UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2014

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                 to

Commission File No. 033-28976

RIVERSOURCE LIFE INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

Minnesota	41-0823832
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1099 Ameriprise Financial Center, Minneapolis, Minnesota	55474
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (612) 671-3131

 Former name, former address and former fiscal year, if changed since last report:   Not Applicable

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No  o

 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No  o

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer x (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o   No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 5, 2014
Common Stock (par value $30 per share)	100,000 shares

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

RIVERSOURCE LIFE INSURANCE COMPANY

FORM 10-Q

INDEX

Part I.	Financial Information:
	Item 1.	Financial Statements
		Consolidated Balance Sheets — March 31, 2014 and December 31, 2013	1
		Consolidated Statements of Income — Three months ended March 31, 2014 and 2013	2
		Consolidated Statements of Comprehensive Income — Three months ended March 31, 2014 and 2013	2
		Consolidated Statements of Shareholder’s Equity — Three months ended March 31, 2014 and 2013	3
		Consolidated Statements of Cash Flows — Three months ended March 31, 2014 and 2013	4
		Notes to Consolidated Financial Statements	6
	Item 2.	Management’s Narrative Analysis	32
	Item 4.	Controls and Procedures	40
Part II.	Other Information:
	Item 1.	Legal Proceedings	41
	Item 1A.	Risk Factors	41
	Item 6.	Exhibits	41
	Signatures		42
	Exhibit Index		E-1

RIVERSOURCELIFE INSURANCE COMPANY

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(in millions, except share amounts)

	March 31, 2014		December 31, 2013
	(unaudited)
Assets
Investments:
Available-for-Sale:
Fixed maturities, at fair value (amortized cost: 2014, $22,487; 2013, $22,902)	$	24,287	$	24,387
Common stocks, at fair value (cost: 2014 and 2013, $2)	7		6
Mortgage loans, at amortized cost (less allowance for loan losses: 2014, $23; and 2013, $24)	3,310		3,326
Policy loans	779		773
Other investments	956		915
Total investments	29,339		29,407
Cash and cash equivalents	123		344
Reinsurance recoverables	2,201		2,177
Other receivables	171		195
Accrued investment income	262		275
Deferred acquisition costs	2,599		2,633
Other assets	4,152		4,357
Separate account assets	78,033		77,616
Total assets	$	116,880	$	117,004
Liabilities and Shareholder’s Equity
Liabilities:
Policyholder account balances, future policy benefits and claims	$	29,117	$	29,149
Short-term borrowings	300		500
Line of credit with Ameriprise Financial, Inc.	—		150
Other liabilities	5,008		5,431
Separate account liabilities	78,033		77,616
Total liabilities	112,458		112,846
Shareholder’s equity:
Common stock, $30 par value; 100,000 shares authorized, issued and outstanding	3		3
Additional paid-in capital	2,464		2,463
Retained earnings	1,190		1,042
Accumulated other comprehensive income, net of tax	765		650
Total shareholder’s equity	4,422		4,158
Total liabilities and shareholder’s equity	$	116,880	$	117,004

See Notes to Consolidated Financial Statements.

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RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in millions)

	Three Months Ended   March 31,
	2014			2013
Revenues
Premiums	$	104		$	108
Net investment income	333			358
Policy and contract charges	447			416
Other revenues	95			88
Net realized investment gains (losses)	4			(1		)
Total revenues	983			969
Benefits and expenses
Benefits, claims, losses and settlement expenses	208			235
Interest credited to fixed accounts	186			198
Amortization of deferred acquisition costs	71			59
Other insurance and operating expenses	182			183
Total benefits and expenses	647			675
Pretax income	336			294
Income tax provision	38			54
Net income	$	298		$	240
Supplemental Disclosures:
Total other-than-temporary impairment losses on securities	$	(1	)	$	(1	)
Portion of loss recognized in other comprehensive income (loss) (before taxes)	—			—
Net impairment losses recognized in net realized investment gains (losses)	$	(1	)	$	(1	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in millions)

	Three Months Ended   March 31,
	2014			2013
Net income	$	298		$	240
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on securities:
Net unrealized securities gains (losses) arising during the period	208			(141		)
Reclassification of net securities gains included in net income	(3		)	—
Impact on deferred acquisition costs, deferred sales inducement costs, benefit reserves and reinsurance recoverables	(91		)	64
Total net unrealized gains (losses) on securities	114			(77		)
Net unrealized losses on derivatives:
Reclassification of net derivative losses included in net income	1			1
Total net unrealized losses on derivatives	1			1
Total other comprehensive income (loss), net of tax	115			(76		)
Total comprehensive income	$	413		$	164

See Notes to Consolidated Financial Statements.

2

RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY (UNAUDITED)

(in millions)

	Common Shares		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income			Total
Balances at January 1, 2013	$	3	$	2,462	$	1,000		$	1,234		$	4,699
Comprehensive income:
Net income	—		—		240			—			240
Other comprehensive loss, net of tax	—		—		—			(76		)	(76		)
Total comprehensive income											164
Cash dividend to Ameriprise Financial, Inc.	—		—		(325		)	—			(325		)
Balances at March 31, 2013	$	3	$	2,462	$	915		$	1,158		$	4,538
Balances at January 1, 2014	$	3	$	2,463	$	1,042		$	650		$	4,158
Comprehensive income:
Net income	—		—		298			—			298
Other comprehensive income, net of tax	—		—		—			115			115
Total comprehensive income											413
Tax adjustment on share-based incentive compensation plan	—		1		—			—			1
Cash dividend to Ameriprise Financial, Inc.	—		—		(150		)	—			(150		)
Balances at March 31, 2014	$	3	$	2,464	$	1,190		$	765		$	4,422

See Notes to Consolidated Financial Statements.

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RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)

	Three Months Ended   March 31,
	2014			2013
Cash Flows from Operating Activities
Net income	$	298		$	240
Adjustments to reconcile net income to net cash provided (used in) by operating activities:
Depreciation, amortization and accretion, net	2			(6		)
Deferred income tax expense (benefit)	(93		)	85
Contractholder and policyholder charges, non-cash	(82		)	(69		)
Loss from equity method investments	6			7
Net realized investment gains	(5		)	(1		)
Other-than-temporary impairments and provision for loan losses recognized in net realized investment gains	1			2
Changes in operating assets and liabilities:
Deferred acquisition costs	9			(3		)
Policyholder account balances, future policy benefits and claims, net	167			(495		)
Derivatives, net of collateral	(97		)	289
Reinsurance recoverables	(27		)	(33		)
Other receivables	23			19
Accrued investment income	13			14
Other, net	24			(107		)
Net cash provided by (used in) operating activities	239			(58		)
Cash Flows from Investing Activities
Available-for-Sale securities:
Proceeds from sales	99			45
Maturities, sinking fund payments and calls	780			997
Purchases	(447		)	(689		)
Proceeds from maturities and repayments of mortgage loans	138			178
Funding of mortgage loans	(124		)	(148		)
Proceeds from sales and collections of other investments	30			35
Purchase of other investments	(101		)	(67		)
Purchase of land, buildings, equipment and software	(1		)	(1		)
Change in policy loans, net	(6		)	—
Other, net	10			—
Net cash provided by investing activities	378			350

See Notes to Consolidated Financial Statements.

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RIVERSOURCE LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (continued)

(in millions)

	Three Months Ended   March 31,
	2014			2013
Cash Flows from Financing Activities
Policyholder account balances:
Deposits and other additions	$	494		$	494
Net transfers to separate accounts	(56		)	(36		)
Surrenders and other benefits	(661		)	(512		)
Change in short-term borrowings, net	(200		)	(1		)
Proceeds from line of credit with Ameriprise Financial, Inc.	8			—
Payments on line of credit with Ameriprise Financial, Inc.	(158		)	—
Tax adjustment on share-based incentive compensation plan	1			—
Cash paid for purchased options with deferred premiums	(116		)	(98		)
Cash dividend to Ameriprise Financial, Inc.	(150		)	(325		)
Net cash used in financing activities	(838		)	(478		)
Net decrease in cash and cash equivalents	(221		)	(186		)
Cash and cash equivalents at beginning of period	344			336
Cash and cash equivalents at end of period	$	123		$	150
Supplemental Disclosures:
Income taxes paid (received), net	$	179		$	(3	)
Interest paid on borrowings	1			1
Non-cash investing activity:
Affordable housing partnership commitments not yet remitted	—			10

See Notes to Consolidated Financial Statements.

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RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

RiverSource Life Insurance Company is a stock life insurance company with two wholly owned subsidiaries, RiverSource Life Insurance Co. of New York and RiverSource Tax Advantaged Investments, Inc. (“RTA”). RiverSource Life Insurance Company is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”).

The accompanying Consolidated Financial Statements include the accounts of RiverSource Life Insurance Company and companies in which it directly or indirectly has a controlling financial interest (collectively, the “Company”). All intercompany transactions and balances have been eliminated in consolidation.

The interim financial information in this report has not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods have been made. All adjustments made were of a normal recurring nature.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Results of operations reported for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission on February 27, 2014.

The Company reclassified certain prior period amounts in the Consolidated Statements of Cash Flows, as discussed below, to improve the transparency of its cash flows. Total cash flows provided by (used in) operating and financing activities did not change as a result of the reclassifications.

Within operating activities, the change in freestanding derivatives was reclassified from “Other, net” to “Derivatives, net of collateral”. The change in derivatives collateral was reclassified from “Derivatives collateral, net” to “Derivatives, net of collateral”. As a result of these reclassifications, changes in all freestanding derivatives and related collateral are included in one line within operating cash flows.

Within financing activities, the increase in policyholder account balances for interest credited was reclassified from “Policyholder account balances: Surrenders and other benefits” to “Policyholder account balances: Deposits and other additions”.

The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. 

2. Recent AccountingPronouncements

Adoption of New Accounting Standards

Income Taxes

In July 2013, the Financial Accounting Standards Board ("FASB") updated the accounting standard for income taxes. The update provides guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The standard is effective for interim and annual periods beginning after December 15, 2013 and should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company adopted the standard in the first quarter of 2014. The adoption of the standard did not have any effect on the Company’s consolidated financial condition and results of operations.

Future Adoption of New Accounting Standards

Receivables - Troubled Debt Restructuring by Creditors

In January 2014, the FASB updated the accounting standard related to recognizing residential real estate obtained through a repossession or foreclosure from a troubled debtor. The update clarifies the criteria for derecognition of the loan receivable and recognition of the real estate property. The standard is effective for interim and annual periods beginning after December 15, 2014 and can be applied under a modified retrospective transition method or a prospective transition method. Early adoption is permitted. The adoption of the standard is not expected to have a material impact on the Company’s consolidated financial condition and results of operations.

Investments - Equity Method and Joint Ventures

In January 2014, the FASB updated the accounting standard related to investments in qualified affordable housing projects. The update allows for an accounting policy election to account for investments in qualified affordable housing projects using the

6

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

proportional amortization method if certain conditions are met. Under the proportional amortization method, the investment in a qualified affordable housing project is amortized in proportion to the tax credits and other tax benefits received. The net investment performance is recognized as a component of income tax expense (benefit). The standard is effective for interim and annual periods beginning after December 15, 2014 and should be applied retrospectively to all periods presented. Early adoption is permitted. The Company is currently evaluating the impact of the standard on its consolidated financial condition and results of operations.

3. Variable Interest Entities

RTA, a subsidiary of RiverSource Life Insurance Company, has variable interests in affordable housing partnerships for which it is not the primary beneficiary and, therefore, does not consolidate.

RTA’s maximum exposure to loss as a result of its investments in the affordable housing partnerships is limited to the carrying values of these investments. The carrying values are reflected in other investments and were $487 million and $495 million as of March 31, 2014 and December 31, 2013, respectively. RTA has no obligation to provide financial or other support to the affordable housing partnerships in addition to liabilities already recorded for future funding commitments nor has it provided any additional support to the affordable housing partnerships. The Company had liabilities of $120 million and $137 million recorded in other liabilities as of March 31, 2014 and December 31, 2013, respectively, related to the future funding commitments for affordable housing partnerships.

4. Investments

Available-for-Sale securities distributed by type were as follows:

	March 31, 2014
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI(1)
	(in millions)
Fixed maturities:
Corporate debt securities	$	14,270	$	1,497	$	(47	)	$	15,720	$	3
Residential mortgage backed securities	3,697		136		(73		)	3,760		(16		)
Commercial mortgage backed securities	2,298		134		(7		)	2,425		—
State and municipal obligations	958		128		(34		)	1,052		—
Asset backed securities	986		50		(3		)	1,033		—
Foreign government bonds and obligations	238		21		(6		)	253		—
U.S. government and agencies obligations	40		4		—			44		—
Total fixed maturities	22,487		1,970		(170		)	24,287		(13		)
Common stocks	2		5		—			7		2
Total	$	22,489	$	1,975	$	(170	)	$	24,294	$	(11	)

	December 31, 2013
Description of Securities	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Noncredit OTTI(1)
	(in millions)
Fixed maturities:
Corporate debt securities	$	14,658	$	1,311	$	(96	)	$	15,873	$	3
Residential mortgage backed securities	3,773		133		(95		)	3,811		(18		)
Commercial mortgage backed securities	2,309		136		(11		)	2,434		—
State and municipal obligations	950		87		(39		)	998		—
Asset backed securities	938		48		(5		)	981		—
Foreign government bonds and obligations	234		19		(8		)	245		—
U.S. government and agencies obligations	40		5		—			45		—
Total fixed maturities	22,902		1,739		(254		)	24,387		(15		)
Common stocks	2		4		—			6		2
Total	$	22,904	$	1,743	$	(254	)	$	24,393	$	(13	)

(1) Represents the amount of other-than-temporary impairment (“OTTI”) losses in accumulated other comprehensive income. Amount includes unrealized gains and losses on impaired securities subsequent to the initial impairment measurement date. These amounts are included in gross unrealized gains and losses as of the end of the period.

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RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

As of March 31, 2014 and December 31, 2013, investment securities with a fair value of $2.0 billion and $2.3 billion, respectively, were pledged to meet contractual obligations under derivative contracts and repurchase agreements.

At both March 31, 2014 and December 31, 2013, fixed maturity securities comprised approximately 83% of the Company’s total investments. Rating agency designations are based on the availability of ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”), including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings Ltd. (“Fitch”). The Company uses the median of available ratings from Moody’s, S&P and Fitch, or if fewer than three ratings are available, the lower rating is used. When ratings from Moody’s, S&P and Fitch are unavailable, the Company may utilize ratings from other NRSROs or rate the securities internally. At March 31, 2014 and December 31, 2013, approximately $1.1 billion and $1.3 billion, respectively, of securities were internally rated by Columbia Management Investment Advisers, LLC, an affiliate of the Company, using criteria similar to those used by NRSROs.

A summary of fixed maturity securities by rating was as follows:

	March 31, 2014						December 31, 2013
Ratings	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized  Cost		Fair Value		Percent of Total Fair Value
	(in millions, except percentages)
AAA	$	5,475	$	5,685	23	%	$	5,557	$	5,738	23	%
AA	1,036		1,186		5		1,055		1,171		5
A	4,584		5,032		21		4,687		5,062		21
BBB	9,864		10,858		45		10,062		10,897		45
Below investment grade	1,528		1,526		6		1,541		1,519		6
Total fixed maturities	$	22,487	$	24,287	100	%	$	22,902	$	24,387	100	%

At March 31, 2014 and December 31, 2013, approximately 42% and 41%, respectively, of the securities rated AAA were GNMA, FNMA and FHLMC mortgage backed securities. No holdings of any other issuer were greater than 10% of total equity.

The following tables provide information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position:

	March 31, 2014
	Less than 12 months						12 months or more						Total
Description of Securities	Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	97	$	1,441	$	(34	)	12	$	212	$	(13	)	109	$	1,653	$	(47	)
Residential mortgage backed securities	45	982		(30		)	50	403		(43		)	95	1,385		(73		)
Commercial mortgage backed securities	17	180		(5		)	2	22		(2		)	19	202		(7		)
State and municipal obligations	1	5		—			2	95		(34		)	3	100		(34		)
Asset backed securities	19	214		(2		)	3	19		(1		)	22	233		(3		)
Foreign government bonds and obligations	21	65		(6		)	1	1		—			22	66		(6		)
Total	200	$	2,887	$	(77	)	70	$	752	$	(93	)	270	$	3,639	$	(170	)

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RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

	December 31, 2013
	Less than 12 months						12 months or more						Total
Description of Securities	Number of  Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses
	(in millions, except number of securities)
Corporate debt securities	156	$	2,567	$	(82	)	10	$	160	$	(14	)	166	$	2,727	$	(96	)
Residential mortgage backed securities	52	1,411		(54		)	45	295		(41		)	97	1,706		(95		)
Commercial mortgage backed securities	27	323		(9		)	3	22		(2		)	30	345		(11		)
State and municipal obligations	4	38		(2		)	2	92		(37		)	6	130		(39		)
Asset backed securities	17	219		(4		)	3	26		(1		)	20	245		(5		)
Foreign government bonds and obligations	23	77		(8		)	—	—		—			23	77		(8		)
Total	279	$	4,635	$	(159	)	63	$	595	$	(95	)	342	$	5,230	$	(254	)

As part of the Company’s ongoing monitoring process, management determined that a majority of the change in gross unrealized losses on its Available-for-Sale securities is attributable to movement in interest rates.

The following table presents a rollforward of the cumulative amounts recognized in the Consolidated Statements of Income for other-than-temporary impairments related to credit losses on Available-for-Sale securities for which a portion of the securities’ total other-than-temporary impairments was recognized in other comprehensive income (loss):

	Three Months Ended   March 31,
	2014		2013
	(in millions)
Beginning balance	$	54	$	87
Credit losses for which an other-than-temporary impairment was previously recognized	—		1
Reductions for securities sold during the period (realized)	—		(13		)
Ending balance	$	54	$	75

The change in net unrealized securities gains (losses) in other comprehensive income (loss) includes three components, net of tax: (i) unrealized gains (losses) that arose from changes in the market value of securities that were held during the period; (ii) (gains) losses that were previously unrealized, but have been recognized in current period net income due to sales of Available-for-Sale securities and due to the reclassification of noncredit other-than-temporary impairment losses to credit losses; and (iii) other items primarily consisting of adjustments in asset and liability balances, such as deferred acquisition costs ("DAC"), deferred sales inducement costs (“DSIC”), benefit reserves and reinsurance recoverables, to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet dates.

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RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents a rollforward of the net unrealized securities gains on Available-for-Sale securities included in accumulated other comprehensive income:

	Net Unrealized Securities Gains			Deferred Income Tax			Accumulated Other Comprehensive Income Related to Net Unrealized Securities Gains
	(in millions)
Balance at January 1, 2013	$	1,930		$	(675	)	$	1,255
Net unrealized securities losses arising during the period(1)	(217		)	76			(141		)
Reclassification of net securities losses included in net income	1			(1		)	—
Impact on DAC, DSIC, benefit reserves and reinsurance recoverables	98			(34		)	64
Balance at March 31, 2013	$	1,812		$	(634	)	$	1,178		(2)
Balance at January 1, 2014	$	1,033		$	(366	)	$	667
Net unrealized securities gains arising during the period(1)	320			(112		)	208
Reclassification of net securities gains included in net income	(4		)	1			(3		)
Impact on DAC, DSIC, benefit reserves and reinsurance recoverables	(140		)	49			(91		)
Balance at March 31, 2014	$	1,209		$	(428	)	$	781		(2)

(1) Includes other-than-temporary impairment losses on Available-for-Sale securities related to factors other than credit that were recognized in other comprehensive income (loss) during the period.

(2)  Includes $6 million and $12 million of noncredit related impairments on securities and net unrealized securities losses on previously impaired securities at March 31, 2014 and 2013, respectively.

Net realized gains and losses on Available-for-Sale securities, determined using the specific identification method, recognized in net realized investment gains (losses) were as follows:

	Three Months Ended   March 31,
	2014			2013
	(in millions)
Gross realized investment gains	$	6		$	—
Gross realized investment losses	(1		)	—
Other-than-temporary impairments	(1		)	(1		)
Total	$	4		$	(1	)

Other-than-temporary impairments for the three months ended March 31, 2014 primarily related to the Company's decision to sell a corporate debt security. Other-than-temporary impairments for the three months ended March 31, 2013 primarily related to credit losses on non-agency residential mortgage backed securities.

Available-for-Sale securities by contractual maturity at March 31, 2014 were as follows:

	Amortized Cost		Fair Value
	(in millions)
Due within one year	$	933	$	953
Due after one year through five years	5,399		5,918
Due after five years through 10 years	5,634		5,954
Due after 10 years	3,540		4,244
	15,506		17,069
Residential mortgage backed securities	3,697		3,760
Commercial mortgage backed securities	2,298		2,425
Asset backed securities	986		1,033
Common stocks	2		7
Total	$	22,489	$	24,294

10

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Residential mortgage backed securities, commercial mortgage backed securities and asset backed securities are not due at a single maturity date. As such, these securities, as well as common stocks, were not included in the maturities distribution.

Net investment income is summarized as follows:

	Three Months Ended   March 31,
	2014		2013
	(in millions)
Income on fixed maturities	$	286	$	309
Income on mortgage loans	46		51
Other investments	9		6
	341		366
Less: investment expenses	8		8
Total	$	333	$	358

5. Financing Receivables

The Company’s financing receivables include commercial and residential mortgage loans, syndicated loans and policy loans. Syndicated loans are reflected in other investments. Policy loans do not exceed the cash surrender value of the policy at origination. As there is minimal risk of loss related to policy loans, the Company does not record an allowance for loan losses for policy loans. The Company does not currently have an allowance for loan losses for residential mortgage loans.

Allowance for Loan Losses

The following table presents a rollforward of the allowance for loan losses for the three months ended and the ending balance of the allowance for loan losses by impairment method and type of loan:

	March 31, 2014									March 31, 2013
	Commercial Mortgage Loans			Syndicated Loans			Total			Commercial Mortgage Loans		Syndicated Loans		Total
	(in millions)
Beginning balance	$	24		$	4		$	28		$	26	$	4	$	30
Charge-offs	(1		)	(1		)	(2		)	—		—		—
Ending balance	$	23		$	3		$	26		$	26	$	4	$	30
Individually evaluated for impairment	$	7		$	—		$	7		$	5	$	—	$	5
Collectively evaluated for impairment	16			3			19			21		4		25

The recorded investment in financing receivables by impairment method and type of loan was as follows:

	March 31, 2014
	Commercial Mortgage Loans		Residential Mortgage Loans		Syndicated Loans		Total
	(in millions)
Individually evaluated for impairment	$	30	$	—	$	3	$	33
Collectively evaluated for impairment	2,549		754		403		3,706
Total	$	2,579	$	754	$	406	$	3,739

	December 31, 2013
	Commercial Mortgage Loans		Residential Mortgage Loans		Syndicated Loans		Total
	(in millions)
Individually evaluated for impairment	$	40	$	—	$	5	$	45
Collectively evaluated for impairment	2,524		786		356		3,666
Total	$	2,564	$	786	$	361	$	3,711

11

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

As of March 31, 2014 and December 31, 2013, the Company’s recorded investment in financing receivables individually evaluated for impairment for which there was no related allowance for loan losses was $11 million and $12 million, respectively.

Residential mortgage loans are presented net of unamortized discount of $48 million and $53 million as of March 31, 2014 and December 31, 2013, respectively. During the three months ended March 31, 2014 and 2013, the Company purchased $65 million and $22 million, respectively, and sold $4 million and $1 million, respectively, of syndicated loans.

The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.

Credit Quality Information

Nonperforming loans, which are generally loans 90 days or more past due, were $10 million and $20 million as of March 31, 2014 and December 31, 2013, respectively. All other loans were considered to be performing.

Commercial Mortgage Loans

The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates as necessary. Commercial mortgage loans which management has assigned its highest risk rating were 1% and 2% of total commercial mortgage loans at March 31, 2014 and December 31, 2013, respectively. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. In addition, the Company reviews the concentrations of credit risk by region and property type.

Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:

	Loans				Percentage
	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
	(in millions)
South Atlantic	$	689	$	679	27	%	26	%
Pacific	645		631		25		25
Mountain	246		248		9		10
East North Central	241		248		9		10
Middle Atlantic	206		202		8		8
West North Central	197		194		8		7
West South Central	152		153		6		6
New England	135		138		5		5
East South Central	68		71		3		3
	2,579		2,564		100	%	100	%
Less: allowance for loan losses	23		24
Total	$	2,556	$	2,540

Concentrations of credit risk of commercial mortgage loans by property type were as follows:

	Loans				Percentage
	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
	(in millions)
Retail	$	919	$	917	36	%	36	%
Office	548		548		21		21
Industrial	449		431		17		17
Apartments	443		454		17		18
Mixed use	46		36		2		1
Hotel	29		32		1		1
Other	145		146		6		6
	2,579		2,564		100	%	100	%
Less: allowance for loan losses	23		24
Total	$	2,556	$	2,540

12

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Residential Mortgage Loans

The Company considers the credit worthiness of borrowers (FICO score), collateral characteristics such as loan-to-value (“LTV”) and geographic concentration to determine when an amount for an allowance for loan losses for residential mortgage loans is appropriate. At a minimum, management updates FICO scores and LTV ratios semiannually. As of March 31, 2014 and December 31, 2013, no allowance for loan losses was recorded.

As of both March 31, 2014 and December 31, 2013, approximately 4% of residential mortgage loans had FICO scores below 640. At both March 31, 2014 and December 31, 2013, approximately 1% of the Company’s residential mortgage loans had LTV ratios greater than 90%. The Company’s most significant geographic concentration for residential mortgage loans is in California representing 37% and 38% of the portfolio as of March 31, 2014 and December 31, 2013, respectively. No other state represents more than 10% of the total residential mortgage loan portfolio.

Syndicated Loans

The Company’s syndicated loan portfolio is diversified across industries and issuers. The primary credit indicator for syndicated loans is whether the loans are performing in accordance with the contractual terms of the syndication. Total nonperforming syndicated loans at March 31, 2014 and December 31, 2013 were $1 million and $3 million, respectively.

Troubled Debt Restructurings

The following table presents the number of loans restructured by the Company during the period and their recorded investment at the end of the period:

	Three Months Ended March 31,
	2014			2013
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	(in millions, except number of loans)
Commercial mortgage loans	2	$	8	—	$	—
Residential mortgage loans	—	—		2	—
Syndicated loans	1	—		—	—
Total	3	$	8	2	$	—

The troubled debt restructurings did not have a material impact to the Company’s allowance for loan losses or income recognized for the three months ended March 31, 2014 and 2013. There are no material commitments to lend additional funds to borrowers whose loans have been restructured. 

6. DeferredAcquisitionCostsand Deferred Sales Inducement Costs

The balances of and changes in DAC were as follows:

	2014			2013
	(in millions)
Balance at January 1	$	2,633		$	2,373
Capitalization of acquisition costs	62			62
Amortization	(71		)	(59		)
Impact of change in net unrealized securities losses (gains)	(25		)	33
Balance at March 31	$	2,599		$	2,409

The balances of and changes in DSIC, which is included in other assets, were as follows:

	2014			2013
	(in millions)
Balance at January 1	$	409		$	404
Capitalization of sales inducement costs	1			2
Amortization	(13		)	(12		)
Impact of change in net unrealized securities losses (gains)	(5		)	3
Balance at March 31	$	392		$	397

13

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

7. Policyholder Account Balances, Future Policy Benefits and Claims and Separate Account Liabilities

Policyholder account balances, future policy benefits and claims consisted of the following:

	March 31, 2014			December 31, 2013
	(in millions)
Policyholder account balances
Fixed annuities	$	13,511		$	13,826
Variable annuity fixed sub-accounts	4,892			4,926
Variable universal life (“VUL”)/universal life (“UL”) insurance	2,798			2,790
Indexed universal life (“IUL”) insurance	363			315
Other life insurance	868			878
Total policyholder account balances	22,432			22,735
Future policy benefits
Variable annuity guaranteed minimum withdrawal benefits (“GMWB”)(1)	(267		)	(383		)
Variable annuity guaranteed minimum accumulation benefits (“GMAB”)(1)	(69		)	(62		)
Other annuity liabilities	103			76
Fixed annuities life contingent liabilities	1,517			1,523
Equity indexed annuities (“EIA”)	28			29
Life, disability income and long term care insurance	4,845			4,739
VUL/UL and other life insurance additional liabilities	373			336
Total future policy benefits	6,530			6,258
Policy claims and other policyholders' funds	155			156
Total policyholder account balances, future policy benefits and claims	$	29,117		$	29,149

(1) Includes the value of GMWB and GMAB embedded derivatives which was a net asset at both March 31, 2014 and December 31, 2013 and the amount is reported as a contra liability.

Separate account liabilities consisted of the following:

	March 31, 2014		December 31, 2013
	(in millions)
Variable annuity	$	71,072	$	70,687
VUL insurance	6,918		6,885
Other insurance	43		44
Total	$	78,033	$	77,616

8. Variable Annuity and Insurance Guarantees

The majority of the variable annuity contracts offered by the Company contain guaranteed minimum death benefit (“GMDB”) provisions. The Company also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings, which are referred to as gain gross-up (“GGU”) benefits. In addition, the Company offers contracts with GMWB and GMAB provisions. The Company previously offered contracts containing guaranteed minimum income benefit (“GMIB”) provisions.

Certain UL policies offered by the Company provide secondary guarantee benefits. The secondary guarantee ensures that, subject to specified conditions, the policy will not terminate and will continue to provide a death benefit even if there is insufficient policy value to cover the monthly deductions and charges.

14

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table provides information related to variable annuity guarantees for which the Company has established additional liabilities:

	March 31, 2014							December 31, 2013
Variable Annuity Guarantees by  Benefit Type(1)	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age	Total Contract Value		Contract Value in Separate Accounts		Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
GMDB:
Return of premium	$	53,368	$	51,554	$	26	64	$	52,616	$	50,790	$	28	64
Five/six-year reset	10,938		8,392		36		64	11,220		8,663		42		64
One-year ratchet	7,608		7,203		36		66	7,676		7,261		38		65
Five-year ratchet	1,790		1,734		1		62	1,781		1,725		1		62
Other	1,002		983		37		69	1,015		996		36		69
Total — GMDB	$	74,706	$	69,866	$	136	64	$	74,308	$	69,435	$	145	64
GGU death benefit	$	1,051	$	999	$	121	66	$	1,052	$	998	$	121	64
GMIB	$	396	$	372	$	8	66	$	413	$	389	$	8	66
GMWB:
GMWB	$	3,864	$	3,850	$	1	67	$	3,936	$	3,921	$	1	67
GMWB for life	34,821		34,695		92		65	34,069		33,930		77		64
Total — GMWB	$	38,685	$	38,545	$	93	65	$	38,005	$	37,851	$	78	64
GMAB	$	4,201	$	4,190	$	1	58	$	4,194	$	4,181	$	2	58

(1) Individual variable annuity contracts may have more than one guarantee and therefore may be included in more than one benefit type. Variable annuity contracts for which the death benefit equals the account value are not shown in this table.

The net amount at risk for GMDB, GGU and GMAB guarantees is defined as the current guaranteed benefit amount in excess of the current contract value. The net amount at risk for GMIB and GMWB guarantees is defined as the greater of the present value of the minimum guaranteed withdrawal payments less the current contract value or zero. The present value is calculated using a discount rate that is consistent with assumptions embedded in the Company’s annuity pricing models.

The following table provides information related to insurance guarantees for which the Company has established additional liabilities:

	March 31, 2014			December 31, 2013
	Net Amount at Risk		Weighted Average Attained Age	Net Amount at Risk		Weighted Average Attained Age
	(in millions, except age)
UL secondary guarantees	$	5,749	62	$	5,674	62

The net amount at risk for UL secondary guarantees is defined as the current guaranteed death benefit amount in excess of the current policyholder value.

15

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Changes in additional liabilities (contra liabilities) for variable annuity and insurance guarantees were as follows:

	GMDB & GGU			GMIB		GMWB(1)			GMAB(1)			UL
	(in millions)
Balance at January 1, 2013	$	4		$	9	$	799		$	103		$	155
Incurred claims	1			—		(480		)	(80		)	17
Paid claims	(1		)	—		—			—			(3		)
Balance at March 31, 2013	$	4		$	9	$	319		$	23		$	169
Balance at January 1, 2014	$	4		$	6	$	(383	)	$	(62	)	$	206
Incurred claims	1			—		116			(7		)	11
Paid claims	(1		)	—		—			—			4
Balance at March 31, 2014	$	4		$	6	$	(267	)	$	(69	)	$	221

(1) The incurred claims for GMWB and GMAB represent the total change in the liabilities (contra liabilities).

The liabilities for guaranteed benefits are supported by general account assets.

The following table summarizes the distribution of separate account balances by asset type for variable annuity contracts providing guaranteed benefits:

	March 31, 2014		December 31, 2013
	(in millions)
Mutual funds:
Equity	$	39,742	$	39,195
Bond	25,965		26,519
Other	4,168		3,764
Total mutual funds	$	69,875	$	69,478

9. Line of Credit

RiverSource Life Insurance Company, as the borrower, had an outstanding balance at March 31, 2014 and December 31, 2013 of nil and $150 million, respectively, under a revolving credit agreement with Ameriprise Financial as the lender. The aggregate amount outstanding under the line of credit may not exceed $800 million at any time. The interest rate for any borrowing under the agreement is established by reference to LIBOR plus 90 basis points, subject to adjustment based on debt ratings of the senior unsecured debt of Ameriprise Financial. Amounts borrowed may be repaid at any time with no prepayment penalty. The outstanding balance at December 31, 2013 was paid in full during the first quarter of 2014.

10. Short-term Borrowings

The Company enters into repurchase agreements in exchange for cash which it accounts for as secured borrowings. The Company has pledged Available-for-Sale securities consisting of agency residential mortgage backed securities and commercial mortgage backed securities to collateralize its obligation under the repurchase agreements. The fair value of the securities pledged is recorded in investments and was $51 million and $52 million at March 31, 2014 and December 31, 2013, respectively. The amount of the Company’s liability including accrued interest as of both March 31, 2014 and December 31, 2013 was $50 million. The weighted average annualized interest rate on the repurchase agreements held as of both March 31, 2014 and December 31, 2013 was 0.3%.

RiverSource Life Insurance Company is a member of the Federal Home Loan Bank (“FHLB”) of Des Moines which provides access to collateralized borrowings. In 2013, the Company began to borrow short-term funds under these FHLB borrowings. The Company has pledged Available-for-Sale securities consisting of commercial mortgage backed securities to collateralize its obligation under these borrowings. The fair value of the securities pledged is recorded in investments and was $506 million and $574 million at March 31, 2014 and December 31, 2013, respectively. The amount of the Company’s liability including accrued interest as of March 31, 2014 and December 31, 2013 was $250 million and $450 million, respectively. The weighted average annualized interest rate on the FHLB advances held as of both March 31, 2014 and December 31, 2013 was 0.3%.

11. Fair Values of Assets and Liabilities

GAAP defines fair value as 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; that is, an exit price. The exit price assumes the asset or liability is not exchanged subject to a forced liquidation or distressed sale.

16

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Valuation Hierarchy

The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2 Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis:

	March 31, 2014
	Level 1		Level 2		Level 3			Total
	(in millions)
Assets
Available-for-Sale securities: Fixed maturities:
Corporate debt securities	$	—	$	14,329	$	1,391		$	15,720
Residential mortgage backed securities	—		3,749		11			3,760
Commercial mortgage backed securities	—		2,370		55			2,425
State and municipal obligations	—		1,052		—			1,052
Asset backed securities	—		884		149			1,033
Foreign government bonds and obligations	—		253		—			253
U.S. government and agencies obligations	9		35		—			44
Total Available-for-Sale securities: Fixed maturities	9		22,672		1,606			24,287
Common stocks	3		4		—			7
Cash equivalents	1		101		—			102
Other assets:
Interest rate derivative contracts	—		1,462		—			1,462
Equity derivative contracts	306		1,275		—			1,581
Credit derivative contracts	—		1		—			1
Foreign currency derivative contracts	—		3		—			3
Total other assets	306		2,741		—			3,047
Separate account assets	—		78,033		—			78,033
Total assets at fair value	$	319	$	103,551	$	1,606		$	105,476
Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives	$	—	$	5	$	—		$	5
IUL embedded derivatives	—		—		154			154
GMWB and GMAB embedded derivatives	—		—		(471		)	(471		)	(2)
Total policyholder account balances, future policy benefits and claims	—		5		(317		)	(312		)	(1)
Other liabilities:
Interest rate derivative contracts	—		1,442		—			1,442
Equity derivative contracts	552		2,234		—			2,786
Total other liabilities	552		3,676		—			4,228
Total liabilities at fair value	$	552	$	3,681	$	(317	)	$	3,916

(1) The Company’s adjustment for nonperformance risk resulted in a $169 million cumulative increase to the embedded derivatives.

(2) The fair value of the GMWB and GMAB embedded derivatives was a net asset at March 31, 2014 and the amount is reported as a contra liability.

17

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

	December 31, 2013
	Level 1		Level 2		Level 3			Total
	(in millions)
Assets
Available-for-Sale securities: Fixed maturities:
Corporate debt securities	$	—	$	14,357	$	1,516		$	15,873
Residential mortgage backed securities	—		3,753		58			3,811
Commercial mortgage backed securities	—		2,404		30			2,434
State and municipal obligations	—		998		—			998
Asset backed securities	—		763		218			981
Foreign government bonds and obligations	—		245		—			245
U.S. government and agencies obligations	9		36		—			45
Total Available-for-Sale securities: Fixed maturities	9		22,556		1,822			24,387
Common stocks	3		3		—			6
Cash equivalents	1		320		—			321
Other assets:
Interest rate derivative contracts	—		1,488		—			1,488
Equity derivative contracts	265		1,503		—			1,768
Credit derivative contracts	—		3		—			3
Foreign currency derivative contracts	—		2		—			2
Total other assets	265		2,996		—			3,261
Separate account assets	—		77,616		—			77,616
Total assets at fair value	$	278	$	103,491	$	1,822		$	105,591
Liabilities
Policyholder account balances, future policy benefits and claims:
EIA embedded derivatives	$	—	$	5	$	—		$	5
IUL embedded derivatives	—		—		125			125
GMWB and GMAB embedded derivatives	—		—		(575		)	(575		)	(2)
Total policyholder account balances, future policy benefits and claims	—		5		(450		)	(445		)	(1)
Other liabilities:
Interest rate derivative contracts	—		1,693		—			1,693
Equity derivative contracts	549		2,390		—			2,939
Total other liabilities	549		4,083		—			4,632
Total liabilities at fair value	$	549	$	4,088	$	(450	)	$	4,187

(1) The Company’s adjustment for nonperformance risk resulted in a $150 million cumulative increase to the embedded derivatives.

(2) The fair value of the GMWB and GMAB embedded derivatives was a net asset at December 31, 2013 and the amount is reported as a contra liability.

18

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables provide a summary of changes in Level 3 assets and liabilities measured at fair value on a recurring basis:

	Available-for-Sale Securities: Fixed Maturities																Policyholder Account Balances, Future Policy Benefits and Claims:
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Total				IUL Embedded Derivatives				GMWB and GMAB Embedded Derivatives				Total
	(in millions)
Balance, January 1, 2014	$	1,516		$	58		$	30		$	218		$	1,822			$	(125	)		$	575			$	450
Total gains (losses) included in:
Net income	1			—			—			—			1			(1)	(6		)	(2)	(52		)	(3)	(58		)
Other comprehensive loss	5			—			—			—			5				—				—				—
Purchases	24			11			39			—			74				—				—				—
Sales	(11		)	—			—			—			(11		)		—				—				—
Issues	—			—			—			—			—				(24		)		(59		)		(83		)
Settlements	(144		)	—			—			—			(144		)		1				7				8
Transfers out of Level 3	—			(58		)	(14		)	(69		)	(141		)		—				—				—
Balance, March 31, 2014	$	1,391		$	11		$	55		$	149		$	1,606			$	(154	)		$	471			$	317
Changes in unrealized gains (losses) relating to assets and liabilities held at March 31, 2014 included in:
Benefits, claims, losses and settlement expenses	$	—		$	—		$	—		$	—		$	—			$	—			$	(52	)		$	(52	)
Interest credited to fixed accounts	—			—			—			—			—				(6		)		—				(6		)

(1) Represents a $1 million net gain included in net realized investment gains (losses) in the Consolidated Statements of Income.

(2) Included in interest credited to fixed accounts in the Consolidated Statements of Income.

(3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income.

	Available-for-Sale Securities: Fixed Maturities																Policyholder Account Balances, Future Policy Benefits and Claims:
	Corporate Debt Securities			Residential Mortgage Backed Securities			Commercial Mortgage Backed Securities			Asset Backed Securities			Total				IUL Embedded Derivatives				GMWB and GMAB Embedded Derivatives				Total
	(in millions)
Balance, January 1, 2013	$	1,654		$	23		$	170		$	156		$	2,003			$	(45	)		$	(833	)		$	(878	)
Total gains (losses) included in:
Net income	—			—			—			1			1			(1)	(4		)	(2)	618			(3)	614
Other comprehensive income	—			—			(2		)	4			2				—				—				—
Purchases	54			—			—			—			54				—				—				—
Issues	—			—			—			—			—				(12		)		(50		)		(62		)
Settlements	(55		)	—			—			(1		)	(56		)		—				(1		)		(1		)
Transfers out of Level 3	—			(15		)	—			—			(15		)		—				—				—
Balance, March 31, 2013	$	1,653		$	8		$	168		$	160		$	1,989			$	(61	)		$	(266	)		$	(327	)
Changes in unrealized gains (losses) relating to assets and liabilities held at March 31, 2013 included in:
Net investment income	$	—		$	—		$	—		$	1		$	1			$	—			$	—			$	—
Benefits, claims, losses and settlement expenses	—			—			—			—			—				—				609				609
Interest credited to fixed accounts	—			—			—			—			—				(4		)		—				(4		)

(1) Represents a $1 million net gain included in net realized investment gains (losses) in the Consolidated Statements of Income.

(2) Included in interest credited to fixed accounts in the Consolidated Statements of Income.

(3) Included in benefits, claims, losses and settlement expenses in the Consolidated Statements of Income.

The impact to pretax income of the Company’s adjustment for nonperformance risk on the fair value of its embedded derivatives was $15 million and $(62) million, net of DAC, DSIC, unearned revenue amortization and the reinsurance accrual, for the three months ended March 31, 2014 and 2013, respectively.

Securities transferred from Level 3 primarily represent securities with fair values that are now obtained from a third party pricing service with observable inputs. Securities transferred to Level 3 represent securities with fair values that are now based

19

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

on a single non-binding broker quote. The Company recognizes transfers between levels of the fair value hierarchy as of the beginning of the quarter in which each transfer occurred. For assets and liabilities held at the end of the reporting periods that are measured at fair value on a recurring basis, there were no transfers between Level 1 and Level 2.

The following tables provide a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities:

	March 31, 2014
	Fair Value			Valuation Technique	Unobservable Input	Range			Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	1,366		Discounted cash flow	Yield/spread to U.S. Treasuries	0.8%	-	4.8%	1.4	%
IUL embedded derivatives	$	154		Discounted cash flow	Nonperformance risk(3)	70		bps
GMWB and GMAB embedded derivatives	$	(471	)	Discounted cash flow	Utilization of guaranteed withdrawals(1)	0.0%	-	51.1%
					Surrender rate	0.1%	-	57.9%
					Market volatility(2)	4.7%	-	17.8%
					Nonperformance risk(3)	70		bps
					Elective contractholder strategy allocations(4)	0.0%	-	50.0%

	December 31, 2013
	Fair Value			Valuation Technique	Unobservable Input	Range			Weighted Average
	(in millions)
Corporate debt securities (private placements)	$	1,487		Discounted cash flow	Yield/spread to U.S. Treasuries	0.9%	-	5.3%	1.6%
IUL embedded derivatives	$	125		Discounted cash flow	Nonperformance risk(3)	74		bps
GMWB and GMAB embedded derivatives	$	(575	)	Discounted cash flow	Utilization of guaranteed withdrawals(1)	0.0%	-	51.1%
					Surrender rate	0.1%	-	57.9%
					Market volatility(2)	4.9%	-	18.8%
					Nonperformance risk(3)	74		bps
					Elective contractholder strategy allocations(4)	0.0%		50.0%

(1) The utilization of guaranteed withdrawals represents the percentage of contractholders that will begin withdrawing in any given year.

(2) Market volatility is implied volatility of fund of funds and managed volatility funds.

(3) The nonperformance risk is the spread added to the observable interest rates used in the valuation of the embedded derivatives.

(4) The elective allocation represents the percentage of contractholders that are assumed to electively switch their investment allocation to a different allocation model.

Level 3 measurements not included in the table above are obtained from non-binding broker quotes where unobservable inputs are not reasonably available to the Company.

Sensitivity of Fair Value Measurements to Changes in Unobservable Inputs

Significant increases (decreases) in the yield/spread to U.S. Treasuries used in the fair value measurement of Level 3 corporate debt securities in isolation would result in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in nonperformance risk used in the fair value measurement of the IUL embedded derivatives in isolation would result in a significantly lower (higher) fair value measurement.

Significant increases (decreases) in utilization, surrender rate and volatility used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would result in a significantly lower (higher) asset value, possibly creating a liability. Significant increases (decreases) in nonperformance risk and elective investment allocation model used in the fair value measurement of the GMWB and GMAB embedded derivatives in isolation would result in a significantly higher (lower) asset value. Utilization of guaranteed withdrawals and surrender rates vary with the type of rider, the duration of the policy, the age of the contractholder, the distribution system and whether the value of the guaranteed benefit exceeds the contract accumulation value.

20

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Determination of Fair Value

The Company uses valuation techniques consistent with the market and income approaches to measure the fair value of its assets and liabilities. The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The Company’s income approach uses valuation techniques to convert future projected cash flows to a single discounted present value amount. When applying either approach, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Assets

Cash Equivalents

Cash equivalents include highly liquid investments with original maturities of 90 days or less. Actively traded money market funds are measured at their net asset value (“NAV”) and classified as Level 1. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

Available-for-Sale Securities

When available, the fair value of securities is based on quoted prices in active markets. If quoted prices are not available, fair values are obtained from third party pricing services, non-binding broker quotes, or other model-based valuation techniques. Level 1 securities include U.S. Treasuries. Level 2 securities include corporate bonds, residential mortgage backed securities, commercial mortgage backed securities, state and municipal obligations, asset backed securities and U.S. agency and foreign government securities. The fair value of these Level 2 securities is based on a market approach with prices obtained from third party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. Level 3 securities primarily include certain corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and asset backed securities. The fair value of corporate bonds, non-agency residential mortgage backed securities, commercial mortgage backed securities and certain asset backed securities classified as Level 3 is typically based on a single non-binding broker quote. The underlying inputs used for some of the non-binding broker quotes are not readily available to the Company. The Company’s privately placed corporate bonds are typically based on a single non-binding broker quote. In addition to the general pricing controls, the Company reviews the broker prices to ensure that the broker quotes are reasonable and, when available, compares prices of privately issued securities to public issues from the same issuer to ensure that the implicit illiquidity premium applied to the privately placed investment is reasonable considering investment characteristics, maturity, and average life of the investment.

In consideration of the above, management is responsible for the fair values recorded on the financial statements. Prices received from third party pricing services are subjected to exception reporting that identifies investments with significant daily price movements as well as no movements. The Company reviews the exception reporting and resolves the exceptions through reaffirmation of the price or recording an appropriate fair value estimate. The Company also performs subsequent transaction testing. The Company performs annual due diligence of third party pricing services. The Company’s due diligence procedures include assessing the vendor’s valuation qualifications, control environment, analysis of asset-class specific valuation methodologies, and understanding of sources of market observable assumptions and unobservable assumptions, if any, employed in the valuation methodology. The Company also considers the results of its exception reporting controls and any resulting price challenges that arise.

Separate Account Assets

The fair value of assets held by separate accounts is determined by the NAV of the funds in which those separate accounts are invested. The NAV represents the exit price for the separate account. Separate account assets are classified as Level 2 as they are traded in principal-to-principal markets with little publicly released pricing information.

Other Assets

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The fair value of derivatives that are traded in less active over-the-counter (“OTC”) markets are generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The counterparties’ nonperformance risk associated with uncollateralized derivative assets was immaterial at March 31, 2014 and December 31, 2013. See Note 12 and Note 13 for further information on the credit risk of derivative instruments and related collateral.

21

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Liabilities

Policyholder Account Balances, Future Policy Benefits and Claims

The Company values the embedded derivatives attributable to the provisions of certain variable annuity riders using internal valuation models. These models calculate fair value by discounting expected cash flows from benefits plus margins for profit, risk and expenses less embedded derivative fees. The projected cash flows used by these models include observable capital market assumptions and incorporate significant unobservable inputs related to contractholder behavior assumptions, implied volatility, and margins for risk, profit and expenses that the Company believes an exit market participant would expect. The fair value also reflects a current estimate of the Company’s nonperformance risk specific to these embedded derivatives. Given the significant unobservable inputs to this valuation, these measurements are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims.

The Company uses various Black-Scholes calculations to determine the fair value of the embedded derivatives associated with the provisions of its EIA and IUL products. Significant inputs to the EIA calculation include observable interest rates, volatilities and equity index levels and, therefore, are classified as Level 2. The fair value of the IUL embedded derivatives includes significant observable interest rates, volatilities and equity index levels and the significant unobservable estimate of the Company’s nonperformance risk. Given the significance of the nonperformance risk assumption to the fair value, the IUL embedded derivatives are classified as Level 3. The embedded derivatives attributable to these provisions are recorded in policyholder account balances, future policy benefits and claims.

The Company’s Corporate Actuarial Department calculates the fair value of the embedded derivatives on a monthly basis. During this process, control checks are performed to validate the completeness of the data. Actuarial management approves various components of the valuation along with the final results. The change in the fair value of the embedded derivatives is reviewed monthly with senior management. The Level 3 inputs into the valuation are consistent with the pricing assumptions and updated as experience develops. Significant unobservable inputs that reflect policyholder behavior are reviewed quarterly along with other valuation assumptions.

Other Liabilities

Derivatives that are measured using quoted prices in active markets, such as derivatives that are exchange-traded, are classified as Level 1 measurements. The fair value of derivatives that are traded in less active OTC markets are generally measured using pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy and include swaps and the majority of options. The Company’s nonperformance risk associated with uncollateralized derivative liabilities was immaterial at March 31, 2014 and December 31, 2013. See Note 12 and Note 13 for further information on the credit risk of derivative instruments and related collateral.

During the reporting periods, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

The following tables provide the carrying value and the estimated fair value of financial instruments that are not reported at fair value. All other financial instruments that are reported at fair value have been included above in the table with balances of assets and liabilities measured at fair value on a recurring basis.

	March 31, 2014
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	3,310	$	—	$	—	$	3,381	$	3,381
Policy loans	779		—		—		769		769
Other investments	426		—		386		43		429
Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	13,791	$	—	$	—	$	14,459	$	14,459
Short-term borrowings	300		—		300		—		300
Other liabilities	120		—		—		117		117
Separate account liabilities	393		—		393		—		393

22

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

	December 31, 2013
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
	(in millions)
Financial Assets
Mortgage loans, net	$	3,326	$	—	$	—	$	3,372	$	3,372
Policy loans	773		—		—		765		765
Other investments	385		—		346		42		388
Financial Liabilities
Policyholder account balances, future policy benefits and claims	$	14,106	$	—	$	—	$	14,724	$	14,724
Short-term borrowings	500		—		500		—		500
Line of credit with Ameriprise Financial	150		—		—		150		150
Other liabilities	137		—		—		134		134
Separate account liabilities	400		—		400		—		400

Mortgage Loans, Net

The fair value of commercial mortgage loans, except those with significant credit deterioration, is determined by discounting contractual cash flows using discount rates that reflect current pricing for loans with similar remaining maturities, liquidity and characteristics including LTV ratio, occupancy rate, refinance risk, debt-service coverage, location, and property condition. For commercial mortgage loans with significant credit deterioration, fair value is determined using the same adjustments as above with an additional adjustment for the Company’s estimate of the amount recoverable on the loan.

The fair value of residential mortgage loans is determined by discounting estimated cash flows and incorporating adjustments for prepayment, administration expenses, loss severity and credit loss estimates, with discount rates based on the Company’s estimate of current market conditions.

Given the significant unobservable inputs to the valuation of mortgage loans, these measurements are classified as Level 3.

Policy Loans

Policy loans represent loans made against the cash surrender value of the underlying life insurance or annuity product. These loans and the related interest are usually realized at death of the policyholder or contractholder or at surrender of the contract and are not transferable without the underlying insurance or annuity contract. The fair value of policy loans is determined by estimating expected cash flows discounted at rates based on the U.S. Treasury curve. Policy loans are classified as Level 3 as the discount rate used may be adjusted for the underlying performance of individual policies.

Other Investments

Other investments primarily consist of syndicated loans and an investment in FHLB. The fair value of syndicated loans is obtained from a third party service or non-binding broker quotes. Syndicated loans that are priced using a market approach with observable inputs are classified as Level 2 and syndicated loans priced using a single non-binding broker quote are classified as Level 3. The fair value of the investment in FHLB is approximated by the carrying value and classified as Level 3 due to restrictions on transfer and lack of liquidity in the primary market for this asset.

Policyholder Account Balances, Future Policy Benefits and Claims

The fair value of fixed annuities, in deferral status, is determined by discounting cash flows using a risk neutral discount rate with adjustments for profit margin, expense margin, early policy surrender behavior, a margin for adverse deviation from estimated early policy surrender behavior and the Company’s nonperformance risk specific to these liabilities. The fair value of non-life contingent fixed annuities in payout status, EIA host contracts and the fixed portion of a small number of variable annuity contracts classified as investment contracts is determined in a similar manner. Given the use of significant unobservable inputs to these valuations, the measurements are classified as Level 3.

Short-term Borrowings

The fair value of short-term borrowings is obtained from a third party pricing service. A nonperformance adjustment is not included as collateral requirements for these borrowings minimize the nonperformance risk. The fair value of short-term borrowings is classified as Level 2.

23

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Line of Credit with Ameriprise Financial

The fair value of the line of credit is determined by discounting cash flows with an adjustment for the Company’s nonperformance risk specific to this liability. The fair value of the line of credit is classified as Level 3.

Other Liabilities

Other liabilities consist of future funding commitments to affordable housing partnerships. The fair value of these future funding commitments is determined by discounting cash flows. The fair value of these commitments includes an adjustment for the Company’s nonperformance risk and is classified as Level 3 due to the use of the significant unobservable input.

Separate Account Liabilities

Certain separate account liabilities are classified as investment contracts and are carried at an amount equal to the related separate account assets. The NAV of the related separate account assets represents the exit price for the separate account liabilities. Separate account liabilities are classified as Level 2 as they are traded in principal-to-principal markets with little publicly released pricing information. A nonperformance adjustment is not included as the related separate account assets act as collateral for these liabilities and minimize nonperformance risk.

12. Offsetting Assets and Liabilities

Certain financial instruments and derivative instruments are eligible for offset in the Consolidated Balance Sheets. The Company’s derivative instruments and repurchase agreements are subject to master netting arrangements and collateral arrangements and qualify for offset. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. The Company’s policy is to recognize amounts subject to master netting arrangements on a gross basis in the Consolidated Balance Sheets.

The following tables present the gross and net information about the Company’s assets subject to master netting arrangements:

	March 31, 2014
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
							Financial Instruments(1)			Cash Collateral			Securities Collateral			Net Amount
	(in millions)
Derivatives:
OTC	$	2,959	$	—	$	2,959	$	(2,862	)	$	(30	)	$	(43	)	$	24
OTC cleared	41		—		41		(29		)	(12		)	—			—
Exchange-traded	47		—		47		—			—			—			47
Total derivatives	$	3,047	$	—	$	3,047	$	(2,891	)	$	(42	)	$	(43	)	$	71

	December 31, 2013
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Assets Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
							Financial Instruments(1)			Cash Collateral			Securities Collateral			Net Amount
	(in millions)
Derivatives:
OTC	$	3,180	$	—	$	3,180	$	(3,134	)	$	(17	)	$	(16	)	$	13
OTC cleared	21		—		21		(20		)	(1		)	—			—
Exchange-traded	60		—		60		—			—			—			60
Total derivatives	$	3,261	$	—	$	3,261	$	(3,154	)	$	(18	)	$	(16	)	$	73

(1) Represents the amount of assets that could be offset by liabilities with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

24

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following tables present the gross and net information about the Company’s liabilities subject to master netting arrangements:

	March 31, 2014
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
							Financial Instruments(1)			Cash Collateral			Securities Collateral			Net Amount
	(in millions)
Derivatives:
OTC	$	4,198	$	—	$	4,198	$	(2,862	)	$	—		$	(1,318	)	$	18
OTC cleared	30		—		30		(29		)	(1		)	—			—
Total derivatives	4,228		—		4,228		(2,891		)	(1		)	(1,318		)	18
Repurchase agreements	50		—		50		—			—			(50		)	—
Total	$	4,278	$	—	$	4,278	$	(2,891	)	$	(1	)	$	(1,368	)	$	18

	December 31, 2013
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Amounts of Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
							Financial Instruments(1)			Cash Collateral			Securities Collateral			Net Amount
	(in millions)
Derivatives:
OTC	$	4,610	$	—	$	4,610	$	(3,134	)	$	—		$	(1,465	)	$	11
OTC cleared	22		—		22		(20		)	(2		)	—			—
Total derivatives	4,632		—		4,632		(3,154		)	(2		)	(1,465		)	11
Repurchase agreements	50		—		50		—			—			(50		)	—
Total	$	4,682	$	—	$	4,682	$	(3,154	)	$	(2	)	$	(1,515	)	$	11

(1) Represents the amount of liabilities that could be offset by assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Consolidated Balance Sheets.

In the tables above, the amounts of assets or liabilities presented in the Consolidated Balance Sheets are offset first by financial instruments that have the right of offset under master netting or similar arrangements, then any remaining amount is reduced by the amount of cash and securities collateral. The actual amounts of collateral may be greater than amounts presented in the tables.

The Company’s freestanding derivative instruments are reflected in other assets and other liabilities. Repurchase agreements are reflected in short-term borrowings. See Note 13 for additional disclosures related to the Company’s derivative instruments and Note 10 for additional disclosures related to the Company’s repurchase agreements.

13. Derivatives and Hedging Activities

Derivative instruments enable the Company to manage its exposure to various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity and interest rate indices or prices. The Company primarily enters into derivative agreements for risk management purposes related to the Company’s products and operations.

The Company’s freestanding derivatives are recorded at fair value and are reflected in other assets or other liabilities. The Company’s freestanding derivative instruments are all subject to master netting arrangements. The Company’s policy on the recognition of derivatives on the Consolidated Balance Sheets is to not offset fair value amounts recognized for derivatives and collateral arrangements executed with the same counterparty under the same master netting arrangement. See Note 12 for additional information regarding the estimated fair value of the Company’s freestanding derivatives after considering the effect of master netting arrangements and collateral.

25

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The Company currently uses derivatives as economic hedges and accounting hedges. The following table presents the balance sheet location and the gross fair value of derivative instruments, including embedded derivatives:

		Assets					Liabilities
Derivatives not designated as hedging instruments	Balance Sheet Location	March 31, 2014		December 31, 2013		Balance Sheet Location	March 31, 2014			December 31, 2013
		(in millions)					(in millions)
GMWB and GMAB
Interest rate contracts	Other assets	$	1,452	$	1,484	Other liabilities	$	1,429		$	1,672
Equity contracts	Other assets	1,553		1,741		Other liabilities	2,765			2,918
Credit contracts	Other assets	1		3		Other liabilities	—			—
Foreign currency contracts	Other assets	3		2		Other liabilities	—			—
Embedded derivatives(1)	N/A	—		—		Policyholder account balances, future policy benefits and claims(2)	(471		)	(575		)
Total GMWB and GMAB		3,009		3,230			3,723			4,015
Other derivatives:
Interest rate
Macro hedge program	Other assets	10		4		Other liabilities	13			21
Equity
Macro hedge program	Other assets	—		—		Other liabilities	12			8
EIA embedded derivatives	N/A	—		—		Policyholder account balances, future policy benefits and claims	5			5
IUL	Other assets	28		27		Other liabilities	9			13
IUL embedded derivatives	N/A	—		—		Policyholder account balances, future policy benefits and claims	154			125
Total other		38		31			193			172
Total derivatives		$	3,047	$	3,261		$	3,916		$	4,187

N/A Not applicable.

(1) The fair values of GMWB and GMAB embedded derivatives fluctuate based on changes in equity, interest rate and credit markets.

(2) The fair value of the GMWB and GMAB embedded derivatives was a net asset at both March 31, 2014 and December 31, 2013 and the amount is reported as a contra liability.

See Note 11 for additional information regarding the Company’s fair value measurement of derivative instruments.

26

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The following table presents a summary of the impact of derivatives not designated as hedging instruments on the Consolidated Statements of Income:

		Amount of Gain (Loss) on Derivatives Recognized in Income
Derivatives not designated as hedging instruments	Location of Gain (Loss) on Derivatives Recognized in Income	Three Months Ended March 31,
		2014			2013
		(in millions)
GMWB and GMAB
Interest rate contracts	Benefits, claims, losses and settlement expenses	$	264		$	(132	)
Equity contracts	Benefits, claims, losses and settlement expenses	(190		)	(492		)
Credit contracts	Benefits, claims, losses and settlement expenses	(10		)	—
Foreign currency contracts	Benefits, claims, losses and settlement expenses	(1		)	5
Embedded derivatives(1)	Benefits, claims, losses and settlement expenses	(104		)	567
Total GMWB and GMAB		(41		)	(52		)
Other derivatives:
Interest rate
Macro hedge program	Benefits, claims, losses and settlement expenses	17			—
Tax hedge	Net investment income	3			—
Equity
Macro hedge program	Benefits, claims, losses and settlement expenses	(4		)	—
EIA	Interest credited to fixed accounts	—			1
EIA embedded derivatives	Interest credited to fixed accounts	—			(1		)
IUL	Interest credited to fixed accounts	5			4
IUL embedded derivatives	Interest credited to fixed accounts	6			3
Total other		27			7
Total derivatives		$	(14	)	$	(45	)

(1) The fair values of GMWB and GMAB embedded derivatives fluctuate based on changes in equity, interest rate and credit markets.

The Company holds derivative instruments that either do not qualify or are not designated for hedge accounting treatment. These derivative instruments are used as economic hedges of equity, interest rate, credit and foreign currency exchange rate risk related to various products and transactions of the Company.

Certain annuity contracts contain GMWB or GMAB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments or guarantee a minimum accumulation value of consideration received at the beginning of the contract period, after a specified holding period, respectively. The Company economically hedges the exposure related to non-life contingent GMWB and GMAB provisions primarily using various futures, options, interest rate swaptions, interest rate swaps, total return swaps, variance swaps and credit default swaps. At March 31, 2014 and December 31, 2013, the gross notional amount of derivative contracts for the Company’s GMWB and GMAB provisions was $138.8 billion and $142.4 billion, respectively.

The deferred premium associated with certain of the above options is paid or received semi-annually over the life of the option contract or at maturity. The following is a summary of the payments the Company is scheduled to make and receive for these options:

	Premiums Payable		Premiums Receivable
	(in millions)
2014(1)	$	295	$	76
2015	340		67
2016	298		51
2017	227		45
2018	185		55
2019-2026	479		77
Total	$	1,824	$	371

(1) 2014 amounts represent the amounts payable and receivable for the period from April 1, 2014 to December 31, 2014.

27

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Actual timing and payment amounts may differ due to future contract settlements, modifications or exercises of options prior to the full premium being paid or received.

During 2013, the Company transferred net derivative liabilities with a fair value of $94 million, consisting of long-dated options, along with cash payment of the same amount to Ameriprise Financial. The transaction improves the risk management profile of statutory tail scenario risk for the Company's variable annuities. 

Beginning in the fourth quarter of 2013, the Company established a macro hedge program which uses a combination of options and/or swaps to provide protection against the statutory tail scenario risk arising from variable annuity reserves on the Company’s statutory surplus. The program also covers some of the residual risks not covered by other hedging activities. The gross notional amount of these derivative contracts was $710 million at both March 31, 2014 and December 31, 2013.

EIA and IUL products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the obligation incurred by the Company related to EIA and IUL products will positively or negatively impact earnings over the life of these products. As a means of economically hedging its obligations under the provisions of these products, the Company enters into index options and futures contracts. The gross notional amount of these derivative contracts was $604 million and $512 million at March 31, 2014 and December 31, 2013, respectively.

Embedded Derivatives

Certain annuities contain GMAB and non-life contingent GMWB provisions, which are considered embedded derivatives. In addition, the equity component of the EIA and IUL product obligations are also considered embedded derivatives. These embedded derivatives are bifurcated from their host contracts for valuation purposes and reported on the Consolidated Balance Sheets at fair value with changes in fair value reported in earnings. As discussed above, the Company uses derivatives to mitigate the financial statement impact of these embedded derivatives.

Cash Flow Hedges

The Company has amounts classified in accumulated other comprehensive income ("AOCI") related to gains and losses associated with the effective portion of previously designated cash flow hedges. The Company reclassifies these amounts into income as the forecasted transactions impact earnings. During the three months ended March 31, 2014, the Company held no derivatives that were designated as cash flow hedges.

At March 31, 2014, the Company expects to reclassify $6 million of deferred loss on derivative instruments from AOCI to earnings during the next 12 months that will be recorded in net investment income. These were originally losses on derivative instruments related to interest rate swaptions. During the three months ended March 31, 2014 and 2013, no hedge relationships were discontinued due to forecasted transactions no longer being expected to occur according to the original hedge strategy. For the three months ended March 31, 2014 and 2013, amounts recognized in earnings on derivative transactions that were ineffective were not material.

The following table presents a rollforward of unrealized derivative losses related to cash flow hedges included in accumulated other comprehensive income (loss):

	2014			2013
	(in millions)
Net unrealized derivative losses at January 1	$	(17	)	$	(21	)
Reclassification of realized losses(1)	2			2
Income tax benefit	(1		)	(1		)
Net unrealized derivative losses at March 31	$	(16	)	$	(20	)

(1) Loss reclassified from AOCI to net investment income on the Consolidated Statements of Income.

Currently, the longest period of time over which the Company is hedging exposure to the variability in future cash flows is five years and relates to interest credited on forecasted fixed premium product sales.

Credit Risk

Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. To mitigate such risk, the Company has established guidelines and oversight of credit risk through a comprehensive enterprise risk management program that includes members of senior management. Key components of this program are to require preapproval of counterparties and the use of master netting arrangements and collateral arrangements whenever practical. See Note 12 for additional information on the Company’s credit exposure related to derivative assets.

28

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Certain of the Company’s derivative contracts contain provisions that adjust the level of collateral the Company is required to post based on the Company’s financial strength rating (or based on the debt rating of the Company’s parent, Ameriprise Financial). Additionally, certain of the Company’s derivative contracts contain provisions that allow the counterparty to terminate the contract if the Company does not maintain a specific financial strength rating or Ameriprise Financial’s debt does not maintain a specific credit rating (generally an investment grade rating). If these termination provisions were to be triggered, the Company’s counterparty could require immediate settlement of any net liability position. At March 31, 2014 and December 31, 2013, the aggregate fair value of derivative contracts in a net liability position containing such credit contingent provisions was $818 million and $950 million, respectively. The aggregate fair value of assets posted as collateral for such instruments as of March 31, 2014 and December 31, 2013 was $807 million and $940 million, respectively. If the credit contingent provisions of derivative contracts in a net liability position at March 31, 2014 and December 31, 2013 were triggered, the aggregate fair value of additional assets that would be required to be posted as collateral or needed to settle the instruments immediately would have been $11 million and $10 million, respectively.

14. Shareholder’s Equity

The following table provides information related to amounts reclassified from AOCI:

		Three Months Ended March 31,
AOCI Reclassification	Location of (Gain) Loss Recognized in Income	2014			2013
		(in millions)
Net unrealized (gains) losses on Available-for-Sale securities	Net realized investment gains (losses)	$	(4	)	$	1
Tax expense (benefit)	Income tax provision	1			(1		)
Net of tax		$	(3	)	$	—
Losses on cash flow hedges:
Swaptions	Net investment income	$	2		$	2
Tax benefit	Income tax provision	(1		)	(1		)
Net of tax		$	1		$	1

See Note 4 for additional information related to the impact on DAC, DSIC, benefit reserves and reinsurance recoverable from net unrealized securities gains/losses included in AOCI. See Note 13 for additional information regarding the Company’s cash flow hedges. 

15. Income Taxes

The Company’s effective tax rates were 11% and 18% for the three months ended March 31, 2014 and 2013, respectively. The effective tax rates are lower than the statutory rate as a result of tax preferred items including the dividends received deduction and low income housing credits, as well as an $18 million benefit related to the completion of an Internal Revenue Service ("IRS") audit. The decrease in the effective rate for the three months ended March 31, 2014 compared to the prior year period is primarily because of the audit benefit.

Included in the Company's deferred income tax assets are tax benefits related to state net operating losses of $6 million which will expire beginning December 31, 2014.

The Company is required to establish a valuation allowance for any portion of the deferred tax assets that management believes will not be realized. Included in deferred tax assets is a significant deferred tax asset relating to capital losses that have been recognized for financial statement purposes but not yet for tax return purposes as well as future deductible capital losses realized for tax return purposes. Under current U.S. federal income tax law, capital losses generally must be used against capital gain income within five years of the year in which the capital losses are recognized for tax purposes. Significant judgment is required in determining if a valuation allowance should be established, and the amount of such allowance if required. Factors used in making this determination include estimates relating to the performance of the business including the ability to generate capital gains. Consideration is given to, among other things in making this determination, (i) future taxable income exclusive of reversing temporary differences and carryforwards, (ii) future reversals of existing taxable temporary differences, (iii) taxable income in prior carryback years, and (iv) tax planning strategies. Based on analysis of the Company’s tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will not allow the Company to realize certain state deferred tax assets and state net operating losses and therefore a valuation allowance of $6 million was established as of both March 31, 2014 and December 31, 2013.

As of March 31, 2014 and December 31, 2013, the Company had $128 million and $144 million, respectively, of gross unrecognized tax benefits. If recognized, approximately $5 million and $23 million, net of federal tax benefits, of unrecognized tax benefits as of March 31, 2014 and December 31, 2013, respectively, would affect the effective tax rate.

29

RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

It is reasonably possible that the total amounts of unrecognized tax benefits will change in the next 12 months. Based on the current audit position of the Company, it is estimated that the total amount of gross unrecognized tax benefits may decrease by $120 million to $130 million in the next 12 months due to resolution of IRS examinations.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax provision. The Company recognized a net decrease of $1 million and a net increase of $2 million in interest and penalties for the three months ended March 31, 2014 and 2013, respectively. As of March 31, 2014 and December 31, 2013, the Company had a payable of $35 million and $36 million, respectively, related to accrued interest and penalties.

The Company or one or more of its subsidiaries files income tax returns as part of its inclusion in the consolidated federal income tax returns of Ameriprise Financial in the U.S. federal jurisdiction and various state jurisdictions. The IRS had previously completed its field examination of the 1997 through 2007 tax returns in recent years. However, for federal income tax purposes, these years except for 2007, continue to remain open as a consequence of certain unagreed-upon issues. The IRS completed the audits of the Company's 2008 and 2009 tax returns in the first quarter of 2014. The IRS is in the process of completing the audits of the Company’s income tax returns for 2010 through 2011 and expects these audits to be completed in 2014. The Company or certain of its subsidiaries’ state income tax returns are currently under examination by various jurisdictions for years ranging from 1997 through 2010 and remain open for the years after 2010. The Company filed its 2012 tax return in the third quarter of 2013, but the IRS has not yet begun its examination of 2012.

16. Guarantees and Contingencies

Guarantees

The Company is required by law to be a member of the guaranty fund association in every state where it is licensed to do business. In the event of insolvency of one or more unaffiliated insurance companies, the Company could be adversely affected by the requirement to pay assessments to the guaranty fund associations. Uncertainty and volatility in the U.S. economy and financial markets in recent years have weakened the financial condition of numerous insurers, including insurers currently in receiverships, increasing the risk of triggering guaranty fund assessments.

The Company projects its cost of future guaranty fund assessments based on estimates of insurance company insolvencies provided by the National Organization of Life and Health Insurance Guaranty Associations (“NOLHGA”) and the amount of its premiums written relative to the industry-wide premium in each state. The Company accrues the estimated cost of future guaranty fund assessments when it is considered probable that an assessment will be imposed, the event obligating the Company to pay the assessment has occurred and the amount of the assessment can be reasonably estimated.

Executive Life Insurance Company of New York (“ELNY”) was placed into rehabilitation by a New York state court in 1991. On April 16, 2012, the court issued an order converting the rehabilitation into a liquidation proceeding under a plan submitted by the New York insurance regulator with support from NOLHGA and the industry. Closing under the liquidation plan took place in August 2013.

The Company has a liability for estimated guaranty fund assessments and a related premium tax asset, primarily associated with ELNY. At March 31, 2014 and December 31, 2013, the estimated liability was $13 million and $14 million, respectively. At both March 31, 2014 and December 31, 2013, the related premium tax asset was $11 million. Subsequent to the August 2013 closing described above, the Company has received and paid assessments related to ELNY from some of the state guaranty fund associations; however, the expected period over which all of the assessments will be made and the related tax credits recovered is not known.

Contingencies

Insurance companies have been the subject of increasing regulatory, legislative and judicial scrutiny. Numerous state and federal regulatory agencies have commenced examinations and other inquiries of insurance companies regarding sales and marketing practices (including sales to older consumers and disclosure practices), claims handling, and unclaimed property and escheatment practices and procedures. With regard to an industry-wide investigation of unclaimed property and escheatment practices and procedures, the Company is responding to regulatory audits, market conduct examinations and other inquiries (including inquiries from the State of Minnesota and a multistate insurance department examination). The Company has cooperated and will continue to cooperate with the applicable regulators regarding their inquiries.

The Company is involved in the normal course of business in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of its business activities. The Company believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory investigation, examination or proceeding that is likely to have a material adverse effect on its consolidated financial condition, results of operations or liquidity.

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RIVERSOURCELIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Notwithstanding the foregoing, it is possible that the outcome of any current or future legal, arbitration or regulatory proceeding could have a material impact on results of operations in any particular reporting period as the proceedings are resolved.

Uncertain economic conditions, heightened and sustained volatility in the financial markets and significant financial reform legislation may increase the likelihood that clients and other persons or regulators may present or threaten legal claims or that regulators increase the scope or frequency of examinations of the Company or the insurance industry generally.

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ITEM 2. MANAGEMENT’S NARRATIVE ANALYSIS

The following information should be read in conjunction with RiverSource Life Insurance Company’s Consolidated Financial Statements and Notes presented in Item 1. RiverSource Life Insurance Company and its subsidiaries are referred to collectively in this Form 10-Q as the “Company”. This narrative analysis may contain forward-looking statements that reflect the Company’s plans, estimates and beliefs. Actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed under “Forward-Looking Statements.”  The Company believes it is useful to read this narrative analysis in conjunction with its Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 (“2013 10-K”), as well as its current reports on Form 8-K and other publicly available information.

The Company follows U.S. generally accepted accounting principles (“GAAP”), and the following discussion is presented on a consolidated basis consistent with GAAP.

Management’s narrative analysis of the results of operations is presented in lieu of management’s discussion and analysis of financial condition and results of operations, pursuant to General Instructions H(2)(a) of Form 10-Q.

Overview

RiverSource Life Insurance Company is a stock life insurance company with one wholly owned stock life insurance company subsidiary, RiverSource Life Insurance Co. of New York (“RiverSource Life of NY”). RiverSource Life Insurance Company is a wholly owned subsidiary of Ameriprise Financial, Inc. (“Ameriprise Financial”). 

• RiverSource Life Insurance Company is domiciled in Minnesota and holds Certificates of Authority in American Samoa, the District of Columbia and all states except New York. RiverSource Life Insurance Company issues insurance and annuity products.

• RiverSource Life of NY is domiciled and holds a Certificate of Authority in New York. RiverSource Life of NY issues insurance and annuity products.

RiverSource Life Insurance Company also wholly owns RiverSource Tax Advantaged Investments, Inc. (“RTA”). RTA is a stock company domiciled in Delaware and is a limited partner in affordable housing partnership investments.

Critical Accounting Policies

The accounting and reporting policies that the Company uses affect its Consolidated Financial Statements. Certain of the Company’s accounting and reporting policies are critical to an understanding of the Company’s financial condition and results of operations and, in some cases, the application of these policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of the Consolidated Financial Statements. These accounting policies are discussed in detail in “Management’s Narrative Analysis — Critical Accounting Policies” in the Company’s 2013 10-K.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements and their expected impact on the Company’s future consolidated financial condition or results of operations, see Note 2 to the Consolidated Financial Statements.

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Consolidated Results of Operations for theThree Months EndedMarch 31, 2014 and 2013

The following table presents the Company’s consolidated results of operations (unaudited):

	Three Months Ended March 31,
	2014		2013			Change
			(in millions)
Revenues
Premiums	$	104	$	108		$	(4	)	(4	)%
Net investment income	333		358			(25		)	(7	)
Policy and contract charges	447		416			31			7
Other revenues	95		88			7			8
Net realized investment gains (losses)	4		(1		)	5			NM
Total revenues	983		969			14			1
Benefits and expenses
Benefits, claims, losses and settlement expenses	208		235			(27		)	(11	)
Interest credited to fixed accounts	186		198			(12		)	(6	)
Amortization of deferred acquisition costs	71		59			12			20
Other insurance and operating expenses	182		183			(1		)	(1	)
Total benefits and expenses	647		675			(28		)	(4	)
Pretax income	336		294			42			14
Income tax provision	38		54			(16		)	(30	)
Net income	$	298	$	240		$	58		24	%

NM  Not Meaningful.

Overview

Net income increased $58 million or 24% to $298 million for the three months ended March 31, 2014 compared to $240 million for the prior year period. Pretax income increased $42 million or 14% to $336 million for the three months ended March 31, 2014 compared to $294 million for the prior year period primarily reflecting the impact of market appreciation, net realized gains on securities for the three months ended March 31, 2014 compared to net realized losses on securities in the prior year period, and a $27 million benefit from policyholder movement of investments in Portfolio Navigator funds under certain in-force variable annuities with living benefit guarantees into managed volatility funds, partially offset by the negative impact from spread compression in the Company’s fixed annuities, fixed insurance and the fixed portion of variable annuities and variable insurance contracts and the market impacts on variable annuity guaranteed benefits (net of hedges and the related deferred acquisition costs ("DAC") and deferred sales inducement costs ("DSIC") amortization). The market impact on variable annuity guaranteed benefits (net of hedges and the related DAC and DSIC amortization) was an expense of $3 million for the first quarter of 2014, which included a $2 million expense associated with policyholder movement of investments in Portfolio Navigator funds under certain in-force variable annuities with living benefit guarantees to the managed volatility funds, compared to an expense of $2 million for the prior year period.

The Company's variable annuity account balances increased 7% to $75.9 billion at March 31, 2014 compared to the prior year period due to equity market appreciation, partially offset by net outflows of $964 million. The Company's fixed annuity account balances declined 5% to $12.9 billion at March 31, 2014 compared to the prior year period reflecting elevated surrenders on products sold through third parties where rates have been reset. This decline is offset by the change in crediting rates, which decreased the level of spread compression in the first quarter of 2014. Approximately $3.0 billion of the five-year guarantee block has been re-priced and approximately $1.1 billion will be re-priced in the balance of the year.

Revenues

Total revenues increased $14 million or 1% to $983 million for the three months ended March 31, 2014 compared to $969 million for the prior year period.

Net investment income decreased $25 million or 7% to $333 million for the three months ended March 31, 2014 compared to $358 million for the prior year period reflecting a decrease in investment income on fixed maturities primarily due to lower invested assets and continued low interest rates.

Policy and contract charges increased $31 million or 7% to $447 million for the three months ended March 31, 2014 compared to $416 million for the prior year period. The increase is primarily due to higher separate account fees driven by higher average separate account balances due to positive market performance and higher rider fee rates on new business.

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Other revenues increased $7 million or 8% to $95 million for the three months ended March 31, 2014 compared to $88 million for the prior year period reflecting higher marketing support due to higher average separate account balances driven by positive market performance.

Net realized investment gains were $4 million for the three months ended March 31, 2014 compared to net realized investment losses of $1 million for the prior year period. In the three months ended March 31, 2014, net realized gains of $5 million on Available-for-Sale securities due to sales, calls and tenders were partially offset by other-than-temporary impairments recognized in earnings of $1 million which primarily related to the Company's decision to sell a corporate debt security. In the three months ended March 31, 2013, other-than-temporary impairments recognized in earnings were $1 million which primarily related to credit losses on non-agency residential mortgage backed securities.

Benefits and Expenses

Total benefits and expenses decreased $28 million or 4% to $647 million for the three months ended March 31, 2014 compared to $675 million for the prior year period primarily due to a decrease in benefits, claims, losses and settlement expenses, interest credited to fixed accounts partially offset by an increase in amortization of DAC.

Benefits, claims, losses and settlement expenses decreased $27 million, or 11% to $208 million for the three months ended March 31, 2014 compared to $235 million for the prior year period primarily reflecting the following items:

• A $32 million decrease in expenses from policyholder movement of investments in Portfolio Navigator funds under certain in-force variable annuities with living benefit guarantees to the managed volatility funds, which included a $2 million expense related to the market impact on variable annuity guaranteed benefits. During the fourth quarter of 2013, the Company added managed volatility fund options for its in-force variable annuities with living benefit guarantees.

• A $109 million decrease in expense compared to the prior year period from the unhedged nonperformance credit spread risk adjustment on variable annuity guaranteed living benefits.

• An increase in expenses of approximately $9 million related to higher reserve funding driven by the impact of higher fees from prior year sales with variable annuity guarantees.

• A $109 million increase in expense from other market impacts on variable annuity guaranteed living benefits, net of hedges in place to offset those risks and the related DSIC amortization. The $109 million increase was the result of an unfavorable $805 million change in the market impact on variable annuity guaranteed living benefits reserves, a favorable $695 million change in the market impact on derivatives hedging the variable annuity guaranteed benefits and a favorable $1 million DSIC offset. The main market drivers contributing to these changes are summarized below:

• Interest rates were down in 2014 and up in 2013 resulting in an unfavorable change in the variable annuity guaranteed living benefits liability, partially offset by a favorable change in the related hedge assets.

• Equity market and volatility impacts on the hedge assets resulted in lower expenses in 2014 compared to 2013. This benefit was partially offset by an unfavorable change in 2014 compared to 2013 from equity market and volatility impacts on the corresponding variable annuity guaranteed living benefits liability.

• Other unhedged items, including the difference between the assumed and actual underlying separate account investment performance, fixed income credit exposures, transaction costs and various behavioral items, were a net favorable impact compared to the prior year period.

Interest credited to fixed accounts decreased $12 million or 6% to $186 million for the three months ended March 31, 2014 compared to $198 million for the prior year period driven by lower average fixed annuity balances. Average fixed annuities contract accumulation values decreased $651 million or 5% to $13.1 billion for the three months ended March 31, 2014 compared to the prior year due to net outflows.

Amortization of DAC increased $12 million or 20% to $71 million for the three months ended March 31, 2014 compared to $59 million for the prior year period primarily reflecting the following items:

• A $5 million expense related to the DAC offset to the benefit from policyholder movement of investments in Portfolio Navigator funds under certain in-force variable annuities with living benefit guarantees to the managed volatility funds.

• The DAC offset to the market impact on variable annuity guaranteed living benefits (net of hedges and the related DSIC amortization) was an expense of $2 million for the three months ended March 31, 2014, compared to an expense of $1 million in the prior year period.

• The market impact on DAC was a benefit of $6 million for the first quarter of 2014 compared to a benefit of $12 million for the prior year period as a result of less favorable equity market returns partially offset by more favorable bond fund returns compared to the prior year period.

34

Income Taxes

The Company’s effective tax rate was 11% for the three months ended March 31, 2014, compared to 18% for the three months ended March 31, 2013. The effective tax rate for both periods is lower than the statutory rate as a result of tax preferred items including the dividends received deduction and low income housing credits, as well as an $18 million benefit related to the completion of an Internal Revenue Service audit. The decrease in the effective tax rate for the three months ended March 31, 2014 compared to the prior year period is primarily because of the audit benefit.

Market Risk

The Company’s primary market risk exposures are interest rate, equity price and credit risk. Equity price and interest rate fluctuations can have a significant impact on the Company’s results of operations, primarily due to the effects on asset-based fees and expenses, the “spread” income generated on its fixed annuities, fixed life insurance and fixed portion of its variable annuities and variable insurance contracts, the value of DAC and DSIC assets, the value of liabilities for guaranteed benefits associated with its variable annuities and the value of derivatives held to hedge these benefits.

The Company’s earnings from fixed annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts are based upon the spread between rates earned on assets held and the rates at which interest is credited to accounts. The Company primarily invests in fixed rate securities to fund the rate credited to clients. The Company guarantees an interest rate to the holders of these products. Investment assets and client liabilities generally differ as it relates to basis, repricing or maturity characteristics. Rates credited to clients’ accounts generally reset at shorter intervals than the yield on the underlying investments. Therefore, in an increasing interest rate environment, higher interest rates may be reflected in crediting rates to clients sooner than in rates earned on invested assets, which could result in a reduced spread between the two rates, reduced earned income and a negative impact on pretax income. However, the current low interest rate environment is resulting in interest rates below the level of some of the Company's liability guaranteed minimum interest rates (“GMIRs”). Hence, a modest rise in interest rates would not necessarily result in changes to all the liability credited rates while projected asset purchases would capture the full increase in interest rates. This dynamic would result in widening spreads under a modestly rising rate scenario given the current relationship between the current level of interest rates and the underlying GMIRs on the business.

As a result of the low interest rate environment, the Company's current reinvestment yields are generally lower than the current portfolio yield. The Company expects its portfolio income yields to continue to decline in future periods if interest rates remain low. The carrying value and weighted average yield of non-structured fixed maturity securities and commercial mortgage loans that may generate proceeds to reinvest through 2015 due to prepayment, maturity or call activity at the option of the issuer, excluding securities with a make-whole provision, was $2.0 billion and 4.9%, respectively, as of March 31, 2014. In addition, residential mortgage-backed securities, which are subject to prepayment risk as a result of the low interest rate environment, totaled $3.8 billion and had a weighted average yield of 4.2% as of March 31, 2014. While these amounts represent investments that could be subject to reinvestment risk, it is also possible that these investments will be used to fund liabilities or may not be prepaid and will remain invested at their current yields. In addition to the interest rate environment, the mix of benefit payments versus product sales as well as the timing and volumes associated with such mix may impact the Company’s investment yield. Furthermore, reinvestment activities and the associated investment yield may also be impacted by corporate strategies implemented at management discretion. The average yield for investment purchases during the three months ended March 31, 2014 was approximately 3.8%.

The reinvestment of proceeds from maturities, calls and prepayments at rates below the current portfolio yield, which may be below the level of some liability guaranteed minimum interest rates, will have a negative impact to future operating results. To mitigate the unfavorable impact that the low interest rate environment has on the Company's spread income, it assesses reinvestment risk in its investment portfolio and monitors this risk in accordance with its asset/liability management framework. In addition, the Company may reduce the crediting rates on its fixed products when warranted, subject to guaranteed minimums. In the first quarter of 2014, the Company continued the process of setting lower renewal interest rates for a portion of its fixed annuities that are above the guaranteed minimum, which helps relieve some of the spread compression caused by low rates. Approximately $3.0 billion of the five-year guarantee block has been re-priced and approximately $1.1 billion will be re-priced in the balance of the year.

35

The following table presents the account values of fixed annuities, fixed insurance, and the fixed portion of variable annuities and variable insurance contracts by range of guaranteed minimum crediting rates and the range of the difference between rates credited to contractholders as of March 31, 2014 and the respective guaranteed minimums, as well as the percentage of account values subject to rate reset in the time period indicated. Rates are reset at the Company’s discretion, subject to guaranteed minimums.

	Account Values with Crediting Rates
	At Guaranteed Minimum			1-49 bps Above Guaranteed Minimum			50-99 bps Above Guaranteed Minimum			100-150 bps Above Guaranteed Minimum			Greater than 150 bps Above Guaranteed Minimum			Total
Range of Guaranteed Minimum Crediting Rates	(in billions, except percentages)
1% - 1.99%	$	0.3		$	2.0		$	0.4		$	0.4		$	1.4		$	4.5
2% - 2.99%	0.5			—			0.1			—			—			0.6
3% - 3.99%	9.5			—			0.1			—			—			9.6
4% - 5.00%	5.8			—			—			—			—			5.8
Total	$	16.1		$	2.0		$	0.6		$	0.4		$	1.4		$	20.5
Percentage of Account Values That Reset In:
Next 12 months(1)	99		%	92		%	52		%	47		%	99		%	96		%
> 12 months to 24 months(2)	—			1			13			25			1			1
> 24 months(2)	1			7			35			28			—			3
Total	100		%	100		%	100		%	100		%	100		%	100		%

(1) Includes contracts with annual discretionary crediting rate resets and contracts with twelve or less months until the crediting rate becomes discretionary on an annual basis.

(2) Includes contracts with more than twelve months remaining until the crediting rate becomes an annual discretionary rate.

In addition to the fixed rate exposures noted above, the Company also has the following variable annuity guarantee benefits: guaranteed minimum withdrawal benefits ("GMWB"), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”). Each of these guaranteed benefits guarantees payouts to the annuity holder under certain specific conditions regardless of the performance of the underlying investment assets.

The variable annuity guarantees continue to be managed by utilizing a hedging program which attempts to match the sensitivity of the assets with the sensitivity of the liabilities. This approach works with the premise that matched sensitivities will produce a highly effective hedging result. The Company’s comprehensive hedging program focuses mainly on first order sensitivities of assets and liabilities; Equity Market Level (Delta), Interest Rate Level (Rho) and Volatility (Vega). Additionally, various second order sensitivities are managed. The Company uses various index options across the term structure, interest rate swaps and swaptions, total return swaps and futures to manage the risk exposures. The exposures are measured and monitored daily and adjustments to the hedge portfolio are made as necessary.

In 2013, the Company established a macro hedge program which uses a combination of options and/or swaps to provide protection against the statutory tail scenario risk arising from variable annuity reserves on its statutory surplus. The program also covers some of the residual risks not covered by other hedging activities. The Company assesses this residual risk under a range of scenarios in creating and executing the macro hedge program. The macro hedge program could result in additional earnings volatility as changes in the value of the macro hedge derivatives, which are designed to reduce statutory capital volatility, may not be closely aligned to changes in the variable annuity guaranty embedded derivatives.

To evaluate interest rate and equity price risk, the Company performs sensitivity testing which measures the impact on pretax income from the sources listed below for a 12-month period following a hypothetical 100 basis point increase in interest rates or a hypothetical 10% decline in equity prices. The interest rate risk test assumes a sudden 100 basis point parallel shift in the yield curve, with rates then staying at those levels for the next 12 months. The equity price risk test assumes a sudden 10% drop in equity prices, with equity prices then staying at those levels for the next 12 months. In estimating the values of variable annuity riders, equity indexed annuities, indexed universal life insurance and the associated hedge assets, the Company assumed no change in implied market volatility despite the 10% drop in equity prices.

36

The following tables present the Company’s estimate of the impact on pretax income from the above defined hypothetical market movements as of March 31, 2014:

	Equity Price Exposure to Pretax Income
Equity Price Decline 10%	Before Hedge Impact			Hedge Impact			Net Impact
	(in millions)
Asset-based fees and expenses	$	(89	)	$	—		$	(89	)
DAC and DSIC amortization(1) (2)	(99		)	—			(99		)
Variable annuity riders:
GMDB and GMIB(2)	(84		)	—			(84		)
GMWB	(172		)	148			(24		)
GMAB	(35		)	29			(6		)
DAC and DSIC amortization(3)	N/A			N/A			8
Total variable annuity riders	(291		)	177			(106		)
Macro hedge program(4)	—			6			6
Equity indexed annuities	1			(1		)	—
Indexed universal life insurance	11			(12		)	(1		)
Total	$	(467	)	$	170		$	(289	)

	Interest Rate Exposure to Pretax Income
Interest Rate Increase 100 Basis Points	Before Hedge Impact			Hedge Impact			Net Impact
	(in millions)
Asset-based fees and expenses	$	(21	)	$	—		$	(21	)
Variable annuity riders:
GMDB and GMIB	—			—			—
GMWB	507			(534		)	(27		)
GMAB	23			(24		)	(1		)
DAC and DSIC amortization(3)	N/A			N/A			(1		)
Total variable annuity riders	530			(558		)	(29		)
Macro hedge program(4)	—			(31		)	(31		)
Fixed annuities, fixed insurance and fixed portion of variable annuities and variable insurance products	18			—			18
Indexed universal life insurance	17			—			17
Total	$	544		$	(589	)	$	(46	)

N/A Not Applicable.

(1) Market impact on DAC and DSIC amortization resulting from lower projected profits.

(2) In estimating the impact on DAC and DSIC amortization resulting from lower projected profits, the Company has not changed its assumed equity asset growth rates. This is a significantly more conservative estimate than if the Company assumed management follows its mean reversion guideline and increased near-term rates to recover the drop in equity values over a five-year period. The Company makes this same conservative assumption in estimating the impact from GMDB and GMIB riders.

(3) Market impact on DAC and DSIC amortization related to variable annuity riders is modeled net of hedge impact.

(4) The market impact of the macro hedge program is modeled net of any related impact to DAC and DSIC amortization.

The above results compare to an estimated negative net impact to pretax income of $252 million related to a 10% equity price decline and an estimated negative net impact to pretax income of $55 million related to a 100 basis point increase in interest rates as of December 31, 2013.

Net impacts shown in the above table from GMWB and GMAB riders result largely from differences between the liability valuation basis and the hedging basis. Liabilities are valued using fair value accounting principles, with risk margins incorporated in contractholder behavior assumptions and with discount rates increased to reflect a current market estimate of the Company’s risk of nonperformance specific to these liabilities. The nonperformance spread risk is not hedged.

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Actual results could differ materially from those illustrated above as they are based on a number of estimates and assumptions. These include assuming that implied market volatility does not change when equity prices fall by 10%, that management does not increase assumed equity asset growth rates to anticipate recovery of the drop in equity values when valuing DAC, DSIC and GMDB and GMIB liability values and that the 100 basis point increase in interest rates is a parallel shift of the yield curve. Furthermore, the Company has not tried to anticipate changes in client preferences for different types of assets or other changes in client behavior, nor has the Company tried to anticipate actions management might take to increase revenues or reduce expenses in these scenarios.

The selection of a 100 basis point interest rate increase as well as a 10% equity price decline should not be construed as a prediction of future market events. Impacts of larger or smaller changes in interest rates or equity prices may not be proportional to those shown for a 100 basis point increase in interest rates or a 10% decline in equity prices.

Fair Value Measurements

The Company reports certain assets and liabilities at fair value; specifically, separate account assets, derivatives, embedded derivatives, most investments and cash equivalents. Fair value assumes the exchange of assets or liabilities occurs in orderly transactions and is not the result of a forced liquidation or distressed sale. The Company includes actual market prices, or observable inputs, in its fair value measurements to the extent available. Broker quotes are obtained when quotes from pricing services are not available. The Company validates prices obtained from third parties through a variety of means such as: price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of vendors. See Note 11 to the Consolidated Financial Statements for additional information on the Company’s fair value measurements.

Fair Value of Liabilities and Nonperformance Risk

Companies are required to measure the fair value of liabilities at the price that would be received to transfer the liability to a market participant (an exit price). Since there is not a market for the Company’s obligations of its variable annuity riders and indexed universal life insurance, the Company considers the assumptions participants in a hypothetical market would make to reflect an exit price. As a result, the Company adjusts the valuation of variable annuity riders and indexed universal life insurance by updating certain contractholder assumptions, adding explicit margins to provide for profit, risk and expenses, and adjusting the rates used to discount expected cash flows to reflect a current market estimate of the Company’s nonperformance risk. The nonperformance risk adjustment is based on broker quotes for credit default swaps that are adjusted to estimate the risk of the Company not fulfilling these liabilities. Consistent with general market conditions, this estimate resulted in a spread over the LIBOR swap curve as of March 31, 2014. As the Company’s estimate of this spread widens or tightens, the liability will decrease or increase. If this nonperformance credit spread moves to a zero spread over the LIBOR swap curve, the reduction to net income would be approximately $84 million, net of DAC, DSIC, unearned revenue amortization, the reinsurance accrual and income taxes (calculated at the statutory tax rate of 35%), based on March 31, 2014 credit spreads.

Liquidity and Capital Resources

Liquidity Strategy

The liquidity requirements of the Company are generally met by funds provided by investment income, maturities and periodic repayments of investments, deposits, premiums and proceeds from sales of investments as well as capital contributions from Ameriprise Financial. Other liquidity sources the Company has established are short-term borrowings and available lines of credit with Ameriprise Financial aggregating $1 billion.

The Company enters into short-term borrowings, which may include repurchase agreements and Federal Home Loan Bank (“FHLB”) advances to reduce reinvestment risk from higher levels of expected annuity net cash flows. Short-term borrowings allow the Company to receive cash to reinvest in longer-duration assets, while paying back the short-term debt with cash flows generated by the fixed income portfolio. The balance of repurchase agreements at both March 31, 2014 and December 31, 2013 was $50 million which is collateralized with agency residential mortgage backed securities and commercial mortgage backed securities from the Company’s investment portfolio. RiverSource Life Insurance Company is a member of the FHLB of Des Moines, which provides RiverSource Life Insurance Company access to collateralized borrowings. At March 31, 2014 and December 31, 2013, the Company had borrowings of $250 million and $450 million, respectively, from the FHLB which is collateralized with commercial mortgage backed securities.

The outstanding balance under the lines of credit with Ameriprise Financial was nil and $150 million at March 31, 2014 and December 31, 2013, respectively. See Note 9 to the Consolidated Financial Statements for additional information on the line of credit.

The primary uses of funds are policy benefits, commissions, other product-related acquisition and sales inducement costs, operating expenses, policy loans, dividends to Ameriprise Financial and investment purchases. The Company routinely reviews its sources and uses of funds in order to meet its ongoing obligations.

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Capital Activity

Dividends paid and received by RiverSource Life Insurance Company were as follows:

	Three Months Ended March 31,
	2014		2013
	(in millions)
Cash dividends paid to Ameriprise Financial	$	150	$	325

During the three months ended March 31, 2014 and 2013, RiverSource Life Insurance Company made a cash contribution to RTA of nil and $15 million, respectively, for ongoing funding commitments related to affordable housing partnership investments.

Regulatory Capital

RiverSource Life Insurance Company and RiverSource Life of NY are subject to regulatory capital requirements. Actual capital, determined on a statutory basis, and regulatory capital requirements for each of the life insurance entities are as follows:

	Actual Capital(a)				Regulatory Capital Requirement(b)
	March 31, 2014		December 31, 2013		December 31, 2013
			(in millions)
RiverSource Life Insurance Company	$	2,999	$	2,747	$	591
RiverSource Life Insurance Co. of New York	284		251		49

(a) Actual capital, as defined by the National Association of Insurance Commissioners for purposes of meeting regulatory capital requirements, includes statutory capital and surplus, plus certain statutory valuation reserves.

(b) Regulatory capital requirement is based on the statutory risk-based capital filing.

Contractual Commitments

There have been no material changes to the Company’s contractual obligations disclosed in the Company’s 2013 10-K.

Forward-Looking Statements

This report contains forward-looking statements that reflect the Company’s plans, estimates and beliefs. The Company’s actual results could differ materially from those described in these forward-looking statements. Examples of such forward-looking statements include: 

• statements of the Company’s plans, intentions, expectations, objectives, or goals, including those related to the introduction, cessation, terms or pricing of new or existing products and services and the consolidated tax rate;

• other statements about future economic performance, the performance of equity markets and interest rate variations and the economic performance of the United States and of global markets; and

• statements of assumptions underlying such statements.

The words “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” “forecast,” “on pace,” “project” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements.

Such factors include, but are not limited to: 

• conditions in the interest rate, credit default, equity market and foreign exchange environments, including changes in valuations, liquidity and volatility;

• changes in and the adoption of relevant accounting standards and securities rating agency standards and processes, as well as changes in the litigation and regulatory environment, including ongoing legal proceedings and regulatory actions, the frequency and extent of legal claims threatened or initiated by clients, other persons and regulators, and developments in regulation and legislation, including the rules and regulations implemented or to be implemented in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act;

• the Company’s investment management performance and consumer acceptance of the Company’s products;

• effects of competition in the financial services industry, including pricing pressure, the introduction of new products and services and changes in product distribution mix and distribution channels;

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• changes to the Company’s reputation that may arise from employee or Ameriprise Financial Services, Inc. advisor misconduct, legal or regulatory actions, improper management of conflicts of interest or otherwise;

• the Company’s capital structure as a subsidiary of Ameriprise Financial, including the ability of its parent to support its financial strength and ratings, as well as the opinions of rating agencies and other analysts or the Company’s regulators distributors or policyholders and contractholders in response to any change or prospect of change in any such opinion;

• risks of default, capacity constraints or repricing by issuers or guarantors of investments the Company owns or by counterparties to hedge derivative, insurance or reinsurance arrangements, experience deviations from the Company’s assumptions regarding such risks, the evaluations or the prospect of changes in evaluations of any such third parties published by rating agencies or other analysts and the reactions of other market participants or the Company’s regulators, distribution partners or customers in response to any such evaluation or prospect of changes in evaluation;

• experience deviations from the Company’s assumptions regarding morbidity, mortality and persistency in certain annuity and insurance products, or from assumptions regarding market returns assumed in valuing or unlocking DAC and DSIC or market volatility underlying the Company’s valuation and hedging of guaranteed benefit annuity riders;

• successfully cross-selling insurance and annuity products and services to Ameriprise Financial’s customer base;

• the Company’s ability to effectively hedge risks relating to guaranteed benefit riders and certain other products;

• the impact of intercompany allocations to the Company from Ameriprise Financial and its affiliates;

• Ameriprise Financial’s ability to attract, recruit and retain qualified advisors and employees and its ability to distribute the Company’s products through current and future distribution channels;

• changes in capital requirements that may be indicated, required or advised by regulators or rating agencies;

• the impacts of Ameriprise Financial’s efforts to improve distribution economics and realize benefits from reengineering and tax planning;

• interruptions or other failures in the Company’s communications, technology and other operating systems, including errors or failures caused by third party service providers, interference or failures caused by third party attacks on the Company’s systems, or the failure to safeguard the privacy or confidentiality of sensitive information and data on such systems; and

• general economic and political factors, including consumer confidence in the economy, the ability and inclination of consumers generally to invest, as well as their ability and inclination to invest in financial instruments and products other than cash and cash equivalents, the costs of products and services the Company consumes in the conduct of its business, and applicable legislation and regulation and changes therein, including tax laws, tax treaties, fiscal and central government treasury policy, and policies regarding the financial services industry and regulatory rulings and pronouncements.

The Company cautions the reader that the foregoing list of factors is not exhaustive. There may also be other risks that the Company is unable to predict at this time that may cause actual results to differ materially from those in forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update publicly or revise any forward-looking statements.

The foregoing list of factors should be read in conjunction with the “Risk Factors” discussion as Part I, Item 1A in the Company’s 2013 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) designed to provide reasonable assurance that the information required to be reported in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in and pursuant to Securities and Exchange Commission regulations, including controls and procedures designed to ensure that this information is accumulated and communicated to the Company’s management, including its principal executive officer and chief financial officer, as appropriate, to allow timely decisions regarding the required disclosure. It should be noted that, because of inherent limitations, the Company’s disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

The Company’s management, under the supervision and with the participation of the Company’s principal executive officer and chief financial officer, evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company’s principal executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures were effective at a reasonable level of assurance as of March 31, 2014.

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Changes in Internal Control over Financial Reporting

There have not been any changes in RiverSource Life Insurance Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, RiverSource Life Insurance Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 16 to the Consolidated Financial Statements in Part I, Item 1 is incorporated herein by reference. 

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors provided in Part I, Item 1A of RiverSource Life Insurance Company’s 2013 10-K. 

ITEM 6. EXHIBITS

The list of exhibits required to be filed as exhibits to this report are listed on page E-1 hereof, under “Exhibit Index,” which is incorporated herein by reference.

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RIVERSOURCE LIFE INSURANCE COMPANY

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		RIVERSOURCE LIFE INSURANCE COMPANY
		(Registrant)
Date:	May 5, 2014	By	/s/ John R. Woerner
			John R. Woerner
			Chairman and President
Date:	May 5, 2014	By	/s/ Brian J. McGrane
			Brian J. McGrane
			Executive Vice President and
			Chief Financial Officer

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RIVERSOURCE LIFE INSURANCE COMPANY

EXHIBIT INDEX

The following exhibits are filed as part of this Quarterly Report:

Exhibit Description

3.1 Copy of Certificate of Incorporation of IDS Life Insurance Company, filed as Exhibit 3.1 to Post-Effective Amendment No. 5 to Registration Statement No. 33-28976, is incorporated by reference.

3.1.1 Copy of Certificate of Amendment of Certificate of Incorporation of IDS Life Insurance Company dated June 22, 2006, filed as Exhibit 3.1 to Form 8-K filed on January 5, 2007, is incorporated by reference.

3.2 Copy of Amended and Restated By-Laws of RiverSource Life Insurance Company dated June 22, 2006, filed as Exhibit 27(f)(2) to Post-Effective Amendment No. 28 to Registration Statement No. 333-69777, is incorporated by reference.

31.1* Certification of John R. Woerner, Chairman and President, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

31.2* Certification of Brian J. McGrane, Chief Financial Officer, pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

32* Certification of John R. Woerner, Chairman and President, and Brian J. McGrane, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101* The following materials from RiverSource Life Insurance Company's Quarterly Report on Form 10-Q for the period ended March 31, 2014, formatted in XBRL: (i) Consolidated Balance Sheets at March 31, 2014 and December 31, 2013; (ii) Consolidated Statements of Income for the three months ended March 31, 2014 and 2013; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2014 and 2013; (iv) Consolidated Statements of Shareholder's Equity for the three months ended March 31, 2014 and 2013; (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013; and (vi) Notes to the Consolidated Financial Statements.

______________________________________

* Filed electronically herewith.

E-1