.400 | |||||||||
TA JPMorgan Core Bond - Initial Class |
2019 | $ | 27.077576 | $ | 28.980531 | 480,346.825 | ||||||||
2018 | $ | 27.436756 | $ | 27.077576 | 626,751.620 | |||||||||
2017 | $ | 26.836827 | $ | 27.436756 | 667,054.051 | |||||||||
2016 | $ | 26.575701 | $ | 26.836827 | 715,015.606 | |||||||||
2015 | $ | 26.783613 | $ | 26.575701 | 680,684.642 | |||||||||
2014 | $ | 25.785189 | $ | 26.783613 | 878,236.575 | |||||||||
2013 | $ | 26.637056 | $ | 25.785189 | 932,265.631 | |||||||||
2012 | $ | 25.730325 | $ | 26.637056 | 1,396,065.882 | |||||||||
2011 | $ | 24.263482 | $ | 25.730325 | 1,367,473.130 | |||||||||
2010 | $ | 22.729850 | $ | 24.263482 | 1,412,094.269 | |||||||||
TA JPMorgan Enhanced Index - Initial Class |
2019 | $ | 24.275867 | $ | 31.370686 | 328,280.525 | ||||||||
2018 | $ | 26.192446 | $ | 24.275867 | 326,577.837 | |||||||||
2017 | $ | 21.920957 | $ | 26.192446 | 366,457.357 | |||||||||
2016 | $ | 19.961165 | $ | 21.920957 | 329,773.443 | |||||||||
2015 | $ | 20.255581 | $ | 19.961165 | 443,526.594 | |||||||||
2014 | $ | 17.987584 | $ | 20.255581 | 568,313.215 | |||||||||
2013 | $ | 13.763725 | $ | 17.987584 | 545,379.842 | |||||||||
2012 | $ | 11.995952 | $ | 13.763725 | 434,876.400 | |||||||||
2011 | $ | 12.074293 | $ | 11.995952 | 297,194.565 | |||||||||
2010 | $ | 10.630040 | $ | 12.074293 | 442,787.889 |
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
TA JPMorgan International Moderate Growth - Initial Class |
2019 | $ | 10.931857 | $ | 12.696900 | 85,702.411 | ||||||||
2018 | $ | 12.538437 | $ | 10.931857 | 105,629.799 | |||||||||
2017 | $ | 10.439662 | $ | 12.538437 | 114,194.445 | |||||||||
2016 | $ | 10.457835 | $ | 10.439662 | 127,758.801 | |||||||||
2015 | $ | 10.781151 | $ | 10.457835 | 157,737.390 | |||||||||
2014 | $ | 10.984137 | $ | 10.781151 | 211,235.998 | |||||||||
2013 | $ | 9.881309 | $ | 10.984137 | 251,541.535 | |||||||||
2012 | $ | 8.882872 | $ | 9.881309 | 326,098.628 | |||||||||
2011 | $ | 9.723873 | $ | 8.882872 | 430,916.379 | |||||||||
2010 | $ | 8.922881 | $ | 9.723873 | 476,182.207 | |||||||||
TA JPMorgan Mid Cap Value - Initial Class |
2019 | $ | 33.245143 | $ | 41.378951 | 174,355.780 | ||||||||
2018 | $ | 38.226369 | $ | 33.245143 | 201,796.101 | |||||||||
2017 | $ | 34.157480 | $ | 38.226369 | 226,795.730 | |||||||||
2016 | $ | 30.223990 | $ | 34.157480 | 249,656.971 | |||||||||
2015 | $ | 31.509063 | $ | 30.223990 | 268,355.101 | |||||||||
2014 | $ | 27.713933 | $ | 31.509063 | 326,497.603 | |||||||||
2013 | $ | 21.318986 | $ | 27.713933 | 370,873.885 | |||||||||
2012 | $ | 17.937213 | $ | 21.318986 | 417,689.256 | |||||||||
2011 | $ | 17.828627 | $ | 17.937213 | 495,134.123 | |||||||||
2010 | $ | 14.699065 | $ | 17.828627 | 596,703.933 | |||||||||
TA JPMorgan Tactical Allocation - Initial Class |
2019 | $ | 35.755792 | $ | 39.555962 | 377,784.367 | ||||||||
2018 | $ | 37.356207 | $ | 35.755792 | 419,838.833 | |||||||||
2017 | $ | 34.830167 | $ | 37.356207 | 478,066.571 | |||||||||
2016 | $ | 33.808929 | $ | 34.830167 | 536,910.494 | |||||||||
2015 | $ | 34.319089 | $ | 33.808929 | 612,482.543 | |||||||||
2014 | $ | 32.667302 | $ | 34.319089 | 736,138.216 | |||||||||
2013 | $ | 31.395038 | $ | 32.667302 | 814,019.386 | |||||||||
2012 | $ | 29.556083 | $ | 31.395038 | 948,065.707 | |||||||||
2011 | $ | 28.919091 | $ | 29.556083 | 1,135,293.284 | |||||||||
2010 | $ | 29.356638 | $ | 28.919091 | 1,402,093.730 | |||||||||
TA Managed Risk - Balanced ETF - Service Class |
2019 | $ | 12.988645 | $ | 14.813538 | 97,074.591 | ||||||||
2018 | $ | 13.798830 | $ | 12.988645 | 106,824.887 | |||||||||
2017 | $ | 12.333954 | $ | 13.798830 | 155,436.118 | |||||||||
2016 | $ | 12.053844 | $ | 12.333954 | 135,401.341 | |||||||||
2015 | $ | 12.442802 | $ | 12.053844 | 125,790.481 | |||||||||
2014 | $ | 12.068013 | $ | 12.442802 | 233,291.201 | |||||||||
2013 | $ | 10.981.557 | $ | 12.068013 | 158,022.751 | |||||||||
2012 | $ | 10.273408 | $ | 10.981.557 | 51,301.080 | |||||||||
2011 | $ | 10.266361 | $ | 10.273408 | 36,195.796 | |||||||||
2010 | $ | 9.404541 | $ | 10.266361 | 38,241.246 | |||||||||
TA Managed Risk – Growth ETF - Service Class |
2019 | $ | 13.235794 | $ | 15.586626 | 219,511.851 | ||||||||
2018 | $ | 14.457009 | $ | 13.235794 | 249,786.916 | |||||||||
2017 | $ | 12.373297 | $ | 14.457009 | 239,195.106 | |||||||||
2016 | $ | 11.986436 | $ | 12.373297 | 219,150.013 | |||||||||
2015 | $ | 12.596982 | $ | 11.986436 | 228,129.997 | |||||||||
2014 | $ | 12.285492 | $ | 12.596982 | 302,360.583 | |||||||||
2013 | $ | 10.487780 | $ | 12.285492 | 216,973.371 | |||||||||
2012 | $ | 9.533750 | $ | 10.487780 | 203,958.431 | |||||||||
2011 | $ | 9.777805 | $ | 9.533750 | 198,443.911 | |||||||||
2010 | $ | 8.773736 | $ | 9.777805 | 211,868.642 | |||||||||
TA Morgan Stanley Capital Growth – Initial Class |
2019 | $ | 43.610910 | $ | 53.218716 | 790,208.150 | ||||||||
2018 | $ | 41.454641 | $ | 43.610910 | 560,617.912 | |||||||||
2017 | $ | 29.272040 | $ | 41.454641 | 606,900.361 | |||||||||
2016 | $ | 30.368066 | $ | 29.272040 | 613,493.360 | |||||||||
2015 | $ | 27.546123 | $ | 30.368066 | 743,796.504 | |||||||||
2014 | $ | 26.349811 | $ | 27.546123 | 824,938.430 | |||||||||
2013 | $ | 18.022621 | $ | 26.349811 | 890,548.292 | |||||||||
2012 | $ | 15.816975 | $ | 18.022621 | 979,617.094 | |||||||||
2011 | $ | 17.026758 | $ | 15.816975 | 1,139,134.068 | |||||||||
2010 | $ | 13.547895 | $ | 17.026758 | 1,348,083.780 | |||||||||
TA Multi-Managed Balanced - Initial Class |
2019 | $ | 24.607563 | $ | 29.550552 | 1,912,066.244 | ||||||||
2018 | $ | 25.901738 | $ | 24.607563 | 2,031,888.008 | |||||||||
2017 | $ | 23.010464 | $ | 25.901738 | 2,254,815.664 | |||||||||
2016 | $ | 21.628589 | $ | 23.010464 | 2,465,532.288 | |||||||||
2015 | $ | 21.884434 | $ | 21.628589 | 2,736,886.588 | |||||||||
2014 | $ | 20.026114 | $ | 21.884434 | 3,244,314.462 | |||||||||
2013 | $ | 17.195305 | $ | 20.026114 | 3,441,117.220 | |||||||||
2012 | $ | 15.490313 | $ | 17.195305 | 3,659,012.499 | |||||||||
2011 | $ | 15.097327 | $ | 15.490313 | 4,208,764.914 | |||||||||
2010 | $ | 12.333687 | $ | 15.097327 | 4,823,162.940 |
Separate Account Expense 1.40% | ||||||||||||||
Subaccount |
Year | Beginning AUV | Ending AUV | # Units | ||||||||||
TA PIMCO Total Return - Initial Class |
2019 | $ | 1.095302 | $ | 1.292711 | 288,553.447 | ||||||||
2018 | $ | 1.193522 | $ | 1.095302 | 281,929.061 | |||||||||
2017 | $ | 1.080159 | $ | 1.193522 | 286,944.034 | |||||||||
2016 | $ | 1.039326 | $ | 1.080159 | 307,067.157 | |||||||||
2015 | $ | 1.081404 | $ | 1.039326 | 421,378.216 | |||||||||
2014 | $ | 1.016911 | $ | 1.081404 | 457,893.208 | |||||||||
2013 | $ | 0.921928 | $ | 1.016911 | 1,103,306.571 | |||||||||
2012 | $ | 0.925800 | $ | 0.921928 | 741,985.571 | |||||||||
2011 | $ | 0.971851 | $ | 0.925800 | 1,137,181.718 | |||||||||
2010 | $ | 1.020793 | $ | 0.971851 | 1,135,155.737 | |||||||||
TA QS Investors Active Asset Allocation – Conservative Service Class |
2019 | $ | 11.744290 | $ | 12.883292 | 6,654.034 | ||||||||
2018 | $ | 12.263969 | $ | 11.744290 | 10,437.498 | |||||||||
2017 | $ | 11.132899 | $ | 12.263969 | 13,803.762 | |||||||||
2016 | $ | 10.997182 | $ | 11.132899 | 14,298.453 | |||||||||
2015 | $ | 11.420770 | $ | 10.997182 | 19,541.691 | |||||||||
2014 | $ | 11.177589 | $ | 11.420770 | 47,454.253 | |||||||||
2013 | $ | 10.585587 | $ | 11.177589 | 36,109.176 | |||||||||
2012 | $ | 10.052927 | $ | 10.585587 | 18,379.132 | |||||||||
TA QS Investors Active Asset Allocation – Moderate Growth Service Class |
2019 | $ | 12.904082 | $ | 14.170984 | 76,253.074 | ||||||||
2018 | $ | 13.913821 | $ | 12.904082 | 77,273.119 | |||||||||
2017 | $ | 11.726955 | $ | 13.913821 | 81,818.958 | |||||||||
2016 | $ | 11.661353 | $ | 11.726955 | 92,293.944 | |||||||||
2015 | $ | 12.651363 | $ | 11.661353 | 170,605.062 | |||||||||
2014 | $ | 12.427705 | $ | 12.651363 | 188,973.893 | |||||||||
2013 | $ | 10.816258 | $ | 12.427705 | 120,097.196 | |||||||||
2012 | $ | 9.885567 | $ | 10.816258 | 152,787.562 | |||||||||
TA Small/Mid Cap Value - Initial Class |
2019 | $ | 34.044688 | $ | 42.062181 | 837,148.420 | ||||||||
2018 | $ | 38.992024 | $ | 34.044688 | 939,347.316 | |||||||||
2017 | $ | 34.214832 | $ | 38.992024 | 1,067,607.061 | |||||||||
2016 | $ | 28.641739 | $ | 34.214832 | 1,178,657.222 | |||||||||
2015 | $ | 29.791257 | $ | 28.641739 | 1,249,547.932 | |||||||||
2014 | $ | 28.708285 | $ | 29.791257 | 1,718,657.949 | |||||||||
2013 | $ | 21.354532 | $ | 28.708285 | 1,988,683.040 | |||||||||
2012 | $ | 18.606161 | $ | 21.354532 | 608,966.044 | |||||||||
2011 | $ | 19.381200 | $ | 18.606161 | 859,742.606 | |||||||||
2010 | $ | 15.069250 | $ | 19.381200 | 942,081.304 | |||||||||
TA T. Rowe Price Small Cap - Initial Class |
2019 | $ | 34.209055 | $ | 44.792520 | 391,454.167 | ||||||||
2018 | $ | 37.334887 | $ | 34.209055 | 418,819.904 | |||||||||
2017 | $ | 30.930545 | $ | 37.334887 | 440,977.477 | |||||||||
2016 | $ | 28.198406 | $ | 30.930545 | 497,289.708 | |||||||||
2015 | $ | 27.913912 | $ | 28.198406 | 565,783.129 | |||||||||
2014 | $ | 26.564854 | $ | 27.913912 | 664,113.380 | |||||||||
2013 | $ | 18.696763 | $ | 26.564854 | 729,572.490 | |||||||||
2012 | $ | 16.388292 | $ | 18.696763 | 739,471.839 | |||||||||
2011 | $ | 16.340636 | $ | 16.388292 | 750,308.638 | |||||||||
2010 | $ | 12.325987 | $ | 16.340636 | 953,175.026 | |||||||||
TA WMC US Growth - Initial Class |
2019 | $ | 28.542218 | $ | 39.420366 | 4,774,810.650 | ||||||||
2018 | $ | 28.883208 | $ | 28.542218 | 4,999,843.375 | |||||||||
2017 | $ | 22.668067 | $ | 28.883208 | 5,639,781.363 | |||||||||
2016 | $ | 22.356201 | $ | 22.668067 | 6,339,997.451 | |||||||||
2015 | $ | 21.216391 | $ | 22.356201 | 7,022,054.790 | |||||||||
2014 | $ | 19.363417 | $ | 21.216391 | 8,165,763.664 | |||||||||
2013 | $ | 14.822366 | $ | 19.363417 | 9,080,815.161 | |||||||||
2012 | $ | 13.281899 | $ | 14.822366 | 10,318,960.594 | |||||||||
2011 | $ | 13.989617 | $ | 13.281899 | 11,844,893.009 | |||||||||
2010 | $ | 12.040781 | $ | 13.989617 | 9,505,461.923 |
WRL FREEDOM BELLWETHER®
VARIABLE ANNUITY
Issued Through
WRL SERIES ANNUITY ACCOUNT
By
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
Prospectus
This prospectus gives you important information about the WRL Freedom Bellwether®, a flexible payment variable deferred annuity contract (“Contract”). Please read this prospectus and the fund prospectuses before you invest and keep them for future reference. This Contract is available to individuals as well as to certain group and individual retirement plans. The Contract is not available in all states.
You can put your money into one or more of the following investment choices. Money you put in a subaccount is invested exclusively in a single mutual fund portfolio. Your investments in the portfolios are not guaranteed. You could lose your money. Money you direct into the fixed account earns interest at a rate guaranteed by Western Reserve.
If you would like more information about the WRL Freedom Bellwether®, you can obtain a free copy of the Statement of Additional Information (“SAI”) dated May 1, 2008. Please call us at 1-800-851-9777 (Monday – Friday, 8:30 a.m. - 7:00 p.m. Eastern Time), write us at: Western Reserve, Attention: Customer Care Group, 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499-0001 or visit our website at www.westernreserve.com. A registration statement, including the SAI, has been filed with the Securities and Exchange Commission (“SEC”) and is incorporated herein by reference. The SEC maintains a website (www.sec.gov) that contains the prospectus, the SAI, material incorporated by reference and other information. The table of contents of the SAI is included at the end of this prospectus.
Please note that the Contract and the funds:
• | are not bank deposits |
• | are not federally insured |
• | are not endorsed by any bank or government agency |
• | are not guaranteed to achieve their goal |
• | involve risks, including possible loss of premium |
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.
PORTFOLIOS ASSOCIATED WITH THE SUBACCOUNTS
TRANSAMERICA SERIES TRUST – INITIAL CLASS
Portfolio Construction Manager: Morningstar Associates, LLC
Transamerica Asset Allocation – Conservative VP
Transamerica Asset Allocation – Growth VP
Transamerica Asset Allocation – Moderate VP
Transamerica Asset Allocation – Moderate Growth VP
Transamerica International Moderate Growth VP
Subadvised by BlackRock Investment Management, LLC
Transamerica BlackRock Large Cap Value VP
Subadvised by Capital Guardian Trust Company
Transamerica Capital Guardian U.S. Equity VP
Transamerica Capital Guardian Value VP
Subadvised by ING Clarion Real Estate Securities
Transamerica Clarion Global Real Estate Securities VP
Subadvised by Federated Equity Management Company of Pennsylvania
Transamerica Federated Market Opportunity VP
Subadvised by J.P. Morgan Investment Advisors, Inc.
Transamerica JPMorgan Core Bond VP
Subadvised by J.P. Morgan Investment Management Inc.
Transamerica JPMorgan Enhanced Index VP
Subadvised by ClearBridge Advisors, LLC
Transamerica Legg Mason Partners All Cap VP
Subadvised by MFS® Investment Management
Transamerica MFS High Yield VP
Transamerica MFS International Equity VP
Subadvised by Columbia Management Advisors, LLC
Transamerica Marsico Growth VP
Subadvised by Munder Capital Management
Transamerica Munder Net50 VP
Subadvised by Pacific Investment Management Company LLC
Transamerica PIMCO Total Return VP
Subadvised by T. Rowe Price Associates, Inc.
Transamerica T. Rowe Price Equity Income VP
Transamerica T. Rowe Price Small Cap VP
Subadvised by Templeton Investment Counsel, LLC and
Transamerica Investment Management, LLC
Transamerica Templeton Global VP
Subadvised by Third Avenue Management LLC
Transamerica Third Avenue Value VP
|
Subadvised by Transamerica Investment Management, LLC
Transamerica Balanced VP
Transamerica Convertible Securities VP
Transamerica Equity VP
Transamerica Growth Opportunities VP
Transamerica Money Market VP
Transamerica Science & Technology VP
Transamerica Small/Mid Cap Value VP
Transamerica U.S. Government Securities VP
Transamerica Value Balanced VP
Managed by AEGON USA Investment Management
Transamerica Index 50 VP
Transamerica Index 75 VP
Subadvised by Van Kampen Asset Management
Transamerica Van Kampen Mid-Cap Growth VP
ProFunds
Managed by ProFund Advisors LLC
ProFund VP Asia 30
ProFund VP Basic Materials
ProFund VP Bull
ProFund VP Consumer Services
ProFund VP Emerging Markets
ProFund VP Europe 30
ProFund VP Falling U.S. Dollar
ProFund VP Financials
ProFund VP International
ProFund VP Japan
ProFund VP Mid-Cap
ProFund VP Money Market
ProFund VP NASDAQ-100
ProFund VP Oil & Gas
ProFund VP Pharmaceuticals
ProFund VP Precious Metals
ProFund VP Short Emerging Markets
ProFund VP Short International
ProFund VP Short NASDAQ-100
ProFund VP Short Small-Cap
ProFund VP Small-Cap
ProFund VP Small-Cap Value
ProFund VP Telecommunications
ProFund VP UltraSmall-Cap
ProFund VP U.S. Government Plus
ProFund VP Utilities
ACCESS ONE TRUST
Managed by ProFund Advisors LLC
Access VP High Yield FundSM
2
DEFINITIONS OF SPECIAL TERMS | 4 | |||||
SUMMARY | 6 | |||||
ANNUITY CONTRACT FEE TABLE | 12 | |||||
1. | 14 | |||||
2. | 14 | |||||
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6. | 29 | |||||
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Partial Withdrawals and Surrenders – Qualified Contracts Generally |
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Annuity Contracts Purchased by Nonresident Aliens and Foreign Corporations |
32 | |||||
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7. | 33 | |||||
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8. | 35 | |||||
9. | 36 | |||||
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10. | 41 | |||||
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TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION | 45 | |||||
APPENDIX A | ||||||
Condensed Financial Information | 46 |
3
Accumulation period—The period between the Contract date and the maturity date while the Contract is in force.
Accumulation unit value—An accounting unit of measure we use to calculate subaccount values during the accumulation period.
Administrative office—Our phone number is 1-800-851-9777. Our hours are Monday - Friday from 8:30 a.m. – 7:00 p.m. Eastern time.
Age—The issue age, which is annuitant’s age on the birthday nearest the Contract date, plus the number of completed Contract years. When we use the term “age” in this prospectus, it has the same meaning as “attained age” in the Contract.
Annuitant—The person you named in the application (or later changed), to receive annuity payments. The annuitant may be changed as provided in the Contract’s death benefit provisions and annuity provision.
Annuity unit value—An accounting unit of measure we use to calculate annuity payments from the subaccounts after the maturity date.
Annuity value—The sum of the separate account value and the fixed account value at the end of any valuation period.
Annuitize (Annuitization)—When you switch from the accumulation phase to the income phase and we begin to make annuity payments to you (or your designee).
Beneficiary(ies) —The person(s) you elect to receive the death benefit proceeds under the Contract.
Cash value—The annuity value less any applicable premium taxes any loans and unpaid accrued interest, the annual Contract charge, and any rider charges.
Code—The Internal Revenue Code of 1986, as amended.
Contract anniversary—The same day in each succeeding year as the Contract date. If there is no day in a calendar year which coincides with the Contract date, the Contract anniversary will be the first day of the next month.
|
Contract date—Generally, the later of the date on which the initial purchase payment is received, or the date that the properly completed application is received, at Western Reserve’s administrative office. We measure Monthiversaries, Contract years, Contract months and Contract anniversaries from the Contract date.
Death claim day—Any day after the death report day on which we receive a beneficiary’s completed election form regarding payment of his/her portion of the death benefit proceeds that are payable upon the death of an owner who is the annuitant.
Death report day—The valuation date on which we have received both proof of death of an owner who is the annuitant and a beneficiary’s election regarding payment. If the spouse of the deceased owner/annuitant elects to continue (if sole beneficiary) the Contract, there are two death report days (one relating to the death of the first owner/annuitant to die; the second relating to the death of the spouse who continues the Contract). If there is no spousal continuation of the Contract, then there is only one death report day for the Contract. If there are multiple beneficiaries, the death report day is the earliest date on which we receive both proof of death and any beneficiary’s completed election form.
Fixed account—An investment option to which you can direct your money under the Contract, other than the separate account. It provides a guarantee of principal and interest. The assets supporting the fixed account are held in the general account. The fixed account is not available in all states.
Fixed account value—During the accumulation period, your Contract’s value allocated in the fixed account.
Funds—Investment companies which are registered with the U.S. Securities and Exchange Commission. The Contract allows you to invest in the portfolios of the funds through our subaccounts. We reserve the right to add portfolios of other registered investment companies as investment choices under the Contract in the future.
In force—Condition under which the Contract is active and an owner is entitled to exercise all rights under the Contract.
4
Mailing address—4333 Edgewood Road NE, Cedar Rapids, Iowa 52499-0001. All premium payments, loan repayments, correspondence and notices should be sent to this address.
Maturity date—The date on which the accumulation period ends and annuity payments begin. The latest maturity date is the annuitant’s 90th birthday.
Monthiversary—The same day in the month as the Contract date. When there is no date in a calendar month that coincides with the Contract date, the Monthiversary is the first day of the next month.
NYSE—New York Stock Exchange.
Nonqualified Contracts—Contracts issued other than in connection with retirement plans.
Owner (you, your)—The person(s) entitled to exercise all rights under the Contract. The annuitant is an owner unless the application states otherwise, or unless a change of ownership is made at a later time.
Portfolio—A separate investment portfolio of a fund.
Purchase payments/premium—Amounts paid by an owner or on an owner’s behalf to Western Reserve as consideration for the benefits provided by the Contract. When we use the term “purchase payment” or “premium” in this prospectus, it has the same meaning as “net payment” in the Contract, which means the purchase payment less any applicable premium taxes.
Qualified Contracts—Contracts issued in connection with retirement plans that qualify for special federal income tax treatment under the Code.
Separate account—WRL Series Annuity Account, a unit investment trust consisting of subaccounts. Each
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subaccount of the separate account invests solely in shares of a corresponding portfolio of a fund.
Separate account value—During the accumulation period, your Contract’s value in the separate account, which equals the sum of the values in each subaccount.
Subaccount—A subdivision of the separate account that invests exclusively in the shares of a specified portfolio and supports the Contracts. Subaccounts corresponding to each portfolio hold assets under the Contract during the accumulation period. Other subaccounts corresponding to each portfolio will hold assets after the maturity date if you select a variable annuity payment option.
Surrender—The termination of a Contract at the option of an owner.
Valuation date/business date—Each day on which the NYSE is open for trading, except when a subaccount’s corresponding portfolio does not value its shares. Western Reserve is open for business on each day that the NYSE is open. When we use the term “business day,” it has the same meaning as valuation date.
Valuation period—The period of time over which we determine the change in the value of the subaccounts in order to price accumulation units and annuity units. Each valuation period begins at the close of normal trading on the NYSE (currently 4:00 p.m. Eastern Time on each valuation date) and ends at the close of normal trading of the NYSE on the next valuation date.
Western Reserve (we, us, our)—Western Reserve Life Assurance Co. of Ohio.
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The sections in this summary correspond to sections in this prospectus, which discuss the topics in more detail. Please read the entire prospectus carefully.
1. | The Annuity Contract |
The WRL Freedom Bellwether® is a flexible payment variable deferred annuity contract (the “Contract”) offered by Western Reserve. It is a contract between you, as the owner, and Western Reserve, a life insurance company. The Contract provides a way for you to invest on a tax-deferred basis in the subaccounts of the separate account and the fixed account. We intend the Contract to be used to accumulate money for retirement or other long-term investment purposes.
The Contract allows you to direct your money into one or more of the subaccounts. Each subaccount invests exclusively in a single portfolio of a fund. The money you invest in the subaccounts will fluctuate daily based on the portfolio’s investment results. The value of your investment in the subaccounts is not guaranteed and may increase or decrease. You bear the investment risk for amounts you invest in the subaccounts.
You can also direct money to the fixed account. Amounts in the fixed account earn interest annually at a fixed rate that is guaranteed by us never to be less than 4%, and may be more. We guarantee the interest, as well as principal, on money placed in the fixed account. The fixed account is not available in all states.
You can transfer money between any of the investment choices during the accumulation period, subject to certain limits on transfers from the fixed account.
For an additional charge, you may purchase an Additional Earnings Rider that may provide a supplemental death benefit. You may only add the Additional Earnings Rider when you purchase the Contract. See Section 9. Death Benefit, for details concerning this rider. Subject to compliance with applicable law, we may at any time discontinue offering any optional rider described in this prospectus.
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The Guaranteed Minimum Income Benefit Rider is no longer available for new sales, but if you have previously elected the Guaranteed Minimum Income Benefit Rider you can still upgrade.
The Contract, like all deferred annuity contracts, has two phases: the “accumulation period” and the “income phase.” During the accumulation period, earnings accumulate on a tax-deferred basis and are taxed as ordinary income when you take them out of the Contract. The income phase starts on the maturity date when you begin receiving regular payments from your Contract. The money you can accumulate during the accumulation period, as well as the annuity payment option you choose, will largely determine the amount of any income payments you receive during the income phase.
2. | Annuity Payments (The Income Phase) |
The Contract allows you to receive income after the maturity date under one of several annuity payment options. You may choose from fixed payment options or variable payment options. If you select a variable payment option, the dollar amount of the payments you receive may go up or down depending on the investment results of the portfolios you invest in at that time. Generally, you cannot annuitize before your Contract’s fifth anniversary.
3. | Purchase |
You can buy this Contract with $25,000 or more under most circumstances. You can add as little as $50 at any time during the accumulation period. We allow purchase payments up to a total of $1,000,000 per Contract year without prior approval. There is no limit on the total purchase payments you may make during the accumulation period.
4. | Investment Choices |
You can invest your money in any of the fund portfolios by directing it to the corresponding subaccount. The portfolios are described in the fund prospectuses. The portfolios now available to you under the Contract are:
Transamerica Asset Allocation - Conservative VP - Initial Class
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Transamerica Asset Allocation - Growth VP - Initial Class
Transamerica Asset Allocation - Moderate VP - Initial Class
Transamerica Asset Allocation - Moderate Growth VP - Initial Class
Transamerica International Moderate Growth VP - Initial Class
Transamerica BlackRock Large Cap Value VP - Initial Class
Transamerica Capital Guardian U.S. Equity VP - Initial Class
Transamerica Capital Guardian Value VP - Initial Class
Transamerica Clarion Global Real Estate Securities VP - Initial Class
Transamerica Federated Market Opportunity VP - Initial Class
Transamerica JPMorgan Core Bond VP - Initial Class
Transamerica JPMorgan Enhanced Index VP - Initial Class
Transamerica Legg Mason Partners All Cap VP - Initial Class
Transamerica MFS High Yield VP - Initial Class
Transamerica MFS International Equity VP - Initial Class
Transamerica Marsico Growth VP - Initial Class
Transamerica Munder Net50 VP - Initial Class
Transamerica PIMCO Total Return VP - Initial Class
Transamerica T. Rowe Price Equity Income VP - Initial Class
Transamerica T. Rowe Price Small Cap VP - Initial Class
Transamerica Templeton Global VP - Initial Class
Transamerica Third Avenue Value VP - Initial Class
Transamerica Balanced VP - Initial Class
Transamerica Convertible Securities VP - Initial Class
Transamerica Equity VP - Initial Class
Transamerica Growth Opportunities VP - Initial Class
Transamerica Money Market VP - Initial Class
Transamerica Science & Technology VP - Initial Class
Transamerica Small/Mid Cap Value VP - Initial Class
Transamerica U.S. Government Securities VP - Initial Class
Transamerica Value Balanced VP - Initial Class
Transamerica Index 50 VP - Initial Class
Transamerica Index 75 VP - Initial Class
Transamerica Van Kampen Mid-Cap Growth VP - Initial Class
ProFund VP Asia 30(1)
ProFund VP Basic Materials(1)
ProFund VP Bull(1)
ProFund VP Consumer Services(1)
ProFund VP Emerging Markets(1)
ProFund VP Europe 30(1)
ProFund VP Falling U.S. Dollar(1)
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ProFund VP Financials(1)
ProFund VP International(1)
ProFund VP Japan(1)
ProFund VP Mid-Cap(1)
ProFund VP Money Market(1)
ProFund VP NASDAQ-100(1)
ProFund VP Oil & Gas(1)
ProFund VP Pharmaceuticals(1)
ProFund VP Precious Metals(1)
ProFund VP Short Emerging Markets(1)
ProFund VP Short International(1)
ProFund VP Short NASDAQ-100(1)
ProFund VP Short Small-Cap(1)
ProFund VP Small-Cap(1)
ProFund VP Small-Cap Value(1)
ProFund VP Telecommunications(1)
ProFund VP UltraSmall-Cap(1)
ProFund VP U.S. Government Plus(1)
ProFund VP Utilities(1)
Access VP High Yield FundSM(1)
(1) | The ProFunds and Access portfolios permit frequent transfers and investors in these portfolios may bear the additional costs and investment risks of frequent transfers. |
Please contact our administrative office at 1-800-851-9777 (Monday - Friday 8:30 a.m. - 7:00 p.m. Eastern Time) or visit our website (www.westernreserve.com) to obtain an additional copy of the fund prospectuses containing more complete information concerning the funds and portfolios.
Depending upon market conditions, you can make or lose money in any of these subaccounts. We reserve the right to offer other investment choices in the future.
You can also allocate your purchase payments to the fixed account. The fixed account is not available in all states. If your Contract was issued in New Jersey or Washington, you may not direct or transfer any money to the fixed account.
Transfers. You have the flexibility to transfer assets within your Contract. During the accumulation period you may transfer amounts among the subaccounts and between the subaccounts and the fixed account. Certain restrictions and charges apply.
5. | Expenses |
We do not take any deductions for sales charges from purchase payments at the time you buy the Contract. You generally invest the full amount of each purchase payment in one or more of the investment choices.
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During the accumulation period and the income phase (if you elect a variable annuity payment option), we deduct a daily mortality and expense risk charge of 1.25% and a daily administrative charge of 0.15% annually from the money you have invested in the subaccounts.
If you select the Additional Earnings Rider, there is an annual charge during the accumulation period of 0.35% of your Contract’s annuity value. This charge will not increase after you purchase the rider. We deduct the rider charge from your annuity value on each rider anniversary and pro rata on the termination date of the rider. We do not assess this charge during the income phase. This rider is not available in all states.
During the accumulation period, we deduct an annual Contract charge of $30 from the annuity value on each Contract anniversary and at the time of surrender.
We impose a $10 charge per transfer if you make more than 12 transfers among the subaccounts per Contract year. There is no charge for transfers from the fixed account. We do not currently charge for Internet transfers, although we reserve the right to do so in the future.
If you take a Contract loan, we will impose a $30 loan processing fee. Only certain types of qualified Contracts can take Contract loans. This fee is not applicable in all states.
We may deduct state premium taxes, which currently range from 0% to 3.50%, when you make your purchase payment(s), if you surrender the Contract or partially withdraw its value, if we pay out death benefit proceeds, or if you begin to receive regular annuity payments. We only charge you premium taxes in those states that require us to pay premium taxes.
The value of the assets in each subaccount will reflect the fees and expenses paid by the underlying fund portfolios. The lowest and highest fund expenses for the previous calendar year are found in the “Annuity Contract Fee Table” section of this prospectus. See the prospectuses for the underlying fund portfolios for more information.
See Section 10. Other Information - Distribution of the Contracts for information concerning
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compensation we pay our agents for the sale of the Contracts.
6. | Taxes |
The Contract’s earnings are generally not taxed until you take them out. For federal tax purposes, if you take money out during the accumulation period, earnings come out first and are taxed as ordinary income. The annuity payments you receive during the income phase may be considered partly a return of your original investment so that part of each payment may not be taxable as income until the “investment in the contract” has been fully recovered. Different tax consequences may apply for a qualified Contract. If you are younger than 591⁄2 when you take money out of a Contract, you may be charged a 10% federal penalty tax on the amount you must report as taxable income.
Death benefits are taxable and generally are included in the income of the recipient as follows: if received under an annuity payment option, death benefits are taxed in the same manner as annuity payouts; if not received under an annuity option (for instance, if paid out in a lump sum), death benefits are taxed in the same manner as a partial withdrawal or complete surrender.
7. | Access to Your Money |
You can take some or all of your money out anytime during the accumulation period. Unless we otherwise consent, you may not take a partial withdrawal if it reduces the cash value below $25,000. No partial withdrawals may be made from the fixed account without prior consent from us. Access to amounts held in qualified Contracts may be restricted or prohibited by law or regulation or the terms of the plan. Other restrictions and withdrawal charges may apply. You may also have to pay federal income tax and a penalty tax on any money you take out. No withdrawal charges apply.
Partial withdrawals may reduce the death benefit and the Additional Earnings Rider benefit by more than the amount withdrawn.
8. | Performance |
The value of your Contract will vary up or down depending upon the investment performance of the subaccounts you choose and will be reduced by Contract fees and charges. Past performance does not guarantee future results.
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9. | Death Benefit |
If you are both an owner and the annuitant and you die before the maturity date, your beneficiary will receive the death benefit proceeds. If your sole beneficiary is your surviving spouse (and you are the owner/annuitant), then your surviving spouse may elect to continue the Contract. If your surviving spouse elects continuation, we will adjust the annuity value as of the death report day to equal the death benefit proceeds on the death report day. Death benefit provisions may vary by state.
If you are named only as an owner, and you die before the annuitant and before the maturity date, and if your surviving spouse is the successor owner, then the Contract continues. However, the annuity value is not increased to equal the death benefit proceeds.
If you name different persons as owner and annuitant, you can affect whether the death benefit proceeds are payable and who will receive them. Use care when naming owners, annuitants and beneficiaries, and consult your agent if you have questions.
Payments upon death are subject to certain distribution requirements under the Code. See the SAI for more details.
If the annuitant who is an owner dies before the maturity date and if a death benefit is payable, the death benefit proceeds will be the greatest of:
• | the annuity value of your Contract on the death report day; |
• | the total purchase payments you make to the Contract, reduced by partial withdrawals, credited with 5% on each Contract anniversary (until the annuitant turns age 80), up to a maximum of 200% of total purchase payments less withdrawals. (Please note that the 5% credit is not available in all states.); or |
• | the highest annuity value of your Contract on any Contract anniversary between May 1, 2000 or the Contract date (as shown on your Contract schedule page), if later, and the earlier of: |
• | the annuitant’s date of death; or |
• | the Contract anniversary nearest the annuitant’s 80th birthday. This benefit terminates at age 80. |
The highest annuity value will be increased by purchase payments made and decreased by adjusted partial withdrawals taken since the Contract anniversary with the highest annuity value.
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An additional death benefit may be payable if you purchase the Additional Earnings Rider and it is in effect at the time the death benefit proceeds become payable. You may only select the Additional Earnings Rider if you are both the owner and the annuitant (except in the case of a trust or employee-sponsored plan). See Section 9. Death Benefit - Additional Earnings Rider for details.
The death benefit payable, if any, on or after the maturity date depends on the annuity payment option selected. See Section 2. Annuity Payments (The Income Phase) - Fixed Annuity Payment Options and Variable Annuity Payment Options for a description of the annuity payment options. Not all payment options provide for the payment of a death benefit.
10. | Other Information |
Right to Cancel Period. You may return your Contract for a refund within 10 days after you receive it. In most states, the amount of the refund will be the total purchase payments we have received, plus (or minus) any gains (or losses) in the amounts you invested in the subaccounts. You will keep any gains, and bear any losses, on amounts that you invested in the subaccounts. If state law requires, we will refund your original purchase payment(s). We determine the value of the refund as of the date we receive the returned Contract at our administrative office. We will pay the refund within 7 days after we receive your original signature written notice of cancellation and the returned Contract. A faxed version or a copy of the written notice of cancellation will not be sufficient for us to pay a refund. The Contract will then be deemed void. In some states you may have more than 10 days and/or receive a different refund amount.
Who Should Purchase the Contract? We have designed this Contract for people seeking long-term tax deferred accumulation of assets, generally for retirement. This includes persons who have maximized their use of other retirement savings methods, such as 401(k) plans. The tax-deferred feature is most attractive to people in high federal and state tax brackets. You should not buy this Contract if you are looking for a short-term investment or if you cannot take the risk of getting back less money than you put in. If you are purchasing the Contract through a tax-favored arrangement, including traditional IRAs and Roth IRAs, you should consider carefully the costs and benefits of the Contract (including annuity income benefits) before purchasing the Contract, because the tax-favored arrangement itself provides tax-sheltered growth.
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Additional Features. This Contract has additional features that might interest you. These include the following:
• | Systematic Partial Withdrawals: You can arrange to have money automatically sent to you monthly, quarterly, semi-annually, or annually while your Contract is in the accumulation period. Amounts you receive may be included in your gross income and, in certain circumstances, may be subject to penalty taxes. |
• | Dollar Cost Averaging: You can arrange to have a certain amount of money automatically transferred monthly from one or any combination of the fixed account, the Transamerica Money Market VP subaccount or Transamerica JPMorgan Core Bond VP subaccount to your choice of subaccounts. Dollar cost averaging does not guarantee a profit and does not protect against a loss if market prices decline. |
• | Asset Rebalancing: We will, upon your request, automatically transfer amounts periodically among the subaccounts on a regular basis to maintain a desired allocation of the annuity value among the various subaccounts. |
• | Telephone, Fax and Internet Transactions: You may make transfers, withdrawals and/or change the allocation of additional purchase payments by telephone or fax. You may also make transfers and change premium payment allocations through our website – www.westernreserve.com. Internet transactions are not available for transfers and changes in premium payment allocation involving the fixed account. Transfer orders made in writing, by telephone, by facsimile, or via the Internet must be received before the close of our business day, which is the same as when the NYSE closes, usually 4:00 p.m. Eastern Time. Transfer orders received at our administrative office before the NYSE closes are priced using the subaccount accumulation unit value determined at the close of that regular business session of the NYSE (usually 4:00 p.m. Eastern Time). If we receive a transfer order at our administrative office after the NYSE closes for normal trading, we will process the order using the subaccount accumulation unit value determined at the close of the next regular business session of the NYSE. |
• | Contract Loans (for certain qualified Contracts): If you own a qualified Contract, you may be eligible to take out Contract loans during the accumulation period, subject to certain restrictions. Penalties may apply if you fail to comply with required restrictions. See |
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Section 7. Access to Your Money - Contract Loans for Certain Qualified Contracts for details. |
• | Guaranteed Minimum Death Benefit Features: |
• | Additional Benefits with Spousal Continuation: If an owner who is the annuitant dies before the maturity date, and if the surviving spouse of the deceased owner is the sole beneficiary, then the surviving spouse may continue the Contract as sole owner and annuitant. We will pay a death benefit on the death of the surviving spouse and revise the way we calculate the death benefit so that it is based on the age of the surviving spouse. If the surviving spouse is the sole beneficiary and elects to continue the Contract, we will adjust the annuity value as of the death report day to equal the death benefit proceeds as of the death report day. |
• | Additional Death Benefit on Beneficiary’s Death: If an owner who is the annuitant dies before the maturity date, and the deceased owner’s spouse is not named as the sole beneficiary who elects to continue the Contract, then each beneficiary can elect to keep the Contract in the accumulation period (with some restrictions) and to receive his or her portion of the death benefit proceeds over a period not to exceed that beneficiary’s life expectancy (the “distribution period”). We will pay a death benefit under the Contract if the beneficiary dies during the distribution period and permit such beneficiary to name a new beneficiary. We will revise the way we calculate that death benefit so that it is based on the age of such beneficiary. |
• | Multiple Beneficiaries: If an owner who is the annuitant dies before the maturity date, and the deceased owner has named multiple beneficiaries, each beneficiary may choose individually how he or she wants to receive his/her portion of the death benefit proceeds. |
• | Additional Earnings Rider: You may add this rider for an additional charge only when you purchase the Contract and if you and the annuitant are age 75 or younger. It may provide you with a supplemental death benefit to help offset the taxes typically due on annuity death benefits. The Additional Earnings Rider may continue with the Contract if the surviving spouse elects to continue the Contract. If the Additional Earnings Rider is attached to a Contract with multiple beneficiaries, and the |
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death benefit proceeds are payable to the beneficiaries, then each beneficiary may choose individually whether to receive any benefit under the Additional Earnings Rider as of the death report day (and thereby terminate the rider), or continue the rider (with fees) and have any benefit under the Additional Earnings Rider paid on that beneficiary’s death. This rider is not available in all states and may vary by state. We recommend that you consult your tax advisor before you purchase this rider. |
These features are not available in all states, may vary by state and may not be suitable for certain qualified Contracts or in your particular situation. Subject to compliance with applicable law, we may at any time discontinue offering any optional rider or feature described in this prospectus.
Certain states place restrictions on access to the fixed account, on the death benefit calculation, on the annuity payment options and on other features of the Contract. Consult your agent and the Contract for details.
Scheduled Financial Transaction Processing. We process scheduled financial transactions based on the accumulation unit values determined at the end of the business day on which we schedule the transaction. Examples of scheduled financial transactions include systematic partial withdrawals, dollar cost averaging and asset rebalancing.
A business day is any day the NYSE is open. Our business day closes when the NYSE closes, usually 4:00 p.m. Eastern Time. We observe the same holidays as the NYSE. If a day on which a scheduled financial transaction would ordinarily occur falls on a day the NYSE is closed, we will process the transaction the next day that the NYSE is open.
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Other Contracts. We offer other variable annuity contracts which also invest in the same portfolios of the funds. These contracts may have different charges that could affect subaccount performance and may offer different benefits more suitable to your needs. To obtain more information about these contracts, contact your agent, or call us at 1-800-851-9777 (Monday - Friday 8:30 a.m. - 7:00 p.m. Eastern Time).
Financial Information. We have included in Appendix A a financial history of the accumulation unit values for the subaccounts available through this Contract.
11. | Inquiries |
If you need additional information or want to make a transaction, please contact us at:
Western Reserve Life Assurance Co. of Ohio
Administrative Office
1-800-851-9777
(Monday-Friday 8:30 a.m.-7:00 p.m. Eastern Time)
You may check your policy at www.westernreserve.com. We cannot guarantee that you will be able to access this site.
Or write to us at our mailing address:
Western Reserve Life Assurance Co. of Ohio
Attention: Customer Care Group
4333 Edgewood Road NE
Please send all premium payments, loan repayments, correspondence and notices to the mailing address.
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The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract. The first table describes the fees and charges that you will pay at the time that you buy the Contract, take a loan from the Contract, partially withdraw or completely surrender the Contract, or transfer annuity value between the subaccounts and/or the fixed account. State premium taxes may also apply.
Owner Transaction Expenses |
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Sales Load on Purchase Payments |
None | |||
Maximum Withdrawal Charge (as a % of purchase payments)(2) |
None | |||
Transfer Charge(3) |
$ | 10 after 12 per year | ||
Loan Processing Fee(4) |
$ | 30 per loan | ||
Special Service Fee |
$ | 0 - $25 |
The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including portfolio fees and expenses. This table also includes the charges you would pay if you added optional riders to your Contract.
Annual Contract Charge(5) |
$ | 30 per Contract year | ||
Separate Account Annual Expenses (as a % of average separate account value during the accumulation period)(6) |
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Mortality and Expense Risk Charge |
1.25 | % | ||
Administrative Charge |
0.15 | % | ||
Total Separate Account Annual Expenses |
1.40 | % | ||
Annual Optional Rider Fees: |
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Additional Earnings Rider Charge(7) |
0.35 | % |
The next table shows the lowest and highest total operating expenses charged by the portfolios for the fiscal year ended December 31, 2007. Expenses of the portfolios may be higher or lower in the future. More detail concerning each portfolio’s fees and expenses is contained in the prospectus for each portfolio.
Total Annual Portfolio Operating Expenses |
Lowest | Highest | ||
Expenses that are deducted from portfolio assets, including management fees, 12b-1 fees, and other expenses. |
0.40% | 2.07% |
Examples of Maximum Charges
The following Example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. The Example shows the highest costs of investing in the Contract, including Contract owner transaction expenses, the annual Contract charge, separate account charges, the charge for the optional Additional Earnings Rider, and highest Annual Portfolio Operating Expenses.
The Example assumes that you invest $10,000 in the Contract for the time periods indicated. The Example also assumes that your investment has a 5% return each year.
Example(8) |
1 Year | 3 Years | 5 Years | 10 Years | ||||
If you surrender the Contract at the end of the applicable time period. |
$391 | $1191 | $2015 | $4182 | ||||
If you annuitize* or remain invested in the Contract at the end of the applicable time period. |
$391 | $1191 | $2015 | $4182 |
* | You cannot annuitize your Contract before your Contract’s fifth anniversary. |
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Please remember that the Example is an illustration and does not represent past or future expenses. Your actual expenses may be higher or lower than those shown. Similarly, your rate of return may be more or less than the 5% assumed in the Example.
For information concerning compensation paid for the sale of the Contracts, see “Distribution of the Contracts.”
(1) | The Fee Table applies only to the accumulation period. During the income phase, the fees may be different than those described in the fee table. See Section 5 Expenses. |
(2) | We will deduct from any payment for a partial or complete surrender the charge for any extraordinary expenses we incur for expediting delivery of the payment of your partial or complete surrender – such as for wire transfers or overnight mail expenses. We charge $25 for a wire transfer and $20 ($30 for a Saturday delivery) for an overnight delivery. |
(3) | There is no charge for transfers from the fixed account. We do not currently charge for Internet transfers, although we reserve the right to do so in the future. |
(4) | Loans are available only for certain qualified Contracts. The loan processing fee is not applicable in all states. |
(5) | We may waive the annual Contract charge for Contracts sold to groups of employees with the same employer, including our directors, officers and full-time employees, or other groups where sales to the group reduce our administrative expenses. We currently waive this charge if either the annuity value, or the total premium payments, minus all partial surrenders, equals or exceeds $50,000 on the Contract anniversary for which the charge is payable. However, we will deduct this charge from your annuity value if you surrender your Contract completely. |
(6) | These charges are assessed on assets in each subaccount. They do not apply to the fixed account. These charges apply during the accumulation period; they also apply during the income phase if you elect variable annuity income payments. |
(7) | This rider is optional. You may only add this rider when we issue the Contract. If you add it, we will impose during the accumulation period an annual rider charge equal to 0.35% of your Contract’s annuity value on each rider anniversary and pro rata on the termination date of the rider (including contract surrender). The charge will not increase once the rider has been issued. We deduct the rider charge from the fixed account and from each subaccount in proportion to the amount of the annuity value in each account. We do not assess this charge during the income phase. This rider is not available in all states. |
(8) | The Example does not reflect transfer fees or premium taxes (which may range up to 3.5%, depending on the jurisdiction). The annual Contract charge of $30 is reflected as an annual charge of 0.04% that is determined by dividing the total Contract charges collected during 2007 by total average net assets attributable to the Contract during 2007. Different fees and expenses not reflected in the Example may be assessed after you annuitize under a variable annuity payout option. |
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1. | THE ANNUITY CONTRACT |
This prospectus describes the WRL Freedom Bellwether® variable annuity contract offered by Western Reserve.
An annuity is a contract between you, the owner, and an insurance company (in this case Western Reserve), where the insurance company promises to pay the annuitant an income in the form of annuity payments. These payments begin after the maturity date. (See Section 2 below.) Until the maturity date, your annuity is in the accumulation period and the earnings generally are tax deferred. Tax deferral means you generally are not taxed on your annuity until you take money out of your annuity. After the maturity date, your annuity switches to the income phase.
The Contract is a flexible payment variable deferred annuity. You can use the Contract to accumulate funds for retirement or other long-term financial planning purposes.
It is a “flexible payment” Contract because after you purchase it, you can generally make additional investments of $50 or more at any time, until the maturity date. But you are not required to make any additional investments.
The Contract is a “variable” annuity because the value of your Contract can go up or down based on the performance of your investment choices. If you select the variable investment portion of the Contract, the amount of money you are able to accumulate in your Contract during the accumulation period depends upon the performance of your investment choices. If you elect to receive variable annuity payments during the income phase of your Contract, the amount of your annuity payments will also depend upon the performance of your investment choices for the income phase.
The Contract also contains a fixed account. The fixed account offers an interest rate that is guaranteed by Western Reserve to equal at least 4% per year. There may be different interest rates for each payment or transfer you direct to the fixed account which are equal to or greater than the guaranteed rate. The interest rates we set will be credited for periods of at least one year measured from each payment or transfer date.
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The fixed account is not available in all states. If your Contract was issued in New Jersey or Washington, you may not direct or transfer any money to the fixed account.
2. | ANNUITY PAYMENTS (THE INCOME PHASE) |
You choose the date when annuity payments start under the Contract. This is the maturity date. You can change this date by giving us 30 days written notice. The maturity date cannot be earlier than the end of the fifth Contract year. The maturity date cannot be later than the annuitant’s 90th birthday. The maturity date may be earlier for qualified Contracts.
Election of Annuity Payment Option. Before the maturity date, if the annuitant is alive, you may choose an annuity payment option or change your option. If you do not choose an annuity option by the maturity date, we will make payments under Option D (see below) as a Variable Life Income with 10 years of guaranteed payments. You cannot change the annuity payment option after the maturity date.
If you choose a variable payment option, you must specify how you want the annuity proceeds divided among the subaccounts as of the maturity date. If you do not specify, we will allocate the annuity proceeds in the same proportion as the annuity value is allocated among the investment options on the maturity date. As of the maturity date, you may make transfers among the subaccounts, but you may not make transfers from or to the fixed account; we may limit subaccount transfers to one per Contract year.
Unless you specify otherwise, the annuitant named on the application will receive the annuity payments. As of the maturity date and so long as we agree, you may elect a different annuitant or add a joint annuitant who will be a joint payee under a joint and survivor life income payment option. If you do not choose an annuitant, we will consider you to be the annuitant.
Supplemental Contract. Once you annuitize and if you have selected a fixed annuity payment option, the Contract will end and we will issue a supplemental Contract to describe the terms of the option you selected. The supplemental Contract will name who will receive the annuity payments and describe when the annuity payments will be made.
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Annuity Payment Options Under the Contract
The Contract provides several annuity payment options that are described below. You may choose any annuity payment option available under your Contract. You can choose to receive payments monthly, quarterly, semi-annually or annually.
We will use your “annuity proceeds” to provide these payments. The “annuity proceeds” is your annuity value on the maturity date, less any premium tax that may apply. If your annuity payment would be less than $20, then we will pay you the annuity proceeds in one lump sum.
Fixed Annuity Income Payments. If you choose annuity payment Option A, B or C, the dollar amount of each annuity payment will be fixed on the maturity date and guaranteed by us. The payment amount will generally depend on the following:
• | The amount of the annuity proceeds on the maturity date; |
• | The interest rate we credit on those amounts (we guarantee a minimum annual interest rate of 3%); and |
• | The specific payment option you choose. |
Variable Annuity Income Payments. If you choose variable annuity payment Option D or E, the dollar amount of the first variable payment will be determined in accordance with the annuity payment rates set forth in the applicable table contained in the Contract. The dollar amount of each additional variable payment will vary based on the investment performance of the subaccount(s) you invest in and the Contract’s assumed investment return of 5%. The dollar amount of each variable payment after the first may increase, decrease or remain constant. If, after all charges are deducted, the actual investment performance exactly matches the Contract’s assumed investment return of 5% at all times, then the dollar amount of the next variable annuity payment would remain the same. If actual investment performance, after all charges are deducted, exceeds the assumed investment return, then the dollar amount of the variable annuity payments would increase. But, if actual investment performance, less charges, is lower than the 5% assumed investment return, then the dollar amount of the variable annuity payments would decrease. The portfolio in which you are invested must grow at a rate at least equal to the 5% assumed investment return (plus the mortality and expense risk charge of 1.25% annually and the administrative charge of 0.15% annually) in order to
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avoid a decrease in the dollar amount of variable annuity payments. For more information on how variable annuity income payments are determined, see the SAI.
If you elect a variable annuity payment option, we deduct a daily mortality and expense risk charge of 1.10% annually and an administrative charge at 0.15% annually from your subaccount assets.
The annuity payment options are explained below. Some of the annuity payment options may not be available in all states. Options A, B, and C are fixed only. Options D and E are variable only.
Payment Option A — Fixed Installments. We will pay the annuity in equal payments over a fixed period of 5, 10, 15 or 20 years or any other fixed period acceptable to Western Reserve.
Payment Option B — Life Income: Fixed Payments
• | No Period Certain: We will make level payments only during the annuitant’s lifetime; |
• | 10 Years Certain: We will make level payments for the longer of the annuitant’s lifetime or 10 years; or |
• | Guaranteed Return of Annuity Proceeds: We will make level payments for the longer of the annuitant’s lifetime or until the total dollar amount of payments we made to you equals the annuity proceeds. |
Payment Option C — Joint and Survivor Life Income: Fixed Payments. We will make level payments during the joint lifetime of the annuitant and a joint annuitant of your choice. Payments will be made as long as either person is living.
For more information on how the fixed annuity payments are determined, see the SAI.
Variable Annuity Payment Options
Payment Option D — Variable Life Income. The annuity proceeds are used to purchase variable annuity units in the subaccounts you select. You may choose between:
• | No Period Certain: We will make variable payments only during the annuitant’s lifetime; or |
• | 10 Years Certain: We will make variable payments for the longer of the annuitant’s lifetime or 10 years. |
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Payment Option E — Variable Joint and Survivor Life Income. We will make variable payments during the joint lifetime of the annuitant and a joint annuitant of your choice. Payments will be made as long as either person is living.
Other annuity payment options may be arranged by agreement with us.
If your contract is a qualified contract, payment option A may not satisfy minimum required distribution rules. Consult a tax advisor before electing that option.
Note Carefully: The death benefit payable after the maturity date will be affected by the annuity option you choose.
IF:
• | you choose Life Income with No Period Certain or a Joint and Survivor Life Income (fixed or variable); and |
• | the annuitant(s) dies, for example, before the due date of the second annuity payment; |
THEN:
• | we may make only one annuity payment and there will be no death benefit payable. |
IF:
• | you choose Fixed Installments, Life Income with 10 Years Certain, Life Income with Guaranteed Return of Annuity Proceeds, or Variable Life Income with 10 Years Certain; and |
• | the person receiving payments dies prior to the end of the guaranteed period; |
THEN:
• | the remaining guaranteed payments will be continued to that person’s beneficiary, or their value (determined at the date of death) may be paid in a single sum. |
We will not pay interest on amounts represented by uncashed annuity payment checks if the postal or other delivery service is unable to deliver checks to the annuitant’s address of record. The annuitant is responsible for keeping Western Reserve informed of the annuitant’s current address of record.
3. | PURCHASE |
We will not issue a Contract unless:
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• | we receive the information we need to issue the Contract; |
• | we receive a minimum initial purchase payment (except for 403(b) Contracts); and |
• | you and the annuitant are age 85 or younger. |
You should make checks or drafts for purchase payments payable only to “Western Reserve” and send them to our administrative office. Your check or draft must be honored in order for us to pay any associated payments and benefits due under the Contract.
The initial purchase payment for most Contracts must be at least $25,000. We will credit your initial purchase payment to your Contract within two business days after the day we receive it and your complete Contract information at our administrative office. If we are unable to credit your initial purchase payment, we (or your agent) will contact you within five business days and explain why. We will also return your initial purchase payment at that time unless you tell us (or your agent) to keep it. We will credit your initial purchase payment as soon as we receive all necessary application information.
The date on which we credit your initial purchase payment to your Contract is generally the Contract date. If the date we credit your premium to the contract falls on the 29th, 30th or 31st day of the month, your Contract date will be the 28th day of the month. The Contract date is used to determine Contract years, Contract months and Contract anniversaries.
Although we do not anticipate delays in processing your application, we may experience delays if agents fail to forward applications and purchase payments to our administrative office in a timely manner.
If you wish to make purchase payments by bank wire, please contact our administrative office at 1-800-851-9777 (Monday – Friday 8:30 a.m. – 7:00 p.m. Eastern Time.
We may reject any application or purchase payment for any reason permitted by law.
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You are not required to make any additional purchase payments. However, you can make additional purchase payments as often as you like during the lifetime of the annuitant and prior to the maturity date. We will accept purchase payments by bank wire or by check. Additional purchase payments must be at least $50 ($1,000 if by wire). We will credit any additional purchase payments you make to your Contract at the accumulation unit value computed at the end of the business day on which we receive them at our administrative office. Our business day closes when the NYSE closes, usually at 4:00 p.m. Eastern Time. If we receive your purchase payments after the close of our business day, we will calculate and credit them as of the close of the next business day.
Maximum Annual Purchase Payments
We allow purchase payments up to a total of $1,000,000 per Contract year without prior approval. There is no limit on the total purchase payments you may make during the accumulation period.
Allocation of Purchase Payments
On the Contract date, we will allocate your purchase payment to the investment choices you selected on your application. Your allocation must be in whole percentages and must total 100%. We will allocate additional purchase payments as you selected on your application, unless you request a different allocation.
You may change allocations for future additional purchase payments by writing to or telephoning the administrative office or by visiting our website – www.westernreserve.com, subject to the limitations described under Section 4. Investment Choices – Telephone, Fax and Internet Transactions. The allocation change will apply to purchase payments received after the date we receive the change request at our administrative office.
You should review periodically how your payments are divided among the subaccounts because market conditions and your overall financial objectives may change.
You may return your Contract for a refund within 10 days after you receive it. In most states, the amount of the refund will be the total purchase
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payments we have received, plus (or minus) any gains (or losses) in the amounts you invested in the subaccounts. You will keep any gains, and bear any losses, on amounts that you invested in the subaccounts. If state law requires, we will refund your original purchase payment(s). We determine the value of the refund as of the date we receive (at our administrative office) your written notice of cancellation and the returned Contract at our administrative office. We will pay the refund within 7 days after we receive your written notice of cancellation and the returned Contract. The Contract will then be deemed void. In some states you may have more than 10 days and/or receive a different refund amount.
You should expect your annuity value to change from valuation period to valuation period to reflect the investment performance of the portfolios, the interest credited to your value in the fixed account, and the fees and charges we deduct. A valuation period begins at the close of business on each business day and ends at the close of business on the next valuation date. A valuation date is any day the NYSE is open. Our business day closes when the NYSE closes, usually 4:00 p.m. Eastern Time. We observe the same holidays as the NYSE.
We measure the value of your Contract during the accumulation period by using a measurement called an accumulation unit. During the income phase, we use a measurement called an annuity unit. When you direct money into a subaccount, we credit your Contract with accumulation units for that subaccount. We determine how many accumulation units to credit by dividing the dollar amount you direct to the subaccount by the subaccount’s accumulation unit value as of the end of that valuation date. If you withdraw or transfer out of a subaccount, or if we assess a transfer charge, annual Contract charge, or any Additional Earnings Rider charge, we subtract accumulation units from the subaccounts using the same method.
Each subaccount’s accumulation unit value was set at $10 when the subaccount started. We recalculate the accumulation unit value for each subaccount at the close of each valuation date. The new accumulation unit value reflects the investment performance and the fees and expenses of the underlying portfolio and the daily deduction of the mortality and expense risk charge and the administrative charge. For a detailed discussion of how we determine accumulation unit values, see the SAI.
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4. | INVESTMENT CHOICES |
Currently the following underlying fund portfolios are offered through this Contract.
TRANSAMERICA SERIES TRUST – INITIAL CLASS(1)
Portfolio Construction Manager: Morningstar Associates, LLC
Transamerica Asset Allocation – Conservative VP(2)
Transamerica Asset Allocation – Growth VP(2)
Transamerica Asset Allocation – Moderate VP(2)
Transamerica Asset Allocation – Moderate Growth VP(2)
Transamerica International Moderate Growth VP(3)
Subadvised by BlackRock Investment Management, LLC
Transamerica BlackRock Large Cap Value VP(4)
Subadvised by Capital Guardian Trust Company
Transamerica Capital Guardian U.S. Equity VP(4)
Transamerica Capital Guardian Value VP(4)
Subadvised by ING Clarion Real Estate Securities
Transamerica Clarion Global Real Estate Securities VP(4)
Subadvised by Federated Equity Management Company of Pennsylvania
Transamerica Federated Market Opportunity VP(4)
Subadvised by J.P. Morgan Investment Advisors, Inc.
Transamerica JPMorgan Core Bond VP(4)
Subadvised by J.P. Morgan Investment Management Inc.
Transamerica JPMorgan Enhanced Index VP(4)
Subadvised by ClearBridge Advisors, LLC
Transamerica Legg Mason Partners All Cap VP(4)
Subadvised by MFS® Investment Management
Transamerica MFS High Yield VP(4)
Transamerica MFS International Equity VP(4)
Subadvised by Columbia Management Advisors, LLC
Transamerica Marsico Growth VP(4)
Subadvised by Munder Capital Management
Transamerica Munder Net50 VP(4)
Subadvised by Pacific Investment Management Company LLC
Transamerica PIMCO Total Return VP(4)
Subadvised by T. Rowe Price Associates, Inc.
Transamerica T. Rowe Price Equity Income VP(4)
Transamerica T. Rowe Price Small Cap VP(4)
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Subadvised by Templeton Investment Counsel, LLC and Transamerica Investment Management, LLC
Transamerica Templeton Global VP(5)
Subadvised by Third Avenue Management LLC
Transamerica Third Avenue Value VP(4)
Subadvised by Transamerica Investment Management, LLC
Transamerica Balanced VP(4)
Transamerica Convertible Securities VP(4)
Transamerica Equity VP(4)
Transamerica Growth Opportunities VP(4)
Transamerica Money Market VP(4)
Transamerica Science & Technology VP(4)
Transamerica Small/Mid Cap Value VP(4)
Transamerica U.S. Government Securities VP(4)
Transamerica Value Balanced VP(4)
Managed by AEGON USA Investment Management
Transamerica Index 50 VP
Transamerica Index 75 VP
Subadvised by Van Kampen Asset Management
Transamerica Van Kampen Mid-Cap Growth VP(4)
PROFUNDS(6)
Managed by ProFund Advisors LLC
ProFund VP Asia 30
ProFund VP Basic Materials
ProFund VP Bull
ProFund VP Consumer Services
ProFund VP Emerging Markets
ProFund VP Europe 30
ProFund VP Falling U.S. Dollar
ProFund VP Financials
ProFund VP International
ProFund VP Japan
ProFund VP Mid-Cap
ProFund VP Money Market
ProFund VP NASDAQ-100(7)
ProFund VP Oil & Gas
ProFund VP Pharmaceuticals
ProFund VP Precious Metals
ProFund VP Short Emerging Markets
ProFund VP Short International
ProFund VP Short NASDAQ-100(8)
ProFund VP Short Small-Cap
ProFund VP Small-Cap
ProFund VP Small-Cap Value
ProFund VP Telecommunications
ProFund VP UltraSmall-Cap
ProFund VP U.S. Government Plus
ProFund VP Utilities
ACCESS ONE TRUST(6)
Managed by ProFund Advisors LLC
Access VP High Yield FundSM
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(1) | Formerly known as AEGON/Transamerica Series Trust. |
(2) | Transamerica was added to the beginning of the fund name; and Portfolio was replaced with VP at the end of the fund name. |
(3) | Transamerica was added to the beginning of the fund name; and Fund was replaced with VP at the end of the fund name. |
(4) | Unless previously part of the name; Transamerica was added to the beginning of the fund name; and VP was added to the end of the fund name. |
(5) | Formerly known as Templeton Transamerica Global. |
(6) | The ProFunds and Access portfolios permit frequent transfers and investors in these portfolios may bear the additional costs and investment risks of frequent transfers. |
(7) | Formerly known as ProFund VP OTC. |
(8) | Formerly known as ProFund VP Short OTC. |
The following subaccount is closed to new investment as of December 12, 2005:
TRANSAMERICA SERIES TRUST – INITIAL CLASS(1)
Subadvised by J.P. Morgan Investment Management Inc.
Transamerica JPMorgan Mid Cap Value VP(2)
(1) | Formerly known as AEGON/Transamerica Series Trust. |
(2) | Formerly known as JPMorgan Mid Cap Value. |
The following portfolios are available for investment only to Contract owners who purchased their Contract before May 1, 2003.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND - SERVICE CLASS 2
Advised by Fidelity Management & Research Company
Fideltiy - VIP Contrafund® Portfolio
Fidelity - VIP Equity-Income Portfolio
Fidelity - VIP Growth Opportunities Portfolio
The general public may not purchase these portfolios. Their investment objectives and policies may be similar to other portfolios and mutual funds managed by the same investment adviser or sub-adviser that are sold directly to the public. You should not expect that the investment results of the other portfolios and mutual funds will be comparable to the portfolios offered by this prospectus.
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There is no assurance that a portfolio will achieve its stated objective(s). More detailed information may be found in the fund prospectuses that accompany this prospectus. You should read the fund prospectuses carefully before you invest.
Please contact our administrative office at 1-800-851-9777 (Monday - Friday 8:30 a.m. - 7:00 p.m. Eastern Time) or visit our website (www.westernreserve.com) to obtain an additional copy of the fund prospectuses containing more complete information concerning the funds and portfolios.
Selection of Underlying Portfolios
The underlying portfolios offered through this product are selected by Western Reserve, and Western Reserve may consider various factors, including, but not limited to, asset class coverage, the strength of the adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor that we may consider is whether the underlying portfolio or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates. For additional information about these arrangements, see “Revenue We Receive.” We review the portfolios periodically and may remove a portfolio, or limit its availability to new premiums and/or transfers of cash value if we determine that a portfolio no longer satisfies one or more of the selection criteria, and/or if the portfolio has not attracted significant allocations from owners. We have included the Transamerica Series Trust (“TST”) portfolios at least in part because they are managed by Transamerica Asset Management, Inc. (“TAM”), our directly owned subsidiary.
You are responsible for choosing the portfolios, and the amounts allocated to each, that are appropriate for your own individual circumstances and your investment goals, financial situation, and risk tolerance. Because investment risk is borne by you, decisions regarding investment allocations should be carefully considered.
In making your investment selections, we encourage you to thoroughly investigate all of the information regarding the portfolios that is available to you, including each fund’s prospectus, statement of additional information and annual and semi/annual reports. Other sources such as newspapers and financial and other magazines provide more current information, including information about any
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regulatory actions or investigations relating to a fund or portfolio. After you select portfolios for your initial premium, you should monitor and periodically re-evaluate your allocations to determine if they are still appropriate.
You bear the risk of any decline in the cash value of your Contract resulting from the performance of the Portfolios you have chosen.
We do not recommend or endorse any particular portfolio and we do not provide investment advice.
We do not guarantee that each portfolio will always be available for investment through the Contract. We reserve the right, subject to compliance with applicable laws, to add new portfolios or portfolio classes, close existing portfolios or portfolio classes to allocations of new premiums by existing owners or new Contract owners at any time, or substitute portfolio shares that are held by any subaccount for shares of a different portfolio. New or substitute portfolios or portfolio classes may have different fees and expenses and their availability may be limited to certain classes of purchasers. We will not add, delete or substitute any shares attributable to your interest in a subaccount without notice to you and prior approval of the SEC, to the extent required by applicable law.
We reserve the right to limit the number of subaccounts you are invested in at any one time.
Purchase payments you allocate and amounts you transfer to the fixed account become part of the general account of Western Reserve. Interests in the general account have not been registered under the Securities Act of 1933 (the “1933 Act”), nor is the general account registered as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). Accordingly, neither the general account nor any interests in the general account is generally subject to the provisions of the 1933 Act or 1940 Act. Western Reserve has been advised that the staff of the SEC has not reviewed the disclosure in this prospectus which relate to the fixed account.
We guarantee that the interest credited to the fixed account will not be less than 4% per year. We have no formula for determining fixed account interest rates. We establish the interest rate, at our sole discretion, for each purchase payment or transfer into
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the fixed account. Rates are guaranteed for at least one year, but will never be less than 4% per year.
Any money you allocate or transfer to the fixed account will be placed with the other general assets of Western Reserve. All assets in our general account are subject to the general liabilities of our business operations. The amount of money you are able to accumulate in the fixed account during the accumulation period depends upon the total interest credited. The amount of annuity payments you receive during the income phase under a fixed annuity option will remain level for the entire income phase.
When you request a transfer, or if we consent to a partial withdrawal from the fixed account, we will account for it on a first-in, first-out (“FIFO”) basis, for purposes of crediting your interest. This means that we will take the deduction from the oldest money you have put in the fixed account. You may transfer money from the fixed account to the subaccounts once during each Contract year, subject to certain restrictions. You may not transfer money between the fixed account and the subaccounts during the income phase. You may not make partial withdrawals from the fixed account unless we consent.
During the accumulation period, you or your agent/registered representative of record may make transfers from any subaccount. However, if you elect the asset rebalancing program, you may not make any transfers if you want to continue in the program. A transfer would automatically cancel your participation in the asset rebalancing program.
Currently, we allow you to transfer up to 100% of the amount in the fixed account. However, we reserve the right to require that you comply with one or more of the following:
• | That you only make one transfer per Contract year. This restriction does not apply if you have selected dollar cost averaging. |
• | That you request transfers from the fixed account in writing; |
• | That you only make transfers from the fixed account during the 30 days following each contract anniversary; and |
• | That you limit the maximum amount you transfer from the fixed account to the greater of: |
1) | 25% of the amount in the fixed account; or |
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2) | the amount you transferred from the fixed account in the immediately prior Contract year. |
Before affecting any of these requirements, we will notify you in writing, and they will apply uniformly to all Owners.
Except when used to make purchase payments, we may also defer payment of any amounts from the fixed account for no longer than six months after we receive written notice of your request for the transfer. Transfers from the fixed account are not available through our Internet website.
During the income phase of your Contract, you may transfer values from one subaccount to another. No transfers may be made to or from the fixed account during the income phase. The minimum amount that can be transferred during this phase is the lesser of $10 of monthly income, or the entire monthly income of the variable annuity units in the subaccount from which the transfer is being made. We may limit subaccount transfers to one per Contract year.
The fixed account is not available in all states. If your Contract was issued in New Jersey or Washington, you may not transfer any of their Contract value to the fixed account.
Transfers may be made by telephone, fax, mail or Internet, subject to limitations described under Section 4. Investment Choices – Telephone, Fax and Internet Transactions. We consider all transfers made in any one day to be a single transfer.
If you make more than 12 transfers from the subaccounts in any Contract year, we will charge you $10 for each additional transfer you make during that year. There is no charge for transfers from the fixed account. We do not currently charge for Internet transfers, although we reserve the right to do so in the future.
Transfers to and from the subaccounts will be processed based on the accumulation unit values determined at the end of the business day on which we receive your written, telephoned, internet, or faxed request at our administrative office, provided we receive your request at our administrative office before the close of our business day (usually 4:00 p.m. Eastern Time). If we receive your request at our administrative office at or after the close of our business day, we will process the transfer request using the accumulation unit value for the next business day.
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Market Timing and Disruptive Trading
The market timing policy and the related procedures (discussed below) do not apply to the ProFunds or Access subaccounts because the corresponding portfolios are specifically designed to accommodate frequent transfer activity. If you invest in the ProFunds or Access subaccounts, you should be aware that you may bear the costs and increased risks of frequent transfers discussed below.
Statement of Policy. This variable insurance product was not designed for the use of market timers or frequent or disruptive traders (frequent transfers are considered to be disruptive). Such transfers may be harmful to the underlying fund portfolios and increase transaction costs.
Market timing and disruptive trading among the subaccounts or between the subaccounts and the fixed account can cause risks with adverse effects for other contract owners (and beneficiaries and underlying fund portfolios). These risks and harmful effects include:
(1) | dilution of the interests of long-term investors in a subaccount if purchases or transfers into or out of an underlying fund portfolio are made at prices that do not reflect an accurate value for the underlying fund portfolio’s investments (some market timers attempt to do this through methods known as “time-zone arbitrage” and “liquidity arbitrage”); |
(2) | an adverse effect on portfolio management, such as: |
(a) | impeding a portfolio manager’s ability to sustain an investment objective; |
(b) | causing the underlying fund portfolio to maintain a higher level of cash than would otherwise be the case; or |
(c) | causing an underlying fund portfolio to liquidate investments prematurely (or otherwise at an inopportune time) in order to pay withdrawals or transfers out of the underlying fund portfolio; and |
(3) | increased brokerage and administrative expenses. |
These costs are borne by all contract owners invested in those subaccounts, not just those making the transfers.
We have developed policies and procedures with respect to market timing and disruptive trading (which vary for certain subaccounts at the request of the corresponding underlying fund portfolios) and we
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do not make special arrangements or grant exceptions to accommodate market timing or disruptive trading. As discussed herein, we cannot detect or deter all market timing or potentially disruptive trading. Do not invest with us (except in the ProFunds or Access subaccounts as discussed above) if you intend to conduct market timing or potentially disruptive trading.
Detection. We employ various means in an attempt to detect and deter market timing and disruptive trading. However, despite our monitoring we may not be able to detect nor halt all harmful trading. In addition, because other insurance companies (and retirement plans) with different policies and procedures may invest in the underlying fund portfolios, we cannot guarantee that all harmful trading will be detected or that an underlying fund portfolio will not suffer harm from market timing and disruptive trading among subaccounts of variable products issued by these other insurance companies or retirement plans.
Deterrence. If we determine you are engaged in market timing or disruptive trading, we may take one or more actions in an attempt to halt such trading. Your ability to make transfers is subject to modification or restriction if we determine, in our sole opinion, that your exercise of the transfer privilege may disadvantage or potentially harm the rights or interests of other contract owners (or others having an interest in the variable insurance products). As described below, restrictions may take various forms, but under our current policies and procedures will include loss of expedited transfer privileges. We consider transfers by telephone, fax, overnight mail, or the Internet to be “expedited” transfers. This means that we would accept only written transfer requests with an original signature transmitted to us only by U.S. mail. We may also restrict the transfer privileges of others acting on your behalf, including your registered representative or an asset allocation or investment advisory service.
We reserve the right to reject any premium payment or transfer request from any person without prior notice, if, in our judgment, (1) the payment or transfer, or series of transfers, would have a negative impact on an underlying fund portfolio’s operations, or (2) if an underlying fund portfolio would reject or has rejected our purchase order or has instructed us not to allow that purchase or transfer, or (3) because of a history of market timing or disruptive trading. We may impose other restrictions on transfers, or even prohibit transfers for any owner who, in our view, has abused, or appears likely to abuse, the
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transfer privilege on a case-by-case basis. We may, at any time and without prior notice, discontinue transfer privileges, modify our procedures, impose holding period requirements or limit the number, size, frequency, manner, or timing of transfers we permit. Because determining whether to impose any such special restrictions depends on our judgment and discretion, it is possible that some policy owners could engage in disruptive trading that is not permitted for others. We also reserve the right to reverse a potentially harmful transfer if an underlying fund portfolio refuses or reverses our order; in such instances some contract owners may be treated differently than others in that some transfers may be reversed and others allowed. For all of these purposes, we may aggregate two or more variable insurance products that we believe are connected.
In addition to our internal policies and procedures, we will administer your variable insurance product to comply with any applicable state, federal, and other regulatory requirements concerning transfers. We reserve the right to implement, administer, and charge you for any fee or restriction, including redemption fees, imposed by any underlying fund portfolio. To the extent permitted by law, we also reserve the right to defer the transfer privilege at any time that we are unable to purchase or redeem shares of any of the underlying fund portfolios.
Under our current policies and procedures, we do not:
• | impose redemption fees on transfers; or |
• | expressly limit the number or size of transfers in a given period except for certain subaccounts where an underlying fund portfolio has advised us to prohibit certain transfers that exceed a certain size. |
Redemption fees, transfer limits, and other procedures or restrictions may be more or less successful than ours in deterring market timing or other disruptive trading and in preventing or limiting harm from such trading.
In the absence of a prophylactic transfer restriction (e.g., expressly limiting the number of trades within a given period or their size), it is likely that some level of market timing and disruptive trading will occur before it is detected and steps taken to deter it (although some level of market timing and disruptive trading can occur with a prophylactic transfer restriction). As noted above, we do not impose a prophylactic transfer restriction and, therefore, it is likely that, some level of market timing and disruptive trading will occur before we are able to detect it and take steps in an attempt to deter it.
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Please note that the limits and restrictions described herein are subject to our ability to monitor transfer activity. Our ability to detect market timing or disruptive trading may be limited by operational and technological systems, as well as by our ability to predict strategies employed by contract owners (or those acting on their behalf) to avoid detection. As a result, despite our efforts to prevent harmful trading activity among the variable investment options available under this variable insurance product, there is no assurance that we will be able to detect or deter market timing or disruptive trading by such contract owners or intermediaries acting on their behalf. Moreover, our ability to discourage and restrict market timing or disruptive trading may be limited by decisions of state regulatory bodies and court orders that we cannot predict.
Furthermore, we may revise our policies and procedures in our sole discretion at any time and without prior notice, as we deem necessary or appropriate (1) to better detect and deter harmful trading that may adversely affect other contract owners, other persons with material rights under the variable insurance products, or underlying fund shareholders generally, (2) to comply with state or federal regulatory requirements, or (3) to impose additional or alternative restrictions on owners engaging in market timing or disruptive trading among the investment options under the variable insurance product. In addition, we may not honor transfer requests if any variable investment option that would be affected by the transfer is unable to purchase or redeem shares of its corresponding underlying fund portfolio.
Underlying Fund Portfolio Frequent Trading Policies. The underlying fund portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. Underlying fund portfolios may, for example, assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period of time. The prospectuses for the underlying fund portfolios describe any such policies and procedures. The frequent trading policies and procedures of an underlying fund portfolio may be different, and more or less restrictive, than the frequent trading policies and procedures of other underlying fund portfolios and the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading. Contract owners should be aware that we may not have the contractual ability or the operational capacity to monitor contract owners’ transfer requests and apply the frequent
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trading policies and procedures of the respective underlying funds that would be affected by the transfers. Accordingly, contract owners and other persons who have material rights under our variable insurance products should assume that any protection they may have against potential harm from market timing and disruptive trading is the protection, if any, provided by the policies and procedures we have adopted for our variable insurance products to discourage market timing and disruptive trading in certain subaccounts.
Contract owners should be aware that we are required to provide to an underlying fund portfolio or its designee, promptly upon request, certain information about the trading activity of individual contract owners, and to restrict or prohibit further purchases or transfers by specific contract owners identified by an underlying fund portfolio as violating the frequent trading policies established for that portfolio.
Omnibus Orders. Contract owners and other persons with material rights under the variable insurance products also should be aware that the purchase and redemption orders received by the underlying fund portfolios generally are “omnibus” orders from intermediaries such as retirement plans and separate accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and individual owners of variable insurance products. The omnibus nature of these orders may limit the underlying fund portfolios’ ability to apply their respective frequent trading policies and procedures. We cannot guarantee that the underlying fund portfolios will not be harmed by transfer activity relating to the retirement plans or other insurance companies that may invest in the underlying fund portfolios. These other insurance companies are responsible for their own policies and procedures regarding frequent transfer activity. If their policies and procedures fail to successfully discourage harmful transfer activity, it will affect other owners of underlying fund portfolio shares, as well as the owners of all of the variable annuity or life insurance policies, including ours, whose variable investment options correspond to the affected underlying fund portfolios. In addition, if an underlying fund portfolio believes that an omnibus order we submit may reflect one or more transfer requests from owners engaged in market timing and disruptive trading, the underlying fund portfolio may reject the entire omnibus order and thereby delay or prevent us from implementing your request.
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ProFunds and Access Subaccounts. The restrictions above do not apply to ProFunds or Access subaccounts. Because the above restrictions do not apply to the ProFunds or Access subaccounts, they may have a greater risk than others of suffering from the harmful effects of market timing and disruptive trading, as discussed above (i.e., dilution, an adverse effect on portfolio management, and increased expenses).
Dollar cost averaging allows you to transfer systematically a specific amount each month from the fixed account, the Transamerica Money Market VP subaccount, the Transamerica JPMorgan Core Bond VP subaccount or any combination of these accounts to a different subaccount. You may specify the dollar amount to be transferred monthly; however, you must transfer a total of $1,000 monthly ($500 for New Jersey residents). To qualify, a minimum of $25,000 must be in each subaccount from which we make transfers.
You may request dollar cost averaging at any time. To enter into dollar cost averaging, you must submit a completed request form, signed by the owner, to us at our administrative office. There is no charge for this program. However, these transfers do count towards the 12 free transfers allowed during each Contract year.
If you make dollar cost averaging transfers from the fixed account, each month you may transfer no more than 1/10th of the dollar amount in the fixed account on the date you start dollar cost averaging.
By transferring a set amount on a regular schedule instead of transferring the total amount at one particular time, you may reduce the risk of investing in the portfolios only when the price is high. Dollar cost averaging does not guarantee a profit and it does not protect you from loss if market prices decline.
We reserve the right to discontinue offering dollar cost averaging 30 days after we send notice to you. Dollar cost averaging is not available if you have elected the asset rebalancing program or if you elect to participate in any asset allocation service provided by a third party.
Dollar Cost averaging will terminate if we receive (at our mailing office) your or your authorized registered representative request to cancel your participation or the value in the account from which we make the transfers is depleted.
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If we receive additional premium payments after a Dollar Cost Averaging program is completed; the additional premium will be allocated according to the current payment allocations at that time and will not reactivate a completed Dollar Cost Averaging program. New Dollar Cost Averaging instructions will be required to Dollar Cost Average this additional premium.
During the accumulation period you can instruct us to rebalance automatically the amounts in your subaccounts to maintain your desired asset allocation. This feature is called asset rebalancing. To enter into asset rebalancing, you must submit a completed request form, signed by the owner to our mailing office. To end participation in asset rebalancing, you or your authorized registered representative may call or write to our mailing office. Entrance to the asset rebalancing program is limited to once per Contract year. However, we will not rebalance if you are in the dollar cost averaging program or systematic partial withdrawal program, if you elect to participate in any asset allocation service provided by a third party or if you request any other transfer, or if we receive your request to discontinue participation at our administrative office. Asset rebalancing ignores amounts in the fixed account. You can choose to rebalance monthly, quarterly, semi-annually, or annually.
If you request the Asset Rebalancing program, we will change your future payment allocation to match the subaccounts in your Asset Rebalancing Program.
To qualify for asset rebalancing, a minimum annuity value of $25,000 for an existing Contract, or a minimum initial purchase payment of $25,000 for a new Contract, is required. Any annuity value in the fixed account value may not be included in the asset rebalancing program. Asset rebalancing does not guarantee gains, nor does it assure that any subaccount will not have losses.
There is no charge for this program. However, each reallocation which occurs under asset rebalancing will be counted towards the 12 free transfers allowed during each Contract year.
We reserve the right to discontinue, modify or suspend the asset rebalancing program at any time.
Telephone, Fax and Internet Transactions
You may make transfers, change the allocation of
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additional purchase payments and request partial withdrawals by telephone. Telephonic partial withdrawals are not allowed in the following situations:
• | for qualified Contracts (except IRAs); |
• | if the amount you want to withdraw is greater than $50,000; or |
• | if the address of record has been changed within the past 10 days. |
Upon instructions from you, the registered representative/agent of record for your Contract may also make telephonic transfers or partial withdrawals for you. If you do not want the ability to make transfers or partial withdrawals by telephone, you should notify us in writing.
You may make telephonic transfers, allocation changes or request partial withdrawals by calling our toll-free number: 1-800-851-9777 (Monday-Friday 8:30 a.m.-7:00 p.m. Eastern Time). You will be required to provide certain information for identification purposes when you request a transaction by telephone. We may also require written confirmation of your request. We will not be liable for following telephone requests that we believe are genuine. Telephone transfers for contracts owned by trusts will only be allowed if a current trust certification form with a signature guarantee is on file at our administrative office. If we do not employ reasonable confirmation procedures, we may be liable for losses due to unauthorized or fraudulent transactions.
Telephone, fax and Internet orders must be received at our administrative office before 4:00 p.m. Eastern Time to receive same-day pricing. Orders received at our office at or after 4:00 p.m. Eastern Time will receive the price computed at the end of the next business day.
We may deny the telephone transaction privileges to market timers and frequent or disruptive traders.
Please use the following fax numbers for the following types of transactions:
• | To request a transfer, please fax your request to us at 727-299-1648. We will not be responsible for same-day processing of transfers if you fax your transfer request to a number other than this fax number; and |
• | To request a partial withdrawal, please fax your request to us at 727-299-1620. We will not be responsible for same-day processing of partial withdrawals if you fax your partial |
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withdrawal request to a number other than this fax number. |
You may make transfers and change premium allocations through our website – www.westernreserve.com.
We will not be responsible for transmittal problems which are not reported to us by the following business day. Any reports must be accompanied by proof of the faxed transmittal.
We cannot guarantee that telephone, fax or Internet transactions will always be available. For example, our administrative office may be closed during severe weather emergencies or there may be interruptions in telephone service or problems with computer systems that are beyond our control. If the volume of calls is unusually high, we might not have someone immediately available to receive your order. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. Outages or shutdowns may prevent or delay our receipt of your order or request.
In addition, you should protect your personal identification number (“PIN”) because self-service options will be available to your agent of record and to anyone who provides your PIN. We will not be able to verify that the person providing instructions via an automated telephone or online system is you or is authorized to act on your behalf.
We may discontinue the availability of telephone, fax or Internet transactions at any time.
Third Party Investment Services
Western Reserve or an affiliate may provide administrative or other support services to independent third parties you authorize to conduct transfers on your behalf, or who provide recommendations as to how your subaccount values should be allocated. This includes, but is not limited to, transferring subaccount values among subaccounts in accordance with various investment allocation strategies that these third parties employ.
Western Reserve does not engage any third parties to offer investment allocation services of any type, so that persons or firms offering such services do so independent from any agency relationship they may have with Western Reserve for the sale of Contracts. Western Reserve, therefore, takes no responsibility for the
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investment allocations and transfers transacted on your behalf by such third parties or any investment allocation recommendations made by such parties.
Western Reserve does not currently charge you any additional fees for providing these support services. Western Reserve reserves the right to discontinue providing administrative and support services to owners utilizing independent third parties who provide investment allocation and transfer recommendations.
Note carefully:
• | Western Reserve does not offer, and does not engage any third parties to offer, investment allocation services of any type for use with the Contract. |
• | Western Reserve is not party to any agreement that you may have with any third parties that offer investment allocation services for use with your Contract. Western Reserve is not responsible for any recommendations such investment advisers make, any investment strategies they choose to follow, or any specific transfers they make on your behalf. |
• | Any fee that is charged by third parties offering investment allocation services for use with your Contract is in addition to the fees and expenses that apply under your Contract. |
• | If you make withdrawals of policy value to pay advisory fees, then taxes may apply to any such withdrawals and tax penalties may be assessed on withdrawals made before you attain age 591⁄2. |
5. | EXPENSES |
There are charges and expenses associated with your Contract that reduce the return on your investment in the Contract. Unless we indicate otherwise, the expenses described below apply only during the accumulation period. The charges we deduct are used to pay aggregate Contract costs and expenses that we incur in providing the services and benefits under the Contract and assuming the risks associated with the Contract and riders. The charges may result in a profit to us.
Partial Withdrawals and Complete Surrenders
During the accumulation period, you can withdraw part or all of the cash value. We will not deduct any withdrawal charges. Cash value is the annuity value less the annual Contract charge, any loans and unpaid
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interest, any rider charges and any premium taxes. Partial surrenders may be subject to tax and a penalty may apply.
Mortality and Expense Risk Charge
We charge a fee as compensation for bearing certain mortality and expense risks under the Contract. Examples include a guarantee of annuity rates, the death benefits, certain Contract expenses, and assuming the risk that the current charges will be insufficient in the future to cover costs of administering the Contract. The mortality and expense risk charge is equal, on an annual basis, to 1.25% of the average daily net assets that you have invested in each subaccount. This charge is deducted daily from the subaccounts during the accumulation period. If you elect variable annuity income payments, we will continue to deduct this charge during the income phase.
If these charges do not cover our actual mortality and expense risk costs, we absorb the loss. Conversely, if these charges more than cover actual costs, the excess is added to our surplus. We expect to profit from these charges. We may use any profits to cover distribution costs.
We deduct an annual administrative charge to partially cover the costs of administering the Contracts. This charge is assessed daily and is equal to 0.15% per year of the daily net assets that you have invested in each subaccount. If you elect variable annuity income payments, we will continue to deduct this charge during the income phase.
Additional Earnings Rider Charge
If you select the Additional Earnings Rider, there is an annual charge during the accumulation period of 0.35% of your Contract’s annuity value. The charge will not be increased once the rider has been issued. We deduct the rider charge from your annuity value on each rider anniversary and pro rata on the termination date of the rider, including Contract surrender. We do not assess this charge during the income phase.
We deduct an annual Contract charge of $30 from your annuity value on each Contract anniversary during the accumulation period and at surrender. We
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deduct this charge from the fixed account and each subaccount in proportion to the amount of annuity value in each account. We deduct the charge to cover our costs of administering the Contract.
You are generally allowed to make 12 free transfers among the subaccounts per Contract year. If you make more than 12 transfers per Contract year, we charge $10 for each additional transfer. We deduct the charge from the amount transferred. Dollar cost averaging transfers and asset rebalancing are considered transfers. All transfer requests made on the same day are treated as a single request. There is no charge for transfers from the fixed account, however, they will be counted towards the 12 free transfers allowed per Contract year. We do not currently charge for Internet transfers, although we reserve the right to do so in the future. We deduct the charge to compensate us for the cost of processing the transfer.
If you take a Contract loan, we will impose a $30 loan processing fee. We deduct this fee from the loan amount. This fee is not applicable in all states. This fee covers loan processing and other expenses associated with establishing and administering the loan reserve. Only certain types of qualified Contracts can take Contract loans.
Some states assess premium taxes on the purchase payments you make. A premium tax is a regulatory tax that some states assess on the purchase payments made into a contract. If we should have to pay any premium tax, we may deduct the tax from each purchase payment or from the accumulation unit value as we incur the tax. We may deduct the total amount of premium taxes, if any, from the annuity value when:
• | you elect to begin receiving annuity payments; |
• | you surrender the Contract; |
• | you request a partial withdrawal; or |
• | a death benefit is paid. |
Generally, premium taxes range from 0% to 3.50%, depending on the state.
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Federal, State and Local Taxes
We may in the future deduct charges from the Contract for any taxes we incur because of the Contract. However, no deductions are being made at the present time.
We will deduct a charge for special services, such as overnight delivery, up to $25 per service provided.
The value of the assets in each subaccount is reduced by the management fees and expenses paid by the portfolios. Some portfolios also deduct 12b-1 fees from portfolio assets. These fees and expenses reduce the value of your portfolio shares. A description of these fees and expenses is found in the Annuity Contract Fee Table section of this prospectus and in the fund prospectuses.
We (and our affiliates) may directly or indirectly receive payments from the portfolios, their advisers, subadvisers, distributors or affiliates thereof, in connection with certain administrative, marketing and other services we (and our affiliates) provide and expenses we incur. We (and/or our affiliates) generally receive three types of payments:
• | Rule 12b-1 Fees. Our affiliate Transamerica Capital, Inc. (“TCI”) is the principal underwriter for the contracts. TCI receives some or all of the 12b-1 fees from the funds. Any 12b-1 fees received by TCI that are attributable to our variable annuity products are then credited to us as an administrative expense. These fees range from 0.00% to 0.25% of the average daily assets of the certain portfolios attributable to the Contracts and to certain other variable annuity and insurance products that we and our affiliates issue. |
• | Administrative, Marketing and Support Service Fees (“Service Fees”). As noted above, an investment adviser, sub-adviser, administrator and/or distributor (or affiliates thereof) of the underlying fund portfolios may make payments to us and/or our affiliates, including TCI. These payments may be derived, in whole or in part, from the profits the investment adviser or sub-adviser receives from the advisory fee deducted from underlying fund portfolio assets. Contract owners, through their indirect investment in the |
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underlying fund portfolios, bear the costs of these advisory fees (see the prospectuses for the underlying funds for more information). The amount of the payments we (or our affiliates) receive is based on a percentage of the assets of the particular portfolios attributable to the Contract and to certain other variable annuity and insurance products that our affiliates and we issue. These percentages differ and the amounts may be significant. Some advisers or sub-advisers (or other affiliates) pay us more than others. |
The following chart provides the maximum combined percentages of 12b-1 fees and Service Fees that we anticipate will be paid to us on an annual basis:
Incoming Payments to Western Reserve and TCI
Fund |
Maximum Fee % of assets(1) |
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Access One Trust |
0.25 | % | ||
Transamerica Series Trust(2) |
0.00 | % | ||
ProFunds |
0.25 | % | ||
Variable Insurance Products Fund (Fidelity) (3) |
0.50 | % |
(1) | Payments are based on a percentage of the average assets of each underlying fund portfolio owned by the subaccounts available under this contract and under certain other variable insurance products offered by our affiliates and us. We may continue to receive 12b-1 fees and administrative fees on subaccounts that are closed to new investments, depending on the terms of the agreements supporting those payments and on the services we provide. |
(2) | Because Transamerica Series Trust (“TST”) is managed by our affiliate Transamerica Asset Management, Inc. (“TAM”), there are additional benefits to us and our affiliates for amounts you allocate to the TST underlying fund portfolios, in terms of our and our affiliates’ overall profitability. These additional benefits may be significant. Payments or other arrangements may be received from TAM. A variety of financial and accounting methods may be used to allocate resources and profits to us. Such payments or arrangements may be entered into for a variety of purposes, such as to allocate resources to us to provide administrative services to the policyholders who invest in the TST underlying fund portfolios. These payments or arrangements may take the form of internal credits, recognition, or cash payments. Additionally, if a TST portfolio is sub-advised by an entity that is affiliated with us, we may retain more revenue than on those TST portfolios that are sub-advised by non-affiliated entities. During 2007 we received $24,366,029.88 from TAM pursuant |
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to these arrangements. We anticipate receiving comparable amounts in the future. |
(3) | We receive this percentage once $100 million in fund shares are held by the subaccounts of Western Reserve and its affiliates. |
• | Other payments. We and our affiliates, including Transamerica Capital, Inc. (“TCI”), InterSecurities, Inc. (“ISI”), and World Group Securities (“WGS”), also directly or indirectly receive additional amounts or different percentages of assets under management from certain advisers and sub-advisers to the portfolios (or their affiliates) with regard to variable insurance products or mutual funds that are issued by us and our affiliates. These amounts may be derived, in whole or in part, from the profits the investment adviser or sub-adviser receives from the advisory fee deducted from underlying fund portfolio assets. Contract owners, through their indirect investment in the underlying fund portfolios, bear the costs of these advisory fees. Certain advisers and sub-advisers of the underlying portfolios (or their affiliates) (1) may pay TCI amounts up to $75,000 per year to participate in a “preferred sponsor” program that provides such advisers and sub-advisers with access to TCI’s wholesalers at TCI’s national and regional sales conferences as well as internal and external meetings and events that are attended by TCI’s wholesalers and/or TCI employees; (2) may pay ISI varying amounts to obtain access to ISI’s wholesaling and selling representatives; (3) may provide us and/or certain affiliates and/or selling firms with occasional gifts, meals, tickets or other compensation as an incentive to market the portfolios and to cooperate with their promotional efforts; and (4) may reimburse our affiliated selling firms for exhibit booths and other items at national conferences of selling representatives. The amounts may be significant and provide the adviser or subadviser (or other affiliates) with increased access to us and to our affiliates involved in the distribution of the Contract. |
For the calendar year ended December 31, 2007, TCI received revenue sharing payments ranging from $2,500 to $49,350 (for a total of $381,768.22) from the following Fund managers and/or sub-advisers to participate in TCI’s events: ClearBridge Advisors, LLC, T. Rowe Price Associates Inc., Transamerica Investment Management, LLC, Van Kampen Asset Management, Morgan Stanley Investment |
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Management, Inc., Janus Capital Management, LLC, Jennison Associates LLC, Pacific Investment Management Company LLC, MFS® Investment Management, American Century Investment Management, Inc., AllianceBernstein L.P., Federated Equity Management Company of Pennsylvania, Federated Investment Management Company, Fidelity Management & Research Company, ING Clarion Real Estate Securities, BlackRock Advisors LLC, BlackRock Investment Management, LLC, Invesco AIM, Inc., Columbia Management Advisors, LLC, J.P. Morgan Investment Management, Inc., OppenheimerFunds, Inc., and RidgeWorth Capital Management, Inc.
Proceeds from certain of these payments by the underlying fund portfolios, the advisers, the sub-advisers and/or their affiliates may be used for any corporate purpose, including payment of expenses (1) that we and our affiliates incur in promoting, marketing, and administering the contract, and (2) that we incur, in our role as intermediary, in promoting, marketing, and administering the underlying fund portfolios. We and our affiliates may profit from these payments.
For further details about the compensation payments we make in connection with the sale of the Contracts, see “Sale of the Contracts” in this prospectus.
6. | TAXES |
NOTE: We have prepared the following information on federal income taxes as a general discussion of the subject. It is not intended as tax advice to any individual. You should consult your own tax adviser about your own circumstances. We have included an additional discussion regarding taxes in the SAI.
Deferred annuity contracts are a way of setting aside money for future needs like retirement. Congress recognized how important saving for retirement is and provided special rules in the Internal Revenue Code for annuities.
Simply stated, these rules generally provide individuals will not be taxed on the earnings, if any, on the money held in an annuity contract until taken out. This is referred to as tax deferral. When a non-natural person (e.g., corporation or certain other entities other than tax-qualified trusts) owns a
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nonqualified contract, the contract will generally not be treated as an annuity for tax purposes and tax deferral will not apply.
There are different rules as to how you will be taxed depending on how you take the money out and the type of contract—qualified or nonqualified.
You will generally not be taxed on increases in the value of your contract until a distribution occurs (either as a partial withdrawal, surrender, or as annuity payments).
Qualified and Nonqualified Contracts
If you purchase the contract under an individual retirement annuity, a 403(b) plan, a pension plan, or specially sponsored program, your contract is referred to as a qualified contract.
Qualified contracts are issued in connection with the following:
• | Individual Retirement Annuity (IRA): A traditional IRA allows individuals to make contributions, which may be deductible, to the contract. A Roth IRA also allows individuals to make contributions to the contract, but it does not allow a deduction for contributions, and distributions may be tax-free if the owner meets certain rules. |
• | Tax-Sheltered Annuity (403(b) Plan): A 403(b) Plan may be made available to employees of certain public school systems and tax-exempt organizations and permits contributions to the contract on a pre-tax basis. |
• | Corporate Pension and Profit-Sharing and H.R. 10 Plan: Employers and self-employed individuals can establish pension or profit-sharing plans for their employees or themselves and make contributions to the contract on a pre-tax basis. |
• | Deferred Compensation Plan (457 Plan): Certain governmental and tax-exempt organizations can establish a plan to defer compensation on behalf of their employees through contributions to the contract. |
There is no additional tax deferral benefit derived from placing qualified funds into a variable annuity. Features other than tax deferral should be considered in the purchase of a qualified contract. There are limits on the amount of contributions you can make to a qualified contract.
Other restrictions may apply including terms of the plan in which you participate. Optional death benefit features in some cases may exceed the greater of the
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premium payments or the contract value. Such a death benefit could be characterized as an incidental benefit, the amount of which is limited in any pension or profit-sharing plan or 403(b) plan. Because an optional death benefit may exceed this limitation, anyone using the contract in connection with such plans should consult their tax adviser before purchasing an optional death benefit. The Internal Revenue Service has not reviewed the contract for qualification as an IRA, and has not addressed in a ruling of general applicability whether the death benefit options and riders available, with the contract, if any, comport with IRA qualification requirements.
If you purchase the contract as an individual and not under an individual retirement annuity, 403(b) plan, 457 plan, or pension or profit sharing plan, your contract is referred to as a nonqualified contract.
Partial Withdrawals and Surrenders—Qualified Contracts Generally
There are special rules that govern qualified contracts. Generally, these rules restrict:
• | the amount that can be contributed to the contract during any year; |
• | the time when amounts can be paid from the contract; and |
• | the amount of any death benefit that may be allowed. |
In the case of a withdrawal under a qualified contract, a pro rata portion of the amount you receive is taxable, generally based on the ratio of your “investment in the contract” to your total account balance or accrued benefit under the retirement plan. Your “investment in the contract” generally equals the amount of any non-deductible purchase payments made by you or on your behalf. In some cases, your “investment in the contract” can be zero.
In addition, a penalty tax may be assessed on amounts partially withdrawn or surrendered from the contract prior to the date you reach age 591⁄2, unless you meet one of the exceptions to this rule. You may also be required to begin taking minimum distributions from the contract by a certain date. The terms of the plan may limit the rights otherwise available to you under the contract. We have provided more information in the SAI.
If you are attempting to satisfy minimum required distribution rules through partial surrenders, the value of any enhanced death benefit or other optional rider
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may need to be included in calculating the amount required to be distributed.
You should consult your legal counsel or tax adviser if you are considering purchasing a contract for use with any qualified retirement plan or arrangement.
Partial Withdrawals and Surrenders—403(b) Contracts
The rules described above for qualified contracts generally apply to 403(b) contracts. However, specific rules apply to surrenders from certain 403(b) contracts. Partial withdrawals and surrenders can generally only be made when an owner:
• | reaches age 591⁄2; |
• | leaves his/her job; |
• | dies; |
• | becomes disabled (as that term is defined in the Internal Revenue Code); or |
• | declares hardship. However, in the case of hardship, the owner can only partially withdraw or surrender the premium payments and not any earnings. |
Please Note: In some instances the signature of the employer may be required.
Defaulted loans from Code Section 403(b) arrangements, and pledges and assignments of qualified contracts generally are taxed in the same manner as surrenders from such contracts. Please refer to the SAI for further information applicable to distributions from 403(b) contracts.
Partial Withdrawals and Surrenders—Nonqualified Contracts
The information above describing the taxation of qualified contracts does not apply to nonqualified contracts. If you take a partial withdrawal or surrender (including systematic payouts and payouts under an optional feature, if any) from a nonqualified contract before the annuity commencement date, the Internal Revenue Code treats that partial withdrawal or surrender as first coming from earnings and then from your premium payments. If your contract contains an excess interest adjustment feature (also known as a market value adjustment), then your account value immediately before the surrender may have to be increased by any positive excess interest adjustments that result from the surrender. There is, however, no definitive guidance on the proper tax treatment of excess interest adjustments, and you may want to discuss the potential tax consequences
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of an excess interest adjustment with your tax advisor. When you make a partial withdrawal or surrender you are taxed on the amount of the partial withdrawal or surrender that is earnings. If you make a surrender, you are generally taxed on the amount that your surrender proceeds exceeds the “investment in the contract,” which is generally your premiums paid (adjusted for any prior partial withdrawals or portions thereof that were not taxable). In general loans, pledges, and assignments are taxed in the same manner as partial withdrawals and surrenders. Different rules apply for annuity payments. See “Annuity Payments” below.
The Internal Revenue Code also provides that partially withdrawn or surrendered earnings may be subject to a penalty tax. The amount of the penalty tax is equal to 10% of the amount that is includable in income. Some partial withdrawals and surrenders will be exempt from the penalty tax. They include, among others, any amounts:
• | paid on or after the taxpayer reaches age 591⁄2; |
• | paid after an owner dies; |
• | paid if the taxpayer becomes disabled (as that term is defined in the Internal Revenue Code); |
• | paid in a series of substantially equal payments made annually (or more frequently) under a lifetime annuity; |
• | paid under an immediate annuity; or |
• | which come from premium payments made prior to August 14, 1982. |
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 for purposes of determining the amount includable in the owner’s income when a taxable distribution occurs.
Taxation of Death Benefit Proceeds
Amounts may be distributed from the contract because of the death of the annuitant. Generally, such amounts should be includable in the income of the recipient:
• | if distributed in a lump sum, these amounts are taxed in the same manner as a surrender; or |
• | if distributed under an annuity payment option, these amounts are taxed in the same manner as annuity payments. |
Although the tax consequences may vary depending on the annuity payment option you select, in general,
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for nonqualified and certain qualified contracts, only a portion of the annuity payments you receive will be includable in your gross income.
In general, the excludable portion of each annuity payment you receive will be determined as follows:
• | Fixed payments—by dividing the “investment in the contract” on the annuity commencement date by the total expected value of the annuity payments for the term of the payments. This is the percentage of each annuity payment that is excludable. |
• | Variable payments—by dividing the “investment in the contract” on the annuity commencement date by the total number of expected periodic payments. This is the amount of each annuity payment that is excludable. |
The remainder of each annuity payment is includable in gross income. Once the “investment in the contract” has been fully recovered, the full amount of any additional annuity payments is includable in gross income and taxed as ordinary income.
If you select more than one annuity payment option, special rules govern the allocation of the contract’s entire “investment in the contract” to each such option, for purposes of determining the excludable amount of each payment received under that option. We advise you to consult a competent tax adviser as to the potential tax effects of allocating amounts to any particular annuity payment option.
If, after the annuity commencement date, annuity payments stop because an annuitant died, the excess (if any) of the “investment in the contract” as of the annuity commencement date over the aggregate amount of annuity payments received that was excluded from gross income may possibly be allowable as a deduction in your tax return.
Diversification and Distribution Requirements
The Internal Revenue Code provides that the underlying investments for a variable annuity must satisfy certain diversification requirements in order to be treated as an annuity. The contract must also meet certain distribution requirements at the death of an owner in order to be treated as an annuity. These diversification and distribution requirements are discussed in the SAI. We may modify the contract to attempt to maintain favorable tax treatment.
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While no attempt is being made to discuss 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 advisor for more information.
Generation-Skipping Transfer Tax
Under certain circumstances, the Internal Revenue Code may impose a “generation skipping transfer tax” 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 Internal Revenue Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS.
Annuity Purchases by Residents of Puerto Rico
The Internal Revenue Service recently 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 Contracts Purchased by Nonresident Aliens and Foreign Corporations
The discussion above provided general information (but not tax advice) regarding U.S. federal income tax consequences to annuity owners that are U.S. persons. Taxable distributions made to owners who are not U.S. persons will generally be subject to U.S. federal income tax withholding at a 30% rate, unless a lower treaty rate applies. In addition, distributions may be subject to state and/or municipal taxes and taxes that may be imposed by the owner’s country of citizenship or residence. Prospective foreign owners are advised to consult with a qualified tax adviser regarding U.S., state, and foreign taxation for any annuity contract purchase.
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Transfers, Assignments or Exchanges of Contracts
A transfer of ownership or assignment of a contract, the designation of an annuitant or payee or other beneficiary who is not also the owner, the selection of certain annuity commencement dates, or a change of annuitant, may result in certain income or gift tax consequences to the owner that are beyond the scope of this discussion. An owner contemplating any such transfer, assignment, selection, or change should contact a competent tax adviser with respect to the potential tax effects of such a transaction.
Although the likelihood of legislative or regulatory changes is uncertain, there is always the possibility that the tax treatment of the contract could change by legislation, regulation or otherwise. You should consult a tax adviser with respect to legal or regulatory developments and their effect on the contract.
We have the right to modify the contract to meet the requirements of any applicable laws or regulations, including legislative or regulatory changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive.
It is possible that the Internal Revenue Service may take a position that fees for certain optional benefits (e.g., death benefits other than the death benefit) are deemed to be taxable distributions to you. In particular, the Internal Revenue Service may treat fees associated with certain optional benefits as a taxable surrender, which might also be subject to a tax penalty if the surrender occurs prior to age 591⁄2. Although we do not believe that the fees associated with any optional benefit provided under the contract should be treated as taxable surrenders, the tax rules associated with these benefits are unclear, and we advise that you consult your tax advisor prior to selecting any optional benefit under the contract.
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.
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7. | ACCESS TO YOUR MONEY |
Partial Withdrawals and Complete Surrenders
During the accumulation period, you can have access to the money in your Contract by making either a partial withdrawal or complete surrender.
If you want to surrender your Contract completely, you will receive cash value, which equals the annuity value of your Contract, minus:
• | any premium taxes; |
• | any loans; |
• | any unpaid accrued interest; |
• | the annual Contract charge; and |
• | the pro rata Additional Earnings Rider charge, if applicable. |
The cash value will be determined at the accumulation unit value next determined as of the end of the business day (usually 4:00 p.m. Eastern Time) on which we receive your request for partial withdrawal or complete surrender at our administrative office, unless you specify a later date in your request.
Unless we otherwise consent, no partial withdrawal is permitted if the withdrawal would reduce the cash value below $25,000. You may not make partial withdrawals from the fixed account unless we consent. Unless you tell us otherwise, we will take the partial withdrawal from each of the investment choices in proportion to the annuity value.
Remember that any partial withdrawal you make will reduce the annuity value. Under some circumstances, a partial withdrawal will reduce the death benefit by more than the dollar amount of the withdrawal. See Section 9. Death Benefit, and the SAI for more details.
Income taxes, federal tax penalties and certain restrictions may apply to any partial withdrawals or any complete surrender you make. We must receive (at our administrative office) a properly completed surrender request which must contain your original signature. We will accept fax or telephone requests for partial withdrawals as long as the withdrawal proceeds are being sent to the address of record. The maximum withdrawal amount you may request by telephone is $50,000.
When we incur extraordinary expenses, such as wire transfers or overnight mail expenses, for expediting
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delivery of your partial withdrawal or complete surrender payment, we will deduct that charge from the payment. We charge $25 for a wire transfer and $20 for an overnight delivery ($30 for Saturday delivery).
For your protection, a signature guarantee may be required in certain circumstances including but not limited to:
• | all requests for partial withdrawals or complete surrenders over $500,000; |
• | where the partial withdrawal or surrender proceeds will be sent to an address other than the address of record; or |
• | any request for partial withdrawal or complete surrender within 10 days of our receipt of an address change. |
All signature guarantees must be made by:
• | a national or state bank; |
• | a member firm of a national stock exchange; or |
• | any institution that is an eligible guarantor under SEC rules and regulations. |
Notarization is not an acceptable form of signature guarantee.
If the Contract’s owner is not an individual, additional information may be required. If you own a qualified Contract, the Code may require your spouse to consent to any withdrawal. Other restrictions will apply to Section 403(b) qualified Contracts and Texas Optional Retirement Program Contracts. For more information, call us at 1-800-851-9777 (Monday-Friday 8:30 a.m.-7:00 p.m. Eastern Time).
Delay of Payment and Transfers
Payment of any amount due from the separate account for a partial withdrawal, a complete surrender, a death benefit, loans, or on the death of the owner of a nonqualified Contract, will generally occur within seven days from the date all required information is received by us. We may be permitted to defer such payment from the separate account if:
• | the NYSE is closed for other than usual weekends or holidays or trading on the NYSE is otherwise restricted; or |
• | an emergency exists as defined by the SEC or the SEC requires that trading be restricted; or |
• | the SEC permits a delay for the protection of owners. |
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In addition, transfers of amounts from the subaccounts may be deferred under these circumstances.
Pursuant to the requirements of certain state laws, we reserve the right to defer payment of transfers, partial withdrawals, complete surrenders, death benefits and loan amounts from the fixed account for up to six months.
If mandated under applicable law or by regulation, we may be required to reject a purchase payment . We may be required to provide additional information about you or your account to governmental regulators. In addition, we may be required to block a Contract owner’s account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans, annuity payments or death benefits until instructions are received from the appropriate regulators.
Systematic Partial Withdrawals
During the accumulation period, you can elect to receive regular payments from your Contract by using systematic partial withdrawals. Unless you specify otherwise, we will deduct systematic partial withdrawal amounts from each subaccount (and, if we consent, the fixed account) in proportion to the value each subaccount bears to the annuity value at the time of the partial withdrawal. Payments are made monthly, quarterly, semi-annually or annually, in equal payments of at least $200 ($50 if by direct deposit). Your initial purchase payment, if a new Contract, or your annuity value, if an existing Contract, must equal at least $25,000. We will not process a systematic partial withdrawal if the annuity value for the entire Contract would be reduced below $25,000. No systematic partial withdrawals are permitted from the fixed account without our prior consent.
There is no charge for taking systematic partial withdrawals. You may stop systematic partial withdrawals at any time. We reserve the right to discontinue offering systematic partial withdrawals 30 days after we send you written notice.
You can take systematic partial withdrawals during the accumulation period only. On the maturity date, you must annuitize the Contract and systematic partial withdrawal payments must stop.
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Income taxes, federal tax penalties and other restrictions may apply to any systematic partial withdrawal you receive.
Contract Loans for Certain Qualified Contracts
You can take Contract loans during the accumulation period after the right to cancel period has expired when the Contract is used in connection with a tax-sheltered annuity plan under Section 403(b) of the Code (limit of one Contract loan per Contract year). No additional loans will be allowed if there is a defaulted loan. There can be no more than two outstanding loans at any given time.
The maximum amount you may borrow against the Contract is the lesser of:
• | 50% of the annuity value; or |
• | $50,000 reduced by the highest outstanding loan balance during the one-year period immediately prior to the loan date. However, if the annuity value is less than $20,000, the maximum you may borrow against the Contract is the lesser of 80% of the annuity value or $10,000. |
The minimum loan amount is $1,000 (unless otherwise required by state law). You are responsible for requesting and repaying loans that comply with applicable tax requirements, and other laws, such as the Employee Retirement Income Security Act of 1974 (“ERISA”). In addition, the Department of Labor has issued regulations governing loans taken by plan participants under retirement plans subject to ERISA. These regulations require, in part, that a loan from an ERISA-governed plan be made under an enforceable agreement, charge a reasonable rate of interest, be adequately secured, provide a reasonable repayment schedule, and be made available on a basis that does not discriminate in favor of employees who are officers or shareholders or who are highly compensated.
Failure to comply with these requirements may result in penalties under the Code and ERISA. You and your employer are responsible for determining whether your plan is subject to, and complies with, ERISA and the Department of Labor’s regulations governing plan loans and the tax rules applicable to loans. Accordingly, you should consult a competent tax advisor before requesting a Contract loan.
The loan amount will be withdrawn from your investment choices and transferred to the loan reserve. The loan reserve is part of the fixed account
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and is used as collateral for all Contract loans. We reserve the right to postpone distributing the loan amount from the fixed account for up to six months, if required.
On each Contract anniversary we will compare the amount of the Contract loan to the amount in the loan reserve. If all Contract loans and unpaid interest due on the loan exceed the amount in the loan reserve, we will withdraw the difference and transfer it to the loan reserve. If the amount of the loan reserve exceeds the amount of the outstanding Contract loan, we will withdraw the difference from the loan reserve and transfer it in accordance with your current purchase payment allocation. We reserve the right to transfer the excess to the fixed account if the amount used to establish the loan reserve was transferred from the fixed account.
If all Contract loans and unpaid interest due on the loan exceeds the cash value, we will mail to your last known address and to any assignee of record a notice stating the amount due in order to reduce the loan amount so that the loan amount no longer exceeds the cash value. If the excess amount is not paid within 31 days after we mail the notice, the Contract will terminate without value.
You can repay any Contract loan in full:
• | while the Contract is in force; and |
• | during the accumulation period. |
Note Carefully: If you do not repay your Contract loan, we will deduct an amount equal to the unpaid loan balance plus any unpaid accrued interest from:
• | the amount of any death benefit proceeds; |
• | the amount we pay upon a partial withdrawal or complete surrender; or |
• | the amount we apply on the maturity date to provide annuity payments. |
You must pay interest on the loan at the rate of 6% per year. You are responsible for determining whether this interest rate is reasonable under ERISA. We deduct interest in arrears. Amounts in the loan reserve will earn interest at a minimum guaranteed effective annual interest rate of 4%. Principal and interest must be repaid:
• | in level quarterly or monthly payments over a 5-year period; or |
• | over a 10, 15 or 20-year period, if the loan is used to buy your principal residence. |
Please Note: Once established, you cannot change the due date or payment method.
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An extended repayment period cannot go beyond the year you turn 701⁄2.
IF:
• | a repayment is not received within 31 days from the original due date; |
THEN:
• | under federal tax law you will be treated as having a deemed distribution of all Contract loans and unpaid accrued interest and any applicable charges. |
This distribution will be reported as taxable to the Internal Revenue Service, may be subject to income and penalty tax, and may cause the Contract to not qualify under Section 403(b) of the Code.
You may fax your loan request to us at 727-299-1620.
The loan date is the date we process the loan request. We charge a $30 fee to cover loan processing and expenses associated with establishing and administering the loan reserve (not applicable in all states). For your protection, we will require a signature guarantee for any loan request within 30 days of an address change. We reserve the right to limit the number of Contract loans to one per Contract year.
Contract loans may not be available in all states.
8. | PERFORMANCE |
We periodically advertise performance of the subaccounts and investment portfolios. We may disclose at least four different kinds of performance.
First, we may disclose standardized total return figures for the subaccounts that reflect the deduction of all charges assessed during the accumulation period under the Contract, including the mortality and expense charge, the administrative charge and the annual Contract charge. Charges for the optional Additional Earnings Rider are not deducted. These figures are based on the actual historical performance of the subaccounts investing in the underlying portfolios since their inception, adjusted to reflect current Contract charges.
Second, we may disclose total return figures on a non-standardized basis. This means that the data may be presented for different time periods and different dollar amounts. We will only disclose non-standardized performance data if it is accompanied by standardized total return data.
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Third, we may present historic performance data for the portfolios since their inception reduced by some or all fees and charges under the Contract. Such adjusted historic performance includes data that precedes the inception dates of the subaccounts, but is designed to show the performance that would have resulted if the Contract had been available during that time.
Fourth, we may include in our advertising and sales materials, tax-deferred compounding charts and other hypothetical illustrations, which may include comparisons of currently taxable and tax-deferred investment programs, based on selected tax brackets.
The TST fund prospectus presents the total return of certain existing SEC-registered funds that are managed by sub-advisers to the TST fund portfolios. These funds have investment objectives, policies and strategies that are substantially similar to those of certain portfolios. We call the funds the “Similar Sub-Adviser Funds.” None of the fees and charges under the Contract has been deducted from the performance data of the Similar Sub-Adviser Funds. If Contract fees and charges were deducted, the investment returns would be lower. The similar Sub-Adviser Funds are not available for investment under the Contract.
9. | DEATH BENEFIT |
We will pay death benefit proceeds to your beneficiary(ies), under certain circumstances, if you are both an owner and annuitant, and you die during the accumulation period (that is before the maturity date). A beneficiary may choose to receive payment of his or her portion of the death benefit proceeds under a life annuity payment option, to continue the Contract in the accumulation period for a specified number of years, or to receive a lump sum payment. Death benefit provisions may vary from state to state.
If a beneficiary does not choose one of these options, then the default option for nonqualified Contracts is complete distribution of the beneficiary’s interest within 5 years of the owner’s death, and the default option for qualified Contracts is payout over a beneficiary’s life expectancy. Please see Alternate Payment Elections Before the Maturity Date below for details.
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Payments upon death are subject to certain distribution requirements under the Code. See the SAI for more details.
An additional death benefit may be payable if the Additional Earnings Rider was purchased and is in effect at the time the death benefit proceeds become payable. See Additional Earnings Rider below for details.
Before the Maturity Date. Payment of the death benefit proceeds depends on the status of the person who dies, as shown below:
IF:
• | an owner and the annuitant ARE the same person, and that person dies; |
THEN:
• | we pay the death benefit proceeds to the beneficiaries, if alive, and, in some cases, reset the death benefit(1)(2)(4)(8). If the sole beneficiary is the surviving spouse, he or she may continue the Contract with a reset death benefit and the annuity value adjusted to equal the death benefit proceeds (3). |
IF:
• | the surviving spouse who continued the Contract dies |
THEN:
• | we pay the death benefit proceeds to the beneficiaries, if alive(1)(2)(3)(4)(8), otherwise to the estate of the surviving spouse. |
IF:
• | an owner and the annuitant ARE NOT the same person, and an annuitant dies first |
THEN:
• | an owner becomes the annuitant and the Contract continues. |
IF:
• | an owner and the annuitant ARE NOT the same person, and an owner dies first |
THEN:
• | we pay the cash value to the successor owner named by the deceased owner (1)(5)(6)(7), or if the successor owner is the surviving spouse, then the Contract continues with the surviving spouse as the new owner(5). |
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(1) | The Code requires that payment to the beneficiaries or successor owners be made in a certain manner and within certain strict timeframes. We discuss these timeframes in Alternate Payment Elections Before the Maturity Date below. |
(2) | If no beneficiary is alive on the death report day, then the death benefit proceeds are paid to the owner’s estate. If the sole beneficiary was living on the owner’s date of death, but died before the death report day, the death benefit is paid to the owner’s estate, not to the beneficiary’s estate. |
(3) | If the sole beneficiary is the deceased owner’s surviving spouse, then the surviving spouse may elect to continue the Contract in force as the new owner and annuitant. We will adjust the annuity value as of the death report day to equal the death benefit proceeds as of the death report day. We will reset the age used in the death benefit provisions under the continuing Contract as of the death report day so that the death benefit is based on the age of the surviving spouse. Consequently, the phrase “the annuitant’s 80th birthday” will refer to the age of the surviving spouse. If the surviving spouse is over age 81 on the death report day of the first deceased owner, then we will calculate the death benefit paid on the death of the surviving spouse by taking the highest annuity value (i.e., the annuity value as of the death report day) and adding any subsequent purchase payments and subtracting the total partial withdrawals following the death report day of the first deceased owner. |
(4) | If a beneficiary elects to receive his or her portion of the death benefit proceeds within five years of the date of death of the annuitant or over a period that does not exceed such beneficiary’s life expectancy (the “distribution period”), then the Contract will continue with some modifications until the end of the elected distribution period. We will adjust the annuity value as of the death report day to equal the death benefit proceeds as of the death report day. We will pay a death benefit if such beneficiary dies during the distribution period, and we will revise the way we calculate the death benefit so that it is based on the age of such beneficiary. The Contract will terminate at the end of the distribution period. |
(5) | If the successor owner is alive and is the deceased owner’s surviving spouse at the time of the deceased owner’s death, then the Contract will continue with the spouse as the new owner. |
(6) | If the successor owner is not the deceased owner’s surviving spouse, then any living successor owner must receive the cash value in the manner and within the timeframes discussed below in Alternate Payment Elections Before the Maturity Date. |
(7) | If no successor owner is alive, the owner’s estate will become the new owner and the cash value must be distributed within 5 years of the deceased owner’s death. |
(8) | If there are multiple beneficiaries, each beneficiary may elect, individually, how he or she wishes to receive his or her proportionate share of the death benefit proceeds. |
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Different rules apply if the owner, successor owner or beneficiary is not a natural person. Please consult the SAI, your Contract or your agent for more details.
After the Maturity Date. The death benefit paid after the start of annuity payments depends upon the annuity option you selected. See Section 2. Annuity Payments (The Income Phase) - Fixed Annuity Payment Options and Variable Annuity Payment Options. Not all payment options provide for a death benefit.
If any owner dies on or after the start of annuity payments, the remaining portion of any interest in the Contract will be distributed at least as rapidly as under the method of distribution being used as of the date of the annuitant’s death.
Amount of Death Benefit Before the Maturity Date
Death benefit provisions may differ from state to state. The death benefit proceeds may be paid as a lump sum; as substantially equal payments while the Contract continues in the accumulation period for a specified number of years; or as annuity payments, but in all events will be paid in accordance with any applicable federal and state laws, rules and regulations.
If an owner who is the annuitant dies before the maturity date and if the death benefit proceeds are payable, the death benefit proceeds will be the greatest of the following:
• | the annuity value of your Contract on the death report day; |
• | the total purchase payments you make to the Contract, reduced by any partial withdrawals, credited with 5% on each Contract anniversary (until you turn age 80), up to a maximum of 200% of total purchase payments less withdrawals. (Please note that the 5% credit is not available in all states); or |
• | the highest annuity value on any Contract anniversary between May 1, 2000, or your Contract date (as shown on your Contract schedule page), if later, and the earlier of: |
• | the annuitant’s date of death; or |
• | the Contract anniversary nearest the annuitant’s 80th birthday. This benefit terminates at age 80. |
The highest annuity value will be increased by purchase payments made and decreased by adjusted partial withdrawals taken following the Contract anniversary date with the highest annuity value. The adjusted partial withdrawal is equal to (a) times (b) where:
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(a) | is the ratio of the death benefit to the partial withdrawal is processed, but prior to the processing; and |
(b) | is the amount of the partial withdrawal. |
The death benefit proceeds are reduced by any outstanding Contract loans and premium taxes due.
The death benefit proceeds are not payable after the maturity date.
Guaranteed Minimum Death Benefit Features
Additional Benefits with Spousal Continuation. If an owner who is the annuitant dies before the maturity date, and if the surviving spouse of the deceased owner is the sole beneficiary who elects to continue the Contract, then the Contract continues with the surviving spouse as sole owner and annuitant. We will increase the annuity value of the Contract as of the death report day to equal the death benefit proceeds as of the death report day. We will pay a death benefit on the death of the surviving spouse and revise the way we calculate the death benefit so that it is based on the age of the surviving spouse.
If an owner who is not the annuitant dies before an annuitant and before the maturity date, and if the deceased owner’s surviving spouse is the successor owner, the Contract continues with the surviving spouse as the new owner. However, we will not increase the annuity value to equal the death benefit proceeds.
Additional Death Benefit on Beneficiary’s Death. If an owner who is the annuitant dies before the maturity date, and if the deceased owner’s spouse is not named as the sole beneficiary who elects to continue the Contract, then each beneficiary can elect to keep the Contract in the accumulation period (with some restrictions) and to receive his or her portion of the death benefit proceeds over a period not to exceed the beneficiary’s life expectancy (the “distribution period”). We will pay a death benefit if the beneficiary dies during the distribution period and permit such beneficiary to name a new beneficiary. We will revise the way we calculate that death benefit so that it is based on the age of such beneficiary.
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Alternate Payment Elections Before the Maturity Date
If a beneficiary is entitled to receive the death benefit proceeds, a beneficiary may elect to receive the death benefit in a lump sum payment or to receive payment under one of the following options that provides for complete distribution and termination of this Contract at the end of the distribution period:
1. | within 5 years of the date of the owner’s death; |
2. | over the beneficiary’s lifetime, with payments beginning within one year of the deceased owner’s death; or |
3. | over a specified number of years, not to exceed the beneficiary’s life expectancy, with payments beginning within one year of the owner’s death. |
To determine payments, we may use the “account-based” method under which we recalculate the amount of the payment each year by dividing the remaining unpaid proceeds by the beneficiary’s current life expectancy, with payments beginning within one year of the deceased owner’s death.
Different rules may apply if the Contract is a qualified Contract.
Multiple beneficiaries may choose individually among any of these options.
If the deceased annuitant was an owner, and one or more beneficiaries chooses one of the above options instead of a lump sum payment, we will “reset” the age used in the death benefit provisions under the new option as of the death report day, so that the death benefit is based on the age of the particular new annuitant (i.e., the beneficiary). As a result, the phrase “the annuitant’s 80th birthday” will refer to the age of the particular beneficiary. If the beneficiary is over age 81 on the death report day of the first deceased owner, then we will calculate the death benefit paid on the death of the particular beneficiary by taking the highest annuity value (i.e., the annuity value as of the death report day) and adding any subsequent purchase payments and subtracting the total partial withdrawals following the death report day of the first deceased owner. This option applies to both spousal and non-spousal beneficiaries.
If a beneficiary chooses 1 or 3 above, this Contract remains in effect and remains in the accumulation period until it terminates at the end of the elected period. The beneficiary’s proportionate share of the death benefit proceeds becomes the new annuity value. If a beneficiary chooses 2 above, the Contract remains in effect, but moves into the income phase
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with that beneficiary receiving payments under a life annuity payout option. Special restrictions apply to options 1 and 3 above. See the SAI for more details.
These Alternate Payment Elections do not apply if the sole beneficiary (or successor owner) is the surviving spouse of the deceased owner and the surviving spouse continues the Contract. These Alternate Payment Elections do apply when we pay the cash value to the successor owner on the death of an owner who is not the annuitant.
The optional Additional Earnings Rider may pay an Additional Earnings Rider Amount when the owner who is the annuitant dies and death benefit proceeds are paid under your Contract. In order to buy this rider;
• | you must purchase it when we issue the Contract; |
• | you must be both the owner and annuitant (except in the case of a trust or employer-sponsored plan); and |
• | you and the annuitant must be age 75 or younger. |
Unless we otherwise consent, we limit the number of Additional Earnings Riders to one per annuitant.
The date you add the rider to the Contract is the rider date.
We will pay the Additional Earnings Rider Amount under this rider only if:
• | the rider is in force at the time of death; |
• | death benefit proceeds are payable under the Contract; and |
• | there are rider earnings when the death benefit proceeds are calculated. |
Additional Earnings Rider Amount. The Additional Earnings Rider Amount is equal to the additional earnings factor (see below), multiplied by the lesser of:
• | the rider earnings on the date we calculate the death benefit proceeds (the death report day); or |
• | the rider earnings limit (shown on your rider) multiplied by the rider base on the death report day. |
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The maximum we will pay under this rider is $1 million.
Rider earnings equal:
• | the death benefit proceeds payable under the Contract; minus |
• | the rider base, which is: |
• | the initial purchase payment at Contract issue (this rider is no longer available after issue); plus |
• | the purchase payments made after the rider date; less |
• | the amount of each partial withdrawal made after the rider date, multiplied by the ratio of the rider base to the annuity value immediately before the partial withdrawal. |
Example: A person aged 60 purchases a Contract with the Additional Earnings Rider for a $40,000 purchase payment (the rider base). The rider has an additional earnings factor of 40% and rider earnings limit of 250%. The maximum benefit we will pay under the rider is $1,000,000.
At the time of the owner’s death, the death benefit proceeds are valued at $75,000. To calculate the benefit we will pay under the Additional Earnings Rider (that is, the Additional Earnings Rider Amount), first we subtract the rider base ($40,000) from the death benefit proceeds to get the rider earnings ($75,000—$40,000=$35,000).
Then we perform several additional calculations. The benefit we pay under the Additional Earnings Rider is the lesser of a), b), or c):
a) | The rider earnings ($35,000) multiplied by the additional earnings factor (40%)=$14,000; |
b) | The rider earnings limit (250%) multiplied by the rider base ($40,000) multiplied by the additional earnings factor (40%)=$40,000; or |
c) | The maximum benefit under the rider=$1,000,000. |
The Additional Earnings Rider Amount (that is, the benefit we will pay under the Additional Earnings Rider) is $14,000. The total death benefit under these circumstances (that is, the death benefit proceeds plus the Additional Earnings Rider Amount) is $89,000 ($75,000 + $14,000). For additional examples, see the SAI.
We will not pay a benefit under the Additional Earnings Rider if there are no rider earnings on the date we calculated the death benefit proceeds. If you
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purchased your Contract as part of a 1035 exchange or if you added the rider after you purchased the Contract, rider earnings do not include any gains before the rider is added to your Contract. As with all insurance, you may not realize a benefit from the purchase of this rider.
The additional earnings factors are as follows:
Owner/Annuitant’s Age |
Percent |
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0-65 |
40 | % | ||
66-67 |
35 | % | ||
68-69 |
30 | % | ||
70-75 |
25 | % |
For purposes of computing taxable gains payable on the death benefit proceeds, both the death benefit proceeds payable under the Contract and the Additional Earnings Rider Amount will be considered.
See the SAI for an example which illustrates the Additional Earnings Rider Amount payable as well as the effect of a partial withdrawal on the Additional Earnings Rider Amount.
Continuation. If an owner who is the annuitant dies during the accumulation period and the deceased owner’s spouse is the sole beneficiary and elects to continue the Contract, the annuity value is adjusted to equal the death benefit proceeds, the deceased owner’s spouse will have the following options:
• | terminate the Additional Earnings Rider and receive a one-time annuity value increase equal to the Additional Earnings Rider Amount. All future withdrawal charges on this amount, if any, will be waived; or |
• | continue the Additional Earnings Rider (with fees) without the one-time annuity value increase. An Additional Earnings Rider Amount would then be paid upon the death of the spouse who continued the Contract. Because we have not issued a new rider, but simply continued the rider purchased by the deceased owner, we will calculate the Additional Earnings Rider Amount using the additional earnings factor and other calculation factors applicable to the original rider. |
Alternate Election. If an owner who is the annuitant dies during the accumulation period and one or more of the beneficiaries elects to receive the complete distribution of the death proceeds under alternate payment option (1) or (3), then that beneficiary will have the following options:
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• | terminate the Additional Earnings Rider and receive a one-time increase in death benefit proceeds equal to a proportionate share of the Additional Earnings Rider Amount. All withdrawal charges on this amount, if any, will be waived; or |
• | continue the Additional Earnings Rider (with fees) without the one-time annuity value increase. An Additional Earnings Rider Amount would then be paid in a lump sum upon the death of the beneficiary and the Contract will terminate. This amount will be calculated using the additional earnings factor and other calculation factors determined under the original rider. The required annual distributions under the alternate payment elections are likely to reduce significantly the value of this rider during this period. |
See Alternate Payment Election Options Before the Maturity Date above.
Rider Fee. There is an annual charge during the accumulation period of 0.35% of your Contract’s annuity value. The charge will not be increased once the rider has been issued. We deduct the rider charge from your annuity value on each rider anniversary and pro rata on the termination date of the rider. We will deduct this fee from each subaccount and the fixed account in proportion to the amount of the annuity value in each account. We do not assess this charge during the income phase. The rider fee is deducted even during periods when the rider would not pay any benefit because there are no rider earnings.
Termination. The rider will remain in effect until:
• | we receive your written notice to cancel the rider at our administrative office; |
• | you annuitize or surrender the Contract; or |
• | the Additional Earnings Rider Amount is paid or added to the annuity value under a continuation, as described above. |
It is possible that the Internal Revenue Service may take a position that charges for the Additional Earnings Rider should be treated as taxable distributions to you. Although we do not believe that a rider charge under the Contract should be treated as a taxable distribution, you should consult your tax advisor before selecting this rider under the Contract.
The Additional Earnings Rider may vary by state and may not be available in all states.
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10. | OTHER INFORMATION |
You, as owner of the Contract, exercise all rights under the Contract, including the right to transfer of ownership (subject to any assignee or irrevocable beneficiary’s consent). You can change the owner at any time by notifying us in writing. An ownership change may be a taxable event.
The annuitant is the person named in the application to receive annuity payments. If no person is named, the owner will be the annuitant. As of the maturity date, and upon our agreement, the owner may change the annuitant or, if either annuity Option C or Option E has been selected, add a joint annuitant. On the maturity date, the annuitant(s) will become the payee(s) and receive the annuity payments.
A beneficiary is the person who receives the death benefit proceeds when an owner who is also the annuitant dies. You may change beneficiary(ies) during the lifetime of the annuitant, subject to the rights of any irrevocable beneficiary. Any change must be made in writing and received by us at our administrative office and, if accepted, will be effective as of the date on which the request was signed by the owner. Before the maturity date, if the owner who is the annuitant dies, and no beneficiary is alive on the death report day, benefits payable at death will be paid to the owner’s estate. In the case of certain qualified Contracts, the Treasury Regulations prescribe certain limitations on the designation of a beneficiary. See the SAI for more details on the beneficiary.
If an owner who is not the annuitant dies before the annuitant and the successor owner is not the owner’s spouse, the successor owner will become the new owner and receive the cash value.
You can also assign the Contract any time prior to the maturity date. We will not be bound by the assignment until we receive written notice of the assignment at our administrative office. We will not be liable for any payment or other action we take in
|
accordance with the Contract before we receive notice of the assignment. An assignment may be a taxable event. There may be limitations on your ability to assign a qualified Contract and such assignments may be subject to tax penalties and taxed as distributions under the Code.
Western Reserve Life Assurance Co. of Ohio
Western Reserve was initially incorporated under the laws of Ohio on October 1, 1957. It is engaged in the business of writing life insurance policies and annuity contracts. Western Reserve is a wholly-owned indirect subsidiary of Transamerica Corporation, which conducts most of its operations through subsidiary companies engaged in the insurance business or in providing non-insurance financial services. All of the stock of Transamerica Corporation is indirectly owned by AEGON N.V. of the Netherlands, the securities of which are publicly traded. AEGON N.V., a holding company, conducts its business through subsidiary companies engaged primarily in the insurance business. Western Reserve is licensed in the District of Columbia, Guam, Puerto Rico and in all states except New York. Western Reserve is obligated to pay all benefits under the Contract.
Western Reserve established a separate account, called the WRL Series Annuity Account, under the laws of the State of Ohio on April 12, 1988. The separate account is divided into subaccounts, each of which invests exclusively in shares of a mutual fund portfolio. Western Reserve may add, close, remove, combine or substitute subaccounts or investments held by the subaccounts, and reserves the right to change the investment objective of any subaccount, subject to applicable law as described in the SAI. In addition, the separate account may be used for other variable annuity contracts issued by Western Reserve.
The separate account is registered with the SEC as a unit investment trust under the 1940 Act. However, the SEC does not supervise the management, the investment practices, or the contracts of the separate account or Western Reserve.
The assets of the separate account are held in Western Reserve’s name on behalf of the separate account and belong to Western Reserve. However, the assets underlying the Contracts are not chargeable with liabilities arising out of any other business Western Reserve may conduct. The income, gains
41
and losses, realized and unrealized, from the assets allocated to each subaccount are credited to and charged against that subaccount without regard to the income, gains and losses from any other of our accounts or subaccounts.
Information about the separate account can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. You may obtain information about the operation of the public reference room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website (www.sec.gov) that contains other information regarding the separate account.
You can generally exchange one annuity contract for another in a “tax-free exchange” under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both annuities carefully. Remember that if you exchange another annuity for the one described in this prospectus, you might have to pay a surrender charge on your old contract, and other charges may be higher (or lower) and the benefits may be different. If the exchange does not qualify for Section 1035 treatment, you may have to pay federal income tax, and penalty tax, on the exchange. You should not exchange another annuity for this one unless you determine, after knowing all the facts, that the exchange is in your best interest and not just better for the person selling you the Contract (that person will generally earn a commission if you buy this Contract through an exchange or otherwise).
To the extent required by law, Western Reserve will vote all shares of the portfolios in accordance with instructions we receive from you and other owners that have voting interests in the portfolios. We will send you and other owners requests for instructions on how to vote those shares. When we receive those instructions, we will vote all of the shares in accordance with those instructions. We will vote shares for which no timely instructions were received in the same proportion as the voting instructions we received. Accordingly, it is possible for a small number of policy owners (assuming there is a quorum) to determine the outcome of a vote, especially if they have large policy values. However, if we determine that we are permitted to vote the shares in our own right, we may do so. Each person having a voting interest will receive proxy material,
|
reports, and other materials relating to the appropriate portfolio.
Distribution and Principal Underwriting Agreement. We have entered into a principal underwriting and distribution agreement with our affiliate, TCI, for the distribution and sale of the Contracts. We reimburse TCI for certain expenses it incurs in order to pay for the distribution of the Contracts (e.g., commissions payable to selling firms selling the Contracts, as described below.)
Compensation to Broker-Dealers Selling the Contracts. The Contracts are offered to the public through broker-dealers (“selling firms”) that are licensed under the federal securities laws; the selling firm and/or its affiliates are also licensed under state insurance laws. The selling firms have entered into written selling agreements with us and with TCI as principal underwriter for the Contracts. We pay commissions through TCI to the selling firms for their sales of the Contracts.
A limited number of affiliated and unaffiliated broker-dealers may also be paid commissions and overrides to “wholesale” the Contracts, that is, to provide sales support and training to sales representatives at selling firms. We may also provide compensation to a limited number of broker-dealers for providing ongoing service in relation to Contracts that have already been purchased.
The selling firms who have selling agreements with TCI and us are paid commissions for the promotion and sale of the Contracts according to one or more schedules. The amount and timing of commissions may vary depending on the selling agreement, but the maximum commission is 0.75% of premiums (additional amounts may be paid as overrides to wholesalers).
To the extent permitted by FINRA rules of the Financial Industry Regulatory Authority, Western Reserve, ISI and other affiliated parties may pay (or allow other broker-dealers to provide) promotional incentives or payments in the form of cash or non-cash compensation or reimbursement to some, but not all, selling firms. These arrangements are described further below.
The registered representative who sells you the Contract typically receives a portion of the compensation we (and our affiliates) pay to the selling firms, depending on the agreement between
42
the selling firm and its registered representative and the firm’s internal compensation program. These programs may include other types of cash and non-cash compensation and other benefits. Ask your sales representative for further information about the compensation your sales representative, and the selling firm that employs your sales representative, may receive in connection with your purchase of a Contract. Also inquire about any revenue sharing arrangements that we and our affiliates may have with the selling firm, including the conflicts of interests that such arrangements may create.
Special Compensation For Affiliated Wholesaling and Selling Firms. Our parent company provides paid-in capital to TCI and pays the cost of TCI’s operating and other expenses, including costs for facilities, legal and accounting services, and other internal administrative functions.
Western Reserve’s two main distribution channels are InterSecurities, Inc. (“ISI”) and World Group Securities (“WGS”), both affiliates, who sell Western Reserve products.
Western Reserve underwrites the cost of ISI’s various facilities, third-party services and internal administrative functions, including employee salaries, sales representative training and computer systems that are provided directly to ISI. These facilities and services are necessary for ISI’s administration and operation, and Western Reserve is compensated by ISI for these expenses based on ISI’s usage. In addition, Western Reserve and other affiliates pay for certain sales expenses of ISI, including the costs of preparing and producing prospectuses and sales promotional materials for the Contract.
ISI pays its branch managers a portion of the commissions received from Western Reserve for the sale of the Contracts. Sales representatives receive a portion of the commissions for their sales of Contracts in accordance with ISI’s internal compensation programs.
To support its sales of Western Reserve’s variable annuity products, WGS receives an expense allowance of 0.35% of the annual annuity premiums paid on variable annuities sold by WGS. Sales representatives receive a portion of the commissions for their sales of Contracts in accordance with WGS’s internal compensation programs.
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Sales representatives and their managers at ISI and WGS may receive directly or indirectly additional cash benefits and non-cash compensation or reimbursements from us or our affiliates. Additional compensation or reimbursement arrangements may include payments in connection with the firm’s conferences or seminars, sales or training programs for invited selling representatives and other employees, seminars for the public, trips (such as travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items, and payments, loans, loan guaranties, or loan forgiveness to assist a firm or a representative in connection with systems, operating, marketing and other business expenses. The amounts may be significant and may provide us with increased access to the sales representatives.
In addition, ISI’s managers and/or sales representatives who meet certain productivity standards may be eligible for additional compensation. Sales of the Contracts by affiliated selling firms may help sales representatives and/or their managers qualify for certain benefits, and may provide such persons with special incentive to sell our Contracts. For example, ISI’s and WGS’s registered representatives, general agents, marketing directors and supervisors may be eligible to participate in a voluntary stock purchase plan that permits participants to purchase stock of AEGON N.V. (Western Reserve’s ultimate parent) by allocating a portion of the commissions they earn to purchase such shares. A portion of the contributions of commissions by ISI’s representatives may be matched by ISI.
ISI’s and WGS’s registered representatives may also be eligible to participate in a stock option and award plan. Registered representatives who meet certain production goals will be issued options on the stock of AEGON N.V.
Additional Compensation that We and our Affiliates Pay to Selected Selling Firms. We may pay certain selling firms additional cash amounts for “preferred product” treatment of the Contracts in their marketing programs in order to receive enhanced marketing services and increased access to their sales representatives. In exchange for providing us with access to their distribution network, such selling firms may receive additional compensation or reimbursement for, among other things, the hiring and training of sales personnel, marketing, sponsoring of conferences, meetings, seminars, and events and/or other services they provide to us and our affiliates. To the extent permitted by applicable
43
law, we and other parties may allow other non-cash incentives and compensation to be paid to these selling firms. These special compensation arrangements are not offered to all selling firms and the terms of such arrangements may differ between selling firms.
Special compensation arrangements are calculated in different ways by different selling firms and may be based on past or anticipated sales of the Contracts or other criteria. For instance, Western Reserve made flat fee payments to several selling firms with payments ranging from $2,000 to $15,750 in 2007 for the sales of the Western Reserve’s insurance products.
During 2007, we had entered into “preferred product” arrangements with ISI, WGS, Berthel Fisher & Co Financial Services, H. Beck Inc., First Founders Securities Inc., Harbour Investments Inc., Coordinated Capital Securities, Inc., Trustmont Financial Group, Inc., Packerland Brokerage Services, Inc. and Investors Capital Corp. We paid the following amounts (in addition to sales commissions and expense allowances) to these firms:
Name of Firm |
Aggregate Amount Paid in 2007 |
|||
H. Beck, Inc. |
$ | 10,000 | ||
Berthel Fisher |
$ | 10,000 | ||
Investors Capital Corp. |
$ | 15,750 | ||
First Founders Securities, Inc. |
$ | 2,725 | ||
Harbour Investments, Inc. |
$ | 6,000 | ||
Coordinated Capital Securities, Inc. |
$ | 2,000 | ||
Trustmont Financial Group, Inc. |
$ | 2,000 | ||
Packerland Brokerage Services, Inc. |
$ | 3,000 |
No specific charge is assessed directly to Contract owners or the separate account to cover commissions and other incentives or payments described above. We do intend to recoup commissions and other sales expenses and incentives we pay, however through fees and charges deducted under the Contract and other corporate revenue.
You should be aware that a selling firm or its sales representatives may receive different compensation or incentives for selling one product over another. In some cases, these payments may create an incentive for the selling firm or its sales representatives to recommend or sell this Contract to you. You may wish to take such payments into account when
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considering and evaluating any recommendation relating to the Contracts.
The Contract does not participate or share in the profits or surplus earnings of Western Reserve. No dividends are payable on the Contract.
Variations in Contract Provisions
Certain provisions of the Contracts may vary from the descriptions in this prospectus in order to comply with different state laws. See your Contract for variations since any such state variations will be included in your Contract or in riders or endorsements attached to your Contract.
The fixed account is not available in all states. If your Contract was issued in New Jersey or Washington, you may not direct or transfer any money to the fixed account.
We are a member of the Insurance Marketplace Standards Association (“IMSA”). IMSA is an independent, voluntary organization of life insurance companies. It promotes high ethical standards in the sales and advertising of individual life insurance, long-term care insurance and annuity products. Through its Principles and Code of Ethical Market Conduct, IMSA encourages its member companies to develop and implement policies and procedures to promote sound market practices. Companies must undergo a rigorous self and independent assessment of their practices to become a member of IMSA. The IMSA logo in our sales literature shows our ongoing commitment to these standards. You may find more information about IMSA and its ethical standards at www.imsaethics.org in the “Consumer” section or by contacting IMSA at: 240-744-3030.
There are no legal proceedings to which the separate account is a party or to which the assets of the separate account are subject. The Company, like other life insurance companies, is involved in lawsuits. In some class action and other lawsuits involving other insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation cannot be predicted with certainty, the Company believes that at the present time there are no pending or threatened
44
lawsuits that are reasonably likely to have a material adverse impact on the separate account, on the ability of Transamerica Capital, Inc. to perform under its principal underwriting agreement, or on the ability of the Company to meet its obligations under the Contract.
The financial statements of Western Reserve and the separate account are included in the SAI.
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
Definitions of Special Terms
The Contract—General Provisions
Certain Federal Income Tax Consequences
Investment Experience
Historical Performance Data
Published Ratings
Administration
Records and Reports
Distribution of the Contracts
Other Products
Custody of Assets
Legal Matters
Independent Registered Public Accounting Firm
Other Information
Financial Statements*
* | Not included in the re-filed Statement of Additional Information dated May 1, 2008. |
|
Inquiries and requests for an SAI should be directed to:
Western Reserve Life Assurance Co. of Ohio
Administrative Office
1-800-851-9777
(Monday – Friday 8:30 a.m. – 7:00 p.m. Eastern Time)
Or write to us at our mailing address:
Western Reserve Life Assurance Co. of Ohio
Attention: Customer Care Group
4333 Edgewood Road NE
45
CONDENSED FINANCIAL INFORMATION
The accumulation unit values (“AUV”) and the number of accumulation units outstanding for each subaccount from the date of inception are shown in the following tables. The number of accumulation units combines the units outstanding for several variable annuity contracts issued by Western Reserve within each subaccount class.
1.40% | ||||||||||||||||
Subaccount |
Year | Beginning AUV |
Ending AUV |
# Units | ||||||||||||
Transamerica Asset Allocation Conservative VP - Initial Class(1) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
13.219 12.507 11.808 10.915 9.005 10.000 |
|
$ $ $ $ $ $ |
13.867 13.219 12.507 11.808 10.915 9.005 |
|
|
4,583,355 5,034,789 5,828,496 6,517,814 5,841,967 2,988,055 |
| ||||
Transamerica Asset Allocation - Growth VP - Initial Class(1) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
14.833 13.009 11754 10.439 8.093 10.00 |
|
$ $ $ $ $ $ |
15.761 14.833 13.009 11754 10.439 8.093 |
|
|
9,049,661 11,307,827 12,328,154 12,181,001 9,124,299 3,146,691 |
| ||||
Transamerica Asset Allocation - Moderate VP - Initial Class(1) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
13.749 12.507 11.804 10.746 8.727 10.000 |
|
$ $ $ $ $ $ |
14.637 13.749 12.507 11.804 10.746 8.727 |
|
|
15,052,020 18,260,819 21,105,353 21,341,134 19,088,264 8,790,569 |
| ||||
Transamerica Asset Allocation - Moderate Growth VP - Initial Class(1) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
14.418 12.844 11.850 10.584 8.440 10.000 |
|
$ $ $ $ $ $ |
15.329 14.418 12.844 11.850 10.584 8.440 |
|
|
18,085,015 21,377,053 22,806,861 22,388,762 18,300,336 9,042,969 |
| ||||
Transamerica International Moderate Growth VP – Initial Class(2) Subaccount Inception Date May 1, 2006 |
|
2007 2006 |
|
$ $ |
10.343 10.000 |
|
$ $ |
11.075 10.333 |
|
|
618,174 226,525 |
| ||||
Transamerica BlackRock Large Cap Value VP - Initial Class(3) Subaccount Inception Date May 1, 1996 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
25.316 21.956 19.203 16.456 12.859 15.200 15.698 13.820 12.983 13.827 11.213 |
|
$ $ $ $ $ $ $ $ $ $ $ |
26.122 25.316 21.956 19.203 16.456 12.859 15.200 15.698 13.820 12.983 13.827 |
|
|
2,009,292 2,817,033 3,426,531 3,315,051 4,030,078 4,664,060 5,207,255 5,063,664 5,579,088 7,102,945 7,035,132 |
| ||||
Transamerica Capital Guardian U.S. Equity VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
13.283 12.233 11.669 10.781 8.009 10.00 |
|
$ $ $ $ $ $ |
13.078 13.283 12.233 11.669 10.781 8.009 |
|
|
971,562 1,230,830 1,526,266 1,903,558 1,572,703 576,817 |
| ||||
Transamerica Capital Guardian Value VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
14.691 12.788 12.039 10.462 7.883 10.000 |
|
$ $ $ $ $ $ |
13.577 14.691 12.788 12.039 10.462 7.883 |
|
|
1,840,545 2,506,241 2,517,861 2,482,269 1,700,168 736,005 |
|
46
1.40% | ||||||||||||||||
Subaccount |
Year | Beginning AUV |
Ending AUV |
# Units | ||||||||||||
Transamerica Clarion Global Real Estate Securities VP - Initial Class(3) Subaccount Inception Date May 1, 1998 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 |
|
$ $ $ $ $ $ $ $ $ $ |
31.479 22.436 20.050 15.304 11.434 11.192 10.220 7.996 8.427 10.000 |
|
$ $ $ $ $ $ $ $ $ $ |
28.960 31.479 22.436 20.050 15.304 11.434 11.192 10.220 7.996 8.427 |
|
|
1,901,925 3,458,947 3,840,201 4,420,244 4,388,984 4,593,344 2,405,050 1,056,274 203,365 157,193 |
| ||||
Transamerica Federated Market Opportunity VP - Initial Class(3) Subaccount Inception Date March 1, 1994 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
30.919 30.512 29.480 27.375 21.886 21.982 19.267 15.127 16.055 15.799 12.853 |
|
$ $ $ $ $ $ $ $ $ $ $ |
30.345 30.919 30.512 29.480 27.375 21.886 21.982 19.267 15.127 16.055 15.799 |
|
|
2,885,299 4,516,150 6,378,008 7,819,718 8,687,045 9,403,118 7,937,435 3,892,691 3,023,724 3,248,069 2,315,992 |
| ||||
Transamerica JPMorgan Core Bond VP - Initial Class(3) Subaccount Inception Date December 03, 1992 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
19.154 18.691 18.528 17.976 17.480 16.119 15.125 13.832 14.452 13.407 12.455 |
|
$ $ $ $ $ $ $ $ $ $ $ |
20.200 19.154 18.691 18.528 17.976 17.480 16.119 15.125 13.832 14.452 13.407 |
|
|
2,194,678 3,026,024 4,408,034 5,799,745 7,789,081 11,128,051 9,620,928 5,244,630 6,280,541 6,350,826 4,801,744 |
| ||||
Transamerica JPMorgan Enhanced Index VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
13.060 11.485 11.257 10.283 8.087 10.000 |
|
$ $ $ $ $ $ |
13.463 13.060 11.485 11.257 10.283 8.087 |
|
|
331,154 440,597 658,214 745,971 443,924 293,155 |
| ||||
Transamerica JPMorgan Mid Cap Value VP - Initial Class(3) Subaccount Inception Date May 3, 1999 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 |
|
$ $ $ $ $ $ $ $ $ |
17.567 15.194 14.115 12.493 9.640 11.201 11.825 10.620 10.000 |
|
$ $ $ $ $ $ $ $ $ |
17.814 17.567 15.194 14.115 12.493 9.640 11.201 11.825 10.620 |
|
|
1,237,756 1,797,202 2,807,754 3,071,429 3,200,782 3,204,752 1,873,567 902,381 209,699 |
| ||||
Transamerica Legg Mason Partners All Cap VP - Initial Class(3) Subaccount Inception Date May 3, 1999 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 |
|
$ $ $ $ $ $ $ $ $ |
17.178 14.693 14.316 13.302 9.981 13.445 13.356 11.449 10.000 |
|
$ $ $ $ $ $ $ $ $ |
17.115 17.178 14.693 14.316 13.302 9.981 13.445 13.356 11.449 |
|
|
2,662,028 3,814,746 5,410,442 7,044,334 8,431,451 9,358,103 10,509,975 4,108,412 425,168 |
| ||||
Transamerica MFS High Yield VP - Initial Class(3) Subaccount Inception Date May 1, 2003 |
|
2007 2006 2005 2004 2003 |
|
$ $ $ $ $ |
12.918 11.807 11.759 10.864 10.000 |
|
$ $ $ $ $ |
12.975 12.918 11.807 11.759 10.864 |
|
|
419,236 1,206,639 1,273,537 817,140 842,573 |
|
47
1.40% | ||||||||||||||||
Subaccount |
Year | Beginning AUV |
Ending AUV |
# Units | ||||||||||||
Transamerica MFS International Equity VP - Initial Class(3) Subaccount Inception Date January 2, 1997 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
13.460 11.090 9.964 8.832 7.149 9.198 12.184 14.536 11.797 10.601 10.000 |
|
$ $ $ $ $ $ $ $ $ $ $ |
14.488 13.460 11.090 9.964 8.832 7.149 9.198 12.184 14.536 11.797 10.601 |
|
|
4,267,649 5,817,353 5,871,721 6,615,253 6,818,662 2,158,257 1,814,753 1,768,548 1,407,842 1,642,437 1,050,984 |
| ||||
Transamerica Marsico Growth VP - Initial Class(3) Subaccount Inception Date May 3, 1999 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 |
|
$ $ $ $ $ $ $ $ $ |
10.015 9.638 9.001 8.132 6.527 8.943 10.558 11.640 10.000 |
|
$ $ $ $ $ $ $ $ $ |
11.891 10.015 9.638 9.001 8.132 6.527 8.943 10.558 11.640 |
|
|
1,540,856 1,973,884 2,760,471 2,599,341 2,979,598 2,134,641 2,107,889 1,148,171 503,875 |
| ||||
Transamerica Munder Net50 VP - Initial Class(3) Subaccount Inception Date May 3, 1999 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 |
|
$ $ $ $ $ $ $ $ $ |
10.031 10.172 9.545 8.393 5.108 8.412 11.438 11.631 10.000 |
|
$ $ $ $ $ $ $ $ $ |
11.577 10.031 10.172 9.545 8.393 5.108 8.412 11.438 11.631 |
|
|
770,032 1,070,811 1,592,298 2,424,273 3,041,944 1,592,715 883,021 411,613 166,378 |
| ||||
Transamerica PIMCO Total Return VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
11.629 11.316 11.214 10.883 10.521 10.000 |
|
$ $ $ $ $ $ |
12.494 11.629 11.316 11.214 10.883 10.521 |
|
|
1,671,402 2,105,599 2,788,432 2,996,383 3,564,020 3,222,374 |
| ||||
Transamerica T. Rowe Price Equity Income VP - Initial Class(3) Subaccount Inception Date May 3, 1999 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 |
|
$ $ $ $ $ $ $ $ $ |
12.824 10.932 10.648 9.405 7.518 9.392 9.938 9.173 10.000 |
|
$ $ $ $ $ $ $ $ $ |
13.066 12.824 10.932 10.648 9.405 7.518 9.392 9.938 9.173 |
|
|
2,679,663 3,167,787 3,898,074 3,897,780 3,071,835 3,078,698 2,836,118 1,122,878 691,875 |
| ||||
Transamerica T. Rowe Price Small Cap VP - Initial Class(3) Subaccount Inception Date May 3, 1999 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 |
|
$ $ $ $ $ $ $ $ $ |
13.262 12.982 11.902 10.936 7.899 11.026 12.385 13.719 10.000 |
|
$ $ $ $ $ $ $ $ $ |
14.334 13.262 12.982 11.902 10.936 7.899 11.026 12.385 13.719 |
|
|
1,359,753 1,852,828 4,035,090 3,799,997 3,555,552 2,382,626 1,973,947 1,163,345 359,295 |
| ||||
Transamerica Templeton Global VP - Initial Class(4) Subaccount Inception Date December 3, 1992 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
37.895 32.349 30.524 28.380 23.350 32.011 42.074 51.748 30.669 23.921 20.428 |
|
$ $ $ $ $ $ $ $ $ $ $ |
43.066 37.895 32.349 30.524 28.380 23.350 32.011 42.074 51.748 30.669 23.921 |
|
|
2,637,987 3,763,011 5,455,744 7,460,349 8,803,516 11,483,393 15,750,810 20,629,370 18,875,171 17,104,721 15,530,666 |
|
48
1.40% | ||||||||||||||||
Subaccount |
Year | Beginning AUV |
Ending AUV |
# Units | ||||||||||||
Transamerica Third Avenue Value VP - Initial Class(3) Subaccount Inception Date January 2, 1998 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 |
|
$ $ $ $ $ $ $ $ $ $ |
28.462 24.866 21.224 17.245 12.741 14.661 14.004 10.483 9.187 10.000 |
|
$ $ $ $ $ $ $ $ $ $ |
28.404 28.462 24.866 21.224 17.245 12.741 14.661 14.004 10.483 9.187 |
|
|
4,020,137 5,809,063 7,141,447 7,389,914 7,182,665 7,316,937 6,522,300 4,130,688 968,035 1,025,234 |
| ||||
Transamerica Balanced VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
13.260 12.321 11.573 10.559 9.401 10.000 |
|
$ $ $ $ $ $ |
14.854 13.260 12.321 11.573 10.559 9.401 |
|
|
930,691 1,026,071 994,375 1,174,368 1,218,670 1,222,243 |
| ||||
Transamerica Convertible Securities VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
14.077 12.872 12.565 11.259 9.233 10.000 |
|
$ $ $ $ $ $ |
16.468 14.077 12.872 12.565 11.259 9.233 |
|
|
659,363 811,580 943,727 1,086,067 873,405 206,962 |
| ||||
Transamerica Equity VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
15.478 14.437 12.563 11.001 8.502 10.000 |
|
$ $ $ $ $ $ |
17.749 15.478 14.437 12.563 11.001 8.502 |
|
|
16,561,548 25,851,207 13,672,577 17,089,942 2,829,041 1,701,104 |
| ||||
Transamerica Growth Opportunities VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
13.945 13.455 11.739 10.207 7.889 10.000 |
|
$ $ $ $ $ $ |
16.926 13.945 13.455 11.739 10.207 7.889 |
|
|
1,895,768 3,127,296 4,060,552 4,831,365 1,398,371 342,370 |
| ||||
Transamerica Money Market VP - Initial Class(3) Subaccount Inception Date December 3, 1992 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
13.801 13.363 13.172 13.224 13.305 13.300 12.971 12.396 11.989 11.546 11.119 |
|
$ $ $ $ $ $ $ $ $ $ $ |
14.294 13.801 13.363 13.172 13.224 13.305 13.300 12.971 12.396 11.989 11.546 |
|
|
3,301,488 3,966,551 5,662,245 6,858,649 11,342,685 22,772,399 22,584,444 15,661,242 21,724,144 7,839,228 5,382,846 |
| ||||
Transamerica Science and Technology VP - Initial Class(3) Subaccount Inception Date May 1, 2000 |
|
2007 2006 2005 2004 2003 2002 2001 2000 |
|
$ $ $ $ $ $ $ $ |
4.028 4.044 4.018 3.771 2.533 4.151 6.677 10.000 |
|
$ $ $ $ $ $ $ $ |
5.274 4.028 4.044 4.018 3.771 2.533 4.151 6.677 |
|
|
1,975,072 2,071,614 3,153,974 5,229,954 7,365,392 5,389,756 5,092,957 2,786,341 |
| ||||
Transamerica Small/Mid Cap Value VP - Initial Class(3) Subaccount Inception date May 3, 2004 |
|
2007 2006 2005 2004 |
|
$ $ $ $ |
14.874 12.777 11.409 10.000 |
|
$ $ $ $ |
18.297 14.874 12.777 11.409 |
|
|
1,160,433 1,052,520 1,124,332 338,560 |
| ||||
Transamerica U.S. Government Securities VP - Initial Class(3) Subaccount Inception Date May 1, 2002 |
|
2007 2006 2005 2004 2003 2002 |
|
$ $ $ $ $ $ |
11.072 10.872 10.784 10.588 10.430 10.000 |
|
$ $ $ $ $ $ |
11.579 11.072 10.872 10.784 10.588 10.430 |
|
|
344,790 404,997 529,899 581,204 834,983 1,091,530 |
|
49
1.40% | ||||||||||||||||
Subaccount |
Year | Beginning AUV |
Ending AUV |
# Units | ||||||||||||
Transamerica Value Balanced VP - Initial Class(3) Subaccount Inception Date January 3, 1995 |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
23.261 20.463 19.468 17.954 15.152 17.831 17.649 15.270 16.411 15.363 13.363 |
|
$ $ $ $ $ $ $ $ $ $ $ |
24.479 23.261 20.463 19.468 17.954 15.152 17.831 17.649 15.270 16.411 15.363 |
|
|
5,195,677 7,046,508 10,005,043 13,174,940 7,541,570 9,360,804 8,056,184 7,316,935 10,938,985 14,496,370 12,633,177 |
| ||||
Transamerica Van Kampen Mid-Cap Growth VP – Initial Class(3) |
|
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 |
|
$ $ $ $ $ $ $ $ $ $ $ |
36.408 33.592 31.673 29.979 23.723 35.939 54.586 62.846 31.063 22.938 19.152 |
|
$ $ $ $ $ $ $ $ $ $ $ |
43.992 36.408 33.592 31.673 29.979 23.723 35.939 54.586 62.846 31.063 22.938 |
|
|
2,232,162 3,364,728 5,031,502 6,800,245 8,603,602 10,523,277 13,224,828 16,201,070 14,178,995 12,278,821 11,279,603 |
| ||||
ProFund VP Asia 30 Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 11.690 | 107,427 | ||||||||||
ProFund VP Basic Materials Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 11.123 | 217,332 | ||||||||||
ProFund VP Bull Subaccount Inception Date June 12, 2006 |
|
2007 2006 |
|
$ $ |
11.421 10.000 |
|
$ $ |
11.662 11.421 |
|
|
107,154 928,230 |
| ||||
ProFund VP Consumer Services Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.154 | 0 | ||||||||||
ProFund VP Emerging Markets Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 11.474 | 77,440 | ||||||||||
ProFund VP Europe 30 Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.293 | 254,070 | ||||||||||
ProFund VP Falling U.S. Dollar Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.580 | 3,152 | ||||||||||
ProFund VP Financials Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 8.641 | 0 | ||||||||||
ProFund VP International Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.103 | 3,519 | ||||||||||
ProFund VP Japan Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.126 | 0 | ||||||||||
ProFund VP Mid-Cap Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.755 | 0 | ||||||||||
ProFund VP Money Market Subaccount Inception Date June 12, 2006 |
|
2007 2006 |
|
$ $ |
10.144 10.000 |
|
$ $ |
10.380 10.144 |
|
|
1,886,833 35,549 |
| ||||
ProFund VP NASDAQ-100(5) Subaccount Inception Date June 12, 2006 |
|
2007 2006 |
|
$ $ |
11.400 10.000 |
|
$ $ |
13.223 11.400 |
|
|
82,710 240,507 |
| ||||
ProFund VP Oil & Gas Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.911 | 97,260 | ||||||||||
ProFund VP Pharmaceuticals Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.996 | 0 | ||||||||||
ProFund VP Precious Metals Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 11.780 | 122,871 | ||||||||||
ProFund VP Short Emerging Markets Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 8.242 | 0 | ||||||||||
ProFund VP Short International Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.831 | 0 | ||||||||||
ProFund VP Short NASDAQ-100(6) Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.732 | 0 | ||||||||||
ProFund VP Short Small-Cap Subaccount Inception Date June 12, 2006 |
|
2007 2006 |
|
$ $ |
8.786 10.000 |
|
$ $ |
9.056 8.786 |
|
|
11,950 12,535 |
| ||||
ProFund VP Small-Cap Subaccount Inception Date June 12, 2006 |
|
2007 2006 |
|
$ $ |
11.214 10.000 |
|
$ $ |
10.814 11.214 |
|
|
88,292 520,447 |
|
50
1.40% | ||||||||||||||||
Subaccount |
Year | Beginning AUV |
Ending AUV |
# Units | ||||||||||||
ProFund VP Small-Cap Value Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.161 | 703 | ||||||||||
ProFund VP Telecommunications Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 9.541 | 50 | ||||||||||
ProFund VP UltraSmall-Cap Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 8.866 | 23,136 | ||||||||||
ProFund VP U.S. Government Plus Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.819 | 72,279 | ||||||||||
ProFund VP Utilities Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.745 | 276,532 | ||||||||||
Access VP High Yield FundSM Subaccount Inception Date September 6, 2007 |
2007 | $ | 10.00 | $ | 10.307 | 1,348 | ||||||||||
Fidelity VIP - Contrafund® Portfolio - Service Class 2 Subaccount Inception Date May 1, 2000 |
|
2007 2006 2005 2004 2003 2002 2001 2000 |
|
$ $ $ $ $ $ $ $ |
13.056 11.882 10.329 9.096 7.195 8.072 9.352 10.000 |
|
$ $ $ $ $ $ $ $ |
15.103 13.056 11.882 10.329 9.096 7.195 8.072 9.352 |
|
|
1,958,288 2,599,635 3,234,967 2,969,700 2,899,774 2,847,105 1,397,660 575,608 |
| ||||
Fidelity VIP - Equity-Income Portfolio - Service Class 2 Subaccount Inception Date May 1, 2000 |
|
2007 2006 2005 2004 2003 2002 2001 2000 |
|
$ $ $ $ $ $ $ $ |
14.482 12.245 11.762 10.723 8.363 10.237 10.954 10.000 |
|
$ $ $ $ $ $ $ $ |
14.462 14.482 12.245 11.762 10.723 8.363 10.237 10.954 |
|
|
1,140,970 1,437,937 1,575,184 2,093,774 2,413,903 2,300,628 1,742,074 251,005 |
| ||||
Fidelity VIP - Growth Opportunities Portfolio - Service Class 2 Subaccount Inception Date May 1, 2000 |
|
2007 2006 2005 2004 2003 2002 2001 2000 |
|
$ $ $ $ $ $ $ $ |
8.256 7.964 7.431 7.054 5.525 7.184 8.535 10.000 |
|
$ $ $ $ $ $ $ $ |
10.006 8.256 7.964 7.431 7.054 5.525 7.184 8.535 |
|
|
494,904 544,698 680,874 860,008 961,238 910,288 706,972 333,333 |
|
(1) | Transamerica was added to the beginning of the fund name; and Portfolio was replaced with VP at the end of the fund name. |
(2) | Transamerica was added to the beginning of the fund name; and Fund was replaced with VP at the end of the fund name. |
(3) | Unless previously part of the name; Transamerica was added to the beginning of the fund name; and VP was added to the end of the fund name. |
(4) | Formerly known as Templeton Transamerica Global. |
(5) | Formerly known as ProFund VP OTC |
(6) | Formerly known as ProFund VP Short OTC |
The Transamerica Index 50 VP and Transamerica Index 75 VP had not commenced operations as of December 31, 2007 therefore, comparable data is not available.
51
WRL FREEDOM BELLWETHERSM
Issued by
TRANSAMERICA LIFE INSURANCE COMPANY
(Former Depositor, Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Supplement Dated October 1, 2020
to the
Statement of Additional Information dated May 1, 2008
This Supplement updates certain information contained in the Statement of Additional Information dated May 1, 2008 for the WRL Freedom BellwetherSM variable annuity contract (the “Contract”). Please read this Supplement carefully and retain it for future reference. Capitalized terms not otherwise defined in this supplement have the same meanings given to them in the Statement of Additional Information. Except as modified in this supplement, all other terms and information in the Statement of Additional Information remain unchanged.
Effective on October 1, 2020, Transamerica Premier Life Insurance Company (“TPLIC”; formerly known as Western Reserve Life Assurance Co. of Ohio) merged with and into its affiliate Transamerica Life Insurance Company (“TLIC”). Before the merger, TPLIC was the issuer of the contracts. Upon consummation of the Merger, TPLIC’s corporate existence ceased by operation of law, and TLIC assumed legal ownership of all of the assets of TPLIC, including WRL Series Annuity Account (the “Separate Account”) that funds the Contracts, and the assets of the Separate Account. As a result of the merger, TLIC became responsible for all liabilities and obligations of TPLIC, including those created under the Contracts. The Contracts have thereby become flexible premium individual deferred variable annuity contracts funded by a separate account of TLIC. Accordingly, all references in the Statement of Additional Information to the issuer of the Contracts are amended to refer to Transamerica Life Insurance Company.
TPLIC no longer sells the Contract. Following the Merger, TLIC will not issue new Contracts. Although Contracts will no longer be sold, additional purchase payments will continue to be permitted.
The following hereby replaces the Independent Registered Public Accounting Firm section of the Statement of Additional Information, page 21:
Independent Registered Public Accounting Firm
The financial statements of the WRL Series Annuity Account as of December 31, 2019 and for the years ended December 31, 2019 and 2018, and the statutory-basis financial statements and schedules of Transamerica Life Insurance Company and Transamerica Premier Life Insurance Company as of December 31, 2019 and 2018 and for each of the three years in the period ended December 31, 2019 included in this Statement of Additional Information have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The following paragraph hereby replaces the FINANCIAL STATEMENTS section of the Statement of Additional Information, Page 22.
FINANCIAL STATEMENTS
Our financial statements, which are presented in conformity with accounting practices prescribed or permitted by the Iowa Department of Insurance as well as the audited financial statements of the Separate Account are located in the Statement of Additional Information (SAI).
Separate Account
The values of Your interest in the Separate Account will be affected solely by the investment results of the selected Subaccount(s). The statutory-basis financial statements and schedules of Transamerica Life Insurance Company should be considered only as bearing on the ability of us to meet our obligations under the policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account.
The following financial statements replace the financial statements contained in the Statement of Additional Information
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Amounts presented in thousands
Effective October 1, 2020, Transamerica Life Insurance Company (“TLIC”, or “the Company”) will merge with Transamerica Premier Life Insurance Company (“TPLIC”), an Iowa domiciled affiliate, and MLIC Re I, Inc. (“MLRe”), a Vermont domiciled affiliate, with TLIC emerging as the surviving entity pursuant to the Plan of Merger, which was approved by the Iowa Insurance Division (IID) and the Department of Financial Regulation of Vermont.
In conjunction with the merger the historical financial statements were combined under NAIC Statutory Accounting Practices and Procedures Manual Statements of Statutory Accounting Principles (SSAP) No. 68 Business Combinations and Goodwill (SSAP 68) Paragraph 10 Statutory Merger, whereby the former statutory bases of accounting are retained.
The unaudited pro forma condensed combined financial information below should be read in conjunction with the notes thereto and audited consolidated financial statements for the year ended December 31, 2019 included herein.
The following unaudited pro forma condensed combined financial information is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the merger been completed on the dates indicated above. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the resulting company. This information does not give effect to (1) our results of operations or other transactions or developments since December 31, 2019, (2) the impact of releasing the letter of credit reflected as an admitted asset by MLRe, (3) the effects of transactions or developments that may occur subsequent to December 31, 2019 after the pro forma financial statements, and (4) the impact of intercompany transactions between entities, including reinsurance, that have not been reflected in historical balances, but will be adjusted on a go forward basis. The foregoing matters could cause both TLIC’s historical pro forma financial position and results of operations, and TLIC’s actual future financial position and results of operations, to differ materially from those presented in the following unaudited pro forma condensed combined financial information.
The following unaudited pro forma condensed combined financial information of TLIC gives effect to the merger as if it had been completed as of December 31, 2019. The statutory financial statements for the Company, TPLIC, and MLRe are combined below retaining the historical statutory bases to arrive at merged pro forma financial statements at December 31, 2019 as follows:
Transamerica Life Insurance Co – Merged Company
Statutory Condensed Combined Balance Sheet
12/31/2019 Pro forma - Unaudited
($ thousands)
TLIC Dec 31 2019 as Reported |
TPLIC Dec 31 2019 as Reported |
MLRe Dec 31 2019 as Reported |
Eliminations2 Dec 31 2019 |
Merged Dec 31 2019 Pro Forma3 |
||||||||||||||||
ASSETS: |
||||||||||||||||||||
Investments |
41,771,924 | 24,479,103 | 314,148 | — | 66,565,175 | |||||||||||||||
Letter of Credit1 |
— | — | 770,000 | — | 770,000 | |||||||||||||||
Other Assets |
2,730,813 | 1,529,256 | 35,731 | — | 4,295,800 | |||||||||||||||
Separate Account Assets |
85,720,689 | 26,508,334 | — | — | 112,229,023 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
TOTAL ADMITTED ASSETS |
130,223,426 | 52,516,693 | 1,119,879 | — | 183,859,998 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
LIABILITIES, CAPITAL & SURPLUS: |
||||||||||||||||||||
Policy Liabilities |
27,308,732.0 | 18,714,626.0 | 770,000.0 | — | 46,793,358.0 | |||||||||||||||
Other Liabilities |
10,665,836.0 | 4,992,797.0 | 9,103.0 | — | 15,667,736.0 | |||||||||||||||
Separate Account Liabilities |
85,720,688.0 | 26,508,334.0 | — | — | 112,229,022.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Liabilities |
123,695,256.0 | 50,215,757.0 | 779,103.0 | — | 174,690,116.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Capital |
6,762.0 | 10,137.0 | 250.0 | (10,387.0 | ) | 6,762.0 | ||||||||||||||
Surplus Notes |
— | 60,000.0 | — | — | 60,000.0 | |||||||||||||||
Gross Paid in and Contributed Surplus |
2,610,713.0 | 1,057,861.0 | 123,000.0 | — | 3,791,574.0 | |||||||||||||||
Aggregate write-in for Special Surplus |
195,434.0 | 1,334.0 | — | — | 196,768.0 | |||||||||||||||
Unassigned Surplus |
3,715,261.0 | 1,171,604.0 | 217,526.0 | 10,387.0 | 5,114,778.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Capital & Surplus |
6,528,170.0 | 2,300,936.0 | 340,776.0 | — | 9,169,882.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
TOTAL LIABILITIES , CAPITAL & SURPLUS |
130,223,426.0 | 52,516,693.0 | 1,119,879.0 | — | 183,859,998.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Transamerica Life Insurance Co – Merged Company
Statutory Condensed Combined Earnings
12/31/2019 Pro Forma - Unaudited
($ thousands)
TLIC Dec 31 2019 as Reported |
TPLIC Dec 31 2019 as Reported |
MLRe Dec 31 2019 as Reported |
Eliminations2 Dec 31 2019 |
Merged Dec 31 2019 Pro Forma3 |
||||||||||||||||
REVENUES: |
||||||||||||||||||||
Premiums and Deposits |
12,146,106.0 | 3,347,881.0 | 198,853.0 | — | 15,692,840.0 | |||||||||||||||
Net Investment Income |
1,644,325.0 | 1,094,859.0 | 11,735.0 | — | 2,750,919.0 | |||||||||||||||
Comm and Exp Allowance & Reserve Adj Ceded |
444,368.0 | (170,748.0 | ) | — | — | 273,620.0 | ||||||||||||||
Other |
1,907,252.0 | 362,101.0 | — | — | 2,269,353.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Revenue |
16,142,051.0 | 4,634,093.0 | 210,588.0 | — | 20,986,732.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Benefits and Expenses: |
||||||||||||||||||||
Benefits Paid |
17,561,497.0 | 3,534,284.0 | 391,512.0 | — | 21,487,293.0 | |||||||||||||||
Policy liability change |
(2,277,561.0 | ) | 961,715.0 | (60,000.0 | ) | — | (1,375,846.0 | ) | ||||||||||||
Commissions |
908,521.0 | 512,527.0 | 48,511.0 | — | 1,469,559.0 | |||||||||||||||
Expenses and other |
833,410.0 | 503,282.0 | (230,348.0 | ) | — | 1,106,344.0 | ||||||||||||||
Transfers to (from) Separate Accounts |
(3,868,617.0 | ) | (1,261,078.0 | ) | — | — | (5,129,695.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Benefits and Expenses |
13,157,250.0 | 4,250,730.0 | 149,675.0 | — | 17,557,655.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gain from Operations Before Policyholder Dividends and Taxes |
2,984,801.0 | 383,363.0 | 60,913.0 | — | 3,429,077.0 | |||||||||||||||
Policyholder Dividends |
9,236.0 | 1,030.0 | — | — | 10,266.0 | |||||||||||||||
Taxes |
(77,933.0 | ) | 39,259.0 | (202.0 | ) | — | (38,876.0 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gain from Operations Before Net Realized Capital Gains (Losses) |
3,053,498.0 | 343,074.0 | 61,115.0 | — | 3,457,687.0 | |||||||||||||||
Realized Capital Gains (Losses) |
240,524.0 | 229,130.0 | (47.0 | ) | — | 469,607.0 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Statutory Income |
3,294,022.0 | 572,204.0 | 61,068.0 | — | 3,927,294.0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Footnote references from financial statements:
1: | As of December 31, 2019, MLRe had a permitted practice with explicit permission of the Deputy Commissioner of Captive Insurance of the State of Vermont that allows the admission on the U.S. statutory statement of a letter of credit. The letter of credit was $770,000 at December 31, 2019 and is included in the Total Admitted Assets balance of MLRe presented above. Upon MLRe being merged into TLIC, the permitted practice will no longer exist and the letter of credit will not transfer into the merged entity. Pursuant to the plan of merger approved by the IID, the LOC will be presented in the historical combined financial statements as of year-end 2019. |
2: | Merger proforma includes the elimination of $10,387 of Unassigned Surplus with an offsetting charge to Capital on the balance sheet is related to the cancellation of the common stock ownership of TPLIC by the Company, and was eliminated based on the requirements set forth in SSAP 68 requiring adjustment of the capital accounts of entities to reflect appropriate par values of the new entity. |
3: | On May 15, 2020, TPLIC paid a dividend to its parent company, Commonwealth General Corporation (“CGC”), in the amount of $700,000. The dividend and contribution included $76,604 in cash and $623,396 in securities. The December 31, 2019 amounts presented above do not reflect that transaction. |
Subsequent Events:
Additional subsequent events have been evaluated for disclosure through September 29, 2020.
On June 30, 2020, the Company received $96,035 from Transamerica Financial Life Insurance Company (“TFLIC”) as consideration for TFLIC’s repurchase of its remaining 1,254 common stock shares held by the Company. The shares were redeemed at par of $125 with total par value of $157 and paid-in surplus of $95,878.
On June 30, 2020, the Company, Transamerica Pacific Re, Inc. (“TPRe”), a newly formed AXXX captive and affiliate, and Transamerica Pacific Insurance Company, Ltd (“TPIC”) entered into a novation agreement whereby the Company consented to the assignment, transfer and novation of TPIC’s obligations under the TLIC/TPIC universal life coinsurance agreements to TPRe. The novation resulted in no gain or loss. The Company then entered into a recapture agreement with TPRe to recapture certain universal life insurance risks for consideration of $2,124,341 equal to the statutory reserves recaptured resulting in no gain or loss. With approval from the IID, subsequent to the novation and the recapture on June 30, 2020, the Company and TPRe amended the agreements to cover the secondary guarantee only.
Effective July 1, 2020, the Company entered into a reinsurance agreement with Wilton Reassurance Company to novate corporate owned life insurance policies previously issued by the Company to TPLIC. The Company novated $173,052 of reserves and claim reserves and paid a ceding commission of $7,400. The transaction resulted in a pre-tax loss of $7,400 which has been included in the Statements of Operations.
Basis of Presentation
The accompanying pro forma financial statements have been prepared in conformity with accounting practices prescribed or permitted by the IID, which practices differ from accounting principles generally accepted in the United States of America (GAAP).
The IID recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Iowa Insurance Law. The NAIC Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed practices by the State of Iowa. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed. See the audited financials for a summary of the accounting practices permitted and prescribed by the IID and reflected in the Company’s financial statements.
The pro forma financial statements and any financial reporting restatements with respect to the newly merged entity will be prepared in accordance with NAIC SAP. More specifically, the pro forma reflects the statutory merger with the assets, liabilities and surplus of the reported statutory entities carried forward from the historical statutory accounting basis.
Use of Estimates
The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
The accompanying pro forma financial statements should be read in conjunction with the related historical information for the Company and are not necessarily indicative of the results that would have been attained had the merger taken place as of the presentation date.
Impacts of Merger
As demonstrated in the pro formas above, the historical balances for the companies involved in the merger have been retained, as outlined in the Plan of Merger approved by the IID. There are intercompany transactions between entities, including reinsurance, that have not been eliminated in historical balances, but will be adjusted on a go forward basis. While the adjustments may be material to individual line items, the eliminations have no impact on the merged company capital and surplus.
Before the merger, TPLIC was the issuer of the variable policies. Upon consummation of the merger, TPLIC’s corporate existence ceased by operation of law, and TLIC assumed legal ownership of all of the assets of TPLIC, including all of TPLIC’s separate accounts (the “Separate Accounts”) that fund TPLIC’s variable policies, and the assets of the Separate Accounts. As a result of the merger, TLIC became responsible for all liabilities and obligations of TPLIC, including those created under TPLIC’s variable policies. Accordingly, all references in the variable policy prospectuses to Transamerica Premier Life Insurance Company are amended to refer to Transamerica Life Insurance Company.
The merger did not affect the terms of, or the rights and obligations under, the variable policies, other than to change the insurance company that provides policy benefits from TPLIC to TLIC. The merger also did not result in any adverse tax consequences for any policy owners, and policy owners will not be charged additional fees or expenses as a result of the merger. The account value or unit values of the policies will not change as a result of the merger.
FINANCIAL STATEMENTS – STATUTORY BASIS
AND SUPPLEMENTARY INFORMATION
Transamerica Life Insurance Company
Years Ended December 31, 2019, 2018 and 2017
Transamerica Life Insurance Company
Financial Statements – Statutory Basis
and Supplementary Information
Years Ended December 31, 2019, 2018 and 2017
1 | ||||
Audited Financial Statements |
||||
3 | ||||
4 | ||||
Statements of Changes in Capital and Surplus – Statutory Basis |
5 | |||
7 | ||||
Notes to Financial Statements – Statutory Basis | ||||
9 | ||||
2. Basis of Presentation and Summary of Significant Accounting Policies |
11 | |||
26 | ||||
30 | ||||
39 | ||||
6. Premium and Annuity Considerations Deferred and Uncollected |
60 | |||
60 | ||||
72 | ||||
77 | ||||
84 | ||||
87 | ||||
88 | ||||
90 | ||||
95 | ||||
15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities |
101 | |||
104 | ||||
105 | ||||
106 | ||||
Statutory-Basis Financial Statement Schedules |
||||
Summary of Investments – Other Than Investments in Related Parties |
110 | |||
111 | ||||
112 |
Report of Independent Auditors
To the Board of Directors of
Transamerica Life Insurance Company
We have audited the accompanying statutory-basis financial statements of Transamerica Life Insurance Company (the “Company”), which comprise the balance sheets – statutory basis as of December 31, 2019 and 2018, and the related statements of operations – statutory basis, of changes in capital and surplus – statutory basis, and of cash flow – statutory basis for each of the three years in the period ended December 31, 2019, including the related notes and schedules of supplementary insurance information and reinsurance as of December 31, 2019, 2018 and for each of the three years in the period ended December 31, 2019 and summary of investments—other than investments in related parties as of December 31, 2019 listed in the accompanying index (collectively referred to as the “financial statements”).
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 Iowa Insurance Division. 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.
Auditors’ 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 Iowa Insurance Division, 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.
PricewaterhouseCoopers LLP, 1 N Upper Wacker Drive, Chicago, IL 60606
T: 312-298-2000, F: , www.pwc.com
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, 2019 and 2018 or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2019.
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 surplus of the Company as of December 31, 2019 and 2018 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division described in Note 2.
Emphasis of Matters
As discussed in Note 1 to the financial statements, the financial statements give retroactive effect to the merger of Transamerica Advisors Life Insurance Company into the Company on July 1, 2019 in a transaction accounted for as a statutory merger. Our opinion is not modified with respect to this matter.
As discussed in Note 3 to the financial statements, in 2019 the Company changed its valuation basis for variable annuities. Our opinion is not modified with respect to this matter.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
PricewaterhouseCoopers LLP, 1 N Upper Wacker Drive, Chicago, IL 60606
T: 312-298-2000, F: , www.pwc.com
Transamerica Life Insurance Company
Balance Sheets – Statutory Basis
(Dollars in Thousands)
December 31 | ||||||||
2019 | 2018 | |||||||
Admitted assets |
||||||||
Cash, cash equivalents and short-term investments |
$ | 1,693,803 | $ | 2,331,468 | ||||
Bonds |
25,412,467 | 27,627,135 | ||||||
Preferred stocks |
111,630 | 104,793 | ||||||
Common stocks |
3,217,206 | 2,998,481 | ||||||
Mortgage loans on real estate |
5,096,613 | 4,600,493 | ||||||
Real estate |
51,546 | 114,446 | ||||||
Policy loans |
1,099,596 | 1,139,853 | ||||||
Securities lending reinvested collateral assets |
1,246,827 | 1,835,122 | ||||||
Derivatives |
1,718,025 | 2,097,951 | ||||||
Other invested assets |
2,124,211 | 1,666,946 | ||||||
|
|
|
|
|||||
Total cash and invested assets |
41,771,924 | 44,516,688 | ||||||
Accrued investment income |
404,846 | 428,558 | ||||||
Premiums deferred and uncollected |
286,843 | 115,235 | ||||||
Net deferred income tax asset |
475,358 | 627,639 | ||||||
Variable annuity reserve hedge offset deferral |
195,067 | 231,853 | ||||||
Other assets |
1,368,699 | 1,472,587 | ||||||
Separate account assets |
85,720,689 | 76,783,392 | ||||||
|
|
|
|
|||||
Total admitted assets |
$ | 130,223,426 | $ | 124,175,952 | ||||
|
|
|
|
|||||
Liabilities and capital and surplus |
||||||||
Aggregate reserves for policies and contracts |
$ | 26,237,936 | 27,294,949 | |||||
Policy and contract claim reserves |
479,226 | 527,901 | ||||||
Liability for deposit-type contracts |
591,570 | 967,757 | ||||||
Other policyholders’ funds |
21,831 | 17,617 | ||||||
Transfers from separate accounts due or accrued |
(898,597 | ) | (1,034,929 | ) | ||||
Funds held under reinsurance treaties |
4,094,413 | 3,785,867 | ||||||
Asset valuation reserve |
879,143 | 694,388 | ||||||
Interest maintenance reserve |
308,453 | 299,928 | ||||||
Derivatives |
1,851,801 | 975,974 | ||||||
Payable for collateral under securities loaned and other transactions |
1,731,464 | 3,080,656 | ||||||
Borrowed money |
1,274,504 | 3,052,991 | ||||||
Other liabilities |
1,402,824 | 1,452,027 | ||||||
Separate account liabilities |
85,720,688 | 76,783,391 | ||||||
|
|
|
|
|||||
Total liabilities |
123,695,256 | 117,898,517 | ||||||
|
|
|
|
|||||
Total capital and surplus |
6,528,170 | 6,277,435 | ||||||
|
|
|
|
|||||
Total liabilities and capital and surplus |
$ | 130,223,426 | $ | 124,175,952 | ||||
|
|
|
|
See accompanying notes.
3
Transamerica Life Insurance Company
Statements of Operations – Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Revenues |
||||||||||||
Premiums and other considerations |
$ | 12,146,106 | $ | 10,813,518 | $ | (3,514,168 | ) | |||||
Net investment income |
1,644,325 | 1,667,172 | 2,516,282 | |||||||||
Commissions and expense allowances on reinsurance ceded |
527,860 | 835,062 | 608,958 | |||||||||
Reserve adjustment on reinsurance ceded |
(83,492 | ) | (67,838 | ) | (1,210,892 | ) | ||||||
Consideration received on reinsurance recapture and novations |
15,485 | 217,258 | 462,313 | |||||||||
Separate accounts net gain from operations |
— | — | 139,852 | |||||||||
Fee revenue and other income |
1,891,767 | 1,971,474 | 1,996,610 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
16,142,051 | 15,436,646 | 998,955 | |||||||||
Benefits and expenses |
||||||||||||
Death benefits |
1,706,779 | 1,760,272 | 1,588,061 | |||||||||
Annuity benefits |
1,173,639 | 1,183,691 | 1,207,143 | |||||||||
Accident and health benefits |
281,435 | 295,343 | 141,823 | |||||||||
Surrender benefits |
14,231,385 | 14,536,177 | 13,109,739 | |||||||||
Other benefits |
168,259 | 156,157 | 156,951 | |||||||||
Net increase (decrease) in reserves |
(2,277,561 | ) | 228,055 | (12,826,051 | ) | |||||||
Commissions |
908,521 | 912,831 | 927,565 | |||||||||
Net transfers to (from) separate accounts |
(3,868,617 | ) | (4,075,245 | ) | (2,619,683 | ) | ||||||
IMR adjustment due to reinsurance |
— | (13,229 | ) | (2,065,984 | ) | |||||||
General insurance expenses and other |
833,410 | 1,219,389 | 1,033,737 | |||||||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
13,157,250 | 16,203,441 | 653,301 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before dividends and federal income taxes |
2,984,801 | (766,795 | ) | 345,654 | ||||||||
|
|
|
|
|
|
|||||||
Dividends to policyholders |
9,236 | 5,953 | 8,057 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before federal income taxes |
2,975,565 | (772,748 | ) | 337,597 | ||||||||
Federal income tax (benefit) expense |
(77,933 | ) | (63,062 | ) | (1,035,106 | ) | ||||||
|
|
|
|
|
|
|||||||
Net gain (loss) from operations |
3,053,498 | (709,686 | ) | 1,372,703 | ||||||||
Net realized capital gains (losses), after tax and amounts transferred to interest maintenance reserve |
240,524 | (714,132 | ) | (575,050 | ) | |||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 3,294,022 | $ | (1,423,818 | ) | $ | 797,653 | |||||
|
|
|
|
|
|
See accompanying notes.
4
Transamerica Life Insurance Company
Statements of Changes in Capital and Surplus – Statutory Basis
(Dollars in Thousands)
Balance at January 1, 2017 | Common Stock | Preferred Stock |
Treasury Stock |
Surplus Notes |
Paid-in Surplus |
Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
||||||||||||||||||||||||
As originally presented |
$ | 6,762 | $ | 1,282 | $ | (58,000 | ) | $ | 150,000 | $ | 3,653,830 | $ | 577,936 | $ | 2,135,591 | 6,467,401 | ||||||||||||||||
Merger of Transamerica Advisors Life Insurance Company (TALIC) |
— | — | — | — | 242,198 | — | 453,845 | 696,043 | ||||||||||||||||||||||||
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|
|
|
|||||||||||||||||
Balance at January 1, 2017 (TALIC Merger) |
6,762 | 1,282 | (58,000 | ) | 150,000 | 3,896,028 | 577,936 | 2,589,436 | 7,163,444 | |||||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | — | 797,653 | 797,653 | ||||||||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
— | — | — | — | — | (489,076 | ) | 1,172,461 | 683,385 | |||||||||||||||||||||||
Change in net deferred income tax asset |
— | — | — | — | — | — | (956,486 | ) | (956,486 | ) | ||||||||||||||||||||||
Change in nonadmitted assets |
— | — | — | — | — | — | 474,981 | 474,981 | ||||||||||||||||||||||||
Change in asset valuation reserve |
— | — | — | — | — | — | 124,240 | 124,240 | ||||||||||||||||||||||||
Change in surplus in separate accounts |
— | — | — | — | — | — | (117,876 | ) | (117,876 | ) | ||||||||||||||||||||||
Change in surplus as a result of reinsurance |
— | — | — | — | — | — | 230,908 | 230,908 | ||||||||||||||||||||||||
Dividends to stockholders |
— | — | — | — | — | — | (620,523 | ) | (620,523 | ) | ||||||||||||||||||||||
Return of capital |
— | — | — | — | (422,572 | ) | — | — | (422,572 | ) | ||||||||||||||||||||||
Other changes—net |
— | (298 | ) | — | — | (626 | ) | 981 | (5,738 | ) | (5,681 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2017 |
$ | 6,762 | $ | 984 | $ | (58,000 | ) | $ | 150,000 | $ | 3,472,830 | $ | 89,841 | $ | 3,689,056 | $ | 7,351,473 | |||||||||||||||
Net income (loss) |
— | — | — | — | — | — | (1,423,818 | ) | (1,423,818 | ) | ||||||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
— | — | — | — | — | 145,059 | 1,145,316 | 1,290,375 | ||||||||||||||||||||||||
Change in net deferred income tax asset |
— | — | — | — | — | — | 164,466 | 164,466 | ||||||||||||||||||||||||
Change in nonadmitted assets |
— | — | — | — | — | — | 45,646 | 45,646 | ||||||||||||||||||||||||
Change in asset valuation reserve |
— | — | — | — | — | — | 16,359 | 16,359 | ||||||||||||||||||||||||
Change in surplus as a result of reinsurance |
— | — | — | — | — | — | 17,616 | 17,616 | ||||||||||||||||||||||||
Dividends to stockholders |
— | — | — | — | — | — | (624,567 | ) | (624,567 | ) | ||||||||||||||||||||||
Return of capital |
— | — | — | — | (558,740 | ) | — | — | (558,740 | ) | ||||||||||||||||||||||
Other changes—net |
— | (559 | ) | — | — | 2,576 | (3,047 | ) | (345 | ) | (1,375 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2018 |
$ | 6,762 | $ | 425 | $ | (58,000 | ) | $ | 150,000 | $ | 2,916,666 | $ | 231,853 | $ | 3,029,729 | $ | 6,277,435 | |||||||||||||||
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|
Continued on next page.
5
Transamerica Life Insurance Company
Statements of Changes in Capital and Surplus – Statutory Basis
(Dollars in Thousands)
Common Stock |
Preferred Stock |
Treasury Stock |
Surplus Notes |
Paid-in Surplus | Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
|||||||||||||||||||||||||
Balance at December 31, 2018 |
$ | 6,762 | $ | 425 | $ | (58,000 | ) | $ | 150,000 | $ | 2,916,666 | $ | 231,853 | $ | 3,029,729 | $ | 6,277,435 | |||||||||||||||
Net income (loss) |
— | — | — | — | — | — | 3,294,022 | 3,294,022 | ||||||||||||||||||||||||
Change in net unrealized capital gains/losses, net of tax |
— | — | — | — | — | (36,786 | ) | (290,676 | ) | (327,462 | ) | |||||||||||||||||||||
Change in net deferred income tax asset |
— | — | — | — | — | — | (164,812 | ) | (164,812 | ) | ||||||||||||||||||||||
Change in nonadmitted assets |
— | — | — | — | — | — | 105,654 | 105,654 | ||||||||||||||||||||||||
Change in reserve on account of change in valuation basis |
— | — | — | — | — | — | (1,248,411 | ) | (1,248,411 | ) | ||||||||||||||||||||||
Change in asset valuation reserve |
— | — | — | — | — | — | (184,755 | ) | (184,755 | ) | ||||||||||||||||||||||
Change in surplus as a result of reinsurance |
— | — | — | — | — | — | (146,952 | ) | (146,952 | ) | ||||||||||||||||||||||
Change in surplus notes |
— | — | — | (150,000 | ) | — | — | — | (150,000 | ) | ||||||||||||||||||||||
Change in treasury stock |
— | — | 58,000 | — | — | 58,000 | ||||||||||||||||||||||||||
Return of capital |
— | — | — | — | (307,578 | ) | — | — | (307,578 | ) | ||||||||||||||||||||||
Dividends to stockholders |
— | — | — | — | — | — | (725,000 | ) | (725,000 | ) | ||||||||||||||||||||||
Other changes—net |
— | (425 | ) | — | — | 1,625 | 367 | 46,462 | 48,029 | |||||||||||||||||||||||
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|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2019 |
$ | 6,762 | $ | — | $ | — | $ | — | $ | 2,610,713 | $ | 195,434 | $ | 3,715,261 | $ | 6,528,170 | ||||||||||||||||
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|
|
|
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|
|
See accompanying notes.
6
Transamerica Life Insurance Company
Statements of Cash Flow – Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 11,959,055 | $ | 10,836,714 | $ | 5,030,303 | ||||||
Net investment income |
1,853,706 | 1,826,005 | 2,524,319 | |||||||||
Other income |
2,295,448 | 2,891,089 | 6,905,408 | |||||||||
Benefit and loss related payments |
(17,435,718 | ) | (17,958,301 | ) | (16,076,467 | ) | ||||||
Net transfers from separate accounts |
4,005,482 | 4,343,398 | 2,904,380 | |||||||||
Commissions and operating expenses |
(1,898,769 | ) | (1,892,868 | ) | (2,050,512 | ) | ||||||
Dividends paid to policyholders |
(5,889 | ) | (6,350 | ) | (7,348 | ) | ||||||
Federal income taxes (paid) received |
(139,992 | ) | 939,301 | 438,896 | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
633,323 | 978,988 | (331,021 | ) | ||||||||
Investing activities |
||||||||||||
Proceeds from investments sold, matured or repaid |
$ | 15,951,729 | $ | 9,086,610 | $ | 10,468,686 | ||||||
Costs of investments acquired |
(13,028,169 | ) | (7,574,764 | ) | (8,455,291 | ) | ||||||
Net change in policy loans |
40,258 | 48,668 | 52,058 | |||||||||
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|
|
|
|||||||
Net cost of investments acquired |
(12,987,911 | ) | (7,526,096 | ) | (8,403,233 | ) | ||||||
|
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|
|
|
|
|||||||
Net cash provided by (used in) investing activities |
$ | 2,963,818 | $ | 1,560,514 | $ | 2,065,453 | ||||||
Financing and miscellaneous activities |
||||||||||||
Repayment of surplus notes |
$ | (150,000 | ) | $ | — | $ | — | |||||
Capital and paid in surplus received (returned) |
(248,376 | ) | (556,833 | ) | (434,179 | ) | ||||||
Dividends to stockholders |
(725,000 | ) | (564,220 | ) | (620,523 | ) | ||||||
Net deposits (withdrawals) on deposit-type contracts |
(429,725 | ) | (201,168 | ) | (2,167,303 | ) | ||||||
Net change in borrowed money |
(1,765,528 | ) | (1,151,474 | ) | 1,874,369 | |||||||
Net change in funds held under reinsurance treaties |
(60,731 | ) | (271,793 | ) | (75,583 | ) | ||||||
Net change in payable for collateral under securities lending and other transactions |
(1,347,778 | ) | (15,819 | ) | (125,030 | ) | ||||||
Other cash (applied) provided |
492,332 | 587,583 | 98,001 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
(4,234,806 | ) | (2,173,724 | ) | (1,450,248 | ) | ||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
(637,665 | ) | 365,778 | 284,184 | ||||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
2,331,468 | 1,965,690 | 1,681,506 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 1,693,803 | $ | 2,331,468 | $ | 1,965,690 | ||||||
|
|
|
|
|
|
See accompanying notes.
7
Transamerica Life Insurance Company
Statements of Cash Flow (supplemental) – Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
Supplemental disclosures of cash flow information | 2019 | 2018 | 2017 | |||||||||
Non-cash activities during the year not included in the Statutory Statement of Cash Flows: |
||||||||||||
Stock cancellations |
$ | 57,575 | $ | — | $ | — | ||||||
Non-cash dividend to parent company |
— | 60,347 | — | |||||||||
Investments received for insured securities losses |
— | 16,489 | — | |||||||||
Write off of prepaid real estate related assets |
— | 2,727 | — | |||||||||
Non-cash capital contribution to investment subsidiary |
— | 1,971 | — | |||||||||
Transfer of bonds and mortgage loans related to reinsurance agreement with third party |
— | — | 7,196,754 | |||||||||
Transfer of bonds, mortgage loans, and derivatives related to affiliated reinsurance amendment |
— | — | 5,650,741 | |||||||||
Transfer of bonds to settle reinsurance obligations |
— | — | 22,479 | |||||||||
Asset transfer of ownership between hedge funds |
— | — | 125,036 |
8
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
1. Organization and Nature of Business
Transamerica Life Insurance Company (the Company) is a stock life insurance company owned by Commonwealth General Corporation (CGC). CGC is an indirect, wholly-owned subsidiary of Aegon N.V., a holding company organized under the laws of The Netherlands.
On July 1, 2019, the Company completed a merger with Transamerica Advisors Life Insurance Company (TALIC), an Arkansas-domiciled affiliate. On October 1, 2018, the Company completed a merger with Firebird Re Corp (FReC), an Arizona-domiciled affiliate. The mergers were accounted for in accordance with the Statement of Statutory Accounting Principles (SSAP) No. 68, Business Combinations and Goodwill, as a statutory merger. As such, financial statements for periods prior to the mergers were combined and the recorded assets, liabilities and surplus of TALIC and FReC on a US statutory basis were carried forward to the merged company. As a result of the mergers, TALIC and FReC’s common stock was deemed cancelled by operation of law. Each share of the Company’s capital stock issued and outstanding immediately before the merger shall continue to represent one share of the capital stock. As a result of the merger, the business previously ceded from the Company to FReC is no longer reflected as ceded risk in the restated merged financials. As a result of the merger, the business previously ceded from TALIC to the Company is no longer reflected as assumed risk in the restated merged financials.
Summarized financial information for the Company and TALIC presented separately for periods prior to the merger is as follows. The amounts presented for the Company’s revenues are reflective of the revision as described in Note 3:
Year Ended December 31 | ||||||||
2018 | 2017 | |||||||
Revenues: |
||||||||
Company |
$ | 15,206,362 | $ | 730,065 | ||||
TALIC |
230,284 | 268,890 | ||||||
|
|
|
|
|||||
$ | 15,436,646 | $ | 998,955 | |||||
|
|
|
|
|||||
Net income (loss): |
||||||||
Company |
$ | (1,353,504 | ) | $ | 603,700 | |||
TALIC |
(70,314 | ) | 193,953 | |||||
|
|
|
|
|||||
$ | (1,423,818 | ) | $ | 797,653 | ||||
|
|
|
|
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 |
||||
Assets: |
||||
Company |
$ | 117,015,550 | ||
TALIC |
7,204,454 | |||
Reclassification to conform to current year presentation: Current federal income tax recoverable |
(44,052 | ) | ||
|
|
|||
$ | 124,175,952 | |||
|
|
|||
Liabilities: |
||||
Company |
$ | 111,237,254 | ||
TALIC |
6,705,315 | |||
Reclassification to conform to current year presentation: Other liabilities |
(44,052 | ) | ||
|
|
|||
$ | 117,898,517 | |||
|
|
|||
Capital and Surplus: |
||||
Company |
$ | 5,778,296 | ||
TALIC |
499,139 | |||
|
|
|||
$ | 6,277,435 | |||
|
|
Nature of Business
The Company sells individual non-participating whole life, endowment and term contracts, and pension products, as well as a broad line of single fixed and flexible premium annuity products and guaranteed investment contracts. In addition, the Company offers group life, universal life, credit life, and individual and specialty health coverages. The Company is licensed in 49 states and the District of Columbia, Guam, Puerto Rico and US Virgin Islands. Sales of the Company’s products are primarily through a network of agents, brokers, and financial institutions.
10
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Iowa Insurance Division (IID), which practices differ from accounting principles generally accepted in the United States of America (GAAP).
The IID recognizes only statutory accounting practices prescribed or permitted by the State of Iowa for determining and reporting the financial condition and results of operations of an insurance company, and for determining its solvency under the Iowa Insurance Law. The National Association of Insurance Commissioners’ (NAIC) Accounting Practices and Procedures Manual (NAIC SAP) has been adopted as a component of prescribed practices by the State of Iowa. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed.
The following is a summary of the accounting practices permitted and prescribed by the IID and reflected in the Company’s financial statements which differs from NAIC SAP:
The State of Iowa has adopted a prescribed accounting practice that differs from that found in the NAIC SAP related to the reported value of the assets supporting the Company’s guaranteed separate accounts. As prescribed by Iowa Administrative Code 508A.1.4, the Commissioner found that the Company is entitled to value the assets of the guaranteed separate account at amortized cost, whereas the assets would be required to be reported at fair value under SSAP No. 56, Separate Accounts, of the NAIC SAP. There is no impact to the Company’s income or surplus as a result of utilizing this prescribed practice.
11
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
A reconciliation of the Company’s net income (loss) and capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Iowa is shown below:
SSAP# | F/S Page |
F/S Line | 2019 | 2018 | 2017 | |||||||||||||||||||
Net income (loss), State of Iowa basis |
XXX | XXX | XXX | $ | 3,294,022 | $ | (1,423,818 | ) | $ | 797,653 | ||||||||||||||
State prescribed practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
Separate account asset valuation |
56 | NA | NA | — | — | — | ||||||||||||||||||
State permitted practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
None |
— | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Net income (loss), NAIC SAP |
XXX | XXX | XXX | $ | 3,294,022 | $ | (1,423,818 | ) | $ | 797,653 | ||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Statutory surplus, state of Iowa basis |
XXX | XXX | XXX | $ | 6,528,170 | $ | 6,277,435 | $ | 7,351,473 | |||||||||||||||
State prescribed practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
Separate account asset valuation |
56 | NA | NA | — | — | — | ||||||||||||||||||
State permitted practices that are an increase(decrease) from NAIC SAP: |
||||||||||||||||||||||||
Hedge reserve offset deferral |
86 |
|
Balance Sheet;
Statement of |
|
|
Variable annuity reserve hedge offset deferral Special surplus funds—Change in net unrealized capital gains/ losses |
|
— | (231,853 | ) | (86,794 | ) | ||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Statutory surplus, NAIC SAP |
XXX | XXX | XXX | $ | 6,528,170 | $ | 6,045,582 | $ | 7,264,679 | |||||||||||||||
|
|
|
|
|
|
The Company elected early adoption of SSAP No. 108, Derivatives Hedging Variable Annuities Guarantees (SSAP 108) effective July 1, 2019. The early adoption allowed for transition from and release of a similar permitted practice in place with the IID since October 1, 2016 (the Permitted Practice). The Company received approval from the IID on September 4, 2019. Please refer to Note 3 for additional information.
Use of Estimates
The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
12
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The effects of the following variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material. Significant accounting policies and variances from GAAP are as follows:
Investments
Investments in bonds, except those to which the Securities Valuation Office (SVO) of the NAIC has ascribed a NAIC designation of 6, are reported at amortized cost using the interest method. Bonds containing call provisions, except make-whole call provisions, are amortized to the call or maturity value/date which produces the lowest asset value, often referred to as yield-to-worst method. Bonds ascribed a NAIC designation of 6 are reported at the lower of amortized cost or fair value with unrealized gains and losses reported in changes in capital and surplus. Prepayment penalty or acceleration fees received in the event a bond is liquidated prior to its scheduled termination date are reported as investment income.
Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuer’s senior note holders. These securities meet the definition of a bond, in accordance with SSAP No. 26R, Bonds, and therefore, are reported at amortized cost or fair value based upon their NAIC rating.
For GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in earnings for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.
Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. These securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium using either the retrospective or prospective methods. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. For statutory reporting, the retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.
For GAAP, all securities purchased or retained that represent beneficial interests in securitized assets, other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If high credit quality securities are adjusted, the retrospective method is used.
The Company closely monitors below investment grade holdings and investment grade issuers where the Company has concerns to determine if an other-than-temporary impairment (OTTI) has occurred. The Company also regularly monitors industry sectors. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary including: (1) the probability of the Company collecting all amounts due according to the
13
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
contractual terms of the security in effect at the date of acquisition; (2) the Company’s decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Company’s ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairment.
For structured securities, cash flow trends and underlying levels of collateral are monitored. An OTTI is considered to have occurred if the fair value of the structured security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis. An OTTI is also considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security and the security is in an unrealized loss position. Structured securities considered other-than-temporarily impaired are written down to discounted estimated cash flows if the impairment is the result of cash flow analysis. If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairments.
For GAAP, if it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date. If the entity does not intend to sell the security or the entity will likely not be required to sell the security before recovery, the OTTI should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.
Investments in both affiliated and unaffiliated preferred stocks in good standing (those with NAIC designations RP1 to RP3 and P1 to P3), are reported at cost or amortized cost, depending on the characteristics of the securities. Investments in both affiliated and unaffiliated preferred stocks not in good standing (those with NAIC designations RP4 to RP6 and P4 to P6), are reported at the lower of cost, amortized cost, or fair value, depending on the characteristics of the securities. The related net unrealized capital gains and losses for all NAIC designations are reported in changes in capital and surplus.
Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries’ equity is included in net unrealized capital gains or losses and are reported in changes in capital and surplus.
Common stocks of unaffiliated companies, which include shares of mutual funds, are reported at fair value and the related net unrealized capital gains or losses are reported in changes in capital and surplus.
14
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company owns stock issued by the Federal Home Loan Bank (FHLB), which is only redeemable at par, and its fair value is presumed to be par, unless other-than-temporarily impaired.
If the Company determines that a decline in the fair value of a common stock or a preferred stock is other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers the following factors in determining whether a decline in value is other-than-temporary: (a) the financial condition and prospects of the issuer; (b) whether or not the Company has made a decision to sell the investment; and (c) the length of time and extent to which the value has been below cost.
Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized. Prepayment penalty or acceleration fees received in the event a loan is liquidated prior to its scheduled termination date are reported as investment income.
Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.
The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.
Land is reported at cost. Real estate occupied by the Company is reported at depreciated cost net of encumbrances. Real estate held for the production of income is reported at depreciated cost net of related obligations. Real estate the Company classifies as held for sale is measured at lower of carrying amount or fair value less cost to sell. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties. The Company recognizes an impairment loss if the Company determines that the carrying amount of the real estate is not recoverable and exceeds its fair value. The Company deems that the carrying amount of the asset is not recoverable if the carrying amount exceeds the sum of undiscounted cash flows expected to result from the use and disposition. The impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value.
Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Company’s occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.
15
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee.
For a decline in the fair value of an investment in a joint venture or limited partnership which is determined to be other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers an impairment to have occurred if it is probable that the Company will be unable to recover the carrying amount of the investment or if there is evidence indicating inability of the investee to sustain earnings which would justify the carrying amount of the investment.
Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company. The carrying value is amortized over the life of the investment. Amortization is calculated as a ratio of the current year tax credits and tax benefits compared to the total expected tax credits and tax benefits over the life of the investment.
Cash equivalents are short-term highly liquid investments with original maturities of three months or less (principally stated at amortized cost) or money market mutual funds which are reported at fair value.
Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.
Policy loans are reported at unpaid principal balances.
Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.
Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Income is also not accrued when collection is uncertain. Due and accrued amounts determined to be uncollectible are written off through the statements of operations.
Valuation Reserves
Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, primarily bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals into net investment income over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. The net deferral is reported as the
16
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statements of operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.
The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.
In 2019, the NAIC revised the AVR Factors (basic contribution, reserve objective and maximum reserve) to be consistent with the risk-based capital (RBC) after-tax factors, which were amended in 2018 as a result of federal tax reform. The AVR factor changes are effective for year-end 2019. As of December 31, 2019, the factor changes decreased Capital and Surplus by $127,960. The changes were recorded to the Change in Asset Valuation Reserve line of the Statements of Changes in Capital and Surplus.
Derivative Instruments
Overview: The Company may use various derivative instruments (options, caps, floors, swaps, forwards, and futures) to manage risks related to its ongoing business operations. On the transaction date of the derivative instrument, the Company designates the derivative as either (A) hedging (fair value, foreign currency fair value, cash flow, foreign currency cash flow, forecasted transactions, or net investment in a foreign operation), (B) replication, (C) income generation, or (D) held for other investment/risk management activities, which do not qualify for hedge accounting under SSAP No. 86—Derivatives.
(A) | Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability (amortized cost or fair value). Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains and losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of OCI rather than to income as required for fair value hedges, and an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and the risk of the host contract is accounted for separately from the host contract and valued and reported at fair value. |
(B) | Derivative instruments are also used in replication (synthetic asset) transactions. A replication transaction is a derivative transaction entered into in conjunction with a cash instrument to reproduce the investment characteristics of an otherwise permissible investment. In these transactions, the derivative is accounted for in a manner consistent with the cash instrument and replicated asset. For GAAP, the derivative is reported at fair value, with the changes in fair value reported in income. |
17
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
(C) | Derivative instruments used in income generation relationships are accounted for on a basis that is consistent with the associated covered asset or underlying interest to which the derivative relates (amortized cost or fair value). |
(D) | Derivative instruments held for other investment/risk management activities are measured at fair value with value adjustments recorded in unassigned surplus. |
Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges, consequently, when the value of the hedged asset or liability changes, the value of the hedging derivative is expected to move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.
The Company is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments, but it does not expect any counterparties to fail to meet their obligations given their high credit rating of ‘BBB’ or better. The credit exposure of interest rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Company’s behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, then the Company is required to post assets instead.
Instruments:
Interest rate swaps are used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
Cross currency swaps are utilized to mitigate risks when the Company holds foreign denominated assets or liabilities; therefore, converting the asset or liability to a U.S. dollar denominated security. These cross currency swap agreements involve the exchange of two principal amounts in two different currencies at the prevailing currency rate at contract inception. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually where the terms of the swap must meet the terms of the hedged instrument. For swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract and the foreign currency translation
18
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
adjustment is recorded as unrealized gain/loss in capital and surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.
Total return swaps are used in the asset/liability management process to mitigate the market risk on minimum guarantee insurance contracts linked to an index. These total return swaps generally provide for the exchange of the difference between fixed leg (tied to the Standard & Poor’s (S&P) or other global market financial index) and floating leg (tied to the London Interbank Offered Rate (LIBOR)) amounts based on an underlying notional amount (also tied to the underlying index). Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Variance swaps are used in the asset/liability management process to mitigate the gamma risk created when the Company has issued minimum guarantee insurance contracts linked to an index. These variance swaps are similar to volatility options where the underlying index provides for the market value movements. Variance swaps do not accrue interest. Typically, no cash is exchanged at the outset of initiating the variance swap, and a single receipt or payment occurs at the maturity or termination of the contract. Variance swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Bond forwards are used to hedge the interest rate risk that future liability claims increase as rates decrease, leading to higher guarantee values.
Futures contracts are used to hedge the liability risk when the Company issues products providing the customer a return based on various global market indices. Futures are marked to market on a daily basis whereby a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.
The Company issues products providing the customer a return based on the various global equity market indices. The Company uses options to hedge the liability option risk associated with these products. Options are marked to fair value in the balance sheets and fair value adjustments are recorded as capital and surplus in the financial statements. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment.
19
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Caps are used in the asset/liability management process to mitigate the interest rate risk created due to a rapidly rising interest rate environment. The caps are similar to options where the underlying interest rate index provides for the market value movements. The caps do not accrue interest until the interest rate environment exceeds the caps strike rate. Cash is exchanged at the onset, and a single receipt or payment occurs at the maturity or termination of the contract. Caps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Caps that do not meet hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
The Company uses zero cost collars to hedge the interest rate risk associated with rising short term interest rates, whereby the exposure would otherwise adversely impact the Company’s capital generation. The collar position(s) help range bound the floating rate by combining a cap and floor position.
The Company may sell products with expected benefit payments extending beyond investment assets currently available in the market. Because assets will have to be purchased in the future to fund future liability cash flows, the Company is exposed to the risk of future investments made at lower yields than what is assumed at the time of pricing. Forward-starting interest rate swaps are utilized to lock-in the current forward rate. The accrual of income begins at the forward date, rather than at the inception date. These forward-starting swaps meet hedge accounting rules and are carried at cost in the financial statements. Gains and losses realized upon termination of the forward-starting swap are deferred and used to adjust the basis of the asset purchased in the hedged forecasted period. The basis adjustment is then amortized into income as a yield adjustment to the asset over its life.
The Company issues fixed liabilities that have a guaranteed minimum crediting rate. The Company uses receiver swaptions, whereby the swaption is designed to generate cash flows to offset lower yields on assets during a low interest rate environment. The Company pays a single premium at the beginning of the contract and is amortized throughout the life of the swaption. These swaptions are marked to fair value in the balance sheets and the fair value adjustment is recorded in unassigned surplus. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment.
The Company replicates investment grade corporate bonds or sovereign debt by combining a highly rated security as a cash component with a written credit default swap which, in effect, converts the high quality asset into an investment grade corporate asset or a sovereign debt. The benefits of using the swap market to replicate credit include possible enhanced relative values as well as ease of executing larger transactions in a shortened time frame. Generally, a premium is received by the Company on a periodic basis and recognized in investment income. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional amount of the contract will be made by the Company and recognized as a capital loss.
20
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Securities Lending Assets and Liabilities
The Company loans securities to third parties under agent-managed securities lending programs accounted for as secured borrowings. Cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the balance sheets (securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Non-cash collateral received which may not be sold or repledged is not recorded on the Company’s balance sheets. Under GAAP, the reinvested collateral is included within invested assets (i.e. it is not one-line reported).
Repurchase Agreements
For dollar repurchase agreements accounted for as secured borrowings, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. The securities transferred are not removed from the balance sheets, and the cash received as collateral is invested as needed or used for general corporate purposes of the Company. A liability is established to record the obligation to return the cash collateral and included in Borrowed Money on the Balance Sheets.
Offsetting of Assets and Liabilities
Financial assets and liabilities are offset in the Balance Sheets when the Company has a legally enforceable right to offset and has the intention to settle the asset and liability on a net basis.
Other Assets and Other Liabilities
Other assets consist primarily of reinsurance receivable, accounts receivable and company owned life insurance. Company owned life insurance is carried at cash surrender value.
Other liabilities consist primarily of remittances, amounts withheld by the Company, accrued expenses, payable for securities and municipal repurchase agreements. Municipal repurchase agreements are investment contracts issued to municipalities that pay either a fixed or floating rate of interest on the guaranteed deposit balance. The floating interest rate is based on a market index. The related liabilities are equal to the policyholder deposit and accumulated interest. These municipal repurchase agreements require a minimum of 95% of the fair value of the securities transferred to be maintained as collateral.
Separate Accounts
The majority of separate accounts held by the Company, primarily for individual policyholders as well as for group pension plans, do not have any minimum guarantees, and the investment risks associated with fair value changes are borne by the policyholder. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments.
21
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Certain other separate accounts held by the Company provide a minimum guaranteed return of 3% of the average investment balance to policyholders. The assets consist of long-term bonds and short-term investments which are carried at amortized cost.
Certain other non-indexed guaranteed separate accounts represent funds invested by the Company for the benefit of the contract holders who are guaranteed certain returns as specified in the contracts. Separate account asset performance different than the guaranteed requirements is either transferred to or received from the general account and reported in the statements of operations. Non-indexed guaranteed separate account assets and liabilities are carried at fair value. These guarantees are included in the general account due to the nature of the guaranteed return.
Assets held in trust for purchases of variable life, variable universal life, variable annuity, and modified guaranteed annuity contracts and the Company’s corresponding obligation to the contract owners are shown separately in the balance sheets. The assets in the separate accounts are valued at fair value.
Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements. The investment risks associated with fair value changes of the separate accounts are borne entirely by the policyholders except in cases where minimum guarantees exist.
Income and gains and losses with respect to the assets in the separate accounts supporting modified guaranteed annuity contracts are included in the statements of operations as a component of net transfers from separate accounts.
Surplus funds transferred from the general account to the separate accounts, commonly referred to as seed money, and earnings accumulated on seed money are reported as surplus in the separate accounts until transferred or repatriated to the general account. The transfer of such funds between the separate account and the general account is reported as surplus contributed or withdrawn during the year.
Aggregate Reserves for Policies and Contracts
Life, annuity and accident and health benefit reserves are calculated by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law.
For GAAP, policy reserves are calculated based on estimated expected experience or actual account balances.
Surrender values are not promised in excess of the legally computed reserves. For annual premium variable life insurance there is an extra premium charged to the policyholder before the premium is transferred to the Separate Accounts. An additional reserve for this policy is held in the General Account that is a multiple of the reserve that would otherwise be held. For interest sensitive whole life, the reserves held in the General Account are equal to the cash surrender value.
22
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
In accordance with SSAP No. 51R, Life Contracts, and No. 54R, Individual and Group Accident and Health Contracts, the Company reports the amount of insurance, if any, for which the gross premiums are less than the net premiums according to the valuation standards and any related premium deficiency reserve established. Anticipated investment income is included as a factor in the health contract premium deficiency calculation, respectively.
Policy and Contract Claim Reserves
Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the balance sheets date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.
Deposit-Type Contracts
Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include guaranteed investment contracts (GICs), funding agreements and other annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the statements of operations. Interest on these policies is reflected in other benefits.
Premiums and Annuity Considerations
Revenues for life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability using deposit accounting.
Policyholder Dividends
Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.
23
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Reinsurance
Coinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of in force blocks of business are included in unassigned surplus and amortized into income as earnings emerge on the reinsured block of business. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.
Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.
Losses associated with an indemnity reinsurance transaction are reported within income when incurred rather than being deferred and amortized over the remaining life of the underlying reinsured contracts as would be required under GAAP.
Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.
Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.
Under GAAP, for certain reinsurance agreements whereby assets are retained by the ceding insurer (such as funds withheld or modified coinsurance) and a return is paid based on the performance of underlying investments, the assets and liabilities for these reinsurance arrangements must be adjusted to reflect the fair value of the invested assets. The NAIC SAP does not contain a similar requirement.
Deferred Income Taxes
The Company computes deferred income taxes in accordance with SSAP No. 101, Income Taxes. Unlike GAAP, SSAP No. 101 does not consider state income taxes in the measurement of deferred taxes. SSAP No. 101 also requires additional testing to measure gross deferred tax assets. The additional testing limits gross deferred tax asset admission to 1) the amount of federal income taxes paid in prior years recoverable through hypothetical loss carrybacks of existing temporary differences expected to reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the amount of remaining gross deferred tax assets expected to be realized within three years limited to an amount that is no greater than 15% of current period’s adjusted statutory capital and surplus, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities after considering character (i.e. ordinary versus capital) and reversal patterns. The Company’s reported net deferred tax asset or liability is the sum of gross deferred tax assets admitted through this three part test plus the sum of all deferred tax liabilities.
24
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Policy Acquisition Costs
The costs of acquiring and renewing business are expensed when incurred. Under GAAP, incremental costs directly related to the successful acquisition of insurance and investment contracts are deferred. For traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, acquisition costs are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.
Value of Business Acquired
Under GAAP, value of business acquired (VOBA) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future contracts and contract changes, premiums, mortality and morbidity, separate account performance, surrenders, operation expenses, investment returns, nonperformance risk adjustment and other factors. VOBA is not recognized under the NAIC SAP.
Subsidiaries and Affiliated Companies
Investments in subsidiaries, controlled and affiliated companies (SCA) are stated in accordance with the Purposes and Procedures Manual of the NAIC SVO, as well as SSAP No. 97 – Investments in Subsidiary, Controlled and Affiliated Entities.
The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP. Dividends or distributions received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to an investee. Changes in investments in SCA’s are recorded as a change to the carrying value of the investment with a corresponding amount recorded directly to unrealized gain/loss (capital and surplus).
Surplus Notes
Surplus notes are reported as surplus rather than as liabilities as would be required under GAAP.
Nonadmitted Assets
Certain assets designated as “nonadmitted”, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC SAP, are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheets to the extent that they are not impaired.
25
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Statements of Cash Flow
Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less and money market mutual funds. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.
3. Accounting Changes and Corrections of Errors
The Company’s policy is to disclose as recent accounting pronouncements the adopted accounting guidance with a current year effective date that has been classified by the NAIC as a substantive change, as well as items classified as nonsubstantive changes that have had a material impact on the financial position or results of operations of the Company.
Recent Accounting Pronouncements
As of July 1, 2019, the Company has received IID approval on an approach for transitioning from a prior permitted practice into full implementation of SSAP No. 108. The approved transition approach will not result in adjustment to the Company’s historical statutory reporting or existing unamortized deferral balances established under the permitted practice at the time of transition. The Company will continue amortizing deferral balances established under the permitted practice according to the amortization schedule previously approved. This amortization will be reported as net realized capital gains (losses) in the Statements of Operations. The net deferral is re-classed from unassigned to special surplus and is presented in the Variable annuity reserve hedge offset deferral financial statement line item on the balance sheets. As of the date of transition, current period fair value fluctuations in the designated derivative instruments offset by the current period Valuation Manual section 21 (VM-21) liability change attributed to the hedged risk (“natural offset”) will be included in net realized capital gains (losses) in the Statements of Operations. As of the date of transition, the Company is fully compliant with the provisions of SSAP 108. The adoption of SSAP 108 and the contemporaneous release of the Permitted Practice will not impact historical statutory reporting or remaining residual balances established under the Permitted Practice and will not have a significantly different impact, in comparison to the Permitted Practice, on the Company’s statutory capital position or RBC ratio. Differences include reporting the natural offset as net realized capital gains/losses in the statements of operations compared to previously being included within the change in unrealized gains/losses with no impact to capital and surplus. Additionally, the deferral amortization under SSAP 108 begins in the subsequent reporting period as opposed to starting in the period it was established, as with the Permitted Practice. The delay in deferral amortization impacts the timing and flow through statutory capital and surplus, but does not create material differences from the Permitted Practice.
Effective January 1, 2019, the NAIC adopted revisions to SSAP No. 30, Unaffiliated Common Stock, which updated the definition of common stock to include SEC registered closed-end funds and unit investment trusts. The adoption of this guidance did not impact the financial position or results of operations of the Company.
26
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Change in Valuation Basis
As of December 31, 2019, the Company has received IID approval on an approach for adoption of the NAIC 2020 VM-21 and related Risk Based Capital C3P2 changes documented in the VM-21 2020 NAIC Valuation Manual: Requirements for Principle-Based Reserves for Variable Annuities. The Company has elected to early adopt the VM-21 requirements for variable annuities effective December 31, 2019. The approved transition approach did not result in an adjustment to the Company’s historical statutory reporting or existing balances at the time of transition. The Company reported the increase to the VM-21 reserve of $1,248,411. As a result, the Company released the voluntary reserve that was recorded to account for the adoption in the amount of $850,000 which was developed considering Q4 2018 balances and factors. The change year-over-year is due to significant market factor changes such as bond yields and treasury rates. As of the date of transition, the Company is fully compliant with the provisions of VM-21.
27
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Revision to Prior Years
During 2019, the Company identified errors in prior year financial statements for which the Company has determined it appropriate to revise. The Company assessed the materiality of these revisions and concluded these revisions are not material to the December 31, 2018 and 2017 financial statements as a whole. The following tables show the impact of the revision after the effect of the TALIC merger as described in Note 1:
Year Ended December 31, 2018 | ||||||||||||
As Revised for the Merger |
Adjustment | As Revised | ||||||||||
Statements of Operations |
||||||||||||
Revenues |
||||||||||||
Premiums and other considerations |
$ | 11,448,988 | $(635,470 | ) | $ | 10,813,518 | ||||||
Fee revenue and other income |
1,977,174 | (5,700 | ) | 1,971,474 | ||||||||
|
|
|
|
|
|
|||||||
Total revenue |
$ | 16,077,816 | $ | (641,170 | ) | $ | 15,436,646 | |||||
|
|
|
|
|
|
|||||||
Benefits and expenses |
||||||||||||
Surrender benefits |
$ | 15,154,347 | $ | (618,170 | ) | $ | 14,536,177 | |||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
16,821,611 | (618,170 | ) | 16,203,441 | ||||||||
Gain (loss) from operations before dividends and federal income taxes |
(743,795 | ) | (23,000 | ) | (766,795 | ) | ||||||
|
|
|
|
|
|
|||||||
Federal income tax (benefit) expense |
(55,012 | ) | (8,050 | ) | (63,062 | ) | ||||||
Net gain (loss) from operations |
(694,736 | ) | (14,950 | ) | (709,686 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | (1,408,868 | ) | $ | (14,950 | ) | $ | (1,423,818 | ) | |||
|
|
|
|
|
|
|||||||
Statements of Changes in Capital and Surplus |
||||||||||||
Balance at December 31, 2017 |
||||||||||||
Net income (loss) |
$ | (1,408,868 | ) | $ | (14,950 | ) | $ | (1,423,818 | ) | |||
Other changes—net |
(16,325 | ) | 14,950 | (1,375 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018 |
$ | 6,277,435 | $ | — | $ | 6,277,435 | ||||||
|
|
|
|
|
|
|||||||
Statements of Cash Flows |
||||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 11,449,184 | $ | (612,470 | ) | $ | 10,836,714 | |||||
Other income |
2,896,789 | (5,700 | ) | 2,891,089 | ||||||||
Benefit and loss related payments |
(18,576,471 | ) | 618,170 | (17,958,301 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
978,988 | — | 978,988 | |||||||||
Financing and miscellaneous activities |
||||||||||||
Net deposits (withdrawals) on deposit-type contracts |
$ | (146,883 | ) | $ | (54,285 | ) | $ | (201,168 | ) | |||
Other cash (applied) provided |
533,298 | 54,285 | 587,583 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
(2,173,724 | ) | — | (2,173,724 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
365,778 | — | 365,778 | |||||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
1,965,690 | — | 1,965,690 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 2,331,468 | $ | — | $ | 2,331,468 | ||||||
|
|
|
|
|
|
28
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Year Ended December 31, 2017 | ||||||||||||
As Revised for the Merger |
Adjustment | As Revised | ||||||||||
Statements of Operations |
||||||||||||
Revenues |
||||||||||||
Premiums and other considerations |
$ | (3,098,001 | ) | $ | (416,167 | ) | $ | (3,514,168 | ) | |||
Fee revenue and other income |
1,997,110 | (500 | ) | 1,996,610 | ||||||||
|
|
|
|
|
|
|||||||
Total revenue |
$ | 1,415,622 | $ | (416,667 | ) | $ | 998,955 | |||||
|
|
|
|
|
|
|||||||
Benefits and expenses |
||||||||||||
Surrender benefits |
$ | 13,526,406 | $ | (416,667 | ) | $ | 13,109,739 | |||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
1,069,968 | (416,667 | ) | 653,301 | ||||||||
Gain (loss) from operations before dividends and federal income taxes |
345,654 | — | 345,654 | |||||||||
|
|
|
|
|
|
|||||||
Net gain (loss) from operations |
1,372,703 | — | 1,372,703 | |||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 797,653 | $ | — | $ | 797,653 | ||||||
|
|
|
|
|
|
|||||||
Statements of Cash Flows |
||||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 5,446,470 | $ | (416,167 | ) | $ | 5,030,303 | |||||
Other income |
6,905,908 | (500 | ) | 6,905,408 | ||||||||
Benefit and loss related payments |
(16,493,134 | ) | 416,667 | (16,076,467 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) operating activities |
(331,021 | ) | — | (331,021 | ) | |||||||
Financing and miscellaneous activities |
||||||||||||
Net deposits (withdrawals) on deposit-type contracts |
$ | (2,130,022 | ) | $ | (37,281 | ) | $ | (2,167,303 | ) | |||
Other cash (applied) provided |
60,720 | 37,281 | 98,001 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing and miscellaneous activities |
(1,450,248 | ) | — | (1,450,248 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and short-term investments |
284,184 | — | 284,184 | |||||||||
Cash, cash equivalents and short-term investments: |
||||||||||||
Beginning of year |
1,681,506 | — | 1,681,506 | |||||||||
|
|
|
|
|
|
|||||||
End of year |
$ | 1,965,690 | $ | — | $ | 1,965,690 | ||||||
|
|
|
|
|
|
Management has determined that the amounts primarily relate to misclassifications of balances within the Statements of Operations and Cash Flows for the years ended December 31, 2018 and 2017 related to accounting for retirement plan cash flows and other cash flow presentation reclassifications. This error resulted in offsetting misstatements to premiums and other considerations, fee revenue and other income, and surrender benefits and corresponding offsetting misstatements within the cash provided by (used in) operating activities and cash provided by (used in) financing and miscellaneous activities. The misclassifications had no impact to the Company’s net income or capital and surplus in the prior years.
In addition, Management reclassified certain prior year out of period adjustments from income to capital and surplus per SSAP No. 3, Accounting Changes and Corrections of Errors.
29
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Reclassifications
Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.
4. Fair Values of Financial Instruments
The fair value of a financial instrument 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.
Determination of fair value
The fair values of financial instruments are determined by management after taking into consideration several sources of data. When available, the Company uses quoted market prices in active markets to determine the fair value of its investments. The Company’s valuation policy utilizes a pricing hierarchy which dictates that publicly available prices are initially sought from indices and third-party pricing services. In the event that pricing is not available from these sources, those securities are submitted to brokers to obtain quotes. Lastly, securities are priced using internal cash flow modeling techniques. These valuation methodologies commonly use reported trades, bids, offers, issuer spreads, benchmark yields, estimated prepayment speeds, and/or estimated cash flows.
To understand the valuation methodologies used by third-party pricing services, the Company reviews and monitors their applicable methodology documents. Any changes to their methodologies are noted and reviewed for reasonableness. In addition, the Company performs in-depth reviews of prices received from third-party pricing services on a sample basis. The objective for such reviews is to demonstrate the Company can corroborate detailed information such as assumptions, inputs and methodologies used in pricing individual securities against documented pricing methodologies. Only third-party pricing services and brokers with a substantial presence in the market and with appropriate experience and expertise are used.
Each month, the Company performs an analysis of the information obtained from indices, third-party services, and brokers to ensure the information is reasonable and produces a reasonable estimate of fair value. The Company considers both qualitative and quantitative factors as part of this analysis, including but not limited to, recent transactional activity for similar securities, review of pricing statistics and trends, and consideration of recent relevant market events. Other controls and procedures over pricing received from indices, third-party pricing services, or brokers include validation checks such as exception reports which highlight significant price changes, stale prices or un-priced securities.
30
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Fair value hierarchy
The Company’s financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100R, Fair Value. 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 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
Level 1 - | Unadjusted quoted prices for identical assets or liabilities in active markets accessible at the measurement date. | |
Level 2 - | Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following: | |
a) Quoted prices for similar assets or liabilities in active markets | ||
b) Quoted prices for identical or similar assets or liabilities in non-active markets | ||
c) Inputs other than quoted market prices that are observable | ||
d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means | ||
Level 3 - | Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Company’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. |
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying balance sheets for these financial instruments is either reported at fair value or amortized cost (which approximates fair value). Cash is not included in the below tables.
Short-Term Notes Receivable from Affiliates: The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair value.
Bonds and Stocks: The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. The fair values of bonds and stocks are reported or determined using the following pricing sources: indices, third-party pricing services, brokers, external fund managers and internal models.
Fair values for fixed maturity securities (including redeemable preferred stock) actively traded are determined from third-party pricing services, which are determined as discussed above in the description of Level 1 and Level 2 values within the fair value hierarchy. For fixed maturity
31
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from third-party pricing services, or are based on non-binding broker quotes or internal models. In the case of private placements, fair values are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.
Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.
Real Estate: Real estate held for sale is typically valued utilizing independent external appraisers in conjunction with reviews by qualified internal appraisers. Valuations are primarily based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. If such information is not available, other valuation methods are applied, considering the value that the property’s net earning power will support, the value indicated by recent sales of comparable properties and the current cost of reproducing or replacing the property.
Other Invested Assets: The fair values for other invested assets, which include investments in surplus notes issued by other insurance companies and fixed or variable rate investments with underlying characteristics of bonds were determined primarily by using indices, third-party pricing services and internal models.
Derivative Financial Instruments: The fair value of futures and forwards are based upon the latest quoted market price and spot rates at the balance sheets date. The estimated fair values of equity and interest rate options (calls, puts, caps) are based upon the latest quoted market price at the balance sheets date. The estimated fair values of swaps, including equity, interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The estimated fair values of credit default swaps are based upon active market data, including interest rate quotes, credit spreads, and recovery rates, which are then used to calculate probabilities of default for the fair value calculation. The Company accounts for derivatives that receive and pass hedge accounting in the same manner as the underlying hedged instrument. If that instrument is held at amortized cost, then the derivative is also held at amortized cost.
Policy Loans: The book value of policy loans is considered to approximate the fair value of the loan, which is stated at unpaid principal balance.
Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short-term and long-term debt instruments. The fair values of these investments are determined using the methods described above under Cash Equivalents and Short-Term Investments and Bonds and Stocks.
Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices when available. When not available, they are primarily valued either using third-party pricing services or are valued in the same manner as the general account assets as further described in this note. However, some separate account assets are valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or
32
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
internal modeling which utilizes input that are not market observable. The fair value of separate account annuity liabilities is based on the account value for separate accounts business without guarantees. For separate accounts with guarantees, fair value is based on discounted cash flows.
Investment Contract Liabilities: Fair value for the Company’s liabilities under investment contracts, which include deferred annuities and GICs, are estimated using discounted cash flow calculations. For those liabilities that are short in duration, carrying amount approximates fair value. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.
Deposit-Type Contracts: The carrying amounts of deposit-type contracts reported in the accompanying balance sheets approximate their fair values. These are included in the Investment Contract Liabilities.
Fair values for the Company’s insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.
The Company accounts for its investments in affiliated common stock in accordance with SSAP No. 97, as such, they are not included in the following disclosures.
33
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables set forth a comparison of the estimated fair values and carrying amounts of the Company’s financial instruments, including those not measured at fair value in the balance sheets, as of December 31, 2019 and 2018, respectively:
December 31, 2019 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates | $ | 1,298,116 | $ | 1,298,076 | $ | 1,042,719 | $ | 255,397 | $ | — | $ | — | $ | — | ||||||||||||||
Short-term notes receivable from affiliates | 240,300 | 240,300 | — | 240,300 | — | — | — | |||||||||||||||||||||
Bonds | 28,644,195 | 25,412,467 | 5,355,305 | 22,844,657 | 444,233 | — | — | |||||||||||||||||||||
Preferred stocks, other than affiliates | 109,845 | 111,630 | — | 108,849 | 996 | — | — | |||||||||||||||||||||
Common stocks, other than affiliates | 80,789 | 80,789 | 10,227 | 19 | 70,543 | — | — | |||||||||||||||||||||
Mortgage loans on real estate | 5,383,132 | 5,096,613 | — | — | 5,383,132 | — | — | |||||||||||||||||||||
Other invested assets | 262,406 | 218,682 | — | 243,524 | 18,882 | — | — | |||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||
Options |
311,739 | 311,739 | — | 311,739 | — | — | — | |||||||||||||||||||||
Interest rate swaps |
1,363,717 | 1,363,526 | — | 1,363,717 | — | — | — | |||||||||||||||||||||
Currency swaps |
8,929 | 7,304 | — | 8,929 | — | — | — | |||||||||||||||||||||
Credit default swaps |
59,599 | 34,248 | — | 59,599 | — | — | — | |||||||||||||||||||||
Equity swaps |
55 | 55 | — | 55 | — | — | — | |||||||||||||||||||||
Interest rate futures |
467 | 467 | 467 | — | — | — | — | |||||||||||||||||||||
Equity futures |
686 | 686 | 686 | — | — | — | — | |||||||||||||||||||||
Derivative assets total |
1,745,192 | 1,718,025 | 1,153 | 1,744,039 | — | — | — | |||||||||||||||||||||
Policy loans | 1,099,596 | 1,099,596 | — | 1,099,596 | — | — | — | |||||||||||||||||||||
Securities lending reinvested collateral | 987,763 | 987,763 | 96 | 987,667 | — | — | — | |||||||||||||||||||||
Separate account assets | 85,275,020 | 85,209,155 | 81,391,463 | 3,878,274 | 5,283 | — | — | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities | 16,687,551 | 11,934,145 | — | 218,239 | 16,469,312 | — | — | |||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||
Options |
151,696 | 151,696 | — | 151,696 | — | — | — | |||||||||||||||||||||
Interest rate swaps |
1,279,477 | 1,442,132 | — | 1,279,477 | — | — | — | |||||||||||||||||||||
Currency swaps |
2,279 | 4,328 | — | 2,279 | — | — | — | |||||||||||||||||||||
Credit default swaps |
(3,740 | ) | 13,450 | — | (3,740 | ) | — | — | — | |||||||||||||||||||
Equity swaps |
211,606 | 211,606 | — | 211,606 | — | — | — | |||||||||||||||||||||
Interest rate futures |
22,916 | 22,916 | 22,916 | — | — | — | — | |||||||||||||||||||||
Equity futures |
5,673 | 5,673 | 5,673 | — | — | — | — | |||||||||||||||||||||
Derivative liabilities total |
1,669,907 | 1,851,801 | 28,589 | 1,641,318 | — | — | — | |||||||||||||||||||||
Dollar repurchase agreements | 448,829 | 448,829 | — | 448,829 | — | — | — | |||||||||||||||||||||
Payable for securities lending | 1,246,827 | 1,246,827 | — | 1,246,827 | — | — | — | |||||||||||||||||||||
Payable for derivative cash collateral | 484,637 | 484,637 | — | 484,637 | — | — | — | |||||||||||||||||||||
Separate account annuity liabilities | 78,615,086 | 78,617,102 | 2,783 | 78,565,537 | 46,766 | — | — |
34
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates |
$ | 1,966,071 | $ | 1,966,071 | $ | 1,385,771 | $ | 580,300 | $ | — | $ | — | $ | — | ||||||||||||||
Short-term notes receivable from affiliates |
261,000 | 261,000 | — | 261,000 | — | — | — | |||||||||||||||||||||
Bonds |
28,352,356 | 27,627,135 | 7,005,814 | 20,905,525 | 441,017 | — | — | |||||||||||||||||||||
Preferred stocks, other than affiliates |
97,812 | 104,793 | — | 94,815 | 2,997 | — | — | |||||||||||||||||||||
Common stocks, other than affiliates |
171,979 | 171,979 | 15,401 | 6 | 156,572 | — | — | |||||||||||||||||||||
Mortgage loans on real estate |
4,647,770 | 4,600,493 | — | — | 4,647,770 | — | — | |||||||||||||||||||||
Other invested assets |
241,689 | 214,934 | — | 229,963 | 11,726 | — | — | |||||||||||||||||||||
Derivative assets: |
||||||||||||||||||||||||||||
Options |
996,427 | 996,427 | — | 996,427 | — | — | — | |||||||||||||||||||||
Interest rate swaps |
710,817 | 711,165 | — | 710,817 | — | — | — | |||||||||||||||||||||
Currency swaps |
15,288 | 15,495 | — | 15,288 | — | — | — | |||||||||||||||||||||
Credit default swaps |
52,360 | 52,579 | — | 52,360 | — | — | — | |||||||||||||||||||||
Equity swaps |
281,457 | 281,457 | — | 281,457 | — | — | — | |||||||||||||||||||||
Interest rate futures |
20,639 | 20,639 | 20,639 | — | — | — | — | |||||||||||||||||||||
Equity futures |
20,189 | 20,189 | 20,189 | — | — | — | — | |||||||||||||||||||||
Derivative assets total |
2,097,177 | 2,097,951 | 40,828 | 2,056,349 | — | — | — | |||||||||||||||||||||
Policy loans |
1,139,853 | 1,139,853 | — | 1,139,853 | — | — | — | |||||||||||||||||||||
Securities lending reinvested collateral |
1,660,683 | 1,660,683 | 71,045 | 1,589,638 | — | — | — | |||||||||||||||||||||
Separate account assets |
76,150,197 | 76,130,173 | 72,461,882 | 3,684,492 | 3,823 | — | — | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities |
13,297,887 | 12,379,779 | — | 243,143 | 13,054,743 | — | — | |||||||||||||||||||||
Derivative liabilities: |
||||||||||||||||||||||||||||
Options |
344,808 | 344,808 | — | 344,808 | — | — | — | |||||||||||||||||||||
Interest rate swaps |
376,095 | 591,999 | — | 376,095 | — | — | — | |||||||||||||||||||||
Currency swaps |
1,706 | 645 | — | 1,706 | — | — | — | |||||||||||||||||||||
Credit default swaps |
(1,309 | ) | 13,394 | — | (1,309 | ) | — | — | — | |||||||||||||||||||
Equity swaps |
16,890 | 16,890 | — | 16,890 | — | — | — | |||||||||||||||||||||
Interest rate futures |
6,999 | 6,999 | 6,999 | — | — | — | — | |||||||||||||||||||||
Equity futures |
1,239 | 1,239 | 1,239 | — | — | — | — | |||||||||||||||||||||
Derivative liabilities total |
746,428 | 975,974 | 8,238 | 738,190 | — | — | — | |||||||||||||||||||||
Dollar repurchase agreements |
214,357 | 214,357 | — | 214,357 | — | — | — | |||||||||||||||||||||
Payable for securities lending |
1,835,122 | 1,835,122 | — | 1,835,122 | — | — | — | |||||||||||||||||||||
Payable for derivative cash collateral |
1,245,534 | 1,245,534 | — | 1,245,534 | — | — | — | |||||||||||||||||||||
Separate account annuity liabilities |
69,914,071 | 69,915,907 | 3,069 | 69,874,047 | 36,955 | — | — |
35
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables provide information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2019 and 2018:
2019 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Industrial and miscellaneous |
$ | — | $ | 15,615 | $ | 4,075 | $ | — | $ | 19,690 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
— | 15,615 | 4,075 | — | 19,690 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
— | 41 | 996 | — | 1,037 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
— | 41 | 996 | — | 1,037 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Mutual funds |
5,049 | — | — | — | 5,049 | |||||||||||||||
Industrial and miscellaneous |
5,178 | 19 | 70,543 | — | 75,740 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
10,227 | 19 | 70,543 | — | 80,789 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
1,042,719 | — | — | — | 1,042,719 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
1,042,719 | — | — | — | 1,042,719 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
96 | — | — | — | 96 | |||||||||||||||
Derivative assets |
1,153 | 1,671,609 | — | — | 1,672,762 | |||||||||||||||
Separate account assets |
81,255,681 | 3,293,963 | 4,271 | — | 84,553,915 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 82,309,876 | $ | 4,981,247 | $ | 79,885 | $ | — | $ | 87,371,008 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 28,589 | $ | 1,633,210 | $ | — | $ | — | 1,661,799 | |||||||||||
Separate account liabilities |
2,783 | — | — | — | 2,783 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 31,372 | $ | 1,633,210 | $ | — | $ | — | $ | 1,664,582 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2018 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | — | $ | 900 | $ | — | $ | — | $ | 900 | ||||||||||
Industrial and miscellaneous |
— | 26,472 | 8,205 | — | 34,677 | |||||||||||||||
Hybrid securities |
— | 2,282 | — | — | 2,282 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
— | 29,654 | 8,205 | — | 37,859 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
— | 1,601 | 2,997 | — | 4,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
— | 1,601 | 2,997 | — | 4,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Mutual funds |
12,648 | — | — | — | 12,648 | |||||||||||||||
Industrial and miscellaneous |
2,753 | 6 | 156,572 | — | 159,331 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
15,401 | 6 | 156,572 | — | 171,979 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
1,385,771 | — | — | — | 1,385,771 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
1,385,771 | — | — | — | 1,385,771 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
71,045 | — | — | — | 71,045 | |||||||||||||||
Derivative assets |
40,828 | 1,995,419 | — | — | 2,036,247 | |||||||||||||||
Separate account assets |
72,321,900 | 3,124,101 | 3,823 | — | 75,449,824 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 73,834,945 | $ | 5,150,781 | $ | 171,597 | $ | — | $ | 79,157,323 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 8,238 | $ | 811,965 | $ | — | $ | — | $ | 820,203 | ||||||||||
Separate account liabilities |
3,069 | — | — | — | 3,069 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 11,307 | $ | 811,965 | $ | — | $ | — | $ | 823,272 | ||||||||||
|
|
|
|
|
|
|
|
|
|
36
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable.
Preferred stock classified as Level 3 are internally valued using significant unobservable inputs.
Common stock classified as Level 3 are comprised primarily of shares in the FHLB of Des Moines, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB.
The following tables summarize the changes in assets classified as Level 3 for 2019 and 2018:
Beginning Balance at January 1, 2019 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
RMBS |
$ | — | $ | 5 | $ | — | $ | — | $ | (5 | ) | |||||||||
Other |
8,206 | — | 1,829 | 72 | 398 | |||||||||||||||
Preferred stock |
2,997 | — | — | — | (2,654 | ) | ||||||||||||||
Common stock |
156,572 | — | 4,197 | (5,874 | ) | 3,296 | ||||||||||||||
Separate account assets |
3,824 | 1,264 | 807 | (3 | ) | (789 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 171,598 | $ | 1,269 | $ | 6,833 | $ | (5,805 | ) | $ | 246 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2019 |
||||||||||||||||
Bonds |
||||||||||||||||||||
RMBS |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Other |
— | — | — | 2,772 | 4,075 | |||||||||||||||
Preferred stock |
653 | — | — | — | 996 | |||||||||||||||
Common stock |
4,645 | 6,702 | 90,600 | 1 | 70,543 | |||||||||||||||
Separate account assets |
848 | — | (27 | ) | 93 | 4,271 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 6,146 | $ | 6,702 | $ | 90,573 | $ | 2,866 | $ | 79,885 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
37
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Beginning Balance at January 1, 2018 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | — | $ | — | $ | — | $ | (3 | ) | $ | 3 | |||||||||
RMBS |
— | — | — | (26 | ) | 26 | ||||||||||||||
Other |
14,619 | — | 5,465 | 108 | 423 | |||||||||||||||
Preferred stock |
3,180 | — | — | — | (754 | ) | ||||||||||||||
Common stock |
197,751 | — | 270 | (2,000 | ) | 3,398 | ||||||||||||||
Other long term |
— | 920 | 1,040 | — | (310 | ) | ||||||||||||||
Derivatives |
29,230 | — | — | (84,445 | ) | (29,230 | ) | |||||||||||||
Separate account assets |
51,040 | 1,394 | 249 | (43,234 | ) | (77 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 295,820 | $ | 2,314 | $ | 7,024 | $ | (129,600 | ) | $ | (26,521 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2018 |
||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
RMBS |
— | — | — | — | — | |||||||||||||||
Other |
— | — | — | 1,479 | 8,206 | |||||||||||||||
Preferred stock |
828 | — | 259 | — | 2,997 | |||||||||||||||
Common stock |
— | 216 | 42,400 | 123 | 156,572 | |||||||||||||||
Other long term |
430 | — | — | — | — | |||||||||||||||
Derivatives |
— | — | (3,869 | ) | (80,576 | ) | — | |||||||||||||
Separate account assets |
100 | — | 3,490 | 1,660 | 3,824 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,358 | $ | 216 | $ | 42,280 | $ | (77,314 | ) | $ | 171,598 | |||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
Transfers between fair value hierarchy levels are recognized at the beginning of the reporting period.
Nonrecurring fair value measurements
As indicated in Note 2, real estate held for sale is measured at the lower of carrying amount or fair value less cost to sell. As of December 31, 2019, the Company held no properties as held-for-sale, where fair value was less than its carrying value. As of December 31, 2019, the Company held one property as held-for sale, where carrying amount of $576 was equal to fair value.
Fair value was determined by utilizing an external appraisal following the sales comparison approach. The fair value measurements are classified as Level 3 as the comparable sales and adjustments for the specific attributes of these properties are not market observable inputs.
38
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Bonds and Stocks
The carrying amounts and estimated fair value of investments in bonds and stocks are as follows:
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Bonds: |
||||||||||||||||
United States Government and agencies |
$ | 4,280,658 | $ | 775,293 | $ | 372 | $ | 5,055,579 | ||||||||
State, municipal and other government |
1,174,675 | 125,422 | 16,509 | 1,283,588 | ||||||||||||
Hybrid securities |
271,982 | 42,062 | 1,464 | 312,580 | ||||||||||||
Industrial and miscellaneous |
15,555,330 | 2,013,749 | 42,420 | 17,526,659 | ||||||||||||
Mortgage and other asset-backed securities |
4,129,822 | 351,694 | 15,727 | 4,465,789 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
25,412,467 | 3,308,220 | 76,492 | 28,644,195 | ||||||||||||
Unaffiliated preferred stocks |
111,630 | 6,330 | 8,115 | 109,845 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 25,524,097 | $ | 3,314,550 | $ | 84,607 | $ | 28,754,040 | |||||||||
|
|
|
|
|
|
|
|
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
$ | 58,311 | $ | 22,545 | $ | 67 | $ | 80,789 | ||||||||
|
|
|
|
|
|
|
|
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Bonds: |
||||||||||||||||
United States Government and agencies |
$ | 6,578,120 | $ | 277,575 | $ | 121,838 | $ | 6,733,857 | ||||||||
State, municipal and other government |
761,458 | 35,634 | 19,456 | 777,636 | ||||||||||||
Hybrid securities |
260,707 | 13,182 | 8,417 | 265,472 | ||||||||||||
Industrial and miscellaneous |
15,824,266 | 731,481 | 383,320 | 16,172,427 | ||||||||||||
Mortgage and other asset-backed securities |
4,202,584 | 265,837 | 65,457 | 4,402,964 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
27,627,135 | 1,323,709 | 598,488 | 28,352,356 | ||||||||||||
Unaffiliated preferred stocks |
104,793 | 3,022 | 10,003 | 97,812 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 27,731,928 | $ | 1,326,731 | $ | 608,491 | $ | 28,450,168 | |||||||||
|
|
|
|
|
|
|
|
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
$ | 154,552 | $ | 18,557 | $ | 1,130 | $ | 171,979 | ||||||||
|
|
|
|
|
|
|
|
39
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The carrying amount and estimated fair value of bonds at December 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
2019 | ||||||||
December 31: | Carrying Value | Fair Value | ||||||
Due in one year or less |
$ | 715,115 | $ | 721,686 | ||||
Due after one year through five years |
4,446,683 | 4,713,256 | ||||||
Due after five years through ten years |
5,108,090 | 5,808,153 | ||||||
Due after ten years |
11,012,757 | 12,935,311 | ||||||
|
|
|
|
|||||
21,282,645 | 24,178,406 | |||||||
Mortgage and other asset-backed securities |
4,129,822 | 4,465,789 | ||||||
|
|
|
|
|||||
$ | 25,412,467 | $ | 28,644,195 | |||||
|
|
|
|
The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2019 and 2018 is as follows:
2019 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | 896 | $ | 4 | $ | 10,513 | $ | 368 | ||||||||
State, municipal and other government |
37,638 | 10,695 | 96,166 | 5,814 | ||||||||||||
Hybrid securities |
18,613 | 1,464 | — | — | ||||||||||||
Industrial and miscellaneous |
349,475 | 31,808 | 398,580 | 10,612 | ||||||||||||
Mortgage and other asset-backed securities |
217,019 | 12,486 | 503,736 | 3,241 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
623,641 | 56,457 | 1,008,995 | 20,035 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
47,696 | 8,025 | 4,511 | 90 | ||||||||||||
Common stocks-unaffiliated |
— | — | 739 | 67 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 671,337 | $ | 64,482 | $ | 1,014,245 | $ | 20,192 | |||||||||
|
|
|
|
|
|
|
|
40
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | 415,707 | $ | 25,873 | $ | 3,771,379 | $ | 95,965 | ||||||||
State, municipal and other government |
84,973 | 6,723 | 192,550 | 12,733 | ||||||||||||
Hybrid securities |
13,815 | 2,063 | 114,678 | 6,354 | ||||||||||||
Industrial and miscellaneous |
1,584,834 | 141,445 | 4,936,668 | 241,875 | ||||||||||||
Mortgage and other asset-backed securities |
796,932 | 39,004 | 828,836 | 26,453 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
2,896,261 | 215,108 | 9,844,111 | 383,380 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
23,579 | 6,575 | 38,576 | 3,428 | ||||||||||||
Common stocks-unaffiliated |
— | — | 11,083 | 1,130 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$2,919,840 | $221,683 | $9,893,770 | $387,938 | |||||||||||||
|
|
|
|
|
|
|
|
During 2019, there were $4,294 of loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold for a period of time to recover the amortized cost basis. During 2018 and 2017, there were no loan-backed or structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold for a period of time to recover the amortized cost basis.
For loan-backed and structured securities with a recognized OTTI due to the Company’s cash flow analysis, in which the security is written down to estimated future cash flows discounted at the security’s effective yield, in 2019, 2018 and 2017 the Company recognized OTTI of $5,546, $4,339 and $7,960, respectively.
41
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following loan-backed and structured securities were held at December 31, 2019, for which an OTTI was recognized during the current reporting period:
CUSIP |
Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized OTTI |
Amortized Cost After OTTI |
Fair Value at Time of OTTI |
Date of Financial Statement Where Reported |
||||||||||||||||||
$ | 1,299 | $ | 1,056 | $ | 243 | $ | 1,056 | $ | 869 | 3/31/2019 | ||||||||||||||
295 | 271 | 24 | 271 | 228 | 3/31/2019 | |||||||||||||||||||
1,399 | 1,295 | 104 | 1,295 | 1,295 | 6/30/2019 | |||||||||||||||||||
587 | 484 | 103 | 484 | 387 | 6/30/2019 | |||||||||||||||||||
250 | 250 | — | 250 | 209 | 6/30/2019 | |||||||||||||||||||
19,646 | 18,718 | 928 | 18,718 | 17,362 | 9/30/2019 | |||||||||||||||||||
2,493 | 2,237 | 256 | 2,237 | 1,754 | 9/30/2019 | |||||||||||||||||||
221 | 203 | 18 | 203 | 58 | 9/30/2019 | |||||||||||||||||||
4 | 4 | — | 4 | 4 | 9/30/2019 | |||||||||||||||||||
491 | 480 | 11 | 480 | 424 | 9/30/2019 | |||||||||||||||||||
2,245 | 2,245 | — | 2,245 | 2,245 | 9/30/2019 | |||||||||||||||||||
18,422 | 18,368 | 54 | 18,368 | 16,944 | 12/31/2019 | |||||||||||||||||||
2,237 | 1,134 | 1,103 | 1,134 | 1,751 | 12/31/2019 | |||||||||||||||||||
3,049 | 366 | 2,683 | 366 | 1,870 | 12/31/2019 | |||||||||||||||||||
432 | 417 | 15 | 417 | 426 | 12/31/2019 | |||||||||||||||||||
428 | 424 | 4 | 424 | 381 | 12/31/2019 | |||||||||||||||||||
|
|
|||||||||||||||||||||||
$ | 5,546 | |||||||||||||||||||||||
|
|
The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2019 and 2018 is as follows:
2019 | 2018 | |||||||||||||||
Losses 12 Months or More |
Losses Less Than 12 Months |
Losses 12 Months or More |
Losses Less Than 12 Months |
|||||||||||||
Year ended December 31: |
||||||||||||||||
The aggregate amount of unrealized losses |
$ | 12,486 | $ | 15,728 | $ | 39,004 | $40,117 | |||||||||
The aggregate related fair value of securities with unrealized losses |
217,019 | 517,385 | 796,932 | 850,568 |
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 199 and 663 securities with a carrying amount of $735,818 and $3,141,523, and an unrealized loss of $64,482 and $221,683. Of this portfolio, 65.2% and 90.7% were investment grade with associated unrealized losses of $19,696 and $165,913, respectively.
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for less than twelve months, the Company held 245 and 1,411 securities with a carrying amount of $1,033,633 and $10,269,495 and an unrealized loss of $20,125 and $386,809. Of this portfolio, 91.1% and 89.7% were investment grade with associated unrealized losses of $11,888 and $302,186, respectively.
42
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, there were no common stocks that have been in a continuous loss position for greater than or equal to twelve months.
At December 31, 2019 and 2018, respectively, for common stocks that have been in a continuous loss position for less than twelve months, the Company held 7 and 13 securities with a cost of $807 and $12,212 and an unrealized loss of $67 and $1,130.
The following table provides the number of 5GI securities, aggregate book adjusted carrying value and aggregate fair value by investment type:
Number of 5GI Securities |
Book / Adjusted Carrying Value |
Fair Value | ||||||||||
Bond, amortized cost |
2 | $ | 18,813 | $ | 18,169 | |||||||
Loan-backed and structured securities, amortized cost |
3 | 6,719 | 6,719 | |||||||||
Preferred stock, amortized cost |
1 | 996 | 996 | |||||||||
|
|
|
|
|
|
|||||||
Total |
6 | $ | 26,528 | $ | 25,884 | |||||||
|
|
|
|
|
|
|||||||
Bond, amortized cost |
3 | $ | 29,647 | $ | 29,725 | |||||||
Loan-backed and structured securities, amortized cost |
1 | 8 | 8 | |||||||||
Preferred stock, amortized cost |
1 | 2,996 | 2,996 | |||||||||
|
|
|
|
|
|
|||||||
Total |
5 | $ | 32,651 | $ | 32,729 | |||||||
|
|
|
|
|
|
The tables below present the Company’s gross and net receivable for securities and borrowed money financial statement line items that were subject to offsetting:
December 31, 2019 | Gross Amount Recognized |
Amount Offset | Net Amount Presented on Financial Statements |
|||||||||
Assets: |
||||||||||||
Receivables for securities |
$ | 120,009 | $ | 101,474 | $ | 18,535 | ||||||
Liabilities: |
||||||||||||
Borrowed money |
$ | 550,303 | $ | 101,474 | $ | 448,829 |
43
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | Gross Amount Recognized |
Amount Offset | Net Amount Presented on Financial Statements |
|||||||||
Assets: |
||||||||||||
Receivables for securities |
$ | 273,566 | $ | 149,607 | $ | 123,959 | ||||||
Liabilities: |
||||||||||||
Borrowed money |
$ | 353,860 | $ | 149,607 | $ | 204,253 |
During 2019 and 2018, the Company sold, redeemed or otherwise disposed of 175 and 159 securities as a result of a callable feature which generated investment income of $13,296 and $18,683 as a result of a prepayment penalty and/or acceleration fee.
Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses are reflected in the following table. The amounts exclude maturities and include transfers associated with reinsurance agreements.
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Proceeds |
$ | 13,048,390 | $ | 5,928,234 | $ | 18,171,710 | ||||||
|
|
|
|
|
|
|||||||
Gross realized gains |
$ | 133,153 | $ | 86,626 | $ | 2,375,500 | ||||||
Gross realized losses |
(37,677 | ) | (209,899 | ) | (151,723 | ) | ||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) |
$ | 95,476 | $ | (123,273 | ) | $ | 2,223,777 | |||||
|
|
|
|
|
|
The Company had gross realized losses, which relate to losses recognized on other-than-temporary declines in the fair value of bonds and preferred stocks, for the years ended December 31, 2019, 2018 and 2017 of $30,802, $10,795 and $19,101, respectively.
At December 31, 2019 and 2018, the Company had no investments in restructured securities.
44
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Mortgage Loans
The credit quality of mortgage loans by type of property for the years ended December 31, 2019 and 2018 were as follows:
Farm | Commercial | Total | ||||||||||
AAA - AA |
$ | 10,519 | $ | 3,000,254 | $ | 3,010,773 | ||||||
A |
31,600 | 1,812,978 | 1,844,578 | |||||||||
BBB |
6,458 | 217,779 | 224,237 | |||||||||
BB |
8,536 | 4,089 | 12,625 | |||||||||
B |
— | 4,400 | 4,400 | |||||||||
|
|
|
|
|
|
|||||||
$ | 57,113 | $ | 5,039,500 | $ | 5,096,613 | |||||||
|
|
|
|
|
|
Farm | Commercial | Total | ||||||||||
AAA - AA |
$ | 219 | $ | 2,635,041 | $ | 2,635,260 | ||||||
A |
42,814 | 1,745,127 | 1,787,941 | |||||||||
BBB |
6,690 | 157,753 | 164,443 | |||||||||
BB |
8,730 | 4,119 | 12,849 | |||||||||
B |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
$ | 58,453 | $ | 4,542,040 | $ | 4,600,493 | |||||||
|
|
|
|
|
|
The credit quality for commercial and farm mortgage loans was determined based on an internal credit rating model which assigns a letter rating to each mortgage loan in the portfolio as an indicator of the credit quality of the mortgage loan. The internal credit rating model was designed based on rating agency methodology, then modified for credit risk associated with the Company’s mortgage lending process, taking into account such factors as projected future cash flows, net operating income, and collateral value. The model produces a credit rating score and an associated letter rating which is intended to align with S&P ratings as closely as possible. Information supporting the credit risk rating process is updated at least annually.
During 2019, the Company issued mortgage loans with a maximum interest rate of 5.52% and a minimum interest rate of 3.50% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2019 at the time of origination was 82%. During 2018, the Company issued mortgage loans with a maximum interest rate of 5.57% and a minimum interest rate of 3.95% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2018 at the time of origination was 69%.
During 2019 and 2018, the Company did not reduce the interest rate on any outstanding mortgage loans.
45
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The age analysis of mortgage loans and identification in which the Company is a participant or co-lender in a mortgage loan agreement is as follows for December 31, 2019 and 2018.
Commercial | ||||||||||||
Farm | All Other | Total | ||||||||||
Recorded Investment (All) |
||||||||||||
(a) Current |
$ | 57,113 | $ | 4,958,605 | $ | 5,015,718 | ||||||
(b) 30-59 Days Past Due |
— | — | — | |||||||||
(c) 60-89 Days Past Due |
— | — | — | |||||||||
(d) 90-179 Days Past Due |
— | — | — | |||||||||
(e) 180+ Days Past Due |
— | 80,895 | 80,895 | |||||||||
Accruing interest 90-179 days past due |
||||||||||||
(a) Recorded investment |
— | — | — | |||||||||
(b) Interest accrued |
— | — | — | |||||||||
Participant or Co-lender in Mortgage Loan Agreement |
||||||||||||
(a) Recorded Investment |
$ | 33,658 | $ | 1,483,157 | $ | 1,516,815 |
Commercial | ||||||||||||
Farm | All Other | Total | ||||||||||
Recorded Investment (All) |
||||||||||||
(a) Current |
$ | 50,576 | $ | 4,461,023 | $ | 4,511,599 | ||||||
(b) 30-59 Days Past Due |
— | — | — | |||||||||
(c) 60-89 Days Past Due |
— | 57,005 | 57,005 | |||||||||
(d) 90-179 Days Past Due |
7,875 | — | 7,875 | |||||||||
(e) 180+ Days Past Due |
— | 24,014 | 24,014 | |||||||||
Accruing interest 90-179 days past due |
||||||||||||
(a) Recorded investment |
7,876 | — | 7,876 | |||||||||
(b) Interest accrued |
96 | — | 96 | |||||||||
Participant or Co-lender in Mortgage Loan Agreement |
||||||||||||
(a) Recorded Investment |
$ | 31,524 | $ | 1,286,604 | $ | 1,318,128 |
At December 31, 2019 and 2018, respectively, multiple mortgage loans with a carrying value of $80,895 and $24,014 were non-income producing for the previous 180 days. There was no accrued interest related to these mortgage loans at December 31, 2019 and 2018. The Company has a mortgage or deed of trust on the property thereby creating a lien which gives it the right to take possession of the property (among other things) if the borrower fails to perform according to the terms of the loan documents. The Company requires all mortgaged properties to carry fire insurance equal to the value of the underlying property. At December 31, 2019 and 2018, there were no taxes, assessments and other amounts advanced and not included in the mortgage loan total.
At December 31, 2019 and 2018, the Company held no impaired loans with related allowance for credit losses. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2019 and 2018, respectively. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2019 and 2018, respectively, that were subject to participant or co-lender mortgage loan agreement for which the Company is restricted from unilaterally foreclosing on the mortgage loans. The average recorded investment in impaired loans during 2019 and 2018 was $0 and $49,118, respectively.
46
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table provides a reconciliation of the beginning and ending balances for the allowance for credit losses on mortgage loans:
Year Ended December 31 |
||||||||||||
2019 | 2018 | 2017 | ||||||||||
Balance at beginning of period |
$ | — | $ | 26,618 | $ | 1,421 | ||||||
Additions, net charged to operations |
— | — | 26,618 | |||||||||
Recoveries in amounts previously charged off |
— | (26,618 | ) | (1,421 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at end of period |
$ | — | $ | — | $ | 26,618 | ||||||
|
|
|
|
|
|
As of December 31, 2019 and 2018, the Company had no mortgage loans derecognized as a result of foreclosure.
The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on nonperforming loans generally is recognized on a cash basis. For the years ended December 31, 2019, 2018 and 2017, respectively, the Company recognized $0, $852 and $5,359 of interest income on impaired loans. Interest income of $0, $860 and $2,806, respectively, was recognized on a cash basis for the years ended December 31, 2019, 2018 and 2017.
At December 31, 2019 and 2018, the Company held a mortgage loan loss reserve in the AVR of $69,202 and $46,436, respectively.
The Company’s mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:
Geographic Distribution |
Property Type Distribution |
|||||||||||||||||
December 31 |
December 31 |
|||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
Pacific |
25 | % | 28 | % | Apartment | 47 | % | 47 | % | |||||||||
South Atlantic |
23 | 22 | Retail | 19 | 21 | |||||||||||||
Middle Atlantic |
16 | 16 | Office | 15 | 16 | |||||||||||||
E. North Central |
9 | 8 | Industrial | 15 | 12 | |||||||||||||
W. North Central |
8 | 8 | Other | 2 | 2 | |||||||||||||
W. South Central |
8 | 7 | Agricultural | 1 | 1 | |||||||||||||
Mountain |
7 | 6 | Medical | 1 | 1 | |||||||||||||
E. South Central |
3 | 4 | ||||||||||||||||
New England |
1 | 1 |
47
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019, 2018 and 2017, the Company had mortgage loans with a total net admitted asset value of $20,550, $23,144 and $83,445, respectively, which had been restructured in accordance with SSAP No. 36, Troubled Debt Restructuring. There were no realized losses during the years ended December 31, 2019, 2018 and 2017 related to such restructurings. At December 31, 2019 and 2018, there were no commitments to lend additional funds to debtors owing receivables.
Real Estate
The fair value of property is determined based on an appraisal from a third-party appraiser, along with information obtained from discussions with internal asset managers and a listing broker regarding recent comparable sales data and other relevant property information. Impairment losses of $5,078, $26,231 and $4,033 were taken on real estate in 2019, 2018 and 2017, respectively, to write the book value down to the current fair value, and included in net realized capital gains (losses), within the Statements of Operations, for the year ended December 31, 2019.
As of December 31, 2019, there were four properties classified as held for sale. As of December 31, 2018, there were nine properties classified as held for sale. The Company is working with an external commercial real estate advisor firm to actively market the properties and negotiate with potential buyers. During 2019, one property classified as held for sale was disposed of resulting in a net realized gain of $1,788. During 2018, six properties classified as held for sale were disposed of resulting in a net realized gain of $4,579. These gains and losses were included in net realized capital gains (losses) within the Statements of Operations.
The Company also disposed of other properties during 2019 and 2018 resulting in net realized gains of $9,047 and $26,756, respectively.
The carrying value of the Company’s real estate assets at December 31, 2019 and 2018 was as follows:
2019 | 2018 | |||||||
Home office properties |
$ | 45,831 | $ | 52,466 | ||||
Investment properties |
— | 18,953 | ||||||
Properties held for sale |
5,715 | 43,027 | ||||||
|
|
|
|
|||||
$ | 51,546 | $ | 114,446 | |||||
|
|
|
|
Accumulated depreciation on real estate at December 31, 2019 and 2018, was $47,188 and $72,083, respectively.
Other Invested Assets
During 2019, the Company recorded impairments of $5,488, $3,363, and $13,867 throughout 2019, 2018 and 2017. These impairments were primarily related to private equity funds, except for 2017, which also included an impairment for a tax credit fund. The impairments were taken because the decline in fair value of the funds were deemed to be other than temporary and a recovery in value from the remaining underlying investments in the funds were not anticipated.
48
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
These write-downs are included in net realized capital gains (losses) within the Statements of Operations.
During 2017, the Company reassigned its ownership interest in the Prisma Spectrum Fund for an additional interest in the Zero Beta Fund in the amount of $125,036, which resulted in a realized gain of $19,443.
Tax Credits
At December 31, 2019, the Company had ownership interests in forty-six LIHTC investments with a carrying value of $58,163. The remaining years of unexpired tax credits ranged from one to twelve, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to sixteen years. The amount of contingent equity commitments expected to be paid during the years 2020 to 2029 is $26,728. Tax credits recognized in 2019 were $81,690, and other tax benefits recognized in 2019 were $2,795. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
At December 31, 2018, the Company had ownership interests in forty-seven LIHTC investments with a carrying value of $33,212. The remaining years of unexpired tax credits ranged from one to eleven, and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to sixteen years. The amount of contingent equity commitments expected to be paid during the years 2019 to 2029 is $55,107. Tax credits recognized during 2018 was $76,141. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
The following tables provide the carrying value of transferable state tax credits gross of any related tax liabilities and total unused transferable tax credits by state and in total as of December 31, 2019 and 2018:
December 31, 2019 | ||||||||||
Description of State Transferable and Non- transferable Tax Credits |
State | Carrying Value | Unused Amount* | |||||||
Low-Income Housing Tax Credits |
MA | $ | 2,683 | $ | 5,024 | |||||
Economic Redevelopment and Growth Tax Credits |
NJ | 5,281 | 20,948 | |||||||
|
|
|
|
|||||||
Total |
$ | 7,964 | $ | 25,972 | ||||||
|
|
|
|
December 31, 2018 | ||||||||||
Description of State Transferable and Non- transferable Tax Credits |
State | Carrying Value | Unused Amount | |||||||
Low-Income Housing Tax Credits |
MA | $ | 3,880 | $ | 6,220 | |||||
Economic Redevelopment and Growth Tax Credits |
NJ | 3,994 | 20,948 | |||||||
|
|
|
|
|||||||
Total |
$ | 7,874 | $ | 27,168 | ||||||
|
|
|
|
* | The unused amount reflects credits that the Company deems will be realizable in the period 2019-2030. |
The Company did not have any non-transferable state tax credits.
49
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits, and comparing the projected future tax liability to the availability of remaining state transferable tax credits. The Company had no impairment losses related to state transferable tax credits.
Derivatives
Amounts disclosed in this Derivatives section do not include derivatives utilized in the hedging of variable annuity guarantees in accordance with SSAP 108. Please see the subsequent section “Derivatives Hedging Variable Annuity Guarantees” for results associated with those derivatives.
The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets (cash or securities) on the Company’s behalf in an amount equal to the difference between the net positive fair value of the contracts and an agreed upon threshold based on the credit rating of the counterparty. If the net fair value of all contracts with this counterparty is negative, then the Company is required to post similar assets (cash or securities). Fair value of derivative contracts, aggregated at a counterparty level at December 31, 2019 and 2018 was as follows:
2019 | 2018 | |||||||
Fair value - positive |
$ | 647,378 | $ | 2,285,546 | ||||
Fair value - negative |
(646,157 | ) | (934,798 | ) |
At December 31, 2019, 2018 and 2017, the Company has recorded unrealized gains (losses) of ($257,972), $858,229 and ($131,678), respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. The Company did not recognize any unrealized gains or losses during 2019, 2018 and 2017 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.
The maximum term over which the Company is hedging its exposure to the variability of future cash flows is approximately 24 years for forecasted hedge transactions. At December 31, 2019 and 2018, none of the Company’s cash flow hedges have been discontinued as it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship. As of December 31, 2019 and 2018, the Company has accumulated deferred gains in the amount of $2,334 and $0, respectively, related to the termination of swaps that were hedging forecasted transactions. It is expected that these gains will be used as basis adjustments on future asset purchases expected to transpire throughout 2020.
50
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Summary of realized gains (losses) by derivative type for the years ended December 31, 2019, 2018 and 2017:
2019 | 2018 | 2017 | ||||||||||
Options: |
||||||||||||
Calls |
$ | (15,424 | ) | $ | 59,693 | $ | 2,473 | |||||
Caps |
— | — | (1,203 | ) | ||||||||
Puts |
— | (26,491 | ) | (7,634 | ) | |||||||
|
|
|
|
|
|
|||||||
Total options |
$ | (15,424 | ) | $ | 33,202 | $ | (6,364 | ) | ||||
|
|
|
|
|
|
|||||||
Swaps: |
||||||||||||
Interest rate |
$ | 95,162 | $ | (299,024 | ) | $ | 307,519 | |||||
Credit |
(3,099 | ) | (14,288 | ) | 8,209 | |||||||
Total return |
(611,814 | ) | (205,341 | ) | (1,443,432 | ) | ||||||
|
|
|
|
|
|
|||||||
Total swaps |
$ | (519,751 | ) | $ | (518,653 | ) | $ | (1,127,704 | ) | |||
|
|
|
|
|
|
|||||||
Futures—net positions |
535,875 | (310,914 | ) | 60,205 | ||||||||
Lehman settlements |
106 | 537 | 1,195 | |||||||||
|
|
|
|
|
|
|||||||
Total realized gains (losses) |
$ | 806 | $ | (795,828 | ) | $ | (1,072,668 | ) | ||||
|
|
|
|
|
|
The average estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 56,455 | $ | 55,387 | $ | (9,504 | ) $ | (6,341 | ) | |||||||
Interest rate swaps |
3,225 | 1,650 | — | 8,598 |
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
The estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 59,599 | $ | 43,455 | $ | (11,589 | ) | $ | (1,309 | ) | ||||||
Interest rate swaps |
3,972 | 2,188 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 63,571 | $ | 45,643 | $ | (11,589 | ) | $ | (1,309 | ) | ||||||
|
|
|
|
|
|
|
|
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
51
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The net realized gains (losses) on the derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019, 2018 and 2017:
2019 | 2018 | 2017 | ||||||||||
Derivative component of RSATs |
||||||||||||
Credit default swaps |
$ | (3,099 | ) | $ | (4,476 | ) | $ | 8,209 | ||||
Interest rate swaps |
— | (8,207 | ) | (59,357 | ) | |||||||
|
|
|
|
|
|
|||||||
Total |
$ | (3,099 | ) | $ | (12,683 | ) | $ | (51,148 | ) | |||
|
|
|
|
|
|
As stated in Note 2, the Company replicates investment grade corporate bonds, sovereign debt, or commercial mortgage backed securities by writing credit default swaps. As a writer of credit swaps, the Company actively monitors the underlying asset, being careful to note any events (default or similar credit event) that would require the Company to perform on the credit swap. If such events would take place, a payment equal to the notional amount of the contract, less any potential recoveries as determined by the underlying agreement, will be made by the Company to the counterparty to the swap.
The following tables present the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2019 and 2018:
2019 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 6,522 | $ | 441,000 | 1.9 | |||||||||||
Credit default swaps referencing indices |
108 | 10,000 | 39.9 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
6,630 | 451,000 | 2.7 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
41,004 | 1,781,035 | 1.8 | |||||||||||||
Credit default swaps referencing indices |
23,093 | 1,192,624 | 2.9 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
64,097 | 2,973,659 | 2.3 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
462 | 50,000 | 1.2 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
462 | 50,000 | 1.2 | |||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 71,189 | $ | 3,474,659 | 2.3 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard and Poor’s Rating Services (“S&P”), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
52
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 5,534 | $ | 468,085 | 2.6 | |||||||||||
Credit default swaps referencing indices |
(109 | ) | 10,000 | 40.9 | ||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
5,425 | 478,085 | 3.4 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
32,228 | 1,905,450 | 2.7 | |||||||||||||
Credit default swaps referencing indices |
7,806 | 907,000 | 3.3 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
40,034 | 2,812,450 | 2.9 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
2,427 | 145,500 | 2.7 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
2,427 | 145,500 | 2.7 | |||||||||||||
|
|
|
|
|||||||||||||
B |
4 | |||||||||||||||
Single name credit default swaps (3) |
(2,809 | ) | 27,000 | 2.7 | ||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
(2,809 | ) | 27,000 | 2.7 | ||||||||||||
|
|
|
|
|||||||||||||
CCC and lower |
5 | |||||||||||||||
Single name credit default swaps (3) |
(312 | ) | 5,000 | 1.0 | ||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
(312 | ) | 5,000 | 1.0 | ||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 44,765 | $ | 3,468,035 | 2.9 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard and Poor’s Rating Services (“S&P”), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
The Company may enter into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. At December 31, 2019, the maximum amounts of potential future recoveries available to offset the $3,474,659 from the table above were $0. At December 31, 2018, the maximum amounts of potential future recoveries available to offset the $3,468,035 from the table above were $0.
53
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, the Company’s outstanding derivative instruments, shown in notional or contract amounts and fair value, are summarized as follows:
Contract or Notional Amount* | Fair Value | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative assets: |
||||||||||||||||
Credit default swaps |
$ | 2,402,624 | $ | 2,509,467 | $ | 59,599 | $ | 52,360 | ||||||||
Currency swaps |
88,501 | 129,622 | 8,929 | 15,288 | ||||||||||||
Equity futures |
— | 22 | 686 | 20,189 | ||||||||||||
Equity swaps |
209,341 | 3,706,430 | 55 | 281,457 | ||||||||||||
Interest rate futures |
— | 38 | — | 20,639 | ||||||||||||
Interest rate swaps |
33,735 | 24,881,535 | 5,147 | 710,817 | ||||||||||||
Options |
21,196,796 | 23,094,442 | 311,739 | 996,427 | ||||||||||||
Derivative liabilities: |
||||||||||||||||
Credit default swaps |
1,446,000 | 1,318,568 | (3,740 | ) | (1,309 | ) | ||||||||||
Currency swaps |
142,704 | 18,459 | 2,279 | 1,706 | ||||||||||||
Equity futures |
(12 | ) | (1 | ) | 5,673 | 1,239 | ||||||||||
Equity swaps |
4,823,034 | 145,269 | 211,606 | 16,890 | ||||||||||||
Interest rate futures |
— | (19 | ) | — | 6,999 | |||||||||||
Interest rate swaps |
3,366,493 | 15,261,493 | 17,420 | 376,095 | ||||||||||||
Options |
(3,676,923 | ) | (3,815,570 | ) | 151,696 | 344,808 |
* | Futures are presented in contract format. Swaps and options are presented in notional format. |
Derivatives Hedging Variable Annuity Guarantees
The hedged obligation consists of guaranteed benefits on variable annuity contracts and resembles a long dated put option where claim payment is made whenever account value is less than a guaranteed amount, adjusted for applicable fees. Changes in interest rates impact the present value of future product cash flows (discount rate) as well as the value of investments comprising the account value to be assessed against the guarantee. Under this VM-21 compliant clearly defined hedging strategy (CDHS), interest rate risk may be hedged by a duration matched portfolio of interest sensitive derivatives such as treasury bond forwards, treasury futures, interest rate swaps, interest rate swaptions or treasury future options. The hedging strategy is unchanged from the prior reporting period, and the total return on the designated portfolio of derivatives has been highly effective in covering the interest rate risk (rho) of the hedged obligation. Hedge effectiveness is measured in accordance with the requirements outlined under SSAP 108 and entails assessment of the total return on the designated portfolio of derivatives against changes in the fair value of the hedged obligation due to interest rate movements on a cumulative basis.
54
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Scheduled amortization for SSAP 108 derivatives as of December 31, 2019 is as follows:
Amortization Year |
Deferred Assets | Deferred Liabilities | ||||||
2020 |
$ | 68,503 | $ | 18,702 | ||||
2021 |
60,234 | 18,702 | ||||||
2022 |
39,808 | 18,702 | ||||||
2023 |
39,808 | 18,702 | ||||||
2024 |
39,808 | 18,702 | ||||||
2025 |
39,808 | 18,702 | ||||||
2026 |
29,176 | 18,702 | ||||||
2027 |
22,720 | 18,702 | ||||||
2028 |
17,393 | 18,702 | ||||||
2029 |
20,155 | 14,028 | ||||||
|
|
|
|
|||||
Total |
$ | 377,413 | $ | 182,346 | ||||
|
|
|
|
As discussed in Note 2 and 3, the Company elected to adopt SSAP 108 effective July 1, 2019.
The following table is a reconciliation of the total deferred balance of SSAP 108 derivatives from the date of adoption through December 31, 2019. The beginning deferred balance was the deferral under a previous permitted practice described in Note 2.
1. | Total Deferred Balance, July 1, 2019 | $ | 189,601 | |||
2. | Current Year Amortization | 19,002 | ||||
3. | Current Year Deferred Recognition | (24,468 | ) | |||
|
|
|||||
4. | Ending Deferred Balance [1-(2+3)] | $ | 195,067 | |||
|
|
The following tables provide information regarding SSAP 108 hedging instruments:
12/31/2019 | 7/1/2019 | |||||||
Amortized cost |
$ | (51 | ) | $ | (53 | ) | ||
Fair value |
$ | 74,063 | $ | 447,385 |
Net Investment Income |
Realized Gain (Loss) |
Unrealized Gain (Loss) |
Total | |||||||||||||
Derivative performance |
$ | 23,639 | $ | 495,410 | $ | (373,324 | ) | $ | 145,725 | |||||||
SSAP 108 Adjustments |
||||||||||||||||
Portion of the derivative performance attributed to natural offset |
— | (184,385 | ) | 14,192 | (170,193 | ) | ||||||||||
Deferred |
(23,639 | ) | (311,025 | ) | 359,132 | 24,468 |
55
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Prior year fair value of hedged item |
$ | (2,294,125 | ) | |
Current year fair value of hedged item |
(2,573,520 | ) | ||
|
|
|||
Change in fair value attributable to interest rates |
$ | (279,395 | ) | |
|
|
|||
Portion of the fair value change attributed to the hedged risk |
$ | (232,394 | ) | |
|
|
Restricted Assets
The following tables show the pledged or restricted assets as of December 31, 2019 and 2018, respectively:
Gross Restricted (Admitted & Nonadmitted) 2019 |
||||||||||||||||||||
Restricted Asset Category |
Total General Account (G/A) |
G/A Supporting Separate Account (S/A) |
Total S/A Restricted Assets |
S/A Assets Supporting G/A Activity |
Total | |||||||||||||||
Collateral held under security lending agreements |
$ | 1,246,827 | $ | — | $ | — | $ | — | $ | 1,246,827 | ||||||||||
Subject to repurchase agreements |
113,025 | — | — | — | 113,025 | |||||||||||||||
Subject to dollar repurchase agreements |
550,333 | — | — | — | 550,333 | |||||||||||||||
FHLB capital stock |
42,800 | — | — | — | 42,800 | |||||||||||||||
On deposit with states |
43,813 | — | — | — | 43,813 | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
1,259,059 | — | — | — | 1,259,059 | |||||||||||||||
Pledged as collateral not captured in other categories |
736,696 | — | — | — | 736,696 | |||||||||||||||
Other restricted assets |
1,170,136 | — | — | — | 1,170,136 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total restricted assets |
$ | 5,162,689 | $ | — | $ | — | $ | — | $ | 5,162,689 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Gross (Admitted & Nonadmitted) Restricted | Percentage | |||||||||||||||||||||||
Restricted Asset Category |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Nonadmitted Restricted |
Total Admitted Restricted |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||
Collateral held under security lending agreements |
$ | 1,842,557 | $ | (595,730 | ) | $ | — | $ | 1,246,827 | 0.96 | % | 0.96 | % | |||||||||||
Subject to repurchase agreements |
205,405 | (92,380 | ) | — | 113,025 | 0.09 | % | 0.09 | % | |||||||||||||||
Subject to dollar repurchase agreements |
371,260 | 179,073 | — | 550,333 | 0.42 | % | 0.42 | % | ||||||||||||||||
FHLB capital stock |
133,400 | (90,600 | ) | — | 42,800 | 0.03 | % | 0.03 | % | |||||||||||||||
On deposit with states |
43,908 | (95 | ) | — | 43,813 | 0.03 | % | 0.03 | % | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
4,405,503 | (3,146,444 | ) | — | 1,259,059 | 0.97 | % | 0.97 | % | |||||||||||||||
Pledged as collateral not captured in other categories |
687,891 | 48,805 | — | 736,696 | 0.56 | % | 0.56 | % | ||||||||||||||||
Other restricted assets |
1,172,934 | (2,798 | ) | — | 1,170,136 | 0.90 | % | 0.90 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total restricted assets |
$ | 8,862,858 | $ | (3,700,169 | ) | $ | — | $ | 5,162,689 | 3.96 | % | 3.96 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The amounts reported as other restricted assets in the table above represent assets held in trust related to reinsurance.
56
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables show the pledged or restricted assets in other categories as of December 31, 2019 and 2018, respectively:
Gross (Admitted & Nonadmitted) Restricted 2019 |
||||||||||||||||||||
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 | |||||||||||||||
Derivatives |
$ | 728,018 | $ | — | $ | — | $ | — | $ | 728,018 | ||||||||||
Secured funding agreements |
6,357 | — | — | — | 6,357 | |||||||||||||||
AMBAC |
2,321 | — | — | — | 2,321 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 736,696 | $ | — | $ | — | $ | — | $ | 736,696 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Gross (Admitted & Nonadmitted) Restricted |
Percentage | |||||||||||||||||||
Description of Assets |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Current Year Admitted Restricted |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
|||||||||||||||
Derivatives |
$ | 638,025 | $ | 89,993 | $ | 728,018 | 0.56 | % | 0.56 | % | ||||||||||
Secured funding agreements |
46,723 | (40,366 | ) | 6,357 | 0.00 | % | 0.00 | % | ||||||||||||
AMBAC |
3,143 | (822 | ) | 2,321 | 0.00 | % | 0.00 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 687,891 | $ | 48,805 | $ | 736,696 | 0.56 | % | 0.56 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
The following tables show the collateral received and reflected as assets within the financial statements as of December 31, 2019 and 2018:
2019 |
||||||||||||||||
Collateral Assets |
Carrying Value |
Fair Value | Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 898,267 | $ | 898,267 | 2.02 | % | 2.02 | % | ||||||||
Securities lending collateral assets |
1,246,827 | 1,246,827 | 2.80 | 2.80 | ||||||||||||
Other |
35,199 | 35,199 | 0.08 | 0.08 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 2,180,293 | $ | 2,180,293 | 4.90 | % | 4.90 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 2,181,672 | 5.75 | % |
57
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 |
||||||||||||||||
Collateral Assets |
Carrying Value |
Fair Value | Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 1,453,892 | $ | 1,453,892 | 3.05 | % | 3.06 | % | ||||||||
Securities lending collateral assets |
1,835,122 | 1,835,122 | 3.85 | 3.87 | ||||||||||||
Other |
5,999 | 5,999 | 0.01 | 0.01 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 3,295,013 | $ | 3,295,013 | 6.91 | % | 6.94 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 3,296,139 | 8.01 | % |
Net Investment Income
Detail of net investment income is presented below:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Income: |
||||||||||||
Bonds |
$ | 1,185,232 | $ | 1,276,258 | $ | 1,660,465 | ||||||
Preferred stocks |
6,230 | 8,251 | 6,160 | |||||||||
Common stocks |
143,184 | 100,616 | 214,463 | |||||||||
Mortgage loans on real estate |
226,766 | 204,434 | 245,562 | |||||||||
Real estate |
21,899 | 20,190 | 20,862 | |||||||||
Policy loans |
67,366 | 69,773 | 72,733 | |||||||||
Cash, cash equivalents and short-term investments |
59,292 | 39,557 | 24,772 | |||||||||
Derivatives |
16,562 | 32,673 | 82,507 | |||||||||
Other invested assets |
49,846 | 73,164 | 295,840 | |||||||||
|
|
|
|
|
|
|||||||
Gross investment income |
1,776,377 | 1,824,916 | 2,623,364 | |||||||||
Less: investment expenses |
171,238 | 205,794 | 172,388 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income before amortization of IMR |
1,605,139 | 1,619,122 | 2,450,976 | |||||||||
Amortization of IMR |
39,186 | 48,050 | 65,306 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income |
$ | 1,644,325 | $ | 1,667,172 | $ | 2,516,282 | ||||||
|
|
|
|
|
|
58
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Realized Capital Gains (Losses)
Net realized capital gains (losses) on investments, including OTTI, are summarized below:
Realized | ||||||||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | 62,739 | $ | (135,605 | ) | $ | 2,204,142 | |||||
Preferred stocks |
1,933 | 1,539 | 535 | |||||||||
Common stocks |
25,384 | (3,690 | ) | (1,978 | ) | |||||||
Mortgage loans on real estate |
388 | (25,696 | ) | 93,149 | ||||||||
Real estate |
5,756 | 5,104 | (4,101 | ) | ||||||||
Cash, cash equivalents and short-term investments |
239 | (51 | ) | (202 | ) | |||||||
Derivatives |
311,724 | (796,365 | ) | (1,073,863 | ) | |||||||
Variable annuity reserve hedge offset |
(159,833 | ) | — | — | ||||||||
Other invested assets |
82,951 | 113,854 | 118,984 | |||||||||
|
|
|
|
|
|
|||||||
Change in realized capital gains (losses), before taxes |
331,281 | (840,910 | ) | 1,336,666 | ||||||||
Federal income tax effect |
(43,047 | ) | 4,006 | (197,937 | ) | |||||||
Transfer from (to) interest maintenance reserve |
(47,710 | ) | 122,772 | (1,713,779 | ) | |||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) on investments |
$ | 240,524 | $ | (714,132 | ) | $ | (575,050 | ) | ||||
|
|
|
|
|
|
Unrealized Capital Gains (Losses)
The changes in net unrealized capital gains and losses on investments, including the changes in net unrealized foreign capital gains and losses were as follows:
Change in Unrealized | ||||||||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | 48,719 | $ | 34,184 | $ | 65,937 | ||||||
Preferred stocks |
(2,504 | ) | (859 | ) | (564 | ) | ||||||
Common stocks |
5,052 | 1,874 | 1,468 | |||||||||
Affiliated entities |
447,273 | 157,530 | 398,521 | |||||||||
Mortgage loans on real estate |
— | 26,618 | (25,197 | ) | ||||||||
Cash equivalents and short-term investments |
(31 | ) | 145 | 6 | ||||||||
Derivatives |
(761,219 | ) | 1,093,543 | (66,675 | ) | |||||||
Other invested assets |
18,228 | 32,164 | 182,596 | |||||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), before taxes |
(244,482 | ) | 1,345,199 | 556,092 | ||||||||
Taxes on unrealized capital gains (losses) |
(82,980 | ) | (54,824 | ) | 123,327 | |||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), net of tax |
$ | (327,462 | ) | $ | 1,290,375 | $ | 679,419 | |||||
|
|
|
|
|
|
59
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
6. Premium and Annuity Considerations Deferred and Uncollected
Deferred and uncollected life premium and annuity considerations, net of reinsurance, at December 31, 2019 and 2018 were as follows:
2019 | 2018 | |||||||||||||||
Gross | Net of Loading | Gross | Net of Loading | |||||||||||||
Life and annuity: |
||||||||||||||||
Ordinary first-year business |
$ | 1,003 | $ | 168 | $ | 1,077 | $ | 173 | ||||||||
Ordinary renewal business |
278,922 | 256,376 | 94,286 | 84,273 | ||||||||||||
Group life direct business |
17,843 | 9,477 | 16,474 | 7,911 | ||||||||||||
Credit direct business |
9 | 9 | 13 | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 297,777 | $ | 266,030 | $ | 111,850 | $ | 92,370 | |||||||||
|
|
|
|
|
|
|
|
7. Policy and Contract Attributes
Insurance Liabilities
Policy reserves, deposit-type contracts and policy claims at December 31, 2019 and 2018 were as follows:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Life insurance reserves |
$ | 11,472,311 | $ | 12,368,680 | ||||
Annuity reserves and supplementary contracts with life contingencies |
14,094,715 | 14,244,431 | ||||||
Accident and health reserves (including long term care) |
670,910 | 681,838 | ||||||
|
|
|
|
|||||
Total policy reserves |
$ | 26,237,936 | $ | 27,294,949 | ||||
Deposit-type contracts |
591,570 | 967,757 | ||||||
Policy claims |
479,226 | 527,901 | ||||||
|
|
|
|
|||||
Total policy reserves, deposit-type contracts and claim liabilities |
$ | 27,308,732 | $ | 28,790,607 | ||||
|
|
|
|
Life Insurance Reserves
The aggregate policy reserves for life insurance policies are based upon the 1941, 1958, 1980, 2001 and 2017 Commissioner’s Standard Ordinary Mortality and American Experience Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 6.00 percent and are computed principally on the Net Level Premium Valuation and the Commissioner’s Reserve Valuation Method. Reserves for universal life policies are based on account balances adjusted for the Commissioner’s Reserve Valuation Method or Actuarial Guideline XXXVIII. Effective July 1, 2017, term insurance issued follows Valuation Manual section 20 (VM-20) reserve requirements.
Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula.
60
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the date of death. Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Effective July 1, 2017, for substandard term insurance policies, per VM-20 requirements, the substandard rating is applied to the reserve mortality. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioner’s Reserve Valuation Method for universal life policies and recognizing any substandard ratings.
As of December 31, 2019 and 2018, the Company had insurance in force aggregating $59,712,049 and $78,179,488, respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the IID. The Company established policy reserves of $1,608,260 and $1,667,131 to cover these deficiencies as of December 31, 2019 and 2018, respectively.
Participating life insurance policies were issued by the Company in prior years which entitle policyholders to a share in the earnings of the participating policies, provided that a dividend distribution, which is determined annually based on mortality and persistency experience of the participating policies, is authorized by the Company. Participating insurance constituted less than 0.05% of ordinary life insurance in force at December 31, 2019 and 2018.
Annuity Reserves and Supplementary Contracts Involving Life Contingencies
Deferred annuity reserves are calculated according to the Commissioner’s Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest.
Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 2.25 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.
Annuity reserves also include GICs and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications of Insurance or Managed Care Contracts. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement option, on a change in fund basis, according to the Commissioner’s Annuity Reserve Valuation Method.
For variable annuities with guaranteed living benefits and variable annuities with minimum guaranteed death benefits the Company complies with VM-21. VM-21 specifies statutory reserve requirements for variable annuity contracts with benefit guarantees (VACARVM) and without benefit guarantees and related products. The VM-21 reserve calculation covers all variable annuity products. Examples of covered guaranteed benefits include guaranteed minimum accumulation benefits, return of premium death benefits, guaranteed minimum income benefits, guaranteed minimum withdrawal benefits and guaranteed payout annuity floors. The aggregate reserve for contracts falling within the scope of VM-21 is equal to the stochastic reserves plus the additional standard projection amount.
61
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Both the stochastic reserves and the standard projection are determined as the conditional tail expectation (CTE)-70 of the scenario reserves. To determine the CTE-70 values, the Company used 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) and Society of Actuaries. The stochastic reserves uses prudent estimate assumptions based on Company experience, while the standard projection uses the assumptions prescribed in VM-21 for determining the additional standard projection amount.
Accident and Health Liabilities
Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.
At December 31, 2019 and 2018, the Company had no premium deficiency reserve related to accident and health policies.
For indeterminate premium products, a full schedule of current and anticipated premium rates is developed at the point of issue. Premium rate adjustments are considered when anticipated future experience foretells deviations from the original profit standards. The source of deviation (mortality, persistency, expense, etc.) is an important consideration in the re-rating decision as well as the potential effect of a rate change on the future experience of the existing block of business.
Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. Unpaid claims include amounts for losses and related adjustment expenses and are estimates of the ultimate net costs of all losses, reported and unreported. These estimates are subject to the impact of future changes in claim severity, frequency and other factors.
62
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Activity in the liability for unpaid claims and related processing costs net of reinsurance is summarized as follows:
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | — | $ | 276,850 | $ | 201,741 | $ | 75,109 | ||||||||
2018 and prior |
135,241 | 2,690 | 86,381 | 51,550 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
135,241 | $ | 279,540 | $ | 288,122 | 126,659 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 632,180 | $ | 623,147 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 767,421 | $ | 749,806 | ||||||||||||
|
|
|
|
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | — | $ | 308,983 | $ | 225,500 | $ | 83,483 | ||||||||
2017 and prior |
157,201 | (21,859 | ) | 83,584 | 51,758 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
157,201 | $ | 287,124 | $ | 309,084 | 135,241 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 657,543 | $ | 632,180 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 814,744 | $ | 767,421 | ||||||||||||
|
|
|
|
The change in the Company’s unpaid claims reserve was $2,690 and ($21,859) for the years ended December 31, 2019 and 2018, respectively, for health claims that were incurred prior to those balance sheets dates. The change in 2019 was in normal range. The change in 2018 resulted primarily from variances in the estimated frequency of claims and claim severity.
Activity in the liability for unpaid claims adjustment expense is summarized as follows:
Liability Beginning of Year |
Incurred | Paid | Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | — | $ | 17,934 | $ | 17,219 | $ | 715 | ||||||||
2018 and prior |
3,091 | (1,017 | ) | 1,584 | 490 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 3,091 | $ | 16,917 | $ | 18,803 | $ | 1,205 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | — | $ | 16,859 | $ | 14,951 | $ | 1,908 | ||||||||
2017 and prior |
3,279 | (325 | ) | 1,771 | 1,183 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ 3,279 | $16,534 | $ 16,722 | $ 3,091 | |||||||||||||
|
|
|
|
|
|
|
|
63
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company did not increase or decrease the claim adjustment expense provision for insured events of prior years during 2019.
Deposit-type Contracts
Tabular interest on funds not involving life contingencies has been determined primarily by formula.
The Company issues certain funding agreements with well-defined class-based annuity purchase rates defining either specific or maximum purchase rate guarantees. However, these funding agreements are not issued to or for the benefit of an identifiable individual or group of individuals. These contracts are classified as deposit-type contracts in accordance with SSAP No. 50.
Withdrawal Characteristics of Annuity Reserves and Deposit Funds
A portion of the Company’s policy reserves and other policyholders’ funds (including separate account liabilities) relates to liabilities established on a variety of the Company’s annuity, deposit fund and life products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on annuity and deposit fund products, by withdrawal characteristics, is summarized as follows:
December 31 2019 | ||||||||||||||||||||
Individual Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 541,753 | $ | 561 | $ | — | $ | 542,314 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
907,255 | — | — | 907,255 | 1 | |||||||||||||||
At fair value |
3,842 | — | 49,151,231 | 49,155,073 | 80 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
1,452,850 | 561 | 49,151,231 | 50,604,642 | 82 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
7,800,086 | — | — | 7,800,086 | 13 | |||||||||||||||
Not subject to discretionary withdrawal provision |
2,498,084 | — | 264,646 | 2,762,730 | 5 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
11,751,020 | 561 | 49,415,877 | 61,167,458 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
2,833,026 | — | — | 2,833,026 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuities reserves |
$ | 8,917,994 | $ | 561 | $ | 49,415,877 | $ | 58,334,432 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
8 | — | — | 8 | ||||||||||||||||
|
|
|
|
|
|
|
|
64
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2019 | ||||||||||||||||||||
Group Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 1,107,433 | $ | 18,568 | $ | — | $ | 1,126,001 | 3 | % | ||||||||||
At book value less surrender charge of 5% or more |
235 | — | — | 235 | — | |||||||||||||||
At fair value |
— | — | 29,101,801 | 29,101,801 | 84 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
1,107,668 | 18,568 | 29,101,801 | 30,228,037 | 87 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
2,475,633 | — | — | 2,475,633 | 7 | |||||||||||||||
Not subject to discretionary withdrawal provision |
2,189,501 | — | 38,174 | 2,227,675 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuities reserves |
5,772,802 | 18,568 | 29,139,975 | 34,931,345 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
377,165 | — | — | 377,165 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuities reserves |
$ | 5,395,637 | $ | 18,568 | $29,139,975 | $ | 34,554,180 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
December 31 2019 |
||||||||||||||||||||
Deposit-type contracts (no life contingencies): | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 4,789 | $ | — | $ | — | $ | 4,789 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
— | — | — | — | — | |||||||||||||||
At fair value |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
4,789 | — | — | 4,789 | 1 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
775 | — | — | 775 | — | |||||||||||||||
Not subject to discretionary withdrawal provision |
375,756 | 48,782 | 9,686 | 434,224 | 99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
381,320 | 48,782 | 9,686 | 439,788 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
8,666 | — | — | 8,666 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit-type contracts |
$ | 372,654 | $ | 48,782 | $ | 9,686 | $ | 431,122 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
65
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Reconcililation to the Annual Statement: | Amount | |||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 13,457,795 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
636,920 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
591,570 | |||
|
|
|||
Subtotal |
14,686,285 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
78,311,341 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
263,640 | |||
Other contract deposit funds |
58,468 | |||
|
|
|||
Subtotal |
78,633,449 | |||
|
|
|||
Combined total |
$ | 93,319,734 | ||
|
|
December 31 2018 |
||||||||||||||||||||
Individual Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 528,969 | $ | 1,279 | $ | — | $ | 530,248 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
501,977 | — | — | 501,977 | 1 | |||||||||||||||
At fair value |
97,877 | — | 44,202,566 | 44,300,443 | 77 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
1,128,823 | 1,279 | 44,202,566 | 45,332,668 | 79 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
8,701,240 | — | — | 8,701,240 | 15 | |||||||||||||||
Not subject to discretionary withdrawal provision |
3,209,969 | — | 214,506 | 3,424,475 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
13,040,032 | 1,279 | 44,417,072 | 57,458,383 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
2,819,439 | — | — | 2,819,439 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuity reserves |
$ | 10,220,593 | $ | 1,279 | $ | 44,417,072 | $ | 54,638,944 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
66
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 | ||||||||||||||||||||
Group Annuities: | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 653,206 | $ | 25,742 | $ | — | $ | 678,948 | 2 | % | ||||||||||
At book value less surrender charge of 5% or more |
127 | — | — | 127 | — | |||||||||||||||
At fair value |
— | — | 25,390,084 | 25,390,084 | 82 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
653,333 | 25,742 | 25,390,084 | 26,069,159 | 84 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
2,543,431 | — | — | 2,543,431 | 8 | |||||||||||||||
Not subject to discretionary withdrawal provision |
2,273,676 | — | 31,585 | 2,305,261 | 8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuity reserves |
5,470,440 | 25,742 | 25,421,669 | 30,917,851 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
398,265 | — | — | 398,265 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuity reserves |
$ | 5,072,175 | $ | 25,742 | $ | 25,421,669 | $ | 30,519,586 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
December 31 2018 | ||||||||||||||||||||
Deposit-type contracts (no life contingencies): | General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | |||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 4,718 | $ | — | $ | — | $ | 4,718 | 1 | % | ||||||||||
At book value less surrender charge of 5% or more |
— | — | — | — | — | |||||||||||||||
At fair value |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
4,718 | — | — | 4,718 | 1 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
761 | — | — | 761 | — | |||||||||||||||
Not subject to discretionary withdrawal provision |
731,816 | 38,792 | 8,286 | 778,894 | 99 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
737,295 | 38,792 | 8,286 | 784,373 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
8,174 | — | — | 8,174 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit-type contracts |
$ | 729,121 | $ | 38,792 | $ | 8,286 | $ | 776,199 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Amount included in book value less surrender charge above that will move to book value without adjustment in the year after the statement date |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
67
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Amount | ||||
Reconcililation to the Annual Statement: |
||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 14,401,938 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
652,194 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
967,757 | |||
|
|
|||
Subtotal |
16,021,889 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
69,652,375 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
213,387 | |||
Other contract deposit funds |
47,078 | |||
|
|
|||
Subtotal |
69,912,840 | |||
|
|
|||
Combined total |
$ | 85,934,729 | ||
|
|
The amount of reserves on life products, by withdrawal characteristics, is summarized as follows:
December 31 2019 | ||||||||||||||||||||||||
General Account | Separate Account—Guaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, |
||||||||||||||||||||||||
Term policies with cash value |
$ | 127,240 | $ | 174,114 | $ | 294,514 | $ | — | $ | — | $ | — | ||||||||||||
Universal life |
8,928,502 | 8,652,284 | 12,290,308 | — | — | — | ||||||||||||||||||
Universal life with secondary guarantees |
3,583,462 | 3,496,533 | 8,994,292 | — | — | — | ||||||||||||||||||
Indexed universal life with secondary guarantees |
138,016 | 98,875 | 127,312 | — | — | — | ||||||||||||||||||
Other permanent cash value life insurance |
272,553 | 1,009,143 | 1,542,059 | — | — | — | ||||||||||||||||||
Variable universal life |
42,258 | 41,415 | 924,560 | 4,151,215 | 4,149,688 | 5,473,280 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
— | — | 7,946,544 | — | — | — | ||||||||||||||||||
Accidental death benefits |
— | — | 36,530 | — | — | — | ||||||||||||||||||
Disability- active lives |
— | — | 31,521 | — | — | — | ||||||||||||||||||
Disability- disabled lives |
— | — | 55,431 | — | — | — | ||||||||||||||||||
Miscellaneous reserves |
— | — | 2,244,758 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
13,092,031 | 13,472,364 | 34,487,829 | 4,151,215 | 4,149,688 | 5,473,280 | ||||||||||||||||||
Reinsurance ceded |
4,155,647 | 4,155,691 | 23,015,518 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 8,936,384 | $ | 9,316,673 | $ | 11,472,311 | $ | 4,151,215 | $ | 4,149,688 | $ | 5,473,280 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reconcililation to the Annual Statement: | Amount | |||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Life insurance section, total (net) |
$ | 10,549,729 | ||
Exhibit 5, Accidental death benefits section total (net) |
8,050 | |||
Exhibit 5, Disability—active lives section, total (net) |
7,441 | |||
Exhibit 5, Disability—disabled lives section, total (net) |
38,391 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
868,700 | |||
|
|
|||
Subtotal |
11,472,311 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Life insurance section, total |
5,473,280 | |||
|
|
|||
Subtotal |
5,473,280 | |||
|
|
|||
Combined total |
$ | 16,945,591 | ||
|
|
68
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 | ||||||||||||||||||||||||
General Account | Separate Account—Guaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, |
||||||||||||||||||||||||
Term policies with cash value |
$ | 119,933 | $ | 164,337 | $ | 278,907 | $ | — | $ | — | $ | — | ||||||||||||
Universal life |
8,754,568 | 8,450,724 | 12,226,647 | — | — | — | ||||||||||||||||||
Universal life with secondary guarantees |
3,675,642 | 3,595,227 | 8,938,774 | — | — | — | ||||||||||||||||||
Indexed universal life with secondary guarantees |
128,144 | 83,151 | 117,301 | — | — | — | ||||||||||||||||||
Other permanent cash value life insurance |
262,629 | 1,033,222 | 1,574,909 | — | — | — | ||||||||||||||||||
Variable universal life |
46,724 | 45,526 | 983,103 | 3,882,674 | 3,880,143 | 5,068,091 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
— | — | 7,708,101 | — | — | — | ||||||||||||||||||
Accidental death benefits |
— | — | 37,849 | — | — | — | ||||||||||||||||||
Disability- active lives |
— | — | 32,726 | — | — | — | ||||||||||||||||||
Disability- disabled lives |
— | — | 57,672 | — | — | — | ||||||||||||||||||
Miscellaneous reserves |
— | — | 2,139,264 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
12,987,640 | 13,372,187 | 34,095,253 | 3,882,674 | 3,880,143 | 5,068,091 | ||||||||||||||||||
Reinsurance ceded |
4,106,880 | 4,106,881 | 22,536,273 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 8,880,760 | $ | 9,265,306 | $ | 11,558,980 | $ | 3,882,674 | $ | 3,880,143 | $ | 5,068,091 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Reconcililation to the Annual Statement: | Amount | |||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Life insurance section, total (net) |
$ | 10,812,154 | ||
Exhibit 5, Accidental death benefits section total (net) |
7,954 | |||
Exhibit 5, Disability—active lives section, total (net) |
8,226 | |||
Exhibit 5, Disability—disabled lives section, total (net) |
40,261 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
1,500,085 | |||
|
|
|||
Subtotal |
12,368,680 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Life insurance section, total |
5,068,091 | |||
|
|
|||
Subtotal |
5,068,091 | |||
|
|
|||
Combined total |
$ | 17,436,771 | ||
|
|
Separate Accounts
Certain separate and variable accounts held by the Company relate to individual variable life insurance policies. The benefits provided on the policies are determined by the performance and/or fair value of the investments held in the separate account. The net investment experience of the separate account is credited directly to the policyholder and can be positive or negative. The assets of these separate accounts are carried at fair value. The life insurance policies typically provide a guaranteed minimum death benefit.
Certain separate accounts held by the Company represent funds which are administered for pension plans. The assets consist primarily of fixed maturities and equity securities and are carried at fair value. The Company provides a minimum guaranteed return to policyholders of certain separate accounts. Certain other separate accounts do not have any minimum guarantees and the investment risks associated with fair value changes are borne entirely by the policyholder.
69
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Information regarding the separate accounts of the Company as of and for the years ended December 31, 2019, 2018 and 2017 is as follows:
Guaranteed Indexed |
Nonindexed Guarantee Less Than or Equal to 4% |
Nonindexed Guarantee Greater Than 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2019 |
$ | — | $ | — | $ | 11,868 | $ | 8,778,459 | $ | 8,790,327 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts as of December 31, 2019 with assets at: |
||||||||||||||||||||
Fair value |
$ | — | $ | 49,425 | $ | 18,485 | $ | 83,386,230 | $ | 83,454,140 | ||||||||||
Amortized cost |
— | 652,587 | — | — | 652,587 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total as of December 31, 2019 |
$ | — | $ | 702,012 | $ | 18,485 | $ | 83,386,230 | $ | 84,106,727 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts by withdrawal characteristics as of |
||||||||||||||||||||
With fair value adjustment |
$ | — | $ | 19,128 | $ | — | $ | — | $ | 19,128 | ||||||||||
At fair value |
— | — | — | 83,073,724 | 83,073,724 | |||||||||||||||
At book value without fair value adjustment and with current surrender charge of less than 5% |
— | 652,587 | — | — | 652,587 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
— | 671,715 | — | 83,073,724 | 83,745,439 | |||||||||||||||
Not subject to discretionary withdrawal |
— | 30,297 | 18,485 | 312,506 | 361,288 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total separate account reserve liabilities at December 31, 2019 |
$ | — | $ | 702,012 | $ | 18,485 | $ | 83,386,230 | $ | 84,106,727 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Guaranteed Indexed |
Nonindexed Guarantee Less Than or Equal to 4% |
Nonindexed Guarantee Greater Than 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2018 |
$ | — | $ | — | $ | 11,732 | $ | 8,859,114 | $ | 8,870,846 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts as of December 31, 2018 with assets at: |
||||||||||||||||||||
Fair value |
$ | — | $ | 51,005 | $ | 14,808 | $ | 74,268,245 | $ | 74,334,058 | ||||||||||
Amortized cost |
— | 646,872 | — | — | 646,872 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total as of December 31, 2018 |
$ | — | $ | 697,877 | $ | 14,808 | $ | 74,268,245 | $ | 74,980,930 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
By withdrawal characteristics: |
||||||||||||||||||||
Reserves for separate accounts by withdrawal characteristics as of |
||||||||||||||||||||
With fair value adjustment |
$ | — | $ | 27,021 | $ | — | $ | — | $ | 27,021 | ||||||||||
At fair value |
— | — | — | 74,013,868 | 74,013,868 | |||||||||||||||
At book value without fair value adjustment and with current surrender charge of less than 5% |
— | 646,872 | — | — | 646,872 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
— | 673,893 | — | 74,013,868 | 74,687,761 | |||||||||||||||
Not subject to discretionary withdrawal |
— | 23,984 | 14,808 | 254,377 | 293,169 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total separate account reserve liabilities at December 31, 2018 |
$ | — | $ | 697,877 | $ | 14,808 | $ | 74,268,245 | $ | 74,980,930 | ||||||||||
|
|
|
|
|
|
|
|
|
|
70
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Guaranteed Indexed |
Nonindexed Guarantee Less Than or Equal to 4% |
Nonindexed Guarantee Greater Than 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2017 |
$ | — | $ | 80 | $ | 10,782 | $ | 8,536,011 | $ | 8,546,873 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts as of December 31, 2017 with assets at: |
||||||||||||||||||||
Fair value |
$ | — | $ | 57,965 | $ | 19,569 | $ | 83,794,485 | $ | 83,872,019 | ||||||||||
Amortized cost |
— | 633,003 | — | — | 633,003 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total as of December 31, 2017 |
$ | — | $ | 690,968 | $ | 19,569 | $ | 83,794,485 | $ | 84,505,022 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2017: |
||||||||||||||||||||
With fair value adjustment |
$ | — | $ | 32,619$ | — | $ | — | $ | 32,619 | |||||||||||
At fair value |
— | — | — | 83,719,277 | 83,719,277 | |||||||||||||||
At book value without fair value adjustment and with current surrender charge of less than 5% |
— | 633,003 | — | — | 633,003 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
— | 665,622 | — | 83,719,277 | 84,384,899 | |||||||||||||||
Not subject to discretionary withdrawal |
— | 25,346 | 19,569 | 75,208 | 120,123 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total separate account reserve liabilities at December 31, 2017 |
$ | — | $ | 690,968 | $ | 19,569 | $ | 83,794,485 | $ | 84,505,022 | ||||||||||
|
|
|
|
|
|
|
|
|
|
A reconciliation of the amounts transferred to and from the Company’s separate accounts is presented below:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Transfer as reported in the summary of operations of the separate accounts statement: |
||||||||||||
Transfers to separate accounts |
$ | 9,249,559 | $ | 9,208,119 | $ | 8,751,721 | ||||||
Transfers from separate accounts |
(12,987,554 | ) | (13,130,804 | ) | (11,815,503 | ) | ||||||
|
|
|
|
|
|
|||||||
Net transfers from separate accounts |
(3,737,995 | ) | (3,922,685 | ) | (3,063,782 | ) | ||||||
Miscellaneous reconciling adjustments |
(130,622 | ) | (152,560 | ) | 444,099 | |||||||
|
|
|
|
|
|
|||||||
Net transfers as reported in the summary of operations of the life, accident and health annual statement |
$ | (3,868,617 | ) | $ | (4,075,245 | ) | $ | (2,619,683 | ) | |||
|
|
|
|
|
|
71
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. At December 31, 2019 and 2018, the Company’s separate account statement included legally insulated assets of $85,698,798 and $76,754,148, respectively. The assets legally insulated from general account claims at December 31, 2019 and 2018 are attributed to the following products:
2019 | 2018 | |||||||
Group annuities |
$ | 27,466,046 | $ | 23,941,313 | ||||
Variable annuities |
52,062,801 | 46,955,172 | ||||||
Fixed universal life |
684,149 | 695,569 | ||||||
Variable universal life |
4,124,798 | 3,737,005 | ||||||
Variable life |
1,338,413 | 1,409,360 | ||||||
Modified separate accounts |
9,646 | 4,813 | ||||||
Registered market value annuity product—SPL |
12,945 | 10,916 | ||||||
|
|
|
|
|||||
Total separate account assets |
$ | 85,698,798 | $ | 76,754,148 | ||||
|
|
|
|
At December 31, 2019 and 2018, the Company held separate account assets not legally insulated from the general account in the amount of $21,891 and $29,244, respectively, related to variable annuity products.
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. To compensate the general account for the risk taken, the separate account paid risk charges of $542,322, $538,628, $525,773, $504,689, and $456,558, to the general account in 2019, 2018, 2017, 2016, and 2015, respectively. During the years ended December 31, 2019, 2018, 2017, 2016, and 2015 the general account of the Company had paid $73,992, $68,367, $69,207, $103,800, and $250,471 respectively, toward separate account guarantees.
At December 31, 2019 and 2018, the Company reported guaranteed separate account assets at amortized cost in the amount of $653,181 and $643,109, respectively, based upon the prescribed practice granted by the State of Iowa as described in Note 2. These assets had a fair value of $719,048 and $679,964 at December 31, 2019 and 2018, respectively, which would have resulted in an unrealized gain of $65,867 and $36,855, respectively, had these assets been reported at fair value.
The Company does not participate in securities lending transactions within the separate account.
Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.
72
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Premiums earned reflect the following reinsurance amounts:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Direct premiums |
$ | 14,573,402 | $ | 13,848,720 | $ | 13,209,093 | ||||||
Reinsurance assumed—non affiliates |
1,225,065 | 1,268,615 | 1,351,628 | |||||||||
Reinsurance assumed—affiliates |
106,627 | 125,367 | 325,332 | |||||||||
Reinsurance ceded—non affiliates |
(2,436,179 | ) | (3,044,184 | ) | (15,104,247 | ) | ||||||
Reinsurance ceded—affiliates |
(1,322,809 | ) | (1,385,000 | ) | (3,295,974 | ) | ||||||
|
|
|
|
|
|
|||||||
Net premiums earned |
$ | 12,146,106 | $ | 10,813,518 | $ | (3,514,168 | ) | |||||
|
|
|
|
|
|
The Company received reinsurance recoveries in the amount of $3,943,015, $3,729,097 and $3,736,461, during 2019, 2018 and 2017, respectively. At December 31, 2019 and 2018, estimated amounts recoverable from reinsurers that have been deducted from policy and contract claim reserves totaled $1,146,686 and $1,061,987. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2019 and 2018 of $42,515,411 and $42,224,573, respectively, of which $21,356,465 and $20,685,636 were ceded to affiliates.
During 2019, 2018 and 2017, amortization of deferred gains associated with previously transacted reinsurance agreements was released into income in the amount of $219,496 ($142,972 after tax), $514,911 ($335,855 after tax) and $90,556 ($62,716 after tax), respectively.
During 2019, 2018 and 2017, the Company obtained letters of credit of $26,675, $56,994 and $55,017, respectively, for the benefit of affiliated and nonaffiliated companies that have reinsured business to the Company where the ceding company’s state of domicile does not recognize the Company as an authorized reinsurer.
Effective January 1, 2019, the Company recaptured term insurance business of a reinsurance treaty with an affiliate, LIICA Re II, Inc. The universal life with secondary guarantees remained reinsured under the treaty. The Company received cash of $15,079, recaptured $67,590 in policyholder reserves, $371 of claim reserves, and net due, deferred and advance premiums of $2,279. The transaction resulted in a pre-tax loss of $50,603, which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cession of this business to LIICA Re II in the amount of $13,826 with a corresponding charge to unassigned surplus.
In January 2018, Scottish Re Group (SRUS) announced a sale and restructuring plan and commenced Chapter 11 (reorganization) procedures for some of its subsidiaries. In December 2018, the Delaware Department of Insurance began oversight procedures of Scottish Re (U.S.), Inc. (SRUS), with whom the Company is a counterparty for some of its reinsurance activities. SRUS was ordered into receivership for the purposes of rehabilitation on March 6, 2019. The IID suspended the certificate of authority for SRUS on May 16, 2019. The IID has continued to allow reinsurance credit for contracts in force as of May 16, 2019. At December 31, 2019, the Company’s reserves ceded to Scottish Re Group were $102,181. The receiver currently has committed to the court it will provide a rehabilitation plan or a recommendation to move to liquidation in 2020.
73
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Effective October 1, 2018, the Company recaptured credit insurance business from an affiliate, Ironwood Re Corp. The Company released $1,812 in funds withheld liability, recaptured $2,430 of policyholder reserves and $426 of claim reserves. The transaction resulted in a pre-tax loss of $1,044 which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cession of this business to Ironwood in the amount of $1,262 ($821 after-tax) with a corresponding charge to unassigned surplus.
Effective October 1, 2018, an affiliate, Transamerica Premier Life Insurance Company (TPLIC) recaptured group health insurance business from the Company. The Company paid consideration of $33,799 and released $13,767 of policyholder reserves, $980 of unearned premium reserve and $7,366 of claim reserves. The transaction resulted in a pre-tax loss of $11,686 which has been included in the Statements of Operations.
Effective July 1, 2018, the Company recaptured term insurance business from an affiliate, Stonebridge Reinsurance Company. The Company received cash of $137,447, recaptured $680,477 in policyholder reserves, $28,815 in claim reserves, net due premiums and commissions of $11,764 and $10,560 in interest maintenance reserve liability. The transaction resulted in a pre-tax loss of $570,641 which was included in the Statements of Operations. In addition, as a result of this transaction, amounts previously deferred to surplus under SSAP No. 61R, were released resulting in an increase to earnings, net of tax, of $184,144.
Effective July 1, 2018, the Company entered into a reinsurance agreement to cede an in force block of term insurance business to SCOR Global Life Americas. The Company paid consideration of $260,000, ceded $674,799 in policyholder reserves, $27,884 in claim reserves, $8,289 in due premium (net of commissions), and $13,229 in interest maintenance reserves liability. The transaction resulted in a pre-tax gain of $447,623 which will be identified separately on the insurer’s statutory financial statement as a surplus item. Recognition of the surplus increase as income shall be reflected on a net of tax basis as earnings emerge from the business reinsured.
Effective June 29, 2018, the Company and Wilton Re U. S. Holdings, Inc. (Wilton Re) entered into an agreement as to the “Final Net Settlement Statements and Other Matters” (NSS) associated with the reinsurance agreement between the two companies that was effective April 1, 2017. This agreement related to the reinsurance of the payout annuity and BOLI/COLI business to Wilton Re. As a result of the mutual concessions between the parties, Wilton Re will pay the Company $47,221. In addition, the Company released a reinsurance receivable in the amount of $3,234 related to the initial proposed final NSS that was used for closing. The net pretax impact to Capital and Surplus of these adjustments was $43,986.
Effective June 29, 2018, the Company and Wilton Re agreed to Amendment No. 1 to the Reinsurance Agreement dated June 28, 2017. This amendment converted risks that were ceded on a modified coinsurance basis to a coinsurance basis by reducing the amount of reinsurance ceded in the NSS and reducing the modco reserves ceded. At the close of the original transaction,
74
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
the Company offset the reserve ceded related to a modified separate account contract. Within the amendment to the Master Transaction Agreement, the Company agrees to pay Wilton Re an amount in cash equal to $95,386, which will be offset in full against an equivalent balance of other amounts due and payable to the Company, such that no cash or other assets shall be required to be transferred by the Parties.
Effective December 1, 2017, the Company entered into an agreement with TPLIC, an affiliate, to convert the modified coinsurance agreement to coinsurance and funds withheld. As a result, TLIC transferred cash and invested assets to TPLIC. Assets that were not able to be transferred were retained in a FWH portfolio by TLIC until they mature, are sold or can be transferred. The Company transferred cash and invested assets with a market value of $6,487,360 to TPLIC. The reserves of $4,543,045 and claim reserves of $199,940 net of due and advance premium of $5,815 previously held on a modco basis were transferred to TPLIC. As a result of the transaction $18,642 existing IMR and $1,125,506 newly created IMR ($1,731,547 pre-tax gains) was released and transferred to TPLIC. The transaction results in a pre-tax loss of $606,042 which has been included in the Statements of Operations. Realized gains on the sale of assets supporting the business resulted in gains that offset the impact of the pre-tax loss related to the transaction. The Company ceded modified coinsurance reserves of $4,536,010 as of December 31, 2016 for certain stand-alone long-term care policies under the indemnity reinsurance agreement with TPLIC.
Effective October 1, 2017, the Company recaptured credit life business from an affiliate, Southwest Equity Life Insurance Company. Subsequently, the mortgage life and disability insurance business was recaptured from the Company by TPLIC.
Effective October 1, 2017, the Company recaptured term insurance business from an affiliate, Transamerica International Reinsurance (Bermuda) Ltd. The Company received cash of $346,458, recaptured $1,260,767 in policyholder reserves, $35,798 claim reserves, $3,502 commissions payable and $26,595 due premium. The transaction results in a pre-tax loss of $927,014 which has been included in the Statements of Operations. The Company subsequently entered into an agreement with SCOR Global Life Americas to assume business related to this recapture at the same consideration. The gain related to this reinsurance agreement was deferred to surplus. The combination of the transaction results in no impact to the surplus of the Company.
Effective October 1, 2017, the Company recaptured term insurance business from an affiliate, LIICA Re I. The Company received cash of $113,953, recaptured $724,596 in policyholder reserves, $19,768 claim reserves and $11,124 in interest maintenance reserve liability. The transaction results in a pre-tax loss of $641,535 which has been included in the Statements of Operations. The Company subsequently entered into an agreement with SCOR Global Life Americas to assume business related to this recapture.
Effective October 1, 2017, the Company recaptured certain term insurance business from an affiliate, Transamerica Pacific Insurance Company (TPIC). The Company received cash of $1,902 and recaptured $17,310 in policyholder reserves, $2,897 claim reserves and $325 due premium (net of commission). The transaction results in a pre-tax loss of $17,980 which has been included in the Statements of Operations. The Company subsequently entered into an agreement with SCOR Global Life Americas to assume business related to this recapture.
75
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Effective October 1, 2017, the Company novated the reinsurance agreement between TPIC and Transamerica International Re (Bermuda) Ltd. No cash or invested asset or net reserves were transferred as a result of this novation. The transaction results in no pre-tax gain or loss.
Subsequently effective October 1, 2017, the Company entered into a reinsurance agreement to cede an in force block of term insurance business to SCOR Global Life Americas. The Company accrued to a funds withheld payable of $314,000 ceding $737,678 in policyholder reserves, $21,886 claim reserves, $10,958 due premium (net of commissions), offset by a reinsurance recoverable of $6,000 receivable and $11,124 in interest maintenance reserves liability. The transaction results in a pre-tax gain of $451,730 which has been identified separately on the insurer’s statutory financial statement as a surplus item and recognition of the surplus increase as income shall be reflected on a net of tax basis as earnings emerge from the business reinsured. The funds withheld balance was paid to SCOR Global Life Americas on December 29, 2017.
On June 28, 2017, Transamerica completed a transaction to reinsure its payout annuity business and Bank Owned Life Insurance/Corporate Owned Life Insurance business (BOLI/COLI). Under the terms of the Master Agreement, the Company entered into a 100% coinsurance (general account liabilities)/100% modified coinsurance (separate account liabilities) reinsurance agreement with Wilton Reassurance Company, with an effective date of April 1, 2017. The Company transferred assets in the amount of $8,312,263, which included a negative ceding commission of $112,183, and released policy and deposit-type reserves of $7,186,330 and reinsurance deposit, policy loans and other balances related to the business of $191,144. Modified coinsurance separate account reserves of $3,695,331 were retained by the Company. As a part of the transaction, the Company realized $972,360 in net gains on the assets that were transferred of which $627,872 were deferred to IMR. The IMR liability simultaneously was released along with historical deferrals associated with the blocks of business in the amount of $921,322, resulting in a pretax loss of $51,266, which has been included in the Statements of Operations.
Effective January 1, 2017, three affiliated reinsurance treaties with TLB were amended to include the cession of all business with secondary guarantee universal life (SGUL) issued or novated by the Company. The Company increased cessions from 80 to 100% coinsurance and increased the expense allowance by fifteen basis points of account value on all business ceded based on the end of the period account value. As consideration for the cessions, the Company received cash and invested assets of $206,742, equal to the additional U.S. statutory reserves, resulting in no gain or loss on the transaction.
76
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The net deferred income tax asset at December 31, 2019 and 2018 and the change from the prior year are comprised of the following components:
December 31, 2019 | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | 1,422,652 | $ | 101,290 | $ | 1,523,942 | ||||||
Statutory Valuation Allowance Adjustment |
13,747 | — | 13,747 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
1,408,905 | 101,290 | 1,510,195 | |||||||||
Deferred Tax Assets Nonadmitted |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
1,408,905 | 101,290 | 1,510,195 | |||||||||
Deferred Tax Liabilities |
843,226 | 191,611 | 1,034,837 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 565,679 | $ | (90,321 | ) | $ | 475,358 | |||||
|
|
|
|
|
|
December 31, 2018 | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | 1,618,151 | $ | 132,884 | $ | 1,751,035 | ||||||
Statutory Valuation Allowance Adjustment |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
1,618,151 | 132,884 | 1,751,035 | |||||||||
Deferred Tax Assets Nonadmitted |
96,652 | — | 96,652 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
1,521,499 | 132,884 | 1,654,383 | |||||||||
Deferred Tax Liabilities |
816,662 | 210,082 | 1,026,744 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 704,837 | $ | (77,198 | ) | $ | 627,639 | |||||
|
|
|
|
|
|
Change | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | (195,499 | ) | $ | (31,594 | ) | $ | (227,093 | ) | |||
Statutory Valuation Allowance Adjustment |
13,747 | — | 13,747 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
(209,246 | ) | (31,594 | ) | (240,840 | ) | ||||||
Deferred Tax Assets Nonadmitted |
(96,652 | ) | — | (96,652 | ) | |||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
(112,594 | ) | (31,594 | ) | (144,188 | ) | ||||||
Deferred Tax Liabilities |
26,564 | (18,471 | ) | 8,093 | ||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | (139,158 | ) | $ | (13,123 | ) | $ | (152,281 | ) | |||
|
|
|
|
|
|
77
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The main components of deferred income tax amounts are as follows:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Assets: | ||||||||||||
Ordinary |
||||||||||||
Policyholder reserves |
$ | 486,010 | $ | 601,605 | $ | (115,595 | ) | |||||
Investments |
328,516 | 295,047 | 33,469 | |||||||||
Deferred acquisition costs |
255,732 | 225,485 | 30,247 | |||||||||
Policyholder dividends accrual |
1,914 | 1,232 | 682 | |||||||||
Fixed assets |
4,933 | 17,844 | (12,911 | ) | ||||||||
Compensation and benefits accrual |
19,346 | 21,148 | (1,802 | ) | ||||||||
Receivables—nonadmitted |
11,594 | 13,038 | (1,444 | ) | ||||||||
Tax credit carry-forward |
259,638 | 349,547 | (89,909 | ) | ||||||||
Other (including items <5% of total ordinary tax assets) |
54,969 | 93,205 | (38,236 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
1,422,652 | 1,618,151 | (195,499 | ) | ||||||||
Statutory valuation allowance adjustment |
13,747 | — | 13,747 | |||||||||
Nonadmitted |
— | 96,652 | (96,652 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted ordinary deferred tax assets |
1,408,905 | 1,521,499 | (112,594 | ) | ||||||||
Capital: |
||||||||||||
Investments |
101,290 | 132,884 | (31,594 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
101,290 | 132,884 | (31,594 | ) | ||||||||
Statutory valuation allowance adjustment |
— | — | — | |||||||||
Nonadmitted |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Admitted capital deferred tax assets |
101,290 | 132,884 | (31,594 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted deferred tax assets |
$ | 1,510,195 | $ | 1,654,383 | $ | (144,188 | ) | |||||
|
|
|
|
|
|
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Liabilities: | ||||||||||||
Ordinary |
||||||||||||
Investments |
$ | 657,801 | $ | 602,167 | $ | 55,634 | ||||||
Policyholder reserves |
185,248 | 177,087 | 8,161 | |||||||||
Other (including items <5% of total ordinary tax liabilities) |
177 | 37,408 | (37,231 | ) | ||||||||
Subtotal |
843,226 | 816,662 | 26,564 | |||||||||
|
|
|
|
|
|
|||||||
Capital |
||||||||||||
Investments |
191,611 | 210,082 | (18,471 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
191,611 | 210,082 | (18,471 | ) | ||||||||
|
|
|
|
|
|
|||||||
Deferred tax liabilities |
1,034,837 | 1,026,744 | 8,093 | |||||||||
|
|
|
|
|
|
|||||||
Net deferred tax assets/liabilities | $ | 475,358 | $ | 627,639 | $ | (152,281 | ) | |||||
|
|
|
|
|
|
As a result of the 2017 Tax Cuts and Jobs Act (TCJA), the Company’s tax reserve deductible temporary difference increased by $49,757. This change results in an offsetting ($49,757) taxable temporary difference that will be amortized into taxable income evenly over the eight years subsequent to 2017. The remaining amortizable balance is included within the Policyholder Reserves line items above.
78
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019, the Company recorded a tax valuation allowance of $13,747 for deferred tax assets related to its foreign tax credit carryover. Due to the TCJA reduction in the U.S. Federal tax rate, Management no longer believes it is more likely than not that the Company will realize the benefit of its foreign tax credit carryover. The ultimate realization of this deferred tax asset depends on generation of sufficient future foreign source taxable income before the foreign tax credit carryover expires in 2027. Management considers the projected foreign source taxable income, credit expirations and tax planning strategies in making the assessment.
As discussed in Note 2, for the years ended December 31, 2019 and 2018 the Company admits deferred income tax assets pursuant to SSAP No. 101. The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 101 is as follows:
December 31, 2019 | ||||||||||||||
Ordinary | Capital | Total | ||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | — | $ | — | $ | — | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | 557,252 | 31,779 | 589,031 | ||||||||||
1. Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | 557,252 | 31,779 | 589,031 | |||||||||||
2. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 907,922 | |||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities | 851,653 | 69,511 | 921,164 | ||||||||||
|
|
|
|
|
|
|||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 1,408,905 | $ | 101,290 | $ | 1,510,195 | |||||||
|
|
|
|
|
|
79
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||
Ordinary | Capital | Total | ||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | — | $ | — | $ | — | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) |
596,212 | 34,054 | 630,266 | ||||||||||
1. Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date |
596,212 | 34,054 | 630,266 | |||||||||||
2. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold |
XXX | XXX | 847,469 | |||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities |
925,287 | 98,830 | 1,024,117 | ||||||||||
|
|
|
|
|
|
|||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) |
$ | 1,521,499 | $ | 132,884 | $ | 1,654,383 | |||||||
|
|
|
|
|
|
Change | ||||||||||||||
Ordinary | Capital | Total | ||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks |
$ | — | $ | — | $ | — | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) |
(38,960 | ) | (2,275 | ) | (41,235 | ) | |||||||
1. Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date |
(38,960 | ) | (2,275 | ) | (41,235 | ) | ||||||||
2. Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold |
XXX | XXX | 60,453 | |||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities |
(73,634 | ) | (29,319 | ) | (102,953 | ) | |||||||
|
|
|
|
|
|
|||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) |
$ | (112,594 | ) | $ | (31,594 | ) | $ | (144,188 | ) | ||||
|
|
|
|
|
|
December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Ratio Percentage Used To Determine Recovery Period and Threshold Limitation Amount |
848 | % | 818 | % | 30 | % | ||||||
|
|
|
|
|
|
|||||||
Amount of Adjusted Capital and Surplus Used To Determine Recovery Period and Threshold Limitation in 2(b)2 Above |
$ | 6,052,812 | $ | 5,649,795 | $ | 403,017 | ||||||
|
|
|
|
|
|
80
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The impact of tax planning strategies at December 31, 2019 and 2018 was as follows:
December 31, 2019 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent | ||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
1 | % | 0 | % | 1 | % | ||||||
|
|
|
|
|
|
December 31, 2018 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent | ||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
2 | % | 24 | % | 4 | % | ||||||
|
|
|
|
|
|
The Company’s tax planning strategies do not include the use of reinsurance-related tax planning strategies.
Current income taxes incurred consist of the following major components:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | (77,933 | ) | $ | (63,062 | ) | $ | (14,871 | ) | |||
Foreign |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
(77,933 | ) | (63,062 | ) | (14,871 | ) | ||||||
Federal income tax on net capital gains |
43,047 | (4,006 | ) | 47,053 | ||||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | (34,886 | ) | $ | (67,068 | ) | $ | 32,182 | ||||
|
|
|
|
|
|
Year Ended December 31 | ||||||||||||
2018 | 2017 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | (63,062 | ) | $ | (1,035,137 | ) | $ | 972,075 | ||||
Foreign |
— | 31 | (31 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
(63,062 | ) | (1,035,106 | ) | 972,044 | |||||||
Federal income tax on net capital gains |
(4,006 | ) | 197,937 | (201,943 | ) | |||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | (67,068 | ) | $ | (837,169 | ) | $ | 770,101 | ||||
|
|
|
|
|
|
81
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company’s current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate to income before tax as follows:
Year Ended December 31 |
||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current income taxes incurred |
$ | (34,886 | ) | $ | (67,068 | ) | $ | (837,169 | ) | |||
Change in deferred income taxes (without tax on unrealized gains and losses) |
164,812 | (164,466 | ) | 956,486 | ||||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 129,926 | $ | (231,534 | ) | $ | 119,317 | |||||
|
|
|
|
|
|
|||||||
Income before taxes |
$ | 3,306,846 | $ | (1,613,658 | ) | $ | 1,674,439 | |||||
21.00 | % | 21.00 | % | 35.00 | % | |||||||
|
|
|
|
|
|
|||||||
Expected income tax expense (benefit) at statutory rate |
$ | 694,438 | $ | (338,868 | ) | $ | 586,054 | |||||
Increase (decrease) in actual tax reported resulting from: |
||||||||||||
Pre-tax income of disregarded subsidiaries |
$ | 22,600 | $ | 13,405 | $ | 343,013 | ||||||
Dividends received deduction |
(58,418 | ) | (51,477 | ) | (233,578 | ) | ||||||
Tax-exempt income |
(9,681 | ) | (2,455 | ) | (3,063 | ) | ||||||
Nondeductible expenses |
5,058 | 5,176 | 64,514 | |||||||||
Pre-tax items reported net of tax |
(39,457 | ) | (9,892 | ) | (712,769 | ) | ||||||
Tax credits |
(29,037 | ) | (52,239 | ) | (54,076 | ) | ||||||
Prior period tax return adjustment |
10,746 | 10,586 | (5,969 | ) | ||||||||
Change in statutory valuation allowance |
13,747 | (2,432 | ) | (11,576 | ) | |||||||
Change in tax rates |
— | — | 18,760 | |||||||||
Change in uncertain tax positions |
(241 | ) | 3,104 | 3,668 | ||||||||
Deferred tax change on other items in surplus |
(480,743 | ) | 207,024 | 140,162 | ||||||||
Other |
914 | (13,466 | ) | (15,823 | ) | |||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 129,926 | $ | (231,534 | ) | $ | 119,317 | |||||
|
|
|
|
|
|
On December 22, 2017, the TCJA reduced the federal tax rate to 21%. As a result, the Company reduced its net deferred tax asset balance by $18,760, excluding $42,500 of net deferred tax asset reduction on unrealized gains (losses) in the 2017 financial statements.
The effects of the U.S. tax reform were reflected in the 2017 financial statements as determined or as reasonably estimated provisional amounts based on available information subject to interpretation in accordance with the SEC’s Staff Accounting Bulletin No. 118 (SAB 118), as adopted by NAIC SAPWG INT 18-01. SAB 118 provides guidance on accounting for the effects of U.S. tax reform where the Company’s determinations are incomplete but the Company can determine a reasonable estimate. The TCJA related disclosures and figures in the 2018 financials represent final impacts with no estimated figures remaining.
The Company’s federal income tax return is consolidated with other included affiliated companies. Please see the listing of companies in Appendix A. The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated
82
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
group’s income tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in any carryback or carryforward year when so applied. Intercompany income tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service. A tax return has not been filed for 2019.
The amounts, origination dates and expiration dates of operating loss and tax credit carryforwards available for tax purposes:
Description |
Amounts | Origination Dates | Expiration Dates | |||||||||
Foreign Tax Credit |
$ | 13,747 | 12/31/2017 | 12/31/2027 | ||||||||
|
|
|||||||||||
Foreign Tax Credit Total |
$ | 13,747 | ||||||||||
|
|
|||||||||||
General Business Credit |
$ | 29,094 | 12/31/2009 | 12/31/2029 | ||||||||
General Business Credit |
51,443 | 12/31/2010 | 12/31/2030 | |||||||||
General Business Credit |
46,730 | 12/31/2011 | 12/31/2031 | |||||||||
General Business Credit |
30,962 | 12/31/2012 | 12/31/2032 | |||||||||
General Business Credit |
24,765 | 12/31/2013 | 12/31/2033 | |||||||||
General Business Credit |
20,930 | 12/31/2014 | 12/31/2034 | |||||||||
General Business Credit |
18,131 | 12/31/2015 | 12/31/2035 | |||||||||
General Business Credit |
2,935 | 12/31/2016 | 12/31/2036 | |||||||||
General Business Credit |
5,189 | 12/31/2017 | 12/31/2037 | |||||||||
General Business Credit |
5,280 | 12/31/2018 | 12/31/2038 | |||||||||
General Business Credit |
10,431 | 12/31/2019 | 12/31/2039 | |||||||||
|
|
|||||||||||
General Business Credit Total |
$ | 245,890 | ||||||||||
|
|
Gross AMT Credit Recognized as:
(1) Gross AMT credit recognized as: |
||||
a. Current year recoverable |
$ | 14,515 | ||
b. Deferred tax asset (DTA) |
— | |||
(2) Beginning balance of AMT credit carryforward |
14,515 | |||
(3) Amounts recovered |
14,515 | |||
(4) Adjustments |
— | |||
|
|
|||
(5) Ending balance of AMT credit carryforward (5=2-3-4) |
— | |||
(6) Reduction for sequestration |
— | |||
(7) Nonadmitted by reporting entity |
— | |||
|
|
|||
(8) Reporting entity ending balance (8=5-6-7) |
$ | — | ||
|
|
The Company elected to account for its alternative minimum tax credit carryforward as a deferred tax asset.
83
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The total amount of the unrecognized tax benefits that if recognized, would affect the effective income tax rate:
Unrecognized Tax Benefits |
||||
Balance at January 1, 2018 |
$ | 15,486 | ||
Tax positions taken during prior period |
3,105 | |||
|
|
|||
Balance at December 31, 2018 |
$ | 18,591 | ||
Tax positions taken during prior period |
(241 | ) | ||
|
|
|||
Balance at December 31, 2019 |
$ | 18,350 | ||
|
|
The Company classifies interest and penalties related to income taxes as income tax expense. The amount of interest and penalties accrued on the balance sheets as income taxes includes the following:
Total payable | ||||||||||||
Interest | Penalties | (receivable) | ||||||||||
Balance at January 1, 2017 |
$ | 11,926 | $ | — | $ | 11,926 | ||||||
Interest expense (benefit) |
(5,815 | ) | — | (5,815 | ) | |||||||
Cash received (paid) |
(9,212 | ) | — | (9,212 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2017 |
$ | (3,101 | ) | $ | — | $ | (3,101 | ) | ||||
Interest expense (benefit) |
2,727 | — | 2,727 | |||||||||
Cash received (paid) |
1,810 | — | 1,810 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018 |
$ | 1,436 | $ | — | $ | 1,436 | ||||||
Interest expense (benefit) |
5,709 | — | 5,709 | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019 |
$ | 7,145 | $ | — | $ | 7,145 | ||||||
|
|
|
|
|
|
The Company has no federal income tax returns currently under examination. The Internal Revenue Service completed its examination for years 2009 through 2013 resulting in tax return adjustments for which an appeals conference was requested. Federal income tax returns filed in 2014 through 2018 remain open, subject to potential future examination. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions.
The Company had authorized 1,000,000 common stock shares at $10 per share par value of which 676,190 shares were issued and outstanding at December 31, 2019 and 2018.
The Company has 42,500 Series A preferred shares authorized, 0 shares issued and outstanding. On December 26, 2006, the Company repurchased its Series A preferred shares for $58,000. The Company previously reported 42,500 shares of Series A preferred stock outstanding at $10 par, carried as treasury stock. It has been determined that these shares were cancelled by operation of law as they were not stipulated by the Board of Directors to be treasury shares at the time they were repurchased. The cancellation and removal of the preferred stock had no impact to Capital and Surplus of the Company. The Company also has 250,000 Series B preferred non-voting shares authorized at $10 per share par value, of which 0 shares were issued and outstanding at December 31, 2019. The Company paid its parent company to redeem the Series B non-voting preferred stock at par value on the following dates: December 13, 2018: 55,930 shares for $559; December 27, 2017: 29,787 shares for $297 and December 22, 2016: 31,437 shares for $314.
84
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company is subject to limitations, imposed by the State of Iowa, on the payment of dividends to its stockholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Company’s statutory surplus as of the preceding December 31, or (b) the Company’s statutory gain from operations before net realized capital gains (losses) on investments for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2020, without the prior approval of insurance regulatory authorities, is $3,053,498.
On December 20, 2019, the Company paid extraordinary common stock dividends of $725,000 to its parent company.
On June 21, 2019, the Company paid an extraordinary dividend of $400,000 split between a return of capital of $250,000 to its parent company and paid off the remaining balance of a surplus note of $150,000 to Transamerica Corporation (TA Corp).
On December 31, 2018, the Company provided a non-cash distribution of the Pension Plan for U.S. Agents of TLIC asset valued at $60,347 to its parent company in order to facilitate the approved plan merger of the Pension Plan for U.S. Agents of TLIC maintained by the Company into the Transamerica Employee Pension Plan maintained by TA Corp.
The Company paid an extraordinary preferred stock dividend and an extraordinary common stock dividend of $16,732 and $47,488, respectively, to its parent company on December 13, 2018.
The Company provided cash returns of capital to its parent company in the amount of $558,740 on December 13, 2018.
The Company paid an ordinary preferred stock dividend and an ordinary common stock dividend of $16,920 and $283,080, respectively, to its parent company on June 29, 2018.
Prior to the merger, TALIC paid an ordinary dividend of $200,000 to its parent company, TA Corp, on April 20, 2018.
On December 31, 2019, the Company received ordinary common stock dividends of $100,000 from TLIC Oakbrook Reinsurance, Inc. (TORI).
On December 20, 2019, the Company received $99,982 from Transamerica Financial Life Insurance Company (TFLIC) as consideration for repurchase of 821 of the Company’s common stock shares in TFLIC at $125 par value. These shares were subsequently cancelled by operation of law.
On December 17, 2019, the Company received a $28,220 common stock dividend from Transamerica Life (Bermuda) Ltd. (TLB).
85
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
On June 21, 2019, the Company received an ordinary common stock dividend of $9,075 from its affiliate, TFLIC.
On March 29, 2019, the Company received ordinary common stock dividend of $60,000 from LIICA Re II, Inc.
The Company received ordinary common stock dividends from TFLIC in the amount of $12,105 on June 29, 2018. On December 13, 2018, the Company received preferred stock dividends of $430 from TFLIC.
On December 18, 2018, the Company received common stock dividends of $23,520 from its subsidiary TLB.
On December 13, 2018, the Company received $7,162 from TFLIC as a redemption of preferred stock.
On August 6, 2018, the Company received a common stock dividend in the amount of $140,000 from Stonebridge Reinsurance Company (SRC) prior to its merger with LIICA Re II, Inc.
On December 31, 2018, the Company made a non-cash capital contribution in the amount of $1,971 to REAP 3A.
Life and health insurance companies are subject to certain RBC requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on various risk factors. At December 31, 2019, the Company meets the minimum RBC requirements.
The Company’s surplus notes are held by TA Corp. These notes are due 20 years from the date of issuance at an interest rate of 6%, and are subordinate and junior in right of payment to all obligations and liabilities of the Company. In the event of liquidation of the Company, the holders of the issued and outstanding preferred stock shall be entitled to priority only with respect to accumulated but unpaid dividends before the holder of the surplus notes and full payment of the surplus notes shall be made before the holders of common stock become entitled to any distribution of the remaining assets of the Company. The Company received approval from the IID prior to paying quarterly interest payments.
On June 21, 2019, the Company repaid in full its $150,000 surplus note with TA Corp. The Company received approval from the IID prior to its repayment of the surplus note as well as prior to making quarterly interest payments.
Additional information related to the outstanding surplus notes at December 31, 2019 and 2018 is as follows:
For Year Ending |
Balance Outstanding |
Interest Paid Current Year |
Cumulative Interest Paid |
Accrued Interest |
||||||||||||
2019 |
$ | — | $ | 4,275 | $ | 148,275 | $ | — | ||||||||
2018 |
$ | 150,000 | $ | 9,000 | $ | 144,000 | $ | 2,250 |
86
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company participates in an agent-managed securities lending program in which the Company primarily loans out US Treasuries and other bonds. The Company receives collateral equal to 102% of the fair value of the loaned government or other domestic securities as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.
At December 31, 2019 and 2018, respectively, securities with a fair value of $1,121,274 and $1,791,674 were on loan under securities lending agreements. At December 31, 2019 and 2018, the collateral the Company received from securities lending activities was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral has a fair value of $1,246,827 and $1,835,122 at December 31, 2019 and 2018, respectively.
The contractual maturities of the securities lending collateral positions are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 1,246,827 | $ | 1,842,557 | ||||
|
|
|
|
|||||
Total |
1,246,827 | 1,842,557 | ||||||
Securities received |
— | — | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 1,246,827 | $ | 1,842,557 | ||||
|
|
|
|
The Company receives primarily cash collateral in an amount in excess of the fair value of the securities lent. The Company reinvests the cash collateral into higher yielding securities than the securities which the Company has lent to other entities under the arrangement.
87
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The maturity dates of the reinvested securities lending collateral are as follows:
2019 | 2018 | |||||||||||||||
Amortized Cost |
Fair Value | Amortized Cost |
Fair Value | |||||||||||||
Open |
$ | 43,483 | $ | 43,483 | $ | 245,460 | $ | 245,460 | ||||||||
30 days or less |
342,947 | 342,947 | 478,305 | 478,305 | ||||||||||||
31 to 60 days |
509,716 | 509,716 | 335,517 | 335,517 | ||||||||||||
61 to 90 days |
124,351 | 124,351 | 190,847 | 190,847 | ||||||||||||
91 to 120 days |
121,552 | 121,552 | 329,816 | 329,816 | ||||||||||||
121 to 180 days |
104,778 | 104,778 | 251,440 | 251,440 | ||||||||||||
1 to 2 years |
— | — | 417 | 417 | ||||||||||||
2 to 3 years |
— | — | 935 | 935 | ||||||||||||
Greater than 3 years |
— | — | 2,385 | 2,385 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
1,246,827 | 1,246,827 | 1,835,122 | 1,835,122 | ||||||||||||
Securities received |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral reinvested |
$ | 1,246,827 | $ | 1,246,827 | $ | 1,835,122 | $ | 1,835,122 | ||||||||
|
|
|
|
|
|
|
|
Collateral for securities lending transactions that extend beyond one year from the report date is as follows:
Description of collateral |
2019 | 2018 | ||||||
ABS Autos |
$ | — | $ | 1,352 | ||||
ABS Credit Cards |
— | 2,385 | ||||||
|
|
|
|
|||||
Total collateral extending beyond one year of the reporting date |
$ | — | $ | 3,737 | ||||
|
|
|
|
For securities lending, the Company’s source of cash used to return the cash collateral is dependent upon the liquidity of the current market conditions. Under current conditions, the Company has securities with a par value of $1,248,011 (fair value of $1,246,827) that are currently tradable securities that could be sold and used to pay for the $1,246,827 in collateral calls that could come due under a worst-case scenario.
12. Retirement and Compensation Plans
Defined Contribution Plans
The Company’s employees participate in a contributory defined contribution plan sponsored by TA Corp which is qualified under Section 401(k) of the Internal Revenue Code (IRC). Generally, employees of the Company who customarily work at least 20 hours per week and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to 100% of eligible earnings, subject to government or other plan restrictions for certain key employees. The Company will match an amount up to three percent of the participant’s eligible earnings. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Benefits expense of $11,926, $12,769 and $13,133 was allocated to the Company for the years ended December 31, 2019, 2018 and 2017 respectively.
88
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Defined Benefit Plans
The Company’s employees participate in a qualified defined benefit pension plan sponsored by TA Corp. Generally, employees of the Company who customarily work at least 20 hours per week and complete six months of continuous service and meet the other eligibility requirements are participants of the plan. The Company has no legal obligation for the plan. The benefits are based on years of service and the employee’s eligible compensation. The plan provides benefits based on a traditional final average formula or a cash balance formula. The plan is subject to the reporting and disclosure requirements of ERISA.
TA Corp sponsors supplemental retirement plans to provide the Company’s senior management with benefits in excess of normal pension benefits. The Company has no legal obligation for the plan. The plans are noncontributory and benefits are based on years of service and the employee’s eligible compensation. The plan provides benefits based on a traditional final average formula or cash balance formula. The plans are unfunded and nonqualified under the IRC.
The Company recognizes pension expense equal to its allocation from TA Corp. The pension expense related to both the qualified defined pension plan and the supplemental retirement plans is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits, and based upon actuarial participant benefit calculations, which is within the guidelines of SSAP No. 102, Pensions. Pension expenses were $23,904, $23,481 and $30,676 for the years ended December 31, 2019, 2018 and 2017, respectively.
In addition to pension benefits, TA Corp sponsors unfunded plans that provide health care and life insurance benefits to retired Company employees meeting certain eligibility requirements. The Company has no legal obligation for the plan. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans are allocated among the participating companies based on IAS 19 and based upon actuarial participant benefit calculations which is within the guidelines of SSAP No. 92, Postretirement Benefits Other Than Pensions. The Company’s allocation of postretirement expenses was $5,037, $5,027 and $7,332 for the years ended December 31, 2019, 2018 and 2017, respectively.
Other Plans
TA Corp has established deferred compensation plans for certain key employees of the Company. The Company’s allocation of expense for these plans for each of the years ended December 31, 2019, 2018 and 2017 was insignificant.
89
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
13. Related Party Transactions
The Company shares certain officers, employees and general expenses with affiliated companies.
The Company is party to a shared services and cost sharing agreement among and between the Transamerica companies, under which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs of services rendered. The Company is also party to a service agreement with TFLIC, in which the Company provides services, including accounting, data processing and other professional services, in consideration of reimbursement of the actual costs of services rendered. The Company is also a party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, LLC whereby the advisor serves as the administrator and advisor for the Company’s mortgage loan operations. AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company. The amount received by the Company as a result of being a party to these agreements was $920,368, $894,440 and $1,117,864 during 2019, 2018 and 2017, respectively. The amount paid as a result of being a party to these agreements was $559,946, $596,861 and $826,172 during 2019, 2018 and 2017, respectively. Fees charged between affiliates approximate their cost. The Company has an administration service agreement with Transamerica Asset Management, Inc. to provide administrative services to the Transamerica Series Trust. The Company received $130,182, $138,490 and $150,063 for these services during 2019, 2018 and 2017, respectively.
Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred expenses under this agreement of $50,537, $40,865 and $37,060 for the years ended December 31, 2019, 2018 and 2017, respectively.
Receivables from and payables to affiliates bear interest at the thirty-day commercial paper rate. During 2019, 2018 and 2017, the Company received (paid) net interest of ($1,760), ($476) and ($869) from (to) affiliates, respectively. At December 31, 2019 and 2018, respectively, the Company reported net payables from affiliates of $29,972 and $44,462. Terms of settlement require that these amounts are settled within 60 days.
At December 31, 2019, the Company had short-term intercompany notes receivable of $240,300 as follows. In accordance with SSAP No. 25, Affiliates and Other Related Parties, these notes are reported as short-term investments.
Receivable from |
Amount | Due By | Interest Rate |
|||||||||
TA Corp |
$ | 77,700 | September 4, 2020 | 2.04 | % | |||||||
TA Corp |
1,400 | September 5, 2020 | 2.04 | % | ||||||||
TA Corp |
43,700 | September 19, 2020 | 2.04 | % | ||||||||
TA Corp |
49,000 | October 21, 2020 | 1.92 | % | ||||||||
TA Corp |
43,500 | December 26, 2020 | 1.61 | % | ||||||||
TA Corp |
25,000 | December 29, 2020 | 1.61 | % |
90
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2018, the Company had short-term intercompany notes receivable of $261,000.
Receivable from |
Amount | Due By | Interest Rate | |||||||||
TA Corp |
$ | 220,500 | December 13, 2019 | 2.31 | % | |||||||
TA Corp |
40,500 | December 21, 2019 | 2.31 | % |
In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate, TPLIC. At December 31, 2019 and 2018, the cash surrender value of these policies was $182,753 and $179,004, respectively, and is included in Other assets on the balance sheets. In addition, the Company also issued life insurance policies to an affiliate, TPLIC, covering the lives of certain employees of that affiliate. Aggregate reserves for policies and contracts related to these policies are $170,124 and $167,126 at December 31, 2019 and 2018, respectively, and is included in Aggregate reserves for policies and contracts on the Balance Sheets.
The Company utilizes the look-through approach in valuing its investment in the following entities.
Real Estate Alternatives Portfolio 2, LLC |
$ | 22,345 | ||
Real Estate Alternatives Portfolio 3, LLC |
$ | 18,419 | ||
Real Estate Alternatives Portfolio 4 HR, LLC |
$ | 95,091 | ||
Real Estate Alternatives Portfolio 4 MR, LLC |
$ | 6,085 | ||
Aegon Multi-Family Equity Fund, LLC |
$ | 55,911 | ||
Aegon Workforce Housing Fund 2, L.P. |
$ | 154,601 | ||
Aegon Workforce Housing Fund 3, L.P. |
$ | 12,477 | ||
Natural Resources Alternatives Portfolio I, LLC |
$ | 170,193 | ||
Natural Resources Alternatives Portfolio II, LLC |
$ | 1 | ||
Natural Resources Alternatives Portfolio 3, LLC |
$ | 125,161 | ||
Zero Beta Fund, LLC |
$ | 257,897 |
These entity’s financial statements are not audited and the Company has limited the value of its investment in these entities to the value contained in the audited financial statements of the underlying LP/LLC investments, including adjustments required by SSAP No. 97 entities and/or non-SCA SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies, entities owned by these entities. All liabilities, commitments, contingencies, guarantees or obligations of these entities 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 entities.
Effective December 31, 2017, the Company received a liquidating distribution from Investors Warranty of America, LLC (IWA), a wholly owned limited liability company reported using the equity method outlined in SSAP No. 48, fully redeeming the Company’s membership interest therein. The Company received $176,999 cash, $57,050 directly held real estate, $17,602 real estate LLC membership, $4,328 intercompany receivable, and $2,684 tax refund receivable in redemption of the Company’s equity method basis in IWA. The transaction resulted in a pre-tax realized loss of $39,953 reported on the Statements of Operations which is offset by a pre-tax $40,097 unrealized loss reduction that is reported on the Statement of Changes in Capital and Surplus.
91
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables shows the disclosures for all SCA investments, except 8bi entities, and balance sheet value (admitted and nonadmitted) as of December 31, 2019 and 2018:
SCA Entity |
Percentage of SCA Ownership |
Gross Amount | Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
None |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
None |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
54 | % | $ | 12,963 | $ | 12,963 | $ | — | ||||||||
GARNET ASSURANCE CORP |
100 | — | — | — | ||||||||||||
LIFE INVESTORS ALLIANCE LLC |
100 | — | — | — | ||||||||||||
ASIA INVESTMENT HOLDING LTD |
100 | — | — | — | ||||||||||||
AEGON FINANCIAL SERVICES GROUP |
100 | — | — | — | ||||||||||||
GARNET ASSURANCE CORP III |
100 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 12,963 | $ | 12,963 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
94 | % | $ | 1,261,461 | $ | 1,261,461 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | 1,261,461 | $ | 1,261,461 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 1,274,424 | $ | 1,274,424 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 1,274,424 | $ | 1,274,424 | $ | — | |||||||||
|
|
|
|
|
|
|
|
SCA Entity |
Percentage of SCA Ownership |
Gross Amount |
Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
None |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
None |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
54 | % | $ | 22,419 | $ | 22,419 | $ | — | ||||||||
GARNET ASSURANCE CORP |
100 | — | — | — | ||||||||||||
LIFE INVESTORS ALLIANCE LLC |
100 | — | — | — | ||||||||||||
AEGON FINANCIAL SERVICES GROUP |
100 | — | — | — | ||||||||||||
GARNET ASSURANCE CORP III |
100 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 22,419 | $ | 22,419 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
94 | % | $ | 1,000,646 | $ | 1,000,646 | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | 1,000,646 | $ | 1,000,646 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 1,023,065 | $ | 1,023,065 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 1,023,065 | $ | 1,023,065 | $ | — | |||||||||
|
|
|
|
|
|
|
|
92
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table shows the NAIC responses for the SCA filings (except 8bi entities):
December 31, 2019 | ||||||||||||||||||||||||
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
None |
$ | — | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
None |
$ | — | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 10/31/2019 | $ | 20,940 | Y | N | I | |||||||||||||||||
GARNET ASSURANCE CORP |
NA | — | — | — | — | I | ||||||||||||||||||
LIFE INVESTORS ALLIANCE LLC |
NA | — | — | — | — | I | ||||||||||||||||||
ASIA INVESTMENT HOLDING LTD |
NA | — | — | — | — | I | ||||||||||||||||||
AEGON FINANCIAL SERVICES GROUP |
NA | — | — | — | — | I | ||||||||||||||||||
GARNET ASSURANCE CORP III |
NA | — | — | — | — | I | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
— | — | $ | 20,940 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
S2 | 1/21/2020 | $ | 608,633 | Y | N | I | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
— | — | $ | 608,633 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
— | — | $ | 629,573 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
— | — | $ | 629,573 | — | — | — | |||||||||||||||||
|
|
* | S1 – Sub1, S2 – Sub2 or RDF – Resubmission of Disallowed Filing |
** | I – Immaterial or M – Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
93
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||||||||||||
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
None |
$ | — | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
None |
$ | — | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 12/21/2018 | $ | 16,471 | Y | N | I | |||||||||||||||||
GARNET ASSURANCE CORP |
NA | — | — | Y | N | I | ||||||||||||||||||
LIFE INVESTORS ALLIANCE LLC |
NA | — | — | Y | N | I | ||||||||||||||||||
AEGON FINANCIAL SERVICES GROUP |
NA | — | — | Y | N | I | ||||||||||||||||||
GARNET ASSURANCE CORP III |
NA | — | — | N | N | I | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
— | — | $ | 16,471 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
TRANSAMERICA LIFE (BERMUDA) LTD |
S2 | 10/8/2018 | $ | 815,587 | N | N | I | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
— | — | $ | 815,587 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
— | — | $ | 832,058 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
— | — | $ | 832,058 | — | — | — | |||||||||||||||||
|
|
* | S1 – Sub1, S2 – Sub2 or RDF – Resubmission of Disallowed Filing |
** | I – Immaterial or M – Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
The Company reports an investment in the following insurance SCAs for which the reported statutory equity reflects a departure from NAIC SAP. Each of the insurance SCAs listed in the table below reflects an admitted asset, equal to the value of the letter of credit provided by an unaffiliated company, whereas this would not be an admitted asset recognized by SSAP No. 4, Assets and Non Admitted Assets.
LIICA Re II, Inc. | Excess of loss reinsurance asset | |||
Pine Falls Re (PFRe) | Letter of credit | |||
MLIC Re I, Inc. (MLIC Re) | Letter of credit |
94
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has two Limited Purpose Subsidiaries (LPS) with prescribed practices whereby under Iowa Administrative Code 191-99.11(3), the LPS are entitled to admit the following assets that would not be admissible under the NAIC SAP:
TLIC Oakbrook Reinsurance, Inc. (TORI) | Credit linked note | |||
TLIC Watertree Reinsurance, Inc. (TWRI) | Excess of loss reinsurance asset |
The monetary effect on net income and surplus as a result of using an accounting practice that differed from NAIC SAP, the amount of the investment in the insurance SCA per reported statutory equity, and amount of the investment if the insurance SCA has completed statutory financial statements in accordance with the NAIC SAP. The SCAs are valued in the Company’s financial statements at zero in accordance with SSAP No. 97.
Monetary Effect on NAIC SAP | Amount of Investment | |||||||||||||||
SCA Entity |
Net Income Increase (Decrease) |
Surplus Increase (Decrease) |
Per Reported Statutory Equity |
If the Insurance SCA Had Completed Statutory Financial Statements* |
||||||||||||
LIICA Re II** |
$ | — | $ | (2,298,765 | ) | $ | — | $ | — | |||||||
Pine Falls Re** |
— | (1,100,000 | ) | — | — | |||||||||||
MLIC Re** |
— | (770,000 | ) | — | — | |||||||||||
TLIC Oakbrook Reinsurance, Inc. |
— | (3,383,614 | ) | 1,238,107 | — | |||||||||||
TLIC Watertree Reinsurance, Inc. |
— | (858,258 | ) | 544,597 | — |
* | Per AP&P Manual (without permitted or prescribed practices) |
** | The SCA is valued at zero in the Company’s financial statements |
Had the above SCA entities not been permitted to recognize the letters of credit, excess of loss reinsurance assets, or the credit linked note as admitted assets in the financial statements, the risk-based capital would have been below the mandatory control level which would have triggered a regulatory event.
Information regarding the Company’s affiliated reinsurance transactions is available in Note 8. Reinsurance.
Information regarding the Company’s affiliated guarantees is available in Note 14. Commitments and Contingencies.
14. Commitments and Contingencies
At December 31, 2019 and 2018, the Company has mortgage loan commitments of $177,098 and $238,370, respectively.
The Company has contingent commitments of $732,478 and $718,870 as of December 31, 2019 and 2018, respectively, to provide additional funding for various joint ventures, partnerships, and limited liability companies, which includes LIHTC commitments of $26,728 and $55,107, respectively.
95
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company leases office buildings and equipment under various non-cancelable operating lease agreements. Rental expense for the years 2019 and 2018 was $12,478 and $11,086, respectively.
Private placement commitments outstanding as of December 31, 2019 and 2018 were $81,493 and $78,516, respectively.
The Company sold $101,473 and $1,658 of “to-be-announced” (TBA) securities as of December 31, 2019 and 2018, respectively. Due to different counterparties, the receivable related to these TBAs was not reclassed.
The Company may pledge cash as collateral for derivative transactions. When cash is pledged as collateral, it is derecognized and a receivable is recorded to reflect the eventual return of that cash by the counterparty. The amount of cash collateral pledged by the Company as of December 31, 2019 and 2018, respectively, was $80,993 and $6,782.
At December 31, 2019 and 2018, securities in the amount of $46,975 and $254,930, respectively, were posted to the Company as collateral from derivative counterparties. The securities were not included on the Company’s balance sheets as the Company does not have the ability to sell or repledge the collateral.
The Company has provided back-stop guarantees for the performance of non-insurance affiliates or subsidiaries that are involved in the guaranteed sale of investments in low-income housing tax credit partnerships. The nature of the obligation is to provide third party investors with a minimum guaranteed annual and cumulative return on their contributed capital which is based on tax credits and tax losses generated from the low income housing tax credit partnerships. Guarantee payments arise if low income housing tax credit partnerships experience unexpected significant decreases in tax credits and tax losses or there are compliance issues with the partnerships. A significant portion of the remaining term of the guarantees is between 13-18 years. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Company’s financial statements as a decrease in net investment income. No payments are required as of December 31, 2019. The current assessment of risk of making payments under these guarantees is remote.
The Company has guaranteed to the Monetary Authority of Singapore (MAS) that it will provide adequate funds to make up for any liquidity shortfall in its wholly-owned foreign life insurance subsidiary, Transamerica Life Bermuda LTD (TLB) (Singapore Branch), and continue to meet, pay and settle all present and future obligations of TLB. As of December 31, 2019, there is no payment or performance risk because TLB has adequate liquidity as of this date.
The Company has guaranteed to the Hong Kong Insurance Authority that it will provide the financial support to TLB for maintaining TLB’s solvency at all times so as to enable TLB to promptly meet its obligations and liabilities. If at any time the value of TLB’s assets do not exceed its liabilities by the prevailing acceptable level of solvency, the Company will increase the
96
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
paid up share capital of TLB or provide financial assistance to TLB to maintain the acceptable level of solvency. An acceptable level of solvency is net assets at one hundred and fifty percent of the required margin of solvency as stipulated under the Insurance Companies (Margin of Solvency) Regulation. As of December 31, 2019, there is no payment or performance risk because TLB is able to meet its obligations and has assets in excess of its liabilities by the prevailing level of solvency as of this date.
The Company has guaranteed that TLB will (1) maintain tangible net worth of at least equal to the greater of 165% of Standard & Poor’s Risk-Based Capital and the minimum required by regulatory authorities in all jurisdictions in which TLB operates, (2) have, at all times, sufficient cash to pay all contractual obligations in a timely manner and (3) have a maximum operating leverage ratio of 20 times. TLIC can terminate this agreement upon thirty days written notice, but not until TLB attains a rating from Standard & Poor’s the same as without the support from this agreement, or the entire book of TLB business is transferred provided that it is transferred to an entity with a rating from S&P that is the same as or better than TLIC’s then current rating or AA, whichever is lower. As of December 31, 2019, there is no payment or performance risk because TLB has adequate tangible net worth, sufficient cash to meet its obligations and an operating leverage ratio not in excess of 20 times as of this date.
The Company is not able to estimate the financial statement impact or the maximum potential amount of future payments it could be required to make under these three guarantees as they are considered to be unlimited under the provisions of SSAP No. 5R.
The Company has provided a guarantee to TLB’s (Singapore Branch) policyholders. If TLB fails to pay a valid claim solely by reason of it becoming insolvent as defined by Bermuda law, then the Company shall pay directly to the policy owner or named beneficiary the amount of the valid claim. At December 31, 2019 and 2018, TLB holds related statutory-basis policy and claim reserves of $2,334,649 and $2,212,527, respectively, which would be the maximum potential amount of future payments the Company could be required to make under this guarantee. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Company’s financial statements as an increase to incurred claims. As of December 31, 2019, there is no payment or performance risk because TLB is not insolvent as of this date.
The Company has provided a guarantee to TLB’s (Hong Kong Branch) policyholders. If TLB fails to pay a valid claim solely by reason of it becoming insolvent as defined by Bermuda law, then the Company shall pay directly to the policy owner or named beneficiary the amount of the valid claim. At December 31, 2019 and 2018, TLB policies covered by this guarantee would have resulted in US statutory policy and claim reserves of $3,585,273 and $3,458,012, respectively, which would represent a fair measure of the maximum potential amount of future payments the Company under this guarantee based on the US statutory reserve requirements. TLB is a subsidiary of the Company and TLB has invested assets supporting these policies which mitigates this risk. In the event the Company is required to make a payment under this guarantee, the payment would be reflected in the Company’s financial statements as an increase to incurred claims. As of December 31, 2019, there is no payment or performance risk because TLB is not insolvent as of this date.
97
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company did not recognize a liability for any of the TLB guarantees due to the adoption of SSAP No. 5R, as a liability is not required for guarantees to or on behalf of a wholly-owned subsidiary. Management monitors TLB’s financial condition, and there are no indications that TLB will become insolvent. As such, management feels the risk of payment under these guarantees on behalf of TLB is remote.
The Company is a party to a fee agreement with TLB whereby the Company continues to provide the guarantees with respect to TLB described in the paragraphs above. The Company received $577 and $587 under this agreement in 2019 and 2018, respectively.
The Company has provided guarantees for the obligations of noninsurance affiliates who have accepted assignments of structured settlement payment obligations from other insurers and purchase structured settlement insurance policies from subsidiaries of the Company that match those obligations. The guarantees made by the Company are specific to each structured settlement contract and vary in date and duration of the obligation. These are numerous and are backed by the reserves established by the Company to represent the present value of the future payments for those contracts. The direct statutory reserve established at December 31, 2019 and 2018 for the total payout block is $3,154,349 and $3,235,571, respectively. As this reserve is already recorded on the balance sheets of the Company, there was no additional liability recorded due to the adoption of SSAP No. 5R.
During 2019, the Company entered into an agreement with Aegon USA Realty Advisors, LLC to commit to purchase certain tax credit investments up to a maximum of $100,000. Under the terms of the agreement, the Company provides certain commitments to purchase tax credit investments that are part of tax credit funds in the event certain conditions are met. The Company did not acquire any tax credit investments during 2019 under this agreement. As of December 31, 2019, the commit to purchase amount is $47,890.
The following table provides an aggregate compilation of guarantee obligations as of December 31, 2019 and 2018:
December 31 | ||||||||
2019 | 2018 | |||||||
Aggregate maximum potential of future payments of all guarantees (undiscounted) |
$ | 5,919,933 | $ | 5,670,570 | ||||
|
|
|
|
|||||
Current liability recognized in financial statements: |
||||||||
Noncontingent liabilities |
— | — | ||||||
|
|
|
|
|||||
Contingent liabilities |
— | — | ||||||
|
|
|
|
|||||
Ultimate financial statement impact if action required: |
||||||||
Incurred claims |
5,919,922 | 5,670,539 | ||||||
Other |
11 | 31 | ||||||
|
|
|
|
|||||
Total impact if action required |
$ | 5,919,933 | $ | 5,670,570 | ||||
|
|
|
|
98
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company is a member of the FHLB of Des Moines. Through its membership, the Company has conducted business activity (borrowings) with the FHLB. It is part of the Company’s strategy to utilize these funds for asset and liability management and spread lending purposes. The Company has determined the actual/estimated long-term maximum borrowing capacity as $3,472,120. The Company calculated this amount in accordance with the terms and conditions of agreement with FHLB of Des Moines.
At December 31, 2019 and 2018, the Company purchased/owned the following FHLB stock as part of the agreement:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Membership Stock: |
||||||||
Class A |
$ | — | $ | — | ||||
Class B |
10,000 | 10,000 | ||||||
Activity Stock |
32,800 | 123,400 | ||||||
Excess Stock |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | 42,800 | $ | 133,400 | ||||
|
|
|
|
At December 31, 2019 and 2018, Membership Stock (Class A and B) Eligible for Redemption and the anticipated timeframe for redemption was as follows:
Less Than 6 Months |
6 Months to Less Than 1 Year |
1 to Less Than 3 Years |
3 to 5 Years |
|||||||||||||
Membership Stock |
||||||||||||||||
Class A |
$ | — | $ | — | $ | — | $ | — | ||||||||
Class B |
— | — | — | 10,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | — | $ | 10,000 | ||||||||
|
|
|
|
|
|
|
|
Less Than 6 Months |
6 Months to Less Than 1 Year |
1 to Less Than 3 Years |
3 to 5 Years |
|||||||||||||
Membership Stock |
||||||||||||||||
Class A |
$ | — | $ | — | $ | — | $ | — | ||||||||
Class B |
— | — | — | 10,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | — | $ | 10,000 | ||||||||
|
|
|
|
|
|
|
|
99
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, the amount of collateral pledged and the maximum amount pledged to the FHLB was as follows:
Fair Value | Carry Value | |||||||
Total Collateral Pledged |
$ | 1,334,507 | $ | 1,259,059 | ||||
Maximum Collateral Pledged |
4,031,902 | 4,029,873 |
Fair Value | Carry Value | |||||||
Total Collateral Pledged |
$ | 4,379,240 | $ | 4,405,503 | ||||
Maximum Collateral Pledged |
5,176,835 | 5,131,250 |
At December 31, 2019 and 2018, the borrowings from the FHLB were as follows:
December 31, 2019 | December 31, 2018 | |||||||||||||||
General Account |
Funding Agreements Reserves Established |
General Account |
Funding Agreements Reserves Established |
|||||||||||||
Debt1 |
$ | 820,000 | $ | — | $ | 2,820,000 | $ | — | ||||||||
Funding agreements2 |
— | — | 265,000 | 266,742 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 820,000 | $ | — | $ | 3,085,000 | $ | 266,742 | ||||||||
|
|
|
|
|
|
|
|
1 The maximum amount of borrowing during 2019 was $2,695,000
2 The maximum amount of borrowing during 2019 was $0
As of December 31, 2019, the weighted average interest rate on FHLB advances was 2.183% with a weighted average term of 2.3 years. As of December 31, 2018, the weighted average interest rate on FHLB advances was 2.602% with a weighted average term of 4.3 years.
At December 31, 2019, the borrowings from the FHLB were not subject to prepayment penalties.
The Company has issued synthetic GIC contracts to benefit plan sponsors totaling $1,953,828 and $1,905,244 as of December 31, 2019 and 2018, respectively. A synthetic GIC is an off-balance sheet fee-based product sold primarily to tax qualified plans, where the plan sponsor retains ownership and control of the related plan assets and the Company provides book value benefit responsiveness to qualified participant withdrawals, in the event withdrawals requested exceeds plan cash flows. In certain contracts, the Company agrees to make advances to meet benefit withdrawal needs and earns a market interest rate on these advances. A periodically adjusted contract-crediting rate is a means by which investment and benefit responsiveness experience is passed through to participants. In return for the book value benefit responsiveness guarantee, the Company receives a premium that varies based on such elements as benefit responsiveness exposure and contract size. The Company underwrites the plans for the possibility of having to make benefit payments and also must agree to the investment guidelines ensuring the appropriate credit quality and cash flow. Funding requirements to date have been minimal and management does not anticipate any future material funding requirements to have a material impact on the reported financial results. In compliance with statutory guidelines, no reserves were recorded at December 31, 2019.
100
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company is party to legal proceedings involving a variety of issues incidental to its business, including class action lawsuits. Lawsuits may be brought in any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Company’s legal proceedings are subject to many variables, and given their complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes includes substantial demands for compensatory and punitive damages, and injunctive relief, damages arising from such demands are typically not to be material to the Company’s financial position.
The Company has been named in class actions and individual lawsuits relating to increases in monthly deduction rates (MDR) on universal life products. The Company continues to defend against various lawsuits initiated by opt outs of one federal class action filed in the Central District of California that was settled in 2018 and approved in 2019. While the settlement has been administered for participating class members, the Company continues to hold a provision for opt out policyholder litigation. The Company also continues to defend other class actions and individual actions relating to MDR increases on different blocks of universal life insurance policies.
The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Company’s balance sheets. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for financial reporting purposes. The Company has established a reserve of $7,066 and $7,893 and an offsetting premium tax benefit $5,402 and $6,198 at December 31, 2019 and 2018, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund (benefit) expense was $2,296, $400 and $216, for the years ended December 31, 2019, 2018 and 2017, respectively.
15. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities
The Company is party to municipal repurchase agreements which were established via bilateral trades and accounted for as secured borrowings. For municipal repurchase agreements, the Company rigorously manages asset/liability risks via an integrated risk management framework. The Company’s liquidity position is monitored constantly, and factors heavily in the management of the asset portfolio. Projections comparing liquidity needs to available resources in both adverse and routine scenarios are refreshed monthly. The results of these projections on time horizons ranging from 16 months to 24 months are the basis for the near-term liquidity planning. This liquidity model excludes new business (non applicable for the spread business), renewals and other sources of cash and assumes all liabilities are paid off on the earliest dates required. Interest rate risk is carefully managed, in part through rigorously defined and monitored derivatives programs.
101
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables provide information on the securities sold under the municipal repurchase agreements for four quarters of 2019 and 2018:
December 31, 2019 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 113,025 | |||||||||||
Fair Value |
$ | 218,538 | $ | 207,007 | $ | 231,989 | $ | 125,603 | ||||||||
Ending Balance |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 113,025 | |||||||||||
Fair Value |
$ | 170,891 | $ | 207,007 | $ | 231,989 | $ | 125,603 |
December 31, 2018 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 215,269 | |||||||||||
Fair Value |
$ | 171,138 | $ | 190,768 | $ | 225,811 | $ | 225,409 | ||||||||
Ending Balance |
||||||||||||||||
BACV |
XXX | XXX | XXX | $ | 205,405 | |||||||||||
Fair Value |
$ | 171,138 | $ | 188,120 | $ | 225,811 | $ | 217,575 |
2019 | 2018 | |||||||||||||||||||||||
NAIC 1 | NAIC 2 | Total | NAIC 1 | NAIC 2 | Total | |||||||||||||||||||
Bonds—BACV |
$ | 111,825 | $ | 1,200 | $ | 113,025 | $ | 193,398 | $ | 12,007 | $ | 205,405 | ||||||||||||
Bonds—FV |
124,403 | 1,200 | 125,603 | 205,526 | 12,049 | 217,575 |
These securities have maturity dates that range from 2020 to 2097.
102
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table provides information on the cash collateral received and liability to return collateral under the municipal repurchase agreements for four quarters of 2019 and 2018:
December 31, 2019 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
Cash |
$ | 125,952 | $ | 157,496 | $ | 174,120 | $ | 99,794 | ||||||||
Ending Balance (1) |
||||||||||||||||
Cash |
$ | 125,952 | $ | 154,345 | $ | 78,286 | $ | 97,858 |
(1) | The remaining collateral held was greater than 90 days from contractual maturity. |
December 31, 2018 | ||||||||||||||||
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
|||||||||||||
Maximum Amount |
||||||||||||||||
Cash |
$ | 122,018 | $ | 152,634 | $ | 167,228 | $ | 98,835 | ||||||||
Ending Balance |
||||||||||||||||
Cash |
$ | 121,892 | $ | 148,082 | $ | 78,013 | $ | 95,515 |
The Company enters into dollar repurchase agreements in which securities are delivered to the counterparty once adequate collateral has been received. At December 31, 2019 and 2018, the Company had dollar repurchase agreements outstanding in the amount of $450,208 and $215,483, respectively, which is included in borrowed money on the balance sheets. Those amounts include accrued interest of $1,379 and $1,125, at December 31, 2019 and 2018, respectively. At December 31, 2019, securities with a book value of $550,333 and a fair value of $551,504 were subject to dollar repurchase agreements. These securities have maturity dates that range from October 1, 2034 to October 1, 2049. At December 31, 2018, securities with a book value of $371,260 and a fair value of $368,256 were subject to dollar repurchase agreements. The Company does not have the legal right to recall or substitute the underlying assets prior to the transaction’s scheduled termination. Upon scheduled termination, the counterparty is obligated to return substantially similar assets.
The contractual maturities of the dollar repurchase agreement positions are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 448,829 | $ | 214,357 | ||||
|
|
|
|
|||||
Total |
448,829 | 214,357 | ||||||
Securities received |
— | — | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 448,829 | $ | 214,357 | ||||
|
|
|
|
103
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
In the course of the Company’s asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Company’s yield on its investment portfolio. The details by NAIC designation 3 or below of securities sold during 2019 and reacquired within 30 days of the sale date are:
Number of Transactions | Book Value of Securities Sold |
Cost of Securities Repurchased |
Gains (Losses) | |||||||||||||
Common stocks |
6 | $ | 26 | $ | 12 | $ | 17 |
16. Reconciliation to Statutory Statement
The following is a reconciliation of amounts previously reported to the Iowa Department of Financial Regulation in the 2019 Annual Statement, to those reported in the accompanying statutory-basis financial statements:
December 31 | ||||||||
2019 | 2018 | |||||||
Balance Sheets |
||||||||
Total assets as reported in the Company’s Annual Statement |
$ | 130,191,350 | $ | 124,175,952 | ||||
Increase in other assets |
23,416 | — | ||||||
Increase in net deferred income tax asset |
8,660 | — | ||||||
|
|
|
|
|||||
Total assets as reported in the accompanying audited statutory basis balance sheet |
$ | 130,223,426 | $ | 124,175,952 | ||||
|
|
|
|
|||||
Total liabilities as reported in the Company’s Annual Statement |
$ | 123,630,600 | $ | 117,898,517 | ||||
Increase in other liabilities |
23,416 | — | ||||||
Increase in aggregate reserves for policies and contracts |
41,240 | — | ||||||
|
|
|
|
|||||
Total liabilities as reported in the accompanying audited statutory basis balance sheet |
$ | 123,695,256 | $ | 117,898,517 | ||||
|
|
|
|
|||||
Total capital and surplus as reported in the Company’s Annual Statement |
$ | 6,560,750 | $ | 6,277,435 | ||||
Decrease in premiums |
— | (14,950 | ) | |||||
Increase in change in aggregate reserves |
(41,240 | ) | — | |||||
Increase in change in net deferred income tax asset |
8,660 | — | ||||||
Increase in other changes—net |
— | 14,950 | ||||||
|
|
|
|
|||||
Total capital and surplus as reported in the accompanying audited statutory basis balance sheet |
$ | 6,528,170 | $ | 6,277,435 | ||||
|
|
|
|
|||||
Statements of Operations |
||||||||
Statutory net income as reported in the Company’s Annual Statement |
$ | 3,335,262 | $ | (1,408,868 | ) | |||
Decrease in premiums and other considerations |
(653,203 | ) | (635,470 | ) | ||||
Decrease in fee revenue and other income |
— | (5,700 | ) | |||||
Decrease in surrender benefits |
653,203 | 618,170 | ||||||
Increase in change in aggregate reserves |
(41,240 | ) | — | |||||
Increase in federal income tax (benefit) expense |
— | (8,050 | ) | |||||
|
|
|
|
|||||
Total net income as reported in the accompanying audited statutory basis statement of operations |
$ | 3,294,022 | $ | (1,423,818 | ) | |||
|
|
|
|
The reconciling differences to the Annual Statement is driven by Management’s decision to revise prior year amounts. Please refer to Revision to Prior Years in Note 3 for further details.
104
Transamerica Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Other adjustments relate to actuarial modeling errors and reclassification errors. The Company considered the impacts of each of these errors to be not material both individually and in the aggregate and concluded that none were significant for individual categorization herein.
The financial statements are adjusted to reflect events that occurred between the balance sheets date and the date when the financial statements are available to be issued, provided they give evidence of conditions that existed at the balance sheets date (Type I). The Company has not identified any Type I subsequent events for the year ended December 31, 2019 through April 27, 2020.
Events that are indicative of conditions that arose after the balance sheets date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II). The Company has identified Type II subsequent events for the year ended December 31, 2019.
Since January 2020, the Coronavirus disease (COVID-19) outbreak is causing disruption to business, markets, and industry. The Company is continuously monitoring the market, and the economic factors that impact the Company, to proactively manage the associated risks. At this point, management believes that the most significant risks the Company faces are related to financial markets (particularly credit, equity, and interest rates risks), and underwriting risks (particularly related to mortality, morbidity and policyholder behavior). As of the audit report release date, the Company continues to monitor and evaluate the impacts of the COVID-19 crisis on the Company’s 2020 results through the use of sensitivities and stress testing. While it is too early to provide long-term impacts, if any, management has determined the Company remains strongly capitalized with RBC remaining within target limits set by the capital management policy.
The Company is defending a class action lawsuit and individual lawsuits relating to increases in MDR on universal life products. A settlement announced in the class action lawsuit in early April 2020 will result in the establishment of an estimated $94,000 reserve, which will be reflected in the Company’s first quarter of 2020 results. If the settlement is ultimately approved by the court, the Company expects to fund the settlement in third or fourth quarter of 2020.
105
Transamerica Life Insurance Company
Appendix A – Listing of Affiliated Companies
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |||
Transamerica Corporation |
42-1484983 | |||
Aegon Asset Management Services Inc |
39-1884868 | |||
Aegon Direct Marketing Services Inc |
42-1470697 | |||
Aegon Financial Services Group Inc |
41-1479568 | |||
Aegon Institutional Markets Inc |
61-1085329 | |||
Aegon Management Company |
35-1113520 | |||
Aegon USA Real Estate Services Inc |
61-1098396 | |||
Aegon USA Realty Advisors of CA |
20-5023693 | |||
AFSG Securities Corporation |
23-2421076 | |||
AUSA Properties Inc |
27-1275705 | |||
Commonwealth General Corporation |
51-0108922 | |||
Creditor Resources Inc |
42-1079584 | |||
CRI Solutions Inc |
52-1363611 | |||
Financial Planning Services Inc |
23-2130174 | |||
Garnet Assurance Corporation |
11-3674132 | |||
Garnet Assurance Corporation II |
14-1893533 | |||
Garnet Assurance Corporation III |
01-0947856 | |||
Intersecurities Ins Agency |
42-1517005 | |||
LIICA RE II |
20-5927773 | |||
Massachusetts Fidelity Trust |
42-0947998 | |||
MLIC RE I Inc |
01-0930908 | |||
Money Services Inc |
42-1079580 | |||
Monumental General Administrators Inc |
52-1243288 | |||
Pearl Holdings Inc I |
20-1063558 | |||
Pearl Holdings Inc II |
20-1063571 | |||
Pine Falls Re Inc |
26-1552330 | |||
Real Estate Alternatives Portfolio 3A Inc |
20-1627078 | |||
River Ridge Insurance Company |
20-0877184 | |||
Short Hills Management |
42-1338496 | |||
Stonebridge Benefit Services Inc |
75-2548428 | |||
Stonebridge Reinsurance Company |
61-1497252 | |||
TCF Asset Management Corp |
84-0642550 |
106
Transamerica Life Insurance Company
Appendix A – Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |||
TCFC Air Holdings Inc |
32-0092333 | |||
TCFC Asset Holdings Inc |
32-0092334 | |||
TLIC Oakbrook Reinsurance Inc. |
47-1026613 | |||
TLIC Riverwood Reinsurance Inc |
45-3193055 | |||
TLIC Watertree Reinsurance, Inc. |
81-3715574 | |||
Tranasmerica Advisors Life Insurance Company |
91-1325756 | |||
Transamerica Accounts Holding Corp |
36-4162154 | |||
Transamerica Affinity Services Inc |
42-1523438 | |||
Transamerica Affordable Housing Inc |
94-3252196 | |||
Transamerica Agency Network Inc |
61-1513662 | |||
Transamerica Asset Management |
59-3403585 | |||
Transamerica Capital Inc |
95-3141953 | |||
Transamerica Casualty Insurance Company |
31-4423946 | |||
Transamerica Commercial Finance Corp I |
94-3054228 | |||
Transamerica Consumer Finance Holding Company |
95-4631538 | |||
Transamerica Corporation (OREGON) |
98-6021219 | |||
Transamerica Distribution Finance Overseas Inc |
36-4254366 | |||
Transamerica Finance Corporation |
95-1077235 | |||
Transamerica Financial Advisors |
59-2476008 | |||
Transamerica Financial Life Insurance Company |
36-6071399 | |||
Transamerica Fund Services Inc |
59-3403587 | |||
Transamerica Home Loan |
95-4390993 | |||
Transamerica International Re (Bermuda) Ltd |
98-0199561 | |||
Transamerica Investors Securities Corp |
13-3696753 | |||
Transamerica Leasing Holdings Inc |
13-3452993 | |||
Transamerica Life Insurance Company |
39-0989781 | |||
Transamerica Pacific Insurance Co Ltd |
94-3304740 | |||
Transamerica Premier Life Insurance Company |
52-0419790 | |||
Transamerica Resources Inc |
52-1525601 | |||
Transamerica Small Business Capital Inc |
36-4251204 | |||
Transamerica Stable Value Solutions Inc |
27-0648897 | |||
Transamerica Vendor Financial Services Corporation |
36-4134790 |
107
Transamerica Life Insurance Company
Appendix A – Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |||
United Financial Services Inc |
52-1263786 | |||
WFG China Holdings Inc |
20-2541057 | |||
World Fin Group Ins Agency of Massachusetts Inc |
04-3182849 | |||
World Financial Group Inc |
42-1518386 | |||
World Financial Group Ins Agency of Hawaii Inc |
99-0277127 | |||
World Financial Group Insurance Agency of WY Inc |
42-1519076 | |||
World Financial Group Insurance Agency |
95-3809372 | |||
Zahorik Company Inc |
95-2775959 | |||
Zero Beta Fund LLC |
26-1298094 |
108
Statutory-Basis Financial
Statement Schedules
109
Transamerica Life Insurance Company
Summary of Investments – Other Than
Investments in Related Parties
(Dollars in Thousands)
SCHEDULE I
Type of Investment |
Cost (1) | Fair Value | Amount at Which Shown in the Balance Sheet (2) |
|||||||||
Fixed maturities |
||||||||||||
Bonds: |
||||||||||||
United States government and government agencies and authorities |
$ | 4,124,054 | $ | 5,081,559 | $ | 4,306,199 | ||||||
States, municipalities and political subdivisions |
1,315,704 | 1,407,331 | 1,315,705 | |||||||||
Foreign governments |
349,796 | 369,821 | 349,796 | |||||||||
Hybrid securities |
396,942 | 440,640 | 396,942 | |||||||||
All other corporate bonds |
19,066,967 | 21,344,844 | 19,043,825 | |||||||||
Preferred stocks |
115,659 | 109,845 | 111,630 | |||||||||
|
|
|
|
|
|
|||||||
Total fixed maturities |
25,369,122 | 28,754,040 | 25,524,097 | |||||||||
Equity securities |
||||||||||||
Common stocks: |
||||||||||||
Industrial, miscellaneous and all other |
58,311 | 80,789 | 80,789 | |||||||||
|
|
|
|
|
|
|||||||
Total equity securities |
58,311 | 80,789 | 80,789 | |||||||||
Mortgage loans on real estate |
5,096,613 | 5,096,613 | ||||||||||
Real estate |
51,546 | 51,546 | ||||||||||
Policy loans |
1,099,596 | 1,099,596 | ||||||||||
Other long-term investments |
1,072,720 | 1,072,720 | ||||||||||
Receivable for securities |
18,535 | 18,535 | ||||||||||
Securities lending |
1,246,827 | 1,246,827 | ||||||||||
Cash, cash equivalents and short-term investments |
1,453,503 | 1,453,503 | ||||||||||
|
|
|
|
|||||||||
Total investments |
$ | 35,466,773 | $ | 35,644,226 | ||||||||
|
|
|
|
(1) | Equity securities are reported at original cost. Fixed maturities are reported at original cost reduced by repayments and adjusted for amortization of premiums and accrual of discounts. |
(2) | United States government and corporate bonds of $19,690 are held at fair value rather than amortized cost due to having an NAIC 6 rating. Two preferred stock securities are held at fair value of $1,037 due to having an NAIC 4 and 5 ratings. |
110
Transamerica Life Insurance Company
Supplementary Insurance Information
(Dollars in Thousands)
SCHEDULE III
Future Policy Benefits and Expenses |
Unearned Premiums |
Policy and Contract Liabilities |
Premium Revenue |
Net Investment Income* |
Benefits, Claims Losses and Settlement Expenses |
Other Operating Expenses* |
||||||||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||||||||||
Individual life |
$ | 10,421,944 | $ | — | $ | 341,604 | $ | 1,006,977 | $ | 642,673 | $ | 1,171,877 | $ | 422,774 | ||||||||||||||
Individual health |
80,537 | 92,813 | 27,401 | 100,145 | 10,837 | 55,956 | 229,548 | |||||||||||||||||||||
Group life and health |
1,527,571 | 20,356 | 76,891 | 595,324 | 94,785 | 202,901 | 212,660 | |||||||||||||||||||||
Annuity |
14,094,715 | — | 33,330 | 10,443,660 | 896,030 | 13,853,202 | (2,991,668 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 26,124,767 | $ | 113,169 | $ | 479,226 | $ | 12,146,106 | $ | 1,644,325 | $ | 15,283,936 | $ | (2,126,686 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||||||||||
Individual life |
$ | 11,337,912 | $ | — | $ | 378,855 | $ | 87,370 | $ | 746,129 | $ | 1,605,665 | $ | 803,671 | ||||||||||||||
Individual health |
86,822 | 92,364 | 30,578 | 106,230 | 25,370 | 65,813 | 193,680 | |||||||||||||||||||||
Group life and health |
1,512,345 | 21,075 | 81,403 | 638,938 | 95,911 | 306,199 | 276,705 | |||||||||||||||||||||
Annuity |
14,244,431 | — | 37,065 | 9,980,980 | 658,084 | 16,182,017 | (3,230,310 | ) | ||||||||||||||||||||
Other |
— | — | — | — | 141,678 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 27,181,510 | $ | 113,439 | $ | 527,901 | $ | 10,813,518 | $ | 1,667,172 | $ | 18,159,694 | $ | (1,956,254 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||||||||||
Individual life |
$ | 10,967,747 | $ | — | $ | 279,234 | $ | (7,804,573 | ) | $ | (1,001,846 | ) | $ | (1,700,459 | ) | $ | 519,906 | |||||||||||
Individual health |
100,420 | 91,784 | 27,176 | (1,489,124 | ) | 1,344,780 | (4,084,846 | ) | (885,516 | ) | ||||||||||||||||||
Group life and health |
1,528,445 | 23,229 | 100,510 | 508,023 | 238,217 | (36,386 | ) | 186,023 | ||||||||||||||||||||
Annuity |
14,355,269 | — | 27,887 | 5,271,506 | 1,497,683 | 9,199,357 | (2,544,778 | ) | ||||||||||||||||||||
Other |
— | — | — | — | 437,448 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 26,951,881 | $ | 115,013 | $ | 434,807 | $ | (3,514,168 | ) | $ | 2,516,282 | $ | 3,377,666 | $ | (2,724,365 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied. |
111
Transamerica Life Insurance Company
(Dollars in Thousands)
SCHEDULE IV
Gross Amount | Ceded to Other Companies |
Assumed From Other Companies |
Net Amount | Percentage of Amount Assumed to Net |
||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||
Life insurance in force |
$ | 503,852,244 | $ | 774,726,771 | $ | 421,298,647 | $ | 150,424,120 | 280 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 2,582,854 | $ | 2,821,951 | $ | 1,246,074 | $ | 1,006,977 | 124 | % | ||||||||||
Individual health |
529,850 | 432,873 | 3,168 | 100,145 | 3 | % | ||||||||||||||
Group life and health |
704,156 | 109,598 | 766 | 595,324 | 0 | % | ||||||||||||||
Annuity |
10,756,542 | 394,566 | 81,684 | 10,443,660 | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 14,573,402 | $ | 3,758,988 | $ | 1,331,692 | $ | 12,146,106 | 11 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||
Life insurance in force |
$ | 976,929,481 | $ | 831,268,672 | $ | 1,204 | $ | 145,662,013 | 0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 2,460,547 | $ | 3,668,683 | $ | 1,295,506 | $ | 87,370 | 1483 | % | ||||||||||
Individual health |
532,131 | 429,165 | 3,264 | 106,230 | 3 | % | ||||||||||||||
Group life and health |
753,426 | 131,816 | 17,328 | 638,938 | 3 | % | ||||||||||||||
Annuity |
10,102,616 | 199,520 | 77,884 | 9,980,980 | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 13,848,720 | $ | 4,429,184 | $ | 1,393,982 | $ | 10,813,518 | 13 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||
Life insurance in force |
$ | 537,551,597 | $ | 887,853,357 | $ | 484,570,357 | $ | 134,268,597 | 361 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 2,452,523 | $ | 11,837,526 | $ | 1,580,429 | $ | (7,804,574 | ) | -20 | % | |||||||||
Individual health |
530,052 | 2,022,968 | 3,792 | (1,489,124 | ) | 0 | % | |||||||||||||
Group life and health |
802,090 | 321,533 | 27,466 | 508,023 | 5 | % | ||||||||||||||
Annuity |
9,424,428 | 4,218,194 | 65,273 | 5,271,507 | 1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 13,209,093 | $ | 18,400,221 | $ | 1,676,960 | $ | (3,514,168 | ) | -48 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
112
18. Subsequent Events (Unaudited)
Additional subsequent events have been evaluated for disclosure through September 28, 2020.
On May 15, 2020, TPLIC paid a dividend to its parent company, CGC, in the amount of $700,000. CGC then contributed this amount to TLIC. The dividend and contribution included $76,604 in cash and $623,396 in securities.
On June 30, 2020, the Company received $96,035 from TFLIC as consideration for TFLIC’s repurchase of its remaining 1,254 common stock shares held by the Company. The shares were redeemed at par of $125 per share with total par value of $157 and paid-in surplus of $95,878.
On June 30, 2020, the Company, Transamerica Pacific Re, Inc. (TPRe), a newly formed AXXX captive and affiliate, and TPIC entered into a novation agreement whereby the Company consented to the assignment, transfer and novation of TPIC’s obligations under the TLIC/TPIC universal life coinsurance agreements to TPRe. The novation resulted in no gain or loss. The Company then entered into a recapture agreement with TPRe to recapture universal life insurance risks for consideration of $2,124,341 equal to the statutory reserves recaptured resulting in no gain or loss. With approval from the IID, subsequent to the novation and the recapture on June 30, 2020, the Company and TPRe amended the agreements whereby the secondary guarantee is retained by TPRe.
Effective July 1, 2020, the Company entered into a reinsurance agreement with Wilton Reassurance Company to novate corporate owned life insurance policies previously issued by the company to TPLIC. The company novated $173,052 of reserves and claim reserves and paid a ceding commission of $7,400. The transaction resulted in a pre-tax loss of $7,400 which has been included in the Statements of Operations.
Effective October 1, 2020, the Company will merger with TPLIC, an Iowa domiciled affiliate, and MLIC Re, a Vermont domiciled affiliate, with the Company emerging as the surviving entity per the Plan of Merger which was approved by the Iowa Insurance Department and the Department of Financial Regulation of Vermont.
113
FINANCIAL STATEMENTS – STATUTORY BASIS
AND SUPPLEMENTARY INFORMATION
Transamerica Premier Life Insurance Company
Years Ended December 31, 2019, 2018 and 2017
Transamerica Premier Life Insurance Company
Financial Statements – Statutory Basis
and Supplementary Information
Years Ended December 31, 2019, 2018 and 2017
1 | ||||
Audited Financial Statements |
||||
3 | ||||
4 | ||||
Statements of Changes in Capital and Surplus – Statutory Basis |
5 | |||
7 | ||||
Notes to Financial Statements – Statutory Basis |
||||
9 | ||||
2. Basis of Presentation and Summary of Significant Accounting Policies |
9 | |||
22 | ||||
22 | ||||
31 | ||||
6. Premium and Annuity Considerations Deferred and Uncollected |
49 | |||
50 | ||||
63 | ||||
66 | ||||
73 | ||||
75 | ||||
76 | ||||
77 | ||||
84 | ||||
84 | ||||
16. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities |
88 | |||
89 | ||||
89 | ||||
91 | ||||
Statutory-Basis Financial Statement Schedules |
||||
Summary of Investments – Other Than Investments in Related Parties |
95 | |||
96 | ||||
97 |
2
Report of Independent Auditors
To the Board of Directors of
Transamerica Premier Life Insurance Company
We have audited the accompanying statutory-basis financial statements of Transamerica Premier Life Insurance Company (the “Company”), which comprise the balance sheets – statutory basis as of December 31, 2019 and 2018, and the related statements of operations – statutory basis, of changes in capital and surplus – statutory basis, and of cash flow – statutory basis for each of the three years in the period ended December 31, 2019.
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 Iowa Insurance Division. 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.
Auditors’ 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 Iowa Insurance Division, 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, 2019 and 2018 or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2019.
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 surplus of the Company as of December 31, 2019 and 2018 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in accordance with the accounting practices prescribed or permitted by the Iowa Insurance Division described in Note 2.
Other Matter
Our audit was conducted for the purpose of forming an opinion on the statutory basis financial statements taken as a whole. The Supplemental Schedule of Selected Statutory - Basis Financial Data, Supplemental Schedule of Investment Risks Interrogatories – Statutory Basis, and Summary Investment Schedule – Statutory Basis (collectively, the “supplemental schedules”) of the Company as of December 31, 2019 and for the year then ended are presented to comply with the National Association of Insurance Commissioners’ Annual Statement Instructions and Accounting Practices and Procedures Manual and for purposes of additional analysis and are not a required part of the statutory-basis financial statements. The supplemental schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the statutory-basis financial statements. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the statutory-basis financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the statutory-basis financial statements or to the statutory-basis financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental schedules are fairly stated, in all material respects, in relation to the statutory-basis financial statements taken as a whole.
Chicago, Illinois
2
Transamerica Premier Life Insurance Company
Balance Sheets – Statutory Basis
(Dollars in Thousands)
December 31 | ||||||||
2019 | 2018 | |||||||
Admitted assets |
||||||||
Cash, cash equivalents and short-term investments |
$ | 728,220 | $ | 902,074 | ||||
Bonds |
17,877,965 | 16,814,750 | ||||||
Preferred stocks |
4,955 | 9,958 | ||||||
Common stocks |
158,426 | 150,617 | ||||||
Mortgage loans on real estate |
2,737,109 | 2,436,202 | ||||||
Real estate |
187,639 | 217,646 | ||||||
Policy loans |
962,408 | 936,884 | ||||||
Securities lending reinvested collateral assets |
757,186 | 575,155 | ||||||
Derivatives |
25,531 | 34,933 | ||||||
Other invested assets |
1,039,664 | 808,423 | ||||||
|
|
|
|
|||||
Total cash and invested assets |
24,479,103 | 22,886,642 | ||||||
Accrued investment income |
226,564 | 219,256 | ||||||
Premiums deferred and uncollected |
151,139 | 176,727 | ||||||
Funds held by reinsurer |
524,067 | 453,319 | ||||||
Net deferred income tax asset |
231,249 | 238,949 | ||||||
Other assets |
396,237 | 365,474 | ||||||
Separate account assets |
26,508,334 | 23,296,139 | ||||||
|
|
|
|
|||||
Total admitted assets |
$ | 52,516,693 | $ | 47,636,506 | ||||
|
|
|
|
|||||
Liabilities and capital and surplus |
||||||||
Aggregate reserves for policies and contracts |
$ | 17,894,601 | $ | 16,965,724 | ||||
Policy and contract claim reserves |
463,716 | 434,245 | ||||||
Liability for deposit-type contracts |
356,309 | 584,693 | ||||||
Other policyholders’ funds |
9,790 | 11,304 | ||||||
Transfers from separate accounts due or accrued |
(26,478 | ) | (41,964 | ) | ||||
Funds held under reinsurance treaties |
641,858 | 689,145 | ||||||
Asset valuation reserve |
384,650 | 317,840 | ||||||
Interest maintenance reserve |
1,039,810 | 1,110,342 | ||||||
Derivatives |
81,072 | 61,290 | ||||||
Payable for collateral under securitites loaned and other transactions |
959,484 | 695,892 | ||||||
Borrowed money |
1,434,416 | 1,290,299 | ||||||
Other liabilities |
468,195 | 256,398 | ||||||
Separate account liabilities |
26,508,334 | 23,296,139 | ||||||
|
|
|
|
|||||
Total liabilities |
50,215,757 | 45,671,347 | ||||||
Capital and surplus |
||||||||
Common stock |
10,137 | 10,137 | ||||||
Preferred stock |
— | — | ||||||
Treasury stock |
— | — | ||||||
Surplus notes |
60,000 | 160,000 | ||||||
Paid-in surplus |
1,057,861 | 1,057,857 | ||||||
Special surplus funds |
1,334 | — | ||||||
Unassigned surplus |
1,171,604 | 737,165 | ||||||
|
|
|
|
|||||
Total capital and surplus |
2,300,936 | 1,965,159 | ||||||
|
|
|
|
|||||
Total liabilities and capital and surplus |
$ | 52,516,693 | $ | 47,636,506 | ||||
|
|
|
|
See accompanying notes.
3
Transamerica Premier Life Insurance Company
Statements of Operations – Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Revenues |
||||||||||||
Premiums and annuity considerations |
$ | 3,347,881 | $ | 3,550,022 | $ | 2,296,304 | ||||||
Net investment income |
1,094,859 | 1,050,408 | 879,492 | |||||||||
Commissions, expense allowances, and reserve adjustments on reinsurance ceded |
(170,748 | ) | (144,423 | ) | 239,322 | |||||||
Fee revenue and other income |
362,101 | 417,003 | 335,473 | |||||||||
|
|
|
|
|
|
|||||||
Total revenue |
4,634,093 | 4,873,010 | 3,750,591 | |||||||||
Benefits and expenses |
||||||||||||
Death benefits |
384,956 | 376,460 | 339,863 | |||||||||
Accident and health benefits |
831,058 | 828,511 | 1,049,960 | |||||||||
Annuity benefits |
318,391 | 258,654 | 289,541 | |||||||||
Surrender benefits |
1,939,577 | 1,176,594 | 1,071,731 | |||||||||
Other benefits |
60,302 | 67,143 | 68,312 | |||||||||
Net increase (decrease) in reserves |
961,715 | 790,001 | 3,400,067 | |||||||||
Commissions |
512,527 | 628,139 | 1,210,260 | |||||||||
Net transfers to (from) separate accounts |
(1,261,078 | ) | (332,080 | ) | (161,346 | ) | ||||||
Modified coinsurance reserve adjustment assumed |
(7,160 | ) | (13,365 | ) | (4,855,921 | ) | ||||||
IMR adjustment due to reinsurance |
— | — | 714,351 | |||||||||
General insurance expenses and other |
510,442 | 453,327 | 453,186 | |||||||||
|
|
|
|
|
|
|||||||
Total benefits and expenses |
4,250,730 | 4,233,384 | 3,580,004 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before dividends and federal income taxes |
383,363 | 639,626 | 170,587 | |||||||||
|
|
|
|
|
|
|||||||
Dividends to policyholders |
1,030 | 1,025 | 1,081 | |||||||||
|
|
|
|
|
|
|||||||
Gain (loss) from operations before federal income taxes |
382,333 | 638,601 | 169,506 | |||||||||
Federal income tax (benefit) expense |
39,259 | 30,372 | 903,151 | |||||||||
|
|
|
|
|
|
|||||||
Net gain (loss) from operations |
343,074 | 608,229 | (733,645 | ) | ||||||||
Net realized capital gains (losses), after tax and amounts transferred to interest maintenance reserve |
229,130 | (71,838 | ) | 411,452 | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
$ | 572,204 | $ | 536,391 | $ | (322,193 | ) | |||||
|
|
|
|
|
|
See accompanying notes.
4
Transamerica Premier Life Insurance Company
Statements of Changes in Capital and Surplus – Statutory Basis
(Dollars in Thousands)
Class A Common Stock |
Class B Common Stock |
Surplus Notes |
Paid-in Surplus |
Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
||||||||||||||||||||||
Balance at January 1, 2017 |
$ | 7,364 | $ | 2,773 | $ | 160,000 | $ | 710,131 | $ | 2,105 | $ | 795,304 | $ | 1,677,677 | ||||||||||||||
Net income (loss) |
— | — | — | — | — | (322,193 | ) | (322,193 | ) | |||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
— | — | — | — | — | (23,101 | ) | (23,101 | ) | |||||||||||||||||||
Change in net deferred income tax asset |
— | — | — | — | — | (39,231 | ) | (39,231 | ) | |||||||||||||||||||
Change in nonadmitted assets |
— | — | — | — | — | (16,230 | ) | (16,230 | ) | |||||||||||||||||||
Change in reserve on account of change in valuation basis |
— | — | — | — | — | 42,157 | 42,157 | |||||||||||||||||||||
Change in asset valuation reserve |
— | — | — | — | — | (64,645 | ) | (64,645 | ) | |||||||||||||||||||
Change in surplus as a result of reinsurance |
— | — | — | — | — | 322,858 | 322,858 | |||||||||||||||||||||
Dividends to stockholders |
— | — | — | — | — | (350,000 | ) | (350,000 | ) | |||||||||||||||||||
Capital Contribution |
— | — | — | 350,000 | — | — | 350,000 | |||||||||||||||||||||
Other changes - net |
— | — | (2,221 | ) | 1,580 | 2,416 | 1,775 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2017 |
7,364 | 2,773 | 160,000 | 1,057,910 | 3,685 | 347,335 | 1,579,067 | |||||||||||||||||||||
Net income (loss) |
— | — | — | — | — | 536,391 | 536,391 | |||||||||||||||||||||
Change in net unrealized capital gains/losses, net of taxes |
— | — | — | — | — | 36,958 | 36,958 | |||||||||||||||||||||
Change in net deferred income tax asset |
— | — | — | — | — | 7,833 | 7,833 | |||||||||||||||||||||
Change in nonadmitted assets |
— | — | — | — | — | 20,283 | 20,283 | |||||||||||||||||||||
Change in reserve on account of change in valuation basis |
— | — | — | — | — | (7,030 | ) | (7,030 | ) | |||||||||||||||||||
Change in asset valuation reserve |
— | — | — | — | — | (27,727 | ) | (27,727 | ) | |||||||||||||||||||
Change in surplus as a result of reinsurance |
— | — | — | — | — | (179,574 | ) | (179,574 | ) | |||||||||||||||||||
Other changes - net |
— | — | — | (53 | ) | (3,685 | ) | 2,696 | (1,042 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2018 |
$ | 7,364 | $ | 2,773 | $ | 160,000 | $ | 1,057,857 | $ | — | $ | 737,165 | $ | 1,965,159 | ||||||||||||||
|
|
|
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5
Transamerica Premier Life Insurance Company
Statements of Changes in Capital and Surplus – Statutory Basis (continued)
(Dollars in Thousands)
Class A Common Stock |
Class B Common Stock |
Surplus Notes |
Paid-in Surplus |
Special Surplus Funds |
Unassigned Surplus |
Total Capital and Surplus |
||||||||||||||||||||||
Balance at December 31, 2018 |
$ | 7,364 | $ | 2,773 | $ | 160,000 | $ | 1,057,857 | $ | — | $ | 737,165 | $ | 1,965,159 | ||||||||||||||
Net income (loss) |
— | — | — | — | — | 572,204 | 572,204 | |||||||||||||||||||||
Change in net unrealized capital gains/losses, net of tax |
— | — | — | — | — | 51,698 | 51,698 | |||||||||||||||||||||
Change in net deferred income tax asset |
— | — | — | — | — | 10,084 | 10,084 | |||||||||||||||||||||
Change in nonadmitted assets |
— | — | — | — | — | 14,015 | 14,015 | |||||||||||||||||||||
Change in reserve on account of change in valuation basis |
— | — | — | — | — | 30,452 | 30,452 | |||||||||||||||||||||
Change in asset valuation reserve |
— | — | — | — | — | (66,810 | ) | (66,810 | ) | |||||||||||||||||||
Change in surplus as a result of reinsurance |
— | — | — | — | — | (181,854 | ) | (181,854 | ) | |||||||||||||||||||
Change in surplus notes |
— | (100,000 | ) | — | (100,000 | ) | ||||||||||||||||||||||
Dividends to stockholders |
— | — | — | — | (8,444 | ) | (8,444 | ) | ||||||||||||||||||||
Other changes - net |
— | — | — | 4 | 1,334 | 13,094 | 14,432 | |||||||||||||||||||||
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Balance at December 31, 2019 |
$ | 7,364 | $ | 2,773 | $ | 60,000 | $ | 1,057,861 | $ | 1,334 | $ | 1,171,604 | $ | 2,300,936 | ||||||||||||||
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See accompanying notes.
6
Transamerica Premier Life Insurance Company
Statements of Cash Flow – Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Operating activities |
||||||||||||
Premiums and annuity considerations |
$ | 3,374,817 | $ | 3,573,062 | $ | 3,605,127 | ||||||
Net investment income |
1,049,463 | 988,075 | 719,246 | |||||||||
Other income |
119,112 | 184,835 | 208,482 | |||||||||
Benefit and loss related payments |
(3,470,951 | ) | (2,617,277 | ) | (2,662,734 | ) | ||||||
Net transfers from separate accounts |
1,276,609 | 344,666 | 180,649 | |||||||||
Commissions and operating expenses |
(1,151,522 | ) | (1,242,500 | ) | (1,119,469 | ) | ||||||
Dividends paid to policyholders |
(1,091 | ) | — | — | ||||||||
Federal income taxes (paid) received |
(25,440 | ) | (1,009,824 | ) | (14,189 | ) | ||||||
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Net cash provided by operating activities |
1,170,997 | 221,037 | 917,112 | |||||||||
Investing activities |
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Proceeds from investments sold, matured or repaid |
3,850,764 | 4,220,254 | 3,939,238 | |||||||||
Costs of investments acquired |
(5,233,742 | ) | (4,906,476 | ) | (4,461,555 | ) | ||||||
Net increase (decrease) in policy loans |
(25,524 | ) | (11,481 | ) | 997 | |||||||
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Net cost of investments acquired |
(5,259,266 | ) | (9,346,512 | ) | (4,460,558 | ) | ||||||
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Net cash provided by (used in) investing activities |
(1,408,502 | ) | (697,703 | ) | (521,320 | ) | ||||||
Financing and miscellaneous activities |
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Capital and paid in surplus, less treasury stock |
$ | (100,000 | ) | $ | — | $ | — | |||||
Capital contribution received (returned) |
4 | 149,947 | 200,000 | |||||||||
Dividends to stockholders |
— | — | (350,000 | ) | ||||||||
Net deposits (withdrawals) on deposit-type contracts |
(237,635 | ) | (155,020 | ) | (138,376 | ) | ||||||
Net change in borrowed money |
144,774 | (188,058 | ) | 127,948 | ||||||||
Net change in payable for collateral under securities lending and other transactions |
182,031 | 146,987 | (130,411 | ) | ||||||||
Other cash (applied) provided |
74,478 | (56,482 | ) | 168,040 | ||||||||
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Net cash provided by (used in) financing and miscellaneous activities |
63,651 | (102,626 | ) | (122,799 | ) | |||||||
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Net increase (decrease) in cash, cash equivalents and short-term investments |
(173,854 | ) | (579,292 | ) | 272,993 | |||||||
Cash, cash equivalents and short-term investments: |
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Beginning of year |
902,074 | 1,481,366 | 1,208,373 | |||||||||
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End of year |
$ | 728,220 | $ | 902,074 | $ | 1,481,366 | ||||||
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See accompanying notes.
7
Transamerica Premier Life Insurance Company
Statements of Cash Flow (supplemental) – Statutory Basis
(Dollars in Thousands)
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Supplemental disclosures of cash flow information |
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Significant non-cash activities during the year not included in the Statutory Statements of Cash Flow |
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Transfer of bonds and mortgage loans related to reinsurance agreement with third party |
$ | — | $ | — | $ | 2,593,112 | ||||||
Receipt of bonds, mortgage loans, and derivatives related to affiliated reinsurance amendment |
— | — | 5,650,741 | |||||||||
Tranfer of bonds to settle reinsurance obligations |
— | — | 22,479 | |||||||||
Dividend received from subsidiary |
11,270 | 30,000 | 100,000 | |||||||||
Contribution receivable from parent |
— | — | 150,000 | |||||||||
Asset transfer of ownership between hedge funds |
— | — | 88,481 | |||||||||
Release of funds withheld related to affiliated reinsurance recapture |
— | — | — | |||||||||
Investments received for insured securities losses |
— | 30,032 | — | |||||||||
Noncash contribution (distribution) to affiliate |
(8,444 | ) | 1,360 | — | ||||||||
Noncash return of capital from affiliate |
— | 5,912 | — | |||||||||
Noncash transaction on sale of real estate |
(540 | ) | — | — |
8
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
1. Organization and Nature of Business
Transamerica Premier Life Insurance Company (the Company, formerly known as Monumental Life Insurance Company) is a stock life insurance company owned by Commonwealth General Corporation (CGC). CGC is an indirect, wholly-owned subsidiary of AEGON N.V., a holding company organized under the laws of The Netherlands.
The Company sells a full line of insurance products, including individual, credit, group, indexed universal life, variable universal life and variable annuities, annuity, long term care insurance, and accident and health policies as well as investment products, including guaranteed investment contracts. The Company is licensed in 49 states, the District of Columbia, Guam, and Puerto Rico. Sales of the Company’s products are through agents, brokers, financial planners, independent representatives, financial institutions, stockbrokers and direct response methods. The majority of the Company’s new life insurance, and a portion of new annuities, are written through an affiliated marketing organization.
2. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Iowa Insurance Division (IID), which practices differ from accounting principles generally accepted in the United States of America (GAAP).
Use of Estimates
The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.
The effects of the following variances from GAAP on the accompanying statutory-basis financial statements have not been determined by the Company, but are presumed to be material. Significant accounting policies and variances from GAAP are as follows:
Investments
Investments in bonds, except those to which the Securities Valuation Office (SVO) of the NAIC has ascribed a NAIC designation of 6, are reported at amortized cost using the interest method. Bonds containing call provisions, except make-whole call provisions, are amortized to the call or maturity value/date which produces the lowest asset value, often referred to as yield-to-worst method. Bonds ascribed a NAIC designation of 6 are reported at the lower of amortized cost or fair value with unrealized gains and losses reported in changes in capital and surplus. Prepayment penalty or acceleration fees received in the event a bond is liquidated prior to its scheduled termination date are reported as investment income.
9
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Hybrid securities, as defined by the NAIC, are securities designed with characteristics of both debt and equity and provide protection to the issuer’s senior note holders. These securities meet the definition of a bond, in accordance with SSAP No. 26R, Bonds, and therefore, are reported at amortized cost or fair value based upon their NAIC rating.
For GAAP, such fixed maturity investments would be designated at purchase as held-to-maturity, trading or available-for-sale. Held-to-maturity fixed investments would be reported at amortized cost, and the remaining fixed maturity investments would be reported at fair value with unrealized holding gains and losses reported in earnings for those designated as trading and as a separate component of other comprehensive income (OCI) for those designated as available-for-sale.
Single class and multi-class mortgage-backed/asset-backed securities are valued at amortized cost using the interest method, including anticipated prepayments, except for those with an initial NAIC designation of 6, which are valued at the lower of amortized cost or fair value. These securities are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium using either the retrospective or prospective methods. Prepayment assumptions are obtained from dealer surveys or internal estimates and are based on the current interest rate and economic environment. For statutory reporting, the retrospective adjustment method is used to value all such securities, except principal-only and interest-only securities, which are valued using the prospective method.
For GAAP, all securities purchased or retained that represent beneficial interests in securitized assets, other than high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If high credit quality securities are adjusted, the retrospective method is used.
The Company closely monitors below investment grade holdings and investment grade issuers where the Company has concerns to determine if an other-than-temporary impairment (OTTI) has occurred. The Company also regularly monitors industry sectors. The Company considers relevant facts and circumstances in evaluating whether the impairment is other-than-temporary including: (1) the probability of the Company collecting all amounts due according to the contractual terms of the security in effect at the date of acquisition; (2) the Company’s decision to sell a security prior to its maturity at an amount below its carrying amount; and (3) the Company’s ability to hold a structured security for a period of time to allow for recovery of the value to its carrying amount. Additionally, financial condition, near term prospects of the issuer and nationally recognized credit rating changes are monitored. Non-structured securities in unrealized loss positions that are considered other-than-temporary are written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairment.
For structured securities, cash flow trends and underlying levels of collateral are monitored. An OTTI is considered to have occurred if the fair value of the structured security is less than its amortized cost basis and the entity intends to sell the security or the entity does not have the intent and ability to hold the security for a period of time sufficient to recover the amortized cost basis. An OTTI is also considered to have occurred if the discounted estimated future cash flows are less than the amortized cost basis of the security and the security is in an unrealized loss position. Structured securities considered other-than-
10
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
temporarily impaired are written down to discounted estimated cash flows if the impairment is the result of cash flow analysis. If the Company has an intent to sell or lack of ability to hold a structured security, it is written down to fair value. The Company will record a charge to the statements of operations for the amount of the impairments.
For GAAP, if it is determined that a decline in fair value is other-than-temporary and the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the amortized cost basis and its fair value at the impairment date. If the entity does not intend to sell the security or the entity will likely not be required to sell the security before recovery, the OTTI should be separated into a) the amount representing the credit loss, which is recognized in earnings, and b) the amount related to all other factors, which is recognized in OCI, net of applicable taxes.
Investments in both affiliated and unaffiliated preferred stocks in good standing (those with NAIC designations RP1 to RP3 and P1 to P3), are reported at cost or amortized cost, depending on the characteristics of the securities. Investments in preferred stocks not in good standing (those with NAIC designations RP4 to RP6 and P4 to P6), are reported at the lower of cost, amortized cost, or fair value, depending on the characteristics of the securities. The related net unrealized capital gains and losses for all NAIC designations are reported in changes in capital and surplus.
Common stocks of affiliated noninsurance subsidiaries are reported based on underlying audited GAAP equity. The net change in the subsidiaries’ equity is included in net unrealized capital gains or losses and are reported in changes in capital and surplus.
Common stocks of unaffiliated companies, which include shares of mutual funds, are reported at fair value and the related net unrealized capital gains or losses are reported in changes in capital and surplus.
The Company owns stock issued by the Federal Home Loan Bank (FHLB), which is only redeemable at par, and its fair value is presumed to be par, unless other-than-temporarily impaired.
If the Company determines that a decline in the fair value of a common stock or a preferred stock is other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers the following factors in determining whether a decline in value is other-than-temporary: (a) the financial condition and prospects of the issuer; (b) whether or not the Company has made a decision to sell the investment; and (c) the length of time and extent to which the value has been below cost.
Mortgage loans are reported at unpaid principal balances, less an allowance for impairment. A mortgage loan is considered to be impaired when it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. When management determines the impairment is other-than-temporary, the mortgage loan is written down to realizable value and a realized loss is recognized. Prepayment penalty or acceleration fees received in the event a loan is liquidated prior to its scheduled termination date are reported as investment income.
11
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Valuation allowances are established for mortgage loans, if necessary, based on the difference between the net value of the collateral, determined as the fair value of the collateral less estimated costs to obtain and sell, and the recorded investment in the mortgage loan. Under GAAP, such allowances are based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, if foreclosure is probable, on the estimated fair value of the collateral.
The initial valuation allowance and subsequent changes in the allowance for mortgage loans are charged or credited directly to unassigned surplus as part of the change in asset valuation reserve (AVR), rather than being included as a component of earnings as would be required under GAAP.
Land is reported at cost. Real estate occupied by the Company is reported at depreciated cost net of encumbrances. Real estate held for the production of income is reported at depreciated cost net of related obligations. Real estate the Company classifies as held for sale is measured at lower of carrying amount or fair value less cost to sell. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties. The Company recognizes an impairment loss if the Company determines that the carrying amount of the real estate is not recoverable and exceeds its fair value. The Company deems that the carrying amount of the asset is not recoverable if the carrying amount exceeds the sum of undiscounted cash flows expected to result from the use and disposition. The impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value.
Investments in real estate are reported net of related obligations rather than on a gross basis as for GAAP. Real estate owned and occupied by the Company is included in investments rather than reported as an operating asset as under GAAP, and investment income and operating expenses for statutory reporting include rent for the Company’s occupancy of those properties. Changes between depreciated cost and admitted amounts are credited or charged directly to unassigned surplus rather than to income as would be required under GAAP.
The Company has interests in joint ventures and limited partnerships. The Company carries these investments based on its interest in the underlying audited GAAP equity of the investee.
For a decline in the fair value of an investment in a joint venture or limited partnership which is determined to be other-than-temporary, the Company writes it down to fair value as the new cost basis and the amount of the write down is accounted for as a realized loss in the statements of operations. The Company considers an impairment to have occurred if it is probable that the Company will be unable to recover the carrying amount of the investment or if there is evidence indicating inability of the investee to sustain earnings which would justify the carrying amount of the investment.
The Company’s investment in reverse mortgages is recorded net of an appropriate actuarial reserve. The actuarial reserve is calculated using the projected cash flows from the reverse mortgage product. Assumptions used in the actuarial model include an estimate of current home values, projected cash flows from the realization of the appreciated value of the property from its eventual sale (subject to certain limitations in the contract), mortality and termination rates based on group annuity mortality tables adjusted for the Company’s experience and a constant interest rate environment.
12
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Investments in Low Income Housing Tax Credit (LIHTC) properties are valued at amortized cost. Tax credits are recognized in operations in the tax reporting year in which the tax credit is utilized by the Company. The carrying value is amortized over the life of the investment. Amortization is calculated as a ratio of the current year tax credits and tax benefits compared to the total expected tax credits and tax benefits over the life of the investment.
Cash equivalents are short-term highly liquid investments with original maturities of three months or less (principally stated at amortized cost) or money market mutual funds which are reported at fair value.
Short-term investments include investments with remaining maturities of one year or less at the time of acquisition and are principally stated at amortized cost.
Policy loans are reported at unpaid principal balances.
Realized capital gains and losses are determined using the specific identification method and are recorded net of related federal income taxes. Changes in admitted asset carrying amounts of bonds, mortgage loans, common and preferred stocks are credited or charged directly to unassigned surplus.
Interest income is recognized on an accrual basis. The Company does not accrue income on bonds in default, mortgage loans on real estate in default and/or foreclosure or which are delinquent more than twelve months, or real estate where rent is in arrears for more than three months. Income is also not accrued when collection is uncertain. Due and accrued amounts determined to be uncollectible are written off through the statements of operations.
Valuation Reserve
Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals into net investment income over the remaining period to maturity of the bond or mortgage loan based on groupings of individual securities sold in five year bands. The net deferral is reported as the interest maintenance reserve (IMR) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income tax and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in the statements of operations on a pre-tax basis in the period that the assets giving rise to the gains or losses are sold.
The AVR provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula with changes reflected directly in unassigned surplus; AVR is not recognized for GAAP.
In 2019, the NAIC revised the AVR Factors (basic contribution, reserve objective and maximum reserve) to be consistent with the Risk Based Capital (RBC) after-tax factors, which were amended in 2018 as a result of federal tax reform. The AVR factor changes are effective for year-end 2019. As of December 31, 2019, the factor changes decreased Capital and Surplus by $54,607. The changes were recorded to the Change in Asset Valuation Reserve line of the Statements of Changes in Capital and Surplus.
13
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Derivative Instruments
Overview: The Company may use various derivative instruments (swaps and futures) to manage risks related to its ongoing business operations. On the transaction date of the derivative instrument, the Company designates the derivative as either (A) hedging (fair value, foreign currency fair value, cash flow, foreign currency cash flow, forecasted transactions, or net investment in a foreign operation), (B) replication, (C) income generation, or (D) held for other investment/risk management activities, which do not qualify for hedge accounting under SSAP No. 86 - Derivatives.
(A) | Derivative instruments used in hedging transactions that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability (amortized cost or fair value). Embedded derivatives are not accounted for separately from the host contract. Derivative instruments used in hedging transactions that do not meet or no longer meet the criteria of an effective hedge are accounted for at fair value, and the changes in the fair value are recorded in unassigned surplus as unrealized gains or losses. Under GAAP, the effective and ineffective portions of a single hedge are accounted for separately, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of OCI rather than to income as required for fair value hedges, and an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and the risk of the host contract is accounted for separately from the host contract and valued and reported at fair value. |
(B) | Derivative instruments are also used in replication (synthetic asset) transactions. A replication transaction is a derivative transaction entered into conjunction with a cash instrument to reproduce the investment characteristics of an otherwise permissible investment. In these transactions, the derivative is accounted for in a manner consistent with the cash instrument and replicated asset. For GAAP, the derivative is reported at fair value, with the changes in fair value reported in income. |
(C) | Derivative instruments used in income generation relationships are accounted for on a basis that is consistent with the associated covered asset or underlying interest to which the derivative relates (amortized cost or fair value). |
(D) | Derivative instruments held for other investment/risk management activities are measured at fair value with value adjustments recorded in unassigned surplus. |
Derivative instruments are subject to market risk, which is the possibility that future changes in market prices may make the instruments less valuable. The Company uses derivatives as hedges; consequently, when the value of the hedged asset or liability changes, the value of the hedging derivative is expected to move in the opposite direction. Market risk is a consideration when changes in the value of the derivative and the hedged item do not completely offset (correlation or basis risk) which is mitigated by active measuring and monitoring.
The Company is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments, but it does not expect any counterparties to fail to meet their obligations given
14
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
their high credit rating of ‘BBB’ or better. The credit exposure of interest rate swaps and currency swaps is represented by the fair value of contracts, aggregated at a counterparty level, with a positive fair value at the reporting date. The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets on the Company’s behalf. The posted amount is equal to the difference between the net positive fair value of the contracts and an agreed upon threshold that is based on the credit rating of the counterparty. Inversely, if the net fair value of all contracts with this counterparty is negative, then the Company is required to post assets instead.
Instruments:
Interest rate swaps are the primary derivative financial instruments used in the overall asset/liability management process to modify the interest rate characteristics of the underlying asset or liability. These interest rate swaps generally provide for the exchange of the difference between fixed and floating rate amounts based on an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
Interest rate basis swaps are used in the overall asset/liability management process to modify the interest rate characteristics of the underlying liability to mitigate the basis risk of assets and liabilities resetting on different indices. These interest rate swaps generally provide for the exchange of the difference between a floating rate on one index to a floating rate of another index, based upon an underlying notional amount. Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged at each due date. Swaps meeting hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in unassigned surplus.
Cross currency swaps are utilized to mitigate risks when the Company holds foreign denominated assets or liabilities; therefore, converting the asset or liability to a U.S. dollar denominated security. These cross currency swap agreements involve the exchange of two principal amounts in two different currencies at the prevailing currency rate at contract inception. During the life of the swap, the counterparties exchange fixed or floating rate interest payments in the swapped currencies. At maturity, the principal amounts are again swapped at a pre-determined rate of exchange. Each asset or liability is hedged individually where the terms of the swap must meet the terms of the hedged instrument. For swaps qualifying for hedge accounting, the premium or discount is amortized into income over the life of the contract, and the foreign currency translation adjustment is recorded as unrealized gain/loss in capital and surplus. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus. If a swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the hedged instrument receives that treatment.
15
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Total return swaps are used in the asset/liability management process to mitigate the market risk on minimum guarantee insurance contracts linked to an index. These total return swaps generally provide for the exchange of the difference between fixed leg (tied to the Standard & Poor’s (S&P) or other global market financial index) and floating leg (tied to the London Interbank Offered Rate (LIBOR)) amounts based on an underlying notional amount (also tied to the underlying index). Typically, no cash is exchanged at the outset of the swap contract and a single net payment is exchanged each due date. Swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, in the financial statements. If the swap is terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Variance swaps are used in the asset/liability management process to mitigate the gamma risk created when the Company has issued minimum guarantee insurance contracts linked to an index. These variance swaps are similar to volatility options where the underlying index provides for the market value movements. Variance swaps do not accrue interest. Typically, no cash is exchanged at the outset of initiating the variance swap, and a single receipt or payment occurs at the maturity or termination of the contract. Variance swaps that meet hedge accounting rules are carried in a manner consistent with the hedged item, generally at amortized cost, on the financial statements. If terminated prior to maturity, proceeds are exchanged equal to the fair value of the contract. These gains and losses may be included in IMR or AVR if the underlying instrument receives that treatment. Swaps not meeting hedge accounting rules are carried at fair value with fair value adjustments recorded in capital and surplus.
Futures contracts are used to hedge the liability risk when the Company issues products providing the customer a return based on various global market indices. Futures are marked to market on a daily basis whereby a cash payment is made or received by the Company. These payments are recognized as realized gains or losses in the financial statements.
The Company may sell products with expected benefit payments extending beyond investment assets currently available in the market. Because assets will have to be purchased in the future to fund future liability cash flows, the Company is exposed to the risk of future investments made at lower yields than what is assumed at the time of pricing. Forward-starting interest rate swaps are utilized to lock-in the current forward rate. The accrual of income begins at the forward date, rather than at the inception date. These forward-starting swaps meet hedge accounting rules and are carried at cost in the financial statements. Gains and losses realized upon termination of the forward-starting swap are deferred and used to adjust the basis of the asset purchased in the hedged forecasted period. The basis adjustment is then amortized into income as a yield adjustment to the asset over its life.
The Company replicates investment grade corporate bonds or sovereign debt by combining a highly rated security as a cash component with a written credit default swap which, in effect, converts the high quality asset into an investment grade corporate asset or a sovereign debt. The benefits of using the swap market to replicate credit include possible enhanced relative values as well as ease of executing larger transactions in a shortened time frame. Generally, a premium is received by the Company on a periodic basis and recognized in investment income. In the event the representative issuer defaults on its debt obligation referenced in the contract, a payment equal to the notional amount of the contract will be made by the Company and recognized as a capital loss.
16
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Securities Lending Assets and Liabilities
The Company loans securities to third parties under agent-managed securities lending programs accounted for as secured borrowings. Cash collateral received which may be sold or repledged by the Company is reflected as a one-line entry on the balance sheet (securities lending reinvested collateral assets) and a corresponding liability is established to record the obligation to return the cash collateral. Non-cash collateral received which may not be sold or repledged is not recorded on the Company’s balance sheet. Under GAAP, the reinvested collateral is included within invested assets (i.e. it is not one-line reported).
Repurchase Agreements
For dollar repurchase agreements accounted for as secured borrowings, the Company receives cash collateral in an amount at least equal to the fair value of the securities transferred by the Company in the transaction as of the transaction date. The securities transferred are not removed from the balance sheet, and the cash received as collateral is invested as needed or used for general corporate purposes of the Company. A liability is established to record the obligation to return the cash collateral and included in Borrowed Money on the Balance Sheets.
Other Assets and Other Liabilities
Other assets consist primarily of general insurance accounts receivable, reinsurance receivable, and company owned life insurance. Other “admitted assets” are valued principally at cost, as required or permitted by Iowa Insurance Laws.
Other liabilities consist primarily of amounts withheld by the Company, payables for securities, and reinsurance payable.
Separate Accounts
The majority of the separate accounts held by the Company, primarily for individual policyholders, do not have minimum guarantees and the investment risks associated with the fair value changes are borne by the policyholder. Assets held in trust for purchases of variable universal life and variable annuity contracts and the Company’s corresponding obligation to the contract owners are shown separately in the balance sheet. The assets in the accounts, carried at estimated fair value, consist of underlying mutual fund shares, common stocks, long-term bonds and short-term investments. All variable account contracts are subject to discretionary withdrawal by the policyholder at the fair value of the underlying assets less the current surrender charge. Separate account contract holders have no claim against the assets of the general account.
Some of the Company’s separate accounts provide policyholders with a guaranteed return. 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. These separate accounts are included in the general account due to the nature of the guaranteed return.
17
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Income and gains and losses with respect to the assets in the separate accounts accrue to the benefit of the contract owners and, accordingly, the operations of the separate accounts are not included in the accompanying financial statements.
Aggregate Reserves for Policies and Contracts
Life, annuity and accident and health benefit reserves are calculated by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed cash value, or the amount required by law. For direct business issued after October 1964, the Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the month of death. For policies assumed during 1992 from former affiliates, Monumental General Insurance Company and Monumental Life Insurance Group, Inc., and for all business from company mergers occurring in 1998, the Company waives deduction of deferred fractional premium upon death of the insured and returns any portion of the final premium paid beyond the month of death. For fixed premium life insurance business resulting from company mergers occurring in 2004 and 2007, the Company waives deduction of deferred fractional premiums upon death of the insured and refunds portions of premiums unearned after the date of death. Where appropriate, the Company holds a non-deduction and/or refund reserve. The reserve for these benefits is computed using aggregate methods. The reserves are equal to the greater of the cash surrender value and the legally computed reserve.
In accordance with SSAP No. 51R, Life Contracts, and No. 54R, Individual and Group Accident and Health Contracts, the Company reports the amount of insurance, if any, for which the gross premiums are less than the net premiums according to the valuation standards and any related premium deficiency reserve established. Anticipated investment income is included as a factor in the health contract premium deficiency calculation.
For GAAP, policy reserves are calculated based on estimated expected experience or actual account balances.
Policy and Contract Claim Reserves
Claim reserves represent the estimated accrued liability for claims reported to the Company and claims incurred but not yet reported through the balance sheet date. These reserves are estimated using either individual case-basis valuations or statistical analysis techniques. These estimates are subject to the effects of trends in claim severity and frequency. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes available.
18
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Deposit-Type Contracts
Deposit-type contracts do not incorporate risk from the death or disability of policyholders. These types of contracts may include guaranteed investment contracts (GICs), funding agreements, supplemental contracts and certain annuity contracts. Deposits and withdrawals on these contracts are recorded as a direct increase or decrease, respectively, to the liability balance and are not reported as premiums, benefits or changes in reserves in the statements of operations. Interest on these policies is reflected in other benefits.
Premiums and Annuity Considerations
Revenues for life and annuity policies with mortality or morbidity risk (including annuities with purchase rate guarantees) consist of the entire premium received. Benefits incurred represent surrenders and death benefits paid and the change in policy reserves. Under GAAP, for universal life policies, premiums received in excess of policy charges would not be recognized as premium revenue and benefits would represent interest credited to the account values and the excess of benefits paid over the policy account value. Under GAAP, for all annuity policies without significant mortality risk, premiums received and benefits paid would be recorded directly to the reserve liability using deposit accounting.
Policyholder Dividends
Policyholder dividends are recognized when declared rather than over the term of the related policies as would be required under GAAP.
Reinsurance
Reinsurance premiums, commissions, expense reimbursements and reserves related to reinsured business are accounted for on bases consistent with those used in accounting for the original policies and the terms of the reinsurance contracts. Gains associated with reinsurance of in force blocks of business are included in unassigned surplus and amortized into income as earnings emerge on the reinsured block of business. Premiums ceded and recoverable losses have been reported as a reduction of premium income and benefits, respectively. Policy liabilities and accruals are reported in the accompanying financial statements net of reinsurance ceded.
Any reinsurance amounts deemed to be uncollectible have been written off through a charge to operations. In addition, a liability for reinsurance balances would be established for unsecured policy reserves ceded to reinsurers not authorized to assume such business. Changes to the liability are credited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible would be established through a charge to earnings.
Losses associated with an indemnity reinsurance transaction are reported within income when incurred rather than being deferred and amortized over the remaining life of the underlying reinsured contracts as would be required under GAAP.
19
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Policy and contract liabilities ceded to reinsurers have been reported as reductions of the related reserves rather than as assets as would be required under GAAP.
Commissions allowed by reinsurers on business ceded are reported as income when incurred rather than being deferred and amortized with deferred policy acquisition costs as required under GAAP.
Under GAAP, for certain reinsurance agreements whereby assets are retained by the ceding insurer (such as funds withheld or modified coinsurance) and a return is paid based on the performance of underlying investments, the assets and liabilities for these reinsurance arrangements must be adjusted to reflect the fair value of the invested assets. The NAIC SAP does not contain a similar requirement.
Deferred Income Taxes
The Company computes deferred income taxes in accordance with SSAP No. 101, Income Taxes. Unlike GAAP, SSAP 101 does not consider state income taxes in the measurement of deferred taxes. SSAP 101 also requires additional testing to measure gross deferred tax assets. The additional testing limits gross deferred tax asset admission to 1) the amount of federal income taxes paid in prior years recoverable through hypothetical loss carrybacks of existing temporary differences expected to reverse during a timeframe corresponding with the Internal Revenue Service tax loss carryback provisions, not to exceed three years, plus 2) the amount of remaining gross deferred tax assets expected to be realized within three years limited to an amount that is no greater than 15% of current period’s adjusted statutory capital and surplus, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities after considering character (i.e. ordinary versus capital) and reversal patterns. The Company’s reported deferred tax asset or liability is the sum of gross deferred tax assets admitted through this three part test plus the sum of all deferred tax liabilities.
Policy Acquisition Costs
The costs of acquiring and renewing business are expensed when incurred. Under GAAP, incremental costs directly related to the successful acquisition of insurance and investment contracts are deferred. For traditional life insurance and certain long-duration accident and health insurance, to the extent recoverable from future policy revenues, acquisition costs are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance and investment products, to the extent recoverable from future gross profits, deferred policy acquisition costs are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality and expense margins.
Value of Business Acquired
Under GAAP, value of business acquired (VOBA) is an intangible asset resulting from a business combination that represents that excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future contracts and contract changes, premiums, mortality and morbidity, separate account performance, surrenders, operation expenses, investment returns, nonperformance risk adjustment and other factors. VOBA is not recognized under the NAIC Accounting Practices and Procedures Manual (NAIC SAP).
20
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Goodwill
Goodwill is measured as the difference between the cost of acquiring the entity and the reporting entity’s share of the book value of the acquired entity. Goodwill is admitted subject to an aggregate limitation of ten percent of the capital and surplus in the most recently filed annual statement excluding electronic data processing equipment, operating system software, net deferred income tax assets and net positive goodwill. Excess goodwill is nonadmitted. Goodwill is amortized over ten years. Under GAAP, goodwill is measured as the excess of the consideration transferred plus the fair value of any noncontrolling interest in the acquiree at the acquisition date as compared to the fair values of the identifiable net assets acquired. Goodwill is not amortized but is assessed for impairment on an annual basis, or more frequently if circumstances indicate that a possible impairment has occurred.
Subsidiaries and Affiliated Companies
Investments in subsidiaries, controlled and affiliated companies (SCA) are stated in accordance with the Purposes and Procedures Manual of the NAIC SVO, as well as SSAP No. 97, Investments in Subsidiary, Controlled and Affiliated Entities.
The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required under GAAP. Dividends or distributions received from an investee are recognized in investment income when declared to the extent that they are not in excess of the undistributed accumulated earnings attributable to an investee. Changes in investments in SCA’s are recorded as a change to the carrying value of the investment with a corresponding amount recorded directly to unrealized gain/loss (capital and surplus).
Surplus Notes
Surplus notes are reported as surplus rather than as liabilities as would be required under GAAP.
Nonadmitted Assets
Certain assets designated as “nonadmitted”, primarily net deferred tax assets and other assets not specifically identified as an admitted asset within the NAIC SAP, are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheet to the extent that they are not impaired.
Statements of Cash Flow
Cash, cash equivalents and short-term investments in the statements of cash flow represent cash balances and investments with initial maturities of one year or less and money market mutual funds. Under GAAP, the corresponding caption of cash and cash equivalents includes cash balances and investments with initial maturities of three months or less.
21
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company’s policy is to disclose as recent accounting pronouncements the adopted accounting guidance with a current year effective date that has been classified by the NAIC as a substantive change, as well as items classified as nonsubstantive changes that have had a material impact on the financial position or results of operations of the Company.
Recent Accounting Pronouncements
Effective January 1, 2019, the NAIC adopted revisions to SSAP No. 30, Unaffiliated Common Stock, which updated the definition of common stock to include SEC registered closed-end funds and unit investment trusts. The adoption of this guidance did not impact the financial position or results of operations of the Company.
Change in Valuation Basis
As of December 31, 2019, the Company has received IID approval on an approach for adoption of the NAIC 2020 Valuation Manual section 21 (VM-21) and related Risk Based Capital C3P2 changes documented in the VM-21 2020 NAIC Valuation Manual: Requirements for Principle-Based Reserves for Variable Annuities. The Company has elected to early adopt the VM-21 requirements for variable annuities effective December 31, 2019. The approved transition approach did not result in an adjustment to the Company’s historical statutory reporting or existing balances at the time of transition. The Company reported the decrease to the VM-21 reserve of $30,452. As of the date of transition, the Company is fully compliant with the provisions of VM-21.
Reclassifications
Certain amounts in prior year financial statement balances and footnote disclosures have been reclassified to conform to the current year presentation.
4. Fair Values of Financial Instruments
The fair value of a financial instrument 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.
Determination of fair value
The fair values of financial instruments are determined by management after taking into consideration several sources of data. When available, the Company uses quoted market prices in active markets to determine the fair value of its investments. The Company’s valuation policy utilizes a pricing hierarchy which dictates that publicly available prices are initially sought from indices and third-party pricing services. In the event that pricing is not available from these sources, those securities are submitted to brokers to obtain quotes. Lastly, securities are priced using internal cash flow modeling techniques. These valuation methodologies commonly use reported trades, bids, offers, issuer spreads, benchmark yields, estimated prepayment speeds, and/or estimated cash flows.
22
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
To understand the valuation methodologies used by third-party pricing services, the Company reviews and monitors their applicable methodology documents. Any changes to their methodologies are noted and reviewed for reasonableness. In addition, the Company performs in-depth reviews of prices received from third-party pricing services on a sample basis. The objective for such reviews is to demonstrate the Company can corroborate detailed information such as assumptions, inputs and methodologies used in pricing individual securities against documented pricing methodologies. Only third-party pricing services and brokers with a substantial presence in the market and with appropriate experience and expertise are used.
Each month, the Company performs an analysis of the information obtained from indices, third-party services, and brokers to ensure the information is reasonable and produces a reasonable estimate of fair value. The Company considers both qualitative and quantitative factors as part of this analysis, including but not limited to, recent transactional activity for similar securities, review of pricing statistics and trends, and consideration of recent relevant market events. Other controls and procedures over pricing received from indices, third-party pricing services, or brokers include validation checks such as exception reports which highlight significant price changes, stale prices or un-priced securities.
Fair value hierarchy
The Company’s financial assets and liabilities carried at fair value are classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100R, Fair Value. 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 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
Level 1 | - | Unadjusted quoted prices for identical assets or liabilities in active markets accessible at the measurement date. | ||||
Level 2 | - | Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following: |
a) | Quoted prices for similar assets or liabilities in active markets |
b) | Quoted prices for identical or similar assets or liabilities in non-active markets |
c) | Inputs other than quoted market prices that are observable |
d) | Inputs that are derived principally from or corroborated by observable market data through correlation or other means |
Level 3 | - | Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect the Company’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. |
23
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:
Cash Equivalents and Short-Term Investments: The carrying amounts reported in the accompanying balance sheets for these financial instruments is either reported at fair value or amortized cost (which approximates fair value). Cash is not included in the below tables.
Short-Term Notes Receivable from Affiliates: The carrying amounts reported in the accompanying balance sheets for these financial instruments approximate their fair value.
Bonds and Stocks: The NAIC allows insurance companies to report the fair value determined by the SVO or to determine the fair value by using a permitted valuation method. The fair values of bonds and stocks are reported or determined using the following pricing sources: indices, third-party pricing services, brokers, external fund managers and internal models.
Fair values for fixed maturity securities (including redeemable preferred stock) actively traded are determined from third-party pricing services, which are determined as discussed above in the description of Level 1 and Level 2 values within the fair value hierarchy. For fixed maturity securities (including redeemable preferred stock) not actively traded, fair values are estimated using values obtained from third-party pricing services, or are based on non-binding broker quotes or internal models. In the case of private placements, fair values are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit and maturity of the investments.
Mortgage Loans on Real Estate: The fair values for mortgage loans on real estate are estimated utilizing discounted cash flow analyses, using interest rates reflective of current market conditions and the risk characteristics of the loans.
Real Estate: Real estate held for sale is typically valued utilizing independent external appraisers in conjunction with reviews by qualified internal appraisers. Valuations are primarily based on active market prices, adjusted for any difference in the nature, location or condition of the specific property. If such information is not available, other valuation methods are applied, considering the value that the property’s net earning power will support, the value indicated by recent sales of comparable properties and the current cost of reproducing or replacing the property.
Other Invested Assets: The fair values for other invested assets, which include investments in surplus notes issued by other insurance companies and fixed or variable rate investments with underlying characteristics of bonds were determined primarily by using indices, third-party pricing services and internal models.
24
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Derivative Financial Instruments: The fair value of futures and forwards are based upon the latest quoted market price and spot rates at the balance sheet date. The estimated fair values of equity and interest rate options (calls, puts, caps) are based upon the latest quoted market price at the balance sheet date. The estimated fair values of swaps, including equity, interest rate and currency swaps, are based on pricing models or formulas using current assumptions. The estimated fair values of credit default swaps are based upon active market data, including interest rate quotes, credit spreads, and recovery rates, which are then used to calculate probabilities of default for the fair value calculation. The Company accounts for derivatives that receive and pass hedge accounting in the same manner as the underlying hedged instrument. If that instrument is held at amortized cost, then the derivative is also held at amortized cost.
Policy Loans: The book value of policy loans is considered to approximate the fair value of the loan, which is stated at unpaid principal balance.
Securities Lending Reinvested Collateral: The cash collateral from securities lending is reinvested in various short-term and long-term debt instruments. The fair values of these investments are determined using the methods described above under Cash, Cash Equivalents and Short-Term Investments and Bonds and Stocks.
Separate Account Assets and Annuity Liabilities: The fair value of separate account assets are based on quoted market prices when available. When not available, they are primarily valued either using third-party pricing services or are valued in the same manner as the general account assets as further described in this note. However, some separate account assets are valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilizes input that are not market observable. The fair value of separate account annuity liabilities is based on the account value for separate accounts business without guarantees. For separate accounts with guarantees, fair value is based on discounted cash flows.
Investment Contract Liabilities: Fair value for the Company’s liabilities under investment contracts, which include deferred annuities, GICs and funding agreements, are estimated using discounted cash flow calculations. For those liabilities that are short in duration, carrying amount approximates fair value. For investment contracts with no defined maturity, fair value is estimated to be the present surrender value.
Deposit-Type Contracts: The carrying amounts of deposit-type contracts reported in the accompanying balance sheets approximate their fair values. These are included in the Investment Contract Liabilities.
The Company accounts for its investments in affiliated common stock in accordance with SSAP No. 97, as such, they are not included in the following disclosures.
Fair values for the Company’s insurance contracts other than investment-type contracts (including separate account universal life liabilities) are not required to be disclosed. However, the fair values of liabilities under all insurance contracts are taken into consideration in the Company’s overall management of interest rate risk, such that the Company’s exposure to changing interest rates is minimized through the matching of investment maturities with amounts due under insurance contracts.
25
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables set forth a comparison of the estimated fair values and carrying amounts of the Company’s financial instruments, including those not measured at fair value in the balance sheets, as of December 31, 2019 and 2018, respectively:
December 31, 2019 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates |
$ | 631,215 | $ | 631,185 | $ | 441,346 | $ | 189,869 | $ | — | $ | — | $ | — | ||||||||||||||
Short-term notes receivable from affiliates |
102,900 | 102,900 | — | 102,900 | — | — | — | |||||||||||||||||||||
Bonds |
19,995,877 | 17,877,965 | 2,000,037 | 17,791,417 | 204,423 | — | — | |||||||||||||||||||||
Preferred stocks, other than affiliates |
4,361 | 4,955 | — | 2,089 | 2,272 | — | — | |||||||||||||||||||||
Common stocks, other than affiliates |
59,057 | 59,057 | 1,872 | — | 57,185 | — | — | |||||||||||||||||||||
Mortgage loans on real estate |
2,876,259 | 2,737,109 | — | — | 2,876,259 | — | — | |||||||||||||||||||||
Other invested assets |
190,192 | 172,968 | — | 189,214 | 978 | — | — | |||||||||||||||||||||
Derivative assets: |
||||||||||||||||||||||||||||
Interest rate swaps |
11,171 | 8,635 | — | 11,171 | — | — | — | |||||||||||||||||||||
Currency swaps |
13,458 | 4,365 | — | 13,458 | — | — | — | |||||||||||||||||||||
Credit default swaps |
19,459 | 10,576 | — | 19,459 | — | — | — | |||||||||||||||||||||
Interest rate futures |
7 | 7 | 7 | — | — | — | — | |||||||||||||||||||||
Equity futures |
1,948 | 1,948 | 1,948 | — | — | — | — | |||||||||||||||||||||
Derivative assets total |
46,043 | 25,531 | 1,955 | 44,088 | — | — | — | |||||||||||||||||||||
Policy loans |
962,408 | 962,408 | — | 962,408 | — | — | — | |||||||||||||||||||||
Securities lending reinvested collateral |
599,859 | 599,859 | 58 | 599,801 | — | — | — | |||||||||||||||||||||
Separate account assets |
25,337,229 | 25,337,230 | 23,358,660 | 1,978,570 | — | — | — | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities |
2,272,404 | 1,461,721 | — | 45,313 | 2,227,090 | — | — | |||||||||||||||||||||
Derivative liabilities: |
||||||||||||||||||||||||||||
Interest rate swaps |
(75,597 | ) | 58,916 | — | (75,597 | ) | — | — | — | |||||||||||||||||||
Currency swaps |
17,050 | 14,733 | — | 17,050 | — | — | — | |||||||||||||||||||||
Credit default swaps |
(2,855 | ) | 1,169 | — | (2,855 | ) | — | — | — | |||||||||||||||||||
Equity swaps |
4,361 | 4,361 | — | 4,361 | — | — | — | |||||||||||||||||||||
Interest rate futures |
544 | 544 | 544 | — | — | — | — | |||||||||||||||||||||
Equity futures |
1,349 | 1,349 | 1,349 | — | — | — | — | |||||||||||||||||||||
Derivative liabilities total |
(55,148 | ) | 81,072 | 1,893 | (57,041 | ) | — | — | — | |||||||||||||||||||
Dollar repurchase agreements |
254,814 | 254,814 | — | 254,814 | — | — | — | |||||||||||||||||||||
Payable for securities lending |
757,186 | 757,186 | — | 757,186 | — | — | — | |||||||||||||||||||||
Payable for derivative cash collateral |
202,298 | 202,298 | — | 202,298 | — | — | — | |||||||||||||||||||||
Separate account annuity liabilities |
22,578,162 | 22,578,162 | 13 | 22,578,149 | — | — | — |
26
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31, 2018 | ||||||||||||||||||||||||||||
Aggregate Fair Value |
Admitted Value |
(Level 1) | (Level 2) | (Level 3) | Net Asset Value (NAV) |
Not Practicable (Carrying Value) |
||||||||||||||||||||||
Admitted assets |
||||||||||||||||||||||||||||
Cash equivalents and short-term investments, other than affiliates |
$ | 718,998 | $ | 718,998 | $ | 656,505 | $ | 62,493 | $ | — | $ | — | $ | — | ||||||||||||||
Short-term notes receivable from affiliates |
194,600 | 194,600 | — | 194,600 | — | — | — | |||||||||||||||||||||
Bonds |
16,943,037 | 16,814,750 | 1,833,213 | 14,958,270 | 151,554 | — | — | |||||||||||||||||||||
Preferred stocks, other than affiliates |
9,214 | 9,958 | — | 2,380 | 6,834 | — | — | |||||||||||||||||||||
Common stocks, other than affiliates |
67,063 | 67,063 | 134 | — | 66,929 | — | — | |||||||||||||||||||||
Mortgage loans on real estate |
2,433,036 | 2,436,202 | — | — | 2,433,036 | — | — | |||||||||||||||||||||
Other invested assets |
178,709 | 174,272 | — | 177,480 | 1,229 | — | — | |||||||||||||||||||||
Derivative assets: |
||||||||||||||||||||||||||||
Interest rate swaps |
9,174 | 4,634 | — | 9,174 | — | — | — | |||||||||||||||||||||
Currency swaps |
14,877 | 7,633 | — | 14,877 | — | — | — | |||||||||||||||||||||
Credit default swaps |
13,304 | 15,582 | — | 13,304 | — | — | — | |||||||||||||||||||||
Equity swaps |
4,589 | 4,589 | — | 4,589 | — | — | — | |||||||||||||||||||||
Interest rate futures |
213 | 213 | 213 | — | — | — | — | |||||||||||||||||||||
Equity futures |
2,282 | 2,282 | 2,282 | — | — | — | — | |||||||||||||||||||||
Derivative assets total |
44,439 | 34,933 | 2,495 | 41,944 | — | — | — | |||||||||||||||||||||
Policy loans |
936,884 | 936,884 | — | 936,884 | — | — | — | |||||||||||||||||||||
Securities lending reinvested collateral |
518,646 | 518,646 | 24,677 | 493,969 | — | — | — | |||||||||||||||||||||
Separate account assets |
22,017,523 | 22,017,523 | 19,752,326 | 2,265,141 | 56 | — | — | |||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||
Investment contract liabilities |
1,919,385 | 1,799,337 | — | 45,337 | 1,874,048 | — | — | |||||||||||||||||||||
Derivative liabilities: |
||||||||||||||||||||||||||||
Interest rate swaps |
(44,671 | ) | 49,173 | — | (44,671 | ) | — | — | — | |||||||||||||||||||
Currency swaps |
15,155 | 9,391 | — | 15,155 | — | — | — | |||||||||||||||||||||
Credit default swaps |
(1,148 | ) | 2,352 | — | (1,148 | ) | — | — | — | |||||||||||||||||||
Equity swaps |
208 | 208 | — | 208 | — | — | — | |||||||||||||||||||||
Interest rate futures |
39 | 39 | 39 | — | — | — | — | |||||||||||||||||||||
Equity futures |
127 | 127 | 127 | — | — | — | — | |||||||||||||||||||||
Derivative liabilities total |
(30,290 | ) | 61,290 | 166 | (30,456 | ) | — | — | — | |||||||||||||||||||
Dollar repurchase agreements |
110,040 | 110,040 | — | 110,040 | — | — | — | |||||||||||||||||||||
Payable for securities lending |
575,155 | 575,155 | — | 575,155 | — | — | — | |||||||||||||||||||||
Payable for derivative cash collateral |
120,737 | 120,737 | — | 120,737 | — | — | — | |||||||||||||||||||||
Separate account annuity liabilities |
20,027,327 | 20,027,327 | 3,278 | 20,024,049 | — | — | — |
27
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables provide information about the Company’s financial assets and liabilities measured at fair value as of December 31, 2019 and 2018:
2019 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Government |
$ | — | $ | 129 | $ | — | $ | — | $ | 129 | ||||||||||
Industrial and miscellaneous |
— | 336 | 2,791 | — | 3,127 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
— | 465 | 2,791 | — | 3,256 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
— | — | 2,272 | — | 2,272 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
— | — | 2,272 | — | 2,272 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Industrial and miscellaneous |
1,872 | — | 57,185 | — | 59,057 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
1,872 | — | 57,185 | — | 59,057 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
441,346 | — | — | — | 441,346 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
441,346 | — | — | — | 441,346 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
58 | — | — | — | 58 | |||||||||||||||
Derivative assets |
1,955 | 8,556 | — | — | 10,511 | |||||||||||||||
Separate account assets |
23,358,660 | 1,978,570 | — | — | 25,337,230 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 23,803,891 | $ | 1,987,591 | $ | 62,248 | $ | — | $ | 25,853,730 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 1,893 | $ | 16,699 | $ | — | $ | — | $ | 18,592 | ||||||||||
Separate account liabilities |
13 | — | — | — | 13 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 1,906 | $ | 16,699 | $ | — | $ | — | $ | 18,605 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
2018 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Net Asset Value (NAV) |
Total | ||||||||||||||||
Assets: |
||||||||||||||||||||
Bonds |
||||||||||||||||||||
Industrial and miscellaneous |
$ | — | $ | 30,077 | $ | 4,858 | $ | — | $ | 34,935 | ||||||||||
Hybrid securities |
— | 16,037 | — | — | 16,037 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total bonds |
— | 46,114 | 4,858 | — | 50,972 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Preferred stock |
||||||||||||||||||||
Industrial and miscellaneous |
— | — | 6,834 | — | 6,834 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total preferred stock |
— | — | 6,834 | — | 6,834 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
||||||||||||||||||||
Industrial and miscellaneous |
134 | — | 66,929 | — | 67,063 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total common stock |
134 | — | 66,929 | — | 67,063 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash equivalents and short-term |
||||||||||||||||||||
Money market mutual funds |
656,505 | — | — | — | 656,505 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash equivalents and short-term |
656,505 | — | — | — | 656,505 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Securities lending reinvested collateral |
24,677 | — | — | — | 24,677 | |||||||||||||||
Derivative assets |
2,495 | 9,144 | — | — | 11,639 | |||||||||||||||
Separate account assets |
19,752,326 | 2,265,141 | 56 | — | 22,017,523 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 20,436,137 | $ | 2,320,399 | $ | 78,677 | $ | — | $ | 22,835,213 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities: |
||||||||||||||||||||
Derivative liabilities |
$ | 166 | $ | 10,091 | $ | — | $ | — | $ | 10,257 | ||||||||||
Separate account liabilities |
3,278 | — | — | — | 3,278 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
$ | 3,444 | $ | 10,091 | $ | — | $ | — | $ | 13,535 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Bonds classified as Level 3 are primarily those valued using non-binding broker quotes, which cannot be corroborated by other market observable data, or internal modeling which utilize significant inputs that are not market observable.
Preferred stock classified as Level 3 is internally valued using significant unobservable inputs.
28
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Common stocks classified as Level 3 are comprised primarily of shares in the FHLB of Des Moines, which are valued at par as a proxy for fair value as a result of restrictions that allow redemptions only by FHLB.
The following tables summarize the changes in assets classified as Level 3 for 2019 and 2018.
Beginning Balance at January 1, 2019 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | 4,858 | $ | — | $ | 622 | $ | 44 | $ | 247 | ||||||||||
Preferred stock |
6,834 | — | — | — | (6,052 | ) | ||||||||||||||
Common stock |
66,929 | — | 1,700 | (553 | ) | (28 | ) | |||||||||||||
Separate account assets |
56 | — | 53 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 78,677 | $ | — | $ | 2,375 | $ | (509 | ) | $ | (5,833 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2019 |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | — | $ | — | $ | — | $ | 1,736 | $ | 2,791 | ||||||||||
Preferred stock |
1,490 | — | — | — | 2,272 | |||||||||||||||
Common stock |
811 | 1,526 | 9,800 | — | 57,185 | |||||||||||||||
Separate account assets |
— | — | — | 3 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 2,301 | $ | 1,526 | $ | 9,800 | $ | 1,739 | $ | 62,248 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
29
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Beginning Balance at January 1, 2018 |
Transfers in (Level 3) |
Transfers out (Level 3) |
Total Gains (Losses) Included in Net income (a) |
Total Gains (Losses) Included in Surplus (b) |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | 4,974 | $ | 287 | $ | — | $ | 78 | $ | (26 | ) | |||||||||
Preferred stock |
7,390 | — | — | — | (1,856 | ) | ||||||||||||||
Common stock |
70,335 | — | 34 | (27 | ) | (1,173 | ) | |||||||||||||
Separate account assets |
67 | — | — | 1 | (1 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 82,766 | $ | 287 | $ | 34 | $ | 52 | $ | (3,056 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Purchases | Issuances | Sales | Settlements | Ending Balance at December 31, 2018 |
||||||||||||||||
Bonds |
||||||||||||||||||||
Other |
$ | — | $ | — | $ | — | $ | 455 | $ | 4,858 | ||||||||||
Preferred stock |
1,888 | — | 588 | — | 6,834 | |||||||||||||||
Common stock |
— | 28 | 2,200 | — | 66,929 | |||||||||||||||
Separate account assets |
— | — | — | 11 | 56 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 1,888 | $ | 28 | $ | 2,788 | $ | 466 | $ | 78,677 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | Recorded as a component of Net Realized Capital Gains (Losses) on Investments in the Statements of Operations |
(b) | Recorded as a component of Change in Net Unrealized Capital Gains (Losses) in the Statements of Changes in Capital and Surplus |
Nonrecurring fair value measurements
As indicated in Note 2, real estate held for sale is measured at the lower of carrying amount or fair value less cost to sell. As of December 31, 2019 the Company has 1 property that is held for sale. This property is carried at fair value less cost to sell, which amounts to $745.
The Company also had three properties that were held for sale as of December 31, 2018. The carrying amount for each of these properties was less than their fair value and, therefore, they are not measured at fair value.
Fair value was determined by utilizing an external appraisal following the sales comparison approach. The fair value measurements are classified as Level 3 as the comparable sales and adjustments for the specific attributes of these properties are not market observable inputs.
30
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Bonds and Stocks
The carrying amounts and estimated fair values of investments in bonds and stocks are as follows:
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated bonds: |
||||||||||||||||
United States Government and agencies |
$ | 1,601,214 | $ | 247,311 | $ | 357 | $ | 1,848,168 | ||||||||
State, municipal and other government |
699,845 | 36,231 | 8,841 | 727,235 | ||||||||||||
Hybrid securities |
139,964 | 18,294 | 2,490 | 155,768 | ||||||||||||
Industrial and miscellaneous |
13,440,685 | 1,677,600 | 43,652 | 15,074,633 | ||||||||||||
Mortgage and other asset-backed securities |
1,996,257 | 199,752 | 5,936 | 2,190,073 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
17,877,965 | 2,179,188 | 61,276 | 19,995,877 | ||||||||||||
Unaffiliated preferred stocks |
4,955 | 66 | 660 | 4,361 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 17,882,920 | $ | 2,179,254 | $ | 61,936 | $ | 20,000,238 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
58,999 | 111 | 53 | 59,057 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Book Adjusted Carrying Value |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated bonds: |
||||||||||||||||
United States Government and agencies |
$ | 1,645,120 | $ | 69,542 | $ | 33,955 | $ | 1,680,707 | ||||||||
State, municipal and other government |
416,752 | 12,733 | 13,939 | 415,546 | ||||||||||||
Hybrid securities |
145,271 | 9,152 | 7,013 | 147,410 | ||||||||||||
Industrial and miscellaneous |
12,911,155 | 528,970 | 550,783 | 12,889,342 | ||||||||||||
Mortgage and other asset-backed securities |
1,696,452 | 134,037 | 20,457 | 1,810,032 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total unaffiliated bonds |
16,814,750 | 754,434 | 626,147 | 16,943,037 | ||||||||||||
Unaffiliated preferred stocks |
9,958 | 56 | 800 | 9,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 16,824,708 | $ | 754,490 | $ | 626,947 | $ | 16,952,251 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost | Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Unaffiliated common stocks |
67,017 | 67 | 21 | 67,063 | ||||||||||||
|
|
|
|
|
|
|
|
31
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The carrying amount and estimated fair value of bonds at December 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
2019 | ||||||||
December 31: | Carrying Value | Fair Value | ||||||
Due in one year or less |
$ | 330,436 | $ | 332,890 | ||||
Due after one year through five years |
2,673,811 | 2,820,295 | ||||||
Due after five years through ten years |
3,000,633 | 3,362,510 | ||||||
Due after ten years |
9,876,828 | 11,290,108 | ||||||
|
|
|
|
|||||
15,881,708 | 17,805,803 | |||||||
Mortgage and other asset-backed securities |
1,996,257 | 2,190,074 | ||||||
|
|
|
|
|||||
Total |
$ | 17,877,965 | $ | 19,995,877 | ||||
|
|
|
|
The estimated fair value of bonds, preferred stocks and common stocks with gross unrealized losses at December 31, 2019 and 2018 is as follows:
2019 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | — | $ | — | $ | 11,224 | $ | 357 | ||||||||
State, municipal and other government |
17,582 | 2,010 | 232,694 | 6,831 | ||||||||||||
Hybrid securities |
26,780 | 2,475 | 3,302 | 15 | ||||||||||||
Industrial and miscellaneous |
262,510 | 29,928 | 387,345 | 13,724 | ||||||||||||
Mortgage and other asset-backed securities |
60,442 | 2,868 | 369,603 | 3,067 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
367,314 | 37,281 | 1,004,168 | 23,994 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
1,340 | 660 | — | — | ||||||||||||
Common stocks-unaffiliated |
— | — | 609 | 53 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 368,654 | $ | 37,941 | $ | 1,004,777 | $ | 24,047 | ||||||||
|
|
|
|
|
|
|
|
32
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Equal to or Greater than 12 Months |
Less than 12 Months | |||||||||||||||
Estimated Fair Value |
Gross Unrealized Losses |
Estimated Fair Value |
Gross Unrealized Losses |
|||||||||||||
United States Government and agencies |
$ | 63,881 | $ | 4,817 | $ | 707,210 | $ | 29,138 | ||||||||
State, municipal and other government |
33,780 | 2,461 | 158,447 | 11,478 | ||||||||||||
Hybrid securities |
12,595 | 1,893 | 44,591 | 5,120 | ||||||||||||
Industrial and miscellaneous |
1,180,161 | 67,218 | 6,509,117 | 483,565 | ||||||||||||
Mortgage and other asset-backed securities |
213,966 | 10,505 | 418,923 | 9,952 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total bonds |
1,504,383 | 86,894 | 7,838,288 | 539,253 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Preferred stocks-unaffiliated |
1,200 | 800 | — | — | ||||||||||||
Common stocks-unaffiliated |
— | — | 165 | 21 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,505,583 | $ | 87,694 | $ | 7,838,453 | $ | 539,274 | ||||||||
|
|
|
|
|
|
|
|
During 2019, 2018, and 2017, respectively, there were $2,799, $99,187 and $0 of loan-backed and structured securities with a recognized OTTI due to intent to sell or lack of intent and ability to hold.
For loan-backed and structured securities with a recognized OTTI due to the Company’s cash flow analysis, in which the security is written down to estimated future cash flows discounted at the security’s effective yield, in 2019, 2018 and 2017 the Company recognized OTTI of $503, $6,003, and $2,512, respectively.
The following loan-backed and structured securities were held at December 31, 2019, for which an OTTI was recognized during the current reporting period:
CUSIP |
Amortized Cost Before Current Period OTTI |
Present Value of Projected Cash Flows |
Recognized OTTI |
Amortized Cost After OTTI |
Fair Value at Time of OTTI |
Date of Financial Statement Where Reported |
||||||||||||||||||
87266TAJ1 | $ | 170 | $ | 163 | $ | 7 | $ | 163 | $ | 114 | 03/31/2019 | |||||||||||||
79548KXQ6 | 189 | 173 | 16 | 173 | 154 | 03/31/2019 | ||||||||||||||||||
14984WAA8 | 2,799 | 2,591 | 208 | 2,591 | 2,591 | 6/30/2019 | ||||||||||||||||||
87266TAJ1 | 154 | 127 | 27 | 127 | 102 | 6/30/2019 | ||||||||||||||||||
79548KXQ6 | 159 | 79 | 80 | 80 | 142 | 6/30/2019 | ||||||||||||||||||
36828QQK5 | 277 | 249 | 28 | 249 | 195 | 9/30/2019 | ||||||||||||||||||
026935AC0 | 2,080 | 2,066 | 14 | 2,066 | 1,968 | 12/31/2019 | ||||||||||||||||||
36828QQK5 | 249 | 126 | 123 | 126 | 195 | 12/31/2019 | ||||||||||||||||||
|
|
|||||||||||||||||||||||
$ | 503 | |||||||||||||||||||||||
|
|
33
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The unrealized losses of loan-backed and structured securities where fair value is less than cost or amortized cost for which an OTTI has not been recognized in earnings as of December 31, 2019 and 2018 is as follows:
2019 | 2018 | |||||||||||||||
Losses 12 Months or More |
Losses Less Than 12 Months |
Losses 12 Months or More |
Losses Less Than 12 Months |
|||||||||||||
Year ended December 31: |
||||||||||||||||
The aggregate amount of unrealized losses |
$ | 2,868 | $ | 3,417 | $ | 10,505 | $ | 17,168 | ||||||||
The aggregate related fair value of securities with unrealized losses |
60,442 | 372,394 | 213,966 | 465,773 |
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for greater than or equal to twelve months, the Company held 104 and 374 securities with a carrying amount of $406,595 and $1,593,276 and an unrealized loss of $37,941 and $87,694. Of this portfolio, 66.8% and 88.0% were investment grade with associated unrealized losses of $10,107 and $62,824, respectively.
At December 31, 2019 and 2018, respectively, for bonds and preferred stocks that have been in a continuous loss position for less than twelve months, the Company held 214 and 1209 securities with a carrying amount of $1,028,162 and $8,377,542 and an unrealized loss of $23,994 and $539,253. Of this portfolio, 95.6% and 92.8% were investment grade with associated unrealized losses of $21,691 and $476,336, respectively.
At December 31, 2019 and 2018, respectively, there were no common stocks that have been in a continuous loss position for greater than or equal to twelve months.
At December 31, 2019 and 2018, respectively, for common stocks that have been in a continuous loss position for less than twelve months, the Company held 5 and 6 securities with a cost of $661 and $186 and an unrealized loss of $53 and $21.
The following table provides the number of 5GI securities, aggregate book adjusted carrying value and aggregate fair value by investment type:
Number of 5GI Securities |
Book / Adjusted Carrying Value |
Fair Value | ||||||||||
Bond, amortized cost |
3 | $ | 5,561 | $ | 5,401 | |||||||
Loan-backed and structured securities, amortized cost |
1 | 3,138 | 3,138 | |||||||||
Preferred stock, amortized cost |
1 | 2,272 | 2,272 | |||||||||
|
|
|
|
|
|
|||||||
Total |
5 | $ | 10,971 | $ | 10,811 | |||||||
Bond, amortized cost |
3 | $ | 6,034 | $ | 6,010 | |||||||
Preferred stock, amortized cost |
1 | 6,835 | 6,834 | |||||||||
|
|
|
|
|
|
|||||||
Total |
4 | $ | 12,869 | $ | 12,844 |
34
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
During 2019 and 2018, the Company sold, redeemed or otherwise disposed of 75 and 57 securities as a result of a callable feature which generated investment income of $5,927 and $16,484, as a result of prepayment penalty and/or acceleration fee.
Proceeds from sales and other disposals of bonds and preferred stock and related gross realized capital gains and losses are reflected in the following table. The amounts exclude maturities and include transfers associated with reinsurance agreements.
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Proceeds |
$ | 2,953,444 | $ | 3,505,561 | $ | 5,152,507 | ||||||
|
|
|
|
|
|
|||||||
Gross realized gains |
$ | 24,798 | $ | 23,436 | $ | 574,671 | ||||||
Gross realized losses |
(18,768 | ) | (168,483 | ) | (12,699 | ) | ||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) |
$ | 6,030 | $ | (145,047 | ) | $ | 561,972 | |||||
|
|
|
|
|
|
The Company had gross realized losses which relate to losses recognized on other-than-temporary declines in the fair value of bonds and preferred stocks for the years ended December 31, 2019, 2018 and 2017 of $8,476, $25,453 and $2,992, respectively.
At December 31, 2019, and 2018, the Company had no investments in restructured securities.
Mortgage Loans
The credit quality of mortgage loans by type of property for the years ended December 31, 2019 and 2018 were as follows:
December 31, 2019 | Farm | Commercial | Total | |||||||||
AAA - AA |
$ | — | $ | 1,372,173 | $ | 1,372,173 | ||||||
A |
9,890 | 1,254,899 | 1,264,789 | |||||||||
BBB |
— | 98,796 | 98,796 | |||||||||
|
|
|
|
|
|
|||||||
$ | 9,890 | $ | 2,725,868 | $ | 2,735,758 | |||||||
|
|
|
|
|
|
|||||||
December 31, 2018 | Farm | Commercial | Total | |||||||||
AAA - AA |
$ | — | $ | 1,048,151 | $ | 1,048,151 | ||||||
A |
10,000 | 1,304,089 | 1,314,089 | |||||||||
BBB |
— | 72,347 | 72,347 | |||||||||
|
|
|
|
|
|
|||||||
$ | 10,000 | $ | 2,424,587 | $ | 2,434,587 | |||||||
|
|
|
|
|
|
The above tables exclude residential mortgage loans
35
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The credit quality for commercial and farm mortgage loans was determined based on an internal credit rating model which assigns a letter rating to each mortgage loan in the portfolio as an indicator of the credit quality of the mortgage loan. The internal credit rating model was designed based on rating agency methodology, then modified for credit risk associated with the Company’s mortgage lending process, taking into account such factors as projected future cash flows, net operating income, and collateral value. The model produces a credit rating score and an associated letter rating which is intended to align with S&P ratings as closely as possible. Information supporting the credit risk rating process is updated at least annually.
During 2019, the Company issued mortgage loans with a maximum interest rate of 5.57% and a minimum interest rate of 3.50% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2019 at the time of origination was 70%. During 2018, the Company issued mortgage loans with a maximum interest rate of 5.23% and a minimum interest rate of 3.78% for commercial loans. The maximum percentage of any one mortgage loan to the value of the underlying real estate originated or acquired during the year ending December 31, 2018 at the time of origination was 74%.
The age analysis of mortgage loans and identification in which the Company is a participant or co-lender in a mortgage loan agreement is as follows for December 31, 2019 and 2018.
Residential | Commercial | |||||||||||||||
Farm | All Other | All Other | Total | |||||||||||||
|
||||||||||||||||
Recorded Investment (All) |
||||||||||||||||
(a) Current |
$ | 9,890 | $ | 303 | $ | 2,700,403 | $ | 2,710,596 | ||||||||
(b) 30-59 Days Past Due |
— | 886 | — | 886 | ||||||||||||
(c) 60-89 Days Past Due |
— | 131 | — | 131 | ||||||||||||
(d) 90-179 Days Past Due |
— | 25 | 3,500 | 3,525 | ||||||||||||
(e) 180+ Days Past Due |
— | 6 | 21,965 | 21,971 | ||||||||||||
Accruing interest 90-179 days past due |
||||||||||||||||
(a) Recorded investment |
— | 25 | — | 25 | ||||||||||||
(b) Interest accrued |
— | — | — | — | ||||||||||||
Participant or Co-lender in |
||||||||||||||||
Mortgage Loan Agreement |
||||||||||||||||
(a) Recorded Investment |
$ | 9,890 | $ | — | $ | 1,046,933 | $ | 1,056,823 |
36
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Residential | Commercial | |||||||||||||||
Farm | All Other | All Other | Total | |||||||||||||
|
||||||||||||||||
Recorded Investment (All) |
||||||||||||||||
(a) Current |
$ | 10,000 | $ | 431 | $ | 2,399,122 | $ | 2,409,553 | ||||||||
(b) 30-59 Days Past Due |
— | 1,045 | — | 1,045 | ||||||||||||
(c) 60-89 Days Past Due |
— | 40 | 25,465 | 25,505 | ||||||||||||
(d) 90-179 Days Past Due |
— | 93 | — | 93 | ||||||||||||
(e) 180+ Days Past Due |
— | 7 | — | 7 | ||||||||||||
Accruing interest 90-179 days past due |
||||||||||||||||
(a) Recorded investment |
— | 93 | — | 93 | ||||||||||||
(b) Interest accrued |
— | — | — | — | ||||||||||||
Participant or Co-lender in |
||||||||||||||||
Mortgage Loan Agreement |
||||||||||||||||
(a) Recorded Investment |
$ | 10,000 | $ | — | $ | 832,611 | $ | 842,611 |
At December 31, 2019 and 2018, there were no recorded investments in impaired loans with a related allowance for credit losses. The Company held no allowances for credit losses on mortgage loans at December 31, 2019 or December 31, 2018. There was no average recorded investment in impaired loans during 2019 or 2018. There were no impaired mortgage loans held without an allowance for credit losses as of December 31, 2019 and 2018, respectively, that were subject to participant or co-lender mortgage loan agreement for which the Company is restricted from unilaterally foreclosing on the mortgage loans.
As of December 31, 2019 and 2018, the Company had no mortgage loans derecognized as a result of foreclosure.
The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 91 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on non-performing loans generally is recognized on a cash basis. The Company recognized no interest income on impaired loans for the years ended December 31, 2019, 2018 and 2017, respectively. The Company recognized no interest income on a cash basis for the years ended December 31, 2019, 2018 and 2017, respectively.
At December 31, 2019 and 2018, the Company held a mortgage loan loss reserve in the AVR of $36,207 and $25,537, respectively.
37
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company’s mortgage loan portfolio is diversified by geographic region and specific collateral property type as follows:
Geographic Distribution |
Property Type Distribution |
|||||||||||||||||
December 31 | December 31 | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
South Atlantic |
27 | % | 28 | % | Apartment | 53 | % | 55 | % | |||||||||
Pacific |
25 | 22 | Retail | 14 | 14 | |||||||||||||
Middle Atlantic |
10 | 10 | Industrial | 14 | 12 | |||||||||||||
E. North Central |
8 | 9 | Office | 11 | 9 | |||||||||||||
Mountain |
8 | 9 | Other | 6 | 7 | |||||||||||||
W. South Central |
8 | 8 | Medical | 2 | 2 | |||||||||||||
W. North Central |
7 | 7 | Agricultural | — | 1 | |||||||||||||
E. South Central |
4 | 4 | ||||||||||||||||
New England |
3 | 3 |
At December 31, 2019, 2018 and 2017, the Company held mortgage loans with a total net admitted asset value of $208, $239, and $268, respectively, which had been restructured in accordance with SSAP No. 36, Troubled Debt Restructuring. There were no realized losses during the years ended December 31, 2019, 2018 and 2017 related to such restructurings. There were no unfunded commitments to existing borrowers whose debt had been restructured at December 31, 2019, 2018 and 2017.
Real Estate
The fair value of property is determined based on an appraisal from a third-party appraiser, along with information obtained from discussions with internal asset managers and a listing broker regarding recent comparable sales data and other relevant property information.
The carrying value of the Company’s real estate assets at December 31, 2019 and 2018 was as follows:
2019 | 2018 | |||||||
Investment properties |
$ | 186,894 | $ | 187,420 | ||||
Properties held for sale |
745 | 30,226 | ||||||
|
|
|
|
|||||
$ | 187,639 | $ | 217,646 |
As of December 31, 2019, there was one property classified as held-for-sale. As of December 31, 2018, there were three properties held-for-sale. The Company is working with an external commercial real estate advisor firm to actively market the property and negotiate with potential buyers. During 2019, the Company disposed of three properties throughout 2019, resulting in a net realized gains of $24,201. During 2018, one property classified as held-for-sale was disposed of resulting in a net realized loss of $8.
The Company disposed of one other property throughout 2019, resulting in a net realized loss of $57.
The Company does not engage in retail land sales operations.
38
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company does not hold any real estate investments with participating mortgage loans.
Accumulated depreciation on real estate at December 31, 2019 and 2018, was $58,540 and $63,664, respectively.
There were no impairment losses taken on real estate in 2019 and 2018. Impairment losses of $696 were taken on real estate in 2017 to write the book value down to the current fair value, and were reflected as net realized losses in the statements of operations.
Reverse Mortgages
The company has reverse mortgages, which are reported as Other Invested Assets on the balance sheet. The carrying amount of the investment in reverse mortgages of $6,920 and $11,118 at December 31, 2019 and 2018, respectively, is net of the reserve of $2,891 and $4,197, respectively. Interest income of $523 and $814 was recognized for the years ended December 31, 2019 and 2018 respectively. The Company’s commitment includes making advances to the borrower until termination of the contract. The contract is terminated at the time the borrower moves, sells the property, dies, repays the loan balance or violates the provisions of the loan contract.
During 2019 and 2018, respectively, reverse mortgages of $1,584 and $0 were foreclosed or acquired by deed and transferred to real estate.
Other Invested Assets
During 2019, 2018 and 2017, the Company did not recognize any impairment write down for its investments in joint ventures, partnerships or limited liability companies.
During 2017, the Company reassigned its ownership interest in the Prisma Spectrum Fund for an additional interest in the Zero Beta Fund in the amount of $88,481, which resulted in a realized gain of $43,498.
Tax Credits
For the year ending December 31, 2019, the Company had ownership interests in twenty-nine LIHTC properties with a carrying value of . The remaining years of unexpired tax credits ranged from one to twelve and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to seventeen years. The amount of contingent equity commitments expected to be paid during the years 2020 to 2029 is $66,571. Tax credits recognized in 2019 were $12,733, and other tax benefits recognized in 2019 were $1,546. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
For the year ending December 31, 2018, the Company had ownership interests in twenty-seven LIHTC properties with a carrying value of $35,907. The remaining years of unexpired tax credits ranged from two to twelve and the properties were not subject to regulatory review. The length of time remaining for holding periods ranged from one to seventeen years. The amount of contingent equity commitments
39
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
expected to be paid during the years 2019 to 2029 is $77,186. Tax credits recognized in 2018 were $7,866, and other tax benefits recognized in 2018 were $2,964. There were no impairment losses, write-downs or reclassifications during the year related to any of these credits.
The following tables provide the carrying value of state transferable tax credits gross of any related tax liabilities and total unused transferable tax credits by state and in total as of December 31, 2019 and 2018:
December 31, 2019 | ||||||||||||
Description of State Transferable and Non- |
State | Carrying Value | Unused Amount* | |||||||||
Low-Income Housing Tax Credits |
MA | $ | 568 | $ | 1,478 | |||||||
Economic Redevelopment and Growth Tax Credits |
NJ | — | 18,700 | |||||||||
|
|
|
|
|||||||||
Total |
$ | 568 | $ | 20,178 | ||||||||
|
|
|
|
|||||||||
December 31, 2018 | ||||||||||||
Description of State Transferable and Non- |
State | Carrying Value | Unused Amount | |||||||||
Low-Income Housing Tax Credits |
MA | $ | 1,268 | $ | 2,178 | |||||||
Economic Redevelopment and Growth Tax Credits |
NJ | — | 18,700 | |||||||||
|
|
|
|
|||||||||
Total |
$ | 1,268 | $ | 20,878 | ||||||||
|
|
|
|
* | The unused amount reflects credits that the Company deems will be realizable in the period 2019-2029. |
The Company did not have any non-transferable state tax credits.
The Company estimated the utilization of the remaining state transferable tax credits by projecting a future tax liability based on projected premium, tax rates and tax credits, and comparing the projected future tax liability to the availability of remaining state transferable tax credits. The Company had no impairment losses related to state transferable tax credits as of December 31, 2019, 2018 and 2017.
Derivatives
The Company has entered into collateral agreements with certain counterparties wherein the counterparty is required to post assets (cash or securities) on the Company’s behalf in an amount equal to the difference between the net positive fair value of the contracts and an agreed upon threshold based on the credit rating of the counterparty. If the net fair value of all contracts with this counterparty is negative, then the Company is required to post similar assets (cash or securities). Fair value of derivative contracts, aggregated at a counterparty level at December 31, 2019 and 2018, was as follows:
2019 | 2018 | |||||||
Fair value - positive |
$ | 218,361 | $ | 168,821 | ||||
Fair value - negative |
(117,169 | ) | (94,091 | ) |
40
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
For the years ended December 31, 2019, 2018 and 2017, the Company has recorded ($7,547), $2,406 and ($3,602), respectively, for the component of derivative instruments utilized for hedging purposes that did not qualify for hedge accounting. This has been recorded directly to unassigned surplus as an unrealized gain (loss). The Company did not recognize any unrealized gains or losses during 2019, 2018, or 2017 that represented the component of derivative instruments gain or loss that was excluded from the assessment of hedge effectiveness.
The maximum term over which the Company is hedging its exposure to the variability of future cash flows is approximately 13 years for forecasted hedge transactions. For the years ended December 31, 2019, 2018 and 2017 none of the Company’s cash flow hedges have been discontinued as it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship. As of December 31, 2019 and 2018, the Company has accumulated deferred gains in the amount of $1,186 and $1,186, respectively, related to the termination of swaps that were hedging forecasted transactions. It is expected that these gains will be used as basis adjustments on futures asset purchases expected to transpire throughout 2026.
Summary of realized gains (losses) by derivative type for the years ended December 31, 2019, 2018 and 2017:
2019 | 2018 | 2017 | ||||||||||
Options: |
||||||||||||
Calls |
$ | — | $ | — | $ | 67 | ||||||
Caps |
— | — | (45,848 | ) | ||||||||
Puts |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total options |
$ | — | $ | — | $ | (45,781 | ) | |||||
|
|
|
|
|
|
|||||||
Swaps: |
||||||||||||
Interest rate |
$ | 293 | $ | (1,105 | ) | $ | 102,724 | |||||
Credit |
(279 | ) | (2,444 | ) | — | |||||||
Total return |
(9,112 | ) | (4,853 | ) | (26,122 | ) | ||||||
|
|
|
|
|
|
|||||||
Total swaps |
$ | (9,098 | ) | $ | (8,402 | ) | $ | 76,602 | ||||
|
|
|
|
|
|
|||||||
Futures - net positions |
216,114 | (81,504 | ) | 167,302 | ||||||||
Lehman settlements |
14 | 55 | 122 | |||||||||
|
|
|
|
|
|
|||||||
Total realized gains (losses) |
$ | 207,030 | $ | (89,851 | ) | $ | 198,245 | |||||
|
|
|
|
|
|
The average estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 18,303 | $ | 16,608 | $ | (2,535 | ) | $ | (1,212 | ) | ||||||
Interest rate swaps |
— | — | — | 751 |
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
41
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The estimated fair value of derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019 and 2018:
Asset(1) | Liability(1) | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative component of RSATs |
||||||||||||||||
Credit default swaps |
$ | 19,459 | $ | 13,304 | $ | (2,855 | ) | $ | (1,148 | ) | ||||||
Interest rate swaps |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 19,459 | $ | 13,304 | $ | (2,855 | ) | $ | (1,148 | ) | ||||||
|
|
|
|
|
|
|
|
(1) | Asset and liability classification is based on the positive (asset) or negative (liability) book/adjusted carrying value of each derivative. |
The net realized gains (losses) on the derivatives held for other than hedging purposes is presented in the following table for the years ended December 31, 2019, 2018, and 2017:
2019 | 2018 | 2017 | ||||||||||
Derivative component of RSATs |
||||||||||||
Credit default swaps |
$ | (279 | ) | $ | (2,444 | ) | $ | — | ||||
Interest rate swaps |
— | (616 | ) | — | ||||||||
|
|
|
|
|
|
|||||||
Total |
$ | (279 | ) | $ | (3,060 | ) | $ | — | ||||
|
|
|
|
|
|
As stated in Note 2, the Company replicates investment grade corporate bonds or sovereign debt by writing credit default swaps. As a writer of credit swaps, the Company actively monitors the underlying asset, being careful to note any events (default or similar credit event) that would require the Company to perform on the credit swap. If such events would take place, a payment equal to the notional amount of the contract, less any potential recoveries as determined by the underlying agreement, will be made by the Company to the counterparty to the swap.
42
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables present the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at December 31, 2019 and 2018:
2019 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 3,915 | $ | 273,200 | 1.7 | |||||||||||
Credit default swaps referencing indices |
7 | 10,000 | 41.7 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
3,922 | 283,200 | 3.1 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
9,747 | 560,760 | 2.0 | |||||||||||||
Credit default swaps referencing indices |
5,721 | 315,700 | 2.6 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
15,468 | 876,460 | 2.2 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
2,924 | 28,350 | 2.3 | |||||||||||||
Credit default swaps referencing indices |
— | — | — | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
2,924 | 28,350 | 2.3 | |||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 22,314 | $ | 1,188,010 | 2.4 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard and Poor’s Rating Services (“S&P”), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
43
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
2018 | ||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations (1) |
NAIC Designation |
Estimated Fair Value of Credit Default Swaps |
Maximum Amount of Future Payments under Credit Default Swaps |
Weighted Average Years to Maturity (2) |
||||||||||||
AAA/AA/A |
1 | |||||||||||||||
Single name credit default swaps (3) |
$ | 3,556 | $ | 259,450 | 2.6 | |||||||||||
Credit default swaps referencing indices |
— | — | — | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
3,556 | 259,450 | 2.6 | |||||||||||||
|
|
|
|
|||||||||||||
BBB |
2 | |||||||||||||||
Single name credit default swaps (3) |
5,635 | 590,510 | 3.0 | |||||||||||||
Credit default swaps referencing indices |
2,588 | 291,500 | 3.4 | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
8,223 | 882,010 | 3.1 | |||||||||||||
|
|
|
|
|||||||||||||
BB |
3 | |||||||||||||||
Single name credit default swaps (3) |
2,674 | 28,350 | 3.3 | |||||||||||||
Credit default swaps referencing indices |
— | — | — | |||||||||||||
|
|
|
|
|||||||||||||
Subtotal |
2,674 | 28,350 | 3.3 | |||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | 14,453 | $ | 1,169,810 | 3.0 | |||||||||||
|
|
|
|
(1) | The rating agency designations are based on availability and the blending of the applicable ratings among Moody’s Investors Service (“Moody’s”), Standard and Poor’s Rating Services (“S&P”), and Fitch Ratings. If no rating is available from a rating agency, then an internally derived rating is used. |
(2) | The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts. |
(3) | Includes corporate, foreign government and state entities. |
44
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019 and 2018, the Company’s outstanding derivative instruments, shown in notional or contract amounts and fair value, are summarized as follows:
Contract or Notional Amount* | Fair Value | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Derivative assets: |
||||||||||||||||
Credit default swaps |
$ | 900,200 | $ | 886,000 | $ | 19,459 | $ | 13,304 | ||||||||
Currency swaps |
51,684 | 73,235 | 13,458 | 14,877 | ||||||||||||
Equity futures |
5 | 2 | 1,948 | 2,282 | ||||||||||||
Equity swaps |
— | 61,739 | — | 4,589 | ||||||||||||
Interest rate futures |
— | — | 7 | 213 | ||||||||||||
Interest rate swaps |
365,450 | 247,450 | 11,171 | 9,174 | ||||||||||||
Derivative liabilities: |
||||||||||||||||
Credit default swaps |
287,810 | 283,810 | (2,855 | ) | (1,148 | ) | ||||||||||
Currency swaps |
257,493 | 180,599 | 17,050 | 15,155 | ||||||||||||
Equity futures |
12 | 3 | 1,349 | 127 | ||||||||||||
Equity swaps |
78,802 | 100 | 4,361 | 208 | ||||||||||||
Interest rate futures |
1 | — | 544 | 39 | ||||||||||||
Interest rate swaps |
2,131,433 | 2,579,033 | (75,597 | ) | (44,671 | ) |
* | Futures are presented in contract format. Swaps and options are presented in notional format. |
Restricted Assets
The following tables show the pledged or restricted assets as of December 31, 2019 and 2018, respectively:
Gross Restricted (Admitted & Nonadmitted) 2019 | ||||||||||||||||||||
Restricted Asset Category |
Total General Account (G/A) |
G/A Supporting Separate Account (S/A) Activity |
Total S/A Restricted Assets |
S/A Assets Supporting G/A Activity |
Total | |||||||||||||||
Collateral held under security lending agreements |
$ | 757,186 | $ | — | $ | — | $ | — | $ | 757,186 | ||||||||||
Subject to dollar repurchase agreements |
254,966 | — | — | — | 254,966 | |||||||||||||||
FHLB capital stock |
57,000 | — | — | — | 57,000 | |||||||||||||||
On deposit with states |
4,180 | — | — | — | 4,180 | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
1,829,750 | — | — | — | 1,829,750 | |||||||||||||||
Pledged as collateral not captured in other categories |
249,326 | — | — | — | 249,326 | |||||||||||||||
Other restricted assets |
182,479 | — | — | — | 182,479 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Restricted Assets |
$ | 3,334,887 | $ | — | $ | — | $ | — | $ | 3,334,887 | ||||||||||
|
|
|
|
|
|
|
|
|
|
45
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Gross (Admitted & Nonadmitted) Restricted | Percentage | |||||||||||||||||||||||
Restricted Asset Category |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Nonadmitted Restricted |
Total Admitted Restricted (5 minus 8) |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
||||||||||||||||||
Collateral held under security lending agreements |
$ | 574,886 | $ | 182,300 | $ | — | $ | 757,186 | 1.43 | % | 1.44 | % | ||||||||||||
Subject to dollar repurchase agreements |
109,657 | 145,309 | — | 254,966 | 0.48 | % | 0.49 | % | ||||||||||||||||
FHLB capital stock |
66,800 | (9,800 | ) | — | 57,000 | 0.11 | % | 0.11 | % | |||||||||||||||
On deposit with states |
4,730 | (550 | ) | — | 4,180 | 0.01 | % | 0.01 | % | |||||||||||||||
Pledged as collateral to FHLB (including assets backing funding agreements) |
2,086,543 | (256,793 | ) | — | 1,829,750 | 3.46 | % | 3.48 | % | |||||||||||||||
Pledged as collateral not captured in other categories |
266,068 | (16,742 | ) | — | 249,326 | 0.47 | % | 0.47 | % | |||||||||||||||
Other restricted assets |
195,728 | (13,249 | ) | — | 182,479 | 0.34 | % | 0.35 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Restricted Assets |
$ | 3,304,412 | $ | 30,475 | $ | — | $ | 3,334,887 | 6.30 | % | 6.35 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The following tables show the pledged or restricted assets in other categories as of December 31, 2019 and 2018, respectively:
Gross (Admitted & Nonadmitted) Restricted 2019 | ||||||||||||||||||||
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 | |||||||||||||||
Derivatives |
$ | 249,326 | $ | — | $ | — | $ | — | $ | 249,326 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 249,326 | $ | — | $ | — | $ | — | $ | 249,326 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Gross (Admitted & Nonadmitted) Restricted |
Percentage | |||||||||||||||||||
Description of Assets |
Total From Prior Year (2018) |
Increase/ (Decrease) |
Total Current Year Admitted Restricted |
Gross (Admitted & Nonadmitted) Restricted to Total Assets |
Admitted Restricted to Total Admitted Assets |
|||||||||||||||
Derivatives |
$ | 266,068 | $ | (16,742 | ) | $ | 249,326 | 0.47 | % | 0.47 | % | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 266,068 | $ | (16,742 | ) | $ | 249,326 | 0.47 | % | 0.47 | % | |||||||||
|
|
|
|
|
|
|
|
|
|
46
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table shows the collateral received and reflected as assets within the financial statements as of December 31, 2019 and 2018.
2019 |
||||||||||||||||
Collateral Assets |
Carrying Value | Fair Value | % of CV to Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 456,116 | $ | 456,116 | 1.72 | % | 1.75 | % | ||||||||
Securities lending collateral assets |
757,186 | 757,186 | 2.86 | 2.91 | ||||||||||||
Other |
997 | 997 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 1,214,299 | $ | 1,214,299 | 4.58 | % | 4.66 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 1,214,975 | 5.13 | % |
2018 |
||||||||||||||||
Collateral Assets |
Carrying Value | Fair Value | % of CV to Total Assets (Admitted and Nonadmitted) |
% of CV to Total Admitted Assets |
||||||||||||
Cash |
$ | 229,777 | $ | 229,777 | 0.93 | % | 0.94 | % | ||||||||
Securities lending collateral assets |
575,155 | 575,155 | 2.32 | 2.36 | ||||||||||||
Other |
1,000 | 1,000 | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral assets |
$ | 805,932 | $ | 805,932 | 3.25 | % | 3.30 | % | ||||||||
|
|
|
|
|
|
|
|
Amount | % of Liability to Total Liabilities |
|||||||
Recognized obligation to return collateral asset |
$ | 806,292 | 3.60 | % |
47
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Net Investment Income
Detail of net investment income is presented below:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Income: |
||||||||||||
Bonds |
$ | 780,857 | $ | 763,422 | $ | 579,022 | ||||||
Preferred stocks |
1,617 | 1,441 | 1,364 | |||||||||
Common stocks |
91,649 | 63,241 | 102,361 | |||||||||
Mortgage loans on real estate |
119,009 | 104,675 | 72,505 | |||||||||
Real estate |
33,040 | 35,371 | 35,366 | |||||||||
Policy loans |
49,354 | 49,379 | 49,680 | |||||||||
Cash, cash equivalents and short-term investments |
20,104 | 13,218 | 10,218 | |||||||||
Derivatives |
25,690 | 26,047 | 23,631 | |||||||||
Other invested assets |
14,736 | 11,521 | 33,533 | |||||||||
|
|
|
|
|
|
|||||||
Gross investment income |
1,136,056 | 1,068,315 | 907,680 | |||||||||
Less: investment expenses |
110,855 | 97,376 | 81,193 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income before amortization of IMR |
$ | 1,025,201 | $ | 970,939 | $ | 826,487 | ||||||
Amortization of IMR |
69,658 | 79,469 | 53,005 | |||||||||
|
|
|
|
|
|
|||||||
Net investment income, including IMR |
$ | 1,094,859 | $ | 1,050,408 | $ | 879,492 | ||||||
|
|
|
|
|
|
Realized Capital Gains (Losses)
Net realized capital gains (losses) on investments, including OTTI, are summarized below:
Realized Year Ended December 31 |
||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | (5,516 | ) | $ | (170,936 | ) | $ | 559,366 | ||||
Preferred stocks |
78 | — | — | |||||||||
Common stocks |
(590 | ) | 1,051 | 39,352 | ||||||||
Mortgage loans on real estate |
(582 | ) | (1,394 | ) | 10,955 | |||||||
Real estate |
24,177 | (8 | ) | (663 | ) | |||||||
Cash, cash equivalents and short-term investments |
45 | (17 | ) | 19 | ||||||||
Derivatives |
207,015 | (89,906 | ) | 198,123 | ||||||||
Other invested assets |
12,226 | 23,531 | 67,295 | |||||||||
|
|
|
|
|
|
|||||||
Change in realized capital gains (losses), before taxes |
236,853 | (237,679 | ) | 874,447 | ||||||||
Federal income tax effect |
(8,597 | ) | 47,135 | (94,516 | ) | |||||||
Transfer from (to) interest maintenance reserve |
874 | 118,706 | (368,479 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net realized capital gains (losses) on investments |
$ | 229,130 | $ | (71,838 | ) | $ | 411,452 | |||||
|
|
|
|
|
|
48
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Unrealized Capital Gains (Losses)
The changes in net unrealized capital gains and losses on investments, including the changes in net unrealized foreign capital gains and losses were as follows:
Change in Unrealized | ||||||||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Bonds |
$ | 25,237 | $ | 8,468 | $ | 32,575 | ||||||
Preferred stocks |
(6,052 | ) | (1,856 | ) | (1,182 | ) | ||||||
Common stocks |
12 | (1,197 | ) | (37,604 | ) | |||||||
Affiliated entities |
19,774 | 29,355 | 10,774 | |||||||||
Cash equivalents and short-term investments |
(13 | ) | 29 | 35 | ||||||||
Derivatives |
(25,855 | ) | (4,952 | ) | 36,372 | |||||||
Other invested assets |
48,659 | 10,159 | (49,430 | ) | ||||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), before taxes |
61,762 | 40,006 | (8,460 | ) | ||||||||
Taxes on unrealized capital gains (losses) |
(10,064 | ) | (3,048 | ) | (13,166 | ) | ||||||
|
|
|
|
|
|
|||||||
Change in unrealized capital gains (losses), net of tax |
$ | 51,698 | $ | 36,958 | $ | (21,626 | ) | |||||
|
|
|
|
|
|
6. Premium and Annuity Considerations Deferred and Uncollected
Deferred and uncollected life premium and annuity considerations, net of reinsurance, at December 31, 2019 and 2018 were as follows:
2019 | 2018 | |||||||||||||||
Gross | Net of Loading | Gross | Net of Loading | |||||||||||||
Life and annuity: |
||||||||||||||||
Ordinary first-year business |
$ | 8,311 | $ | 1,553 | $ | 9,413 | $ | 1,652 | ||||||||
Ordinary renewal business |
143,173 | 113,543 | 149,737 | 117,652 | ||||||||||||
Group life direct business |
5,805 | 4,051 | 6,768 | 4,753 | ||||||||||||
Credit direct business |
22 | 22 | 86 | 86 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 157,311 | $ | 119,169 | $ | 166,004 | $ | 124,143 | |||||||||
|
|
|
|
|
|
|
|
49
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
7. Policy and Contract Attributes
Insurance Liabilities
Policy reserves, deposit-type contracts and policy claims at December 31, 2019 and 2018 were as follows:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Life insurance reserves |
$ | 10,444,776 | $ | 9,567,419 | ||||
Annuity reserves and supplementary contracts with life contingencies |
1,383,733 | 1,466,569 | ||||||
Accident and health reserves (including long term care) |
6,066,092 | 5,931,736 | ||||||
|
|
|
|
|||||
Total policy reserves |
$ | 17,894,601 | 16,965,724 | |||||
Deposit-type contracts |
356,309 | 584,693 | ||||||
Policy claims |
463,716 | 434,245 | ||||||
|
|
|
|
|||||
Total policy reserves, deposit-type contracts and claim liabilities |
$ | 18,714,626 | $ | 17,984,662 | ||||
|
|
|
|
Life Insurance Reserves
The aggregate policy reserves for life insurance policies are based upon the 1941, 1958, 1980, 2001 and 2017 Commissioner’s Standard Ordinary Mortality Tables, the 1912, 1941 and 1961 Standard Industrial Mortality Tables, the 1960 Commissioner’s Standard Group Mortality Table, and the American Men, Actuaries and American Experience Mortality Tables. The reserves are calculated using interest rates ranging from 2.00 to 6.50 percent and are computed principally on the Net Level Premium Valuation and the Commissioner’s Reserve Valuation Method. Reserves for universal life policies are based on account balances adjusted for the Commissioner’s Reserve Valuation Method.
Tabular interest, tabular less actual reserves released and tabular cost have been determined by formula.
The Company waives deduction of deferred fractional premiums upon death of the insured and returns any portion of the final premium for periods beyond the date of death. Additional premiums are charged or additional mortality charges are assessed for policies issued on substandard lives according to underwriting classification. Generally, mean reserves are determined by computing the regular mean reserve for the plan at the true age and holding, in addition, one-half (1/2) of the extra premium charge for the year. For certain flexible premium and fixed premium universal life insurance products, reserves are calculated utilizing the Commissioner’s Reserve Valuation Method for universal life policies and recognizing any substandard ratings.
At December 31, 2019 and 2018, the Company had insurance in force aggregating $3,797,278 and $4,392,920 respectively, in which the gross premiums are less than the net premiums required by the valuation standards established by the Iowa Insurance Division. The Company established policy reserves of $44,585 and $49,923 to cover these deficiencies at December 31, 2019 and 2018, respectively.
50
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Participating life insurance policies were issued by the Company which entitle policyholders to a share in the earnings of the participating policies, provided that a dividend distribution, which is determined annually based on mortality and persistency experience of the participating policies, is authorized by the Company. Participating insurance constituted less than 1% of ordinary life insurance in force at December 31, 2019 and 2018.
For the years ended December 31, 2019, 2018 and 2017, premiums for participating life insurance policies were $920, $963 and $1,003, respectively. The Company accounts for its policyholder dividends based on dividend scales and experience of the policies. The Company paid dividends in the amount of $1,030, $1,025 and $1,081 to policyholders during 2019, 2018 and 2017, respectively, and did not allocate any additional income to such policyholders.
Annuity Reserves and Supplementary Contracts Involving Life Contingencies
Deferred annuity reserves are calculated according to the Commissioner’s Annuity Reserve Valuation Method including excess interest reserves to cover situations where the future interest guarantees plus the decrease in surrender charges are in excess of the maximum valuation rates of interest. Reserves for immediate annuities and supplementary contracts with and without life contingencies are equal to the present value of future payments assuming interest rates ranging from 1.25 to 11.25 percent and mortality rates, where appropriate, from a variety of tables.
Annuity reserves also include GICs and funding agreements classified as life-type contracts as defined in SSAP No. 50, Classifications of Insurance or Managed Care Contracts. These liabilities have annuitization options at guaranteed rates and consist of floating interest rate and fixed interest rate contracts. The contract reserves are carried at the greater of the account balance or the value as determined for an annuity with cash settlement option, on a change in fund basis, according to the Commissioner’s Annuity Reserve Valuation Method.
The liabilities related to guaranteed investment contracts and policyholder funds left on deposit with the Company generally are equal to fund balances less applicable surrender charges.
For variable annuities with guaranteed living benefits and variable annuities with minimum guaranteed death benefits the Company complies with VM-21. VM-21 specifies statutory reserve requirements for variable annuity contracts with benefit guarantees (VACARVM) and without benefit guarantees and related products. The VM-21 reserve calculation covers all variable annuity products. Examples of covered guaranteed benefits include guaranteed minimum accumulation benefits, guaranteed minimum death benefits, guaranteed minimum withdrawal benefits, guaranteed minimum income benefits, and variable payout annuity with guaranteed floors. The aggregate reserve for contracts falling within the scope of VM-21 is equal to the stochastic reserves plus the additional standard projection amount.
Both the stochastic reserves and the standard projection are determined as the CTE70 of the scenario reserves. To determine the CTE70 values, the Company used 1,000 of the pre-packaged scenarios developed by the American Academy of Actuaries (AAA) and the Society of Actuaries. The stochastic reserves use and prudent estimate assumptions based on company experience, while the standard projection uses the assumptions prescribed in VM-21 for determining the additional standard projection amount.
51
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Accident and Health Liabilities
Accident and health policy reserves are equal to the greater of the gross unearned premiums or any required mid-terminal reserves plus net unearned premiums and the present value of amounts not yet due on both reported and unreported claims.
At December 31, 2019 and 2018, the Company had no premium deficiency reserve related to accident and health policies.
The Company’s primary method utilized to estimate premium adjustments for contracts subject to redetermination is to review experience periodically and to adjust premiums for differences between the experience anticipated at the time of redetermination and that underlying the original premiums. The Company has not limited its degree of discretion contractually; however, in some states it has agreed not to raise premiums in order to recoup past losses. The Company forgoes premium changes on existing policies at its option if the administrative cost and other business issues associated with the change outweigh the direct financial impact of the change. Also, the Company has extra-contractually guaranteed the current premium scale for certain policies.
Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business.
The Company does not write any accident and health business that is subject to the Affordable Care Act risk sharing provisions.
Liabilities for losses and loss/claim adjustment expenses for accident and health contracts are estimated using statistical claim development models to develop best estimates of liabilities for medical expense business and using tabular reserves employing mortality/morbidity tables and discount rates meeting minimum regulatory requirements for other business. Unpaid claims include amounts for losses and related adjustment expenses and are estimates of the ultimate net costs of all losses, reported and unreported. These estimates are subject to the impact of future changes in claim severity, frequency and other factors.
52
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Activity in the liability for unpaid claims and related processing costs net of reinsurance is summarized as follows:
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | — | $ | 864,693 | $ | 266,218 | $ | 598,474 | ||||||||
2018 and prior |
1,860,793 | (18,289 | ) | 558,704 | 1,283,801 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,860,793 | $ | 846,404 | $ | 824,922 | 1,882,276 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 4,390,665 | $ | 4,512,675 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 6,251,458 | $ | 6,394,951 | ||||||||||||
|
|
|
|
|||||||||||||
Unpaid Claims Liability Beginning of Year |
Claims Incurred |
Claims Paid |
Unpaid Claims Liability End of Year |
|||||||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | — | $ | 954,895 | $ | 294,034 | $ | 660,861 | ||||||||
2017 and prior |
1,751,452 | (12,178 | ) | 539,342 | 1,199,932 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,751,452 | $ | 942,717 | $ | 833,376 | 1,860,793 | |||||||||||
|
|
|
|
|||||||||||||
Active life reserve |
$ | 4,238,123 | $ | 4,390,665 | ||||||||||||
|
|
|
|
|||||||||||||
Total accident and health reserves |
$ | 5,989,575 | $ | 6,251,458 | ||||||||||||
|
|
|
|
The Company’s unpaid claims reserve was increased (decreased) by $(18,289) and $(12,178) for the years ended December 31, 2019 and 2018, respectively, for health claims that were incurred prior to those balance sheet dates. The change in 2019 and 2018 resulted primarily from variances in the estimated frequency of claims and claim severity.
53
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Activity in the liability for unpaid claims adjustment expense is summarized as follows:
Liability Beginning of Year |
Incurred | Paid | Liability End of Year |
|||||||||||||
Year ended December 31, 2019 |
||||||||||||||||
2019 |
$ | — | $ | 15,113 | $ | 1,428 | $ | 13,685 | ||||||||
2018 and prior |
46,226 | (14,407 | ) | 2,464 | 29,355 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 46,226 | $ | 706 | $ | 3,892 | $ | 43,040 | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Year ended December 31, 2018 |
||||||||||||||||
2018 |
$ | — | $ | 19,236 | $ | 2,819 | $ | 16,417 | ||||||||
2017 and prior |
43,512 | (11,813 | ) | 1,890 | 29,809 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 43,512 | $ | 7,423 | $ | 4,709 | $ | 46,226 | |||||||||
|
|
|
|
|
|
|
|
The Company did not increase or decrease the claim adjustment expense provision for insured events of prior years during 2019 or 2018.
Deposit-type Contracts
Tabular interest on funds not involving life contingencies has been determined primarily by formula.
The Company issues certain funding agreements with well-defined class-based annuity purchase rates defining either specific or maximum purchase rate guarantees. However, these funding agreements are not issued to or for the benefit of an identifiable individual or group of individuals. These contracts are classified as deposit-type contracts in accordance with SSAP No. 50.
Included in the liability for deposit-type contracts at December 31, 2019 and 2018 are approximately $11,288 and $11,543, respectively, of funding agreements issued to special purpose entities in conjunction with non-recourse medium-term note programs. Under these programs, the proceeds from each note series issuance are used to purchase a funding agreement from the Company which secures that particular series of notes. In general, the payment terms of the note series match the payment terms of the funding agreement that secures that series. Claims for the principal and interest for these funding agreements are afforded equal priority as other policyholders.
54
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Withdrawal Characteristics of Annuity Reserves and Deposit Funds
A portion of the Company’s policy reserves and other policyholders’ funds (including separate account liabilities) relates to liabilities established on a variety of the Company’s annuity, deposit fund and life products. There may be certain restrictions placed upon the amount of funds that can be withdrawn without penalty. The amount of reserves on annuity and deposit fund products, by withdrawal characteristics, is summarized as follows:
December 31 2019 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Individual Annuities: |
||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 7,602 | $ | 6,629 | $ | — | $ | 14,230 | 0 | % | ||||||||||
At book value less surrender charge of 5% or more |
2,535 | — | — | 2,535 | 0 | |||||||||||||||
At fair value |
85 | — | 20,282,900 | 20,282,984 | 93 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
10,221 | 6,629 | 20,282,900 | 20,299,749 | 93 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
963,508 | — | — | 963,508 | 4 | |||||||||||||||
Not subject to discretionary withdrawal provision |
321,922 | — | 134,490 | 456,411 | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
1,295,651 | 6,629 | 20,417,389 | 21,719,669 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
210,156 | — | — | 210,156 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuity reserves |
$ | 1,085,496 | $ | 6,629 | $ | 20,417,389 | $ | 21,509,514 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
December 31 2019 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Group Annuities |
||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 711 | $ | 8,844 | $ | — | $ | 9,555 | 0 | % | ||||||||||
At fair value |
— | — | 2,142,869 | 2,142,869 | 86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
711 | 8,844 | 2,142,869 | 2,152,424 | 86 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
318,578 | — | — | 318,578 | 13 | |||||||||||||||
Not subject to discretionary withdrawal provision |
29,631 | — | — | 29,631 | 1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuity reserves |
348,920 | 8,844 | 2,142,869 | 2,500,633 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuity reserves |
$ | 348,920 | $ | 8,844 | $ | 2,142,869 | $ | 2,500,633 | ||||||||||||
|
|
|
|
|
|
|
|
55
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2019 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Deposit-type contracts (no life contingencies): | ||||||||||||||||||||
Not subject to discretionary withdrawal provision |
$ | 320,770 | $ | — | $ | 2,417 | $ | 323,187 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
320,770 | — | 2,417 | 323,187 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
15,143 | — | — | 15,143 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit- type contracts |
$ | 305,627 | $ | — | $ | 2,417 | $ | 308,044 | ||||||||||||
|
|
|
|
|
|
|
|
Amount | ||||
Reconcililation to the Annual Statement: | ||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 1,145,835 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
237,898 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
356,309 | |||
|
|
|||
Subtotal |
1,740,042 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
22,441,205 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
134,526 | |||
Other contract deposit funds |
2,417 | |||
|
|
|||
Subtotal |
22,578,149 | |||
|
|
|||
Combined total |
$ | 24,318,191 | ||
|
|
December 31 2018 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Individal Annuities: | ||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 7,885 | $ | 6,677 | $ | — | $ | 14,562 | 0 | % | ||||||||||
At book value less surrender charge of 5% or more |
3,458 | — | — | 3,458 | 0 | |||||||||||||||
At fair value |
3,038 | — | 17,464,766 | 17,467,804 | 92 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
14,380 | 6,677 | 17,464,766 | 17,485,824 | 92 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
1,011,556 | — | — | 1,011,556 | 5 | |||||||||||||||
Not subject to discretionary withdrawal provision |
405,171 | — | 103,186 | 508,357 | 3 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total individual annuity reserves |
1,431,107 | 6,677 | 17,567,953 | 19,005,737 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
287,593 | — | — | 287,593 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net individual annuities reserves |
$ | 1,143,514 | $ | 6,677 | $ | 17,567,953 | $ | 18,718,144 | ||||||||||||
|
|
|
|
|
|
|
|
56
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Group Annuities: | ||||||||||||||||||||
Subject to discretionary withdrawal with adjustment: |
||||||||||||||||||||
With fair value adjustment |
$ | 648 | $ | 9,780 | $ | — | $ | 10,427 | 0 | % | ||||||||||
At fair value |
— | — | 2,437,946 | 2,437,946 | 86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total with adjustment or at fair value |
648 | 9,780 | 2,437,946 | 2,448,373 | 87 | |||||||||||||||
At book value without adjustment (minimal or no charge or adjustment) |
343,252 | — | — | 343,252 | 12 | |||||||||||||||
Not subject to discretionary withdrawal provision |
30,091 | — | — | 30,091 | 1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total group annuities reserves |
373,991 | 9,780 | 2,437,946 | 2,821,716 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net group annuities reserves |
$ | 373,991 | $ | 9,780 | $ | 2,437,946 | $ | 2,821,716 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
December 31 2018 |
||||||||||||||||||||
General Account |
Separate Account with Guarantees |
Separate Account Non- Guaranteed |
Total | Percent | ||||||||||||||||
Deposit-type contracts (no life contingencies): | ||||||||||||||||||||
provision |
$ | 549,673 | $ | — | $ | 1,693 | $ | 551,366 | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposit-type contracts |
549,673 | — | 1,693 | 551,366 | 100 | % | ||||||||||||||
|
|
|||||||||||||||||||
Less reinsurance ceded |
15,916 | — | — | 15,916 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net deposit-type contracts |
$ | 533,756 | $ | — | $ | 1,693 | $ | 535,450 | ||||||||||||
|
|
|
|
|
|
|
|
Amount | ||||
Reconcililation to the Annual Statement: |
||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Annuities section, total (net) |
$ | 1,252,507 | ||
Exhibit 5, Supp contracts with life contingencies section, total (net) |
214,062 | |||
Exhibit 7, Deposit-type contracts, net balance at the end of the current year after reinsurance |
584,693 | |||
|
|
|||
Subtotal |
2,051,261 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Annuities section, total |
19,919,133 | |||
Exhibit 3, Supp contracts with life contingencies section, total |
103,223 | |||
Other contract deposit funds |
1,693 | |||
|
|
|||
Subtotal |
20,024,049 | |||
|
|
|||
Combined total |
$ | 22,075,310 | ||
|
|
57
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Amount of reserves on life products, by withdrawal characteristics, is summarized as follow:
December 31 2019 |
||||||||||||||||||||||||
General Account | Separate Account - Guaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, surrender values, or policy loans: |
||||||||||||||||||||||||
Term policies with cash value |
$ | 46,855 | $ | 49,165 | $ | 82,395 | $ | — | $ | — | $ | — | ||||||||||||
Universal life |
1,465,607 | 1,286,331 | 1,547,962 | — | — | — | ||||||||||||||||||
Universal life with secondary guarantees |
2,375 | 2,338 | 2,391 | — | — | — | ||||||||||||||||||
Indexed universal life with secondary guarantees |
3,825,616 | 2,436,729 | 3,500,501 | — | — | — | ||||||||||||||||||
Other permanent cash value life Insurance |
3,299,189 | 3,513,583 | 5,450,095 | — | — | — | ||||||||||||||||||
Variable universal life |
604,929 | 592,688 | 635,586 | 3,909,192 | 3,878,306 | 3,884,304 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
— | — | 498,864 | — | — | — | ||||||||||||||||||
Accidental death benefits |
— | — | 15,453 | — | — | — | ||||||||||||||||||
Disability- active lives |
— | — | 35,660 | — | — | — | ||||||||||||||||||
Disability- disabled lives |
— | — | 116,543 | — | — | — | ||||||||||||||||||
Miscellaneous reserves |
— | — | 360,709 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
9,244,572 | 7,880,834 | 12,246,159 | 3,909,192 | 3,878,306 | 3,884,304 | ||||||||||||||||||
Reinsurance ceded |
179 | 179 | 1,801,384 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 9,244,394 | $ | 7,880,656 | $ | 10,444,776 | $ | 3,909,192 | $ | 3,878,306 | $ | 3,884,304 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount | ||||
Reconciliation to the Annual Statement: |
||||
Life & Accident & Health Annual Statement: |
||||
Exhibit 5, Life insurance section, total (net) |
$ | 9,935,044 | ||
Exhibit 5, Accidental death benefits section total (net) |
15,453 | |||
Exhibit 5, Disability - active lives section, total (net) |
32,467 | |||
Exhibit 5, Disability - disabled lives section, total (net) |
115,629 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
346,182 | |||
|
|
|||
Subtotal |
10,444,776 | |||
Separate Accounts Annual Statement: |
||||
Exhibit 3, Life insurance section, total |
3,884,304 | |||
|
|
|||
Subtotal |
3,884,304 | |||
|
|
|||
Combined total |
$ | 14,329,079 | ||
|
|
58
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
December 31 2018 |
||||||||||||||||||||||||
General Account | Separate Account - Guaranteed and Nonguaranteed |
|||||||||||||||||||||||
Account Value | Cash Value | Reserve | Account Value | Cash Value | Reserve | |||||||||||||||||||
Subject to discretionary withdrawal, surrender values, or policy loans: |
||||||||||||||||||||||||
Term policies with cash value |
$ | 43,796 | $ | 46,558 | $ | 81,109 | $ | — | $ | — | $ | — | ||||||||||||
Universal life |
1,225,940 | 1,112,843 | 1,614,862 | — | — | — | ||||||||||||||||||
Universal life with secondary guarantees |
2,429 | 2,366 | 2,432 | — | — | — | ||||||||||||||||||
Indexed universal life with secondary guarantees |
3,204,343 | 1,978,577 | 2,888,016 | — | — | — | ||||||||||||||||||
Other permanent cash value life Insurance |
3,914,841 | 4,136,607 | 5,386,907 | — | — | — | ||||||||||||||||||
Variable universal life |
596,517 | 576,230 | 631,725 | 3,244,160 | 3,208,949 | 3,208,268 | ||||||||||||||||||
Not subject to discretionary withdrawal or no cash values |
||||||||||||||||||||||||
Term policies without cash value |
— | — | 503,026 | — | — | — | ||||||||||||||||||
Accidental death benefits |
— | — | 16,248 | — | — | — | ||||||||||||||||||
Disability- active lives |
— | — | 34,741 | — | — | — | ||||||||||||||||||
Disability- disabled lives |
— | — | 119,414 | — | — | — | ||||||||||||||||||
Miscellaneous reserves |
— | — | 117,498 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (gross) |
8,987,866 | 7,853,181 | 11,395,979 | 3,244,160 | 3,208,949 | 3,208,268 | ||||||||||||||||||
Reinsurance ceded |
5,974 | 5,974 | 1,828,560 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (net) |
$ | 8,981,892 | $ | 7,847,206 | $ | 9,567,419 | $ | 3,244,160 | $ | 3,208,949 | $ | 3,208,268 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Amount | ||||
Reconciliation to the Annual Statement: | ||||
Life & Accident & Health Annual Statement: |
| |||
Exhibit 5, Life insurance section, total (net) |
$ | 9,299,306 | ||
Exhibit 5, Accidental death benefits section total (net) |
16,248 | |||
Exhibit 5, Disability - active lives section, total (net) |
31,530 | |||
Exhibit 5, Disability - disabled lives section, total (net) |
118,484 | |||
Exhibit 5, Miscellaneous reserves section, total (net) |
101,851 | |||
|
|
|||
Subtotal |
9,567,419 | |||
Separate Accounts Annual Statement: |
— | |||
Exhibit 3, Life insurance section, total |
3,208,268 | |||
|
|
|||
Subtotal |
3,208,268 | |||
|
|
|||
Combined total |
$ | 12,775,687 | ||
|
|
Separate Accounts
Certain separate and variable accounts held by the Company represent funds for which the benefit is determined by the performance and/or fair value of the investments held in the separate account. The assets of these are carried at fair value. These variable annuities generally provide an additional minimum guaranteed death benefit. Some variable annuities also provide a minimum guaranteed income benefit. The Company’s Guaranteed Indexed separate accounts provide customers a return based on the total performance of a specified financial index plus an enhancement. Hedging instruments that return the chosen index are purchased by the Company and held within the separate account. The assets in the accounts, carried at fair value, consist primarily of long-term bonds.
59
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Information regarding the separate accounts of the Company as of and for the year ended December 31, 2019, 2018 and 2017 is as follows:
Nonindexed Guarantee Less Than or Equal to 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2019 |
$ | 47 | $ | 844,837 | $ | 844,884 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts as of December 31, 2019 with assets at: |
||||||||||||
Fair value |
$ | 15,473 | $ | 26,446,979 | $ | 26,462,452 | ||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2019 |
$ | 15,473 | $ | 26,446,979 | $ | 26,462,452 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2019: |
||||||||||||
With fair value adjustment |
$ | 15,473 | $ | — | $ | 15,473 | ||||||
At fair value |
— | 26,310,072 | 26,310,072 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
$ | 15,473 | $ | 26,310,072 | $ | 26,325,545 | ||||||
Not subject to discretionary withdrawal |
— | 136,907 | 136,907 | |||||||||
|
|
|
|
|
|
|||||||
Total separate account reserve liabilities at December 31, 2019 |
$ | 15,473 | $ | 26,446,979 | $ | 26,462,452 | ||||||
|
|
|
|
|
|
60
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Nonindexed Guarantee Less Than or Equal to 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2018 |
$ | 166 | $ | 995,559 | $ | 995,725 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts as of December 31, 2018 with assets at: |
||||||||||||
Fair value |
$ | 16,457 | $ | 23,215,860 | $ | 23,232,317 | ||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2018 |
$ | 16,457 | $ | 23,215,860 | $ | 23,232,317 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2018: |
||||||||||||
With fair value adjustment |
$ | 16,457 | $ | — | $ | 16,457 | ||||||
At fair value |
— | 23,110,980 | 23,110,980 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
$ | 16,457 | $ | 23,110,980 | $ | 23,127,437 | ||||||
Not subject to discretionary withdrawal |
— | 104,880 | 104,880 | |||||||||
|
|
|
|
|
|
|||||||
Total separate account reserve liabilities at December 31, 2018 |
$ | 16,457 | $ | 23,215,860 | $ | 23,232,317 | ||||||
|
|
|
|
|
|
61
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Nonindexed Guarantee Less Than or Equal to 4% |
Nonguaranteed Separate Accounts |
Total | ||||||||||
Premiums, deposits and other considerations for the year ended December 31, 2017 |
$ | 128 | $ | 1,005,564 | $ | 1,005,692 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts as of December 31, 2017 with assets at: |
||||||||||||
Fair value |
$ | 17,955 | $ | 24,836,712 | $ | 24,854,667 | ||||||
|
|
|
|
|
|
|||||||
Total as of December 31, 2017 |
$ | 17,955 | $ | 24,836,712 | $ | 24,854,667 | ||||||
|
|
|
|
|
|
|||||||
Reserves for separate accounts by withdrawal characteristics as of December 31, 2017: |
||||||||||||
With fair value adjustment |
$ | 17,955 | $ | — | $ | 17,955 | ||||||
At fair value |
— | 24,725,399 | 24,725,399 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal |
$ | 17,955 | $ | 24,725,399 | $ | 24,743,354 | ||||||
Not subject to discretionary withdrawal |
— | 111,313 | 111,313 | |||||||||
|
|
|
|
|
|
|||||||
Total separate account reserve liabilities at December 31, 2017 |
$ | 17,955 | $ | 24,836,712 | $ | 24,854,667 | ||||||
|
|
|
|
|
|
A reconciliation of the amounts transferred to and from the Company’s separate accounts is presented below:
2019 | 2018 | 2017 | ||||||||||
Transfer as reported in the summary of operations of the separate accounts statement: |
||||||||||||
Transfers to separate accounts |
$ | 866,291 | $ | 1,010,534 | $ | 1,024,418 | ||||||
Transfers from separate accounts |
(2,228,421 | ) | (1,460,192 | ) | (1,290,485 | ) | ||||||
|
|
|
|
|
|
|||||||
Net transfers from separate accounts |
(1,362,130 | ) | (449,658 | ) | (266,067 | ) | ||||||
Miscellaneous reconciling adjustments |
101,052 | 117,578 | 104,721 | |||||||||
|
|
|
|
|
|
|||||||
Net transfers as reported in the summary of operations of the life, accident and health annual statement |
$ | (1,261,078 | ) | $ | (332,080 | ) | $ | (161,346 | ) | |||
|
|
|
|
|
|
62
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The legal insulation of separate account assets prevents such assets from being generally available to satisfy claims resulting from the general account. The assets legally insulated from general account claims at December 31, 2019 and 2018 are attributed to the following products:
2019 | 2018 | |||||||
Group annuities |
$ | 2,146,648 | $ | 2,446,903 | ||||
Variable annuities |
20,425,457 | 17,578,936 | ||||||
Variable universal life |
3,909,194 | 3,244,160 | ||||||
Modified separate account |
17,709 | 17,970 | ||||||
WRL asset accumulator |
9,326 | 8,170 | ||||||
|
|
|
|
|||||
Total separate account assets |
$ | 26,508,334 | $ | 23,296,139 | ||||
|
|
|
|
To compensate the general account for the risk taken, the separate account paid risk charges of $9,441, $11,344, $12,133, $11,993, and $12,368 to the general account in 2019, 2018, 2017, 2016 and 2015, respectively. During the years ended December 31, 2019, 2018, 2017, 2016 and 2015, the general account of the Company had paid $540, $480, $750, $15,371, and $43,256, respectively, toward separate account guarantees.
The Company does not participate in securities lending transactions within the separate account.
Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements. The Company reinsures portions of the risk on certain insurance policies which exceed its established limits, thereby providing a greater diversification of risk and minimizing exposure on larger risks. The Company remains contingently liable with respect to any insurance ceded, and this would become an actual liability in the event that the assuming insurance company became unable to meet its obligation under the reinsurance treaty.
Premiums and annuity considerations earned reflect the following reinsurance amounts:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Direct premiums |
$ | 3,348,455 | $ | 3,578,753 | $ | 3,656,349 | ||||||
Reinsurance assumed - non affiliates |
54,209 | 68,724 | 76,854 | |||||||||
Reinsurance assumed - affiliates |
414,063 | 405,528 | 2,153,409 | |||||||||
Reinsurance ceded - non affiliates |
(103,725 | ) | (75,864 | ) | (3,181,521 | ) | ||||||
Reinsurance ceded - affiliates |
(365,122 | ) | (427,119 | ) | (408,787 | ) | ||||||
|
|
|
|
|
|
|||||||
Net premiums earned |
$ | 3,347,881 | $ | 3,550,022 | $ | 2,296,304 | ||||||
|
|
|
|
|
|
The Company received reinsurance recoveries in the amount of $587,197, $591,703 and $558,976 during 2019, 2018 and 2017, respectively. At December 31, 2019 and 2018, estimated amounts recoverable from
63
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
reinsurers that have been deducted from policy and contract claim reserves totaled $31,033 and $29,604. The aggregate reserves for policies and contracts were reduced for reserve credits for reinsurance ceded at December 31, 2019 and 2018 of $4,161,453 and $4,320,660, respectively, of which $1,920,004 and $2,016,383 were ceded to affiliates.
During 2019, 2018 and 2017, amortization of deferred gains associated with previously transacted reinsurance agreements was released into income in the amount of $279,776 ($181,854 after tax), $276,268 ($179,574 after tax) and $109,601 ($71,241 after tax), respectively, into earnings on a net of tax basis with a corresponding charge to unassigned surplus.
Letters of credit held for all unauthorized reinsurers as of December 31, 2019, 2018 and 2017 were $1,235,644, $1,285,244 and $1,330,944 respectively.
Effective July 1, 2019, the Company recaptured indexed universal life and variable universal life insurance business from an affiliate, WFG Reinsurance Limited. The Company paid cash of $39,039, recaptured $1,725 in policyholder reserves, $488 in claim reserves and policy loans of $1,176. The transaction resulted in a pre-tax loss of $40,076 which was partially offset by a commission expense allowance of $6,472 as unamortized amounts previously deferred to unassigned surplus related to the original inforce reinsurance transactions were released.
Effective October 1, 2018, the Company recaptured credit insurance business from an affiliate, Ironwood Re Corp. The Company released $248 of funds withheld liability, recaptured $335 of policyholder reserves and $68 of claim reserves. The transaction resulted in a pre-tax loss of $155 which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original cession of this business to Ironwood in the amount of $309 ($201 after-tax) with a corresponding charge to unassigned surplus.
Effective October 1, 2018, the Company recaptured insurance business from an affiliate, Harbor View Re Corp. The Company paid cash of $1,400, released a funds withheld liability of $9,750 and assumed $10,387 of policyholder reserves, $144 of claim reserves and net due premiums and commissions of $781. The transaction resulted in a pre-tax loss of $1,400 which has been included in the Statements of Operations.
Effective October 1, 2018, the Company recaptured group health insurance business from Transamerica Life Insurance Company (TLIC), an affiliate. The Company received cash of $33,799, recaptured $13,767 of policyholder reserves, $980 of unearned premium reserve and $7,366 of claim reserves. The transaction resulted in a pre-tax gain of $11,686 which has been included in the Statements of Operations. In addition, the Company released into income a previously deferred unamortized gain resulting from the original transaction in the amount of $2,191 ($1,424 after-tax) with a corresponding charge to unassigned surplus.
Effective June 29th, 2018, the Company and Wilton Re U. S. Holdings, Inc. (Wilton Re) entered into an agreement as to the “Final Net Settlement Statements and Other Matters” (NSS) associated with the reinsurance agreement between the two companies that was effective April 1, 2017. This agreement related to the reinsurance of the payout annuity and BOLI/COLI business to Wilton Re. As a result of the
64
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
mutual concessions between the parties, Wilton Re paid the Company $19,084. In addition, the Company released a reinsurance receivable in the amount of $8,428 related to the initial proposed NSS used for closing. The net pretax impact to capital and surplus of these adjustments was $10,656.
Effective December 1, 2017, the Company entered into an agreement with TLIC to convert the modified coinsurance agreement to coinsurance and funds withheld. As a result, TLIC transferred cash and invested assets to the Company. Assets that were not able to be transferred were retained in a FWH portfolio by TLIC until they mature, are sold or can be transferred. The company received cash and invested assets with a market value of $6,487,360 along with policy reserves of $4,543,045 and claim reserves of $199,940 net of due an advance premium of $5,815 from TLIC (which the Company previously assumed on a modco basis). As a result of the transaction $1,144,148 of IMR were released from TLIC and transferred to the Company. The transaction results in a pre-tax gain of $606,041 ($393,926 net of tax) which has been reported in surplus. Recognition of the surplus increase as income shall be reflected on a net of tax basis as earnings emerge from the business reinsured.
On June 28, 2017, Transamerica completed a transaction to reinsure its payout annuity business and Bank Owned Life Insurance/ Corporate Owned Life Insurance business (BOLI/COLI). Under the terms of the Master Agreement, the Company entered into a 100% coinsurance (general account liabilities)/modified coinsurance (separate account liabilities) reinsurance agreement with Wilton Reassurance Company, with an effective date of April 1, 2017. The Company transferred assets in the amount of $3,063,865, which included a ceding commission of $135,819, and released policy and deposit-type reserves of $2,264,229 and policy loans of $7,545 related to the business. Modified coinsurance separate account reserves of $401,609 were retained by the company. As a part of the transaction, the company realized $568,029 in net gains on the assets that were transferred of which $363,243 were deferred to IMR. The IMR liability simultaneously was released along with historical deferrals associated with the blocks of business in the amount of $429,415, resulting in a pretax loss of $172,980, which has been included in the Statements of Operations.
Effective January 1, 2017, the Company entered into a coinsurance retrocession agreement with TLIC Watertree Reinsurance, Inc. (TWRI), an affiliate, under which TWRI coinsures to the Company accelerated death benefits on a product ceded from Transamerica Life Insurance Company to TWRI.
Effective April 14, 2015, the reinsurance agreement dated December 31, 2008 reinsuring variable annuity reinsurance between the Company and Transamerica International Re (Bermuda) Ltd (TIRe), an affiliate, was novated to Firebird Re Corp. (FReC), also an affiliate. Subsequent to the novation, the Companies entered into an amended and restated reinsurance agreement related to the block of business. The modified coinsurance reinsurance reserves were converted to coinsurance reserves and a general account funds withheld was established. During 2017, the Company received invested assets in the amount of $22,479 from FReC as settlement of reinsurance receivables. FReC merged into TLIC, an affiliate, effective October 1, 2018, so the reinsurance agreement is now with TLIC. In 2018, all reinsurance between the Company and TLIC (FReC) was settled in cash.
65
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The net deferred income tax asset at December 31, 2019 and 2018 and the change from the prior year are comprised of the following components:
Ordinary | December 31, 2019 Capital |
Total | ||||||||||
Gross Deferred Tax Assets |
$ | 708,175 | $ | 31,638 | $ | 739,813 | ||||||
Statutory Valuation Allowance Adjustment |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
708,175 | 31,638 | 739,813 | |||||||||
Deferred Tax Assets Nonadmitted |
334,893 | — | 334,893 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
373,282 | 31,638 | 404,920 | |||||||||
Deferred Tax Liabilities |
129,055 | 44,616 | 173,671 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 244,227 | $ | (12,978 | ) | $ | 231,249 | |||||
|
|
|
|
|
|
|||||||
December 31, 2018 | ||||||||||||
Ordinary | Capital | Total | ||||||||||
Gross Deferred Tax Assets |
$ | 693,441 | $ | 51,157 | $ | 744,598 | ||||||
Statutory Valuation Allowance Adjustment |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
693,441 | 51,157 | 744,598 | |||||||||
Deferred Tax Assets Nonadmitted |
335,913 | — | 335,913 | |||||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
357,528 | 51,157 | 408,685 | |||||||||
Deferred Tax Liabilities |
123,272 | 46,464 | 169,736 | |||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 234,256 | $ | 4,693 | $ | 238,949 | ||||||
|
|
|
|
|
|
|||||||
Ordinary | Change Capital |
Total | ||||||||||
Gross Deferred Tax Assets |
$ | 14,734 | $ | (19,519 | ) | $ | (4,785 | ) | ||||
Statutory Valuation Allowance Adjustment |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted Gross Deferred Tax Assets |
14,734 | (19,519 | ) | (4,785 | ) | |||||||
Deferred Tax Assets Nonadmitted |
(1,020 | ) | — | (1,020 | ) | |||||||
|
|
|
|
|
|
|||||||
Subtotal (Net Deferred Tax Assets) |
15,754 | (19,519 | ) | (3,765 | ) | |||||||
Deferred Tax Liabilities |
5,783 | (1,848 | ) | 3,935 | ||||||||
|
|
|
|
|
|
|||||||
Net Admitted Deferred Tax Assets |
$ | 9,971 | $ | (17,671 | ) | $ | (7,700 | ) | ||||
|
|
|
|
|
|
66
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The main components of deferred income tax amounts are as follows:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Assets: |
||||||||||||
Ordinary |
||||||||||||
Policyholder reserves |
$ | 364,402 | $ | 361,776 | $ | 2,626 | ||||||
Investments |
74,613 | 68,973 | 5,640 | |||||||||
Deferred acquisition costs |
237,251 | 227,453 | 9,798 | |||||||||
Policyholder dividends accrual |
196 | 210 | (14 | ) | ||||||||
Fixed assets |
1,590 | 420 | 1,170 | |||||||||
Compensation and benefits accrual |
383 | 358 | 25 | |||||||||
Receivables - nonadmitted |
19,999 | 23,535 | (3,536 | ) | ||||||||
Other (including items <5% of total ordinary tax assets) |
9,741 | 10,716 | (975 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
708,175 | 693,441 | 14,734 | |||||||||
Nonadmitted |
334,893 | 335,913 | (1,020 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted ordinary deferred tax assets |
373,282 | 357,528 | 15,754 | |||||||||
Capital: |
||||||||||||
Investments |
31,638 | 51,157 | (19,519 | ) | ||||||||
Subtotal |
31,638 | 51,157 | (19,519 | ) | ||||||||
Admitted capital deferred tax assets |
31,638 | 51,157 | (19,519 | ) | ||||||||
|
|
|
|
|
|
|||||||
Admitted deferred tax assets |
$ | 404,920 | $ | 408,685 | $ | (3,765 | ) | |||||
|
|
|
|
|
|
|||||||
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Deferred Tax Liabilities: |
||||||||||||
Ordinary |
||||||||||||
Investments |
$ | 72,740 | $ | 66,130 | $ | 6,610 | ||||||
Policyholder reserves |
53,123 | 53,653 | (530 | ) | ||||||||
Other (including items <5% of total ordinary tax liabilities) |
3,191 | 3,489 | (298 | ) | ||||||||
|
|
|
|
|
|
|||||||
Subtotal |
129,054 | 123,272 | 5,782 | |||||||||
Capital |
||||||||||||
Investments |
44,617 | 46,464 | (1,847 | ) | ||||||||
Subtotal |
44,617 | 46,464 | (1,847 | ) | ||||||||
|
|
|
|
|
|
|||||||
Deferred tax liabilities |
173,671 | 169,736 | 3,935 | |||||||||
|
|
|
|
|
|
|||||||
Net deferred tax assets/liabilities |
$ | 231,249 | $ | 238,949 | $ | (7,700 | ) | |||||
|
|
|
|
|
|
As a result of the 2017 Tax Cuts and Jobs Act (TCJA), the Company’s tax reserve deductible temporary difference decreased by ($400,000). This change results in an offsetting $400,000 deductible temporary difference that will be amortized into taxable income evenly over the eight years subsequent to 2017. The remaining amortizable balance is included within the Policyholder Reserves line items above.
67
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
As discussed in Note 2, for the years ended December 31, 2019 and 2018 the Company admits deferred income tax assets pursuant to SSAP No. 101. The amount of admitted adjusted gross deferred income tax assets under each component of SSAP No. 101 is as follows:
December 31, 2019 | ||||||||||||||||
Ordinary | Capital | Total | ||||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | — | $ | 11,238 | $ | 11,238 | |||||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | 220,011 | — | 220,011 | ||||||||||||
1. | Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | 220,011 | — | 220,011 | ||||||||||||
2. | Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 310,453 | ||||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a)and 2(b) above) Offset by Gross Deferred Tax Liabilities | 153,271 | 20,400 | 173,671 | ||||||||||||
|
|
|
|
|
|
|||||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 373,282 | $ | 31,638 | $ | 404,920 | |||||||||
|
|
|
|
|
|
|||||||||||
Ordinary | December 31, 2018 Capital |
Total | ||||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | — | $ | 17,086 | $ | 17,086 | |||||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | 221,863 | — | 221,863 | ||||||||||||
1. | Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | 221,863 | — | 221,863 | ||||||||||||
2. | Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 258,932 | ||||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a)and 2(b) above) Offset by Gross Deferred Tax Liabilities | 135,665 | 34,071 | 169,736 | ||||||||||||
|
|
|
|
|
|
|||||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 357,528 | $ | 51,157 | $ | 408,685 | |||||||||
|
|
|
|
|
|
68
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Ordinary | Change Capital |
Total | ||||||||||||||
Admission Calculation Components SSAP No. 101 |
||||||||||||||||
2(a) |
Federal Income Taxes Paid in Prior Years Recoverable Through Loss Carrybacks | $ | — | $ | (5,848 | ) | $ | (5,848 | ) | |||||||
2(b) |
Adjusted Gross Deferred Tax Assets Expected to be Realized (Excluding The Amount of Deferred Tax Assets From 2(a) above) After Application of the Threshold Limitation (the Lesser of 2(b)1 and 2(b)2 below) | (1,852 | ) | — | (1,852 | ) | ||||||||||
1. | Adjusted Gross Deferred Tax Assets Expected to be Realized Following the Balance Sheet Date | (1,852 | ) | — | (1,852 | ) | ||||||||||
2. | Adjusted Gross Deferred Tax Assets Allowed per Limitation Threshold | XXX | XXX | 51,521 | ||||||||||||
2(c) |
Adjusted Gross Deferred Tax Assets (Excluding The Amount Of Deferred Tax Assets From 2(a) and 2(b) above) Offset by Gross Deferred Tax Liabilities | 17,606 | (13,671 | ) | 3,935 | |||||||||||
|
|
|
|
|
|
|||||||||||
2(d) |
Deferred Tax Assets Admitted as the result of application of SSAP No. 101, Total (2(a) + 2(b) + 2(c)) | $ | 15,754 | $ | (19,519 | ) | $ | (3,765 | ) | |||||||
|
|
|
|
|
|
|||||||||||
December 31 | ||||||||||||||||
2019 | 2018 | Change | ||||||||||||||
Ratio Percentage Used To Determine Recovery Period and Threshold Limitation Amount |
877 | % | 758 | % | 119 | % | ||||||||||
|
|
|
|
|
|
|||||||||||
Amount of Adjusted Capital and Surplus Used To Determine Recovery Period and Threshold Limitation in 2(b)2 Above |
$ | 2,069,687 | $ | 1,726,211 | $ | 343,476 | ||||||||||
|
|
|
|
|
|
69
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The impact of tax planning strategies at December 31, 2019 and 2018 was as follows:
December 31, 2019 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent |
||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
2 | % | 0 | % | 2 | % | ||||||
|
|
|
|
|
|
|||||||
December 31, 2018 | ||||||||||||
Ordinary Percent |
Capital Percent |
Total Percent |
||||||||||
Impact of Tax Planning Strategies: |
||||||||||||
(% of Total Adjusted Gross DTAs) |
0 | % | 0 | % | 0 | % | ||||||
|
|
|
|
|
|
|||||||
(% of Total Net Admitted Adjusted Gross DTAs) |
0 | % | 30 | % | 4 | % | ||||||
|
|
|
|
|
|
The Company’s tax planning strategies do not include the use of reinsurance-related tax planning strategies.
Current income taxes incurred consist of the following major components:
Year Ended December 31 | ||||||||||||
2019 | 2018 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | 39,259 | $ | 30,372 | $ | 8,887 | ||||||
|
|
|
|
|
|
|||||||
Subtotal |
39,259 | 30,372 | 8,887 | |||||||||
Federal income tax on net capital gains |
8,597 | (47,135 | ) | 55,732 | ||||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | 47,856 | $ | (16,763 | ) | $ | 64,619 | |||||
|
|
|
|
|
|
|||||||
Year Ended December 31 | ||||||||||||
2018 | 2017 | Change | ||||||||||
Current Income Tax |
||||||||||||
Federal |
$ | 30,372 | $ | 903,151 | $ | (872,779 | ) | |||||
|
|
|
|
|
|
|||||||
Subtotal |
30,372 | 903,151 | (872,779 | ) | ||||||||
Federal income tax on net capital gains |
(47,135 | ) | 94,516 | (141,651 | ) | |||||||
|
|
|
|
|
|
|||||||
Federal and foreign income taxes incurred |
$ | (16,763 | ) | $ | 997,667 | $ | (1,014,430 | ) | ||||
|
|
|
|
|
|
70
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company’s current income tax incurred and change in deferred income tax differs from the amount obtained by applying the federal statutory rate to income before tax as follows:
Year Ended December 31 | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Current income taxes incurred |
$ | 47,856 | $ | (16,763 | ) | $ | 997,667 | |||||
Change in deferred income taxes (without tax on unrealized gains and losses) |
(10,084 | ) | (7,833 | ) | 39,231 | |||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 37,772 | $ | (24,596 | ) | $ | 1,036,898 | |||||
|
|
|
|
|
|
|||||||
Income before taxes |
$ | 619,186 | $ | 400,924 | $ | 1,058,153 | ||||||
21.00 | % | 21.00 | % | 35.00 | % | |||||||
|
|
|
|
|
|
|||||||
Expected income tax expense (benefit) at statutory rate |
$ | 130,029 | $ | 84,194 | $ | 370,354 | ||||||
Increase (decrease) in actual tax reported resulting from: |
||||||||||||
Pre-tax income of disregarded subsidiaries |
$ | (2,007 | ) | $ | (2,411 | ) | $ | (1,074 | ) | |||
Dividends received deduction |
(31,895 | ) | (25,962 | ) | (46,859 | ) | ||||||
Tax-exempt income |
(861 | ) | (1,102 | ) | (1,663 | ) | ||||||
Nondeductible expenses |
252 | 604 | 304 | |||||||||
Pre-tax items reported net of tax |
(52,817 | ) | (54,399 | ) | 344,472 | |||||||
Tax credits |
(13,951 | ) | (9,199 | ) | (6,892 | ) | ||||||
Prior period tax return adjustment |
4,028 | (21,398 | ) | 4,029 | ||||||||
Change in tax rates |
— | — | 357,034 | |||||||||
Change in uncertain tax positions |
— | 948 | (3,844 | ) | ||||||||
Deferred tax expense on other items in surplus |
4,916 | 3,900 | 20,986 | |||||||||
Other |
78 | 229 | 51 | |||||||||
|
|
|
|
|
|
|||||||
Total income tax reported |
$ | 37,772 | $ | (24,596 | ) | $ | 1,036,898 | |||||
|
|
|
|
|
|
On December 22, 2017, the TCJA reduced the federal tax rate to 21%. As a result, the Company reduced its net deferred tax asset balance by $357,034, excluding $23,017 of net deferred tax asset reduction on unrealized gains/(losses) in the 2017 financial statements.
The effects of the U.S. tax reform were reflected in the 2017 financial statements as determined or as reasonably estimated provisional amounts based on available information subject to interpretation in accordance with the SEC’s Staff Accounting Bulletin No. 118 (SAB 118), as adopted by NAIC SAPWG INT 18-01. SAB 118 provides guidance on accounting for the effects of U.S. tax reform where the Company’s determinations are incomplete but the Company can determine a reasonable estimate. The TCJA related disclosures and figures in the 2018 financials represent final impacts with no estimated figures remaining.
The Company’s federal income tax return is consolidated with other included affiliated companies. Please see the listing of companies in Appendix A. The method of allocation between the companies is subject to a written tax allocation agreement. Under the terms of the tax allocation agreement, allocations are based
71
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
on separate income tax return calculations. The Company is entitled to recoup federal income taxes paid in the event the future losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in the year generated. The Company is also entitled to recoup federal income taxes paid in the event the losses and credits reduce the greater of the Company’s separately computed income tax liability or the consolidated group’s income tax liability in any carryback or carryforward year when so applied. Intercompany income tax balances are settled within thirty days of payment to or filing with the Internal Revenue Service. A tax return has not been filed for 2019.
The following is income tax expense for current year and preceding years that is available for recoupment in the event of future losses:
Total | ||||
2019 |
$ | 7,361 | ||
2018 |
$ | — | ||
2017 |
$ | 72,284 |
The total amount of the unrecognized tax benefits that, if recognized, would affect the effective income tax rate:
Unrecognized Tax Benefits |
||||
Balance at January 1, 2018 |
$ | 1,804 | ||
Tax positions taken during prior period |
948 | |||
|
|
|||
Balance at December 31, 2018 |
$ | 2,752 | ||
|
|
|||
Balance at December 31, 2019 |
$ | 2,752 | ||
|
|
The Company classifies interest and penalties related to income taxes as income tax expense. The amount of interest and penalties accrued on the balance sheet as income taxes includes the following:
Interest | Penalties | Total payable (receivable) | ||||||||||
Balance at January 1, 2017 |
$ | 236 | $ | — | $ | 236 | ||||||
Interest expense (benefit) |
(20 | ) | — | (20 | ) | |||||||
Penalties expense (benefit) |
— | — | — | |||||||||
Cash (paid) received |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2017 |
$ | 216 | $ | — | $ | 216 | ||||||
Interest expense (benefit) |
419 | — | 419 | |||||||||
Penalties expense (benefit) |
— | — | — | |||||||||
Cash (paid) received |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2018 |
$ | 635 | $ | — | $ | 635 | ||||||
Interest expense (benefit) |
264 | — | 264 | |||||||||
Penalties expense (benefit) |
— | — | — | |||||||||
Cash (paid) received |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Balance at December 31, 2019 |
$ | 899 | $ | — | $ | 899 | ||||||
|
|
|
|
|
|
72
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has no federal income tax returns currently under examination. The Internal Revenue Service completed its examination for years 2009 through 2013 resulting in tax return adjustments for which an appeals conference was requested. Federal income tax returns filed in 2014 through 2018 remain open, subject to potential future examination. The Company believes that there are adequate defenses against or sufficient provisions established related to any open or contested tax positions.
The Company has two classes of common stock, Class A and Class B. Each outstanding share of Class A is entitled to four votes for any matter submitted to a vote at a meeting of stockholders, whereas each outstanding share of Class B is entitled to one such vote. The Company has 10,000 shares of Class A and 10,000 shares of Class B common shares authorized at $750 per share par value of which, 9,819 of Class A and 3,697 of Class B were issued and outstanding at December 31, 2019 and 2018.
The Company has no preferred stock authorized.
The Company is subject to limitations, imposed by the State of Iowa, on the payment of dividends to its stockholders. Generally, dividends during any twelve-month period may not be paid, without prior regulatory approval, in excess of the greater of (a) 10 percent of the Company’s statutory surplus as of the preceding December 31, or (b) the Company’s statutory gain from operations before net realized capital gains (losses) on investments for the preceding year. Subject to the availability of unassigned surplus at the time of such dividend, the maximum payment which may be made in 2019, without the prior approval of insurance regulatory authorities, is $349,625.
On February 1, 2019, the Company paid ordinary common stock dividends of $8,444 to Commonwealth General Corporation.
The Company received ordinary common stock dividends of $30,000, $20,000, $15,000, and $15,000 from World Financial Group Insurance Agency, Inc. on March 29, 2019, June 21, 2019, September 30, 2019, and December 20, 2019, respectively.
On December 20, 2019, Transamerica Realty paid ordinary common stock dividends of $2,826 to the Company.
The Company reported a contribution receivable from parent of $150,000 at December 31, 2017. The contribution was received on February 1, 2018.
On December 31, 2018 the Company received a $6 contribution from its subsidiary Transamerica Asset Management, Inc. On December 31, 2018, the Company paid a $1,360 non-cash contribution to its subsidiary, Real Estate Alternatives Portfolio 3A, Inc. (REAP 3A). On December 19, 2018, the Company received a common stock dividend from its subsidiary, World Financial Group Insurance Agency, Inc. in the amount of $30,000. On September 27, 2018, the Company received a non-cash common stock dividend from its subsidiary, World Financial Group Insurance Agency, Inc. in the amount of $30,000.
73
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Life and health insurance companies are subject to certain RBC requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life or health insurance company is to be determined based on the various risk factors related to it. At December 31, 2019, the Company meets the minimum RBC requirements.
The Company’s surplus notes are held by CGC and Transamerica Corporation (TA Corp). These notes are due 20 years from the date of issuance at an interest rate of 6% and are subordinate and junior in right of payment to all obligations and liabilities of the Company. In the event of liquidation of the Company, full payment of the surplus notes shall be made before the holders of common stock become entitled to any distribution of the remaining assets of the Company. The Company received approval from the Iowa Insurance Division prior to paying quarterly interest payments.
On December 20, 2019, the Company repaid in full its $57,266 surplus note with Transamerica Corporation and made a partial repayment of $42,734 on its surplus note with Commonwealth General Corporation. The Company received IID approval for this transaction. Additional information related to the outstanding surplus notes at December 31, 2019 and 2018 is as follows:
For Year Ending |
Balance Outstanding |
Interest Paid Current Year |
Cumulative Interest Paid |
Accrued Interest |
||||||||||||
2019 |
||||||||||||||||
CGC |
$ | 60,000 | $ | 6,306 | $ | 98,822 | $ | 300 | ||||||||
TA Corp |
— | 3,627 | 45,724 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 60,000 | $ | 9,933 | $ | 144,546 | $ | 300 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
2018 |
||||||||||||||||
CGC |
$ | 102,734 | $ | 6,164 | $ | 92,515 | $ | 514 | ||||||||
TA Corp |
57,266 | 3,436 | 42,097 | 286 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 160,000 | $ | 9,600 | $ | 134,612 | $ | 800 | ||||||||
|
|
|
|
|
|
|
|
74
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company participates in an agent-managed securities lending program in which the Company primarily loans out US Treasuries and other bonds. The Company receives collateral equal to 102% of the fair value of the loaned government or other domestic securities as of the transaction date. If the fair value of the collateral is at any time less than 102% of the fair value of the loaned securities, the counterparty is mandated to deliver additional collateral, the fair value of which, together with the collateral already held in connection with the lending transaction, is at least equal to 102% of the fair value of the loaned government or other domestic securities. In the event the Company loans a foreign security and the denomination of the currency of the collateral is other than the denomination of the currency of the loaned foreign security, the Company receives and maintains collateral equal to 105% of the fair value of the loaned security.
At December 31, 2019 and 2018, respectively, securities with a fair value of $716,001 and $555,825 were on loan under securities lending agreements as part of this program. At December 31, 2019 and 2018, the collateral the Company received from securities lending activities was in the form of cash and on open terms. This cash collateral is reinvested and is not available for general corporate purposes. The reinvested cash collateral has a fair value of $757,186 and $575,155 at December 31, 2019 and 2018, respectively.
The contractual maturities of the securities lending collateral positions are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 757,186 | $ | 574,886 | ||||
|
|
|
|
|||||
Total |
757,186 | 574,886 | ||||||
Securities received |
— | — | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 757,186 | $ | 574,886 | ||||
|
|
|
|
The Company receives primarily cash collateral in an amount in excess of the fair value of the securities lent. The Company reinvests the cash collateral into higher yielding securities than the securities which the Company has lent to other entities under the arrangement.
75
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The maturity dates of the reinvested securities lending collateral are as follows:
2019 | 2018 | |||||||||||||||
Amortized Cost |
Fair Value | Amortized Cost |
Fair Value | |||||||||||||
Open |
$ | 26,407 | $ | 26,407 | $ | 85,260 | $ | 85,260 | ||||||||
30 days or less |
208,268 | 208,268 | 140,236 | 140,236 | ||||||||||||
31 to 60 days |
309,546 | 309,546 | 104,248 | 104,249 | ||||||||||||
61 to 90 days |
75,517 | 75,517 | 60,156 | 60,155 | ||||||||||||
91 to 120 days |
73,818 | 73,818 | 104,653 | 104,653 | ||||||||||||
121 to 180 days |
63,630 | 63,630 | 80,602 | 80,602 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
757,186 | 757,186 | 575,155 | 575,155 | ||||||||||||
Securities received |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total collateral reinvested |
$ | 757,186 | $ | 757,186 | $ | 575,155 | $ | 575,155 | ||||||||
|
|
|
|
|
|
|
|
For securities lending, the Company’s source of cash used to return the cash collateral is dependent upon the liquidity of the current market conditions. Under current conditions, the Company has securities with a par value of $757,905 (fair value of $757,186) that are currently tradable securities that could be sold and used to pay for the $757,186 in collateral calls that could come due under a worst-case scenario.
12. Retirement and Compensation Plans
Defined Contribution Plans
The Company’s employees participate in a contributory defined contribution plan sponsored by TA Corp which is qualified under Section 401(k) of the Internal Revenue Code. Generally, employees of the Company who customarily work at least 20 hours per week and meet the other eligibility requirements are participants of the plan. Participants may elect to contribute up to 100% of eligible earnings, subject to government or other plan restrictions for certain key employees. The Company will match an amount up to three percent of the participant’s eligible earnings. Participants may direct all of their contributions and plan balances to be invested in a variety of investment options. The plan is subject to the reporting and disclosure requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Benefits expense was $1,746, $1,767 and $1,805 was allocated to the Company for the years ended December 31, 2019, 2018 and 2017, respectively.
Defined Benefit Plans
The Company’s employees participate in a qualified defined benefit pension plan sponsored by TA Corp. Generally, employees of the Company who customarily work at least 20 hours per week and complete six months of continuous service and meet the other eligibility requirements are participants of the plan. The Company has no legal obligation for the plan. The benefits are based on years of service and the employee’s eligible compensation. The plan provides benefits based on a traditional final average formula or a cash balance formula. The plan is subject to the reporting and disclosure requirements of the ERISA.
76
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
TA Corp sponsors supplemental retirement plans to provide the Company’s senior management with benefits in excess of normal pension benefits. The Company has no legal obligation for the plan. The plans are noncontributory and benefits are based on years of service and the employee’s eligible compensation. The plan provides benefits based on a traditional final average formula or cash balance formula. The plans are unfunded and nonqualified under the Internal Revenue Service Code.
The Company recognizes pension expense equal to its allocation from TA Corp. The pension expense related to both the defined pension plan and the supplemental retirement plans is allocated among the participating companies based on International Accounting Standards 19 (IAS 19), Accounting for Employee Benefits, and based upon actuarial participant benefit calculations, which is within the guidelines of SSAP No. 102, Pensions. Pension expenses were $3,889, $3,832 and $4,166, for the years ended December 31, 2019, 2018 and 2017, respectively.
In addition to pension benefits, TA Corp sponsors unfunded plans that provide health care and life insurance benefits to retired Company employees meeting certain eligibility requirements. The Company has no legal obligation for the plan. Portions of the medical and dental plans are contributory. The expenses of the postretirement plans are allocated among the participating companies based on IAS 19 and based upon actuarial participant benefit calculations which is within the guidelines of SSAP No. 92, Postretirement Benefits Other Than Pensions. The Company expensed $585, $710 and $769 related to these plans for the years ended December 31, 2019, 2018 and 2017, respectively.
Other Plans
TA Corp has established deferred compensation plans for certain key employees of the Company. The Company’s allocation of expense for these plans for each of the years ended December 31, 2019, 2018 and 2017 was insignificant.
13. Related Party Transactions
The Company shares certain officers, employees and general expenses with affiliated companies.
The Company is party to a shared services and cost sharing agreement among and between the Transamerica companies, under which various affiliated companies may perform specified administrative functions in connection with the operation of the Company, in consideration of reimbursement of actual costs of services rendered. The Company is also a party to a Management and Administrative and Advisory agreement with AEGON USA Realty Advisors, LLC. whereby the advisor serves as the administrator and advisor for the Company’s mortgage loan operations. AEGON USA Investment Management, LLC acts as a discretionary investment manager under an Investment Management Agreement with the Company. The Company provides office space, marketing and administrative services to certain affiliates. The amount received by the Company as a result of being a party to these agreements was $121,914, $101,998 and $50,807 during 2019, 2018 and 2017, respectively. The amount paid as a result of being a party to these agreements was $449,378, $477,650 and $328,319 during 2019, 2018 and 2017, respectively.
77
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Transamerica Capital, Inc. provides wholesaling distribution services for the Company under a distribution agreement. The Company incurred expenses under this agreement of $19, $24 and $41 for the years ended December 31, 2019, 2018 and 2017, respectively.
At December 31, 2019 and 2018, the Company reported a net amount of $28,746 and ($12,506) (payable to)/receivable from parent, subsidiary and affiliated companies, respectively. Terms of settlement require that these amounts be settled within 90 days. Receivables from and payables to affiliates bear interest at the thirty-day commercial paper rate.
During 2019, 2018 and 2017, the Company (paid)/received net interest of ($37), ($582) and ($75), respectively, to affiliates.
The Company has an administration service agreement with Transamerica Asset Management, Inc. to provide administrative services to the Transamerica Series Trust. The Company received $20,792, $21,516 and $22,070 for these services during 2019, 2018 and 2017, respectively.
At December 31, 2019, the Company had short-term intercompany notes receivable of $102,900 as follows. In accordance with SSAP No. 25, Affiliates and Other Related Parties, these notes are reported as short-term investments.
Receivable from |
Amount | Due By |
Interest Rate | |||||||
Transamerica Corporation |
$ | 8,600 | December 18, 2020 | 1.61 | % | |||||
Transamerica Corporation |
94,300 | December 30, 2020 | 1.61 | % |
At December 31, 2018, the Company had short-term intercompany notes receivable of $194,600 as follows.
Receivable from |
Amount | Due By |
Interest Rate | |||||||
Transamerica Corporation |
$ | 24,100 | September 21, 2019 | 1.99 | % | |||||
Transamerica Corporation |
22,500 | October 3, 2019 | 2.15 | % | ||||||
Transamerica Corporation |
12,800 | October 5, 2019 | 2.15 | % | ||||||
Transamerica Corporation |
29,200 | October 26, 2019 | 2.15 | % | ||||||
Transamerica Corporation |
106,000 | December 14, 2019 | 2.31 | % |
In prior years, the Company purchased life insurance policies covering the lives of certain employees of the Company from an affiliate, TLIC. At December 31, 2019 and 2018, the cash surrender value of these policies was $170,124 and $167,126, respectively.
During 1998, TLIC issued life insurance policies to LIICA, covering the lives of certain LIICA employees. The Company entered into an assumption reinsurance transaction with TLIC effective September 30, 2008, resulting in the Company assuming all liabilities of TLIC arising under these policies. Accordingly, the Company held aggregate reserves for policies and contracts related to these policies of $181,648 and $179,004 at December 31, 2019 and 2018, respectively.
78
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
Information regarding the Company’s affiliated reinsurance transactions is available in Note 8. Reinsurance.
Information regarding the Company’s affiliated guarantees is available in Note 15. Commitments and Contingencies.
The Company utilizes the look-through approach in valuing its investment in the following ten entities.
Real Estate Alternatives Portfolio 3, LLC |
$ | 6,338 | ||
Real Estate Alternatives Portfolio 4 HR, LLC |
$ | 47,545 | ||
Real Estate Alternatives Portfolio 4 MR, LLC |
$ | 3,043 | ||
Aegon Multi-Family Equity Fund, LLC |
$ | 14,713 | ||
Aegon Workforce Housing Fund 2, L.P. |
$ | 40,684 | ||
Aegon Workforce Housing Fund 3, L.P. |
$ | 6,238 | ||
Natural Resources Alternatives Portfolio I, LLC |
$ | 85,097 | ||
Natural Resources Alternatives Portfolio II, LLC |
$ | 2 | ||
Natural Resources Alternatives Portfolio 3, LLC |
$ | 79,648 | ||
Zero Beta Fund, LLC |
$ | 283,925 |
These entity’s financial statements are not audited and the Company has limited the value of its investment in these entities to the value contained in the audited financial statements of the underlying LP/LLC investments, including adjustments required by SSAP No. 97 entities and/or non-SCA SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies, entities owned by these entities. All liabilities, commitments, contingencies, guarantees or obligations of these entities 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 entities.
79
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following tables shows the disclosures for all SCA investments, except 8bi entities, and balance sheet value (admitted and nonadmitted) as of December 31, 2019 and 2018:
SCA Entity |
Percentage of SCA Ownership |
Gross Amount | Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
— | % | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
— | % | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
37 | % | $ | 8,949 | $ | 8,949 | $ | — | ||||||||
INTERSECURITIES INS AGENCY INC |
100 | — | — | — | ||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
77 | 90,420 | 90,420 | — | ||||||||||||
TRANSAMERICA FUND SERVICES INC |
44 | — | — | — | ||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
100 | — | — | — | ||||||||||||
AEGON DIRECT MARKETING SVC INC |
73 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 99,369 | $ | 99,369 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
0 |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 99,369 | $ | 99,369 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 99,369 | $ | 99,369 | $ | — | |||||||||
|
|
|
|
|
|
|
|
80
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
SCA Entity |
Percentage of SCA Ownership |
Gross Amount | Admitted Amount |
Nonadmitted Amount |
||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||
None |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8a Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||
None |
— | % | $ | — | $ | — | $ | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(ii) Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
37 | % | $ | 15,475 | $ | 15,475 | $ | — | ||||||||
INTERSECURITIES INS AGENCY INC |
100 | — | — | — | ||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
77 | 68,079 | 68,079 | — | ||||||||||||
TRANSAMERICA FUND SERVICES INC |
44 | — | — | — | ||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
100 | — | — | — | ||||||||||||
AEGON DIRECT MARKETING SVC INC |
74 | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iii) Entities |
XXX | $ | 83,554 | $ | 83,554 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||
None |
— | % | $ |
— |
|
$ |
— |
|
$ | — | ||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b(iv) Entities |
XXX | $ | — | $ | — | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
XXX | $ | 83,554 | $ | 83,554 | $ | — | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Aggregate Total |
XXX | $ | 83,554 | $ | 83,554 | $ | — | |||||||||
|
|
|
|
|
|
|
|
81
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The following table shows the NAIC responses for the SCA filings (except 8bi entities) as of December 31, 2019 and 2018:
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
$ | — | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
— | — | — | — | — | — | ||||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
$ | — | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 1/6/2020 | $ | 14,455 | Y | N | I | |||||||||||||||||
INTERSECURITIES INS AGENCY INC |
NA | — | — | — | I | |||||||||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
S2 | 8/30/2019 | 66,705 | Y | N | I | ||||||||||||||||||
TRANSAMERICA FUND SERVICES INC |
NA | — | — | — | I | |||||||||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
NA | — | — | — | I | |||||||||||||||||||
AEGON DIRECT MARKETING SVC INC |
NA | — | — | — | I | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
— | — | $ | 81,160 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
$ | — | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
— | — | $ | 81,160 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
— | — | $ | 81,160 | — | — | — | |||||||||||||||||
|
|
* | S1 – Sub1, S2 – Sub2 or RDF – Resubmission of Disallowed Filing |
** | I – Immaterial or M – Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
82
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
SCA Entity |
Type of NAIC Filing* |
Date of Filing to the NAIC |
NAIC Valuation Amount |
NAIC Response Received Y/N |
NAIC Disallowed Entities Valuation Method, Submission Required Y/N |
Code** | ||||||||||||||||||
SSAP No. 97 8a Entities |
||||||||||||||||||||||||
None |
— | $ | — | — | — | — | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8a Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(ii) Entities |
||||||||||||||||||||||||
None |
— | $ | — | — | — | — | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(ii) Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iii) Entities |
||||||||||||||||||||||||
REAL ESTATE ALTERN PORT 3A INC |
S2 | 12/21/2018 | $ | 11,370 | Y | N | I | |||||||||||||||||
INTERSECURITIES INS AGENCY INC |
NA | — | — | — | I | |||||||||||||||||||
TRANSAMERICA ASSET MANAGEMENT INC |
S2 | 2/19/2019 | 39,532 | Y | N | I | ||||||||||||||||||
TRANSAMERICA FUND SERVICES INC |
NA | — | — | — | I | |||||||||||||||||||
WORLD FIN GRP INSURANCE AGENCY INC |
NA | — | — | — | I | |||||||||||||||||||
AEGON DIRECT MARKETING SVC INC |
NA | — | — | — | I | |||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iii) Entities |
— | — | $ | 50,902 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
SSAP No. 97 8b(iv) Entities |
||||||||||||||||||||||||
None |
— | $ | — | — | — | — | ||||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b(iv) Entities |
— | — | $ | — | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Total SSAP No. 97 8b Entities (except 8bi entities) |
— | — | $ | 50,902 | — | — | — | |||||||||||||||||
|
|
|||||||||||||||||||||||
Aggregate Total |
— | — | $ | 50,902 | — | — | — | |||||||||||||||||
|
|
* | S1 – Sub1, S2 – Sub2 or RDF – Resubmission of Disallowed Filing |
** | I – Immaterial or M – Material |
(1) | NAIC Valuation Amount is as of the Filing Date to the NAIC |
83
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company utilizes managing general agents (MGA) and third-party administrators (TPA) in its operation. Information regarding these entities for the year ended December 31, 2019 is as follows:
Name and Address of
Managing |
FEIN | Exclusive Contract |
Types of Business Written |
Types of Authority Granted |
Total Direct Premiums Written/ Produced By |
|||||||||||||||
The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355 |
23-1945930 | NO | |
Deferred and Income Annuities |
|
C,B,P,U | $ | 631,289 | ||||||||||||
|
|
|||||||||||||||||||
Total |
$ | 631,289 | ||||||||||||||||||
|
|
C- | Claims Payment |
B- | Binding Authority1% |
P- | Premium Collection |
U- | Underwriting |
For the years ended December 31, 2019, 2018 and 2017, respectively, direct premiums of $631,289, $783,938 and $928,060 were written by MGA’s and TPA’s.
15. Commitments and Contingencies
The Company has issued synthetic GIC contracts to benefit plan sponsors on assets totaling $50,276,331 and $52,252,582 as of December 31, 2019 and 2018, respectively. A synthetic GIC is an off-balance sheet fee-based product sold primarily to tax qualified plans. The plan sponsor retains ownership and control of the related plan assets. The Company provides book value benefit responsiveness in the event that qualified plan benefit requests exceed plan cash flows. In certain contracts, the Company agrees to make advances to meet benefit payment needs and earns a market interest rate on these advances. The periodically adjusted contract-crediting rate is the means by which investment and benefit responsive experience is passed through to participants. In return for the book value benefit responsive guarantee, the Company receives a premium that varies based on such elements as benefit responsive exposure and contract size. The Company underwrites the plans for the possibility of having to make benefit payments and also must agree to the investment guidelines to ensure appropriate credit quality and cash flow. There has been no contract reserve established for the possibility of unexpected benefit payments at below market interest rates at December 31, 2019 and 2018, respectively. Effective July 1, 2017, the Company entered into a coinsurance agreement under which the Company cedes 50% of its outstanding synthetic GIC notional.
At December 31, 2019 and 2018, the Company has mortgage loan commitments of $205,984 and $166,585, respectively.
84
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
The Company has contingent commitments of $457,896 and $311,089 at December 31, 2019 and 2018, respectively, to provide additional funding for various joint ventures, partnerships and limited liability companies, which includes LIHTC commitments of $66,571 and $77,186.
Private placement commitments outstanding as of December 31, 2019 were $73,260. Private placement commitments outstanding as of December 31, 2018 were and $34,030.
There were no securities acquired (sold) on a TBA basis as of December 31, 2019 and 2018, respectively.
The Company may pledge cash as collateral for derivative transactions. When cash is pledged as collateral, it is derecognized and a receivable is recorded to reflect the eventual return of that cash by the counterparty. The amount of cash collateral pledged by the Company as of December 31, 2019 and 2018, respectively, was $0 and $11,500.
At December 31, 2019 and 2018, securities in the amount of $0 and $1,777, respectively, were posted to the Company as collateral from derivative counterparties. The securities were not included on the Company’s balance sheet as the Company does not have the ability to sell or repledge the collateral.
The Company is a member of the FHLB of Des Moines. Through its membership, the Company has conducted business activity (borrowings) with the FHLB. It is part of the Company’s strategy to utilize these funds to improve spread lending liquidity. The Company has determined the actual/estimated maximum borrowing capacity as $1,866,170. The Company calculated this amount in accordance with the terms and conditions of agreement with FHLB of Des Moines.
At December 31, 2019 and 2018, the Company purchased/owned the following FHLB stock as part of the agreement:
Year Ended December 31 | ||||||||
2019 | 2018 | |||||||
Membership Stock: |
||||||||
Class A |
$ | — | $ | — | ||||
Class B |
10,000 | 10,000 | ||||||
Activity Stock |
47,000 | 56,800 | ||||||
Excess Stock |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | 57,000 | $ | 66,800 | ||||
|
|
|
|
85
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
At December 31, 2019, Membership Stock (Class A and B) Eligible for Redemption and the anticipated timeframe for redemption was as follows:
Less Than 6 Months |
6 Months to Less Than 1 Year |
1 to Less Than 3 Years |
3 to 5 Years |
|||||||||||||
Membership Stock |
||||||||||||||||
Class A |
$ | — | $ | — | $ | — | $ | — | ||||||||
Class B |
— | — | — | 10,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | — | $ | — | $ | 10,000 | ||||||||
|
|
|
|
|
|
|
|
At December 31, 2019 and 2018, the amount of collateral pledged and the maximum amount pledged to the FHLB during the reporting period was as follows:
Fair Value | Carry Value | |||||||
Total Collateral Pledged |
$ | 1,928,082 | $ | 1,829,749 | ||||
Maximum Collateral Pledged |
1,918,144 | 1,872,037 | ||||||
Fair Value | Carry Value | |||||||
Decemeber 31, 2018 |
||||||||
Total Collateral Pledged |
$ | 2,063,593 | $ | 2,086,543 | ||||
Maximum Collateral Pledged |
2,066,367 | 2,135,128 |
At December 31, 2019 and 2018, the borrowings from the FHLB were as follows:
December 31, 2019 | December 31, 2018 | |||||||||||||||
General Account |
Funding Agreements Reserves Established |
General Account |
Funding Agreements Reserves Established |
|||||||||||||
Debt1 |
$ | 1,175,000 | $ | — | $ | 1,175,000 | $ | — | ||||||||
Funding agreements2 |
— | — | 245,000 | 246,610 | ||||||||||||
Other |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,175,000 | $ | — | $ | 1,420,000 | $ | 246,610 | ||||||||
|
|
|
|
|
|
|
|
1 | The maximum amount of borrowing during 2019 was $1,175,000 |
2 | The maximum amount of borrowing during 2019 was $0 |
86
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
As of December 31, 2019 , the weighted average interest rate on FHLB advances was 2.120% with a weighted average term of 0.8 years. During 2018, the weighted average interest rate on FHLB advances was 2.738% with a weighted average term of 2.1 years.
At December 31, 2019, the borrowings from the FHLB were not subject to prepayment penalties.
The Company has provided guarantees for the obligations of noninsurance affiliates who have accepted assignments of structured settlement payment obligations from other insurers and purchase structured settlement insurance policies from subsidiaries of the Company that match those obligations. The guarantees made by the Company are specific to each structured settlement contract and vary in date and duration of the obligation. These are numerous and are backed by the reserves established by the Company to represent the present value of the future payments for those contracts. The statutory reserve established at December 31, 2019 for the total payout block is $2,124,229. As this reserve is already recorded on the balance sheet of the Company, there was no additional liability recorded due to the adoption of SSAP No. 5R.
The Company is a party to legal proceedings involving a variety of issues incidental to its business, including class actions lawsuits. Lawsuits may be brought in nearly any federal or state court in the United States or in an arbitral forum. In addition, there continues to be significant federal and state regulatory activity relating to financial services companies. The Company’s legal proceedings are subject to many variables, and given its complexity and scope, outcomes cannot be predicted with certainty. Although legal proceedings sometimes include substantial demands for compensatory and punitive damages, and injunctive relief, it is management’s opinion that damages arising from such demands will not be material to the Company’s financial position.
In addition, the insurance industry has increasingly and routinely been the subject of litigation, investigations, regulatory activity and challenges by various governmental and enforcement authorities and policyholder advocate groups concerning certain practices. For example, unclaimed property administrators and state insurance regulators are performing unclaimed property examinations of the life insurance industry in the U.S., including the Company. These are in some cases multi-state examinations that include the collective action of many of the states. Additionally, some states are conducting separate examinations or instituting separate enforcement actions in regard to unclaimed property laws and related claims practices. As other insurers in the United States have done, the Company identified certain additional internal processes that it has implemented or is in the process of implementing. As of December 31, 2019 and 2018, the Company’s reserves related to this matter were not material to the Company’s financial position.
The Company is subject to insurance guaranty laws in the states in which it writes business. These laws provide for assessments against insurance companies for the benefit of policyholders and claimants in the event of insolvency of other insurance companies. Assessments are charged to operations when received by the Company, except where right of offset against other taxes paid is allowed by law. Amounts available for future offsets are recorded as an asset on the Company’s balance sheet. The future obligation for known insolvencies has been accrued based on the most recent information available from the National Organization of Life and Health Insurance Guaranty Associations. Potential future obligations for unknown insolvencies are not determinable by the Company and are not required to be accrued for
87
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
financial reporting purposes. The Company has established a reserve of $2,780 and $3,122, and an offsetting premium tax benefit of $2,125 and $2,456 at December 31, 2019 and 2018, respectively, for its estimated share of future guaranty fund assessments related to several major insurer insolvencies. The guaranty fund (benefit) expense was $1,122, $386 and $1,193 for the years ended December 31, 2019, 2018 and 2017.
16. Sales, Transfer, and Servicing of Financial Assets and Extinguishments of Liabilities
The Company enters into dollar repurchase agreements in which securities are delivered to the counterparty once adequate collateral has been received. At December 31, 2019 and 2018, the Company had dollar repurchase agreements outstanding in the amount of $255,491 and $110,400, respectively, which is included in borrowed money on the balance sheets. Those amounts include accrued interest of $677 and $360, at December 31, 2019 and 2018, respectively. At December 31, 2019, securities with a book value of $254,966 and a fair value of $255,467 were subject to dollar repurchase agreements. These securities have maturity dates that range from January 1, 2033 to November 1, 2049. At December 31, 2018, securities with a book value of $109,657 and a fair value of $111,051 were subject to dollar repurchase agreements. The Company does not have the legal right to recall or substitute the underlying assets prior to the transaction’s scheduled termination. Upon scheduled termination, the counterparty is obligated to return substantially similar assets.
The contractual maturities of dollar repurchase agreements are as follows:
Fair Value | ||||||||
2019 | 2018 | |||||||
Open |
$ | 254,814 | $ | 110,040 | ||||
30 days or less |
— | — | ||||||
31 to 60 days |
— | — | ||||||
61 to 90 days |
— | — | ||||||
Greater than 90 days |
— | — | ||||||
|
|
|
|
|||||
Total |
254,814 | 110,040 | ||||||
Securities received |
— | — | ||||||
|
|
|
|
|||||
Total collateral received |
$ | 254,814 | $ | 110,040 | ||||
|
|
|
|
In the course of the Company’s asset management, securities are sold and reacquired within 30 days of the sale date to enhance the Company’s yield on its investment portfolio. There were no securities of NAIC designation 3 or below sold during 2019 and reacquired within 30 days of the sale date.
88
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
17. Reconciliation to Statutory Statement
The following is a reconciliation of amounts previously reported to the Iowa Department of Financial Regulation in the 2019 Annual Statement, to those reported in the accompanying statutory-basis financial statements:
December 31 2019 |
||||
Balance Sheets |
||||
Total assets as reported in the Company’s Annual Statement |
$ | 52,514,952 | ||
Increase in other assets |
1,741 | |||
|
|
|||
Total assets as reported in the accompanying audited statutory basis balance sheet |
$ | 52,516,693 | ||
|
|
|||
Total liabilities as reported in the Company’s Annual Statement |
$ | 50,207,465 | ||
Increase in policy and contract claim reserves |
8,292 | |||
|
|
|||
Total liabilities as reported in the accompanying audited statutory basis balance sheet |
$ | 50,215,757 | ||
|
|
|||
Total capital and surplus as reported in the Company’s Annual Statement |
$ | 2,307,487 | ||
Decrease in net income |
(6,551 | ) | ||
|
|
|||
Total capital and surplus as reported in the accompanying audited statutory basis balance sheet |
$ | 2,300,936 | ||
|
|
|||
Statements of Operations |
||||
Statutory net income as reported in the Company’s Annual Statement |
$ | 578,755 | ||
Decrease in federal income tax (benefit) expense |
1,741 | |||
Increase in death benefits |
(8,292 | ) | ||
|
|
|||
Total net income as reported in the accompanying audited statutory basis statement of operations |
$ | 572,204 | ||
|
|
The reconciling differences to the Annual Statement are driven by Management’s decision to record a current year adjustment identified after annual statement reporting.
The financial statements are adjusted to reflect events that occurred between the balance sheet date and the date when the financial statements are available to be issued, provided they give evidence of conditions that existed at the balance sheet date (Type I). The Company has not identified any Type I subsequent events for the year ended December 31, 2019 through April 20, 2020.
Events that are indicative of conditions that arose after the balance sheet date are disclosed, but do not result in an adjustment of the financial statements themselves (Type II). The Company has identified the following Type II subsequent events for the year ended December 31, 2019:
89
Transamerica Premier Life Insurance Company
Notes to Financial Statements – Statutory Basis
(Dollars in Thousands, Except per Share amounts)
In January 2020, management entered into a letter of intent for the sale of the Pyramid Center Complex owned by the Company. The estimated pre-tax gain on the transaction is $450,000. The letter of intent is consistent with the Company’s objective to reduce its commercial real estate exposure and is expected to close in the second quarter of 2020.
Since January 2020, the Coronavirus disease (COVID-19) outbreak is causing disruption to business, markets, and industry. The Company is continuously monitoring the market, and the economic factors that impact the Company, to proactively manage the associated risks. At this point, management believes the most significant risks the Company faces are related to financial markets (particularly credit, equity, and interest rates risks), and underwriting risks (particularly related to mortality, morbidity and policyholder behavior). As of the audit report release date, the Company continues to monitor and evaluate the impacts of the COVID-19 crisis on the Company’s 2020 results through the use of sensitivities and stress testing. While it is too early to provide long-term impacts, if any, management has determined the Company remains strongly capitalized with RBC remaining within target limits set by the capital management policy.
90
Transamerica Premier Life Insurance Company
Appendix A – Listing of Affiliated Companies
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |
Transamerica Corporation |
42-1484983 | |
Aegon Asset Management Services Inc |
39-1884868 | |
Aegon Direct Marketing Services Inc |
42-1470697 | |
Aegon Financial Services Group Inc |
41-1479568 | |
Aegon Institutional Markets Inc |
61-1085329 | |
Aegon Management Company |
35-1113520 | |
Aegon USA Real Estate Services Inc |
61-1098396 | |
Aegon USA Realty Advisors of CA |
20-5023693 | |
AFSG Securities Corporation |
23-2421076 | |
AUSA Properties Inc |
27-1275705 | |
Commonwealth General Corporation |
51-0108922 | |
Creditor Resources Inc |
42-1079584 | |
CRI Solutions Inc |
52-1363611 | |
Financial Planning Services Inc |
23-2130174 | |
Garnet Assurance Corporation |
11-3674132 | |
Garnet Assurance Corporation II |
14-1893533 | |
Garnet Assurance Corporation III |
01-0947856 | |
Intersecurities Ins Agency |
42-1517005 | |
LIICA RE II |
20-5927773 | |
Massachusetts Fidelity Trust |
42-0947998 | |
MLIC RE I Inc |
01-0930908 | |
Money Services Inc |
42-1079580 | |
Monumental General Administrators Inc |
52-1243288 | |
Pearl Holdings Inc I |
20-1063558 | |
Pearl Holdings Inc II |
20-1063571 | |
Pine Falls Re Inc |
26-1552330 | |
Real Estate Alternatives Portfolio 3A Inc |
20-1627078 | |
River Ridge Insurance Company |
20-0877184 | |
Short Hills Management |
42-1338496 | |
Stonebridge Benefit Services Inc |
75-2548428 | |
Stonebridge Reinsurance Company |
61-1497252 | |
TCF Asset Management Corp |
84-0642550 |
91
Transamerica Premier Life Insurance Company
Appendix A – Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |
TCFC Air Holdings Inc |
32-0092333 | |
TCFC Asset Holdings Inc |
32-0092334 | |
TLIC Oakbrook Reinsurance Inc. |
47-1026613 | |
TLIC Riverwood Reinsurance Inc |
45-3193055 | |
TLIC Watertree Reinsurance, Inc. |
81-3715574 | |
Tranasmerica Advisors Life Insurance Company |
91-1325756 | |
Transamerica Accounts Holding Corp |
36-4162154 | |
Transamerica Affinity Services Inc |
42-1523438 | |
Transamerica Affordable Housing Inc |
94-3252196 | |
Transamerica Agency Network Inc |
61-1513662 | |
Transamerica Asset Management |
59-3403585 | |
Transamerica Capital Inc |
95-3141953 | |
Transamerica Casualty Insurance Company |
31-4423946 | |
Transamerica Commercial Finance Corp I |
94-3054228 | |
Transamerica Consumer Finance Holding Company |
95-4631538 | |
Transamerica Corporation (OREGON) |
98-6021219 | |
Transamerica Distribution Finance Overseas Inc |
36-4254366 | |
Transamerica Finance Corporation |
95-1077235 | |
Transamerica Financial Advisors |
59-2476008 | |
Transamerica Financial Life Insurance Company |
36-6071399 | |
Transamerica Fund Services Inc |
59-3403587 | |
Transamerica Home Loan |
95-4390993 | |
Transamerica International Re (Bermuda) Ltd |
98-0199561 | |
Transamerica Investors Securities Corp |
13-3696753 | |
Transamerica Leasing Holdings Inc |
13-3452993 | |
Transamerica Life Insurance Company |
39-0989781 | |
Transamerica Pacific Insurance Co Ltd |
94-3304740 | |
Transamerica Premier Life Insurance Company |
52-0419790 | |
Transamerica Resources Inc |
52-1525601 | |
Transamerica Small Business Capital Inc |
36-4251204 | |
Transamerica Stable Value Solutions Inc |
27-0648897 | |
Transamerica Vendor Financial Services Corporation |
36-4134790 |
92
Transamerica Premier Life Insurance Company
Appendix A – Listing of Affiliated Companies (continued)
Transamerica Corporation
EIN: 42-1484983
AFFILIATIONS SCHEDULE
YEAR ENDED DECEMBER 31, 2019
Attachment to Note 9
Entity Name |
FEIN | |
United Financial Services Inc |
52-1263786 | |
WFG China Holdings Inc |
20-2541057 | |
World Fin Group Ins Agency of Massachusetts Inc |
04-3182849 | |
World Financial Group Inc |
42-1518386 | |
World Financial Group Ins Agency of Hawaii Inc |
99-0277127 | |
World Financial Group Insurance Agency of WY Inc |
42-1519076 | |
World Financial Group Insurance Agency |
95-3809372 | |
Zahorik Company Inc |
95-2775959 | |
Zero Beta Fund LLC |
26-1298094 |
93
Statutory-Basis Financial
Statement Schedules
94
Transamerica Premier Life Insurance Company
Summary of Investments – Other Than
Investments in Related Parties
(Dollars in Thousands)
SCHEDULE I
Type of Investment |
Cost (1) | Fair Value |
Amount at Which Shown in the Balance Sheet (2) |
|||||||||
Fixed maturities |
||||||||||||
Bonds: |
||||||||||||
United States government and government agencies and authorities |
$ | 1,560,785 | $ | 1,862,567 | $ | 1,615,584 | ||||||
States, municipalities and political subdivisions |
833,144 | 850,566 | 833,144 | |||||||||
Foreign governments |
137,981 | 148,272 | 137,879 | |||||||||
Hybrid securities |
196,725 | 212,249 | 196,725 | |||||||||
All other corporate bonds |
15,095,418 | 16,922,223 | 15,094,633 | |||||||||
Preferred stocks |
14,277 | 4,361 | 4,955 | |||||||||
|
|
|
|
|
|
|||||||
Total fixed maturities |
17,838,330 | 20,000,237 | 17,882,922 | |||||||||
Equity securities |
||||||||||||
Common stocks: |
||||||||||||
Industrial, miscellaneous and all other |
59,000 | 59,056 | 59,056 | |||||||||
|
|
|
|
|
|
|||||||
Total equity securities |
59,000 | 59,056 | 59,056 | |||||||||
Mortgage loans on real estate |
2,737,109 | 2,737,109 | ||||||||||
Real estate |
187,639 | 187,639 | ||||||||||
Policy loans |
962,408 | 962,408 | ||||||||||
Other long-term investments |
395,529 | 395,529 | ||||||||||
Receivable for securities |
117 | 117 | ||||||||||
Securities lending |
757,186 | 757,186 | ||||||||||
Cash, cash equivalents and short-term investments |
625,320 | 625,320 | ||||||||||
|
|
|
|
|||||||||
Total investments |
$ | 23,562,638 | $ | 23,607,286 | ||||||||
|
|
|
|
(1) | Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts. |
(2) | United States government and corporate bonds of $3,256 are held at fair value rather than amortized cost due to having an NAIC 6 rating. Two preferred stock securities are held at fair value of $2,272 due to having an NAIC 5 rating. |
95
Transamerica Premier Life Insurance Company
Supplementary Insurance Information
(Dollars in Thousands)
Future Policy Benefits and Expenses |
Unearned Premiums |
Policy and Contract Liabilities |
Premium Revenue |
Net Investment Income* |
Benefits, Claims Losses and Settlement Expenses |
Other Operating Expenses* |
||||||||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||||||||||
Individual life |
$ | 9,986,959 | $ | — | $ | 130,291 | $ | 1,662,742 | $ | 599,147 | $ | 1,101,732 | $ | 752,986 | ||||||||||||||
Individual health |
5,486,208 | 91,920 | 271,895 | 649,805 | 346,063 | 978,406 | 90,735 | |||||||||||||||||||||
Group life and health |
935,594 | 10,187 | 60,863 | 270,557 | 60,130 | 267,918 | 93,548 | |||||||||||||||||||||
Annuity |
1,383,733 | — | 667 | 764,777 | 89,519 | 2,147,944 | (1,182,538 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 17,792,494 | $ | 102,107 | $ | 463,716 | $ | 3,347,881 | $ | 1,094,859 | $ | 4,495,999 | $ | (245,269 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||||||||||
Individual life |
$ | 9,092,422 | $ | — | $ | 108,676 | $ | 1,564,433 | $ | 461,112 | $ | 1,126,141 | $ | 699,006 | ||||||||||||||
Individual health |
5,352,657 | 87,849 | 239,105 | 623,162 | 355,005 | 849,323 | 69,107 | |||||||||||||||||||||
Group life and health |
949,395 | 16,832 | 85,766 | 454,695 | 55,332 | 298,180 | 191,302 | |||||||||||||||||||||
Annuity |
1,466,569 | — | 698 | 907,732 | 87,245 | 1,223,719 | (223,394 | ) | ||||||||||||||||||||
Other |
— | — | — | — | 91,714 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 16,861,043 | $ | 104,681 | $ | 434,245 | $ | 3,550,022 | $ | 1,050,408 | $ | 3,497,363 | $ | 736,021 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||||||||||
Individual life |
$ | 8,490,074 | $ | — | $ | 102,824 | $ | 1,030,788 | $ | 1,190,643 | $ | 1,233,999 | $ | 784,581 | ||||||||||||||
Individual health |
5,104,517 | 86,651 | 232,622 | 2,206,192 | (984,774 | ) | 5,013,202 | (2,848,263 | ) | |||||||||||||||||||
Group life and health |
948,227 | 25,767 | 98,609 | 739,799 | 20,356 | 758,598 | (26,525 | ) | ||||||||||||||||||||
Annuity |
1,513,456 | — | 466 | (1,680,475 | ) | 559,012 | (786,325 | ) | (563,464 | ) | ||||||||||||||||||
Other |
— | — | — | — | 94,255 | — | — | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
$ | 16,056,274 | $ | 112,418 | $ | 434,521 | $ | 2,296,304 | $ | 879,492 | $ | 6,219,474 | $ | (2,653,671 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Allocations of net investment income and other operating expenses are based on a number of assumptions and estimates, and the results would change if different methods were applied. |
96
Transamerica Premier Life Insurance Company
(Dollars in Thousands)
Gross Amount | Ceded to Other Companies |
Assumed From Other Companies |
Net Amount | Percentage of Amount Assumed to Net |
||||||||||||||||
Year ended December 31, 2019 |
||||||||||||||||||||
Life insurance in force |
$ | 228,583,374 | $ | 58,822,199 | $ | 733,656 | $ | 170,494,831 | 0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 1,992,383 | $ | 352,503 | $ | 22,863 | $ | 1,662,743 | 1 | % | ||||||||||
Individual health |
266,540 | 21 | 383,287 | 649,806 | 59 | % | ||||||||||||||
Group life and health |
263,504 | 55,112 | 62,165 | 270,557 | 23 | % | ||||||||||||||
Annuity |
826,029 | 61,210 | (43 | ) | 764,776 | 0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 3,348,455 | $ | 468,847 | $ | 468,272 | $ | 3,347,881 | 14 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2018 |
||||||||||||||||||||
Life insurance in force |
$ | 225,354,149 | $ | 65,732,854 | $ | 797,813 | $ | 160,419,108 | 0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 1,931,651 | $ | 391,966 | $ | 24,748 | $ | 1,564,433 | 2 | % | ||||||||||
Individual health |
241,100 | 129 | 382,191 | 623,162 | 61 | % | ||||||||||||||
Group life and health |
454,075 | 66,673 | 67,292 | 454,695 | 15 | % | ||||||||||||||
Annuity |
951,927 | 44,216 | 21 | 907,732 | 0 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 3,578,753 | $ | 502,984 | $ | 474,252 | $ | 3,550,022 | 13 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2017 |
||||||||||||||||||||
Life insurance in force |
$ | 221,055,780 | $ | 69,201,990 | $ | 987,895 | $ | 152,841,685 | 1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums: |
||||||||||||||||||||
Individual life |
$ | 1,851,802 | $ | 846,830 | $ | 25,816 | $ | 1,030,788 | 3 | % | ||||||||||
Individual health |
227,972 | (137 | ) | 1,978,082 | 2,206,191 | 90 | % | |||||||||||||
Group life and health |
603,267 | 89,820 | 226,352 | 739,799 | 31 | % | ||||||||||||||
Annuity |
973,308 | 2,653,795 | 13 | (1,680,474 | ) | 0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 3,656,349 | $ | 3,590,308 | $ | 2,230,263 | $ | 2,296,304 | 97 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
97
19. Subsequent Events (Unaudited)
Additional subsequent events have been evaluated for disclosure through September 28, 2020.
As discussed in Note 18 to the audited financial statements, the Company entered into a letter of intent for the sale of the Pyramid Center Complex owned by the Company. On June 30, 2020, a purchase and sale agreement was reached with a sales price of $650,000 and expected closure by the end of 2020. As such, the asset has been classified as held for sale beginning on June 30, 2020 until final sale closure.
On May 15, 2020, the Company paid a dividend to its parent company, CGC, in the amount $700,000. The dividend included $76,604 in cash and $623,396 in securities.
On June 22, 2020, the Company repaid $60,000 of a surplus note to CGC. The Company received approval from the IID prior to its repayment of the surplus note as well as prior to making interest payments.
On June 30, 2020, the Company provided $5,000 to Transamerica Pacific Re, Inc. (TPRe), a newly formed AXXX captive reinsurance related party entity, in consideration for 5,000 shares of its stock becoming the sole shareholder of TPRe. The Company provided an additional capital contribution of $70,000 to TPRe on June 30, 2020.
With approval from the IID, the Company entered into a reinsurance agreement with Wilton Reassurance Company to novate life owned life insurance policies previously issued by the Company to TLIC effective July 1, 2020. The company novated $183,967 of reserves and claim reserves, which was recorded as an adjustment to the balance sheet, and paid a ceding commission of $7,400. The transaction resulted in a pre-tax loss of $7,400 which has been included in the Statements of Operations.
Effective October 1, 2020, the Company was merged with TLIC, an Iowa domiciled affiliate, with TLIC emerging as the surviving entity per the Plan of Merger which was approved by the Iowa Insurance Division.
98
FINANCIAL STATEMENTS
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Years Ended December 31, 2019 and 2018
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Financial Statements
Years Ended December 31, 2019 and 2018
1 | ||
Financial Statements |
||
2 | ||
5 | ||
23 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Transamerica Premier Life Insurance Company and the Contract Owners of WRL Series Annuity Account
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities of each of the subaccounts of WRL Series Annuity Account indicated in the table below as of December 31, 2019, and the related statements of operations and changes in net assets for each of the two years in the period ended December 31, 2019, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the subaccounts of WRL Series Annuity Account as of December 31, 2019, and the results of each of their operations and the changes in each of their net assets for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
Access VP High Yield | TA BlackRock Tactical Allocation Service Class | |
Fidelity® VIP Contrafund® Service Class 2 | TA Greystone International Growth Initial Class | |
Fidelity® VIP Equity-Income Service Class 2 | TA Greystone International Growth Service Class | |
Fidelity® VIP Growth Opportunities Service Class 2 | TA Janus Balanced Service Class | |
Fidelity® VIP Index 500 Service Class 2 | TA Janus Mid-Cap Growth Initial Class | |
ProFund VP Asia 30 | TA Janus Mid-Cap Growth Service Class | |
ProFund VP Basic Materials | TA JPMorgan Asset Allocation - Conservative Initial Class | |
ProFund VP Bull | TA JPMorgan Asset Allocation - Conservative Service Class | |
ProFund VP Consumer Services | TA JPMorgan Asset Allocation - Growth Initial Class | |
ProFund VP Emerging Markets | TA JPMorgan Asset Allocation - Growth Service Class | |
ProFund VP Europe 30 | TA JPMorgan Asset Allocation - Moderate Initial Class | |
ProFund VP Falling U.S. Dollar | TA JPMorgan Asset Allocation - Moderate Service Class | |
ProFund VP Financials | TA JPMorgan Asset Allocation - Moderate Growth Initial Class | |
ProFund VP Government Money Market | TA JPMorgan Asset Allocation - Moderate Growth Service Class | |
ProFund VP International | TA JPMorgan Core Bond Initial Class | |
ProFund VP Japan | TA JPMorgan Core Bond Service Class | |
ProFund VP Mid-Cap | TA JPMorgan Enhanced Index Initial Class | |
ProFund VP NASDAQ-100 | TA JPMorgan Enhanced Index Service Class | |
ProFund VP Oil & Gas | TA JPMorgan International Moderate Growth Initial Class | |
ProFund VP Pharmaceuticals | TA JPMorgan International Moderate Growth Service Class | |
ProFund VP Precious Metals | TA JPMorgan Mid Cap Value Initial Class | |
ProFund VP Short Emerging Markets | TA JPMorgan Mid Cap Value Service Class | |
ProFund VP Short International | TA JPMorgan Tactical Allocation Initial Class | |
ProFund VP Short NASDAQ-100 | TA JPMorgan Tactical Allocation Service Class | |
ProFund VP Short Small-Cap | TA Managed Risk - Balanced ETF Service Class | |
ProFund VP Small-Cap | TA Managed Risk - Growth ETF Service Class | |
ProFund VP Small-Cap Value | TA Morgan Stanley Capital Growth Initial Class | |
ProFund VP Telecommunications | TA Morgan Stanley Capital Growth Service Class | |
ProFund VP U.S. Government Plus | TA Multi-Managed Balanced Initial Class | |
ProFund VP UltraSmall-Cap | TA Multi-Managed Balanced Service Class | |
ProFund VP Utilities | TA PIMCO Tactical - Balanced Service Class | |
TA Aegon High Yield Bond Initial Class | TA PIMCO Tactical - Conservative Service Class | |
TA Aegon High Yield Bond Service Class | TA PIMCO Tactical - Growth Service Class | |
TA Aegon U.S. Government Securities Initial Class | TA PIMCO Total Return Initial Class | |
TA Aegon U.S. Government Securities Service Class | TA PIMCO Total Return Service Class | |
TA Barrow Hanley Dividend Focused Initial Class | TA QS Investors Active Asset Allocation - Conservative Service Class | |
TA Barrow Hanley Dividend Focused Service Class | TA QS Investors Active Asset Allocation - Moderate Growth Service Class | |
TA BlackRock Global Real Estate Securities Initial Class | TA Small/Mid Cap Value Initial Class | |
TA BlackRock Global Real Estate Securities Service Class | TA Small/Mid Cap Value Service Class | |
TA BlackRock Government Money Market Initial Class | TA T. Rowe Price Small Cap Initial Class | |
TA BlackRock Government Money Market Service Class | TA T. Rowe Price Small Cap Service Class | |
TA BlackRock iShares Edge 40 Initial Class | TA WMC US Growth Initial Class | |
TA BlackRock iShares Edge 40 Service Class | TA WMC US Growth Service Class |
Basis for Opinions
These financial statements are the responsibility of the Transamerica Premier Life Insurance Company’s management. Our responsibility is to express an opinion on the financial statements of each of the subaccounts of WRL Series Annuity Account based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the subaccounts of WRL Series Annuity Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2019 by correspondence with the investee mutual funds. We believe that our audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
We have served as the auditor of one or more of the subaccounts of WRL Series Annuity Account since 2014.
1
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Assets and Liabilities
Subaccount | Number of Shares | Cost | Assets at Market Value |
Due (to)/from General Account |
Net Assets | Units Outstanding | Range of Unit Values | |||||||||||||||||||||||||
Access VP High Yield | 85,426.922 | $ | 2,401,754 | $ | 2,452,607 | $ | 2 | $ | 2,452,609 | 129,072 | $ | 10.878675 | $ | 19.450759 | ||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 | 655,052.416 | 19,375,221 | 23,647,392 | 8 | 23,647,400 | 770,478 | 13.634762 | 31.793944 | ||||||||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 | 313,300.714 | 6,419,462 | 7,237,246 | 62 | 7,237,308 | 289,721 | 12.024006 | 25.944441 | ||||||||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 | 79,247.954 | 2,015,531 | 3,807,864 | 4 | 3,807,868 | 134,060 | 19.498169 | 31.853034 | ||||||||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 | 121.112 | 27,137 | 38,316 | (2 | ) | 38,314 | 1,242 | 14.402986 | 30.850974 | |||||||||||||||||||||||
ProFund VP Asia 30 | 21,775.135 | 1,264,048 | 1,353,325 | 25 | 1,353,350 | 132,954 | 9.675713 | 12.515758 | ||||||||||||||||||||||||
ProFund VP Basic Materials | 25,886.204 | 1,683,862 | 1,675,096 | 17 | 1,675,113 | 130,845 | 10.654131 | 13.319580 | ||||||||||||||||||||||||
ProFund VP Bull | 166,419.147 | 8,121,536 | 8,923,395 | (12 | ) | 8,923,383 | 406,666 | 13.263060 | 22.805040 | |||||||||||||||||||||||
ProFund VP Consumer Services | 53,411.138 | 3,829,466 | 4,431,522 | (13 | ) | 4,431,509 | 160,964 | 13.427846 | 29.382969 | |||||||||||||||||||||||
ProFund VP Emerging Markets | 259,139.593 | 6,898,688 | 7,535,779 | (16 | ) | 7,535,763 | 877,583 | 8.187193 | 12.965674 | |||||||||||||||||||||||
ProFund VP Europe 30 | 32,591.315 | 774,427 | 765,896 | (14 | ) | 765,882 | 77,818 | 8.663922 | 13.169799 | |||||||||||||||||||||||
ProFund VP Falling U.S. Dollar | 1,538.597 | 27,911 | 27,079 | 1 | 27,080 | 4,565 | 5.660565 | 9.423281 | ||||||||||||||||||||||||
ProFund VP Financials | 77,853.490 | 2,968,525 | 3,585,932 | 5 | 3,585,937 | 305,753 | 11.036967 | 21.496766 | ||||||||||||||||||||||||
ProFund VP Government Money Market | 3,677,103.630 | 3,677,104 | 3,677,104 | (7 | ) | 3,677,097 | 417,993 | 8.264659 | 9.699825 | |||||||||||||||||||||||
ProFund VP International | 83,163.721 | 1,670,068 | 1,634,999 | (3 | ) | 1,634,996 | 186,580 | 7.761061 | 11.643101 | |||||||||||||||||||||||
ProFund VP Japan | 8,563.648 | 394,853 | 471,514 | 99 | 471,613 | 47,925 | 9.178549 | 17.682038 | ||||||||||||||||||||||||
ProFund VP Mid-Cap | 91,541.859 | 2,321,045 | 2,186,935 | (14 | ) | 2,186,921 | 125,779 | 11.100731 | 18.355278 | |||||||||||||||||||||||
ProFund VP NASDAQ-100 | 214,821.491 | 9,317,960 | 11,101,975 | 4 | 11,101,979 | 271,981 | 16.103640 | 43.255925 | ||||||||||||||||||||||||
ProFund VP Oil & Gas | 58,165.602 | 2,159,688 | 1,736,825 | 11 | 1,736,836 | 236,439 | 7.000065 | 8.146809 | ||||||||||||||||||||||||
ProFund VP Pharmaceuticals | 63,991.828 | 2,338,398 | 2,194,280 | 4 | 2,194,284 | 114,413 | 11.211658 | 19.729413 | ||||||||||||||||||||||||
ProFund VP Precious Metals | 105,758.755 | 2,094,309 | 2,637,623 | 1 | 2,637,624 | 470,215 | 5.204690 | 13.008019 | ||||||||||||||||||||||||
ProFund VP Short Emerging Markets | 2,891.384 | 122,327 | 99,319 | (3 | ) | 99,316 | 44,107 | 2.053659 | 6.367731 | |||||||||||||||||||||||
ProFund VP Short International | 553.939 | 24,246 | 19,482 | (17 | ) | 19,465 | 6,268 | 2.946932 | 7.289493 | |||||||||||||||||||||||
ProFund VP Short NASDAQ-100 | 5,410.791 | 223,514 | 172,604 | 1 | 172,605 | 180,892 | 0.918668 | 5.031573 | ||||||||||||||||||||||||
ProFund VP Short Small-Cap | 64,957.143 | 915,599 | 662,563 | (7 | ) | 662,556 | 540,411 | 1.161867 | 7.330842 | |||||||||||||||||||||||
ProFund VP Small-Cap | 46,827.843 | 1,632,002 | 1,657,706 | 85 | 1,657,791 | 90,536 | 10.971977 | 19.622520 | ||||||||||||||||||||||||
ProFund VP Small-Cap Value | 26,629.844 | 1,259,166 | 1,296,075 | - | 1,296,075 | 74,749 | 10.385443 | 18.581368 | ||||||||||||||||||||||||
ProFund VP Telecommunications | 25,020.393 | 858,063 | 788,893 | - | 788,893 | 75,578 | 9.189345 | 13.453829 | ||||||||||||||||||||||||
ProFund VP U.S. Government Plus | 34,181.732 | 839,309 | 928,034 | (27 | ) | 928,007 | 51,902 | 9.980591 | 19.076482 | |||||||||||||||||||||||
ProFund VP UltraSmall-Cap | 166,945.047 | 4,313,175 | 3,959,937 | 14 | 3,959,951 | 222,784 | 11.934316 | 28.891596 | ||||||||||||||||||||||||
ProFund VP Utilities | 65,102.996 | 2,977,212 | 3,283,795 | - | 3,283,795 | 176,089 | 13.223334 | 19.094308 | ||||||||||||||||||||||||
TA Aegon High Yield Bond Initial Class | 979,828.744 | 7,717,429 | 7,623,068 | 19 | 7,623,087 | 318,230 | 11.246738 | 25.145891 | ||||||||||||||||||||||||
TA Aegon High Yield Bond Service Class | 24,471.291 | 192,974 | 193,568 | (4 | ) | 193,564 | 8,132 | 11.479637 | 24.163791 | |||||||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class | 624,932.650 | 6,953,662 | 6,824,265 | (13 | ) | 6,824,252 | 478,822 | 9.700297 | 15.062903 | |||||||||||||||||||||||
TA Aegon U.S. Government Securities Service Class | 9,675.009 | 121,484 | 109,134 | (1 | ) | 109,133 | 8,097 | 10.468440 | 13.613902 | |||||||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class | 2,728,402.833 | 50,768,048 | 61,580,052 | (39 | ) | 61,580,013 | 1,509,939 | 11.739070 | 45.203922 | |||||||||||||||||||||||
TA Barrow Hanley Dividend Focused Service Class | 36,197.542 | 689,557 | 817,702 | 16 | 817,718 | 25,177 | 12.044185 | 33.125010 | ||||||||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class | 1,726,442.549 | 21,821,062 | 23,134,330 | - | 23,134,330 | 615,895 | 11.708388 | 47.158788 | ||||||||||||||||||||||||
TA BlackRock Global Real Estate Securities Service Class | 33,523.469 | 411,559 | 472,346 | 2 | 472,348 | 15,487 | 11.961228 | 31.260115 | ||||||||||||||||||||||||
TA BlackRock Government Money Market Initial Class | 25,524,372.535 | 25,524,373 | 25,524,373 | (130 | ) | 25,524,243 | 1,932,882 | 8.150933 | 15.927650 | |||||||||||||||||||||||
TA BlackRock Government Money Market Service Class | 367,328.790 | 367,329 | 367,329 | (5 | ) | 367,324 | 39,530 | 8.834716 | 9.830448 | |||||||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class | 258,915.876 | 2,407,380 | 2,431,220 | (3 | ) | 2,431,217 | 130,278 | 11.259651 | 19.635619 |
See accompanying notes. | 2 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Assets and Liabilities
Subaccount | Number of Shares | Cost | Assets at Market Value |
Due (to)/from General Account |
Net Assets | Units Outstanding | Range of Unit Values | |||||||||||||||||||||||||
TA BlackRock iShares Edge 40 Service Class | 4,248.362 | $ | 35,037 | $ | 39,595 | $ | 8 | $ | 39,603 | 2,064 | $ | 11.546005 | $ | 19.411135 | ||||||||||||||||||
TA BlackRock Tactical Allocation Service Class | 279,966.522 | 4,261,479 | 4,451,468 | 4 | 4,451,472 | 352,235 | 11.570442 | 12.755183 | ||||||||||||||||||||||||
TA Greystone International Growth Initial Class | 4,204,837.501 | 34,498,581 | 34,984,248 | 4 | 34,984,252 | 1,932,480 | 12.493275 | 22.280031 | ||||||||||||||||||||||||
TA Greystone International Growth Service Class | 34,148.821 | 281,635 | 277,971 | 1 | 277,972 | 10,627 | 12.770641 | 26.930584 | ||||||||||||||||||||||||
TA Janus Balanced Service Class | 392,993.382 | 5,815,669 | 6,610,149 | (18 | ) | 6,610,131 | 3,878,813 | 1.588522 | 13.512512 | |||||||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class | 2,915,245.181 | 86,013,342 | 115,385,404 | (24 | ) | 115,385,380 | 1,460,824 | 16.410124 | 102.675225 | |||||||||||||||||||||||
TA Janus Mid-Cap Growth Service Class | 17,974.191 | 531,848 | 677,807 | (9 | ) | 677,798 | 17,924 | 16.279355 | 38.612973 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class | 4,037,796.862 | 42,402,201 | 43,042,915 | (38 | ) | 43,042,877 | 2,260,800 | 11.812529 | 20.211621 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Service Class | 90,557.512 | 940,847 | 952,665 | 6 | 952,671 | 47,595 | 11.713332 | 20.587233 | ||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class | 6,210,614.189 | 62,827,417 | 77,881,102 | 67 | 77,881,169 | 3,220,218 | 12.961406 | 25.061764 | ||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Service Class | 199,032.952 | 1,943,233 | 2,471,989 | 11 | 2,472,000 | 87,294 | 13.301396 | 28.794269 | ||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class | 7,614,144.814 | 84,187,597 | 91,445,879 | 17 | 91,445,896 | 4,279,917 | 11.939056 | 22.392497 | ||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Service Class | 172,565.791 | 1,877,007 | 2,041,453 | (1 | ) | 2,041,452 | 87,976 | 12.204218 | 23.624047 | |||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class | 10,845,109.865 | 129,710,423 | 134,913,167 | 41 | 134,913,208 | 5,916,260 | 12.333559 | 23.897918 | ||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Service Class | 288,484.364 | 3,199,504 | 3,533,933 | 8 | 3,533,941 | 137,204 | 12.659335 | 26.213966 | ||||||||||||||||||||||||
TA JPMorgan Core Bond Initial Class | 2,476,740.142 | 32,000,064 | 32,767,272 | (6 | ) | 32,767,266 | 1,113,966 | 10.363886 | 43.606603 | |||||||||||||||||||||||
TA JPMorgan Core Bond Service Class | 25,434.947 | 351,033 | 360,413 | - | 360,413 | 23,349 | 10.758844 | 16.012082 | ||||||||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class | 1,118,652.254 | 22,414,619 | 24,621,536 | (3 | ) | 24,621,533 | 801,581 | 13.700761 | 32.206304 | |||||||||||||||||||||||
TA JPMorgan Enhanced Index Service Class | 5,075.443 | 86,782 | 111,304 | 2 | 111,306 | 3,092 | 14.048830 | 36.499301 | ||||||||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class | 278,228.432 | 2,672,625 | 2,776,720 | 16 | 2,776,736 | 218,632 | 11.757778 | 12.956969 | ||||||||||||||||||||||||
TA JPMorgan International Moderate Growth Service Class | 2,011.862 | 19,616 | 19,877 | (1 | ) | 19,876 | 1,606 | 11.633571 | 12.529347 | |||||||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class | 733,691.652 | 12,405,364 | 11,944,500 | 4 | 11,944,504 | 307,965 | 11.422826 | 42.673125 | ||||||||||||||||||||||||
TA JPMorgan Mid Cap Value Service Class | 5,095.800 | 87,408 | 81,380 | 13 | 81,393 | 2,004 | 11.720356 | 40.914731 | ||||||||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class | 2,026,991.456 | 27,834,330 | 30,567,031 | 29 | 30,567,060 | 847,076 | 11.347739 | 41.099891 | ||||||||||||||||||||||||
TA JPMorgan Tactical Allocation Service Class | 24,803.844 | 358,801 | 393,885 | 9 | 393,894 | 23,373 | 11.259063 | 17.075214 | ||||||||||||||||||||||||
TA Managed Risk - Balanced ETF Service Class | 452,070.829 | 5,355,794 | 5,800,069 | 2 | 5,800,071 | 394,604 | 11.569385 | 15.071837 | ||||||||||||||||||||||||
TA Managed Risk - Growth ETF Service Class | 591,835.116 | 6,049,090 | 6,421,411 | (5 | ) | 6,421,406 | 414,709 | 12.076963 | 15.858407 | |||||||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class | 4,064,311.079 | 70,301,626 | 75,027,183 | 12 | 75,027,195 | 1,458,314 | 17.268160 | 54.883148 | ||||||||||||||||||||||||
TA Morgan Stanley Capital Growth Service Class | 41,325.148 | 744,299 | 735,588 | (1 | ) | 735,587 | 15,070 | 17.720869 | 50.421325 | |||||||||||||||||||||||
TA Multi-Managed Balanced Initial Class | 7,262,790.294 | 95,005,529 | 112,863,761 | (28 | ) | 112,863,733 | 3,824,424 | 12.775448 | 30.337883 | |||||||||||||||||||||||
TA Multi-Managed Balanced Service Class | 37,500.120 | 502,574 | 569,252 | (2 | ) | 569,250 | 19,115 | 12.677939 | 30.306389 | |||||||||||||||||||||||
TA PIMCO Tactical - Balanced Service Class | 112,419.627 | 1,291,271 | 1,399,624 | 6 | 1,399,630 | 1,075,360 | 1.203671 | 11.958265 | ||||||||||||||||||||||||
TA PIMCO Tactical - Conservative Service Class | 145,124.932 | 1,617,686 | 1,767,622 | 5 | 1,767,627 | 1,413,528 | 1.187674 | 12.387515 | ||||||||||||||||||||||||
TA PIMCO Tactical - Growth Service Class | 37,370.055 | 432,347 | 461,520 | 1 | 461,521 | 343,250 | 1.242103 | 13.077634 | ||||||||||||||||||||||||
TA PIMCO Total Return Initial Class | 2,621,122.186 | 29,942,908 | 30,824,397 | (27 | ) | 30,824,370 | 1,829,150 | 10.225765 | 17.876947 | |||||||||||||||||||||||
TA PIMCO Total Return Service Class | 19,412.444 | 221,625 | 226,155 | (10 | ) | 226,145 | 14,709 | 10.810576 | 15.944545 | |||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Service Class | 57,661.593 | 620,165 | 623,898 | - | 623,898 | 48,895 | 11.176566 | 13.038058 | ||||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Service Class | 129,212.489 | 1,462,360 | 1,479,483 | - | 1,479,483 | 104,482 | 11.602620 | 14.341238 | ||||||||||||||||||||||||
TA Small/Mid Cap Value Initial Class | 3,936,361.186 | 78,407,994 | 76,798,407 | (12 | ) | 76,798,395 | 1,918,647 | 11.676642 | 42.062181 | |||||||||||||||||||||||
TA Small/Mid Cap Value Service Class | 79,868.848 | 1,549,588 | 1,511,119 | (8 | ) | 1,511,111 | 37,173 | 11.976229 | 41.412335 | |||||||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class | 2,303,319.574 | 33,711,380 | 37,820,507 | (99 | ) | 37,820,408 | 927,098 | 13.749305 | 46.194295 |
See accompanying notes. | 3 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Assets and Liabilities
Subaccount | Number of Shares | Cost | Assets at Market Value |
Due (to)/from General Account |
Net Assets | Units Outstanding | Range of Unit Values | |||||||||||||||||||||||||
TA T. Rowe Price Small Cap Service Class | 24,943.727 | $ | 335,754 | $ | 381,888 | $ | 14 | $ | 381,902 | 7,372 | $ | 14.029317 | $ | 53.725263 | ||||||||||||||||||
TA WMC US Growth Initial Class | 12,993,997.163 | 331,069,172 | 446,343,803 | (69 | ) | 446,343,734 | 11,230,271 | 17.104780 | 42.390969 | |||||||||||||||||||||||
TA WMC US Growth Service Class | 60,478.832 | 1,533,472 | 2,020,598 | (5 | ) | 2,020,593 | 48,057 | 16.975932 | 42.868843 |
See accompanying notes. | 4 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
Access VP High Yield | Fidelity® VIP Contrafund® Service Class 2 |
Fidelity® VIP Equity-Income Service Class 2 |
Fidelity® VIP Growth Opportunities Service Class 2 |
Fidelity® VIP Index 500 Service Class 2 | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 2,510,865 | $ | 25,210,827 | $ | 8,214,903 | $ | 3,209,856 | $ | 93,353 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
67,234 | 103,782 | 151,099 | 3,049 | 1,446 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
34,801 | 338,546 | 107,824 | 47,177 | 1,498 | |||||||||||||||
Net Investment Income (Loss) |
32,433 | (234,764 | ) | 43,275 | (44,128 | ) | (52 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
51,142 | 2,208,149 | 371,039 | 194,103 | 457 | |||||||||||||||
Realized Gain (Loss) on Investments |
(63,091 | ) | 1,263,187 | 227,774 | 302,307 | 29,701 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
(11,949 | ) | 3,471,336 | 598,813 | 496,410 | 30,158 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(72,782 | ) | (4,904,843 | ) | (1,358,882 | ) | (106,055 | ) | (36,318 | ) | ||||||||||
Net Gain (Loss) on Investment |
(84,731 | ) | (1,433,507 | ) | (760,069 | ) | 390,355 | (6,160 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(52,298 | ) | (1,668,271 | ) | (716,794 | ) | 346,227 | (6,212 | ) | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(164,282 | ) | (3,188,855 | ) | (995,602 | ) | (446,393 | ) | (3,232 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(216,580 | ) | (4,857,126 | ) | (1,712,396 | ) | (100,166 | ) | (9,444 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 2,294,285 | $ | 20,353,701 | $ | 6,502,507 | $ | 3,109,690 | $ | 83,909 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
114,015 | 48,362 | 127,741 | - | 890 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
33,533 | 320,158 | 100,192 | 50,768 | 848 | |||||||||||||||
Net Investment Income (Loss) |
80,482 | (271,796 | ) | 27,549 | (50,768 | ) | 42 | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 2,650,441 | 471,227 | 306,048 | 1,225 | |||||||||||||||
Realized Gain (Loss) on Investments |
(14,431 | ) | 857,764 | 180,948 | 360,670 | 2,022 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
(14,431 | ) | 3,508,205 | 652,175 | 666,718 | 3,247 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
184,804 | 2,527,675 | 902,903 | 533,705 | 14,519 | |||||||||||||||
Net Gain (Loss) on Investment |
170,373 | 6,035,880 | 1,555,078 | 1,200,423 | 17,766 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
250,855 | 5,764,084 | 1,582,627 | 1,149,655 | 17,808 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(92,531 | ) | (2,470,385 | ) | (847,826 | ) | (451,477 | ) | (63,403 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
158,324 | 3,293,699 | 734,801 | 698,178 | (45,595 | ) | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 2,452,609 | $ | 23,647,400 | $ | 7,237,308 | $ | 3,807,868 | $ | 38,314 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
5 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Asia 30 | ProFund VP Basic Materials | ProFund VP Bull | ProFund VP Consumer Services |
ProFund VP Emerging Markets |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 2,109,116 | $ | 3,239,102 | $ | 9,444,133 | $ | 4,046,679 | $ | 9,637,430 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
8,261 | 9,120 | - | - | 20,377 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
23,179 | 35,890 | 123,686 | 61,132 | 110,218 | |||||||||||||||
Net Investment Income (Loss) |
(14,918 | ) | (26,770 | ) | (123,686 | ) | (61,132 | ) | (89,841 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | 939,809 | 195,730 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
142,252 | 157,762 | 513,915 | 401,343 | 942,275 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
142,252 | 157,762 | 1,453,724 | 597,073 | 942,275 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(392,035 | ) | (652,690 | ) | (1,685,724 | ) | (588,497 | ) | (1,992,501 | ) | ||||||||||
Net Gain (Loss) on Investment |
(249,783 | ) | (494,928 | ) | (232,000 | ) | 8,576 | (1,050,226 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(264,701 | ) | (521,698 | ) | (355,686 | ) | (52,556 | ) | (1,140,067 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(760,092 | ) | (899,821 | ) | (4,141,391 | ) | (225,872 | ) | (2,764,647 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(1,024,793 | ) | (1,421,519 | ) | (4,497,077 | ) | (278,428 | ) | (3,904,714 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 1,084,323 | $ | 1,817,583 | $ | 4,947,056 | $ | 3,768,251 | $ | 5,732,716 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
2,528 | 5,563 | 22,448 | - | 29,598 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
16,043 | 23,767 | 102,960 | 65,757 | 90,703 | |||||||||||||||
Net Investment Income (Loss) |
(13,515 | ) | (18,204 | ) | (80,512 | ) | (65,757 | ) | (61,105 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 48,612 | 145,805 | 186,476 | - | |||||||||||||||
Realized Gain (Loss) on Investments |
6,539 | 8,939 | (21,683 | ) | 186,625 | 135,350 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
6,539 | 57,551 | 124,122 | 373,101 | 135,350 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
253,577 | 217,918 | 1,396,637 | 560,917 | 1,208,969 | |||||||||||||||
Net Gain (Loss) on Investment |
260,116 | 275,469 | 1,520,759 | 934,018 | 1,344,319 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
246,601 | 257,265 | 1,440,247 | 868,261 | 1,283,214 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
22,426 | (399,735 | ) | 2,536,080 | (205,003 | ) | 519,833 | |||||||||||||
Total Increase (Decrease) in Net Assets |
269,027 | (142,470 | ) | 3,976,327 | 663,258 | 1,803,047 | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 1,353,350 | $ | 1,675,113 | $ | 8,923,383 | $ | 4,431,509 | $ | 7,535,763 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
6 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Europe 30 | ProFund VP Falling U.S. Dollar | ProFund VP Financials | ProFund VP Government Money Market |
ProFund VP International | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 1,766,777 | $ | 40,511 | $ | 3,970,409 | $ | 7,788,548 | $ | 2,844,219 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
43,722 | - | 13,499 | 26,259 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
23,538 | 1,017 | 51,802 | 106,462 | 36,839 | |||||||||||||||
Net Investment Income (Loss) |
20,184 | (1,017 | ) | (38,303 | ) | (80,203 | ) | (36,839 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 5,454 | - | - | 383,823 | |||||||||||||||
Realized Gain (Loss) on Investments |
130,959 | (8,696 | ) | 251,352 | - | 79,822 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
130,959 | (3,242 | ) | 251,352 | - | 463,645 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(303,988 | ) | (3,831 | ) | (596,272 | ) | - | (790,308 | ) | |||||||||||
Net Gain (Loss) on Investment |
(173,029 | ) | (7,073 | ) | (344,920 | ) | - | (326,663 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(152,845 | ) | (8,090 | ) | (383,223 | ) | (80,203 | ) | (363,502 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(826,545 | ) | 44,289 | (649,147 | ) | 704,385 | (844,174 | ) | ||||||||||||
Total Increase (Decrease) in Net Assets |
(979,390 | ) | 36,199 | (1,032,370 | ) | 624,182 | (1,207,676 | ) | ||||||||||||
Net Assets as of December 31, 2018: |
$ | 787,387 | $ | 76,710 | $ | 2,938,039 | $ | 8,412,730 | $ | 1,636,543 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
21,786 | 22 | 17,131 | 39,741 | 4,422 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
14,069 | 687 | 48,338 | 77,780 | 28,390 | |||||||||||||||
Net Investment Income (Loss) |
7,717 | (665 | ) | (31,207 | ) | (38,039 | ) | (23,968 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | 160,937 | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(1,085 | ) | (4,025 | ) | 68,445 | - | (81,295 | ) | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
(1,085 | ) | (4,025 | ) | 229,382 | - | (81,295 | ) | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
113,558 | 2,131 | 615,888 | - | 370,277 | |||||||||||||||
Net Gain (Loss) on Investment |
112,473 | (1,894 | ) | 845,270 | - | 288,982 | ||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
120,190 | (2,559 | ) | 814,063 | (38,039 | ) | 265,014 | |||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(141,695 | ) | (47,071 | ) | (166,165 | ) | (4,697,594 | ) | (266,561 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(21,505 | ) | (49,630 | ) | 647,898 | (4,735,633 | ) | (1,547 | ) | |||||||||||
Net Assets as of December 31, 2019: |
$ | 765,882 | $ | 27,080 | $ | 3,585,937 | $ | 3,677,097 | $ | 1,634,996 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
7 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Japan | ProFund VP Mid-Cap | ProFund VP NASDAQ-100 | ProFund VP Oil & Gas | ProFund VP Pharmaceuticals | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 506,669 | $ | 2,505,202 | $ | 10,391,899 | $ | 2,489,839 | $ | 3,471,074 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | - | - | 43,775 | 35,978 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
7,063 | 41,513 | 163,074 | 34,759 | 46,488 | |||||||||||||||
Net Investment Income (Loss) |
(7,063 | ) | (41,513 | ) | (163,074 | ) | 9,016 | (10,510 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 587,208 | 1,051,896 | - | 78,856 | |||||||||||||||
Realized Gain (Loss) on Investments |
8,323 | (311,352 | ) | 1,325,185 | (17,133 | ) | (10,094 | ) | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
8,323 | 275,856 | 2,377,081 | (17,133 | ) | 68,762 | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(62,299 | ) | (625,950 | ) | (2,494,051 | ) | (509,927 | ) | (263,832 | ) | ||||||||||
Net Gain (Loss) on Investment |
(53,976 | ) | (350,094 | ) | (116,970 | ) | (527,060 | ) | (195,070 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(61,039 | ) | (391,607 | ) | (280,044 | ) | (518,044 | ) | (205,580 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(47,559 | ) | (103,983 | ) | (1,329,788 | ) | (156,340 | ) | (871,221 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(108,598 | ) | (495,590 | ) | (1,609,832 | ) | (674,384 | ) | (1,076,801 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 398,071 | $ | 2,009,612 | $ | 8,782,067 | $ | 1,815,455 | $ | 2,394,273 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
595 | 3,341 | - | 25,917 | 18,864 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
6,661 | 34,940 | 150,022 | 26,858 | 35,912 | |||||||||||||||
Net Investment Income (Loss) |
(6,066 | ) | (31,599 | ) | (150,022 | ) | (941 | ) | (17,048 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | 72,384 | 61,443 | 274,917 | |||||||||||||||
Realized Gain (Loss) on Investments |
32,882 | (264,463 | ) | 465,041 | (70,622 | ) | (51,400 | ) | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
32,882 | (264,463 | ) | 537,425 | (9,179 | ) | 223,517 | |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
46,561 | 709,921 | 2,528,353 | 130,995 | 52,461 | |||||||||||||||
Net Gain (Loss) on Investment |
79,443 | 445,458 | 3,065,778 | 121,816 | 275,978 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
73,377 | 413,859 | 2,915,756 | 120,875 | 258,930 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
165 | (236,550 | ) | (595,844 | ) | (199,494 | ) | (458,919 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
73,542 | 177,309 | 2,319,912 | (78,619 | ) | (199,989 | ) | |||||||||||||
Net Assets as of December 31, 2019: |
$ | 471,613 | $ | 2,186,921 | $ | 11,101,979 | $ | 1,736,836 | $ | 2,194,284 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
8 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Precious Metals | ProFund VP Short Emerging Markets |
ProFund VP Short International |
ProFund VP Short NASDAQ- 100 |
ProFund VP Short Small-Cap | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 2,449,216 | $ | 134,202 | $ | 26,189 | $ | 266,807 | $ | 809,054 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | - | - | - | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
31,105 | 2,108 | 406 | 4,211 | 11,427 | |||||||||||||||
Net Investment Income (Loss) |
(31,105 | ) | (2,108 | ) | (406 | ) | (4,211 | ) | (11,427 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(5,374 | ) | (17,420 | ) | 2,491 | (119,140 | ) | (18,716 | ) | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
(5,374 | ) | (17,420 | ) | 2,491 | (119,140 | ) | (18,716 | ) | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(283,573 | ) | 32,991 | 3,159 | 82,435 | 109,120 | ||||||||||||||
Net Gain (Loss) on Investment |
(288,947 | ) | 15,571 | 5,650 | (36,705 | ) | 90,404 | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(320,052 | ) | 13,463 | 5,244 | (40,916 | ) | 78,977 | |||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
122,677 | (9,715 | ) | (4,072 | ) | 40,954 | 14,426 | |||||||||||||
Total Increase (Decrease) in Net Assets |
(197,375 | ) | 3,748 | 1,172 | 38 | 93,403 | ||||||||||||||
Net Assets as of December 31, 2018: |
$ | 2,251,841 | $ | 137,950 | $ | 27,361 | $ | 266,845 | $ | 902,457 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
960 | 689 | 158 | 290 | 873 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
34,252 | 1,876 | 356 | 3,025 | 10,336 | |||||||||||||||
Net Investment Income (Loss) |
(33,292 | ) | (1,187 | ) | (198 | ) | (2,735 | ) | (9,463 | ) | ||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 11,351 | 772 | - | 77,531 | |||||||||||||||
Realized Gain (Loss) on Investments |
(127,389 | ) | (11,756 | ) | (2,453 | ) | (14,194 | ) | (19,080 | ) | ||||||||||
Net Realized Capital Gains (Losses) on Investments |
(127,389 | ) | (405 | ) | (1,681 | ) | (14,194 | ) | 58,451 | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
1,047,498 | (31,786 | ) | (3,217 | ) | (56,276 | ) | (238,914 | ) | |||||||||||
Net Gain (Loss) on Investment |
920,109 | (32,191 | ) | (4,898 | ) | (70,470 | ) | (180,463 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
886,817 | (33,378 | ) | (5,096 | ) | (73,205 | ) | (189,926 | ) | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(501,034 | ) | (5,256 | ) | (2,800 | ) | (21,035 | ) | (49,975 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
385,783 | (38,634 | ) | (7,896 | ) | (94,240 | ) | (239,901 | ) | |||||||||||
Net Assets as of December 31, 2019: |
$ | 2,637,624 | $ | 99,316 | $ | 19,465 | $ | 172,605 | $ | 662,556 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
9 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Small-Cap | ProFund VP Small-Cap Value | ProFund VP Telecommunications |
ProFund VP U.S. Government Plus |
ProFund VP UltraSmall-Cap | ||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 2,510,409 | $ | 2,209,769 | $ | 1,014,543 | $ | 1,122,450 | $ | 3,106,142 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | - | 41,091 | 8,622 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
36,521 | 23,975 | 11,826 | 12,864 | 56,040 | |||||||||||||||
Net Investment Income (Loss) |
(36,521 | ) | (23,975 | ) | 29,265 | (4,242 | ) | (56,040 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
113,749 | 114,823 | - | - | 881,858 | |||||||||||||||
Realized Gain (Loss) on Investments |
(160,524 | ) | (51,389 | ) | (44,107 | ) | (75,221 | ) | 206,099 | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
(46,775 | ) | 63,434 | (44,107 | ) | (75,221 | ) | 1,087,957 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(377,600 | ) | (283,552 | ) | (118,360 | ) | 2,740 | (2,410,048 | ) | |||||||||||
Net Gain (Loss) on Investment |
(424,375 | ) | (220,118 | ) | (162,467 | ) | (72,481 | ) | (1,322,091 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(460,896 | ) | (244,093 | ) | (133,202 | ) | (76,723 | ) | (1,378,131 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(363,140 | ) | (1,311,269 | ) | (245,894 | ) | 72,139 | 1,296,880 | ||||||||||||
Total Increase (Decrease) in Net Assets |
(824,036 | ) | (1,555,362 | ) | (379,096 | ) | (4,584 | ) | (81,251 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 1,686,373 | $ | 654,407 | $ | 635,447 | $ | 1,117,866 | $ | 3,024,891 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | - | 28,121 | 8,101 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
27,848 | 14,496 | 12,972 | 13,515 | 52,469 | |||||||||||||||
Net Investment Income (Loss) |
(27,848 | ) | (14,496 | ) | 15,149 | (5,414 | ) | (52,469 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(67,857 | ) | (10,657 | ) | (72,532 | ) | 2,485 | (146,467 | ) | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
(67,857 | ) | (10,657 | ) | (72,532 | ) | 2,485 | (146,467 | ) | |||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
418,842 | 179,740 | 147,383 | 129,112 | 1,515,525 | |||||||||||||||
Net Gain (Loss) on Investment |
350,985 | 169,083 | 74,851 | 131,597 | 1,369,058 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
323,137 | 154,587 | 90,000 | 126,183 | 1,316,589 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(351,719 | ) | 487,081 | 63,446 | (316,042 | ) | (381,529 | ) | ||||||||||||
Total Increase (Decrease) in Net Assets |
(28,582 | ) | 641,668 | 153,446 | (189,859 | ) | 935,060 | |||||||||||||
Net Assets as of December 31, 2019: |
$ | 1,657,791 | $ | 1,296,075 | $ | 788,893 | $ | 928,007 | $ | 3,959,951 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
10 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
ProFund VP Utilities | TA Aegon High Yield Bond Initial Class |
TA Aegon High Yield Bond Service Class |
TA Aegon U.S. Government Securities Initial Class |
TA Aegon U.S. Government Securities Service Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 3,251,613 | $ | 9,531,143 | $ | 193,348 | $ | 7,034,021 | $ | 119,665 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
63,766 | 533,967 | 11,399 | 195,882 | 2,789 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
42,928 | 123,020 | 2,562 | 93,328 | 1,485 | |||||||||||||||
Net Investment Income (Loss) |
20,838 | 410,947 | 8,837 | 102,554 | 1,304 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
96,121 | - | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
(45,495 | ) | 129,986 | (159 | ) | (314,313 | ) | (1,619 | ) | |||||||||||
Net Realized Capital Gains (Losses) on Investments |
50,626 | 129,986 | (159 | ) | (314,313 | ) | (1,619 | ) | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(47,831 | ) | (840,290 | ) | (16,334 | ) | 125,490 | (1,357 | ) | |||||||||||
Net Gain (Loss) on Investment |
2,795 | (710,304 | ) | (16,493 | ) | (188,823 | ) | (2,976 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
23,633 | (299,357 | ) | (7,656 | ) | (86,269 | ) | (1,672 | ) | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(490,179 | ) | (1,689,677 | ) | (2,583 | ) | (433,896 | ) | (7,716 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(466,546 | ) | (1,989,034 | ) | (10,239 | ) | (520,165 | ) | (9,388 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 2,785,067 | $ | 7,542,109 | $ | 183,109 | $ | 6,513,856 | $ | 110,277 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
46,693 | 474,927 | 11,277 | 134,030 | 1,995 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
44,720 | 110,056 | 2,520 | 97,173 | 1,494 | |||||||||||||||
Net Investment Income (Loss) |
1,973 | 364,871 | 8,757 | 36,857 | 501 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
175,318 | - | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
12,929 | 16,853 | (331 | ) | (206,309 | ) | (98 | ) | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
188,247 | 16,853 | (331 | ) | (206,309 | ) | (98 | ) | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
385,830 | 531,723 | 13,695 | 489,875 | 5,071 | |||||||||||||||
Net Gain (Loss) on Investment |
574,077 | 548,576 | 13,364 | 283,566 | 4,973 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
576,050 | 913,447 | 22,121 | 320,423 | 5,474 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(77,322 | ) | (832,469 | ) | (11,666 | ) | (10,027 | ) | (6,618 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
498,728 | 80,978 | 10,455 | 310,396 | (1,144 | ) | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 3,283,795 | $ | 7,623,087 | $ | 193,564 | $ | 6,824,252 | $ | 109,133 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
11 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA Barrow Hanley Dividend Focused Initial Class |
TA Barrow Hanley Dividend Focused Service Class |
TA BlackRock Global Real Estate Securities Initial Class |
TA BlackRock Global Real Estate Securities Service Class |
TA BlackRock Government Money Market Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 70,745,509 | $ | 937,602 | $ | 26,858,475 | $ | 523,924 | $ | 28,870,273 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
1,414,208 | 16,916 | 2,029,072 | 37,411 | 530,097 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
924,562 | 11,974 | 342,215 | 6,689 | 418,347 | |||||||||||||||
Net Investment Income (Loss) |
489,646 | 4,942 | 1,686,857 | 30,722 | 111,750 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
4,026,452 | 52,724 | 311,010 | 8,928 | - | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
4,026,452 | 52,724 | 311,010 | 8,928 | - | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(12,849,683 | ) | (166,191 | ) | (4,797,783 | ) | (96,922 | ) | - | |||||||||||
Net Gain (Loss) on Investment |
(8,823,231 | ) | (113,467 | ) | (4,486,773 | ) | (87,994 | ) | - | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(8,333,585 | ) | (108,525 | ) | (2,799,916 | ) | (57,272 | ) | 111,750 | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(6,176,574 | ) | (139,004 | ) | (3,310,227 | ) | (49,107 | ) | 4,124,509 | |||||||||||
Total Increase (Decrease) in Net Assets |
(14,510,159 | ) | (247,529 | ) | (6,110,143 | ) | (106,379 | ) | 4,236,259 | |||||||||||
Net Assets as of December 31, 2018: |
$ | 56,235,350 | $ | 690,073 | $ | 20,748,332 | $ | 417,545 | $ | 33,106,532 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
1,475,170 | 17,182 | 207,444 | 2,720 | 541,924 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
835,988 | 10,485 | 325,908 | 6,334 | 386,354 | |||||||||||||||
Net Investment Income (Loss) |
639,182 | 6,697 | (118,464 | ) | (3,614 | ) | 155,570 | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
9,064,092 | 118,699 | - | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
3,638,028 | 10,427 | 311,373 | 5,084 | - | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
12,702,120 | 129,126 | 311,373 | 5,084 | - | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(1,418,482 | ) | 14,235 | 4,516,415 | 91,835 | - | ||||||||||||||
Net Gain (Loss) on Investment |
11,283,638 | 143,361 | 4,827,788 | 96,919 | - | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
11,922,820 | 150,058 | 4,709,324 | 93,305 | 155,570 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(6,578,157 | ) | (22,413 | ) | (2,323,326 | ) | (38,502 | ) | (7,737,859 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
5,344,663 | 127,645 | 2,385,998 | 54,803 | (7,582,289 | ) | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 61,580,013 | $ | 817,718 | $ | 23,134,330 | $ | 472,348 | $ | 25,524,243 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
12 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA BlackRock Government Money Market Service Class |
TA BlackRock iShares Edge 40 Initial Class |
TA BlackRock iShares Edge 40 Service Class |
TA BlackRock Tactical Allocation Service Class |
TA Greystone International Growth Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 364,763 | $ | 2,843,283 | $ | 47,754 | $ | 5,008,073 | $ | 41,972,396 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
3,030 | 50,573 | 709 | 46,367 | 442,651 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
5,325 | 38,414 | 583 | 66,222 | 536,671 | |||||||||||||||
Net Investment Income (Loss) |
(2,295 | ) | 12,159 | 126 | (19,855 | ) | (94,020 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | - | - | 210,374 | 188,184 | |||||||||||||||
Realized Gain (Loss) on Investments |
- | 43,995 | 785 | (23,993 | ) | 1,958,095 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
- | 43,995 | 785 | 186,381 | 2,146,279 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
- | (204,523 | ) | (3,409 | ) | (429,456 | ) | (9,289,286 | ) | |||||||||||
Net Gain (Loss) on Investment |
- | (160,528 | ) | (2,624 | ) | (243,075 | ) | (7,143,007 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(2,295 | ) | (148,369 | ) | (2,498 | ) | (262,930 | ) | (7,237,027 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
1,027 | (255,001 | ) | (6,191 | ) | (575,288 | ) | (4,244,878 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(1,268 | ) | (403,370 | ) | (8,689 | ) | (838,218 | ) | (11,481,905 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 363,495 | $ | 2,439,913 | $ | 39,065 | $ | 4,169,855 | $ | 30,490,491 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
6,107 | 55,734 | 787 | 99,500 | 542,899 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
5,224 | 36,418 | 526 | 62,261 | 475,988 | |||||||||||||||
Net Investment Income (Loss) |
883 | 19,316 | 261 | 37,239 | 66,911 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
- | 329,683 | 5,279 | 210,039 | 5,451,076 | |||||||||||||||
Realized Gain (Loss) on Investments |
- | 60,714 | 341 | (31,003 | ) | 757,496 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
- | 390,397 | 5,620 | 179,036 | 6,208,572 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
- | (89,516 | ) | (794 | ) | 410,840 | 1,283,732 | |||||||||||||
Net Gain (Loss) on Investment |
- | 300,881 | 4,826 | 589,876 | 7,492,304 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
883 | 320,197 | 5,087 | 627,115 | 7,559,215 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
2,946 | (328,893 | ) | (4,549 | ) | (345,498 | ) | (3,065,454 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
3,829 | (8,696 | ) | 538 | 281,617 | 4,493,761 | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 367,324 | $ | 2,431,217 | $ | 39,603 | $ | 4,451,472 | $ | 34,984,252 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
13 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA Greystone International Growth Service Class |
TA Janus Balanced Service Class |
TA Janus Mid-Cap Growth Initial Class |
TA Janus Mid-Cap Growth Service Class |
TA JPMorgan Asset Allocation - Conservative Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 356,351 | $ | 4,014,346 | $ | 107,804,582 | $ | 640,456 | $ | 50,223,296 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
3,365 | 61,750 | 62,656 | - | 825,845 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
4,844 | 57,255 | 1,478,775 | 8,547 | 682,520 | |||||||||||||||
Net Investment Income (Loss) |
(1,479 | ) | 4,495 | (1,416,119 | ) | (8,547 | ) | 143,325 | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
1,819 | 101,708 | 4,647,977 | 26,883 | 1,864,365 | |||||||||||||||
Realized Gain (Loss) on Investments |
5,898 | 175,991 | 3,350,731 | 19,258 | 445,436 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
7,717 | 277,699 | 7,998,708 | 46,141 | 2,309,801 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(76,300 | ) | (333,969 | ) | (8,270,714 | ) | (44,162 | ) | (4,907,306 | ) | ||||||||||
Net Gain (Loss) on Investment |
(68,583 | ) | (56,270 | ) | (272,006 | ) | 1,979 | (2,597,505 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(70,062 | ) | (51,775 | ) | (1,688,125 | ) | (6,568 | ) | (2,454,180 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
460 | (23,139 | ) | (12,206,488 | ) | (110,557 | ) | (6,090,451 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(69,602 | ) | (74,914 | ) | (13,894,613 | ) | (117,125 | ) | (8,544,631 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 286,749 | $ | 3,939,432 | $ | 93,909,969 | $ | 523,331 | $ | 41,678,665 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
3,705 | 69,586 | 80,236 | - | 1,125,313 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
4,084 | 70,916 | 1,472,791 | 8,430 | 631,778 | |||||||||||||||
Net Investment Income (Loss) |
(379 | ) | (1,330 | ) | (1,392,555 | ) | (8,430 | ) | 493,535 | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
45,393 | 227,450 | 5,858,112 | 34,897 | 1,595,093 | |||||||||||||||
Realized Gain (Loss) on Investments |
13,244 | 102,499 | 4,343,873 | 9,081 | (220,637 | ) | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
58,637 | 329,949 | 10,201,985 | 43,978 | 1,374,456 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
7,909 | 587,575 | 22,933,864 | 139,877 | 3,072,909 | |||||||||||||||
Net Gain (Loss) on Investment |
66,546 | 917,524 | 33,135,849 | 183,855 | 4,447,365 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
66,167 | 916,194 | 31,743,294 | 175,425 | 4,940,900 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(74,944 | ) | 1,754,505 | (10,267,883 | ) | (20,958 | ) | (3,576,688 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(8,777 | ) | 2,670,699 | 21,475,411 | 154,467 | 1,364,212 | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 277,972 | $ | 6,610,131 | $ | 115,385,380 | $ | 677,798 | $ | 43,042,877 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
14 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA JPMorgan Asset Allocation - Conservative Service Class |
TA JPMorgan Asset Allocation - Growth Initial Class |
TA JPMorgan Asset Allocation - Growth Service Class |
TA JPMorgan Asset Allocation - Moderate Initial Class |
TA JPMorgan Asset Allocation - Moderate Service Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 971,877 | $ | 82,900,292 | $ | 2,699,330 | $ | 101,084,222 | $ | 2,391,296 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
13,819 | 1,466,152 | 40,340 | 1,686,188 | 34,959 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
12,474 | 1,131,141 | 34,103 | 1,397,376 | 31,199 | |||||||||||||||
Net Investment Income (Loss) |
1,345 | 335,011 | 6,237 | 288,812 | 3,760 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
36,342 | 5,105,751 | 161,254 | 4,586,400 | 110,024 | |||||||||||||||
Realized Gain (Loss) on Investments |
7,757 | 4,527,390 | 158,096 | 2,548,051 | 67,054 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
44,099 | 9,633,141 | 319,350 | 7,134,451 | 177,078 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(95,056 | ) | (18,727,665 | ) | (605,903 | ) | (13,584,263 | ) | (334,444 | ) | ||||||||||
Net Gain (Loss) on Investment |
(50,957 | ) | (9,094,524 | ) | (286,553 | ) | (6,449,812 | ) | (157,366 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(49,612 | ) | (8,759,513 | ) | (280,316 | ) | (6,161,000 | ) | (153,606 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(115,980 | ) | (7,648,270 | ) | (310,345 | ) | (7,152,673 | ) | (218,096 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(165,592 | ) | (16,407,783 | ) | (590,661 | ) | (13,313,673 | ) | (371,702 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 806,285 | $ | 66,492,509 | $ | 2,108,669 | $ | 87,770,549 | $ | 2,019,594 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
17,844 | 1,271,634 | 33,863 | 1,937,350 | 41,121 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
11,033 | 1,047,758 | 30,914 | 1,285,547 | 28,837 | |||||||||||||||
Net Investment Income (Loss) |
6,811 | 223,876 | 2,949 | 651,803 | 12,284 | |||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
28,196 | 6,731,275 | 211,962 | 5,020,985 | 120,130 | |||||||||||||||
Realized Gain (Loss) on Investments |
5,726 | 2,767,354 | 59,769 | 2,310,231 | 53,352 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
33,922 | 9,498,629 | 271,731 | 7,331,216 | 173,482 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
49,981 | 5,942,045 | 220,014 | 4,312,527 | 100,397 | |||||||||||||||
Net Gain (Loss) on Investment |
83,903 | 15,440,674 | 491,745 | 11,643,743 | 273,879 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
90,714 | 15,664,550 | 494,694 | 12,295,546 | 286,163 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
55,672 | (4,275,890 | ) | (131,363 | ) | (8,620,199 | ) | (264,305 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
146,386 | 11,388,660 | 363,331 | 3,675,347 | 21,858 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 952,671 | $ | 77,881,169 | $ | 2,472,000 | $ | 91,445,896 | $ | 2,041,452 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
15 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
TA JPMorgan Asset Allocation - Moderate Growth Service Class |
TA JPMorgan Core Bond Initial Class |
TA JPMorgan Core Bond Service Class |
TA JPMorgan Enhanced Index Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 141,013,924 | $ | 3,592,533 | $ | 38,276,644 | $ | 393,003 | $ | 22,968,725 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
2,638,353 | 58,416 | 1,143,823 | 11,110 | 245,810 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
1,940,160 | 47,588 | 503,113 | 5,767 | 360,426 | |||||||||||||||
Net Investment Income (Loss) |
698,193 | 10,828 | 640,710 | 5,343 | (114,616 | ) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
7,318,498 | 186,287 | - | - | 963,002 | |||||||||||||||
Realized Gain (Loss) on Investments |
3,489,061 | 58,736 | (210,661 | ) | (538 | ) | 1,082,395 | |||||||||||||
Net Realized Capital Gains (Losses) on Investments |
10,807,559 | 245,023 | (210,661 | ) | (538 | ) | 2,045,397 | |||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(22,992,767 | ) | (554,574 | ) | (919,939 | ) | (11,127 | ) | (3,660,755 | ) | ||||||||||
Net Gain (Loss) on Investment |
(12,185,208 | ) | (309,551 | ) | (1,130,600 | ) | (11,665 | ) | (1,615,358 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(11,487,015 | ) | (298,723 | ) | (489,890 | ) | (6,322 | ) | (1,729,974 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(5,960,478 | ) | (128,059 | ) | (1,855,080 | ) | (5,460 | ) | (1,554,304 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(17,447,493 | ) | (426,782 | ) | (2,344,970 | ) | (11,782 | ) | (3,284,278 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 123,566,431 | $ | 3,165,751 | $ | 35,931,674 | $ | 381,221 | $ | 19,684,447 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
2,856,397 | 66,697 | 872,803 | 8,283 | 265,236 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
1,851,872 | 45,866 | 485,406 | 5,651 | 352,016 | |||||||||||||||
Net Investment Income (Loss) |
1,004,525 | 20,831 | 387,397 | 2,632 | (86,780 | ) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
10,994,910 | 293,647 | - | - | 2,606,435 | |||||||||||||||
Realized Gain (Loss) on Investments |
1,846,905 | 54,662 | 129,991 | 5,199 | 476,884 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
12,841,815 | 348,309 | 129,991 | 5,199 | 3,083,319 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
7,918,761 | 198,577 | 1,868,048 | 17,395 | 2,618,879 | |||||||||||||||
Net Gain (Loss) on Investment |
20,760,576 | 546,886 | 1,998,039 | 22,594 | 5,702,198 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
21,765,101 | 567,717 | 2,385,436 | 25,226 | 5,615,418 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(10,418,324 | ) | (199,527 | ) | (5,549,844 | ) | (46,034 | ) | (678,332 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
11,346,777 | 368,190 | (3,164,408 | ) | (20,808 | ) | 4,937,086 | |||||||||||||
Net Assets as of December 31, 2019: |
$ | 134,913,208 | $ | 3,533,941 | $ | 32,767,266 | $ | 360,413 | $ | 24,621,533 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
16 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA JPMorgan Enhanced Index Service Class |
TA JPMorgan International Moderate Growth Initial Class |
TA JPMorgan International Moderate Growth Service Class |
TA JPMorgan Mid Cap Value Initial Class |
TA JPMorgan Mid Cap Value Service Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 108,755 | $ | 3,367,764 | $ | 20,572 | $ | 15,497,187 | $ | 108,158 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
898 | 73,672 | 410 | 113,838 | 550 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
1,381 | 44,094 | 251 | 190,278 | 1,173 | |||||||||||||||
Net Investment Income (Loss) |
(483 | ) | 29,578 | 159 | (76,440 | ) | (623 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
4,458 | 30,976 | 192 | 295,776 | 1,979 | |||||||||||||||
Realized Gain (Loss) on Investments |
5,745 | 55,272 | 375 | 440,424 | 4,484 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
10,203 | 86,248 | 567 | 736,200 | 6,463 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(18,038 | ) | (523,721 | ) | (3,171 | ) | (2,356,634 | ) | (16,693 | ) | ||||||||||
Net Gain (Loss) on Investment |
(7,835 | ) | (437,473 | ) | (2,604 | ) | (1,620,434 | ) | (10,230 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(8,318 | ) | (407,895 | ) | (2,445 | ) | (1,696,874 | ) | (10,853 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(2,158 | ) | (210,106 | ) | (1,206 | ) | (2,855,698 | ) | (31,378 | ) | ||||||||||
Total Increase (Decrease) in Net Assets |
(10,476 | ) | (618,001 | ) | (3,651 | ) | (4,552,572 | ) | (42,231 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 98,279 | $ | 2,749,763 | $ | 16,921 | $ | 10,944,615 | $ | 65,927 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
1,009 | 62,439 | 388 | 161,338 | 887 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
1,414 | 38,275 | 249 | 164,461 | 976 | |||||||||||||||
Net Investment Income (Loss) |
(405 | ) | 24,164 | 139 | (3,123 | ) | (89 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
12,458 | 219,330 | 1,559 | 1,044,463 | 7,008 | |||||||||||||||
Realized Gain (Loss) on Investments |
5,411 | 71,080 | (32 | ) | 232,515 | (134 | ) | |||||||||||||
Net Realized Capital Gains (Losses) on Investments |
17,869 | 290,410 | 1,527 | 1,276,978 | 6,874 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
9,448 | 94,501 | 1,110 | 1,287,157 | 9,247 | |||||||||||||||
Net Gain (Loss) on Investment |
27,317 | 384,911 | 2,637 | 2,564,135 | 16,121 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
26,912 | 409,075 | 2,776 | 2,561,012 | 16,032 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(13,885 | ) | (382,102 | ) | 179 | (1,561,123 | ) | (566 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
13,027 | 26,973 | 2,955 | 999,889 | 15,466 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 111,306 | $ | 2,776,736 | $ | 19,876 | $ | 11,944,504 | $ | 81,393 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
17 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA JPMorgan Tactical Allocation Initial Class |
TA JPMorgan Tactical Allocation Service Class |
TA Managed Risk -Balanced ETF Service Class |
TA Managed Risk -Growth ETF Service Class |
TA Morgan Stanley Capital Growth Initial Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 36,397,504 | $ | 456,875 | $ | 5,932,144 | $ | 5,715,740 | $ | 43,695,752 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
741,094 | 8,178 | 100,455 | 85,983 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
464,632 | 5,720 | 83,230 | 79,139 | 688,739 | |||||||||||||||
Net Investment Income (Loss) |
276,462 | 2,458 | 17,225 | 6,844 | (688,739 | ) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
956,518 | 12,022 | - | - | 8,409,295 | |||||||||||||||
Realized Gain (Loss) on Investments |
558,862 | 5,757 | 52,029 | 11,331 | 3,801,467 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
1,515,380 | 17,779 | 52,029 | 11,331 | 12,210,762 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(3,252,081 | ) | (39,752 | ) | (389,811 | ) | (512,345 | ) | (9,293,177 | ) | ||||||||||
Net Gain (Loss) on Investment |
(1,736,701 | ) | (21,973 | ) | (337,782 | ) | (501,014 | ) | 2,917,585 | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(1,460,239 | ) | (19,515 | ) | (320,557 | ) | (494,170 | ) | 2,228,846 | |||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(4,338,597 | ) | (46,487 | ) | (522,196 | ) | 18,821 | (3,179,808 | ) | |||||||||||
Total Increase (Decrease) in Net Assets |
(5,798,836 | ) | (66,002 | ) | (842,753 | ) | (475,349 | ) | (950,962 | ) | ||||||||||
Net Assets as of December 31, 2018: |
$ | 30,598,668 | $ | 390,873 | $ | 5,089,391 | $ | 5,240,391 | $ | 42,744,790 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
749,402 | 8,181 | 111,508 | 101,114 | - | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
428,031 | 5,216 | 81,593 | 82,571 | 755,230 | |||||||||||||||
Net Investment Income (Loss) |
321,371 | 2,965 | 29,915 | 18,543 | (755,230 | ) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
398,221 | 4,882 | 148,544 | 503,034 | 4,021,115 | |||||||||||||||
Realized Gain (Loss) on Investments |
435,295 | 4,689 | 20,826 | (16,104 | ) | 2,487,090 | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
833,516 | 9,571 | 169,370 | 486,930 | 6,508,205 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
1,972,067 | 26,529 | 526,980 | 440,089 | 5,219,377 | |||||||||||||||
Net Gain (Loss) on Investment |
2,805,583 | 36,100 | 696,350 | 927,019 | 11,727,582 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
3,126,954 | 39,065 | 726,265 | 945,562 | 10,972,352 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(3,158,562 | ) | (36,044 | ) | (15,585 | ) | 235,453 | 21,310,053 | ||||||||||||
Total Increase (Decrease) in Net Assets |
(31,608 | ) | 3,021 | 710,680 | 1,181,015 | 32,282,405 | ||||||||||||||
Net Assets as of December 31, 2019: |
$ | 30,567,060 | $ | 393,894 | $ | 5,800,071 | $ | 6,421,406 | $ | 75,027,195 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
18 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA Morgan Stanley Capital Growth Service Class |
TA Multi-Managed Balanced Initial Class |
TA Multi-Managed Balanced Service Class |
TA PIMCO Tactical - Balanced Service Class |
TA PIMCO Tactical - Conservative Service Class |
||||||||||||||||
Subaccount | Subaccount | Subaccount | Subaccount | Subaccount | ||||||||||||||||
Net Assets as of December 31, 2017: |
$ | 152,287 | $ | 117,196,596 | $ | 583,996 | $ | 1,287,190 | $ | 875,674 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | 1,581,635 | 6,737 | 39,405 | 32,629 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
4,955 | 1,519,830 | 7,555 | 16,983 | 13,452 | |||||||||||||||
Net Investment Income (Loss) |
(4,955 | ) | 61,805 | (818 | ) | 22,422 | 19,177 | |||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
79,164 | 4,332,272 | 22,104 | 90,178 | 61,815 | |||||||||||||||
Realized Gain (Loss) on Investments |
5,807 | 3,176,733 | 10,662 | 10,892 | 17,253 | |||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
84,971 | 7,509,005 | 32,766 | 101,070 | 79,068 | |||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(96,528 | ) | (12,884,028 | ) | (59,663 | ) | (238,059 | ) | (164,691 | ) | ||||||||||
Net Gain (Loss) on Investment |
(11,557 | ) | (5,375,023 | ) | (26,897 | ) | (136,989 | ) | (85,623 | ) | ||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(16,512 | ) | (5,313,218 | ) | (27,715 | ) | (114,567 | ) | (66,446 | ) | ||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
276,854 | (10,881,733 | ) | (44,277 | ) | 59,973 | 57,249 | |||||||||||||
Total Increase (Decrease) in Net Assets |
260,342 | (16,194,951 | ) | (71,992 | ) | (54,594 | ) | (9,197 | ) | |||||||||||
Net Assets as of December 31, 2018: |
$ | 412,629 | $ | 101,001,645 | $ | 512,004 | $ | 1,232,596 | $ | 866,477 | ||||||||||
Investment Income: |
||||||||||||||||||||
Reinvested Dividends |
- | 1,773,577 | 8,030 | 2,130 | 1,716 | |||||||||||||||
Investment Expense: |
||||||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
7,376 | 1,465,029 | 7,404 | 17,492 | 22,297 | |||||||||||||||
Net Investment Income (Loss) |
(7,376 | ) | 308,548 | 626 | (15,362 | ) | (20,581 | ) | ||||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||||||
Capital Gain Distributions |
41,854 | 6,724,467 | 35,851 | - | - | |||||||||||||||
Realized Gain (Loss) on Investments |
3,848 | 2,809,413 | 26,866 | 4,235 | (740 | ) | ||||||||||||||
Net Realized Capital Gains (Losses) on Investments |
45,702 | 9,533,880 | 62,717 | 4,235 | (740 | ) | ||||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
65,836 | 9,772,407 | 37,666 | 227,591 | 252,566 | |||||||||||||||
Net Gain (Loss) on Investment |
111,538 | 19,306,287 | 100,383 | 231,826 | 251,826 | |||||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
104,162 | 19,614,835 | 101,009 | 216,464 | 231,245 | |||||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
218,796 | (7,752,747 | ) | (43,763 | ) | (49,430 | ) | 669,905 | ||||||||||||
Total Increase (Decrease) in Net Assets |
322,958 | 11,862,088 | 57,246 | 167,034 | 901,150 | |||||||||||||||
Net Assets as of December 31, 2019: |
$ | 735,587 | $ | 112,863,733 | $ | 569,250 | $ | 1,399,630 | $ | 1,767,627 | ||||||||||
See Accompanying Notes. (1) See Footnote 1 |
19 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA PIMCO Tactical - Growth Service Class Subaccount |
TA PIMCO Total Return Initial Class Subaccount |
TA PIMCO Total Return Service Class Subaccount |
TA QS Investors Active Asset Allocation - Subaccount |
|||||||||||||
Net Assets as of December 31, 2017: |
$ | 597,454 | $ | 36,408,838 | $ | 265,191 | $ | 784,026 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
17,421 | 840,533 | 5,717 | 11,296 | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
7,890 | 484,582 | 3,530 | 13,313 | ||||||||||||
Net Investment Income (Loss) |
9,531 | 355,951 | 2,187 | (2,017 | ) | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
56,434 | 165,727 | 1,254 | - | ||||||||||||
Realized Gain (Loss) on Investments |
4,700 | (273,398 | ) | (1,673 | ) | 7,362 | ||||||||||
Net Realized Capital Gains (Losses) on Investments |
61,134 | (107,671 | ) | (419 | ) | 7,362 | ||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(114,453 | ) | (1,018,669 | ) | (8,375 | ) | (46,814 | ) | ||||||||
Net Gain (Loss) on Investment |
(53,319 | ) | (1,126,340 | ) | (8,794 | ) | (39,452 | ) | ||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(43,788 | ) | (770,389 | ) | (6,607 | ) | (41,469 | ) | ||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(98,842 | ) | (4,227,370 | ) | (39,675 | ) | (69,703 | ) | ||||||||
Total Increase (Decrease) in Net Assets |
(142,630 | ) | (4,997,759 | ) | (46,282 | ) | (111,172 | ) | ||||||||
Net Assets as of December 31, 2018: |
$ | 454,824 | $ | 31,411,079 | $ | 218,909 | $ | 672,854 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
- | 789,909 | 5,019 | 12,518 | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
6,451 | 461,628 | 3,224 | 9,547 | ||||||||||||
Net Investment Income (Loss) |
(6,451 | ) | 328,281 | 1,795 | 2,971 | |||||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
- | - | - | 47,398 | ||||||||||||
Realized Gain (Loss) on Investments |
(3,795 | ) | 317,949 | (316 | ) | 3,802 | ||||||||||
Net Realized Capital Gains (Losses) on Investments |
(3,795 | ) | 317,949 | (316 | ) | 51,200 | ||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
93,574 | 1,440,399 | 12,703 | 5,669 | ||||||||||||
Net Gain (Loss) on Investment |
89,779 | 1,758,348 | 12,387 | 56,869 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
83,328 | 2,086,629 | 14,182 | 59,840 | ||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(76,631 | ) | (2,673,338 | ) | (6,946 | ) | (108,796 | ) | ||||||||
Total Increase (Decrease) in Net Assets |
6,697 | (586,709 | ) | 7,236 | (48,956 | ) | ||||||||||
Net Assets as of December 31, 2019: |
$ | 461,521 | $ | 30,824,370 | $ | 226,145 | $ | 623,898 | ||||||||
See Accompanying Notes. (1) See Footnote 1 |
20 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA QS Investors Active Asset Allocation - Moderate Growth Service Class Subaccount |
TA Small/Mid Cap Value Initial Class Subaccount |
TA Small/Mid Cap Value Service Class Subaccount |
TA T. Rowe Price Small Cap Initial Class Subaccount |
|||||||||||||
Net Assets as of December 31, 2017: |
$ | 1,455,615 | $ | 90,549,665 | $ | 1,654,682 | $ | 37,366,458 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
19,812 | 755,536 | 10,422 | - | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
21,285 | 1,195,181 | 21,458 | 563,142 | ||||||||||||
Net Investment Income (Loss) |
(1,473 | ) | (439,645 | ) | (11,036 | ) | (563,142 | ) | ||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
- | 8,175,299 | 154,266 | 1,970,727 | ||||||||||||
Realized Gain (Loss) on Investments |
3,932 | 531,323 | 6,163 | 1,776,153 | ||||||||||||
Net Realized Capital Gains (Losses) on Investments |
3,932 | 8,706,622 | 160,429 | 3,746,880 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(114,186 | ) | (18,383,225 | ) | (342,434 | ) | (5,938,655 | ) | ||||||||
Net Gain (Loss) on Investment |
(110,254 | ) | (9,676,603 | ) | (182,005 | ) | (2,191,775 | ) | ||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(111,727 | ) | (10,116,248 | ) | (193,041 | ) | (2,754,917 | ) | ||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
32,576 | (11,016,247 | ) | (186,263 | ) | (3,014,319 | ) | |||||||||
Total Increase (Decrease) in Net Assets |
(79,151 | ) | (21,132,495 | ) | (379,304 | ) | (5,769,236 | ) | ||||||||
Net Assets as of December 31, 2018: |
$ | 1,376,464 | $ | 69,417,170 | $ | 1,275,378 | $ | 31,597,222 | ||||||||
Investment Income: |
||||||||||||||||
Reinvested Dividends |
24,032 | 729,587 | 10,793 | - | ||||||||||||
Investment Expense: |
||||||||||||||||
Mortality and Expense Risk and Administrative Charges |
20,246 | 1,062,555 | 19,556 | 525,824 | ||||||||||||
Net Investment Income (Loss) |
3,786 | (332,968 | ) | (8,763 | ) | (525,824 | ) | |||||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||||||
Capital Gain Distributions |
95,338 | 5,811,432 | 114,803 | 3,721,930 | ||||||||||||
Realized Gain (Loss) on Investments |
(2,391 | ) | (928,999 | ) | (4,030 | ) | 608,327 | |||||||||
Net Realized Capital Gains (Losses) on Investments |
92,947 | 4,882,433 | 110,773 | 4,330,257 | ||||||||||||
Net Change in Unrealized Appreciation (Depreciation) |
36,231 | 11,071,345 | 190,705 | 5,573,973 | ||||||||||||
Net Gain (Loss) on Investment |
129,178 | 15,953,778 | 301,478 | 9,904,230 | ||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
132,964 | 15,620,810 | 292,715 | 9,378,406 | ||||||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(29,945 | ) | (8,239,585 | ) | (56,982 | ) | (3,155,220 | ) | ||||||||
Total Increase (Decrease) in Net Assets |
103,019 | 7,381,225 | 235,733 | 6,223,186 | ||||||||||||
Net Assets as of December 31, 2019: |
$ | 1,479,483 | $ | 76,798,395 | $ | 1,511,111 | $ | 37,820,408 | ||||||||
See Accompanying Notes. (1) See Footnote 1 |
21 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Statements of Operations and Changes in Net Assets
Years Ended December 31, 2018 and 2019
TA T. Rowe Price Small Cap Subaccount |
TA WMC US Growth Initial Class Subaccount |
TA WMC US Growth Service Subaccount |
||||||||||
Net Assets as of December 31, 2017: |
$ | 395,752 | $ | 390,459,587 | $ | 1,685,981 | ||||||
Investment Income: |
||||||||||||
Reinvested Dividends |
- | 1,912,129 | 4,754 | |||||||||
Investment Expense: |
||||||||||||
Mortality and Expense Risk and Administrative Charges |
5,023 | 5,325,548 | 23,412 | |||||||||
Net Investment Income (Loss) |
(5,023 | ) | (3,413,419 | ) | (18,658 | ) | ||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||
Capital Gain Distributions |
17,336 | 32,996,196 | 145,982 | |||||||||
Realized Gain (Loss) on Investments |
33,986 | 12,258,481 | 68,317 | |||||||||
Net Realized Capital Gains (Losses) on Investments |
51,322 | 45,254,677 | 214,299 | |||||||||
Net Change in Unrealized Appreciation (Depreciation) |
(65,689 | ) | (42,416,340 | ) | (198,593 | ) | ||||||
Net Gain (Loss) on Investment |
(14,367 | ) | 2,838,337 | 15,706 | ||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
(19,390 | ) | (575,082 | ) | (2,952 | ) | ||||||
Increase (Decrease) in Net Assets from Contract Transactions |
(107,469 | ) | (46,040,228 | ) | (250,015 | ) | ||||||
Total Increase (Decrease) in Net Assets |
(126,859 | ) | (46,615,310 | ) | (252,967 | ) | ||||||
Net Assets as of December 31, 2018: |
$ | 268,893 | $ | 343,844,277 | $ | 1,433,014 | ||||||
Investment Income: |
||||||||||||
Reinvested Dividends |
- | 515,305 | - | |||||||||
Investment Expense: |
||||||||||||
Mortality and Expense Risk and Administrative Charges |
4,737 | 5,301,672 | 23,393 | |||||||||
Net Investment Income (Loss) |
(4,737 | ) | (4,786,367 | ) | (23,393 | ) | ||||||
Increase (Decrease) in Net Assets from Operations: |
||||||||||||
Capital Gain Distributions |
36,848 | 33,557,592 | 148,338 | |||||||||
Realized Gain (Loss) on Investments |
3,605 | 12,121,971 | 45,117 | |||||||||
Net Realized Capital Gains (Losses) on Investments |
40,453 | 45,679,563 | 193,455 | |||||||||
Net Change in Unrealized Appreciation (Depreciation) |
47,544 | 85,905,608 | 371,619 | |||||||||
Net Gain (Loss) on Investment |
87,997 | 131,585,171 | 565,074 | |||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
83,260 | 126,798,804 | 541,681 | |||||||||
Increase (Decrease) in Net Assets from Contract Transactions |
29,749 | (24,299,347 | ) | 45,898 | ||||||||
Total Increase (Decrease) in Net Assets |
113,009 | 102,499,457 | 587,579 | |||||||||
Net Assets as of December 31, 2019: |
$ | 381,902 | $ | 446,343,734 | $ | 2,020,593 | ||||||
See Accompanying Notes. (1) See Footnote 1 |
22 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
1. Organization
WRL Series Annuity Account (the Separate Account) is a segregated investment account of Transamerica Premier Life Insurance Company (TPLIC), an indirect wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of the Netherlands.
The Separate Account is registered with the Securities and Exchange Commission as a Unit Investment Trust pursuant to provisions of the Investment Company Act of 1940. TPLIC and the Separate Account are regulated by the Securities and Exchange Commission. The assets and liabilities of the Separate Account are clearly identified and distinguished from TPLIC’s other assets and liabilities. The Separate Account consists of multiple investment subaccounts. Each subaccount invests exclusively in the corresponding portfolio of a Mutual Fund. Each Mutual Fund is registered as an open-end management investment company under the Investment Company Act of 1940, as amended. Activity in these specified investment subaccounts is available to contract owners of WRL Freedom Attainer®, WRL Freedon Premier®, WRL Freedom Conqueror®, WRL Freedom Wealth Creator®, WRL Freedom Access®, WRL Freedom Enhancer®, WRL Freedom Bellwether®, and WRL Freedom Variable Annuity.
Subaccount Investment by Mutual Fund:
Subaccount | Mutual Fund | |
Access One Trust |
Access One Trust | |
Access VP High Yield |
Access VP High Yield | |
Fidelity® Variable Insurance Products Fund |
Fidelity® Variable Insurance Products Fund | |
Fidelity® VIP Contrafund® Service Class 2 |
Fidelity® VIP Contrafund® Portfolio Service Class 2 | |
Fidelity® VIP Equity-Income Service Class 2 |
Fidelity® VIP Equity-Income Portfolio Service Class 2 | |
Fidelity® VIP Growth Opportunities Service Class 2 |
Fidelity® VIP Growth Opportunities Portfolio Service Class 2 | |
Fidelity® VIP Index 500 Service Class 2 |
Fidelity® VIP Index 500 Portfolio Service Class 2 | |
ProFunds |
ProFunds | |
ProFund VP Asia 30 |
ProFund VP Asia 30 | |
ProFund VP Basic Materials |
ProFund VP Basic Materials | |
ProFund VP Bull |
ProFund VP Bull | |
ProFund VP Consumer Services |
ProFund VP Consumer Services | |
ProFund VP Emerging Markets |
ProFund VP Emerging Markets | |
ProFund VP Europe 30 |
ProFund VP Europe 30 | |
ProFund VP Falling U.S. Dollar |
ProFund VP Falling U.S. Dollar | |
ProFund VP Financials |
ProFund VP Financials | |
ProFund VP Government Money Market |
ProFund VP Government Money Market | |
ProFund VP International |
ProFund VP International | |
ProFund VP Japan |
ProFund VP Japan | |
ProFund VP Mid-Cap |
ProFund VP Mid-Cap | |
ProFund VP NASDAQ-100 |
ProFund VP NASDAQ-100 | |
ProFund VP Oil & Gas |
ProFund VP Oil & Gas | |
ProFund VP Pharmaceuticals |
ProFund VP Pharmaceuticals | |
ProFund VP Precious Metals |
ProFund VP Precious Metals | |
ProFund VP Short Emerging Markets |
ProFund VP Short Emerging Markets | |
ProFund VP Short International |
ProFund VP Short International | |
ProFund VP Short NASDAQ-100 |
ProFund VP Short NASDAQ-100 | |
ProFund VP Short Small-Cap |
ProFund VP Short Small-Cap | |
ProFund VP Small-Cap |
ProFund VP Small-Cap | |
ProFund VP Small-Cap Value |
ProFund VP Small-Cap Value |
23
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
1. Organization (continued)
Subaccount Investment by Mutual Fund:
Subaccount | Mutual Fund | |
ProFunds |
ProFunds | |
ProFund VP Telecommunications |
ProFund VP Telecommunications | |
ProFund VP U.S. Government Plus |
ProFund VP U.S. Government Plus | |
ProFund VP UltraSmall-Cap |
ProFund VP UltraSmall-Cap | |
ProFund VP Utilities |
ProFund VP Utilities | |
Transamerica Series Trust |
Transamerica Series Trust | |
TA Aegon High Yield Bond Initial Class |
Transamerica Aegon High Yield Bond VP Initial Class | |
TA Aegon High Yield Bond Service Class |
Transamerica Aegon High Yield Bond VP Service Class | |
TA Aegon U.S. Government Securities Initial Class |
Transamerica Aegon U.S. Government Securities VP Initial Class | |
TA Aegon U.S. Government Securities Service Class |
Transamerica Aegon U.S. Government Securities VP Service Class | |
TA Barrow Hanley Dividend Focused Initial Class |
Transamerica Barrow Hanley Dividend Focused VP Initial Class | |
TA Barrow Hanley Dividend Focused Service Class |
Transamerica Barrow Hanley Dividend Focused VP Service Class | |
TA BlackRock Global Real Estate Securities Initial Class |
Transamerica BlackRock Global Real Estate Securities VP Initial Class | |
TA BlackRock Global Real Estate Securities Service Class |
Transamerica BlackRock Global Real Estate Securities VP Service Class | |
TA BlackRock Government Money Market Initial Class |
Transamerica BlackRock Government Money Market VP Initial Class | |
TA BlackRock Government Money Market Service Class |
Transamerica BlackRock Government Money Market VP Service Class | |
TA BlackRock iShares Edge 40 Initial Class |
Transamerica BlackRock Smart Beta 40 VP Initial Class | |
TA BlackRock iShares Edge 40 Service Class |
Transamerica BlackRock Smart Beta 40 VP Service Class | |
TA BlackRock Tactical Allocation Service Class |
Transamerica BlackRock Tactical Allocation VP Service Class | |
TA Greystone International Growth Initial Class |
Transamerica Greystone International Growth VP Initial Class | |
TA Greystone International Growth Service Class |
Transamerica Greystone International Growth VP Service Class | |
TA Janus Balanced Service Class |
Transamerica Janus Balanced VP Service Class | |
TA Janus Mid-Cap Growth Initial Class |
Transamerica Janus Mid-Cap Growth VP Initial Class | |
TA Janus Mid-Cap Growth Service Class |
Transamerica Janus Mid-Cap Growth VP Service Class | |
TA JPMorgan Asset Allocation - Conservative Initial Class |
Transamerica JPMorgan Asset Allocation - Conservative VP Initial Class | |
TA JPMorgan Asset Allocation - Conservative Service Class |
Transamerica JPMorgan Asset Allocation - Conservative VP Service Class | |
TA JPMorgan Asset Allocation - Growth Initial Class |
Transamerica JPMorgan Asset Allocation - Growth VP Initial Class | |
TA JPMorgan Asset Allocation - Growth Service Class |
Transamerica JPMorgan Asset Allocation - Growth VP Service Class | |
TA JPMorgan Asset Allocation - Moderate Initial Class |
Transamerica JPMorgan Asset Allocation - Moderate VP Initial Class | |
TA JPMorgan Asset Allocation - Moderate Service Class |
Transamerica JPMorgan Asset Allocation - Moderate VP Service Class | |
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
Transamerica JPMorgan Asset Allocation - Moderate Growth VP Initial Class | |
TA JPMorgan Asset Allocation - Moderate Growth Service Class |
Transamerica JPMorgan Asset Allocation - Moderate Growth VP Service Class | |
TA JPMorgan Core Bond Initial Class |
Transamerica JPMorgan Core Bond VP Initial Class | |
TA JPMorgan Core Bond Service Class |
Transamerica JPMorgan Core Bond VP Service Class | |
TA JPMorgan Enhanced Index Initial Class |
Transamerica JPMorgan Enhanced Index VP Initial Class |
24
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
1. Organization (continued)
Subaccount Investment by Mutual Fund:
Subaccount | Mutual Fund | |
Transamerica Series Trust |
Transamerica Series Trust | |
TA JPMorgan Enhanced Index Service Class |
Transamerica JPMorgan Enhanced Index VP Service Class | |
TA JPMorgan International Moderate Growth Initial Class |
Transamerica JPMorgan International Moderate Growth VP Initial Class | |
TA JPMorgan International Moderate Growth Service Class |
Transamerica JPMorgan International Moderate Growth VP Service Class | |
TA JPMorgan Mid Cap Value Initial Class |
Transamerica JPMorgan Mid Cap Value VP Initial Class | |
TA JPMorgan Mid Cap Value Service Class |
Transamerica JPMorgan Mid Cap Value VP Service Class | |
TA JPMorgan Tactical Allocation Initial Class |
Transamerica JPMorgan Tactical Allocation VP Initial Class | |
TA JPMorgan Tactical Allocation Service Class |
Transamerica JPMorgan Tactical Allocation VP Service Class | |
TA Managed Risk - Balanced ETF Service Class |
Transamerica Managed Risk - Balanced ETF VP Service Class | |
TA Managed Risk - Growth ETF Service Class |
Transamerica Managed Risk - Growth ETF VP Service Class | |
TA Morgan Stanley Capital Growth Initial Class |
Transamerica Morgan Stanley Capital Growth VP Initial Class | |
TA Morgan Stanley Capital Growth Service Class |
Transamerica Morgan Stanley Capital Growth VP Service Class | |
TA Multi-Managed Balanced Initial Class |
Transamerica Multi-Managed Balanced VP Initial Class | |
TA Multi-Managed Balanced Service Class |
Transamerica Multi-Managed Balanced VP Service Class | |
TA PIMCO Tactical - Balanced Service Class |
Transamerica PIMCO Tactical - Balanced VP Service Class | |
TA PIMCO Tactical - Conservative Service Class |
Transamerica PIMCO Tactical - Conservative VP Service Class | |
TA PIMCO Tactical - Growth Service Class |
Transamerica PIMCO Tactical - Growth VP Service Class | |
TA PIMCO Total Return Initial Class |
Transamerica PIMCO Total Return VP Initial Class | |
TA PIMCO Total Return Service Class |
Transamerica PIMCO Total Return VP Service Class | |
TA QS Investors Active Asset Allocation - Conservative Service Class |
Transamerica QS Investors Active Asset Allocation - Conservative VP Service Class | |
TA QS Investors Active Asset Allocation - Moderate Growth Service Class |
Transamerica QS Investors Active Asset Allocation - Moderate Growth VP Service Class | |
TA Small/Mid Cap Value Initial Class |
Transamerica Small/Mid Cap Value VP Initial Class | |
TA Small/Mid Cap Value Service Class |
Transamerica Small/Mid Cap Value VP Service Class | |
TA T. Rowe Price Small Cap Initial Class |
Transamerica T. Rowe Price Small Cap VP Initial Class | |
TA T. Rowe Price Small Cap Service Class |
Transamerica T. Rowe Price Small Cap VP Service Class | |
TA WMC US Growth Initial Class |
Transamerica WMC US Growth VP Initial Class | |
TA WMC US Growth Service Class |
Transamerica WMC US Growth VP Service Class |
The following subaccount name changes were made effective during the fiscal year ended December 31, 2019:
Subaccount | Formerly | |
TA BlackRock iShares Edge 40 Initial Class |
TA BlackRock Smart Beta 40 Initial Class | |
TA BlackRock iShares Edge 40 Service Class |
TA BlackRock Smart Beta 40 Service Class |
25
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
1. Organization (continued)
During the current year the following subaccounts were liquidated and subsequently reinvested:
Reinvested Subaccount | Liquidated Subaccount | |
TA Morgan Stanley Capital Growth Initial Class |
TA Jennison Growth Initial Class | |
TA Morgan Stanley Capital Growth Service Class |
TA Jennison Growth Service Class | |
TA WMC US Growth Initial Class |
TA Torray Concentrated Growth Initial Class | |
TA WMC US Growth Service Class |
TA Torray Concentrated Growth Service Class |
26
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
2. Summary of Significant Accounting Policies
The financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for variable annuity separate accounts registered as unit investment trusts. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions regarding matters that affect the reported amount of assets and liabilities. Actual results could differ from those estimates.
Investments
Net purchase payments received by the Separate Account are invested in the portfolios of the Mutual Funds as selected by the contract owner. Investments are stated at the closing net asset values per share on December 31, 2019.
Realized capital gains and losses from sales of shares in the Separate Account are determined on the first-in, first-out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date. Unrealized gains or losses from investments in the Mutual Funds are included in the Statements of Operations and Changes in Net Assets.
Dividend Income
Dividends received from the Mutual Fund investments are reinvested to purchase additional mutual fund shares.
Fair Value Measurements and Fair Value Hierarchy
The Accounting Standards Codification™ (ASC) 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the nature of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.
The Separate Account has categorized its financial instruments into a three level hierarchy which is based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.
Financial assets and liabilities recorded at fair value on the Statements of Assets and Liabilities are categorized as follows:
Level 1. Unadjusted quoted prices for identical assets or liabilities in an active market.
Level 2. Quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
a) Quoted prices for similar assets or liabilities in active markets
b) Quoted prices for identical or similar assets or liabilities in non-active markets
c) Inputs other than quoted market prices that are observable
d) Inputs that are derived principally from or corroborated by observable market data through correlation or other means.
Level 3. Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.
All investments in the Mutual Funds included in the Statements of Assets and Liabilities are stated at fair value and are based upon published closing NAV per share and therefore are considered Level 1.
There were no transfers between Level 1, Level 2 and Level 3 during the year ended December 31, 2019.
27
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
3. Investments
The aggregate cost of purchases and proceeds from sales of investments for the period ended December 31, 2019 were as follows:
Subaccount | Purchases | Sales | ||||||
Access VP High Yield |
$ | 908,252 | $ | 920,225 | ||||
Fidelity® VIP Contrafund® Service Class 2 |
3,085,871 | 3,177,610 | ||||||
Fidelity® VIP Equity-Income Service Class 2 |
800,301 | 1,149,363 | ||||||
Fidelity® VIP Growth Opportunities Service Class 2 |
379,435 | 575,634 | ||||||
Fidelity® VIP Index 500 Service Class 2 |
5,100 | 67,240 | ||||||
ProFund VP Asia 30 |
658,401 | 649,519 | ||||||
ProFund VP Basic Materials |
279,750 | 649,117 | ||||||
ProFund VP Bull |
4,798,713 | 2,197,338 | ||||||
ProFund VP Consumer Services |
649,493 | 733,780 | ||||||
ProFund VP Emerging Markets |
2,265,006 | 1,806,275 | ||||||
ProFund VP Europe 30 |
138,554 | 272,529 | ||||||
ProFund VP Falling U.S. Dollar |
21,279 | 69,014 | ||||||
ProFund VP Financials |
346,305 | 382,741 | ||||||
ProFund VP Government Money Market |
5,583,118 | 10,318,725 | ||||||
ProFund VP International |
175,808 | 466,333 | ||||||
ProFund VP Japan |
167,969 | 173,885 | ||||||
ProFund VP Mid-Cap |
447,925 | 716,069 | ||||||
ProFund VP NASDAQ-100 |
1,944,179 | 2,617,663 | ||||||
ProFund VP Oil & Gas |
290,976 | 429,974 | ||||||
ProFund VP Pharmaceuticals |
658,769 | 859,819 | ||||||
ProFund VP Precious Metals |
930,303 | 1,464,687 | ||||||
ProFund VP Short Emerging Markets |
357,554 | 352,645 | ||||||
ProFund VP Short International |
240,181 | 242,411 | ||||||
ProFund VP Short NASDAQ-100 |
279,715 | 303,484 | ||||||
ProFund VP Short Small-Cap |
368,356 | 350,264 | ||||||
ProFund VP Small-Cap |
179,484 | 559,067 | ||||||
ProFund VP Small-Cap Value |
584,283 | 111,698 | ||||||
ProFund VP Telecommunications |
379,158 | 300,561 | ||||||
ProFund VP U.S. Government Plus |
615,722 | 937,172 | ||||||
ProFund VP UltraSmall-Cap |
462,140 | 896,141 | ||||||
ProFund VP Utilities |
902,599 | 802,629 | ||||||
TA Aegon High Yield Bond Initial Class |
1,661,795 | 2,129,396 | ||||||
TA Aegon High Yield Bond Service Class |
11,277 | 14,184 | ||||||
TA Aegon U.S. Government Securities Initial Class |
1,726,025 | 1,699,195 | ||||||
TA Aegon U.S. Government Securities Service Class |
1,995 | 8,114 | ||||||
TA Barrow Hanley Dividend Focused Initial Class |
12,458,108 | 9,332,983 |
28
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
3. Investments (continued)
Subaccount | Purchases | Sales | ||||||
TA Barrow Hanley Dividend Focused Service Class |
$ | 140,574 | $ | 37,595 | ||||
TA BlackRock Global Real Estate Securities Initial Class |
1,317,729 | 3,759,521 | ||||||
TA BlackRock Global Real Estate Securities Service Class |
5,116 | 47,232 | ||||||
TA BlackRock Government Money Market Initial Class |
9,337,293 | 16,919,540 | ||||||
TA BlackRock Government Money Market Service Class |
71,558 | 67,724 | ||||||
TA BlackRock iShares Edge 40 Initial Class |
562,512 | 542,405 | ||||||
TA BlackRock iShares Edge 40 Service Class |
6,066 | 5,078 | ||||||
TA BlackRock Tactical Allocation Service Class |
684,821 | 783,043 | ||||||
TA Greystone International Growth Initial Class |
7,493,260 | 5,040,726 | ||||||
TA Greystone International Growth Service Class |
53,000 | 82,930 | ||||||
TA Janus Balanced Service Class |
2,579,969 | 599,342 | ||||||
TA Janus Mid-Cap Growth Initial Class |
9,733,235 | 15,535,547 | ||||||
TA Janus Mid-Cap Growth Service Class |
56,057 | 50,545 | ||||||
TA JPMorgan Asset Allocation - Conservative Initial Class |
7,725,958 | 9,214,002 | ||||||
TA JPMorgan Asset Allocation - Conservative Service Class |
223,949 | 133,270 | ||||||
TA JPMorgan Asset Allocation - Growth Initial Class |
11,556,068 | 8,876,744 | ||||||
TA JPMorgan Asset Allocation - Growth Service Class |
256,100 | 172,553 | ||||||
TA JPMorgan Asset Allocation - Moderate Initial Class |
11,824,385 | 14,771,794 | ||||||
TA JPMorgan Asset Allocation - Moderate Service Class |
182,066 | 313,958 | ||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
20,778,697 | 19,197,571 | ||||||
TA JPMorgan Asset Allocation - Moderate Growth Service Class |
421,046 | 306,096 | ||||||
TA JPMorgan Core Bond Initial Class |
3,918,671 | 9,081,119 | ||||||
TA JPMorgan Core Bond Service Class |
44,126 | 87,528 | ||||||
TA JPMorgan Enhanced Index Initial Class |
4,390,035 | 2,548,709 | ||||||
TA JPMorgan Enhanced Index Service Class |
14,193 | 16,026 | ||||||
TA JPMorgan International Moderate Growth Initial Class |
539,457 | 678,069 | ||||||
TA JPMorgan International Moderate Growth Service Class |
2,739 | 861 | ||||||
TA JPMorgan Mid Cap Value Initial Class |
1,921,147 | 2,440,932 | ||||||
TA JPMorgan Mid Cap Value Service Class |
7,895 | 1,545 | ||||||
TA JPMorgan Tactical Allocation Initial Class |
2,125,479 | 4,564,448 | ||||||
TA JPMorgan Tactical Allocation Service Class |
23,719 | 51,917 | ||||||
TA Managed Risk - Balanced ETF Service Class |
736,013 | 573,140 | ||||||
TA Managed Risk - Growth ETF Service Class |
1,533,647 | 776,618 | ||||||
TA Morgan Stanley Capital Growth Initial Class |
34,203,247 | 9,627,310 | ||||||
TA Morgan Stanley Capital Growth Service Class |
277,494 | 24,219 | ||||||
TA Multi-Managed Balanced Initial Class |
12,401,351 | 13,121,065 |
29
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
3. Investments (continued)
Subaccount | Purchases | Sales | ||||||
TA Multi-Managed Balanced Service Class |
$ | 115,741 | $ | 123,026 | ||||
TA PIMCO Tactical - Balanced Service Class |
87,394 | 152,186 | ||||||
TA PIMCO Tactical - Conservative Service Class |
859,040 | 209,722 | ||||||
TA PIMCO Tactical - Growth Service Class |
11,484 | 94,565 | ||||||
TA PIMCO Total Return Initial Class |
7,369,717 | 9,714,765 | ||||||
TA PIMCO Total Return Service Class |
6,704 | 11,855 | ||||||
TA QS Investors Active Asset Allocation - Conservative Service Class |
70,910 | 129,337 | ||||||
TA QS Investors Active Asset Allocation - Moderate Growth Service Class |
129,215 | 60,037 | ||||||
TA Small/Mid Cap Value Initial Class |
8,529,411 | 11,290,518 | ||||||
TA Small/Mid Cap Value Service Class |
140,667 | 91,608 | ||||||
TA T. Rowe Price Small Cap Initial Class |
6,172,983 | 6,132,014 | ||||||
TA T. Rowe Price Small Cap Service Class |
82,413 | 20,557 | ||||||
TA WMC US Growth Initial Class |
54,089,653 | 49,617,758 | ||||||
TA WMC US Growth Service Class |
318,674 | 147,829 |
30
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Units
The change in units outstanding were as follows:
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
Access VP High Yield | 43,166 | (48,214 | ) | (5,048 | ) | 42,067 | (51,815 | ) | (9,748 | ) | ||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 |
16,307 | (102,672 | ) | (86,365 | ) | 14,182 | (132,643 | ) | (118,461 | ) | ||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 |
10,093 | (45,108 | ) | (35,015 | ) | 3,811 | (49,053 | ) | (45,242 | ) | ||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 |
3,502 | (20,498 | ) | (16,996 | ) | 1,030 | (22,475 | ) | (21,445 | ) | ||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 |
109 | (2,518 | ) | (2,409 | ) | 2,518 | (2,669 | ) | (151 | ) | ||||||||||||||||||
ProFund VP Asia 30 |
68,657 | (68,287 | ) | 370 | 36,799 | (112,208 | ) | (75,409 | ) | |||||||||||||||||||
ProFund VP Basic Materials |
18,761 | (52,581 | ) | (33,820 | ) | 39,944 | (113,308 | ) | (73,364 | ) | ||||||||||||||||||
ProFund VP Bull |
226,113 | (108,930 | ) | 117,183 | 114,207 | (329,523 | ) | (215,316 | ) | |||||||||||||||||||
ProFund VP Consumer Services |
18,401 | (26,060 | ) | (7,659 | ) | 54,558 | (65,420 | ) | (10,862 | ) | ||||||||||||||||||
ProFund VP Emerging Markets |
290,689 | (229,939 | ) | 60,750 | 283,132 | (614,318 | ) | (331,186 | ) | |||||||||||||||||||
ProFund VP Europe 30 |
13,543 | (27,376 | ) | (13,833 | ) | 20,354 | (111,762 | ) | (91,408 | ) | ||||||||||||||||||
ProFund VP Falling U.S. Dollar |
3,662 | (11,713 | ) | (8,051 | ) | 28,624 | (22,081 | ) | 6,543 | |||||||||||||||||||
ProFund VP Financials |
13,320 | (31,782 | ) | (18,462 | ) | 52,406 | (115,414 | ) | (63,008 | ) | ||||||||||||||||||
ProFund VP Government Money Market |
616,000 | (1,132,350 | ) | (516,350 | ) | 1,610,043 | (1,531,203 | ) | 78,840 | |||||||||||||||||||
ProFund VP International |
20,888 | (53,028 | ) | (32,140 | ) | 69,462 | (173,298 | ) | (103,836 | ) | ||||||||||||||||||
ProFund VP Japan |
17,936 | (17,570 | ) | 366 | 1,561 | (6,682 | ) | (5,121 | ) | |||||||||||||||||||
ProFund VP Mid-Cap |
26,798 | (41,915 | ) | (15,117 | ) | 116,862 | (126,224 | ) | (9,362 | ) | ||||||||||||||||||
ProFund VP NASDAQ-100 |
50,704 | (69,313 | ) | (18,609 | ) | 129,573 | (168,991 | ) | (39,418 | ) | ||||||||||||||||||
ProFund VP Oil & Gas |
27,815 | (56,068 | ) | (28,253 | ) | 112,434 | (132,749 | ) | (20,315 | ) | ||||||||||||||||||
ProFund VP Pharmaceuticals |
20,401 | (46,294 | ) | (25,893 | ) | 15,791 | (63,596 | ) | (47,805 | ) | ||||||||||||||||||
ProFund VP Precious Metals |
188,698 | (294,507 | ) | (105,809 | ) | 136,290 | (94,847 | ) | 41,443 | |||||||||||||||||||
ProFund VP Short Emerging Markets |
133,112 | (137,387 | ) | (4,275 | ) | 175,287 | (178,729 | ) | (3,442 | ) | ||||||||||||||||||
ProFund VP Short International |
68,764 | (69,672 | ) | (908 | ) | 94,575 | (95,221 | ) | (646 | ) | ||||||||||||||||||
ProFund VP Short NASDAQ-100 |
238,304 | (255,759 | ) | (17,455 | ) | 1,222,498 | (1,213,942 | ) | 8,556 | |||||||||||||||||||
ProFund VP Short Small-Cap |
207,574 | (243,292 | ) | (35,718 | ) | 339,709 | (325,520 | ) | 14,189 | |||||||||||||||||||
ProFund VP Small-Cap |
10,061 | (31,832 | ) | (21,771 | ) | 191,682 | (220,413 | ) | (28,731 | ) | ||||||||||||||||||
ProFund VP Small-Cap Value |
35,071 | (6,128 | ) | 28,943 | 127,392 | (211,464 | ) | (84,072 | ) |
31 |
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Units (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
ProFund VP Telecommunications |
34,878 | (28,399 | ) | 6,479 | 1,036 | (24,163 | ) | (23,127 | ) | |||||||||||||||||||
ProFund VP U.S. Government Plus |
37,143 | (55,538 | ) | (18,395 | ) | 38,702 | (34,276 | ) | 4,426 | |||||||||||||||||||
ProFund VP UltraSmall-Cap |
30,478 | (54,553 | ) | (24,075 | ) | 120,710 | (54,878 | ) | 65,832 | |||||||||||||||||||
ProFund VP Utilities |
39,613 | (44,403 | ) | (4,790 | ) | 33,019 | (66,278 | ) | (33,259 | ) | ||||||||||||||||||
TA Aegon High Yield Bond Initial Class |
53,931 | (87,857 | ) | (33,926 | ) | 75,364 | (148,417 | ) | (73,053 | ) | ||||||||||||||||||
TA Aegon High Yield Bond Service Class |
- | (521 | ) | (521 | ) | 86 | (204 | ) | (118 | ) | ||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class |
118,082 | (114,102 | ) | 3,980 | 105,946 | (134,197 | ) | (28,251 | ) | |||||||||||||||||||
TA Aegon U.S. Government Securities Service Class |
- | (531 | ) | (531 | ) | 14 | (624 | ) | (610 | ) | ||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class |
61,228 | (232,228 | ) | (171,000 | ) | 70,154 | (224,746 | ) | (154,592 | ) | ||||||||||||||||||
TA Barrow Hanley Dividend Focused Service Class |
171 | (909 | ) | (738 | ) | 265 | (5,004 | ) | (4,739 | ) | ||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class |
37,589 | (102,028 | ) | (64,439 | ) | 23,421 | (117,321 | ) | (93,900 | ) | ||||||||||||||||||
TA BlackRock Global Real Estate Securities Service Class |
105 | (1,467 | ) | (1,362 | ) | 698 | (2,560 | ) | (1,862 | ) | ||||||||||||||||||
TA BlackRock Government Money Market Initial Class |
648,585 | (1,250,171 | ) | (601,586 | ) | 1,317,122 | (1,017,763 | ) | 299,359 | |||||||||||||||||||
TA BlackRock Government Money Market Service Class |
6,964 | (6,509 | ) | 455 | 324 | (223 | ) | 101 | ||||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class |
10,464 | (28,093 | ) | (17,629 | ) | 4,895 | (18,938 | ) | (14,043 | ) | ||||||||||||||||||
TA BlackRock iShares Edge 40 Service Class |
- | (252 | ) | (252 | ) | 5 | (361 | ) | (356 | ) | ||||||||||||||||||
TA BlackRock Tactical Allocation Service Class |
32,153 | (60,496 | ) | (28,343 | ) | 14,654 | (64,887 | ) | (50,233 | ) | ||||||||||||||||||
TA Greystone International Growth Initial Class |
95,348 | (281,732 | ) | (186,384 | ) | 160,259 | (407,269 | ) | (247,010 | ) | ||||||||||||||||||
TA Greystone International Growth Service Class |
180 | (3,305 | ) | (3,125 | ) | 1,078 | (1,143 | ) | (65 | ) | ||||||||||||||||||
TA Janus Balanced Service Class |
1,436,029 | (344,230 | ) | 1,091,799 | 601,109 | (625,955 | ) | (24,846 | ) | |||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class |
97,946 | (226,128 | ) | (128,182 | ) | 63,565 | (263,093 | ) | (199,528 | ) | ||||||||||||||||||
TA Janus Mid-Cap Growth Service Class |
622 | (1,306 | ) | (684 | ) | 112 | (3,642 | ) | (3,530 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class |
285,422 | (481,145 | ) | (195,723 | ) | 249,089 | (568,387 | ) | (319,298 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Service Class |
9,142 | (6,496 | ) | 2,646 | 255 | (6,378 | ) | (6,123 | ) | |||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class |
166,224 | (365,423 | ) | (199,199 | ) | 154,302 | (499,184 | ) | (344,882 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Service Class |
538 | (5,725 | ) | (5,187 | ) | 1,051 | (12,817 | ) | (11,766 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class |
257,569 | (688,198 | ) | (430,629 | ) | 216,121 | (570,464 | ) | (354,343 | ) |
32
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Units (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Service Class |
1,017 | (13,026 | ) | (12,009 | ) | 6,437 | (16,827 | ) | (10,390 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
386,356 | (838,309 | ) | (451,953 | ) | 702,584 | (960,286 | ) | (257,702 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Service Class |
2,827 | (10,810 | ) | (7,983 | ) | 4,272 | (9,679 | ) | (5,407 | ) | ||||||||||||||||||
TA JPMorgan Core Bond Initial Class |
117,823 | (305,049 | ) | (187,226 | ) | 230,747 | (287,296 | ) | (56,549 | ) | ||||||||||||||||||
TA JPMorgan Core Bond Service Class |
2,268 | (5,453 | ) | (3,185 | ) | 892 | (1,223 | ) | (331 | ) | ||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class |
55,087 | (80,259 | ) | (25,172 | ) | 165,513 | (231,447 | ) | (65,934 | ) | ||||||||||||||||||
TA JPMorgan Enhanced Index Service Class |
23 | (450 | ) | (427 | ) | 402 | (458 | ) | (56 | ) | ||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class |
21,772 | (54,691 | ) | (32,919 | ) | 8,812 | (25,744 | ) | (16,932 | ) | ||||||||||||||||||
TA JPMorgan International Moderate Growth Service Class |
71 | (52 | ) | 19 | 81 | (171 | ) | (90 | ) | |||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class |
39,364 | (60,732 | ) | (21,368 | ) | 352 | (75,713 | ) | (75,361 | ) | ||||||||||||||||||
TA JPMorgan Mid Cap Value Service Class |
- | (15 | ) | (15 | ) | - | (856 | ) | (856 | ) | ||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class |
41,073 | (123,886 | ) | (82,813 | ) | 36,526 | (168,365 | ) | (131,839 | ) | ||||||||||||||||||
TA JPMorgan Tactical Allocation Service Class |
684 | (2,935 | ) | (2,251 | ) | 776 | (3,758 | ) | (2,982 | ) | ||||||||||||||||||
TA Managed Risk - Balanced ETF Service Class |
35,202 | (35,801 | ) | (599 | ) | 43,407 | (80,445 | ) | (37,038 | ) | ||||||||||||||||||
TA Managed Risk - Growth ETF Service Class |
64,744 | (47,386 | ) | 17,358 | 36,940 | (36,439 | ) | 501 | ||||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class |
630,682 | (180,371 | ) | 450,311 | 136,242 | (207,273 | ) | (71,031 | ) | |||||||||||||||||||
TA Morgan Stanley Capital Growth Service Class |
5,222 | (345 | ) | 4,877 | 6,663 | (424 | ) | 6,239 | ||||||||||||||||||||
TA Multi-Managed Balanced Initial Class |
163,911 | (432,170 | ) | (268,259 | ) | 73,248 | (491,195 | ) | (417,947 | ) | ||||||||||||||||||
TA Multi-Managed Balanced Service Class |
2,582 | (4,067 | ) | (1,485 | ) | 85 | (1,776 | ) | (1,691 | ) | ||||||||||||||||||
TA PIMCO Tactical - Balanced Service Class |
68,551 | (111,768 | ) | (43,217 | ) | 163,075 | (116,940 | ) | 46,135 | |||||||||||||||||||
TA PIMCO Tactical - Conservative Service Class |
757,041 | (155,929 | ) | 601,112 | 371,074 | (324,847 | ) | 46,227 | ||||||||||||||||||||
TA PIMCO Tactical - Growth Service Class |
9,371 | (63,631 | ) | (54,260 | ) | 9,386 | (87,494 | ) | (78,108 | ) | ||||||||||||||||||
TA PIMCO Total Return Initial Class |
395,087 | (557,430 | ) | (162,343 | ) | 237,425 | (485,535 | ) | (248,110 | ) | ||||||||||||||||||
TA PIMCO Total Return Service Class |
119 | (572 | ) | (453 | ) | 6 | (2,748 | ) | (2,742 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Service Class |
1,027 | (9,710 | ) | (8,683 | ) | 84,666 | (91,275 | ) | (6,609 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Service Class |
859 | (3,159 | ) | (2,300 | ) | 10,961 | (8,651 | ) | 2,310 |
33
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Units (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
Units Purchased | Units Redeemed and Transferred to/from |
Net Increase (Decrease) |
||||||||||||||||||||||
TA Small/Mid Cap Value Initial Class |
72,303 | (279,129 | ) | (206,826 | ) | 67,903 | (352,659 | ) | (284,756 | ) | ||||||||||||||||||
TA Small/Mid Cap Value Service Class |
464 | (1,986 | ) | (1,522 | ) | 329 | (5,382 | ) | (5,053 | ) | ||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class |
68,069 | (153,991 | ) | (85,922 | ) | 101,279 | (180,475 | ) | (79,196 | ) | ||||||||||||||||||
TA T. Rowe Price Small Cap Service Class |
967 | (356 | ) | 611 | 29 | (2,335 | ) | (2,306 | ) | |||||||||||||||||||
TA WMC US Growth Initial Class |
567,123 | (1,280,552 | ) | (713,429 | ) | 100,967 | (1,564,454 | ) | (1,463,487 | ) | ||||||||||||||||||
TA WMC US Growth Service Class |
4,486 | (3,343 | ) | 1,143 | 384 | (7,946 | ) | (7,562 | ) |
34
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
Access VP High Yield |
$ | 796,340 | $ | (888,871 | ) | $ | (92,531 | ) | $ | 728,194 | $ | (892,476 | ) | $ | (164,282 | ) | ||||||||||||
Fidelity® VIP Contrafund® Service Class 2 |
394,419 | (2,864,804 | ) | (2,470,385 | ) | 342,692 | (3,531,547 | ) | (3,188,855 | ) | ||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 |
201,834 | (1,049,660 | ) | (847,826 | ) | 83,436 | (1,079,038 | ) | (995,602 | ) | ||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 |
73,767 | (525,244 | ) | (451,477 | ) | 22,168 | (468,561 | ) | (446,393 | ) | ||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 |
3,013 | (66,416 | ) | (63,403 | ) | 64,289 | (67,521 | ) | (3,232 | ) | ||||||||||||||||||
ProFund VP Asia 30 |
658,092 | (635,666 | ) | 22,426 | 379,790 | (1,139,882 | ) | (760,092 | ) | |||||||||||||||||||
ProFund VP Basic Materials |
227,281 | (627,016 | ) | (399,735 | ) | 542,305 | (1,442,126 | ) | (899,821 | ) | ||||||||||||||||||
ProFund VP Bull |
4,637,162 | (2,101,082 | ) | 2,536,080 | 2,198,912 | (6,340,303 | ) | (4,141,391 | ) | |||||||||||||||||||
ProFund VP Consumer Services |
466,817 | (671,820 | ) | (205,003 | ) | 1,391,024 | (1,616,896 | ) | (225,872 | ) | ||||||||||||||||||
ProFund VP Emerging Markets |
2,249,197 | (1,729,364 | ) | 519,833 | 2,333,027 | (5,097,674 | ) | (2,764,647 | ) | |||||||||||||||||||
ProFund VP Europe 30 |
117,511 | (259,206 | ) | (141,695 | ) | 212,955 | (1,039,500 | ) | (826,545 | ) | ||||||||||||||||||
ProFund VP Falling U.S. Dollar |
21,286 | (68,357 | ) | (47,071 | ) | 185,390 | (141,101 | ) | 44,289 | |||||||||||||||||||
ProFund VP Financials |
172,105 | (338,270 | ) | (166,165 | ) | 539,525 | (1,188,672 | ) | (649,147 | ) | ||||||||||||||||||
ProFund VP Government Money Market |
5,550,346 | (10,247,940 | ) | (4,697,594 | ) | 14,533,597 | (13,829,212 | ) | 704,385 | |||||||||||||||||||
ProFund VP International |
172,295 | (438,856 | ) | (266,561 | ) | 591,125 | (1,435,299 | ) | (844,174 | ) | ||||||||||||||||||
ProFund VP Japan |
167,619 | (167,454 | ) | 165 | 15,481 | (63,040 | ) | (47,559 | ) | |||||||||||||||||||
ProFund VP Mid-Cap |
446,129 | (682,679 | ) | (236,550 | ) | 2,028,266 | (2,132,249 | ) | (103,983 | ) | ||||||||||||||||||
ProFund VP NASDAQ-100 |
1,892,077 | (2,487,921 | ) | (595,844 | ) | 4,525,254 | (5,855,042 | ) | (1,329,788 | ) | ||||||||||||||||||
ProFund VP Oil & Gas |
206,206 | (405,700 | ) | (199,494 | ) | 1,023,507 | (1,179,847 | ) | (156,340 | ) | ||||||||||||||||||
ProFund VP Pharmaceuticals |
365,921 | (824,840 | ) | (458,919 | ) | 298,124 | (1,169,345 | ) | (871,221 | ) | ||||||||||||||||||
ProFund VP Precious Metals |
931,574 | (1,432,608 | ) | (501,034 | ) | 519,779 | (397,102 | ) | 122,677 | |||||||||||||||||||
ProFund VP Short Emerging Markets |
345,578 | (350,834 | ) | (5,256 | ) | 444,602 | (454,317 | ) | (9,715 | ) | ||||||||||||||||||
ProFund VP Short International |
239,262 | (242,062 | ) | (2,800 | ) | 325,632 | (329,704 | ) | (4,072 | ) | ||||||||||||||||||
ProFund VP Short NASDAQ-100 |
279,577 | (300,612 | ) | (21,035 | ) | 1,533,857 | (1,492,903 | ) | 40,954 | |||||||||||||||||||
ProFund VP Short Small-Cap |
290,118 | (340,093 | ) | (49,975 | ) | 460,723 | (446,297 | ) | 14,426 | |||||||||||||||||||
ProFund VP Small-Cap |
180,374 | (532,093 | ) | (351,719 | ) | 3,674,692 | (4,037,832 | ) | (363,140 | ) | ||||||||||||||||||
ProFund VP Small-Cap Value |
584,797 | (97,716 | ) | 487,081 | 2,280,654 | (3,591,923 | ) | (1,311,269 | ) |
35
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
ProFund VP Telecommunications |
$ | 351,278 | $ | (287,832 | ) | $ | 63,446 | $ | 12,022 | $ | (257,916 | ) | $ | (245,894 | ) | |||||||||||||
ProFund VP U.S. Government Plus |
608,483 | (924,525 | ) | (316,042 | ) | 605,747 | (533,608 | ) | 72,139 | |||||||||||||||||||
ProFund VP UltraSmall-Cap |
466,629 | (848,158 | ) | (381,529 | ) | 2,259,400 | (962,520 | ) | 1,296,880 | |||||||||||||||||||
ProFund VP Utilities |
683,426 | (760,748 | ) | (77,322 | ) | 511,847 | (1,002,026 | ) | (490,179 | ) | ||||||||||||||||||
TA Aegon High Yield Bond Initial Class |
1,192,836 | (2,025,305 | ) | (832,469 | ) | 1,660,953 | (3,350,630 | ) | (1,689,677 | ) | ||||||||||||||||||
TA Aegon High Yield Bond Service Class |
- | (11,666 | ) | (11,666 | ) | 1,788 | (4,371 | ) | (2,583 | ) | ||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class |
1,599,987 | (1,610,014 | ) | (10,027 | ) | 1,413,220 | (1,847,116 | ) | (433,896 | ) | ||||||||||||||||||
TA Aegon U.S. Government Securities Service Class |
- | (6,618 | ) | (6,618 | ) | 164 | (7,880 | ) | (7,716 | ) | ||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class |
1,995,109 | (8,573,266 | ) | (6,578,157 | ) | 2,058,237 | (8,234,811 | ) | (6,176,574 | ) | ||||||||||||||||||
TA Barrow Hanley Dividend Focused Service Class |
5,067 | (27,480 | ) | (22,413 | ) | 7,811 | (146,815 | ) | (139,004 | ) | ||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class |
1,138,539 | (3,461,865 | ) | (2,323,326 | ) | 574,585 | (3,884,812 | ) | (3,310,227 | ) | ||||||||||||||||||
TA BlackRock Global Real Estate Securities Service Class |
3,011 | (41,513 | ) | (38,502 | ) | 19,908 | (69,015 | ) | (49,107 | ) | ||||||||||||||||||
TA BlackRock Government Money Market Initial Class |
8,848,738 | (16,586,597 | ) | (7,737,859 | ) | 17,436,069 | (13,311,560 | ) | 4,124,509 | |||||||||||||||||||
TA BlackRock Government Money Market Service Class |
65,579 | (62,633 | ) | 2,946 | 3,120 | (2,093 | ) | 1,027 | ||||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class |
178,460 | (507,353 | ) | (328,893 | ) | 66,687 | (321,688 | ) | (255,001 | ) | ||||||||||||||||||
TA BlackRock iShares Edge 40 Service Class |
- | (4,549 | ) | (4,549 | ) | 96 | (6,287 | ) | (6,191 | ) | ||||||||||||||||||
TA BlackRock Tactical Allocation Service Class |
376,019 | (721,517 | ) | (345,498 | ) | 169,964 | (745,252 | ) | (575,288 | ) | ||||||||||||||||||
TA Greystone International Growth Initial Class |
1,547,937 | (4,613,391 | ) | (3,065,454 | ) | 2,578,881 | (6,823,759 | ) | (4,244,878 | ) | ||||||||||||||||||
TA Greystone International Growth Service Class |
4,116 | (79,060 | ) | (74,944 | ) | 27,458 | (26,998 | ) | 460 | |||||||||||||||||||
TA Janus Balanced Service Class |
2,289,024 | (534,519 | ) | 1,754,505 | 890,296 | (913,435 | ) | (23,139 | ) | |||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class |
3,919,949 | (14,187,832 | ) | (10,267,883 | ) | 2,951,544 | (15,158,032 | ) | (12,206,488 | ) | ||||||||||||||||||
TA Janus Mid-Cap Growth Service Class |
21,874 | (42,832 | ) | (20,958 | ) | 3,387 | (113,944 | ) | (110,557 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class |
5,047,583 | (8,624,271 | ) | (3,576,688 | ) | 3,978,687 | (10,069,138 | ) | (6,090,451 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Service Class |
177,948 | (122,276 | ) | 55,672 | 4,897 | (120,877 | ) | (115,980 | ) | |||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class |
3,648,915 | (7,924,805 | ) | (4,275,890 | ) | 3,287,079 | (10,935,349 | ) | (7,648,270 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Service Class |
13,951 | (145,314 | ) | (131,363 | ) | 27,563 | (337,908 | ) | (310,345 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class |
4,952,311 | (13,572,510 | ) | (8,620,199 | ) | 4,134,396 | (11,287,069 | ) | (7,152,673 | ) |
36
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Service Class |
$ | 22,515 | $ | (286,820 | ) | $ | (264,305 | ) | $ | 141,582 | $ | (359,678 | ) | $ | (218,096 | ) | ||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
7,027,710 | (17,446,034 | ) | (10,418,324 | ) | 14,291,711 | (20,252,189 | ) | (5,960,478 | ) | ||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Service Class |
66,314 | (265,841 | ) | (199,527 | ) | 100,123 | (228,182 | ) | (128,059 | ) | ||||||||||||||||||
TA JPMorgan Core Bond Initial Class |
3,096,463 | (8,646,307 | ) | (5,549,844 | ) | 5,776,047 | (7,631,127 | ) | (1,855,080 | ) | ||||||||||||||||||
TA JPMorgan Core Bond Service Class |
35,918 | (81,952 | ) | (46,034 | ) | 12,412 | (17,872 | ) | (5,460 | ) | ||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class |
1,537,985 | (2,216,317 | ) | (678,332 | ) | 4,457,388 | (6,011,692 | ) | (1,554,304 | ) | ||||||||||||||||||
TA JPMorgan Enhanced Index Service Class |
748 | (14,633 | ) | (13,885 | ) | 12,026 | (14,184 | ) | (2,158 | ) | ||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class |
259,015 | (641,117 | ) | (382,102 | ) | 96,018 | (306,124 | ) | (210,106 | ) | ||||||||||||||||||
TA JPMorgan International Moderate Growth Service Class |
796 | (617 | ) | 179 | 980 | (2,186 | ) | (1,206 | ) | |||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class |
719,741 | (2,280,864 | ) | (1,561,123 | ) | 12,438 | (2,868,136 | ) | (2,855,698 | ) | ||||||||||||||||||
TA JPMorgan Mid Cap Value Service Class |
- | (566 | ) | (566 | ) | - | (31,378 | ) | (31,378 | ) | ||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class |
1,014,373 | (4,172,935 | ) | (3,158,562 | ) | 1,029,929 | (5,368,526 | ) | (4,338,597 | ) | ||||||||||||||||||
TA JPMorgan Tactical Allocation Service Class |
10,960 | (47,004 | ) | (36,044 | ) | 12,225 | (58,712 | ) | (46,487 | ) | ||||||||||||||||||
TA Managed Risk - Balanced ETF Service Class |
476,516 | (492,101 | ) | (15,585 | ) | 586,946 | (1,109,142 | ) | (522,196 | ) | ||||||||||||||||||
TA Managed Risk - Growth ETF Service Class |
930,289 | (694,836 | ) | 235,453 | 543,979 | (525,158 | ) | 18,821 | ||||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class |
30,271,024 | (8,960,971 | ) | 21,310,053 | 6,174,136 | (9,353,944 | ) | (3,179,808 | ) | |||||||||||||||||||
TA Morgan Stanley Capital Growth Service Class |
236,111 | (17,315 | ) | 218,796 | 295,501 | (18,647 | ) | 276,854 | ||||||||||||||||||||
TA Multi-Managed Balanced Initial Class |
4,011,429 | (11,764,176 | ) | (7,752,747 | ) | 1,820,097 | (12,701,830 | ) | (10,881,733 | ) | ||||||||||||||||||
TA Multi-Managed Balanced Service Class |
72,070 | (115,833 | ) | (43,763 | ) | 2,237 | (46,514 | ) | (44,277 | ) | ||||||||||||||||||
TA PIMCO Tactical - Balanced Service Class |
85,418 | (134,848 | ) | (49,430 | ) | 197,497 | (137,524 | ) | 59,973 | |||||||||||||||||||
TA PIMCO Tactical - Conservative Service Class |
857,621 | (187,716 | ) | 669,905 | 419,187 | (361,938 | ) | 57,249 | ||||||||||||||||||||
TA PIMCO Tactical - Growth Service Class |
11,515 | (88,146 | ) | (76,631 | ) | 109,159 | (208,001 | ) | (98,842 | ) | ||||||||||||||||||
TA PIMCO Total Return Initial Class |
6,631,254 | (9,304,592 | ) | (2,673,338 | ) | 3,529,337 | (7,756,707 | ) | (4,227,370 | ) | ||||||||||||||||||
TA PIMCO Total Return Service Class |
1,737 | (8,683 | ) | (6,946 | ) | 91 | (39,766 | ) | (39,675 | ) | ||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Service Class |
10,997 | (119,793 | ) | (108,796 | ) | 1,030,028 | (1,099,731 | ) | (69,703 | ) |
37
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
4. Change in Unit Dollars (continued)
Year Ended December 31, 2019 | Year Ended December 31, 2018 | |||||||||||||||||||||||||||
Subaccount | Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
Units Purchased in Dollars |
Units Redeemed and Transferred to/from in Dollars |
Dollar Net Increase (Decrease) |
||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Service Class |
$ | 11,727 | $ | (41,672 | ) | $ | (29,945 | ) | $ | 153,357 | $ | (120,781 | ) | $ | 32,576 | |||||||||||||
TA Small/Mid Cap Value Initial Class |
2,084,708 | (10,324,293 | ) | (8,239,585 | ) | 2,148,942 | (13,165,189 | ) | (11,016,247 | ) | ||||||||||||||||||
TA Small/Mid Cap Value Service Class |
16,764 | (73,746 | ) | (56,982 | ) | 12,439 | (198,702 | ) | (186,263 | ) | ||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class |
2,513,434 | (5,668,654 | ) | (3,155,220 | ) | 3,472,687 | (6,487,006 | ) | (3,014,319 | ) | ||||||||||||||||||
TA T. Rowe Price Small Cap Service Class |
45,780 | (16,031 | ) | 29,749 | 1,368 | (108,837 | ) | (107,469 | ) | |||||||||||||||||||
TA WMC US Growth Initial Class |
20,260,598 | (44,559,945 | ) | (24,299,347 | ) | 2,864,649 | (48,904,877 | ) | (46,040,228 | ) | ||||||||||||||||||
TA WMC US Growth Service Class |
171,669 | (125,771 | ) | 45,898 | 12,497 | (262,512 | ) | (250,015 | ) |
38
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights
The Separate Account offers various death benefit options, which have differing fees that are charged against the contract owner’s account balance. These charges are discussed in more detail in the individual’s policy. Differences in the fee structures for these units result in different unit values, expense ratios, and total returns.
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
Access VP High Yield |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 129,072 | $ | 19.45 | to | $ | 10.88 | $ | 2,452,609 | 4.73 | % | 1.25 | % | to | 2.50 | % | 11.04 | % | to | 9.69 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 134,120 | 17.52 | to | 9.92 | 2,294,285 | 2.70 | 1.25 | to | 2.50 | (1.85 | ) | to | (3.05 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 143,868 | 17.85 | to | 10.23 | 2,510,865 | 3.68 | 1.25 | to | 2.50 | 3.50 | to | 2.25 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 172,784 | 17.24 | to | 11.83 | 2,916,776 | 3.07 | 1.25 | to | 2.50 | 7.66 | to | 6.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 156,213 | 16.02 | to | 11.12 | 2,456,583 | 4.12 | 1.25 | to | 2.50 | (1.08 | ) | to | (2.29 | ) | ||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Contrafund® Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 770,478 | 31.79 | to | 13.63 | 23,647,400 | 0.21 | 1.25 | to | 2.50 | 29.65 | to | 28.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 856,843 | 24.52 | to | 10.65 | 20,353,701 | 0.43 | 1.25 | to | 2.50 | (7.80 | ) | to | (8.93 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 975,304 | 26.60 | to | 11.69 | 25,210,827 | 0.77 | 1.25 | to | 2.50 | 20.09 | to | 18.63 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,054,142 | 22.15 | to | 14.66 | 22,732,324 | 0.60 | 1.25 | to | 2.50 | 6.40 | to | 5.11 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,201,658 | 20.81 | to | 13.95 | 24,392,067 | 0.76 | 1.25 | to | 2.50 | (0.82 | ) | to | (2.03 | ) | ||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Equity-Income Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 289,721 | 25.94 | to | 12.02 | 7,237,308 | 1.80 | 1.25 | to | 2.50 | 25.54 | to | 24.01 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 324,736 | 20.67 | to | 9.70 | 6,502,507 | 1.99 | 1.25 | to | 2.50 | (9.67 | ) | to | (10.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 369,978 | 22.88 | to | 10.87 | 8,214,903 | 1.50 | 1.25 | to | 2.50 | 11.26 | to | 9.91 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 401,527 | 20.56 | to | 17.81 | 8,031,081 | 2.07 | 1.25 | to | 2.50 | 16.26 | to | 14.85 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 458,928 | 17.69 | to | 15.51 | 7,915,041 | 2.80 | 1.25 | to | 2.50 | (5.42 | ) | to | (6.57 | ) | ||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Growth Opportunities Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 134,060 | 29.35 | to | 19.50 | 3,807,868 | - | 1.25 | to | 2.50 | 38.76 | to | 37.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 151,056 | 21.15 | to | 14.23 | 3,109,690 | 0.09 | 1.25 | to | 2.50 | 10.82 | to | 9.46 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 172,501 | 19.09 | to | 13.00 | 3,209,856 | 0.11 | 1.25 | to | 2.50 | 32.53 | to | 30.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 194,205 | 14.40 | to | 16.22 | 2,733,979 | 0.05 | 1.25 | to | 2.50 | (1.17 | ) | to | (2.37 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 210,658 | 14.57 | to | 16.61 | 3,007,997 | 0.00 | 1.25 | to | 2.50 | 4.04 | to | 2.77 | ||||||||||||||||||||||||||||||||||||||||||
Fidelity® VIP Index 500 Service Class 2 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,242 | 30.85 | to | 29.00 | 38,314 | 1.62 | 1.40 | to | 1.80 | 29.21 | to | 28.70 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 3,651 | 23.88 | to | 22.53 | 83,909 | 1.60 | 1.40 | to | 1.80 | (6.05 | ) | to | (6.42 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 3,802 | 25.41 | to | 24.08 | 93,353 | 1.61 | 1.40 | to | 1.80 | 19.74 | to | 19.27 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 3,821 | 21.23 | to | 20.19 | 78,548 | 0.54 | 1.40 | to | 1.80 | 10.05 | to | 9.61 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 14,949 | 19.29 | to | 18.42 | 275,623 | 1.80 | 1.40 | to | 1.80 | (0.31 | ) | to | (0.71 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Asia 30 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 132,954 | 10.34 | to | 11.41 | 1,353,350 | 0.22 | 1.25 | to | 2.50 | 24.75 | to | 23.22 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 132,584 | 8.29 | to | 9.26 | 1,084,323 | 0.51 | 1.25 | to | 2.50 | (19.61 | ) | to | (20.59 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 207,993 | 10.31 | to | 11.66 | 2,109,116 | - | 1.25 | to | 2.50 | 31.24 | to | 29.65 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 116,649 | 7.86 | to | 9.00 | 905,298 | 1.01 | 1.25 | to | 2.50 | (0.60 | ) | to | (1.81 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 183,758 | 7.91 | to | 9.16 | 1,432,518 | 0.30 | 1.25 | to | 2.50 | (10.50 | ) | to | (11.59 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Basic Materials |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 130,845 | 13.06 | to | 10.65 | 1,675,113 | 0.33 | 1.25 | to | 2.50 | 16.27 | to | 14.85 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 164,665 | 11.23 | to | 9.28 | 1,817,583 | 0.36 | 1.25 | to | 2.50 | (18.68 | ) | to | (19.68 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 238,029 | 13.81 | to | 11.55 | 3,239,102 | 0.38 | 1.25 | to | 2.50 | 21.44 | to | 19.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 195,346 | 11.37 | to | 10.66 | 2,190,575 | 0.41 | 1.25 | to | 2.50 | 17.03 | to | 15.61 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 195,994 | 9.72 | to | 9.22 | 1,879,897 | 0.64 | 1.25 | to | 2.50 | (14.99 | ) | to | (16.02 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Bull |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 406,666 | 22.81 | to | 19.26 | 8,923,383 | 0.33 | 1.25 | to | 2.65 | 27.29 | to | 25.55 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 289,483 | 17.92 | to | 15.34 | 4,947,056 | - | 1.25 | to | 2.65 | (7.31 | ) | to | (8.58 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 504,799 | 19.33 | to | 16.78 | 9,444,133 | - | 1.25 | to | 2.65 | 17.87 | to | 16.27 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 471,572 | 16.40 | to | 14.43 | 7,499,368 | - | 1.25 | to | 2.65 | 8.31 | to | 6.84 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 534,506 | 15.14 | to | 13.51 | 7,900,288 | - | 1.25 | to | 2.65 | (1.69 | ) | to | (2.89 | ) |
39
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
ProFund VP Consumer Services |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 160,964 | $ | 28.20 | to | $ | 13.43 | $ | 4,431,509 | - | % | 1.25 | % | to | 2.50 | % | 23.10 | % | to | 21.60 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 168,623 | 22.91 | to | 11.04 | 3,768,251 | - | 1.25 | to | 2.50 | (0.63 | ) | to | (1.85 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 179,485 | 23.05 | to | 11.25 | 4,046,679 | - | 1.25 | to | 2.50 | 16.91 | to | 15.49 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 188,756 | 19.72 | to | 14.79 | 3,662,078 | - | 1.25 | to | 2.50 | 2.90 | to | 1.65 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 275,217 | 19.16 | to | 14.55 | 5,204,126 | - | 1.25 | to | 2.50 | 3.40 | to | 2.14 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Emerging Markets |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 877,583 | 8.75 | to | 8.49 | 7,535,763 | 0.47 | 1.25 | to | 2.65 | 22.70 | to | 21.03 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 816,833 | 7.13 | to | 7.02 | 5,732,716 | 0.27 | 1.25 | to | 2.65 | (16.32 | ) | to | (17.47 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,148,019 | 8.53 | to | 8.50 | 9,637,430 | 0.06 | 1.25 | to | 2.65 | 31.62 | to | 29.83 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 698,180 | 6.48 | to | 6.55 | 4,475,117 | 0.15 | 1.25 | to | 2.65 | 9.64 | to | 8.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 643,781 | 5.91 | to | 6.06 | 3,758,833 | 0.98 | 1.25 | to | 2.65 | (18.38 | ) | to | (19.38 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Europe 30 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 77,818 | 9.26 | to | 13.09 | 765,882 | 2.74 | 1.25 | to | 2.65 | 16.33 | to | 14.75 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 91,651 | 7.96 | to | 11.41 | 787,387 | 3.08 | 1.25 | to | 2.65 | (15.20 | ) | to | (16.36 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 183,059 | 9.39 | to | 13.64 | 1,766,777 | 1.65 | 1.25 | to | 2.65 | 18.24 | to | 16.63 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 216,694 | 7.94 | to | 11.70 | 1,743,388 | 3.45 | 1.25 | to | 2.65 | 6.48 | to | 5.03 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 228,326 | 7.46 | to | 11.14 | 1,687,322 | 5.10 | 1.25 | to | 2.65 | (11.98 | ) | to | (13.05 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Falling U.S. Dollar |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 4,565 | 6.05 | to | 9.12 | 27,080 | 0.05 | 1.25 | to | 2.50 | (3.55 | ) | to | (4.72 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 12,616 | 6.27 | to | 9.57 | 76,710 | - | 1.25 | to | 2.50 | (7.47 | ) | to | (8.61 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 6,073 | 6.78 | to | 10.47 | 40,511 | - | 1.25 | to | 2.50 | 7.12 | to | 5.82 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 7,027 | 6.33 | to | 6.02 | 43,828 | - | 1.25 | to | 1.80 | (7.02 | ) | to | (7.52 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 15,092 | 6.81 | to | 6.51 | 101,565 | - | 1.25 | to | 1.80 | (11.12 | ) | to | (11.60 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Financials |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 305,753 | 11.80 | to | 12.64 | 3,585,937 | 0.51 | 1.25 | to | 2.50 | 28.66 | to | 27.09 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 324,215 | 9.17 | to | 9.95 | 2,938,039 | 0.37 | 1.25 | to | 2.50 | (11.54 | ) | to | (12.63 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 387,223 | 10.37 | to | 11.39 | 3,970,409 | 0.34 | 1.25 | to | 2.50 | 16.73 | to | 15.32 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 345,078 | 8.88 | to | 15.63 | 3,046,205 | 0.34 | 1.25 | to | 2.50 | 13.90 | to | 12.51 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 295,681 | 7.80 | to | 13.90 | 2,301,455 | 0.38 | 1.25 | to | 2.50 | (2.71 | ) | to | (3.90 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Government Money Market |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 417,993 | 9.16 | to | 8.26 | 3,677,097 | 0.82 | 1.25 | to | 2.65 | (0.47 | ) | to | (1.83 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 934,343 | 9.21 | to | 8.42 | 8,412,730 | 0.37 | 1.25 | to | 2.65 | (0.83 | ) | to | (2.19 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 855,503 | 9.28 | to | 8.61 | 7,788,548 | 0.02 | 1.25 | to | 2.65 | (1.21 | ) | to | (2.56 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 586,236 | 9.40 | to | 8.83 | 5,402,213 | 0.02 | 1.25 | to | 2.65 | (1.21 | ) | to | (2.56 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 944,040 | 9.51 | to | 9.06 | 8,848,803 | 0.02 | 1.25 | to | 2.65 | (1.21 | ) | to | (2.42 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP International |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 186,580 | 8.30 | to | 11.39 | 1,634,996 | 0.26 | 1.25 | to | 2.65 | 17.80 | to | 16.19 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 218,720 | 7.04 | to | 9.81 | 1,636,543 | - | 1.25 | to | 2.65 | (16.80 | ) | to | (17.95 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 322,556 | 8.47 | to | 11.95 | 2,844,219 | - | 1.25 | to | 2.65 | 20.30 | to | 18.66 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 313,247 | 7.04 | to | 10.07 | 2,302,307 | - | 1.25 | to | 2.65 | (2.15 | ) | to | (3.48 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 274,407 | 7.19 | to | 10.43 | 2,069,286 | - | 1.25 | to | 2.65 | (4.71 | ) | to | (5.88 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Japan |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 47,925 | 9.81 | to | 11.55 | 471,613 | 0.13 | 1.25 | to | 2.50 | 18.52 | to | 17.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 47,559 | 8.28 | to | 9.87 | 398,071 | - | 1.25 | to | 2.50 | (12.73 | ) | to | (13.80 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 52,680 | 9.49 | to | 11.45 | 506,669 | - | 1.25 | to | 2.50 | 16.99 | to | 15.57 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 66,445 | 8.11 | to | 15.10 | 546,518 | - | 1.25 | to | 2.35 | (0.82 | ) | to | (1.89 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 95,081 | 8.18 | to | 15.39 | 786,337 | - | 1.25 | to | 2.35 | 4.50 | to | 3.38 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Mid-Cap |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 125,779 | 18.36 | to | 11.10 | 2,186,921 | 0.15 | 1.25 | to | 2.50 | 22.00 | to | 20.51 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 140,896 | 15.05 | to | 9.21 | 2,009,612 | - | 1.25 | to | 2.50 | (13.94 | ) | to | (15.00 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 150,258 | 17.48 | to | 10.84 | 2,505,202 | - | 1.25 | to | 2.50 | 12.04 | to | 10.68 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 278,017 | 15.60 | to | 12.12 | 4,206,515 | - | 1.25 | to | 2.50 | 16.73 | to | 15.31 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 221,392 | 13.37 | to | 10.51 | 2,862,711 | - | 1.25 | to | 2.50 | (5.63 | ) | to | (6.78 | ) |
40
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
ProFund VP NASDAQ-100 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 271,981 | $ | 43.26 | to | $ | 28.08 | $ | 11,101,979 | - | % | 1.25 | % | to | 2.65 | % | 35.01 | % | to | 33.17 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 290,590 | 32.04 | to | 21.08 | 8,782,067 | - | 1.25 | to | 2.65 | (3.09 | ) | to | (4.42 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 330,008 | 33.06 | to | 22.06 | 10,391,899 | - | 1.25 | to | 2.65 | 28.77 | to | 27.02 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 289,244 | 25.67 | to | 17.36 | 7,132,174 | - | 1.25 | to | 2.65 | 3.96 | to | 2.55 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 316,065 | 24.70 | to | 16.93 | 7,606,553 | - | 1.25 | to | 2.65 | 6.13 | to | 4.83 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Oil & Gas |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 236,439 | 7.48 | to | 7.12 | 1,736,836 | 1.37 | 1.25 | to | 2.50 | 7.18 | to | 5.87 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 264,692 | 6.98 | to | 6.72 | 1,815,455 | 1.79 | 1.25 | to | 2.50 | (21.21 | ) | to | (22.18 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 285,007 | 8.86 | to | 8.64 | 2,489,839 | 1.10 | 1.25 | to | 2.50 | (4.37 | ) | to | (5.53 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 480,494 | 9.27 | to | 9.15 | 4,367,718 | 1.45 | 1.25 | to | 2.50 | 22.66 | to | 21.16 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 378,298 | 7.56 | to | 8.64 | 2,816,391 | 0.71 | 1.25 | to | 2.50 | (24.32 | ) | to | (25.24 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Pharmaceuticals |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 114,413 | 19.73 | to | 11.21 | 2,194,284 | 0.80 | 1.25 | to | 2.50 | 12.63 | to | 11.26 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 140,306 | 17.52 | to | 10.08 | 2,394,273 | 1.18 | 1.25 | to | 2.50 | (7.36 | ) | to | (8.50 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 188,111 | 18.91 | to | 11.01 | 3,471,074 | 0.89 | 1.25 | to | 2.50 | 9.00 | to | 7.67 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 261,957 | 17.35 | to | 15.11 | 4,445,006 | 0.86 | 1.25 | to | 2.50 | (4.92 | ) | to | (6.08 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 348,505 | 18.25 | to | 16.08 | 6,237,135 | 0.51 | 1.25 | to | 2.50 | 3.15 | to | 1.90 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Precious Metals |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 470,215 | 5.74 | to | 5.20 | 2,637,624 | 0.04 | 1.25 | to | 2.50 | 44.18 | to | 42.42 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 576,024 | 3.98 | to | 3.65 | 2,251,841 | - | 1.25 | to | 2.50 | (14.54 | ) | to | (15.59 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 534,581 | 4.66 | to | 4.33 | 2,449,216 | - | 1.25 | to | 2.50 | 3.98 | to | 2.72 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 528,623 | 4.48 | to | 4.21 | 2,336,663 | - | 1.25 | to | 2.50 | 53.90 | to | 52.03 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 466,513 | 2.91 | to | 2.77 | 1,341,438 | - | 1.25 | to | 2.50 | (33.68 | ) | to | (34.49 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Short Emerging Markets |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 44,107 | 2.20 | to | 3.63 | 99,316 | 0.55 | 1.25 | to | 2.50 | (21.97 | ) | to | (22.92 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 48,382 | 2.81 | to | 4.71 | 137,950 | - | 1.25 | to | 2.50 | 11.19 | to | 9.83 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 51,824 | 2.53 | to | 4.29 | 134,202 | - | 1.25 | to | 2.50 | (28.73 | ) | to | (29.60 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 44,310 | 3.55 | to | 6.09 | 162,068 | - | 1.25 | to | 2.50 | (17.27 | ) | to | (18.28 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 210,999 | 4.29 | to | 7.46 | 902,102 | - | 1.25 | to | 2.50 | 10.14 | to | 8.80 | ||||||||||||||||||||||||||||||||||||||||||
ProFund VP Short International |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 6,268 | 3.15 | to | 4.87 | 19,465 | 0.60 | 1.25 | to | 2.50 | (18.44 | ) | to | (19.43 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 7,176 | 3.86 | to | 6.05 | 27,361 | - | 1.25 | to | 2.50 | 14.04 | to | 12.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 7,822 | 3.39 | to | 5.37 | 26,189 | - | 1.25 | to | 2.50 | (21.61 | ) | to | (22.57 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 10,126 | 4.32 | to | 6.93 | 43,239 | - | 1.25 | to | 2.50 | (7.06 | ) | to | (8.19 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 14,407 | 4.65 | to | 7.55 | 66,424 | - | 1.25 | to | 2.50 | (4.97 | ) | to | (6.13 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Short NASDAQ-100 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 180,892 | 0.98 | to | 1.09 | 172,605 | 0.14 | 1.25 | to | 2.50 | (28.94 | ) | to | (29.81 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 198,347 | 1.38 | to | 1.56 | 266,845 | - | 1.25 | to | 2.50 | (4.09 | ) | to | (5.27 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 189,791 | 1.44 | to | 1.64 | 266,807 | - | 1.25 | to | 2.50 | (26.17 | ) | to | (27.07 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 179,841 | 1.95 | to | 2.25 | 343,987 | - | 1.25 | to | 2.50 | (11.17 | ) | to | (12.25 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 121,191 | 2.20 | to | 2.57 | 263,406 | - | 1.25 | to | 2.50 | (14.12 | ) | to | (15.17 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Short Small-Cap |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 540,411 | 1.25 | to | 1.66 | 662,556 | 0.12 | 1.25 | to | 2.50 | (21.76 | ) | to | (22.72 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 576,129 | 1.60 | to | 2.15 | 902,457 | - | 1.25 | to | 2.50 | 9.02 | to | 7.69 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 561,940 | 1.47 | to | 1.99 | 809,054 | - | 1.25 | to | 2.50 | (15.26 | ) | to | (16.29 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 296,285 | 1.73 | to | 2.38 | 503,694 | - | 1.25 | to | 2.50 | (22.56 | ) | to | (23.50 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 84,555 | 2.23 | to | 3.11 | 184,753 | - | 1.25 | to | 2.50 | (2.05 | ) | to | (3.24 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Small-Cap |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 90,536 | 19.62 | to | 10.97 | 1,657,791 | - | 1.25 | to | 2.50 | 22.08 | to | 20.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 112,307 | 16.07 | to | 9.10 | 1,686,373 | - | 1.25 | to | 2.50 | (13.97 | ) | to | (15.03 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 141,038 | 18.69 | to | 10.71 | 2,510,409 | - | 1.25 | to | 2.50 | 11.04 | to | 9.69 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 191,995 | 16.83 | to | 14.71 | 3,093,475 | - | 1.25 | to | 2.50 | 18.21 | to | 16.77 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 195,017 | 14.23 | to | 12.60 | 2,660,072 | - | 1.25 | to | 2.50 | (7.37 | ) | to | (8.50 | ) |
41
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
ProFund VP Small-Cap Value |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 74,749 | $ | 17.79 | to | $ | 10.39 | $ | 1,296,075 | - | % | 1.25 | % | to | 2.50 | % | 21.05 | % | to | 19.57 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 45,806 | 14.70 | to | 8.69 | 654,407 | - | 1.25 | to | 2.50 | (15.28 | ) | to | (16.32 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 129,878 | 17.35 | to | 10.38 | 2,209,769 | 0.01 | 1.25 | to | 2.50 | 8.36 | to | 7.04 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 237,352 | 16.01 | to | 14.85 | 3,734,499 | - | 1.25 | to | 2.50 | 27.19 | to | 25.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 69,338 | 12.59 | to | 11.82 | 864,453 | - | 1.25 | to | 2.50 | (9.41 | ) | to | (10.52 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Telecommunications |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 75,578 | 10.55 | to | 9.19 | 788,893 | 3.37 | 1.25 | to | 2.50 | 13.35 | to | 11.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 69,099 | 9.31 | to | 8.21 | 635,447 | 5.44 | 1.25 | to | 2.50 | (16.16 | ) | to | (17.19 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 92,226 | 11.10 | to | 9.91 | 1,014,543 | 3.78 | 1.25 | to | 2.50 | (3.33 | ) | to | (4.50 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 249,496 | 11.48 | to | 13.58 | 2,831,821 | 1.74 | 1.25 | to | 2.50 | 20.16 | to | 18.70 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 147,651 | 9.56 | to | 11.44 | 1,405,804 | 1.42 | 1.25 | to | 2.50 | 0.27 | to | (0.95 | ) | |||||||||||||||||||||||||||||||||||||||||
ProFund VP U.S. Government Plus |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 51,902 | 19.08 | to | 9.98 | 928,007 | 0.85 | 1.25 | to | 2.50 | 16.76 | to | 15.34 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 70,297 | 16.34 | to | 8.65 | 1,117,866 | 0.95 | 1.25 | to | 2.50 | (6.60 | ) | to | (7.74 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 65,871 | 17.49 | to | 9.38 | 1,122,450 | 0.44 | 1.25 | to | 2.50 | 8.14 | to | 6.82 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 135,505 | 16.18 | to | 8.78 | 2,157,286 | - | 1.25 | to | 2.50 | (1.54 | ) | to | (2.73 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 84,079 | 16.43 | to | 9.03 | 1,355,237 | - | 1.25 | to | 2.50 | (6.81 | ) | to | (7.94 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP UltraSmall-Cap |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 222,784 | 18.20 | to | 11.93 | 3,959,951 | - | 1.25 | to | 2.50 | 45.51 | to | 43.74 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 246,859 | 12.50 | to | 8.30 | 3,024,891 | - | 1.25 | to | 2.50 | (27.86 | ) | to | (28.75 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 181,027 | 17.33 | to | 11.65 | 3,106,142 | - | 1.25 | to | 2.50 | 23.66 | to | 22.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 204,385 | 14.02 | to | 11.16 | 2,822,347 | - | 1.25 | to | 2.50 | 37.87 | to | 36.20 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 230,925 | 10.17 | to | 8.20 | 2,329,080 | - | 1.25 | to | 2.50 | (14.05 | ) | to | (15.10 | ) | ||||||||||||||||||||||||||||||||||||||||
ProFund VP Utilities |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 176,089 | 19.04 | to | 13.22 | 3,283,795 | 1.54 | 1.25 | to | 2.50 | 21.36 | to | 19.88 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 180,879 | 15.69 | to | 11.03 | 2,785,067 | 2.20 | 1.25 | to | 2.50 | 1.61 | to | 0.36 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 214,138 | 15.44 | to | 10.99 | 3,251,613 | 1.96 | 1.25 | to | 2.50 | 9.28 | to | 7.95 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 338,022 | 14.13 | to | 14.50 | 4,706,843 | 1.76 | 1.25 | to | 2.50 | 13.66 | to | 12.28 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 209,957 | 12.43 | to | 12.91 | 2,588,380 | 2.22 | 1.25 | to | 2.50 | (7.56 | ) | to | (8.69 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Aegon High Yield Bond Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 318,230 | 25.15 | to | 13.90 | 7,623,087 | 6.14 | 1.25 | to | 2.50 | 12.80 | to | 11.43 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 352,156 | 22.29 | to | 12.47 | 7,542,109 | 6.14 | 1.25 | to | 2.50 | (3.56 | ) | to | (4.75 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 425,209 | 23.12 | to | 13.09 | 9,531,143 | 6.13 | 1.25 | to | 2.50 | 6.12 | to | 4.83 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 514,749 | 21.78 | to | 12.49 | 10,919,456 | 6.14 | 1.25 | to | 2.50 | 13.92 | to | 12.54 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 545,477 | 19.12 | to | 11.10 | 10,164,490 | 5.66 | 1.25 | to | 2.50 | (5.40 | ) | to | (6.56 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Aegon High Yield Bond Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 8,132 | 24.16 | to | 22.07 | 193,564 | 5.96 | 1.25 | to | 1.80 | 12.57 | to | 11.96 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 8,653 | 21.47 | to | 19.71 | 183,109 | 5.96 | 1.25 | to | 1.80 | (3.92 | ) | to | (4.44 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 8,771 | 22.34 | to | 20.63 | 193,348 | 5.70 | 1.25 | to | 1.80 | 5.89 | to | 5.32 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 9,266 | 21.10 | to | 19.59 | 192,251 | 5.49 | 1.25 | to | 1.80 | 13.59 | to | 12.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 10,353 | 18.57 | to | 17.34 | 190,165 | 5.56 | 1.25 | to | 1.80 | (5.48 | ) | to | (5.99 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Aegon U.S. Government Securities Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 478,822 | 15.06 | to | 9.70 | 6,824,252 | 2.00 | 1.25 | to | 2.50 | 5.29 | to | 4.00 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 474,842 | 14.31 | to | 9.33 | 6,513,856 | 3.01 | 1.25 | to | 2.50 | (0.99 | ) | to | (2.20 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 503,093 | 14.45 | to | 9.54 | 7,034,021 | 3.60 | 1.25 | to | 2.50 | 1.39 | to | 0.16 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 605,013 | 14.25 | to | 9.52 | 8,363,249 | 0.64 | 1.25 | to | 2.50 | (0.93 | ) | to | (2.14 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 650,846 | 14.39 | to | 9.73 | 9,082,155 | 2.07 | 1.25 | to | 2.50 | (1.14 | ) | to | (2.34 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Aegon U.S. Government Securities Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 8,097 | 13.61 | to | 12.43 | 109,133 | 1.77 | 1.25 | to | 1.80 | 5.04 | to | 4.47 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 8,628 | 12.96 | to | 11.90 | 110,277 | 2.51 | 1.25 | to | 1.80 | (1.23 | ) | to | (1.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 9,238 | 13.12 | to | 12.12 | 119,665 | 3.09 | 1.25 | to | 1.80 | 1.10 | to | 0.55 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 8,791 | 12.98 | to | 12.05 | 113,305 | 0.47 | 1.25 | to | 1.80 | (1.09 | ) | to | (1.63 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 10,918 | 13.12 | to | 12.25 | 142,248 | 1.76 | 1.25 | to | 1.80 | (1.41 | ) | to | (1.94 | ) |
42
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA Barrow Hanley Dividend Focused Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,509,939 | $ | 45.20 | to | $ | 16.99 | $ | 61,580,013 | 2.46 | % | 1.25 | % | to | 2.65 | % | 22.38 | % | to | 20.71 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 1,680,939 | 36.94 | to | 14.07 | 56,235,350 | 2.14 | 1.25 | to | 2.65 | (12.60 | ) | to | (13.80 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,835,531 | 42.26 | to | 16.33 | 70,745,509 | 2.36 | 1.25 | to | 2.65 | 14.99 | to | 13.43 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,002,057 | 36.75 | to | 14.39 | 67,284,511 | 2.17 | 1.25 | to | 2.65 | 13.50 | to | 11.96 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,288,668 | 32.38 | to | 12.86 | 67,896,107 | 1.82 | 1.25 | to | 2.65 | (4.78 | ) | to | (6.08 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Barrow Hanley Dividend Focused Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 25,177 | 33.13 | to | 30.25 | 817,718 | 2.23 | 1.25 | to | 1.80 | 22.05 | to | 21.39 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 25,915 | 27.14 | to | 24.92 | 690,073 | 1.93 | 1.25 | to | 1.80 | (12.78 | ) | to | (13.26 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 30,654 | 31.12 | to | 28.73 | 937,602 | 2.18 | 1.25 | to | 1.80 | 14.70 | to | 14.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 31,898 | 27.13 | to | 25.19 | 855,507 | 1.82 | 1.25 | to | 1.80 | 13.18 | to | 12.57 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 38,087 | 23.97 | to | 22.37 | 901,145 | 1.60 | 1.25 | to | 1.80 | (5.02 | ) | to | (5.53 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Global Real Estate Securities Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 615,895 | 39.29 | to | 13.15 | 23,134,330 | 0.91 | 1.25 | to | 2.65 | 23.65 | to | 21.96 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 680,334 | 31.78 | to | 10.78 | 20,748,332 | 8.48 | 1.25 | to | 2.65 | (11.21 | ) | to | (12.42 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 774,234 | 35.79 | to | 12.31 | 26,858,475 | 3.64 | 1.25 | to | 2.65 | 9.95 | to | 8.45 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 889,883 | 32.55 | to | 11.35 | 28,283,157 | 1.77 | 1.25 | to | 2.65 | (0.61 | ) | to | (1.96 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 989,058 | 32.75 | to | 11.58 | 31,992,993 | 4.23 | 1.25 | to | 2.65 | (1.83 | ) | to | (3.03 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Global Real Estate Securities Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 15,487 | 31.26 | to | 28.55 | 472,348 | 0.60 | 1.25 | to | 1.80 | 23.34 | to | 22.68 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 16,849 | 25.34 | to | 23.27 | 417,545 | 7.80 | 1.25 | to | 1.80 | (11.44 | ) | to | (11.92 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 18,711 | 28.62 | to | 26.42 | 523,924 | 3.20 | 1.25 | to | 1.80 | 9.65 | to | 9.06 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 19,305 | 26.10 | to | 24.23 | 493,658 | 1.44 | 1.25 | to | 1.80 | (0.82 | ) | to | (1.35 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 21,552 | 26.31 | to | 24.56 | 556,162 | 4.03 | 1.25 | to | 1.80 | (2.10 | ) | to | (2.62 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Government Money Market Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,932,882 | 15.93 | to | 12.05 | 25,524,243 | 1.96 | 1.25 | to | 2.65 | 0.71 | to | (0.66 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,534,468 | 15.81 | to | 12.13 | 33,106,532 | 1.80 | 1.25 | to | 2.65 | 0.54 | to | (0.84 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,235,109 | 15.73 | to | 12.23 | 28,870,273 | 0.01 | 1.25 | to | 2.65 | (1.23 | ) | to | (2.57 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,757,450 | 15.92 | to | 12.56 | 35,868,268 | 0.01 | 1.25 | to | 2.65 | (1.23 | ) | to | (2.57 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 3,005,592 | 16.12 | to | 12.89 | 39,711,303 | 0.01 | 1.25 | to | 2.65 | (1.23 | ) | to | (2.58 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Government Money Market Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 39,530 | 9.67 | to | 8.83 | 367,324 | 1.71 | 1.25 | to | 1.80 | 0.46 | to | (0.08 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 39,075 | 9.63 | to | 8.84 | 363,495 | 0.84 | 1.25 | to | 1.80 | (0.41 | ) | to | (0.95 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 38,974 | 9.67 | to | 8.93 | 364,763 | 0.01 | 1.25 | to | 1.80 | (1.23 | ) | to | (1.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 40,865 | 9.79 | to | 9.09 | 388,343 | 0.01 | 1.25 | to | 1.80 | (1.23 | ) | to | (1.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 40,917 | 9.91 | to | 9.25 | 394,765 | 0.01 | 1.25 | to | 1.80 | (1.23 | ) | to | (1.76 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock iShares Edge 40 Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 130,278 | 19.64 | to | 11.26 | 2,431,217 | 2.22 | 1.25 | to | 2.50 | 13.88 | to | 12.50 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 147,907 | 17.24 | to | 10.01 | 2,439,913 | 1.91 | 1.25 | to | 2.50 | (5.33 | ) | to | (6.49 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 161,950 | 18.21 | to | 10.70 | 2,843,283 | 1.76 | 1.25 | to | 2.50 | 8.39 | to | 7.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 187,662 | 16.80 | to | 10.55 | 3,043,341 | 1.48 | 1.25 | to | 2.50 | 0.97 | to | (0.26 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 233,654 | 16.64 | to | 10.58 | 3,761,026 | 1.22 | 1.25 | to | 2.50 | (1.31 | ) | to | (2.51 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock iShares Edge 40 Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,064 | 19.41 | to | 17.73 | 39,603 | 1.97 | 1.25 | to | 1.80 | 13.68 | to | 13.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,316 | 17.08 | to | 15.68 | 39,065 | 1.62 | 1.25 | to | 1.80 | (5.61 | ) | to | (6.13 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,672 | 18.09 | to | 16.70 | 47,754 | 1.48 | 1.25 | to | 1.80 | 8.17 | to | 7.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 3,087 | 16.72 | to | 15.53 | 51,002 | 1.09 | 1.25 | to | 1.80 | 0.73 | to | 0.19 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 5,312 | 16.60 | to | 15.50 | 87,997 | 0.96 | 1.25 | to | 1.80 | (1.65 | ) | to | (2.18 | ) | ||||||||||||||||||||||||||||||||||||||||
TA BlackRock Tactical Allocation Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 352,235 | 12.76 | to | 11.57 | 4,451,472 | 2.24 | 1.25 | to | 2.50 | 15.61 | to | 14.20 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 380,578 | 11.03 | to | 10.13 | 4,169,855 | 0.98 | 1.25 | to | 2.50 | (5.60 | ) | to | (6.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 430,811 | 11.69 | to | 10.87 | 5,008,073 | 1.45 | 1.25 | to | 2.50 | 10.31 | to | 8.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 499,515 | 10.60 | to | 10.25 | 5,272,511 | 2.30 | 1.25 | to | 2.50 | 3.62 | to | 2.36 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 508,062 | 10.23 | to | 10.02 | 5,183,059 | 1.67 | 1.25 | to | 2.50 | (1.36 | ) | to | (2.56 | ) |
43
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA Greystone International Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,932,480 | $ | 19.82 | to | $ | 12.49 | $ | 34,984,252 | 1.64 | % | 1.25 | % | to | 2.65 | % | 26.11 | % | to | 24.39 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 2,118,864 | 15.72 | to | 10.04 | 30,490,491 | 1.19 | 1.25 | to | 2.65 | (18.73 | ) | to | (19.84 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,365,874 | 19.34 | to | 12.53 | 41,972,396 | 1.34 | 1.25 | to | 2.65 | 25.68 | to | 23.97 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,397,198 | 15.39 | to | 10.11 | 34,115,617 | 1.49 | 1.25 | to | 2.65 | (1.15 | ) | to | (2.50 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,643,779 | 15.57 | to | 10.37 | 38,180,904 | 1.55 | 1.25 | to | 2.65 | (1.16 | ) | to | (2.51 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Greystone International Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 10,627 | 26.93 | to | 24.60 | 277,972 | 1.28 | 1.25 | to | 1.80 | 25.83 | to | 25.15 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 13,752 | 21.40 | to | 19.65 | 286,749 | 0.98 | 1.25 | to | 1.80 | (18.97 | ) | to | (19.41 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 13,817 | 26.41 | to | 24.39 | 356,351 | 1.20 | 1.25 | to | 1.80 | 25.42 | to | 24.75 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 17,719 | 21.06 | to | 19.55 | 363,728 | 1.35 | 1.25 | to | 1.80 | (1.36 | ) | to | (1.89 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 17,987 | 21.35 | to | 19.93 | 376,671 | 1.55 | 1.25 | to | 1.80 | (1.47 | ) | to | (2.01 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Janus Balanced Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 3,878,813 | 1.71 | to | 1.59 | 6,610,131 | 1.35 | 1.25 | to | 2.50 | 20.27 | to | 18.80 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,787,014 | 1.42 | to | 1.34 | 3,939,432 | 1.48 | 1.25 | to | 2.50 | (1.31 | ) | to | (2.52 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,811,860 | 1.44 | to | 1.37 | 4,014,346 | 1.37 | 1.25 | to | 2.50 | 15.30 | to | 13.89 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,468,867 | 1.25 | to | 1.20 | 3,068,250 | 1.03 | 1.25 | to | 2.50 | 2.84 | to | 1.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,420,829 | 1.22 | to | 1.19 | 2,928,473 | 0.79 | 1.25 | to | 2.50 | (1.11 | ) | to | (1.50 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Janus Mid-Cap Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,460,824 | 102.68 | to | 18.63 | 115,385,380 | 0.07 | 1.25 | to | 2.65 | 35.02 | to | 33.18 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,589,006 | 76.04 | to | 13.99 | 93,909,969 | 0.06 | 1.25 | to | 2.65 | (2.44 | ) | to | (3.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,788,534 | 77.95 | to | 14.54 | 107,804,582 | 0.10 | 1.25 | to | 2.65 | 27.42 | to | 25.69 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,102,514 | 61.17 | to | 11.56 | 97,100,650 | - | 1.25 | to | 2.65 | (3.25 | ) | to | (4.57 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,363,832 | 63.23 | to | 12.12 | 112,766,072 | - | 1.25 | to | 2.65 | (6.20 | ) | to | (7.48 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Janus Mid-Cap Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 17,924 | 38.61 | to | 35.27 | 677,798 | - | 1.25 | to | 1.80 | 34.65 | to | 33.92 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 18,608 | 28.68 | to | 26.33 | 523,331 | - | 1.25 | to | 1.80 | (2.68 | ) | to | (3.21 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 22,138 | 29.47 | to | 27.21 | 640,456 | - | 1.25 | to | 1.80 | 27.15 | to | 26.47 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 23,590 | 23.17 | to | 21.51 | 537,762 | - | 1.25 | to | 1.80 | (3.51 | ) | to | (4.03 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 27,298 | 24.02 | to | 22.42 | 645,880 | - | 1.25 | to | 1.80 | (6.43 | ) | to | (6.94 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,260,800 | 20.21 | to | 12.42 | 43,042,877 | 2.62 | 1.25 | to | 2.50 | 12.50 | to | 11.12 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,456,523 | 17.97 | to | 11.17 | 41,678,665 | 1.77 | 1.25 | to | 2.50 | (5.17 | ) | to | (6.33 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,775,821 | 18.95 | to | 11.93 | 50,223,296 | 2.10 | 1.25 | to | 2.50 | 11.42 | to | 10.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 3,037,681 | 17.00 | to | 10.84 | 49,764,078 | 1.98 | 1.25 | to | 2.50 | 3.33 | to | 2.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 3,469,275 | 16.46 | to | 10.62 | 55,158,737 | 2.11 | 1.25 | to | 2.50 | (3.17 | ) | to | (4.35 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Conservative Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 47,595 | 20.59 | to | 18.80 | 952,671 | 2.24 | 1.25 | to | 1.80 | 12.15 | to | 11.54 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 44,949 | 18.36 | to | 16.86 | 806,285 | 1.54 | 1.25 | to | 1.80 | (5.47 | ) | to | (5.98 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 51,072 | 19.42 | to | 17.93 | 971,877 | 1.91 | 1.25 | to | 1.80 | 11.18 | to | 10.58 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 47,379 | 17.47 | to | 16.21 | 812,205 | 1.73 | 1.25 | to | 1.80 | 3.02 | to | 2.46 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 64,446 | 16.95 | to | 15.82 | 1,070,632 | 1.91 | 1.25 | to | 1.80 | (3.35 | ) | to | (3.87 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 3,220,218 | 25.06 | to | 22.84 | 77,881,169 | 1.73 | 1.25 | to | 2.65 | 24.50 | to | 22.80 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 3,419,417 | 20.13 | to | 18.60 | 66,492,509 | 1.86 | 1.25 | to | 2.65 | (11.51 | ) | to | (12.72 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 3,764,299 | 22.75 | to | 21.31 | 82,900,292 | 1.43 | 1.25 | to | 2.65 | 23.10 | to | 21.43 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 4,180,515 | 18.48 | to | 17.55 | 75,086,961 | 2.18 | 1.25 | to | 2.65 | 4.77 | to | 3.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 4,684,076 | 17.64 | to | 16.98 | 80,463,064 | 1.55 | 1.25 | to | 2.65 | (3.14 | ) | to | (4.46 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 87,294 | 28.79 | to | 26.30 | 2,472,000 | 1.47 | 1.25 | to | 1.80 | 24.31 | to | 23.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 92,481 | 23.16 | to | 21.27 | 2,108,669 | 1.59 | 1.25 | to | 1.80 | (11.81 | ) | to | (12.29 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 104,247 | 26.27 | to | 24.25 | 2,699,330 | 1.21 | 1.25 | to | 1.80 | 22.84 | to | 22.18 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 111,907 | 21.38 | to | 19.85 | 2,361,906 | 1.89 | 1.25 | to | 1.80 | 4.52 | to | 3.95 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 126,039 | 20.46 | to | 19.09 | 2,548,916 | 1.38 | 1.25 | to | 1.80 | (3.33 | ) | to | (3.85 | ) |
44
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 4,279,917 | $ | 22.39 | to | $ | 12.79 | $ | 91,445,896 | 2.17 | % | 1.25 | % | to | 2.50 | % | 14.98 | % | to | 13.58 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 4,710,546 | 19.47 | to | 11.26 | 87,770,549 | 1.75 | 1.25 | to | 2.50 | (6.30 | ) | to | (7.45 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 5,064,889 | 20.79 | to | 12.17 | 101,084,222 | 1.86 | 1.25 | to | 2.50 | 15.03 | to | 13.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 5,573,642 | 18.07 | to | 10.71 | 97,300,865 | 2.19 | 1.25 | to | 2.50 | 4.26 | to | 3.00 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 6,490,919 | 17.33 | to | 10.40 | 109,041,306 | 1.89 | 1.25 | to | 2.50 | (3.43 | ) | to | (4.61 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 87,976 | 23.62 | to | 21.58 | 2,041,452 | 1.94 | 1.25 | to | 1.80 | 14.74 | to | 14.12 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 99,985 | 20.59 | to | 18.91 | 2,019,594 | 1.53 | 1.25 | to | 1.80 | (6.52 | ) | to | (7.03 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 110,375 | 22.03 | to | 20.34 | 2,391,296 | 1.65 | 1.25 | to | 1.80 | 14.69 | to | 14.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 114,280 | 19.20 | to | 17.83 | 2,160,473 | 1.89 | 1.25 | to | 1.80 | 3.96 | to | 3.40 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 141,600 | 18.47 | to | 17.24 | 2,580,279 | 1.82 | 1.25 | to | 1.80 | (3.68 | ) | to | (4.20 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 5,916,260 | 23.90 | to | 12.33 | 134,913,208 | 2.19 | 1.25 | to | 2.50 | 18.53 | to | 17.08 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 6,368,213 | 20.16 | to | 10.53 | 123,566,431 | 1.93 | 1.25 | to | 2.50 | (8.22 | ) | to | (9.35 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 6,625,915 | 21.97 | to | 11.62 | 141,013,924 | 1.71 | 1.25 | to | 2.50 | 18.30 | to | 16.86 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 7,499,355 | 18.57 | to | 12.45 | 135,374,742 | 2.02 | 1.25 | to | 2.50 | 5.23 | to | 3.95 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 8,608,286 | 17.65 | to | 11.98 | 147,997,224 | 2.15 | 1.25 | to | 2.50 | (3.44 | ) | to | (4.62 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Asset Allocation - Moderate Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 137,204 | 26.21 | to | 23.94 | 3,533,941 | 1.95 | 1.25 | to | 1.80 | 18.31 | to | 17.67 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 145,187 | 22.16 | to | 20.35 | 3,165,751 | 1.65 | 1.25 | to | 1.80 | (8.47 | ) | to | (8.97 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 150,594 | 24.21 | to | 22.35 | 3,592,533 | 1.51 | 1.25 | to | 1.80 | 18.02 | to | 17.39 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 174,428 | 20.51 | to | 19.04 | 3,532,397 | 1.74 | 1.25 | to | 1.80 | 4.94 | to | 4.38 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 215,395 | 19.54 | to | 18.24 | 4,159,994 | 1.95 | 1.25 | to | 1.80 | (3.72 | ) | to | (4.24 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Core Bond Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,113,966 | 43.61 | to | 10.77 | 32,767,266 | 2.52 | 1.25 | to | 2.65 | 7.19 | to | 5.72 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,301,192 | 40.68 | to | 10.18 | 35,931,674 | 3.19 | 1.25 | to | 2.65 | (1.16 | ) | to | (2.52 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,357,741 | 41.16 | to | 10.45 | 38,276,644 | 2.97 | 1.25 | to | 2.65 | 2.39 | to | 0.99 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,414,510 | 40.20 | to | 10.34 | 39,394,427 | 2.14 | 1.25 | to | 2.65 | 1.13 | to | (0.24 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,445,997 | 39.75 | to | 10.37 | 40,527,063 | 1.96 | 1.25 | to | 2.65 | (0.63 | ) | to | (1.84 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Core Bond Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 23,349 | 16.01 | to | 14.62 | 360,413 | 2.18 | 1.25 | to | 1.80 | 6.92 | to | 6.34 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 26,534 | 14.98 | to | 13.75 | 381,221 | 2.89 | 1.25 | to | 1.80 | (1.33 | ) | to | (1.87 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 26,865 | 15.18 | to | 14.01 | 393,003 | 2.54 | 1.25 | to | 1.80 | 2.15 | to | 1.60 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 29,693 | 14.86 | to | 13.79 | 428,217 | 1.77 | 1.25 | to | 1.80 | 0.80 | to | 0.26 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 30,296 | 14.74 | to | 13.76 | 434,627 | 1.68 | 1.25 | to | 1.80 | (0.90 | ) | to | (1.44 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Enhanced Index Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 801,581 | 32.21 | to | 13.70 | 24,621,533 | 1.19 | 1.25 | to | 2.50 | 29.42 | to | 27.84 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 826,753 | 24.89 | to | 10.72 | 19,684,447 | 1.08 | 1.25 | to | 2.50 | (7.18 | ) | to | (8.32 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 892,687 | 26.81 | to | 11.69 | 22,968,725 | 0.59 | 1.25 | to | 2.50 | 19.66 | to | 18.21 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 816,184 | 22.40 | to | 16.45 | 17,602,725 | 0.42 | 1.25 | to | 2.50 | 9.98 | to | 8.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 969,934 | 20.37 | to | 15.14 | 19,127,259 | 0.88 | 1.25 | to | 2.50 | (1.31 | ) | to | (2.51 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Enhanced Index Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 3,092 | 36.50 | to | 33.34 | 111,306 | 0.94 | 1.25 | to | 1.80 | 29.08 | to | 28.38 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 3,519 | 28.28 | to | 25.97 | 98,279 | 0.84 | 1.25 | to | 1.80 | (7.41 | ) | to | (7.91 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 3,575 | 30.54 | to | 28.20 | 108,755 | 0.38 | 1.25 | to | 1.80 | 19.33 | to | 18.69 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 5,298 | 25.59 | to | 23.76 | 134,748 | 0.17 | 1.25 | to | 1.80 | 9.75 | to | 9.16 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 7,554 | 23.32 | to | 21.76 | 171,937 | 0.81 | 1.25 | to | 1.80 | (1.58 | ) | to | (2.12 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan International Moderate Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 218,632 | 12.96 | to | 11.76 | 2,776,736 | 2.29 | 1.25 | to | 2.50 | 16.32 | to | 14.90 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 251,551 | 11.14 | to | 10.23 | 2,749,763 | 2.35 | 1.25 | to | 2.50 | (12.68 | ) | to | (13.75 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 268,483 | 12.76 | to | 11.87 | 3,367,764 | 1.81 | 1.25 | to | 2.50 | 20.28 | to | 18.82 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 294,251 | 10.61 | to | 10.13 | 3,071,889 | 2.08 | 1.25 | to | 2.50 | (0.03 | ) | to | (1.24 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 357,260 | 10.61 | to | 10.26 | 3,738,784 | 1.76 | 1.25 | to | 2.50 | (2.86 | ) | to | (4.04 | ) |
45
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA JPMorgan International Moderate Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,606 | $ | 12.53 | to | $ | 11.63 | $ | 19,876 | 2.08 | % | 1.25 | % | to | 1.80 | % | 16.16 | % | to | 15.53 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 1,587 | 10.79 | to | 10.07 | 16,921 | 2.19 | 1.25 | to | 1.80 | (13.00 | ) | to | (13.48 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,677 | 12.40 | to | 11.64 | 20,572 | 1.62 | 1.25 | to | 1.80 | 19.97 | to | 19.33 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,341 | 10.33 | to | 9.75 | 23,682 | 1.88 | 1.25 | to | 1.80 | (0.17 | ) | to | (0.71 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 3,671 | 10.35 | to | 9.82 | 36,813 | 1.85 | 1.25 | to | 1.80 | (3.10 | ) | to | (3.62 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Mid Cap Value Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 307,965 | 42.67 | to | 11.42 | 11,944,504 | 1.37 | 1.25 | to | 2.50 | 24.65 | to | 23.13 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 329,333 | 34.23 | to | 9.28 | 10,944,615 | 0.83 | 1.25 | to | 2.50 | (12.90 | ) | to | (13.97 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 404,694 | 39.30 | to | 10.78 | 15,497,187 | 0.78 | 1.25 | to | 2.50 | 12.08 | to | 10.72 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 442,975 | 35.07 | to | 31.17 | 15,150,810 | 2.09 | 1.25 | to | 2.50 | 13.18 | to | 11.81 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 490,634 | 30.99 | to | 27.88 | 14,839,661 | 0.84 | 1.25 | to | 2.50 | (3.94 | ) | to | (5.11 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Mid Cap Value Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 2,004 | 40.91 | to | 37.37 | 81,393 | 1.17 | 1.25 | to | 1.80 | 24.44 | to | 23.77 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 2,019 | 32.88 | to | 30.19 | 65,927 | 0.61 | 1.25 | to | 1.80 | (13.19 | ) | to | (13.66 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,875 | 37.87 | to | 34.97 | 108,158 | 0.56 | 1.25 | to | 1.80 | 11.79 | to | 11.19 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 5,447 | 33.88 | to | 31.45 | 183,899 | 1.90 | 1.25 | to | 1.80 | 12.87 | to | 12.26 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 5,569 | 30.01 | to | 28.01 | 166,628 | 0.68 | 1.25 | to | 1.80 | (4.14 | ) | to | (4.66 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Tactical Allocation Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 847,076 | 41.10 | to | 11.55 | 30,567,060 | 2.42 | 1.25 | to | 2.65 | 10.79 | to | 9.28 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 929,889 | 37.10 | to | 10.57 | 30,598,668 | 2.22 | 1.25 | to | 2.65 | (4.14 | ) | to | (5.46 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,061,728 | 38.70 | to | 11.17 | 36,397,504 | 1.88 | 1.25 | to | 2.65 | 7.41 | to | 5.95 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,179,049 | 36.03 | to | 10.55 | 37,737,402 | 1.37 | 1.25 | to | 2.65 | 3.17 | to | 1.77 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,332,653 | 34.92 | to | 10.36 | 41,651,399 | 1.26 | 1.25 | to | 2.65 | (1.34 | ) | to | (2.69 | ) | ||||||||||||||||||||||||||||||||||||||||
TA JPMorgan Tactical Allocation Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 23,373 | 17.08 | to | 15.59 | 393,894 | 2.08 | 1.25 | to | 1.80 | 10.53 | to | 9.93 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 25,624 | 15.45 | to | 14.19 | 390,873 | 1.90 | 1.25 | to | 1.80 | (4.39 | ) | to | (4.91 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 28,606 | 16.16 | to | 14.92 | 456,875 | 1.57 | 1.25 | to | 1.80 | 7.17 | to | 6.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 31,484 | 15.08 | to | 14.00 | 469,672 | 1.12 | 1.25 | to | 1.80 | 2.91 | to | 2.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 33,093 | 14.65 | to | 13.67 | 480,000 | 0.92 | 1.25 | to | 1.80 | (1.63 | ) | to | (2.16 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Managed Risk - Balanced ETF Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 394,604 | 15.07 | to | 11.57 | 5,800,071 | 1.99 | 1.25 | to | 2.50 | 14.22 | to | 12.83 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 395,203 | 13.20 | to | 10.25 | 5,089,391 | 1.77 | 1.25 | to | 2.50 | (5.73 | ) | to | (6.89 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 432,241 | 14.00 | to | 11.01 | 5,932,144 | 1.75 | 1.25 | to | 2.50 | 12.04 | to | 10.68 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 427,520 | 12.49 | to | 11.71 | 5,238,736 | 1.66 | 1.25 | to | 2.50 | 2.48 | to | 1.23 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 427,618 | 12.19 | to | 11.57 | 5,122,140 | 1.53 | 1.25 | to | 2.50 | (2.98 | ) | to | (4.17 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Managed Risk - Growth ETF Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 414,709 | 15.86 | to | 12.08 | 6,421,406 | 1.74 | 1.25 | to | 2.50 | 17.94 | to | 16.50 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 397,351 | 13.45 | to | 10.37 | 5,240,391 | 1.55 | 1.25 | to | 2.50 | (8.31 | ) | to | (9.44 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 396,850 | 14.67 | to | 11.45 | 5,715,740 | 1.58 | 1.25 | to | 2.50 | 17.01 | to | 15.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 379,400 | 12.53 | to | 11.96 | 4,678,318 | 1.60 | 1.25 | to | 1.80 | 3.38 | to | 2.82 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 401,376 | 12.12 | to | 11.63 | 4,796,510 | 1.46 | 1.25 | to | 1.80 | (4.71 | ) | to | (5.22 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Morgan Stanley Capital Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,458,314 | 54.88 | to | 49.79 | 75,027,195 | - | 1.25 | to | 2.65 | 22.21 | to | 20.54 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,008,003 | 44.91 | to | 41.31 | 42,744,790 | - | 1.25 | to | 2.65 | 5.36 | to | 3.91 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,079,034 | 42.62 | to | 39.75 | 43,695,752 | - | 1.25 | to | 2.65 | 41.83 | to | 39.90 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,094,613 | 30.05 | to | 28.42 | 31,225,617 | - | 1.25 | to | 2.65 | (3.47 | ) | to | (4.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,331,309 | 31.13 | to | 29.84 | 39,550,470 | - | 1.25 | to | 2.65 | 10.41 | to | 8.90 | ||||||||||||||||||||||||||||||||||||||||||
TA Morgan Stanley Capital Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 15,070 | 50.42 | to | 46.05 | 735,587 | - | 1.25 | to | 1.80 | 21.95 | to | 21.29 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 10,193 | 41.35 | to | 37.97 | 412,629 | - | 1.25 | to | 1.80 | 5.11 | to | 4.54 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 3,954 | 39.34 | to | 36.32 | 152,287 | - | 1.25 | to | 1.80 | 41.50 | to | 40.74 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 4,057 | 27.80 | to | 25.81 | 110,701 | - | 1.25 | to | 1.80 | (3.70 | ) | to | (4.22 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 4,809 | 28.87 | to | 26.94 | 136,600 | - | 1.25 | to | 1.80 | 10.07 | to | 9.48 |
46
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA Multi-Managed Balanced Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 3,824,424 | $ | 30.34 | to | $ | 15.66 | $ | 112,863,733 | 1.65 | % | 1.25 | % | to | 2.65 | % | 20.27 | % | to | 18.63 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 4,092,683 | 25.23 | to | 13.20 | 101,001,645 | 1.42 | 1.25 | to | 2.65 | (4.85 | ) | to | (6.16 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 4,510,630 | 26.51 | to | 14.06 | 117,196,596 | 0.85 | 1.25 | to | 2.65 | 12.73 | to | 11.20 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 4,869,178 | 23.52 | to | 12.65 | 112,466,066 | 0.96 | 1.25 | to | 2.65 | 6.55 | to | 5.10 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 5,315,773 | 22.07 | to | 12.04 | 115,378,765 | 1.32 | 1.25 | to | 2.65 | (1.02 | ) | to | (2.37 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Multi-Managed Balanced Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 19,115 | 30.31 | to | 27.68 | 569,250 | 1.46 | 1.25 | to | 1.80 | 20.00 | to | 19.35 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 20,600 | 25.26 | to | 23.19 | 512,004 | 1.21 | 1.25 | to | 1.80 | (5.10 | ) | to | (5.61 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 22,291 | 26.61 | to | 24.57 | 583,996 | 0.70 | 1.25 | to | 1.80 | 12.42 | to | 11.81 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 29,104 | 23.67 | to | 21.98 | 681,273 | 0.86 | 1.25 | to | 1.80 | 6.31 | to | 5.74 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 30,154 | 22.27 | to | 20.78 | 664,276 | 1.17 | 1.25 | to | 1.80 | (1.30 | ) | to | (1.83 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Tactical - Balanced Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,075,360 | 1.31 | to | 1.20 | 1,399,630 | 0.16 | 1.25 | to | 2.50 | 18.20 | to | 16.76 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,118,577 | 1.11 | to | 1.03 | 1,232,596 | 3.11 | 1.25 | to | 2.50 | (8.09 | ) | to | (9.22 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,072,442 | 1.21 | to | 1.14 | 1,287,190 | 0.30 | 1.25 | to | 2.50 | 10.66 | to | 9.31 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,133,290 | 1.09 | to | 1.04 | 1,230,060 | 0.27 | 1.25 | to | 2.50 | 4.08 | to | 2.82 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,362,009 | 1.05 | to | 1.01 | 1,421,087 | - | 1.25 | to | 2.50 | (3.75 | ) | to | (4.92 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Tactical - Conservative Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,413,528 | 1.24 | to | 11.41 | 1,767,627 | 0.10 | 1.25 | to | 2.50 | 16.11 | to | 14.70 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 812,416 | 1.06 | to | 9.95 | 866,477 | 3.27 | 1.25 | to | 2.50 | (6.32 | ) | to | (7.47 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 766,189 | 1.14 | to | 10.76 | 875,674 | 1.47 | 1.25 | to | 2.50 | 9.04 | to | 7.71 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 873,047 | 1.04 | to | 10.79 | 914,327 | 0.38 | 1.25 | to | 2.35 | 3.69 | to | 2.57 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 802,756 | 1.01 | to | 10.52 | 812,699 | 0.26 | 1.25 | to | 2.35 | (3.29 | ) | to | (4.33 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Tactical - Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 343,250 | 1.29 | to | 11.91 | 461,521 | - | 1.25 | to | 2.50 | 20.05 | to | 18.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 397,510 | 1.08 | to | 10.04 | 454,824 | 3.15 | 1.25 | to | 2.50 | (8.83 | ) | to | (9.95 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 475,618 | 1.18 | to | 11.15 | 597,454 | 0.40 | 1.25 | to | 2.50 | 13.41 | to | 12.03 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 466,968 | 1.04 | to | 10.93 | 535,650 | - | 1.25 | to | 2.50 | 3.58 | to | 2.32 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 534,302 | 1.01 | to | 10.68 | 590,984 | - | 1.25 | to | 2.50 | (4.65 | ) | to | (5.81 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Total Return Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,829,150 | 17.88 | to | 10.87 | 30,824,370 | 2.50 | 1.25 | to | 2.65 | 7.08 | to | 5.61 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,991,493 | 16.70 | to | 10.29 | 31,411,079 | 2.54 | 1.25 | to | 2.65 | (1.89 | ) | to | (3.23 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,239,603 | 17.02 | to | 10.63 | 36,408,838 | - | 1.25 | to | 2.65 | 3.59 | to | 2.18 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,476,883 | 16.43 | to | 10.41 | 39,071,390 | 2.28 | 1.25 | to | 2.65 | 1.45 | to | 0.07 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,723,471 | 16.19 | to | 10.40 | 42,614,585 | 2.52 | 1.25 | to | 2.65 | (0.55 | ) | to | (1.77 | ) | ||||||||||||||||||||||||||||||||||||||||
TA PIMCO Total Return Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 14,709 | 15.94 | to | 14.56 | 226,145 | 2.26 | 1.25 | to | 1.80 | 6.88 | to | 6.30 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 15,162 | 14.92 | to | 13.70 | 218,909 | 2.35 | 1.25 | to | 1.80 | (2.25 | ) | to | (2.78 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 17,904 | 15.26 | to | 14.09 | 265,191 | - | 1.25 | to | 1.80 | 3.36 | to | 2.80 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 19,139 | 14.77 | to | 13.71 | 275,511 | 1.95 | 1.25 | to | 1.80 | 1.21 | to | 0.67 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 29,529 | 14.59 | to | 13.62 | 422,137 | 2.60 | 1.25 | to | 1.80 | (0.72 | ) | to | (1.26 | ) | ||||||||||||||||||||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Conservative Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 48,895 | 13.04 | to | 11.18 | 623,898 | 1.94 | 1.25 | to | 2.50 | 9.86 | to | 8.52 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 57,578 | 11.87 | to | 10.30 | 672,854 | 1.23 | 1.25 | to | 2.50 | (4.09 | ) | to | (5.27 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 64,187 | 12.37 | to | 10.87 | 784,026 | 1.73 | 1.25 | to | 2.50 | 10.32 | to | 8.98 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 68,619 | 11.22 | to | 11.00 | 761,346 | 1.25 | 1.25 | to | 1.65 | 1.38 | to | 0.99 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 78,597 | 11.06 | to | 10.89 | 862,222 | 0.80 | 1.25 | to | 1.65 | (3.57 | ) | to | (3.95 | ) | ||||||||||||||||||||||||||||||||||||||||
TA QS Investors Active Asset Allocation - Moderate Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 104,482 | 14.34 | to | 11.60 | 1,479,483 | 1.69 | 1.25 | to | 2.50 | 9.98 | to | 8.64 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 106,782 | 13.04 | to | 10.68 | 1,376,464 | 1.33 | 1.25 | to | 2.50 | (7.12 | ) | to | (8.26 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 104,472 | 14.04 | to | 11.64 | 1,455,615 | 1.28 | 1.25 | to | 2.50 | 18.82 | to | 17.38 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 125,623 | 11.82 | to | 11.46 | 1,475,496 | 1.21 | 1.25 | to | 2.50 | 0.71 | to | (0.51 | ) | |||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 206,436 | 11.73 | to | 11.52 | 2,409,312 | 0.96 | 1.25 | to | 2.50 | (7.69 | ) | to | (8.05 | ) |
47
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
At December 31 | For the Year Ended December 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Subaccount | Units | Unit Fair
Value |
Net Assets |
Investment Income Ratio* |
Expense Ratio** Lowest to Highest |
Total Return*** Corresponding to Lowest to Highest Expense Ratio |
||||||||||||||||||||||||||||||||||||||||||||||||
TA Small/Mid Cap Value Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 1,918,647 | $ | 41.42 | to | $ | 39.36 | $ | 76,798,395 | 0.97 | % | 1.25 | % | to | 2.65 | % | 23.73 | % | to | 22.05 | % | ||||||||||||||||||||||||||||||||||
12/31/2018 | 2,125,473 | 33.47 | to | 32.25 | 69,417,170 | 0.89 | 1.25 | to | 2.65 | (12.56 | ) | to | (13.76 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 2,410,229 | 38.28 | to | 37.39 | 90,549,665 | 1.13 | 1.25 | to | 2.65 | 14.13 | to | 12.58 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 2,659,878 | 33.54 | to | 33.21 | 88,019,316 | 0.78 | 1.25 | to | 2.65 | 19.63 | to | 18.01 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 2,891,947 | 28.04 | to | 28.14 | 80,029,700 | 0.96 | 1.25 | to | 2.65 | (3.72 | ) | to | (5.03 | ) | ||||||||||||||||||||||||||||||||||||||||
TA Small/Mid Cap Value Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 37,173 | 41.41 | to | 38.03 | 1,511,111 | 0.75 | 1.25 | to | 1.80 | 23.40 | to | 22.73 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 38,695 | 33.56 | to | 30.99 | 1,275,378 | 0.67 | 1.25 | to | 1.80 | (12.73 | ) | to | (13.21 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 43,748 | 38.46 | to | 35.70 | 1,654,682 | 0.95 | 1.25 | to | 1.80 | 13.84 | to | 13.23 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 46,590 | 33.78 | to | 31.53 | 1,549,998 | 0.54 | 1.25 | to | 1.80 | 19.32 | to | 18.68 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 54,729 | 28.31 | to | 26.57 | 1,526,343 | 0.79 | 1.25 | to | 1.80 | (3.93 | ) | to | (4.45 | ) | ||||||||||||||||||||||||||||||||||||||||
TA T. Rowe Price Small Cap Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 927,098 | 46.19 | to | 41.91 | 37,820,408 | - | 1.25 | to | 2.65 | 31.13 | to | 29.34 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 1,013,020 | 35.23 | to | 32.40 | 31,597,222 | - | 1.25 | to | 2.65 | (8.24 | ) | to | (9.50 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 1,092,216 | 38.39 | to | 35.80 | 37,366,458 | - | 1.25 | to | 2.65 | 20.88 | to | 19.24 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 1,179,221 | 31.76 | to | 30.03 | 33,811,998 | - | 1.25 | to | 2.65 | 9.85 | to | 8.36 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 1,318,039 | 28.91 | to | 27.71 | 34,501,014 | - | 1.25 | to | 2.65 | 1.17 | to | (0.21 | ) | |||||||||||||||||||||||||||||||||||||||||
TA T. Rowe Price Small Cap Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 7,372 | 53.73 | to | 49.07 | 381,902 | - | 1.25 | to | 1.80 | 30.76 | to | 30.05 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 6,761 | 41.09 | to | 37.73 | 268,893 | - | 1.25 | to | 1.80 | (8.43 | ) | to | (8.93 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 9,067 | 44.87 | to | 41.43 | 395,752 | - | 1.25 | to | 1.80 | 20.52 | to | 19.87 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 9,249 | 37.23 | to | 34.56 | 335,165 | - | 1.25 | to | 1.80 | 9.64 | to | 9.04 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 9,652 | 33.96 | to | 31.70 | 320,094 | - | 1.25 | to | 1.80 | 0.89 | to | 0.35 | ||||||||||||||||||||||||||||||||||||||||||
TA WMC US Growth Initial Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 11,230,271 | 40.47 | to | 36.88 | 446,343,734 | 0.13 | 1.25 | to | 2.65 | 38.32 | to | 36.43 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 11,943,700 | 29.26 | to | 27.04 | 343,844,277 | 0.48 | 1.25 | to | 2.65 | (1.03 | ) | to | (2.39 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 13,407,187 | 29.56 | to | 27.70 | 390,459,587 | 0.42 | 1.25 | to | 2.65 | 27.61 | to | 25.87 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 14,994,920 | 23.17 | to | 22.00 | 342,544,499 | 0.40 | 1.25 | to | 2.65 | 1.54 | to | 0.16 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 16,722,509 | 22.82 | to | 21.97 | 376,658,725 | 0.72 | 1.25 | to | 2.65 | 5.53 | to | 4.09 | ||||||||||||||||||||||||||||||||||||||||||
TA WMC US Growth Service Class |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
12/31/2019 | 48,057 | 42.87 | to | 39.15 | 2,020,593 | - | 1.25 | to | 1.80 | 37.95 | to | 37.21 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2018 | 46,914 | 31.07 | to | 28.54 | 1,433,014 | 0.28 | 1.25 | to | 1.80 | (1.27 | ) | to | (1.81 | ) | ||||||||||||||||||||||||||||||||||||||||
12/31/2017 | 54,476 | 31.48 | to | 29.06 | 1,685,981 | 0.21 | 1.25 | to | 1.80 | 27.28 | to | 26.59 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2016 | 60,231 | 24.73 | to | 22.96 | 1,466,115 | 0.18 | 1.25 | to | 1.80 | 1.28 | to | 0.73 | ||||||||||||||||||||||||||||||||||||||||||
12/31/2015 | 62,855 | 24.42 | to | 22.79 | 1,512,969 | 0.52 | 1.25 | to | 1.80 | 5.29 | to | 4.73 |
(1) | See Footnote 1 |
* | These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the 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 contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the Mutual Fund in which the subaccounts invest. |
** | These amounts represent the annualized contract expenses of the subaccount, consisting primarily of mortality and expense charges, for each period indicated. These ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the Mutual Fund have been excluded. |
48
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
5. Financial Highlights (continued)
*** | These amounts represent the total return for the periods indicated, including changes in the value of the Mutual 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 variable account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. Total returns reflect a full twelve month period and total returns for subaccounts opened during the year have not been disclosed as they may not be indicative of a full year return. Expense ratios not in effect for the full twelve months are not reflected in the total return as they may not be indicative of a full year return. |
49
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
6. Administrative and Mortality and Expense Risk Charges
TPLIC deducts a daily administrative charge equal to an annual rate ranging from 0% to 0.40% of the daily net assets value of each subaccount for administrative expenses. TPLIC deducts an annual charge during the accumulation phase, not to exceed $35, proportionately from the subaccounts’ unit values. An annual charge ranging from 0.85% to 2.25% is deducted (based on the death benefit selected) from the unit values of the subaccounts of the Separate Account for TPLIC’s assumption of certain mortality and expense risks incurred in connection with the contract. The charge is assessed daily based on the net asset value of the Mutual Fund. Charges for administrative and mortality and expense risk are an expense of the subaccount. Charges reflected above are those currently assessed and may be subject to change. Contract owners should see their actual policy and any related attachments to determine their specific charges.
7. Income Tax
Operations of the Separate Account form a part of TPLIC, which is taxed as a life insurance company under Subchapter L of the Internal Revenue Code of 1986, as amended (the Code). The operations of the Separate Account are accounted for separately from other operations of TPLIC for purposes of federal income taxation. The Separate Account is not separately taxable as a regulated investment company under Subchapter M of the Code and is not otherwise taxable as an entity separate from TPLIC. Under existing federal income tax laws, the income of the Separate Account is not taxable to TPLIC, as long as earnings are credited under the variable annuity contracts.
50
Transamerica Premier Life Insurance Company
WRL Series Annuity Account
Notes to Financial Statements
8. Subsequent Events
The Separate Account has evaluated the financial statements for subsequent events through the date which the financial statements were issued. During this period, there were no subsequent events requiring recognition in the financial statements.
Events that are indicative of conditions that arose after the balance sheet date are disclosed, but do not result in an adjustment of the financial statements themselves. Since January 2020, the Coronavirus disease (COVID-19) pandemic and economic uncertainties have arisen which have impacted the Separate Account’s net assets. The extent to which the COVID-19 pandemic will continue to impact the net assets will depend on future developments, which are highly uncertain and cannot be estimated, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.
9. Related Parties
Transamerica Capital, Inc. (TCI), a wholesaling broker-dealer, is an affiliated entity of TPLIC and an indirect wholly owned subsidiary of AEGON N.V. TCI distributes TPLIC’s products through broker-dealers and other financial intermediaries.
The subaccounts invest in the mutual funds listed in Footnote 1. These investments include funds managed by Transamerica Asset Management, Inc. (TAM). Transamerica Fund Services, Inc. (TFS) serves as a transfer agent to TAM, and AEGON USA Asset Management Holding, LLC (AAM) serves as a sub-advisor for certain funds managed by TAM. TAM, TFS and AAM are affiliated entities of TPLIC and indirect wholly owned subsidiaries of AEGON N.V. Funds managed by TAM are identified by their fund name, which includes reference to Aegon, Transamerica or both. The Separate Account pays management fees to the related funds as detailed in the fund prospectus.
No charges other than those disclosed in Footnote 6 are deducted for the service rendered by related parties.
Contract owners may transfer funds between available subaccount options within the Separate Account. These transfers are performed at unit value at the time of the transfer.
10. Subsequent Events (Unaudited)
Effective October 1, 2020, TPLIC merged into Transamerica Life Insurance Company (TLIC) and the Separate Account became a segregated investment account of TLIC, an indirect wholly owned subsidiary of AEGON N.V., a holding company organized under the laws of the Netherlands. There is no anticipated impact to the financial statements or contract holders.
51
STATEMENT OF ADDITIONAL INFORMATION
WRL FREEDOM BELLWETHER®
VARIABLE ANNUITY
Issued through
WRL SERIES ANNUITY ACCOUNT
Offered by
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
This Statement of Additional Information (“SAI”) expands upon subjects discussed in the current prospectus for the WRL Freedom Bellwether® variable annuity offered by Western Reserve Life Assurance Co. of Ohio. You may obtain a copy of the prospectus dated May 1, 2008, by calling 1-800-851-9777 (Monday – Friday 8:30 a.m. to 7:00 p.m. Eastern Time), by writing to Western Reserve Life, Attention: Customer Care Group, 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499-0001 or by visiting our website at www.westernreserve.com. The prospectus sets forth information that a prospective investor should know before investing in a Contract. Terms used in the current prospectus for the Contract are incorporated in this SAI.
This SAI is not a prospectus and should be read only in conjunction with the prospectus for the Contract and with the prospectuses for the funds.
Dated: May 1, 2008
WRL00029-5/2008
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2
accumulation period | The period between the Contract date and the maturity date while the Contract is in force. | |
accumulation unit value | An accounting unit of measure we use to calculate subaccount values during the accumulation period. | |
administrative office | Our administrative office phone number is 1-800-851-9777. | |
age | The issue age, which is annuitant’s age on the birthday nearest the Contract date, plus the number of completed Contract years. When we use the term “age” in this SAI, it has the same meaning as “attained age” in the Contract. | |
annuitant | The person you named in the application (or later changed), to receive annuity payments. The annuitant may be changed as provided in the Contract’s death benefit provisions and annuity provision. | |
annuity unit value | An accounting unit of measure we use to calculate annuity payments from the subaccounts after the maturity date. | |
annuity value | The sum of the separate account value and the fixed account value at the end of any valuation period. | |
beneficiary(ies) | The person(s) you elect to receive the death benefit proceeds under the Contract. | |
cash value | The annuity value less any applicable premium taxes, any loans and unpaid accrued interest, the annual Contract charge, and any rider charges. | |
Code | The Internal Revenue Code of 1986, as amended. | |
Contract anniversary | The same day in each succeeding year as the Contract date. If there is no day in a calendar year which coincides with the Contract date, the Contract anniversary will be the first day of the next month. | |
Contract date | Generally the later of the date on which the initial purchase payment is received, or the date that the properly completed application is received, at Western Reserve’s administrative office. We measure Monthiversaries, Contract years, Contract months, and Contract anniversaries from the Contract date. | |
death benefit proceeds | If the owner who is the annuitant dies during the accumulation period, the death benefit proceeds are the amount, if any, payable under the death benefit described in your Contract. | |
death claim day | Any day after the death report day on which we receive a beneficiary’s completed election form regarding payment of his/her portion of the death benefit proceeds that are payable upon the death of an owner who is the annuitant. | |
death report day | The valuation date on which we have received both proof of death of an owner who is the annuitant and a beneficiary’s election regarding payment. If the spouse of the deceased owner/annuitant elects to continue (if sole beneficiary) the Contract, there are two death report days (one relating to the death of the first owner/annuitant to die; the second relating to the death of the spouse who continues the Contract). If there is no spousal continuation of the Contract, then there is only one death report day for the Contract. If there are multiple beneficiaries, the death report day is the earliest date on which we receive both proof of death and any beneficiary’s completed election form. |
3
fixed account | An investment option to which you can direct your money under the Contract, other than the separate account. It provides a guarantee of principal and interest. The assets supporting the fixed account are held in the general account. The fixed account is not available in all states. | |
fixed account value | During the accumulation period, your Contract’s value in the fixed account. | |
funds | Investment companies which are registered with the U.S. Securities and Exchange Commission. The Contract allows you to invest in the portfolios of the funds through our subaccounts. We reserve the right to add portfolios of other registered investment companies as investment choices under the Contract in the future. | |
in force | Condition under which the Contract is active and an owner is entitled to exercise all rights under the Contract. | |
maturity date | The date on which the accumulation period ends and annuity payments begin. The latest maturity date is the annuitant’s 90th birthday. | |
Monthiversary | The same day in the month as the Contract date. When there is no date in a calendar month that coincides with the Contract date, the Monthiversary is the first day of the next month. | |
NYSE | New York Stock Exchange. | |
nonqualified Contracts | Contracts issued other than in connection with retirement plans. | |
owner (you, your) | The person(s) entitled to exercise all rights under the Contract. The annuitant is an owner unless the application states otherwise, or unless a change of ownership is made at a later time. | |
portfolio | A separate investment portfolio of a fund. | |
purchase payments/ | ||
premium | Amounts paid by an owner or on an owner’s behalf to Western Reserve as consideration for the benefits provided by the Contract. When we use the term “purchase payment” or “premium” in this SAI, it has the same meaning as “net payment” in the Contract, which means the purchase payment less any applicable premium taxes. | |
qualified Contracts | Contracts issued in connection with retirement plans that qualify for special federal income tax treatment under the Code. | |
separate account | WRL Series Annuity Account, a unit investment trust consisting of subaccounts. Each subaccount of the separate account invests solely in shares of a corresponding portfolio of a fund. | |
separate account value | During the accumulation period, your Contract’s value in the separate account, which equals the sum of the values in each subaccount. | |
subaccount | A subdivision of the separate account that invests exclusively in the shares of a specified portfolio and supports the Contracts. Subaccounts corresponding to each portfolio hold assets under the Contract during the accumulation period. Other subaccounts corresponding to each portfolio will hold assets after the maturity date if you select a variable annuity payment option. | |
surrender | The termination of a Contract at the option of an owner. |
4
valuation date/ business day | Each day on which the NYSE is open for trading, except when a subaccount’s corresponding portfolio does not value its shares. Western Reserve is open for business on each day that the NYSE is open. When we use the term “business day,” it has the same meaning as valuation date. | |
valuation period | The period of time over which we determine the change in the value of the subaccounts in order to price accumulation units and annuity units. Each valuation period begins at the close of normal trading on the NYSE (currently 4:00 p.m. Eastern Time on each valuation date) and ends at the close of normal trading of the NYSE on the next valuation date. | |
Western Reserve | ||
(we, us, our) | Western Reserve Life Assurance Co. of Ohio. |
5
In order to supplement the description in the prospectus, the following provides additional information about Western Reserve and the Contract, which may be of interest to a prospective purchaser.
THE CONTRACT - GENERAL PROVISIONS
The Contract shall belong to the owner upon issuance of the Contract after completion of an application and delivery of the initial purchase payment. While the annuitant is living, the owner may: (1) assign the Contract; (2) surrender the Contract; (3) amend or modify the Contract with Western Reserve’s consent; (4) receive annuity payments or name a payee to receive the payments; and (5) exercise, receive and enjoy every other right and benefit contained in the Contract. The exercise of these rights may be subject to the consent of any assignee or irrevocable beneficiary; and of an owner’s spouse in a community or marital property state.
A successor owner may be named in the Contract application or in a written notice to our administrative office. The successor owner will become the new owner upon the owner’s death, if the owner is not the annuitant and dies before the annuitant. If no successor owner survives the owner and the owner dies before the annuitant, the owner’s estate will become the owner.
An owner may change the ownership of the Contract in a written notice to our administrative office. When this change takes effect, all rights of ownership in the Contract will pass to the new owner. A change of ownership may have tax consequences.
When there is a change of owner or successor owner, the change will take effect as of the date Western Reserve accepts the written notice at our administrative office. We assume no liability for any payments made, or actions taken before a change is accepted, and shall not be responsible for the validity or effect of any change of ownership. Changing an owner or naming a new successor owner cancels any prior choice of successor owner, but does not change the designation of the beneficiary or the annuitant.
The Contract and any endorsements thereon and the Contract application constitute the entire contract between Western Reserve and the owner. All statements in the application are representations and not warranties. No statement will cause the Contract to be void or to be used in defense of a claim unless contained in the application.
If the age or gender of the annuitant has been misstated, Western Reserve will change the annuity benefit payable to that which the purchase payments would have purchased for the correct age or gender. The dollar amount of any underpayment Western Reserve makes shall be paid in full with the next payment due such person or the beneficiary. The dollar amount of any overpayment Western Reserve makes due to any misstatement shall be deducted from payments subsequently accruing to such person or beneficiary. Any underpayment or overpayment will include interest at 5% per year, from the date of the wrong payment to the date of the adjustment. The age of the annuitant may be established at any time by the submission of proof Western Reserve finds satisfactory.
Addition, Deletion, or Substitution of Investments
We reserve the right, subject to compliance with applicable law, to add, remove or combine subaccounts, and substitute the shares that are held by the separate account or that the separate account for shares of another portfolio, at our discretion. We reserve the right to eliminate the shares of any portfolios of a fund and to substitute shares of another portfolio of a fund (or of another open-end registered investment company) if the shares of a portfolio are no longer available for investment or, if in our judgment further investment in any portfolio should become inappropriate in view of the purposes of the separate account. We will not, however, substitute shares attributable to an owner’s interest in a subaccount without notice to, and prior approval of, the Securities and Exchange Commission (the “SEC”) to the extent required by the Investment Company Act of 1940, as amended (the “1940 Act”), or other applicable law.
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We also reserve the right to establish additional subaccounts, each of which would invest in a new portfolio of a fund, or in shares of another investment company, with a specified investment objective. New subaccounts may be established when, in the sole discretion of Western Reserve, marketing, tax, investment or other conditions warrant, and any new subaccounts will be made available to existing owners on a basis to be determined by Western Reserve. We may also eliminate one or more subaccounts if, in our sole discretion, marketing, tax, investment or other conditions warrant. In the event any subaccount is eliminated, Western Reserve will notify you and request a reallocation of the amounts invested in the eliminated subaccount.
Similarly, Western Reserve may, at is discretion, close a subaccount to new investment (either transfers or premium payments). Any amounts that would otherwise be invested in a closed subaccount (for premium allocations, portfolio rebalancing, dollar cost averaging, automatic checking account or payroll deductions for period premiums, etc.) will, if you do not provide instructions for a new allocation be invested in the subaccount that invests in the Transamerica Money Market VP Fund (or in a similar portfolio of money market instruments). If a portfolio of money market instruments is unavailable, Western Reserve will reinvest the amounts in another subaccount, or in the fixed account, if appropriate.
In the event of any such substitution or change, we may make such changes in the Contracts and other annuity contracts as may be necessary or appropriate to reflect such substitution or change. If deemed by us to be in the best interests of persons having voting rights under the Contracts, the separate account may be operated as a management company under the 1940 Act, or subject to any required approval, it may be deregistered under the 1940 Act in the event such registration is no longer required.
We reserve the right to change the investment objective of any subaccount. Additionally, if required by law or regulation, we will not materially change an investment objective of the separate account or of a portfolio designated for a subaccount unless a statement of change is filed with and approved by the appropriate insurance official of the state of Western Reserve’s domicile, or deemed approved in accordance with such law or regulation.
During the lifetime of the annuitant and prior to the maturity date, the owner may choose an annuity payment option or change the election. If no election is made prior to the maturity date, annuity payments will be made under Payment Option D as Variable Life Income with 10 years of guaranteed payments.
Thirty days prior to the maturity date, we will mail to the owner a notice and a form upon which the owner can select allocation options for the annuity proceeds as of the maturity date. We reserve the right to limit transfers to once per year after the maturity date. If a variable annuity payment option is chosen, the owner must include in the written notice the subaccount allocation of the annuity proceeds as of the maturity date. If we do not receive that form or other written notice acceptable to us prior to the maturity date, the Contract’s existing allocation options will remain in effect. The owner may also, prior to the maturity date, select or change the frequency of annuity payments, which may be monthly, quarterly, semi-annually or annually, provided that the annuity payment option and payment frequency provides for payments of at least $20 per period. If none of these is possible, a lump sum payment will be made.
Determination of the First Variable or Fixed Payment. The amount of the first variable or fixed annuity payment is determined by multiplying the annuity proceeds times the appropriate rate for the annuity option selected. The rates are based on the Society of Actuaries 1983 Individual Mortality Table A with projection Scale G, and variable rates are based on a 5% effective annual assumed investment return and assuming a maturity date in the year 2000. Gender based mortality tables will be used unless prohibited by law.
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The amount of the first annuity payment depends upon the gender (if consideration of gender is allowed under state law) and adjusted age of the annuitant. The adjusted age is the annuitant’s actual age nearest birthday, at the maturity date, adjusted as follows:
Maturity Date |
Adjusted Age | |
Before 2001 | Actual Age | |
2001-2010 | Actual Age minus 1 | |
2011-2020 | Actual Age minus 2 | |
2021-2030 | Actual Age minus 3 | |
2031-2040 | Actual Age minus 4 | |
After 2040 | As determined by Western Reserve |
This adjustment assumes an increase in life expectancy, and therefore it results in lower payments than without such an adjustment.
Determination of Additional Variable Payments. The amount of variable annuity payments after the first will increase or decrease according to the annuity unit value which reflects the investment experience of the selected subaccount(s). Each variable annuity payment after the first will be equal to the number of units attributable to the Contract in each selected subaccount multiplied by the annuity unit value of that subaccount on the date the payment is processed. The number of such units is determined by dividing the first payment allocated to that subaccount by the annuity unit value of that subaccount on the date the first annuity payment is processed.
Death of Owner. Federal tax law requires that if any owner (including any successor owner who has become a current owner) dies before the maturity date, then the entire value of the Contract must generally be distributed within five years of the date of death of such owner. Special rules apply where (1) the spouse of the deceased owner is the sole beneficiary, (2) an owner is not a natural person and the primary annuitant dies or is changed, or (3) any owner dies after the maturity date. See Certain Federal Income Tax Consequences of this SAI for a detailed description of these rules. Other rules may apply to qualified Contracts.
If an owner is not the annuitant and dies before the annuitant:
• | if no successor owner is named and alive on the death report day, the owner’s estate will become the new owner. The cash value must be distributed within five years of the former owner’s death; |
• | if the successor owner is alive and is the owner’s spouse, the Contract will continue with the spouse as the new owner; or |
• | if the successor owner is alive and is not the owner’s spouse, the successor owner will become the new owner. The cash value must be distributed either: |
• | within five years of the former owner’s death; or |
• | over the lifetime of the new owner, if a natural person, with payments beginning within one year of the former owner’s death; or |
• | over a period that does not exceed the life expectancy (as defined by the Code and regulations adopted under the Code) of the new owner, if a natural person, with payments beginning within one year of the former owner’s death. |
To determine payments, we may use the “account-based” method under which we recalculate the amount of the payment each year by dividing the remaining unpaid proceeds by the beneficiary’s current life expectancy, with payments beginning with one year of the deceased owner’s death.
Death of Annuitant. Due proof of death of the annuitant is proof that the annuitant died prior to the commencement of annuity payments. Upon receipt of this proof and an election of a method of settlement and return of the Contract, the death benefit generally will be paid within seven days, or as soon thereafter as we have sufficient information about the beneficiary(ies) to make the payment. The beneficiary may receive the amount payable in a lump sum cash benefit, or, subject to any limitation under any state or federal law, rule, or regulation, under one of the annuity payment options unless a settlement agreement is effective at an owner’s death preventing such election.
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If the annuitant who is not an owner dies during the accumulation period and an owner is a natural person other than the annuitant, the owner will automatically become the annuitant and this Contract will continue. If a successor owner is named and is the owner’s spouse, the successor owner will automatically become the new annuitant and this Contract will continue. If the annuitant dies during the accumulation period and an owner is either (1) the same individual as the annuitant; or (2) other than a natural person, then the death benefit proceeds are payable to the beneficiary in a lump sum distribution.
If the annuitant who is an owner dies before the maturity date, and the sole beneficiary is not the deceased annuitant’s spouse who elects to continue the contract, (1) the death benefit must be distributed within five years of the date of the annuitant/deceased owner’s death, or (2) payments must begin no later than one year after the annuitant/deceased owner’s death and must be made (i) for the beneficiary’s lifetime or (ii) for a period certain (so long as any certain period does not exceed the beneficiary’s life expectancy). Payments may be made in accordance with the “account-based” method under which we recalculate the amount of the payment each year by dividing the remaining unpaid proceeds by the beneficiary’s current life expectancy, with payments beginning within one year of the deceased owner’s death. Death benefit proceeds which are not paid to or for the benefit of a natural person must be distributed within five years of the date of the annuitant/deceased owner’s death. If the sole beneficiary is the annuitant/deceased owner’s surviving spouse, such spouse may elect to continue the Contract as the new annuitant and owner instead of receiving the death benefit. (See Certain Federal Income Tax Consequences.) We will increase the annuity value as of the death report day to equal the death benefit proceeds as of the death report day.
If a beneficiary elects to receive the death benefit proceeds under the alternate payment option (1) or 2(ii) above, then we will: (a) allow partial withdrawals and transfers among the subaccounts and the fixed account; (b) deduct the transfer fee from each transfer after the first 12 transfers during the Contract year; (c) deduct the annual Contract charge each Contract year; and (d) not permit payment of the death benefit proceeds under the annuity provisions of the Contract upon complete distribution.
The beneficiary may name a new beneficiary for payment of the death benefit proceeds. If no new beneficiary is named, such payment will be made to the contingent beneficiary if named by the owner. If no new beneficiary or contingent beneficiary is named, such payment will be made to the beneficiary’s estate.
Beneficiary. The beneficiary designation in the application will remain in effect until changed. An owner may change the designated beneficiary(ies) during the annuitant’s lifetime by sending written notice to us at our administrative office. A beneficiary’s consent to such change is not required unless the beneficiary was irrevocably designated or law requires consent. (If an irrevocable beneficiary dies, an owner may then designate a new beneficiary.) The change will take effect as of the date an owner signs the written notice. We will not be liable for any payment made before the written notice is received at our administrative office. Unless we receive written notice from an owner to the contrary, no beneficiary may assign any payments under the Contract before such payments are due. To the extent permitted by law, no payments under the Contract will be subject to the claims of any beneficiary’s creditors.
Additional Earnings Rider. The following examples illustrate the additional death benefit payable under the Additional Earnings Rider, as well as the effect of a partial withdrawal on the Additional Earnings Rider Amount.
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EXAMPLE 1 – Basic Additional Earnings Rider Example, with no additional purchase payments or partial withdrawals (Assumed Facts for Example) | ||||||
At Rider Issue | 60 | Rider Issue Age | ||||
40 | % | Additional Earnings Factor (AEF) | ||||
250 | % | Rider Earnings Limit (REL) | ||||
$ | 1,000,000 | Maximum Rider Benefit (MRB) | ||||
$ | 40,000.00 | Rider Base at issue (RBI) (equal to the greater of the death benefit proceeds on the Rider Date or the Annuity Value on that date) | ||||
At Death | $ | 75,000.00 | Death Benefit Proceeds (DBP) | |||
$ | 35,000.00 | Rider Earnings (RE) = DBP – RBI = 75,000 – 40,000 | ||||
$ | 14,000.00 | Additional Earnings Rider Amount = lesser of
a) RE * AEF = 35,000 * 40% = 14,000 or
b) REL * RBI * AEF = 250% * 40,000 * 40% = 40,000 or
c) MRB = 1,000,000. |
EXAMPLE 2 – Additional Earnings Rider Example, showing the effect of a partial withdrawal (Assumed Facts for Example) | ||||||
At Rider Issue | 60 | Rider Issue Age | ||||
40 | % | Additional Earnings Factor (AEF) | ||||
250 | % | Rider Earnings Limit (REL) | ||||
$ | 1,000,000 | Maximum Rider Benefit (MRB) | ||||
$ | 40,000.00 | Rider Base at issue (RBI) (equal to the greater of the death benefit proceeds on the Rider Date or the Annuity Value on that date) | ||||
At Partial Withdrawal | $ | 50,000.00 | Annuity Value before partial withdrawal (AV) | |||
$ | 15,000.00 | Partial Withdrawal (PW) (including withdrawal charges) | ||||
$ | 12,000.00 | Withdrawal Adjustment to Base (WAB) = PW * RBI / AV = 15,000 * 40,000 / 50,000 | ||||
$ | 28,000.00 | Rider Base after partial withdrawal (RB) = RBI – WAB = 40,000 – 12,000 | ||||
At Death | $ | 70,000.00 | Death Benefit Proceeds (DBP) | |||
$ | 42,000.00 | Rider Earnings (RE) = DBP – RB = 70,000 – 28,000 | ||||
$ | 16,800.00 | Additional Earnings Rider Amount = lesser of
a) RE * AEF = 42,000 * 40% = 16,800 or
b) REL * RB * AEF = 250% * 28,000 * 40% = 28,000 or
c) MRB = 1,000,000. |
During the annuitant’s lifetime and prior to the maturity date (subject to any irrevocable beneficiary’s rights) the owner may assign any rights or benefits provided by a nonqualified Contract. The assignment of a Contract will be treated as a distribution of the annuity value for federal tax purposes. Any assignment must be made in writing and accepted by us. An assignment will be effective as of the date the request is received at our administrative office and is accepted by us. We assume no liability for any payments made or actions taken before a change is accepted and shall not be responsible for the validity or effect of any assignment.
With regard to qualified Contracts, any assignment may be subject to restrictions, penalties, taxation as a distribution, or even prohibition under the Code, and must be permitted under the terms of the underlying retirement plan.
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Proof of Age, Gender and Survival
We may require proper proof of age and gender of any annuitant or joint annuitant prior to making the first annuity payment. Prior to making any payment, we may require proper proof that the annuitant or joint annuitant is alive and legally qualified to receive such payment. If required by law to ignore differences in gender of any payee, annuity payments will be determined using unisex rates.
The Contract will not share in Western Reserve’s surplus earnings; no dividends will be paid.
The Contract may be acquired by an employee or registered representative of any broker/dealer authorized to sell the Contract or by their spouse or minor children, or by an officer, director, trustee or bona fide full-time employee of Western Reserve or its affiliated companies or their spouse or minor children. In such a case, we may credit an amount equal to a percentage of each purchase payment to the Contract due to lower acquisition costs we experience on those purchases. We may offer, in our discretion, certain employer sponsored savings plans, reduced or waived fees and charges including, but not limited to, the annual Contract charge, for certain sales under circumstances which may result in savings of certain costs and expenses. In addition, there may be other circumstances of which we are not presently aware which could result in reduced sales or distribution expenses. Credits to the Contract or reductions in these fees and charges will not be unfairly discriminatory against any owner.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary does not constitute tax advice. It is a general discussion of certain of the expected federal income tax consequences of investment in and distributions with respect to a Contract, based on the Internal Revenue Code of 1986, as amended, proposed and final Treasury regulations thereunder, judicial authority, and current administrative rulings and practice. This summary discusses only certain federal income tax consequences to “United States Persons,” and does not discuss state, local, or foreign tax consequences. United States Persons means citizens or residents of the United States, domestic corporations, domestic partnerships and trusts or estates that are subject to United States federal income tax regardless of the source of their income.
Diversification Requirements. Section 817(h) of the Code provides that in order for a non-qualified variable contract which is based on a segregated asset account to qualify as an annuity contract under the Code, the investments made by such account must be “adequately diversified” in accordance with Treasury regulations. The Treasury regulations issued under Section 817(h) (Treas. Reg. § 1.817-5) apply a diversification requirement to each of the subaccounts of the separate account. The separate account, through the funds and their portfolios, intends to comply with the diversification requirements of the Treasury.
Section 817(h) applies to variable annuity contracts other than pension plan contracts. The regulations reiterate that the diversification requirements do not apply to pension plan contracts. All of the qualified retirement plans (described below) are defined as pension plan contracts for these purposes. Notwithstanding the exception of qualified contracts from application of the diversification rules, the investment vehicle for Western Reserve’s qualified Contracts (i.e., the funds) will be structured to comply with the diversification standards because it serves as the investment vehicle for nonqualified contracts as well as qualified contracts.
Owner Control. In some circumstances, owners of variable contracts who retain excessive control over the investment of the underlying separate account assets may be treated as the owners of those assets and may be subject to tax on income produced by those assets. Although published guidance in this area does not address certain aspects of the Contracts, we believe that the owner of a Contract should not be treated as the owner of the separate account assets. We reserve the right to modify the Contracts to bring them into conformity with applicable standards should such modification be necessary to prevent owners of the Contracts from being treated as the owners of the underlying separate account assets.
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Distribution Requirements. The Code also requires that nonqualified contracts contain specific provisions for distribution of contract proceeds upon the death of an owner. In order to be treated as an annuity contract for federal income tax purposes, the Code requires that such contracts provide that if any owner dies on or after the maturity date and before the entire interest in the contract has been distributed, the remaining portion must be distributed at least as rapidly as under the method in effect on such owner’s death. If any owner dies before the maturity date, the entire interest in the contract must generally be distributed within five years after such owner’s date of death or be applied to provide an immediate annuity under which payments will begin within one year of such owner’s death and will be made for the life of the beneficiary or for a period not extending beyond the life expectancy of the beneficiary. However, if such owner’s death occurs prior to the maturity date, and such owner’s surviving spouse is named beneficiary, then the contract may be continued with the surviving spouse as the new owner. If any owner is not a natural person, then for purposes of these distribution requirements, the primary annuitant shall be treated as an owner and any death or change of such primary annuitant shall be treated as the death of the owner. The Contract contains provisions intended to comply with these requirements of the Code. No regulations interpreting these requirements of the Code have yet been issued and thus no assurance can be given that the provisions contained in the Contracts satisfy all such Code requirements. The provisions contained in the Contracts will be reviewed and modified if necessary to maintain their compliance with the Code requirements when clarified by regulation or otherwise.
The following discussion is based on the assumption that the Contract qualifies as an annuity contract for federal income tax purposes.
In General. Code Section 72 governs taxation of annuities in general. We believe that an owner who is an individual will not be taxed on increases in the value of a contract until such amounts are withdrawn or distributed. For this purpose, the assignment, pledge, or agreement to assign or pledge any portion of the contract value, and in the case of a qualified contract, any portion of an interest in the plan, generally will be treated as a distribution. The taxable portion of a distribution is taxable as ordinary income.
Non-Natural Persons. Pursuant to Section 72(u) of the Code, a nonqualified contract held by a taxpayer other than a natural person generally will not be treated as an annuity contract under the Code; accordingly, an owner who is not a natural person will recognize as ordinary income for a taxable year the excess, if any, of the contract value over the “investment in the contract”. There are some exceptions to this rule and a prospective purchaser of the contract that is not a natural person should discuss these with a competent tax adviser.
Withholding. The portion of any distribution under a Contract that is includable in gross income will be subject to federal income tax withholding unless the recipient of such distribution elects not to have federal income tax withheld and properly notifies us. For certain qualified Contracts, certain distributions are subject to mandatory withholding. The withholding rate varies according to the type of distribution and the owner’s tax status. For qualified Contracts, “eligible rollover distributions” from section 401(a) plans, section 403(a) annuities and section 403(b) tax-sheltered annuities and governmental section 457 deferred compensation plans are subject to a mandatory federal income tax withholding of 20%. For this purpose, an eligible rollover distribution is a distribution from such a plan, except certain distributions such as distributions required by the Code, hardship distributions, certain after-tax contributions, or distributions in a specified annuity form. The 20% withholding does not apply, however, to nontaxable distributions or if the owner chooses a “direct rollover” from the plan to another tax-qualified plan or IRA.
Qualified Contracts. The qualified Contract is designed for use with several types of tax-qualified retirement plans. The tax rules applicable to participants and beneficiaries in tax-qualified retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits; distributions prior to age 591⁄2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. Some retirement plans are
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subject to distribution and other requirements that are not incorporated into the Contracts and our Contract administration procedures. Owners, participants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contract comply with applicable law.
For qualified plans under sections 401(a), 403(a), 403(b), and 457, the Code requires that distributions generally must commence no later than the later of April 1 of the calendar year following the calendar year in which the owner (or plan participant) (i) reaches age 701⁄2 or (ii) retires, and must be made in a specified form or manner. If the plan participant is a “5 percent owner” (as defined in the Code), or in the case of an IRA (other than a Roth IRA) distributions generally must begin no later than April 1 of the calendar year in which the owner (or plan participant) reaches age 701⁄2. Each owner is responsible for requesting distributions under the Contract that satisfy applicable tax rules.
If you are attempting to satisfy minimum required distribution rules through partial surrenders, the value of any enhanced death benefit or other optional rider may need to be included in calculating the amount required to be distributed. Consult a tax advisor.
We make no attempt to provide more than general information about use of the Contract with the various types of retirement plans. Purchasers of Contracts for use with any retirement plan should consult their legal counsel and tax advisor regarding the suitability of the Contract.
Individual Retirement Annuities. In order to qualify as a traditional individual retirement annuity (“IRA”) under section 408(b) of the Code, a Contract must contain certain provisions: (i) the owner must be the annuitant; (ii) the Contract generally is not transferable by the owner, e.g., the owner may not designate a new owner, designate a contingent owner or assign the Contract as collateral security; (iii) subject to special rules, the total purchase payments for any tax year on behalf of any individual may not exceed $5,000 for 2008 ($6,000 if age 50 or older), except in the case of a rollover amount or contribution under sections 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code; (iv) annuity payments or partial withdrawals must begin no later than April 1 of the calendar year following the calendar year in which the annuitant attains age 701⁄2 and must be made in a specified form and manner; (v) an annuity payment option with a period certain that will guarantee annuity payments beyond the life expectancy of the annuitant and the beneficiary may not be selected; (vi) certain payments of death benefits must be made in the event the annuitant dies prior to the distribution of the annuity value; (vii) the entire interest of the owner is non-forfeitable, and (viii) premiums must not be fixed. Contracts intended to qualify as traditional IRAs under section 408(b) of the Code contain such provisions. Amounts in the IRA (other than nondeductible contributions) are taxed when distributed from the IRA. Distributions prior to age 591⁄2 (unless certain exceptions apply) are subject to a 10% penalty tax.
Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under section 408A of the Code, contains many of the same provisions as a traditional IRA. However, there are some differences. First, the contributions are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA may be subject to tax and other special rules may apply to the rollover or conversion and to distributions attributable thereto. You should consult a tax advisor before combining any converted amounts with any other Roth IRA contributions, including any other conversion amounts from other tax years. The Roth IRA is available to individuals with earned income and whose modified adjusted gross income is under $116,000 for single filers, $169,000 for married filing jointly, and $10,000 for married filing separately. The amount per individual that may be contributed to all IRAs (Roth and traditional) is $5,000 for 2008 ($6,000 if age 50 or older). Secondly, the distributions are taxed differently. The Roth IRA offers tax-free distributions when made five tax years after the first contribution to any Roth IRA of the individual and made after attaining age 591⁄2, or to pay for qualified first time homebuyer expenses (lifetime maximum of $10,000), or due to death or disability. All other distributions are subject to income tax when made from earnings and may be subject to a premature withdrawal penalty tax unless an exception applies. A 10% penalty tax may apply to amounts attributable to a conversion from an IRA if the amounts are distributed within the five taxable years beginning with the year in which the conversion was made. Unlike the traditional IRA, there are no minimum required distributions during the owner’s lifetime; however, required distributions at death are generally the same.
Section 403(b) Plans. Under section 403(b) of the Code, payments made by public school systems and certain tax exempt organizations to purchase Contracts for their employees are excludable from the gross income of the
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employee, subject to certain limitations. However, such payments may be subject to FICA (Social Security) taxes. The Contract includes a death benefit that in some cases may exceed the greater of the purchase payments or the annuity value. The death benefit could be characterized as an incidental benefit, the amount of which is limited in any tax-sheltered annuity under section 403(b). Because the death benefit may exceed this limitation, employers using the Contract in connection with such plans should consult their tax advisor. Additionally, in accordance with the requirements of the Code, section 403(b) annuities generally may not permit distribution of (i) elective contributions made in years beginning after December 31, 1988, (ii) earnings on those contributions, and (iii) earnings on amounts attributed to elective contributions held as of the end of the last year beginning before January 1, 1989. Distributions of such amounts will be allowed only upon the death of the employee, on or after attainment of age 591⁄2, severance from employment, disability, or financial hardship, except that income attributable to elective contributions may not be distributed in the case of hardship.
Corporate Pension, Profit Sharing Plans and H.R. 10 Plans. Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of retirement plans for employees and self-employed individuals to establish qualified plans for themselves and their employees. Such retirement plans may permit the purchase of the Contracts to accumulate retirement savings. Adverse tax consequences to the plan, the participant or both may result if the Contract is assigned or transferred to any individual as a means to provide benefit payments. The Contract includes a death benefit that in some cases may exceed the greater of the purchase payments or the annuity value. The death benefit could be characterized as an incidental benefit, the amount of which is limited in a pension or profit-sharing plan. Because the death benefit may exceed this limitation, employers using the Contract in connection with such plans should consult their tax advisor.
Deferred Compensation Plans. Section 457 of the Code, while not actually providing for a qualified plan (as that term is used in the Code), provides for certain deferred compensation plans with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and tax exempt organizations. The Contracts can be used with such plans. Under such plans a participant may specify the form of investment in which his or her participation will be made. For non-governmental section 457 plans, all such investments, however, are owned by the sponsoring employer, and are subject to the claims of the general creditors of the sponsoring employer. Depending on the terms of the particular plan, a non-governmental employer may be entitled to draw on deferred amounts for purposes unrelated to its section 457 plan obligations.
Western Reserve at present is taxed as a life insurance company under Part I of Subchapter L of the Code. The separate account is treated as part of us and, accordingly, will not be taxed separately as a “regulated investment company” under Subchapter M of the Code. We do not expect to incur any federal income tax liability with respect to investment income and net capital gains arising from the activities of the separate account retained as part of the reserves under the Contract. Based on this expectation, it is anticipated that no charges will be made against the separate account for federal income taxes. If, in future years, any federal income taxes are incurred by us with respect to the separate account, we may make a charge to the separate account.
Allocations of a purchase payment directed to a subaccount are credited in the form of accumulation units. Each subaccount has a distinct accumulation unit value. The number of units credited is determined by dividing the purchase payment or amount transferred to the subaccount by the accumulation unit value of the subaccount as of the end of the valuation period during which the allocation is made. For each subaccount, the accumulation unit value for a given business day is based on the net asset value of a share of the corresponding portfolio of a fund less any applicable charges or fees.
Upon allocation to the selected subaccount of the separate account, purchase payments are converted into accumulation units of the subaccount. The number of accumulation units to be credited is determined by dividing the dollar amount allocated to each subaccount by the value of an accumulation unit for that subaccount as next determined after the premium payment is received at the administrative and service office or, in the case of the
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initial premium payment, when the enrollment form is completed, whichever is later. The value of an accumulation unit for each subaccount was arbitrarily established at the inception of each subaccount. Thereafter, the value of an accumulation unit is determined as of the close of trading on each day the New York Stock Exchange is open for business.
An index (the “net investment factor”) which measures the investment performance of a subaccount during a valuation period is used to determine the value of an accumulation unit for the next subsequent valuation period. The net investment factor may be greater or less than or equal to one; therefore, the value of an accumulation unit may increase, decrease, or remain the same from one valuation period to the next. You bear this investment risk. The net investment performance of a subaccount and deduction of certain charges affect the accumulation unit value.
The net investment factor for any subaccount for any valuation period is determined by dividing (a) by (b) and subtracting (c) from the result, where:
(a) | is the net result of: |
(1) | the net asset value per share of the shares held in the subaccount determined at the end of the current valuation period, plus |
(2) | the per share amount of any dividend or capital gain distribution made with respect to the shares held in the subaccount if the ex-dividend date occurs during the current valuation period, plus or minus |
(3) | a per share credit or charge for any taxes determined by WRL to have resulted during the valuation period from the investment operations of the subaccount; |
(b) | is the net asset value per share of the shares held in the subaccount determined as of the end of the immediately preceding valuation period; and |
(c) | is an amount representing the separate account charge and any optional benefit fees, if applicable. |
Illustration of Separate Account Accumulation Unit Value Calculations
Formula and Illustration for Determining the Net Investment Factor
Net Investment Factor = | (A + B - C) - E | |
D |
Where:
A = | The net asset value of an underlying fund portfolio share as of the end of the current valuation period. | |||
Assume | A = $11.57 | |||
B = | The per share amount of any dividend or capital gains distribution since the end of the immediately preceding valuation period. | |||
Assume | B = 0 | |||
C = | The per share charge or credit for any taxes reserved for at the end of the current valuation period. | |||
Assume | C = 0 | |||
D = | The net asset value of an underlying fund portfolio share at the end of the immediately preceding valuation period. | |||
Assume | D = $11.40 | |||
E = | The daily deduction for the mortality and expense risk fee and the administrative charge, and any optional benefit fees. Assume E totals 1.40% on an annual basis; on a daily basis, this equals .000038091. |
Then, the net investment factor = | ($11.57 + 0 - 0) - .000038091 = Z = 1.014874190 | |
($11.40) |
15
Formula and Illustration for Determining Accumulation Unit Value
Accumulation Unit Value = A * B
Where:
A = | The accumulation unit value for the immediately preceding valuation period. | |||
Assume | = $X | |||
B = | The net investment factor for the current valuation period. | |||
Assume | = Y |
Then, the accumulation unit value = $X * Y = $Z
Annuity Unit Value And Annuity Payment Rates
The amount of variable annuity payments will vary with annuity unit values. Annuity unit values rise if the net investment performance of the subaccount (that is, the portfolio performance minus subaccount fees and charges including the mortality and expense risk and administrative charges that will equal an annual rate of 1.40%) exceeds the assumed interest rate of 5% annually. Conversely, annuity unit values fall if the net investment performance of the subaccount is less than the assumed rate. The value of a variable annuity unit in each subaccount was established at $10.00 on the date operations began for that subaccount. The value of a variable annuity unit on any subsequent business day is equal to (a) multiplied by (b) multiplied by (c), where:
(a) | is the variable annuity unit value for that subaccount on the immediately preceding business day; |
(b) | is the net investment factor for that subaccount for the valuation period; and |
(c) | is the investment return adjustment factor for the valuation period. |
The investment return adjustment factor for the valuation period is the product of discount factors of .99986634 per day to recognize the 5% effective annual assumed investment return. The valuation period is the period from the close of the immediately preceding business day to the close of the current business day.
The net investment factor for the Contract used to calculate the value of a variable annuity unit in each subaccount for the valuation period is determined by dividing (i) by (ii) and subtracting (iii) from the result, where:
(i) | is the result of: |
(1) | the net asset value of a portfolio share held in that subaccount determined at the end of the current valuation period; plus |
(2) | the per share amount of any dividend or capital gain distributions made by the portfolio for shares held in that subaccount if the ex-dividend date occurs during the valuation period; plus or minus |
(3) | a per share charge or credit for any taxes reserved for which we determine to have resulted from the investment operations of the subaccount. |
(ii) | is the net asset value of a portfolio share held in that subaccount determined as of the end of the immediately preceding valuation period. |
(iii) | is a factor representing the mortality and expense risk charge and the administrative charge. This factor is equal, on an annual basis, to 1.40% of the daily net asset value of the portfolio share held in that subaccount. |
The dollar amount of subsequent variable annuity payments will depend upon changes in applicable annuity unit values.
The annuity payment rates vary according to the annuity option elected and the gender and adjusted age of the annuitant at the maturity date. See Annuity Payment Options – Determination of the First Variable and Fixed Payment, which contains a table for determining the adjusted age of the annuitant.
16
Illustration of Calculations for Annuity Unit Value
and Variable Annuity Payments
Formula and Illustration for Determining Annuity Unit Value
Annuity unit value = ABC
Where: | A = | Annuity unit value for the immediately preceding valuation period. | ||||
Assume | = $X | |||||
B = | Net investment factor for the valuation period for which the annuity unit value is being calculated. | |||||
Assume | = Y | |||||
C = | A factor to neutralize the assumed interest rate of 5% built into the annuity tables used. | |||||
Assume | = Z |
Then, the annuity unit value is: $XYZ = $Q
Formula and Illustration for Determining Amount of
First Monthly Variable Annuity Payment
First monthly variable annuity payment = | AB | |||
$1,000 |
Where: | A = | The annuity value as of the maturity date. | ||||
Assume | = $X | |||||
B = | The annuity purchase rate per $1,000 based upon the option selected, the gender and adjusted age of the annuitant according to the tables contained in the Contract. | |||||
Assume | = $Y |
Then, the first monthly variable annuity payment = | $X$Y = $Z 1,000 |
Formula and Illustration for Determining the Number of Annuity Units
Represented by Each Monthly Variable Annuity Payment
Number of annuity units = | A | |||
B |
Where: | A = | The dollar amount of the first monthly variable annuity payment. | ||||
Assume | = $X | |||||
B = | The annuity unit value for the valuation date on which the first monthly payment is due. | |||||
Assume | = $Y |
Then, the number of annuity units = | $X = Z | |||
$Y |
Yield - The yield quotation set forth in the prospectus for the Transamerica Money Market VP subaccount is for the seven days ended on the date of the most recent balance sheet of the separate account included in the registration statement, and is computed by determining the net change, exclusive of capital changes and income other than investment income, in the value of a hypothetical pre-existing account having a balance of one unit in the Transamerica Money Market VP subaccount at the beginning of the period, subtracting a hypothetical charge reflecting deductions from owner accounts, and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return, and multiplying the base period return by (365/7) with the resulting figure carried to at least the nearest hundredth of one percent.
17
Effective Yield - The effective yield quotation for the Transamerica Money Market VP subaccount set forth in the prospectus is for the seven days ended on the date of the most recent balance sheet of the separate account included in the registration statement. The effective yield is computed by determining the net change, exclusive of capital changes and income other than investment income, in the value of a hypothetical pre-existing subaccount having a balance of one unit in the Transamerica Money Market VP subaccount at the beginning of the period. A hypothetical charge, reflecting deductions from owner accounts, is subtracted from the balance. The difference is divided by the value of the subaccount at the beginning of the base period to obtain the base period return, which is then compounded by adding 1. Next, the sum is raised to a power equal to 365 divided by 7, and 1 is subtracted from the result. The following formula describes the computation:
EFFECTIVE YIELD = ({BASE PERIOD RETURN + 1} 365/7) – 1 |
The effective yield is shown at least to the nearest hundredth of one percent.
Hypothetical Charge - For purposes of the yield and effective yield computations, the hypothetical charge reflects all fees and charges that are charged to all owner accounts in proportion to the length of the base period, including the annual Contract charge. The yield and effective yield quotations do not reflect any deduction for premium taxes or transfer charges that may be applicable to a particular Contract. Nor do the yield and effective yield calculations take into account the surrender charges imposed under the Contract or the charges for any optional riders. No fees or sales charges are assessed upon annuitization under the Contracts, except premium taxes. Realized gains and losses from the sale of securities, and unrealized appreciation and depreciation of assets held by the Transamerica Money Market VP subaccount and the fund are excluded from the calculation of yield.
The yield on amounts held in the Transamerica Money Market VP subaccount normally will fluctuate on a daily basis. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields or rates of return. The Transamerica Money Market VP subaccount actual yield is affected by changes in interest rates on money market securities, average portfolio maturity of the Transamerica Money Market VP, the types and quality of portfolio securities held by the Transamerica Money Market VP and its operating expenses. Because of the charges and deductions imposed under a Contract, the yield for the Transamerica Money Market VP Subaccount will be lower than the yield for the corresponding money market portfolio.
The yield quotations for all of the subaccounts except the Transamerica Money Market VP subaccount, representing the accumulation period set forth in the prospectus is based on the 30-day period ended on the date of the most recent balance sheet of the separate account and are computed by dividing the net investment income per unit earned during the period by the maximum offering price per unit on the last date of the period, according to the following formula:
YIELD = 2[ (a – b + 1)6 -1] | ||||
cd |
Where: | a = | net investment income earned during the period by the corresponding portfolio of the fund attributable to shares owned by the subaccount. | ||
b = | expenses accrued for the period (net of reimbursement). | |||
c = | the average daily number of units outstanding during the period. | |||
d = | the maximum offering price per unit on the last day of the period. |
For purposes of the yield quotations for all of the subaccounts except the Transamerica Money Market VP subaccount, the calculations take into account all fees that are charged to all owner accounts during the accumulation period, including the annual Contract charge. The calculations do not take into account any premium taxes or any transfer charges. Nor do the yield calculations take into account the surrender charges imposed under the Contract or the charges for any optional riders.
18
Premium taxes currently range from 0% to 3.5% of purchase payments depending upon the jurisdiction in which the Contract is delivered.
The yield on amounts held in the subaccounts of the separate account normally will fluctuate over time. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields or rates of return. A subaccount’s actual yield is affected by the types and quality of its investments and its operating expenses. Because of the charges and deductions imposed under a Contract, the yield for all subaccounts (including the Transamerica Money Market VP Subaccount) will be lower than the yield for the corresponding underlying portfolio.
The total return quotations set forth in the prospectus for all subaccounts, except the Transamerica Money Market VP subaccount, holding assets for the Contracts during the accumulation period are average annual total return quotations for the one, five, and ten-year periods (or, if a subaccount has been in existence for a period of less than one, five or ten years, for such lesser period) ended on the date of the most recent balance sheet of the separate account, and for the period from the date any subaccount investing in an underlying portfolio commenced operations until the aforesaid date. The quotations are computed by determining the average annual compounded rates of return over the relevant periods that would equal the initial amount invested to the ending redeemable value, adjusted to reflect current subaccount charges, according to the following formula:
P(1 + T)n = ERV |
Where: | P | = | a hypothetical initial payment of $1,000 | |||
T | = | average annual total return | ||||
n | = | number of years | ||||
ERV | = | ending redeemable value of a hypothetical $1,000 payment made at the | ||||
beginning of each period at the end of each period. |
For purposes of the total return quotations for all of the subaccounts, except the Transamerica Money Market VP subaccount, the calculations take into account all current fees that are charged under the Contract to all owner accounts during the accumulation period except the optional Additional Earnings Rider. Such fees include the mortality and expense risk charge, the administrative charge, and the annual Contract charge. The calculations do not reflect any deduction for premium taxes or any transfer charge that may be applicable to a particular Contract.
We may present the total return data stated in the prospectus on a non-standardized basis. This means that the data will not be reduced by all the fees and charges under the Contract and that the data may be presented for different time periods and for different purchase payment amounts. Non-standardized performance data will only be disclosed if standardized performance data for the required periods is also disclosed.
We may also disclose cumulative total returns and average annual compound rates of return (T) for the subaccounts based on the inception date of the subaccounts investing in the underlying portfolios. We calculate cumulative total returns according to the following formula:
(1 + T)n - 1 |
Where: | T and n are the same values as above |
In addition, we may present historic performance data for the portfolios since their inception reduced by some or all of the fees and charges under the Contract. Such adjusted historic performance includes data that precedes the inception dates of the subaccounts. This data is designed to show the performance that would have resulted if the Contract had been in existence during that time.
For instance, we may disclose average annual total returns for the portfolios reduced by some or all fees and charges under the Contract, as if the Contract had been in existence. Such fees and charges include the mortality and
19
expense risk charge, the administrative charge, and the annual Contract charge. Such data may or may not assume a complete surrender of the Contract at the end of the period. The charge for the optional Additional Earnings Rider will not be deducted.
Advertising and Sales Literature
From time to time we may refer to the diversifying process of asset allocation based on the Modern Portfolio Theory developed by Nobel Prize winning economist Harry Markowitz. The basic assumptions of Modern Portfolio Theory are: (1) the selection of individual investments has little impact on portfolio performance, (2) market timing strategies seldom work, (3) markets are efficient, and (4) portfolio selection should be made among asset classes. Modern Portfolio Theory allows an investor to determine an efficient portfolio selection that may provide a higher return with the same risk or the same return with lower risk.
When presenting the asset allocation process we may outline the process of personal and investment risk analysis including determining individual risk tolerances and a discussion of the different types of investment risk. We may classify investors into four categories based on their risk tolerance and will quote various industry experts on which types of investments are best suited to each of the four risk categories. The industry experts quoted may include Ibbotson Associates, CDA Investment Technologies, Lipper Analytical Services and any other expert which has been deemed by us to be appropriate. We may also provide an historical overview of the performance of a variety of investment market indices, the performance of these indices over time, and the performance of different asset classes, such as stocks, bonds, cash equivalents, etc. We may also discuss investment volatility including the range of returns for different asset classes and over different time horizons, and the correlation between the returns of different asset classes. We may also discuss the basis of portfolio optimization including the required inputs and the construction of efficient portfolios using sophisticated computer-based techniques. Finally, we may describe various investment strategies and methods of implementation, the periodic rebalancing of diversified portfolios, the use of dollar cost averaging techniques, a comparison of the tax impact of purchase payments made on a “before tax” basis through a tax-qualified plan with those made on an “after tax” basis outside of a tax-qualified plan, and a comparison of tax-deferred versus non tax-deferred accumulation of purchase payments.
As described in the prospectus, in general, an owner is not taxed on increases in value under a Contract until a distribution is made under the Contract. As a result, the Contract will benefit from tax deferral during the accumulation period, as the annuity value may grow more rapidly than under a comparable investment where certain increases in value are taxed on a current basis. From time to time, we may use narrative, numerical or graphic examples to show hypothetical benefits of tax deferral in advertising and sales literature.
We may from time to time publish in advertisements, sales literature and reports to owners, the ratings and other information assigned to it by one or more independent rating organizations such as A.M. Best Company, Standard & Poor’s Insurance Rating Services, Moody’s Investors Service, Inc. and Fitch Ratings. These ratings are opinions of an operating insurance company’s financial strength and capacity to meet its obligations to Contract owners. These ratings do not apply to the separate account, its subaccounts, the funds or their portfolios, or to their performance.
Western Reserve performs administrative services for the Contracts. These services include issuance of the Contracts, maintenance of records concerning the Contracts, and certain valuation services.
All records and accounts relating to the separate account will be maintained by Western Reserve. As presently required by the 1940 Act and regulations promulgated thereunder, Western Reserve will mail to all Contract owners at their last known address of record, at least annually, reports containing such information as may be required under the 1940 Act or by any other applicable law or regulation. Contract owners will also receive confirmation of each financial transaction including: purchase payments, transfers, partial withdrawals, and a complete surrender, and any other reports required by law or regulation.
20
We currently offer the Contracts on a continuous basis. We anticipate continuing to offer the Contracts, but reserve the right to discontinue the offering.
TCI serves as principal underwriter for the Contracts. TCI’s home office is located at 4600 S Syracuse St. Suite 1100 Denver, Colorado 80237-2719. TCI is an affiliate of Western Reserve and, like Western Reserve, is an indirect, wholly owned subsidiary of AEGON USA. TCI is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of FINRA. TCI is not a member of the Securities Investor Protection Corporation.
The Contracts are offered to the public through sales representatives of broker-dealers (“selling firms”) that have entered into selling agreements with us and with TCI. Sales representatives are appointed as our insurance agents.
During fiscal years 2007, 2006, and 2005, before TCI replaced our affiliate AFSG Securities Corporation (“AFSG”) as principal underwriter for the Contracts the amounts paid to AFSG in connection with all Contracts sold through the separate account were $360,450, $1,029,081, $1,059,053, respectively and $631,185 to TCI in 2007. TCI passed through commissions it received to selling firms for their sales and did not retain any portion of them. We and our affiliates provide paid-in capital to TCI (and provided paid-in capital to AFSG) and pay for TCI’s (and paid for AFSG’S) operating and other expenses, including overhead, legal and accounting fees.
We and/or TCI or ISI may pay certain selling firms additional cash amounts for: (1) “preferred product” treatment of the Contracts in their marketing programs, which may include marketing services and increased access to their sales representatives; (2) sales promotions relating to the Contracts; (3) costs associated with sales conferences and educational seminars for their sales representatives; and (4) other sales expenses incurred by them. We and/or TCI may make bonus payments to certain selling firms based on aggregate sales or persistency standards. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms.
Western Reserve makes other variable annuity contracts available that may also be funded through the separate account. These variable annuity contracts may have different features, such as different investment choices or charges.
WRL holds assets of each of the subaccounts. The assets of each of the subaccounts are segregated and held separate and apart from the assets of the other subaccounts and from WRL’s general account assets. WRL maintains records of all purchases and redemptions of shares of the underlying fund portfolios held by each of the subaccounts. Additional protection for the assets of the separate account is afforded by WRL’s fidelity bond, presently in the amount of $5,000,000, covering the acts of officers and employees of WRL.
Sutherland Asbill & Brennan LLP, of Washington, D.C. has provided legal advice to WRL relating to certain matters under the federal securities laws.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The financial statements of the Separate Account at December 31, 2007 and for the periods disclosed in the financial statements, and the statutory-basis financial statements and schedules of Western Reserve at December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, appearing herein, have been audited by Ernst & Young LLP, 801 Grand Avenue, Suite 3000, Des Moines, Iowa 50309, Independent Registered Public Accounting Firm, as set forth in their respective reports thereon appearing elsewhere herein, and are included in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.
21
A Registration Statement has been filed with the SEC, under the Securities Act of 1933 as amended, with respect to the Contracts discussed in this SAI. Not all of the information set forth in the Registration Statement, amendments and exhibits thereto has been included in the prospectus or this SAI. Statements contained in the prospectus and this SAI concerning the content of the Contracts and other legal instruments are intended to be summaries. For a complete statement of the terms of these documents, reference should be made to the instruments filed with the SEC.
The values of an owner’s interest in the separate account will be affected solely by the investment results of the selected subaccount(s). Western Reserve’s financial statements, which are included in this SAI, should be considered only as bearing on our ability to meet our obligations under the Contracts. They should not be considered as bearing on the investment performance of the assets held in the separate account.
Financial statements for Western Reserve as of December 31, 2007 and 2006 and for each of the three years in the period ended December 31, 2007 have been prepared on the basis of statutory accounting principles, rather than accounting principles generally accepted in the United States.
22
PART C | OTHER INFORMATION |
Item 24. | Financial Statements and Exhibits |
(12) | Not applicable. | |||||||
(13) | Powers of Attorney. Blake S. Bostwick, Fred Gingerich, Mark W. Mullin, David Schulz, C. Michiel van Katwijk. Note 28 | |||||||
Note 1. | Incorporated herein by reference to Post-Effective Amendment No. 11 to Form N-4 Registration Statement (File No. 033-49556) filed on April 20, 1998. | |||||||
Note 2. | Incorporated herein by reference to the Initial Filing of Form N-4 Registration Statement (File No. 333-199075) filed on October 1, 2014. | |||||||
Note 3. | Incorporated by reference to the Initial Filing of Form N-4 Registration Statement (File No. 333-187912) filed on April 15, 2013. | |||||||
Note 4. | Incorporated herein by reference to Initial Filing to Form N-4 Registration Statement (File No. 333-185574) filed on December 20, 2012. | |||||||
Note 5. | Incorporated herein by reference to Post-Effective Amendment No. 11 to Form N-4 Registration Statement (File No. 033-49550) filed on April 20, 1998. | |||||||
Note 6. | Incorporated herein by reference to Post-Effective Amendment No. 3 to Form N-4 Registration Statement (File No. 333-24959) filed on April 22, 1999. | |||||||
Note 7. | Incorporated herein by reference to Post-Effective Amendment No. 3 to Form N-4 Registration Statement (File No. 333-82705) filed on February 19, 2002. | |||||||
Note 8. | Incorporated herein by reference to Post-Effective Amendment No. 5 to Form N-4 Registration Statement (File No. 333-93169) filed on April 14, 2003. | |||||||
Note 9. | Incorporated herein by reference to Post-Effective Amendment No. 17 to Form N-4 Registration Statement (File No. 033-49556) filed on April 17, 2003. | |||||||
Note 10. | Incorporated herein by reference to Post-Effective Amendment No. 8 to Form N-4 Registration Statement (File No. 333-108525) filed on February 13, 2007. | |||||||
Note 11. | Incorporated herein by reference to Post-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-145461) filed on October 23, 2007. | |||||||
Note 12. | Incorporated herein by reference to Post-Effective Amendment No. 23 to Form N-4 Registration Statement (File No. 333-108525) filed on April 22, 2013. | |||||||
Note 13. | Incorporated herein by reference to Post-Effective Amendment No. 24 to Form N-4 Registration Statement (File No. 333-108525) filed on August 16, 2013. | |||||||
Note 14. | Incorporated herein by reference to Post-Effective Amendment No. 4 to Form N-4 Registration Statement (File No. 333-146323) Filed on April 29, 2008. | |||||||
Note 15. | Incorporated herein by reference to Post-Effective Amendment No. 10 to Form N-4 Registration Statement (File No. 333-146323) Filed on April 30, 2014. | |||||||
Note 16. | Incorporated herein by reference to Post-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-199072) Filed on April 28, 2015. |
Note 17. | Incorporated herein by reference to Post-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-199072) Filed on April 28, 2015. | |||||||
Note 18. | Incorporated herein by reference to Post-Effective Amendment No. 2 to Form N-4 Registration Statement (File No. 333-199072) filed on April 26, 2016. | |||||||
Note 19. | Incorporated herein by reference to the Initial Filing of Form N-4 Registration Statement (File No. 333-215598) filed on January 18, 2017. | |||||||
Note 20. | Incorporated herein by reference to Post-Effective Amendment No. 3 to Form N-4 Registration Statement (File No. 333-199072) filed on April 27, 2017. | |||||||
Note 21. | Incorporated herein by reference to Post-Effective Amendment No. 4 to Form N-4 Registration Statement (File No. 333-199072) filed on April 26, 2018. | |||||||
Note 22. | Incorporated herein by reference to Post-Effective Amendment No. 5 to Form N-4 Registration Statement (File No. 333-199072) filed on December 7, 2018. | |||||||
Note 23 | Incorporated herein by reference to Post-Effective Amendment No. 7 to Form N-4 Registration Statement (File No. 333-199072) filed on April 24, 2020. | |||||||
Note 24. | Incorporated herein by reference to Post-Effective Amendment No. 28 to Form N-4 Registration Statement (Filed No. 333-108525) dated April 30, 2014 | |||||||
Note 25. | Incorporated herein by reference to Pre-Effective Amendment No. 1 to Form N-4 Registration Statement (File No. 333-185573) filed on April 10, 2013. | |||||||
Note 26. | Incorporated herein by reference to the Initial Filing of Form N-4 Registration Statement (File No. 333-169445) filed on September 17, 2010. | |||||||
Note 27. | Incorporated herein by reference to Post-Effective Amendment No. 24 to Form N-4 Registration Statement (File No. 033-80958) filed on April 27, 2005. | |||||||
Note 28. | Filed herewith. |
Item 25. | Directors and Officers of the Depositor (Transamerica Life Insurance Company) |
Name and Business Address |
Principal Positions and Offices with Depositor | |
Blake S. Bostwick 1801 California St. Suite 5200 |
Director and President | |
Fred Gingerich 4333 Edgewood Road, N.E. |
Controller and Vice President | |
Mark W. Mullin 100 Light Street |
Director and Chairman of the Board | |
David Schulz 4333 Edgewood Road, N.E. |
Director, Chief Tax Officer and Senior Vice President | |
C. Michiel van Katwijk 100 Light Street |
Director, Chief Financial Officer, Executive Vice President and Treasurer | |
Karyn Polak 100 Light Street |
Director and Secretary |
Item 26. Persons Controlled by or under Common Control with the Depositor or Registrant
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
25 East 38th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
239 West 20th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
313 East 95th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
319 East 95th Street, LLC
|
Delaware | Sole Member: Yarra Rapids, LLC | Real estate investments | |||
AEGON Affordable Housing Debt Fund I, LLC | Delaware | Members: AHDF Manager I, LLC (0.01%), Managing Member; Transamerica Life Insurance Company (5%); non-AEGON affiliates: Dominium Taxable Fund I, LLC (94.99%)
|
Affordable housing loans | |||
AEGON AM Funds, LLC | Delaware | AEGON USA Investment Management, LLC is the Manager; equity will be owned by clients/Investors of AEGON USA Investment Management, LLC
|
To serve as a fund for a client and offer flexibility to accommodate other similarly situated clients. | |||
AEGON Asset Management Services, Inc. | Delaware | 100% AUSA Holding, LLC
|
Registered investment advisor | |||
Aegon Community Investments 50, LLC | Delaware | Members: Aegon Community Investments 50, LLC (0.10%); Transamerica Financial Life Insurance Company (25.49750%); Transamerica Premier Life Insurance Company (25.49750%); non-AEGON affiliate, Citibank, N.A. (48.9950%)
|
Investments | |||
Aegon Community Investments 51, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 52, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 53, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 54, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 55, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 56, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 57, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 58, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 59, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 60, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 61, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Aegon Community Investments 62, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
AEGON Direct Marketing Services, Inc. | Maryland | Transamerica Premier Life Insurance Company owns 103,324 shares; Commonwealth General Corporation owns 37,161 shares
|
Marketing company | |||
AEGON Direct Marketing Services International, LLC
|
Maryland | 100% AUSA Holding, LLC | Marketing arm for sale of mass marketed insurance coverage | |||
AEGON Direct Marketing Services Mexico, S.A. de C.V.
|
Mexico | 100% AEGON DMS Holding B.V. | Provide management advisory and technical consultancy services. | |||
AEGON Direct Marketing Services Mexico Servicios, S.A. de C.V. | Mexico | 100% AEGON DMS Holding B.V. | Provide marketing, trading, telemarketing and advertising services in favor of any third party, particularly in favor of insurance and reinsurance companies.
| |||
AEGON Energy Management, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AEGON Financial Services Group, Inc. | Minnesota | 100% Transamerica Life Insurance Company
|
Marketing | |||
AEGON Funding Company, LLC. | Delaware | Sole Member: Transamerica Corporation | Issue debt securities-net proceeds used to make loans to affiliates
| |||
Aegon Global Services, LLC | Iowa | Sole Member: Commonwealth General Corporation
|
Holding company | |||
AEGON Institutional Markets, Inc. | Delaware | 100% Commonwealth General Corporation | Provider of investment, marketing and administrative services to insurance companies
| |||
AEGON Life Insurance Agency Inc. | Taiwan | 100% AEGON Direct Marketing Services, Inc. (Taiwan Domiciled)
|
Life insurance | |||
Aegon LIHTC Fund 50, LLC | Delaware | Members: Aegon Community Investments 50, LLC (0.01%); Transamerica Financial Life Insurance Company (25.49750%); Transamerica Premier Life Insurance Company (25.49750%); non-affiliate of AEGON, Citibank, N.A. (48.9950%)
|
Investments | |||
Aegon LIHTC Fund 51, LLC | Delaware | Members: Aegon Community Investments 51, LLC (.01%) as Managing Member; non-affiliate of AEGON, Citibank, N.A. (99.99%)
|
Investments | |||
Aegon LIHTC Fund 52, LLC | Delaware | Members: Transamerica Financial Life Insurance Company (10.18%); Transamerica Life Insurance Company (1%); Managing Member - Aegon Community Investments 52, LLC (0.01%); non-affiliates of AEGON, Citibank, N.A. (49%); California Bank & Trust (5.21%); Pacific West Bank (7.58%); Ally Bank (11.35%); US Bank (7.58%); Bank of the West (7.46%)
|
Investments | |||
Aegon LIHTC Fund 54, LLC | Delaware | Non-Member Manager Aegon Community Investments 54, LLC (0%); Members: non-affiliate of Aegon, FNBC Leasing Corporation (100%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Aegon LIHTC Fund 55, LLC | Delaware | Members: Managing Member - Aegon Community Investments 55, LLC (.01%); Transamerica Premier Life Insurance Company (2.82%); non-affiliates of AEGON, Bank of Hope (14.26%); CMFG Life Insurance Company (9.72%); Citibank, N.A. (21.69%); ZB National Association (1.81%); Ally Bank (8.21%); U.S. Bancorp Community Development Corporation (22.10%); Lake City Bank (1.47%); The Guardian Life Insurance Company of America (10.45%); Minnesota Life Insurance Company (7.46%)
|
Investments | |||
Aegon LIHTC Fund 57, LLC | Delaware | Members: Managing Member - Aegon Community Investments 57, LLC (.01%); non-affiliate of AEGON, Bank of America, N.A. as Investor Member (99.99%)
|
Investments | |||
Aegon LIHTC Fund 58, LLC | Delaware | Members: Managing Member - Aegon Community Investments 58, LLC (0.01%); Transamerica Premier Life Insurance Company (12%); non-affiliates of AEGON, Allstate Insurance Company (12%); Allstate Life Insurance Company (12%); Ally Bank (17%); CMFG Life Insurance Company (8.05%); Santander Bank, N.A. (22.25%); U.S. Bancorp Community Development Corporation (19.47%); Zions Bancorporation, N.A. (6.35%)
|
Investments | |||
Aegon LIHTC Fund 60, LLC | Delaware | Sole Member: Aegon Community Investments 60, LLC
|
Investments | |||
Aegon LIHTC Fund 61, LLC | Delaware | Non-Member Manager Aegon Community Investments 61, LLC (0%); Members: non-affiliate of Aegon, HSBC Bank, N.A. (100%)
|
Investments | |||
Aegon LIHTC Fund 62, LLC | Delaware | Sole Member: Aegon Community Investments 62, LLC
|
Investments | |||
AEGON Managed Enhanced Cash, LLC | Delaware | Members: Transamerica Life Insurance Company (62.9705%) ; Transamerica Premier Life Insurance Company (37.0295%)
|
Investment vehicle for securities lending cash collateral | |||
AEGON Management Company | Indiana | 100% Transamerica Corporation
|
Holding company | |||
Aegon Market Neutral Income Fund, LLC | Delaware | AEGON USA Investment Management, LLC is the sole Member until the first Investor buys in, then the entity will be managed by a 3-Member Board of Managers.
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Aegon Multi-Family Equity Fund, LLC | Delaware | Members: Transamerica Life Insurance Company (15.83333%); Transamerica Financial Life Insurance Company (5%); Transamerica Premier Life Insurance Company (4.16667%); non-affiliates of AEGON: Landmark Real Estate Partners VIII, L.P. (72.1591%)
|
Investments | |||
Aegon Opportunity Zone Fund Joint Venture 1, LLC
|
Delaware | Sole Member: Aegon OZF Investments 1, LLC | Investments | |||
Aegon OZF Investments 1, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
Aegon Private Opportunities Partners I, LLC | Delaware | Sole member: Transamerica Life Insurance Company
|
Investments (private equity) | |||
Aegon Upstream Energy Fund, LLC | Delaware | Sole Member: AEGON Energy Management, LLC
|
Investments | |||
AEGON USA Asset Management Holding, LLC
|
Iowa | Sole Member: AUSA Holding, LLC | Holding company | |||
AEGON USA Investment Management, LLC | Iowa | Sole Member: AEGON USA Asset Management Holding, LLC
|
Investment advisor | |||
AEGON USA Real Estate Services, Inc. | Delaware | 100% AEGON USA Realty Advisors, Inc. | Real estate and mortgage holding company
| |||
AEGON USA Realty Advisors, LLC | Iowa | Sole Member: AEGON USA Asset Management Holding, LLC
|
Administrative and investment services | |||
AEGON USA Realty Advisors of California, Inc.
|
Iowa | 100% AEGON USA Realty Advisors, Inc. | Investments | |||
Aegon Workforce Housing Boynton Place REIT, LLC | Delaware | Sole Member: Aegon Worforce Housing Separate Account 1, LLC
|
Multifamily private equity structure with third-party Investor | |||
Aegon Workforce Housing Fund 2 Holding Company, LLC | Delaware | Sole Member: Aegon Workforce Housing Fund 2, LP
|
Holding company | |||
Aegon Workforce Housing Fund 2, LP | Delaware | General Partner is AWHF2 General Partner, LLC. Fund Partners: Transamerica Life Insurance Company (63%), Transamerica Financial Life Insurance Company (20%) and Transamerica Premier Life Insurance Company (17%)
|
Investments | |||
Aegon Workforce Housing Fund 3 Holding Company, LLC | Delaware | Sole Member: Aegon Workforce Housing Fund 3, LP
|
Holding company | |||
Aegon Workforce Housing Fund 3, LP | Delaware | General Partner is AWHF3 General Partner, LLC. Fund Partners: Transamerica Life Insurance Company (60%), Transamerica Financial Life Insurance Company (10%) and Transamerica Premier Life Insurance Company (30%)
|
Investments | |||
Aegon Workforce Housing Park at Via Rosa REIT, LLC | Delaware | Sole Member: Aegon Worforce Housing Separate Account 1, LLC
|
Multifamily private equity structure with third-party Investor | |||
Aegon Workforce Housing Separate Account 1, LLC | Delaware | Undecided as of 11/1/19 | Multifamily private equity structure with third-party Investor
|
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
AHDF Manager I, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
ALH Properties Eight LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Eleven LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Four LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Nine LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Seven LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Seventeen LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Sixteen LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Ten LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Twelve LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
ALH Properties Two LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
AMFETF Manager, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AMTAX HOLDINGS 308, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 347, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 388, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 483, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 559, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 561, LLC | Ohio | TAHP Fund VII, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 588, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 613, LLC | Ohio | Garnet LIHTC Fund VII, LLC - 99% Member; Cupples State LIHTC Investors, LLC - 1% Member; TAH Pentagon Funds, LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 639, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 649, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
AMTAX HOLDINGS 672, LLC | Ohio | TAHP Fund I, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
AMTAX HOLDINGS 713, LLC | Ohio | TAHP Fund II, LLC - 100% Member; TAH Pentagon Funds LLC - non-owner Manager
|
Affordable housing | |||
Apollo Housing Capital Arrowhead Gardens, LLC | Delaware | Sole Member: Garnet LIHTC Fund XXXV, LLC
|
Affordable housing | |||
AUIM Credit Opportunities Fund, LLC | Delaware | Members: AEGON USA Investment Management, LLC (98.36%); non-affiliate of AEGON (1.64%)
|
Investment vehicle | |||
AUSA Holding, LLC | Maryland | Sole Member: 100% Transamerica Corporation
|
Holding company | |||
AUSA Properties, Inc. | Iowa | 100% AEGON USA Realty Advisors, LLC
|
Own, operate and manage real estate | |||
AWHF2 General Partner, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AWHF3 General Partner, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Investments | |||
AWHSA Manager 1, LLC | Delaware | Sole Member: AEGON USA Realty Advisors, LLC
|
Multifamily private equity structure with third-party Investor | |||
Barfield Ranch Associates, LLC | Florida | Members: Mitigation Manager, LLC (50%); non-affiliate of AEGON, OBPFL-Barfield, LLC (50%)
|
Investments | |||
Bay State Community Investments I, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments in low income housing tax credit properties | |||
Bay State Community Investments II, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments in low income housing tax credit properties | |||
Carle Place Leasehold SPE, LLC | Delaware | Sole Member: Transamerica Financial Life Insurance Company
|
Lease holder | |||
Cedar Funding, Ltd. | Cayman Islands | 100% Transamerica Life Insurance Company
|
Investments | |||
Commonwealth General Corporation | Delaware | 100% Transamerica Corporation
|
Holding company | |||
Creditor Resources, Inc. | Michigan | 100% AUSA Holding, LLC
|
Credit insurance | |||
CRI Solutions Inc. | Maryland | 100% Creditor Resources, Inc.
|
Sales of reinsurance and credit insurance | |||
Cupples State LIHTC Investors, LLC | Delaware | Sole Member: Garnet LIHTC Fund VIII, LLC
|
Investments | |||
Equitable AgriFinance, LLC | Delaware | Members: AEGON USA Realty Advisors, LLC (50%); AXA Equitable Life Insurance Company, a non-affiliate of AEGON (50%)
|
Agriculturally-based real estate advisory services | |||
FD TLIC, Limited Liability Company | New York | 100% Transamerica Life Insurance Company
|
Broadway production | |||
FGH Realty Credit LLC | Delaware | Sole Member: FGH USA, LLC
|
Real estate | |||
FGH USA LLC | Delaware | Sole Member: RCC North America LLC
|
Real estate |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Fifth FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Financial Planning Services, Inc. | District of Columbia | 100% Commonwealth General Corporation
|
Management services | |||
First FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Fourth FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Garnet Assurance Corporation | Kentucky | 100% Transamerica Life Insurance Company
|
Investments | |||
Garnet Assurance Corporation II | Iowa | 100% Commonwealth General Corporation
|
Business investments | |||
Garnet Assurance Corporation III | Iowa | 100% Transamerica Life Insurance Company
|
Business investments | |||
Garnet Community Investments, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments III, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Business investments | |||
Garnet Community Investments IV, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments V, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments VI, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments VII, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments VIII, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments IX, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments X, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments XI, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments XII, LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Investments | |||
Garnet Community Investments XVIII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXIV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investment XXVI, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXVII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investment XXVIII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXIX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet Community Investments XXXI, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXIII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXIV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXV, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXVI, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXVII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXVIII, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XXXIX, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XL, LLC | Delaware | Sole Member - Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLI, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLIII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLIV, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLVI, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLVII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLVIII, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet Community Investments XLIX, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Garnet ITC Fund XLIII, LLC | Delaware | Members: Garnet Community Investments XLIII, LLC (0%) asset Manager: non-affiliate of AEGON, Solar TC Corp. (100%) Investor Member
|
Investments | |||
Garnet LIHTC Fund III, LLC | Delaware | Members: Transamerica Life Insurance Company (.01%); non-affiliate of AEGON, Aegon Community Investments III, (99.99%)
|
Investments | |||
Garnet LIHTC Fund IV, LLC | Delaware | Members: Garnet Community Investments IV, LLC (99.99%); Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund V, LLC | Delaware | Members: Garnet Community Investments V, LLC (99.99%); Transamerica Life Insurance Company (.01%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund VI, LLC | Delaware | Members: Garnet Community Investments VI, LLC (99.99%); Transamerica Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund VII, LLC | Delaware | Members: Garnet Community Investments VII, LLC (99.99%); Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund VIII, LLC | Delaware | Members: Garnet Community Investments VIII, LLC (99.99%); Transamerica Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund IX, LLC | Delaware | Members: Garnet Community Investments IX, LLC (99.99%); Transamerica Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund X, LLC | Delaware | Members: Garnet Community Investments X, LLC (0.01%); Goldenrod Asset Management, a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XI, LLC | Delaware | Members: Garnet Community Investments XI, LLC (99.99%) and Transamerica Life
Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund XII, LLC | Delaware | Members: Managing Member, Garnet Community Investments XII (.01%), Garnet LIHTC Fund XII-B (13.30%), Garnet LIHTC Fund XII-C (13.30%); non-affiliate of Aegon, Bank of America, N.A. (73.39%)
|
Investments | |||
Garnet LIHTC Fund XII-A, LLC | Delaware | Members: Garnet Community Investments XII, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XII-B, LLC | Delaware | Members: Garnet Community Investments XII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund XII-C, LLC | Delaware | Members: Garnet Community Investments XII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund XIII, LLC | Delaware | Members: Managing Member, Garnet Community Investments .01%; Garnet LIHTC Fund XIII-A (68.10%); Garnet LIHTC Fund XIII-B (31.89%)
|
Investments | |||
Garnet LIHTC Fund XIII-A, LLC | Delaware | Members: Managing Member, Garnet Community Investments XIII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments | |||
Garnet LIHTC Fund XIII-B, LLC | Delaware | Members: Managing Member, Garnet Community Investments XIII, LLC (99.99%) and Transamerica Life Insurance Company (.01%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XIV, LLC | Delaware | Members: 0.01% Garnet Community Investments, LLC (0.01%); Wells Fargo Bank, N.A. (49.995%); and Goldenrod Asset Management, Inc.(49.995%), both non-AEGON affiliates
|
Investments | |||
Garnet LIHTC Fund XV, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XVI, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); FNBC Leasing Corporation, a non-AEGON entity (99.99%)
|
Investments | |||
Garnet LIHTC Fund XVII, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Special Situations Investing Group II, LLC, a non-affiliate of AEGON (99.99%)
|
Investments | |||
Garnet LIHTC Fund XVIII, LLC | Delaware | Members: Garnet Community Investments XVIII, LLC (0.01%); Verizon Capital Corp., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XIX, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Bank of America, N.A., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XX, LLC | Delaware | Sole Member - Garnet Community Investments XX, LLC
|
Investments | |||
Garnet LIHTC Fund XXI, LLC | Delaware | Sole Member: Garnet Community Investments, LLC
|
Investments | |||
Garnet LIHTC Fund XXII, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); NorLease, Inc., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXIII, LLC | Delaware | Members: Garnet Community Investments, LLC (0.01%); Idacorp Financial Services, Inc., a non-AEGON affiliate (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXIV, LLC | Delaware | Members: Garnet Community Investments XXIV, LLC (0.01% as Managing Member); Transamerica Life Insurance Company (21.26%); non-affiliates of AEGON: New York Life Insurance Company (25.51%), New York Life Insurance and Annuity Corporation (21.73%) and Principal Life Insurance Company (31.49%)
|
Investments | |||
Garnet LIHTC Fund XXV, LLC | Delaware | Members: Garnet Community Investment XXV, LLC (0.01%); Garnet LIHTC Fund XXVIII LLC (1%); non-affiliates of AEGON: Mt. Hamilton Fund, LLC (97.99%); Google Affordable housing I LLC (1%)
|
Investments | |||
Garnet LIHTC Fund XXVI, LLC | Delaware | Members: Garnet Community Investments XXVI, LLC (0.01%); American Income Life Insurance Company, a non-affiliate of AEGON (99.99%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XXVII, LLC | Delaware | Members: Garnet Community Investments XXVII, LLC (0.01%); Transamerica Life Insurance Company (16.7045%); non-affiliates of AEGON: Aetna Life Insurance Company (30.2856%); New York Life Insurance Company (22.7142%); ProAssurance Casualty Company (3.6343%); ProAssurance Indemnity Company (8.4800%); State Street Bank and Trust Company (18.1714%)
|
Investments | |||
Garnet LIHTC Fund XXVIII, LLC | Delaware | Members: Garnet Community Investments XXVIII LLC (0.01%); non-affiliates of AEGON: USAA Casualty Insurance Company (17.998%); USAA General Indemnity Company (19.998%); USAA Life Insurance Company (3.999%); United Services Automobile Association (57.994%)
|
Investments | |||
Garnet LIHTC Fund XXIX, LLC | Delaware | Members: Garnet Community Investments XXIX, LLC (.01%); non-affiliate of AEGON: Bank of America, N.A. (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXX, LLC | Delaware | Members: Garnet Community Investments XXX, LLC (0.01%); non-affiliate of AEGON, New York Life Insurance Company (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXXI, LLC | Delaware | Members: Garnet Community Investments XXXI, LLC (0.1%); non-affiliates of AEGON: Thunderbolt Peak Fund, LLC (98.99%); Google Affordable Housing I, LLC (1%)
|
Investments | |||
Garnet LIHTC Fund XXXII, LLC | Delaware | Sole Member: Garnet Community Investments XXXVII, LLC.
|
Investments | |||
Garnet LIHTC Fund XXXIII, LLC | Delaware | Members: Garnet Community Investment XXXIII, LLC (0.01%); non-affiliate of AEGON, NorLease, Inc. (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXXIV, LLC | Delaware | Members: Garnet Community Investments XXXIV, LLC (99.99%) and Transamerica Premier Life Insurance Company (0.01%)
|
Investments | |||
Garnet LIHTC Fund XXXV, LLC | Delaware | Members: Garnet Community Investment XXXV, LLC (0.01%); non-affiliate of AEGON, Microsoft Corporation (99.99%)
|
Investments | |||
Garnet LIHTC Fund XXXVI, LLC | Delaware | Members: Garnet Community Investments XXXVI, LLC (1%) as Managing Member; JPM Capital Corporation, a non-AEGON affiliate (99%) as Investor Member
|
Investments | |||
Garnet LIHTC Fund XXXVII, LLC | Delaware | Members: Garnet Community Investments XXXVII, LLC (.01%); LIH Realty Corporation, a non-AEGON affiliate (99.99%)
|
Investments |
Name | Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XXXVIII, LLC | Delaware | Members: Garnet Community Investments XXXVIII, LLC, non-Member Manager; non-affiliate of AEGON, Norlease, Inc. (100%)
|
Investments | |||
Garnet LIHTC Fund XXXIX, LLC | Delaware | Members: Garnet Community Investments XXXIX, LLC a Managing Member (1%); non-AEGON affiliate, FNBC Leasing Corporation as Investor Member (99%)
|
Investments | |||
Garnet LIHTC Fund XL, LLC | Delaware | Members: Garnet Community Investments XL, LLC (.01%); non-AEGON affiliate, Partner Reinsurance Company of the U.S. (99.99%)
|
Investments | |||
Garnet LIHTC Fund XLI, LLC | Delaware | Members: Transamerica Life Insurance Company (9.990%) and Garnet Community Investments XLI, LLC (.01% Managing Member); non-AEGON affiliates : BBCN Bank (1.2499%), East West Bank (12.4988%), Opus Bank (12.4988%), Standard Insurance Company (24.9975%), Mutual of Omaha (12.4988%), Pacific Western Bank (7.4993%) and Principal Life Insurance Company (18.7481%).
|
Investments | |||
Ganet LIHTC Fund XLII, LLC | Delaware | Members: Garnet Community Investments XLII, LLC (.01%) Managing Member; non-affiliates of AEGON: Community Trust Bank (83.33%) Investor Member; Metropolitan Bank (16.66%) Investor Member.
|
Investments | |||
Garnet LIHTC Fund XLIV—A, LLC | Delaware | Sole Member: ING Capital, LLC; Asset Manager: Garnet Community Investments XLIV, LLC (0% interest)
|
Investments | |||
Garnet LIHTC Fund XLIV-B, LLC | Delaware | Sole Member: Lion Capital Delaware, Inc.; Asset Manager: Garnet Community Investments XLIV, LLC (0% interest)
|
Investments | |||
Garnet LIHTC Fund XLVI, LLC | Delaware | Members: Garnet Community Investments XLVI, LLC (0.01%) Managing Member; non-affiliate of AEGON, Standard Life Insurance Company (99.99%) Investor Member
|
Investments |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Garnet LIHTC Fund XLVII, LLC | Delaware | Members: Garnet Community Investments XLVII, LLC (1%) Managing Member; Transamerica Premier Life Insurance Company (14%) Investor Member; non-affiliate of AEGON: Citibank, N.A. (49%) Investor Member; New York Life Insurance Company (20.5%) Investor Member and New York Life Insurance and Annuity Corporation (15.5%) Investor Member
|
Investments | |||
Garnet LIHTC Fund XLVIII, LLC | Delaware | Members: Transamerica Financial Life Insurance Company (75.18%) and Garnet Community Investments XXXLVIII, LLC (.01%); non-affiliates of AEGON: U.S. Bancorp Community Development Corporation (21.04%), American Republic Insurance Company (2.84%), Bank of Hope (.93%)
|
Investments | |||
Horizons Acquisition 5, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Horizons St. Lucie Development, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Imani Fe, LP | California | Partners: Garnet LIHTC Fund XIV, LL (99.99% Investor limited partner); Transamerica Affordable Housing, Inc. (non-owner special limited partner); non-affiliates of AEGON: ABS Imani Fe, LLC (.0034% class A limited partner); TAH Imani Fe GP, LLC (.0033% co-general partner); Grant Housing and Economic Development Corporation (.0033% Managing general partner)
|
Affordable housing | |||
InterSecurities Insurance Agency, Inc. | California | 100% Transamerica Premier Life Insurance Company
|
Insurance agency | |||
Investors Warranty of America, LLC | Iowa | Sole Member: RCC North America LLC
|
Leases business equipment | |||
Ironwood Re Corp. | Hawaii | 100% Commonwealth General Corporation
|
Captive insurance company | |||
LCS Associates, LLC | Delaware | Sole Member: RCC North America LLC
|
Investments | |||
Life Investors Alliance LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Purchase, own, and hold the equity interest of other entities | |||
LIHTC Fund 53, LLC | Delaware | Non-Member Manager, AEGON Community Investments 53, LLC (0%); non-affiliates of AEGON: Bank of America, National Association (98%); MUFG Union Bank, N.A. (2%)
|
Investments |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
LIHTC Fund 56, LLC | Delaware | Members: Managing Member - Aegon Community Investments 56, LLC (0%); non-affiliates of AEGON, Bank of America, National Association (90%) and MUFG Union Bank, N.A. (10%)
|
Investments | |||
LIHTC Fund 59, LLC | Delaware | Members: Non-Member Manager Aegon Community Investments 59, LLC (0%); non-affiliates of AEGON, Bank of America, National Association (99.99%); Dominium Taxable Fund II, LLC (0.01%)
|
Investments | |||
LIHTC Fund XLV, LLC | Delaware | Non-Member Manager: Garnet Community Investments XLV, LLC (0%)
|
Investments | |||
LIHTC Fund XLIX, LLC | Delaware | Sole Member: Garnet Community Investments XLIX, LLC
|
Investments | |||
LIICA Re II, Inc. | Vermont | 100% Transamerica Life Insurance Company
|
Captive insurance company | |||
Massachusetts Fidelity Trust Company | Iowa | 100% AUSA Holding, LLC
|
Trust company | |||
Mitigation Manager, LLC | Delaware | Sole Member: RCC North America LLC
|
Investments | |||
MLIC Re I, Inc. | Vermont | 100% Transamerica Life Insurance Company
|
Captive insurance company | |||
Money Services, Inc. | Delaware | 100% AUSA Holding, LLC | Provides certain financial services for affiliates including, but not limited to, certain intellectual property, computer and computer-related software and hardware services, including procurement and contract services to some or all of the Members of the AEGON Group in the United States and Canada.
| |||
Monumental Financial Services, Inc. | Maryland | 100% Transamerica Corporation
|
DBA in the State of West Virginia for United Financial Services, Inc.
| |||
Monumental General Administrators, Inc. | Maryland | 100% AUSA Holding, LLC | Provides management services to unaffiliated third party administrator
| |||
Natural Resources Alternatives Portfolio I, LLC | Delaware | Members: Transamerica Life Insurance Company (64%); Transamerica Premier Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%); Managing Member: AEGON USA Realty Advisors, LLC
|
Investment vehicle - to invest in Natural Resources | |||
Natural Resources Alternatives Portfolio II, LLC | Delaware | Members: Transamerica Premier Life Insurance Company (60%); Transamerica Life Insurance Company (35%); Transamerica Financial Life Insurance Company (5%)
|
Investment vehicle | |||
Natural Resources Alternatives Portfolio 3, LLC | Delaware | Members: Transamerica Life Insurance Company (55%); Transamerica Premier Life Insurance Company (35%); Transamerica Financial Life Insurance Company (10%)
|
Investment vehicle |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Nomagon Title Grandparent, LLC | Delaware | Sole member is AEGON USA Asset Management Holding, LLC; AEGON USA Realty Advisors, LLC is the non-member manager of this entity
|
Investment vehicle | |||
Nomagon Title Holding 1, LLC | Delaware | Sole member is Nomagon Title Parent, LLC; AEGON USA Realty Advisors, LLC is the non-member manager of this entity
|
Investment vehicle | |||
Nomagon Title Parent, LLC | Delaware | Sole member is Nomagon Title Grandparent, LLC; AEGON USA Realty Advisors, LLC is the non-member manager of this entity
|
Investment vehicle | |||
Osceola Mitigation Partners, LLC | Florida | Members: Mitigation Manager, LLC (50%); non-affiliate of AEGON, OBPFL-MITBK, LLC (50%)
|
Investmetns | |||
Pearl Holdings, Inc. I | Delaware | 100% AEGON USA Asset Management Holding, LLC
|
Holding company | |||
Pearl Holdings, Inc. II | Delaware | 100% AEGON USA Asset Management Holding, LLC
|
Holding company | |||
Peoples Benefit Services, LLC | Pennsylvania | Sole Member - Transamerica Life Insurance Company
|
Marketing non-insurance products | |||
Pine Falls Re, Inc. | Vermont | 100% Transamerica Life Insurance Company
|
Captive insurance company | |||
Placer 400 Investors, LLC | California | Members: RCC North Amerivca LLC (50%); non-affiliate of AEGON, AKT Placer 400 Investors, LLC (50%)
|
Investments | |||
Primus Guaranty, Ltd. | Bermuda | Members: Transamerica Life Insurance Company (20% 13.1%) and non-affiliates of AEGON and the public holders own the remainder.
|
Provides protection from default risk of investment grade corporate and sovereign issues of financial obligations. | |||
PSL Acquisitions Operating, LLC | Iowa | Sole Member: RCC North America LLC
|
Owner of Core subsidiary entities | |||
RCC North America LLC | Delaware | Sole Member: Transamerica Corporation
|
Real estate | |||
Real Estate Alternatives Portfolio 2 LLC | Delaware | Members are: Transamerica Life Insurance Company (92.%); Transamerica Financial Life Insurance Company (7.5%). Manager: AEGON USA Realty Advisors, Inc.
|
Real estate alternatives investment | |||
Real Estate Alternatives Portfolio 3 LLC | Delaware | Members are: Transamerica Life Insurance Company (74.4%); Transamerica Premier Life Insurance Company (25.6%). Manager: AEGON USA Realty Advisors, Inc.
|
Real estate alternatives investment | |||
Real Estate Alternatives Portfolio 3A, Inc. | Delaware | Members: Transamerica Premier Life Insurance Company (37%); Transamerica Financial Life Insurance Company (9.4%); Transamerica Life Insurance Company (53.6%).
|
Real estate alternatives investment |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Real Estate Alternatives Portfolio 4 HR, LLC | Delaware | Members: Transamerica Life Insurance Company (64%); Transamerica Premier Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%). Manager: AEGON USA Realty Advisors, Inc.
|
Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment | |||
Real Estate Alternatives Portfolio 4 MR, LLC | Delaware | Members: Transamerica Life Insurance Company (64%); Transamerica Premier Life Insurance Company (32%); Transamerica Financial Life Insurance Company (4%). Manager: AEGON USA Realty Advisors, Inc.
|
Investment vehicle for alternative real estate investments that are established annually for our affiliated companies common investment | |||
River Ridge Insurance Company | Vermont | 100% AEGON Management Company
|
Captive insurance company | |||
SB Frazer Owner, LLC | Delaware | Sole Member: Transamerica Life Insurance Company
|
Investments | |||
Second FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Seventh FGP LLC | Delaware | Sole Member: FGH USA LLC
|
Real estate | |||
Short Hills Management Company | New Jersey | 100% Transamerica Corporation
|
Dormant | |||
St. Lucie West Development Company, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Stonebridge Benefit Services, Inc. | Delaware | 100% Commonwealth General Corporation
|
Health discount plan | |||
TA Private Equity Assets, LLC | Delaware | Sole Member - Transamerica Premier Life Insurance Company
|
Investments (private equity) | |||
TABR Realty Services, LLC | Delaware | Sole Member: AUSA Holding, LLC
|
Real estate investments | |||
TAH-MCD IV, LLC | Iowa | Sole Member - Transamerica Affordable Housing, Inc.
|
Serve as the general partner for McDonald Corporate Tax Credit Fund IV Limited Partnership.
| |||
TAH Pentagon Funds, LLC | Iowa | Sole Member - Transamerica Affordable Housing, Inc.
|
Serve as a general partner in a lower-tier tax credit entity | |||
TAHP Fund 1, LLC | Delaware | Sole Member - Garnet LIHTC Fund IX, LLC
|
Real estate investments | |||
TAHP Fund 2, LLC | Delaware | Sole Member - Garnet LIHTC Fund VIII, LLC
|
Low incoming housing tax credit | |||
TAHP Fund VII, LLC | Delaware | Investor Member: Garnet LIHTC Fund XIX, LLC
|
Real estate investments | |||
The AEGON Trust Advisory Board: Onno van Klinken, Mark W. Mullin, Jay Orlandi and Eilard Friese
|
Delaware | 100% AEGON International B.V.
|
Voting Trust |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
THH Acquisitions, LLC | Iowa | Sole Member - Transamerica Life Insurance Company
|
Acquirer of Core South Carolina mortgage loans from Investors Warranty of America, LLC and holder of foreclosed real estate. | |||
TLIC Oakbrook Reinsurance, Inc. | Iowa | 100% Transamerica Life Insurance Company
|
Limited purpose subsidiary life insurance company | |||
TLIC Watertree Reinsurance Inc. | Iowa | 100% Transamerica Life Insurance Company
|
Limited purpose subsidiary life insurance company | |||
Tradition Development Company, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Development company | |||
Tradition Irrigation Company, LLC | Florida | Sole Member - PSL Acquisitions Operating, LLC
|
Irrigation company | |||
Tradition Land Company, LLC | Iowa | Sole Member: RCC North America LLC
|
Acquirer of Core Florida mortgage loans from Investors Warranty and holder of foreclosed real estate. | |||
Transamerica Affinity Marketing Corretora de Seguros Ltda. | Brazil | 749,000 quota shares owned by AEGON DMS Holding B.V.; 1 quota share owned by AEGON International B.V.
|
Brokerage company | |||
Transamerica Affinity Services, Inc. | Maryland | 100% AEGON Direct Marketing Services, Inc.
|
Marketing company | |||
Transamerica Affordable Housing, Inc. | California | 100% Transamerica Realty Services, LLC
|
General partner LHTC Partnership | |||
Transamerica Agency Network, Inc. | Iowa | 100% AUSA Holding, LLC
|
Special purpose subsidiary | |||
Transamerica Asset Management, Inc. | Florida | Transamerica Premier Life Insurance Company owns 77%; AUSA Holding, LLC owns 23%.
|
Fund advisor | |||
Transamerica (Bermuda) Services Center, Ltd. | Bermuda | 100% AEGON International B.V.
|
Special purpose corporation | |||
Transamerica Capital, Inc. | California | 100% AUSA Holding, LLC
|
Broker/Dealer | |||
Transamerica Casualty Insurance Company | Iowa | 100% Transamerica Corporation
|
Insurance company | |||
Transamerica Corporation | Delaware | 100% The AEGON Trust
|
Major interest in insurance and finance | |||
Transamerica Corporation | Oregon | 100% Transamerica Corporation
|
Holding company | |||
Transamerica Finance Corporation | Delaware | 100% Transamerica Corporation
|
Commercial & Consumer Lending & equipment leasing
| |||
Transamerica Financial Advisors, Inc. | Delaware | 1,000 shares owned by AUSA Holding, LLC; 209 shares owned by Commonwealth
General Corporation;
|
Broker/Dealer | |||
Transamerica Financial Life Insurance Company
|
New York | 100% Transamerica Corporation
|
Insurance |
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Transamerica Fund Services, Inc. | Florida | Transamerica Premier Life Insurance Company owns 44%; AUSA Holding, LLC owns 56%
|
Mutual fund | |||
Transamerica Home Loan | California | 100% Transamerica Consumer Finance Holding Company
|
Consumer mortgages | |||
Transamerica Insurance Marketing Asia Pacific Pty Ltd. | Australia | 100% Transamerica Direct Marketing Asia Pacific Pty Ltd.
|
Insurance intermediary | |||
Transamerica International Direct Marketing Consultants, LLC | Maryland | Members: 51% Beth Lewellyn; 49% AEGON Direct Marketing Services, Inc.
|
Provide consulting services ancillary to the marketing of insurance products overseas. | |||
Transamerica International RE (Bermuda) Ltd.
|
Bermuda | 100% Transamerica Corporation | Reinsurance | |||
Transamerica International Re Escritório de Representação no Brasil Ltd | Brazil | 95% Transamerica International Re(Bermuda) Ltd.; 5% Commonwealth General Corporation
|
Insurance and reinsurance consulting | |||
Transamerica Investment Management, LLC | Delaware | Sole Member - AEGON USA Asset Management Holding, LLC
|
Investment advisor | |||
Transamerica Investors Securities Corporation | Delaware | 100% Transamerica Retirement Solutions, LLC
|
Broker/Dealer | |||
Transamerica Leasing Holdings Inc. | Delaware | 100% Transamerica Finance Corporation
|
Holding company | |||
Transamerica Life Insurance Company | Iowa | 100% - Commonwealth General Corporation
|
Insurance | |||
Transamerica Life (Bermuda) Ltd. | Bermuda | 100% Transamerica Life Insurance Company | Long-term life insurer in Bermuda — will primarily write fixed universal life and term insurance
| |||
Transamerica Pacific Insurance Company, Ltd.
|
Hawaii | 100% Commonwealth General Corporation | Life insurance | |||
Transamerica Premier Life Insurance Company
|
Iowa | 100% Commonwealth General Corporation | Insurance Company | |||
Transamerica Pyramid Properties LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Realty limited liability company | |||
Transamerica Realty Investment Properties LLC | Delaware | Sole Member: Transamerica Premier Life Insurance Company
|
Realty limited liability company | |||
Transamerica Redwood Park, LLC | Delaware | Sole Member - Transamerica Corporation | Hold property interests in Redwood Park in California
| |||
Transamerica Resources, Inc. | Maryland | 100% Monumental General Administrators, Inc.
|
Provides education and information regarding retirement and economic issues. | |||
Transamerica Retirement Advisors, LLC | Delaware | Sole Member: Transamerica Retirement Solutions, LLC
|
Investment advisor | |||
Transamerica Retirement Insurance Agency, LLC | Delaware | Sole Member: Transamerica Retirement Solutions, LLC
|
Conduct business as an insurance agency. | |||
Transamerica Retirement Solutions, LLC | Delaware | Sole Member: AUSA Holding, LLC
|
Retirement plan services. | |||
Transamerica Stable Value Solutions Inc. | Delaware | 100% Commonwealth General Corporation
|
Principle Business: Provides management services to the stable value division of AEGON insurers who issue synthetic GIC contracts.
|
Name |
Jurisdiction of Incorporation |
Percent of Voting Securities Owned |
Business | |||
Transamerica Travel and Conference Services, LLC
|
Iowa | Sole Member: Money Services, Inc. | Travel and conference services | |||
Transamerica Ventures, LLC | Delaware | Sole Member: AUSA Holding, LLC
|
Investments | |||
Transamerica Ventures Fund, LLC | Delaware | 100% AUSA Holding, LLC
|
Investments | |||
United Financial Services, Inc. | Maryland | 100% Transamerica Corporation
|
General agency | |||
Universal Benefits, LLC | Iowa | Sole Member: AUSA Holding, LLC
|
Third party administrator | |||
US PENG, INC. | Delaware | Sole Member: AEGON Levensverzekering N.V.
|
Energy investment strategy | |||
WFG Insurance Agency of Puerto Rico, Inc. | Puerto Rico | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
WFG Properties Holdings, LLC | Georgia | Sole Member: World Financial Group, Inc.
|
Marketing | |||
WFG Securities Inc. | Canada | 100% World Financial Group Holding Company of Canada, Inc.
|
Mutual fund dealer | |||
World Financial Group Canada Inc. | Canada | 100% World Financial Group Holding Company of Canada Inc.
|
Marketing | |||
World Financial Group Holding Company of Canada Inc.
|
Canada | 100% Commonwealth General Corporation
|
Holding company | |||
World Financial Group, Inc. | Delaware | 100% AEGON Asset Management Services, Inc.
|
Marketing | |||
World Financial Group Insurance Agency of Canada Inc. | Ontario | 50% World Financial Group Holding Co. of Canada Inc.; 50% World Financial Group Subholding Co. of Canada Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency of Hawaii, Inc. | Hawaii | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency of Massachusetts, Inc. | Massachusetts | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency of Wyoming, Inc. | Wyoming | 100% World Financial Group Insurance Agency, Inc.
|
Insurance agency | |||
World Financial Group Insurance Agency, Inc. | California | 100% Transamerica Premier Life Insurance Company
|
Insurance agency | |||
World Financial Group Subholding Company of Canada Inc. | Canada | 100% World Financial Group Holding Company of Canada, Inc.
|
Holding company | |||
Yarra Rapids, LLC | Delaware | Members are: Real Estate Alternatives Portfolio 4MR, LLC (49%) and non-AEGON affiliate (51%)
|
Real estate investments | |||
Zahorik Company, Inc. | California | 100% AUSA Holding, LLC
|
Inactive | |||
Zero Beta Fund, LLC | Delaware | Members are: Transamerica Life Insurance Company (35.86%); Transamerica Premier Life Insurance Company (33.29%); Transamerica Financial Life Insurance Company (16.58%); Transamerica Pacific Insurance Company, Ltd. (14.27%). Manager: AEGON USA Investment Management LLC | Aggregating vehicle formed to hold various fund investments. |
Item 27. | Number of Contract Owners |
As of July 31, 2020, there were 536 Owners of the Contracts.
Item 28. | Indemnification |
The Iowa Code (Sections 490.850 et. seq.) provides for permissive indemnification in certain situations, mandatory indemnification in other situations, and prohibits indemnification in certain situations. The Code also specifies producers for determining when indemnification payments can be made.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Depositor pursuant to the foregoing provisions, 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 the 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, officer or controlling person 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 the Act and will be governed by the final adjudication of such issue.
Item 29 | Principal Underwriters |
(a) | Transamerica Capital, Inc. serves as the principal underwriter for: |
Transamerica Capital, Inc. serves as the principal underwriter for the Retirement Builder Variable Annuity Account, Separate Account VA B, Separate Account VA Q, Separate Account VA FF, Separate Account VA HH, Separate Account VA-1, Separate Account VA-2L, Separate Account VA-5, Separate Account VA-6, Separate Account VA-7, Separate Account VA-8, Separate Account Fund B, Separate Account Fund C, Transamerica Corporate Separate Account Sixteen, Transamerica Separate Account R3, Separate Account VL, Separate Account VUL-1; Separate Account VUL-2, Separate Account VUL-3, Separate Account VUL-4, Separate Account VUL-5, Separate Account VUL-6, Separate Account VUL-A, and Variable Life Account A, Merrill Lynch Life Variable Annuity Separate Account, Merrill Lynch Life Variable Annuity Separate Account A, Merrill Lynch Life Variable Annuity Separate Account B, Merrill Lynch Life Variable Annuity Separate Account C, Merrill Lynch Life Variable Annuity Separate Account D, Merrill Lynch Variable Life Separate Account, and Merrill Lynch Life Variable Life Separate Account II, Separate Account VA BB, Separate Account VA CC, Separate Account VA U, Separate Account VA V, Separate Account VA AA, WRL Series Annuity Account, WRL Series Annuity Account B, WRL Series Life Account, WRL Series Life Account G, WRL Series Life Corporate Account and Separate Account VL E. These accounts are separate accounts of Transamerica Life Insurance Company.
Transamerica Capital, Inc. serves as principal underwriter for Separate Account VA BNY, Separate Account VA QNY, TFLIC Separate Account VNY, Separate Account VA-2LNY, TFLIC Separate Account C, Separate Account VA-5NLNY, Separate Account VA-6NY, TFLIC Series Annuity Account, TFLIC Series Life Account, TFLIC Pooled Account No. 44, Transamerica Variable Funds, ML of New York Variable Annuity Separate Account A, ML of New York Variable Annuity Separate Account B, ML of New York Variable Annuity Separate Account C, ML of New York Variable Annuity Separate Account D and ML of New York Variable Life Separate Account II. These accounts are separate accounts of Transamerica Financial Life Insurance Company.
Transamerica Capital, Inc. also serves as principal underwriter for Transamerica Series Trust, Transamerica Funds, Transamerica Investors, Inc., and Transamerica Asset Allocation Variable Funds.
(b) | Directors and Officers of Transamerica Capital, Inc.: |
Name |
Principal Business Address |
Position and Offices with Underwriter | ||
Brian Beitzel | (2) | Director, Treasurer and Chief Financial Officer | ||
Joe Boan | (1) | Director, Chairman of the Board, Chief Executive Officer and Vice President | ||
Doug Hellerman |
(3) | Chief Compliance Officer and Vice President | ||
Gregory E. Miller-Breetz | (1) | Secretary |
(1) |
(2) | 4333 Edgewood Road N.E., Cedar Rapids, IA 52499-0001 |
(3) |
Item 30. | Location of Accounts and Records |
The records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by Manager Regulatory Filing Unit, Transamerica Life Insurance Company at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-0001.
Item 31. | Management Services. |
All management Contracts are discussed in Part A or Part B.
Item 32. | Undertakings |
(a) | Registrant undertakes that it will file a post-effective amendment to this registration statement as frequently as 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 contract may be accepted. |
(b) | Registrant undertakes that it will include either (i) 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 or (ii) a space in the application that an applicant can check to request a Statement of Additional Information. |
(c) | Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request. |
(d) | The Depositor hereby 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 the Depositor. |
SECTION 403(B) REPRESENTATIONS
Transamerica Life Insurance Company represents that it is relying on a no-action letter dated November 28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88), regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of 1940, in connection with redeemability restrictions on Section 403(b) Policies, and that paragraphs numbered (1) through (4) of that letter will be complied with.
TEXAS ORP REPRESENTATION
The Registrant intends to offer policies to participants in the Texas Option Retirement Program. In connection with that offering, the Registrant is relying on Rule 6c-7 under the Investment Company Act of 1940 and is complying with, or shall comply with, paragraphs (a) – (d) of that Rule.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this Registration Statement to be signed on its behalf, in the City of Denver and State of Colorado, on this 30th day of September, 2020.
WRL SERIES ANNUITY ACCOUNT |
Registrant |
TRANSAMERICA LIFE INSURANCE COMPANY |
Depositor |
* |
Blake S. Bostwick |
Director and President |
As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signatures |
Title |
Date | ||
* |
Director and President | September 30, 2020 | ||
Blake S. Bostwick | ||||
* |
Controller and Vice President | September 30, 2020 | ||
Fred Gingerich | ||||
* |
Director and Chairman of the Board | September 30, 2020 | ||
Mark W. Mullin | ||||
* |
Director, Chief Tax Officer and Senior Vice President | September 30, 2020 | ||
David Schulz | ||||
* |
Director, Chief Financial Officer, Executive Vice | September 30, 2020 | ||
C. Michiel van Katwijk | President and Treasurer | |||
/s/ Brian Stallworth |
Assistant Secretary | September 30, 2020 | ||
Brian Stallworth |
* | By: Brian Stallworth – Attorney-in-Fact pursuant to Powers of Attorney filed previously and/or herewith. |
This ‘N-4’ Filing | Date | Other Filings | ||
---|---|---|---|---|
10/1/34 | ||||
1/1/33 | ||||
1/1/26 | ||||
1/1/21 | ||||
12/30/20 | ||||
12/29/20 | ||||
12/26/20 | ||||
12/18/20 | ||||
10/21/20 | ||||
10/1/20 | EFFECT | |||
Filed on: | 9/30/20 | N-4 | ||
9/29/20 | N-4 | |||
9/28/20 | ||||
9/19/20 | ||||
9/5/20 | ||||
9/4/20 | ||||
7/31/20 | ||||
7/1/20 | ||||
6/30/20 | N-30D | |||
6/22/20 | ||||
5/15/20 | ||||
4/27/20 | ||||
4/24/20 | 485BPOS | |||
4/20/20 | ||||
4/17/20 | ||||
12/31/19 | 24F-2NT, N-30D, N-CEN | |||
12/21/19 | ||||
12/20/19 | ||||
12/17/19 | ||||
12/14/19 | ||||
12/13/19 | ||||
10/26/19 | ||||
10/5/19 | ||||
10/3/19 | ||||
9/30/19 | ||||
9/21/19 | ||||
9/4/19 | ||||
7/1/19 | ||||
6/21/19 | ||||
5/16/19 | ||||
3/29/19 | ||||
3/6/19 | ||||
2/1/19 | ||||
1/1/19 | ||||
12/31/18 | 24F-2NT, N-30D, N-CEN | |||
12/19/18 | ||||
12/18/18 | ||||
12/13/18 | ||||
12/7/18 | 485BPOS | |||
10/1/18 | 485APOS | |||
9/27/18 | ||||
8/6/18 | ||||
7/1/18 | ||||
6/29/18 | ||||
4/26/18 | 485BPOS | |||
4/20/18 | ||||
2/1/18 | ||||
1/1/18 | ||||
12/31/17 | 24F-2NT, N-30D, NSAR-U | |||
12/29/17 | ||||
12/27/17 | ||||
12/22/17 | ||||
12/1/17 | ||||
10/1/17 | ||||
7/1/17 | ||||
6/28/17 | ||||
4/27/17 | 485BPOS | |||
4/1/17 | ||||
1/18/17 | ||||
1/1/17 | ||||
12/31/16 | 24F-2NT, N-30D, NSAR-U | |||
12/22/16 | ||||
10/1/16 | ||||
4/26/16 | 485BPOS | |||
12/31/15 | 24F-2NT, N-30D, NSAR-U | |||
4/28/15 | 485BPOS | |||
4/14/15 | ||||
10/1/14 | EFFECT, N-4 | |||
4/30/14 | 485BPOS | |||
8/16/13 | ||||
4/22/13 | 485BPOS | |||
4/15/13 | ||||
4/10/13 | ||||
12/20/12 | ||||
9/17/10 | ||||
12/31/08 | 24F-2NT, N-30D, NSAR-U | |||
9/30/08 | ||||
5/1/08 | 485BPOS | |||
4/29/08 | ||||
12/31/07 | 24F-2NT, N-30D, NSAR-U | |||
10/23/07 | ||||
9/6/07 | ||||
2/13/07 | ||||
12/31/06 | 24F-2NT, N-30D, NSAR-U | |||
12/26/06 | ||||
6/12/06 | ||||
5/1/06 | 485BPOS | |||
12/12/05 | ||||
4/27/05 | 485BPOS | |||
5/3/04 | 497, 497J | |||
5/1/03 | 485BPOS | |||
4/17/03 | 485BPOS | |||
4/14/03 | 485BPOS | |||
5/1/02 | 485BPOS | |||
2/19/02 | 485APOS | |||
5/1/00 | 485BPOS | |||
5/3/99 | 497, 497J | |||
4/22/99 | 485BPOS | |||
5/1/98 | ||||
4/20/98 | 485BPOS | |||
1/2/98 | ||||
1/2/97 | 497 | |||
5/1/96 | ||||
1/3/95 | ||||
3/1/94 | ||||
3/1/93 | ||||
12/3/92 | ||||
List all Filings |